MUMBAI - Fundamental credit outlook for the Indian banking system remains negative, reflecting rising "problem loans", asset quality concerns and changing economic conditions, ratings agency Moody's Investors Service said in its latest report.
In January, the agency had revised the rating to negative from stable. Moody's said its main concern for the sector was deteriorating asset quality and volume of restructured loans, even when seen in the context of the global economic slowdown.
"The rapid expansion of retail lending in recent years, combined with the slowdown of the Indian economy, has led to increased delinquency rates, especially for unsecured retail loans. Concurrently, the future performance of restructured loans will determine the evolution of the NPL trend in India," Moody's said.
In 2008-09 (Apr-Mar), the absolute level of gross non-performing loans for all Indian commercial banks increased 22.5%, compared with 11.9% the year before.
Moody’s cautions India on non-performing loans
Deteriorating credit conditions in India’s banking system over the coming months have raised concerns about a hefty increase in problem loans and weakening bank profitability, ratings agency Moody’s warned on Monday.
Do read the whole article about Moody's report on FT web site :- http://www.ft.com/cms/s/0/
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