Amendment to Para 15 of Master Circular for Credit Rating Agencies (CRAs) dated May 16, 2024 (“Master Circular”)

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.... May 16, 2024 ("Master Circular") 1. As per Annexure 11 of the Master Circular, definition of default for debentures/ bonds is specified as "A delay of 1 day even of 1 rupee (of principal or interest) from the scheduled repayment date". No exemption is provided from the above, except in case of rescheduling of the debt instrument by the lenders prior to the due date of payment. Therefore, any other instance of a one-day delay in payment or one-rupee shortfall in payment shall be recognized by the CRA as default. Such requirement is reiterated and remains unchanged from since the notification of the SEBI (Credit Rating Agencies) Regulations, 1999. 2. In the wake of COVID-19 pandemic, with a view to providing some flexibility to CRAs in....

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....ic policy guidance on treatment of 'technical defaults' so that the policy is applied uniformly across CRAs. 4. In this regard, the Working Group has highlighted that the following scenarios of non-payment of debt (principal and/ or interest) may arise due to reasons beyond the control of the issuer, namely, failure to remit payment due to absence of correct information or due to incorrect or dormant investor account furnished by the investor(s) or due to notice/ instruction received from a government authority to freeze the account of investor(s). 5. It has been decided that in the aforesaid scenario, the CRA shall confirm and verify the availability of adequate funds with the issuer and also confirm and verify: 5.1. the proof of ....