Majority govt stake sale in public sector banks may be credit negative for PSBs: Icra© financialexpress.com

Majority govt stake sale in public sector banks may be credit negative for PSBs: Icra

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The proposed divestment of the Centre's majority stake in certain PSBs will be credit negative for these lenders, ratings agency ICRA said on Thursday.

Citing recent reports which suggest a possible divestment of majority stake in few PSBs that were left out of the PSBs consolidation exercise announced last year, ICRA said that most of these PSBs have weak credit profile and their credit ratings are primarily supported by their sovereign ownership and a stable deposit base, which in turn is supported by their ownership.

"The existing ratings are also notched up from the standalone credit profile and going forward, the ratings on these PSBs would reflect their standalone credit profile depending on their new ownership of these banks," it said in a statement.