India allows state-run banks to sell shares for capital boost

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The state-run banks have been allowed to raise as much as 1.6 trillion rupees ($26 billion) from share sales to boost capital.

The government has decided to cut its ownership in banks to as low as 52 percent in a “phased manner” in order to curb slowdown in credit growth.

Excluding dividends received from the lenders, budgetary support may be 444 billion rupees in 2015 to 2019.

The government holds a 59 percent stake in the country’s largest lender State Bank of India (SBI). State shareholdings range from as high as 84 percent in Central Bank of India to as low as 56 percent in Bank of Baroda (BOB).



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