BANKING NEWS INTERNATIONAL
Outlook on
Indian banking
system
Moody’s Investors Service maintained
its negative outlook on India’s banking
system, reflecting the negative effects
of currency volatility, persistent
inflation, and slowing economic
growth.
According to Moody’s, asset quality will continue to deteriorate,
particularly for public sector banks, and profitability will likely remain
weak, limiting internal capital generation.
‘The operating environment for India’s banking system continues to
exert negative pressure on ratings of many public sector banks. While
structural issues related to the infrastructure sector are not new, the
recent downturn in economic growth has exacerbated these problems
and increased their negative effects on asset quality,’ says Gene Fang,
Moody’s Vice President and Senior Analyst.
While asset quality for private sector banks has largely rem Z[