No change in CRISIL rating grades for banks: RBI

Banks can use CRISIL rating grades in determining the capital requirement benchmark even after the rating company, engaged in other advisories as well, formed a dedicated subsidiary to assess creditworthiness, the Reserve Bank of India said in a notification Wednesday.

The move will likely help banks from operational hazards for accounting, which would have arisen due to any such structural change.

“Banks may therefore, use the ratings of the CRISIL Ratings Limited for the purpose of risk weighting their claims for capital adequacy purposes,” the central bank said.

Rating company Crisil underwent an internal restructuring, a process through which it transferred rating business of CRISIL Ltd to CRISIL Ratings Ltd.

“The rating-risk weight mapping for the long term and short-term ratings assigned by CRISIL Ratings Limited will be the same as was in the case of CRISIL Limited and there is no change in the rating symbols earlier assigned by CRISIL Limited,” RBI said.

CRISIL Limited was accredited for the purpose of risk weighting the banks’ claims for capital adequacy purposes along with other credit rating agencies registered with Securities and Exchange Board of India (SEBI), the capital market regulator.

Capital Adequacy Ratio is one of the key regulatory capital standards that lenders are mandated to maintain.

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