New Delhi: Central Bank of India has received a strong vote of confidence as CARE Ratings reaffirmed its highest short-term credit rating of ‘CARE A1+’ for the bank’s Certificate of Deposit (CD) programme. Along with the rating reaffirmation, the agency has also doubled the size of the programme from ₹10,000 crore to ₹20,000 crore, signaling improved financial stability and investor trust.
The update was released on 18 June 2026 in Mumbai and reflects the bank’s strengthening fundamentals, supported by government backing and better asset quality performance.
Strong Government Support Strengthens Financial Profile
CARE Ratings highlighted the strong backing of the Government of India, which holds an 81.19% stake in the bank. Between FY16 and FY23, the government infused a total of ₹21,835 crore into the lender, reinforcing its capital base.
In addition, the bank raised ₹1,500 crore through a Qualified Institutional Placement (QIP) in FY25, further improving its financial position and ensuring stable capital adequacy levels.
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Capital Adequacy Remains Well Above Regulatory Norms
As of March 31, 2026, Central Bank of India reported a Capital Adequacy Ratio (CAR) of 17.91%, significantly higher than the regulatory requirement of 11.5%.
This strong capital buffer reflects improved internal accruals, government support, and prudent financial management, according to CARE Ratings.
Asset Quality Shows Consistent Improvement
The bank has demonstrated steady progress in cleaning up its balance sheet. Key improvements include:
- Gross NPA reduced to 2.67% in FY26 from 3.18% in FY25
- Net NPA improved to 0.49%
- Lower slippages and higher recoveries supported asset quality gains
CARE Ratings expects further improvement in asset quality, supported by recoveries and tighter credit monitoring.
Profitability Strengthens Despite Margin Pressure
Central Bank of India reported a net profit of ₹4,369 crore in FY26, compared to ₹3,785 crore in FY25. Total income rose to ₹42,341 crore, driven by strong credit growth and recoveries from written-off accounts.
However, the Net Interest Margin (NIM) declined to 2.79% from 3.05%, indicating some pressure on lending spreads. Despite this, CARE Ratings expects margins to remain stable due to the bank’s strong CASA (low-cost deposit) base.
Retail, Agriculture, and MSME Segments Drive Loan Growth
The bank’s lending portfolio witnessed strong expansion, with gross advances growing nearly 19% year-on-year to ₹3.45 lakh crore.
Key highlights include:
- Retail, agriculture, and MSME loans form over 68% of total advances
- Home loans remain the largest retail segment
- Deposits increased 13% to ₹4.68 lakh crore
- CASA ratio stood strong at 47.18%
This diversified portfolio continues to support steady credit growth.
Key Risks Identified by CARE Ratings
Despite the positive outlook, CARE Ratings flagged potential risks that could impact future ratings:
- Government stake falling below 51%
- Gross NPA rising above 5% on a sustained basis
- Capital buffers weakening below required safety thresholds
These factors will be closely monitored in future rating assessments.
What the Upgrade Means for Investors and the Bank
The reaffirmation of the A1+ short-term rating and the doubling of the CD programme size signals strong confidence in Central Bank of India’s financial health. It reflects improving asset quality, strong capital adequacy, and continued sovereign backing, making the bank more attractive in the short-term debt market.
Overall, the development enhances investor trust and strengthens the bank’s funding capacity in the money market.
About Central Bank of India
Central Bank of India is a public sector bank backed by the Government of India, with a strong retail, MSME, and agricultural lending base. It continues to focus on improving asset quality, expanding credit growth, and maintaining strong capital buffers while leveraging government support to strengthen its long-term financial stability.
