What changed
The minimum investment grade credit rating for NBFCs accepting public deposits has been revised to 'BBB-' from any SEBI-registered credit rating agency. This replaces the earlier rating requirements listed in the 2016 Master Direction.
What it means for you
NBFCs and deposit-taking HFCs now have a lower bar to meet for accepting public deposits, which could expand their funding options. Lenders and depositors should note that 'BBB-' is the lowest investment grade, indicating moderate credit risk.
What you must do
- Update internal policies to reflect the new minimum rating of 'BBB-' for NBFC deposit acceptance.
- Review your NBFC's current credit rating and ensure it meets or exceeds 'BBB-' from a SEBI-registered agency.
- Communicate the revised rating requirement to deposit operations and compliance teams.
- Monitor any further RBI modifications to the Master Direction on NBFC deposits.
Who it affects
All deposit-taking NBFCs, Deposit-taking HFCs, SEBI-registered credit rating agencies, Depositors and investors in NBFC deposits
What is the new minimum credit rating for NBFC deposits?
The minimum investment grade credit rating is now 'BBB-' from any SEBI-registered credit rating agency.
Does this apply to all NBFCs?
Yes, it applies to all deposit-taking NBFCs, including deposit-taking housing finance companies (HFCs).
When did this change take effect?
The notification was issued on May 2, 2022, and is effective from that date.