The Credit Risk is primarily assessed as a part of appraisal process, which considers various parameters. Management, track record of the promoters and the company, technology, overall capacity, demand and supply scenario, competitors, industry environment etc are assessed to evaluate the credit risk which will in turn decide the level of banking facilities and the spread chargeable (credit spread) over the bench mark interest rate. While the appraisal process assesses the Credit Risk quality, exposure limits set for individual companies, groups and industries facilitate limiting credit risk quantity. Besides, specific risk mitigation covenants are incorporated in the terms and conditions of credit facilities. The risk perception also gets reflected in pricing, within the constraints of competition. All major sanctions are committee based to ensure better discussion / evaluation. Recognizing the significance of credit risk in banking operations, IDBI Bank has put in place a Credit Risk Management Framework with appropriate risk management skill sets, which provides not only a competitive advantage in the market place, but also positions IDBI Bank to capitalize on the opportunities for growth. IDBI Bank follows a proactive Credit Policy, which is regularly reviewed and updated to take into account the developments in the credit scenario. Best practices are employed through appropriate credit delivery processes and portfolio & account monitoring. IDBI Bank has adopted the Standardised Approach for credit risk as per RBI guidelines and is in the process of further upgrading and strengthening its Credit Risk Management System, to migrate to the advanced (Internal Rating Based) approaches of Basel-II.