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For loans in the absence of transparency in lending
Everything is expected
All loans must be placed under surveillance
Greetings to you
CAMEL is the prime banking reliance at bankers to have clean and optimized lending books
customer reputability
assets
management
earnings
liquidity
Like other businesses ,banks are also exposed to various risks. Credit risk is the greatest risk in a bank. Bank has to lend and take exposure for survival. However, the aim should be to develop quality assets which can be ensured by following golden rules of lending e.g
Character- Lend to person of good credit history
Capital- The borrower should have good amount of equity in business
Collateral- Loan should be well secured
Cash flows- Lending should be based on borrower projected cash flows to ensure repayment
these are few rules of lending
