Moody's downgrades outlook for Indian banks   2011-11-09 19:53:51FeedbackPrintRSS

NEW DELHI, Nov. 9 (Xinhua) -- Global rating agency Moody's has downgraded the outlook for Indian banks from stable to negative, said local media reports Wednesday.
The rating agency said the asset quality of various banks of India could deteriorate in the next 18 months due to high inflation, monetary tightening policy of India's central bank and rising interest rates.
"India's economic momentum is slowing because of high inflation, monetary tightening, and rapidly rising interest rates," Vineet Gupta, Moody's vice president and senior analyst, was quoted as saying by Indo-Asian News Service.
"At the same time, concerns have emerged over the sustainability of the recovery in the U.S. and Europe, and rise in the borrowing program of the Indian government, which could drain funds away from private credit market," Gupta said while releasing Moody's latest outlook for the Indian banking system in Mumbai.
Moody's rates 15 commercial banks in India, including biggies like State Bank of India (SBI) and private lender ICICI Bank, which together account for about 66 percent of the system's total assets as of March 2011. Indian banking is dominated by state- owned lenders which account for around 75 percent of the market in asset terms.
It had in October downgraded the rating of the country's largest lender SBI.

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