There are two approaches to measure credit risk: one is use of credit ratings (external and /or internal) - Banks should have a comprehensive risk scoring / rating system that serves as a single point indicator of diverse risk factors of a counterparty and for taking credit decisions in a consistent manner. Another method is estimating the loan loss i.e. expected loss (t he average loss that the organization expects from exposure over a fixed time period, usually a year) using 3 integral components (known as risk components) that are required to be estimated for credit risk quantification. o Probability of Default (PD): It refers to the probability/risk/chance of a borrower defaulting on the payment of the credit obligations, within a given time horizon, usually one year. o Loss Given Default (LGD): It refers to the loss likely to be suffered in the event of a default occurring in an exposure. It takes into account the number of recoveries likely to be made post default o Exposure at Default (EAD): It refers to the amount that is exposed to the default risk. It is usually the amount outstanding as well as undrawn commitment that is expected to be drawn by the time of default.
RBI has decided to increase the threshold limit for deposits and other extensions of funds made by non-financial Small Business Customers from ₹ 5 cr...
……………………………………………. allows the RBI to absorb liquidity (deposit) from commercial banks without giving government secur...
A rate at which RBI (Reserve Bank of India) lends to commercial banks by purchasing securities:
The Reserve Bank of India, recently has proposed to hike UPI (Unified Payment Interface) transaction limit for investing in IPO to…
Who has been recently appointed as an Executive Director by RBI to look after the Monetary Policy Department
RBI in its MPC meeting held on June 8th, revised Indiarsquo;s estimated GDP growth rate for FY23 to be
The total liability of the monetary authority of India i.e. RBI, is included in which of the following?
The Reserve Bank has released a booklet that aims to enhance public awareness about various types of financial frauds perpetrated on gullible customers...
Which among the following is a numerical measurement that is used to predict the chances of a business going bankrupt in the next two years.
The Reserve Bank has released a booklet that aims to enhance public awareness about various types of financial frauds perpetrated on gullible customers...