Credit rating establishes a link between risk and return. An investor or any other interested person uses the rating to assess the risk level and compares the offered rate of return with his expected rate of return. It facilitates the investors in taking a decision whether to go for an investment or not. The agency, which performs the credit rating is called the Credit Rating Agency. It is a body corporate, which is engaged in the business of rating of securities offered by way of public issue or right issue. Rating means an opinion regarding securities, expressed in the form of standard symbols numeric, alphanumeric and alphabets or any other standardized manner assigned by a CRA and used by the issuer of such securities.
An analysis of the adequacy of the regulatory framework governing credit rating agencies. Summary: The Report examines the role of credit ratings in the financial system and highlights concerns regarding the regulation of credit rating agencies in India and makes recommendations to improve their functioning. Credit Rating Agencies form an essential part of the financial markets. SEBI has regulated them since
All About Credit Rating & Agencies in India | Banking Awareness
This post is also available in: Hindi. Basically, the credit ratings are based on the creditworthiness and the credentials of an individual or a company, which involves the analysis of the possible credit risks associated with granting a financial instrument. The ability of the individual or company to meet the debt obligations is determined after weighing the statements of liabilities and assets. Also, static GK is one of the more scoring sections in the exams.
One of our mentor will revert to you within 48 hours. Meanwhile you can Enjoy the Free Study Material. A Credit Rating Agency is a company that assigns ratings to the debtors according to their ability to pay back the debt in a timely manner.