The National Bank for Agriculture and Rural Development, (NABARD) on March 14, 2024, issued a Guidance Note on Credit Risk Management.
The advisory aims to guide banks in enhancing their risk management framework, emphasizing customization to individual institutional characteristics. With the banking system's expansion, there's an increasing anticipation of higher risks, especially in credit functions. Effective credit risk management is crucial to maintain capital adequacy and overall financial health. NABARD has adopted an Enhanced CAMELSC-based supervisory framework to provide forward-looking risk intelligence and early intervention. Given heightened supervisory expectations, guidelines on credit risk management have been revised to ensure SEs identify, measure, monitor, and control credit risks effectively.
Banks are advised to put in place effective and robust Credit Risk Management by March 31, 2024.
[Notification No. NB. HO. DoS. Pol. / 4263 / J-1 / 2023-2024]
