Vinu: Manu, many relationship managers want to move into credit roles. Why is this transition challenging?

Manu: Because relationship management focuses on growth and client comfort, while credit analysis focuses on risk and protection of bank funds. The mindset must change.

Vinu: From the beginning, what is the first skill an RM must develop?

Manu: Financial statement analysis. An RM must go beyond turnover and profit and understand cash flow, leverage, and sustainability.

Vinu: RMs already know customers well. Isn’t that enough?

Manu: Customer knowledge helps, but credit decisions require evidence. Comfort with a client cannot replace data-driven judgment.

Vinu: Which technical skills are most critical?

Manu: Ratio analysis, cash flow assessment, working capital cycle analysis, and DSCR calculation. These form the backbone of credit appraisal.

Vinu: How important is understanding business models?

Manu:  Extremely important. A credit analyst must know how money is earned, where it gets stuck, and what can go wrong in that specific industry.

Vinu: What about documentation and compliance?

Manu: Non-negotiable. Analysts must understand sanction terms, covenants, and regulatory guidelines. Weak documentation increases post-sanction risk.

Vinu: RMs focus on sales. How should they adjust their approach?

Manu: By learning to say “no” or “not now.” Protecting asset quality is as important as building a portfolio.

Vinu: How does monitoring differ in a credit role?

Manu: Credit analysts track early warning signals—overdrawings, delayed statements, frequent limit requests—before defaults occur.

Vinu: What is the biggest mindset shift required?

Manu: Moving from relationship comfort to risk accountability. Credit analysts own the consequences of their decisions.

Vinu: Final advice for aspiring credit analysts?

Manu: Develop analytical depth and professional skepticism. In credit, doubts save banks.

Vinu: That clearly defines the transition.

Manu:  And the responsibility that comes with it.

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