THIRUVANANTHAPURAM: The Reserve Bank of India has downgraded Kerala Bank to ‘C’ class, based on a report from Nabard. As per the latest classification, the bank will not be eligible to give personal loans above Rs 25 lakh.
Kerala Bank has written to its branches, explaining the new restrictions and guidelines. The bank was categorised in ‘B’ class earlier.
Bank authorities, however, said the new classification would have little impact on its business. “The restrictions are only for sanctioning mortgage loans above Rs 25 lakh. The number of such loans are comparatively low.
‘Won’t affect agri, home, MSME loans’
After the formation of Kerala Bank, the mortgage loans are generally below Rs 20 lakh,” an official said, adding that it would not affect home loans, MSME loans, agri or primary cooperatives. The failure to meet several criteria set by RBI to ensure professional competency — like enough competent professionals and healthy NPA rates — has reportedly led to the downgrade.