The CIBIL score is a three-digit number lying in which range?

The correct answer is B, the Securities and Exchange Board of India. Credit rating agencies rate securities offered to the public, so they fall within the securities market and work under the SEBI (Credit Rating Agencies) Regulations of 1999, framed under the SEBI Act of 1992; no agency may rate a public issue of debt without registration with SEBI. Option A is wrong because the Reserve Bank regulates the other family in this chapter, the credit information companies or credit bureaus, under the Credit Information Companies (Regulation) Act of 2005, and it also accredits agencies for limited purposes such as the risk weights on bank exposures. Option C is wrong because IRDAI regulates insurers. Option D is wrong because the Ministry of Finance frames policy and moves legislation but does not itself register market intermediaries, which is the work of the statutory regulator.

The correct answer is B, the Credit Information Companies (Regulation) Act, 2005. This Act created the framework for credit bureaus, requiring them to register with the Reserve Bank of India, obliging banks and other credit institutions to become members and to furnish data, and giving borrowers the right to see and correct their own records. Option A is wrong because the SEBI Act of 1992 governs the securities market and, through regulations of 1999, the credit rating agencies, which are a different set of bodies. Option C is wrong because the Banking Regulation Act of 1949 deals with the licensing and conduct of banks themselves. Option D is wrong because the Reserve Bank of India Act of 1934 constitutes the central bank and provides for currency and monetary management; the Reserve Bank's power over credit bureaus comes from the Act of 2005, not from its own founding statute.

The correct answer is C, CRISIL. The Credit Rating Information Services of India Limited was set up in 1987 as India's first credit rating agency, promoted by ICICI and the Unit Trust of India, and the global firm S and P Global later became its majority shareholder. Option A is wrong because ICRA, the Investment Information and Credit Rating Agency of India Limited, came four years later in 1991, promoted by IFCI, and is now majority held by Moody's. Option B is wrong because CARE, the Credit Analysis and Research Limited, was set up in 1993 and promoted by IDBI, making it the third of the Indian agencies. Option D is wrong because Brickwork Ratings is a much later entrant. The order to memorise is CRISIL in 1987, ICRA in 1991 and CARE in 1993, each promoted by a different development finance institution.

The correct answer is B, IFCI. The Investment Information and Credit Rating Agency of India Limited was set up in 1991 with the Industrial Finance Corporation of India as its promoter, and Moody's later acquired a majority stake in it. Option A is wrong because IDBI, the Industrial Development Bank of India, promoted CARE, the Credit Analysis and Research Limited, in 1993. Option C is wrong because ICICI promoted CRISIL in 1987 along with the Unit Trust of India, making CRISIL the country's first rating agency. Option D is wrong because SIDBI, the Small Industries Development Bank of India, was itself set up in 1990 to finance small industry and did not promote a rating agency of this kind. The pattern worth noting is that each of India's first three rating agencies was floated by a different development finance institution.

The correct answer is D, CARE Ratings. CARE is a credit rating agency registered with SEBI, which rates debt instruments and the companies that issue them; it does not keep the credit histories of individuals. Four credit information companies operate in India under the Act of 2005, registered with the Reserve Bank: TransUnion CIBIL, Equifax Credit Information Services, Experian Credit Information Company of India and CRIF High Mark. Option A is wrong as an answer because CIBIL, incorporated in August 2000, is in fact the oldest of the four. Option B is wrong because Equifax is one of the four, the Indian arm of a global bureau. Option C is wrong because CRIF High Mark is the fourth of them and is known for its coverage of microfinance borrowers. The distinction being tested is instrument ratings against individual credit records.