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Typically there are quite a few providers of Credit rating for different companies e.g. Crisil, S&P, Moodys etc. However I observed that, as part of risk management, different banks also derive credit rating internally. My question is what are the reasons for that? Isnt it just reinventing the wheel, because they can just subscribe to those external rating for the company in question? Is there any regulatory mandate to do so? Also, when they derive such ratings internally, do they also use ratings from Crisil etc as important variable into the equation?

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