Rating Agencies To Take Up New Nbfc Norms With Rbi Today

The countrys four credit rating agencies are expected to take up the immediate fall out of the new norms for non-banking finance companies, their implication on the financial sector and impact on the rating agencies with Reserve Bank deputy governor S P Talwar on Monday.

The top brass of Credit Rating Information Services of India Ltd (Crisil), Investment Information and Credit Rating Agency of India (Icra), Credit Analysis and Research (Care) and Duff and Phelps Credit Rating India Private Ltd (DCR India) are likely to attend the meeting.

Sources said that the rating agencies will also seek clarification from the RBI on the responsibilities that they are required to shoulder as a consequence of the new norms.

 

According to new norms, the quantum of public deposits any NBFC can raise is linked with rating it has been assigned.

Besides, RBI has stated that NBFCs desiring to raise deposits will have to be rated as A or above to be eligible for raising public deposits.

While a AAA rated company engaged in equipment leasing and hire purchase company can raise three times its net owned fund (NOF), a AA can raise twice its NOF and A rated can raise equal to its NOF.

Companies engaged in loan and investment companies and rated as AAA can raise twice its net owned funds, a AA can raise equal to its NOF and A rated can raise 0.5 time its NOF

With this move, the rating agencies has gained immense responsibility in the eye of depositors and gain importance in the eyes of NBFCs, said sources.

Meanwhile, the committee, appointed by Securities and Exchange Board of India (Sebi), to formulate draft of regulations for the rating agencies met in Mumbai on Friday. The committee, which includes R Ravimohan of Crisil, P S Subramaium of Industrial Development Bank of India (IDBI) and executive director of Sebi, discussed issues that will have to be undertaken in light if new norms for NBFCs in drafting the regulations for rating agencies..