(13)sandeep gurung
TRANSCRIPT
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PRESENTED BY:
SANDEEP GURUNG
PATUCK GALA COLLEGEROLL NO:13
DIV: A
PROF: MONISHA DCOSTA
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Topic: Credit procedure of Financial Institution( HDFC & LIC )
Credit is the trust which allows one party to
provide resources to another party where that second party does
not reimburse the first party immediately, but instead arrangeseither to repay or return those resources at a later date.
Carry fixed interest rate, monthly or quarterly repayment
schedules and a set maturity date
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OBJECTIVE OF THE STUDY
PRIMARY OBJECTIVE:To study credit procedures of Financial
Institution
SECONDARY OBJECTIVE: To study the growth of financial credit industry in India.
To study the credit procedure adopted by a private bank.
To study the credit procedure adopted by a financial
institution. To study consumer prospective for choosing a credit
institution.
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PERIOD OF CREDIT
SHORT TERM LOAN
Repayable within 3 years
MEDIUM TERM LOAN
Repayable in more than 3 years and
less than 6 years
LONG TERM LOAN
Repayable in more than 6 years
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TYPES OF CREDIT
Bank credit
Commerce credit
Consumer credit
Investment credit International credit
Public credit
Real estate credit
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The Six C's of Credit
Character
Capacity
Collateral
Conditions Credit
Capital
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Contribution of Credits inEconomic Growth
Bank credits promote capital formation
Investment in new enterprises
Promotion of trade and industry
Development of agriculture
Balanced development of different regions
Influencing economic activity
Implementation of Monetary policy
Export promotion cells
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CREDIT RISK
A consumer may fail to make a payment due ona mortgage loan, credit card, line of credit, or other loan
A company is unable to repay amounts secured by afixed or floating charge over the assets of the company
A business or consumer does not pay a trade
invoice when due A business does not pay an employee'searned wages when due
A business or government bond issuer does not make apayment on a coupon or principal payment when due
An insolvent insurance company does not pay a policy
obligation An insolvent bank won't return funds to a depositor A government grants bankruptcy protection to
an insolvent consumer or business
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Disadvantages
Credit does not carry voting rights.
Generally do not represent negotiable securities.
Upon failure to repay or delay in payment
beyond 1 year entails serious consequences.
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FACTORS THAT BANKS CONSIDER
Credit worthiness of the borrower
Integrity/reputation
Credit risk profile
Sensitivity to economic and marketdevelopments
Liquidity
Solvency
Profitability of business Resourceefficiency
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CREDIT DECISIONS
Safety of loans is directly related: basis on which decision to lend is taken type and quantum of credit to be provided terms and conditions of the loan
Two-pronged approach: Pre-Sanction appraisal To determine the bankability of each loan proposal Post-Sanction control
To ensure proper documentation, follow-up andsupervision
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MOST PREFERED BANK
HDFC BANK LICHF
LOAN ACCOUNT 38 12
0
5
10
15
20
25
30
35
40
AxisTitle
LOAN ACCOUNT
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TYPES OF LOAN OFFERED
Housingloan
Personalloan
Car loanWorkingcapital
loan
educationloan
HDFC 10 4 6 7 6
LICHF 12 0 0 0 0
0
2
4
6
8
10
1214
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CONCLUSION
According to the survey done, the followingresults are interpreted:
HDFC is the most preferred Bank as
compared to LIC.
LIC provides minimum number of loans tocustomers.
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