Credit rating agencies are regulated primarily by SEBI and RBI policies. In fact, SEBI, through the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999, was one of the first regulators in the world to design an effective and comprehensive regulatory framework for credit rating agencies credit. SEBI regulations for credit rating agencies have been designed to ensure the following: players enter and exist in the business - The regulations are designed in such a way that fair and objective opinions are given by the rating agencies - Investors have wide access to ratings - The applicant must be registered as a company under the Companies Act, 1956 and have a minimum network of Rs.5 crore. Additionally, the International Organization of Securities Commissions (IOSCO) has suggested certain changes in its code of conduct to enhance the credibility of credit rating agencies. The proposals, once put in place, will have to be adopted by all national regulatory authorities. The proposed changes include strengthening provisions to preserve the integrity of the credit rating process in order to avoid conflicts of interest, increase transparency and at the same time protect public information. (Source: The Economic Times, February 10, 2014) Market Performance Crisil was the first credit rating agency to set up in India in 1987. At that time, the industry was in its infancy and faced several obstacles due to the following problems: the absence of a bond market - Absence of market-determined interest rates. However, the liberalization of the Indian economy has promoted the growth of the industry due to the rapid economic growth of the country, which has prompted private and public companies to turn to the capital market for financing options . receive ...... middle of paper ...... resources as well as having sophisticated analytical methods and facilities. However, the growth of the sector depends to a large extent on how the corporate debt and derivatives market develops in India. This would require capital account liberalization and deregulation to meet the growing demand for debt instruments in not only domestic but also international markets. India is also facing pressure from international quarters in this regard. So far, regulators have taken a cautious line as this would lead to disruptions and fluctuations in the domestic market. However, the future is not entirely bleak for this industry. The credit rating industry in India has huge growth potential due to the following factors: - Strong investment cycle in the Indian economy - Lower penetration due to corporate bond market - Regulatory push due to implementation of Basel II standards