Goldman Sachs upgrades Indian banks to 'neutral'

Goldman Sachs has upgraded Indian banks to "neutral" from "cautious" citing favourable risk/reward in public sector bank stock prices, as the gap between state-owned and private banks widens to a 10-year high.

The investment bank has upgraded Punjab National Bank to "buy" from "neutral", and Bank of India and Union Bank of India to "neutral" from "sell", citing attractive valuations.

The investment bank, however, still prefers private banks over their public sector counterparts, as asset quality concerns linger.