"Credit rating not only plays a significant role in investor protection but also benefits industry as a whole." Discuss.

The statement is absolutely correct, credit rating not only plays a significant role in investor protection but also benefits industry as a whole in terms of direct mobilization of savings from individuals. Ratings also provide a marketing tool to the company and its investment bankers in playing company' debt obligations with an investor's base that is aware of and comfortable with the level of risk. Credit rating helps to improve the corporate image of a company. High credit rating creates confidence and trust in the minds of the investors about the company. Credit rating not only helps to develop a good image of the company among the investors, but also among the customers, dealers, suppliers, etc. High credit rating can act as a marketing tool to develop confidence in the minds of customers, dealer, suppliers, etc. Companies that have high credit rating for their debt instruments get funds at lower costs from the market. High rating enables the company to offer low interest rates on fixed deposits, debentures and other debt securities.