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POLICIES AND
PROCEDURES
Paarthasaarathi
Associate Professor
Department of Finance
AICAR BUSINESS SCHOOL, MUMBAI
loan
Capacity:
The loan officer must be sure that the
customer requesting credit has the authority to
request a loan and the legal standing to sign a
binding loan agreement. This customer
characteristic is known as the capacity to
borrow money.
Factoring.
A bank can purchase a borrower's
accounts receivable based upon some
percentage of their book value.
The borrower's customers are required to
send their payments to the purchasing
bank.
Usually the borrower promises to set
aside funds in order to cover some or all
of the losses that the bank may suffer
from any unpaid receivables.
Real
Public notice of a mortgage against real
estate is filed with the Registrar in the
place where the property resides.
The bank may also take out title
insurance and insist that the borrower
purchase insurance to cover damage
from floods and other hazards, with the
bank receiving first claim on any
insurance settlement that is made.
Thank you.
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