While the US President has imposed 50 percent tariff on India, the US rating agency S&P Global Rating on Friday improved the credit rating of 10 major financial institutions in India. According to PTI news, these include major organizations like State Bank of India (SBI), HDFC Bank and Tata Capital. This upgrade has been made exactly one day after India’s Sovereign Credit Rating was done after 18 years from ‘BBB-‘ to ‘BBB’.
Upgrade these 10 banks/financial institutions
- State Bank of India (SBI)
- ICICI Bank
- HDFC Bank
- Axis bank
- Kotak Mahindra Bank
- Union bank of india
- Indian bank
- Bajaj finance
- Tata capital
- L&T Finance
What did the rating agency say in the statement?
S&P Global Ratings said that India’s financial institutions will continue to take advantage of the country’s strong economic growth rate. These institutions will benefit from infrastructure reforms like their domestic focus and debt recovery. S&P has predicted that in the next 12 to 24 months, Indian banks will be able to maintain proper asset quality, stable profitability and strong capitalization. However, there may be a possibility of risk in some areas. It was also said that systemic credit risk has decreased.
Historical improvement in India’s sovereign rating
Earlier on Thursday, S&P increased India’s long-term sovereign rating from ‘BBB-‘ to ‘BBB’. This step was taken in view of India’s strong economic foundation and the possibilities of continuous development in the next 2-3 years. The agency also said that India’s monetary policy is now becoming more competent for inflation control. IBC reforms mention
S&P appreciated the Insolvency and Bankruptcy Code (IBC), saying that it has improved the payment culture and legal process in the country. The law, which came into force in 2016, has given more strength to lenders and has promoted restructuring of crisis companies.
Second public sector companies also get rating boost
S&P Global Ratings have also upgraded the ratings of ONGC, NTPC, Power Grid and Tata Power to ‘BBB’. Apart from this, the long -term credit rating of India Exim Bank and Indian Railway Finance Corporation (IRFC) has also been increased.
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