Rating agencies Moody’s Investors Service and ICRA on Thursday said they expect deterioration in banks’ asset quality because of the disruption in economic activity from the coronavirus outbreak. While Moody’s changed the outlook for the banking system to negative from stable, ICRA said it expects banks and non-banking financial companies (NBFCs) to see a spike in non-performing assets (NPAs).
Moody’s said banks’ asset quality will deteriorate across the corporate, small and medium enterprises and retail segments, leading to pressure on profitability and capital.
“We have changed the outlook for the Indian banking system to negative from stable. Disruptions to economic