Credit Scoring & Retail Liability
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Retail Banking and Wealth Management — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is credit scoring in the context of retail banking?
Credit scoring is a statistical method used to assess the creditworthiness of a borrower by assigning a numerical score based on factors like repayment history, income, outstanding debt, and credit utilization.
What is the difference between a generic scorecard and a customized scorecard in credit scoring?
Generic scorecards use bureau data; customized scorecards use bank's own historical data.
Which credit bureaus are licensed by RBI to provide credit information reports in India?
RBI has licensed four credit information companies: CIBIL (TransUnion CIBIL), Equifax, Experian, and CRIF High Mark to provide credit information reports in India.
What is a 'cut-off score' in the context of retail credit scoring?
Minimum score below which loan applications are automatically rejected by the bank.
What is the typical CIBIL score range and what score is considered good for retail loan approval?
CIBIL scores range from 300 to 900; a score of 750 and above is generally considered good and increases the probability of loan approval at favorable interest rates.
What is the purpose of a 'scorecard validation' process in retail banking?
To ensure the scorecard's predictive power remains accurate over time using new data.
What legislation governs the functioning of credit information companies in India?
The Credit Information Companies (Regulation) Act, 2005 (CICRA) governs the establishment and functioning of credit information companies in India.
What is a 'champion-challenger' strategy in credit scoring model deployment?
Running a new challenger model alongside the existing champion model to test performance.
Video classes for this chapter
Credit Scoring & Retail Liability Part 1
Credit Scoring & Retail Liability Part 3
Credit Scoring & Retail Liability Part 2
Credit Scoring & Retail Liability Part 1
Credit Scoring & Retail Liability Part 2
Credit Scoring & Retail Liability Part 3
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