Why compliance Over the years there has been parallel development in the art of camouflaging submission of data to the banking system, along with improvement in technologies as well as introduction of risk control measures in banks/financial institutions. Globally bankers, under the aegis of BIS had taken the initiative to evaluate the information available to […]Read More
Purpose For expansion of processing capacity. Project cost The cost of the project is estimated at ……lakhs with D/E of ….. Margin / Promoter’s Contribution 25.00% By way of promoters contribution Equity/ internal accruals/ unsecured loans Rate of Interest MCLR + …% i.e. 11.10% at present with monthly rest. The One Year MCLR effective […]Read More
Working Capital Facility – export Finance Terms of sanction of working capital facility for export is generally advised in the following form for existing borrowers. The expression MCLR represents the benchmark, which may be differently named in different banks. Nature of facility WCFC/ EPC limit enhanced from Rs………. Lakhs to Rs……. Lakhs Limit […]Read More
Working Capital Facility The terms of sanction for fund based working capital limits are as under: Nature of facility Fund Based Working Capital (Cash Credit) limit enhanced from Rs.00.00 Lakhs to Rs.00.00 Lakhs under . Limit Rs.00.00 Crores ( subject to renewal/ review after 12 months) Non Fund based working capital limit : LC …../ guarantee […]Read More
Conditions Precedent in Corporate advances Generally the conditions precedent in case of working capital limits contain the following provisions: The limits will be disbursed on fulfillment of all the terms and conditions of sanction stipulated by the Bank. Borrower shall give unconditional acceptance of terms and conditions as per letter of sanction, which will form […]Read More
Mandatory Covenants While advising sanction of credit facilities, banks issue mandatory covenants , which are general guidelines to be complied by the obligor. These are general safeguards to protect the interest of the bank subsequent to the disbursement. Following are the restrictions mentioned by the banks at the time of allowing credit facilities: The borrower […]Read More
Amid the early signs of revival of the economy, RBI has been proactively nursing the financial ecosystem system with ample liquidity to accelerate credit growth. Manufacturing Purchasing Managers Index (PMI) has gone up to 58.9 in October 2020, the highest in more than a decade. Service sector PMI also increased from 49.8 in September to […]Read More
Internal risk rating (IRR) exercise undertaken annually by banks is like an antibiotic as their credit officers can thereafter conscientiously discard borrowers with a poor prognosis. Rating process The IRR exercise is intended to rate all standard accounts and the Rating Managers at banks begin the process of Rating as soon as audited financials are […]Read More
Post pandemic economy is heavily reliant on restructuring primarily because revenue stream has been intercepted while liability is still escalating. In order to ensure that business units sustain the eventuality, regulator has taken a series of measures which include restructuring so that the accounts are not impaired and employees as well as suppliers dependant on […]Read More
Brief Background Bankers’ primary job is to deploy funds they collect on certain terms from various sources including deposits. By virtue of prevailing applicable Laws and regulations of the country, no bank is expected to refuse acceptance of deposits from its customers, and hence banks have no control on the amount of flow of deposits […]Read More
