India Shifting Capital Support to Target Most Profitable Banks
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India’s support of state-controlled banks is shifting to target the most profitable lenders for capital injections, rather than propping up weaker peers, as the nation seeks to build a more robust financial system.
Amid reduced government support, weaker lenders could look to limit operations to a particular business segment to boost profitability, Financial Services Secretary Hasmukh Adhia said in a March 3 interview. The Bank Board Bureau, an advisory arm to be formed within five months, may be able to “nudge” some of these banks to merge with competitors, he said.