There is good news for Public Sector Banks. If you have an account with a bank like State Bank of India or Punjab National Bank, this is important for you to know. Recently there have been some changes in the ratings of these banks. In fact the rating agency Moody’s has given an information on the ratings of banks. Not only State Bank or Punjab National Bank, but also Canara Bank and Bank of Baroda have been rated higher.
That means these banks have performed well in the past few years. Moody’s Investors Service issued a statement in this regard. It said that these public sector banks are quite stable in the long run. State Bank has given long term deposit rating of BAA3. Besides, the long-term deposit ratings of the remaining three public sector banks improved from earlier.
Long-term deposit ratings of Bank of Baroda, Canara Bank and PNB have gone from BAA1 to BAA3. This rating is actually a reflection of the Indian economy. At the same time, the rating also reflects the government’s support for banks in difficult times. Banks have done well in both sectors. Moody’s Bank Deposit Rating indicates a bank’s ability to meet domestic and foreign currency deposit obligations on time.
The credit situation in India has gradually improved, the agency said. Retail credit has done well and the financial condition of companies is also improving. However, medium and retail businesses still continue to threaten the bank’s asset quality.Moody’s said India’s economic growth will be affected by rising rates and a global slowdown.
But India’s economy will fare better than other emerging markets. The operating environment of banks will help in this regard. The rating agency expects the bank’s asset quality to remain good for the next one and a half years. This will help with favorable operating environment and improving the balance sheet of the company.