Credit Rating Agency ICRA downgrades Indian banking sector outlook to ‘stable’ from ‘positive’ | Current Affairs | Vision IAS
MENU
Home

Periodically curated articles and updates on national and international developments relevant for UPSC Civil Services Examination.

Quick Links

High-quality MCQs and Mains Answer Writing to sharpen skills and reinforce learning every day.

Watch explainer and thematic concept-building videos under initiatives like Deep Dive, Master Classes, etc., on important UPSC topics.

ESC
  • It cited moderation in credit growth and profitability due to decline in interest margins as the reason for downgrade. 
  • Credit Rating is an assessment of the ability of a borrower to pay his/her dues in full and on time.
    • It also indicates the credit risk associated with a specific credit facility or a specific security.
    • Credit ratings are provided by specialized agencies called Credit Rating Agencies (CRAs). 

 

  • About CRAs
    • CRAs assign credit ratings after assessment of companies or governments that issues securities. CRAs also rate bank loans, commercial papers, fixed deposits etc. 
    • Ratings range from AAA (highest credit quality) to D (default). 
    • Seven CRAs are registered with SEBI namely, Acuite, CRISIL, ICRA, CARE, India Ratings, INFOMERICS and Brickwork.
      • Except Brickwork Ratings, all six CRAs are RBI accredited domestic CRAs.

 

  • Regulation of CRAs: 
    • Primarily regulated by SEBI and governed through SEBI (Credit Rating Agencies) Regulations, 1999. 
    • RBI issues accreditation to CRAs as External Credit Assessment Institutions for rating bank loan/facilities.

 

  • Concerns with CRAs: Rating Shopping, opaque and flawed methodologies, personal bias etc.

 

  • Way forward: Switching from ‘issuer pays’ model to ‘investor’ or ‘regulator pays’ model, transparent rating methodologies, rotation of CRAs, etc.
Watch Video News Today

Explore Related Content

Discover more articles, videos, and terms related to this topic

RELATED VIDEOS

1
News Today (Apr 12, 2024)

News Today (Apr 12, 2024)

YouTube HD
Title is required. Maximum 500 characters.

Search Notes

Filter Notes

Loading your notes...
Searching your notes...
Loading more notes...
You've reached the end of your notes

No notes yet

Create your first note to get started.

No notes found

Try adjusting your search criteria or clear the search.

Saving...
Saved

Please select a subject.

Referenced Articles

linked

No references added yet

Subscribe for Premium Features