What is Credit Risk?
Answers were Sorted based on User's Feedback
Answer / amit
credit risk is the risk of loss due to a debtor's non-
payment of a loan or other line of credit (either the
principal or interest (coupon) or both)
Is This Answer Correct ? | 17 Yes | 2 No |
Answer / mehraj wani
Credit Risk is the type of risk which arise when the
borrower fails to meet the obligation to the lender on the
date of maturity of a particular loan whether willfully or
unwillingly by way of principal or interest. Credit risk
may also may arise if third party fails to meet obligation
in favour of the lender (e.g, if bank gives loan against
insurance policy and insurance company fails to meet the
bank's obligation).
The following are the types of credit risk
1) willgful default
2) Time Risk
3) Sovering Risk
Is This Answer Correct ? | 15 Yes | 2 No |
Answer / mayank
credit risk with respect to banks is wheather the borrower
would be able to return the amount of loan which he has
taken . since banks need to give loans to priority sectors
which include some risky sector therefore bank is exposed
to lots of uncertainity that is why it is essentials for
banks to keep certain amount of reserve and capital to
cover those risks
Is This Answer Correct ? | 2 Yes | 1 No |
Answer / madhu
Credit risk is the risk that the lender faces. It is the
risk that the borrower defaults on part or full amount of
the money that he has to pay to the lender. This term is m
ore prevalent in the case of banks and NBFCs
Is This Answer Correct ? | 2 Yes | 1 No |
Answer / mohammad sazzad hossain khan
The Probability that Some of the Financial Firm’s Assets
Will Decline in Value and Perhaps Become Worthless.
Is This Answer Correct ? | 2 Yes | 5 No |
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