This is with reference to the article ‘Rating the raters’ by Mohan R Lavi (October 7). CRISIL agrees with his views. The implicit suggestion to differentiate between raters, which would mean not treating all as equal, is very welcome indeed. It is now 28 years since CRISIL pioneered credit ratings in India.
In the context, it is important to remember that a rating agency is the only independent intermediary in the credit cycle. Issuers, investors, investment banks and brokerages are all interested parties.
The role of credit rating agencies, therefore, is very important, and becoming more so, especially considering that India’s debt market is heading towards an inflection point.
Regulations are also becoming more conducive to debt issuance. On their part, investors are willing to consider lower-rated papers because of innovative structures. And in future, debt issues will become even more complex.
All of this underscores the criticality of proper credit evaluation, and are the reasons why CRISIL has been recommending for many years now that rating agencies must be rated, too and all of them should not be seen as equal.
For CRISIL, credibility is non-negotiable, and that’s why we have, over the years, taken the initiative to increase process transparencies such as publishing default statistics, and setting default trigger at a hair-thin ‘one day, one rupee’ levels.
How serious we are about getting rated can be seen from a recent newspaper article where we have shown how seven yardsticks can be used to measure a rater, and suggested that investors and issuers should consider only those who pass muster.
We believe such scrutiny will add to the safety of Indian financial markets.
Raman Uberoi
Business Head, Large Corp. Ratings, CRISIL
PM’s remarks
Prime Minister Narendra Modi, by his equivocation, appears to be extending his tacit support to his ideological and political peers in what they do to hasten a retreat from secularism and implement their agenda in contravention of the Constitution.
Perhaps he, despite his larger than life image, dare not try to rein them in for fear that he might lose their ‘crucial’ support to him.
The sudden push of pet Hindutva issues with a bang to the top of the national agenda, relegating bread-and-butter issues, has to be seen from the angle of Sangh Parivar’s primary goal of ‘upper caste dominance’. The saddest part of it all is that the weaker sections of the society — Dalits and Muslims in particular — become the target of pre-planned attacks by Hindutva supremacists and zealots.
G David Milton
Maruthancode, Tamil Nadu
Indian Taliban
Shiv Sena should be banned. They have mismanaged many issues. The recent attack on Sudheendra Kulkarni was totally uncalled for and reprehensible. Former Deputy Prime Minister LK Advani condemning the attack on Kulkarni is a step in the right direction.
The attack on Kulkarni attracted all-round condemnation from political parties. The Aam Aadmi Party terming Shiv Sena as “the Indian Taliban” is not wrong. So to avoid further turmoil it is high time the activities of Shiv Sena in Mumbai and elsewhere be checked by the Union government.
KA Solaman
Alappuzha, Kerala
Up in smoke
This is with reference to the article ‘Faultswagen’ by C Gopinath (October 14). The quarterly capitalism which is driving the world is the problem.
The facts are simple. Customers want performance from their cars. Diesel pollutes heavily. Now comes Volkswagen with a slogan ‘clean diesel’, which claims high-mileage, low-pollution, and high performance automobiles.
The German auto company knew that when the emission controls were switched on, there was excessive heat produced in the engine with high wear and tear which reduces the life of the engine. That’s the reason Volkswagen implanted cheating software to get around emission norms.
Quarterly capitalism was the reason for this. Let’s call a spade a spade.
CR Arun
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