The Reserve Bank of India may disallow credit rating agencies from the dual role of being advisor - cum - rating agencies for companies.
The move aims to prevent such entities from making biased assessments about the financial condition of their clients and restrict conflict of interest that may seep in.
Official sources said that the banking regulator may soon initiate a dialogue with market regulator Securities and Exchange Board of India (SEBI) to flesh out new regulations that would impact the way credit rating agencies function.
The changes have become imperative post the IL&FS fiasco where the role of rating agencies came into question.
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