India’s biggest bank overhaul in decades to merge state-run lenders beset with bad loans and low capital has not convinced investors to increase holdings of the shares.
Fund managers, including Aberdeen Standard Investments and JPMorgan Chase & Co, are shying away from increasing their positions in government-owned lenders. As well as poor asset quality at the banks, they cited uncertainty about the merger’s time-line.
NBFC crisis
A prolonged NBFC crisis and hurdles in bankruptcy rules have left India holding the world’s worst bad-debt pile. Seeking to spur lending needed to revive economic growth from a six-year low, Prime Minister Narendra Modi’s government said on August 30 that it plans to merge smaller banks to create four new lenders that would hold more than half of the Indian banking industry’s assets.
This story is from the September 17, 2019 edition of The Hindu Business Line.
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This story is from the September 17, 2019 edition of The Hindu Business Line.
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