Академический Документы
Профессиональный Документы
Культура Документы
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
OVERVIEW
Chapters: 1. Introduction 2. Exposure Levels 11. Take-over of Advances 12. Defaulters List of RBI
3. Substantial Exposures 4. CRA Min. Scores / Hurdle Rates 5. Credit Appraisal Stds. 6. Documentation Stds. 7. Delegation of Powers 8. Maturity of Advances 9. Pricing 10. Review / Renewal
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
1. INTRODUCTION
The present Loan Policy Document of the Bank is effective 26th December 2003. It is aimed at accomplishing the Banks Mission. It is an embodiment of the Banks approach to sanctioning, managing and monitoring Credit Risk.
2. EXPOSURE LEVELS
Loan Policy recognises the need for measures aimed at better Risk Management and avoidance of concentration of Credit Risk.
With this in view, limits have been prescribed for Banks exposure to single borrower, group of borrowers, specific industry / sector, etc. The primary guiding factors for fixing ceiling on exposures are the Prudential Exposure Norms prescribed by RBI.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
2. EXPOSURE LEVELS
PRUDENTIAL EXPOSURE NORMS OF RBI
Maximum Exposure of 15% of Capital Funds 40% of Capital Funds : : And upto 20% of Capital Funds 50% of Capital Funds : : For Single Borrower For a Group For Single Borrower For a Group
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
2. EXPOSURE LEVELS
The following Exposure Levels are prescribed. It would mean Maximum Aggregate Credit Facilities (FB & NFB) other than against Specified Securities:
a)
b) c)
Individuals
(Partnerships, JHF, Assn.)
:
: :
Rs. 25 crores
Rs. 100 crores As per Prudential Exposure Norms of RBI
Non-Corporates Corporates
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
A.
Qualitative Parameters: The proposition is examined from the angle of viability and also from the Banks prudential levels of exposure to the Borrower, Group and Industry. Our past experience, if any, is also taken into account. Opinion Reports from existing bankers and published data are also perused.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
i.
Liquidity : Mfg.: CR of 1.33 will generally be considered as a benchmark level of liquidity. However, the approach has to be flexible. CR of 1.33 is only indicative and may not be deemed mandatory. Others: For FBWCL upto Rs. 5 crores, CR of min. 1.00 and for FBWCL above Rs. 5 crores, CR of min. 1.20. NWC : Movements in NWC to be watched to ascertain whether there is a mismatch of LTS vis--vis LTU for purposes not readily acceptable to the Bank.
ii.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
iii. Financial soundness : This will be dependent upon the owners stake or the leverage. Here again, the benchmark will be different for Mfg., Trading, HP & Leasing concerns. For Mfg. ventures, a TOL / TNW ratio of 3 is reasonable, but deviations in selective cases may be accepted. For others, Max. 5.00.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
v. Profits : While NP is the ultimate yardstick, Cash Accruals conveys the more comparable picture in view of changes in rate of Depreciation and taxation which may have taken place in intervening years. Non-Operating income also to be excluded.
vi. Credit Rating : Wherever the company has been rated by a Credit Rating Agency for any instrument such as CP / FD, this will be taken into account while arriving at a final decision.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
ii.
* Unsecured Loans brought in by the promoters and their close friends and relatives may be treated, except in the case of Non-Corporates, as Quasi-Equity, highly selectively. The standard basic covenant that has been laid down in this regard should invariably be complied with under such circumstances.
iii. iv.
DSCR (Net) : Not to be normally below 2. DSCR (Gross) : Not to be normally below 1.75.
v.
Margin : This would depend on Debt / Equity gearing for the project. To be maximum 2 : 1. Deviations may be permitted very selectively.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
6. DOCUMENTATION STANDARDS
The ultimate objective of documentation is to serve as primary evidence in any dispute between the Bank and the borrower and for enforcing the Banks right to recover the loan amount together with interest thereon, through a Court of Law as a final resort, in the event of all other recourses proving to be of no avail. Documentation is a continuous and ongoing process covering the entire duration of an advance comprising the following stages: Pre-execution formalities Execution of documents Post-execution formalities Protection from Limitation / Safeguarding Securities
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
7. DELEGATION OF POWERS
A carefully formulated Scheme of Delegation of Powers is in operation in the Bank in respect of Financial and Administrative matters for exercise by the various functionaries. This is based on the premise that an executive is required to exercise only those powers which are related to the responsibilities and duties entrusted to him / her.
An appropriate control system is also in operation in tune with the Delegation Structure.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
The maturity of any Term Loan, including moratorium, should not normally exceed 8 years, except cases under CDR Mechanism / Rehabilitation Packages approved by the Bank, Infrastructure Loans, HTLs to individuals, Education Loans and ATLs under approved schemes.
In cases where maturity exceeds 8 years, (except in case of exempted categories mentioned above) the loans should be administratively cleared by the appropriate authorities as prescribed in Loan Policy.
The tenor of the loan will be reckoned from the day of first draw-down.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
9. PRICING
Pricing in the Bank can be divided into interest pricing and non-interest pricing. Pricing of loans upto Rs. 2 lacs will be as prescribed by RBI.
In line with RBI guidelines, the Bank announces from time to time its single Benchmark Prime Lending Rate (BPLR), i.e., reference / indicative rates at which the Bank would lend to its best customers. The BPLR would be referred to as State Bank Advance Rate (SBAR) in our Bank.
Interest rate without reference to SBAR could be charged in respect of certain categories of loan / credit like discounting of bills, etc.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
v.
The TL proposed to be taken over should not have been rephased, generally, by the existing FI / Bank after commencement of commercial production.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Detailed operative guidelines credit monitoring are in responsibilities of different control, Security documents, Debts, etc.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
1.
2. 3.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Proposals with Major deviations from the Banks laid down policies would be required to be sanctioned by a higher authority. Deviations not specifically categorized as Major would be considered as Minor, and may continue to be permitted selectively by the SA, except where a separate structure has been laid down involving approval by some other authority.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
NFB Exposure at the whole-Bank level not to exceed 2 times the FB Exposure (ECCB)
Maturity of Term Loans, including moratorium, generally not to exceed 8 years / 10 years (NCC / SA / CCC-I / SA) General Exposure Norms (ECCB) CRA linked minimum scores (CCC-II / SA / CCC-I / SA)
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
The Bank has the brand name, extensive distribution system, large customer base and ever improving technology utilisation to tap the tremendous growth potential in this sector. The Bank is aiming at increasing the share by approximately 2% annually.
Strategies being adopted include creating special delivery platforms like PBBs, Housing Finance Branches and Loan Divisions.
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Therefore, the sector is being presently extended finance at concessional rates, with flexibility in financing norms.
Export Finance is by and large regulated through the directives / guidelines issued by RBI, DGFT & FEDAI. Export Finance is broadly classified into 2 categories Pre-Shipment Finance
Post-Shipment Finance
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1
THANK YOU
Project SME Gyanshala Capsule Training Programme for Officials handling SME Credit 9.1