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RBI Tells Rating Agencies to Drop It as Deposit Regulator
RBI told rating agencies to stop naming it as bank deposit regulator, creating a conflict with SEBI disclosure rules. Deposit ratings could be at risk for institutional investors.
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The Reserve Bank of India has told credit rating agencies to stop naming the central bank as the regulator of bank deposits in their rating communications, according to a report by The Economic Times. The instruction arrived around 10 days ago, two people familiar with the matter told ET.
The move creates a direct conflict with a Securities and Exchange Board of India circular issued on February 10, 2026. That circular requires rating agencies to disclose the name of the regulator for any financial instrument that falls under another financial-sector regulator's purview. It also demands separate disclosures for activities governed by other regulators, with a clear statement that SEBI's investor-protection and grievance-redressal mechanisms do not apply to those activities.
Rating agencies have already started listing regulators for different instruments under this framework. Acuité, for instance, identifies RBI as the regulator for fixed deposits raised by NBFCs, banks, housing finance companies and financial institutions. The new RBI instruction could force agencies to remove that reference for bank deposits.
The rating agencies have approached SEBI seeking guidance on how to comply with both demands, ET reported. If RBI cannot be cited as the regulator, agencies may eventually stop issuing deposit ratings altogether because they would not be able to satisfy the SEBI disclosure rule.