Guidelines, issued under SEBI Act (1992) and Regulation 20 of CRA Regulations, will enhance the Ease of Doing business for CRAs and protect investor interests. Key guidelines
About Credit rating in India
- Credit ratings: It represents a CRA’s opinion on the probability of timely repayment of debt and the likelihood of default on interest and principal payments.
- CRA: SEBI (Credit Rating Agencies) Regulations, 1999 defines CRA.
- A CRA is a corporate body involved (or proposes to be engaged) in rating securities (either listed or to be listed on a SEBI-recognized stock exchange).
- 7 CRA’s registered with SEBI: CRISIL, CARE, ICRA, Acuité, Brickwork Rating, India Ratings (Ind-Ra) And Research Pvt. Ltd, Infomerics Valuation And Rating Pvt. Ltd.
CRA (Credit Rating Agency) and a Credit Bureau:
- CRA (Credit Rating Agency):
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- It provides an opinion relating to future debt repayments by borrowers.
- The focus is on predicting or assessing the likelihood of future repayments.
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- Credit Bureau:
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- It provides information on past debt repayments by borrowers.
- The focus is on historical data about borrowers’ repayment behavior.