Credit Practice – KASNEB Syllabus



This paper is intended to equip the candidate with the knowledge, skills and attitudes required for the application of various credit management concepts in a practical scenario.


A candidate who passes this paper should be able to:

  • Demonstrate sound technical knowledge in credit management
  • Demonstrate diverse knowledge clearly applied in an analytical and practical manner in solving the problems in a case study
  • Present appropriate alternate solutions in credit management and make effective judgement in a logical and rational manner
  • Communicate effectively with realistic recommendations in a concise and logical manner
  • Prepare a comprehensive credit


Credit portfolio risk management

  • Definition of credit portfolio risk management
  • Pre and post credit disbursement risks
  • Measuring credit portfolio risk
  • Credit risk models
  • Credit enhancement methods
  • Credit portfolio segmentation and risk diversification
  • Identifying concentrations of risk
  • Evaluating and managing concentrations of risk
  • Concentration management techniques

Illustrative case studies on credit portfolio risk management

Regulatory requirements: minimum capital requirements

  • Basel capital adequacy framework for credit risk
  • Impact of changes to the Basel Capital Adequacy framework on credit risk
  • Key differences between regulatory capital (Under Basel framework) and economic capital
  • Uses of economic capital and economic value added concepts in a bank
  • Relationship between shareholder, regulatory and economic capital

Corporate failure and financial distress

  • Definition of Financial Distress
  • Indicators and Early Warning signs of corporate failure
  • Reasons of corporate failure
  • Use of statistical models in predicting corporate failure
  • Comparison of corporate failure prediction models
  • Strategies of Mitigating against Financial Distress and Corporate failure

Illustrative case studies on corporate failure and financial distress

Working capital and credit management

  • Relationship between working capital cycle and credit management
  • Effects of credit terms on working capital management
  • Impact of credit policy on working capital management
  • Determination of working capital
  • Strategies of improving working capital

Illustrative case studies on working capital and credit management

Delinquency management

  • Introduction to delinquency management
  • Causes of delinquency management
  • Delinquency classification
  • Effects of delinquency in credit portfolio
  • Work outs and restructuring
  • Negotiation and influencing
  • Dealing with problem loan accounts: nature of problems and immediate action drill

Illustrative case studies on delinquency management

Accounts receivables management information systems (MIS)

Case study on automation of receivables management function

 Case studies on:

  • Microfinance
  • Cooperatives
  • SME lending
  • Trade and export credit management
  • Credit policy

Emerging Issues and trends

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