India's real GDP rose by 7.8 per cent year on year in the June quarter, up from 6.1 per cent in the March quarter this year.
Global uncertainties will have a lesser impact on the Indian economy, but slower global growth and external demand will weigh on economic activity and could fuel further inflation, the rating agency said in a report.
The country’s banking sector's weak loans will fall to 3-3.5 per cent of gross advances by March 31, 2025, on the back of structural improvement, including healthy corporate balance sheets, tighter underwriting standards and improved risk-management practices, the report, titled 'Global Banks Country-By-Country Outlook 2024', said.
Interest rates in India are unlikely to rise materially, and this should limit the risk for the banking industry, it noted.
The State Bank of India and the leading private-sector banks have largely addressed their asset-quality challenges, the report said.
Many public-sector banks, whose performance lags that of the industry, however, still carry relatively high volumes of weak assets, leading to higher credit losses and hit profitability, the report added.
Fibre2Fashion News Desk (DS)