Browsing by Author "Asbe, Chetana"

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    THE MARKET MAVEN
    (ATLAS SkillTech University, 2023-11) Asbe, Chetana; ISME, Finance Team
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    Need for Credit Resilience Score in India
    (Economic & Political Weekly, 2022) Asbe, Chetana
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    Need for Credit Resilience Score In India
    (Economic & Political Weekly, 2022-09-24) Asbe, Chetana
    As many economies across the globe are heading towards a recession, its repercussions on the Indian economy are being contemplated. Coupled with the global slowdown, India has its own devil to contest the rising inflation. With high inflation and rising interest rates, India’s gross domestic product (GDP) projection for 2022 was lowered to 8.8% from the earlier 9.1% (Economic Times 2022). However, it is expected that albeit the rising infl ation, growth will not be impeded severely as India is outperforming the pre-pandemic level in most macro activities (Business Standard 2022). In the short as well as the long run, sectoral credit growth has substantial influence on the economic growth of an emerging economy like India. Hence, to hold on to the growth momentum, a strong credit growth will be a crucial requisite. The article studies the recent impinge of the pandemic on the unemployment rate, annual GDP growth rate,default rate, credit deployed, and consumer sentiments. Over the pandemic phase, most of these macroeconomic variables did not emerge as very encouraging. Since it is essential to have an uninterrupted credit fl ow during good and bad times, the article therefore identifies the need for inventing and implementing a credit resilience score (CRS). This would equip the Indian fi nancial institutions to better manage credit risk and their loan portfolios through economic fl uctuations. For this, the CRS must be aimed at assisting the lenders in assessing a borrower’s sensitivity to downturns and determining the capability to survive financially through it. The study suggests a conceptual framework for the development of the score. When paired with the existing rating methodology, a resilience score will make the lenders, borrowers and the entire fi nancial sector more robust to deal with upcoming economic shocks.