Moody’s Outlook on Indian Banks: NPLs Stay at 2-3%
Why in the news
Moody’s gave a steady June 2025 outlook for Indian banks, helped by a supportive home economy.
Key facts
- Asset quality will keep diverging across loan types and segments.
- Low dependence on goods trade limits global exposure.
- Growth drivers: capital expenditure, middle-class tax cuts, monetary easing.
| Segment | Outlook |
|---|---|
| Wholesale | Healthy: strong corporate profits, low leverage |
| Secured retail | Low fresh NPL formation |
| Unsecured retail | Higher NPL formation |
Bank groups
- Small private banks are weaker than large private and public sector banks because of unsecured exposure.
Exam angle
- Agency: Moody’s; NPL range: 2-3%.