Credit Rating Agencies in India - An Overview

Credit Rating reflects the payback abilities of individuals or companies. Indian credit rating industry mainly comprises of CRISIL, ICRA, FITCH, CARE, ONICRA, and SMERA. A few years back Economic Survey had criticized the methodologies adopted by credit rating agencies. This article has given brief information about well-known credit agencies.

Aspirants would find this article very helpful while preparing for the IAS Exam.

Aspirants should begin their preparation by solving UPSC Previous Year Question Papers now!!

To complement your preparation for the upcoming exam, check the following links:

What is a Credit Rating?

A credit rating is an assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. It can be assigned to any entity that seeks to borrow money — an individual, corporation, state or provincial authority, or sovereign government.

Evaluating the creditworthiness of an instrument comprises of both qualitative and quantitative assessments, making credit rating far from a straightforward mathematical calculation.

What are Credit Rating Agencies?

A credit rating agency (CRA) is a company that rates debtors on the basis of their ability to pay back their interests and loan amount on time and the probability of them defaulting. CRAs were set up to provide independent evidence and research-based opinion on the ability and willingness of the issuer to meet debt service obligations, quintessentially attaching a probability of default to a specific instrument.

Credit rating agencies in India came into existence in the second half of the 1980s. In India, CRAs are regulated by SEBI (Credit Rating Agencies) Regulations, 1999 of the Securities and Exchange Board of India Act, 1992.

SEBI’s Detection for CRAs

  1. The Securities and Exchange Board of India tightened disclosure standards for credit rating agencies while assigning ratings to companies and their debt instruments.
  2. The regulator directed that rating agencies must now disclose the liquidity position of a company being rated.
  3. If the rating is assigned on the assumption of cash inflow, the agencies would need to disclose the source of the funding.
  4. Rating agencies must disclose their rating history and how the ratings have transitioned across categories.
  5. Credit rating firms will also have to analyze the deterioration of liquidity and also check for asset liability mismatch.

There are six credit rating agencies registered under SEBI namely, CRISIL, ICRA, CARE, SMERA, Fitch India and Brickwork Ratings.

Aspirants can go through the following links to prepare comprehensively for the upcoming Civil Services exams-

Shared and National Credit Program What Do You Mean By Line of Credit? Emergency Credit Line Guarantee Scheme (ECLGs)
Non Performing Assets (NPA) Chequebook Diplomacy Export Credit Guarantee Corporation of India
Strategic Debt Restructuring (SDR) Scheme Pradhan Mantri Mudra Yojana – PMMY Monetary Policy 


  1. This full-service rating agency is the major credit rating agency in India, with a market share of more than 60%.
  2. It is offering its services in financial, manufacturing, service, and SME sectors.
  3. The headquarter of CRISIL is in Mumbai
  4. The majority stake of CRISIL was held by the world’s largest rating agency Standard & Poor’s.

Credit Analysis and Research Limited Ratings (CARE) Ratings

  1. Credit Analysis and Research Limited Ratings was established in 1993.
  2. It is supported by Canara Bank, Unit Trust of India (UTI), Industrial Development Bank of India (IDBI), and other financial and lending institutions.
  3. This is considered as the second-largest credit rating company in India.
  4. The headquarter of Credit Analysis and Research Limited Ratings is in Mumbai

Small and Medium Enterprises Rating Agency (SMERA)

  1. It is a rating agency entirely created for the rating of Small Medium Enterprises.
  2. It is a joint enterprise by SIDBI, Dun & Bradstreet Information Services India Private Limited (D&B), and some chief banks in India.
  3. The headquarter of SMERA is in Mumbai
  4. It has accomplished 7000 ratings.

ONICRA Credit Rating Agency

  1. It was incorporated by Mr. Sonu Mirchandani in 1993
  2. It investigates data and arranges for possible rating solutions for Small and Medium Enterprises and Individuals.
  3. The headquarter of ONICRA Credit Rating Agency is located in Gurgaon
  4. It has a broad experience in performing a wide range of areas such as Accounting, Finance, Back-end Management, Analytics, and Customer Relations. It has rated more than 2500 SMEs.

Fitch (India Ratings & Research)

  1. Fitch Ratings is a global rating agency dedicated to providing the world’s credit markets with independent and prospective credit opinions, research, and data.
  2. The headquarter of Fitch Ratings is in Mumbai.

Aspirants can read more on Fitch Ratings on the linked page.


  1. It was created in 1991 by prominent financial institutions and commercial banks in India with a devoted crew of experts for the MSME sector
  2. Moodys, which is considered as the International credit rating agency holds the major share.

The above details would help candidates prepare for UPSC 2024

Frequently Asked Questions about Credit Rating Agencies in India


How many credit rating agencies are in India?

There are a total of seven credit agencies in India viz, CRISIL, CARE, ICRA, SMREA, Brickwork Rating, India Rating and Research Pvt. Ltd and Infomerics Valuation and Rating Private Limited.

What is meant by Credit-Rating?

Credit rating is a numerical representation of the creditworthiness of an individual or a business. The credit rating is a key aspect that makes or breaks a loan application. The credit rating/score acts as an indicator stating if the borrower has defaulted on loan payments before and if he/she is worth trusting with the new loan.

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