Credit risk

Risk is that part of any process or organization that cannot be

eliminated but only minimized.
It is essential to realize high risks can lead to potential losses that
can crumble a growing business down.
Bank is an institution that performs the important role of lending
funds is required to face risks externally and internally on a daily
basis.
Risk management has become a growing need for banks to provide
a
cushion from the external changes.

TYPES OF RISKS

Four risks that are faced by any corporate

clients are :

Business risk

Industry risk

Financial risk

Management risk

Key Objectives

Identification of financial risks faced by each of the covered

industries.
Conceptualization of parameters that are in line with the identified
financial risks.
Appropriate secondary data collected for application of identified
parameters.
Rating scale development based on identified parameters for each of
the covered industries.
Risk Management
Banks in the process of its intermediation face financial as well
as non financial risks viz. credit interest rates legal etc.
These risks are highly interdependent and can also have
cascading effects.
Top management should give considerable importance to identify
measures and curb the same.

Thank you