SMFG India Credit Credit Manager Interview Questions and Answers

CBIL stands for Credit Bureau India Limited, which is a credit information company in India.

• CBIL is a credit information company that collects and maintains credit information of individuals and businesses.

• It provides credit reports and scores to lenders to help them make informed lending decisions.

• CBIL helps in reducing the risk of default by providing accurate credit information.

• It plays a crucial role in the cr...read more

Metrics used to evaluate risk include credit score, debt-to-income ratio, payment history, and credit utilization.

• Credit score: A numerical representation of a borrower's creditworthiness based on their credit history.

• Debt-to-income ratio: The percentage of a borrower's monthly income that goes towards paying debts.

• Payment history: A record of a borrower's past payments on credit accounts.

• Credit utilization: The a...read more

DSCR stands for Debt Service Coverage Ratio, a financial metric used to evaluate a company's ability to repay its debt.

• DSCR is calculated by dividing a company's operating income by its total debt service obligations.

• A DSCR of 1 or higher indicates that a company is generating enough income to cover its debt payments.

• Lenders typically look for a DSCR of 1.25 or higher to consider a company financially healthy.

• For ...read more

DSCR stands for Debt Service Coverage Ratio, a financial ratio used to measure a company's ability to pay its debts.

• DSCR is calculated by dividing a company's operating income by its total debt service obligations.

• A DSCR of 1 or higher indicates that a company is generating enough income to cover its debt payments.

• Lenders typically look for a DSCR of 1.25 or higher when considering a loan application.

• For example, ...read more

The Debt Equity Ratio measures a company's financial leverage by comparing its total debt to shareholders' equity.

• Indicates the proportion of debt and equity used to finance a company's assets.

• A ratio greater than 1 suggests more debt than equity, indicating higher financial risk.

• Example: A company with $500,000 in debt and $300,000 in equity has a Debt Equity Ratio of 1.67.

• Used by investors to assess the risk of ...read more

Debt Service Coverage Ratio (DSCR) is a financial metric used to assess a borrower's ability to repay debt obligations.

• DSCR measures the cash flow available to cover debt payments.

• It is calculated by dividing the borrower's net operating income by their total debt service.

• A DSCR of 1 or higher indicates that the borrower has sufficient cash flow to cover their debt obligations.

• Lenders often require a minimum DSCR ...read more

Net worth is the value of an individual's or company's assets minus liabilities.

• Net worth is a measure of financial health and indicates the value of an entity after deducting its debts.

• It is calculated by subtracting liabilities from assets.

• Assets can include cash, investments, real estate, vehicles, and other valuable possessions.

• Liabilities encompass debts, loans, mortgages, and other financial obligations.

• A po...read more

Normal credit norms and policy refer to the standard guidelines followed by a company while extending credit to its customers.

• Credit limit is set based on the customer's creditworthiness

• Payment terms are agreed upon between the company and the customer

• Late payment fees and interest rates are charged for delayed payments

• Credit checks are conducted before extending credit to new customers

• Credit policies are reviewed...read more