Mumbai, June 15
FITCH Ratings has downgraded the national rating on Development Credit Bank Ltd's Rs 160 crore subordinated debt programme to "A (ind)" from "A+(ind)", said a press release from the ratings agency. The rating outlook was evolving, it added.
The downgrade reflects the delay in consummating DCB's business plan that sought to write off the legacy non performing loans of the bank and also diversify and grow its income streams.
The slowdown in deposit accretion and the exit of a few top officials , including the Chief Executive Officer, has affected the performance in FY05, the release said.
DCB's promoter, the Aga Khan Fund for Economic Development , infused $32 million, equivalent to 45 per cent of DCB's equity in FY04. The infusion was necessary, as the bank had stepped up the loan loss provisions in FY05.