The Government of India has announced plans to inject around INR700bn ($9.79bn) into public sector banks.

In a press conference, Indian Finance Minister Nirmala Sitharaman said that the move is aimed at improving liquidity situation and boost lending.

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She was quoted by the local media sources as saying that the capital infusion is expected to generate liquidity to the tune of INR5 trillion.

She added that the lenders will introduce repo rate and external benchmark-linked loan products to ensure reduced instalments of various loans.

The banks will also return related documents within 15 days of loan closure to improve efficiency.

“This will benefit borrowers who have mortgaged assets”, the Hindu Business Line quoted the minister as saying.

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In the recent years, the government has announced several such stimulus measures in a bid to recapitalise the banks.

The steps were taken to strengthen the institutions, affected with high bad debts.

In July this year, the Finance Minister in her budget speech announced that the government will provide the state-owned banks with fresh capital of around INR700bn ($10.2bn).

Several merger and consolidation measures were also undertaken by the government to revive the banking sector.

This year, Dena Bank and Vijaya Bank were merged into Bank of Baroda to create a single combined lender. All the State Bank of India subsidiaries were also merged with the parent company, as a part of the efforts.