Central Bank of India has received a credit rating reaffirmation from CARE Ratings Limited for its Certificate of Deposits programme worth ₹10,000 crore. The rating agency maintained the CARE A1+ rating, citing improved capitalisation levels and continued government support as key factors.

Rating Reaffirmation Details

The reaffirmation covers the bank's Certificate of Deposits programme with the following specifications:

Key Rating Drivers

The rating reaffirmation draws strength from several positive developments in the bank's financial profile. CARE Ratings expects continuation of strong funding support by the government when needed by the bank, given the majority ownership and demonstrated support in terms of funding, management and governance.

Financial Performance and Capitalisation

The bank's capitalisation profile has improved significantly over the years, aided by regular equity infusion and improvement in asset quality.

Business Profile and Asset Quality

Central Bank of India has established a pan-India business franchise. The bank has been focusing on retail, agriculture and MSME segments, which have constituted a significant portion of total advances.

Profitability and Outlook

The bank has reported improved profitability in recent years. However, CARE Ratings expects the bank's net interest margin to potentially face some pressure, considering faster repricing of advances than deposits in the year post rate cuts. The rating agency notes that the bank would be required to keep its operational and credit costs under control to maintain profitability in the near term.

Risk Factors and Rating Sensitivities

The rating agency has identified potential negative factors that could lead to rating downgrades, including:

• Reduction in government support and ownership below 51.00%
• Deterioration in asset quality with gross non-performing assets of 5.00% or more on a sustained basis
• Deterioration in capitalisation levels with cushion above minimum regulatory requirement remaining lower than 100 basis points on a sustained basis

Central Bank of India has entered into a distribution agreement with Bandhan AMC Limited to offer mutual fund products to its customers. The partnership represents a strategic move to expand investment opportunities for the bank's customer base through diversified mutual fund offerings.

Partnership Details

The distribution agreement will enable Central Bank of India customers to access various mutual fund products offered by Bandhan AMC Limited. According to the bank's official communication, this arrangement will provide customers with opportunities to unlock the value of their savings through professionally managed investment products.

About Bandhan AMC Limited

Bandhan AMC Limited was established in 2000 and was formerly known as IDFC AMC. The company focuses on helping savers become investors and create wealth through prudently constructed investment products across mutual funds and portfolio management services platforms.

Company Background and Backing

Bandhan AMC Limited is supported by strong institutional backing from multiple entities:

• Bandhan Financial Services Limited
• Chrys Capital
• GIC Singapore

This robust backing provides the asset management company with the financial strength and expertise to serve its growing investor base effectively.

Business Scale and Presence

Bandhan AMC Limited has established itself as one of the leading asset management companies in India with significant market presence and customer reach.

The partnership between Central Bank of India and Bandhan AMC Limited is expected to create mutual benefits for both entities while providing enhanced investment opportunities for banking customers seeking to diversify their financial portfolios through professionally managed mutual fund products.