Question

What are Credit Rating Agencies?

Answer 1

Credit Rating Agencies are specialised institutions that assess and evaluate financial instruments such as shares, debentures, bonds, mutual funds, and public deposits. They assign rating symbols (like AAA, A+, etc.) to indicate the level of creditworthiness and financial stability of these instruments. These ratings help investors make informed decisions by understanding the associated risk levels. In India, major credit rating agencies include the Credit Rating and Information Services of India Limited (CRISIL) and the Investment Information and Credit Rating Agency (ICRA), both of which play a crucial role in strengthening investor confidence and improving transparency in the financial market.