rating at Baa3, while upgrading its baseline credit assessment and additional tier 1 securities program rating to Ba1 and B1 from Ba2 and B2, respectively.The rating upgrades "reflect an improvement in India's macro profile to Moderate+ from Moderate, improving credit metrics of the four banks and Moody's continued assumption of very high level of government support to the banks in times of need," the ratings agency added.
Various liquidity-supporting measures by the government and the Reserve Bank of India during the Covid-19 pandemic have also helped lenders secure their balance sheets from future shocks. Moody's said that credit conditions in India have gradually improved, with a significant reduction in the banks' stock of legacy problem loans over the past three years.
Further, retail loans have performed well despite pandemic-induced economic stresses, indicating better underwriting quality and relatively low household leverage in India compared to those in many other Asian countries, the rating agency added.