Take the Credit Rating Information Services of India (Crisil). Its rating release issued on Thursday almost wails that the ratings of Gujurat Lease Financing Ltd (GLFL), Onida Finance Ltd, and a relatively unknown company, Worldlink Finance Ltd, "have been suspended due to lack of co-operation from the company for carrying out a ratings review". Crisil, on its part, has informed the central bank about NBFCs not cooperating when rating reviews are done. The RBI, of course, can only notify via a media release, the withdrawal of registration for these companies.

Notes Crisil's chief rating officer, Roopa Kudwa: "Most of these NBFCs have been defaulting for years now. It is not something that has happened overnight. If you see, most of these companies had speculative grade ratings. Further, nearly 95 per cent of such suspensions are of NBFCs falling under the this speculative grade". In the case of GLFL, the rating agency has suspended the company's `C' rating which was given to its Rs 38 lakh non-convertible debenture programme.

GLFL's fall is spectacular, to say the least. A decade and a half ago, this NBFC was in contention to bag a banking license from the RBI. That never happened. A rival, CRB Capital Markets, got one. And we all know what happened. "It is surprising that investors put in money despite ratings reflecting that it is not safe to do so. Anything between `FAAA' and `FA-' is fine for fixed deposits as it is investment grade. It is not so if it is between `FB+' to `FD'," notes Ms Kudwa. In the case of debentures, investment grade is between `AAA' to `BBB-' and speculative is `BB+' to `D', says she.

Rating agencies have always been at the receiving end after the CRB fiasco in 1996-97 on the grounds that they did not - along with others like the RBI and the Securities & Exchange Board of India (Sebi) - do their homework. In the immediate aftermath of the CRB scandal, rating agencies had carried out an enmasse donwgrade of NBFCs. However, these suspensions by Crisil need not be taken with great concern.