Credit rating agencies in India: full list here

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What is a rating agency?

This is a company that assesses the ability of various financial institutions to repay their loans with timely principal and interest payments.

What is the credit rating?

  • A credit score is an assessment of a borrower’s creditworthiness (ability to pay) in general terms or with respect to a particular debt or financial obligation.
  • A credit rating can be assigned to any entity that seeks to borrow money – an individual, a corporation (banks, nbfcs, etc.), a state or provincial authority, or a sovereign government

History of credit rating agencies around the world:

The history of modern credit rating agencies (CRAs) dates back to merchant rating agencies of the early 19th century, which rated the ability of merchants to repay their debts in the United States. However, the history of credit rating agencies in India is relatively short and started with the establishment of Credit Rating Information Services of India Limited (CRISIL) in 1987. Subsequently, Investment Information and Credit Rating Agency of India Limited ( ICRA), Credit Analysis and Research Limited (CARE Ratings), India Ratings and Research Pvt. ltd. (formerly Fitch India), SME Rating Agency Limited (SMERA), Brickwork Ratings India Private Limited, Onicra Credit Rating Agency of India Ltd, Micro Credit Ratings International Limited (MCRIL), etc. started their activities in India.

Which credit rating agency was India’s first credit rating agency?

Credit Rating Information Services of India Limited (CRISIL) in 1987.

What is the credit rating agency in India for?

Until 2007, the scope of these rating agencies was limited to corporate bond ratings and niches such as the rating of small industries, small and medium enterprises, individual credit, etc. But after the introduction of the Basel-II standards, Indian banks were required to comply with the Standardized Approach (SA) to the calculation of capital for credit risk as specified under the Basel framework either by March 2008 or March 2009 according to international presence.

Within the Basel framework, two main methodologies are available for banks to measure their capital requirement for credit risk for regulatory purposes, namely the standardized approach (SA) and the internal rating-based approach (IRB). ), based on the preparation of banks in the areas of credit. risk measurement and management.

Which rating agencies have been accredited by RBI under Basel?

Four national ARCs viz. CARE, FITCH India (now replaced by India Ratings), CRISIS and CIFAR have been deemed eligible for accreditation under the Basel framework

Subsequently, two other national credit rating agencies, namely: Masonry and SMERA (now named Acuite) were accredited in April and September 2012, respectively. Indeed, RBI has so far accredited six national CRAs and banks are required to use the ratings assigned by any of these CRAs to RW their exposures under the SA for the calculation of risk capital for credit.

With which regulatory body are credit rating agencies registered?

SEBI

Why SEBI regulates CRA?

The ARC also assesses the securities that make up India’s stock market. Therefore, CRAs are regulated by SEBI.

How many ARCs have been registered so far in India?

7, remember that only 6 are accredited by RBI for the calculation of credit risk capital under SA. Infomerics Valuation and Rating Private Limited is an ARC but is not accredited by RBI.

Names of rating agencies:

  1. CARE,
  2. India (now replaced by India Ratings),
  3. CRISIS
  4. CIFAR
  5. Masonry
  6. SMERA (now named Acuite)
  7. Infomerics Valuation and Rating Private Limited

Last news :

  • SEBI canceled Brickwork Rating’s license for repeated failures and irregularities in the performance of its duties. The exact status of Brickwork Rating is therefore still unknown.
  • Brickwork Ratings, founded by bankers, credit rating professionals, former regulators and professors, is committed to promoting financial literacy. The masonry dimensions have Canara Banka leading public sector bank, as promoter and strategic partner
  • BWR is headquartered in Bangalore
  • Vivek Kulkarni, IAS (retired) Founder and MD.

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