State Bank of India's standalone credit rating was revised upward to 'BBB' from 'BBB-', for the first time since 2012 when it was downgraded.

The rating upgrade reflects the bank's "lower credit risks and improving earnings", S&P Global Credit Ratings said in a noted dated June 26.

Indian banks will benefit from the country's "strong economic growth and better consumer and business confidence", S&P Global said in a note.

The credit rating agency also upgraded HDFC Bank's standalone credit rating to 'A-' from 'BBB+' on account of the bank's ability to "maintain its strong franchise and superior profitability over the next two years". These strengths will be further consolidated with the bank's merger with its parent - HDFC Ltd., the note said.

ICICI Bank's standalone credit rating was also revised to 'BBB' from 'BBB-'. The agency expects the bank to maintain its "strong market position in the Indian banking sector".

The bank's asset quality is likely to remain "better than the Indian sector average and comparable to that of similar-rated international peers", it said.

ICICI is also expected to maintain "good capitalisation over the next 12 - 18 months, supported by healthy earnings", according to it.

The agency does not rate Indian banks above the sovereign because of the direct and indirect influence that the sovereign has on banks operating in the country.