S&P Rating Upgrade: Rating of 10 big institutions, including SBI, HDFC, and Tata Capital, increased

S&P Rating Upgrade: Global rating agency S&P has upgraded the rating of 10 big financial institutions including SBI, HDFC Bank, Tata Capital, ICICI, Axis, Kotak Mahindra, Union Bank, Indian Bank, Bajaj Finance and L&T Finance after increasing India's sovereign credit rating. The agency said that India's banks will benefit from strong economic growth, improved asset quality, profitability and IBC reforms, which will maintain stability in the next 12-24 months and reduce credit risk in the banking system.

S&P Rating Upgrade: Global rating agency S&P Global Ratings on Friday increased the long-term credit rating of India's top 10 financial institutions. These include seven major banks of the country including State Bank of India (SBI), HDFC Bank, Tata Capital and three big financial companies. This step has been taken a day after improving India's sovereign credit rating, which has further strengthened investor confidence.

Main reason for rating improvement

S&P said in its statement that India's financial institutions will continue to benefit from the country's strong economic growth, focus on domestic market and structural reforms. The agency cited India's stable banking system, better asset quality and strong profitability as the main reasons behind this improvement.

Which banks and companies' ratings increased

The 10 financial institutions whose ratings have been upgraded by S&P include seven banks and three financial institutions.

Seven banks

State Bank of India (SBI)

ICICI Bank

HDFC Bank

Axis Bank Limited

Kotak Mahindra Bank

Union Bank of India

Indian Bank

Three financial institutions

Bajaj Finance

Tata Capital

L&T Finance

Historic improvement in India's sovereign credit rating

This move by S&P comes soon after India's sovereign credit rating was upgraded after 18 years. On Thursday, the agency had raised India's rating to 'BBB'. This indicates that India's economic fundamentals and growth rate will remain strong in the coming years.

What is S&P's forecast

S&P estimates that Indian banks will maintain asset quality, profitability and capitalization in the next 12 to 24 months, even though economic pressure remains in some sectors. According to the agency, credit risk in India's banking system has reduced, which can accelerate loan disbursement and investment activities.

Positive impact of IBC law

S&P praised the Insolvency and Bankruptcy Code (IBC) and said that it has strengthened the payment culture and rule of law in India. As a result, the process of loan recovery has become faster and transparent, which has improved the stability of financial institutions.

Role and influence of the government

The agency also clarified that the rating of many financial institutions is limited to the credit rating of the Government of India, as the government has a direct and indirect impact on the banking system. This ensures that trust and stability remains in the banking sector.

Message for investors

This improvement in rating is a signal to international investors that India's banking sector is becoming more secure and profitable. This will not only attract foreign capital but will also increase the confidence of domestic investors. This decision of S&P is a proof of India's economic and financial strength. Improvement in sovereign credit rating after 18 years and the rating upgrade of top financial institutions immediately after that, indicates that India's financial system and banking sector will become more strong and attractive for investors in the coming years.

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