Credit Risk Management in Banking

The learners will gain insights on the essential elements of the process adopted by Banks for Credit Risk Management.

To understand the challenges posed and will be equipped with necessary knowledge.

The Course further ventures into major domains of Credit Risk Management; like Selection of borrower, Reading Financial statements, using Financial Management tools e. g. Ratio Analysis, Fund Flow analysis, Cash flow Analysis.

The Course discusses on various tools, practices, models related to Credit.

It will also be of value to existing bankers who want to understand the various facets of Credit Risk Management and aspire to be a Credit Analyst or Credit Underwriter.

The course is structured in six modules, with each module catering to a separate risk domain.

Introduction

* About the course

* Brief Objectives

* Relevance

Module 1: Principles of Risk Management:

* Introduction to Credit Risk Management:

* Classification of Credit Risk – Credit Spreads

* Credit Risk assessment tools

* Types and mitigants of Concentration and Transaction Risk Management

* Micro & Macro Business environment

Module 2: Basel Accords and its implications; Credit Risk Loss Distribution;

* Credit Risk Models Basel I/II/III/IV Guidelines

* Approaches of Credit Risk

* PD, LGD, EAD, CEL

* External Ratings

* Credit Scoring and Retail Credit Risk Management

* Credit Derivatives

Module 3: Credit process, credit selection

* Credit Analysts Skills/Role

* Credit risk in selection of borrower

Character, Capacity, Collateral, Capital and Condition ***

Counter Party Credit Risk. ***

Module 4: * * Application of Credit Risk Measurement: Reading financial Statement and Economics of Credit __**

* Basic Accounting Principles and Concepts

* Accounting Standards

* Financial Statement Analysis, Profit and Loss account / Balance Sheet

Module 5: Credit Risk management – Mitigation tools

* Financial Assessment Tools

* Trend Analysis

* Ratio Analysis

* Cash Flow Statement

* Fund Flow Statement

Module 6: Strategic credit decision making, management of Credit Portfolio and Credit Rating System

* Selection of Collateral

* Negotiation for Covenants

* Spread Risk, Portfolio Credit Risk, Structured Credit Risk

* Various Credit Risk Models,

Risk Adjusted Return on Capital & Return on Risk Weighted Assets ***

Capital Asset Pricing Model (CAPM), Weighted Average Cost of Capital