The Securities and Exchange Board of India in its notification dated 30th March 2020, has decided to grant relaxations from compliance with certain provisions under the SEBI (Credit Rating Agencies) Regulations, 1999, due to the COVID-19 pandemic and moratorium permitted by RBI.
The RBI in its notification dated 27th March 2020 has permitted moratorium on loan servicing, working capital facilities, etc. for 3 months. In response to the same, SEBI has issued the following clarifications:
- If the delay in payment of interest/ principal has arisen solely due to the lockdown conditions creating temporary operational challenges in servicing debt, including due to procedural delays in approval of moratorium on loans by the lending institutions, CRAs may not consider the same as a default event and/or recognize default.
- The above shall also be applicable on any rescheduling in payment of debt obligation done by the issuer, prior to the due date, with the approval of the investors/ lenders.
- The above relaxation is extended till the period of moratorium by RBI.
The CRAs are dependent on the issuers and third parties for information collection. As the information collection is impaired due to current lockdown, relaxation from timelines for rating action is granted.
Further, an extension of 30 days is being granted for making annual and semi-annual disclosures by CRAs on its website for the period ended March 2020.
Click here to read the Notification.
