FAQs for Bankers

A credit rating represents the rating agency's opinion on the likelihood of a rated debt obligation being repaid in full and on time. A simple alphanumeric symbol is normally used to convey a credit rating.

Ratings from CRISIL Ratings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold or sell any securities/instruments or to make any investment decisions.
 

The Reserve Bank of India (RBI) Master Circular on Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF) clearly lays down the scope of application of external ratings by banks and Clause 6.2.1 states that: "Banks should use the chosen credit rating agencies and their ratings consistently for each type of claim, for both risk weighting and risk management purposes".

CRISIL Ratings shares a rating letter with all clients, clearly specifying the details of rated facilities, rating assigned, and validity of the rating letter. In addition, for each outstanding rating, a publicly available document - rating rationale - is published on our website, www.crisilratings.com. CRISIL Ratings keeps all its outstanding ratings under constant surveillance and hence these can change with time. The rating rationale published on our website carries the most recent rating. The rating letter has to be validated with the rating rationale available on our website.

The letter of acceptance (LoA) is not a rating letter. It cannot be used as a substitute for a valid rating letter or for risk weightage purposes. 

The only process to ascertain the validity of a rating letter is explained in the answer to question no 3. 

CRISIL Ratings shares an LoA along with draft rating rationale with the client before ratings are accepted and made public for the first time. Only after the client accepts the rating by signing the LoA, the rating rationale is published on the CRISIL Ratings’ website, The rating is kept under surveillance, and thus forms part of our ratings transition matrix. Until this process is completed, the rating is not in the public domain and cannot be used by banks for risk weightage purposes. As per Section 6.2.5 of RBI’s NCAF, ratings that are made available only to the parties to a transaction do not satisfy the requirement. 

If the client chooses not to accept the rating assigned by CRISIL Ratings, even though the unaccepted rating is disclosed on our website as per regulatory requirements, such a rating is not kept under surveillance. Consequently, the ratings do not form part of our transition matrix and are ineligible for use by banks as outlined in Section 6.2.5 of the RBI’s NCAF, which states that a rating must be published in an accessible form and included in the external credit agency’s transition matrix.

Rating rationales tagged 'update'/ 'advisory'/ 'issuer not cooperating' cannot be used as a substitute for a valid rating for risk weightage purposes. 

All outstanding ratings are kept under constant surveillance. In case of non-cooperation by the issuer, CRISIL Ratings issues an update and advisory highlighting that adequate information is not received and ultimately marks the ratings as ‘issuer not cooperating' as per regulatory timelines. Consequently, these ratings do not form part of our transition matrix and are ineligible for use by banks as outlined in Section 6.2.5 of the RBI’s NCAF, which states that a rating must be published in an accessible form and included in the external credit agency’s transition matrix.

From the initial management meeting to the assignment of rating, the rating process can take up to four weeks, but CRISIL Ratings sometimes arrives at rating decisions in shorter timeframes to meet urgent requirements. Once the client accepts the rating, CRISIL Ratings issues a rating letter and publishes the rating rationale on its website.
You can contact our helpline number 1800-267-1301, or write a mail to crisilratingdesk@crisil.com to check the status of the rating assignment.

CRISIL Ratings uses the following scale to rate long-term obligations (with original maturity of more than 1 year)

• CRISIL Ratings may apply a '+' (plus) or '-' (minus) sign to a rating in the 'CRISIL AA' to 'CRISIL C' categories to reflect comparative standing within a category.
  
• CRISIL Ratings may assign rating outlooks for ratings from 'CRISIL AAA' to 'CRISIL B'. Ratings put on ‘Rating Watch’ will not carry outlooks.
  
• Outlooks indicate the direction in which ratings may move over 1-2 years, or the ‘medium term’. An outlook can be 'Positive', 'Stable', or 'Negative'. 'Positive' or 'Negative' outlooks are not necessarily precursors to a change in rating.
  

CRISIL Ratings uses the following scale to rate short-term obligations (with original maturity less than 1 year)

• CRISIL Ratings may apply a '+' (plus) sign for ratings from 'CRISIL A1' to 'CRISIL A4' to reflect comparative standing within the category