India's efforts to get a BRICS credit rating agency set up as a counter to Western rating institutions could not take off on Sunday due to lack consensus after some members voiced ''concerns'' over the ''credibility'' and access to ''dependable data'' for the new entity to take on the Wall Street-based Big 3 on commercial principles.
''The leaders were mainly convinced but we couldn't sign the agreement right now because there is a sense that experts need to look at it more closely,'' India's economic relations secretary Amar Sinha told reporters after the Eighth BRICS Summit.
He said because of the lack of consensus, the item has been included under the ''action plan'' and not in the Goa Declaration.
Elaborating on the concerns, he said, ''Every credit rating agency has to have credibility and access to absolutely dependable data. These two things the experts have to look at now.''
Sinha, however, said this is not a setback, pointing out to the other items on the economic cooperation front like agro research and customs cooperation that saw consensus.
The proposed credit rating agency also found a mention in Prime Minister Narendra Modi's closing remarks. ''To further bridge the gap in the global financial architecture, we agreed to fast track the setting up of a BRICS Rating Agency,'' he said in the joint declaration.
India had first mooted the idea of having such an agency for the BRICS grouping which can solve impediments for the emerging market economies posed by the present CRA market, which is dominated by S&P, Moody's and Fitch, all based in Wall Street and being run with pure commercial considerations.
These three hold over 90 per cent of the sovereign ratings market now. Indian officials were at the forefront of pointing out to the shortcomings and the need to have an alternative CRA in the days leading to the Goa summit and during deliberations at the conclave here over the weekend.
According to media reports over the weekend, China had raised certain concerns about the proposal and was not in favour of setting up CRA now.
One of the prime reservations stemmed from the current approach of making the issuer pay for the rating and the strong desire of shifting it to an investor-pays approach to make it more credible.
Other factors which have been flagged included the weighting accorded to a particular country's sovereign rating while assigning the rating, without considering an issuer's capital position.
The Exim Bank of India had presented a concept paper on the need to have such a body and its chairman Yaduvendra Mathur had flagged key issues surrounding conflicts of interest and also higher cost of operating under the present framework on the eve of the summit.
In an interview to PTI in the run-up to the government level summit, Mathur had also said there was an urgent need to have a professional credit rating agency (CRA) which could operate with full integrity.
Citing the case of his own organisation, he said Exim Bank is rated AAA domestically but goes down at par with India's sovereign rating internationally, leading to higher cost of borrowings.
Veteran banker and president of the BRICS-promoted New Development Bank, K V Kamath had also yesterday backed the setting up of such an agency, alleging growth is constrained in the present set up.
''We need not constrain ourselves from our ability to do business…if this is the norm, I fear growth in the developing world will also be impacted,'' he told media in an interaction.