Indian banks are most at risk in South and South-East (S-E) Asia, and being under-capitalised, they lack sufficient loan provisioning, says a Moody's poll according to the PTI.
It said the government has appeared reluctant to increase capital injection into PSU banks despite the limited ability of these lenders to access equity markets for the much-needed capital.
Earlier this month, Moody's polled 210 market participants on some of the industry's most pressing credit issues.
"Indian banks are most at risk in South and South-East Asia. We agree that many banks in India remain undercapitalised and continue to lack sufficient loan-loss provisions. Moreover, the government has appeared reluctant to increase capital injections into the PSU banks, despite the limited ability of these to access equity markets for the much-needed capital," the Moody's poll said.
Earlier this week, Moody's had revised the outlook on several Indian banks to stable or negative from positive, signaling a lowering in potential government support, and/or weaknesses in solvency metrics.