Traditionally, banking was unknown to present day concept of priority sector lending. The commercial banks in India used to provide security oriented finance to trade and industry. Big industrial houses and traders were beneficiaries of security oriented lending concept and a large chunk of bank finance was enjoyed by them. The National Credit Council in…
The principles of lending revolve mainly around the concepts of safety, profitability and liquidity of advance. The criteria for lending get changed or modified from time to time in response to changing the state of the economy. Traditionally commercial banks in India used to provide security oriented finance to trade and industry. Big industrial houses…
(This post explains the essence of Mortgage of properties and several forms of mortgage of immovable properties in India viz. Equitable Mortgage, Simple Mortgage, English mortgage, Mortgage by conditional Sale, Usufructuary Mortgage, and Anomalous Mortgage which are major types of mortgage systems currently existent in India.) The essence of Mortgage of properties: The transfer of…
Various types of guarantees are issued by the banks on behalf of their customers. Bank Guarantees (BG) is also known as Letter of Guarantees which can be broadly classified as (i) Financial Guarantees and (ii) Performance guarantees. Earnest money Deposit guarantee or Bid Bond Guarantee, Guarantee for Payment of Customs duty (specific or continuing), Advance…
The fund based finance in banks is in different forms. The facilities like Overdrafts,Cash Credit A/c, Bills Finance, Demand Loans, Term Loans etc, wherein immediate flow of funds available to borrowers, are called funds based facility. The non fund based facilities like issuance of letter of guarantee, letter of credit wherein banks get fee income…
Credit Appraisal is a knack of adapting certain precautions at the time of new sanction or renewal or enhancement of existing limit. Credit Appraisal revolves around the credit investigation to determine the economic and business environment in which prospective borrower is placed. The process involves assessment of honesty and integrity of the borrower, standing of the borrower,…