World Bank lends $4.3bn to India

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The World Bank is to provide India with$4.3bn (£2.6bn) in loans, including $2bn to support its state-owned banks.

The organisation expects India's economic growth to slow to as little as 5.5% in 2009, down from almost 10% two years ago.

"This is a crucial time to support India," said Roberto Zagha, the World Bank country director for India.

The loans will mainly be used to fund infrastructure projects and support companies that need credit.

'Doubts linger'

"While the worst of the crisis seems to be behind us, doubts linger about the strength of the comeback, partly because the strength of the global recovery is uncertain," Mr Zagha said.

"Today's support will help maintain credit growth and continued infrastructure investments."

The loans came in response to Indian requests for more support to help it cope with the economic downturn.

The $2bn loan to the banking sector will help "prevent shortages of capital from leading to a slowdown in credit growth, and provide a capital buffer to public sector banks to absorb the possible increase in non-performing assets," the World Bank said.

A 28-year loan of $1.195bn is aimed at a range of infrastructure projects including "selected power, roads, and ports projects", it said.

Another $1bn loan is aimed at strengthening India's electricity transmission system.

The World Bank also approved smaller loans to Vietnam, Hungary, Latvia and Nepal.