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  • CM-3.3 CM-3.3 Name-lending

    • CM-3.3.1

      Banks are exposed to credit risk when they provide large credit facilities on a "clean" basis (i.e. without collateral or security). This risk is amplified, specifically, when such clean lending is made without adequate (up to date) financial information.

    • CM-3.3.2

      In many banks there is a tendency to indulge in "name-lending" without any credit analysis or understanding of the concerned counterparty's current borrowings from other banks. The Agency strongly discourages the banks to engage in such activities in order to minimise their credit risk and reputational risk.