SEBI Reg. Investment Advisor

Download App
Help Center Subscribe
Money Works 4 Me Logo MoneyWorks4Me
Talk to Advisor
Login Get Free Account
Sign Up

MoneyWorks4Me

Log In Sign Up Schedule Free 15‑min Call
Login Get Free Account
Sign Up
  1. Home
  2. Stock Market News
  3. Moody’s outlook remains negative for the Indian banking system

Moody’s outlook remains negative for the Indian banking system

05 Dec 2012 Evaluate
Indian banking industry continued to have a negative outlook for next 12-18 months said global rating agency Moody’s. According to the rating agency business environment in India is characterised by slow economic growth, high inflation, high interest rates, and a weak local currency and it expects these factors to lead to a further deterioration in asset quality, an increase in provisioning costs, and a fall in profitability of banks. It has said that the country’s burgeoning fiscal and current account deficits are a matter of concern.

Its banking system outlook report observed that over the past three years, the restructured assets of Indian banks had steadily increased. A growing proportion of the restructured assets tended to become non-performing loans. Restructured assets grew by 104% during the 2012 financial year, while the non-performing loans were estimated to reach 8%. The government has already apportioned Rs 15,000 crore for public sector bank recapitalization this year and the allocation to individual banks will be announced later this week.

The rating agency believes that the government would provide extraordinary support, if needed, in the form of unsecured loans and/ or capital injections to both the public and the rated private banks. Despite the deteriorating environment, government support to the banking system was unlikely to be affected. The agency has rated 15 domestic banks of which 11 are in the public sector and the rest are private, including SBI and ICICI Bank.

Moody’s had further said the asset quality deterioration would continue in the manufacturing sector. The outlook for an export-led recovery also remained dim, despite the improved currency competitiveness. Weak economic activity, persistently high interest rates resulting from chronic inflation of above 8% put challenge for borrowers’ debt servicing capacity. The rating agency identified power distribution companies, independent power producers, telecom companies and airline companies as the major sources for asset stress.

Register Now to get our Free Newsletter & much more!
2026 ©The Alchemists Ark Pvt. Ltd. All rights reserved. MoneyWorks4Me® is a registered trademark of The Alchemists Ark Pvt. Ltd.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through: