The Reserve Bank of India on 2nd May 2022, has decided that the minimum investment grade credit rating for deposits of NBFCs shall be ‘BBB–’ from any of the SEBI-registered Credit Rating Agencies.
As per the earlier notification dated in 2016, non-banking finance companies with net owned funds of 25 lakh rupees and above need to obtain a minimum investment grade or other specified credit ratings for fixed deposits from any one of the approved credit rating agencies at least once a year to accept public deposits.
A credit rating agency is an entity which assesses the ability and willingness of the issuer company for timely payment of interest and principal on a debt instrument. An investment grade rating signifies the rating agency’s belief that the rated instrument is likely to meet its payment obligations. In the Indian context, debt instruments rated ‘BBB-‘ and above are classified as investment grade ratings
