The latest downgrade of Greece's credit rating by Standard and Poor's to "selective default" (SD) has no impact in the banking sector, Greek Finance Ministry said on early Tuesday.

"As expected, S&P has proceeded to downgrade Greece to 'SD' and the list of PSI (Private Sector Involvement) eligible securities to 'D' following the CAC (Collective Action Clauses) legislation onto Greek Law Bonds and the launch of the large scale voluntary PSI offer," the ministry said in a press release.

S&P announced the downgrade decision in a statement on late Monday, saying it has cut Greece's "CC" long-term and "C" short-term sovereign credit ratings to "selective default".

"We lowered our sovereign credit ratings on Greece to 'SD' following the Greek government's retroactive insertion of collective action clauses (CACs) in the documentation of certain series of its sovereign debt on Feb. 23," the rating agency said in a statement on its website.

Last week, Greece formally launched an offer to private sector creditors for a partial writedown of the Greek sovereign debt load in the framework of efforts to make the debt sustainable by 2020.

In parallel, debt-laden Greece pushes through the parliament a new set of austerity and reform policies this week to secure further vital financing by state creditors to avoid a Greek default next month.

S&P's move was pre-announced and all its consequences had been anticipated, planned for and addressed by the relevant decision of the European Council and the Eurogroup, said the finance ministry.

"The downgrade has no impact in the Greek banking sector as its liquidity effect has been addressed by the Bank of Greece, and consequently by the EFSF (European Financial Stability Facility)," stressed the ministry.

The Greek sovereign will remain in "SD" rating while the PSI offer is open and upon completion of the PSI, the sovereign is expected to be re-rated upwards, said the ministry.