Biggest India Bond Holders Ditch Government Paper for State Debt.

"Most of the banking system is replacing sovereign debt with state-development loans or credit", said Srinivas Varadarajan, treasury head at the Indian unit of Deutsche Bank. "It makes sense to sell a government bond at 7.5 percent and buy a state development loan at 8.2-8.3 percent, or give the money out as a loan", Mumbai-based Varadarajan said. [Extracted from the article]