Recovery ratings of NPAs soon

Distressed or non-performing assets can now have a better market with the credit rating agencies offering to rate such assets. The rating agency will assign the rating on the basis of the possibility and extent of recovery from a defaulted or non-performing asset through its recovery rating mechanism. Mr Krishnan Sitaraman, Head - Fund Services & Fixed Income, Research, CRISIL, felt that the key benefit of the recovery rating was basically an independent third-party evaluation of the recovery prospects in defaulted assets or NPAs based on which the banks or asset re-construction companies could arrive at a valuation to their investments backed by such assets.