Surge in bad loans a dark reminder of lax credit standards, inadequate monitoring

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The bad loans of Indian banks has touched a record high of Rs 9.5 trillion at the end of June 2017. The banks witnessed an increase of 4.5% in bad loans from January to June 2017, according to RBI data. The recent surge in bad loans suggests that there is no end to the NPA crisis anytime soon.

Heckyl believes there is a lot more that can be done in the credit risk space in the financial institutions. It is no secret anymore that be it the banks or the non-banking financial companies (NBFCs), the wrath of the non-performing assets has spared none. Although, these financial institutions have their existing risk models in place, the important question remains, that is, are they able to comprehensively highlight the impending risk ahead of time?

Heckyl has developed innovative Credit Risk Early Warning System (EWS) that collects, organizes and performs deep-dive analytics on structured and unstructured data sets to offer 360-degree view on lender’s loan portfolio. Our EWS application identifies the pre-default behavior of corporate borrowers to help lenders pick up warning signals ahead of time.

Heckyl EWS spots several red-flags on Sintex IndustriesSintex Redflags Read the rest of this entry »

Soaring Non-Performing Assets: The Paramount Problem

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We highlight – via a series of posts on Credit Risk Management (Read the  previous blog –  “Credit Risk – Under The Spotlight) – the ever-growing challenge of credit risk in financial institutions, the benefits of real-time analytics and the wave of change that can be brought about with Heckyl’s unique capabilities. We bring to you the second post, from the series.

Global financial catastrophes and consequent losses at several banks have compelled risk management systems at banks to get more focused on Credit Risk. The lack of an efficient system in place that can help the banks to efficiently identify the underlying causes of rising NPA figures has begun to reflect negatively on their performance. A high level Bank 1of bad loans is indicative of a large number of loan defaults that directly affects the profitability and net worth of banks. This in turn necessitates larger provisioning requirements to provide a cushion against loan losses, thus reducing overall profits and shareholders value. While banks have been successful in identifying the need of the hour, they seem unable to exactly place their finger on what will address the problem.

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