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India: Central Bank Fund Transfer Could Pave Way for Stimulus

1 MIN READAug 27, 2019 | 15:48 GMT

What Happened: The Indian government will receive a 1.76 trillion-rupee (roughly $24.4 billion) payout of dividends and surplus capital from the Reserve Bank of India, Bloomberg reported Aug. 26.

Why It Matters: Although India's Finance Ministry didn't specify how the government would use the payout, New Delhi could direct the money toward much-needed stimulus measures to boost economic growth, including a plan to inject state-owned banks with 700 billion rupees to support credit growth.

Background: India's economic growth recently slowed to its lowest expansion rate in over four years, prompting Prime Minister Narendra Modi to announce stimulus measures and the Reserve Bank of India to gradually reduce interest rates.

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