Indian banks most at risk among Southeast Asia peers: Moody’s poll
Moody’s says India appears reluctant to increase capital infusion into PSU banks despite their limited ability to access equity markets for capital
New Delhi: Indian banks are most at risk in South and Southeast 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 infusion 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 at the most risk in South and Southeast 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.
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