On June 18, 2020, Fitch changed outlook on India to Negative from Stable due to the impact of the escalating coronavirus pandemic on India's economy.
Global rating agency Fitch
on Monday revised the outlook from “stable” to “negative” on the Long-Term Issuer Default Ratings (IDR) of nine Indian banks following revision in the outlook on India rating ('BBB-'). It affirmed rating on IDRs, Support Ratings (SR) and Support Rating Floors (SRF).
The rating action covers nine banks - State Bank of India
(SBI), Bank of Baroda (BOB), BOB’s subsidiary in New Zealand, Bank of India (BOI), Canara Bank
(Canara), Punjab National Bank (PNB), ICICI Bank (ICICI), Axis Bank
(Axis) and Export-Import Bank of India (EXIM).
The IDRs for Indian banks are support-driven and anchored to their respective SRFs. They are based on assessment of high to moderate probability of extraordinary state support for these banks. This takes into account our assessment of the sovereign's ability and propensity to provide extraordinary support, Fitch
said in a statement.
The rating action does not affect the banks' Viability Ratings (VRs). EXIM does not have a VR as its role as a policy bank makes an assessment of its standalone credit profile less meaningful.
On June 18, 2020, Fitch
changed outlook on India to Negative from Stable due to the impact of the escalating coronavirus pandemic on India's economy.
The Negative Outlook on India's reflects an increasing strain on the state's ability to provide extraordinary support. The sovereign has limited fiscal space and there has been significant deterioration in fiscal metrics due to challenges from the Covid-19 pandemic, rating agency added.