The Reserve Bank of India has asked rating agencies to enhance the quality of monitoring rated entities through means like social media and corporate filings, and not just depend on information given by companies.
Rating agencies in meeting with RBI top brass, including governor Shaktikanta Das and deputy governors, sought access to Central Repository of Information on Large Credits (CRILC) maintained by central bank.
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Banking regulator informed agencies that it would consider plea for access to CRLIC. It advised them to become proactive and not just look at information after critical events have happened. It is crucial to be pick up signal and work on them before defaults happen, said a person aware of proceedings.
There was also nudging from regulator to use intelligent information systems be it machine learning and Artificial intelligence (AI) that could capture social media alerts and trends useful for rating purpose. This issue may be taken up at panel of market regulators comprising Sebi, Irdai, PFRDA, among others, for improving the quality of oversight.
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During the meeting, held through video conference, CRAs presented assessment of the macroeconomic situation and outlook on various sectors including the financial sector. They also shared perspectives on the overall financial health of the entities rated by the CRAs and major factors that affect credit ratings in current context, RBI said in statement.
RBI also gave feedback on ways to further strengthen the rating processes and engagement with key stakeholders.
Another official said rating agencies expressed concerns over rising share of companies in “not cooperating” categories. These entities should be taken off from monitoring after remaining in this category for 6-12 months.
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