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The global rating agencies have not been kind enough for India. <a href="http://www.businessinsider.in/searchresult.cms?query=rating+agencies&amp;sortorder=effectivedate">Ratings agencies</a> such as S&amp;Ps, Fitch, <keyword id="6355408" type="ORGANIZATION" weightage="20" keywordseo="IMF">IMF</keyword>, etc cut India’s GDP growth forecast. 
 <keyword id="125045" type="CITY" weightage="20" keywordseo="Fitch-Ratings">Fitch Ratings</keyword> lowered <a href="http://www.businessinsider.in/searchresult.cms?query=GDP&amp;sortorder=effectivedate">India’s GDP growth</a> forecast to 6.9% in FY17 from 7.4%. The agency revised GDP forecast for 2017-18 and 2018-19 lower to 7.7% from 8% earlier. 
 
IMF also cut India’s growth rate from 7.6% to 6.6% due to temporary negative consumption shock of demonetisation. 
 However, the <keyword id="44734" type="ORGANIZATION" weightage="20" keywordseo="Indian-Government">Indian Government</keyword> has slammed these rating agencies for their inconsistency in making projections. 
 
While tabling the <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2017&amp;sortorder=effectivedate">Budget 2017</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=arun+jaitley&amp;sortorder=effectivedate">Finance Minister Arun Jaitley</a> said India continues to stand as a bright spot in the world economic landscape. 
 
Later on, while interacting with the mediapersons, Jaitley, in reply to rating agencies, said, “You inherited something 2.5 years ago which was in the range of 4.6% and from 4.6%. To bring it down gradually, year after year, stick to the target, and while sticking to the target, what’s more important is we haven’t stuck to the target just by making budgetary cuts which was done in the past. We stuck to the target where two years in a row, the REs have been higher than the BEs and yet we have stuck to the target.” 
 
The Economic Survey, which was presented on Jan 31, also slammed these agencies, criticising the methodologies adopted by them. The survey was also critical of the differential treatment they showed towards India and China while assigning a rating. 
 
Quoting an example, the Survey noted that China had launched a massive credit expansion in 2009, resulting in the rise of its credit-GDP ratio by about 63 percentage points of the GDP. But growth in GDP slowed from over 10% in 2010 to 6.5% in 2016. 
 
When these two parameters (credit-GDP ratio and economic growth) are plotted on a graph, it creates a scissors pattern. “How did Standard and Poor’s react to this ominous ‘scissors pattern’, which has universally been acknowledged as posing serious risks to China and indeed the world,” the Survey pointed out.

This is what Jaitley has to say to rating agencies

Just days after the <keyword id="6360789" type="ORGANIZATION" weightage="80" keywordseo="Modi-Government">Modi government</keyword> presented the <keyword id="2609226" type="UNKNOWN" weightage="80" keywordseo="Union-Budget-2015">Union Budget 2015</keyword>, the <keyword id="6354335" type="CITY" weightage="80" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (<keyword id="30067" type="ORGANIZATION" weightage="80" keywordseo="RBI">RBI</keyword>) today lowered its policy repo rate by 25 basis points to 7.5%. Following this surprise by India’s apex bank, Chief Economic Advisor <keyword id="6355547" type="PERSON" weightage="80" keywordseo="Arvind-Subramanian">Arvind Subramanian</keyword> asserted that the global <keyword id="113124" type="UNKNOWN" weightage="80" keywordseo="rating-agencies">rating agencies</keyword> should consider upgrading their stance on the credit outlook of the country. 
 "Now we have a 50 basis points rate cut (in two tranches within two months) and I think that is good for the <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">economy</keyword> and all rate cuts benefits... If the outlook is looking good, the rating agencies should draw their lessons from that on improving the outlook," a PTI report quoted Subramanian as saying. 
 
However, after the presentation of budget for the upcoming fiscal, global and domestic agencies had ruled out any immediate upgrade in India's sovereign ratings. 
 
"It (rate cut) shows that RBI and government are on the same page in terms of how we view the economy. It also means that Budget can be seen as conducive to non-inflationary growth," said Subramanian. 
 Revealing about the on monetary policy framework agreement, Subramanian informed that both the Ministry of <keyword id="25455" type="ORGANIZATION" weightage="80" keywordseo="finance">Finance</keyword> and Reserve Bank of India have expressed apprehension about rising prices. 
(Image: The Economic Times)

After RBI’s surprise rate cut, Govt wants rating agencies to mellow down

Indian <keyword id="34984" type="General" weightage="20" keywordseo="airline" source="Orion">airline</keyword> <keyword id="6354887" type="General" weightage="20" keywordseo="industry" source="Orion">industry</keyword> is expecting to prune its <keyword id="9317682" type="General" weightage="20" keywordseo="net-losses" source="Orion">net losses</keyword> to Rs 3,000-5,000 crore in this fiscal from an estimated Rs 17,000-17,500 crore in FY2023 on the back of improved yields and stable cost environment, credit ratings agency <keyword id="6354972" type="General" weightage="20" keywordseo="icra" source="Orion">ICRA</keyword> said on Tuesday. At the same time, ICRA also estimated that domestic air passenger traffic will expand by 8-13 per cent each in FY2024 and FY2025. The <keyword id="164127" type="General" weightage="20" keywordseo="rating-agency" source="Orion">rating agency</keyword> has also maintained its stable outlook on the industry in view of healthy passenger traffic growth, improved yields and a stable cost environment. Building on the fast-paced recovery in FY2023, ICRA at a webinar on Tuesday said it is expecting the domestic air passenger traffic to grow by 8-13 per cent in the ongoing financial year, thereby reaching 150-155 million and surpassing the pre-Covid levels of 141.2 million seen in FY2020. The Industry's net loss (is expected) to shrink to Rs 30-50 billion in FY2024 from an estimated Rs 170-175 billion in FY2023, aided by improved yields and stable cost environment, ICRA said. "The air passenger traffic momentum witnessed in the current fiscal is expected to continue in FY2025, though further expansion in yields from the current levels may be limited. Thus, the industry is estimated to report a similar net loss of ~Rs. 30-50 billion in FY2025 as well," said Suprio Banerjee, Vice President &amp; Sector Head, Corporate Ratings, ICRA Limited. The momentum in air passenger traffic growth is expected to continue in FY2025 as well with a similar estimated year-on-year growth, aided by rising demand for air travel and improving airport infrastructure, ICRA said. During the first eight months of this fiscal, domestic air passenger traffic stood at 100.7 million, witnessing a 17 per cent year-on-year growth, and 5 per cent higher than the pre-Covid levels (8M FY2020) of 95.7 million. Further, the international passenger traffic for Indian carriers, at 23.9 million in FY2023, surpassed the pre-Covid levels, although it trailed the peak levels of 25.9 million in FY2019, ICRA said, adding the same is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers. Moreover, the airlines witnessed better pricing power, as reflected in improved yields and in the spread between revenue per available seat kilometre and cost per available seat kilometre (RASK-CASK) for the airlines, it said. While capacity addition for the industry will continue with the total pending aircraft deliveries of around 1,500, supply chain issues at the aircraft OEMs also mean that the addition could be gradual, ICRA said. Also, a large part of these is towards replacement of old aircraft with new fuel-efficient ones, and with the expected continued growth in passenger traffic, ICRA expects the demand-supply balance to be maintained in the medium-term. Furthermore, a sizeable part of the fleet addition by airlines will also be meant for expanding international operations, it said and added that in FY2023, the share of Indian carriers in international traffic (to and from India) stood at around 42 per cent. This offers adequate growth potential for Indian carriers to gain traction in international traffic over the medium term, the rating agency noted. However, despite a healthy recovery in passenger traffic and improvement in yields, the movement of the latter will remain monitorable amidst elevated ATF prices and depreciation of the Indian Rupee vis-a-vis the US Dollar compared to pre-Covid levels, both of which have a major bearing on the airlines' cost structure, the rating agency noted. The average ATF (aviation turbine fuel) prices stood at Rs 103,189/KL in 9M FY2024, which were 59 per cent higher compared to an average of Rs 64,715/KL during FY2020, albeit a decline of 17 per cent compared to Rs 121,013 /KL in FY2023, it observed. Fuel accounts for 30-40 per cent of the airlines' expenses, while around 35-50 per cent of the airlines' operating expenses 'including aircraft lease payments, fuel expenses, and a significant portion of aircraft and engine maintenance expenses ' are denominated in US dollar terms. "More recently, the Indian aviation industry has been facing significant supply chain issues, resulting in around 20-22 per cent of the total fleet being on the ground currently. "The recent issue related to powder-coating related concerns in engines manufactured by Pratt &amp; Whitney (P&amp;W) is expected to lead to additional aircraft to be grounded by Q4 FY2024 of this fiscal 'amounting to approximately 22-24 per cent of the industry capacity," said Banerjee. This will result in high operating expenses towards cost of grounding, increase in lease rentals due to additional aircraft being taken on lease to offset the grounded capacity, along with increasing lease rates and lower fuel efficiency, which adversely impact the airline's cost structure, and thus overall cash flow generation," he added.

Indian airlines likely to prune losses to Rs 3,000-5,000 cr this fiscal: ICRA

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Aly Weisman/Business InsiderNobody knows anything.</div></div></div><ul><li>Fitch, one of the "Big Three" credit ratings agencies, believes Brexit is now too complicated to call.</li><li>It has removed its base case, because "there is such a wide range of potential Brexit outcomes that no individual scenario has a high probability."</li><li>The ratings agency also believes that the possibility of a no deal Brexit is rising.</li><li><a href="http://uk.businessinsider.com/category/brexit-insider">Follow all of Business Insider's Brexit coverage here.</a></li></ul> LONDON - Fitch, one of the "Big Three" credit ratings agencies, now believes that the manner of the <keyword id="6354868" type="COUNTRY" weightage="60" keywordseo="UK">UK</keyword>'s exit from the European Union is now so unclear that it is impossible to forecast.<a href="https://www.fitchratings.com/site/pr/10041705">In a statement on Thursday afternoon,</a> Fitch said it is abandoning its previous base case - effectively the Brexit scenario it saw as most likely - because there is too much uncertainty to forecast with any accuracy."We no longer believe it is appropriate to identify a specific base case," the agency said in a statement."An intensification of political divisions within the UK and slow progress in negotiations with the EU means there is such a wide range of potential Brexit outcomes that no individual scenario has a high probability," it added.Previously, Fitch identified a scenario in which the UK leaves the EU in March next year with "a transition period until around December 2020 and a framework for a future Free-Trade Agreement" as its base case, but it now says that it "no longer ranks as significantly more likely than other possible outcomes."With just over six months until the UK is scheduled to leave the EU, things remain highly uncertain, particularly after numerous government ministers and EU officials raised the serious possibility of a no deal Brexit. Trade Secretary Liam Fox <a href="https://www.thetimes.co.uk/edition/news/liam-fox-says-there-is-a-6040-chance-of-no-dealbrexit-lpsgm2gdf">recently said there is a 60% chance of it happening</a>, for example.While the government has set out its plans for leaving the EU in the so-called Chequers Agreement, many issues remain unsolved, including the Irish border question and<a href="http://uk.businessinsider.com/exclusive-theresa-may-home-office-settle-status-plan-register-3-million-eu-citizens-alphabetically-2018-8"> how EU citizens will be registered in the UK after Brexit.</a>Fitch said that an "acrimonious and disruptive no deal Brexit is a material and growing possibility."The agency warned that no deal would be a huge negative for the UK, saying that it would "substantially disrupt" trade and the economy."No deal is also a material possibility. This would substantially disrupt customs, trade and economic activity, with the depth of disruption depending on how quickly a 'bare bones' deal could be reached," the statement said.As a result of these warnings, Fitch reaffirmed its negative outlook on the UK's sovereign debt, saying that it could downgrade the UK's credit rating in the event of a no deal Brexit."An outcome that adversely affected growth prospects could lead to a downgrade, as we said when we affirmed the rating in April," the agency said.Our Brexit Insider Facebook group is the best place for up-to-date news and analysis about Britain's departure from the EU, direct from Business Insider's political reporters. Join <a href="https://www.facebook.com/groups/267178180471848/">here.</a> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/lebron-james-spends-millions-cleveland-cavs-nba-finals-champions-2016-6">How LeBron James makes and spends his millions</a></h3> <div> </div> </div>

One of the world's largest ratings agencies on Brexit: &#175;\_(ツ)_/&#175;

<div class="KonaFilter image-container float_right"><div class="image on-image">REUTERS/David GrayA stone craftsman drills a large rock before it is sculpted into a statue in what is called the 'sculpture zone' in the town of Dangcheng in Hebei Province, located around 150 km south of Beijing, January 16, 2008. </div></div><keyword id="1334" type="COUNTRY" weightage="60" keywordseo="China">China</keyword>'s <keyword id="142429" type="EVENT" weightage="60" keywordseo="Credit-Rating">credit rating</keyword> agency <a href="http://en.dagongcredit.com/content/details20_7580.html">Dagong has downgraded the U.S</a>. rating from A to A-.
"[T]he fundamental situation that the debt growth rate significantly outpaces that of fiscal income and GDP remains unchanged," they warned after President Obama signed a deal to end the government shutdown and raise the debt ceiling.
"For a long time the U.S. government maintains its solvency by repaying its old debts through raising new debts, which constantly aggravates the vulnerability of the federal government's solvency. Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future."
Dagong is <a href="http://en.wikipedia.org/wiki/Dagong_Global_Credit_Rating">not recognized by the SEC</a>, and it does not have the influence of the big three: S&amp;P, Moody's, and Fitch.
Not many people outside of China really follow Dagong.
Still, the <keyword id="388461" type="UNKNOWN" weightage="60" keywordseo="downgrade">downgrade</keyword> appears to reflect China's deteriorating sentiment toward U.S. governance. Earlier this week, an China's Xinhua published an op-ed calling for a <a href="http://www.businessinsider.com/chinese-editorial-calling-for-a-de-americanized-world-2013-10">"De-Americanized" world</a>.
From <a href="http://en.dagongcredit.com/content/details20_7580.html">Dagong's press release</a>:
On October 16, 2013 EST, the U.S. Congress approves the resolution to end the partial government shutdown and raise the debt ceiling. By such means the U.S. Federal Government can avoid the default crisis for the moment. However the fundamental situation that the debt growth rate significantly outpaces that of fiscal income and GDP remains unchanged. For a long time the U.S. government maintains its solvency by repaying its old debts through raising new debts, which constantly aggravates the vulnerability of the federal government's solvency. Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future. In light of these facts, Dagong Global Credit Rating Co., Ltd. (hereinafter referred to as "Dagong") decides to downgrade the local and foreign currency credit ratings of the U. S., which has already been on the negative watch list, to A- from A, maintaining a negative outlook. The rationale that supports the conclusion is as follows:
 1. The partial U.S. federal government shutdown apparently highlights the deterioration of the government's solvency, pushing the sovereign debts into a crisis status. The U.S. federal government announced its shutdown on Oct. 1, 2013, a radical event that reflects the liquidity shortage aroused by depleting stock of debts without the increase of new debts, directly resulting in the federal government lack of the funds for its normal function. The partial U.S. government shutdown is an inevitable outcome of its long-term failure to pay its excessive debts. During the fiscal years from 2008 to 2012, the ratio of the federal government's stock of debts to fiscal income increased from 4.0 to 6.6. Under such circumstances, the federal government that can hardly sustain its own expenses, not mentioning collecting reliable income to cover its huge amount of debts. Substantial decrease of the U.S. government's solvency is proven by this shutdown incident, which pushes the federal government into a crisis position of debt cliff and default.
 2. Since the outbreak of the U.S. debt crisis in 2008, the deviation between the federal government's sources of debt repayments and the country's real wealth creation capacity has been constantly broadened. The huge amount of government debts that lack the basis of repayment always stands on the brink of default, and this situation is difficult to change in the long term. The federal government debt stock increased by 60.7% between 2008 and 2012 when the nominal GDP increased by only 8.5% while the fiscal income decreased by 2.9%, which indicates that fiscal income is losing its means as the primary source of debt repayments. Because of the fact that the federal government now depends highly on borrowing new debts to repay its old ones, vulnerability of its debt chain is accumulated so that technically debt default may occur at any time. For the fundamentals of government debt repayment condition will not be essentially improved, the federal government's debt cliff will persist in the long term. 
3. Liquidity has been continuously injected into international financial markets from the U.S., which indirectly plays a key role in combating against the risk of government default. This implicit debt default behavior infringes upon the benefits of creditors. In order to avoid the debt default caused by the lack of debt repayment sources such as fiscal incomes, the U.S. government has been taking advantage of the international currency dominance of the U.S. dollar to monetize its debts and has been taking quantitative easing monetary policy to maintain its government solvency since 2008. The devaluation of the stock of debts hereby directly damages the creditors' interests. Dagong estimates that the depreciation of the U.S. dollar caused a loss of USD628.5bn on foreign creditors over the years of 2008 to 2012.
4. The debt ceiling has been extended continually, increasing the total amount of the federal government debts. In order to avoid the sovereign debt default, it becomes an inevitable choice for the U.S. government to repay its old debts through raising new debts. The fact that the debts grow faster than the fiscal incomes will further impair the federal government's solvency. Ever since Obama's inauguration in 2009, the U.S. Congress has extended the debt ceiling for five times, reaching a total volume of USD5.1tn. This further raise of the debt ceiling shows the government's incapability of improving its solvency by improving the basic economic and fiscal elements.
5. The Democrats and the Republicans of U.S. do not have a consistent strategy target to solving the sovereign debt problem. As the issue of paying sovereign debts falls into a tool that the parties make use of to realize their own interests, the political environment is unfavorable for eliminating the risk of its sovereign debt default in the long term. The recurrence of the bi-partisan conflict over debt ceiling once again reveals the U.S. superstructure's incapacity to solve national debt crisis. A debt crisis evolves into a political crisis, which in turn exacerbates the debt crisis. Such political environment over debt repayment renders the dim and pale prospect of the U.S. federal government's solvency.

China's Dagong Ratings Agency Has Downgraded The US

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="https://static-ssl.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/category/chart-of-the-day"></a></td><td><a href="http://www.businessinsider.com/dollar-past-5-initial-rate-hikes-2015-8"></a></td></tr></tbody></table></div>Credit rating agencies were vilified during the financial crisis for <a href="http://www.businessinsider.com/r-sp-to-pay-77-million-to-settle-sec-state-charges-over-ratings-2015-1">failing to detect risk in the subprime market before it was too late</a>. And in a recent note to clients, Sivan Mahadevan's team at Morgan Stanley looked at the "Fallen Angel Spread," or difference between the lowest-rated investment grade debt (BBB rated) and the highest-rated junk debt, and discovered just how clueless rating agencies really are. According to Morgan Stanley, "It appears that rating agencies are oftentimes 'late to the game,' as their ratings decision usually occurs after materially negative information has already been well disseminated in the investor community." The chart shows BBB spreads widen ahead of a downgrade and blow out on the downgrade event. However, once the downgrade is digested, the BB spread tightens. It seems then that for investors, the rating agency opinion only matters after the fact.<div class="KonaFilter image-container display-table"><div><div class="image">Morgan Stanley</div></div></div>Interestingly, Moody's Corporation's stock price plunged 76% to a low of $17.95 per share in February 2009 after the company and other rating agencies were criticized during the fallout from the financial crisis, but has since climbed 510% to its current level near $110 per share. Moody's has significantly outperformed the S&amp;P 500, which is up 211% over that time.

Here's proof that credit rating agencies are just the worst

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;ALID=2C0BF1FRTM5XG&amp;RW=1464&amp;RH=740#/SearchResult&amp;ALID=2C0BF1FRTM5XG&amp;RW=1464&amp;RH=740&amp;VBID=2C0BX4EF1BM&amp;POPUPPN=11&amp;POPUPIID=2C0BF1FR8Q9R1">REUTERS/Kim Kyung-hoon</a>A security officer stands guard at the Great Hall of the People during the third plenary session of the National People's Congress (NPC) in Beijing, China, March 13, 2016.</div></div></div>China's vice finance minister hit back at cuts made by credit rating agencies in their outlook for Chinese debt.Zhu Guangyao said that prospects for economic growth in China warranted a better rating."Their assessment for change from stable to negative is absolutely wrong because the IMF just downgraded global economic forecasts 2016 from 3.4% to 3.2% and all advanced economies have been downgraded," he said in an interview with CNBC."However, compared with that, the IMF upgraded China's economic forecast from 6.3% to 6.5%… I think the IMF forecast gives us a strong response to ratings agencies," he addedStandard &amp; Poor's last month cut its outlook for the Chinese government's credit rating, maintaining the double-A minus rating but changing the outlook to negative from stable.Another ratings company, Moody's Investors Service, also lowered its outlook on Chinese debt in the same month.Guangyao also cited Britain's EU referendum in June, and a possible "Brexit" as a risk to the global economic outlook."There's many reason I think some uncertainty will continue increase. … economic development in advanced economies faces a slowdown risk and also geopolitical conflict. And in the <keyword id="6354868" type="COUNTRY" weightage="60" keywordseo="UK">UK</keyword>, there's the referendum, refugee issue. So certainly we support a very strong, unified EU," he said. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/game-of-thrones-economics-westeros-iron-throne-lannisters-2016-4">This hidden subplot of 'Game of Thrones' spells out the real trouble for the Lannisters</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="tvNncydDrkw0Adz4yS0Vsg8DPK1cte-i" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Chinese official: Credit rating agencies are 'absolutely wrong'

<div class="KonaFilter image-container"><div class="image on-image"><keyword id="1785757" type="UNKNOWN" weightage="60" keywordseo="Business-Insider-Australia">Business Insider Australia</keyword></div></div>ANZ, CBA, NAB and Westpac enjoy some of the best credit ratings from firms such as Moody's Investor Services and Standard and Poors, thanks in part to the support they get from the Australian Government because they're "too big to fail".
Some say that "too big to fail" status is worth two ratings notches, pushing ratings up to AA+ instead of AA-, or AA instead of A.
A Morningstar report, <a href="http://www.australianbankingfinance.com/banking/major-banks-enjoy-structural-advantage/">noted in Australian Banking and Finance (AB&amp;F)</a> this morning, gives a clearer definition of why Australia's majors are so strong.
From AB&amp;F:
Australia's largest four banks dominate an oligopoly that gives them a durable structural competitive advantage, ensuring they'll earn excess returns over the very long term.
This enables the banks to prosper compared with major banks elsewhere in the world and gives Morningstar's analysts confidence that the banks will have global sector-leading returns on equity for the foreseeable future.
Thus Morningstar has upgraded the banks to having a wide "economic moat", joining only one other bank in its global bank coverage universe and two other companies in its Australian stock coverage.
An economic moat is a "sustainable competitive advantage that allows a firm to generate positive economic profits for the benefit of its owners for an extended period of time."
Basically, the majors have scale advantages, cost advantages, efficiency advantages, investment advantages, capital advantages - flowing from their ability to use internal ratings based capital allocation against assets, funding advantages, competitive advantages and so on.
But what AB&amp;F highlights is that it is the government that largely controls some, if not all, of these advantages, and could act to level the playing field should it chose this path.
Might be something to throw in the mix for the Governments new banking inquiry.
You can read the AB&amp;F story <a href="http://www.australianbankingfinance.com/banking/major-banks-enjoy-structural-advantage/" target="_blank">here</a>
Greg McKenna is a current director and former treasurer of mutual ADIs and a proud member of the <a href="http://www.customerownedbanking.asn.au/" target="_blank">Customer Owned Banking</a> Industry.
Follow <a href="https://twitter.com/gregorymckenna" target="_blank">Greg McKenna</a> on Twitter
Follow Business Insider Australia on <a href="https://www.facebook.com/BusinessInsiderAustralia">Facebook </a>and <a href="https://twitter.com/businsiderau">Twitter</a>
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Why Australia's Big Banks Are Rated So Highly By Credit Ratings Agencies

<ul><li>The Securities and Exchange Board of India (<keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">SEBI</keyword>) has imposed stricter disclosure and review requirements on the country’s credit rating agencies. </li><li>Under the new requirements, credit ratings agencies will have to include a special section devoted to “liquidity” in their ratings actions announcements. </li><li>In addition, credit ratings agencies will have to publish information related to the historical average rating of an issuer, highlighting any gradual change in the company’s rating. </li><li>The new norms will help institutional and retail <keyword id="6359051" type="UNKNOWN" weightage="20" keywordseo="investors">investors</keyword> get a better picture of the financial health of an issuer. </li></ul>On 13 November, the Securities and Exchange Board of India (SEBI) released <a href="https://www.sebi.gov.in/legal/circulars/nov-2018/guidelines-for-enhanced-disclosures-by-credit-rating-agencies-cras-_40988.html">a circular </a>imposing stricter disclosure and review requirements on the country’s credit rating agencies so as to prevent a repeat of the <keyword id="6357293" type="UNKNOWN" weightage="20" keywordseo="ILFS">IL&amp;FS</keyword> <keyword id="41673" type="PERSON" weightage="20" keywordseo="crisis">crisis</keyword>. In the wake of the collapse of IL&amp;FS, wherein India’s largest infrastructure lender defaulted on its debt payments and now teeters on the edge of bankruptcy, a lot of the blame has been passed around. And now, India’s securities regulator has pinned part of the blame on credit ratings agencies, which failed to monitor IL&amp;FS’s liquidity situation closely in the build-up to the default. As a result, investors had no idea they were propping up the cash-strapped lender. Following a series of defaults, IL&amp;FS’s bonds were finally given <a href="https://economictimes.indiatimes.com/markets/stocks/news/ilfs-group-shares-crash-up-to-16-as-icra-assigns-junk-rating-to-parent/articleshow/65750558.cms">a junk rating</a> in September. Under the new requirements, credit ratings agencies will have to include a special section devoted to liquidity in their ratings actions press release. This involves a regular and rigorous assessment of a bond or stock issuer’s liquidity situation and repayment performance. As their final assessment hinges more on liquidity, agencies will also have to disclose discrepancies between the assets and liabilities of an issuer as well as cash flow issues and existing short-term credit lines. These review requirements also extend to all the subsidiaries of the said issuer and the support they receive from their holding companies. In addition, credit ratings agencies will have to publish information related to the historical average rating of the issuer, highlighting any gradual change in the company’s rating. This includes the annual publishing of a one-year historical rating transition for an issuer over a five-year period. The new norms will help institutional and retail investors get a better picture of the financial health of an issuer and allow red flags to be raised well in advance of an actual default. As the main lender for government infrastructure projects, IL&amp;FS benefitted from a lack of regulatory oversight while its promoters failed to carry out adequate due diligence before extending loans. Interestingly, the SEBI isn’t the only regulator whose crosshairs these credit ratings agencies are entangled in. Last week, the Serious Fraud Investigation Office (SFIO) was reported to be <a href="https://www.livemint.com/Industry/uEADr0HGYRTbHZks5ug9nO/Rating-agencies-under-SFIO-watch-for-failure-to-see-stress-i.html">investigating the methods used</a> by rating agencies as part of a wider investigation into the IL&amp;FS default. SEE ALSO: <a href="https://www.businessinsider.in/ilfs-has-no-option-but-to-sell-its-profitable-financial-services-unit-as-it-tries-to-avoid-bankruptcy/articleshow/65898283.cms">IL&amp;FS has no option but to sell its profitable financial services unit as it tries to avoid bankruptcy</a> <a href="https://www.businessinsider.in/after-idbi-bank-lic-now-has-to-bail-a-huge-infrastructure-lender-out/articleshow/65840416.cms">After IDBI Bank, LIC now has to bail a huge infrastructure lender out</a> <a href="https://www.businessinsider.in/india-sebi-just-made-it-a-lot-cheaper-for-you-to-invest-in-mutual-funds/articleshow/65867646.cms">India, SEBI just made it a lot cheaper for you to invest in mutual funds</a>

India’s securities regulator is forcing rating agencies to comply with stricter assessment norms to prevent a repeat of the IL&FS crisis

<ul><li><keyword id="6359483" type="COMPANY" weightage="20" keywordseo="Crisil">CRISIL</keyword> said that less than 1% of 32,500 rating Indian companies would actually be able to achieve a top credit rating of AAA. </li><li>This is significantly less than China (12.8%), Taiwan (8.6%) and even Thailand (4.8%). </li><li>Since India’s sovereign debt is rating BBB, the debt of any Indian firm is usually assessed against a ceiling of BBB. </li></ul>As India’s regulators increase their oversight on the country’s credit rating agencies in the wake of the <keyword id="6357293" type="UNKNOWN" weightage="20" keywordseo="ILFS">IL&amp;FS</keyword> crisis, CRISIL, one of India’s most prominent rating agencies, has <a href="https://www.crisil.com/en/home/newsroom/press-releases/2019/02/global-national-AAA-ratings-not-comparable-says-crisil.html">highlighted the difference</a> between global and national rating systems. In a statement that could set alarm bells ringing, CRISIL said that less than 1% of 32,500 rating Indian companies would actually be able to achieve a top credit rating of AAA. This is significantly less than China (12.8%), Taiwan (8.6%) and even Thailand (4.8%). However, that isn’t a cause for concern as much as it is an explanation for how credit ratings work. The rating agency explained that global ratings could not be compared with national ratings because the latter is an assessment of credit risk that is relative to a country’s credit rating. For example, since India’s sovereign debt is rating BBB, the debt of any Indian firm is usually assessed against a ceiling of BBB. Sovereign debt is generally considered a low-risk and safe investment when compared to corporate paper. On a national level, CRISIL found that 85-90% of bond issuances were carried out by Indian companies that were either rated AAA or AA on a national scale, pointing to saturation at the top of the market. Around 13% of Indian farms have been given a rating of A or higher on a national scale, compared to a global average of 25%. Rating agencies in developed markets usually employ a global ratings scale as opposed to a national one. Credit rating agencies have come under fire for failing to alert investors to the IL&amp;FS crisis. Up until its first default in August 2018, IL&amp;FS was still <a href="https://timesofindia.indiatimes.com/business/india-business/why-ilfs-was-aaa-till-two-months-ago/articleshow/66113222.cms">rated a AAA entity</a>. ICRA, a ratings agency, eventually downgraded <a href="https://www.bloombergquint.com/business/icra-junks-rs-12-000-cr-of-il-fs-group-s-borrowing-programmes">IL&amp;FS to a junk rating </a>around a month later. CRISIL further explained that the number of AAA-rated companies in the world has come down significantly between 2008 and 2018 - from 89 to 9, according to its parent S&amp;P Global Ratings, and from 170 to 53, according to Moody’s. It attributed this to not only to the higher costs of maintaining an <keyword id="624008" type="PERSON" weightage="20" keywordseo="AAA-rating">AAA rating</keyword> - which includes a well-capitalised balance sheet, manageable debt levels and strong risk ratios - but to the fact that companies have become increasingly leveraged since the financial crisis. According to Gurpreet Chhatwal, President, CRISIL Ratings, “Over the past decade or more, companies in the developed economies have relied more on debt in their quest to increase shareholder value. When reliance on debt increases, financial risk also rises leading to a lowering of credit ratings”. SEE ALSO: <a href="https://www.businessinsider.in/indias-securities-regulator-is-forcing-rating-agencies-to-comply-with-stricter-assessment-norms-to-prevent-a-repeat-of-the-ilfs-crisis/articleshow/66616962.cms">India’s securities regulator is forcing rating agencies to comply with stricter assessment norms to prevent a repeat of the IL&amp;FS crisis</a> <a href="https://www.businessinsider.in/as-indias-shadow-banks-brace-for-a-tough-2019-the-central-bank-and-government-will-try-and-prevent-a-repeat-of-the-ilfs-crisis-by-solving-the-data-problem/articleshow/67419846.cms">As India’s shadow banks brace for a tough 2019, the central bank and government will try and prevent a repeat of the IL&amp;FS crisis by solving the data problem</a>

Here’s why less than 1% of India’s companies would get a top credit rating by global standards

Bengaluru, April 1 (IANS) Public sector Hindustan Aeronautics Limited (<keyword id="68124" type="General" weightage="100" keywordseo="hal" source="Orion">HAL</keyword>) has reported its highest ever revenue of over Rs 24,000 crore (provisional and unaudited) for the financial year ending on March 31. Compared to the previous year's revenues of Rs 22,755 crore, the company has registered a 6 per cent revenue growth. "Despite the challenges of the second wave of Covid-19 during the first quarter of the year and the consequent production loss, the Company could meet the targeted revenue growth with improved performance during the balance period of the year," said R. Madhavan, CMD, HAL. The second wave of Covid-19 had compelled the company to declare a phased lockdown at various divisions during April and May 2021. The employees had put in additional hours in June and July 2021 to compensate for the loss of man hours due to the lockdown. Further, based on the improved financial performance and cash flow position, the <keyword id="13520461" type="General" weightage="50" keywordseo="credit-rating-agencies-care-ratings" source="Orion">Credit Rating Agencies CARE Ratings</keyword> and <keyword id="1990286" type="General" weightage="50" keywordseo="icra-limited" source="Orion">ICRA Limited</keyword> have upgraded the Company's credit rating from AA+ Stable to AAA/Stable during the financial year. HAL achieved record revenues through production of 44 new helicopters/aircraft, 84 new engines, overhauling 203 aircraft / helicopters and 478 engines, a statement from HAL noted. Recently, HAL has bagged a contract for production of 15 Light Combat Helicopters (<keyword id="157962" type="General" weightage="50" keywordseo="lch" source="Orion">LCH</keyword>), 10 for <keyword id="6355075" type="General" weightage="50" keywordseo="iaf" source="Orion">IAF</keyword> and five for the <keyword id="6354416" type="General" weightage="50" keywordseo="indian-army" source="Orion">Indian Army</keyword> at a cost of Rs 3,887 crore along with Infrastructure sanctions worth Rs 377 crore. Considering the improved financial performance during the financial year, HAL paid an interim dividend of Rs 40 per share representing 400 per cent on the face value of Rs 10 per share during FY 2021-22. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/list-of-bank-holidays-in-april-2022-month/articleshow/90586419.cms">Here is a list of bank holidays in April 2022</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/after-byjus-and-unacademy-vedantu-is-looking-at-offline-centers/articleshow/90584769.cms">Exclusive: After Byju’s and Unacademy, Vedantu is looking to start offline centres</a>

HAL records its highest ever revenue of ₹24,000 crore in FY 2021-22

Mumbai, Jun 11 () RBI Governor Shaktikanta Das on Thursday sought credit rating agencies' assessment of the macroeconomic situation and their outlook on various industries, including the financial sector, the central bank said in a statement. The RBI Governor met managing directors and chief executives of credit rating agencies (CRAs) through video conferencing. The meeting was also attended by the deputy governors and other senior officials of the Reserve Bank of India (RBI). During the meeting, among other matters, agencies' assessment of the macroeconomic situation and outlook on various sectors, including the financial sector, was discussed. Other issues discussed included perspectives on the overall financial health of the entities rated by the CRAs and major factors that affect credit ratings in current context. The RBI also sought feedback on ways to further strengthen the rating processes and engagement with key stakeholders. NKD MKJ

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You Searched For "rating agency" and got 12 results

This is what Jaitley has to say to rating agencies

Akanksha Jain

After RBI’s surprise rate cut, Govt wants rating agencies to mellow down

BI India Bureau

Indian airlines likely to prune losses to Rs 3,000-5,000 cr this fiscal: ICRA

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Greg McKenna, Business Inside…

India’s securities regulator is forcing rating agencies to comply with stricter assessment norms to prevent a repeat of the IL&FS crisis

Dilsher Dhillon

Here’s why less than 1% of India’s companies would get a top credit rating by global standards

Dilsher Dhillon

HAL records its highest ever revenue of ₹24,000 crore in FY 2021-22

IANS

RBI Guv meets heads of rating agencies to seek macroeconomic assessment

PTI

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One of the world's largest ratings agencies on Brexit: ¯\_(ツ)_/¯