"Moody's had communicated this outlook upgradation to the finance intermediaries early last week," IDBI executive director, TM Nagarajan told The Financial Express. "The positive outlook is a reflection of the improved economic and business scenario," he added. With this rating revision, the four FIs --IFCI, Industrial Development Bank of India (IDBI), ICICI Ltd. and Power Finance Corporation (PFC)-- now have a rating and outlook at par with the country's sovereign rating of `Ba2' with a `positive' outlook. However, the `Ba3' rating (with positive outlook) assigned to the eight banks, viz.

Bank of India, Canara Bank, Central Bank of India, Oriental Bank of Commerce, Punjab National Bank, State Bank of India, Union Bank of India and Bank of Baroda is one notch lower than the sovereign rating.The bank outlook upgrade is supported by the central government ownership and support and also reflects the continuous monitoring and supervision carried out by the Reserve Bank of India (RBI).

In addition, the outlook revision also considers the importance of these financial intermediaries in the country.

"The outlook revision could be a precursor to the possible ratings upgrade in the near future for these banks and FIs," banking sector analysts said. The rating outlook upgrades of the eight commercial banks also reflects the long term deposit rating being linked to the country cieling.