All About Credit Rating Agencies

Hello Reader, today we are going to share All About Credit Rating Agencies .  A credit rating agency (also called a ratings service) is a company that assigns credit ratings which rate debtors ability to back debt and interest in time. Credit rating agency in India regulated by SEBI.

All About Credit Rating Agencies

• Some important International Credit Rating Agencies:-
  (a) Standard & Poor : It is an American financial services company started in        1860. Its head office is located in New York, USA. The company issues credit ratings for the debt of public and private companies, and other public borrowers such as governments and governmental entities.(b) Moody’s : It is bond credit rating agency started in 1909. Its headquarter in New York, USA. Moody’s Investors Service provides international financial research on bonds issued by commercial and government entities.

  (c) Fitch Ratings: It is also a credit rating agency started in 1914.Fitch Ratings is dual-headquartered in New York, USA, and London, UK. Fitch Ratings and Fitch Solutions are part of the Fitch Group.

  Standard & Poor’s, Moody and Fitch Group collectively called  the Big Three credit rating agencies. As of 2013 they hold a collective global market share of “roughly 95 percent” with Moody’s and Standard & Poor’s having approximately 40% each, and Fitch around 15%.

• Indian Credit Rating Agencies:-
  (a) CRISIL : CRISIL or Credit Rating Information Services of India Limited is a global analytical company providing ratings, research, and risk and policy advisory services. It is  a subsidiary of Standard & Poor’s. Its Head office  in Mumbai, Maharashtra. CRISIL’s businesses can be divided into three broad categories – Ratings, Research and Advisory. CRISIL Ratings has rated/assessed over 60,000 entities in India. Its rating capabilities span the entire range of debt instruments and it has worked across  from large corporates to the SMEs in the country.(b) CIBIL : Credit Information Bureau (India) Limited is India’s first Credit Information Company (CIC) founded in 2000. CIBIL collects and maintains records of an individual’s payments. These records are submitted to CIBIL by member banks and credit institutions, on a monthly basis. This information is used to create Credit Information Reports (CIR) and credit scores which are provided to credit institutions in order to evaluate and approve loan applications. Its head quarter in Mumbai, Maharashtra.

  (c) ICRA :-ICRA Limited (ICRA) or Investment Information Credit Rating Agency is an Indian independent credit rating agency. It was established in 1991. It is second largest Indian rating company in term of customer base. It was a joint-venture between Moody’s and various Indian commercial banks and financial services companies. Its Head quarter in Gurgaon, Haryana.

  (d) SMERA : SMERA Ratings Ltd (SMERA) is a full service credit rating agency exclusively set up for micro, small and medium enterprises (MSME) in India. It provides ratings which enable MSME, SMEs,Corporates to raise bank loans at competitive rates of interest. It was founded in 2005 and head office in Mumbai, Maharashtra.

  There are some other credit rating agency also in India such as Fitch Rating India Ltd, Experian, Equifax, High Mark Credit Information Service & ONICRA etc. But for competitive examination point of view it is sufficient to study the above mentioned.

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