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Indian Ratings Agency Companies

Lending is one of the important pillars of any economy. But banks cannot lend loans to any Tom, Dick, and Harry.

Banks have to establish the creditworthiness of a person/entity before it decides to lend a loan. This is where credit rating agencies come into the picture.

Credit rating agencies do their research to conclude where the said person/entity can repay debt. These companies give a rating to the said person/entity based on their conclusion.

Thus, Indian credit rating agencies play a crucial role for banks and other financial entities.

The top Indian rating agency companies are Credit Rating Information Services of India (CRISIL), Investment Information and Credit Rating Agency of India (ICRA), Credit Analysis and Research (CARE), Brickwork Ratings India, SMERA Ratings, and Infometrics Valuation and Rating.

Indian ratings agency companies have been in the field for a long time now and will remain in business for a long time.

However, an investor should check whether the ratings given by these companies are accepted globally. He/she should check whether they’re good in the business they run.

Because there are instances in the past where credit rating agencies have come under scrutiny.

Rating companies globally were already under the scanner in 2009. They had assigned the coveted 'AAA' to subprime lenders. They turned out to be the epicenter of the 2009 credit crisis in the US.

Rating agencies in India too have been hauled up for having conflict of interest.

The firms assign ratings to the clients for a price. Plus the rating agencies are also engaged by their clients for other consulting services.

It has therefore not been difficult to trace instances of rating shopping among non-credit worthy entities.

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