C Overview of credit management
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary objective of credit management in a bank?
The primary objective of credit management is to ensure that credit is extended to eligible borrowers in a manner that maximises returns while minimising the risk of default and loss to the bank.
What is the meaning of 'credit' in the context of banking?
Trust extended by a lender allowing borrower to repay later.
How is credit risk defined in the context of bank lending?
Credit risk is the risk that a borrower or counterparty will fail to meet their obligations in accordance with agreed terms, resulting in a financial loss for the lending bank.
What is the difference between credit appraisal and credit sanction?
Appraisal evaluates viability; sanction is formal approval of credit.
What does the term 'credit culture' refer to in banking?
Credit culture refers to the shared values, beliefs, and practices within a bank that shape its approach to lending decisions, risk appetite, and credit portfolio management.
What is the purpose of a loan policy in a commercial bank?
It guides lending decisions, risk appetite, and portfolio objectives.
What is the role of a Credit Policy in a bank?
A Credit Policy provides a framework of guidelines and principles that govern the bank's lending activities, defining target markets, risk appetite, exposure limits, and approval authorities.
What is credit disbursement in the context of loan management?
Release of sanctioned loan funds to the borrower's account.
Video classes for this chapter
C Overview of credit management Part 2
C Overview of credit management part 3
C Overview of credit management part 1
C Overview of credit management part 4
C Overview of credit management part 5
More chapters in Module C - Credit Management
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