Accordingly, the local currency bank deposit ratings and the senior unsecured ratings of three Indian private sector banks have been downgraded to Baa3/P-3 from earlier Baa2/P-2.
Global rating agency Moody's today downgraded local currency bank deposit ratings and senior unsecured ratings of three biggest private lenders, ICICI Bank, HDFC Bank and Axis Bank, on a change in its fundamental view about government support to such instruments.
"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," it said in a note.
Accordingly, the local currency bank deposit ratings and the senior unsecured ratings of three Indian private sector banks have been downgraded to Baa3/P-3 from earlier Baa2/P-2.
Also Read: What will it take for Moody's to up India's rating?
The foreign currency deposit rating of these three banks 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 announced earlier during the day.
In a big vote of confidence in the Modi government, rating agency Moody's today raised India's credit outlook to 'positive', while Fitch projected faster growth -- raising hopes for an upgrade in its sovereign rating in the next 12-18 months.
This was followed up with assigning positive outlooks to 12 Indian government-owned financial institutions, including the country's largest lender SBI.
The ICICI Bank scrip gained 1.65% to Rs 320.60, HDFC Bank was up 1.98% to Rs 1,056.20 and Axis Bank was up 2.88% to Rs 572.20 at the close of trade on the BSE, with the 30-share Sensex gaining 0.62%.
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