Lending rules for weak shadow banks eased to help them access more funds

India's cabinet has approved easier lending rules for shadow banks, the government said on Wednesday, to help them get more access to funds.

The government said it would allow state-run banks to get partial guarantees against the purchase of BBB+ rated securities of these shadow banks in addition to existing norms for AA or higher rated assets.

The government had earlier this year announced it would partially guarantee state banks' purchase of as much as 1 trillion rupees ($13.93 billion) of performing assets of these non-bank financial companies.

The cabinet also approved a pact with Japan to help build high grade steel manufacturing capabilities in the country.