The growth, profitability, and asset quality of Indian banks are likely to remain subdued in the next 12 months, despite a likely uptick in economic growth, according to Standard & Poor's.

''We expect weakness in banks' asset quality to persist for the next 12 months because the economic recovery is likely to be tepid, and it will take time for the domestic industry to recover and corporate balance sheet leverage to decline,'' said Standard & Poor's credit analyst Amit Pandey.

Indian banks will need sizable capital to support growth and meet Basel III requirements, the report noted.

Rated private-sector banks are better placed than their public-sector peers in terms of meeting Basel III capital requirements, the rating agency said.

Public-sector banks will have to rely on a combination of government capital infusion and equity markets to support their capitalization, it opined.