ATTN: ROLL NOS.

906 TO 932
 YOUR INDIVIDUAL PRESENTATIONS
ON ALLOTTED TOPICS WILL BE ON
THURSDAY, 12TH AUGUST, 2010
FROM 2 PM TO 5 PM.

 NO CLASSES FOR ME ON 13-08-2010

V.Narayanan
 BANK FINANCE
To Individuals: Personal loans( clean)-
( secured)-against security/scrip
Vehicle loans/Consumer loans
Housing Loans/Reverse Mortgage
Education Loans
Margins: 5% to 30%
Interest: linked to PLR-fixed/floating ?
Principal security: Hypothecation/Pledge/Lien
Collateral security: Mortgage, Assignments.
Documentation.
Repayment: EMI
 BANK FINANCE
Type Amount Interest(%) Margin Term(months)
(%)

Personal loans(S) Need based 14% 36

Personal Need based 14/16% 36

loans(U/S)
Vehicle loans Cost of 12-13.50% 30 72
vehicle less
margin

Housing loans Rs. 5 lacs to 12.00/12.50 30 15-20 years

Rs. 300 lacs

Educational Dom-10 11% upto Rs. 5 Various ways

loans lacs 7.50 lacs and 15
Abroad-20 12%thereafter
lacs
 BANK FINANCE
 To Business enterprises:-
 FUND BASED LIMITS
 Working capital
 in the form of Cash Credit Limit
 Only repayment of Interest charged
 Account monitored through stock statements and
inspections.
 Sanctioned limit/drawing power/drawing limit
 Annual review of limit by submission of annual financial
audited statements with other details
 BANK FINANCE
 To Business enterprises:-
FUND BASED LIMITS
Term Loans- for acquisition of fixed assets.
Repayable in Instalments, over 3-7 years
Appraisal to determine repayment capacity-
DSCR, cash flow projections etc.
Monitoring through ledger.
 inspections to ensure the quality/usage of
asset financed.
 BANK FINANCE
 To Business enterprises
 Both Cash Credit and Term loans will have
 Margin: 20-30%
 Interest: % over PLR based on credit rating
 Principal security: of assets financed by way of
hypothecation
 Collateral security: at the option of the bank
 Documentation.
 BANK FINANCE
 ToBusiness enterprises
 Appraisal will consist of:-
 Technical appraisal of feasibility of the project
 Commercial appraisal of demand forecast
 Managerial appraisal of the promoters.
 Economic & Financial appraisal including ratio
analysis, performance analysis, reasonableness of
projections etc.
 Credit Rating is done based on various parameters
as above.
 BANK FINANCE
 ToBusiness enterprises
 NON-FUND BASED LIMITS:
Often required by terms of the trade
Bank Guarantees / Letters of Credit etc.
Though currently do not involve cash
outflow for banks, they are potential
cases for future liability in case of
customer’s default.
Hence appraisal done in detail as done
for Fund Based limits.
Fee-based business- earned profits.