mumbai june 27 reuters  sp global ratings on tuesday raised its assessment of indias banking sector citing a strong recovery underway in the indian financial sector indias banking industry country risk assessment an indicator of an economys financial sector has been raised one notch to 5 from 6 earlier the rating agency said in a note risk scores range from 1 to 10 with 10 signalling the highest risk we believe asset quality will continue to strengthen benefiting from structural improvements in the operating environment and indias good economic prospects sp said the rating agency also upgraded four financial institutions and raised its assessment of the credit profiles of four banks bajaj finance bjfnns  hero fincorp shriram finance shmfns  and union bank of india unbkns were upgraded by one notch each the standalone credit profiles of hdfc bank hdbkns  icici bank icbkns  and state bank of india sbins were also raised by one notch we expect indias financial institutions especially the publicsector banks to sustain their improvement in capital positions sp said bank earnings will also likely be comparable to other emerging market peers although margins could decline as the banks reprice deposits the rating agency sees net credit costs an indicator of cost attached to bad loans to remain at about 12 over the next few years with new bad loans seen at cyclical lows over the next two financial years