The Reserve Bank of India has permitted banks to use the ratings of Brickwork Ratings India Private Limited, two years after the central bank had instructed its regulated entities that no fresh ratings would be obtained from the firm, which was pulled up by regulators for discrepancies.
“On a review, banks are hereby permitted to use the ratings of the CRA (Brickwork Ratings) for risk weighting their claims for capital adequacy purposes…,” the RBI said in a statement on Wednesday.
Listing out certain conditions, the RBI said that in respect of fresh rating mandates, rating may be obtained from Brickwork Ratings for bank loans not exceeding Rs 250 crore. In respect of existing ratings, Brickwork may undertake rating surveillance irrespective of the rated amount for the residual tenure of such loans, the RBI said.
For existing ratings assigned to working capital facilities exceeding Rs 250 crore, Brickwork shall undertake rating surveillance only till the next renewal of such facility by banks, the RBI said.
