Page 38 - Banking Finance September 2019

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 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 average Borrowers are expected to have much better ability
default to service credit obligations then the average
borrower. Such borrowers carry much lower than the
average credit risks.

CMR-5 Marginally lower than average Borrowers in this rank are expected to be marginally
likelihood of default better 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 likelihood of Borrowers in this rank are expected to have higher
default risk in 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 default or Borrowers have defaulted or been delinquent in past
imminent default and have very high likelihood to be in default status.
CMR-10 Highest Likelihood of default or Past defaulters and have highest likelihood to
in default. continue in default status.

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

38 | 2019 | SEPTEMBER | BANKING FINANCE