House panel raps rating agencies for not anticipating IL&FS situation
5 years, 11 months ago

House panel raps rating agencies for not anticipating IL&FS situation

Hindustan Times  

A parliamentary panel wants the finance ministry to spell out steps to make India’s credit rating agencies more accountable and transparent in the backdrop of the crisis at the highly rated finance firm Infrastructure Leasing & Financial Services. The panel wants the government to end the practice of agencies getting paid by the companies that want credit ratings, a business model that has often come under criticism. “A wrong rating can create a havoc for common investors who park their hard earned money in financial instruments.” Earlier this week, members of the standing committee on finance met representatives from credit rating agencies and ministry officials to discuss the functioning of the agencies. During the interactions, several members, including panel chairman Veerappa Moily and Trinamool Congress leader Saugata Ray, drew a parallel between the IL&FS crisis and the Lehmann Brothers collapse and pointed out that both firms were given the highest credit rating.

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History of this topic

Sebi wants ratings agencies to rate all issuers
4 years, 6 months ago

Sebi wants ratings agencies to rate all issuers

Live Mint  

The Securities and Exchange Board of India is not in favour of a demand from credit rating agencies to let them withdraw ratings of uncooperative companies that fail to provide required information, two people aware of the matter said. Rating agencies last week wrote to Sebi and Reserve Bank of India that they wish to stop rating credit instruments and …

Sebi asks agencies to rate all firms
4 years, 6 months ago

Sebi asks agencies to rate all firms

Hindustan Times  

A representation from rating agencies which sought to withdraw ratings of companies who are not cooperating has met with resistance from the markets regulator, the Securities and Exchange Board of India. The regulations for credit rating agencies require that an instrument should be rated all through its lifetime and Sebi is unwilling to change the regulation as it could leave …

Sebi floats tighter norms for full disclosure on loan defaults with rating agencies
5 years, 3 months ago

Sebi floats tighter norms for full disclosure on loan defaults with rating agencies

India TV News  

Markets regulator Sebi has come out with new norms that make it mandatory for companies to provide details on delayed loan repayments and possible defaults to credit rating agencies amid concerns over banks citing 'client confidentiality' to resist sharing of such information by their borrowers. The new framework would enable credit rating agencies to get timely information on possible defaults. …

Credit rating agencies face the prospect of further downgrades
5 years, 4 months ago

Credit rating agencies face the prospect of further downgrades

Live Mint  

Market downgrades have been dogging rating agency scrips. Lately, negative news has dominated the credit rating business, with the top management of two rating agencies asked to step down. The third CRA might have to comply with the regulations to separate rating and non-rating businesses, affecting stock performances,” said Elara Securities Pvt. For credit rating agencies, this poses significant challenges. …

SEBI mulls slew of reforms; tighter check on rating agencies, reward and hotline for informants
5 years, 4 months ago

SEBI mulls slew of reforms; tighter check on rating agencies, reward and hotline for informants

Firstpost  

New Delhi: With an aim to further safeguard investors’ interests and to take defaulters to the task, capital market regulator SEBI is planning to unveil a slew of reforms, including for greater checks on credit rating agencies and for rewarding informants in insider trading cases with up to Rs 1 crore reward. The regulator is also planning to ease its …

IL&FS case: SEBI widens investigation into role of rating agencies; looks into possible systemic lapses at all five rating agencies
5 years, 5 months ago

IL&FS case: SEBI widens investigation into role of rating agencies; looks into possible systemic lapses at all five rating agencies

Firstpost  

Grant Thornton said it identified multiple e-mails over the period from 2008 to 2018 which indicate that the IL&FS group was under stress or faced liquidity issues since 2015. New Delhi: Market regulator SEBI has expanded its probe into the role of five credit rating agencies after a forensic audit mandated by the new board of crisis-ridden IL&FS flagged serious …

Rating agencies, facing regulator's wrath for IL&FS tragedy, are left with a hard choice now
5 years, 5 months ago

Rating agencies, facing regulator's wrath for IL&FS tragedy, are left with a hard choice now

Firstpost  

In the Indian context, there are several examples where rating agencies failed to sense the imminent danger and continued awarding top ratings to firms in trouble only to witness payment defaults a few months later. Though the exact details aren’t known yet, it is understood that the investigation pertains to wrong rating calls given to the collapsed non-banking financial company, …

RBI to regulate housing finance firms, review assets: Report
5 years, 6 months ago

RBI to regulate housing finance firms, review assets: Report

Live Mint  

India will soon give Reserve Bank of India power to regulate housing finance companies, which will almost certainly lead to the lenders facing stringent asset quality reviews, two sources with direct knowledge of the matter said. The housing finance companies, which are part of the broader shadow banking sector known as non-banking finance companies, are currently regulated by the National …

IL&FS fiasco: Sending ICRA executive on leave isn't enough; time regulator kicked off sweeping reforms for raters
5 years, 6 months ago

IL&FS fiasco: Sending ICRA executive on leave isn't enough; time regulator kicked off sweeping reforms for raters

Firstpost  

The international rating agency Moody’s Indian arm ICRA has done well to tick off its executive Naresh Takkar by sending him on leave pending an inquiry on the anonymous charge received by SEBI. The charge relates to top credit ratings given to IL&FS by a slew of credit rating agencies in India including ICRA. ICRA’s top brass must also be …

IL&FS crisis fallout: Sebi tightens disclosure norms for credit rating agencies
6 years, 2 months ago

IL&FS crisis fallout: Sebi tightens disclosure norms for credit rating agencies

Live Mint  

Mumbai: India’s markets regulator has tightened disclosure norms for credit rating agencies after they failed to warn investors in time about the deteriorating credit profile of Infrastructure Leasing and Financial Services Ltd. Credit rating agencies would also need to disclose if the company is expecting additional funds to pare its debt along with the name of the entity that will …

How credit rating agencies missed the IL&FS crisis
6 years, 3 months ago

How credit rating agencies missed the IL&FS crisis

Live Mint  

Mumbai: Indian authorities have spent the week containing the collateral damage from a major infrastructure lender struggling to service $12.6 billion in debt. “We have not had this kind of a systemic event of this magnitude in the bond market before in India, and so we don’t really have a precedent as to how to deal with it,” said Kunal …

ITNL loan default first sign of cracks in IL&FS
6 years, 3 months ago

ITNL loan default first sign of cracks in IL&FS

Live Mint  

Mumbai: Rating firms decided against assigning a default rating on a ₹ 100 crore commercial paper of IL&FS Transportation Networks Ltd despite a delay in repayment in June, relying on the management’s pedigree and key shareholders of its parent Infrastructure Leasing and Financial Services Ltd. To be sure, the three rating agencies—ICRA Ltd, India Ratings and Brickwork Ratings—which rate the …

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