Credit management in banks-Screening of applications-Appraisal of credit-Sanction limit-Post sanction compliance – Monitoring supervision –Review- Government policies for creditextension- Credit institutions- Principles of good lending- Borrower study and bankers opinion-Credit policy by banks- Government regulation of credit -Prudential norms
Over view of credit policy and loan characteristics-The credit process –Characteristics ofdifferent types of loans- Evaluating commercial loan requests – Financial statement analysis-Cash flow analysis- Projections-Management of the firm and other factors –Feasibility study –Fundamental credit issues - Credit analysis-Different types of borrowers – Balance sheet analysisfor lending – Forms of advances secured and unsecured advances- Short term and long termadvances
Evaluating consumer loans – Types- Credit analysis of consumer loans- Risk–return analysis ofconsumer loans- Customer profitability analysis and loan pricing- Fixed Vs floating rates
Loan and advances against pledge- Hypothecation- Mortgage – Lien- Advances against goods-Document to title to goods – Life insurance policies – Stock exchange securities-Fixed depositreceipts –Book debts- Supply bills- Real estates – Advance against collateral securities
Agricultural finances and Retail lending- Crop loans- Crop insurance schemes- Dairy-Sericulture- Poultry- Animal husbandry – Horticulture – Gobar gas – Kissan credit cards –NABARD initiatives – Lead bank schemes – Retail banking advances – Concept – Retailbanking products – Consumer credit financing
Financing to small scale industries and large scale industries- Term lending- Syndicated loansystem- Role of development banks in industrial finance- Working capital finance- Turnovermethod – Modified version of MPBF – Cash budget approach- Long term finance-Projectfinancing –Industrial sickness and BIFR.
NPA management – Introduction- Identification of NPAs- Asset classification- Prudentialnorms- Capital adequacy – International Banking Regulation-Basel II – asset classificationprovisioning – effect of NPA on profitability - Assessment procedure- Pre-sanction appraisal –Post sanction supervision- Monitoring systems for existing and likely NPAs—Tools to manageNPAs –Compromise scheme, Lok Adalats, Debt Recovery Tribunals, Corporate DebtRestructuring, Willful defaulters, SARFAESI Act, Asset Reconstruction Companies-CIBILPractical Components:• Students can visit a bank and study the lending and loan appraisal system relating toAgricultural loan, consumer financing etc.• Students can study the NPA status of leading two PSU banks and two private banks