In a statement, Moody's said, " The rating outlook is negative."
The key drivers for rating downgrade in IndusInd, as per Moody's, is economic disruptions caused by the coronavirus and the downgrade of the sovereign rating.
Moody's has downgraded the Indian government's issuer rating to Baa3 from Baa2 with a negative outlook.
So far, the rating agency has taken action in 11 lenders like Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, EXIM Bank, HDFC Bank, Indian Overseas Bank, PNB, SBI and Union Bank of India apart from IndusInd.
Moody's in the statement said, "IndusInd's funding is weak compared with other rated Indian banks, as reflected by its high deposit concentration and low share of retail deposits. This weaker funding makes the bank more susceptible to dislocations in financial markets, including in terms of wholesale funding sources."
On Sensex, IndusInd Bank ended flat at Rs431.35 per piece down 0.80%. The stock has touched an intraday high and low of Rs452 per piece and Rs426.10 per piece respectively.