Explain the concept of Credit Rating Agencies


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Credit Rating Agencies

 

CRA’s [Credit Rating Agencies]-

  • CRA’s are an integral part of the modern capital markets.
  • CRA’s regularly analyzed the financial position of corporations and assign and revise the ratings for their securities.
  • CRA’s continuously monitors the corporate and the rating is monitored till the life of the instrument. The ratings are a result of collective judgment of committee members.
  • CRA’s in India are registered with the RBI

Functions of CRA’s-

  • Helps investors
  • easy understanding
  • low cost of funds
  • constant monitoring

Important CRA’s in India are-

  • ICRA
  • CARE
  • ONICRA

 


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