Credit-rating Reforms on the Anvil: The Case of Credit Default at Altico Capital in India

Ambuj Gupta

doi:10.5281/zenodo.8350078

Published August 30, 2023 | Version v2

Journal article Restricted

Credit-rating Reforms on the Anvil: The Case of Credit Default at Altico Capital in India

Ambuj Gupta

Abstract: Altico Capital, a systemically important non-deposit taking non-banking finance company (NBFC) registered with Reserve Bank of India (RBI), defaulted on nearly $2.8 m i l l i o n i n t e r e s t p a y m e n t t o D u b a i - b a s e d M a s h r e q B a n k o n S e p t e m b e r 12 2019. T h e r e a l t y - f o c u s e d n o n - b a n k i n g l e n d e r w h i c h h a d b o r r o w e d t o t h e v o l u m e o f$ 625 million, primarily from banks, was facing liquidity woes because of its large-scale exposure to the down trending real estate market in India. The liquidity situation of Altico Capital was exacerbated because of prepayment of loans made to a couple of lenders to avoid high interest rate reset and loan-recall notices received from other lenders. The fallout of this crisis was seen in the form of a debate over the credit rating system in the country which is unable to detect stress in time. This case study draws suggestions to bring about reforms in the credit rating system in India.

Keywords: India, Altico Capital, NBFC, Credit Default, Liquidity Risk, Credit Rating

JEL Classification Number: G18, G24

Files

Restricted

The record is publicly accessible, but files are restricted to users with access.

Request access

If you would like to request access to these files, please fill out the form below.

Subscription is required.

You are currently not logged in. Do you have an account? Log in here

Citations

Oops! Something went wrong while fetching results.

	All versions	This version
Views	148	19
Downloads	4	1
Data volume	1.7 MB	413.3 kB

Credit-rating Reforms on the Anvil: The Case of Credit Default at Altico Capital in India

Creators

Description

Files

Restricted

Request access