Credit Appraisal Process

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TABLE OF CONTENTS
Chapters

1. INTRODUCTION
* Reason for selecting the project
* Scheme of the project
* Research Methodology
* Limitation of the study

2. CREDIT POLICY OF COMMERCIAL BANK
* Commercial banks and its objectives
* Recent policy developments regarding bank credit
* Changing phase of bank credit
* Trends of bank credit in India
* Procedure for providing bank credit
* Credit Appraisal

3. THE PROFILE OF THE ORGANIZATION OF PNB
* Indian banking sector & its major challenges
* Punjab National Bank at a glance
* Mission and Vision
* Organizational structure of PNB

4. CREDIT PHILOSOPHY & POLICY WITH REGARDS TO PNB
* Credit philosophy
* Credit policy
* Introduction to loans
* Classification of loans
* Building up of a proposal
* Requirements as per constitution of borrower
* Financial Appraisal

5. ANALYSIS AND INTERPRETATION OF DATA
* Credit Appraisal techniques
* Process of credit appraisal for providing cash credit * Appraisal techniques for retail loans

6. CONCLUSION
* Conclusion

* BIBLIOGRAPHY

Introduction
The last year financial crises have become the main cause for recession which was started in 2006 from US and was spread across the world. The world economy has been majorly affected from the crisis. The securities in stock exchange have fallen down drastically which has become the root cause of bankruptcy of many financial institutions and individuals. The root cause of the economic and financial crisis is credit default of big companies and individuals which has badly impacted the world economy. So in the present scenario analysing one’s credit worthiness has become very important for any financial institution before providing any form of credit facility so that such situation doesn’t arise in near future again. Analysis of the credit worthiness of the borrowers is known as Credit Appraisal. In order to understand the credit appraisal system followed by the banks this project has been conducted. The project has analysed the credit appraisal procedure with special reference to Punjab National Bank which includes knowing about the different credit facilities provided by the banks to its customers, how a loan proposal is being made, what are the formalities that is to be satisfied and most importantly knowing about the various credit appraisal techniques which are different for each type of credit facility. Before going further it is necessary to understand the need and basic framework of the project. Therefore this chapter provides an introduction to the topic, objective of the project, reasons for selecting the project and the basic structure and framework how the project proceeds. In order to understand the importance of the topic selected an introduction to the overview of the commercial bank , its functions, and present trends and growth in bank credit are required and it is covered in this chapter.

Reasons for selecting the project
Whenever an individual or a company uses a credit that means they are borrowing money that they promise to repay with in a pre-decided period. In order to assess the repaying capability i.e. to evaluate their credit worthiness banks use various techniques that differ with the different types of credit facilities provided by the bank. In the current scenario where it is seen that big companies and financial institutions have been bankrupted just because of credit default so Credit Appraisal has become an important aspect in the banking sector and is gaining prime importance. It is the incident of credit defaults that has given rise to the financial crisis of 2008-09. But in India the credit default is comparatively less that other countries such as US. One of the reasons leading to this may be good appraisal techniques used by banks and financial institutions in India. Eventually...
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