India’s key reform of 2017? Government announces huge banks recapitalisation programme

Kunal Desai, Head of Indian Equities, Neptune

India’s government has announced a huge recapitalisation plan to fortify the balance sheets of its ailing state owned (SOE) banks. The government has committed $32 billion, which was far in excess of market expectations. This capital will be infused over the next two years and should help the SOE banks to meet more than 70% of their capital requirements.

For the wider economy, this was the one reform that we considered as key to kick India’s investment cycle into action.

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