Govt. testing ‘big data’ system to aid banks assess credit risks

Govt. testing ‘big data’ system to aid banks assess credit risks

News:

1. The ministry of Electronics and Information technology is testing the credit rating model which will help banks assess credit risks

Important Facts:

2. The Ministry of Electronics and IT sponsored project include Reserve Bank of India (RBI), Bangalore-based IT firm Processware System and two cooperative banks as partners

3. A statistical and machine learning algorithmic model has been developed to predict the probability of default

4. A model has been developed to predict different types of frauds in banking sector based on RBI guidelines

5. Data from various banks have been used for validating the models

6. Further, web-enabled software has been developed.

7. Benefits:

• Help tackle the issue of rising non-performing assets (NPA)
• It will enable banks to quantify risks associated with retail loans- for example, gold loans, personal loans and vehicle loans.
• The web-enabled software will assist the banks to adopt the models for credit rating, non-performing assets and fraud