New Delhi, Nov 20 (KNN) Under Basel 3, the Reserve Bank of India's decision to allow lenders more time to adhere to additional capital buffer norms, is credit negative for the country's state-run banks, Moody's Investors Service said in a release.

In order to help banks to lend more, the RBI after a nine-hour board meeting announced that it has extended the timeline for Indian banks to set aside an additional 0.625 percent as capital conservation buffer by one year to March 31, 2020.

"The decision to extend the timeline for the full implementation of Basel 3 guidelines by a year is a credit negative for Indian public sector banks," said Srikanth Vadlamani, vice president, financial institutions group at Moody's Investors Service.

Vadlamani added that the common equity Tier 1 ratio or core capital "over the next 12 months would be lower than what we currently expect" for some banks.

"The track record of such dispensations on asset classification, when seen over the last few years in India, has shown that they have largely been unsuccessful in addressing the underlying stress," he said.