However the proposal came under fire as the regional development banks were had just emerged from a bad patch and their financial health was starting to improve. In addition their mission was different from the other two banks.
All the regional development banks had investment grade ratings above BBB- (lka).
Fitch Ratings put the banks on 'ratings watch' indicating that it may have to downgrade them if a merger with SME Bank went ahead, as it had 31 percent dud loans.
"SME Bank's asset quality on its loan portfolio was quite weak with non performing loans to gross loans at a high 31 percent at September 2006," Fitch Rating warned at the time.
The regio