Executive Summary
The Indian banking sector's credit quality, pre-provisioning profitability, and capitalization fundamentals are stronger than those of its Chinese counterpart, despite the credit ratings on the leading Chinese banks being higher than those on the Indian banks. The ratings differential reflects the readiness of the Chinese government to provide substantial resources through capital injections, and the sale of the banks' nonperforming assets to government-owned asset-management companies—factors that boost the Chinese banks' standing but do not necessarily add to their fundamental strength.
