India Ratings & Research's (Ind-Ra) Banks and Financial Institutions Group is the industry's established leader in credit rating coverage. Ind-Ra has developed a unique procedure for assessing banks and assigning them long-term and short-term entity and senior debt ratings.
Ind-Ra was the first to develop a specialized dual rating scale for financial institutions
1) Individual ratings, measuring stand-alone financial strength
2) Support ratings, providing an opinion on the likelihood and source of external support, should a bank experience financial difficulties
We assess the business of the financial
institution in question, the objective of its management, the environment it operates in
and the most likely future development of its business.
The quantitative component of our rating
process focuses on fundamental financial analysis of:
> historical performance
> trend analysis
> analysis of risk appetite
> assessment of market, credit, liquidity,
counterparty and reputation risks
> reviews of capital and leverage
The quantitative review also focuses on
profitability and operating efficiency by business line. From this analysis, we develop
expectations for future earnings performance under various operating or economic scenarios
and prepare peer comparisons.
The qualitative component of our rating
process is the result of an assessment of:
> management depth and experience
> strategic position
> competitive advantage
> funding stability
> risk management capabilities
Funding diversity and risk management have
become key rating considerations in light of recent disruptions in the capital markets,
while increased competition impacts profitability across all business segments. A thorough
understanding of the issuer's competitive advantages as well as strategic responses is
also considered in the rating decision. In summary, the qualitative assessment looks
"beyond the numbers" to assess the intangible strengths and weaknesses of the
issuer. | 
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