Weak asset quality will continue to plague credit profile of banks, with their profitability remaining under pressure till the next fiscal, says a report.
Economists at foreign brokerage Bank of America Merill Lynch said however that it doesn't expect any rate cut in the upcoming review of the bi-monthly policy in December.
Welcoming the RBI measures, Karthik Srinivasan, Senior Vice-President, Icra, said, "The slew of measures announced by RBI should encourage greater participation from issuers, investors and intermediaries as it has accepted many of the recommendations of the Khan committee report."
Karthik Srinivasan, senior VP and co-head of financial sector ratings at ICRA, says: "The stress has only increased and this pressure on asset quality is impacting the profitability of these banks."
ICRA has analysed the performance of 9 life insurance firms - state-owned LIC and eight private sector firms - collectively representing around 92 percent of the market.