A Memorandum of Understanding (MoU) was signed between Credit rating agency ICRA and the SBI associate bank State Bank of Indore. The agency will rate the loans and other exposures of State Bank of Indore under the Reserve Bank’s Basel II norms.
According to a press release of the bank the rating agency has signed a (MoU) with State Bank of Indore to rate the bank's lending’s under the new capital adequacy norms set by RBI.
The agency said it will rate the lending’s under its 'Line of Credit' rating service.
The RBI under the Basel II norms has given some regulatory guidelines under which a bank's exposures have to be rated to keep a check on the banking system.
As per the MoU under the RBI guidelines the bank, with the help of the rating service, will assign the risk weights applicable to its borrowers.
It added, "The risk weights would be linked to the various rating categories and would be as per RBI's Basel II guidelines".