‘India has more than 50% chance of negative outlook getting confirmed’
Meanwhile, Moody’s on Monday said it has a “negative” outlook on India’s banking system due to concerns over asset quality and the high interest rates. “In India, impaired loans are yet to peak among public sector banks,” Moody’s said in its Asia-Pacific Banking Outlook. The agency further said though the government is “likely to remain supportive”, options for the Reserve Bank to slash lending rates are limited due to high inflation and the “modest fiscal capacity”. However, the report said interest rates are likely to fall during 2013 but still they will remain higher than the rest of Asia.
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