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Title: Underwriting in India – Art or Science?
Authors: Arora, Rohit
Keywords: Lending money
CIBIL (Credit Information Bureau of India Limited)
Private sector banks
CAM (Credit appraisal Memo)
RCU (risk containment unit)
TAT (Turn Around Time)
NTC (New To Credit)
LGD (Loss Given Default)
ECL (Expected Credit Loss)
PDs (Probability of Defaults)
Issue Date: Aug-2020
Publisher: The Financial Research and Trading Laboratory (FRTL), IIM Calcutta
Abstract: The landscape of doing credit underwriting in India is changing almost every ten years or so, and this shift is moving credit underwriting from art to science. Art here means more of experience and individual judgement of a credit analyst while sanctioning loans. By contrast, science means lesser human involvement and leaving it for machines to decide like scorecards, artificial intelligence, development of APIs, etc. Let us explore some pages from recent history and try to look into the future for understanding the change of Credit buying process in India.
Description: Biosketch: Rohit Arora is a Chartered Accountant by profession and has close to 18 years of experience with Banks and NBFCs. He started his career with Kotak Mahindra Prime and has worked with ICICI Bank and Reliance Capital. Presently, he is with BMW Financial Services, a captive arm of BMW Group. His areas of experience include credit underwriting, risk management, financial planning and analysis, project management, internal control systems, etc.
Appears in Collections:Issue 2, August 2020 (8th Anniversary Issue)

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