ICRA to rate small and medium sector

Mumbai: ICRA Ltd has signed a memorandum of association with Corporation Bank, a major nationalised bank headquartered in Mangalore, under which the company will assign ratings to small scale industries (SSIs) and small and medium enterprises (SMEs) that are borrowers of the above bank, the rating agency informed the Bombay Stock Exchange in filing.

The SSI ratings will be carried out under the National Small Industries Corporation-ICRA (NSIC-ICRA) performance and credit rating scheme for SSIs. The SME ratings on the other hand will he assigned under the ICRA-SME rating scale.

To assist potential and existing SSI and SME borrowers of Corporation Bank in obtaining ratings, the company is offering special terms to borrowers covered by the MoU.

The MoU between the company and Corporation Bank seeks to deliver a number of benefits to the bank as well as its borrowers. For Corporation Bank, the company's ratings would serve as an objective and scientific input in decision making, assist in risk pricing; serve as an input for setting collateral requirements for borrowers and facilitate future CBO / CLO deals, the release said.

As for Corporation Bank's borrowers, they would be able to obtain the ICRA's ratings at a relatively low cost. The company's rating may also place the rated entity in a superior position in terms of faster loan processing and to obtain competitive credit terms from Corporation Bank.