International ratings agency Moody's, which last week downgraded India's banking sector to 'negative' from 'stable,' claimed that scheduled meetings on Monday with the finance ministry and the Reserve Bank of India were routine.
There has been speculation that the meetings between the agency's executives and government and central bank officials indicate that India's credit worthiness is at risk.
A Moody's official claimed that the meetings had been lined up earlier and were not linked to the downgrade of India's banking sector outlook. Ratings agency executives routinely meet government officials and banking and other industry leaders as part of the evaluation process.
The downgrade by the international agency has come in for criticism from government officials and even banking industry leaders. Moody's, which currently assigns Baa3 rating for India – the lowest investment grade rating, with a stable outlook – downgraded the entire banking sector, making overseas borrowings costlier for domestic institutions.
Interestingly, its rival, Standard & Poor's (S&P), upgraded the Indian banking sector just a day after the Moody's downgrade, noting that its domestic regulations were in line with international standards.
''In our view, banking regulations in India are in line with international standards and RBI, the regulator, has a moderately successful track record,'' S&P declared while upgrading the risk profile of the banking sector a notch higher to 'Group 5'.