What is credit monitoring of loans and advances?

Credit monitoring  strategies in a bank taking place in two stages namely pre-sanction stage and post sanction stage of loans and advances.  Pre-sanction process involves identification of borrower, the  purpose of  the loan, quantum of loan, period of loan, source of repayment, security for advance, profitability, pre-sanction unit inspection, appraisal of credit proposal, and sanctioning…

What is factoring?

Factoring is commonly identified as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Factoring service is a service that covers (i).Collection of bills, (ii).discounting of bills (iii).maintenance of accounts books in domestic and international trade. Factoring enables companies to sell their outstanding book debts for cash. They sell invoiced receivables at a discount…

What is forfaiting?

The term forfaiting refers to a form of trade finance involving discounting of export bills receivables such as drafts drawn under LC, bills of exchange, promissory notes, or other instruments on without recourse basis. The export of capital goods involves account receivables of medium and long term maturities. It is a general practice that the…

Why Micro Small enterprises do not get adequate bank finance?

Although, the commercial banks and other financial institutions have been making steady strides to increase their share of credits to MSE sector, but they have certain difficulties in sanctioning limits to SME borrowers.  In an environment of NPA numbers in banking sector alarmingly swelling, banks themselves are under the stress and facing challenge to raise…