NETWORK SECURITY

J.DINAKAR B.KAVYA SREE B.MOKSHA VIJYETHA

dinakarthesun@gmail.com b.kavyasree4@gmail.com mokshabolem@gmail.com
ABSTRACT:
Creditcard risk management is the majority of financial institutionsand banks losses stem from outright default due to inability of customers to meet obligations in relation to lending, trading, settlement and other financial transactions. Alternatively, banks also face losses as a result of a fall in financial value of their assets due to actual or per- ceived deterioration in asset credit quality during recession or crisis. One major risk that needs to be effectively managed and investigated is credit risk.

INTRODUCTION:
Credit risk is the risk of loss that may arise from the failure of a business partner to reimburse a loan when it is due. For example, if a bank expects a counterparty to reimburse a $10 million loan on a specific date, and the counterparty fails to provide funds, the bank incurs a credit loss. Credit risk is simply defined as the prospective that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms and conditions. In addition to direct accounting loss, credit risk should also be viewed in the context of economic exposures.

ANALYTICAL TECHNIQUES
Response analysis Pricing strategies Loan amount determination Credit loss forecasting Portfolio management strategies Collection strategies

Card Transaction Take Place

Making a payment for the purchased goods with a card, transaction appears to happen as soon as the PIN number is entered. This is often accompanied by complex payments mechanism behind the scene to make sure that the transaction is processed correctly. The diagram below depicts the stages that are involved in card transactions payment cycle.

In addition to direct accounting loss, credit risk should also be viewed in the context of economic exposures. This encompasses opportunity costs, transaction costs and expenses associated. Credit risk does not necessarily occur in isolation.

Credit risk related acronyms

ACPM Active credit portfolio management EAD Exposure at default EL Expected loss ERM Enterprise risk management LGD Loss given default PD Probability of default KMV quantitative credit analysis solution acquired by credit rating agency Moody's PAR Portfolio at Risk

Mission and Goal of Risk Management Unit

Geographical Diversification

Risk Mitigation
Credit risk mitigation is the reduction of credit risk in an exposure by a safety net of tangible and realizable securities as collateral securitie assets. Financial institutions gener- ally require corporate and individual borrowers to commit their assets as security for loans. These securities serve as collateral for financial institutions in case of default.

Liquidity and market risks were not identified as iquidity high ones as in the other European countries and the U.S., it was critical to regularly monitor their development. Banks should also take into consideration the relationships between credit, n liquidity and interest rate risks.

Credit Risk Management Assessment On Aggregated Level Credit Risk Policies

Banks need to manage the credit risk inherent in the entire loan portfolio as well as the risk in individual credit or transaction. The efficient management of credit risk is a vital part of t the overall risk management system and is crucial to each banks bottom line and eventually the survival of all banking establishments.

REFERENCE:
1. mueller,p.h 1984. management of credit and behavioural factor.the journal of commercial bank lending 66:4-12. 66:4 mueller,p.h 1990. credit culture vital to risk management. the journal of commercial bank lending 72:4-10. 72:4 mueller,p.h 1993. risk management and the credit culture:a necessary interaction.the journal of commercial bank lending75(9):612. swarens,r.b 1990. managing risks in consumer loan portfolio.the journal of jo commercial bank lending 72(4):4-8. 72(4):4

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Credit Portfolio Monitoring

Is very important component of the credit risk management on an aggregated level In addition level. to a regular credit portfolio review CRO must ensure to monitor credit portfolio mainly from industrial and single exposure concentrations points of view.