On a review of the capital requirement for PCE, it has been decided that:
a)
To be eligible for PCE from banks,
corporate bonds shall be rated by a minimum of two external credit rating
agencies at all times;
b)
The rating reports shall disclose both
standalone credit rating ( pre- PCE) as well as the enhanced credit rating (post-
PCE).
c)
For the purpose of capital computation
in the books of PCE provider, lower of the two ratings shall be reckoned.
d)
Where the reassessed standalone credit
rating shows improvement over the rating at the time of bond issuance, the
capital requirement may be recalculated on the basis of the reassessed
standalone credit rating and the reassessed enhanced credit rating, without
reference to the constraints of capital floor and difference in notches.
Based on RBI circular dated 18/05/2017.
For any further clarification if required, Please refer www.rbi.org.in
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