New rating agency in the offing

Kathmandu, Aug 31: Vishal Group Limited and Emerging Nepal Limited Wednesday signed a Memorandum of Understanding (MoU) with the Care Ratings India (CRI) to establish a rating agency in Nepal.

Ashok Agrawal and Lalmani Joshi, chairmen of Vishal Group and Emerging Nepal respectively and managing director and chief executive officer of CRI Rajesh Mokashi, signed the MoU on behalf of their respective companies.

The new rating company with its proposed name Credit Rating Nepal will apply to the Security Board of Nepal (SEBON) to get the license.

"We are hopeful to bring the company in operation within a couple of months," informed Joshi.

CRI will have 51 per cent stake in the company while Vishal Group and Emerging Nepal will hold 19 and 10 per cent shares respectively. 

Rest of the stakes will go to the bank and financial institutions and Government of Nepal.

Chairman of CRI S. B. Mainak said that his company would bring good practice, management transparency and efficiency to the new joint-venture in Nepal.

"We will try to explore various rating opportunities in the country. Preparations are underway to apply to the regulators for the license. The company will be a complete array of risk calculating information," he stated.

Agrawal expressed his hope to start the company in a couple of months.

CRI already has its joint ventures or partnerships in Mauritius, Maldives, England and Portugal.

Currently, the country has one credit rating agency – ICRA Nepal.

The rating service company or credit rating agency is a company that assigns credit ratings.

According to the BBC, the ratings are given to large-scale borrowers, whether companies or governments, and are an indications to buyers of this debt how likely they are to be paid back.