Rating Rationale
January 25, 2018 | Mumbai
CRISIL revises outlook on public sector banks to 'Stable' from 'Negative' 
Recapitalisation, peaking of asset quality issues, revival in credit growth to improve outlook 
 
CRISIL has revised its outlook on the long-term debt instruments (excluding Basel III Tier I) of 18 public sector banks (PSB) to 'Stable from 'Negative', while reaffirming their ratings.
 
The revision in outlook is primarily driven by government's PSB recapitalisation programme for this fiscal, which will improve the financial risk profile of these banks and also help them meet Basel III regulatory capital norms, and provide cushion against expected rise in provisioning for non-performing assets (NPAs).
 
The ratings on Basel III Tier I bonds of nine PSBs have also been reaffirmed, and the outlook has been retained as 'Negative'. CRISIL is evaluating the flexibility with banks to set off any accumulated losses with the bank's balance in share premium account and its implication on the availability of eligible reserves to service AT1 coupon payments. We will revisit our ratings on AT1 instruments once there is clarity.
 
On October 24, 2017 after the government announced its Rs 2.11 lakh crore recapitalisation plan, CRISIL had said that it was credit positive for public sector banks and when details of the capital infusion for individual PSBs are announced, it will consider those and take appropriate rating action.
 
On Wednesday, the government announced details of bank-wise infusion of ~Rs 88,000 crore capital this fiscal.
 
CRISIL has assessed the impact of this and believes with expected capital infusion from government, PSBs are now adequately placed to meet Basel III capital norms and are also better prepared to absorb the hit from provisioning on stressed assets and also on account of migration to Ind AS (Indian Accounting Standards).
 
The government has also outlined its banking reforms agenda. The strengthening of prudent lending practices through responsible banking - that is, banking based on core strengths, sharper pre- and post-disbursal monitoring for large exposures, and improving NPA resolution mechanisms (including separate asset management verticals), will structurally improve credit culture at PSBs.
 
Says Krishnan Sitaraman, Senior Director, CRISIL Ratings, 'The recapitalisation plan while emphasising government's support, also persuades public sector banks to up the ante on responsible banking. The upshot of more accountability, governance and efficiencies is a structurally stronger banking system and improved investor sentiment towards them'.
 
Asset quality issues are peaking for banks with incremental slippages to NPAs expected to taper in fiscal 2018 and 2019 as credit health of corporate borrowers' are improving. However, the resolution of large corporate stressed accounts under the Insolvency and Bankruptcy Code and the potential haircuts thereof are expected to increase the provisioning burden of PSBs and impact their earnings profile and capital position in the near term.
 
CRISIL will continue to monitor the performance of PSBs - their asset quality and profitability performance, and the capital support from the government in future and will appropriately factor in the same in the ratings of these banks.
 
Annexure 1 : List of rating actions on PSBs

Bank Tier II Bonds (Under Basel II & Basel III)/ Infrastructure Bonds Hybrid Instruments  (Under Basel II) Fixed Deposits Tier I Bonds (Under Basel III) Certificate of Deposits
Allahabad Bank CRISIL AA-/Stable (Outlook revised from Negative) CRISIL A+/Stable (Outlook revised from Negative)      
Andhra Bank CRISIL AA+/Stable (Outlook revised from Negative) CRISIL AA/Stable (Outlook revised from Negative)   CRISIL AA-/Negative (Reaffirmed)  
Bank of Baroda CRISIL AAA/Stable (Outlook revised from Negative) CRISIL AAA/Stable (Outlook revised from Negative)   CRISIL AA+/Negative (Reaffirmed)  
Bank of India CRISIL AA+/Stable (Outlook revised from Negative) CRISIL AA+/Stable (Outlook revised from Negative)   CRISIL A+/Negative (Reaffirmed) CRISIL A1+ (Reaffirmed)
Bank of Maharashtra CRISIL A+/Stable (Outlook revised from Negative) CRISIL A/Stable (Outlook revised from Negative)   CRISIL BBB+/Negative (Reaffirmed) CRISIL A1+ (Reaffirmed)
Canara Bank CRISIL AAA/Stable (Outlook revised from Negative) CRISIL AAA/Stable (Outlook revised from Negative)   CRISIL AA/Negative (Reaffirmed) CRISIL A1+ (Reaffirmed)
Central Bank of India CRISIL A+/Stable (Outlook revised from Negative) CRISIL A/Stable (Outlook revised from Negative)      
Corporation Bank CRISIL AA-/Stable (Outlook revised from Negative) CRISIL A+/Stable (Outlook revised from Negative) FAA+/Stable (Outlook revised from Negative) CRISIL A-/Negative (Reaffirmed)  
Dena Bank CRISIL AA-/Stable (Outlook revised from Negative) CRISIL A+/Stable (Outlook revised from Negative)   CRISIL A-/Negative (Reaffirmed) CRISIL A1+ (Reaffirmed)
IDBI Bank Ltd. CRISIL A+/Stable (Outlook revised from Negative) CRISIL A/Stable (Outlook revised from Negative) FAA/Stable (Outlook revised from Negative) CRISIL BBB+/Negative (Reaffirmed) CRISIL A1+ (Reaffirmed)
Indian Overseas Bank CRISIL A+/Stable (Outlook revised from Negative) CRISIL A-/Stable (Outlook revised from Negative) FAA/Stable (Outlook revised from Negative)   CRISIL A1+ (Reaffirmed)
Oriental Bank of Commerce     FAA+/Stable (Outlook revised from Negative)   CRISIL A1+ (Reaffirmed)
Punjab & Sind Bank CRISIL AA/Stable (Outlook revised from Negative)        
Punjab National Bank CRISIL AAA/Stable (Outlook revised from Negative) CRISIL AAA/Stable (Outlook revised from Negative)   CRISIL AA/Negative (Reaffirmed)  
Syndicate Bank CRISIL AA/Stable (Outlook revised from Negative) CRISIL AA/Stable (Outlook revised from Negative)      
UCO Bank CRISIL A+/Stable (Outlook revised from Negative) CRISIL A/Stable (Outlook revised from Negative)     CRISIL A1+ (Reaffirmed)
Union Bank of India CRISIL AA+/Stable (Outlook revised from Negative) CRISIL AA+/Stable (Outlook revised from Negative)      
United Bank of India CRISIL AA-/Stable (Outlook revised from Negative) CRISIL A/Stable (Outlook revised from Negative)   CRISIL BBB+/Negative (Reaffirmed) CRISIL A1+ (Reaffirmed)

IDBI Bank Limited
Rating outlook revised to 'Stable' ; ratings reaffirmed
 
Rating Action
Tier II Bonds (Under Basel III) Rs.2000 Crore CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Infrastructure Bonds Aggregating Rs.2000 Crore CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Tier II Bonds (Under Basel III) Rs.3000 Crore CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Infrastructure Bonds Aggregating Rs.8000 Crore CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Senior/Lower Tier-II Bonds Aggregating Rs.5000 Crore (Under Basel II) CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Lower Tier-II Bonds Aggregating Rs.9041.68 Crore (Under Basel II) CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Omni Bonds Aggregating Rs.15479.50 Crore CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Flexi Bonds Aggregating Rs.465.96 Crore CRISIL A+/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Upper Tier-II Bonds Aggregating Rs.3636.20 Crore (Under Basel II) CRISIL A/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Tier-I Perpetual Bonds Aggregating Rs.2708.8 Crore (Under Basel II) CRISIL A/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Fixed Deposit Programme FAA/Stable (Outlook revised from 'Negative'; Rating reaffirmed)
Rs.2500 Crore Tier-I Bond Issue (Under Basel III) CRISIL BBB+/Negative (Reaffirmed)
Rs.2000 Crore Tier-I Bond Issue (Under Basel III) CRISIL BBB+/Negative (Reaffirmed)
Rs.40000 Crore Certificates of Deposit Programme CRISIL A1+ (Reaffirmed)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has revised its outlook on the Tier II bonds (under Basel III), Infrastructure bonds, Lower Tier II bonds (under Basel II), Omni bonds, Flexi bonds, Upper Tier II bonds (under Basel II), Tier I Perpetual bonds (under Basel II) and the Fixed deposit programme of IDBI Bank Ltd (IDBI Bank) to 'Stable' from 'Negative', while reaffirming the ratings at 'CRISIL A+/CRISIL A/FAA'. The ratings on Tier I bonds (under Basel III) and the Certificate of deposits programme have been reaffirmed at 'CRISIL BBB+/Negative/CRISIL A1+'. The revision in the outlook on the Tier II bonds (under Basel III), Infrastructure bonds, Lower Tier II bonds (under Basel II), Omni bonds, Flexi bonds, Upper Tier II bonds (under Basel II), Tier I Perpetual bonds (under Basel II) and the Fixed deposit programme is primarily driven by government's recapitalization plans for public sector banks including IDBI Bank in the current fiscal. CRISIL believes this will improve the financial risk profile of IDBI Bank, help in meeting Basel III regulatory capital norms, and provide a cushion against expected rise in provisioning for non-performing assets (NPAs).  Additionally, CRISIL believes that asset quality issues are peaking with incremental slippages to NPAs expected to taper in fiscal 2018 and 2019. This coupled with likely revival of credit growth in medium term will support IDBI Bank's performance.
 
The ratings continue to factor in CRISIL's belief that IDBI Bank will continue to receive support from its majority owner, Government of India (GoI), both on an ongoing basis and in times of distress, as well as the bank' established market position.  
 
The ratings also continue to factor in the stress on IDBI bank's asset quality especially in the corporate portfolio and the resultant increase in provisions that would continue to impact profitability over medium term. The bank's gross NPA ratio remained high at 24.98% as on September 30, 2017 (21.25% as on March 31, 2017). Profitability is weak with the bank reporting a return on assets (RoA) of -0.6% (annualized) for half year ended September 30, 2017 (-1.4% for fiscal 2017).  However, proposed capital infusion of (Rs 10,610 crore in current fiscal) under the PSBs recapitalisation plan will help to absorb increase in provisioning burden and meet the regulatory capital requirements.
 
These strengths are partially offset by weak asset quality and earnings profile
 
In May 2017, RBI initiated Prompt Corrective Action (PCA) for IDBI. Under the PCA, restrictions have been placed on the bank, including on branch expansion and dividend distribution.

Analytical Approach

For arriving at the ratings, CRISIL has factored in the support that the bank is expected to receive from its majority shareholder, GoI.

Key Rating Drivers & Detailed Description
Strengths
* Strong expectation of support from GoI
The rating continues to factor in an expectation of strong government support, both on an ongoing basis and in the event of distress. This is because GoI is both the majority shareholder in public sector banks (PSBs) and the guardian of India's financial system. The stability of the banking sector is of prime importance to GoI, given the criticality of the sector to the economy, the strong public perception of sovereign backing for PSBs, and the severe implications of any PSB failure in terms of political fallout, systemic stability, and investor confidence in public sector institutions. CRISIL believes that the majority ownership creates a moral obligation on GoI to support the PSBs, including IDBI Bank. As part of the 'Indradhanush' framework, government has pledged to infuse at least Rs 70,000 crore in PSBs during fiscals 2015-19, of which Rs 25,000 crore each was infused in fiscals 2016 and 2017. The government had infused Rs 7524.48 crore in IDBI Bank in the five fiscals through 2016, and Rs 1900 crore in March 2017, Rs 1861 crore in August 2017 and Rs 2729 crore in December 2017.
 
Further, in October 2017, the government had outlined recapitalisation package of Rs 2.11 lakh crores over fiscals 2018 and 2019, out of which PSBs will receive Rs 88,139 crore from the government in fiscal 2018. IDBI Bank has been allocated Rs 10610 crore out of this for the current fiscal. Government will continue to provide distress support to all PSBs and will not allow any of them to fail; it will also ensure they meet Basel III capital regulations.
 
However, in Union Budget 2016, GoI announced its intention of considering various options for diluting its stake in IDBI Bank. While there has been no progress on this, any significant dilution, resulting in GoI's stake falling below 51%, will be a key rating sensitivity factor.
 
* Established market position, supported by a large asset base
The bank had an asset base of Rs 333103 crore as on September 30, 2017. Advances of Rs 183568 crore accounted for around 2.4% of the banking system advances. While the bank has been de-growing over the past few quarters, it is still among one of the large banks in India.
 
Weaknesses
* Weak asset quality; continued pressure expected
Asset quality has continued to deteriorate sharply over the past few quarters as reflected in the steep increase in gross NPAs to 24.98% as on September 30, 2017 (21.25% as on March 31, 2017), from 10.98% as on March 31, 2016. Slippages to NPAs (as a percentage of opening net advances) remained high, at around 13.7% (annualised) in the first half of fiscal 2018 (12.8% in fiscal 2017 and 9% in fiscal 2016.) Additionally, there was a large proportion of restructured standard advances of Rs 12937 crore, constituting 7.0% of advances, as on September 30, 2017 (Rs 12344 crore, constituting 5.9% of advances, as on March 31, 2017). Asset quality will remain under considerable pressure over the medium term, given the sizeable individual corporate exposures to vulnerable sectors such as infrastructure and iron and steel, amid a weak commodity price cycle and inability of leveraged players to sell assets. Containing deterioration in asset quality, and hence profitability, remains a key monitorable.
 
* Weak earnings profile
The sharp deterioration in asset quality has significantly impacted profitability. Net loss and return on assets (annualised) stood at Rs 1051 crore and negative 0.6%, respectively, for the first half of fiscal 2018 (Rs 5158 crore and a negative 1.4%, respectively, for fiscal 2017). The net interest margin (NIM*; net interest income to average total assets) improved to 1.76% for the first half of fiscal 2018 as against 1.56% for fiscal 2017 due to the impact of interest reversal on the NIM being offset by the decline in cost of deposits (5.4% in the first half of fiscal 2018 as against 6.4% for fiscal 2017); however, it still remains low. The earnings profile in the half year of fiscal 2018 was supported by sale of non-core investments (stake in SIDBI and CCIL).
 
However, provisioning costs continue to remain high at 3.1% for the first half of fiscal 2018 (3.6% in fiscal 2017), and are expected to remain high over the next few quarters, given continued slippages and increasing provisioning requirements on stressed assets. The provisioning coverage ratio (excluding technical write offs) remained low at 42.6% as on September 30, 2017. Ability to return to profitability and manage earnings remains a key sensitivity factor.
 
Outlook: Stable (for all instruments except Tier I bonds under Basel III)
CRISIL believes that IDBI Bank will continue to benefit from strong support from GoI, especially given the recent recapitalisation announcement. The bank's asset quality and earnings profile are however, expected to remain under pressure over the medium term.  
 
Upside Scenario:
The outlook may be revised to 'Positive' if there is a significant and sustained improvement in profitability and asset quality.
 
Downside Scenario:
The outlook may be revised to 'Negative' in case of further significant deterioration in its asset quality or earnings profile. 
 
Outlook: Negative (Tier-I Bonds (under Basel III))
CRISIL believes that the expected stress in IDBI Bank's asset quality and earnings profile over the medium term would also impact the bank's eligible reserves position. While the recent recapitalisation announcement will help maintain cushion over minimum regulatory capital ratios, the equity infusion quantum cannot be considered in the calculation of eligible reserves as per RBI guidelines.
 
Upward scenario:
CRISIL is evaluating the flexibility with banks to set off any accumulated losses with the bank's balance in share premium account. Clarity on the same is likely to have positive implication on the availability of eligible reserves to service AT1 coupon payments and thereby the rating on the instruments.
 
Downward scenario:
The rating may be downgraded in case of deterioration in eligible reserves position. The rating may also be downgraded if there is further significant deterioration in its asset quality or earnings profile. 
About the Bank

Industrial Development Bank of India Ltd (IDBI) was constituted by GoI under the Industrial Development Bank of India Act, 1964, and was reconstituted as a banking company on October 1, 2004, to undertake commercial banking and development banking activities. The erstwhile IDBI Bank Ltd, IDBI's subsidiary, was merged with IDBI in 2005. In 2006, IDBI acquired United Western Bank. In 2008, it got its present name.

Key Financial Indicators
As on / for the half year ended September 30   2017 2016
Total Assets Rs crore 333103 376637
Total income Rs crore 15028 16607
Profit after tax Rs crore -1051 297
Gross NPA % 24.98 13.05
Overall capital adequacy ratio % 11.98 11.64
Return on assets % -0.6 0.16

Any other information:
Annexure: Key features of IDBI Bank's Rs 2500 crore Tier I Bonds Issue (under Basel III)

  • Unsecured, non-convertible perpetual Basel III-compliant Tier-I Bonds
  • Coupon payments are on an annual basis and are non-cumulative
  • The bank has full discretion at all times to cancel coupon payments
  • Coupon is to be paid out of current year profit. However, if current year profit is not sufficient, that is, payment of coupon is likely to result in a loss, the coupon payment can be made out of eligible reserves (subject to the bank meeting minimum regulatory requirements for CET I, and Tier I and total capital ratios at all times as prescribed by RBI, and subject to the requirements of capital buffer frameworks) and/or credit balance in profit and loss account.
  • Dividend stopper clause is not applicable to these instruments. This means that the bank can pay dividends to equity shareholders even if it does not pay coupon on these instruments.
  • Loss-absorption features as per RBI's BASEL III norms applicable
    • Instrument will be temporarily written down upon CET I breaching the pre-specified trigger of 5.5% before March 31, 2019, and 6.125% on and after March 31, 2019
    • Instrument may be permanently written off at the option of RBI on occurrence of a trigger event called the point of non-viability (PONV) trigger
    • PONV trigger shall be determined by RBI
Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Note on complexity levels of the rated instrument:
The distinguishing features of non-equity Tier-I capital instruments (under Basel III) are the existence of coupon discretion at all times, high capital thresholds for likely coupon non-payment, and principal write-down (on breach of a pre-specified trigger). These features increase the risk attributes of non-equity Tier-I instruments over those of Tier-II instruments under Basel III, and capital instruments under Basel II. To factor in these risks, CRISIL notches down the rating on these instruments from the bank's corporate credit rating.

The factors that could trigger a default event for non-equity Tier-I capital instruments (under Basel III), resulting in non-payment of coupon, include: i) the bank exercising coupon discretion, ii) inadequacy of eligible reserves to honour coupon payment if the bank reports low profit or a loss, or iii) the bank breaching the minimum regulatory CET I ratio. Moreover, given their additional risk attributes, the rating transition for non-equity Tier-I capital instruments (under Basel III) can potentially be higher than that for Tier-II instruments.
Annexure - Details of Instrument(s)
ISIN Name of Instrument Date of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs Crore) Rating Outstanding with Outlook
INE008A08UA8 Bond 12-Jan-04 7.00 12-Jan-19 25.00 CRISIL A+/Stable
INE008A08N67 Bond 23-Sep-07 10.07 23-Sep-22 4.20 CRISIL A+/Stable
INE008A08O58 Bond 16-Feb-08 9.41 16-Feb-18 2.00 CRISIL A+/Stable
INE008A08Q07 Bond 26-Sep-08 11.00 26-Sep-18 895.80 CRISIL A+/Stable
INE008A08Q72 Bond 15-Dec-08 11.30 15-Dec-18 1439.90 CRISIL A+/Stable
INE008A08Q98 Bond 14-Mar-09 11.25 14-Mar-29 2.00 CRISIL A+/Stable
INE008A08R30 Bond 13-Jun-09 9.56 13-Jun-29 1.00 CRISIL A+/Stable
INE008A08R71 Bond 26-Sep-09 9.67 26-Sep-29 2.00 CRISIL A+/Stable
8006* Bond 1-Aug-03 8.00 1-Aug-18 0.45 CRISIL A+/Stable
INE008A08PO9 Bond 1-Aug-03 8.00 1-Aug-18 499.55 CRISIL A+/Stable
INE008A08PU6 Bond 18-Aug-03 7.75 18-Aug-18 0.19 CRISIL A+/Stable
INE008A08U68# Bond 26-Dec-12 9.40 Perpetual 850.00 CRISIL A+/Stable
INE008A08N18^ Bond 7-May-07 10.10 7-May-17 48.00 CRISIL A+/Stable
INE008A08O33 Bond 1-Jan-08 9.35 1-Jan-18 500.00 CRISIL A+/Stable
INE008A08R89 Bond 29-Sep-09 9.37 29-Sep-18 40.00 CRISIL A+/Stable
INE008A08S13 Bond 23-Nov-09 8.53 23-Nov-19 302.50 CRISIL A+/Stable
INE008A08S62 Bond 23-Mar-10 9.05 23-Mar-20 600.00 CRISIL A+/Stable
INE008A08S88 Bond 8-Jul-10 8.57 8-Jul-25 302.00 CRISIL A+/Stable
INE008A08S96 Bond 29-Sep-10 8.63 29-Sep-20 40.00 CRISIL A+/Stable
INE008A08T20 Bond 20-Jan-11 9.04 20-Jan-26 856.10 CRISIL A+/Stable
INE008A08T61 Bond 4-Aug-11 9.38 4-Aug-21 484.40 CRISIL A+/Stable
INE008108U43 Bond 26-Nov-11 9.72 26-Nov-21 250.00 CRISIL A+/Stable
INE008A08T87 Bond 30-Nov-11 9.70 30-Nov-21 500.00 CRISIL A+/Stable
INE008A08T95 Bond 13-Dec-11 9.45 13-Dec-21 600.00 CRISIL A+/Stable
INE008A08U19 Bond 15-Mar-12 9.25 15-Mar-22 1000.00 CRISIL A+/Stable
INE008108U43 Bond 25-Oct-12 9.25 25-Oct-37 1000.00 CRISIL A+/Stable
INE008A08U50 Bond 13-Dec-12 8.99 13-Dec-27 505.00 CRISIL A+/Stable
INE008A08U76 Bond 12-Sep-14 9.27 12-Sep-24 1000.00 CRISIL A+/Stable
INE008A08U92 Bond 21-Jan-15 8.725 21-Jan-25 3000.00 CRISIL A+/Stable
INE008A08V26 Bond 9-Feb-16 8.80 9-Feb-26 1000.00 CRISIL A+/Stable
INE008A09885 Bond 12-Jan-04 7.00 12-Jan-19 107.44 CRISIL A+/Stable
INE008A09AM3 Bond 20-Apr-04 6.75 20-Apr-19 19.38 CRISIL A+/Stable
INE008A08Q56 Bond 29-Oct-08 11.40 29-Oct-23 500.00 CRISIL A/Stable
INE008A08R14 Bond 31-Mar-09 9.50 31-Mar-24 350.00 CRISIL A/Stable
INE008A08R55 Bond 26-Jun-09 8.95 26-Jun-24 500.00 CRISIL A/Stable
INE008A08R63 Bond 25-Sep-09 9.00 25-Sep-24 500.00 CRISIL A/Stable
INE008A08R97 Bond 19-Nov-09 8.90 19-Nov-24 285.00 CRISIL A/Stable
INE008A08S47 Bond 3-Feb-10 8.65 3-Feb-25 501.20 CRISIL A/Stable
INE008A08T46 Bond 25-Mar-11 9.40 25-Mar-26 1000.00 CRISIL A/Stable
INE008A08Q80 Bonds 26-Mar-09 9.50 Perpetual 332.00 CRISIL A/Stable
INE008A08S21 Bonds 23-Dec-09 9.20 Perpetual 275.50 CRISIL A/Stable
INE008A08S39 Bonds 29-Jan-10 9.25 Perpetual 306.20 CRISIL A/Stable
INE008A08S54 Bonds 10-Mar-10 9.65 Perpetual 550.00 CRISIL A/Stable
INE008A08S70 Bonds 22-Jun-10 9.15 Perpetual 245.10 CRISIL A/Stable
INE008A08U84 Bond 17-Oct-14 10.75 Perpetual 2500.00 CRISILBBB+/Negative
INE008A08V00 Bond 31-Dec-15 8.62 31-Dec-30 1000.00 CRISIL A+/Stable
INE008A08V18 Bond 2-Jan-16 8.62 2-Jan-26 900.00 CRISIL A+/Stable
NA Bond** NA NA NA 30210.23 CRISIL A+/CRISIL A/Stable
CRISIL BBB+/Negative
NA Fixed Deposit
Programme
NA NA NA NA FAA/Stable
NA Certificate of Deposit
Programme
NA NA NA 40000.00 CRISIL A1+
**Unutilised/utilised and redeemed; awaiting third-party verification/details from company
*In physical format

#Instruments were issued as Innovative Perpetual Debt instruments in December 2012. In 2013, they were derecognised as Tier I instruments and considered as senior bonds as per RBI instructions. Given that the features of the instrument are now akin to senior bonds, the rating is the same as that on senior bonds. The bank has an option to call the instrument in December 2022.
^CRISIL is awaiting independent confirmation of redemption before withdrawing ratings on these instruments
Annexure - Rating History for last 3 Years
  Current 2018 (History) 2017  2016  2015  Start of 2015
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Certificate of Deposits  ST  40000  CRISIL A1+    No Rating Change    No Rating Change    No Rating Change    No Rating Change  CRISIL A1+ 
Fixed Deposits  FD  FAA/Stable    No Rating Change  21-08-17  FAA/Negative  10-03-16  FAAA/Negative    No Rating Change  FAAA/Stable 
            23-05-17  FAA/Watch Negative           
            04-05-17  FAA+/Negative           
Flexi Bonds  LT  465.96  CRISIL A+/Stable    No Rating Change  21-08-17  CRISIL A+/Negative  10-03-16  CRISIL AA/Negative  26-02-15  CRISIL AA+/Negative  CRISIL AA+/Stable 
            23-05-17  CRISIL A+/Watch Negative           
            04-05-17  CRISIL AA-/Negative           
Infrastructure Bonds  LT  10000  CRISIL A+/Stable    No Rating Change  21-08-17  CRISIL A+/Negative  10-03-16  CRISIL AA/Negative  26-02-15  CRISIL AA+/Negative  CRISIL AA+/Stable 
            23-05-17  CRISIL A+/Watch Negative           
            04-05-17  CRISIL AA-/Negative           
Lower Tier-II Bonds (under Basel II)  LT  14041.68  CRISIL A+/Stable    No Rating Change  21-08-17  CRISIL A+/Negative  10-03-16  CRISIL AA/Negative  26-02-15  CRISIL AA+/Negative  CRISIL AA+/Stable 
            23-05-17  CRISIL A+/Watch Negative           
            04-05-17  CRISIL AA-/Negative           
Omni Bonds  LT  15479.5  CRISIL A+/Stable    No Rating Change  21-08-17  CRISIL A+/Negative  10-03-16  CRISIL AA/Negative  26-02-15  CRISIL AA+/Negative  CRISIL AA+/Stable 
            23-05-17  CRISIL A+/Watch Negative           
            04-05-17  CRISIL AA-/Negative           
Perpetual Tier-I Bonds (under Basel II)  LT  2708.8  CRISIL A/Stable    No Rating Change  21-08-17  CRISIL A/Negative  10-03-16  CRISIL AA-/Negative  26-02-15  CRISIL AA/Negative  CRISIL AA/Stable 
            23-05-17  CRISIL A/Watch Negative           
            04-05-17  CRISIL A+/Negative           
Tier I Bonds (Under Basel III)  LT  4500  CRISIL BBB+/Negative    No Rating Change  21-08-17  CRISIL BBB+/Negative  10-03-16  CRISIL A/Negative  26-02-15  CRISIL AA-/Negative  CRISIL AA-/Stable 
            23-05-17  CRISIL BBB+/Watch Negative           
            04-05-17  CRISIL A-/Negative           
Tier II Bonds (Under Basel III)  LT  5000  CRISIL A+/Stable    No Rating Change  21-08-17  CRISIL A+/Negative  10-03-16  CRISIL AA/Negative    --  -- 
            23-05-17  CRISIL A+/Watch Negative  02-02-16  CRISIL AA+/Negative       
            04-05-17  CRISIL AA-/Negative           
Upper Tier-II Bonds (under Basel II)  LT  3636.2  CRISIL A/Stable    No Rating Change  21-08-17  CRISIL A/Negative  10-03-16  CRISIL AA-/Negative  26-02-15  CRISIL AA/Negative  CRISIL AA/Stable 
            23-05-17  CRISIL A/Watch Negative           
            04-05-17  CRISIL A+/Negative           
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
Links to related criteria
Rating Criteria for Banks and Financial Institutions
CRISILs Criteria for rating short term debt
Criteria for Notching up Stand Alone Ratings of Entities Based on Government Support
Rating Criteria for Hybrid Capital Instruments Issued by Banks Under Basel II Guidelines
Rating criteria for Basel III - compliant non-equity capital instruments

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CRISIL is an agile and innovative, global analytics company driven by its mission of making markets function better. We are India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture of innovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers.

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About CRISIL Ratings
CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of independence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporates and financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service for Micro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market. Over 1,10,000 MSMEs have been rated by us.


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