India's record bank capital boost lauded by Fitch, Moody's

Mumbai

INDIA'S plan to inject an unprecedented 2.11 trillion rupees (S$44 billion) into state-controlled banks will bolster their risk buffers and support the financial system, two major credit-rating companies said as the country's state-run banks surged in Mumbai trading.

"The proposed infusion is a sizable jump over what had been pledged before as India is seeking to plug a large part of the core equity gap at the state-run banks," said Jobin Jacob, a Mumbai-based associate director at Fitch Ratings Ltd. This addresses "weak core capitalisation, one of the key drivers for our negative outlook on the South Asian nation's banking sector".