Question
Which of the following is not an external factor leading
to credit risk?                   ÂSolution
External factors to credit risk •      State of Economy •      Wide swings in commodity prices •      Trade restrictions •      Economic sanctions •      Government policies                                           Internal factors to credit risk •      Weak credit policy and administration of loan portfolio •      Absence of prudential credit concentration limits •      Lapses in assessing the credit profile of borrower •      Inadequate risk pricing •      Insufficient collateral value or excessive dependence on collaterals •      Failure in post-sanction follow-ups
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