Every loan decision starts with one question: will this borrower pay back? Two kinds of institution help lenders and investors answer it. Credit rating agencies (CRAs) give an opinion on the chance that a company, a bond or a government will default. They are regulated by SEBI, and banks use their ratings, through the RBI's capital rules, to decide how much capital to hold. Credit information companies (CICs), usually called credit bureaus, collect the repayment records of individuals and businesses from every lender and turn them into credit reports and scores. They are regulated by the RBI under a separate law. This part explains both: the laws, the players, the rating and score scales, how a rating changes a bank's capital, India's sovereign rating, the IL&FS failure, and the new weekly reporting rule for credit bureaus that began on 1 July 2026.
This part builds on Part 18, RBI regulation of banks and NBFCs, which introduces Basel III, and on Part 15, the RBI and financial stability, which tells the IL&FS story as a systemic crisis. The capital ratios themselves are in Part 27, Basel III and capital adequacy. Here we look at IL&FS through the eyes of the rating agencies.
In the news
- 31 Aug 2026: RBI penalises three credit bureaus. By orders of 31 August 2026, the RBI fined TransUnion CIBIL ₹26.83 lakh, CRIF High Mark ₹6.90 lakh and Equifax ₹1.19 lakh (₹34.92 lakh in all) for failing to credit compensation to eligible complainants within the prescribed time. The penalties were imposed under Section 25 of the CICRA, 2005. Why it matters for the exam: it shows that the ₹100-a-day compensation rule for delayed corrections is enforced, and that the RBI, not SEBI, regulates credit bureaus.
- 11 Aug 2026: Fitch affirms India at BBB-. Fitch kept India's sovereign rating at BBB- with a stable outlook, forecasting 6.4% growth in 2026-27 despite the West Asia energy shock. Why it matters for the exam: Fitch and Moody's still rate India at the lowest investment grade, one notch below S&P's BBB.
- 6 Aug 2026: SEBI's Annual Report 2025-26 on rating agencies. Eight CRAs were registered on 31 March 2026. They gave 725 fresh ratings in 2025-26, with CRISIL alone giving 339 (46.8%), and 88.4% of the 1,942 outstanding ratings were investment grade. Why it matters for the exam: the market-share and count numbers are standard current-affairs questions.
- 1 Jul 2026: credit bureaus move to weekly updates. Lenders must now report credit data as on the 9th, 16th, 23rd and last day of each month, instead of the 15th and the last day. Why it matters for the exam: this is the biggest change to credit reporting since the CICRA, and it applies to banks, NBFCs, co-operative banks, ARCs and AIFIs alike.
- 26 May 2026: CredStone Ratings registered. SEBI registered CredStone Ratings Private Limited (IN/CRA/010/2026), the second new CRA in a year after Acer Credit Rating (21 August 2025). Why it matters for the exam: India now has nine SEBI-registered CRAs, not seven.
- 13 Jan 2026: SEBI widens what CRAs may rate. The SEBI (Credit Rating Agencies) (Amendment) Regulations, 2026 let CRAs rate instruments that fall under other financial regulators, such as the RBI, if those activities are ring-fenced from SEBI-regulated work. Why it matters for the exam: CRAs are regulated by SEBI, but their ratings are used under RBI, IRDAI and PFRDA rules too.
- 9 Jan 2026: CareEdge Global ratings for all non-resident corporates. The RBI amended its capital rules so that banks can use ratings by CareEdge Global IFSC Limited for all non-resident corporate exposures, alongside S&P, Fitch and Moody's. Why it matters for the exam: the RBI's list of agencies for risk weights is not fixed; it now includes the GIFT City arm of an Indian rating group.
- 4 Dec 2025: RBI issues the weekly reporting rules. Ten sets of amendment directions, one for each type of lender plus one for CICs, set the weekly cycle from 1 July 2026, required lenders to report borrowers' CKYC numbers, and tightened timelines for fixing rejected data. Why it matters for the exam: the draft (29 September 2025) had proposed 1 April 2026; the final rules moved it to 1 July 2026.
Part A: Credit rating agencies
What a rating is
A credit rating is an opinion on the relative likelihood of default of a particular debt instrument or issuer. It is not a recommendation to buy, sell or hold, and it is not a guarantee. A rating answers "how likely is timely payment of interest and principal?", not "is this a good investment?".
Ratings are of two kinds:
- Issue ratings apply to a particular instrument: a bond, a debenture, a commercial paper programme or a bank loan facility.
- Issuer ratings apply to the entity as a whole: a company, a bank or a government.
Ratings are reviewed at least once a year and can be upgraded, downgraded, reaffirmed, placed on watch (with positive, negative or developing implications) or withdrawn. An outlook (positive, stable or negative) signals the likely direction of the rating over the medium term; a watch signals a possible change in the short term, usually after a specific event.
The regulator and the law
CRAs are regulated by SEBI under the SEBI (Credit Rating Agencies) Regulations, 1999. The main conditions for registration:
- the applicant must be a company whose main object is rating;
- minimum net worth of ₹25 crore;
- promoters must meet SEBI's eligibility rules, and the applicant, its promoters and directors must be "fit and proper";
- registration is now permanent (valid until surrendered, suspended or cancelled).
SEBI's rules cover rating methodology, disclosure of rating rationales, the separation of rating from other business, the rotation and independence of rating analysts, and the standard symbols discussed below. The regulations also cover ESG rating providers.
India's rating agencies
On 23 October 2026, SEBI's register listed nine CRAs:
| CRA | SEBI registration no. | Note |
|---|---|---|
| CRISIL Ratings Ltd | IN/CRA/001/1999 | India's first CRA (1987); majority-owned by S&P Global |
| India Ratings and Research | IN/CRA/002/1999 | Formerly Fitch Ratings India; part of the Fitch group |
| CARE Ratings Ltd | IN/CRA/004/1999 | Listed; brand CareEdge |
| Brickwork Ratings India | IN/CRA/005/2008 | Survived a 2022 cancellation order (see below) |
| Acuité Ratings & Research | IN/CRA/006/2011 | Formerly SMERA |
| Infomerics Valuation and Rating | IN/CRA/007/2015 | Ratings carry the prefix IVR |
| ICRA Ltd | IN/CRA/008/15 | Listed; majority-owned by Moody's |
| Acer Credit Rating | IN/CRA/009/2025 | Registered 21 August 2025 |
| CredStone Ratings | IN/CRA/010/2026 | Registered 26 May 2026 |
Three of them (CRISIL Ratings, ICRA and CARE) are listed companies, according to SEBI's Annual Report 2025-26. The market is concentrated: of the 725 fresh ratings of listed or to-be-listed securities in 2025-26, CRISIL gave 46.8%, ICRA 20.1% and India Ratings 19.3%. That is 86.2% from the top three.
Brickwork's case is a common exam trap. On 6 October 2022 SEBI cancelled Brickwork's registration and told it to wind down within six months, for failing to exercise proper skill, care and diligence. The Securities Appellate Tribunal (SAT) first kept the order on hold (while barring new clients) and then, in June 2023, set aside the cancellation as disproportionate and sent the matter back to SEBI. SEBI's fresh order of 13 September 2023 barred Brickwork from taking new clients or new mandates for six months and required a larger board, but did not cancel the licence. Brickwork is still on both SEBI's register and the RBI's list of approved agencies.
The rating scale
Since SEBI's circular of 15 June 2011 on the standardisation of rating symbols, all CRAs use the same symbols, with their own name as a prefix: CRISIL AAA, ICRA AA, IND A, CARE BBB, IVR A1+ and so on.
Long-term scale (instruments of more than one year):
| Symbol | Meaning (in short) | Grade |
|---|---|---|
| AAA | Highest degree of safety; lowest credit risk | Investment |
| AA | High degree of safety; very low credit risk | Investment |
| A | Adequate degree of safety; low credit risk | Investment |
| BBB | Moderate degree of safety; moderate credit risk | Investment |
| BB | Moderate risk of default | Speculative |
| B | High risk of default | Speculative |
| C | Very high risk of default | Speculative |
| D | In default or expected to be in default soon | Default |
Modifiers + and − may be used from AA to C to show standing within a category: AA+ is better than AA, which is better than AA−. BBB− is the lowest investment grade. Anything rated BB+ or lower is called speculative grade, "sub-investment grade" or, informally, junk.
Short-term scale (instruments of up to one year, such as commercial paper): A1 (very strong degree of safety, lowest credit risk), A2 (strong), A3 (moderate), A4 (minimal safety, very high credit risk) and D (default). Only a + modifier is used, so A1+ is the best short-term rating in India.
The global agencies use similar letters but Moody's uses its own: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, with numbers 1, 2 and 3 as modifiers. So Baa3 (Moody's) = BBB− (S&P and Fitch): the lowest investment grade.
How a rating is made
The process is broadly the same at every agency:
- Mandate. The issuer signs an agreement with the CRA and pays a fee.
- Analysis. Analysts study the business, industry, management, financial statements, cash flows, debt structure and any support from a parent or the government, and meet the management.
- Rating committee. A committee, not a single analyst, decides the rating.
- Communication and acceptance. The rating is sent to the issuer.
- Publication. The rating and a rating rationale (press release) are published on the CRA's website.
- Surveillance. The rating is monitored and reviewed at least annually, or whenever events demand.
The issuer-pays model and its conflicts
In India, as in most of the world, the issuer pays for its own rating. This creates obvious conflicts of interest:
- Rating shopping: an issuer can approach several agencies and use the one that offers the best rating.
- Pressure to be lenient: the agency that downgrades a client risks losing it to a rival.
- Cross-selling: agencies or their group companies may sell consulting or research to the same clients.
- Slow downgrades: agencies may wait for the issuer to admit trouble rather than act on early warning signs.
The alternative, the investor-pays or subscriber-pays model, avoids some conflicts but has its own problem: information is sold privately, so the public does not see the rating. SEBI's answer has been more rules rather than a change of model: compulsory disclosure of all ratings (including those not accepted by the issuer), published default and transition statistics, separation of rating from other businesses, and stricter timelines for recognising defaults.
Solicited and unsolicited ratings. A solicited rating is requested and paid for by the issuer. An unsolicited rating is assigned on the agency's own initiative. India's sovereign rating from S&P, for example, is formally an "unsolicited" rating: the Government of India does not pay the global agencies, though it does meet them.
The IL&FS failure
Infrastructure Leasing & Financial Services (IL&FS) and its subsidiary IL&FS Financial Services (IFIN) were among the most highly rated borrowers in India. Their non-convertible debentures carried the highest rating right up to August 2018. Then, in a matter of 25 to 40 days, the same instruments were downgraded all the way to D (default). On 17 September 2018, when ICRA, India Ratings and CARE moved the NCDs and commercial paper of IL&FS and IFIN to D, the outstanding amounts they had rated were ₹11,725 crore, ₹16,270 crore and ₹20,942 crore respectively. The group's consolidated borrowing at March 2018 was over ₹91,000 crore.
SEBI's findings were harsh. In December 2019 its adjudicating officer fined each of the three agencies ₹25 lakh, blaming the default on their "lethargic indifference and needless procrastination and laxity". SEBI then reviewed the orders and, in September 2020, raised the penalty to ₹1 crore each, calling a CRA a "financial gatekeeper" and saying that, had the agencies downgraded in time, investors in AAA-rated paper would not have suffered so badly.
The lessons for the exam:
- A AAA rating is an opinion, not a guarantee. A jump from AAA to D within weeks means the opinion was wrong for months.
- Holding-company structures, related-party lending and asset-liability mismatches can hide risk from analysts who look at each entity separately.
- The failure spread through mutual funds that held IL&FS paper, froze the commercial paper market and raised funding costs for all NBFCs. That systemic story is in Part 15 and Part 31 on NBFCs.
How banks use ratings: ECAIs and risk weights
Under the standardised approach to credit risk in Basel III, a bank's loan to a company is not counted at its face value when calculating capital. It is multiplied by a risk weight that depends on its external rating. The RBI calls the agencies whose ratings may be used External Credit Assessment Institutions (ECAIs).
The RBI's capital adequacy directions (updated to 7 October 2026) allow banks to use the ratings of seven domestic agencies: Acuité, Brickwork, CARE, CRISIL Ratings, ICRA, India Ratings and Infomerics. Acer and CredStone, registered with SEBI only recently, are not yet on the list. For non-resident exposures and foreign sovereigns, banks use S&P, Fitch and Moody's, and CareEdge Global IFSC, whose ratings may be used for all non-resident corporate exposures since 9 January 2026.
Risk weights for claims on corporates and NBFCs (domestic ratings):
| Long-term rating | AAA | AA | A | BBB | BB and below | Unrated |
|---|---|---|---|---|---|---|
| Risk weight | 20% | 30% | 50% | 100% | 150% | 100% |
| Short-term rating | A1+ | A1 | A2 | A3 | A4 and D | Unrated |
|---|---|---|---|---|---|---|
| Risk weight | 20% | 30% | 50% | 100% | 150% | 100% |
Rules worth remembering:
- + and − are ignored: A+ and A− both take the A risk weight of 50%.
- Unrated is not always 100%. It is 150% if the borrower's total exposure from the banking system is more than ₹200 crore, or more than ₹100 crore for a borrower that was rated earlier and has since become unrated. This pushes large companies to get rated.
- No cherry-picking: a bank must use its chosen agency consistently and cannot pick whichever agency's rating gives the lowest weight.
- Fresh and public: the rating must be in force, reviewed in the past 15 months and publicly available.
- Short-term ratings are issue-specific: an A1+ rating on one commercial paper programme cannot be used for an unrated long-term loan. A cash credit limit counts as long-term even if sanctioned for a year.
- Foreign sovereigns: claims on a foreign sovereign rated BBB (S&P or Fitch) or Baa (Moody's) take a 50% risk weight; AAA to AA take 0%.
The RBI released a draft revised standardised approach on 7 October 2025 that would adjust the risk weights of rated loans according to each agency's own default history, rewarding agencies whose ratings have proved accurate. Until final rules apply, the table above is the one in force.
Worked example: from rating to capital
A bank lends ₹500 crore to a company rated CRISIL AA on a five-year term loan. The bank must hold total capital of at least 11.5% of risk-weighted assets (9% minimum plus the 2.5% capital conservation buffer).
- Risk weight for AA: 30%.
- Risk-weighted asset (RWA): ₹500 crore × 30% = ₹150 crore.
- Minimum capital: ₹150 crore × 11.5% = ₹17.25 crore.
Now the company is downgraded to BBB:
- Risk weight: 100%.
- RWA: ₹500 crore × 100% = ₹500 crore.
- Capital: ₹500 crore × 11.5% = ₹57.50 crore.
The downgrade alone makes the bank set aside ₹40.25 crore more capital on the same loan, which is why a downgrade raises the borrower's interest rate. If the company stops being rated and its total bank borrowing is above ₹200 crore, the weight becomes 150%: RWA ₹750 crore and capital ₹86.25 crore.
Sovereign ratings: how the world rates India
A sovereign rating is a rating of a government's ability and willingness to repay its debt, especially its foreign-currency debt. It matters for three reasons: it acts as a ceiling for most Indian companies' international ratings, it affects the cost of overseas borrowing by Indian firms and banks, and some global funds may only hold investment-grade bonds.
India's ratings on 24 October 2026:
| Agency | Rating | Outlook | Latest action |
|---|---|---|---|
| S&P Global | BBB | Stable | Upgraded from BBB− on 14 August 2025 |
| Moody's | Baa3 | Stable | Affirmed on 29 September 2025; Baa3 since June 2020 |
| Fitch | BBB− | Stable | Affirmed on 11 August 2026 |
The history in brief:
- S&P raised India to investment grade (BBB−) in January 2007, changed the outlook to positive on 29 May 2024 and then upgraded India to BBB on 14 August 2025, its first upgrade in 18 years. It also raised the short-term rating from A-3 to A-2 and the transfer and convertibility assessment from BBB+ to A−. S&P cited fiscal consolidation, strong growth and better monetary policy settings.
- Moody's upgraded India from Baa3 to Baa2 on 17 November 2017, its first upgrade in 13 years, citing structural reforms. It cut India back to Baa3 with a negative outlook on 1 June 2020, during the pandemic. On 29 September 2025 it affirmed Baa3 with a stable outlook, forecasting 6.5% growth in 2025-26 but warning that the high government debt would fall only slowly.
- Fitch has kept India at BBB−, most recently affirming it on 25 August 2025 and 11 August 2026.
The government has long argued that the agencies' methods give too much weight to income per head and debt ratios and too little to growth and to the fact that India's debt is almost all in rupees and held at home. The agencies' standard reply is that India's general government debt and interest burden are high for its rating category.
Part B: Credit information companies (credit bureaus)
What a credit bureau does
A credit bureau does not lend and does not rate bonds. It collects the credit history of every borrower from every lender, matches the records, and sells credit information reports (CIRs) and credit scores to lenders. When you apply for a loan or a credit card, the lender pulls your report to see:
- every loan and card you have, with the sanctioned amount, balance and repayment record;
- days past due (DPD) for each month, and any account written off, settled or in default;
- how many lenders have enquired about you recently;
- your identity and contact details, as reported by lenders.
The bureau also condenses this into a credit score, a number that predicts how likely you are to repay.
The law: CICRA, 2005
Credit bureaus are governed by the Credit Information Companies (Regulation) Act, 2005 (CICRA), with the CIC Rules, 2006 and CIC Regulations, 2006 under it. The RBI is the regulator. Key features:
- Registration (Section 5): no company can carry on credit information business without a certificate of registration from the RBI. A CIC must have a net worth of at least ₹2 crore and must be owned and controlled as the RBI's rules require.
- Membership: every credit institution (CI), meaning banks (except payments banks), co-operative banks, NBFCs, AIFIs, ARCs and housing finance companies, must be a member of all four CICs and report data to all of them. CICs may charge a CI at most ₹10,000 as a one-time membership fee and ₹5,000 a year.
- Directions (Section 11): the RBI issues binding directions to CIs and CICs. The current rules are the Credit Information Companies Directions, 2025 and separate Credit Information Reporting Directions, 2025 for each type of lender, all dated 28 November 2025 and amended on 4 December 2025.
- Right to correction (Section 21): a borrower can ask a CI or CIC to correct wrong information, and they must act within 30 days.
- Penalties (Section 25): the RBI can fine CIs and CICs for breaking the Act or its directions, as it did in August 2026.
The four bureaus
| CIC | Registered with the RBI on |
|---|---|
| Experian Credit Information Company of India | 17 February 2010 |
| Equifax Credit Information Services | 26 March 2010 |
| CRIF High Mark Credit Information Services | 25 November 2010 |
| TransUnion CIBIL | 5 March 2012 |
CIBIL (Credit Information Bureau (India) Limited) was India's first credit bureau, set up in 2000; it became TransUnion CIBIL after TransUnion of the United States became its main shareholder. Its name is so well known that people say "CIBIL score" for any credit score, but all four bureaus produce scores. Data is reported in three segments: consumer (individuals), commercial (companies and firms) and microfinance.
CRA versus CIC
| Credit rating agency | Credit information company | |
|---|---|---|
| Regulator | SEBI | RBI |
| Law | SEBI Act, 1992; CRA Regulations, 1999 | CICRA, 2005; CIC Rules and Regulations, 2006 |
| Number | 9 (October 2026) | 4 |
| Examples | CRISIL, ICRA, CARE, India Ratings | TransUnion CIBIL, Experian, Equifax, CRIF High Mark |
| What it assesses | Debt instruments and issuers: bonds, CP, bank loans of companies, governments | Credit history of every individual and business borrower |
| Main output | Rating (AAA to D; A1+ to D) with a rationale | Credit report and credit score (300 to 900) |
| Who pays | Usually the issuer | The lender (or the individual, beyond the free report) |
| Is it public? | Yes, ratings are published | No, reports go only to the borrower and authorised users |
| Used by banks for | Risk weights under Basel III (ECAIs) | Loan approval, pricing and monitoring |
Credit scores
To make scores easy to compare, the RBI requires every CIC to calibrate its credit scores from 300 to 900. A higher score means lower risk. Scores are driven mainly by repayment history (any DPD hurts), how much of your credit limits you use, the length and mix of your credit history, and the number of recent enquiries.
There is no RBI-prescribed cut-off. How lenders read a score is their own policy. A common rule of thumb is that scores of 750 and above are treated as very good and get the best terms, while scores below about 650 make approval harder. Someone with no borrowing history may have no score at all ("new to credit").
The government told Parliament in August 2025 that the RBI has not prescribed any minimum credit score for loans, and that lenders should not reject first-time borrowers merely because they have no credit history; they must instead assess repayment capacity in other ways.
Your rights as a borrower
The RBI's directions give individuals a set of rights:
- One free full credit report a year: every CIC must give each individual whose score it holds one Free Full Credit Report (FFCR), including the credit score, once in each calendar year (January to December), electronically, after authentication. The link must be on the CIC's home page, and the report must be as detailed as the version lenders receive. With four bureaus, that is four free reports a year.
- Alerts when your report is pulled: a CIC must send an SMS or email whenever a lender or other specified user accesses your report.
- Alerts before default is reported: a lender must send you an SMS or email when it reports a default or days past due on your account to the bureaus.
- Reasons for rejection: if a lender rejects your request to correct data, it must give reasons, and CICs circulate a standard list of reasons.
- Corrections in 30 days, or compensation: a complaint about wrong credit information must be resolved within 30 calendar days. The lender gets 21 days to send corrected data to the CIC, and the CIC gets the rest. If the deadline is missed, the complainant gets ₹100 for every calendar day of delay, paid by whichever of them caused the delay, and credited within five working days of resolution.
- Escalation: if compensation is wrongly denied, the complainant can go to the RBI's Integrated Ombudsman.
Worked example: compensation for a delayed correction
Meera finds a loan she closed in 2024 still shown as "overdue" on her report. She files a complaint with the CIC on 1 March 2026.
- The 30-day deadline runs to 31 March 2026.
- The CIC asks the bank to confirm. The bank's 21-day window ends on 22 March if it was told on 1 March; suppose it replies on 8 April, which is late.
- The CIC sends Meera a corrected report on 10 April 2026.
- Delay beyond 30 days: 1 April to 10 April = 10 days.
- Compensation: 10 × ₹100 = ₹1,000, mostly payable by the bank, since its delay caused the miss. If several lenders were late, the RBI's rules split the amount in proportion to each lender's delay.
From fortnightly to weekly reporting
How quickly a repayment shows up in your report depends on how often lenders send data to the bureaus.
- Earlier: monthly.
- From 1 January 2025: at least fortnightly, as on the 15th and last day of each month.
- From 1 July 2026: weekly, as on the 9th, 16th, 23rd and last day of each month (the "reference dates").
Under the new cycle:
- the full file of all accounts as on the last day of the month must reach the CICs by the 5th of the next month;
- for the 9th, 16th and 23rd, lenders send only incremental accounts (new accounts, closed accounts, accounts with a repayment or other change, and overdue accounts) within four calendar days;
- CICs must check each file and send rejection reports within three calendar days, and the lender must fix rejected data by the next reference date;
- lenders must report the borrower's Central KYC (CKYC) number where available, which helps bureaus match records correctly;
- CICs must report to the RBI's Department of Supervision, on the DAKSH portal, any lenders that miss the timelines, every half year.
The draft had proposed 1 April 2026 and included the 28th as a reference date; after feedback, the RBI moved the start to 1 July 2026 and replaced the 7th, 14th, 21st and 28th with the 9th, 16th and 23rd.
Example. Ravi pays off his car loan on 17 September 2026. The next reference date is 23 September, so the bank must send the update by 27 September. Under the old fortnightly cycle, the next reference date would have been 30 September, with the update reaching the bureau only in October. A fresher report helps borrowers who repay, and helps lenders spot borrowers taking several loans at once.
Common exam traps
SEBI versus RBI. CRAs are regulated by SEBI (1999 regulations). Credit bureaus are regulated by the RBI (CICRA, 2005). The RBI does not register CRAs; it only decides which CRAs' ratings banks may use for risk weights.
Seven or nine CRAs? SEBI's register has nine CRAs (October 2026). The RBI's ECAI list has seven domestic agencies. Brickwork is on both lists: its 2022 cancellation was set aside.
CIBIL is one of four. "CIBIL score" is a brand name, not a generic regulator-issued score. The four CICs are TransUnion CIBIL, Experian, Equifax and CRIF High Mark.
Score range. All CICs report scores from 300 to 900. The RBI does not set a minimum score for loans.
Lowest investment grade. It is BBB− (S&P, Fitch, Indian CRAs) and Baa3 (Moody's). India's sovereign rating is BBB from S&P, but BBB− from Fitch and Baa3 from Moody's.
Highest short-term rating. A1+, not AAA. AAA is a long-term symbol.
Weekly, not fortnightly. From 1 July 2026 the reference dates are the 9th, 16th, 23rd and last day, not the 7th, 14th, 21st and 28th of the draft.
Free report. One free full report per CIC per calendar year, including the score, not one per financial year across all bureaus.
Key facts at a glance
| CRA regulator and law | SEBI; SEBI (Credit Rating Agencies) Regulations, 1999 |
| SEBI-registered CRAs (23 Oct 2026) | 9: CRISIL Ratings, ICRA, CARE, India Ratings, Brickwork, Acuité, Infomerics, Acer, CredStone |
| CRA net worth | At least ₹25 crore |
| Rating symbols | Standardised by SEBI circular of 15 June 2011 |
| Long-term scale | AAA, AA, A, BBB (investment); BB, B, C (speculative); D (default) |
| Short-term scale | A1, A2, A3, A4, D; best is A1+ |
| RBI-approved domestic ECAIs | 7: Acuité, Brickwork, CARE, CRISIL, ICRA, India Ratings, Infomerics |
| Corporate risk weights (until 31 March 2027) | AAA 20%, AA 30%, A 50%, BBB 100%, BB and below 150%, unrated 100% (150% above ₹200 crore). From 1 April 2027, revised weights apply (e.g. AA 20%, BBB 75%): see Basel III |
| IL&FS | Downgraded to D on 17 Sep 2018; SEBI fined ICRA, CARE, India Ratings ₹25 lakh each (Dec 2019), raised to ₹1 crore each (Sep 2020) |
| India's sovereign ratings | S&P BBB (14 Aug 2025); Moody's Baa3 (since 1 Jun 2020); Fitch BBB− (affirmed 11 Aug 2026); all stable |
| CIC law | Credit Information Companies (Regulation) Act, 2005 |
| CICs | TransUnion CIBIL, Experian, Equifax, CRIF High Mark |
| Credit score range | 300 to 900 |
| Free report | One free full credit report with score per CIC per calendar year |
| Reporting cycle | Weekly from 1 Jul 2026: 9th, 16th, 23rd, month-end; full file by the 5th |
| Complaint deadline | 30 days (lender 21 days); ₹100 per day compensation after that |
Exam corner: what to remember
- A rating is an opinion on default risk, not advice to buy. BBB−/Baa3 is the lowest investment grade; A1+ is the top short-term rating.
- SEBI regulates CRAs (1999 regulations, ₹25 crore net worth, 9 registered). RBI regulates CICs (CICRA 2005, 4 registered).
- CRISIL (1987) was India's first CRA. CRISIL ↔ S&P, ICRA ↔ Moody's, India Ratings ↔ Fitch.
- Issuer-pays creates conflicts of interest; IL&FS (AAA to D within weeks in 2018) is the classic case; SEBI's penalty went from ₹25 lakh to ₹1 crore per agency.
- Banks use ECAI ratings for risk weights: 20/30/50/100/150% for AAA/AA/A/BBB/BB-and-below until 31 March 2027; unrated 100%, or 150% for large unrated borrowers. Revised weights start on 1 April 2027.
- S&P upgraded India to BBB on 14 August 2025, its first upgrade in 18 years. Moody's (Baa3) and Fitch (BBB−) are one notch lower.
- Credit scores run 300–900; one free full report a year from each CIC; SMS/email alerts when a report is pulled or a default reported.
- Complaints: 30 days to fix (lender 21 days), then ₹100 per day.
- Weekly reporting from 1 July 2026 (9th, 16th, 23rd, month-end), full file by the 5th, increments within 4 days, CKYC number to be reported.
For exam-specific syllabus and pattern details, see our pages for RBI Grade B, SBI PO and IBPS PO.
Test yourself
Credit information companies in India are registered and regulated by:
Show answer
Answer: (b) CICs need a certificate of registration from the RBI under Section 5 of the Credit Information Companies (Regulation) Act, 2005.
From 1 July 2026, lenders must report credit information to CICs as on which dates each month?
Show answer
Answer: (c) The amendment directions of 4 December 2025 set the 9th, 16th, 23rd and last day as reference dates; the 28th of the draft was dropped.
In August 2025, S&P upgraded India's long-term sovereign rating to:
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Answer: (a) On 14 August 2025 S&P raised India from BBB− to BBB with a stable outlook, its first upgrade since January 2007.
A bank lends ₹400 crore to a company rated ICRA A−. With total capital required at 11.5% of RWA, the minimum capital the bank must hold is:
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Answer: (b) A− takes the A risk weight of 50%: RWA = ₹200 crore, and 11.5% of ₹200 crore = ₹23 crore.
Which is the highest rating on the standard short-term scale used by Indian CRAs?
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Answer: (c) Since SEBI's 2011 standardisation, short-term ratings run from A1 to A4 and D, with a + modifier; A1+ is the best.
How many credit rating agencies were registered with SEBI in October 2026?
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Answer: (d) SEBI's register shows nine, after Acer Credit Rating (August 2025) and CredStone Ratings (May 2026) joined the earlier seven.
A complaint about wrong credit information is filed with a CIC on 1 June and the corrected report is sent on 8 July. The compensation due to the complainant is:
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Answer: (a) The 30-day limit runs to 1 July, so the delay is 7 days (2 to 8 July) and compensation is 7 × ₹100 = ₹700.
In the IL&FS case, SEBI finally imposed a penalty of how much on each of ICRA, CARE and India Ratings?
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Answer: (c) The December 2019 penalty of ₹25 lakh each was raised to ₹1 crore each on review in September 2020.
Under the RBI's capital rules, an unrated claim on a corporate whose aggregate exposure from the banking system exceeds ₹200 crore carries a risk weight of:
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Answer: (d) Unrated claims normally take 100%, but 150% applies above ₹200 crore of system exposure (or ₹100 crore if previously rated).
Under the RBI's Credit Information Companies Directions, 2025, each CIC must give an individual a free full credit report, including the score:
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Answer: (b) The FFCR must be provided once at any time during each year from January to December.
Further reading
- RBI, Credit Information Companies Directions, 2025 (updated to 1 July 2026): the full rulebook for bureaus, including the free report, score calibration and the compensation framework.
- RBI, Commercial Banks – Credit Information Reporting Directions, 2025: what banks must report, when, and the worked compensation cases.
- RBI, Commercial Banks – Prudential Norms on Capital Adequacy Directions, 2025: the ECAI list and the rating-to-risk-weight tables.
- SEBI Annual Report 2025-26, Chapter 7: Credit Rating Agencies: three pages of current data on ratings, upgrades, downgrades and defaults by agency.
- SEBI, registered credit rating agencies: the live list of CRAs and their registration numbers.
- S&P Global Ratings, India upgraded to 'BBB' (14 August 2025): a model of how a sovereign rating decision is argued, with upside and downside triggers.
- RBI press release on the amendment directions for credit information reporting (4 December 2025): links to all ten amendment directions and the feedback statement.
Sources
- SEBI, registered intermediaries: credit rating agencies: nine CRAs, registration numbers, Acer (21 August 2025) and CredStone (26 May 2026) (accessed 24 October 2026)
- SEBI Annual Report 2025-26, Chapter 7: eight CRAs at 31 March 2026, three listed; 725 fresh ratings, CRISIL 339 (46.8%), ICRA 20.1%, India Ratings 19.3%; 1,942 outstanding ratings, 88.4% investment grade (85.8% a year earlier); distribution by category; permission to rate instruments under other regulators (accessed 24 October 2026)
- Business Today, 6 August 2026: SEBI's annual report on CRAs rating instruments of other regulators (accessed 24 October 2026)
- Taxmann, CRA Regulations amended to expand permitted activities: SEBI (CRA) (Amendment) Regulations, 2026 of 13 January 2026 (accessed 24 October 2026)
- Lawrbit, Credit rating agency registration with SEBI: ₹25 crore net worth and promoter conditions (accessed 24 October 2026)
- RBI circular, Revision of Rating Symbols and Definitions of CRAs, 13 October 2011: SEBI circular of 15 June 2011, standard symbols, + and − modifiers, A1+ (accessed 24 October 2026)
- RBI, Commercial Banks – Prudential Norms on Capital Adequacy Directions, 2025 (updated to 7 October 2026): seven domestic ECAIs, international agencies including CareEdge Global IFSC (amended 9 January 2026), Tables 5, 9.1, 9.2, 25 and 26, unrated rules, 15-month review, no cherry-picking, 9% MTC plus 2.5% CCB (accessed 24 October 2026)
- RBI press release, draft directions of 7 October 2025: draft revised standardised approach with risk weights adjusted for each agency's default history (accessed 24 October 2026)
- Moneylife, SAT sets aside SEBI order cancelling Brickwork Ratings' licence: SEBI order of 6 October 2022, SAT interim relief and final order (accessed 24 October 2026)
- Board Stewardship, SEBI reverses licence cancellation of Brickwork Ratings (15 September 2023): SEBI order of 13 September 2023 with a six-month bar on new clients (accessed 24 October 2026)
- The Week, 22 September 2020: IL&FS penalties of ₹25 lakh (December 2019) raised to ₹1 crore each; downgrade to D on 17 September 2018; outstanding rated amounts; ₹91,000 crore borrowing (accessed 24 October 2026)
- S&P Global Ratings, 14 August 2025: India upgraded to BBB from BBB−, short-term to A-2, T&C to A−, unsolicited rating (accessed 24 October 2026)
- bne IntelliNews, India receives first S&P upgrade in 18 years: previous S&P upgrade in January 2007 (accessed 24 October 2026)
- Business Standard, 29 May 2024: S&P outlook revised to positive (accessed 24 October 2026)
- Business Standard, 17 November 2017: Moody's upgrade to Baa2 from Baa3 after 13 years (accessed 24 October 2026)
- Business Standard, 2 June 2020: Moody's downgrade to Baa3 with negative outlook (accessed 24 October 2026)
- Business Standard, 29 September 2025: Moody's affirms Baa3, stable (accessed 24 October 2026)
- Business Today, 11 August 2026: Fitch affirms BBB−, stable, 6.4% growth forecast (accessed 24 October 2026)
- Wikipedia, List of countries by credit rating: Fitch affirmation of 25 August 2025 (accessed 24 October 2026)
- RBI, Credit Information Companies Directions, 2025, via TaxGuru's reproduction: list of four CICs with registration dates, scores calibrated 300–900, one FFCR per calendar year, SMS/email alerts on access, membership fees, ₹2 crore net worth (accessed 24 October 2026)
- RBI, Credit Information Companies Amendment Directions, 2025 (4 December 2025): weekly reference dates, full file by the 5th, four-day increments, three-day rejection reports, DAKSH reporting, from 1 July 2026 (accessed 24 October 2026)
- RBI, Commercial Banks – Credit Information Reporting Amendment Directions, 2025: weekly reporting, CKYC number, rectification of rejected data (accessed 24 October 2026)
- RBI, Commercial Banks – Credit Information Reporting Directions, 2025: membership of all CICs, alerts on default reporting, 30-day and 21-day limits, ₹100 a day compensation, five working days, Integrated Ombudsman (accessed 24 October 2026)
- RBI press release, 4 December 2025: ten amendment directions; draft of 29 September 2025; earlier fortnightly rule (accessed 24 October 2026)
- Business Standard, 25 August 2025: no minimum credit score prescribed by the RBI; first-time borrowers not to be rejected for lack of history (accessed 24 October 2026)
- BankBazaar, What is CIBIL score: common lender bands for scores (accessed 24 October 2026)
- FinTech BizNews, 5 September 2026: RBI penalties of 31 August 2026 on Equifax (₹1,19,400), CRIF High Mark (₹6,89,600) and TransUnion CIBIL, ₹34,91,800 in all (accessed 24 October 2026)