Credit rating agencies likely to get access to loan default details

This new norm will address rating agencies' complaints about not getting full disclosures about the potential credit risks of securities

The Securities and Exchange Board of India (Sebi) is likely to come up with a framework for credit-rating agencies (CRAs) to enable them to seek information from lenders or other institutions about loan repayment or possible default by a debtor.

According to a source, Sebi is planning to amend the regulations on CRAs by adding a clause in the agreement between an issuer and a rater to provide an ‘explicit consent’ from the issuer to obtain information related to loans, repayment, delay, etc. from banks or other lending institutions.

At present, banks do not share with CRAs details of a