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Modi Creates Big Banks to Buoy Worse-Than-Expected India Growth

Aug. 30, 2019, 10:51 AMUpdated: Aug. 30, 2019, 1:43 PM

India announced its most sweeping bank overhaul in decades, minutes before data showed economic growth in Asia’s No. 3 economy slumped to a six-year low.

Four new lenders that result from a series of state-bank mergers will hold business worth 55.8 trillion rupees ($781 billion), or about 56% of the Indian banking industry, Finance Minister Nirmala Sitharaman said at a briefing in New Delhi Aug. 30. The government will inject a combined 552.5 billion rupees of capital into these entities, she said.

Prime Minister Narendra Modi is counting on larger and healthier banks to spur fresh credit and revive economic...

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