Indian banks to benefit from strong domestic economic growth: Moody's

Ukraine conflict will not derail the country's recovery

Global rating agency Moody’s said on Wednesday that India’s economy is back on track after the pandemic and the military conflict will not derail the country’s recovery, creating favorable operating conditions for the country’s banks.

The loan performance and profitability of banks are improving, albeit from a low base. Capital and liquidity levels are stable, Moody’s said.

The global economic fallout from the Russia-Ukraine military conflict will push up inflation and interest rates in India, and create supply constraints.

Indian banks, however, are in better shape now than before the pandemic. Loan quality had deteriorated over the prior decade as a large proportion