"Inability of the bank to reverse its declining capitalisation and solvency position in coming periods could result in a downgrade of its ratings," the rating agency said in a statement.
Around 500 million rupees of the upcoming debenture issue will be used to repay a maturing debt, leaving a billion rupees for capital and liquidity purposes.
Fitch said it was affirming the bank's A- (lka) long term rating, as well as BBB+ (lka) ratings of previous subordinated debentures because of several plus points.
"The ratings reflect Seylan's strong market position and customer franchise, systemic importance as the third-largest private sector bank in the country and its fairly diverse revenue streams," Fitch said.
Bu