The small scale of the stimulus highlights the Centre's limited budgetary firepower to support the economy, Moody’s said.
The debt-servicing capacity of most corporate borrowers is sufficient to weather the recession in fiscal 2021, Moody’s noted.
Moody’s downgraded long-term local and foreign currency deposit ratings of BoB, BoI, Canara Bank and UBI to Ba1 from Baa3 and their baseline credit assessments to b1 from ba3
The five PSBs are Bank of Baroda, Bank of India, Canara Bank, Punjab National Bank and Union Bank of India.
The acquisition will also allow RIL to step up its retail footprint in states and territories where it currently does not have a significant presence.
"Debt burdens in Brazil, India and South Africa will rise to among the highest across the large emerging market sovereigns by 2021," Moody's said.
Moody’s has warned that a sharp slowdown in India's economic growth exacerbated the coronavirus outbreak will hurt PSBs asset quality, and result in sharp increases in credit costs, which will hurt profitability.
Yes Bank was near bankrupt in March and was rescued by a Reserve Bank-led bailout plan under which SBI picked up 49 percent equity in the once-storied private sector lender.
Moody's said the UK government's latest 30 billion pound ($37.9 billion) stimulus package, announced this week, would aid a gradual economic recovery but add further pressure to the UK's fiscal position.
"Hopefully we'll have a vaccine, but I think the vaccine is going to take longer than people understand," the chairman of Moody's Investors Service said.
On June 26 the government amended the Banking Regulation Act, 1948, allowing the Reserve Bank of India (RBI) to initiate the resolution of a weak bank by reconstructing its capital or merging it with another bank without the prior requirement of imposing a moratorium on its depositors or creditors.
The revision to the outlook represents a doubling-down by Moody's after it cut SoftBank deeper into junk territory in March - leading to the indebted conglomerate taking the unusual step of asking for its rating to be withdrawn.
A new report by Moody's looked at 14 countries from the United States and Japan to Italy and Britain and assessed how coronavirus-induced economic slowdowns would scar their finances.
The scandal-hit company, whose CEO resigned on Friday, is desperately seeking to reassure investors after its search for the missing cash hit a dead end in the Philippines, prompting ratings agencies to react.
India's ability and willingness to repay debt is gold standard, he said making a case for ratings upgrade.
All these six companies are state-run enterprises in the oil and gas sector, and have $1 billion of rated bonds coming up for repayment till 2021, the agency said.
Moody's Investors Service on Monday downgraded the country's rating by one notch to 'Baa3', the lowest in the investment grade, with a negative outlook on worries over growth and fiscal risks.
CEA Subramanian pointed out that since the COVID-19 outbreak, rating agencies have downgraded around 33 countries, adding that sovereign ratings are not a leading indicator.
Economists at Bank of America (BofA) Securities pitched for the country to continue with the fiscal stimulus measures because of the impact of the coronavirus pandemic.
The credit rating agency has made a reference to weaker institutions and governance. The government should take note.
Experts are of the view that Moody’s downgrade is unlikely to take the Nifty to a new low because the market seems to be climbing a wall of worries on the back of strong liquidity
India's progress has been hamstrung by tardy implementation of reforms, it noted.
Most of these companies get benefit from government support or operate in sectors less affected by the coronavirus outbreak, the Moody's Investors Service said in a report.
Moody's observed that the financial assistance offered to NBFCs under the economic stimulus package is far lesser than the immediate liquidity needed by companies in that sector.
The weakening of NBFCs' solvency will increase risks for banks that have large direct exposures to the sector, global rating agency Moody's said in a report.