Internal Rating System Of Retail Customers Of Pingan Bank

Along with the international financial market,the finance has seen the revolutionary change,as one of the basic business types operated by amodern commercial banks,retail exposure will become an important area for competition.Commercial banks,especially small and medium sized commercial banks are facing more and more complicated risk environment.In order to control and manage the credit risk effectively,many international banks have developed new credit risk management technology and the IRB(Internal Ratings-Based)system is the most-widely applied technology in the credit risk management.However,like other commercial banks in China,scientific internal risk rating system of banks has not been established and the management system of IRB has been not developed in PingAn Bank,which without doubt will be great disadvantage to our bank in the international competition.So establishing the effective IRB is the foundational task of our bank's management.Inviewoftheabove problems,this paper constructs an internal rating system of retail customers to meet the actual demand of PingAn bank.The system includes two main functions:(1)The approval and decision support function.Providing loans or not loans,and amount on every debt of retail bank;Optimizing the approval process and simplifying the credit approval process;Providing the interest rates level support;Tracking the customers' repayment behavior,warningrisk,investigating and monitoring the loan.(2)The management functions.Internal rating system can achieve much more complex functions,such as multi debt management function,bank regulatory capital and economic capital management,reserve management,RAROC performance management,etc.Using the qualitative and quantitative methods,this paper analysis the internal rating condition of retail credit risk of PingAn Bank.Through the analysis of the actual situation,the things of theories can fully play its role in practice.Internal rating model evaluates and verifies the distinguish ability of model by comparing and analyzing the different samples and time data.