A credit rating agency (CRA) is a firm that ranks borrowers based on their capacity to repay their interest and also loan quantity promptly and also the probability of them failing. These agencies may likewise examine the creditworthiness of debt issuers and provide credit ratings to only companies and not individuals customers. The monitored entities might be firms, special purpose entities, state federal governments, local governmental bodies, charitable companies, and also nations. Specialist firms rate specific customers called credit score bureaus that offer a credit rating to every consumer based on his/her economic background. Credit rating agencies in India don’t have a faraway past. They came into being in the second half of the 1980s. Currently, there are six credit rating companies registered under SEBI individually, CRISIL, ICRA, CARE, SMERA, Fitch India and Brickwork Ratings. Rankings supplied by these companies figure out the nature and integrals of the loan. Higher the credit rating, reduced is the rate of interest offered to the company.
1) CRISIL stands for Credit Rating Information Services of India Limited. It is the primary credit ranking firm of the nation which was established in 1987. It calculates the credit reliability of firms based upon their strengths, market share, market track record, and also board. It likewise ranks companies, financial institutions, and organizations, assisting financiers make a better decision before investing in firms’ bonds.
2) ICRA stands for Investment Information, and Credit Rating Agency of India. It was created in 1991 as well as is headquartered in Mumbai. It offers comprehensive rankings to corporates using a transparent rating system. Its score system consists of signs which vary with the economic tools.
3) CARE stands for Credit Analysis, and Research Limited (CARE). It uses a range of credit scores services in areas like debt, bank loan, company governance, recovery, financial sector, and even more. Its ranking range consists of two classifications– long-term financial obligation tools as well as short-term debt rankings.
4) ONICRA stands for Onida Individual Credit Rating Agency of India. It was instituted in 1993, which uses credit history evaluation as well as credit rating services to both people as well as companies. In addition to this, it also applies risk assessment reports to people, tiny and even moderate companies and also corporates. Its scores are based upon two elements– Economic Strength and Performance Capability.
5) SMERA stands for Small Medium Enterprises Rating Agency Of India Limited. It has two departments– SME Rankings as well as Bond Rankings. It was developed in 2011 and is a center of financial specialists.
6) Brickwork Ratings India Private Limited is headquartered in Bangalore, this credit rating firm is responsible for rating bank loans, municipal corporations, capital market instruments, as well as SMEs. Besides this, it is also liable to grade realty investments, medical facilities, NGOs, MFI, etc. It uses numerous ranking system depending upon the different financial instrument.