What changed
RBI has updated its list of eligible credit rating agencies for capital adequacy under the New Capital Adequacy Framework and Basel III regulations. CRISIL Ratings Limited, a wholly owned subsidiary of CRISIL Limited, now replaces CRISIL Limited as an accredited agency. The rating symbols and their risk weight mapping remain unchanged.
What it means for you
Banks can continue to use ratings from CRISIL Ratings Limited for calculating risk-weighted assets without any operational disruption. This ensures continuity in capital adequacy calculations as the rating business was transferred to comply with SEBI regulations. No changes to existing rating-risk weight mappings or other external credit rating provisions are needed.
What you must do
- Update internal systems to recognize CRISIL Ratings Limited as an eligible credit rating agency for capital adequacy purposes.
- Ensure that the rating-risk weight mapping for CRISIL Ratings Limited's ratings matches the existing mapping used for CRISIL Limited.
- Communicate this change to relevant risk management and credit teams to avoid any confusion in capital adequacy calculations.
- Review and update any documentation or policies that reference CRISIL Limited to reflect the new entity.
Who it affects
All Scheduled Commercial Banks (excluding Payment Banks, Local Area Banks, and Regional Rural Banks), Risk management departments, Credit rating users in banks
Why did RBI replace CRISIL Limited with CRISIL Ratings Limited?
CRISIL Limited transferred its rating business to CRISIL Ratings Limited, a wholly owned subsidiary, to comply with SEBI's notification dated September 11, 2018 and circular dated September 19, 2018. RBI has updated its list accordingly.
Will the risk weights for existing ratings change?
No, the rating-risk weight mapping for long-term and short-term ratings assigned by CRISIL Ratings Limited remains the same as was used for CRISIL Limited. There is no change in rating symbols or risk weights.
Do banks need to re-rate existing exposures?
No, banks can continue using existing ratings from CRISIL Limited as they are now assigned by CRISIL Ratings Limited. The circular does not require any re-rating or recalculation of risk weights for existing exposures.