Panel seeks safeguards on credit rating

KP Krishnan committee on Comprehensive Regulation of Credit Rating Agencies(CRA) has observed undercutting of fees between CRAs is taking place and issuers may take advantage of such situations. Issuers attempt to seek informal ratings from various CRAs and pass the rating mandate to the agency that could potentially offer the highest rating. To prevent instances like the damage caused by unscrupulous salesmen of insurance, mutual funds and personal loan products, it is necessary to place safeguards or prescribe standards on outsourcing of credit rating or credit information to any third party. This is in the interests of quality and confidentiality. ...

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