While Indian banks' improved financial metrics do not fully reflect the impact of the Covid-19 pandemic, the under–capitalised PSBs are likely to remain risk averse and lose market share.
The government’s partial credit guarantee on asset purchases does not address investors’ long-term concerns about the sector’s exposure to stressed real estate: Fitch Ratings.
Assumptions that corporate governance at private banks is generally stronger than at state-owned banks due to better-qualified board members and more professional management, could come under question if the investigations expose misconduct at ICICI Bank.
A recent rating agency report read with Reserve Bank of India
deputy governor Viral Acharya’s latest speech paints a gloomy picture for
Indian state-owned banks. There are few options but to merge some good ones
with the bad.
