Reserve Bank of India bars CRAs calling it deposits regulator
The Reserve Bank of India (RBI) just told credit-rating agencies (CRAs) to stop referring to it as the regulator for bank deposits.
This move, linked to a new SEBI rule that requires naming a financial instrument's regulator, might mean CRAs will stop giving ratings for bank deposits altogether.
RBI decision to curb panic withdrawals
While most regular depositors don't really check these ratings, big companies and public-sector organizations rely on them before parking their money.
Experts think RBI's decision is about preventing panic withdrawals if a bank gets downgraded, something that could especially hurt smaller banks.
Even if deposit ratings go away, CRAs will still rate things like loans and bonds.
And don't worry: your deposits are still insured up to ₹5 lakh (with talks of raising it to ₹7.5 lakh awaiting approval).