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    Components of Credit Appraisal Process

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    minushastri33
    The document outlines the key components of a bank's credit appraisal process. It discusses that banks need to gather information about an applicant's income, age, education, employment history, assets, liabilities and more. The applicant's income is the most important factor in determining creditworthiness. Banks have internal norms to assess if applicants fit the eligibility criteria. Based on the applicant's parameters, banks can determine the maximum loan amount. The document groups the key assessment parameters into technical feasibility, economic viability, and bankability. Banks also check an applicant's CIBIL score as part of the process.

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    Components of Credit Appraisal Process

    Uploaded by

    minushastri33
    191 views1 page
    The document outlines the key components of a bank's credit appraisal process. It discusses that banks need to gather information about an applicant's income, age, education, employment history, assets, liabilities and more. The applicant's income is the most important factor in determining creditworthiness. Banks have internal norms to assess if applicants fit the eligibility criteria. Based on the applicant's parameters, banks can determine the maximum loan amount. The document groups the key assessment parameters into technical feasibility, economic viability, and bankability. Banks also check an applicant's CIBIL score as part of the process.

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    Components of Credit Appraisal Process

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    The document outlines the key components of a bank's credit appraisal process. It discusses that banks need to gather information about an applicant's income, age, education, employment history, assets, liabilities and more. The applicant's income is the most important factor in determining creditworthiness. Banks have internal norms to assess if applicants fit the eligibility criteria. Based on the applicant's parameters, banks can determine the maximum loan amount. The document groups the key assessment parameters into technical feasibility, economic viability, and bankability. Banks also check an applicant's CIBIL score as part of the process.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    191 views1 page

    Components of Credit Appraisal Process

    Uploaded by

    minushastri33
    The document outlines the key components of a bank's credit appraisal process. It discusses that banks need to gather information about an applicant's income, age, education, employment history, assets, liabilities and more. The applicant's income is the most important factor in determining creditworthiness. Banks have internal norms to assess if applicants fit the eligibility criteria. Based on the applicant's parameters, banks can determine the maximum loan amount. The document groups the key assessment parameters into technical feasibility, economic viability, and bankability. Banks also check an applicant's CIBIL score as part of the process.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Components of Credit Appraisal Process

    While assessing a customer, the bank needs to know the following


    information: Incomes of applicants and co-applicants, age of applicants,
    educational qualifications, profession, experience, additional sources of
    income, past loan record, family history, employer/business, security of
    tenure, tax history, assets of applicants and their financing pattern, recurring
    liabilities, other present and future liabilities and investments (if any). Out of
    these, the incomes of applicants are the most important criteria to
    understand and calculate the credit worthiness of the applicants. As stated
    earlier, the actual norms decided by banks differ greatly. Each has certain
    norms within which the customer needs to fit in to be eligible for a loan.
    Based on these parameters, the maximum amount of loan that the bank can
    sanction and the customer is eligible for is worked out. The broad tools to
    determine eligibility remain the same for all banks. We can tabulate all the
    conditions under three parameters.
    Parameter Documents
    Technical Field Investigation, Market value
    feasibility of asset
    Economic
    LTV(Loan to Value), IIR
    viability
    Past month bank statements,
    Bankability Asset and liabilities of the
    applicant
    Besides the above said process, profile of the customer is studied properly.
    Their CIBIL (Credit Information Bureau (India) Limited)score is checked.

    Parameter components & How bank asses your creditworthiness through it

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