The Indian Credit Rating agencies are governed by the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 (“the Regulations”). SEBI however recognizing the need for more stringent oversight introduced the SEBI (Credit Rating Agencies) Regulations, 2018, which replaced the earlier regulations. These updated regulations aimed to reinforce the credibility and accountability of…
Credit Rating is an opinion provided by a Credit Rating Agency regarding the ability and willingness of an entity (Government, corporate, municipality, Bank lending, etc. to fulfill its financial obligations in completeness and within the established due dates. Such ratings are based on a comprehensive analysis of various factors, including the issuer’s financial health, debt…
The Credit Information Companies (Regulation) Act, 2005 is an Act to provide for regulation of credit information companies and to facilitate the efficient distribution of credit and for matters connected therewith or incidental thereto. The Reserve Bank of India and the Government of India have enacted the Credit Information Companies Regulations, 2006 (“Regulations”) and the…
A Credit Information Company (CIC) is an independent third-party agency registered under CIC laws that collects financial data of individuals about their loans, credit cards, and other related information and shares it with its members, who generally happen to be banks and other financial institutions. The Credit Information Companies (Regulation) Act, 2005 (“CIC Act”), is…
[This article explains about grading of borrowers who have a short credit history, how the credit score is calculated, factors considered for the calculation of scores, and the important aspects to see in the CIR] Originally posted on April 20, 2016, and updated and reposted on July 20, 2024 Credit scoring models are statistical tools…
The credit information bureau in India is licensed by the Reserve Bank of India and is governed by the CICR Act 2005. Data collected from banks and other financial institutions are maintained in the Credit Bureau to track the credit behavior of consumers and companies. This data helps in assessing their credit reputation while lending…
Under the hire-purchase system, goods are delivered to the buyer at the time of the purchase agreement with a condition that Payment will be made in installments but a buyer will become the owner of goods only on the payment of the last installment. In this system, the buyer pays the price of the goods…
The Hire Purchase Act, of 1972 defines a hire purchase agreement as an agreement under which goods are let on hire and under which the hirer has an option to purchase them by the terms of the agreement and includes an agreement under which: (i) Possession of goods is delivered by the owner thereof to…
Leasing in India is expected to become the preferred financial device for businesses seeking agility and cost-efficiency, promising significant growth with increasing awareness, new market players, and diversification of asset classes. The promising and growth-hungry small and medium Enterprises (SMEs) and startups, having a close eye on capital efficiency, are a confined user base for…
The impact of lease accounting on financial statements is substantial. Financial ratios are important tools used in accounting and financial analysis to gauge a company’s overall financial health. They are derived from financial statements like the balance sheet, income statement, and cash flow statement. These ratios can help in assessing various aspects of a business,…