On August 4, India’s stock market regulator issued a direction to all listed companies asking them to disclose to the stock exchanges in case of delays of payments of interest/installments taken from banks and financial institutions.

The circular goes on to add that this disclosure norm will also apply to other debt sources such as commercial paper, medium term notes, foreign currency convertible bonds and external commercial borrowings.

Earlier, the companies were not required to report delay or default in payments on their debt in the case of banks and financial institutions to the regulator or stock exchanges.

“In order to address this critical gap in the availability of information to investors, listed entities shall comply with the requirements of this circular,” the Securities and Exchange Board of India said in the order.

This comes in the wake of a Rs 10 lakh crore bad loan crisis in India’s banking sector. The Reserve Bank of India recently directed banks to initiate insolvency proceedings against 12 large corporate accounts which comprise 25% of the total NPAs in the sector.

The central bank has earlier argued in the Supreme Court that it cannot disclose the names of wilful defaulters even as the top court asked it to make the list public in 2015. The requirement by SEBI puts the onus on companies to volunteer this information on their own to stock exchanges, which in turn could mean a hit in their stock prices which usually react unfavourably to any negative financial information.

SEBI said that the circular comes into effect from October 1, 2017 and added that the same data should be provided to credit rating agencies in a timely manner.