Question 47 from UPSC CSE 2022 - Economics

Question

Consider the following statements:
1. In India, credit rating agencies are regulated by the 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?

Accepted Answer

Correct Option: B. 2 and 3 only

Strategy: Focus on the regulatory body mentioned in statement 1--Reserve Bank of India. This is a critical keyword, as credit rating agencies are actually regulated by SEBI, not RBI, making statement 1 incorrect. Statement 2 can be verified by recalling that ICRA is publicly listed, confirming its public limited company status. Statement 3 involves recognition that Brickwork Ratings is a known Indian credit rating agency. Thus, statements 2 and 3 are correct, allowing for elimination of options that include statement 1.

Key Info: ## Regulation of Credit Rating Agencies

Credit rating agencies (CRAs) in India are primarily regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Credit Rating Agencies) Regulations, 1999. SEBI oversees their registration, operations, governance, disclosure requirements, and conflict of interest mitigation. Under these regulations, CRAs must follow strict norms for rating process transparency, periodic review, and compliance. The Reserve Bank of India (RBI) does not directly regulate credit rating agencies, though it may recognize ratings for specific regulated entities under banking rules.

## About ICRA Limited

ICRA Limited, established in 1991 (originally as Investment Information and Credit Rating Agency of India Limited), is a public limited company. Its shares are listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). ICRA and its subsidiaries are collectively known as the ICRA Group, providing ratings, research, and risk management services.

## About Brickwork Ratings

Brickwork Ratings (BWR) is an Indian credit rating agency founded in 2007. It is registered with SEBI as a CRA and is also recognized by the Reserve Bank of India, National Housing Bank, and other regulators for various regulatory uses. Brickwork Ratings was promoted by Canara Bank, a public sector bank, and specializes in rating debt, structured obligations, and small and medium enterprises (SMEs).

**Other Major Indian CRAs:**
*   CRISIL
*   CARE Ratings
*   India Ratings

Answer

Option A: 1 and 2 only

Answer

Option C: 1 and 3 only

Answer

Option D: 1, 2, and 3

Consider the following statements: In India, credit rating agencies are regulated by the Reserve Bank of India. The rating agency popularly known as ICRA is a public limited company. Brickwork Ratings is an Indian credit rating agency. Which of the statements given above are correct?

Consider the following statements:

In India, credit rating agencies are regulated by the Reserve Bank of India.

The rating agency popularly known as ICRA is a public limited company.

Brickwork Ratings is an Indian credit rating agency.
Which of the statements given above are correct?