NEW DELHI: Shares of Indian Overseas Bank and Central Bank Of India jumped over 4 per cent on Monday after ratings agency Moody's upgraded their long-term local and foreign currency deposit ratings to Ba2 from Ba3.Shares of Indian Overseas Bank closed at Rs 15.01 up 3.23 per cent while Central Bank Of India stood 3.33 per cent higher at Rs 34.10 on BSE.Moody's has also upgraded their Baseline Credit Assessment (BCA) and Adjusted BCA to b2 from b3.
In addition, Moody's has also assigned foreign currency counterparty risk ratings (CRR) of Ba1/NP to both the banks."The rating upgrade reflects the improved solvency of the banks, following the capital infusion from the government," the rating agency said in a release."Moody's estimates that both banks will achieve a common equity tier 1 (CET1) of more than 8 per cent by March 2019, creating a buffer above the regulatory requirement under Basel III of 7.375 per cent," it further added.