Credit Analysis and Loan Management

Abstract

This report on “Credit Analysis and Loan Management” has been prepared to give an introduction and overview to the readers. The views presented in it are solely according to my understanding of the process, and thus may vary from person to person. The facts and data included in the report have been taken from official and government sources and hence are reliable. In addition to cooperative credit institutions, the Indian banking system includes 12 public sector banks, 22 private sector banks, 46 foreign banks, 56 regional rural banks, 1485 urban cooperative banks, and 96,000 rural cooperative banks. The total number of ATMs in India has climbed to 209,282 as of November 2020. While banks have had problems for a variety of reasons over the years, the most common cause of serious banking issues remains lax credit standards for borrowers, poor portfolio risk management, or a failure to pay attention to changes in economic or other circumstances that can lead to a deterioration in the credit standing of a bank's counterparties. For most banks, loans are the largest and most obvious source of credit risk and because credit risk exposure continues to be the major source of issues in banks around the world, institutions and their supervisors should be able to learn from past mistakes. If a bank provides faulty loans to individuals or businesses, it will suffer losses if the loans are not returned. Because loans are a bank's bread and butter, knowing how to read a bank's loan book is crucial.