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    Oct 13, 2011

    RBI CHANGED THE NAME OF RATING SYMBOLS OF CREDIT RATING AGENCIES

    Reserve Bank of India changed the rating symbols of different credit rating agencies. This step is taken due to the confusion about the rating system as different rating agencies give different rating to the same company with there analysis. So it is necessary now to put the credit rating agency name before the rating symbol. Reserve bank of India issued a circular no. 217 dated 13-10-2011 regarding this issue. Full circular is as under.

     RBI/2011-12/217
    DBOD.No.BP.BC.39 /21.06.007/2011-12
    October 13, 2011
    The Chairman / CMD / MD / CEOAll Scheduled Commercial Banks
    (excluding LABs and RRBs)
    Dear Sir,
    Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF) -Revision of Rating Symbols and Definitions of Credit Rating Agencies
    Please refer to the Master Circular No. DBOD.No.BP.BC.11/21.06.001/2011-12 dated July 1, 2011 on 'Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF)' by which the consolidated prudential guidelines had been issued to banks on the captioned subject.

    2. In terms of para 6 of the circular, four domestic credit rating agencies viz. CARE, CRISIL, FITCH India and ICRA have been accredited for the purpose of risk weighting the banks' claims for capital adequacy purposes. The long term and short term ratings issued by the chosen domestic credit rating agencies have been mapped to the appropriate risk weights applicable as per the Standardised Approach under the Basel II Framework.

    3. SEBI has, vide its circular CIR/MIRSD/4/2011 dated June 15, 2011 on 'Standardisation of Rating Symbols and Definitions', instructed Credit Rating Agencies (CRAs) registered with SEBI to adopt common rating symbols and rating definitions, whichshall henceforth be used for the new ratings / reviews by the CRAs. Under the revised standardized system, there is no change in the long term rating symbols except that rating symbols will henceforth display the rating agency's name as a prefix. In case of short term ratings, a rating scale denoted by 'A' on a scale of '1' to '4' (i.e. A1, A2, A3 and A4) and 'D' has been prescribed. The four accredited CRAs, which are registered with SEBI, have therefore revised their rating symbols of long term and short term debt instruments. The new rating symbols of the chosen CRAs vis-à-vis their old rating symbols for long term and short term instruments are furnished in Annex for ready reference.

    4. The aforesaid change in rating symbols and definitions however does not effect, in any manner, the rating methodology followed by the CRAs for rating such instruments and will have no bearing on the existing ratings assigned by the CRAs under the Basel-II framework.

    5. In view of above, banks are advised that they should henceforth use the revised rating symbols of the credit rating agencies with the corresponding guidance in the master circular under reference for the purpose of assigning risk weights to the various exposures.

    6. All other provisions regarding external credit ratings of the master circular remain unchanged.
    Yours faithfully,
    (Deepak Singhal)
    Chief General Manager-in-charge

    Annex
    Revised Rating Symbols of CARE, CRISIL, FITCH and ICRA
    CARE
    Long-Term Debt instruments
    Short-Term Debt instruments
    Earlier Rating Symbol
    Revised Rating Symbol
    Existing Symbols
    New Symbols
    AAA
    CARE AAA
    PR-1
    CARE A1
    AA
    CARE AA
    PR-2
    CARE A2
    A
    CARE A
    PR-3
    CARE A3
    BBB
    CARE BBB
    PR-4
    CARE A4
    BB
    CARE BB
    PR-5
    CARE D
    B
    CARE B

    C
    CARE C
    D
    CARE D
    CRISIL
    Long-Term Debt instruments
    Long-Term Debt instruments
    Revised Rating Symbol
    Revised Rating Symbol
    Earlier Rating Symbol
    Revised Rating Symbol
    AAA
    CRISIL AAA
    P1
    CRISIL A1
    AA
    CRISIL AA
    P2
    CRISIL A2
    A
    CRISIL A
    P3
    CRISIL A3
    BBB
    CRISIL BBB
    P4
    CRISIL A4
    BB
    CRISIL BB
    P5
    CRISIL D
    B
    CRISIL B

    C
    CRISIL C
    D
    CRISIL D
    FITCH INDIA
    Long-Term Debt instruments
    Short-Term Debt instruments
    Earlier Rating Symbol
    Revised Rating Symbol
    Earlier Rating Symbol
    Revised Rating Symbol
    AAA (ind)
    Fitch AAA
    F1(ind)
    Fitch A1
    AA (ind)
    Fitch AA
    F2(ind)
    Fitch A2
    A (ind)
    Fitch A
    F3 (ind)
    Fitch A3
    BBB(ind)
    Fitch BBB
    F4(ind)
    Fitch A4
    BB(ind)
    Fitch BB
    F5(ind)
    Fitch D
    B(ind)
    Fitch B

    C(ind)
    Fitch C
    D
    Fitch D
    ICRA
    Long-Term Debt instruments
    Short-Term Debt instruments
    Earlier Rating Symbol
    Revised Rating Symbol
    Earlier Rating Symbol
    Revised Rating Symbol
    LAAA
    ICRA AAA
    A1
    ICRA A1
    LAA
    ICRA AA
    A2
    ICRA A2
    LA
    ICRA A
    A3
    ICRA A3
    LBBB
    ICRA BBB
    A4
    ICRA A4
    LBB
    ICRA BB
    A5
    ICRA D
    LB
    ICRA B

    LC
    ICRA C
    LD
    ICRA D

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