PNB & Fitch Ratings sign MoU for Bank Loan Ratings

Fitch Ratings India and Punjab National Bank (PNB) have signed a Memorandum of Understanding (MoU) for Bank Loan Ratings. Under this MoU, Fitch will assign ratings to PNB's loans and its other exposures extended to both its existing and potential borrowers.

Under the standardised approach of the Reserve Bank of India's (RBI) New Capital Adequacy Framework for Basel II, Bank Loan ratings from Fitch Ratings would enable PNB to assign the new risk weights applicable to its borrowers. The risk weights would be linked to the various rating categories and would be in line with RBI's Basel II guidelines. The MoU between Fitch Ratings India and Punjab National Bank would assist in implementing RBI's New Capital Adequacy Framework under Basel II. The existing and potential borrowers of PNB shall benefit through the rating fees specially negotiated under this MOU.

Punjab National Bank, the largest Nationalised Bank, has a network of 4,230 branches, 349 extension counters and 1325 ATMs across India, with a total business of INR254,156 crores as of December 31, 2007 - this is a yoy growth of 16.6%. The bank maintains a diversified credit portfolio providing credit to all major sectors. The bank reported a profit after tax (PAT) of INR1505.01 crores for the nine months ended December 2007, registering a yoy growth of 15.6%. The total deposits figure at end-December 2007 was INR152,622 crores, which is a registered growth of 17.2%, compared to the previous year. The total advances figure at end-December 2007 was at INR1,01,534 crores, which is a yoy gain of 15.8%. The Capital to Risk Asset Ratio of the bank stood at 14.04% as of end-December 2007.

Fitch Ratings India has also signed MoUs with Bank Loan Ratings with several other Nationalised Banks including Allahabad Bank, Bank of Maharashtra, Corporation Bank, Dena Bank, Indian Bank, State Bank of India, State Bank of Mysore, State Bank of Patiala, Syndicate Bank, United Bank of India and UCO Bank.

Fitch Ratings is one of the three large global credit rating agencies. Fitch rates more than 6000 banks/financial institutions, including some 3100 banks and 2400 insurance companies. Fitch currently rates over 1,600 corporate issuers, 100 sovereigns, and 150 sub-sovereigns and maintains surveillance on over 93,000 U.S. municipal transactions. The company currently has over 6,300 U.S. structured finance transactions under surveillance.

Fitch India has four rating offices located in Mumbai, Delhi, Chennai and Kolkata. Fitch is recognised by the Reserve Bank of India, Securities Exchange Board of India (SEBI) and National Housing Bank.

Sourced From: Sampark Public Relations Pvt Ltd