Home | | Banking Financial Services Management | Important Short Questions and Answers: Credit Monitoring and Risk Management

Chapter: Business Science - Banking Financial Services Management - Credit Monitorning

| Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail |

Important Short Questions and Answers: Credit Monitoring and Risk Management

Business Science - Banking Financial Services Management - Credit Monitorning - Important Short Questions and Answers: Credit Monitoring &Risk Management

CREDIT MONITORING &RISK MANAGEMENT

 

1.What is credit monitoring?

The credit monitoring in a bank is to ensure that the funds are utilized for the sanctioned purpose and at the same time complying with all sanction terms &conditions.

 

2.List out the needs of credit monitoring.

        Accurate & comprehensive credit reports

        Account details

        Significant events

        An Extra set of Eyes

 

3.What is Sickness at birth?

The project itself has become infeasible either due to faulty assumptions or a change in environment

 

4.Write about Induced sickeness.

caused by the management in competencies (or) willful         default.

 

5.Describe Genuine sickness

Where the circumstance leading to sickness are beyond the borrowers control has happened inspite of the borrowers sincere effort to avert the situations

 

6.List out financial distress model.

        Alman’s  Z model

        ZETA

        EMS

        GAMBLER model

 

7. Rehabitalization

Banks to detect the sickness at an early stage and facilitate corrective action for revival of the firm

 

8. write a note on Risk

It is a condition where there is a possibilty of an adverse deviation from a desired outcome that is expected or hoped for it.

 

9. Define risk

possibilities of adverse results flowing from any circumstances.

 

10 Define risk management

According to Jorion,risk management is the process by which various risk exposures are identified, measuredand controlled.

 

11.Write about Interest rate risk(IRR)

It is the exposure of a banks financial condition to adverse movements in interest rates.

 

12.What is Liquidity risk

It is a risk that a company or bank may be unable to meet short term financial demands.this is usually occur due to the inability to convert the securities or assets to cash with out loss of capital or income in the process.

 

13.How to calculate NPA?

NPA‟s = gross or net NPA‟s

Total Advances   *  100

Net NPA‟s = gross NPAs- Provisions for NPA‟s

 

14.Write a note on forex risk

It is the variability of domestic currency values of assets,liabilities or operating incomes due to unanticipated changes in exchange rate

 

15.Write a note on credit risk

Credit risk is risk due to uncertainty in a counterparty (also called an obligators or credit)ability to meet its obligations .

 

16.What is credit rating

It is the assessment of a borrowers credit quality.

 

17.Write about market risk

It is the risk of losses due to movements in financial market variables.these may be interest rates,foreign exchanges rates, security prices.

 

18.What is operational risk?

It can be summarized as human risk. It is the risk of business operations failing due to human error.

 

19.write about solvency risk/capital risk

It is a risk that is bank may become insolvent &fail.it is the potential decreases in the market value of assets below the market value of liability,indicating economic worth is zero or less.

 

20.Write about price risk

A seller who wants to sell it in the future is thus concerned about the potential fall in the price and a reduction in the realization or profits of the transactions.

 

21.What is foreign exchange risk?.

it is the exposure of an institution to the potential impact of movements in foreign exchange rates.

 

22.List out the types of foreign exchange risk

        translation exposure.

        economic exposure

        transaction exposure.

 

23.Write about country risk.

A domestic banking institution may transform itself in to an international one when it starts lending across its borders are invests in instruments in issued by foreign business

 

24.Describe the termValue at risk (VaR)

        it measure the potential of economic losses

        VaR corresponded to a presently of portfolio P&L

        And can be expressed as potential loss from the current value of the portfolio or as the loss from the expected value at the horizon.

 

25.Write about Operational risk

Operational risk can be summarized as human risk; it is the risk of business operations failing due to human error.


Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail


Copyright © 2018-2020 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.