Guidelines on What Constitutes Non-cooperation by clients

Once the assigned rating is accepted by the rated entity, it becomes the responsibility of Infomerics to carry out monitoring of the rating until the outstanding under the rated instrument and/or facilities is completely paid off or until the investor and/or lender agrees for withdrawal of the rating at the instance of the issuer and/or borrower. Such monitoring by Infomerics is ongoing and may be onsite or offsite or combination of both. As a matter of practice & prudence, Infomerics seeks to monitor the performance of the issuer on the basis of monthly No Default Statements (NDS), available market information and quarterly operational data/results declared by the issuer from time to time. Further as per SEBI guidelines, Infomerics undertake comprehensive annual surveillance of the rated instruments based on the latest audited financial statements and performance in the preceding period of 12 months.

Surveillance/review of assigned ratings can be carried out at any time after the acceptance, however a surveillance is mandatory within 15 months from the date of initial press release/last press release for Bank Loan Ratings. However Infomerics has a policy to complete the process generally latest by the end of 13 months from the date of last press release to avoid any delay. Similarly the annual surveillance of the NCDs is mandatorily completed within 12 months from the date of last press release. However Infomerics shall follow up and endeavour to complete the annual surveillance within 11 months from the date of initial/last annual surveillance for the same.

The Mandate signed by the issuer/borrower with Infomerics clearly states about the review of the rating and the fee payable at the time of annual surveillance.

For the purpose of annual surveillance or for any periodical or even for any ad-hoc review, Infomerics expects the issuer/borrower to submit certain information to Infomerics which are otherwise not available in the public domain. Infomerics also expects that the issuer/borrower shall pay to Infomerics the contracted annual surveillance fee. Infomerics also expects the borrower to submit the monthly No Default Statement (NDS) without fail as long as the rating is live (same applicable for Ratings with INC status). But for any reason, if any issuer/borrower does not provide the information as indicated above or any other information asked for the purpose of review and/or pay the annual surveillance fee, then it becomes difficult for Infomerics to carry out the rating monitoring exercise. These types of instances such as non-submission of vital information, NDS and/or non-payment of annual surveillance fee on the part of the issuer/borrower are considered as Non-cooperation according to Infomerics.


This is to mention that, in order to further strengthen the rating process of the CRAs with regard to ‘Issuer not cooperating’ (INC) ratings, SEBI has issued the following directions vide circular SEBI/HO/MIRSD/CRADT/CIR/P/2020/2 January 03, 2020.

This states, if an issuer has all the outstanding ratings as non-cooperative for more than 6 months, then the CRA shall downgrade the rating assigned to the instrument of such issuer to non-investment grade with INC status. If non-cooperation by the issuer continues for further six months from the date of downgrade to non-investment grade, no CRA shall assign any new ratings to such issuer until the issuer resumes cooperation or the rating is withdrawn (w.e.f. from July, 2020).

In order to comply with aforesaid guidelines, Infomerics shall be compelled to conduct immediate review of the assigned ratings based on the available information and may take rating action in case any or all of the following cases:-

1. NON submission of NDS for more than 2 months

2. NON submission of quarterly results or performance indicators consecutively for two quarters.

3. Non submission of Audited financial statements by issuer within 6 months from the closure of the financial year.

4. NON payment of Annual surveillance fees on raising the tax invoice

NON submission of details and particulars called by Infomerics within 15 days from the date of seeking the required information.

Migration from INC Status

 An issuer may be migrated from INC status provided it fulfils the following requirements:

1. Payment of Annual Surveillance

2.  Submission of NDS

3.  Submission of operating and financial data as request by Infomerics.

Policy approved in the Board Meeting dated 26th November, 2021

Last Updated: December, 2021