Economic reforms which the country has been witnessing for over the last one-and-half decades have radically transformed the operational environment of the banking industry. With competition as a driver and a key to success in the sector, bankers have no option except to locate new businesses, products and services. Innovations in Bank Credit have become the order of the day to attract new clients and protect existing ones. With deregulation of the banking sector, opportunities alone have not come about, but also risks associated with such opportunities have increased enormously, "Therefore a thorough understanding of the essentials of bank credit is indispensable for the credit to remain performing and the bank to stay ahead in business. An attempt is made in the book to give the reader knowledge on bank credit, right from what it is to how it should be delivered. The book contains case studies and in-basket exercises which make the reader to analyze practical situations involving bank credit. The book intends to meet the requirements of the students of Master of Business Administration, Banking and Finance course of a different Indian Universities and the practicing professionals in the banking sector.
Credit is the lifeline of trade, industry and commerce. Infusion of credit to the sectors of the economy is as important as that of understanding the needs of the sectors and dispensation of the credit in required quantum and in appropriate time. A Banker has to be practical as well as prudent while enabling credit to the needs of the industry. The concept of Credit Management is undergoing unimaginable changes. From the days where bankers were shy of expanding credit, they have reached a stage where they would like to find new avenues of credit. Credit innovations are emerging in the industry.
The Book has been divided in to four units with each unit discussing each segment of credit.
In the First Unit, Essentials of Bank Credit, Evaluation of Bank Credit, Execution of Bank Credit with suitable illustrations, examples and case analysis are discussed.
The Second Unit is devoted to the discussion on Priority Sector Financing and emerging areas in the field of micro credit innovations.
The Third Unit concentrates focus on the international relevance of credit, such` as Export Credit, Import Credit, rules, policies, procedures governing Foreign Exchange Credit.
The Fourth Unit of the book focuses its attention on understanding Performing Credit, Non-performing Credit, Reserve Bank of India`s concern on credit analysis and gaps by the bankers, credit recoveries, strategies and the mechanism put in place for recovery of credit in the sector.
The Fifth Unit of the book deals with the key master circulars/guidelines of the apex monetary body, i.e., Reserve Bank of India.
The Sixth Unit of the book gives an insight into the financial terms at a glance besides in-basket exercises and case studies on Credit Management.
Unit I : Bank Credit
Chapter 1 Loan Policy and Principles of Bank Lending
Chapter 1.1 Golden Rules for a Good Credit
Chapter 1.2 Identifying the Borrowers and Projects
Chapter 1.3 Preparation of Proposal and its Presentation
Chapter 1.4 Types of Forms of Bank Advances
Chapter 1.5 Types of Securities and Attributes of a Good Tangible Security
Chapter 1.6 Financial Analysis of a Proposal
Chapter 1.7 Broad Aspects of Project Appraisal and Lending Decision
Chapter 1.8 Working Capital Assessment
Chapter 1.9 Break-even Analysis and Capital Budgeting
Chapter 1.10 Bank Documentation
Chapter 1.11 Various Methods of Creating Charge Over Securities
Chapter 1.12 Insurance
Chapter 1.13 Loan Pricing
Chapter 1.14 Risk Management in Banks
Chapter 1.15 Credit Risk Rating
Chapter 1.16 Credit Monitoring Arrangement and After
Chapter 1.17 General Board Format Used by the Leading Banks for Processing of Major Loan Proposals-Model ABC Bank
Unit II : Bank Credit
Chapter 2 Priority Sector
Chapter 2.1 Financing Agriculture
Chapter 2.2 Self Help Groups and Bank Linkages
Chapter 2.3 Micro Finance-Conceptual Framework-Indian Context
Chapter 2.4 Micro Finance-International Scenario
Unit III : Bank Credit
Chapter 3 Non-fund Based Finance-Letter of Credit
Chapter 3.1 Types of Letter of Credit
Chapter 3.2 Export Finance
Chapter 3.3 INCO TERMS 2000, UCP 600, URR 525
Chapter 3.4 External Commercial Borrowing
Unit IV : Bank Credit
Chapter 4 Reserve Bank of India`s Observations on Deficiencies Found in Sanctioning of Loans and Monitoring of Borrowal Account by Banks/Financial Institutions
Chapter 4.1 Post Disbursal Follow Up, Monitoring of Credit and Compliance Parameters
Chapter 4.2 Non-Performing Assets, Provisioning Norms, Recovery of Advances and Seizure
Chapter 4.3 Recovery Measures in Banking Sectors
Unit V : Bank Credit
Chapter 5 Master Circular on Exposure Norms
Chapter 5.1 Master Circular-Exposure Norms for Financial Institutions
Chapter 5.2 Master Circular on External Commercial Borrowings and Trade Credits
Chapter 5.3 RBI Guidelines on Issuance of Commercial Paper-2012
Chapter 5.4 RBI Guidelines on Micro, Small and Medium Enterprises