Credit Appraisal Essays

20138 Words Feb 20th, 2013 81 Pages
CREDIT APPRAISAL PROCESS IN BANK OF MAHARASHTRA

A Summer Internship Project Report

Submitted in partial fulfillment of the requirements of the PGDM
(Post Graduate Diploma in Management) ITM BUSINESS SCHOOL,KHARGHAR
SUBMITTED BY:

RACHANA SINGH CHANDEL
(KHR2011PGDM21F216)

UNDER THE GUIDANCE OF:

Mr. Suhas V. Vaishampayam Mr. Narendra Jain
Faculty Guide, Company Guide,
ITM Business School. Chief Manager,
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Firms ask for working capital or cash credit for short term needs and term loan for their medium and long term needs. To back them up during a trade they need letter of credit or guarantee from the bank.
Though firms depend largely on banks to meet their credit needs, banks need to make sure that these firms are indeed in need of these funds and whether or not they will be able to pay back. Also is it a profitable investment on part of bank or whether there are chances that this investment may turn into a Non Performing Asset after some time. In this project I have tried to cover all the points that bank takes into consideration while appraising a proposal/project. It includes the methods, process and rules/conditions of appraisal. The theory has been backed up by the case studies which give a proper idea as to what is actually done in the appraisal by looking at the ratios and various projections done by the bank to arrive at a decision.
Bank’s work does not end here it keeps on monitoring the account even after providing the advance to look any sort of risk or difficulty that may come in the near future.
This whole process is very cumbersome and logical and it takes a lot of hardwork and risk on the part of decision makers i.e. the bank and its various departments that closely work to take the difficult decision i.e.-To give or not to give the loan?
“Credit Appraisal is a process of appraising the credit worthiness of loan applicants. The

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