Banker of the banks, World Bank, extended its support to India by approving loans worth $4.3 billion. The loans would enable financing infrastructure development in the country and in supporting some of the state-run banks, as the Indian economy revives from the global meltdown.
The loans are a part of the World Bank's $14 billion crisis-related lending for the country.
The World Bank claimed that the loan would help maintain credit growth levels, support social banking and boost employment.
Roberto Zagha, World Bank country director for India, told Reuters "The logic of these four loans is that they should support India's economic recovery by enabling enterprises to get access to credit and ... enabling investment in infrastructure."
Zagha said that though the worst of the crisis was over, the pace of recovery could not be ascertained.
He said that India's recovery would be in lines with the global recovery. If the global economy does not recover, India would not be able to grow with the same rates as it used to before the crisis.
India's apex bank, RBI slashed lending rates by 4.25 percentage points between October and April to add liquidity in the market.
The World Bank responded to it by providing $2 billion to India's banking sector to increase the volume of credit available to firms.
The Bank also approved $1.2 billion for the India Infrastructure Finance Co Ltd to spur private financing for public-private partnerships in infrastructure, and to stimulate the development of a long-term local currency debt financing market.
The World Bank is expected to approve a proposal to provide $3 billion to the government to recapitalize the public sector banks. Except a few like SBI and PNB, most of the state-run banks are likely to get a share of these funds.