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CRISIL Credit Rating Overview

Last Updated 04th Dec 2020

RBI keeps Repo Rate unchanged at 4%

CRISIL is India’s first credit rating agency that provides credit ratings to debt instruments and institutions based on parameters such as the business strengths, its market share and portfolio performance.

CRISIL Full Form Credit Rating Information Services of India Limited
CRISIL Instruments Debt instruments and financial entities
Crisil Rating Parameters Business strengths, Market share and reputation
CRISIL Highest Rating Scale CRISIL AAA

    What is CRISIL Rating?

    CRISIL rating is the quantified credit rating issued to every debt instrument and financial entity by CRISIL. CRISIL stands for Credit Rating Information Services of India Limited. It is India’s first credit rating agency which was pioneered in 1937 in India to serve various stakeholders such as banks, NBFCs, lenders, investors, issuers, market intermediaries PSUs, financial institutions, state governments, urban local bodies, mutual funds and manufacturing companies.

    Who does the CRISIL rating cater to?

    CRISIL provides quantified ratings to the entire gamut of debt instruments and financial institutions to determine creditworthiness based on parameters such as business strengths, market share and reputation. These credit ratings help the borrowers and investors to access or invest the funds with credible financiers. Below mentioned is a list of few instruments which are provided rating by the CRISIL.

    Debt instruments Financial institutions
    Loans Manufacturing companies
    Commercial papers NBFCs
    Non-convertible debentures PSUs
    Bonds State governments
    Mortgage-backed securities Mutual funds

    CRISIL Rating Scales: CRISIL provides credit ratings to debt instruments and financial institutions under seven categories.

    1. Long-term instruments: For long-term instruments such as bonds, debentures and loans with a maturity period exceeding one-year CRISIL credit ratings are assigned from ‘CRISIL AAA’ to ‘CRISIL D. ’CRISIL AAA credit rating is assigned to the debt instruments which have the highest safety.

    Rating Meaning
    CRISIL AAA Highest safety
    CRISIL AA A high degree of safety
    CRISIL A An adequate degree of safety
    CRISIL BBB A moderate degree of safety
    CRISIL BB A moderate risk of default
    CRISIL B High risk of default
    CRISIL C Very high risk of default
    CRISIL D Instruments in default

    2. Short-term instruments: Short-term debt instruments include commercial paper, short-term debentures and loans within a maturity period of one year etc. CRISIL credit ratings are assigned from ‘CRISIL A1 to ‘CRISIL D’.

    Rating Meaning
    CRISIL A1 Very Strong degree of safety
    CRISIL A2 Strong degree of safety
    CRISIL A3 Moderate degree of safety
    CRISIL A4 Minimal degree of safety
    CRISIL D In default

    3. Dual Ratings: Debt instruments which have an original maturity of more than one year but also have an option of put option exercisable within one year from the date of issue are assigned credit rating on both long term and short-term scale. Dual rating would be as follows CRISIL AA+/ CRISIL A1+.

    4. Structured Obligations: CRISIL credit ratings assigned to structured finance instruments vary based on long-term and short-term scales. Long-term structured instruments have a maturity period exceeding one year, and short-term structured instruments mature within one year. The credit ratings range from ‘CRISIL AAA (SO)’ to ‘CRISIL D (SO)’ for the long-term instruments and ‘CRISIL A1 (SO)’ to ‘CRISIL D (SO)’ on the short-term instruments.

    5. Credit Enhancement Ratings: Debt instruments that are backed by credit enhancement of third parties are assigned credit ratings under this category based on the maturity period. The credit ratings range from ‘CRISIL AAA (CE)’ to ‘CRISIL D (CE)’ on the long-term scale and ‘CRISIL A1 (CE)’ to ‘CRISIL D (CE)’ on the short-term rating scale as in long-term and short-term debt instruments.

    6. Fixed deposits: FAAA is the highest credit rating provided for the fixed deposits indicating that the financier has the lowest risk of turning into default.

    Rating Meaning
    FAAA Highest safety
    FAA High safety
    FA Adequate safety
    FB Inadequate safety
    FC High risk
    FD Default
    NM Not Meaningful

    7. Corporate Credit Rating: CRISIL assigns credit ratings to companies based on the company strength and how it handles debt obligations.

    Rating Meaning
    CCR AAA Highest degree of strength
    CCR AA High degree of strength
    CCR A Adequate degree of strength
    CCR BBB Moderate degree of strength
    CCR BB Inadequate degree of strength
    CCR B High risk
    CCR C Substantial risk
    CCR D In default
    CCR SD Specific Default

    Credit Rating Scales for specific Debt Instruments

    • CRISIL Mutual Fund Rating: CRISIL mutual fund ranking is based on parameters such as risk-adjusted returns, asset concentration, liquidity and asset quality. It helps the investors to know about the average of daily returns on the net asset value in the defined time period. The investor can also know about the risk of default of the issuer of the mutual funds. Overall, the credit ratings provided to the mutual funds help the investors to invest their funds smartly. CRISIL ranking scales used by the CRISIL Company ranges from 1 to 5. The top 10 percentile of funds is ranked as CRISIL Fund Rank 1 indicating ‘very good performance’ of mutual funds.
    • CRISIL ULIP Rating: CRISIL ULIP ( Unit Linked Insurance Plans) ratings provided by CRISIL company benchmarks various ULIP to facilitate investors in evaluating plans and decision making. Unit linked Insurance plans are insurance plans which integrate the insurance and investments under the single-integrated plan. The CRISIL ULIP ratings, provided to Unit linked insurance plans are based on two factors- cost and portfolio performance. While the cost factor focuses its attention on the costs and charges while offering the product, the portfolio performance is evaluated using the returns on the investments in the past 5 years.

    What is the role of CRISIL ratings?

    CRISIL ratings help the investors and borrowers to make smarter financial decisions by analysing the creditworthiness of debt instruments and financial instruments.

    Role of CRISIL ratings for issuers and borrowers: Borrowers and issuers can use the CRISIL ratings to ease their access to various alternative options and also optimise the cost of funds of different debt instruments of the financial institutions.

    How do CRISIL Rating affect Depositors?

    CRISIL credit ratings provided by CRISIL assess the creditworthiness of any financial institution. Before making any decision about investment in any institutions, you can make an internal evaluation of various institutions. For instance, if you have decided to invest in fixed deposits, the criteria to choose about the lending institution would be a higher rate of interest along with the attractive returns. However, these investment instruments are subject to market risks and not backed by the government. It is thus essential that the creditworthiness or CRISIL rating of the instruments and financial institutions is determined before making any decision. Also, you can know about the attractive offers of the different players in the market using these credit ratings.


    What does CRISIL rating mean?

    CRISIL ratings provided by global agency CRISIL represents the creditworthiness of debt instruments and financial institutions. These credit ratings help the borrowers and investors to access the right financier which has the least credit risk of turning into default.

    How does CRISIL rate a company?

    CRISIL ranking is calculated based on the degree of strength of the company concerning honouring debt obligations. The ratings are based on parameters such as the business strengths, its market share and portfolio performance. A 'CCR AAA' indicates the highest strength of a company with the lowest risk of turning to defaults.

    What does the FAAA rating mean?

    FAAA in CRISIL rating means that the fixed deposits are of the highest safety and there is the lowest risk of default.

    Is Crisil Rating reliable?

    Yes, these ratings are provided by the credible global analytical agency, Credit Rating Information Services of India Limited by analysing various debt instruments and financial institutions.

    How do I find my CRISIL rating?

    You can find the CRISIL rating of any debt instrument or financial instrument on the official website of CRISIL.

    FD News - Dec 2020
    • 2020-12-01 : Lakshmi Vilas Bank customers can access all services
      DBS Bank India announced that customers of the merged bank Lakshmi Vilas Bank can continue to access all banking services. DBS Bank further clarified that the interest rates on savings and fixed deposits are unchanged.
    • 2020-11-26 : Credit growth slows to 5.8% in the September quarter
      RBI reported that the credit growth which includes retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loan decelerated to 5.8% in the September quarter from 8.9% in the year-ago period. Further, deposits which include FD and RD increased by11% year-on-year in the July-September period as compared to 10.1% growth a year ago. The share of current account and saving account (CASA) in total deposits stood at 42.3% in September 2020 compared to 41.2% a year ago.
    • 2020-11-11 : SBI to focus on financial inclusion
      SBI is planning to increase the share of its newly created business vertical, financial inclusion and micro-markets from the current 12% to 20% by March 2022. The bank recently created a separate FI&MM vertical within the bank with an aim of financial inclusion of rural and semi-urban areas to improve customer experience in the hinterland.
    • 2020-11-10 : Ujjivan Small Finance Bank reported a marginal rise in Q2 net profit
      Ujjivan Small Finance Bank posted a marginal rise in net profit at Rs 96 crore for September. Total income during July-September 2020-21 increased to Rs 818.01 crore on the back of retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loans. Further, The bank opened 5.1 lakh deposit accounts between April and September while retail deposits have now grown to 49% of total deposits as against 42% a year back. Deposits which includes fixed and recurring deposits stood at Rs 10,743 crore.
    • 2020-11-06 : New FD rates for Kotak Bank
      Kotak Bank changed its FD rates. The FD rates for 7 to 30 days is 2.50% and 31 to 90 days it is 2.75%. The fixed deposit rate for short tenor for 91 to 179 days it is 3.50% and it is 4.50% for 180 to 364 days. Fixed deposit rate for long tenors of 12 months to 389 days is 4.60%, for 369 days to less than four years is 4.90% and for four years one day to less than 5 years is 4.75%. The revised rates are in effect from 4 November 2020.
    *Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More
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