SMERA Added as Eligible Credit Rating Agency for NCAF
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/205 · issued 13 Sep 2012 · ~2 min read
Quick answerRBI now allows banks to use SMERA ratings for risk weighting claims under Basel II's Standardised Approach, adding to the existing five domestic agencies. The rating-risk weight mapping remains unchanged.
What changed
Previously, only five domestic credit rating agencies (CARE, CRISIL, FITCH India, ICRA, Brickwork) were accredited for risk weighting banks' claims under the New Capital Adequacy Framework. RBI has now added SME Rating Agency of India Ltd. (SMERA) as a sixth eligible agency. The long-term and short-term rating-risk weight mapping for SMERA will be identical to that of the other agencies.
What it means for you
Banks can now use SMERA ratings to determine risk weights for capital adequacy purposes, potentially expanding the pool of rated exposures they can efficiently capitalise. This is particularly relevant for SME lending, as SMERA specialises in rating small and medium enterprises. The move aligns with Basel II's Standardised Approach and may reduce capital charges for banks holding SMERA-rated assets.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update internal systems and risk-weight mapping tables to include SMERA as an eligible credit rating agency.
Train credit and risk teams on accepting SMERA ratings for capital adequacy calculations under the Standardised Approach.
Review existing SME loan portfolios to identify exposures that can benefit from SMERA ratings for lower risk weights.
Ensure compliance with the same rating-risk weight mapping applicable to other accredited agencies.
Who it affects
All scheduled commercial banks (excluding Local Area Banks and RRBs), Credit risk management teams, SME lending divisions, Capital adequacy and Basel II compliance officers
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-18 18:03 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Can we use SMERA ratings for all types of claims?
Yes, SMERA ratings can be used for risk weighting claims for capital adequacy purposes, just like the other five agencies. The mapping for long-term and short-term ratings is the same.
Does this change affect the risk-weight mapping?
No, the rating-risk weight mapping for SMERA remains identical to that of CARE, CRISIL, FITCH India, ICRA, and Brickwork as per the existing framework.
When did this circular become effective?
The circular was issued on September 13, 2012, and is effective from that date for all scheduled commercial banks covered.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1228: DBOD.No.BP.BC.41/21.06.009/2012-13 — "Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF) Eligible Credit ”
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/205
DBOD.No.BP. BC.41/21.06.009/2012-13
September 13, 2012
The Chairman / CMD / MD / CEO
All Scheduled Commercial Banks
(Excluding Local Area Banks and Regional Rural Banks)
Dear Sir,
Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital Adequacy Framework (NCAF) - Eligible Credit Rating Agencies – SME Rating Agency of India Ltd. (SMERA)
Please refer to the Master Circular DBOD.No.BP.BC.16/21.06.001/2012-13 dated July 2, 2012 on 'Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF)'.
2. In terms of para 6 of the circular, five domestic credit rating agencies viz. CARE, CRISIL, FITCH India, ICRA and Brickwork have been accredited for the purpose of risk weighting the banks' claims for capital adequacy purposes. The long term and short term ratings issued by these domestic credit rating agencies have been mapped to the appropriate risk weights applicable as per the Standardised Approach under the Basel II Framework.
3. It has now been decided that banks may also use the ratings of the SME Rating Agency of India Ltd. (SMERA) for the purpose of risk weighting their claims for capital adequacy purposes in addition to the existing five domestic credit rating agencies. The rating-risk weight mapping for the long term and short term ratings assigned by SMERA will be the same as in case of other rating agencies.
Yours faithfully,
( Deepak Singhal )
Chief General Manager-in-charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/205 · issued 13 Sep 2012. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7562&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.