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The objective of this project is to study the working of DENA BANK for

providingl o a n s & a d v a n c e s , c r e d i t t r a n s a c t i o n a n d c r e d i t a p p r a i s a l t
o S ma l l a n d Me d i u mEnterprises. SME sector is critical to Indias economy
and potentially a key driver of growth, job creation, innovation and economic
prosperity.After undertaking in the depth of theoretical study such as type of
advances, SME policy of DENA BANK, credit rating, CMA, Working Capital and
various financialunder SMEs, It was found that the several industries are growing under
banking financeand SMEs is a one of the fast growing Industries from all the sectors.As per
the 3
rd
census report, total output of the registered units in the year 2001-02
wasest i mat ed t o be Rs. 70, 861. 73 cr or es. The SSI s ect or empl oyed
2, 49, 32, 763 per sons during that period.Thus SME plays a very significant role in
the socio-economic development of thecountry.The project was an attempt to
understand and perform the work in credit transactionand credit appraisal proposal which I
have included is just an example of it.I have wor ked on many s uch pr oposal s,
whi ch ar e beyond t he s cope of t hi s pr oj ect . Hence the whole experience of
working in such a renowned public sector unit was verygood & made me learn a lot
out of it.

ACKNOWLEDGEMENT


The project Title Credit appraisal under SME segment in Dena Bank has
beenconducted by me during 15
th
June 2011 to 30
th
July 2011 at Dena Bank, Regional Office,Delhi. I have completed this project, based on the
primary and secondary research under the guidance of my bank guide Mr. J.D. Sinha, Sr.
Manager (SME).He has hel ped me t o l ear n about t he pr oces s of gi vi ng l oans
& advances t o SMEsector by giving me a valuable insight into the role played by Banks
in SME sector. Myincreased spectrum of knowledge in this field is the result of
their constant supervisionand direction that have helped me to absorb relevant and high
quality information.Last but not the least, I feel indebted to all those persons and
organizations who havehelped me directly or indirectly in the successful completion of this
study.
DECLARATION


I her eby decl ar e t hat t he pr oj ect r epor t ent i t l ed
Credit Appraisal Under SMEsS e g me n t a t De n a Ba n k s
s u b mi t t e d f o r t h e D e g r e e O f Ma s t e r O f B u s i n e s s Administration,
is the record of authentic work carried by me during the period from15.06.2011 to
30.07.2011 and the project report has not formed the basis for the award of any degree,
diploma, associate ship, fellowship or similar other titles. It has not beensubmitted
to any other university or institution for the award of any degree or diploma
Table of Contents

Chapter No.Page No.
1. Company Profile2.1 Overview of Dena Bank 2.2
Milestones2.3 Vision and Mission Statement2.4 Growth & Development of the Organization2.5 Area
of operation-Regional Office2.6 Workflow model of R.O.2 . Re s e a r c h
Me t h o d o l o g y 2.1 Introduction Of Research2.2 Statement of the research problem2.
3Obj ect i ve of t he research
st udy2.4 Research Design & Methodology2.5 Rationale for the study2 . 6 Li mi t a t i o
n o f t h e s t u d y 3. I nt roduct i on & Emergence of SMEs
4.
Theoretical Analysis


5. Dat a Processi ng & Anal ysi s 6. Case Study7. Findings and Recommendations8.
Conclusions9. Bibliography
Chapter-1Company Profile-
DENA BANK

1 . 1 Ov e r v i e w o f D e n a B a n k
Dena Bank is one of the earliest nationalized banks in India. Since its inception,
the bank has become a renowned name in the field of banking and financial
solutions. It istrusted all over the country by thousands of consumers. By being a
customer of DenaBank, one can easily enjoy financial stability and also get good
returns on the servicesand the financial solutions.Dena Bank was founded on 26th May,
1938 by the family of Devkaran Nanjee under the name Devkaran Nanjee Banking Company
Ltd
.
It became a Public Ltd. Company inDecember 1939 and later the name was changed to Dena
Bank Ltd.In July 1969 Dena Bank Ltd. along with 13 other major banks was nationalized and
isnow a Public Sector Bank constituted under the Banking Companies
(Acquisition &Transfer of Undertakings) Act, 1970. Under the provisions of the
Banking Regulations


Act 1949, in addition to the business of banking, the Bank can undertake other
businessas specified in Section 6 of the Banking Regulations Act, 1949.
Competitors:
Top three competitors of Dena Bank.

Bank of Baroda

Bank of India

ICICI Bank Limited
Dena Bank has been the first Bank to introduce:

Minor Savings Scheme.

Credit card in rural India known as "DENA KRISHI SAKH PATRA" (DKSP).

Drive-in ATM counter of Juhu, Mumbai.

Smart card at selected branches in Mumbai.

Customer rating system for rating the Bank Services
1 . 2 M I L E S T O N E S

One among six Public Sector Banks selected by the World Bank for sanctioning
aloan of Rs.72.3 crores for augmentation of Tier -II Capital under Financial
Sector Developmental project in the year 1995.

One among t he f ew Banks t o r ecei ve t he Wor l d Bank l oan f or
t echnol ogi cal upgradation and training.

launched a Bond Issue of Rs.92.13 crores in November 1996.

Maiden Public Issue of Rs.180 Crores in November 1996.

Introduced Tele banking facility of selected metropolitan centers.

Dena Bank has been the first bank to introduce-
o
Minor Savings Scheme.
o
Cr e d i t c a r d i n r u r a l I n d i a k n o wn a s " DENA KRI S HI S AKH P ATRA
" (DKSP).
o
Drive-in ATM counters of Juhu, Mumbai.
o
Smart card at selected branches in Mumbai.
o
Customer rating system for rating the Bank Services
.
1 . 3 V I S I O N & MI S S I O N
Mission and Vision Statement of Dena Bank

Mission Statement
-

DENA BANK will provide its
Customers

-
premier financial services of great value,
Staff
-
posi t i ve wor k envi r onment and oppor t uni t y f or gr owt h and achi evement ,
Shareholders

- superior financial returns,
Community

- economic growth.

Vision Statement
-
DENA BANK will emerge as the
most preferred Bank of customer choice
in its areaof operations, by its
reputation and performance.
Logo

The l ogo of
Dena Bank
represents
Lakshmi,
the Goddess of wealth, according toHindu mythology. It was the desire of the
founding fathers of the Bank that the Bank should be a symbol of prosperity for all its
clients, and the logo represents this promise.


The contemporary
'D'
i n t he l ogo r ef l ect s t he
dynamism
,
dedication
and t he
drive
towards customer satisfaction.
1. 4Growt h and Devel opment of t he Organi zat i on
To evolve and position the bank as a world class, progressive, cost -effective
andcustomer friendly institution providing comprehensive financial and related se
rvices:integrating frontiers of technology and serving various segment of society especially
theweaker section of the society: committed to excellence in serving the public
and alsoexcelling in the corporate values. Corporate excellence emanate from
good
corporateg o v e r n a n c e e x e r c i s e d b y a d o p t i n g s t a n d a r d o f t r a n s p a
r e n c y , a c c o u n t a b i l i t y , professionalism, social responsiveness, and ethical
business practices with this in view,t he has been maki ng ef f or t s f or adopt i ng t he
best pr act i ces. The bank commi t ment towards corporate governance is to
bestow greater transparency and openness in themanagement and to ensure best
performance by staff at all the levels to maximize theoperational efficiency.
Adopting the corporate governance as a work ethos, the bank is committed to
enhancing the stakeholders value.
1.8 WORKFLOW MODEL
Here is the workflow model of Dena Banks regional office-
Chapter-2ResearchMethodology
2 . 1 I N T R O D U C T I O
N


RESEARCH-Research

is the search for and retrieval of existing, discovery or creation of newinformation or
knowledge for a specific purpose.
METHODOLOGY-Methodology
means body of met hod us ed i n a par t i cul ar act i vi t y. To pr oceed w i t h
s t u d y i n t h e r i g h t d i r e c t i o n , i t i s e s s e n t i a l t o s e l e c t a n
a p p r o p r i a t e me t h o d . S e l e c t i o n o f me t h o d i s a g a i n a v e r y c a u t i o u s
wo r k a n d h a s t o b e d o n e wi t h p r o p e r under st andi ng.
RESEARCH METHODOLOGY-
Resear ch met hodol ogy i s a way t o s ys t emat i cal l y sol ve t he r es ear ch
pr obl em. It may be under st ood as a s ci ence of st udy how r esear ch i s done
sci ent i f i cal l y. In i t , var i ous st eps ar e st udi ed t hat ar e us ed f or st udyi ng
t he r esear ch pr obl em al ong wi t ht he l ogi c behi nd t hem. Res ear ch
met hodol ogy, t her ef or e has many di mensi ons. It has a wi der scope. T h e
p u r p o s e o f t h e me t h o d o l o g y s e c t i o n i s t o d e s c r i b e t h e
r e s e a r c h p r o c e d u r e s . Th e r e f o r e r e s e a r c h me t h o d o l o g y n o t o n l y
i n c l u d e s t h e r e s e a r c h me t h o d s b u t a l s o c o n s i d e r s t h e l o g i c b e h i n d
t h e me t h o d s i n t h e c o n t e x t o f r e s e a r c h s t u d y . I t h e l p s i n expl ai ni ng
why a par t i cul ar met hod or t echni que i s bei ng us ed and why not ot her s
, sot he r es ear ch r esul t s ar e capabl e of bei ng eval uat ed hi ms el f or by
ot her s.
2. 2STATEMENT OF THE RESEARCH PROBLEM


The factors beyond Credit Appraisal in financial Institute have widely investigated at
theaggregate level and at the Government level. The main reason is Credit appraisal
under SMEs is new field of research.Due to the limitations of knowledge about problems and
challenges faced by the CreditAppraisal SMEs and the factors responsible for their sickness are summarized as
under:

Increased competition from cheap imports

Infrastructural constraints/bottlenecks

Delayed realization of receivables

Delayed/inadequate credit

High cost of funds

Insistence on collateral/margin

Complication and cumbersome procedures of banks

Limited financial resources

Non availability of adequate promoters contribution / equity

Obsolete technology. Low R & D and technology up gradation effort

Inadequate managerial competence

Lack of marketing skills / Poor marketing

Inadequacy of inputs and skills

Government policies
Financial problems

Low quality image (Low ability perceived)

Difficulty in dealing with Govt. buying systemThe choice of this subject was based on many reasons;
there has not been much researchabout credit appraisal under SMEs and also, it is a highly actual
subject availability of dataand also personal interest that influenced our choice of topic.

2 . 3 OB J E C T I V E OF T HE R E S E A R C H S T U D Y
T h e o b j e c t i v e o f t h i s p r o j e c t r e p o r t i s t o s t u d y t h e w o r k i n g
o f D E N A B A N K
f o r p r o v i d i n g l o a n s a n d a d v a n c e s t o S ma l l a n d Me d i u m E n t e
r p r i s e s . S ME s e c t o r i s c r i t i c a l t o I n d i a s e c o n o my a n d
p o t e n t i a l l y a k e y d r i v e r o f g r o wt h , j o b c r e a t i o n , i n n o v a t i o n a n d
e c o n o mi c p r o s p e r i t y. S MEs c o n t r i b u t e a b o u t 4 0 % o f I n d i a s
v a l u e a d d i t i o n ma n u f a c t u r i n g , a l mo s t 5 0 % o f I n d i a s t o t a l e x p o r t s
a n d 4 5 % o f
I n d u s t r i a l u n i t s . T h e y p r o d u c e d i f f e r e n t p r o d u c t s , r a n g i n g f r o
m s i mp l e i t e ms t o h i g h -
t e c h p r o d u c t s u s i n g s o p h i s t i c a t e d s t a t e - o f - a r t -
t e c h n o l o g y f o r b o t h d o m e s t i c a n d i n t e r n a t i o n a l ma r k e t .


SCOPE OF THE STUDY

Get an insight of the banking industry.

Understand the interface of the banks with their clients, customer service expenses in banks.

Using the theoretical knowledge in application and understandingthing practically.

Serve the organization.
2.5 Research Design and MethodologyResearch Design
Resear ch desi gn i s a concept ual st r uct ur e wi t hi n whi ch r esear ch i s condu
ct ed t he blueprint for the collection and measurement and analysis of data .Research
design can be categorized as exploratory and conclusive design. Exploratoryseeks
to discover new relationships while conclusive research is design to take decisions.In
expl or at or y t he mai n ai m i s t o come t o hypot hesi s . It means t ent at i ve
ans wer s t oquestions that serve as guide for most research projects. This type of
research defineshypotheses which are then tested by conclusive research .Conclusive
research design can be of two types viz. the case method and the statistical method.In my
case I have opted for conclusive research design by opting case study method.

In my case I have opted for conclusive research design by opting case studymethod.

This research contains secondary data. A little bit primary source of datacollection is also
used to get an insight of case study.

All analysis and conclusion is derived on the basis of the case study data.



To select this case study random sample technique is used.
Sampling technique:
As it is a conclusive research , therefore this research contains secondary data. A little bi t
pr i mar y sour ce of dat a col l ect i on i s al s o us ed t o get an i ns i ght of cas e
st udy. Al l analysis and conclusion is derived on the basis of the case study data. To select
this casestudy random sample technique is used.
Data collection method:
As far as the study is concerned, sound information base is needed in order to classify
the problem quickly .Basically data is collected from two sources viz. primary
source andsecondary source.
Sources of data:Primary data
It consi st s of or i gi nal i nf or mat i on col l ect ed f or speci f i c pur pos e . Dat a i s
col l ect edthrough a direct source like survey to obtain the first hand information. Others
resourcesare written below:



Discussion with my project guide

Discussion with other members of the credit department.
Secondary data:
It consi st s of i nf or mat i on t hat al r eady exi st s somewher e and has been
col l ect ed f or specific purpose in the study. The secondary data for this study is collected
from varioussources like

Websites

Books

Newspaper

Financial magazine(weekly , business world, etc)The reasons for using these sources for collecting
data are:

It provides more reliable results.

It is easier to tabulate and interpret data gathered in this way.
2 . 6 RATI ONALE FOR THE S TUDY
Offering credit is an operation fraught with risk. Before offering credit to an organization,its
financial health must be analyzed. Credit should be disbursed only after
ascertainingsatisfactory financial performance. Based on the financial health
of an organization, banks assi gn cr edi t r at i ngs. These cr edi t r at i ngs ar e
used t o f i x t he i nt er est r at e andquantum of installment.This study aims to analyze
the credit health of organizations that approach Dena Bank for foreign exchange credit
facilities. After analyzing credit health, the credit rating is determined. On the basis
of credit rating, the interest rate guidelines circular is consultedto fix a price for the credit
facilities i.e. determine the interest rate.


2.7

LIMITATION OF THE STUDY
Limitations of this Study are as follows:-

Time:
The short time duration of one & half months is very inadequate.

Vast topic:
The subject credit appraisal under SME is too vast to study.

Data gathering:
Gathering of data relating to various products of Dena bank was a little difficult task.

Scrutinizing of information:
Data mining was a time consuming task. Useful information had to be extracted
after careful scrutinizing from the large data gathered.


Th e i n v e s t me n t l i mi t o f Rs . 1 c r o r e f o r c l a s s i f i c a t i o n a s S S I h a s
b e e n e n h a n c e d
t o R s . 5 c r o r e i n r e s p e c t o f c e r t a i n s p e c i f i e d i t e m s u n d e r
h o s i e r y , h a n d t o o l s , d r u g s phar maceut i cal s and st at i onar y i t ems
and spor t s goods by t he Gover nment of Indi a.
YEAR 2006
Th e Go v e r n me n t o f I n d i a h a s e n a c t e d t h e Mi c r o , S ma l l a n d
Me d i u m En t e r p r i s e s De v e l o p me n t ( MS MED) Ac t , 2 0 0 6 o n J u n e
1 6 , 2 0 0 6 wh i c h wa s n o t i f i e d o n Oc t o b e r 2 , 2 0 0 6 . Co n s i s t e n t wi t h
t h e n o t i f i c a t i o n o f t h e Mi c r o , S ma l l a n d Me d i u m
En t e r p r i s e s D e v e l o p m e n t ( M S M E D ) A c t 2 0 0 6 , t h e d e f i n i t i
o n o f m i c r o , s m a l l a n d m e d i u m e n t e r p r i s e s e n g a g e d i n ma n
u f a c t u r i n g o r p r o d u c t i o n a n d p r o v i d i n g o r r e n d e r i n g o f ser vi c
es has been modi f i ed.


3 . 3 M S M E D
Introduction:MICRO:-Micro (manufacturing) Enterprises
Enterprises engaged in the manufacturing/production or preservation of goods and
whoseinvestment in plant and machinery (original cost excluding land and building and such
itemsas in 1.1.1
) does not exceed Rs. 25 lakh
, irrespective of the location of the unit.
Micro (service) Enterprises
Enterprises engaged in the providing/rendering of services and whose investment
inequipment (original cost excluding land and building and furniture, fitting and such items
asin 1.1.2)
does not exceed Rs. 10 lakh.SMALL:-Small (manufacturing) Enterprises:
Enterprises engaged in the manufacture/production or preservation of goods &
whoseinvestment in plant and machinery (original cost excluding land and
building & the itemsspecified by the Ministry of Small Scale Industries vide its
notification No.S.O.1722 (E)Dated October 5, 2006 as furnished in Annexure I)
does not exceed Rs. 5 crores
.


Small (service) Enterprises
Enterprises engaged in the providing/rendering of services and whose investment
inequi pment ( or i gi nal cost excl udi ng l and and bui l di ng & f ur ni t ur e,
f i t t i ngs and ot her not directly related to the service rendered or as may be under
the micro, Small and MediumEnterprises development, (MSMED), Act 2006)
does not exceed Rs. 2 crore.MEDIUM:-Medium (manufacturing) Enterprises
Enterprises engaged in the manufacture/production or preservation of goods
and whoseinvestment in plant and machinery (original cost excluding land and
building and the itemsspecified by the Ministry of Small Industries vide its
notification No.S.O. 1722(E) datedOctober 5, 2006) is
more than Rs. 5 crore
but
does not exceed Rs. 10 crore.Medium (service) Enterprises
Enterprises engaged in the providing/rendering of services and whose investment
inequipment (original cost excluding land and building and furniture, fittings as such items
asin 1.1.2) is
more than Rs. 2 crore
but
does not exceed Rs. 5 crore.Banks lending to medium enterprises will not be included for the purpose
of reckoningunder priority sector.

T
INY
U
NIT

WOULD

BE
M
ICRO
E
NTERPRISES
.SSI
WOULD

BE
S
MALL
E
NTERPRISES
.
3.4 NEW NOMENCLATURE & CLASSIFICATION OF MSMED


SMEs have been established in almost all -major sectorsin the Indian industry
such as:
1 . A g r i c u l t u r e i n p u t s 2 . Ch e mi c a l & P h a r ma c e u t i c a l s 3 . El e c t r i c a l ,
El e c t r o n i c s 4 . B i o -
e n g i n e e r i n g 5 . E n g i n e e r i n g 6 . F o o d P r o c e s s i n g 7 . El e c t r o -
me d i c a l e q u i p me n t 8 . Te x t i l e s a n d Ga r me n t s 9 . S p o r t s
g o o d s 10.Plastics products11. Meat Pr oduct s 12.Computer software13.Leather
and Leather goods etc. As a result of globalization and liberalization, coupled with WTO
regime, IndianSMEs have been passing through a transitional period. Those SMEs who have
international business outlook, competitive spirit, strong technological base, and willingness
to restructurethemselves they withstand the present challenges and comes out with
shining colures byadding up to contribution to the Indian economy

SWOT



6 . 0 T E R M L O A N S :
Ter n l oans ar e s anct i oned f or acqui si t i on of f i xed asset s l i ke l and,
bui l di ng, pl ant &machinery, office equipments, furniture & fixture, etc for purchase of
transport vehicles, for purchase of agriculture equipments, machinery & other movable
assets like tractors, pumpssets, cattle, etc.The term loan would be a loan, which is not a
demand loan and is repayable in terms i.e. installments irrespective of period or the
security cover.Term loans are normally granted for the period varying from 3 to 7 years and
in exceptionalcases beyond 7 yrs.7.0
CASH CREDIT ADVANCES:
Cash cr edi t account i s a dr awi ng account agai nst cr edi t gr ant ed by t he
Bank and i soper at ed i n exact l y t he s ame way as a cur r ent account on
whi ch an over dr af t has
beens anct i oned. The var i ous t ypes of s ecur i t i es agai nst whi ch CC i s al l o
wed ar e pl edge, hypot hecat i on of goods or pr oduce, pl edge of document s
of t i t l e t o goods, mor t gage of immovable property, book debts, trust securities, etc.In
CC accounts borrower is allowed to draw on account within the prescribed limit, and
whenrequired.8.0
LETTER OF CREDIT:
Letter of credit (LC) is issued by the bank at the request of its customer in favor of third party
informing him that the bank undertakes to accept the bills drawn on its customers up tothe
amount stated in the LC subject to fulfillment of the conditions stipulated therein.


Th e r e f o r e , wh e n b a n k i s s u e s LC, i t a s s u me s r e s p o n s i b i l i t y t o p a y
i t s b e n e f i c i a r y o n production of bills drawn in accordance with the terms and
conditions of the LC.Whenever the bills drawn under LC are not paid by the party from its
own resources or out of available DP in the CC account on its due date, the LC is said to have
devolved.
9 . 0 G U A R A N T E E :
Is sui ng of guar ant ees on t he behal f of t hei r cust omer s t o t hi r d par t i es i s
one of
t hes er vi ces r ender ed by commer ci al banks. Such guar ant ees ar e cont r act s
t o per f or m t he promise or discharge the liability of the constituent on whose behalf they
are given, in case of his default or failure to perform the contracts undertaken by
him. The party in whose favor t he guar ant ee i s gi ven i s cal l ed t he
benef i ci ar y, wher eas t he i ssui ng bank i s cal l ed t he guarantor and the third
party on whose behalf of guarantee is given is called the principal debtor. Every
guarantee must specify the amount and period of the liability to be undertaken by the bank.
1 0 . 0 D E M A N D L O A N :
A Demand loan account is an advance for a fixed amount and no debits to the
accounts aremade subsequent to initial advance except for interest, insurance premium and
other sundrycharges.Demand loan would be loan, which is repayable on demand in one shot
i.e. bullet repayment. Nor mal l y, demand l oans ar e al l owed agai nst t he Bank s
own deposi t s, govt . secur i t i es , approved shares or debentures of companies,
life insurance policies, pledge of gold/silver ornaments, and mortgage
of immovable property. A separate account for each demand loanshould be kept in
the appropriate demand loan ledger.


4 . 6 C R E D I T R A T I N G S C HE ME
A credit rating scheme has been introduced to encourage the SSI units to get their
creditrating done by the reputed credit rating agencies, with a view to facilitate credit flow to
themand enhancing the comfort -level of lending banks. The scheme, being
implemented by the NSIC, envisages that 75 percent of the cost of the credit
rating exercise, with a maximumlimit of Rs.40,000 per SSI unit, would be
reimbursed to the SSI units availing of this one-time facility. Six credit rating agencies
namely, CRISIL, ICRA, Dun and Bradstreet, Onicra,Care and Fitch, which have agreed to
credit, rate SSI units through NSIC.

4. 7CIBIL ( CREDI T INFORMATION BUREAU ( I) LTD)
In terms of RBI guidelines, all banks have been advised to submit credit informationin
respect of their borrowings accounts to cibil, to create a database to be used by the
member banks for extraction of credit information reports (CIRS) on prospect ive
of submission of cr edi t i nf or mat i on t o CI BI L, RBI had advi s ed banks t hat
t i l l such t i me t he appr opr i at e legislation is passed by the Govt, consents of borrowers
are to be obtained.

4 . 8 C R E D I T M O N I T O R I N G A R R A N
G E M E N T ( C M A )
Effective from October 10,1988, RBI replaced the CAS by new scheme known
asCredit Monitoring Arrangement (CMA).Under the scheme RBI would carry post
sanction scrutiny of proposals relating tosanction of term loans as well as
working capital limits beyond stipulated level.When CMA was introduced banks were
required to report to RBI for post sanction scrutinyall sanctions of working capital
limits Beyond Rs. 5 crores and term loan exceeding RS. 2crores from the banking
system.Si nce December 1992, t he st i pul at ed l evel f or post
sanct i on scr ut i ny by RBI f or wor ki ng capi t al f aci l i t i es ( f und bas ed) has
been r ai s ed t o Rs . 10 cr or es and above. Anysanction of term credit including
deferred payment guarantees in which the share of the banking system is Rs. 5 crores
is required to be reported

Chapter-5DataProcessing&

Analysis
RATIO ANALYSIS
The performance of a unit is judged in the following parameters:-
a ) Gr o w t h i n s a l e s b ) Ma r g i n o f p r o f i t c)Utilization (i.e. turnover) of
assetsd)Financial strength/healthe ) Re t u r n o n i n v e s t me n t
Financial ratios in respect of these parameters should be calculated and used as a measure
of evaluation of performance. However, ratio by themselves cannot be good or bad but must
be judged against ratio of previous years or against those of similar units in the same industry
or of an entire industry. Reasons for an upward or downward trend in ratios have
to be foundand the ratios interpreted accordingly.
1 . Gr o w t h i n S a l e s :


Growth in sales is an important indicator of progress of a unit. The growth may
be either interms of value or in terms of number of unit sold. Thus, although the
figures may show anincrease in sales, the increase may be due to an increase in the price
per unit.The ratio for evaluating growth in sales isPercentage increase = (Current years sales-
previous years sales) *100Previous years salesThis ratios can be calculated in terms of
amount or in terms of number of unit sold.

2 . Ma r g i n o f p r o f i t :
Every concern would like to make a profit. However, the margin of profit and the
quantumhave to be compared over the years. There are four ratios through which this can be
done.
a ) G r o s s m a r g i n r a t i o = G r o s s P r o f i t
* 1 0 0 Net Sales
b ) O p e r a t i n g p r o f i t m a r g i n r a t i o = O p e r a t i n g p r
o f i t * 1 0 0 Net Sales
c ) P B I T r a t i o = P r o f i t b e f o r e i n t e r e s t &
t a x * 1 0 0 Net Sales
d ) N e t p r o f i t m a r g i n r a t i o = N e t
p r o f i t * 1 0 0 Net Sales. The higher the ratio, the higher is the
operating efficiency of the unit.


3. Utilization of Assets:
The efficiency of a concern is judged from the extent to which it utilizes its assets. If
assetsare not fully utilized, it would mean that the money invested in these assets is lying idle
andthis is a cost to the firm. The assets could be land and building, plant and machinery
or inventory or debtors; each of these should be utilized in such a way that they contribute
themaximum towards the profits of the firm. For a manufacturing concern, the use of assets
isfor achieving sales and hence ratios based on sales and assets are used to
evaluate performance. The following ratios are useful:-

a) Total assets turnover ratio =Gross Sales Excise dutyTotal Tangible Assets

b ) Cu r r e n t a s s e t s t u r n o v e r =Gr o s s S a l e s Ex c i s e d u t y Current Assets

c) Fixed assets turnover ratio =Gross Sales Excise dutyFixed Assets.

Normally, a higher ratio means better utilization of assets. However, too high a
ratio(especially Current Assets Turnover ratio) could mean inadequate investment for that
levelsof activity-in other words, over trading.
Another set of ratio is the number of months ratios. There are:-
a) Number of months of raw material = Raw material stock Monthly consumption of raw
material


(where monthly consumption = annual consumption12

b) Number of months finished goods =Stock of semi-finished goodsMonthly cost of
production

c) Number of months finished goods =Stock of finished goods Monthly cost of sales

d) Number of months debtors = Debtors Monthly gross sales(i.e. period of credit
allowed by the concern)Or Turnover of receivables. The higher the number of months ratio,
the greater is the investment needed for a given level of production and sales. Usually, lower
ratios indicate better utilization of current assets.

4. Financial Strength:
There are two aspects of financial strength-liquidity and solvency.Liquidity is the ability of
the firm to pay off current liabilities (normally) by the conversionof assets into cast through
sales.

Current Ratio
= Current AssetsCurrent Liabilities


According to the guidelines given to DENA BANK the ideal level is at 1.33:1
however theacceptable level is at 1.17:1.Liquidity can also be measured through,
Net Working Capital
= Current assets Current liabilities
The higher these ratios, the higher the liquidity
.Solvency is the ability of the firm to repay all its borrowings (i.e. current) as
well as termliabilities. This question will of course arise only when the firm will be
liquidated and all itsassets disposed off. The solvency is therefore measured thus:
Quick Ratio
= total tangible assets total outside liabilities. Where,
Tangible assets = total assets intangible assets (like goodwill, patents,
preliminary andformation expenses etc.)
Outside Liabilities = all liabilities except owners capital, reserves and
surplus/deficit in Profit and Loss account.
Solvency (which also means tangible assets minus total tangible net worth) can also be
determined by the formula, total tangible assets total outside liabilities.
The higher the proportion of tangible assets to outside liabilities, the better is the solvency.
There are

two other measures of solvency, both based on debt/equity ratios. They are:
a . O u t s i d e l i a b i l i t i e s
Tangible net worth

b . T e r m l i a b i l i t i e s
Tangible net worth

The second measure is used by term lending institutions. The lower these ratios are, the better
is the financial strength of the concern.In or der t o j udge whet her t he bor r ower
wi l l abl e t o pay l oan i nst al l ment s and i nt er est periodically, the Debt Service
Coverage (D.S.C.) ratio is used. It is calculated thus:

D.S.C. Ratio
= Net profit (after tax) and interest on long term debts & depreciation
Installment of long term debt & deferred payments & interestIt is also important for the
lender bank to assess the firms debt paying capacity over a period.Such capacity is
derived by calculating ratio like

Debt Service Coverage Ratio
Minimum acceptable level is 1.50.

Debt Equity Ratio
= It is a financial ratio indicating the relative proportion of equity and debt used to finance a
company's assets. This ratio is also known as Risk, Gearing or Leverage. A high debt equity
ratio is not preferable by an investor as the company alreadyhas acquired high amount of
funds from market thereby reducing the investor share over the securities available,
increasing the risk



Interest coverage ratio:
-Interest Coverage Ratio is an indicator as to the number of times the profit covers
theinterest liability of the company. This is a risk parameter and an indicator to
the extent towhich the interest liability will be serviced on the time. Interest for this purpose
would meangross interest payable by the borrower and profit would mean the gross profit
before interest.
Interest Coverage Ratio
= Net profit + depreciation + interest
Gross interest payable

The more the number of times of coverage of interest the better it would be for the
financialstrength of the company. Interest coverage should be minimum of 2.25 times.

5. Return On Investment:
Return on any amount invested in a business have to be taken into account whenwe talk of
profitability. The following are the ratios:

a) Return on total assets = Profit before interest & tax * 100
Total tangible assets

b) Ret ur n on net wor t h = Net Pr of i t * 100
Tangible net worth

Chapter-6Case Study



After printscreens

Total Debt Equity Ratio (TDER):
Th e TDER o f t h e Co mp a n y s t o o d
a t 2 . 1 7 a s o f 3 1 . 0 3 . 0 9 , wh i c h i s u n d e r t h e n o r ms considering Banks
desirable/benchmark TDER of 4:1 (in case of SSI units). The estimatedand projected TDER
for the financial year 2009-10 and 2010-11 is found to be 3.03 and 2.40which is again
under the banks desirable/benchmark. The same indicates satisfactory longterm
solvency of the Borrower.
Current Ratio :
C u r r e n t R a t i o s t o o d a t 1 . 4 1 a s o f 3 1 . 0 3 . 0 9 . T h e s a me i s
a b o v e t h e mi n i mu m desirable/benchmark level of 1.10 in terms of Banks
Loan Policy guidelines. The CurrentRatio is estimated at 1.24 as of 31.03.10 and
is projected at 1.29 as of 31.03.11, which isabove the benchmark level. The same
is indicative of satisfactory liquidity position of the borrower.
Current Asset to Turnover Ratio:
Current Asset to Turnover Ratio is above the desirable level of 1.75.The same is indicative
of satisfactory turnover of stocks.
I . P o s i t i v e i n d i c a t o r s Sales:
Th Net Export Sales projected for the next two years is as under 2009-10---------Rs. 360.00
Lacs

2010-11---------Rs. 381.50 Lacs. The Firm projects Export sales of Rs. 360.00 Lacs
for the year 2009-10 & Rs. 381.50 Lacsfor the FY 2010-
11. The Firm has already achieved sales of Rs. 184.01 lacs till 30-11-
09h a v i n g a c h i e v e me n t i n d e x 7 6 . 6 7 % & h a v e c o n f i r me d o r d e r s f o r
Rs . 8 5 . 8 7 l a c s a s o n 10.01.2010 to be shipped out by end of January, L/C of
which already been received. Wehave further been informed that they are in final
stages of negotiation for further orders
of a p p r o x . Rs . 5 0 . 0 0 l a c s . Th u s t h e Fi r m i s o p t i mi s t i c t o wa r d s a c h
i e v i n g t h e e s t i ma t e d Turnover
II.Negative indicators, if any, with reasonsUnsecured Loans:
Borrower has informed that there was an unsecured loan for Rs. 6.32 lacs from
Mr. M.C.Gupta, father of the prop. during the FY 2008-09. Unfortunately due to his ill
health the samehad to be liquidated to him during February- March 2009, consequently the
total unsecuredloans fell to Rs. 1.29 as on 31.03.2009 as against projections for Rs.
7.50 lacs. At presentunsecured loan stood at Rs. 2.66 lacs and Branch to obtain and keep
on record an undertakingfrom the borrower that the same would be continued during the
currency of Bank finance.
III.Auditors remarks and Management replies.
Nil as reported by the Branch.
IV. Cont i ngent Li abi l i t i es :
Nil

V. Current perf ormance t rends
: Rs in lakhs E s t i m a t e d N e t s a l e s t u r n o v e r f o r t h e F Y
2 0 0 9 -
1 0 3 6 0 . 0 0 A c h i e v e m e n t t
i l l 3 0 . 1 1 . 2 0 0 9 1 8
4 . 0 1 P r o -
r a t a a c h i e v
e m e n t 7 6 . 6 7 %
VI.Comment on current performance trends:


The Firm projects Export sales of Rs. 360.00 Lacs for the year 2009-10 & Rs.
381.50 Lacsfor the FY 2010-
11. The Firm has already achieved sales of Rs. 184.01 lacs till 30-11-
09h a v i n g a c h i e v e me n t i n d e x 7 6 . 6 7 % & h a v e c o n f i r me d o r d e r s f o r
Rs . 8 5 . 8 7 l a c s a s o n 10.01.2010 to be shipped out by end of January, L/C of
which already been received. Wehave further been informed that they are in final
stages of negotiation for further orders
of a p p r o x . Rs . 5 0 . 0 0 l a c s . Th u s t h e Fi r m i s o p t i mi s t i c t o wa r d s a c h
i e v i n g t h e e s t i ma t e d Turnover.
PrintScreen 20, 21

D . C O MME N T S O N A S S E S S ME N T O F WO R K I N G C A P I
T A L WI T H JUSTIFICATION:
The working capital cycle stood at 1.19 months during FY 2008-09 comprising
inventoryhol di ng of 0. 83 mont hs and r ecei vabl es at 0. 36 mont hs s al es .
The bor r ower has nowestimated working capital cycle of 2.83 months during
FY 2009-10, comprising inventoryholding of 2.18 months and receivables at 0.65
months.


Nature of business of the borrower is seasonal considering the fact that most of the
garmentexports to UK and US for Spring-Summer Season takes place during the
period between November to March.
Receivables :
In Balance Sheet Analysis, receivables have been taken as Rs 8.72 lacs as Rs 102.85 lacs
outo f t h e m h a v e b e e n e x c l u d e d s i n c e t h e s e b i l l s h a v e b e e n n e g o t i a t
e d u n d e r F LC a n d accordingly FLC outstanding is also excluded from Bank
Borrowings. The Firm exports onL/C-90 days DA/DP basis.Receivables have been estimated
at 0.65 months (Rs 18.00 lacs) and projected at 0.69 months(Rs 20.00 lacs), as Rs 50.00 lacs
have been excluded from Bank Borrowings towards export bills negotiated under FL/C. The
estimated and projected holding of receivables is consideredneed based and reasonable to
achieve the estimated/projected sales turnover.
Sundry Creditors:
The creditors for goods during FY 2008-09 stood at 1.43 months purchases (Rs 17.89
lacs)which is estimated at 0.56 months (Rs 9.00 lacs) during FY 2009-10. The
main reason for low creditors level during FY 2009-10 is as under : The Fi r m has
r epr esent ed t hat t hey had r ecei ved cer t ai n goods dur i ng t he l ast week
of March09 for their suppliers, which were under checking as on the Audited
date (31.03.09)and hence remained unpaid as on that date. The same was paid
during 1
st
week of April outof available PCH limit. The creditors level is projected at 0.67 months (Rs
8.50 lacs) duringFY 2010-11, which is almost in line with the creditors holding level during
FY 2009-10. Inview of the above, the estimated and projected creditors holding
period is considered need based and reasonable.

Based on the accepted level of holding and receivables, the working capital limit
works outto Rs 70.00 lacs under Modified MPBF Method during FY 2009-10 and FY 2010-
11. However, the Drawing Power, as of 31.03.10, based on the accepted holding levels as
above,works out as under:

Printscreen 22
The D.P. works out to Rs 62.00 lacs during FY 2009-10 and Rs 65.00 lacs during FY 2010-
11. Since only around tow and half months is left before the end of the current financial
year,the limits, based on the accepted projections of FY 2010-11 works out to Rs
65.00 lacs.Accordingly and in line with the Branch recommendation,
we recommend for enhancementin working capital limits by way of PCH-cum-FBP limit
from Rs 55.00 lacs to Rs 65.00 lacs.However, the operative limit would be capped at Rs.
62.00 lacs during FY 2009-10. The fulllimits i.e. upto Rs. 65.00 lacs may be released only
during FY 2010-11, subject to availabilityof D.P.
Renewal of Negotiation of Bills under L/C Limit
:The borrower is presently enjoying Bills Negotiation (under L/C) limit of Rs
50.00 lacs,outside the overall MPBF, which it has requested for continuation. The borrower
utilizes PClimits basically for stocking purpose, which is evident from the month-
wise position of stocks is as under

Printscreen 23

In view of the above, the borrower is unable to utilize the FBP limit. The borrower
requiresseparate Bills Negotiation Limit for negotiation of the Bills under L/C,
which is outsideoverall MPBF.The overall record has been satisfactory and no bills have
been returned unpaid. Accordingly,Branch has recommended for renewal of the Bills
Negotiation under L/C limit of Rs 50.00lacs and we endorse the Branch
recommendation.
17. ASSESSMENT OF TERM LOAN/ DEFERRED PAYMENT GUARANTEE:
N.A.
18. ASSESSMENT OF NON-FUND BASED LIMITS

Printscreen 24, 25, 26, 27, 28

20. COMPLIANCE OF RBI / BANK LOAN POLICY GUIDELINES :
The Proposal is as per RBI/ Banks Loan Policy Guidelines.
21. MODIFICATION IN EXISTING TERMS OF SANCTION IF ANY:
N.A.
22.VIEWS/RECOMMENDATIONS OF THE CREDIT COMMITTEE:
In terms of HO circular No.DCC/GM-Cr/CAD/1249/08 dated 02.06.08, a meeting
of theCredit Committee was held on 07.01.10 at Regional Office, New Delhi.The
Committee cleared the proposal and suggested as under :
i.
As per the estimates in CMA data submitted by the Borrower the D.P. stood at thelevel of
Rs. 62.10 lacs during FY2009-10 and Rs.64.30 thereafter. Accordingly
theoperative limit can be capped at Rs. 62.00 lacs during FY 2009-10. The full
limitsi.e. upto Rs. 65.00 lacs may be released during FY 2010-11 subject to the availabilityof
the Drawing Power.
ii.
It i s al so bei ng obs er ved t hat at t he t i me of l ast s anct i on/ r enewal
Capi t al wasestimated at the level of Rs. 22.50 lacs for FY 2008-09, whereas as
per the AuditedB/S of 31.03.2009 Capital stood at the level of Rs. 19.17 lacs.Ther ef or e
i t i s bei ng st i pul at ed t hat t he Fi r m has
t o i nt r oduce f r esh Capi t al or Unsecured Loan of Rs. 3.00 lacs before release of the
enhanced limits.


2 3 . DI S CRETI ONARY POWER FOR S ANCTI ON AND FOR APPR
OVAL OFDEVIATION, IF ANY:
The credit proposal falls within the overall discretionary powers of Asst. Gen.
Manager- NDR.
24. RECOMMENDATION:

It is an Export Credit Account falling under SME sector.

Though the Firm was established in April 2008, however the Proprietor, Sh.
MohitGupt a i s associ at ed wi t h t he Bank si nce 1999 by vi r t ue of bei ng a
Par t ner i n M/ s xyzApparels Inc.

Over al l conduct of t he a/ c i s Sat i s f act or y, as r epor t ed by t he
Br anch. One Ti meAdditional FBNLC limit of Rs. 100.00 lacs sanctioned by
DGM, NDR on 02.02.2009 andliquidated on time.

The family members of the Proprietor are maintaining substantial deposit in the Branch.(O/s
as on Nov. 2009 Current A/c 0.50 lacs, Saving A/c 1.50 lacs, Term Deposits 20.00 lacs).

Though t he bor r ower has not of f er ed any f r es h col l at er al , however , ext en
si on of Equitable Mortgage over the existing property would result in the
coverage of 527.99%,which is satisfactory.

Over al l f i nanci al i ndi cat or s of t he bor r ower ar e s at i s f act or y as per Bank
s Pol i cy Norms.

Branch has recommended the proposal, as requested by the borrower.

In view of the foregoing and based on Branch recommendation, we recommend
followingsubject to the terms and conditions enclosed as per Annexure IIRelease of the
limits would be as under
:i . T h e o p e r a t i v e l i m i t c a n b e c a p p e d a t R s . 6 2 . 0 0 l a c s d
u r i n g F Y 2 0 0 9 - 1 0 . T h e f u l l l i m i t s i.e. upto Rs. 65.00 lacs may be
released during FY 2010-11 subject to the availability of theDrawing
Power.i i . I t i s a l s o b e i n g o b s e r v e d t h a t a t
t h e t i me o f l a s t s a n c t i o n / r e n e w a l C a p i t a l w a s e s t i ma t e d a t the
level of Rs. 22.50 lacs for FY 2008-09, whereas as per the Audited B/S of 31.03.2009
Capitalstood at the level of Rs. 19.17 lacs. Therefore it is being stipulated that the Firm has to
introducefresh Capital or Unsecured Loan of Rs. 3.00 lacs before release of the enhanced
limits

Printscreen Application 1-10
Capital/ Net Worth as per CMA projections.25. The documents to be vetted by Advocate on
Banks Panel (at the borrowers cost)to ensure that the documents are as per terms of
sanction, valid and enforceable. Acopy of the Vetting Certificate should be kept on
Branch record.26. As per HO circular No.346/42/99 dated 22.11.1999 the following clause
should beincorporated in the sanction letter addressed to the borrower: In case
you commitdefault in repayment of the CC/Loan/Overdraft facilities/additional
interest or anyot her dues t hat may ar i s e out of t he l oan amount
/ f i nanci al assi st ance, t he bank reserves the right to disclose or publish the
names of the directors of the company asdefaulters, in such a manner and through such
media as the Bank/RBI in their absolutediscretion may think
fit.27. As per HO ci r cul ar No. 346/ 42/ 99 dat ed 22. 11. 1999, 54/ 1/ 2004 dt .
22/ 5/ 2004, cons ent l et t er t o be obt ai ned f r om t he bor r ower f or di s cl osi ng
or publ i shi ng t hei r names i n t he
event of bor r ower becomi ng def aul t er s. The s ai d cl ause shoul d beincorpora
ted as last clause of the respective document: I/We hereby agree as pre-condition of
the loan/advance( fund based and non-fund based ) given to me/us by the Bank that in
case I/We commit default in the repaymentof loan/advance or in the repayment of interest
thereon or any of the agreed installmentof the loan on due dates the Bank and/or RBI will
have an unqualified right to
discloseo r p u b l i s h m y / o u r n a m e o r t h e n a m e o f t h e c o m p a n
y / f i r m / u n i t a n d i t s directors/partners/proprietor as defaulter in such manner and
through such media as the bank or RBI in their absolute discretion may think fit.28.
Declaration about no pending court cases (as per H.O. circular no. 351/02/2003) to be
obtained and kept on Branch records.29. An undertaking to be obtained from the borrower,
that the Directors/Guarantors arenot, in any way, connected with any senior official (Scale-IV
and above) of the Bank.
30. Commitment Charges:
The ut i l i zat i on of l i mi t shoul d be made wi t hi n 3 t o 6mont hs of dat e of
communi cat i on of s anct i on t o t he par t y f or wor ki ng capi t al . If average
utilization is less than 75% in case of working capital facilities, commitmentcharges will be
levied @ 0.50% p.a. at quarterly rests on the sanctioned amount.31. Further an
undertaking is to be obtained from the borrower that it will not effectany change
in neither management nor declare/pay dividend nor encumber any of the


securities charged to the Bank, without the express consent of the
Bank.3 2 . Br a n c h t o s u b mi t c e r t i f i c a t e o f c o mp l i a n c e o f t e r ms a n d c
o n d i t i o n s , a s p e r prescribed format, to Regional
Office.33. Gener al Under t aki ng as per H. O. Ci r cul ar No. 54/ 1/ 2004 dat ed
22. 05. 04 t o besubmitted by the borrower.34. Branch Official should visit the site/property
offered as collateral and cross-check its Valuation/Title/Marketability etc. through
discrete / market enquiries and ensurethat the valuation done by the valuer is
justified. Significant divergence observed, if any, vis--vis Reports submitted by
Banks Approved Valuer and Panel Advocateshould be immediately brought to the
notice of the sanctioning
authority.35. Al l l egal expenses/ ot her expens es i ncl udi ng i nci dent al char ge
s t o be i ncur r edduring the course of operation in the account and for completion
of documentationformalities will be borne by the borrower 36. Declaration to the effect
that no court cases are pending against the company, itsdirectors and the group
concerns (as per H.O. circular no. 351/02/2003) to be obtainedand kept on Branch record.37.
Compliance of terms and conditions should be sent to RO in terms of H.O.
circular no.253/41/2002 dated 30.11.2002.38. The borrower to furnish an undertaking that,
where it transpires that the borrower has given a false declaration, the Bank shall forthwith
recall the loan.39. The Company to submit full details of all the items of Statutory
Dues along withCA Certificate of latest date and Branch to ensure that there are no
over dues.40. Consent clause to be submitted by the borrower & guarantor
permitting the Bank for submission of credit information to Credit Information Bureau
(India) Ltd.41. The Branch to ensure that all the suggestions as suggested by the advocate in
NonEncumbrance Report / Legal Search Report ought to be complied before
disbursement.The Branch Head should personally ensure that if the proposed mortgagor
acquired thetitle from Government then Non Encumbrance Report / Legal Search Report
should beat least 30 years and if the proposed mortgagor acquired the title from
sources other than the Government then Non Encumbrance Report / Legal Search Report
should be




The sai d pr oper t y i s al so mor t gaged t o t he Bank f or Mor t gage Loan of
Rs. 10. 85 Lacssanctioned to Sh.. Mahesh C. Gupta, Smt. Shashi Khandelwal,
Sh. Vikas Gupta, Sh. MohitGupta O/S as on 10.01.2010 being Rs. 7.95 Lacs and
Machinery Term Loan sanctioned toM/ s xyz Appar el s Inc- O/ S as on
10. 01. 2010 bei ng Rs. 5. 89 Lacs. The conduct of t heaf or es ai d account s
ar e s at i s f act or y as r epor t ed by t he Br anch and bot h t he account s
ar eclassified as Standard

Printscreen application 11-18

Chapter-7Findings
After undertaking the in depth theoretical study such as types of advances, SME policy
of DENA BANK, credit rating, CMA, working capital and various financial under SMEs, it
wasfound that the several Industries are growing through credit/advances granted
by banks andSMEs is a one of the fast growing Industries within all the sectors.In India, the
Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overallindustrial
economy of the country. It is estimated that in terms of value, the sector accountsfor about
for 39% of the manufacturing output and around 33% of the total export of
thecountry. Further, in recent years the MSE sector has consistently registered
higher growthr at e compar ed t o t he over al l i ndust r i al s ect or . The maj or
advant ages of t he s ect or i s i t s

employment potential at low capital cost. As per available statistics, this sector employs
anestimated 31 million persons spread over 12.8 million enterprises and the labour intensity
inthe MSE sector is estimated to be almost 4 times higher than the large enterprises.As per
the 3
rd
census report, total output of the registered units in the year 2001-02
wasestimated to be Rs. 70,861.73 crores. The SSI sector employed 2,49,32,763
persons duringt hat per i od. Ther e wer e 50606 expor t i ng uni t s account i ng
f or expor t s t o t he t une of Rs. 14,199.56 crores.Thus SME
pl ays a ver y si gni f i cant r ol e i n t he s oci o-
economi c devel opment of t hecountry.
Chapter- 8Conclusion
The project entitled CREDIT APPRAISAL UNDER SME gives the detailed knowledgeof the
whole process of loans and advances which DENA BANK performs. Starting from theloan
application from the borrower and compilation of confidential reports on him and
theguarantor, the process continues till the disbursement of loan and after it the close
monitoringtill the adjustment of Banks loan.The project was an attempt to understand and
perform the work in credit transaction andcredit appraisal proposal which I have included is
just an example of it.

I have wor ked on many such pr oposal s, whi ch ar e beyon d t he s cope of
t hi s pr oj ect . Hence the whole experience of working in such renowned public
sector unit was very goodand made me a learn a lot out of it.
Chapter-9Bibliography

Magazines
1 . B u s i n e s s w e e k 2 . F r o n t l i n e 3 . B u s i n e s s W o r l d

News Papers
1.
Business standard
2.
Financial Express
3.
Economics Times