Global rating agency Moody's kept the local currency deposit ratings of Indian banks unchanged at a grade that is two notches up from India's sovereign rating.
The bank deposits, at 'Baa' grade, implies that they will be able to fulfil financial commitments, even though there is moderate credit risk in the medium term.
Earlier this week, Moody's upgraded India's local currency sovereign rating by a notch from Ba2 to Ba1 on its efforts toward fiscal reforms. The move stands to result in greater capital inflows and appreciation of the value of the rupee.
Moody's said India still has a highly supportive framework for its banks. The government is currently recapitalising a number of public sector banks, which are majority-owned by the government and had lower capitalisation levels than other Indian banks.
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