Rating of Deposits of HFCs – Approved Credit Rating Agencies and Minimum Investment Grade Credit Rating

Last updated: 30 July 2021

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The Reserve Bank of India (RBI) has updated the requirements for deposit-taking Housing Finance Companies (HFCs) regarding credit ratings. These changes align HFC regulations with those already in place for Non-Banking Financial Companies (NBFCs). The update specifies the approved credit rating agencies and the minimum investment grade credit rating required for HFCs to accept public deposits.

RBI/2021-22/74
DOR.FIN.REC.No.34/03.10.136/2021-22

July 29, 2021

All deposit taking Housing Finance Companies (HFCs)

Madam/ Dear Sir,

Rating of Deposits of HFCs – Approved Credit Rating Agencies and Minimum Investment Grade Credit Rating

A reference is invited to Para 25.2 of Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, wherein the names of five approved credit rating agencies and their minimum investment grade credit rating for the purpose of accepting public deposits have been listed.

2. On a review, it has been decided to align the aforesaid provisions for HFCs with provisions on the subject prescribed for NBFCs which are contained in Para 9 of Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016. Accordingly, the names of credit rating agencies and their minimum investment grade ratings for the purpose of accepting public deposits by HFCs are listed in the Annex.

3. The Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 is being modified accordingly.

Yours faithfully,

(J.P. Sharma)
Chief General Manager

Annex

List of Credit Rating Agencies and their respective minimum investment grade ratings

Sl. No.	Name of the rating agency	Minimum investment grade credit rating
1	The Credit Rating Information Services of India Limited (CRISIL)	FA– (FA Minus)
2	ICRA Limited	MA– (MA Minus)
3	Credit Analysis & Research Limited (CARE)	CARE BBB (FD)
4	Fitch Ratings India Private Limited	tA– (ind)(FD)
5	Brickwork Ratings India Private Limited (Brickwork) *	BWR FBBB
6	Acuite Ratings & Research Limited **	ACUITE A
7	Infomerics Valuation and Rating Private Limited (IVRPL) **	IVR BBB
* Rating changed from BWR FA to BWR FBBB for deposits of HFCs, to align with NBFCs. ** New credit rating agencies along with ratings for deposits of HFCs, to align with NBFCs.

FAQ :

This notification updates the list of approved credit rating agencies and their minimum investment grade credit ratings that deposit-taking Housing Finance Companies (HFCs) must adhere to when accepting public deposits.

The approved agencies include CRISIL, ICRA Limited, CARE, Fitch Ratings India Private Limited, Brickwork Ratings India Private Limited, Acuite Ratings & Research Limited, and Infomerics Valuation and Rating Private Limited.

The minimum required ratings vary by agency and include FA- (CRISIL), MA- (ICRA), CARE BBB (FD) (CARE), tA- (ind)(FD) (Fitch), BWR FBBB (Brickwork), ACUITE A (Acuite), and IVR BBB (Infomerics).

The updated provisions for HFCs are aligned with the requirements prescribed for Non-Banking Financial Companies (NBFCs) in their acceptance of public deposits.

Yes, the rating for deposits of HFCs from Brickwork Ratings has changed from BWR FA to BWR FBBB to align with NBFC standards.

Yes, Acuite Ratings & Research Limited and Infomerics Valuation and Rating Private Limited are new credit rating agencies added with their respective ratings for HFC deposits, aligning with NBFC regulations.

Notification No : RBI/2021-22/74 DOR.FIN.REC.No.34/03.10.136/2021-22
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12134&Mode=0

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