RBL Bank ratings on watch as ICRA raises CD limit 2025

What changed in RBL Bank’s ratings

ICRA has placed RBL Bank Limited’s long-term rating on “Watch with Positive Implications” and said it will resolve the watch status on completion of the transaction under review. In a subsequent action, ICRA reaffirmed the bank’s short-term rating and enhanced the rated amount for the certificates of deposit (CD) programme. Across the disclosures, ICRA maintained the bank’s short-term instruments at the highest short-term rating level cited in the document, while the long-term rating watch remained in place because the transaction was yet to be consummated.

The rating actions cited cover multiple instruments including Basel III Tier II bonds, fixed deposits, short-term fixed deposits, and certificates of deposit. The documents also repeatedly refer to “ratings reaffirmed” for RBL Bank, alongside one instance where a rating was withdrawn for a matured or redeemed instrument.

Key dates and the rating timeline

The rating actions in the provided text span from 2022 through late 2025, with repeated reaffirmations in 2024 and 2025, and a watch placement in October 2025. The watch-with-positive-implications status is linked to a proposed transaction that requires regulatory and statutory approvals.

ICRA’s December 2025 note explicitly states that the transaction had shareholder approval but was still subject to various approvals, and that the long-term rating watch continued as the transaction was yet to be consummated. The same note adds that after completion, ENBD would be classified as the promoter of RBL.

Instruments covered and current ratings mentioned

The text lists the following instruments and ratings from ICRA: Basel III Tier II bonds, fixed deposits, short-term fixed deposits, and certificates of deposit. For the periods shown, Basel III Tier II bonds and fixed deposits are shown at [ICRA]AA- with either Stable outlook (in 2024 and August 2025) or placed/continued on Watch with Positive Implications (October and December 2025). Short-term fixed deposits and certificates of deposit are shown at [ICRA]A1+.

A separate set of lines also references other programmes and ratings, including a Basel III compliant Tier II bond programme figure and a fixed deposits programme carrying “ICRA AAA (Stable)” in one table fragment, but the clearest repeated ICRA actions for RBL in the dated sections are around AA- (long-term) and A1+ (short-term).

Certificates of deposit programme: enhancement in December 2025

The December 17, 2025 disclosure states that the certificates of deposit rated amount was enhanced from Rs 6,000 crore to Rs 10,000 crore, with the rating shown as [ICRA]A1+; reaffirmed/assigned for enhanced amount. This change increased the “Total” rated amount shown in that summary from Rs 6,070 crore to Rs 10,070 crore.

The same summary keeps Basel III Tier II bonds at Rs 70 crore and continues the long-term rating on watch with positive implications. It also shows fixed deposits continuing on watch with positive implications, and short-term fixed deposits reaffirmed at [ICRA]A1+.

Why ICRA placed the long-term rating on watch

ICRA’s October 29, 2025 note says it placed RBL’s long-term rating on watch with positive implications and would continue to monitor progress in terms of receipt of requisite approvals. It also said it would seek clarity on ENBD’s strategy and its extent of involvement in bank operations, and take appropriate rating action as more clarity emerges.

ICRA added that it would resolve the rating watch on completion of the transaction. The December 2025 note repeats that the watch continues because the transaction is yet to be consummated, even though shareholder approval had been obtained.

What ICRA highlighted in the August 2024 and August 2025 reaffirmations

In the August 21, 2024 rating action summary, ICRA reaffirmed ratings for Basel III Tier II bonds (Rs 70 crore), certificates of deposit (Rs 6,000 crore), and reaffirmed ratings for fixed deposits and short-term fixed deposits. The note states that the reaffirmation factors in an improvement in RBL’s earnings profile backed by healthy growth in advances and the overall deposit base.

The August 2024 text also says the long-term rating remains constrained by a moderating but high share of unsecured retail loans, largely credit cards and microfinance. It further states that the Stable outlook factors in ICRA’s expectation that the bank will maintain comfortable capitalisation and solvency.

In the August 25, 2025 reaffirmation note, ICRA again reaffirmed the same key instrument ratings and cited RBL’s capital position. It specifically reports CET I of 14.05% and CRAR of 15.59% as on June 30, 2025.

Table: ICRA rating actions and programme sizes (as cited)

Table: December 2025 summary snapshot (ICRA)

Regulatory context: migration of rating scales in 2022

A June 09, 2022 disclosure in the text explains that, following SEBI circulars dated July 16, 2021 and April 1, 2022, ICRA discontinued its medium-term rating scale used for fixed deposit programmes. As a result, ICRA migrated the rating outstanding for RBL’s fixed deposits programme from the medium-term scale to the long-term scale.

The disclosure clarifies that the change in rating symbol due to migration should be construed as recalibration from one scale to another, and not a reflection of a change in the credit risk of the fixed deposit programme.

Market impact: what the actions mean for funding instruments

The most direct market-relevant change stated in the text is the enhancement of the CD programme size from Rs 6,000 crore to Rs 10,000 crore in December 2025, while keeping the short-term rating at [ICRA]A1+. For long-term instruments like Tier II bonds and fixed deposits, the shift from a Stable outlook (in the reaffirmation notes) to a watch with positive implications (in late 2025 notes) signals that ICRA expects to revisit the rating once transaction-related clarity and approvals are in place.

The documents also show that ICRA kept the Tier II bond amount cited in the dated summaries at Rs 70 crore through 2024, 2025, and December 2025, with the rating moving in status from “Stable” to “Watch with Positive Implications” after October 2025. Separately, the text contains references to other programme sizes (including an Rs 800 crore Tier II bond programme in an older note), but the late-2025 watch discussion is tied to the long-term rating and transaction progress rather than a stated change in outstanding long-term amounts.

Conclusion

ICRA’s disclosures show a clear sequence: reaffirmations through 2024 and August 2025, followed by an October 2025 placement of the long-term rating on watch with positive implications, and a December 2025 reaffirmation of short-term ratings alongside a larger CD programme size. The rating watch is explicitly linked to pending approvals and the completion of the referenced transaction, with ICRA stating it will resolve the watch on completion.