SEBI may claim it has constantly \u2018endeavoured to enhance the quality of disclosures\u2019 made by credit rating agencies (CRAs), but the fact is its efforts have been hopelessly inadequate. This is evident from the abrupt downgrade of IL&FS; the NBFC was downgraded to junk status virtually overnight when it should have been red-flagged possibly a year back when the debt was piling up. So, it is a case of too little, too late.On Tuesday, the capital market watchdog added to the list of conditions that rating agencies need to comply with. It said wherever financial support is factored in from the parent firm or group or the government, to enable timely repayments, this needs to be spelt out. Details of the supporting entities and the rationale for assuming the support will come through need to be provided. Also, when subsidiaries or group companies are consolidated to arrive at a rating, a list of all companies, along with details of the equity holdings and the rationale for consolidation needs to be given. It is surprising these details were not required to be furnished all these years. Indeed, CRAs have had it easy all these years. They put out glowing track records showing how well they have analysed AAA or BBB or even BB companies and how very few of them have defaulted. But rating the better companies is not rocket science and it is the not-so-good companies that need to be rated thoroughly. The fact is CRAs failed to alert us on the many companies that did default; and they need to be held accountable for this. How, for instance, did they not notice all the while that IL&FS was so over-leveraged? Why did they not quiz the management continuously? It is a serious lapse, and one for which they have got away with very lightly indeed. In all these years the rating agencies never tipped us off on the state of public sector banks. What exactly were they waiting for? In October last year, SEBI deferred a directive which required listed entities to mandatorily disclose any defaults by them to banks or financial institutions. In August, it had said that companies must inform stock exchanges in the event they default either on the interest or on the principal. As SEBI had observed there is a critical gap in the information available to investors and this needs to be filled. The point is that there is a group of companies which is treating lenders and investors with complete disrespect; this is evident from the large loan losses incurred by banks. Borrowers need to be disciplined and SEBI must ask listed companies to disclose information relating to their dues to lenders more frequently. It is time to crack the whip.