Standard & Poor's (S&P) Ratings Services revised upwards India's banking industry country risk assessment (BICRA) to group 5 from group 6, making it part of a group of countries including China, Portugal, Thailand and Turkey, it said.

A BICRA is scored on a scale from 1 to 10, ranging from the lowest risk banking systems (group 1) to the highest-risk (group 10).

The move is in contrast to that of its rival Moody's Investor Service which on Wednesday downgraded outlook for India's banking system to 'negative' from 'stable', as it warned of slowing growth at home and overseas hitting asset quality, capitalisation and profitability.

S&P Ratings, part of The McGraw-Hill Companies, reviewed its BICRA on Indian banks after publishing its ratings criteria, methodology and assumptions for it, which is designed to provide greater transparency and global comparability of bank ratings, it said in a statement.

"India's banking system has a high level of stable, core customer deposits, which limit dependence on external borrowings... The government is likely to provide timely financial support to the banking system, if needed," it said.

S&P Ratings has also assigned an industry risk score of 5 for India that signifies 'high risk' in 'economic resilience', 'low risk' in 'economic imbalances' and 'high risk' in 'credit risk in the economy', the rating agency said in a statement.

India's economic resilience is constrained by its weak economic structure with very low per capita GDP estimated at $1,418 in 2011, though that is partially offset by a well-diversified economy and sustained high economic growth prospects, S&P added.

"In our view, banking regulations in India are in line with international standards and the regulator has a moderately successful track record," it said.

At 10:27 am, the Bombay Stock Exchange's sector index Bankex was 2.1 per cent at 10,789.45 points and the 30-issue benchmark index was down 0.9 per cent.

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