PSBs' asset quality challenges to pull down FY23 banking outlook

Global rating agency Standard and Poor’s on Thursday said polarisation in the performance of Indian banks may persist in FY23 as many large public-sector banks are still saddled with weak assets, high credit costs, and poor earnings.

State Bank of India and leading private-sector banks have largely addressed their asset quality challenges, and their profitability is improving more sharply than the system's, S&P added.

Similarly, finance companies (fincos) in India are expected to show a mixed performance. The asset quality of these fincos is often weaker than that of major private-sector banks in the country.

The economic recovery in India