And now, the SBI shock

State Bank of India’s chairman Pratip Chaudhuri must be cursing his luck. The higher provisions SBI made immediately after his predecessor OP Bhatt left would have helped make the balance sheet look a lot better when Chaudhuri’s term came to an end, but Moody’s downgrade has put paid to that. Indeed, Moody’s thinks it will get worse, which is why its hybrid debt rating outlook is negative. While downgrading SBI from C- to D+, Moody’s has said “SBI’s ability to absorb losses in a stress situation is below that of the C-rated Indian banks”.

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