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The bank collects latest audited financials, analyses them and financial risk is weighed based on various performance figures / financial ratios.
Management Risk & Market Risk is marked depending on collected particulars.
In case of existing customers, compliance to sanction terms & business consideration are judged and marked.
Then all the marks are summed up to allot the rating numeric & assess the credit risk.
In the existing pattern the rating numeric attached to various risks are as under:
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Credit Quality
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Rating Numeric
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Lowest Risk
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CR-1
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Minimal Risk
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CR-2
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Moderate Risk
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CR-3
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Satisfactory Risk
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CR-4
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Acceptable Risk
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CR-5
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Minimum Credit Rating required for considering a new proposal is CR-5 and for take over proposal is CR-4 at present. The cutoff point is changed from time to time depending on bank's requirements by the management.
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