Credit rating methodology of the Bangladesh Rating Agency Limited

Abstract

Credit Rating is an evaluation of Credit risk of a debtor like bank, business, individuals, government etc. to pay back their borrowed loan to the creditor. Credit Rating Agency analysis this credit risk of a debtor and give them rating award, which is the indicator of credit risk. After the financial crisis started the credit rating agency or credit rating term popularized in the whole world. Bank and NBFI’s giving credit money to the debtor without understanding the credit borrower business and loan repay back capacity. For that reason the Bank and NBFI’s didn’t get back their lending money from the debtor after that country’s financial institutions and government are bankrupted because of money crisis. In this point of time top tree credit rating agency come to the front and they evaluate the credit risk of debtor so that creditor can understand the debtor capacity to mitigate the loan. There many types of Credit Rating in the world like international, corporate, insurer financial strength, and national ratings these all are the types of credit rating. At first BDRAL completes an underlying gathering with its customer and takes data. At that point a detail examination is done on customers' plan of action, money related condition, industry hazard, activity chance, administration, foundation, and credit office. After that a gathering of credit rate banters about and chooses a suitable rating keep up every one of the sets of accepted rules for the credit value of the organization. An honor letter and credit rating report must be submitted specifying the rating to its customer. In this report I've examined about credit rating, credit rating score in Bangladesh, and necessities of rating in Bangladesh, about BDRAL, points of interest discourse on the credit rating process at BDRAL, brief exchange on the money related articulation. In my temporary position report I have completed an examination on Gulf Oil Bangladesh Limited and Freeam Trading Company Ltd. Over all, there are some references on BDRAL and its rating process. It can be said that importance of credit rating is increasing day by day.