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2015 (3) TMI 159 - MADRAS HIGH COURTNeed of a New Policy to regulate the manner of Credit Rating Agencies to assign rating to the borrowers - Direct impact on the ability of the borrowing company to raise loans - Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 exists - Held that:- It is submitted that the general superintendence and regulation of credit rating agencies are carried out by SEBI under Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999. The regulations issued by SEBI cover various aspects viz., registration of rating agencies, fit and proper criteria for rating agencies, rating process and methodology and its records, transparency and disclosures avoidance of conflict of interest, code of conduct, etc. The Reserve Bank accredits CRAs for the limited purpose of Bank Loan Ratings to enable banks to use their ratings for capital adequacy purposes under Basel III Capital Adequacy Framework. Also there is an annual review of accreditation of these Credit Rating Agencies by the RBI itself as a measure of check and balance. It is further pointed out that there has to be a play insofar as the exact methodology adopted by any Credit Rating Agency is concerned and that six such agencies were accredited by the RBI. A borrower has the option, in fact, to approach any one or more than one of the agencies for obtaining its credit rating. The aforesaid, thus, shows that it is not as if the matter has been left unattended, but has received the attention of the RBI, which has accredited the agencies and has made the Regulations applicable ipso facto, since that task had already been carried out under the Regulations of how a rating has to be arrived at.Thus, what is good for securities has also been found good for the loans to be availed from banks and financial institutions. It is trite to say that it is not the function of this Court to get into the economic policy and regulation framework and once the matter has received the attention of the concerned authorities, who have made applicable certain regulations to the matter in issue, nothing more is required. We are, thus, of the view that no directions are required to be passed in the present petition, which stands closed.
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