RBI ups SBIs Camels rating

After a thorough evaluation of key portfolios and the books of the countrys largest lender,State Bank of India (SBI),the Reserve Bank of India (RBI) has raised its Camels rating by one notch,a senior SBI official said. The Camels rating is generally assessed by the banking regulator on six key areas of bank and its portfolios capital,asset quality,management,earnings,liquidity and systems & controls (Camels).

The reason for this upgrade could be our efforts in the last two years or so. We have been constantly monitoring our capital and assets,especially non performing assets (NPAs) to improve them better. In the recent past,we have already taken the first step on provisioning for the teaser loans too, an official said on the condition of anonymity.

The banks Camels rating was downgraded from B to B- by the RBI for the year ended March 2009. When asked about the details of the grade given by the regulator he declined to disclose it,citing confidentiality for both the bank and the regulator. However,a top banker said,It is highly confidential for the bank and the regulator as well. No bank uses the rating for publicity even if it gets the top grades offered by the RBI. Similarly,the regulator does not even make it known even if it very low as that affects public confidence in the lender and risks a run on deposits.

According to a banking source,banks are generally inspected annually,but the RBI does it once in two years for the State Bank of India.