Mumbai: In a major relief to the companies, the Securities & Exchange Board of India (Sebi) has announced relaxation in compliance by the credit rating agencies (CRAs) due to lockdown and RBI moratorium.
The Sebi guidelines are applicable to CRAs for default recognition and three month moratorium granted by RBI to businesses and individuals on payment of installments of all term loans outstanding as of March 1, 2020 in view of the coronavirus pandemic.
Based on its assessment, if the CRA is of the view that the delay in payment of interest/principle has arisen solely due to the lockdown conditions creating temporary operational challenges in servicing debt, including due to procedural delays in approval of moratorium on loans by the lending institutions, CRAs may not consider the same as a default event and/or recognise default.
Such relaxation norms will also apply to any rescheduling in payment of debt obligation done by the issuer, prior to the due date, with the approval of the investors/lenders, and will extend till the period of moratorium by the RBI, however, appropriate disclosures in this regard should be made in a press release.
The relaxation granted to credit rating agencies will also apply to rescheduling of debt obligations by a listed entity prior to due date, if it’s done with the approval of investors or lenders, SEBI said in the circular.
This will continue till the moratorium imposed by the RBI. Sebi also granted a further extension of 30 days to the CRAs for making annual and semi-annual disclosures on its website for the period ended March 2020.
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