RBI lists 6 rating agencies for banks’ capital adequacy purposes

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A list of domestic credit rating agencies was released by Reserve Bank of India. Banks are advised to use them for risk weighting their claims about capital adequacy.

Which are the domestic credit rating agencies?

The central bank listed Acuite Ratings & Research Limited, Credit Analysis and Research Limited (CARE), CRISIL Ratings Limited, ICRA Limited, India Ratings and Research Private Limited, and INFOMERICS Valuation and Rating Pvt Ltd.

Which Credit Rating Agency has been out of the list?

Brickworks Ratings India Private Limited, which had its license cancelled by the SEBI in October 2022 for allegedly violating rules. Regulated Entities/ Market Participants were advised that in respect of ratings/credit evaluations required in terms of any guidelines issued by the Reserve Bank, no such fresh ratings/evaluations shall be obtained from Brickwork Ratings India Private Limited. Banks shall continue to be guided by the press release ibid till further review,” the RBI said

What is Credit Rating Agency?

A credit rating agency (CRA) is a company which rate a debtor’s ability to pay back debt by making timely principal and interest payments and the likelihood of default.

Who uses credit ratings?

Credit ratings are used by investors, and intermediaries like:

• Issuers of debt
• Businesses
• Investment banks
• Corporations
• Institutional and individual investors

Who regulates Credit rating agency in India?

All the credit rating agencies in India are regulated by SEBI (Credit Rating Agencies) Regulations, 1999 of the Securities and Exchange Board of India Act, 1992.

The RBI prescribes a number of regulatory uses of ratings. The RBI requires that a NBFC must have minimum investment grade credit rating if it intends to accept public deposits.

Write answers in the comment section:

1. Which credit agency is the owner of SME rating agency ?

2. What is the headquarters of Brickworks Ratings India Private Limited?

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