Largest bank in India, with good diversity across the country. Above-average funding and liquidity. Stressed asset quality. Modest capitalization and earnings. The stable outlook reflects our expectation that State Bank of India (SBI) will remain the undisputed market leader in India's banking sector and receive growth capital from the government's proposed recapitalization of public sector banks. High customer confidence is likely to keep the bank's funding and liquidity strong. Under our current assessment of SBI's risk profile, the bank can absorb an incremental deterioration in asset quality stemming from ongoing stress in corporate sector lending. That's because SBI's asset quality is better than public sector peers'. We are unlikely to raise the rating on SBI over the next 12-24 months
