Sidbi’s rating agency may face challenge

The Small Industries Development Bank of India’s (Sidbi) proposed credit rating agency, exclusively catering to the the small scale industry (SSI), is likely to run into stiff competition as the National Small Industries Corporation Ltd (NSIC) has sounded out leading credit rating agencies — Crisil, Care, Icra, and Fitch — for empanelment for providing credit rating service to SSIs.

While the proposed rating agency is still in the works, NSIC has managed to get subsidy from the ministry, whereby 75 per cent of the fee charged by a credit rating agency from an SSI will be reimbursed through the Corporation and the balance will be borne by SSI.

NSIC, in consultation with the Indian Banks’ Association, has broached the issue of rating SSIs with credit rating agencies, E.S. Jayaraman, managing director, Care, said.

The SSI ministry feels that independent third party evaluation of SSIs’ creditworthiness will have good acceptance from banks, FIs and customers.