Proposed Course Coverage
Types of lending
Different characteristics of different categories of lending
Different players in retail lending space
Business models of public sector banks
Business models of private sector banks
Business models of new generation private sector banks :
Business models of NBFCs
Regulatory norms in lending for banks
Prudential norms in Banking
Asset Recovery – legal infrastructure
Types of borrowers for :
o Public Sector Bank
o Old Private Sector Bank
o New Private Sector Bank
o NBFCs
o HFCs
Process of evaluating the borrowers by each of the above lending institutions
New methods of evaluating the borrowers by each of the above lending institutions
Types of retail borrowers
Type of non-retail borrowers
o Micro Borrower
o Small and Medium Enterprise
o Mid Corporate
o Large Corporate
Characteristics of each category of borrower in the retail and non-retail space
Type of facilities provided to these category of borrowers by:
o Public Sector Banks
o New Private Sector Banks
o Old Private Sector Banks
o Non-Banking Finance Companies
Characteristics of retail loans
Different types of retail loans
Risks involved in these different types of loans
Different types of working capital products
Fund based and non-fund based working capital products
Characteristics of each of the above product
Usage and mis-usages of each of the above product
Modus operandi of each product
How these products are assessed
Term loan products
Entire process of term loan
Loopholes (if any) in the existing process
Checklist to be carried out for term loan appraisal process which may lead to default
Information asymmetry and credit evaluation
Reduction of information asymmetry and credit evaluation
Usage of information asymmetry and business development
Risk associated with business generation through information asymmetry
Overview of debt ratings: Understanding the types of and purpose of debt ratings
Approach and criteria applied by the rating agencies
Structured approach to credit analysis: Purpose, Payback, Risks and Structure
PROPRIETARY
Types of counterparty: Corporates, financial companies, special purpose entities, and holding
companies
Sources of payback from each type of counterparty
Transaction risk analysis: Categorizing and analysing the risks
Components of structuring to mitigate against default
Structuring credit exposures – a four step approach (Exposure profile, Ranking, Safeguards
and Pricing)
Exposure profile: Key features of the main credit products offered or traded by the bank:
loans, leases, derivatives, bonds etc.
Ranking: Senior, pari passu and junior positions
The role of collateral and other forms of subordination such as structural or effective
subordination
Safeguards: Key types of mitigation found in credit documentation and the purpose and
effectiveness of each
Pricing: The need to be compensated for expected loss
Portfolio management and techniques to spread risk: Syndication, sub-participation, whole
loan sales, credit derivatives, securitization
Recap of the purpose of capital and its importance in relation to credit risk
Regulatory capital (Basel II): Measuring regulatory capital for credit risk under standardized
and advanced measurement approaches
Changes to the Basel capital framework 2011-2019, Basel 2.5 and Basel III
Composition of rating agency ‘Eligible capital’ and key difference from regulatory capital
Economic Capital: What the Economic Capital actually represents, its uses within a bank and
potential issues with calculation
PROPRIETARY
