To decrease credit risk, Bank should implement prudential banking principles and sound loan principles in carrying out its business. If it happens, the possibility of credit risk increases. This can also result in loose binding of the loan and the collateral. Rashly analysis process affects the credit analystsвЂ™ accuracy in analyzing loan application. Starting from less secured loan application process which does not obey the principle of health loan, less secured credit agreement and collateral binding, which potentially results in credit risk. Regarding todayвЂ™s credit problem, several things should be concerned. Accordingly, before a loan application is approved, the bank performs an in-depth analysis of the loan application. Each bank loan possesses potential credit risk. However, this business also contains quite a considerable risk.

The loan business has contributed significantly to the majority of banks' profit. Meanwhile, for Bank, loan is one of its core business in addition to money transfer, clearing, safe deposit box, and foreign exchange. Bank's loan is expected to help to develop their business. For business people, especially those facing capital constraint, bank loan becomes one of the solutions to increase their capital. One of the bank's businesses that popular among the community is loan. By maintaining its health, bank maintains the community trust. It is crucial because the community trusts the bank by saving their money in the bank, which is then used to run the bank's business. BankвЂ™s business is community trust-based business accordingly, the bank should be able to safeguard the community interest and trust.

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