(13)Sandeep Gurung

8/12/2019 (13)Sandeep Gurung

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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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Documents

(13)Sandeep Gurung