Description of Security Highest quality High quality High-medium quality Medium quality Medium-low quality Low quality Poor

quality Very poor quality Lowest quality Rating classification by rating agencies

Ratings Assigned by Moodys Standard & Poors Aaa Aa A Baa Ba B Caa Ca C AAA AA A BBB BB B CCC CC DDD,D

Conclusion The financial sector of Bangladesh is now considered to be the most regulated sector compared to other sectors. As many as 48 banks are now in operation in a small economy like Bangladesh. Consequently, the financial institutions have been facing tough competition in grabbing market share. Bank for International Settlement (BIS) has issued Basel-II Capital Accord, which is in the process of implementation globally. CRAs role has expanded with financial globalization and has received an additional boost from Basel II which incorporates the ratings of CRAs into the rules for setting weights for credit risk. At national level, there is a lack of initiatives to let the CRAs play their natural role. The credit rating industry of our country is yet to be matured. Government and regulatory authorities are taking initiatives to establish a platform for them. Recently, Bangladesh Bank has set up a committee to evaluate the rating process and methodologies followed by the CRAs. The committee is expected to report the central bank to recognize the activities of rating agencies.