The New Development Bank (NDB) of the BRICS countries, which got its first ‘AAA’ rating this week, plans to tap into the Indian rupee offshore market as part of its efforts to raise capital, according to a top bank official.

Shanghai-based NDB — floated by Brazil, Russia, India, China and South Africa (BRICS) — is headed by renowned Indian banker KV Kamath.

Japan rating

Japan Credit Rating Agency Ltd (JCR) on Tuesday assigned ‘AAA’ foreign currency long-term issuer rating with a stable outlook to NDB, the first such rating acquired by the bank since it started functioning four years ago.

“It is the safest of investment ratings. If you are an AAA issuer, essentially it means that there’s almost zero probability of you ever defaulting. That’s what the rating agencies are effectively telling investors out there,” NBD Vice-President and Chief Financial Officer Leslie Maasdorp told PTI in an interview.

Maasdorp said it is significant that NDB got higher rating than the BRICS countries.

“India, for example, is BBB- on investment grade, South Africa has one rating at investment grade, China is A+, Brazil is sub-investment grade and Russia is BBB+. The NDB is rated significantly higher than the weighted average of our members,” he said.

Maasdorp said the bank is looking into the Indian rupee offshore market to raise resources after the Masala bonds market slowed down.

Masala bonds

“For a number of reasons the Masala bond market slowed down. We remain very keen to access the offshore rupee (market) as part of our capital-raising. We are studying the market conditions closely, because, obviously, investors are very sensitive to the interest rate environment,” he said.

Maasdorp said a total of 37 projects have been approved for all the five BRICS countries.

“India is number two in terms of approvals now — I’d say, about 29 per cent of our entire approved loans (totalling $10.2 billion), almost a third of that is in India,” he said. China stands first with 38 per cent of approvals.