Sebi meets rating agencies to increase monitoring of debt instruments

The role of CRAs has come under the regulatory scrutiny in case of Reliance Communications

The Securities and Exchange Board of India (Sebi) had called for a meeting with credit rating agencies (CRAs) earlier this week. According to sources, the regulator had discussed changes in the current reporting system to ensure timely rating action in case of a 'default'. The move comes after the fiasco in the Reliance Communications' debt wherein rating agencies downgraded the papers nearly two months after the actual default happened.

Currently, rating agencies take an action after the depositories confirm a default. This typically takes two to three weeks from the time of actual default. However, the concerned bankers and debenture trustees