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CREDIT RISK
What is credit risk in the context of banking?
Credit risk is the risk of loss arising from a borrower's failure to repay a loan or meet contractual obligations. It is the most significant risk faced by banks in their lending activities.
What is settlement risk in credit risk management?
Risk that counterparty fails to deliver after payment is made.
How does RBI define credit risk for Indian banks?
RBI defines credit risk as the possibility of loss associated with diminution in credit quality of borrowers or counterparties. It includes both default risk and credit deterioration risk.
What is country risk and how does it affect credit risk?
Risk of loss due to political or economic instability in a country.
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