Impact of Crisil Ratings System on Fd | PNB Housing Finance

CRISIL is called India's first credit rating agency that has pioneered the concept of credit rating in the nation. Credit ratings help borrowers or investors access loans or invest their money with credible financiers. One of the nation's first credit rating agency, CRISIL's analysis helps in forming an opinion on the risk types that affect the ability of financiers to service their interest payment obligations and principal repayments. CRISIL's ratings also bridge the gap between the financier and the borrower or investors, enabling them to make the right decisions. CRISIL typically covers all manufacturing companies, and service companies, including banks, non-banking finance companies.

Companies can be either public sector undertakings or state-government owned companies or private companies or public limited companies, partnerships, proprietorships, mutual funds, microfinance institutions, urban local bodies, etc. These ratings come in different categories for long-term, short-term, structured finance, corporate credit ratings, fixed deposit ratings, financial strength ratings for insurance companies, and so on.

Impact of CRISIL on Fixed Deposits:

CRISIL is called India's first credit rating agency that has pioneered the concept of credit rating in the nation. Credit ratings help borrowers or investors access loans or invest their money with credible financiers. One of the nation's first credit rating agency, CRISIL's analysis helps in forming an opinion on the risk types that affect the ability of financiers to service their interest payment obligations and principal repayments. CRISIL's ratings also bridge the gap between the financier and the borrower or investors, enabling them to make the right decisions. CRISIL typically covers all manufacturing companies, and service companies, including banks, non-banking finance companies.

Companies can be either public sector undertakings or state-government owned companies or private companies or public limited companies, partnerships, proprietorships, mutual funds, microfinance institutions, urban local bodies, etc. These ratings come in different categories for long-term, short-term, structured finance, corporate credit ratings, fixed deposit ratings, financial strength ratings for insurance companies, and so on.

Impact of CRISIL on Fixed Deposits:

CRISIL rating is generally the first factor that investors consider before investing in any instrument. Ratings also concern the timely servicing of the entity's financial commitments which define their credibility.

The ratings, thus, empower an investor to differentiate between high credit risk organizations from low credit risk organizations.

If you are considering fixed deposits, you tend to look out for lucrative options and high returns which might make you move towards financiers who offer higher interest rates. Such a move carries an additional risk, when it comes to investing in certain company deposits, due to lack of government backing. Hence, there is a particular risk of losing the money you invest. Fortunately, CRISIL Ratings can help you make the right decisions, as you can determine the rating quality and opt for the right financier. One can use these ratings as a benchmark to make a comparative analysis amongst various players in the market. Hence, there is no direct relation between CRISIL's rating and the interest rate offered on fixed deposit. However, the score undoubtedly provides a sense of the degree of safety and interest rate range that can be expected.

CRISIL's rating system for Fixed Deposit ratings are as follows:

Rating

Meaning

NM

Not Meaningful

FD

Default

FC

High risk

FB

Inadequate safety

FA

Adequate safety

FAA

High safety

FAAA

Highest safety

Impact of CRISIL on PNB Housing Finance:

CRISIL has revised its rating outlook of PNB Housing Finance Limited (PNB Housing) to 'Negative' from 'Stable' while reaffirming the ratings at 'CRISIL AA+/FAAA'.(source- CRISIL website)

Conclusion: Safety is the most important parameter while choosing to open a fixed deposit account. Since CRISIL has awarded the highest rating for PNB Housing, one can rest assured about investing on the same. Apart from safety, PNB HFL stands tall in FD interest rates comparison. There are tax benefits, loan facilities and nomination facilities as well to name a few. PNB Housing also offers a Corporate Deposit scheme for Body Corporates, Private/Public Limited Companies, Corporations, Statutory Board, Local Authorities, and other Banks & Financial Institutions.

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