Banking after Moratorium: Three key Monitorables
With the moratorium behind us, the attention is now on how the loan portfolios will behave. Sumit Kakkar identifies three crucial things that banks need to monitor closely.
Over reliance on credit rating: How Banks constrain SME Lending
Banks are flush with liquidity, but still grappling with twin issues – where to deploy the money and how to source the right credit which meets the stringent criterion. Is the straight jacket approach of the bankers and high reliance on credit rating constraining SME lending? Sumit Kakkar shares his perspective
Way Forward for Banks: Conservatism, Capital and Risk taking
From knee jerk reactions to nudge of regulators through MSME guarantee scheme to TLTRO to capital raise, Banks have gone through the COVID learning curve. Time to start a balanced risk taking approach? Sumit Kakkar assesses the current state
How measuring the ‘Pivot Factor’ can fill Credit Risk assessment gap post COVID
These are unprecedented times for lenders. Customer cashflows are depleted, loan track can’t be ascertained due to moratorium, making it increasingly difficult to decipher customer’s intentions. How, then, does a lender evaluate a customer? Amit Balooni shares some pointers
“Emergency Credit Guarantee” for MSME – Decoding the fine print
Emergency Credit Guarantee for MSME has been unveiled. GOI seems to have pleasantly surprised the banks. There are minimal ambiguities in the eligibility, end use, risk weights and limit assessment. However, the devil lies in the invocation process. Sumit Kakkar evaluates the fine print
Banks being viewed as a panacea for all ills?
While prompt Regulatory actions have tried to address liquidity and other issues of borrowers, there is heavy reliance on Banks to deliver. However, the borrowers and banks together are awaiting reforms. In the COVID Diaries Part 3, Sumit Kakkar evaluates if banks can do heavy lifting
Banks: Evolving asset strategies
Banks need to look at ingenuous ways of growing AUMs – draw up enabling credit lines for cash flow mismatches for existing low leveraged customers. Banks would be less adventurous with new connections, where visibility of corona impact would be limited. Asset strategies would evolve with time. Sumit Kakkar evaluates the evolving asset strategies for banks
Can Credit Scoring replace Judgemental Lending?
With all the excitement in the last decade about data and credit scoring, there are some areas that may still need the human skill tom judge credit risk. Amit Balooni explains the criteria for retaining judgement in lending.
Financial Analysis is not Credit Risk Assessment (SME Lending Models 2)
Financial analysis is the most exciting part for many bankers. Evaluation of ratio trendlines, NWC availability or future cash flows is logical & fun way to credit decisioning. Possibly the next best thing to being an oracle! Who can counter argue when nos. show the future? Here is what spoils the fun: In most geographies, […]