CRISIL is an Indian analytical company and a private-sector institution, formerly known as Credit Rating Information Services of India Limited. It is not an act, scheme, or government provision, but a leading credit rating agency (CRA) and a global analytical firm.
CRISIL was incorporated on January 29, 1987, and was India's first dedicated credit rating agency. It was promoted by the erstwhile ICICI Ltd and the Unit Trust of India (UTI), with initial capital from institutions like SBI and LIC, to pioneer independent credit assessments in the country. The problem it solved was the lack of a transparent, objective mechanism to assess the creditworthiness of companies and debt instruments, thereby enhancing market transparency and investor confidence.
The core mechanism of CRISIL is providing ratings, research, and risk and policy advisory services. Its primary function is to assign a credit rating to a wide range of entities and instruments, including corporate debt, bank loans, and mutual funds, on a scale that indicates the degree of safety regarding timely debt servicing. For instance, its long-term ratings range from CRISIL AAA (highest safety) to CRISIL D (default). The rating process involves a thorough evaluation of factors like financial health, management quality, and industry outlook. For banks and financial institutions, it uses a framework called CRAMEL (Capital Adequacy, Asset Quality, Profitability, and Liquidity).
CRISIL is closely connected to the Indian financial ecosystem and is primarily regulated by the Securities and Exchange Board of India (SEBI). The Reserve Bank of India (RBI) also recognizes CRISIL as an eligible external credit assessment institution, allowing banks to use its ratings to compute the capital levels they must maintain on rated credit exposures. Globally, CRISIL is a subsidiary of the American company S&P Global, which acquired a majority stake in April 2005.
Recently, CRISIL has undergone a strategic shift, moving beyond its traditional ratings business to focus on its Research, Analytics, and Solutions (RAS) segment, which includes its CRISIL Integral IQ and CRISIL Intelligence units. In April 2024, CRISIL received SEBI approval for ESG Scoring in India, reflecting an expansion into the environmental, social, and governance domain. The company's name was formally changed from Credit Rating Information Services of India Limited to Crisil Limited in December 2003.