Q. Consider the following statements regarding “Credit Rating Agency (CRA)”:
1.CRA’s are regulated by the RBI act, 1934.
2.CRA’s are agencies that assess the creditworthiness of an organization, individual or entity, and assign ratings to it.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B
Notes:

Explanation: A credit rating agency is an agency that assesses the creditworthiness of an organization, individual or entity and assign ratings to it.

  • In India, CRAs are regulated by SEBI (Credit Rating Agencies) Regulations, 1999 of the Securities and Exchange Board of India Act, 1992.
  • The global credit rating industry is highly concentrated, with 3 agencies – Moody’s, Standard & Poor’s, and Fitch.

Source: FORUMIAS

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