Amid criticism over failure to timely detect troubles, rating agencies get this advice from Shaktikanta Das

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Published: March 8, 2019 6:13:20 PM

Amid criticism over failure to identify troubles in various companies including IL&FS, Reserve Bank of India (RBI) Governor Shaktikanta Das Friday said credit rating agencies (CRAs) play an important role in financial sector’s proper functioning.

On Thursday, Shaktikanta Das held a meeting with officials of these agencies as part of stakeholder consultation exercise.

Amid criticism over failure to identify troubles in various companies including IL&FS, Reserve Bank of India (RBI) Governor Shaktikanta Das Friday said credit rating agencies (CRAs) play an important role in financial sector’s proper functioning.

“Credit Rating Agencies (CRAs) have a critical role in the financial sector, its stability and efficient functioning. Held a meeting with MD/CEOs of CRAs yesterday as part of stakeholder consultation,” he tweeted.

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On Thursday, Shaktikanta Das held a meeting with officials of these agencies as part of stakeholder consultation exercise. CARE, ICRA, and India Ratings and Research (InRa) are the major domestic credit agencies in the country.

The agencies have been under criticism of late for their failure to timely detect the stress in the IL&FS Group, which defaulted on its loans from banks, mutual funds and provident funds, causing big dip in NAVs of various mutual funds.

Meanwhile, in his last twitter post, RBI Governor has informed about his meeting with foreign investors in Hong Kong. “Held an interactive meeting with FPIs in Hong Kong today (Tuesday). Good participation and discussion,” he said in a tweet.

After taking over as the RBI’s governor in December last year, it was his first interaction overseas with investors.

Since he took over as 25th RBI Governor, he has hold a series of meeting with various stakeholders including heads of public sector banks, private sector banks, non-banking financial services, and industry chambers.

The RBI in February had proposed removal of 20 per cent foreign portfolio investor (FPI) restriction on the corporate debt market.

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