Introduction
Credit rating evaluates credit worthiness of an individual, business or government. Credit Rating Agency provide ratings on debt instrument of the institution to the individual and investor. These agency gives various types grades to a company. A high grade represents company is
able to payback their credit and lower grade represents a company may be not able to payback their credit. so these agency assist individual and investors to taking decision according to the grade.
able to payback their credit and lower grade represents a company may be not able to payback their credit. so these agency assist individual and investors to taking decision according to the grade.
Indian Credit Rating Agencies
Indian Credit rating industry is mainly comprises of CRISIL, ICRA, ONICRA, SMERA and CARE. SMERA is exclusively established for rating of Small and medium enterprises (SMEs)
CRISIL : Credit Rating Information Services of India Ltd ( CRISIL) is the largest rating agency in the India.Its established in 1987 and headquarter situated at mumbai.
ICRA ; Investment Credit Rating Agency (ICRA) was established in 1991 by leading Indian financial institutions and Banks. Headquarter of ICRA is situated at Gurgaon, India. ICRA is developed a linear scale for MSME sector.
CARE ; Credit Analysis and research Limited was established in 1993 and headquarter at Mumbai. CARE is a credit rating,research and advisory committee is promoted by Industrial Development Bank of India (IDBI), Unit Trust of India and other leading Institutions.
Following are the rating scale used by ICRA, CARE & CRISIL
Following are the rating scale used by ICRA, CARE & CRISIL
| RATING DEFINITION | CRISIL | ICRA | CARE |
|---|---|---|---|
| HIGEST SAFETY | CRISIL AAA | ICRA AAA | CARE AAA |
| HIGH SAFETY | CRISIL AA | ICRA AA | CARE AA |
| ADEQUATE SAFETY | CRISIL A | ICRA A | CARE A |
| MODERATE CREDIT RISK | CRISIL BBB | ICRA BBB | CARE BBB |
| MODERATE DEFAULT RISK | CRISIL BB | ICRA BB | CARE BB |
| HIGH DEFAULT RISK | CRISIL B | ICRA B | CARE B |
| VERY HIGH DEFAULT RISK | CRISIL C | ICRA C | CARE C |
| DEFAULT | CRISIL D | ICRA D | CARE D |
ONICRA ; ONICRA was established in 1993 - headquarter in Gurgaon. It analysis data and provide rating solutions for individuals and small scale enterprises.
Following Figure Depicts the grading scale used by ONICRA.
CIBIL ; Credit Information Bureau (India) or CIBIL was founded on 2000 headquarter at mumbai. Credit Information Bureau is an organization thats collects credit information of the individuals from various sources and provide consumer credit information on commercial consumer for variety of uses.
SMERA ; Small and medium enterprises rating agency (SMERA) is joint initiative by SIDBI, Dun & Bradstreet information Service Limited and various leading banks of the country. Its headquarter in Mumbai.
SMERA ; Small and medium enterprises rating agency (SMERA) is joint initiative by SIDBI, Dun & Bradstreet information Service Limited and various leading banks of the country. Its headquarter in Mumbai.
International Rating Agencies
Standard and Poor (S & P), Moody's and Fitch Rating agencies are the major rating agency in the world. we provide a brief details about these agencies given below ;
STANDARD AND POOR : STANDARD AND POOR (S & P) RATING agency is a american based rating agency headquarter in New York . S & P was founded in 1906 by Luther Lee Blake.The company rates borrowers on a scale from AAA to D.
MOODY`S - MOODY`S was founded by John moody in 1909 and headquarter is situated at New York City, United States. The company rank the credit worthiness of the borrower using a standardized rating scale.
FITCH - FITCH ratings was founded by John Knowles Fitch on December 24, 1913 in New York city. Fitch ratings is Dual Headquartered in New York and London. Fitch credit ratings are assigned on an alphabetic scale from AAA to D.
following are the grade table used by these rating agencies..
STANDARD AND POOR : STANDARD AND POOR (S & P) RATING agency is a american based rating agency headquarter in New York . S & P was founded in 1906 by Luther Lee Blake.The company rates borrowers on a scale from AAA to D.
MOODY`S - MOODY`S was founded by John moody in 1909 and headquarter is situated at New York City, United States. The company rank the credit worthiness of the borrower using a standardized rating scale.
FITCH - FITCH ratings was founded by John Knowles Fitch on December 24, 1913 in New York city. Fitch ratings is Dual Headquartered in New York and London. Fitch credit ratings are assigned on an alphabetic scale from AAA to D.
following are the grade table used by these rating agencies..
==>> Must read the procedures of Credit Rating agencies
