What changed
RBI amended paragraph 19A of the NBFC Prudential Norms Directions, 2007 to include Brickwork Ratings India Pvt. Ltd. (Brickwork) as an additional eligible credit rating agency. Previously, only CRISIL, FITCH, CARE, and ICRA were recognized for the minimum 'A' rating requirement for Infrastructure Finance Companies.
What it means for you
IFCs now have a broader choice of accredited rating agencies, potentially increasing competition and flexibility in obtaining the required credit rating. This could ease compliance for some IFCs that may have faced constraints with the earlier limited list. Lenders and investors should note that Brickwork ratings are now on par with the other four agencies for this specific regulatory purpose.
What you must do
- Update internal compliance checklists to include Brickwork Ratings as an eligible agency for IFC rating requirements.
- Review existing IFC loan agreements or investment policies to ensure they reference the updated list of approved rating agencies.
- Inform relevant teams (credit, risk, compliance) about the addition of Brickwork to avoid unnecessary rating restrictions.
Who it affects
Infrastructure Finance Companies (IFCs), Non‑Banking Financial Companies (NBFCs) excluding Residuary NBFCs
Does this change apply to all NBFCs or only Infrastructure Finance Companies?
The amendment specifically addresses Infrastructure Finance Companies (IFCs) as defined in the Prudential Norms Directions, 2007. The circular is addressed to all NBFCs excluding Residuary Non-Banking Companies, but the rating requirement in paragraph 19A applies to IFCs.
What is the minimum credit rating required for an IFC under this amendment?
An IFC must obtain a minimum credit rating of 'A' or equivalent from any of the listed agencies: CRISIL, FITCH, CARE, ICRA, Brickwork Ratings India Pvt. Ltd., or any other credit rating agency accredited by RBI.
Is Brickwork Ratings now fully equivalent to the other four agencies for all RBI purposes?
This circular only adds Brickwork for the specific requirement under paragraph 19A of the NBFC Prudential Norms Directions, 2007. For other regulatory purposes, separate notifications may apply.