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…
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…
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…
Reserve Bank of India updated the Master Circular on priority sector lending on June 21, 2024, incorporating the following updated instructions/guidelines on priority sector lending(PSL)-target and classification. he subject“To address regional disparities in the flow of priority sector credit at the district level, it was decided to rank districts based on per capita credit flow…
The Reserve Bank of India issued draft guidelines to provide a harmonised prudential framework for financing projects in Infrastructure, Non-Infrastructure, and Commercial Real Estate sectors by regulated entities (REs). In the backdrop of a review of the extant instructions and analysis of the risks inherent in such financing, the Central Bank prescribed norms for restructuring…
Priority sector lending is lending to those sectors of the economy that may not otherwise receive timely and adequate credit. These sectors of the economy are identified by the Government of India and the Reserve Bank of India which consider them as important for the development of the basic needs of the country and are…
In a statement on Monday, the RBI said it has been decided to harmonise the instructions on KFS for loans and advances. “This is being done to enhance transparency and reduce information asymmetry on financial products being offered by different regulated entities, thereby empowering borrowers to make an informed financial decision,” the RBI said. Key…
Updated as per RBI master circular dated April 2, 2024 As per RBI guidelines, the following entities/offices are not eligible for bank finance. To know more, continue …. RBI NORMS ON HOUSING FINANCES TO INDIVIDUALS FOR DIFFERENT PURPOSES NORMS ON RESETTING OF FLOATING RATE OF INTEREST ON EMI-BASED LOANS IMPORTANT PRE-SANCTION HOME-LOAN REGULATIONS LAY DOWN…