Introduction of Expected Loss (EL) based Rating Scale and Standardisation of Rating Scales Used by Credit Rating Agencies

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....ing Scale and Standardisation of Rating Scales Used by Credit Rating Agencies 1. SEBI, vide circular numbered CIR/MIRSD/4/2011 dated June 15, 2011, had devised certain standardised rating symbols and their definitions used by the Credit Rating Agencies (CRAs). Further, SEBI vide circular numbered SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2019/ 70 dated June 13, 2019 had standardised symbols and definitions ....

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....cted loss, over the life of the instrument EL 4 Instruments rated "EL 4" are considered to have moderate expected loss over the life of the instrument. EL 5 Instruments rated "EL 5" are considered to have high expected loss, over the life of the instrument EL 6 Instruments rated "EL 6" are considered to have very high expected loss, over the life of the instrument EL 7 Instruments ....

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....r in absence of the same, follow rating scales prescribed by the Board vide circular dated June 15, 2011, June 13, 2019, or any other circular issued by the Board from time to time. 6. CRAs are also advised to note Regulation 24(6) read with Regulation 24(9) of CRA Regulations and in cases where a rating scale has not been prescribed by a financial sector regulator or authority, CRAs shall only u....