ICRA Ratings and their effect on Fixed Deposits

ICRAs’ credit ratings are required to form an opinion about the risk types affecting financiers’ relative ability to their principal repayments and interest payment obligations. With the help of ICRA’s ratings, issuers are able to increase their marketability of the instrument, as well as help borrowers and depositors to make unbiased decisions on the relative safety of an amount on the debt instrument. 

ICRA’s credit ratings are designed for: 

1. Guiding and educating the individual and institutional creditors or investors.
2. Enabling issuers and borrowers to get more resources by accessing capital and finance market.
3. Promoting transparency in the financial markets.
4. Making fund-raising procedures easy for intermediaries.

What are the rating criteria for ICRA?

The quality of asset will reflect the particular financier’s ability for managing their credit quality and asset portfolio for their potential clients. ICRA’s credit ratings enable depositors to make accurate investment decisions just by serving as an assurance for indicating any highest degree of safety funding. This rating is awarded on the basis of different factors, such as analysis made, interactions with management and available information.

How ICRA Ratings affect Depositors?

Fixed deposit is usually a safe instrument, which enables the person to gain stable amount or returns over a fixed time period on the amount they are willing to deposit or save at a bank or a financial institution. The temptation of getting the higher returns to make us go for selecting some financiers offering high-interest rates on cumulative fixed deposit (FD). However, this also increases the risk and sometimes the depositors may even lose all their invested money. 

But if you have unbiased ICRA ratings, it is easier to determine the safety of your fixed deposit amount and even look for right financiers. You can even compare ratings and even select the best financier providing higher interest rates, meanwhile possessing better safety ratings – approved by ICRA.

Also, Read Related Article: All You Need To Know about ICRA Ratings for Fixed Deposit