Fitch Ratings has affirmed RBS Financial Services (India) Private Limited's (RBSFS) National Long-Term rating at 'Fitch AAA(ind)' with Stable Outlook, and its National Short-Term rating at 'Fitch A1+(ind)'.  A list of additional rating actions is provided below.

RBSFS's ratings are driven by Fitch's expectations of support from its parent, Royal Bank of Scotland Group Plc (RBSG; Long-Term Issuer Default Rating (LT IDR): 'A'/Stable; Viability Rating (VR): 'bbb'), owing to its strategic importance to RBSG's corporate and private banking business in India, with which RBSFS has strong operational integration. The ratings also factor in its 100% ownership by the UK bank, the RBS name association, and common management.

Notwithstanding RBSG's announced sale of certain banking business lines in India for 2011 and 2012, RBSFS's core business line of credit trading and planned collateralised lending to private banking clients of the group is considered a key part of the group's future growth strategy in the Indian market. India is

identified by RBSG as one of the key 11 markets in Asia-Pacific. RBSFS's non-bank financial company (NBFC) status gives the group additional flexibility in terms of the range of services it can offer to its clients.

RBSFS's ratings are driven by RBSG's individual financial strength (reflected by its VR) as Fitch believes that support made available to RBSG by its 83% owner, the government of UK, may not be transmitted to overseas subsidiaries and businesses. Any negative rating action therefore would likely stem from similar

action on RBSG's VR - and not its LT IDR -, or if strategic importance to, linkages with, or propensity of support from RBSG are deemed by Fitch to have weakened.

Operating performance, although weak, has improved from the losses reported in the financial year ended March 2010. Funding is reliant on wholesale borrowings, but supported by a well- matched asset-liability management profile and access to funding from the group. Strong asset quality - zero non-performing loans over the last four years - is based on sound risk management procedures.

RBSFS, a RBI-registered non-deposit accepting NBFC, was originally owned by ABN AMRO Bank N.V. and called ABN AMRO Securities (India) Private Limited. It became a part of the RBS group when a consortium including RBS acquired the ABN AMRO Group in 2007.

Rating actions on RBSFS's instruments are as follows:

• Proposed INR3,558.8m principal protected long-term equity-linked debentures (ELDs): assigned a final rating of 'Fitch PP-MLD AAA emr (ind)'

• Rs. 441.2m principal protected long-term ELDs: affirmed at 'Fitch PP-MLD AAA emr (ind)'

• Rs. 5bn commercial paper programme affirmed at 'Fitch A1+(ind)'

The suffix 'emr' denotes the exclusion of the embedded market risk in the rated instrument. Ratings of the equity-linked debentures is an ordinal assessment of the underlying credit risk of the instrument and does not factor in the market risk that investors in such instruments will assume. This market risk stems from

the fact that coupon payment on these instruments will be based on the performance of a reference index or equity share.