India, April 22 -- Fitch Ratings on Tuesday said significant ownership by foreign shareholders can be positive for Indian financial institutions' credit profiles through long-term capital, as well as lifting of governance standards in some cases.

However, foreign interest is not in itself a reliable signal of stronger credit fundamentals.

Transactions that strengthen internal controls, risk management and leadership accountability can be more credit-relevant than those purely for financial gains, it noted.

Fitch said recent greater interest from foreign investors indicates their rising confidence in India's long-term growth prospects, the financial sector's regulations and oversight, and improved risk governance.

Fitch believes invest...