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Tag: PG diploma in Banking and Finance

4 Common Mistakes Made by Beginner Stock Investors!

Posted on by Imarticus Learning

Stock investing is a highly competitive and risky business. The risk of losing your money in the stock market can be mitigated by learning about treasury management, trade finance, and other related areas. If you are a beginner stock investor, there is no time like the present to learn as much as you can about this exciting field.

There are many mistakes that beginners often make, and those mistakes could cost you dearly in the long term. In this post, we’ll discuss four common mistakes made by beginner traders and offer advice on how to avoid them. 

Common mistakes made by beginner traders and how to avoid these mistakes are:

Purchasing without doing the research: One of the most important parts of trading is understanding what you are buying. This requires some background knowledge and information on your part to make an informed investment decision. You should have all this before making any investments to avoid mistakes like jumping into something just because someone else said it was good or looking at a graph that makes something look more promising than it really is.

Not considering risk management: When people hear about successful traders, they often think that these traders were simply lucky; however, there’s much more behind their success than luck alone. These professional investors know how to manage risks properly, which has helped them navigate through rough patches while maintaining portfolios over time. Risk management also helps know what to sell when things go south and how much of a loss is too big.

Not having an exit strategy: Another common mistake investors make is not having an exit strategy. They often get caught up in the moment when something starts to go well and don’t sell it even though they know that it might come back down. Having a solid plan for exiting trades should include some type of profit-taking or using stop-losses, which are set according to your preferences as they can limit potential losses while still allowing you to take advantage of gains.

Getting caught up on emotions: Investing requires patience more than anything else as it takes time for good investments to pay off—but this doesn’t mean you should be patient all of the time. When new traders make a lot of money, they tend to hold onto those stocks thinking that their luck will continue, which isn’t always true; hence why risk management is so important because if things go south (i.e., there was an unanticipated event like bad news from another company), then these beginner traders may end up losing a lot more than they bargained for.

Learn treasury management by joining MBA course at Imarticus Learning Institute

Avoiding these mistakes is the primary step towards becoming a successful trader. The second and equally important part of learning to trade profitably is good risk management skills as well as understanding various compliances in the market. Learn risk and treasury management in banking & finance with Imarticus Learning.

Imarticus Learning offers MBA courses in finance in collaboration with Jain University. This course will enable you to gain in-depth knowledge & understanding of the various treasury operations and also help you understand risk management.

For more information, connect with us through the Live Chat Support system or visit any of our training centers based in – Chennai, Mumbai, Thane, Pune, Bengaluru, Hyderabad, Delhi, and Gurgaon.

Credit Underwriting Standards: A Challenge for Smaller Banks!

Posted on by Imarticus Learning

The main revenue for a bank always comes from the money they lend to different borrowers. The interest obtained on that lent money generates revenue for them. Now, this lending process exposes a bank to risks.

In this article, we will discuss various aspects of credit underwriting standards and the importance of a credit analyst course or a PG diploma in banking and finance.

What are Credit Underwriting Standards?

Underwriting standards are a set of guidelines defined by banks or lending institutes, to determine if a loan applicant is qualified for the loan or credit. Credit underwriting standards determine the loan amount, loan terms and tenures, rate of interest, etc. This credit underwriting standard works as a risk management process that helps minimize the risk factor from the lent loan.

Key factors of Credit Underwriting

There are some basic points a bank should consider before granting the loan.

  • A common problem faced by credit approvers is that they often don’t get sufficient financial information from the applicant.
  • An efficient cash-flow projection report can be prepared with enough historical data, balance sheet statements, and a financial analysis system. However, appropriate information needs to be obtained from borrowers regarding expected trends, upcoming capital structure and incorporated in cash-flow modeling for better prediction.
  • Rating models can be efficiently predictive and render an effective early caution against credit deterioration only when the data fed to them are quality data.
  • When the process is more manual and duplicate data is kept in multiple systems, it causes an increase in “time to cash”. The key factors that contribute to “time to cash” are the market environment, the efficiency of decision-makers, and system infrastructure.
  • To understand the key performance indicators and meet the audit requirements, extracting the right data is essential. Also, a user-friendly way of capturing data and a strict well-defined process is essential to make sure the data is correctly apprehended and managed.
  • Understanding the business model sustainability of the borrower is important. The borrower should have better alignment between business strategy and financially reliable sectors to recover the losses when one sector is underperforming.

Challenge for Smaller Banks

When it comes to smaller banks, they face few challenges while maintaining credit underwriting standards, which either cause problems for them in the present or might create in the future.

  • Major small banks face significant challenges in terms of their ability to produce, manage and maintain sufficient data. This is a clear indication that small banks suffer due to a lack of IT infrastructure and strong risk governance policies.
  • Another key trend among smaller banks is that because of the extremely competitive market, the interest rates that banks offer on loans are not calculated based on the underlying credit risk of those loans, but rather they are more intended towards capturing the market. This lack of risk-based pricing may cause a future inability to recover the money lent.
  • The banks are launching new products, offers, expanding themselves into new markets, re-adjusting risk strategies because of intense market competition. There was a drop in average lending margins which basically reduced the overall profit margin for a bank.

Conclusion

Credit risk management comes with various challenges. Proper analysis of quantitative and qualitative data, decision-making ability, and mutual relationships can help to reduce the risk and only a properly trained professional can do that.

When you are looking for a career in the banking sector, deep knowledge of credit underwriting standards is essential.

Credit risk underwriting courseA credit analyst course or PG diploma in banking and finance may help you to achieve that. Credit Risk and Underwriting Prodegree In Collaboration with Moody’s Analytics is such a tailor-made course for you.