The Reserve Bank of India has authorised banks to utilise ratings provided by Brickwork Ratings India Pvt. Ltd. for loans up to Rs 250 crore.
The decision comes despite the Securities and Exchange Board of India cancelling Brickwork's Certificate of Registration as a Credit Rating Agency (CRA) in October 2022, following the RBI's directive that banks and other regulated entities should not seek new ratings from the company.
The central bank reviewed its October 2022 circular and decided to allow banks to use ratings from credit rating agencies to determine the risk weightage of their claims for capital adequacy, under specified conditions.
"For new rating assignments, banks may obtain ratings from the CRA for loans up to Rs 250 crore. For existing ratings, the CRA may conduct rating surveillance regardless of the loan amount until the remaining tenure of such loans," the RBI stated.
IFSCs Rules Rweaked
Furthermore, the RBI has issued a revised circular modifying regulations concerning remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS).
Following a review, the RBI announced that "authorised persons" are now permitted to facilitate remittances to IFSCs for all allowable purposes under LRS, enabling access to financial services or products as per the International Financial Services Centres Authority Act, 2019, within IFSCs.
At present, remittances under LRS to IFSCs can be made only for making investments in IFSCs in securities, except those issued by entities or companies resident in India (outside IFSC), and payment of fees for education to foreign universities or foreign institutions in IFSCs for pursuing courses.
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