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Name:- Gunjan Bansal Title: - A Study OnCredit Loan Appraisal In Icici Bank EXECUTIVE SUMMARY The study shows

that how the ICICI bank gives the loans to its customers. Credit appraisal is done to evaluate the credit worthiness of a borrower. The credit appraisals for any organization basically follow these steps: Assessment of credit need, financial statement analysis, and financial ratios of the company, credit rating, working capital requirement, term loan analysis, submission of documents, NPA classification and recovery. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own Specific purpose, we may think of following broad categories: To gain familiarity with a phenomenon or to achieve new insights into it. To portray accurately the characteristics of a particular individual, Situation or a group. To determine the frequency with which something occurs or with which it is associated with something else. It is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them OBJECTIVES OF THE STUDY: Identify various parameter on basic of which credit appraisal is aconducted. To understand the reason for choosing these parameter. To identify how score are given against each of these parameter. Recommendations LIMITATION: a. The study restricted to only one branch. b. The time constraint was a limiting factor, as more time required carrying out study on other aspects of the topic. c. Due to secrecy it is difficult obtain actual facts and figures of advances of branches. d. Study limited to Home loans. e. Its hard to get permission from the bank to get all data. SUGGESTIONS: Current Appraisal System is good. The loan processing time should be reduced. The documents required for processing the loan should be reduced. The bank should focus more on advertising to increase awareness among the public about the services that it offers. The bank should completely eliminate the file system and go computerization at every stage as this removes paper work and creates transparency in the system. The bank should work on standardizing the processes and systems their follow. Care must be taken to ensure that the judgment in appraisal process does not depend on one single person and a single factor Need for improvised methods that are on par with international standards. Revising the factors on which appraisal is done to face the ever increasing violability. LEARNING: Financial Analysis is not the only requirement-overall analysis is must. Updating on technology and tools is a must be it a individual or organization. Understanding the nature of business and the market conditions is crucial for effective credit appraisal Real time communication with clients helped me enhance my communication skills. Decent understanding of the credit appraisal techniques.

EXECUTIVE SUMMARY The Credit Apparaisal is a holistic exercise which starts from the time a prospective borrower walks into the branch and culminates in credit delivery and monitoring with the objective of ensuring and maintaining the quality of lending and managing credit risk. The process of Credit Appraisal is multidimensional and includes- Management Appraisal, Technical Appraisal, Commercial Appraisal, Financial Appraisal and Economic Appraisal. Management Appraisal has received lot of attention these days as it is one of the long term factors affecting the business of the concern. Technical Appraisal emphasizes on the technical feasibility of the venture and also finds out the possible economic life period of the present technology. Commercial Appraisal focuses on the commercial viability of the project .It tries to find matters regarding demand in market, the acceptance of product in market. It also focuses on the presence of other substitutes of the product in the market. It also focuses on the multiple scope of the product. Financial Appraisal is done to find out whether the promoter is having the capacity to raise finance both own equity and debt? What are the sources of margin? Will the business generate sufficient funds to service the debt and other stakeholders? Is the capital structure optimal? Economic Appraisal examines level of cost/ benefit and IRR (Internal Rate of Return). The scope of credit structure is incomplete without examination of credit proposal. Credit proposal has to be examined from the point of 6 Cs viz. Character, Capacity, Capital, Condition, Collateral and Cashflow. The Credit Policy of Bank of India has undergone changes to cope with the environmental changes, tap the available opportunities, achieve their commercial objective, fulfill social obligations and adhere to mandatory directed lending norms. The credit policy consists of both fund based credit exposure and non fund based credit exposure. The credit policy is studied under Coverage, Clientele, Marketing. The bank has over the years designed and adopted the Best Practices Code. This in effect represents the banks philosophy towards effective Corporate Governance. Bank of India has specialised type of lending known as Segmented Lending in which bank has set within it specialised branches for focused lending to various segments. This includes-Commercial and Personal Finance Housing Finance Housing and Personal Finance SME Branches Overseas Branches Corporate and Banking Branches This segmented approach is expected to provide both market and customer focus for ensuring better business development, better development of expertise and better customer satisfaction. Bank has also set exposure norms which corresponds to the quantum of finance been credited. These exposure norms are as per the RBI norms and also the banks specific norms. Bank also observes Selective Credit Control with respect to essential commodities like wheat, rice which would directly or indirectly defeat purpose of the directive. This policy is exclusively for essential commodities so that their prices remain same throughout the country. One of the important monitoring aspects in the credit portfolio is the periodic review of advance accounts. The vital decision to deploy the Banks resources should necessarily be based upon the thorough assessment and evaluation of the needs of the borrower. For this, a proper periodical review of any account is inevitable. Bank has introduced Fair Lending Practices Code which helps the bank to provide professional, efficient, courteous, diligent and speedy services in matter of lending. The Fair Practices Code codifies the procedures to ensure clarity, transparency, timeliness and responsiveness in Banks relationship with the borrower customers at all stages like marketing, processing, sanctioning, monitoring and administration. With the kind of transformation that is taking place in the banking industry and in the country, it is imperative for us to be conscious of our earnings and asset quality. Further, as profit is reward for risk bearing capacity, the spread available in case of high quality assets are thin. With the ushering in an era of liberalisation in the economy, new opportunities are available and for a Bank of our size it is important that we realise our market share through better understanding of these developments Different loan schemes are available to meet different needs of customers .These schemes can be categorized under 1) Retail loans: Includes Personal Loans, Housing Loans, Education Loans, Gold Loan Scheme, and many more.

2) Agricultural loans: Includes Agriclinics and Agribusiness. 3) Schemes for SME 4) Schemes for Other Priority Sectors

UTIVE SUMMARY Once a project opportunity is conceived and it is considered after the preliminaryscreening, a detailed feasibility study has to be undertaken covering marketing, technical,and financial aspects of the project. The study in the form of cases deal with calculationsof MPBF (Maximum Permissible Finance), along with going through the borrowersinformation, general information of the proposal, past record of borrower and details of security mortgaged. Financial records of the borrower audited, provisional and projectedsuch as Profit and loss account statements, Balance Sheet and Cash and Fund FlowStatements needed to be considered. The ratios such as current Ratio, Debt ServiceCoverage Ratio etc are also checked. The ultimate decision whether to grant the credit to borrower for the application or not and how to go about it , is undertaken after this studywhich discloses whether the borrower has good past record and information provided aretrue and fair.My project concerns with the Calculations of MPBF i.e. Credit Appraisal and Renewal ,in which I need to asses if the borrower should be granted credit, and what should be therecommended loan amount. This all is done after carefully evaluating the financials andsecurities provided by the borrower.Various financial ratios are calculated for the past and future data provided by the borrower after checking the veracity of the same. The various ratios, which are frequentlycalculated include: Current ratio:[(Receivables + material and finished good inventory)/ (creditors for goods andexpenses)] Long term debt-equity ratio[Long Term Debt/ Net worth]1

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