ICRA expects strong growth in banking sector ahead, revises outlook to positive
In terms of profitability, ICRA expects it to remain strong although rising costs of deposits could limit the upside for banks.
Rating agency ICRA has revised its outlook for the banking sector to 'positive' on the back of strong credit growth, benign asset quality pressures, and the best capital and solvency position during the last eight years. ICRA expects the banking sector's profitability to remain strong going forward. However, the agency does believe that rising interest rates could hamper demand but will still remain healthy ahead. It expects asset quality to improve to a decadal best.