New Delhi: Coronavirus (Covid-19): Moody’s Investors Service, a global credit rating agency, said on Wednesday, a few days after India’s sovereign ratings were downgraded, that the quality of retail and SME loans is also up. Will decline. Enumerating the major reasons behind India’s sovereign downgrade, Moody’s said that the financial system is increasing risk. Some sectors were stressed before the outbreak of the coronavirus. Both assets and liabilities for NBFIs will be stressed in the near future, which is about 10-15 percent of bank loans.
Now the quality of retail and SME loans will also deteriorate: Moody’s
the private power sector has eight-10 percent bank loans. Most of the lending banks in the auto value chain are from the private sector. Moody’s has said that now the quality of retail and SME loans will also deteriorate, which is 44 percent of the total loan. Moody’s Investors Service has said that policy regulatory bodies are facing increasing challenges due to low growth rate, weak fiscal conditions, and rising financial sector tensions. It has said that there is an increasing risk of the financial system. “Our ratings indicate downward on ratings and individual ratings of most rated banks.
Moody’s said that the scenario of non-financing companies rated more than 80 percent is negative or under review for a downgrade. Two-thirds of rated infrastructure is a negative aspect of the portfolio. The agency has said that India’s debt burden remains higher than its counterparts and the deficit has come below the FRBM target. It said that lethargy in India was evident even before the outbreak of coronavirus, as its factors were developing before the epidemic and the risk had been increasing since November 2019.