Markets watchdog Sebi Thursday came out with a strict disclosure framework for credit rating agencies wherein they will be required to provide the probability of default for various rated instruments.
The regulator's move comes against the backdrop of rising instances of debt defaults and concerns over the role of credit rating agencies in assessing the possible risks. Credit rating agencies have also come under the scanner in the IL&FS case.
"...CRAs (credit rating agencies), in consultation with Sebi, shall prepare and disclose standardized and uniform probability of default (PD) benchmarks for each rating category on their website, for one-year, two-year and three-year