Commercial banking Credit regime

Corporate banking Credit facilities

In line with retail banking segment, commercial banking credit department, is here to provide loans to clients who are delegates of respective companies. There are two main loans being offered to established firms; Collateral & Non-collateral loans. It is crucial to understand the differences between the two groups to prevent potential conflicts should circumstances arise. The function of corporate banking is vastly different to consumer banking due to industry regulations and certain law enforcements for the benefits of both parties.

What is Collateral loan? It is a form of secured loan that is being consented only if the company has assets or equities to pledge for the tender amount else risk being upfront rejected or switch to the other form of loan. This type of security ensures that should the firm been unable to repay the installments, rightful measures will be taken to seize the stated collaterals without needing to file court proceedings. It is to mitigate potential losses against the lending banks and also widely known as Hedging. As for non-secured loans, the company has to incur higher costs of borrowings and face tighter regulations in light of the risks being undertaken by corporate credit segment.

Head of corporate Regional Credit

The commercial banking arm is usually answerable to a leader - Regional Head of Corporate bank. In fact, this position has a major impact on credit lines & facilities due to the high costs behind. Based on the past financial crisis news, it is evident that many banks, big and small, cannot escape this massive catastrophe of bankruptcy due to incompetent management. The corporate lending arm has to be intact with strict survillance, proper auditing documents and adequate compliance regiment to safeguard the loan house. While it is not easy to detect some problems, only through undergoing certain experiences, the Head of banking may perform reactive measures to counter potential frauds and fish out problematic credit facilities. It takes some time to adapt to new laws as well as working to improve anti-money laundering activities which requires a great deal of resources for deployment.

Team of Credit Risk analysts

When the matter comes to analyzing risks, there is a team of specialists involved in identifying potential credit issues and suggesting to the bank on various solutions to tackle these problems & mitigation on the identified risks. Credit Risks analysts have a crucial role as banks have conflicts of interests when it comes to generating more revenue therefore neglecting certain vital risks involved. The analysts are under an independent sector, usually classified as cost centre, to segregate from revenue-generating departments and aid the respective segments in assessing risk profiles. The beauty of an analytic team is that it helps to bring out underlying risk principles that others don't have time to perform thorough researches on. It is really important for the existence of credit risks analysts. Let this group of analytic personnel department do the hard work for the bank.

Designing new Credit facilities for advancement

The role of commercial banking segment is to implement new credit products that are under pending status, in turn, bringing in more profitable channels to the core banking house. It is not alien to credit users in seeing latest credit establishments so as to increase market share by inducing awareness using various communication modes. With regards to advancement in credit facilities, there are bound to be risks involved and the relevant authorities need to ensure a sustainable competitive advantage against rivals who compete for similar products. While it is imperative to survive the ordeal, many challenges come in the way, and the banking department has to foresee possible outcomes and take precautionary measures. The financial system is indeed a lucrative one to work with, especially on Credit Terms, till the extent of non-finance competitors' entry, to gain fruitful returns on investments and increase the overall financial well-being and denote social status in the world.