The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) have found instances of the highest credit rating being rubber-stamped without doing proper due diligence which has prompted the regulators to review how rating agencies and debt issuers carry out their business, reported Mint quoting sources.

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The regulators held discussions to look into the business model of the rating agencies and proposed measures that will prevent so-called ratings shopping, in which companies seek out the agency that promises the highest rating, the daily said.

Under the proposals, the high-value debt issuers need to get mandatory dual ratings and invite bids to select a rating agency and the agencies will be required to protect their rating committees from the management, the report said.

The rules will ensure 'greater accountability of the rating agencies' as they will explain in detail when they change the rating stance all of a sudden, the report added.

First Published:May 17, 2019 8:33 AM IST