Rating agency Moody's recently downgraded four financial institutions, Life Insurance Corporation, ICICI Bank, HDFC Bank and Axis Bank. This was in context of an ongoing global review affecting all banks whose standalone ratings are higher than the rating of the government where they are domiciled.
As far as the currency markets and the country's forex reserves are concerned, Sharma said that it is difficult to predict where it is heading due to the global worries. "Based on whatever conversations we've had on this, based on purchasing power parity, Rs 54 to a dollar seems like a fair level for the rupee," she told reporters.
Greece will have a short term impact on the rupee but the medium term fundamentals are not in danger, she added. She also pointed to some positive news that is emerging like the declining gold and oil prices. On the asset quality worries for the banking sector, Sharma said that the concerns over non-performing assets (NPAs) are exaggerated. She added that there would be more loan restructuring undertaken by banks especially for large projects. But restructured assets does not mean bad quality assets. They tend to perform over time, she said.
Axis Bank also announced a partnership with telecom major Airtel to provide banking services through the Airtel Money platform. Through the partnership the no-frills savings account of Axis Bank can be opened for customers offering banking transactions including cash deposit, money transfer and withdrawal.
This will enable the bank to further the goal of reaching un-banked areas, said Sharma. Gradually other banking products and services like micro recurring deposits, micro fixed deposits, small loans and micro-insurance products will also be provided through this platform.
Bharti Airtel CEO, India and South Asia, Sanjay Kapoor said that to begin with, savings and remittance solutions will be provided in Delhi and Mumbai on the sending side, and Bihar and East UP on the receiving side. Thereafter, these services may be extended to other remittance corridors in the country. IT firm Infosys is the technology innovation partner for the offering.