Difference between Lending Risk Analysis (LRA) and Credit Risk Grading (CRG)

 Lending Risk Analysis (LRA) is a technique by which the loan risk is calculated by Credit department of a bank that need to analyze it when loan application is above 1 crore. The ranking of it is total 140, 120 is for total business risk and another 20 is for total security risk. In LRA, following aspects are analyzed: supplies risk, sales risk, performance risk, resilience risk, management ability, level of managerial teamwork, management competent risk, management integrity risk, security control risk, and security covers risk.

 Credit Risk Grading (CRG) is a collective definition based on the pre-specified scale and reflects the underlying credit risk for a given exposure. It deploys a number/ symbol as a primary summary indicator of risks associated with a credit exposure. The proposed CRG scale consists of 8 categories are as: superior, good, acceptable, marginal, special mention, sub-standard, doubtful, and bad & loss.