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Banking Industry Solutions

Credit Scoring (Obligor Default Rating) Solution

In order to stay ahead of the competition and safeguard adequately against credit risks, banks need to upgrade their risk rating systems and comply with BASEL standards. These risk rating systems are intended to assist banks in estimating the Probability of Default (PD) of loans at the time of their sanction or commitment to sanction. The PD (Borrower Ratings or Obligor Default Ratings {ODR}), is used to quantify the probability of default on obligation, of a borrower, during a stipulated period. These are recorded in a numeric risk rating format to reflect the level of default risk associated with borrowers. The rating system ranks the borrower’s credit quality or risk of default on a scale ranging from the highest numerical rating, i.e., the defaulted credit transactions where the bank is expected to suffer a loss, to the lowest numerical rating, i.e., where the risk of default is the lowest and the borrower credibility is high. ODR system design aligns to BASEL standards.

Credit Scoring Solution