Outlook for India's banking system remains negative: Moody's
weeks how much additional capital will be injected into state banks after determining most such lenders will need additional funds, Finance Minister P. Chidambaram said in mid-November.
However, the combined injection of capital will not exceed the 150 billion rupees ($2.73 billion) provided in the budget for the fiscal year ending in March 2013, Chidambaram added. Banking shares rose on Monday after TV channels reported the government will take a decision on capital infusion this week. The banking index was up 0.13 percent on Tuesday, roughly in line with the broader market. "If needed, Moody's believes that the government would provide extraordinary support in the form of unsecured loans and/or capital injections to both the public and the rated private banks," it said in the report.
Outlook for India's banking system remains negative: Moody's
(PTI)
Global rating agency Moody's today said its outlook on Indian banks remains negative as asset quality could further deteriorate, leading to decline in profitability due to slow economic growth and high interest rates.
Moody's Investors Service in a statement said, "its outlook on the Indian banking system for the next 12-18 months remains negative - as it has been since November 2011 - reflecting the continued challenging nature of its domestic operating environment".
Moody's rates a total of 15 public sector and private sector banks, which together accounted for about 66 per cent of the banking system's estimated total assets on March 2012.
The gross gross NPAs or bad loans of all public sector banks taken together has increased to
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