MUMBAI: The Securities and Exchange Board of India (SEBI), the markets regulator has instructed to the credit rating agencies on Monday (August 31) not to recognise the restructuring of debt due to COVID-19 related stress as default.
The banking regulator (RBI) has provided a loan restructuring window for corporates following the increasing demands from bankers and the industry alike. RBI has informed its willingness for restructuring of loans as per the prudential framework issued on June 7, 2019.
“Based on its assessment, if the credit rating agencies (CRAs) are of the view that the restructuring by the lenders/investors is solely due to COVID-19 related stress or under the… RBI framework, CRAs may not consider the same as a default event and/or recognize default,” Sebi said in a circular.
The Securities and Exchange Board of India (Sebi) said such relaxation is extended till December 31, 2020.
In a similar directive, in March, Sebi had asked CRAs not to consider as default any delay in payment of interest or principal loan amount caused solely due to the nationwide lockdown.