UNIQUE SERIES AKTU Syllabus
BMBF205

Bank Credit Management

L-T-P4-0-0 Credits3 Session2025-26 TypeTheory
Appears in 1 semester

MBA Banking & Financial Services · Sem 2 (Core)

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Syllabus

5 units · 40 lecture hours
Unit1

Unit 1: Introduction to Bank Credit Management

8 hrs

Credit Risk Management: Meaning and significance, Lending policies and procedures, Types of credit facilities: funded and non-funded facilities, Steps in lending process, Credit information and role of credit information Bureau; and management of credit portfolio. Principles and regulation of lending; credit policies and procedures; credit manuals; organization of credit function; and credit committee.

Unit2

Unit 2: Credit Evaluation Process

8 hrs

Credit scoring; credit rating; financial analysis; ratios analysis: profitability ratios, liquidity ratios and measures, measuring efficiency, financial leverage, review of financial indicators; common size statement analysis.

Unit3

Unit 3: Commercial and industrial lending

8 hrs

Role of asymmetric information in lending; the competitive environment; loan policy; making loan; principal lending activities; collateral: characteristics of goods collateral, types of collateral; the lending process: evaluating a loan request, structuring commercial loan agreements, pricing commercial loan, and monitoring and loan reviews. On-Fund Based Operations : Bank guarantees; letter of credit: meaning and types, establishing letter of credit, parties involved, basic documents, risk assessment in letter of credit

Unit4

Unit 4: Real Estates and Consumer Lending

8 hrs

Real Estate lending: mortgage debt outstanding, characteristics of mortgage loan, the real estate portfolio, residential mortgage loan, alternative space mortgage instruments, technology, commercial real estate loan; consumer lending: types of consumer loan, leases, finance charges, annual percentage rate, real estate and consumer credit regulation.

Unit5

Unit 5: Credit Administration, Monitoring and Review

8 hrs

Credit structuring; bank documentation; types of securities and methods of creating charge over securities; loan covenants; credit file and credit evaluation memo; sanction and disbursement; follow up mechanism for monitoring; indicators of problem loans; credit audit; Handling problem loans: Credit restructuring: non-performing assets and Provisioning norms; non-banking assets. Characteristics of credit risk, indicators of credit risk, credit risk and bank failure, mitigating credit risk

Course Objectives3 points
  • Understand the credit process, assess credit risk, and describe methods for managing credit risk across different types of credit facilities.
  • Apply knowledge and analytical skills to understand the credit management functions in banking institutions and utilize tools and techniques for effective credit risk management.
  • Analyze key responsibilities of the credit management department and make informed decisions to ensure sound credit practices within financial institutions.
Course Outcomes (COs)5 outcomes

After completion of the course student will be able to:

  1. CO1Understand the nature of bank lending activities and credit riskK2, K1 (Knowledge, Remembering)
  2. CO2Apply the principles of good lending assessing credit propositions from bank customers;K2, K4 (Knowledge, Applying)
  3. CO3Conduct credit analysis for the purpose of lending; perform quantitative and qualitative analyze for assessment of creditworthiness of borrowersK4, K5 (Applying, Analyzing)
  4. CO4structure, price and market loan products in competitive way; identify and work-out problemK3 (Comprehending)
  5. CO5apply various techniques to mitigate credit risk; and demonstrate knowledge and skills required for credit risk management in a bank.K4 (Applying)

Text and Reference Books

  1. Rose, P.S., & Hudgins, S. C. Bank management and financial services. New Delhi: Tata McGraw Hill Education Pvt. Ltd.
  2. Gup, B.E., & Kolari, J. W. Commercial banking. New Delhi: Willey India

References

  1. Murali, S., & Subbakrishna, K. R. Bank credit management. Mumbai: Himalayan Publishing House.
  2. Vijayaragavan, G. Bank credit management: Text and cases. Mumbai: Himalayan Publishing House.
  3. Gestel, T. V. &Baesens, B. Credit risk management. New York: Oxford University Press.

Official AKTU syllabus

This subject is on page 33, 34 of the original AKTU PDF.

Official AKTU syllabus PDF ↗