Sebi withdrew loan default disclosure circular on request for more time from banks, says Tyagi

Months after it silently withdrew a circular mandating corporates to disclose their loan defaults, just a day after it was issued, the markets watchdog Sebi on Monday explained that it was pulled back as banks sought more time to implement it.

The Securities and Exchange Board chairman Ajay Tyagi explained that the regulator is working with banks to define what would constitute a default as banks provide different types of loans to corporates, reports PTI.

"Banks need further time to examine and see. Because they give various types of debts. There's term loans, working capital loans, etc," Tyagi said on the sidelines launching the National E-governance Services (NeSL), an information utility provider here this evening.

On September 30, the Sebi had withdrawn its earlier circular which had mandated corporate to disclose to the stock exchanges any loan default within a day. But just a day before the new rule could kick, Sebi had issued press release stating that the circular mandating disclosure on loan defaults was being deferred 'until further notice'.