Rating agency Standard & Poor’s (S&P) refusal to upgrade India’s sovereign ratings will have no major impact on the country’s creditworthiness, state-run State Bank of India (SBI) said on Friday.
Earlier in the day, the American rating maintained status quo on India’s soveriegn rating at BBB- with a stable outlook, a development that comes a week after Moody’s did an upgrade.
“That S&P did not upgrade India’s sovereign rating will have no impact on the country’s economic prospects. In fact, just last week Moody’s has upgraded the sovereign rating,” state-run SBI’s Chairman Rajnish Kumar told reporters here on the sidelines of the launch of SBI’s integrated lifestyle and banking digital platform YONO.
Signalling a boost to investor sentiments last week, US agency Moody’s Investor Service upgraded India’s sovereign rating to Baa2 from its lowest investment grade of Baa3 after 14 years, while changing the outlook to stable from positive, and said its upgrade was based on the Indian government’s “wide-ranging programme of economic and institutional reforms”.
“If you see the overall business environment in India and the reforms undertaken in recent years, a rating upgrade was long overdue and Moody’s have done so,” said the chairman of the largest Indian lender.
“If S&P have not done so, it is their prerogative, but it will have no impact whatsoever,” he added.
While granting a stable outlook for India, S&P said that there could be downward pressure on the ratings if GDP growth disappoints, if net general government deficits rose significantly, or if the political will to maintain India’s reform agenda significantly lost momentum.