India's weak banking system to strengthen over 2 years: S&P

India's weak banking system will strengthen over couple of years as stressed loans are cleared and capital base expanded by government's fund infusion in state-owned lenders, S&P Global Ratings said today.

In its report titled 'The Worst Is Almost Over For India's Banks', S&P said the ratings on the banks are "more likely to be raised than lowered" in the next 2 years. But, weak risk management and internal-control practices limit the potential for considerable upside, it said.

"We estimate that Indian banks' recognised non-performing loans (NPLs) now cover a substantial part of weak loans in the system, which comprise about
The government is working on a four-pronged strategy to improve the health of the banking sector: recognition, recapitalisation, resolution, and reform. The
first three of the "4Rs" has progressed significantly, but in our view, India