While India was the first country to regulate credit rating agencies, some improvements are required in the existing mechanism, former Securities and Exchange Board of India (Sebi) chairman UK Sinha said.
Speaking on the sidelines of the 58th Skoch Summit, Sinha said: "Instead of coming to a conclusion that the instances of fraud are increasing, I would like to assume that the instances of detection are increasing. The regulators and investigating agencies are now empowered. This is happening not only in India but in other parts of the world also. Today the laws in India are pretty strong," he observed.
According to Sinha, a change in culture is happening as the courts are also stepping in to help investigating agencies. "You will see multiple judgments where courts have expressed their views rather strongly," he said.
Even developed countries are finding it tough to regulate rating agencies, while India has rules in place since 2000. "It is also a question of having coordination between the rating agencies and others on the same framework, for example the debenture trustees or the companies which use the securities. I think Sebi is working in that direction," Sinha pointed out.