Beruflich Dokumente
Kultur Dokumente
Lending
Introduction
Risk assessment in Retail loan
products viz., Auto-loans,
Personal Loans, Consumer
Loans, etc
Appraisal of loan/ credit card
application
Managing Credit Exposure
Controlling Frauds
Topics to be covered
Sourcing Channels
Application Screening
Credit Scoring
Verification
Risk Appraisal
Behavioral Scoring
MIS
Collections
Five Cs of Risk
Assessment
Character
Capacity
Capital
Security
in
the
event
the
Collateral
borrower does not pay
Matching of cash inflow
Cash Flow
to repayment terms
MIS
COLLECTIONS
WRITE
OFF
RISK
MANAGEMENT
ACCOUNT
MAINTENANCE
CREDIT
ACQUISITIONS
Sourcing Channel
Individuals, Retailers, Whole salers,
Corporates, PSUs, Prof.& self employed
etc
Profiling of the employees of the
organisations
Reference checks other Banks &
Financial Institutions
Physical Verification at residence
Bio-data and ID proof
Application Screening
Completeness of application
Sourced from serviceable areas
Basic policy filters:
Documents (ITR/ Form16/ Salary
certificates)
Profile (Age, Occupation, Type of
Residence, Marital status, Phone etc)
Income (Min income cutoff)
Credit Scoring
Statistical tool used to quantify
repayment probabilities
Supports objective/ consistent risk
evaluation
Cost efficient processing marginal
profiles are eliminated- upfront basis
score
Enhances accuracy of loss forecasts
Credit Verification
Prevent Application Fraud
Verify Customer Information
(Contact information, Income,
Identity etc)
Customer contact point
verification to prevent application
fraud Office and Residence
Telephonic verification, Income
Document verification
Credit Verification
Collateral verification and lien
marking
Review Collateral Documents
Credit Bureau CIBIL-Check
References
Need to balance cost of
verification versus risk
Verification Methods/
Issues
Verify original identity documents can be
time consuming
Use of internal staff vs external agencies
quality control issues
Physical verification of addresses may be
expensive & create customer
dissatisfaction
Neighbour verification
Random vs 100% verification
Telephone verification to confirm details
Risk Appraisal 5 Cs
Credit Exposure
Multiples of monthly net/ gross
income are used to determine loan
eligibility/ credit limits
Credit lines are pegged at 2.5 to 3
times the gross monthly income
For loan products the EMI should not
exceed 40% of net monthly income
Management Information
Systems
What is MIS?
MIS 6 Ps
Product
Portfolio
Performance
Productivity
Profitability
Projection
Products-Target Market
Deficient
Planning
Internal Procedures
Capacity
Collection system
Environment
DELINQUENCY
Unexpected events
Economic
Political
Social
Damage to
Payment
Capacity
Deficient
Buying
Credit Policy
Inadequate Sales
Data entry
Verifications
Weak
Maintenance
Labor Changes
Debt Over Burden
Maintenance
Decisions
Updating information
Signs of deterioration
Collection- Strategy
Consider:
One Staff member to work on one
set of accounts through all stages of
delinquency (Cradle to Grave)
OR
Teams of staff members work on a
given stage of delinquency (Front
End, Mid Range, Hard Core,
Recovery)
Collection- Strategy
To decide the type of collection
activity to be performed
Telephone call, emails, Letters,
Visits
Frequency of contact with
customers
Thank You