China's glut and India's dearth show the two faces of liquidity

Banks in the two economies face challenges that differ remarkably

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Lenders in the world's two most populous nations are having very different problems with monetary and fiscal taps. In China, creditors are drowning in cheap central-bank cash, but loan demand is muted. In India, banks are in the middle of their fastest expansion in a decade, but they're parched for liquidity.

While the Chinese authorities' struggle to stimulate the economy with 3 trillion yuan ($418 billion) in long-term cash injections has the world's attention, the Indian deficit is also beginning to worry investors.

Barely a few months before the next general election, Prime Minister Narendra Modi's administration has cut back on spending. That's hurting lenders. Funds that left bank accounts as advance tax payments by companies in December would only return as deposits as New Delhi starts writing checks to contractors working on government projects. But with the fiscal year approaching its 31 March end, there's no sign of a last-minute acceleration.