RBI new guidelines on Basel III Capital Regulations for Credit Rating Agencies [PDF]

The Basel III Capital Regulations outline the eligible credit rating agencies (ECAIs) for risk weighting banks’ claims for capital adequacy purposes. After review, banks are now permitted to use the ratings of the CRA for risk weighting their claims for capital adequacy purposes, subject to certain conditions:

• For fresh rating mandates, banks can obtain ratings from the CRA for bank loans not exceeding Rs. 250 crore.
• For existing ratings, the CRA may undertake rating surveillance regardless of the rated amount until the residual tenure of such loans.
• For existing ratings assigned to working capital facilities exceeding Rs. 250 crore, the CRA will undertake rating surveillance only until the next renewal of such facility by the banks.

Please note that all other provisions regarding external credit ratings stipulated in the Master Circular remain unchanged.

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