Credit rating agencies rate large borrowers like companies and governments on their ability to repay debt. They analyze complex data and provide easily understandable ratings. The key functions of credit rating agencies in India are: 1. Providing low cost information to investors on risk. 2. Helping with risk and return management by informing on risk associated with debt instruments. 3. Assisting in public policy formulation by judging eligibility of securities. 4. Delivering superior information through trained staff and access to private information. 5. Enhancing corporate image through better credit ratings. The major credit rating agencies in India are CRISIL, ICRA, and CARE. CRISIL and ICR

2. AGENCY MEANING
FUNCTIONS OF CRA
IN INDIA CREDIT RATING AGENCIES

3. credit rating agency is a company which rates the
debtors on the basis of their ability to pay back the debt in
timely manner. They rate large scale borrowers, whether
companies or governments.
A credit rating agency is an organization which assigns credit
ratings to the debtors predicting their capability to pay back
debt timely and simultaneously making the forecast on the
chances of the debtor being default. These rating agencies
rate large borrowers (both governments and companies).
Credit Rating Agencies

4. LOW COST INFORMATION
RISK AND RETURN MANGEMENT
HELPS IN FORMULATION OF PUBLIC POLICY
SUPERIOR INFORMATION
ENHANCE CORPORATE IMAGE
CREDIT RATING

5. The credit rating agency collects,
analyses, interprets and makes a
proper conclusion of any complex data
and transforms into very lucid and
easily understandable manner.
1. Low cost information

6. The instruments rated by rating agency
gets greater confidence amongst investor
community. It also gives an idea regarding
the risk associated with the instrument.
2. Provides a basis for suitable risk and return

7. If debt instruments are professionally
rated, it becomes very easy to judge
the eligibility of various securities for
inclusion in the institutional portfolio
with greater confidence
3. Helps in formulation of Public policy

8. Credit rating agency being an independent
rating agency, due to highly trained and
professional staffs and with the access to
information which are not publicly
available information, these agencies are
able to deliver superior information.
4. Provides superior information

9. Better credit rating to any credit investment
enhances visibility and corporate image in the
industry.
If you are a bankers/Finance
Manager/CA/Entrepreneur, you can learn the
critical aspects of Credit Analysis Process in
Elearnmarkets.com
5. Enhances corporate image

10. 1. CRISIL
CRISIL commenced its operations in the year 1987 and it is India’s
first credit rating agency. The company conducts its operations from 8
countries including India, US, UK, Singapore, China, Poland, Argentina
and Hong Kong. However, it has its head office in Mumbai.
The company provides ratings, analytics and solutions, research with a
very good track record of innovation and growth. Standard and Poor’s is
the majority shareholder of S&P’s.
The long term rating given by CRISIL are shown below-
.
Credit rating agencies in India

11. 2. ICRA
ICRA was the second rating agency
established in the year 1991. It is a public limited
company and it has its head office in New Delhi.
Moody’s is the majority shareholder of ICRA.
The long term rating of ICRA is exactly similar
to CRISIL shown in the chart above.

12. 3. CARE
Then in the year 1993, the next credit rating
agency which came up was CARE. It has its
head office in Mumbai and it is India’s
second largest second largest credit rating
agency.
It is one of the five partners of international
rating agency called ARC Ratings