Banking Exam Question - What is Credit Risk in Banks? What are its Types? Explain Interrelated Risk in Details.

Introduction - Credit Risk

A credit chance is the danger of default on an obligation that may emerge from a borrower neglecting to make required installments. In the main resort, the hazard is that of the bank and incorporates lost chief and premium, disturbance to money streams, and expanded gathering costs. 

Credit hazard alludes to the hazard that a borrower may not reimburse an advance and that the bank may lose the key of the advance or the premium related with it. Credit hazard is most essentially characterized as the potential that a bank borrower or counterparty will neglect to meet its commitments as per concurred terms.