QUESTIONNAIRE
SECTION A: BACKGROUND INFORMATION
1)Pleaseaindicateayourarankainathe bank
Supervisor
Manager
Director
Others (specify) ____________________
2) For how long has this bank been in operation in Bangalore, India?
Less than 1 year
1 to 5 years
6-10 years
10 years & above
3) For how long have you worked in the Bank?
Less than 1 year
Between 1 to 5 years
Between 5 to 10 years
10 years & above
4)Using the categories below, please indicate the number of branches you have in Bangalore,
India.
Less than 5
Between 5-10
Between 11-20
20 & above
SECTION B: CREDIT RISK MANAGEMENT
1) Does your Bank have a well-documented Credit Risk Management policy that elaborates
the products offered and all activities that have to be performed to manage the Credit?
Yes
No
2) At what level does your bank identify/classify Credit Risk?
Branch level
Department level
3) How regularly do you review your credit policy?
Quarterly
Semi-annually
Annually
Others (specify) ______________
4) WhoainayourabankaisaresponsibleaforaformulatingatheaCreditaRiskamanagement
practices?
Board of Directors
The Head Office
The Risk Committee
Branch Level
Others (specify) _________________
5) Who approves the overall credit risk management policy in your bank?
Non-Executive Directors
Independent Directors
Chair of the board
Chief Executive Officer
6) With respect to your Bank, please indicate the extent to which each of the following
factors are considered important in loan appraisal and subsequent approval. Use scale 1 to 5
where 1 is to a lesser extent and 5 to a greater extent.
Factors considered important in
loan appraisal and subsequent 1 2 3 4 5
approval (the five Cs)
Borrower’s capacity
Borrower’s character
Borrower’s condition
Borrower’s credit history
Borrower’s collateral
Others (specify)
7) To what extent does Corporation Bank involve the following parties in formulating credit
risk management policies? Use scale 1 to 5 where 1 is to a lesser extent and 5 to a greater
extent.
Parties 1 2 3 4 5
Executive management
Board of Directors
Credit Committee
Credit Managers
Employees
8) An effective credit risk management system that ensures repayment of loans by borrowers
is critical in dealing with asymmetric information problems and in reducing the level of loan
losses. Listed below are some of the factors that influence effectiveness of a credit risk
management system. With respect to your Bank, please indicate the extent to which you
agree/disagree that indeed the factors are considered important in influencing the
effectiveness of a credit risk management system (Tick as appropriate)
Factors that influence the Strongly Disagree Somehow Agree Strongly
effectiveness of a credit risk Disagree agree agree
management system
Establishment of an appropriate
credit environment through
policy and strategies (guidelines)
that clearly outline the scope and
allocation of bank credit
facilities
Maintenance of an appropriate
credit administration that
involves monitoring process as
well as adequate control over
credit
Top management support is
required to ensure that there are
proper and clear guidelines in
managing credit
All credit risk management
guidelines should be properly
communicated throughout the
organization and everybody
involved in credit risk
management should understand
them
Collection of reliable
information from prospective
borrowers is critical in
accomplishing effective
screening)
High quality staff are critical to
ensure that the depth of
knowledge and judgment needed
is always available
Monitoring of borrowers is very
important as current and
potential exposures change with
both the passage of time and the
movements in the underlying
variables, and also very
important in dealing with moral
hazard problem
Supportive technologies and
equipment such as computers
are useful in credit analysis,
monitoring and control, as they
make it easy to keep track on
trend of credits within the
portfolio
9) Which of the following do you believe are the most important potential benefits of a Credit
Risk Management strategy?
Improved pricing of products
Real time exposure updates
Accuracy of exposure modelling
Calculation of regulatory exposure
Credit grading(scoring) models
Reduction in losses
Improved selection of clients according to risk profiles
Others (specify) _____________________________
10) Which of the below models are employed by the banks to identify the credit worthiness
of customer?
Credit portfolio view
Equity based approach
Scenario analysis
Ratings based approach
Stress testing
Sensitivity analysis
Others (specify) _______________
11) Please indicate the extent to which your organization undertakes each of the listed
activities with regards to monitoring of borrowers (Tick as appropriate)
Activities involved in monitoring of Very High Medium Low Very
borrowers high low
Frequent contact with borrowers
Creating an environment that the bank can
be seen as a solver of problems and trusted
advisor
Development of the culture of being
supportive to borrowers wherever they are
recognized to be in difficulties and are
striving to deal with the situation
Monitoring the flow of borrower’s
business through the bank’s account
Regular review of borrowers reports as
well as an onsite visit
Updating borrowers credit files and
periodically reviewing the borrowers
rating assigned at the time the credit was
granted
12)
How important do you believe each of the
following would be in the implementation of Very High Medium Low Very
a successful Credit Risk Management high low
culture within the bank
Having enterprise risk data infrastructure in
place
Policy is supported at board of director or
executive level
Adequate employee training
Hiring qualified staff
Documented records
Ability of Bank to adapt changes in banking
industry
Implementation of technology
13) Major challenges faced in successful implementation of Credit Risk Management policies
Difficulty in quantifying risk
Timelines and quality of information
Difficulty integrating risk management with other banking processes
Lack of necessary knowledge and skills within the bank
Calculation of parameters
Difficulty for banks to separate banking and trading books
Lack of technical knowledge and trained personnel
High cost of information technology
14) How best do you think your bank responds to unforeseen risk or credit crunches? Use
scale 1 to 5 where 1 is to a lesser extent and 5 to a greater extent.
Unforeseen risk or credit 1 2 3 4 5
crunches
Reduce employment
Stringent lending policy
Increase capital reserve ratio
