NEW DELHI: India Ratings and Research has assigned a stable outlook to Jammu and Kashmir Bank’s Rs 600 crore lower Tier II notes and said the instrument carry very “low credit risk”.
“India Ratings and Research (Ind-Ra) has affirmed Jammu and Kashmir Bank Ltd’s (JK Bank) Long-Term Issuer Rating and INR6bn lower Tier II notes at ‘IND AA’ with a Stable Outlook,” the agency said in a statement.
‘IND AA’ instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
JK Bank’s ratings are driven by a continued moderate possibility of support from the Government of India, through the J&K State Government, if required, Ind-Ra said.
“This factors in the bank’s central role in sustaining the economy of the politically important state of J&K, it being the only dividend paying state-owned enterprise, its dominant position in the banking business in J&K state and with State employees, and its role as the RBI’s main agent for conducting the general State Government business,” the agency said.
The bank’s high exposure to stressed sectors such as metals, real estate and infrastructure and stressed corporates could result in further asset deterioration. (AGENCIES)
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