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The Securities and Exchange Board of India (SEBI) plans to make listed firms disclose defaults on their loan within a day has run into rough weather with the Reserve Bank of India, as per a report in Mint.
The report said that the central bank has some reservations about the market regulator’s proposal as it regards banks to be the biggest stakeholders in default data and feels such data is not for public consumption.
The market regulator had first issued a circular on August 4 suggesting default disclosure within a day but withdrew it a day before it was to come into effect on September 30. The proposed circular would have bridged the disparity between bank loan defaults with other debt instruments like bonds.
RBI has submitted to the Supreme Court a list of big defaulters of over Rs 500 crore in a sealed envelope in March 2017 in relation to the PIL on rising bad loans in the economy.
The central bank opposition stems from the fact that loan default data is for regulatory purposes and not for public consumption.
Sandeep Parekh, managing partner at Finsec Law Advisors told the financial daily, the application of the Sebi’s circular requires a standardised approach from both the regulators.
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