A SUMMER PROJECT STUDY SUBMITTED IN PARTIAL FULFILLMENT FOR THE REQUIREMENT OF THE TWO YEAR MASTER OF BUSINESS ADMINISTRATION
BY Ashima kango
Department of Management Studies, IIT Madras
I wish to express my gratitude to HDFC for giving me an opportunity to be a part of their esteemed organization and enhance my knowledge by granting permission to do summer training project under their guidance. I am deeply indebted to my guide, Mr. Vikas Dhamija ,Area Credit Manager, HDFC bank, for his valuable and enlightened guidance. He provided me with the opportunity to learn in the bank and spared his valuable time to help me. A special thanks to my faculty guide, Associate Prof. G. Arunkumar for being the chief facilitator of this project and helped me enhance my knowledge in the field of banking sector. My special thanks to Ms. Rushpinder Kaur, Senior credit manager, HDFC, for providing great support and help whenever was required. I am also highly thankful to Miss Heena Makhija, Credit Manager who provided me the basics of credit appraisal and helped me during training. Last but not the least I am highly obliged to my friends and colleagues for their help and support. The learning during the project was immense and valuable.
Regards, Ashima Kango DoMS IIT Madras
EXECUTIVE SUMMARY BANKING INDUSTRY IN INDIA ABOUT HDFC OBJECTIVE SCOPE PURPOSE METHODOLOGY LIMITATIONS SME SECTOR ANALYSIS AND INTERPRETATION CREDIT APPRAISAL STANDARDS PROCESS OF CREDIT APPRAISAL WORKING CAPITAL APPRAISAL ASSESMENT OF WORKING CAPITAL LIMITS I. II. SECURITY FINDINGS RECOMMENDATIONS AND SUGGESTIONS CONCLUSIONS REFERENCE FUND BASED NON-FUND BASED
This project explains various credit facilities and policies followed by one of the most reputed bank in the country, HDFC. Each bank has its own set of policies within the overall RBI guidelines that must be followed while sanctioning a loan and care must be taken that the money provided by the bank is being used up for the intended purpose only. Each loan proposal falls under powers at different hierarchical levels for adequate decentralization & faster decision making depending on the size of the proposal. The objective of the study is to analyze in depth, credit appraisal system for capital finance to SME’s and the rationale behind various guidelines and policies followed by the bank. Different business entities require funds for various functions: Financing inventories Managing internal cash flows Supporting supply chains Funding production operations Cash support for business expansion Term loans for buying new machinery Non fund facilities for business transactions
Thus companies require fund for various daily operations. In order to finance these needs, a company approaches bank for credit facilities. Branches at HDFC takes care of these facilities and based on the credit worthiness and other useful parameters, the bank sanctions it at a particular rate of interest. In order to understand this, one must be clear with basic topics such as working capital management, balance sheet analysis and forecasting, and cash budget. However in case of working capital financing the basic task for the bank and the company is to evaluate the Net Working capital, which is done through working capital assessment.
NOTE: Due to security/confidentiality reasons all the names in this report have been changed to fictitious.
Banking Industry in India
Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. It is the main confluence that maintains and controls the “Flow of money” to make the commencement of lend permissible. The basic services a bank provides are checking accounts, savings accounts and time deposits that can be used to...
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