Banking Credit Portfolio & Management – Lending to Recovery

Requirements

• Familiarity with Financial Concepts: Students should have a foundational knowledge of key financial concepts such as interest rates
• loans
• and basic accounting principles. Familiarity with financial statements like balance sheets and income statements is advantageous.
• Basic Analytical Skills: Proficiency in analytical thinking and problem-solving skills is essential
• as the course involves assessing financial data and making informed lending decisions.
• Computer Skills: Basic proficiency in using computers and financial software applications is recommended. Familiarity with spreadsheet tools (e.g.
• Microsoft Excel) will be helpful for financial analysis and data management.
• Motivation to Learn: A willingness to engage actively in the course materials and participate in discussions is crucial for a successful learning experience.

Description

Introduction:

In today’s complex financial landscape, mastering the principles of bank finance is essential for professionals looking to excel in lending and credit management. This comprehensive course provides an in-depth understanding of the various aspects of bank lending, financial assessment, risk management, and recovery strategies. Through structured sections and expert lectures, students will develop the skills necessary to effectively navigate the banking environment, make informed lending decisions, and manage credit risk.

Section 1: General Principles of Lending
This section lays the foundation for effective lending practices in banking. Students will learn the basic rules and cardinal principles that govern lending decisions, including the importance of liquidity and profitability. Through an exploration of integrity, adequacy, and timeliness, learners will grasp essential thumb rules for loan officers, ensuring they are equipped with the necessary guidelines for successful lending practices.

Section 2: Assessment of Bank Finance
Building on the foundational knowledge, this section delves into the assessment of bank finance, focusing on working capital and term loans. Students will explore various methods for assessing term loan finance and understand the critical factors involved in evaluating project reports. Emphasis will be placed on the documentation required for credit proposals, along with the assessment of non-fund-based facilities such as guarantees and letters of credit. This section ensures that students are well-versed in evaluating financial proposals and understanding the nuances of bank financing.

Section 3: Analysis of Financial Ratios
In this section, students will discover the significance of financial ratios in assessing a company’s financial health. They will learn to analyze different types of financial ratios, understanding their implications for loan assessment and overall financial analysis. This knowledge is crucial for making informed lending decisions and understanding a borrower’s capacity to repay.

Section 4: Loan Policy
This section focuses on loan policies and their components, providing students with insights into the typical loan policies of banks. Understanding the policy framing process within the guidelines set by the Reserve Bank of India (RBI) will empower students to navigate and implement sound lending practices aligned with regulatory standards.

Section 5: Credit Monitoring
Credit monitoring is a vital aspect of lending, and this section covers its necessity in ensuring loan repayment. Students will learn about different registers used for monitoring credits, as well as how to monitor stock statements, bills portfolios, and the insurance of securities. This section highlights the importance of ongoing oversight in maintaining healthy borrower relationships and preventing defaults.

Section 6: Documentation and Legal Aspects
Proper documentation is crucial in banking, and this section emphasizes the legal aspects associated with loan execution. Students will learn about the types of documents required, the procedure for documentation, and essential points to consider during the execution phase. This knowledge is vital for ensuring compliance and protecting the bank’s interests.

Section 7: Credit Risk Management
Effective credit risk management is fundamental to a bank’s success. In this section, students will explore evaluation and measurement techniques, understanding the mechanisms banks use to manage credit risk. This knowledge will enable students to assess potential risks and implement strategies to mitigate them.

Section 8: Creation of Charge on Securities
This section delves into the various forms of securities that can be used to secure loans. Students will learn about assignment, lien, set-off, hypothecation, pledge, and mortgage, gaining insights into how these mechanisms function within the lending process.

Section 9: Supervision and Follow-up of Advances
Supervision and follow-up are crucial for maintaining the health of advances. This section covers strategies for effective supervision, inspection of stocks, and reviewing borrower accounts. Students will learn how to use tools for forecasting trends and identifying symptoms that may indicate a turning point for accounts.

Section 10: Non-Performing Assets (NPAs)
In this section, students will gain an understanding of NPAs, including their definition and the RBI guidelines for asset classification. Provisioning norms for various types of bank-held assets will also be discussed, providing students with a comprehensive understanding of this critical issue in banking.

Section 11: Preventing Slippage of NPA Accounts
Preventing the slippage of NPA accounts is essential for maintaining a bank’s financial stability. This section explores the RBI guidelines and characteristics of Special Mention Accounts (SMAs), equipping students with strategies to prevent accounts from deteriorating into NPAs.

Section 12: Recovery of Advances
This section focuses on the recovery process for advances, emphasizing non-legal measures and strategies for rehabilitating sick units. Students will learn about compromise proposals, the role of Lok Adalats, and other legal measures for effective recovery, providing them with a well-rounded view of recovery strategies.

Section 13: Debt Restructuring
The course concludes with a deep dive into debt restructuring principles. Students will learn about income recognition, asset classification, and key concepts related to the Corporate Debt Restructuring (CDR) package. This knowledge is vital for understanding how to manage distressed assets effectively.

Conclusion:

By the end of this course, students will have a robust understanding of bank finance, from the fundamental principles of lending to the complexities of credit risk management and recovery strategies. Equipped with practical skills and knowledge, students will be prepared to excel in the banking industry and contribute to sound lending practices.

Who this course is for:

• Banking Professionals: Individuals currently working in banks or financial institutions
• including loan officers
• credit analysts
• and relationship managers
• seeking to deepen their understanding of lending principles and practices.
• Finance Graduates: Recent graduates in finance
• economics
• or business administration who wish to pursue a career in banking or financial services and want to acquire foundational knowledge in lending.
• Credit Risk Analysts: Professionals involved in assessing and managing credit risk who want to enhance their expertise in evaluating loan proposals and monitoring credit quality.
• Loan Officers: Current loan officers looking to refresh their knowledge of lending principles
• assessment techniques
• and credit monitoring strategies.
• Financial Consultants: Consultants who advise businesses on financing options and risk management
• aiming to strengthen their knowledge of lending and credit practices.
• Entrepreneurs and Business Owners: Individuals seeking financing for their businesses and wanting to understand the lending process
• requirements
• and how to improve their chances of obtaining loans.
• Students and Learners: Individuals interested in pursuing further studies in finance or banking
• looking for a comprehensive overview of lending principles and practices.