Global rating agency, Moody’s has downgraded local currency bank deposit ratings and senior unsecured ratings of Axis Bank on a change in its fundamental view about government support to such instruments.
The local currency bank deposit ratings and the senior unsecured ratings of the Indian private sector bank has been downgraded to Baa3/P-3 from earlier Baa2/P-2. The foreign currency deposit rating of the bank has been affirmed at Baa3/P-3 and the outlook on their long-term ratings has been changed to positive from stable, in line with the review of the sovereign rating.
The downgrade is driven by the change in Moody’s view that the capacity for government support is limited to a government’s bond rating, rather than Moody’s previous expectation that banks in India could benefit from additional support through other policy tools.
