SEBI introduces colour-coded Credit Risk-o-Meter to simplify bond risk assessment

SEBI issued a circular on 7 October 2026 ordering all debt issuers and online bond platform providers to embed a standardized Credit Risk-o-Meter in every bond prospectus, advertisement and digital listing. The meter translates six credit-rating bands—AAA through D—into distinct colours, from Irish Green for the safest instruments to Red for the riskiest, with intermediate shades such as Chartreuse, Neon Yellow, Caramel and Dark Orange.

For bonds with multiple agency ratings, the lowest rating must be reflected, while unsecured and Additional Tier-1 bonds require bold red “unsecured” labels and loss-of-capital warnings. A mandatory disclaimer notes that the meter covers only credit risk, not market or liquidity risk. Platforms must refresh the display within 24 hours of rating updates from NSDL or CDSL, placing the meter ahead of any “invest” button. Industry observers say the move will curb reliance on potentially divergent ratings and improve retail investors’ ability to spot high-risk debt.