Rating agency Crisil has placed long term debt instruments of a host of Citibank arms on ‘ratings watch with negative implications.'

A statement from Crisil said, "The long-term ratings have been placed on watch following continued pressure on Citigroup Inc's performance from write-downs on its assets, the announcement of a merger agreement with Wachovia Corp, and the action taken by Standard & Poor's (S&P) on the counterparty ratings on Citigroup and its bank affiliates."

The Indian arms whose instruments have been placed on ratings watch by Crisil are Citifinancial Consumer Finance India (CCFIL), Citicorp Finance (India) (CFIL), Citicorp Capital Markets (CCML), and Citicorp Maruti Finance (CMFL).

The ratings on the short-term debt instruments of these entities have been reaffirmed at ‘P1+.

On September 29th, 2008, the global rating agency S&P placed its ratings on Citigroup on ‘credit watch with negative implications'. The agency noted that ratings on Indian entities centrally factor in the credit profile of Citigroup, the parent entity for the entire group of companies.

In Crisil's opinion, its ratings on the long-term debt instruments of Citibank and the Citigroup are unlikely to fall below the ‘AA' rating category. The agency however confirmed that it will remove the ratings from watch and also revise them if required. Crisil is likely to take a decision in this matter after Citigroup's integration plans with Wachovia Corp are clarified.

Wells Fargo & Co. and Citigroup Inc. are likely to share Wachovia Corp after a legal tug-of-war to acquire the company.

The agency has also lowered the rating outlook for three public sector banks - Corporation Bank, Canara Bank and IDBI Bank.