RBI and Indian government boost banking sector as election nears

Central bank injects liquidity into banks as government recapitalises more state-owned lenders

Reserve Bank of India in Mumbai
The RBI will purchase $330 million of government securities during the first two weeks of March

The Reserve Bank of India announced it will inject liquidity into the banking sector on February 26, a move that follows a capital boost from the government into 12 state-run banks.

The central bank also said it had lifted operational restrictions on two more banks due to the government’s capital injection, as they were no longer considered undercapitalised.

The moves to increase liquidity in the sector come as the government gears up for a general election, expected to be held in April and

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