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Divestment, banking reforms to be factored in review — Moody's

MUMBAI JUNE 26. Steps taken by the Indian Government to strengthen the banking sector, progress on the disinvestment front and easing of tensions along the Indo-Pak border will be factored while reviewing the country's domestic currency rating (now negative), according to Moody's rating services.

"The ratings are not scheduled for review in the near future and Indian foreign currency rating carry `stable' outlook while domestic currency (rupee) has negative outlook due to high level of fiscal deficit,'' Mooody's Investors Services chief executive, John Rutherfurd, told reporters here today.

As and when ratings are reviewed, the agency would look at various developments, he said.

He observed that the disinvestment programme for reducing Government stake in public sector enterprises has gathered pace and the Centre has promulgated an ordinance on securitisation helping banking sector entities.

"The Government raises funds from the market to meet expenditure and any change in terms and conditions unfavourable to investors may be considered as a default,'' the CEO said.

Open to hiking stake in ICRA

Moody's Investor Services Corp is open to raising its stake in ICRA even as the U.S.-based global credit rating agency will outsource some back office operations to its Indian affiliate.

"The Indian agency will not be required to increase the capital base for carrying out back-office operations. We will employ 30-35 people for this new activity,'' ICRA Managing Director, P. K. Choudhary, said. — PTI

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