Rating agencies have approached the Securities and Exchange Board of India (Sebi) to relax the default benchmark rates introduced by the market regulator last year.
"The benchmark default rates have been pegged at zero for certain tenures and ratings. It is not feasible to put in place benchmarks with no room for deviations as entities with high-ratings are also susceptible to defaults on their obligations," said a senior director at a rating agency.
For AAA-rated papers, the market regulator has laid down probability of default benchmark at zero for one-year and two-year periods. For the three-year period, a tolerance level