Standard & Poor's (S&P) Ratings Services revised upwards India's banking industry country risk assessment (BICRA) to group '5' from group '6', making it part of a group of countries including China, Portugal, Thailand and Turkey, it said. A BICRA is scored on a scale from 1 to 10, ranging from the lowest risk banking systems (group '1') to the highest-risk (group '10').
The move is in contrast to that of its rival Moody's Investor Service which on Wednesday downgraded outlook for India's banking system to "negative" from "stable", as it warned of slowing growth at home and overseas hitting asset quality, capitalisation and profitability.
S&P Ratings, part of The McGraw-Hill Companies, reviewed its BICRA on Indian banks after publishing its ratings criteria, methodology and assumptions for it, which is designed to provide greater transparency and global comparability of bank ratings, it said in a statement. "India's banking system has a high level of stable, core customer deposits, which limit dependence on external borrowings...the government is likely to provide timely financial support to the banking system, if needed," it said.
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