The credit culture of a bank, which is a blend of the policies, practices and experiences of the bank, determines the lending behavior acceptable to the bank. A poor credit culture has adverse impact on the asset quality of the bank. It generally results in providing loans for non-commercial reasons, scant regard for the purpose of loan, unrealistic payment schedules etc. For a bank to exhibit an excellent credit culture, the top management should ensure a positive and valuing attitude towards their employees. The management should ensure that they create a healthy credit culture and go beyond the frontiers to fend off the evilcredit risk.

Walter Bagehot, a noted economist, banker, political thinker and commentator, critic and man of letters of the 19th century once said: "A bank lives on credit. Till it is trusted it is nothing; and when it ceases to be trusted, it returns to be nothing".

To put it differently, being in "trust" makes all the differencewhen you have a sure feeling about your "credit-decision", you're less likely to go back and forth uncertain of the actions you have taken or are taking. To be confident about one's credit decisions one needs to listen to his inner voice, his gut, and try to erase the ghosts of self-doubt in countering non-commercial considerations. It is worth remembering here"you have control over how you choose to see situations and decide whether or not to lend". When one goes after his dreams and puts things in the right perspective, his confidence will soar, and he will be able to succeed in building-up healthy loan assets. This however calls for identification of the external forces that are likely to challenge a lending-authority's "decision-making-prowess" so that, one could build-up necessary strategy to overcome these hurdles and build a healthy credit portfolio and that is what this paper shall attempt to accomplish.

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