New Delhi (PTI): Indian banks are most at risk in South and South-East (S-E) Asia, and being under-capitalised, they lack sufficient loan provisioning, says a Moody’s poll.
It said the government has appeared reluctant to increase capital injection into PSU banks despite the limited ability of these lenders to access equity markets for the much-needed capital.
Earlier this month, Moody’s polled 210 market participants on some of the industry’s most pressing credit issues.
“Indian banks are most at risk in South and South-East Asia. We agree that many banks in India remain undercapitalised and continue to lack sufficient loan-loss provisions. Moreover, the government has appeared reluctant to increase capital injections into the PSU banks, despite the limited ability of these to access equity markets for the much-needed capital,” the Moody’s poll said.
Earlier this week, Moody’s had revised the outlook on several Indian banks to stable or negative from positive, signalling a lowering in potential government support, and/or weaknesses in solvency metrics.
