POLICY ON BANK LOAN STATEMENTS FROM CLIENTS

In terms of communication no. DBR: BP: No. 1775 /21.06.007/2018-19 dated 30th August 2018, RBI has directed that “The CRA shall obtain bank statements of the rated entities and critically analyse these as an input to determine the debt serving capacity of the entity”. The matter was discussed among CRAs and RBI officials as well. Based on the consensus arrived at, INFOMERICS has decided to follow the following procedure in this regard:

1. All the clients shall be advised to submit their bank loan statement for the preceding six months at the time of bank loan rating and annual surveillance/review provided more than six months have passed since last rating/surveillance.

2. In case of large consortium advances/multiple banking, statement of account shall be sought from all the  lenders covering 100% of debt exposure. However for processing the rating assignment, statement received on best effort basis can be considered, apart from feedback from all the lenders.

3. The statement of account pertaining to prime operative accounts such as Current Account, Cash Credit/Overdraft and Term Loan Accounts shall be obtained.

4. The analysis on bank statements by analysts will largely confine to the following:

i) Overdrawing in the account beyond the limit sanctioned, periodicity, regularity and clearance.

ii)Checking for imposition of penal interest and penal charges, if any, and ascertaining the reasons thereof.

iii)Servicing of monthly/quarterly interest

iv)Average utilization of limits and available unutilised limits which will support the debt servicing capacity of the client.

5.INFOMERICS shall compile a list of such clients who have partially or fully not submitted the bank loan statements at the time of initial rating/surveillance/review and submit to RBI designated office after the expiry of each calendar month or quarter as directed by the regulators.

6. Note on the efforts made for obtaining the statement and number of clients who have submitted/ not submitted shall be placed before RSCB on quarterly basis.

Reviewed and approved in the BM dated 29th September 2023. (Version II)

 

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