State Bank of India on Tuesday came out against Moody’s move to downgrade its debt rating, saying the decision was “uncalled for” and its concerns for capital were “misplaced”.
Defending the bank’s position in a press conference, SBI’s MD and CFO Arundhati Bhattacharya said, “They have displayed lot of concerns on capital, which is misplaced. The bank has sufficient capital to meet the Basel III norms. We should be in a better position to raise capital from government and market.” SBI controls one-fifth of the loans and deposit market and the government has a stake of 63 per cent.
“We had explained our views to Moody’s, allaying their concerns on debts, deposits as well as recapitalisation, but still they went ahead with the downgrade. We believe Moody’s is overly concerned, and that is completely misplaced. What Moody’s feels is their view and we don’t subscribe to that,” she said.
According to Bhattacharya, the bank still has the highest rating amongst the public sector banks when it comes to bank’s financial stability rating from Moody’s. On Monday, Moody’s had cut SBI’s senior unsecured debt and local currency deposit rating by a notch to “Baa3” from “Baa2”, citing asset quality and recapitalisation concerns.