“We have changed the outlook for the Indian banking system to negative from stable. Disruptions to economic activity from the coronavirus outbreak will exacerbate a slowdown in India’s economic growth,” Moody’s said.
On Thursday Moody’s Investors Services changed the outlook for the Indian banking system to negative from stable, as it expects a deterioration in banks’ asset quality due to disruption in economic activity from the coronavirus outbreak. It said Banks’ advantage quality will disintegrate over the corporate, little and medium undertakings and retail portions, prompting pressure on gainfulness and capital.
A sharp decline in economic activity and a rise in unemployment will lead to a deterioration of household and corporate finances, which in turn will result in increases in delinquencies. While financing and liquidity at public segment banks (PSBs) will be steady, developing hazard avoidance in the framework following a default by a private segment bank (Yes Bank) will expand subsidizing and liquidity pressure on little private-segment moneylenders.
Disruptions from the coronavirus outbreak will exacerbate India’s economic slowdown. A deterioration of worldwide monetary conditions and a 21-day lockdown forced by the Indian government with an end goal to slow the spread of COVID will burden homegrown interest and private speculation
Moody’s rates 16 business banks in India, which together record for around 75 percent of stores in the framework