Singapore, June 22 (ANI): Fitch Ratings has revised the outlook to negative from stable on long-term issuer default ratings (IDRs) of nine India-based banks while affirming their IDRs, support ratings and support rating floors.
They are Export-Import Bank of India (EXIM), State Bank of India, Bank of Baroda, Bank of Baroda (New Zealand) Ltd, Bank of India, Canara Bank, Punjab National Bank, ICICI Bank and Axis Bank.
The rating actions follow Fitch's revision of the outlook on the BBB-minus rating on India to negative from stable on June 18 due to the impact of escalating coronavirus pandemic on the country's economy.
Fitch said the IDRs for all the nine banks are support-driven and anchored to their respective special refinance facilities.
They are based on the assessment of high to moderate probability of extraordinary state support for these banks, which takes into account assessment of the sovereign's ability and propensity to provide extraordinary support.
The negative outlook on India's sovereign rating reflects an increasing strain on the state's ability to provide extraordinary support due to the sovereign's limited fiscal space and the significant deterioration in fiscal metrics due to challenges from the COVID-19 pandemic.
Fitch said the rating action does not affect the banks' viability ratings. EXIM does not have a viability rating as its role as a policy bank makes an assessment of its standalone credit profile less meaningful. (ANI)