NEW DELHI: A day after ratings agency Moody's lowered the outlook on the Indian banking sector, rival Standard & Poor's on Thursday moved it a notch higher in the Banking Industry Country Risk Assessment (BICRA), a tool to evaluate and compare global systems. But the improvement had nothing to do with performance parameters but was the result of a change in methodology. "In our view, banking regulations in India are in line with international standards and the regulator has a moderately successful track record. The Reserve Bank of India (RBI) continually monitors the macroeconomic environment. The RBI also has introduced countercyclical measures and differentiated risk weights to moderate banks' risk appetite. We consider governance standards as generally adequate, though disclosures are somewhat inadequate," S&P said in a statement while upgrading the risk profile to Group 5. The industry risk score of 5 reflects high-risk assessments on the institutional framework and competitive dynamics and low risk regarding system-wide funding, the statement added. At the present level, the Indian banking sector is at par with markets such as China, Portugal, Thailand and Turkey.
TOI
