credit and risk presentation for srei
DESCRIPTION
Credit and Risk presentation of NBFCTRANSCRIPT
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Credit Assessmentsome thoughts andRisk Management
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Absence of Risk Management may diversify your portfolio!!Why Credit and Risk Management ?
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So that all the risks are assumed by the respective parties that can best manage itAnd structure
Risk MatrixAcceptableUnacceptable
Controllableinternal action/monitormitigateUncontrollableTo take a view Insurance/Derivatives
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Risk Management IndependentFocusedTop Management Support
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Look for out of box solutions
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Look into the fine printInsurance... do not leave it to the insurer
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The Credit Assessment ChallengesGetting good data is relatively easyAssessing data involves more than just collecting informationAccurate interpretation of the data is the challengePerception of risk is the key.
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Project Management would mean balancing of various risks.
It is important to identify each of themAnticipate Assess Control Mitigate
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Do not get carried away by the presentation stylesAssessment need to look beyond the cover
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Look Beyond Balance Sheets Market Reports are importantFinancials are importantbut not the last word
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Look out for over ambitious plansAre the Plans Implementable ?
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Assessment of Project Completion A realistic assessment of Project COD and implications of delay is important
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There is no short cut to sustainable profitsAvoid Speculative Projects
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Analysis of the future cash flow is important. Only they can keep the transaction afloatCash Flows are the key
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Projections maybe misleadingAssumptions needs to be carefully examined
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Treat your customers liberally, bearing in mind the fact that a Financial Institution prospers as its customers prosper,
BUT NEVER PERMIT THEM TO DICTATE YOUR POLICY
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... is as important as Market SizeMarket Strategy...
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A Formal Risk Control Trigger Points are essential
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Insist upon the payment of all paper at maturity no matter whether you need the money or not ...
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Invest in the right technology for the futureWatch out for obsolescence
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Management of Documents is vital, particularly in difficult timesDocumentation
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Documentation needs to be friendly but remember that in a financing transaction thats all you have
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Read between the lines No room for ambiguity
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a good deal is one where none of the parties alone has to assume full credit responsibility for the project, yet when the undertakings are combined, the equivalent of a satisfactory credit risk results for all the parties. effective risk allocation where all the risks are assumed by the party that can manage it within effective cost limits efficiently.
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Suggestions???
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