Different Credit Agencies and their criteria

The Indian banking sector has grown over time. Today, Indians are more open to attaining a loan to meet their needs. Many banks, financial institutions and NBFCs offer a plethora of loan products at an attractive rate of interest. However, these lenders often have to face defaults when the borrowers fail to pay their monthly instalments on time. Thus to save themselves of such situations, these lenders check the credit ratings of the borrower before giving them the loan. Higher the credit rating of the borrower, lower will be the interest rate charged by the lenders.

But who decides these credit ratings? Credit rating agencies (CRA) are authorised to rate the borrower on account of their ability to pay back the loan amount along with the interest on time and the chances of them to default.

These agencies also assess entities like state governments, organisations, non-profit organisations, local governmental bodies, companies etc on their creditworthiness. CRAs are concerned with ratings of organisations only and not the individuals. Credit bureaus are responsible for rating individuals on account of their financial history by giving them a credit score.

Presently, there are six main CRAs in India viz. CRISIL, ICRA, CARE, SMERA, Fitch India and Brickwork Ratings which are registered under SEBI. On the basis of the ratings provided by these agencies to the organisation, the lenders determine the key aspects of loan like loan amount, rate of interest and EMIs.

Let us look at the different credit agencies and their criteria in detail.


CRISIL or Credit Rating Information Services of India Limited is the first credit rating agency of India which took birth in 1987. It started with its operations after a year with support from financial institutions like ICICI Limited, UTI etc. Its headquarters is located in Mumbai and also has its operations in foreign nations like UK, USA, Argentina, Poland, China, Hong Kong and Singapore.

  • Currently, CRISIL is one of the top analytical companies of the world and works for rating companies, undertake market research and offer advisory services.
  • It undertakes thorough data analysis and research and offers effective solutions to its clients.
  • CRISIL has a consistent growth chart in terms of research and innovation.
  • Standard & Poor’s- the biggest CRA of the world holds a majority of shares of CRISIL.
  • CRISIL works closely with various developing nations to offer solutions for better infrastructure and other demands of the countries.
  • Till now, CRISIL has rated over 5180 SMEs in the country. Overall it has given ratings for over 10000 SMEs.
  • Its net income is worth Rs. 298 Crores, operating income of Rs. 320 Crores and total revenue of Rs. 1110 Crores.


Established in 1993, Credit Analysis and Research Limited were established in 1993 is touted as the country’s second-largest credit rating agency. Its headquarters is located in Mumbai and has regional offices across the country in Chennai, Bangalore, Hyderabad, Kolkata, New Delhi and Ahmedabad.

During its incorporation, CARE was promoted by various financial institutions including  Industrial Development Bank of India (IDBI), Unit Trust of India (UTI) Bank, Canara Bank among others. It provides credit ratings for various state governments, financial institutions, public utilities, special purpose vehicles and municipal bodies.

Functions of CARE:

  • To provide ratings of debt instruments
  • Loan ratings
  • Credit analysis rating,
  • Corporate governance rating
  • The claims-paying ability of insurance companies
  • Grading construction entities
  • Grading courses that are done by maritime training institutions
  • Rating SMEs on account of their financial health
  • Conducting sector-specific studies
  • Provide advisory to businesses, banks, financial entities for financial restructuring, valuation and credit appraisal systems.


Set up in 1991, Investment Information and Credit Rating Agency or presently ICRA Limited is an independent credit rating agency. Its headquarters is in Gurugram, Haryana and also acts as a corporate investment information agency.

ICRA majorly works for MSME sector and is not involved with international organisations and companies. It caters to real estate companies, hospitals and construction companies and mutual funds and gives corporate governance ratings, grading, performance rating and ranking to them. Its ratings are used for analysing the credit risk within the country.


Revenue generated by ICRA is Rs. 2.28 Billion.


SMERA stands for Small and Medium Enterprises Rating Agency of India. It was incorporated in 2005 by Small Industries Development Bank of India (SIDBI), Dun and Bradstreet Information Services India Private Limited (D&B) and various public, private sector and other MNC banks of India. Its headquarters is located in Mumbai. The agency was accredited by RBI and registered with SEBI in 2012.

Its main focus is on Micro, Small and Medium Enterprises and has rated over 38000 enterprises till now. SMERA ratings are considered by many financial institutions before lending.

Its main functions include rating bank loans under Basel II guidelines, grading instruments like bonds, NCDs, FDs, IPO, commercial papers, security receipts etc.

SMERA is an external credit assessment institution (ECAI).


ONICRA is a private rating agency under ONIDA Finance. Headquartered in Gurugram, Haryana, ONICRA was founded by Sonu Mirchandani in 1993. Its functional areas include providing credit ratings for SMEs, MSMEs, i

ndividuals, corporate and other organisations. It offers grading services, conducts a risk assessment, offers analytical solutions and undertakes functions in various departments like finance, accounting, customer relations, analytics, and back end management.

ONICRA is among the seven agencies licensed by the Small Industries Corporation (NSIC) for the rating of SMEs.

It has till now rated over 2500 SMEs and have signed MoUs with over 16 banks and NBFCs in the country to give a concession of up to 1% in the rate of interest to various MSMEs.


A fully owned subsidiary of Fitch Group, India Ratings and Research (Ind-Ra) is a credit rating agency which offers accurate and quick credit opinions. Its clients range from banks, insurance companies, corporate issuers, urban local bodies, financial institutions, structured finance and project finance.

Its headquarters is located in Mumbai and have branches in Delhi, Kolkata, Ahmedabad, Chennai, Hyderabad and Bengaluru.  It has got recognition by Securities and Exchange Board of India, National Housing Bank and the Reserve Bank of India.

Its major function is to check for the credit capacity of global giants in the industries. It has its presence in over 30 countries.

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