Crisil Revises Outlook on Indian Bank’s Debt Instruments to Negative

In the quarter ended June, the lender’s gross NPA ratio stood at 10.90 per cent while net NPA level was at 3.76 per cent. “The downgrade in the rating of tier 1 bonds (under Basel III) is on account of lower eligible reserves position of the merged bank,” it said.

The ‘Crisil AAA’ rating on the ratings on the tier 2 bonds, infrastructure bonds, upper tier 2 bonds and lower tier 2 bonds continues to factor in expectation of strong support that Indian Bank is likely to receive from the government, it said. The rating also reflects the merged entity’s larger balance sheet size, wider geographic reach leading to deeper penetration, strong resource profile with high proportion of current and savings account (CASA) deposits and adequate capitalisation, as per the filing.