But credit quality woes are unlikely to fade away soon. Hong Kong respondents were slightly more optimistic than Singapore peers but almost none anticipate a sharp improvement, according to the study. "In our opinion, Indian banks are unlikely to reduce their problem loans ratios in FY2016, but the new NPL (non-performing loan) formation rate will probably decline," Moody’s said.
The majority of respondents expect no significant rise in the capital levels of Indian state-owned lenders in the next two years. They are also not optimistic about progress in improving creditor rights of banks over the next three years.
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