Credit rating agency Moody's today revised upwards the outlook to positive, from stable, for 12 state-owned banks and financial institutions...
Credit rating agency Moody’s today revised upwards the outlook to positive, from stable, for 12 state-owned banks and financial institutions including State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, REC and PFC.
“We have affirmed the long-term ratings and changed the outlook to positive from stable for 12 Indian government- owned financial institutions,” the US-based agency said.
“The rating actions (on 12 public-sector entities) are in line with our affirmation of India’s Baa3 rating,” it said.
Earlier in the day, Moody’s raised India’s credit rating outlook to ‘positive’ and said an upgrade in its sovereign rating is also possible in the next 12-18 months.
India’s sovereign rating currently stands at ‘Baa3’, the lowest investment grade — just a notch above ‘junk’ status.
The 12 state-owned financial institutions include State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India, Canara Bank, Oriental Bank of Commerce, Power Finance Corp, and Rural Electrification Corp.
The rating agency said an improvement in the government’s own creditworthiness, as measured by its sovereign rating, has the potential to lift the supported ratings for the financial institutions.
“The assignment of a positive outlook on the sovereign’s and the financial institutions’ ratings signals a higher probability of the sovereign providing support to the financial institutions in times of stress,” it said.