ICRA has assigned a rating of [ICRA]AA+ (Stable) to Bank of India’s (Bol) Basel III Tier II bonds, valued at ₹2,500.00 crore. The rating reflects Bol’s strong capital position and improving solvency, supported by declining net stressed assets. Additionally, ICRA has reaffirmed and withdrawn the rating for Bol’s fixed deposit programme following the bank’s confirmation of no outstanding deposits. The rating considers the bank’s sovereign ownership and demonstrated government support.
ICRA Assigns AA+ Rating to Basel III Tier II Bonds
ICRA has assigned a rating of [ICRA]AA+ (Stable) to Bank of India’s (Bol) Basel III Tier II bonds, amounting to ₹2,500.00 crore. This rating is based on the bank’s robust capital position and continuous improvement in its solvency, driven by a reduction in net stressed assets.
Rating Rationale
The rating considers Bank of India’s strong capital position and improving solvency. The rating agency also considered the sovereign ownership and the demonstrated track record of capital support from the Government of India (Gol). The assessment also reflects Bol’s strong resource profile and granular deposit base.
Asset Quality and Profitability
Bol’s overall potential stress book has decreased from levels seen during the Covid-19 pandemic. The bank’s profitability has steadily improved, with a return on assets (RoA) of 0.91% in H1 FY2026 and 0.95% in FY2025, compared to 0.74% in FY2024.
Key Rating Drivers
The rating is supported by the bank’s sovereign ownership (73.38% as of September 30, 2025) and capital infusions from the Gol of approximately ₹29,784 crore during FY2017-FY2021.
Liquidity and Regulatory Compliance
Bank of India’s liquidity coverage ratio of 119.76% and net stable funding ratio of 113.88% in Q2 FY2026 are above regulatory requirements.
Rating Sensitivity
A positive factor would be Bol’s ability to increase its scale of operations meaningfully, while improving its profitability and maintaining a comfortable solvency and capitalisation profile. A negative factor would be a change in the sovereign ownership, deterioration in asset quality or capitalisation, or a sustained RoA of less than 0.5%.
Withdrawal of Fixed Deposit Programme Rating
ICRA has reaffirmed and subsequently withdrawn the rating for Bank of India’s fixed deposit programme following confirmation from the bank that there are no outstanding deposits.
Source: BSE