RBI permit banks to use ratings of Brickwork Ratings India

RBI Permits Banks to Use Brickwork Ratings for Loans Up to Rs 250 Crore

New Delhi: The Reserve Bank of India (RBI) on Wednesday permitted banks to use ratings by Brickwork Ratings India Private Limited for loans of up to Rs 250 crore. This marks a significant development for the credit rating agency, which had faced regulatory challenges in the past.

In October 2022, the RBI instructed banks and other regulated entities not to obtain any fresh ratings from Brickwork Ratings India after the market regulator, Securities and Exchange Board of India (Sebi), cancelled Brickwork Ratings India's Certificate of Registration as a Credit Rating Agency (CRA).

However, after a thorough review of the October 2022 circular, the RBI has now allowed banks to use the ratings provided by Brickwork Ratings for risk-weighting their claims for capital adequacy purposes, albeit with certain conditions.

"In respect of fresh rating mandates, the rating may be obtained from the CRA for bank loans not exceeding Rs 250 crore. In respect of existing ratings, the CRA may undertake rating surveillance irrespective of the rated amount till the residual tenure of such loans," the RBI stated.

This decision provides a significant boost to Brickwork Ratings, enabling it to continue its operations within specified parameters and aiding banks in their loan assessment processes.

RBI Tweaks Norms for Remittances to IFSCs Under LRS

The Reserve Bank has also issued another circular, amending norms related to remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS).

Upon review, the RBI has decided that "authorised persons" may facilitate remittances for all permissible purposes under LRS to IFSCs for availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019, within IFSCs.

Currently, remittances under LRS to IFSCs can be made only for investments in securities within IFSCs, except those issued by entities or companies resident in India (outside IFSC), and for payment of fees for education to foreign universities or institutions located in IFSCs for pursuing courses.

These amendments are aimed at enhancing the operational flexibility of banks and other entities, thereby promoting a more efficient financial ecosystem.