The Telegraph
Since 1st March, 1999
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Moody’s hints at banks’ upgrade

New Delhi, Nov. 15 (PTI): A day after putting India’s foreign currency rating for a possible upgrade, global rating agency Moody’s today indicated that it may upgrade the deposit and debt issues of the country’s leading banks like the State Bank of India, ICICI Bank, Punjab National Bank and Bank of Baroda.

“Although the ratings of some banks and financial institutions are constrained by the country rating ceilings, other weaker PSUs are pulled to the ceiling based on support by the government,” Moody’s said in a release issued from Limassol today.

Moody’s assigned a “Ba3” rating to foreign currency deposits of SBI, ICICI Bank, Bank of Baroda, PNB, Central Bank of India, Canara Bank, Bank of India, Oriental Bank of Commerce and Union Bank of India.

ICICI Bank’s rating for both debt and issuer has been placed a notch higher at “Ba1”, while SBI’s Resurgent India Bonds have been assigned a “Ba3” rating. The debt issue of IDBI and Power Finance Corporation has been placed at “Ba2”, while IFCI’s issuer rating was pegged at “Ba2” by the rating agency.

“The deposit ratings of Central Bank of India and Union Bank of India, the debt rating of IDBI and the issuer rating of IFCI all impute government support,” Moody’s said.

The rating agency would, however, review the ratings of weak FIs and banks.

“While we continue to believe that the government is willing to support the foreign currency obligations of the banks and FIs, we will review the timeliness of the likely support, especially in the case of weakest institutions,” it said.

Meanwhile, finance secretary S. Narayan today said that Moody’s decision to consider a possible upgrade of India’s sovereign ratings only “vindicated” the government’s view that the country’s economic fundamentals were strong.

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