UPSC Prelims 2022 · Question 62 of 98
UPSC Prelims 2022 question on Credit Rating Agencies
- ExamUPSC CSE
- Year2022
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicMoney Market
- DifficultyMedium
- TypeStatement
Consider the following statements:
1. In India, credit rating agencies are regulated by Reserve Bank of India.
2. The rating agency popularly known as ICRA is a public limited company.
3. Brickwork Ratings is an Indian credit rating agency.
Which of the statements given above are correct?
Show answer
Answer: B. 2 and 3 only
Verdict
Correct statements: 2 and 3 → Option (b).
Statement by statement
Statement 1 – INCORRECT: Credit rating agencies in India are regulated by SEBI — not the Reserve Bank of India. The SEBI (Credit Rating Agencies) Regulations, 1999 govern the credit rating agencies and provide for eligibility criteria for registration of credit rating agencies, monitoring and review of ratings, requirements for a proper rating process, avoidance of conflict of interest and inspection of rating agencies by SEBI.
Statement 2 – CORRECT: ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited) was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency. ICRA is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange.
Statement 3 – CORRECT: Brickwork Ratings (BWR) is a SEBI registered Indian Credit Rating Agency founded by bankers, credit rating professionals, former regulators as well as professors. It is committed to promoting Financial Literacy. Brickwork Ratings has Canara Bank, a leading Public Sector Bank, as its promoter and strategic partner.