Indian Banks To Maintain Stable Asset Quality Despite Global Uncertainty: Moodys

Mumbai: Global score company Moody’s mentioned that Indian banks are well-positioned to deal with strong asset high quality over the following 12 months, whilst world business tensions create uncertainty for the arena economic system. 

According to Moody’s, home financial stipulations stay supportive of enlargement, serving to Indian banks set up their mortgage books successfully. The company expects the non-performing mortgage (NPL) ratio to stick between 2 to 3 in line with cent over the following 12 months.

As of December 2024, the NPL ratio stood at 2.5 in line with cent — reflecting robust asset high quality within the sector. This sure outlook comes at a time when investor passion in banking shares stays prime. On Tuesday, the Nifty Bank index hit a report prime of 56,161.40, pushed through optimism forward of the Reserve Bank of India’s Monetary Policy Committee (MPC) assembly this week.

Investors are hopeful of a possible rate of interest lower, which might additional strengthen credit score enlargement and straightforwardness borrowing prices. The RBI, beneath Governor Sanjay Malhotra, has already lower the repo charge two times this 12 months — from 6.5 in line with cent to 6 in line with cent — and analysts be expecting any other 25 foundation level aid within the upcoming coverage.

Although the Nifty Bank index pulled again somewhat in mid-morning business, slipping 0.1 in line with cent because of profit-booking in heavyweight shares like ICICI Bank, Axis Bank, and Kotak Mahindra Bank, smaller banks akin to AU Small Finance Bank, Federal Bank, PNB, HDFC Bank, and IndusInd Bank noticed modest good points of 0.4 to 1.2 in line with cent.

Despite the temporary dip, Nifty Bank stays one of the vital top-performing indices in 2025, having risen 10 in line with cent year-to-date and 15 in line with cent from its 52-week low. Over the closing 12 months, it has delivered a go back of 9.7 in line with cent — reflecting robust investor self belief in India’s banking sector. Adding to the sure sentiment, India’s GDP grew through 7.4 in line with cent within the March quarter (This autumn) of FY25, with an total annual enlargement charge of 6.5 in line with cent.