To strengthen risk defenses and to comply with recent changes to the Basel III capital standards, India's state-run banks are required this month to decide on methods to put up more than INR1.5 trillion (US$25 billion) in the next 5 years.

In a conference held on July 9 in New Delhi, Rajiv Takru, the banking secretary at India's Finance Ministry, said "Banks have to look at options other than capital infusion by the government to meet the new Basel rules."

Duvvuri Subbarao, the Reserve Bank of India Governor noted last year that the government needs to inject more than NR900 billion into their majority-owned banks to continue the state holding and to aid India meet new Basel III requirements. Bank lending in India grew 14% in last month's year-to-date reports, according to data collected by the Reserve Bank of India. 14% is the lowest rate in more than three years.

India plans to infuse as much as INR140 billion into banks including Bank of Maharashtra ,IDBI Bank Ltd., and the Dena Bank by September.