CRISIL upgrades J&K Bank’s FD rating

Removing J&K Bank from its negative watch list, CRISL, India’s first and leading rating agency, has upgraded ratings of the bank’s fixed deposit to FAA positive.
CRISIL upgrades J&K Bank’s FD rating
File Photo

Removing J&K Bank from its negative implications watch list, CRISL, India's first and leading rating agency, has upgraded ratings of the bank's fixed deposit to FAA-.

FAA rating is an assurance about 'High Safety' of the deposits with timely payment of interest and principal by the bank.

The credit rating agency has earlier on November 8 last year downgraded the rate to FAA-: 'Watch with Negative Implication' on account of the pressure on asset quality compounded by the increase in stress in the advances to small and medium sized enterprises, MSME' and corporate within certain regions of J&K. This was in addition to the continued slippages from its large ticket corporate loan book.

CRISIL has also reaffirmed the bank's short-term fixed deposits and certificate of deposits programme at 'CRISIL A1+', indicating the 'very strong degree of safety regarding timely payment of financial obligations'.

The J&K Bank has witnessed rise in bad loans as well as fall in profit in its previous two quarters, however, a number steps including, experts believe, clearing of balance sheet, restructuring of stressed loans with RBI approval and provisioning will help the bank to bounce back. 

"With the unrelenting commitment and support of the State Government, the bank will pass this challenging phase as the brand franchise of the bank is intact and the captive business base in J&K state is its core strength," J&K Bank Chairman and CEO Parvez Ahmed had said at the time of Q2 result declaration.

Bank had earlier delayed declaration of its quarter results, as it was waiting for the RBI nod, over loan restructuring application.

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