Agencies playing God; no need to downgrade banks: DK Mittal

Financial Services secretary DK Mittal says the downgrade of some of the Indian banks by ratings agencies recently wasn’t justified.

He said there was no reason for any Indian bank to be downgraded.

Mittal said, “We do not find any reason whatsoever. There is nothing alarmist. All the results are out for FY12. On that basis, the banks which have been downgraded have no reason to be. If you are perceiving what is going to happen in future then you are playing God.”

Fitch Ratings has revised the Outlook on the 'BBB-' Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) of India-based financial institutions to Negative from Stable, while affirming the rating.

These include six government banks (including an international banking subsidiary of a government bank), two private banks, two wholly owned government institutions and one infrastructure finance company.

A list of affected entities is as follows:- State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BOB), Bank of Baroda (New Zealand) Limited (BOBNZ), Canara Bank (Canara), IDBI Bank Ltd. (IDBI), ICICI Bank Ltd. (ICICI), Axis Bank (Axis), Export-Import Bank of India (EXIM), Housing and Urban Development Corporation Ltd. (HUDCO), Infrastructure Development Finance Company Ltd. (IDFC).