From October 1, banks have adopted external benchmarks for pricing their new floating-rate retail loans.In the future, credit scores through the life of a loan will be as important as those recorded at its approval. Besides Cibil, there are other credit information companies such as Equifax Experian and CRIF Highmark generating scores to assess borrower creditworthiness. They recognise that an external benchmark is easy and simple to understand,” said Rohit Ranjan, Head, Secured Lending and CitiBusiness, Citibank India.Some banks have stuck to an internal credit assessment, while others have chosen to use external credit scores. State Bank of India (SBI) will adhere to its internal risk grading approach. SBI categorises borrowers into six risk grades (RG), ranging from one to six, across salaried and non-salaried groups.

Source: Economic Times October 10, 2019 02:03 UTC