INSUBCONTINENT EXCLUSIVE:
companies.The move aims to prevent such entities from making biased assessments about the financial condition of their clients and restrict
conflict of interest that may seep in.Official sources said that the banking regulator may soon initiate a dialogue with market regulator
Securities and Exchange Board of India (Sebi) to flesh out new regulations that would impact the way credit rating agencies function.The
changes have become imperative post the ILFS fiasco where the role of rating agencies came into question
Just a month after giving high ratings for debt papers of ILFS bonds in August, the ratings were brought down several notches following the
company defaulting in interest payments on its bonds.Credit rating agencies are jointly regulated by both Sebi and RBI as these firms rate
bank loans and NBFCs, which constitute 70 per cent of their business.Last week, in a meeting with top credit ratings officials, central bank
governor Shaktikanta Das and the deputy governors raised doubts over rating agencies' ability to assess credit risk and take timely rating
action, said a source present there.The source added that RBI is very miffed with these agencies for comfortably carrying out the dual job
of rating the bonds and doing valuation as well as advisory for the same bonds over and over again.
