 "Reserve Bank of India, RBI")
In a move that may put pressure on the capital adequacy of banks, the Reserve Bank of India (RBI) on Monday said loan ratings without information about lenders’ details should be treated as unrated exposure.
Capital should be set aside using risk weightings applicable for unrated exposure to companies and non-banking finance
companies.
The RBI said these instructions would be effective on March 31, 2023. Thus, any burden on account of higher capital charges will be in the current financial year (FY23).
The press releases (PRs) issued by external credit assessment institutions (ECAI) on ratings often do not have lenders’ details.
