How Do Banks Set Up a Credit Risk Management System? – An Infographic

The goal of credit risk management in banks is to maintain credit risk exposure within proper and acceptable parameters. It is the practice of mitigating losses by understanding the adequacy of a bank’s capital and loan loss reserves at any given time. For this, banks not only need to manage the entire portfolio but also individual credits. How can banks set up a credit risk management system in place? What are the advantages and disadvantages of Credit Risk Management? Let’s find out in below infographic: