Q. Consider the following statements regarding Credit Rating Agencies (CRAs) in India:
1.CRAs are primarily regulated by the Securities and Exchange Board of India (SEBI) and assess the creditworthiness of corporate and government debt instruments.
2.CRAs assign ratings based on an analysis of the issuer’s financial strength, market position, and ability to meet its debt obligations.
3.CRISIL, ICRA, and CARE are among the top Credit Rating Agencies operating in the country.
Which of the statements given above are correct?
Answer: D
Notes:
Explanation:
Statement 1: Correct. CRAs are registered with and primarily regulated by SEBI under the SEBI (Credit Rating Agencies) Regulations, 1999. They rate various debt instruments like bonds, debentures, and commercial papers.
Statement 2: Correct. The rating reflects the opinion of the CRA on the likelihood of the issuer fulfilling its financial obligations in full and on time.
Statement 3: Correct. CRISIL, ICRA, and CARE are among the major domestic credit rating agencies in India, alongside others like India Ratings and Acuité.
