Analyze and Manage Credit Risk in Banking

Overview

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Analyze the foundations of credit risk in banking, evaluate borrower creditworthiness using structured appraisal techniques, compute expected credit losses using risk measurement frameworks, and assess advanced credit risk mitigation instruments in complex banking environments. This course equips learners with practical, industry-relevant knowledge to identify, measure, monitor, and manage credit risk across lending portfolios. Participants will explore causes of credit deterioration, regulatory perspectives, asset classification, non-performing assets (NPAs), and the financial impact of weak credit controls. The course further develops analytical skills in probability of default, loss estimation, exposure assessment, and credit evaluation processes. What makes this course unique is its structured progression from foundational credit risk concepts to advanced applications such as off-balance sheet exposures, investment banking risk, and credit risk mitigation tools including collateral, guarantees, and credit derivatives. By completing this course, learners will strengthen their ability to make informed credit decisions, enhance portfolio quality, and apply practical risk management strategies aligned with modern banking practices.

Syllabus

Foundations of Credit Risk in Banking

This module introduces the core concepts of risk and credit risk in banking, examines regulatory perspectives including RBI guidelines, explores internal and external causes of credit risk, and explains the importance of proper loan appraisal and the consequences of weak credit management.

Measuring and Evaluating Credit Risk

This module focuses on the principles of risk management, quantitative methods for measuring credit risk, credit evaluation techniques, expected loss computation, and systematic monitoring practices to strengthen credit portfolio performance.

Advanced Credit Risk Management & Practical Applications

This module explores advanced credit risk mitigation instruments including collateral, guarantees, and credit derivatives, and examines credit exposure in investment banking and off-balance sheet transactions along with effective risk evaluation systems.