Indian Banks Most At Risk Among South, South-East Asian Peers: Poll

Indian banks are most at risk in South and South-East (S-E) Asia, and being under-capitalised, they lack sufficient loan provisioning, says a Moody's poll.

It said the government has appeared reluctant to increase capital injection into PSU banks despite the limited ability of these lenders to access equity markets for the much-needed capital.

Earlier this month, Moody's polled 210 market participants on some of the industry's most pressing credit issues.

"Indian banks are most at risk in South and South-East Asia. We agree that many banks in India remain undercapitalised and continue to lack sufficient loan-loss provisions.

Moreover, the government has appeared reluctant to increase capital injections into the PSU banks, despite the limited ability of these to access equity markets for the much-needed capital," the Moody's poll said.

Earlier this week, Moody's had revised the outlook on several Indian banks to stable or negative from positive, signaling a lowering in potential government support, and/or weaknesses in solvency metrics.