English

Explain the following term/concept.Credit Rating

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Question

Explain the following term/concept.
Credit Rating

Short/Brief Note
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Solution

(1) Every company has to get credit rating of its deposits and include the ratings in the circular or advertisement. The credit rating agency considers the net worth of the company, liquidity position, ability to repay deposits on time etc.
(2) The rating shall be obtained for every year during the tenure of deposits. A copy of the credit rating shall be submitted to ROC.

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Terms and Conditions for Acceptance of Deposits
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Chapter 5: Deposits - Exercises [Page 91]

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