Mumbai, Nov 9: Reacting to Moody's downgrade of the Indian banking sector, country's largest lender State Bank of India (SBI) today said it was uncalled for as domestic banks are well-regulated.
The ratings agency downgraded Indian banking system from “stable” to “negative” on concerns over asset quality, capitalization and profitability, amid global slowdown.
“We believe Indian banks are very well-regulated, well-audited and there is a greater scrutiny,” SBI Chairman Pratip Chaudhuri said, adding that other factors such as lesser degree of leveraging, abhorring exotic assets and having no hidden surprises underneath also help domestic banks.
The rating agencies are “stung” by the experience elsewhere and “like to believe the worst for banks”, he said.
“Banks across the world are being increasingly suspect about their assets and what is underneath...that is why this response (of the downgrade by Moody's).”
The downgrade will not affect its ability to raise funds abroad, SBI's managing director Hemant Contractor told reporters here.
Bombay Stock Exchange's Bankex closed 47 points down at 11,317 points after touching a low of 10,992 points, after the news of the downgrade came in.
