New Delhi, May 14 (IANS): Credit ratings agency Moody's Monday downgraded India's three top private sector lenders -- ICICI Bank, HDFC Bank and Axis Bank -- on growing concerns over the country's sovereign debt ratings.

Moody's lowered the standalone ratings of these top three private sector lenders to the sovereign ratings level of D+ from earlier C-. The lenders' hybrid rating is also lowered a notch to Baa2 from Baa3.

"The downward revision to the three Indian banks' standalone ratings reflects Moody's assessment that their creditworthiness are highly correlated with that of the Indian government's credit strength," Moody's said in a report.

For all three banks, the key drivers for the rating action were: relatively low level of cross-border diversification of their operations; high level of balance-sheet exposure to domestic sovereign debt, compared with their capital bases; franchise resilience and intrinsic strength within the operating environment; and absence of ongoing support from foreign ownership.

"Our review indicated that there are little, if any, reasons to believe that these banks would be insulated from a government debt crisis," Moody's said.

Moody's pointed out that all these three lenders have significant direct exposure to the Indian government securities: equivalent to 239 percent of tier-1 capital at Axis Bank, 226 percent of tier-1 capital of HDFC Bank, and 143 percent of tier-1 capital at ICICI Bank.

"In addition, these three banks are primarily domestic institutions with similar macroeconomic exposures as the sovereign government," it said.

With assets of Rs.4,736.47 billion as on March 31, 2012, ICICI Bank is India's largest private sector lender followed by HDFC Bank with assets of Rs.3,379.10 billion and Axis Bank Rs.2,856.28 billion.