Icra signs pact with Bangladesh agency

Domestic rating agency Icra will provide technical support and related services to the Credit Rating Agency of Bangladesh (CRAB).

The two agencies signed an agreement formalising the arrangement here today. Regulations in Bangladesh require mandatory rating of all debt issues, premium issues of shares and rights issues of listed companies.

"Icra has products such as grading shares which would be adapted to the needs of the Bangladesh market," P K Chowdhury, managing director of Icra, said.

"Bangladesh is witnessing a boom in real estate, health care and infrastructure. Icra had developed products and skills in all these categories to cater to entities in Bangladesh through advisory and grading services," D N Ghosh, chairman of Icra, said.

A former chairman of State Bank of India, Ghosh said investors there would be educated through an awareness creation programme in Bangladesh as the existing market for debt and rights and premium equity issues is not very large.

Associations of companies in sectors, such as real estate and health care, would be tapped to expand the market for these products in Bangladesh, said top CRAB sources. The government there had also indicated its willingness to weed out fly-by-night operators in sensitive sectors such as real estate through an accreditation system like rating.

The micro-finance sector in Bangladesh is also expected to be brought under the regulatory and grading system soon, the sources indicated. Preliminary notifications in this regard had been issued and detailed rules and regulations are expected to follow soon.

Bangladesh doesn't have analysts with requisite skills to provide the mandatory services. CRAB could not have moved ahead without support from ICRA as the government rules require a formal association with a reputed foreign rating agency before issuing a licence for a credit rating agency to operate in Bangladesh, said a CRAB source.

ICRA Europe launch in three months: Icra will be launching its operations in Europe within three months and is expecting requisite clearances soon, P K Chowdhury, managing director of Icra, said.

"This will be followed by launches in two Asian countries. But clearances there would take some time," he added. Chowdhury said the overseas initiatives were Icra's investments and do not have any connections with Moody's, its shareholder and a foreign rating agency.

He said the countries where Icra is setting up shop are those where Moody's interests would not clash with Icra's.

Icra will begin recruitments soon at its BPO outfit, which will be located at Kolkata. Equity research, sector research and economic research would form its basic basket of services. Icra Online Ltd is developing software for the financial sector and analytical tools and content for the mutual fund industry.