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APPRAISAL &
NPA
MANAGEMENT
ARKADIP GUPTA
PGDMB14-101
CONTENTS:
INTRODUCTION
IOB
a general introduction
CREDIT APPRAISAL methods used
NPA MANAGEMENT provisioning of
assets
CASE STUDY ANALYSIS
i. ABC TRADERS
ii. ABC GRAPHICS
CONCLUSION
INTRODUCTION
Experience
Case
at IOB
study details
Lessons
learnt
Recent Achievements
IOB adjudged Best Public Sector Bank in
Priority Sector Lending by Dun & Bradstreet.
IOB has bagged Best bank Award from Govt
of Tamil Nadu for its support to Self Help
Group (SHGs) in the State.
IOB received Banking Excellence Award
from Finance Ministry, GOI
IOB awarded Customer Focus Award for
constantly delivering industry leading
service standards.
Commendable IT Achievements (CBS, CTS,
Mobile Banking, Payment gateway, etc)
SWOT ANALYSIS
Trend Analysis
of IOB
Important ratios
in NPA analysis and values
NAME OF RATIO
4.98%
3.19%
CREDIT APPRAISAL
6 Cs of CREDIT
APPRAISAL
WORKING CAPITAL
CA
CL
WC
Methods:
I.
Turnover Method
II.
Max. Permissible Banking Finance
III.
Cash Budget Method
Types of Loan
Fund
I.
II.
III.
Based
WC loan
Term loans
Composite loans
Non-Fund
I.
II.
Based
Bank Guarantee
Letter of Credit
The workflow of
CREDIT APPRAISAL
Proposal
approval
STAR
T
Receipt of
documents
from
applicants
Proposal
Assessme
nt
Documen
t
verificati
on
Proposal
preparatio
n
Preparation
of financial
data
Documentati
on
mortgaging
and
agreements
Disburseme
nt of loans
Documen
t
verificati
on
Post
sanction
process
STOP
NPA MANAGEMENT
Internal factors
External factors
Impacts:
I.
II.
III.
IV.
Asset Categorization
SubStanard
Asset
Doubtful
Asset
Loss
Asset
Standard
Asset
NPA provisioning
SARFAESI ACT,2002
Allows the banks to recover their nonperforming assets without the legal
intervention. The Act provides three
alternate measures:
I.
Securitization
II. Asset Reconstruction
III. Enforcement of security without legal
powers
Other preventive
measures
DRT
LOAN
RESTRUCTURING
COMPROMISE
/ SETTLEMENT
SCHEMES
BIFR
SALE
ABC TRADERS
WORKING CAPITAL RENEWAL LOAN
The company primarily was distributor of
imported papers and boards
The method followed for renewal of the WC
loan was Nayak Committee Method
Owing to their foreign transactions, they
were also given a LG of 1 CR.
The interest rate was 4.50% over BPLR.
The collateral was worth of 2.26Cr.
It was private limited company with
presence in Tamil Nadu and parts of
Karnataka
ABC TRADERS
BALANCE SHEET
Calculation:
1.
2.
ABC GRAPHICS
WORKING CAPITAL LOAN
The
ABC GRAPHICS
BALANCE SHEET
1.
COMPARATIVE STUDY
between the 2 cases
ABC TRADERS
Private limited
company
The proprietors were
highly experienced in
the paper industries
Its sales prediction
were much accurate
than the former
They had excellent
history of borrowings
with IOB
ABC GRAPHICS
Proprietary company
They were new in the
area of business
The projected sales
on the basis of which
loan was approved
was too ambitious
Their risk assessment
was poor
LESSONS LEARNT
Lessons learnt
Proper