A couple of weeks back, Sebon, the capital market regulator, had instructed ICRA-Nepal, the first firm to apply for the credit rating license, to develop infrastructure and create a pool of necessary human resource before starting its operations. [break]
A team of senior officials of Sebon led by its director Neeraj Giri, examined the ICRA-Nepal´s office at Heritage Plaza, Kathmandu, and will submit its report to Sebon soon. The team had inspected the office set up, equipment, human resources to see whether they met the international standard.
"We will study the inspection report before issuing the operating license. It might take around ten days," Baburam Shrestha, chairman of Sebon, told Republica on Saturday.
ICRA-Nepal is a subsidiary of ICRA-India Ltd, which is a joint venture firm of Moody´s, a New York-based credit rating agency. ICRA-India Ltd, the parent company, has 51 percent stake in its subsidiary in Nepal and a paid up capital worth Rs 20 million. As per the existing provision, a foreign company can hold between 25-75 percent stake in its Nepal subsidiary.
Local investors, comprising of Credit Information Center, local banks and individuals, own the remaining 49 percent share in the firm.
Managing Director of ICRA-Nepal, Deepak Kafle said the company is all set to begin its work as the first credit rating firm in Nepal, once it gets the green signal from Sebon.
ICRA has already acquired permission from Nepal Rastra Bank, the central bank, to operate in Nepal. Paving the way for credit rating firms to operate in the country, Sebon has already formulated Credit Rating Regulations.
"Credit rating companies determine the rating of concerned public companies by analyzing their financial position and management strength as well as their business prospects so that investors get the exact idea about the level of credibility of the companies," said Kafle.
Kafle said share investors, lending agencies, regulatory bodies and concerned companies will benefit with the establishment of the credit rating company in the country. He said the agency could complete the credit rating within one month of a particular company applying for the service.
In addition to making public their prospectus, it is now mandatory for a public company to undergo credit rating before floating its shares for the public.
Related story
SEBON permits BFIs to issue Perpetual Non-Cumulative Preference...
