Fitch Ratings has upgraded the Support Ratings of five nationalised banks — Corporation Bank, Indian Bank, Andhra Bank, Vijaya Bank and Dena Bank to ‘3' from ‘4'. The Support Rating of Vijaya Bank has been removed from ‘Rating Watch Positive'.
The upgrades reflect the Centre's continued strong propensity and commitment towards maintaining healthy financial profiles for government-owned banks, and the Government's improved ability to do this based on better prospects for its fiscal position, said the Fitch report.
The Government's current target is to ensure a minimum Tier-I ratio of eight per cent for government-owned banks by end-March 2011 through an infusion of Rs 16,500 crore in common equity or hybrids.
The government support has been proactive as opposed to bailing out banks in distress, which strengthens expectation that future support will be forthcoming.
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