Mumbai: The coronavirus-related worries are likely to aggravate difficulties for Indian banks, ratings agency Fitch said on Thursday, revising down the operating environment score for the critical sector by a notch.
The score has been revised to "BB" from "BB+" earlier, the agency said, pointing out that COVID-19 outbreak ups the worries for the sector, which is already reeling under weak business and consumer confidence.
The outlook on the score is "negative", given the uncertainty surrounding the severity and duration of the pandemic, and the associated effects on India's banks of restrictions on economic activity, it said. The operating environment score was last revised down in 2019 due to the weakness in business and consumer confidence, it said.
The lockdown will impact industrial production and domestic demand, it said, adding this will exacerbate the economic slowdown of the past few quarters that was partly caused by weaker credit availability from non-bank lenders from September 2018. It however said the closed nature will help restrict the impact on economic growth in India as compared with Asian peers.