Crisil downgrades Indian Bank's tier I bonds on lower reserves position

Rating agency Crisil has downgraded public sector lender Indian Bank’s tier I bonds from “AA+” to “AA” due to lower eligible reserves position of the merged bank. Another public sector lender Allahabad Bank merged with Indian Bank from April 01, 2020.

The downgrade in the rating of Tier I bonds (under Basel III) is on account of lower eligible reserves position of the merged bank.  Crisil evaluated the adequacy of Indian Bank's eligible reserves to service coupon after adjusting for any medium-term impact of profitability on reserves position in a stress scenario.

The capital adequacy ratio of Chennai-based lender stood at 13.45