Easing of Basel III norms credit negative for PSBs, says Moody's

According to Moody's, the track record of such dispensations on asset classification, when seen over the last few years in India, has been unsuccessful in addressing the underlying stress

Global rating agency Moody's on Tuesday said Reserve Bank of India's decision to extend the deadline for Capital Conservation Buffers by one year to March 2020 is credit negative for the public sector banks (PSBs).

It expressed reservations on any benefit coming out from the proposed debt restructuring scheme for stressed MSME loans.

"It was the expectation that all public sector banks would have a core equity tier 1 (CET1) ratio of at least 8% by the end of March 2019. This was based on the government's commitment to capitalize these banks to a level sufficient to meet the minimum