One of the world’s premier rating agency Moody’s has warned major banks in the country of a further debacle under existing circumstances.
Moody’s, whose analysis and eventual rating holds a lot of influence in the market and the business sector has red-flagged the current progress or state many Indian banks, that have already been struggling with myriad issues, including the pandemic induced economic paralysis.
And this, as according to Moody’s Investor Service, that allows businesses and markets to cautiously invest and trade, has said the same of major banks in the Asian economy.
In a recently released report, Moody’s has found a volatile trajectory of asset quality as one of the most crucial threats for emerging market banks, like than in Asia, particularly in India, as operating conditions remain excruciating amid the current times, that have wrecked by the COVID19 pandemic.
According to the service agency, although weak and unreliable business portfolios are affecting the entire Asia-Pacific market, countries like India, and its neighbours are bound to be the worst-hit of all, given the already fragile state of the economic paradigm that existed much before the pandemic.
The report also throws light on certain blemishes in the system that although is known to almost everyone in the circuit, is often ignored for some unknown reason. The Non- performing assets, un the form of bad loans, and other insidiously stagnant systems, are eating the system from the inside.
The banking sector’s inability to regulate its lending to big corporates is leading the entire sector into an arena of concern, as they are only increasing the liability on these banks, at cost of no real movement in a real economic sense on the ground. A surgical restructuring is what is imperative at this stage.
