Nov 11 Standard & Poor's (S&P) Ratings
Services revised upwards India's banking industry country risk
assessment (BICRA) to group '5' from group '6', making it part
of a group of countries including China, Portugal, Thailand and
Turkey, it said.
A BICRA is scored on a scale from 1 to 10, ranging from the
lowest risk banking systems (group '1') to the highest-risk
The move is in contrast to that of its rival Moody's
Investor Service which on Wednesday downgraded outlook for
India's banking system to "negative" from "stable", as it warned
of slowing growth at home and overseas hitting asset quality,
capitalization and profitability.
S&P Ratings, part of The McGraw-Hill Companies,
reviewed its BICRA on Indian banks after publishing its ratings
criteria, methodology and assumptions for it, which is designed
to provide greater transparency and global comparability of bank
ratings, it said in a statement.
"India's banking system has a high level of stable, core
customer deposits, which limit dependence on external
borrowings...the government is likely to provide timely
financial support to the banking system, if needed," it said.
S&P Ratings has also assigned an industry risk score of '5'
for India that signifies "high risk" in "economic resilience,"
"low risk" in "economic imbalances," and "high risk" in "credit
risk in the economy," the rating agency said in a statement.
India's economic resilience is constrained by its weak
economic structure with very low per capita GDP estimated at
US$1,418 in 2011, though that is partially offset by a
well-diversified economy and sustained high economic growth
prospects, S&P added.
"In our view, banking regulations in India are in line with
international standards and the regulator has a moderately
successful track record," it said.
At 10:27 a.m., the Bombay Stock Exchange's sector index
Bankex was 2.1 percent at 10,789.45 points and the
30-issue benchmark index was down 0.9 percent.
(Reporting by Ketan Bondre in MUMBAI; Editing by Rajesh