The Reserve Bank of India (RBI) directs credit rating agencies not to characterize the RBI as the regulator overseeing bank deposits. The move is reported to create uncertainty over how rating agencies describe and assess bank-deposit instruments, with some possibility that they could stop evaluating deposits if their role or wording is constrained.
The Economic Times reports that the instruction could affect market reactions to deposit ratings. The paper notes that investor responses to any deposit downgrades are mixed and highlights concerns raised around potential deposit outflows and bank stability if ratings change or are withdrawn. The directive also underscores the RBI’s position on its regulatory scope and branding in relation to deposit assessment. Other aspects of the report focus on the risk of rating agencies altering coverage, including whether existing deposit evaluation frameworks continue under the new guidance.
