The PHD Chamber of Commerce and Industry (PHDCCI) has called on the Reserve Bank of India (RBI) to take action against credit rating agencies that allegedly demand fees from micro, small, and medium enterprises (MSMEs) even after the withdrawal of their ratings. The industry body described these practices as coercive and urged the central bank to implement measures ensuring fair treatment and transparency in credit assessment processes.

According to PHDCCI, many MSMEs face continued fee demands from rating agencies for services they no longer utilize, creating unnecessary financial burdens. The body has highlighted that such practices discourage smaller enterprises from seeking formal credit ratings, which are crucial for accessing institutional finance and government schemes. By addressing these issues, PHDCCI aims to strengthen the financial ecosystem for MSMEs, which form the backbone of India’s economy.

In addition to curbing unfair fee practices, PHDCCI has recommended that the RBI introduce stricter guidelines to enhance transparency in credit card issuance and priority sector lending through non-banking financial companies (NBFCs). These measures are expected to ensure that MSMEs have equitable access to credit and are protected from exploitative practices in the financial services sector.

Experts note that establishing clear rules for rating agencies and financial institutions will not only safeguard the interests of MSMEs but also improve the overall credit culture in India. Transparent practices in credit ratings and lending can boost confidence among smaller enterprises, enabling them to expand operations and contribute to economic growth.

The RBI has not yet commented on the PHDCCI’s request, but the industry body is optimistic that regulatory intervention will lead to fairer practices and enhanced financial inclusion. Effective implementation could set a precedent for more accountable and transparent operations across the MSME credit ecosystem, benefiting thousands of businesses nationwide.