1.07 Describe the nature of retail/business banking processes

Underwriting Detailed credit analysis preceding the granting of a loan, based on credit information furnished by the borrower, such as employment history, salary, and financial statements; publicly available information, such as the borrower's credit history, which is detailed in a credit report ; and the lender's evaluation of the borrower's credit needs and ability to pay. See also

Loan Processing Entire sequence of steps, from the time a loan application is received (or a loan offer is accepted) to the time loan is closed, the loan proceeds are disbursed, and the aggregate amount (principal plus interest) is placed on the lender's books as an asset.

Collateral Management The practice of putting up collateral in exchange for a loan has long been a part of the lending process between businesses. With more institutions seeking credit, as well as the introduction of newer forms of technology, the scope of collateral management has grown. Increased risks in the field of finance have inspired greater responsibility on the part of borrowers, and it is the aim of the collateral management to make sure the risks are as low as possible for the parties involvedloan

Risk-management processes utilized in retail/business banking Credit risk designs a standard credit management process throughout the Bank. The principles and processes of risk management focus on the entire process of credit business which covers customer investigation, loan evaluation, loan review and approval, loan payment and post-lending monitoring. Internal credit management models, which includes credit rating, credit line setting, loan classification and capital allocation are bank-wide measures utilized throughout the whole process. Furthermore, special organization is established to supervise the entire process of the credit business.

Risk Management Continued Since exposure to credit risk continues to be the leading source of problems in banks world-wide, banks and their supervisors should be able to draw useful lessons from past experiences. Banks should now have a keen awareness of the need to identify, measure, monitor and control credit risk as well as to determine that they hold adequate capital against these risks and that they are adequately compensated for risks incurred

Performance Activity Discuss risk-management processes utilized in retail/business banking. Describe efforts to streamline retail/business banking processes.