1. The credit risk mechanism consists of policies and practices that ensure credit risk is measured, and monitored at account level and portfolio level. The Credit Risk Management policy along with Real Estate Lending Policy and Collateral Management Policy address the Credit Risk related to lending. Credit Approving Authority, Prudential Exposure Limits, Risk Rating System, Risk Based Pricing, Portfolio Management are the various instruments for Management of Credit Risk.

2. The Bank has standardized and well defined approval processes for all credit proposals to minimize the credit risk associated with them. The Bank has set up Credit Approval Grids at Regional Offices/Field General Manager’s Offices and Central Office. The Bank has also developed credit rating models for exposure above Rs 2 lakh and scoring model for Retail lending schemes. Entire credit portfolio of the Bank is subject to internal credit rating. It has credit rating migration and default probability data for the last 8 years.

3. The Bank has implemented a LAS which seamlessly integrates the entire Credit Management Process and provides an assured turnaround time for disposal of loan applications on one hand and standardized processes on the other hand. It also covers Loan Monitoring and NPA Management.

4. The Bank constantly strives to improve credit quality and maintain a risk profile that is diverse in terms of borrowers, products and industry types.