Abhay Kant 043001
Akshit Vij 043007
Saurabh Saharan 043048
Vineet Bhadu 043060
Prof. Vinay K Dutta
FORE School of Management
We hereby declare that the project work entitled “CREDIT APPRAISAL” has been written and submitted as our original work and the empirical findings in the report are based on information collected by us and not copied from somewhere.
We would like to express our sincere thanks to my mentors – Mr. Rajesh Kumar Redhu, Manager(Credit) at Canara Bank (Chandigarh Branch, Circle Office) and Mr. Sanjay Satija, Officer, Canara Bank (Chandigarh Branch, Circle Office) for their guidance that helped me in the completion of the project. Last but not the least, I express my profound gratitude to the staff of Canara Bank (Chandigarh Branch, Circle Office), for providing a congenial and competitive work environment, which made the Summer Internshipr a great learning experience.
TABLE OF CONTENTS
1CHAPTER 1- Introduction 6
1.1 Objective 6
1.2 Methodology 6
2CHAPTER 2- Banking Industry In India 7
2.1 Early History 7
2.2 From World War I to Independence 8
2.3 Post-Independence 9
2.4 Nationalization 9
2.5 Liberalization 9
3CHAPTER 3- Canara bank 11
4CHAPTER 4 - Risk and it’s management14
4.1 Credit risk14
4.2 Tools of credit risk management14
4.3Risk rating model15
5CHAPTER 5 - An overview of Basel II norms18
5.1 Key elements of new accord18
5.1.1Minimum capital requirements18
5.1.2 Standardized approach to credit risk18
5.1.3 Internal rating based approaches19
5.2 Supervisory Review 24 5.3 Market Discipline 24 6CHAPTER 6 – Introduction to Credit Appraisal 25
7.1 Background of the proponent/ management25
7.2 Commercial appraisal26
7.3 Technical appraisal26
7.4 Financial appraisal26
7.5 Pre-sanction appraisal and post sanction supervision27
7.5.1 Pre-sanction appraisal of projects27
7.5.2 Post-Sanction Supervision And Follow-Up29
8 BIBLIOGRAPHY 31
CHAPTER- 1 INTRODUCTION
The main objectives of the project are:
1. To have a conceptualized view on Credit Policy and the Credit Appraisal Process as followed by Canara Bank. 2. To have an understanding of the credit risks that the bank might have to face and the tools in place for efficient Credit Risk Management. 3. To study the credit rating methods adopted by the bank for different credit ranges. 4. To study the method used by the bank to calculate the interest to be charged on different qualities of credit. 5. To study the Basel norms and observe what it has to say w.r.t. the credit risk management of the bank. Methodology:
Sources of data:
Secondary data are those, which have already been collected by someone else. Secondary Data helpful in research were:- 1. Balance sheet of the bank.
2. Credit policy book of Canara bank.
3. Bank website
4. Various articles on banking including text book.
5. RBI website.
We met up with Mrs. Veena malik, an exectutive at the Kingsway camp (north campus) branch of...