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  • CM-3.1 CM-3.1 Overview

    • CM-3.1.1

      A realistic assessment of credit quality is an essential feature of effective credit risk management. The starting point for a systematic review of credit quality is a comprehensive review of the bank's written credit policies and practices. These include, but are not limited to:

      (a) Credit approval procedures;
      (b) Credit underwriting criteria; and
      (c) Credit administration process.
      Amended: January 2011
      October 2007

    • CM-3.1.2

      Credit quality is a relative concept based on performance prospects and external variables. Trends in the economy, and changes in markets and prices of goods affect the evaluation of credit facility repayment value. Assessing credit risk is a dynamic concept which needs to take into account the business cycle and the economic environment.

      October 07

    • CM-3.1.3

      The objectives of the credit assessment are to determine:

      (a) Whether the applicant / customer will have sufficient future liquid resources to honour credit obligations according to the agreed terms;
      (b) Whether the applicant's / customer's present and future prospects indicate that they will continue as a going concern in the foreseeable future;
      (c) Is the applicant / customer of sufficient integrity; and
      (d) To what extent does any security offered affect the risk inherent in the facility.
      Amended: January 2011
      October 2007

    • CM-3.1.4

      To help improve prudential oversight of credit quality, the CBB, in this Module, seeks to establish a set of broad rules that are useful in identifying and containing the impact of impaired assets within banks.

      Amended: January 2011
      October 2007