Bank of Maharashtra — Issuer Summary

Report date: 8 September 2026

1. Business Snapshot and Recent Developments

Bank of Maharashtra (BoM) is a listed Indian public-sector commercial bank headquartered in Pune. Its repayment capacity is anchored in a domestic deposit franchise, lending to retail, corporate, MSME, agriculture and infrastructure customers, and a large portfolio of statutory and other investments; it is not a finance company dependent principally on wholesale refinancing. The Government of India held 73.6% of the equity at 31 March 2026. That ownership is important to the credit story because it supports the expectation of extraordinary support in stress, but it is not evidence that any particular BoM obligation carries an explicit sovereign guarantee.

The latest available reporting set is Q1 FY2027, ended 30 June 2026. Standalone advances were INR301,934 crore, 5% above the March 2026 balance, while deposits were INR344,493 crore, 2% below the March balance. The quarterly movement should not be read as a definitive change in funding quality: deposits and balances are point-in-time measures, whereas the June LCR and NSFR disclosures are quarterly regulatory measures. The more relevant credit question is whether loan growth can remain deposit-funded without eroding liquidity or capital buffers.

Reported earnings continued to expand. Q1 operating profit was INR3,118 crore and standalone PAT INR2,021 crore, compared with INR2,570 crore and INR1,593 crore respectively in Q1 FY2026. Annual FY2026 PAT was INR7,019 crore, compared with INR5,520 crore in FY2025 and INR4,055 crore in FY2024 according to CRISIL’s November 2025 rationale and the FY2026 statutory result. The sequential and annual improvement strengthens internal loss-absorption capacity, although a quarter of earnings cannot establish through-the-cycle profitability and should be read together with provisioning, recovery gains and the effect of interest-rate movements.

2. Industry Position and Franchise Strength

BoM is a mid-sized public-sector bank rather than one of India’s largest national lenders. CRISIL described its deposits and advances as around 1% of system deposits and advances at June 2025, and identified high regional concentration as a structural constraint: Maharashtra accounted for 71.6% of deposits and 51.7% of advances at September 2025. The concentration is a double-edged feature. A long-established home-market franchise can support local deposit gathering and customer knowledge, but a Maharashtra-specific slowdown, property stress, agricultural disruption or competitive deposit pricing would have a more direct effect on BoM than on a geographically diversified national leader.

The bank’s public-sector status, branch network and participation in retail, MSME, agricultural and government-linked banking activities support deposit access and access to systemic liquidity facilities. CRISIL also cited a 50.4% CASA share at September 2025 and access to the RBI liquidity adjustment facility, call-money market and refinance sources. These are useful indicators of funding resilience, but the CASA metric is dated and is not presented here as a current figure. The report therefore treats the current deposit mix as an item for confirmation rather than extrapolating the 2025 ratio.

Government ownership is a meaningful external support factor but should not substitute for analysis of BoM’s standalone risk profile. CRISIL’s CD rationale explicitly based its rating approach on standalone business and financial risk and then factored in expected support from the Government of India. The distinction matters most to holders of subordinated capital, whose contractual loss absorption and ranking can make their risk materially different from senior unsecured creditors even if support expectations remain high.

3. Segment Assessment

BoM reports treasury, corporate/wholesale, retail and other banking operations. For FY2026, reported segment income was INR6,979 crore for treasury, INR11,086 crore for corporate/wholesale banking, INR14,553 crore for retail banking and INR204 crore for other banking. Reported profit before tax was INR1,496 crore, INR3,094 crore, INR3,164 crore and INR104 crore respectively. The accounting segment result is not a risk-adjusted return or capital-consumption measure, so it cannot alone demonstrate which business offers the best credit-adjusted earnings.

Sources: FY2026 exchange filing and Q1 FY2027 issuer filing. FY2026 is an annual flow; Q1 FY2027 is a one-quarter flow. Segment revenues are reported accounting figures and are not comparable with loan balances or regulatory-risk measures without qualification.

Retail banking provides the largest reported FY2026 income contribution and, together with wholesale banking, should diversify the loan book away from a single corporate-risk channel. However, the report has not obtained current loan composition, loan-to-value information, borrower concentration or risk-adjusted segment profitability. Those gaps matter because expanding retail and MSME books can improve granularity while also introducing unsecured-consumer, small-business and operational risks. Treasury earnings are supported by the investment portfolio but can be sensitive to interest rates and valuation effects; they should not be assumed to recur at the same level.

4. Financial Profile and Analysis

The financial profile improved materially over the FY2024-FY2026 period, driven by profit growth and a decline in reported NPA ratios. Total standalone assets reached INR427,363 crore at March 2026, advances INR288,104 crore and deposits INR350,564 crore. At June 2026, assets were INR426,303 crore, advances INR301,934 crore and deposits INR344,493 crore. The apparent balance-sheet contraction in Q1 reflects a mix of point-in-time movements and should not be treated as a negative funding event without deposits, wholesale funding and liquidity data over the full quarter.

Calculated as same-date advances divided by same-date deposits; FY2025 uses CRISIL's dated 30 September 2025 advances and deposits, while FY2026 and Q1 FY2027 use the stated period-end balance sheets. It is a basic funding indicator, not a complete liquidity measure, because it excludes investments, borrowing maturity, contingent funding needs and regulatory runoff assumptions. *June 2026 regulatory metrics: capital ratios are standalone; LCR is disclosed on a consolidated basis; the reviewed NSFR disclosure does not expressly state a separate accounting-consolidation perimeter. These are not directly comparable with accounting balance-sheet figures. All FY figures are annual and period-end where applicable; Q1 profit is a quarterly flow, ROA is annualised, while capital and liquidity are regulatory measures. Calculations are deliberately not used to create unreported comparisons.

The reported decline in gross NPA from 1.88% at March 2024 to 1.45% at March and June 2026 is a central credit positive. Net NPA of 0.13% at June 2026 suggests that specific provisions cover a large part of reported problem assets. In the June Pillar 3 disclosure, gross NPA was INR4,434 crore and net NPA INR405 crore. During the quarter, gross NPA additions were INR890 crore and reductions INR702 crore, producing a higher closing gross-NPA balance than the March balance despite an unchanged rounded ratio. This shows why a flat NPA ratio should not be read as an absence of risk migration: new inflows, recoveries, write-offs and loan growth must be assessed together.

Profitability provides the first line of defense against future credit costs. Q1 FY2027 operating profit increased 21% year on year and PAT 27%, while annualised ROA was 1.90%, up from 1.70% in Q1 FY2026. This is constructive, but provisioning for NPAs was INR755 crore in Q1, and the bank reversed INR250 crore of COVID-related contingency provisions while retaining INR760 crore. The reversal is a fact that needs separate treatment from recurring pre-provision earnings: it may benefit current profitability but does not itself prove that future credit costs will remain low.

The quality of the NPA improvement requires more caution than a headline ratio alone implies. At 30 June 2026, gross NPA opened at INR4,246 crore, additions were INR890 crore and reductions INR702 crore, producing a closing balance of INR4,434 crore. Specific provisions opened at INR3,726 crore; INR754 crore was provided, INR967 crore written off, INR119 crore written back and other adjustments were INR262 crore, leaving INR3,893 crore. Recoveries in written-off accounts were INR305 crore. These figures show active management of impaired assets, including recoveries and write-offs, rather than a simple disappearance of risk. They do not permit this report to calculate a comprehensive coverage ratio or a through-the-cycle credit cost because the required consistently defined data were not obtained. Accordingly, the low net-NPA ratio is a meaningful positive indicator but not conclusive evidence that the remaining loan book will generate low losses.

Multi-period financial reading and evidence constraints

The most useful multi-period observation is the combination of asset growth, earnings growth and lower reported NPA ratios. Total assets rose from INR307,138 crore at March 2024 to INR369,142 crore at March 2025 and INR427,363 crore at March 2026. FY2026 asset growth therefore followed a period of substantial balance-sheet expansion. Annual PAT rose from INR4,055 crore in FY2024 to INR5,520 crore in FY2025 and INR7,019 crore in FY2026. The direction is favorable because stronger earnings can absorb ordinary credit costs, provide retained capital and increase management flexibility. It does not show that every component of profit is equally recurring. Interest income, cost of deposits, treasury income, recoveries, provision reversals and tax effects can each alter annual earnings without changing the underlying borrower-risk profile by the same amount.

The Q1 FY2027 result is supportive rather than dispositive. Q1 total income was INR9,064 crore, interest expense INR4,264 crore, operating expenses INR1,682 crore and operating profit INR3,118 crore. Provisions and contingencies were INR840 crore, including INR755 crore of NPA provisions, resulting in profit before tax of INR2,277 crore and consolidated PAT of INR2,023 crore. Year-on-year operating profit increased from INR2,570 crore and PAT from INR1,593 crore. The bank therefore entered FY2027 with earnings momentum and an ability to absorb a material quarterly provision charge. Yet a single quarterly annualised ROA of 1.90% should not be added mechanically to full-year ratios or used to forecast FY2027 profit. It is a period-flow outcome influenced by the quarter’s interest-rate, recovery, expense and provision conditions.

The report has deliberately not calculated net interest margin, cost-to-income, credit cost or a provision-coverage ratio. Those metrics can be decision-useful, but calculation requires clearly consistent average balances and numerator definitions; a precise-looking derived number based on mixed quarterly and annual disclosures could be more misleading than informative. This is a real information constraint: the public sources reviewed provide a robust high-level result and prudential snapshot, but not the complete multi-year reconciliation needed for a fully modelled bank forecast. It limits the report to a conditional credit conclusion. In particular, the analysis cannot determine how much of the reported earnings improvement is attributable to sustainable loan pricing and lower credit losses versus treasury performance, recoveries, provision releases or other income.

The balance-sheet figures also illustrate why growth needs to be assessed with asset quality rather than in isolation. Advances increased from INR288,104 crore at March 2026 to INR301,934 crore at June 2026, while deposits were lower at the June point in time. The calculated same-date loans-to-deposits ratio therefore rose from 82.2% at March to 87.6% at June. This remains below 100% and does not itself identify funding stress, but the movement is worth monitoring because sustained loan growth faster than deposit growth can increase reliance on borrowings, reduce liquidity flexibility or raise the cost of funding. A countervailing fact is that the June LCR and NSFR were both above minimums. The evidence does not establish which balance-sheet measure will dominate over a full cycle, so the report treats their interaction as a monitoring question rather than as evidence of either emerging pressure or complete comfort.

Asset-quality improvement should also be read against the composition of impaired assets. At June 2026, INR1,802 crore of gross NPA was classified sub-standard, INR2,432 crore as doubtful across the three doubtful buckets and INR201 crore as loss assets. A high doubtful component can mean that resolution and recovery outcomes remain important even where the reported gross-NPA ratio is low. The quarterly provisioning, write-offs and recoveries indicate that the stock is actively managed, but the report does not have borrower-level collateral, time-to-resolution, restructuring or recovery-rate information. It cannot judge the economic value of recoveries or the adequacy of provisions beyond the disclosed net-NPA result. For a creditor, this leaves the timing and earnings impact of remaining legacy stress as an uncertainty rather than a reason to disregard the improvement.

There is also a difference between reported asset quality and the risk in new origination. BoM’s exposure book spans retail, wholesale, infrastructure and other categories. Loan growth can be positive for franchise and earnings, but it can also shift risk toward newer cohorts whose performance is not yet visible in NPA data. The material reviewed does not give vintage curves or a current disaggregation of retail, MSME, agriculture, corporate and infrastructure NPAs. It is therefore not possible to say whether the recent improvement is broad-based across all risk categories. The report’s credit view relies on disclosed aggregate improvement and buffers, while explicitly reserving judgment on segment-level performance for the next update.

What would confirm or challenge the current direction

Confirmation of the constructive direction would require several indicators to move together rather than one headline metric improving. Deposit growth should remain compatible with loan growth without a sustained rise in funding costs or wholesale dependence. Reported gross-NPA additions should moderate relative to reductions, net-NPA should remain low without reliance on exceptional write-offs, and provision charges should be manageable relative to operating profit. CET1 and total capital should remain above regulatory requirements after considering RWA growth, while LCR and NSFR should remain above their respective thresholds with a stable or improving mix of HQLA and funding. None of those conditions requires perfection; together they would show that earnings, liquidity and capital are reinforcing rather than offsetting each other.

Conversely, a challenge to the current direction could emerge before a headline rating action. Higher gross-NPA additions, declining recoveries, rising NPA provisions, lower operating profit, deposit outflows or a persistent rise in loans-to-deposits would reduce the comfort derived from a single quarter’s regulatory ratios. A fall in CET1 or total capital driven by loss absorption or RWA growth would be particularly relevant for subordinated investors. The report has not identified such a deterioration in the reviewed results. It makes the analytical point that the relevant credit test is a sequence: weaker portfolio performance first affects provisions and earnings, then retained capital and risk-weighted assets, and potentially funding confidence and market access. Senior creditors have a different exposure to that sequence from holders of loss-absorbing capital.

The value of the public-sector support factor must be kept in the same sequence. Expected Government of India support can be relevant to confidence and external assessments of a public-sector bank, particularly in a systemic-stress scenario. It is not a substitute for BoM’s own liquidity, earnings and capital management, nor does it eliminate the contractual subordination of regulatory-capital instruments. A deterioration in the bank’s standalone metrics would therefore remain important even if the support expectation did not change. Conversely, the present improvement in standalone indicators is valuable precisely because it reduces dependence on an extraordinary-support assumption. This framework avoids two opposite errors: treating government ownership as a blanket guarantee, or ignoring the practical support relevance of a majority public owner in the Indian banking system.

For this reason, subsequent reporting should retain the same evidence hierarchy: audited annual statements and regulatory disclosures first, current rating actions second, and market or media information only as a clearly identified supplement. That approach is particularly important when conclusions about individual bank securities could otherwise outrun the public documentation available.

This discipline also preserves comparability across future reporting periods.

The earnings-to-capital link is also conditional. Stronger operating profit can replenish common equity through retained earnings, but provisioning, tax, dividends, growth in risk-weighted assets, changes in regulatory requirements and valuation movements can offset that benefit. The June Pillar 3 disclosure reports capital requirements of INR17,152 crore for credit risk, INR105 crore for market risk and INR2,040 crore for operational risk under the stated regulatory approaches. Credit risk therefore dominates capital consumption. The report does not have a multi-period RWA bridge or a management capital plan, so it cannot quantify how much of recent earnings will translate into future CET1 growth. The appropriate inference is narrower: profitability and capital buffers are currently supportive, while their durability must be demonstrated through recurring operating earnings, controlled slippages and capital ratios that remain resilient as the loan book grows.

5. Structural Considerations for Bondholders

The core bank is the principal obligor for its issued debt. The June 2026 Pillar 3 disclosure identifies The Maharashtra Executors & Trustee Co. Pvt. Ltd. as a consolidated subsidiary for accounting purposes and Maharashtra Gramin Bank as an associate accounted for under the equity method; neither is included in the banking regulatory consolidation. These distinctions are relevant because statutory capital ratios apply to the regulatory banking perimeter, while consolidated accounting data can include entities with different activities and creditor structures.

For an identified Tier II instrument, the bank’s official term sheet states that the debentures are unsecured and subordinated, rank below depositors and general creditors, but above Tier I capital, and are not covered by a guarantee of the issuer, related entities or another arrangement enhancing seniority. It also refers to loss absorbency and point-of-non-viability provisions. This supports a clear security-class distinction: Tier II holders should not treat a bank-level issuer view as a substitute for contractual ranking analysis. The report has not reviewed every outstanding term sheet, AT1 terms, call mechanics, coupon-cancellation provisions, trigger levels or senior debt documentation. Those are unconfirmed and must be checked before a specific-security investment.

The verified term-sheet evidence applies only to the identified 7.89% Bank of Maharashtra Basel III Tier 2 Bonds (Series VIII), not to an inventory of all BoM securities. The high-level orientation in this report is therefore limited: depositors and general senior creditors rank ahead of that identified Tier II instrument; Tier II ranks ahead of Tier I capital; and AT1 is generally designed as more deeply loss-absorbing regulatory capital. These statements are not a security recommendation, a complete legal ranking analysis, or a substitute for checking the offering document, maturity and call schedule, coupon provisions, write-down or conversion terms, point-of-non-viability treatment, tax provisions and applicable regulation for the precise instrument being evaluated.

6. Capital Structure, Liquidity and Funding

At June 2026, BoM reported CET1 of 15.56%, Tier 1 of 16.35% and total capital of 18.64%, compared with RBI minimums including the capital conservation buffer of 8.0%, 9.5% and 11.5%, respectively. The buffers support absorption of moderate deterioration in credit quality and give BoM room to grow. Still, regulatory ratios are not static protection: loan growth, higher risk weights, valuation changes, provisioning and losses can reduce them. The FY2026 accounting CET1 figure of 14.59% is not directly comparable with the June regulatory disclosure without scope and date qualification.

Liquidity appears adequate on disclosed regulatory metrics. The June 2026 LCR averaged 117.87%, above the 100% minimum, based on HQLA of INR80,343 crore and net cash outflows of INR68,161 crore. The NSFR was 125.19%, also above 100%. Government securities and cash / excess CRR formed the principal Level 1 liquidity resources. The LCR disclosure nevertheless identifies deposit concentration: the top 20 depositors represented 14% of deposits and the top 10 borrowing counterparties 83% of borrowings. Those figures do not indicate immediate stress, but they make the composition and behavior of wholesale balances an ongoing monitoring issue.

Deposits remain substantially above advances, but a simple loans-to-deposits calculation is not a complete liquidity measure because it excludes investments, borrowings, contingent funding needs and regulatory runoff assumptions. The report therefore relies on LCR and NSFR for the near-term liquidity conclusion. It does not have a complete contractual debt-maturity ladder, foreign-currency funding profile or committed-line data.

The LCR and NSFR provide disclosed regulatory headroom, but do not establish the probability or speed of a deterioration in funding. The evidence set lacks multi-period deposit-mix data, current CASA, a contractual maturity ladder, foreign-currency funding detail and a complete borrowing-counterparty profile. Moreover, the LCR disclosure notes that the top 20 depositors represented 14% of deposits and the top 10 borrowing counterparties 83% of borrowings. The right conclusion is that liquidity metrics were above minimum at June 2026, while the resilience of funding under a prolonged deposit or wholesale-market shock remains an item requiring trend evidence. Future confirmation should compare deposits, CASA, borrowings, HQLA composition, LCR and NSFR across several reporting dates rather than relying on a single reported quarter.

The balance-sheet structure nevertheless helps frame the funding question. At June 2026, deposits funded the largest part of the balance sheet, alongside borrowings of INR38,749 crore and equity plus reserves. Investments were INR100,476 crore and advances INR301,934 crore. A deposit-funded commercial bank can use a high stock of government securities, cash and central-bank balances both for statutory liquidity purposes and as a source of contingent liquidity; BoM’s LCR disclosure says its HQLA is principally mandatory SLR securities, excess SLR government securities, cash and excess CRR. This gives the reported LCR a more tangible asset-side basis than a ratio based chiefly on lower-quality securities. It does not, however, remove interest-rate risk, funding-concentration risk or the possibility that marketable securities could be less liquid than assumed in an idiosyncratic stress.

The difference between liquidity and solvency should remain explicit. LCR tests a 30-calendar-day stress outflow assumption and NSFR compares available and required stable funding over a longer horizon. CET1 and total capital, by contrast, absorb credit, market and operational losses relative to risk-weighted assets. Strong LCR and NSFR cannot compensate indefinitely for deterioration in credit quality, and high capital cannot itself ensure funding stability if deposit confidence weakens. The present credit view rests on the combination of reported headroom across these measures rather than on any single ratio. The principal limitation is that the disclosures do not provide the report with enough multi-period, consistently scoped evidence to determine whether those buffers are widening, flat or narrowing through a changing rate and credit cycle.

6A. Funding, Deposit Franchise and Interest-Rate Sensitivity

BoM’s public-sector and Maharashtra-rooted franchise supports the plausibility of a durable deposit base, but the available evidence should be handled in layers. The current balance sheet shows deposits of INR344,493 crore at June 2026, against INR350,564 crore at March 2026 and INR305,046 crore at June 2025. The year-on-year change is positive, while the quarter-end change is negative. Neither observation is sufficient to establish a trend in customer behavior because quarter-end movements can reflect government, institutional and corporate balances, pricing, seasonality, transaction timing and treasury management. The report has not obtained monthly deposit series or a current retail-versus-wholesale breakdown. It therefore does not characterize the June movement as either a runoff event or evidence that funding is fully stable.

The dated CRISIL rationale provides additional, but not current, context. It cited CASA of 50.4% at September 2025, a cost of deposits of 4.6% in H1 FY2026 and a generally stable resource profile. These data support the historical proposition that BoM had a meaningful low-cost deposit franchise. They do not prove the same mix, pricing or behavioral stability at June 2026. Interest earned increased to INR8,035 crore in Q1 FY2027 from INR7,054 crore a year earlier, while interest expended increased to INR4,264 crore from INR3,762 crore. The resulting reported pre-provision operating profit improved, but the report does not calculate a NIM because average earning assets, exact income definitions and comparable rate data have not all been verified. The investor implication is that margin resilience is a monitoring variable, not an established conclusion.

Funding concentration deserves proportional attention. The LCR disclosure identifies three deposit counterparties individually above 1% of liabilities and says the top 20 depositors represented 14% of deposits. This does not imply an excessive concentration by itself, and the report does not have the underlying tenor or stability classification of those balances. It does mean that a general statement about granular deposits must be qualified. Similarly, top 10 borrowing counterparties represented 83% of borrowings. Borrowings are smaller than deposits but could become more important if deposit growth slowed or if funding was needed for asset growth. Future reports should reconcile deposit flows, CASA, term-deposit repricing, wholesale funding, RBI facilities and capital-market issuance to distinguish ordinary balance volatility from an emerging funding-pressure pattern.

6B. Capital Generation, Growth and Regulatory Sensitivity

BoM’s capital buffers are most useful when considered together with the scale and risk composition of asset growth. The June 2026 capital requirements reported under Pillar 3 imply that credit risk remains the major driver of capital needs. Capital is not available for all balance-sheet assets on the same basis: cash, government securities, retail loans, corporate loans, infrastructure exposure, non-funded commitments and operational risk generate different regulatory requirements. The reported total capital ratio of 18.64% offers material headroom above the 11.50% minimum, but a ratio can decline even if nominal capital rises when RWA growth outpaces retained profits or risk weights increase.

The quarterly issue of share warrants, for which 25% of the subscription price had been received, was reported to increase capital adequacy by 43 basis points. This is a positive incremental buffer, but it should not be conflated with recurring internal capital generation or fully paid common equity until the relevant conversion and payment conditions have been met. Likewise, prior QIP and Tier II issuance cited by CRISIL show continued market access and management’s ability to raise capital, while also highlighting that external capital actions have contributed to the historical capital profile. The report does not have a complete capital-management plan, dividend forecast or RWA forecast. It therefore cannot forecast future headroom.

For creditors, the central test is not whether BoM can report a high ratio at a single date, but whether earnings, provisions and portfolio growth can coexist without a material loss of CET1 headroom. The current data are constructive: FY2026 PAT was higher than FY2025 and Q1 FY2027 PAT was higher year on year, while CET1, Tier 1 and total capital exceeded minima. A harsher case would combine weaker margin, higher slippages, lower recoveries and growth in higher-risk assets. That combination would reduce earnings available for retention and raise RWA or provisions at the same time. Capital ratios would then become a transmission channel from operating stress to subordinated-credit risk before senior default risk becomes immediate.

6C. Portfolio Risk and Asset-Quality Transmission

The available Pillar 3 exposure data allow a more granular, though incomplete, view of credit risk. BoM had total fund exposure of INR358,338 crore and total non-funded exposure of INR28,919 crore at June 2026. Infrastructure was the largest separately stated industry category at INR60,950 crore of funded exposure, including power, roads, airports and other infrastructure. Residuary other exposure was much larger in aggregate, which is consistent with a diversified retail, agriculture, service and smaller-business banking base but does not identify its risk characteristics. The disclosure’s finding that no individual industry exceeded 5% of total gross credit exposure reduces concern about a single disclosed industry concentration, yet it is not equivalent to a detailed concentration test.

Portfolio risk can crystallize through borrower correlations rather than industry labels. For example, a regional slowdown could affect local MSME borrowers, commercial real estate, service businesses and employment-sensitive retail customers at the same time; agricultural stress can be shaped by weather, commodity prices and policy; infrastructure loans can be exposed to project execution, concession, counterparty and refinancing risks. The report does not claim that BoM has material stress in any particular category because current non-performing-asset ratios by segment, geography, rating grade, collateral and borrower are not available in the materials reviewed. These are analytical limitations, not evidence of safety or of impairment.

The NPA ratio progression is nevertheless meaningful over three reporting dates. CRISIL reported gross NPA of 2.47% at March 2023, 1.88% at March 2024 and 1.74% at March 2025; BoM reported 1.45% at March and June 2026. The trend suggests sustained improvement rather than a one-period statistical change. The remaining question is the mechanism: the latest quarter included both additions and reductions, as well as significant write-offs. Improvement can arise from lower fresh slippages, recoveries, upgrades, write-offs, loan growth or a combination of each. Because the report cannot create a fully comparable multi-year slippage and provision series from the reviewed material, it treats sustainability as unconfirmed rather than assigning the improvement to a single driver.

7. Rating Agency View

ICRA reaffirmed [ICRA]AA+ (Stable) on infrastructure bonds and Basel III Tier II bonds on 21 July 2026. This is current third-party evidence of investment-grade domestic debt-market standing, but the underlying full rationale was not obtained and the report does not infer rating triggers beyond what the rating action states. CRISIL reaffirmed CRISIL A1+ on certificates of deposit in November 2025. Its dated rationale cited expected Government of India support, a comfortable resource profile and improvement in asset quality and profitability, offset by moderate scale and regional concentration. The overlap between that rationale and recent disclosures is useful, but the CRISIL analysis predates the latest quarter and must not substitute for a current long-term rating rationale.

8. Credit Positioning

Without live spreads, bond prices or verified peer metrics, this report makes no security-specific relative-value call. Qualitatively, BoM is better viewed as an improving mid-sized public-sector bank with deposit funding, capital and liquidity buffers than as a stand-alone corporate borrower. Its comparatively small national scale and Maharashtra concentration constrain that view, while expected state support is an additional but not contractual credit consideration. Senior unsecured creditors benefit from priority over subordinated capital; Tier II and AT1 investors should require an additional analysis of contractual loss absorption, call incentives and regulatory resolution risk.

Qualitative Positioning for Investors

BoM’s qualitative positioning is between the largest Indian banks with more diversified national franchises and weaker lenders whose funding or capital buffers are thin. Its reported June liquidity and capital buffers, declining NPA ratios and profitability improvement argue against characterizing it as an acute-distress credit. Its moderate scale, home-state concentration, incomplete current deposit-mix information and limited security-level documentation argue against treating it as a fully insulated top-tier issuer. This is a qualitative framework rather than a peer-ranking claim; the report has not obtained a current peer data set, ratings universe or live spread curve.

For a fund manager, the practical implication is to separate the issuer decision from the instrument decision. At the issuer level, BoM’s direction of travel appears constructive subject to confirmation of the sustainability of asset quality and funding. At the instrument level, a senior claim, a Tier II bond and an AT1 security can have materially different sensitivity to capital, resolution and call outcomes. The public information supports monitoring rather than a categorical buy, sell or relative-value recommendation. An investor considering a specific issue should test its maturity, call, coupon, governing documentation, loss-absorption terms and price against comparable Indian public-sector-bank securities using current market data not reviewed in this report.

9. Key Credit Strengths and Constraints

10. Downside Scenarios and Monitoring Triggers

The primary downside is a reversal in asset-quality improvement. A slowdown in Maharashtra, stress among MSME, agricultural, retail or corporate borrowers, or a concentrated sectoral shock could increase slippages and credit costs. The first signs would be higher gross-NPA additions, weaker recoveries, rising special-mention accounts where disclosed, provision charges, and a widening gap between gross and net NPA. A sustained increase in credit costs would lower profitability before it meaningfully reduces capital.

The Pillar 3 portfolio disclosure identifies total gross credit exposure of INR387,257 crore, including INR358,338 crore of fund exposure and INR28,919 crore of non-funded exposure. Infrastructure was INR60,950 crore of funded exposure, of which power was INR16,290 crore, roads INR16,512 crore and other infrastructure INR25,279 crore. No individual industry exceeded 5% of gross credit exposure under the disclosure’s reported categories. This is evidence against a single disclosed industry concentration above that threshold, but it does not establish the absence of borrower, state, collateral, connected-counterparty or correlated-stress concentration. The inability to test those dimensions limits the precision of the downside assessment.

A second downside is margin and funding pressure. Deposit competition can raise funding costs or require greater use of wholesale borrowing; loan growth that exceeds deposit growth could pressure liquidity ratios. Monitor deposit growth and mix, CASA, loans-to-deposits, LCR, NSFR, HQLA composition, top-depositor concentration and the cost of deposits. The present LCR and NSFR are above minimums, but they should be assessed as a trend rather than as a one-quarter pass/fail test.

A third downside is capital erosion through growth, higher RWAs, valuation losses or subordinated-debt dependence. Monitor CET1, Tier 1, total capital, RWA, capital raises, dividend policy and the issuance or call of AT1 and Tier II. A fourth is weaker support expectation: material dilution of Government ownership or a deterioration in the policy view of public-sector banks would change the external-support component of the credit story. The report has not identified evidence of either event; these are monitoring triggers, not current facts.

11. Credit View and Monitoring Focus

BoM’s current credit strength is consistent with an improving domestic public-sector bank profile: reported asset quality has strengthened, profitability has increased, and June 2026 CET1, total capital, LCR and NSFR were above regulatory minimums. The direction of credit quality is positive but should be described as gradual rather than completed, because the June quarter still recorded gross-NPA additions and a portion of recent earnings benefited from a reversal of COVID-related contingency provisions. The June prudential ratios provide disclosed regulatory headroom, but the lack of multi-period deposit-mix, contractual-maturity and wholesale-funding evidence limits any assessment of the speed or probability of deterioration. The view would require reassessment if asset-quality improvement reverses, deposits fail to keep pace with lending, or capital headroom contracts.

The main supports for senior creditor repayment and refinancing are the deposit franchise, HQLA-based liquidity, regulatory capital buffers, improved profitability and expected state support. The principal constraints are moderate national scale, high Maharashtra concentration, incomplete transparency on current loan mix and individual borrower risk, and the need to demonstrate that low NPA ratios and strong earnings can persist through a less favorable operating environment. The current information supports an investment-grade domestic-bank view; it does not support treating all BoM securities as equivalent.

Senior unsecured claims and deposits rank ahead of Tier II. Identified Tier II debt is unsecured, subordinated, non-guaranteed and subject to regulatory loss-absorbency provisions, so it requires a separate security-level assessment even where the bank-level credit story is constructive. No live market data has been reviewed, and this report therefore makes no spread or relative-value recommendation. Future updates should focus on slippages, recoveries, provisions, capital-ratio direction, deposit mix, LCR / NSFR and the terms of any particular instrument under consideration.

12. Short Summary & Conclusion

Bank of Maharashtra is an improving Indian public-sector bank, supported by deposit funding, capital and liquidity buffers, and lower reported NPA ratios. Q1 FY2027 profitability and June 2026 regulatory metrics remain constructive, but the durability of asset-quality improvement, Maharashtra concentration and funding trends require continued monitoring. Senior creditors and depositors should be distinguished from subordinated Tier II and AT1 investors, whose contractual loss-absorption risk must be assessed security by security.

13. Sources

Primary sources

• Bank of Maharashtra, FY2025-26 Annual Report, filed 6 June 2026: https://nsearchives.nseindia.com/annual_reports/AR_29360_MAHABANK_2025_2026_A_16232043_06062026210604.pdf
• Bank of Maharashtra, FY2025-26 financial results, NSE integrated filing: https://nsearchives.nseindia.com/corporate/ixbrl/INTEGRATED_FILING_BANKING_151671_20042026192125_iXBRL_WEB.html
• Bank of Maharashtra, Q1 FY2026-27 financial-results filing, 10 July 2026: https://financialfilings.com/filings/bank-of-maharashtra/earnings-release/2026/49235943/
• Bank of Maharashtra, Basel III Pillar 3 Disclosure at 30 June 2026: https://bankofmaharashtra.bank.in/writereaddata/documentlibrary/328ac6e3-e141-4b11-9d0c-10524c217fc5.pdf
• Bank of Maharashtra, LCR disclosure at June 2026: https://bankofmaharashtra.bank.in/writereaddata/documentlibrary/ab623f01-826c-46b8-8b14-b73797771a69.pdf
• Bank of Maharashtra, NSFR disclosure at June 2026: https://bankofmaharashtra.bank.in/writereaddata/documentlibrary/83237a36-6e24-4b7f-bac9-4b377bf733c2.pdf
• Bank of Maharashtra, Tier II term sheet: https://bankofmaharashtra.bank.in/writereaddata/documentlibrary/b89d027d-f9d7-4c36-b90d-f0da3df1908b.pdf

Rating sources

• ICRA, Bank of Maharashtra rating details, 21 July 2026: https://www.icra.in/Rating/RatingDetails?CompanyId=24021&CompanyName=Bank+of+Maharashtra
• CRISIL, Bank of Maharashtra CD rating rationale, 4 November 2025: https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/BankofMaharashtra_November%2004_%202025_RR_381566.html

Unverified or pending items

• Current CASA ratio, NIM, detailed credit cost, borrower and sector concentration, and full provisioning-coverage trend were not fully confirmed from the materials reviewed.
• All current ratings and complete rating rationales other than the cited actions remain to be checked.
• Individual bond maturity, calls, coupons, covenants, loss-absorption terms, guarantees and seniority must be checked against the relevant offering documents before a security-specific investment.
• No live bond spread, CDS or trade data was reviewed; no market relative-value judgment is made.