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Risk Based Pricing

 

In this eLearning module on Risk Based Pricing - Online training module, let’s familiarize ourselves with risk-based pricing for loans, which involves cost of funds, operating costs, base rates and calculation of credit risk premium. Further we will discuss linked concepts, such as measuring profitability of loans.

 

Coverage and structure for eLearning module

 

Topic

Sub-topic

Introduction to Risk Based Pricing
  • Bank Loan Pricing
  • Impact of Credit Risk
  • Risk Based Pricing

Cost of Funds, Operating Costs & Lending Rates
  • Overview
  • Marginal Cost of Funds
  • Cash Reserve Ratio and Statutory Liquidity Ratio
  • Calculating Negative Carry
  • Operating Costs
  • Return on Net Worth
  • Loan Pricing Today—A Comparison
  • Calculating BR and MCLR

Credit Risk Premium
  • Individual Credit Risk
  • Measuring Credit Risk
  • Probability of Default
  • Static Pool Approach
  • Defining Default
  • Pricing Credit Risk Using Probability of Default
  • Calculating Lending Rate Using Probability of Default
  • Expected Loss
  • Calculating Expected Loss
  • Calculating Lending Rate using Expected Loss

Linked Concepts - NIM, ROA and RAROC
  • Measuring Profitability of Loans
  • Net Interest Margin
  • Return on Assets
  • Risk Adjusted Return on Capital
  • Loan Sanctioning Based on RAROC
  • A Customer’s Request
  • Evaluating Request Further
  • Calculating RAROC
  • Other Considerations
  • Factors Impacting RAROC
  • Strategies to Maximise RAROC
  • Burden of Non-Performing Assets
  • Competition for a Customer
  • Ways to Maximise RAROC
  • Importance of a Healthy RAROC
  • Additional Opportunities to Maximise RAROC

 

 

Module Fees: Rs. 2500/-                                  Access period: 3 months                                 Learning time: 3 hours

 

 

Steps to purchase

 

  • Go to CRISIL Learning platform https://training.crisil.com/
  • On https://training.crisil.com/ (CRISIL Learning platform) – sign up to create your unique login ID and password
  • Once your account is set up, search for "Risk Based Pricing" from the search bar
  • Select the e-learning module - Risk Based Pricing, and click on buy now; it will get added to your cart
  • Click on 'Cart' and purchase the module(s) with your debit or credit card
Detailed steps

Features of eLearning modules:

 

 

Real life case studies

 

Real life case studies built leveraging our expertise in research, ratings & risk solutions

 

Expert Speak

 

Insights incorporated in eLearning, based on 15+ years of classroom training experience

 

Glossary & Resources

 

End to end structure comprising basic definitions to advanced readings

 

Visuals for workflows

 

Use of visuals to show a complex process or workflow

 

Interactive examples

 

Interspersed with practice exercises and interactive examples to help apply concepts

 

Knowledge checks

 

Knowledge checks at the end of each topic to ensure absorption of concepts

 

Animations

 

Animations & Characters to make complex concepts easy to learn

 

Gamification

 

Final assessment questions & gamification at the end of the module to ensure learning objectives are met