Perfecting The Client Rating System Of Domestic Commercial Bank

With the market opening after our country becomes the membership of WTO and the trend of world economic integrating, the client structure of domestic banks is more and more diversiform. And the financial market opening step by step leads to the banking risk rising little by little. Then the one way of the management and control of the bank assets is more important. The client rating (CR) used in domestic banks is not long, and the result of the CR is not used widely, so the CR systems of domestic banks have to be modified whether according to the CR systems of foreign banks or according to the actual requirement.In this paper, the basic theory of the CR and the division of credit rank is introduced firstly; both the character of the CR systems in the foreign and domestic banks and the similarities and differences between them are listed secondly; then, the problems in the current CR system of domestic banks are pointed out and showed with a case.On the base of above analysis, how to modify the current CR systems of domestic banks are proposed as following:1. The rating objects are extended to all clients having credit operation with banks from the ones borrowing from banks;2. The proportion of quantitative analysis in rating modus is increased;3. The division of credit rank is altered to "Four Classes Ten Levels" against "Three Classes Seven Levels";4. The rating indicators are reset and constituted with operating risk, financialrisk and backing valuation, furthermore, they emphasize checking the client's debt refund ability, and the indicators' number is added up to 40.After been modified, the scope of rating objects is expanded and the division of credit rank is detailer. Bank can find clients' latent ventures then control them.There are many uses for CR in bank running. Here the author focuses on two of them: one is to compute line of credit, the other one is to establish warning system on industry credit risk. The former makes the client's credit rank as the parameter to compute the line of credit, and the latter enriches the database with the information from CR process.It is not long from the beginning of CR in domestic bank without sufficient experience, at the same time the requirement to CR according to Basel Agreement is stricter and stricter, therefore further modification to the CR system of domestic bank is needed.