Since the income and profits of credit rating agencies are dependent upon the volume of ratings they assign, there may be a tendency to assign inflated ratings to acquire and retain clients.
This special assistance is granted only against collateral of acceptable assets pledged by the bank or a government guarantee because the Reserve Bank is prohibited by statute from making unsecured loans. The Bank’s policy and practice of solving liquidity problems have recently received considerable attention. Two reports were published in the past year. One was on the failure of Regal Treasury Private Bank Limited.