(Bloomberg) -- India's banks need to raise funds from markets for their growth rather than depend on the government for recapitalization, Finance Minister Nirmala Sitharaman said.
“Banks are today less burdened because books are cleaner,” Sitharaman said at the annual general meeting of the Indian Banks' Association on Sunday. “As a result they will able to go and raise money from markets. I have absolute self-interest in pressing this particular aspect because I would think burden on government to recapitalize you will be far lesser.”
The country will need more large lenders such as the State Bank of India to meet the challenges of economy and industry, she said.
India's government will guarantee 306 billion rupees ($4.2 billion) of security receipts issued by its new bad bank, in a fresh attempt to clean up one of the world's biggest piles of bad loans, she said earlier. The National Asset Reconstruction Company Ltd., to be owned by government-run and private sector lenders, will hold stressed assets which can be sold on to investors at a reduced price.
“No business can happen without borrowing and I am sure you understand better than I understand,” Sitharaman said.
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