Importance of Credit Rating Agencies

Lenders​

Effective risk management​
Informed decisions​

Borrowers

Debt & Capital market access
Foreign investments & Govt. borrowing
Cost optimization through rating

Investors​

Investor Confidence through reliable ratings​

Markets​

Transparency & fairness ​
Efficient capital allocation​

Regulators & Government​

Effective regulations & oversight​
Analytical independence for quality control​

Need for a homegrown agency to complement India’s growth story

A homegrown credit rating agency will be required to complement India’s growth ambitions and policy independence.

• Growth: Indian government has set a target of a $5 trillion economy in the next 3years and a $7 trillion economy by 2030; growth will require mobilization of vastamounts of domestic and international capital
• Sectoral Expertise: Indian economy has unique characteristics and nuances; alocal agency will be able to grasp sectors such as IT, NBFC’s, InfrastructureCompanies, and startups
• Gaps in the Market: Indian market relies heavily on international rating agenciesthat utilize global standards which might not fully capture market dynamics,regulatory environment, and economic indicators specific to India
• Policy Independence: Policy Independence: A homegrown agency will be able to offer a synergetic mixof a global outlook and a deep understanding of domestic policy; a local agencywill not be disproportionately influenced by external economic pressures orbiases