Credit Risk Management

Description

Presently banks are operating in a globalized environment which is highly competitive and risky. They are confronted with various kinds of financial and non-financial risks, viz. credit, operational, interest rate, foreign exchange rate, liquidity, equity price, legal and regulatory, which are interdependent.

Credit risk which represents the major risks, relates not only to credit-worthiness of the borrowers but also interest rate, forex and country risk and is receiving urgent attention of RBI and bank. For effective management of credit risk, following issues need to be addressed appropriately:

• How to measure credit risk covering individual loans and the credit portfolio.
• Development of credit risk scoring and rating models by taking parameters related to operational, financial, management, industry outlook which are highly predictive.
• Evolving effective loan sanctioning process. Also designing loan review mechanism which helps in timely identification of problem exposures and initiation of corrective actions.
• Formulating effective credit policies/procedures and reviewing the progress of their implementation.
• Creating MIS and database which has high degree of reliability/integrity.
• Creating proper organizational structure to match credit portfolio and risk profile of bank.

The book is first of its kind on the subject of 'Credit Risk Management' which addresses the above issues with perfect clarity. The book is written by highly qualified and experienced bankers having a thorough insight into the subject. The book is designed to be of immense use to banks, term lending institutions, firms engaged in consultancy and audit of banks, students of management particularly those specializing in bank management.