Indian Overseas Bank ropes in ICRA for rating loans
12 Sep 2007
Mumbai: Chennai-based Indian Overseas Bank (Bank), a premier nationalised bank, has signed a memorandum of understanding (MoU) with ICRA Ltd under which the latter will assign ratings to the bank''s loans and its other exposures under the standardised approach of RBI''s new capital adequacy framework, Basel-II.
ICRA would carry out the ratings under its "Line of Credit" rating service and would enable the bank to assess the new risk weights applicable to its borrowers under Basel-II, ICRA informed the Bombay Stock Exchange (BSE) in a filing.
The risk weights would be linked to the various rating categories and would be as per RBI''s guideline. To assist potential and existing borrowers of the bank in obtaining ratings, ICRA is offering special terms to the clients of the Bank covered by the MoU.
The
MoU seeks to deliver benefits to the bank as well its clients. For the bank, ICRA''s
line of credit ratings would assist in implementing the Basel-II capital adequacy
norms. For the client, an ICRA rating may place the rated entity in a superior
position in terms of faster loan processing and to obtain competitive credit terms
from the bank.