SEBI vide circular dated November 18, 2024 has amended Master Circular for Credit Rating Agencies (CRAs). It is highlighted that the scenarios of non-payment of debt (principal and/ or interest) may arise for entities rated by CRA’s due to reasons beyond the control of the issuer, namely, failure to remit payment due to absence of correct information or due to incorrect or dormant investor account furnished by the investor(s)or due to notice/ instruction received from a government authority to freeze the account of investor(s).
It has been decided that in the aforesaid scenario, the CRA shall confirm and verify the availability of adequate funds with the issuer and also confirm and verify:
- The proof of failure of the required payment of debt (principal and/ or interest),
- The reasons for failure
- The required amounts being duly paid into a separate escrow account maintained with a scheduled commercial bank by the issuer on the due date of payment.
The CRA shall furnish the details of non-payment and reasons behind it to the Stock Exchanges, Depositories and Debenture Trustee and formulate policy for the same.
