Shares of India’s largest lender by assets, the State Bank of India (SBI) plunged to a two-year low on Tuesday after ratings agency Moody’s downgraded the state-controlled commercial bank. SBI shares slid nearly six percent on the Bombay Stock Exchange to a day’s low of Rs1,751 — its lowest level since September 2009 — dragging down other banking stocks and the broader market. Moody’s vice-president and senior credit officer Beatrice Woo said they had a “negative view on SBI’s credit worthiness” because of its “deteriorating asset quality” and concerns over rising levels of non-performing assets. Non-performing assets are loans made by a bank on which repayments or interest has not been paid for some time — usually three months or more — and run the risk of never being repaid, potentially hitting profits. Moody’s said in an emailed statement from Singapore that the increase in non-performing assets was due to continued high interest rates and a slowdown in the Indian economy. SBI’s financial strength is now rated D+, down from an earlier C-. The rating is well down from Moody’s investment grade of A, denoting lowest risk. Eis Moody’s lowest category, denoting highest financial risk. Bank officials were not immediately available for comment when contacted by AFP. The downgrade reflects the strain on Indian banks’ balance sheets, as the country’s economy slows and rising interest rates make it tougher for customers and businesses to repay loans. India’s central bank has raised interest rates 12 times since March 2010 as it seeks to tame near double-digit inflation.