RBI Lifts Curbs on Brickwork Ratings Usage by Banks

Circular No. RBI/2025-26/50 DOR.STR.REC.29/21.06.008/2025-26; Dated: 09.06.2025

The Reserve Bank of India (RBI) has announced the removal of restrictions previously imposed on banks regarding the use of ratings assigned by Brickwork Ratings India Private Limited (BRIPL) for capital adequacy purposes.

1. Background – Earlier Regulatory Restrictions

Previously, RBI had permitted banks to use BRIPL-assigned credit ratings to risk-weight their claims under the capital adequacy framework, but subject to certain conditions:

• Fresh rating mandates – Credit Rating Agencies (CRAs) could assign ratings only for bank loans up to ₹250 crore.
• Existing ratings – Surveillance of ratings already assigned was allowed, regardless of the loan size, for the remaining tenure of such loans.

2. RBI’s Latest Decision

In a move to ease regulatory constraints, the RBI has now decided to withdraw these restrictions. As a result:

• Banks can freely use ratings assigned by BRIPL for risk-weighting their exposures, without the ₹250 crore cap.
• The earlier distinction between fresh mandates and existing ratings no longer applies.

3. Implication for Banks and BRIPL

This relaxation:

• Restores full recognition to BRIPL as an eligible CRA for capital adequacy purposes
• Expands banks’ options for obtaining risk assessments across a wider range of credit exposures
• Encourages greater competition and transparency in the credit rating ecosystem

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