New Delhi, June 10 -- Asset quality at India's leading banks is expected to improve further in the current fiscal year despite global and domestic economic headwinds, according to an analysis by S&P Global Market Intelligence.

The report, titled "Lower bad loans at Indian banks offer respite amid economic uncertainty", said that major lenders are likely to witness a further decline in bad-loan ratios even as they navigate challenges arising from the ongoing conflict in the Middle East and the prospect of weak rainfall.

Data compiled by S&P Global Market Intelligence showed that nonperforming loans at India's largest public and private sector banks have continued to trend lower, reflecting stronger balance sheets and improved recovery me...