Further, quite many SHGs, before they have matured enough to handle credit and finance, have been exposed to credit. Concomitantly, the credit discipline that had been assiduously built painstakingly over the years has been ruptured. Restoring that spirit, while ensuring continued flow of credit is another balance the banking system has to find. Conclusion 20.
Innovations in credit portfolio management practices have had profound implications for the banking business model. Many banks have moved from the “buy-and-hold” model to the “originate-and-distribute” model, whereby they distribute credit risks they originated to other market participants. In this respect, banks have increasingly performed the role of active portfolio credit risk manager in addition to credit provider.