Global ratings firm Moody’s Investors Service Wednesday changed its outlook for India’s banking system to negative from stable, flagging concerns of a possible rise in bad loans, capitalization constraints and pressure on profitability in a tough environment.
The action, however, is in contrast with the stable outlook assigned to the financial strength rating of 14 out of the 15 banks rated by Moody’s.

“India’s economic momentum is slowing because of high inflation, monetary tightening and rapidly rising interest rates,” said Vineet Gupta, vice president and senior analyst with the Financial Institutions Group at Moody’s.

The negative outlook is because of the cyclical decline in credit quality and not because of a structural change, he added.
Source: WSJ
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