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Indian banks can endure global banking turmoil fallout
April 17, 2023
“Strong funding profiles, a high savings rate, and government support are among the factors that bolster the financial institutions we rate,” the rating agency said.
S&P also said Indian banks had sufficient buffers to withstand losses on their sizable government securities portfolio due to rising interest rates.
The Reserve Bank of India has increased the policy repo rate by 250 basis points since May last year.
Analysts have said that Indian banks are now in a better position to withstand stress given their current capital levels and healthy asset quality.
Stress tests conducted by the central bank and released as part of the Financial Stability Report (FSR) in December have also shown that banks would be able to comply with minimum capital requirements even under adverse scenarios.
S&P said that only a significant escalation of the current crisis would force it to change its view.
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