Page 45 - Banking Finance July 2020

ARTICLE

CIBIL MSME Rank Meaning Description
CMR-1 Lowest Risk of Default Borrowers in this rank are expected to have the highest
likelihood/probability to service their credit obligations on
time. Such borrowers carry lowest credit risk.
CMR-2 Very Low Risk of Default Borrowers in this rank are expected to have t very high
likelihood/probability to service their credit obligations on
time. Such borrowers carry lowest credit risk
CMR-3 Low Risk of Default Borrowers in this Rank are expected to have high likelihood /
probability to service their credit obligations on time. Such
borrowers carry low credit Risk.
CMR-4 Significantly lower than the Borrowers are expected to have much better ability to service
average default credit obligations then the average borrower. Such borrowers
carry much lower than the average credit risks.
CMR-5 Marginally lower than Borrowers in this rank are expected to be marginally better
average likelihood of default than the average ability to service their credit obligations in
a timely manner .Such borrowers have marginally better than
average credit risk.
CMR-6 Average Likelihood of default Borrowers in this rank are expected to have average safety
regarding timely servicing of credit obligations. Such
borrowers carry average credit risk.
CMR-7 Higher than average Borrowers in this rank are expected to have higher risk in
likelihood of default servicing in their debt obligations then average borrower.
Borrowers are considered to have higher then average credit
risk.
CMR-8 High Likelihood of Default Borrowers have defaulted or been delinquent in past and have
very high likelihood to be in default status.
CMR-9 Very High Likelihood of Borrowers have defaulted or been delinquent in past and have
default or imminent default very high likelihood to be in default status.
CMR-10 Highest Likelihood of default Past defaulters and have highest likelihood to continue in
or in default. default status.

Important points: 5. Borrowers without ''CIBIL MSME Rank'' proposal to be
considered as per extent guidelines. If borrower has
1. Borrowers with CMR rating up to CMR-3 should be given
preference for faster disposal availed any credit facilities and then no 'CIBIL MSME
Rank' is coming then reasons for this to be ascertained.
2. For CMR 4/5, need based facilities may be approved.
3. For CMR 6/7, Proper justification for the sanction /
enhancement should be given. Credit Risk mitigants like
additional collateral, guarantee etc.may be stipulated.
4. For CMR of 8/9/10 may not be consider in case of new
proposal while in case of existing accounts,
enhancement may be done if reason is justifiable .Credit
Risk mitigants like additional collateral, guarantee etc.
may be stipulated.

BANKING FINANCE | JULY | 2020 | 45