Explained: Rating agencies’ fee structure for Credit Ratings

Credit Ratings are required to disclose the nature of their compensation arrangements and fee structure for bank loan/facility ratings on their websites. This disclosure is made under the Reserve Bank of India’s communication (dated April 26, 2013, reference no. DBOD.BP.No./5385/21.06.007/2012-13), advising accredited credit rating agencies (CRAs) to disclose the nature of their compensation arrangements and…

New Tax Regime Slabs Changed as well Standard Deduction Up for new tax regime

Finance Minister Mrs.Nirmala Sitharaman in her budget 2024-25 presentation proposed to increase the standard deduction for salaried employees from ₹50,000 to ₹75,000. Also, the deduction on family pension for pensioners is proposed to be enhanced from ₹15,000 to ₹25,000 under the new tax regime. The FM announced changes in new tax regime slabs Taxable Income…

2024 Budget news updates

Union Finance Minister Nirmala Sitharaman presented the Union Budget 2024 in Parliament today (July 23) at 11 am. The following announcements were made by the finance minister in presenting her historic 7th Budget with a focus on employment and skilling. PM package of five schemes of five schemes aimed at facilitating employment and skilling, with…

Factors considered while Rating Companies/Instruments and Process of Credit Ratings explained

Ratings are based on a comprehensive evaluation of the strengths and weaknesses of the company fundamentals including financials along with an in-depth study of the industry and macroeconomic, regulatory, and political environment. Some factors that may be considered for credit rating are the Issuer Company’s operational efficiency, level of technological development, financials, competence and effectiveness…

Characteristics, Importance, and Benefits of Credit Ratings

Credit rating agencies provide an objective and unbiased evaluation of the credit risk of diverse entities, including individuals, groups, businesses, non-profit organisations, governments, and even nations. They provide transparency and consistency in assessing institutions/borrowers’ creditworthiness, making it easier for lenders and investors to make informed decisions. The main characteristics of credit rating are that these…

Regulations for Credit Rating Agencies (CRAs) in India

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…

What is Credit Rating and the Role of Credit Rating Agencies (CRA) in India

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…

Regulatory Guidelines Governing Credit Information Companies (CIC)

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…

Functions of credit information companies (CIC) and membership to CIC

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…