“Global ratings firm Moody’s on Wednesday downgraded the outlook of the Indian banking system to “negative” from “stable” amid an economic slowdown, which is affecting asset quality, capitalisation and profitability.
“With asset quality, given the tightening environment, we anticipate that it will deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in FY2012 and FY2013,” Moody’s Vice-President and Senior Analyst Vineet Gupta said.
A “negative” outlook is one that is characterised by volatility and uncertain conditions, according to Moody’s.”
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