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India allows 7 state-run banks to raise capital from market

[NEW DELHI] India has allowed seven state-run banks to raise capital from market as part of efforts to help them comply with global Basel III banking rules, a finance ministry statement said on Wednesday.

The government in its budget for the next fiscal year that starts from April 1 has allocated 79.4 billion rupees (S$1.75 billion) for capital infusion in state-banks, far lower than what the market had expected.

The statement, issued after government officials' meeting with the chiefs of state-run banks, did not name the lenders allowed to sell shares or mention any timeframe for such sales.

Top lender State Bank of India and at least two other state-owned lenders - Punjab National Bank and Canara Bank - have plans to raise funds through share sales.