1. What are the criteria’s for Loan approvals?

 KYC (Know Your Customer) Document.

 All mandatory documents with respective loan.

 Loan profile score.
 Collateral
 CIBIL score.

2. What is CIBIL?
Credit Information Bureau (India) Limited, commonly known as CIBIL. This is India’s first Credit
Information Company or Credit Bureau. Which is established in 2001. Members of CIBIL-Credit
Information in India (Banks, Financial Institutions, NBFC(s), Credit Card Companies. It maintains
records of all credit-related activity of individuals and companies including loans and credit
cards.

3. What are other organization maintained the financial history of customer in India?
SMERA (Small and medium Enterprises rating agency).
CRISIL.
ICRA (International credit rating agency).
CIBIL (Credit information Bureau India Limited).

4. What is credit (CIBIL) score?

Credit score is a numerical value from 300 to 900
This score is provided to customer as per their financial history by CIBIL.
This score is most important factor for loan approvals.

 If CIBIL Score is in between 300-550 - BAD (Loan is not approved)

 If CIBIL Score is in between 550-650 - FAIR(Loan approval chances is less)
 If CIBIL Score is in between 650-750 - GOOD (Loan is approved)
 If CIBIL Score is in between 750-900 - EXCELLENT(Loan can definitely approved)

5. What is CIBIL Report?

A credit report is a detailed account of your credit history. At this point only Cibil reports are
getting used by all the banks and major lending institutions. It has 5 sections

 Credit score
  Personal Data
 Employment information
 Accounts information
 Enquiry information.

A credit report contains the following information:

 Current outstanding balance
 Defaults on loans, if any
 Number of inquiries made by financial institutions
 Payment history of debts and other expense
 Kinds of credit used
 Credit available on credit card.

CIBIL report the credit history report card. On the basis of CIBIL report the CIBIL score is
created .The CIBIL report generate on the basis of previous loans taken, Existing Loan EMI, No. of
Credit card and Bank Account currently holding.

6. What is Difference between CIBIL Score and CIBIL Report Score?

What is a CIBIL Score?

1. A CIBIL score or credit score is a number that is used to signify the creditworthiness of an
individual. CIBIL scores are derived by processing loan and credit related information of
customers which is sourced from lenders registered with CIBIL which is also known as a credit
bureau.
2. Credit bureaus use multiple parameters to arrive at the final credit score of a customer.
This information can be number of credit channels owned by you, repayment history of credit
card bills, credit utilization information and details about the number of secured and
unsecured loans availed by you.
3. A credit score by CIBIL lies in the range of 300-900. A credit score above 750 is considered a
good CIBIL score; anything below that does not reflect well on the creditworthiness of a
customer.
4. Different rating agencies have different scoring patterns. For example, Equifax sets its range at
1-999. Lower the credit score of a customer, higher is the default-risk that banks associate
with him/her. This makes it difficult for such customers to obtain loans. Even if banks agree
to lend to such customers, it is generally at a higher rate of interest.
5. A CIBIL score is different from a CIBIL report in the fact that while a CIBIL score is a numerical
expression derived as a result of processing credit information, a CIBIL report is a
comprehensive document containing the overall credit information. This means that credit
scores are just numbers that indicate the creditworthiness of customers whereas credit
reports are documents that have detailed information about their credit history.

What is a CIBIL Report?

1. A CIBIL report also referred to as a Credit Information Report (CIR) is a collection or running
record of an individual’s credit and loan related information.
2. A credit report contains not just financial information but also personal details like
PAN number, name, address, gender etc. CIBIL report is an important document to track all your
credit related data.
3. A CIBIL report is generated by CIBIL through customer credit data received from various
banks and lending entities. This data is then formatted and processed to make a detailed
credit report for each customer. Following is the information commonly contained in a CIBIL
report.

 Personal information like name, age, address etc.

 Employment information along with income details
 Loan details along with types of loans availed in the past, ongoing loans and their
subsequent repayment timelines
 Defaults on loans, if any
 Loan settlements, if any
 Credit card details for all cards held by you
 Credit card bill payment defaults, if any
 Credit card cancellations, if any
 Number of enquiries made by you through various loan providers
 Credit score, which is an important part of your credit report

7. Why the CIBIL score is necessary?

Because on the basis of CIBIL score we can identify the previous financial history of that
customer.

8. What are the factors that affect CIBIL Score?

Negatives-

 Late Payments & defaults.

 Number of loans and credit card applications submitted.
 Credit Payment History.
 High percentage of unsecured loans.
 Giving guarantee for loan.
 Increase in credit limit.
 Not checking your credit report for mistakes.
 Credit utilization limit.
 Multiple loan application.
 Number of Loan accounts.
 Outstanding Debt.
 Length of one’s credit history.
 Tenure of the Loan.

Positives-
 Regular Loans and credit card payments.
 Loans and credit cards that you hold currently.

9. What is EMI?
An EMI or Equated Monthly Installment is a fixed amount of money that you need to pay to your
bank or financial institution every month as repayment towards the loan you have taken, until
your loan is fully repaid.
10. How to calculate EMI?
In over application there is a emi calculation window in we can enter Amount, Duration, Rate
of Interest. When we click on button its shows the all EMI of loan. We can verify that all EMI
from sample EMI amount which is provided by client (in xsl format).

Formula for EMI calculation

(P x I) x ((1 + r)n)/ (t x ((1 + r)n)- 1)

11. How to Collect EMI?

In Our Application We Can Collect EMI On
 Monthly Basis.
 Quarterly Basis.
 Half Yearly Basis.
 Yearly Basis.

12. Why EMI is always equal?

 An equated monthly installment (EMI) is a fixed payment amount made by a
borrower to a lender at a specified date each calendar month.
 Equated monthly installments are used to pay off both interest and principal each month
so that over a specified number of years, the loan is paid off in full.
 Moreover, EMI is categorized in two categories i.e. Principal amount & interest
amount.
 At the initial level Principal amount is less & Interest amount is higher. & in last level
principal amount is higher & interest amount is less.
13. What is Lender?
 A lender is an individual, a public group, a private group or a financial institution.
 Lender makes funds available to another.
 Lender expects that the funds will be repaid, in addition to any interest and/or fees,
either in increments (as in a monthly mortgage payment) or as a lump sum.

14. What is Borrower?

A person or organization that takes a loan from a bank under an agreement to pay it back
later, typically with interest.

15. What is Co-Borrower?

An additional borrower(s) whose name(s) appear on loan documents and whose income and
credit history are used to qualify for the loan.
Under this arrangement, all parties involved have an obligation to repay the loan.
For mortgages, the names of applicable co-borrowers also appear on the property.

16. What is Collateral?

Something pledged as security for repayment of a loan, to be forfeited in the event of a default.
Collateral offers some security to the lender should the borrower fail to pay back the loan,
If the borrower stops making the promised loan payments, the lender can seize the collateral to
recoup its losses.

17. What are types of Interest?

Simple Interest - It is calculated only on the principal amount of the loan.
Principal × interest rate × Time= interest
Compound Interest- It is calculated on the principal and on interest earned.
Principal × interest rate = interest for Year One

18. What is Split EMI (Equated Monthly Installment)?

There are Two types of split EMI.
Fix EMI:- "A fixed payment amount made by a borrower to a lender at a specified date each
calendar month.
 For example- Fixed rate of interest on a loan would mean that the equated monthly instalments
or EMIs would remain constant over the tenure of the loan.

Floating EMI:- "A payment amount made by a borrower to a lender at a specified date
each calendar month, here payment amount is not fix. It is varying with market value.
For example: In Floating EMI floating interest rates, the EMIs would fluctuate as per the market
dynamics as interest rate increases or decreases.

19. What is LTV (Loan To Value)?

LTV, or loan-to- value, is all about how much mortgage you have in relation to how much your
property is worth. It's normally a percentage figure that reflects the percentage of your
property that is mortgaged, and the amount that is yours (the amount you own is usually called
your equity).
Example: - For example, if you have a mortgage of 150,000 on a house that 's worth
200,000, you have a loan-to- value of 75% therefore you have 50,000 as equity.

20. What is FOIR (Fixed Obligations to Income Ratio)?

 FOIR (Fixed Obligations to Income Ratio) is a popular parameter which banks use to determine
loan eligibility.
 As per bank’s eligibility criteria, the borrowers should restrict all their fixed obligations
including the currently applying loan EMI to 50% of his monthly income. Or in other words,
considering that 50% of your income is required for your living, banks would see that all
your monthly loan obligations / liabilities should be only 50% of your monthly income.
 Eg . suppose if your monthly income is Rs.50000/- and you have other loans with EMI 15000.
In this scenario, bank would approve you a loan which EMI would be maximum 10000 (if they
mentioned FOIR as 50%).
 FOIR ratio vary from bank to bank and from case to case, but on an average it would be
with 40% to 55%.

21. How to handle Defaulter customer?

Tweak the EMI and Loan Tenure: This option is more suitable in case of partial loss of
income or borrower is finding it difficult to pay the EMI. It may be due to sudden unforeseen
expenses or medical emergency. In such cases, it is advisable to approach the bank and request
them to lower the EMI and increase the tenure. If the past repayment record is good, then the
bank may consider the request of a borrower. Bank will reduce the EMI to avoid default on the
bank loan.
Refinance the loan: Not many borrowers are aware of this option. This is one of the best
choices to prevent bank loan default. It is more preferred option in the case of a credit card
payment default. The outstanding amount is refinanced and converted to a personal loan
with stricter terms. In the case of other loans, it is always advisable to explore option no one
before considering a refinancing of the same.
EMI Holiday: A relatively new concept and not many borrowers are aware of it. If your lender
 provides a facility of EMI holiday, then you should avail the same. Under this facility, a
borrower is exempted from EMI payment for Three to Six months.
Loan against assets: Not many people are aware that they can avail loan against existing
assets. This option should be exercised if a borrower is sure that he will control the financial
distress in few months.
Loan from employer/Advance against Salary: In case bank loan default is due to a reason other
than job loss than a borrower can always approach his/her employer. Most of the organizations
have employee friendly policy to provide a loan at lower interest rate generally 2%. Some of the
employers also provide an advance against salary.

22. What is NPA?

 NPA stands for Non-Performing Assets.
 A non- performing asset (NPA) refers to a classification for loans on the books of financial
institutions that are in default or are in arrears on scheduled payments of principal or interest.
 Most Cases, Debit is Classified as Non Performing when Loan Payments have not been made
for a period of 90 days.
 A non- performing asset (NPA) is a loan or advance for which the principal or interest
payment remained overdue for a period of 90 days.
 There are 4 types of NPA.
1. Standard Assets.
2. Sub Standard Assets.
3. Doubtful Assets.
4. Loss Assets.

23. How to handle duplicate customer data (DCD)?

 When new customer/borrower apply for loan first time, then system generate a unique
customer id for that customer.
 The loan is sanctioned then loan id is also generate for that particular loan. After some
periods the same customer apply for
 The another loan , Then system detect him and do not create new customer id but yes , new
loan id is generated for the new loan.

24. What is Prepayment?

Prepayment is the early payment of a loan by a borrower, in part or in full, often as a result of
optional refinancing to take advantage of lower interest rates.

25. What is loan Maturity?

In finance, maturity or maturity date refers to the final payment date of a loan or other
financial instrument, at which point the principal (and all remaining Interest) is due to be
paid.
The term fixed maturity is applicable to any form of financial instrument under which the loan
is due to be repaid on a fixed date.

26. What is penalty?

A punishment imposed for violating a law or agreement, money one w il l pay for breaking a law
or violating part or all of the terms of a contract
 27. What are the types of Accounts?
Following are the types of Accounts
1. Saving Accounts.
2. Current Account.
3. Recurring Deposit.
4. Fixed Deposit.

28. What are the types of Cheque?

Following are the Types of Cheque.
1. Bearer Cheque.
2. Order Cheque.
3. Crossed Cheque.
4. Account Payee Cheque.
5. Company Crossed Cheque.
6. Stale Cheque.
7. Post Dated Cheque.
8. Anti-Dated Cheque.

29. ACH :( see Automated Clearing House)

Automated Clearing House (ACH) payments are electronic payments that pull funds directly from
your checking account. This feature is available only to borrowers who are not currently on active
payroll status.

Instead of writing out a paper check or initiating a debit or credit card transaction, the money
moves automatically. ACH can make your life easier, but it can also cause problems.

30. Amortization: Loan payments by equal periodic amounts calculated to pay off the debt at the
end of a fixed period, including accrued interest on the outstanding balance.

31. Amortized Loan: A loan to be repaid, by a series of regular instalments of principal and
interest, that are equal or nearly equal, without any special balloon payment prior to maturity.

32. Anniversary Date: The date upon which the twelfth payment is due. This occurs in the same
calendar month and day each year thereafter on any MOP Promissory Note.

33. Annual Percentage Rate (APR): A percentage rate that reflects the amount of interest earned
or charged.

34. Applicant: An eligible Appointee designated by one of the ten University campuses, Office of
the President or, LBNL as eligible to apply for a loan under the UC Home Loan Program.

35. Application Checklist: An itemized list of documentation that the borrower and the campus
need to provide to the Office of Loan Programs for either pre-approval or loan approval. Also
known as form OLP-09.

36. Beneficiary: The lender on the note secured by a deed of trust.

37. Down payment: The difference between the purchase price of real estate and the loan
amount. The borrower is responsible for providing the funds for the down payment.

38. Employee: An Appointee who has actively begun to serve in his or her full-time position.

39. Final Settlement (or Closing) Statement: A financial disclosure giving an accounting of all funds
received and disbursed at loan closing. Also known as HUD 1 Closing Statement.

40. Loan Denial letter: A letter from the Office of Loan Programs denying a loan to a specific
individual. The reasons for denial may include credit history, lack of verifiable liquid assets,
inadequate income, etc.

41. Loan Underwriting: The analysis of risk and the decision whether to make a loan to a potential
homebuyer based on credit, employment, assets, and other factors.

42.Overall Debt to Income Ratio: The ratio, expressed as a percentage, which results when a
borrower's total monthly debt, including the proposed mortgage principal, interest, taxes &
insurance and all recurring monthly debt (such as credit card payment, student loan, mortgage,
and auto loan), is divided by the gross monthly income. The maximum allowable overall ratio for
MOP loans is 48%.

43. Pre-approval: Certificate of Pre-Approval issued by the Office of Loan Programs that states a
borrower’s credit, assets and income have been verified and the applicant qualifies for a Program
loan at a specified amount and interest rate. At the time of pre-approval, the specified initial
interest rate is not “locked-in” and is therefore subject to change prior to the issuance of a loan
commitment letter. The initial interest rate will be the Program rate in effect at the time a loan
commitment is issued.

44. Principal: The amount of debt, exclusive of interest, remaining on a loan.

45. Principal and Interest to Income Ratio: The ratio, expressed as a percentage, which results
when a borrower's proposed Principal and Interest payment expenses is divided by the gross
monthly household income. The maximum allowable ratio for MOP loans is 40%. Also known as
P&I ratio.

46. Processing: The preparation of a mortgage loan application and supporting documents for
consideration by a lender.

47. Conveyance: The transfer of the title of land from one person to the immediate preceding
owner. This instrument of transfer is commonly used to transfer the legal title from the trustee to
the trustor after a deed of trust has been paid in full.

48. Refinancing: The process of paying off an existing loan and establishing a new loan.

49. Renovation: The restoration of the primary residence. Generally, this includes repairs,
improvements and additions to the permanent structure of the primary residence.

50. OVD- Officially Valid Document (OVD) means the passport, the driving licence, and 9proof of
possession of Aadhaar number, the Voter's Identity Card issued by the Election Commission of
India, job card issued by NREGA duly signed by an officer of the State Government and letter
issued by the National Population Register.
51. DE dupe- DE dupe means removing the duplicate entries from a list or database. The private
sector banks have over the years taken steps to ensure that one customer is not allotted multiple
UCIC's, as they had the advantage of starting from a clean state.

52. De-dupe stands for de-duplication and is defined as optimizing data storage by eliminating
duplicate copies of data. An example of de-dupe is to remove multiple copies of the same file that
are stored in a database in multiple locations. Verb.

53. GST for Loan-

A GST of 18% is applicable on loan processing charges Generally, a personal loan processing fee
ranges from 2-3%, while Standard Chartered Bank charges up to 2.25%. You can get a loan amount
up to Rs 30 lakh attractive interest rates and get up to 50% discount on processing fees for online
applications.

54. Processing Fess-

Bank charges housing loan processing fee to cover its cost for completing loan related formalities
which includes expenses incurred for documents collection, credit appraisal and verification etc.

55. How does hunter work?

By highlighting suspicious applications, Hunter prevents application fraud allowing you to

investigate and prevent fraud without inconveniencing honest customers. Hunter matches the
application data against multiple data sources including your fraud data, the device the application
is made on as well as shared fraud databases, dedicated ‘watch lists’ and mortality data.

56. Loan Termination- A termination statement is a legal document signed by a lending institution.
The purpose of the document is to confirm that a loan, previously extended by that lender, has
since been repaid by the borrower.

57. Loan Closer- Closing Your Home Loan? Ensure That You Complete These Important Tasks
You collect all your original documents from your lender.
Obtain a 'no dues' certificate from your lender.
Get lien on property removed.
Obtain the updated Non Encumbrance Certificate.
Your credit records are updated.

58. Pre-Maturity- Pre-closure is the process when one repays the loan before the loan tenure
ends. Some lenders do levy a penalty for preclosing the loan. However, pre-closure at times does
help in lowering the interest rates and debt burden. ... Moreover, the banks do charge a pre-
closure fee to compensate on the interest amount lost

59. Ballon Payment- A balloon payment is a larger-than-usual one-time payment at the end of
the loan term. If you have a mortgage with a balloon payment, your payments may be lower in the
years before the balloon payment comes due, but you could owe a big amount at the end of
the loan.

60. Bullet Payment- A bullet repayment is a lump sum payment made for the entirety of an
outstanding loan amount, usually at maturity. It can also be a single payment of principal on a
bond. In terms of banking and real estate, loans with bullet repayments are also referred to as
balloon loans.
61. Moratorium period- A moratorium period is the time during a loan term when the borrower is
not required to make any repayment. It is a waiting period before which repayment of EMIs
resumes. Normally, the repayment begins after the loan is disbursed and the payments have to be
made every month.

62. Deviation- Each Bank have certain terms and conditions for extending the loan facilities to
their customers .Sometimes few customers are not able to comply the set terms and conditions of
the Bank than Bank deviate from terms and conditions to grant the loan under the discretionary
powers .This is called deviation.

63. Hyphothecian- Hypothecation means offering an asset as collateral security to the lender.
Herein, the ownership lies with a lender and the borrower enjoys the possession. ... It is usually
done in a case of movable assets, for creating the charge against collateral for the loan given.

What is Car Loan “hypothecation”? Hypothecation is the practice where you pledge an asset (in
this case, a car) to a bank when applying for a loan. The bank keeps the car as collateral or security
until you pay it off.

64.Hypothecation is used for creating charge against the security of movable assets, but here the
possession of the security remains with the borrower itself.

The best example of this type of arrangement are Car Loans. In this case Car / Vehicle remains
with the borrower but the same is hypothecated to the bank / financer. In case the borrower,
defaults, banks take possession of the vehicle after giving notice and then sell the same and credit
the proceeds to the loan account.

65. Pledge- (1) Pledge is used when the lender (pledgee) takes actual possession of assets (i.e.
certificates, goods). Such securities or goods are movable securities. In this case the pledgee
retains the possession of the goods until the pledger (i.e. borrower) repays the entire debt
amount. In case there is default by the borrower, the pledgee has a right to sell the goods in his
possession and adjust its proceeds towards the amount due (i.e. principal and interest
amount). Some examples of pledge are Gold /Jewellery Loans, Advance against
goods,/stock, Advances against National Saving Certificates etc.

66. Mortgage: is used for creating charge against immovable property which includes land,
buildings or anything that is attached to the earth or permanently fastened to anything attached
to the earth (However, it does not include growing crops or grass as they can be easily detached
from the earth). The best example when mortage is created is when someone takes a Housing
Loan / Home Loan. In this case house is mortgaged in favour of the bank / financer but remains in
possession of the borrower, which he uses for himself or even may give on rent.

67. APR- The term “annual percentage rate (APR)” refers to the annual rate of interest charged to
borrowers and paid to investors. APR is expressed as a percentage that represents the actual
yearly cost of funds over the term of a loan or income earned on an investment.

68. Disbursement- A disbursement is the actual delivery of funds from a bank account or other
funds. It is a payment made by a company in cash or cash equivalents during a set time period,
such as a quarter or year. ... Disbursements measure the money flowing out of a business and may
differ from actual profit or loss
69. BPI (Broken Period Interest) An indicative broken period is the time gap between the
disbursement of a personal loan and the time when the payment of EMI starts. Banks
charge interest on the broken period which is called broken period interest. For example, the EMI
of a particular personal loan has to be debited on the 5th of every month.

70. DBR Debt Burden Ratio or DBR is a mathematical ratio which banks take into account while
deciding whether a particular applicant is eligible for a loan or not. ... The DBR is calculated as the
ratio of the Total Debt the applicant owes to Total Assets the applicant owns.

71. Write off

The term “write-off” is really just an accounting term. What it means is that the lender doesn't
count the money you owe them as an asset of the company anymore. Its financial statements will
reflect that change. They're required to write off certain bad loans so as not to mislead investors.

72. UCIC : UCIC is Unique Customer Identification Code.

Unique Cust ID helps the bank to identify customers, track the facilities availed, monitor financial
transactions in a comprehensive and combined manner at a customer level and enable the bank to
have a better approach to risk profiling of customers.

73. QDE (Quick data Entry)

-Name
-Address / contact details.
-Identification Details (Aadhar Card, PAN card, Licence ID )
-Loan Amount tenure.
-Collateral Details.
-Documents proof submission.
-Application ID,/Loan number is generated in this phase.

74. Loan sanction amount

A sanction letter typically carries the total amount that a home loan borrower may avail,
repayment tenor, applicable interest rate and its type (fixed, floating or hybrid). Accordingly, the
equated monthly instalment that the borrower has to pay is determined.

75. Top up loan

Top-up loan is a facility provided by banks, housing finance companies and other financial
institutions that allows you to borrow a certain amount of money over and above your home loan.
Features of Top-Up Loan: Eligibility: The top-up loan is not available to everyone who has availed a
home loan from a bank.

76. Moratorium Period Education Loan (Happy period)

Repayment starts after a 'moratorium period' or 'repayment holiday', that is, one year after the
end of studies or six months after getting a job, whichever is earlier. The borrower must have a
repayment strategy in place before EMIs start. Student borrowers get many relaxations.
 77. Maturity

In finance, maturity or maturity date is the date on which the final payment is due on a loan or
other financial instrument, such as a bond or term deposit, at which point the principal (and all
remaining interest) is due to be paid.

78. SLR – (STATUTORY LIQUIDITY RATIO) Every bank has to maintain a certain % of their total
deposits in the form of (Gold + Cash + bonds + Securities) with themselves at the end of every
business days. Current SLR is 20.75%.

79. RETAIL BANKING Retail banking is a type of banking in which direct dealing with the retail
customers is done. This type of banking is also popularly known as consumer banking or personal
banking. It is the visible face of banking to the general public.

80. Who will be proprietor, promoter, partners, and guarantor?

Proprietor: - One granted ownership of a colony and full prerogatives of establishing a government
and distributing land. A person who has the legal right or exclusive title to something: owner.

Promoter: - A promoter is an individual or organization that helps raise money for some type of
investment activity. Promoters are often used for penny stocks, where false promises and
misrepresentation of the company or its prospects have become commonplace

Partners: -The definition of a partner is a person who takes part in an activity or business with others
or one of two people who are in a relationship. An example of a partner is someone who owns a
business with another.

Guarantor: - A guarantor is a third party who 'guarantees' a loan, mortgage, or rental agreement.
This means they agree to repay the total amount owed if the borrower or renter cannot pay what
they owe. By guaranteeing the agreement, you become responsible for any arrears that occur.

81. DBR: - Debt Burden Ratio is a mathematical ratio which banks consider while deciding an
applicant whether is eligible for loan or not. Though all the banks have specific rule of lending but
there are some invariable factors which all the banks follows e.g. Debt Burden Ratio. The formula for
calculating debt burden ratio is

Debt Burden Ratio= Total Debts/ Total Assets

example. Let’s say you have a monthly income of Tk. 20000 and you have EMIs of Tk. 2000, Personal
Loan instalment of Tk. 3000 and Rental Expenditure Tk. 5000. So, your DBR will be

DBR= 10000/20000 X 100= 50%

82. Delegation Matrix /Approval Authority

Delegation Matrix : - A delegation matrix is one tool used by leaders to aid in the decision as to which
tasks to delegate and which to retain. The delegation matrix is a 2×2 table measuring passion or
enjoyment of a task on the y-axis, and competence on the x- axis
.

Approval Authority: - means the authority delegated by the Organization to a person designated to
occupy a position to approve on its behalf one or more procurement functions within the plan-to-pay
cycle up to specified dollar limits subject to the applicable legislation, regulations, and procedures in
effect at such time.

83. Conditions and Covenants.

Conditions:
A document describing the status of assets, liabilities, and equity of a person or business at a particul
ar time.

Covenants: -

 Covenants are promises or agreements entered by a borrowing party that are financial in
nature.

 Covenants are promises or agreements entered by a borrowing party to comply with the
terms agreed upon in relation to a loan agreement.

 A very basic example of a financial covenant is when the borrowing company agrees to
maintain (staying above or below) an agreed financial ratio, such as the interest coverage
ratio, total assets to debt ratio, or debt to equity ratio.

84. Securities and Guarantees (Collateral types)

Collateral is any property or asset that is given by a borrower to a lender to secure a loan. It
serves as an assurance that the lender will not suffer a significant loss.

Collateral e.g.: title of a parcel of land, a car, or a house and lot

Securities, on the other hand, refer specifically to financial assets (such as stock shares) that are
used as collateral.

Securities e.g.: bonds, futures, swaps, options, and stocks.

85. Documents related to entity (Profit and loss Balance sheet etc.)

1) Income Tax Returns along with computation for last 2 financials years

2) Balance Sheet and Profit & Loss account along with all annexures (duly CA certified and audited if
applicable)

3) Last six months current account statement of the business entity and saving account statement of
individual.

86. Watch out Investor: -

To prevent unscrupulous entities /individuals from harming investors and, thereby help build public
confidence in the financial system enabling greater flow of public investment to the right avenues.

87. CAM (CREDIT ASSESMENT MEMO): -

A credit analysis memorandum (CAM) is the starting point of an organized and officially documented
appraisal of a loan proposal. It kick-starts a formal process of structuring and packaging a loan
request for bank management’s approval.

CAM PROCESS: - The credit analysis process refers to evaluating a borrower’s loan application to
determine the financial health of an entity and its ability to generate sufficient cash flows to service
the debt.

88. Term loan: - A term loan is a monetary loan that is repaid in regular payments over a set period of
time. Term loans usually last between one and ten years, but may last as long as 30 years in some
cases. A term loan usually involves an unfixed interest rate that will add additional balance to be
repaid.

Example of Term Loan: A term loan is a type of advance that comes with a fixed duration for
repayment, a fixed amount as loan, a repayment schedule as well as a pre-determined interest rate.
A borrower can opt for a fixed or floating rate of interest for repayment of the advance.

89. Overdraft: - An overdraft is an extension of credit from a lending institution that is granted when
an account reaches zero. … Basically, an overdraft means that the bank allows customers to borrow a
set amount of money. There is interest on the loan, and there is typically a fee per overdraft.

90. Cash credit: - A Cash Credit (CC) is a short-term source of financing for a company. In other
words, a cash credit is a short-term loan. … It enables a company to withdraw money from a bank
account without keeping a credit balance. The account is limited to only borrowing up to the
borrowing limit.
91. SL (Sanction Letter) report what it consist of?

Sanction Letter is a letter issued by the lender to an applicant who has applied for the loan.
This letter authorizes the applicant that he/she is eligible to avail of a certain amount of loan from a
lender subject to the fulfilment of certain terms and condition as mentioned in the sanction letter by
the lender. Sanction letter format is based on information like sanctioned loan amount, loan tenure,
home loan interest rate, and terms and conditions of the lender.

Types of bank

 Central Banks.

 Retail Banks.

 Commercial Banks.

 Shadow Banks.

 Investment Banks.

 Cooperative Banks.

 Credit Unions.

92. What is ECS (Electronic clearing House)

Electronic Clearing Service (ECS) is a mode of electronic funds transfer from one bank account to
another bank account using the services of a Clearing House. This is normally for bulk transfers from
one account to many accounts or vice-versa.