(LiveMint)
A Securities and Exchange Board of India (Sebi) proposal to make listed firms disclose defaults on their loans within a day of it happening is stuck in a turf war between the central bank and the markets regulator, according to two people with direct knowledge of the matter.
The Reserve Bank of India (RBI) has reservations about the Sebi proposal as it considers banks to be the biggest stakeholders in default data and believes such data is not for public consumption, these people said on condition of anonymity.
Sebi had initially released a circular on 4 August proposing default disclosures within a day, only to withdraw it on 30 September, just a day before it was to become operational. The circular had sought to bring bank loan default disclosure on par with delay in repayments on other kinds of debt instruments such as bonds, as required by Sebi’s Listing Obligation and Disclosure Requirement regulations.
The market regulator’s board had discussed the implementation of this proposal in its 28 December board meeting, but could not reach a conclusion, Sebi chairman Ajay Tyagi said after that meeting.
