Banking Awareness Study Notes

Credit Rating Agency

A credit rating agency (CRA, also called a rating service) is a company that assigns credit ratings, which rate a debtor’s ability to pay back debt by making timely interest payments and the likelihood of default.

An agency may rate the creditworthiness of issuers of debt obligations, of debt instruments, and in some cases, of the servicers of the underlying debt, but not of individual consumers.

Leading Credit Rating agencies in the world

  1. Standard and poors (HQ-Newyork, USA)
  2. Moody’s (HQ-Newyork, USA)
  3. Fitch (HQ-Newyork, USA)

Major Credit Rating Agencies In India

Credit Rating Information Services of India Limited (CRISIL)

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. CRISIL’s majority shareholder is Standard & Poor’s, a division of McGraw Hill Financial and provider of financial market intelligence. Headquarter of CRISIL is in Mumbai.


ICRA Limited (ICRA) is an Indian independent and professional investment information and credit rating agency. It was established in 1991, and was originally named Investment Information and Credit Rating Agency of India Limited (IICRA India). It is one of the largest Indian rating company in terms of customer base.

It was a joint-venture between Moody’s and various Indian commercial banks and financial services companies. The company changed its name to ICRA Limited, and went public on 13 April 2007, with a listing on the Bombay Stock Exchange and the National Stock Exchange. Headquarter of ICRA is in Gurgaon (Gurugram).

Credit Analysis and Research Limited (CARE)

It was established in 1993. It deals with advisory services, information and credit rating. The CARE is promoted by Unit Trust of India or UTI, Canara Bank, IDBI and many other reputed banks and companies dealing with financial services.

Ratings conducted by CARE, are authenticated by Government of India. The Reserve Bank of India, SEBI, along with other regulatory authorities also recognises the ratings of CARE. CARE was registered by SEBI as per Securities and Exchange Board of India Regulations, 1999. Headquarter of CARE is in Mumbai. It is the 2nd largest credit rating agency in India.





Fitch Ratings


Sub-prime crisis

The Sub-prime crisis is due to sub-prime lending. These are the loans given to the people having low credit rating.


TransUnion CIBIL Limited (Formerly: Credit Information Bureau (India) Limited) is India’s first Credit Information Company (CIC) founded in August 2000. CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit cards. These records are submitted to CIBIL by member banks and credit institutions, on a monthly basis. This information is then used to create Credit Information Reports (CIR) and credit scores which are provided to credit institutions in order to help evaluate and approve loan applications. CIBIL was created to play a critical role in India’s financial system, helping loan providers manage their business. Headquarter of CIBIL is in Mumbai.