Argus Credit Rating Services Ltd: A comprehensive study on the effects of the current situation of credit rating industry on ACRSL
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Date
2020-01Publisher
Brac UniversityAuthor
Chowdhury, SuraiyaMetadata
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Argus Credit Rating and Services Limited is the fifth credit rating agency to enter the credit
rating industry of Bangladesh. Argus is a joint-venture with Singapore based credit rating
agency DP Information Group which has contributed in the development of credit rating sector
in countries like Indonesia, China and Philippines. In this paper, I have presented an overview
on ACRSL where I have described their history, mission, vision, the types of credit ratings
done by ACRSL and their overall rating procedure. The main focus of this report is the industry
analysis through which I have examined the external and internal factors that affect the business
of ACRSL. I have also identified the challenges of the credit rating industry and the strategies
adopted by Argus to fight back those challenges. From the industry analysis, I have found out
that the credit rating industry now resides between the maturity and decline stage. The strong
rivalry among the existing credit rating agencies and the threat of “IRBA” in near future is
pushing the credit rating industry to the decline stage. But the increase of “SME rating” and
increase of “Instrument rating” can open new opportunities for credit rating agencies like
ACRSL. Another biggest challenge for the credit rating agencies in Bangladesh is the lack of
monitoring in the financial sector by the regulators. Due to lack of monitoring by the regulators,
some credit rating agencies break the “ethical code of conduct” and neglect the guideline and
rules by the regulatory bodies. Also due to the lack of governance some banks uses “expired
credit rating” which affects the business of credit rating agencies. To handle this issue,
Bangladesh Bank has proposed to “shut down” the credit rating agencies that doesn’t abide by
the guidelines of BB and BSEC and has also issued new guidelines to solve the issues of the
Banking sector.