Srikanth Vadlamani of Moody's Investors Service says broader credit growth will be lower in Q4 than before demonetisation levels.
The estimated actual impaired ration of banks now is 1-1.5 percent than reported numbers, believes Srikanth Vadlamani. Moody‘s had put this ration at 2.5-3 percent earlier.
"The Budget is credit negative for public sector banks because the government has stuck to its capital infusion road map announced in 2015, Budgeting Rs 25,000 crore in injection," says Srikanth Vadlamani, Moody's Vice-President and Senior Credit Officer.
Moody‘s expects some weak exposure to remain unrecognized even post the asset quality restructuring undertaken by the Reserve Bank of India and some large corporate exposures with weak financial metrics to continue to remain as standard assets on the banks' books.
"The ongoing tightening of non-performing loans (NPL) recognition norms mean that the minimum standards for NBFCs will match those of banks, a credit positive," Moody's Vice President and Senior Credit Officer Srikanth Vadlamani said.
In the recent times the PSU banks have not been able to access capital market which is a "key negative driver of their overall credit profile", Moody's Investors Service said.