RBI/2024-25/50
DOR.STR.REC. 26/21.06.008/2024-25 

July 10, 2024

All Scheduled Commercial Banks
(including Small Finance Banks)
(excluding Local Area Banks, Payments Banks and Regional Rural Banks)

Dear Sir/ Madam,

Basel III Capital Regulations - Eligible Credit Rating Agencies (ECAI)

Please refer to paragraph 6.1.2 of the Master Circular DOR.CAP.REC.4/21.06.201/2024-25 dated April 1, 2024 on Basel III Capital Regulations, wherein the list of domestic credit rating agencies accredited for the purpose of risk weighting banks' claims for capital adequacy purposes has been prescribed.

2. A reference is also invited to the Press Release: 2022-2023/1033 dated October 12, 2022 in terms of which, regulated entities/market participants were advised that in respect of ratings/credit evaluations required in terms of any guidelines issued by the Reserve Bank, no such fresh ratings/evaluations shall be obtained from Brickwork Ratings India Private Limited (the CRA).

3. On a review, banks are hereby permitted to use the ratings of the CRA for risk weighting their claims for capital adequacy purposes, subject to the following:

• a) In respect of fresh rating mandates, rating may be obtained from the CRA for bank loans not exceeding Rs.250 crore.
  b) In respect of existing ratings, the CRA may undertake rating surveillance irrespective of the rated amount, till the residual tenure of such loans.
  Provided that in case of existing ratings assigned to working capital facilities exceeding Rs.250 crore, the CRA shall undertake rating surveillance only till the next renewal of such facility by the banks.

4. All other provisions regarding external credit ratings stipulated in the Master Circular ibid remain unchanged.

Yours faithfully,

(Vaibhav Chaturvedi)
Chief General Manager