WASHINGTON - Moody's held Standard Chartered Bank's debt rating steady at A1 Tuesday, one day after the bank was threatened with loss of its New York banking license over alleged illegal dealings with Iran.

Moody's said nothing concrete yet had happened to reduce the bank's creditworthiness, after New York State's Department of Financial Services accused Standard Chartered of willfully hiding some $250 billion in financial transactions with Iranian banks over nearly 10 years in violation of US law.

The state regulator, which oversees the hub of the US banking industry, said the bank faced closure of its huge New York US dollar clearing business and possibly loss of its banking license if it could not adequately explain its actions.

The bank, which disputes the regulator's assertions, also risked massive fines for the activity, which allegedly violated US sanctions set against Tehran over its nuclear programme.

But Moody's said it would wait to see how the case proceeds, with Standard Chartered ordered to appear in front of the regulator next week to explain its actions.

"Moody's would view as credit-negative any limitation on Standard Chartered's US dollar clearing activities," the rating agency said in a statement.

"This business directly supports its global commercial and trade-finance franchise and the group places a heavy strategic emphasis on transaction banking and cash-management services."

"The potential for closure of Standard Chartered's New York branch would have broader implications, in particular in terms of the firm's reputation," it added, pointing to the bank's reliance on deposit funding that could be sensitive to a change in its reputation.

Any fines, on the other hand, "are likely to be less significant than the franchise and control considerations."