Components of Credit Management :::

Loan Policy of the Bank

Influenced by market conditions, policies of other banks, own SWOT analysis, RBI guidelines
Exposure limits-single borrower/group
Exposure limits for sectors
Discretionary powers

Credit Appraisal :

Five Cs - Character, Capacity, Capital, Conditions and Collaterals
Credit delivery-documentation, creation of charges
Control and Monitoring
Rehabilitation and Recovery
Risk management-identification,
Measurement & Evaluation
Delivery
Control and Monitoring
Rehabilitation and Recovery
Credit Risk Management
Refinance

RBI Guidelines

End use of funds
Priority sector 40%(agr 18%),weaker sector 10% foreign banks 32%, small enterprises 10%, export credit 12% of ANBC/off balance sheet expo, whichever is higher. Agr, MSE, housing(20 lacs), Education(10 lacs/20 lacs abroad), Export credit, SHG, KVI, Retail
Weaker sec. –small/marginal farmers, artisans, SGSY, SC/ST, DRI, SJSRY, SLRS, SHG
Micro, small and medium enterprises
Mfg sec: Micro upto 25 lacs, Small 25 lacs to 5 crs, Medium 5 crs to 10 crs
Service : Rs 10 lacs, 10-2 crs, 2-5 crs
Credit Exposure Norms –

For individuals/groups : 15/40 of capital funds- addl 5/10 for infra.
NBFC/NBFC-AFC 10/15%- 15/20% on lent infra
Base Rate System

Wef 1/7/2010 replaced BPLR
Banks may determine actual roi
Transparent, applicable to all except DRI, bank’s own employees, against deposits, qtrly review of BR
Existing loans with BPLR to continue, switch over option to be given
Credit Restrictions

Adv against bank’s own shares
Relatives of directors/sr officers
Industries consuming ozone depleting substances
Sensitive commodities
FDRs of other banks/CD
Buy back of shares
Credit Assessment/Delivery

MPBF method
For SME upto 5 crs limits turnover method
Working capital above 10 crs , loan component 80%
For seasonal/cyclical industrial bank may exempt with approval of board.

Fair practices code

Pertains to

Loan application, processing
Appraisal, terms and conditions
Disbursement
Post sanction supervision
Discrimination, harassment in recovery, takeover of accounts

Certified credit professionals

Components of credit management:::

The components include (1) Loan policy of the bank (2) Appraisal (3) Delivery (4) Control and Monitoring (5) Rehabilitation and
recovery (6) Credit risk management (7) Refinance.
1. Loan policy : Each bank formulates its own policy for sanction of credit proposals. The policy normally provides for (a) exposure
limits for individual and group borrowers (b) exposure limits for different sectors (c) discretionary powers at various levels within the
bank.
2. Appraisal : It done on the basis of credit history, financial status, market report of the borrower, the prospects of economic

Credit Management Important MCQs

Credit Management Important MCQs:::

1. An account will be classified as substandard if it remains NPA for a
period not exceeding----months.
A. 18
B. 12
C. 24
D. 6
E. 36
Ans B

2. An account which remains in NPA category for a period of more than --
--- months will be classified as doubtful assets.
A. 18
B. 12
C. 24
D. 6
E. 36
Ans. B
3. An account guaranteed by state government will become NPA if the
interest and or instalment remain overdue for a period of
A. 90 Days
B. 180Days
C. It does not become NPA
D. Depends on case to case basis
E. As per government’s instructions
Ans A
4. In case of a consortium advance account the asset classification has to
be done on the basis of record of recovery with the
A. Bank concerned
B. Leader Bank
C. Majority of Banks
D. Majority of Banks by number
E. Majority of Banks by Share
Ans A
5. In accounts where the erosion of the value and the realizable value is
less than 10% of the outstanding, the account will be classified as
A. Substandard asset
B. Doubtful asset
C. Loss asset
D. No such guideline
E. On case to case basis
Ans C
6. In case of doubtful asset which has remained doubtful for more than 3
years the provision to be made against the secured portion is -----% of
the secured amount.
A. 20
B. 30
C. 50
D. 75
E. 100

7. In case of unsecured exposures in substandard category the provision
to be made is ----% of the total exposure.
A. 15
B. 25
C. 12.5
D. 10
E. 100
Ans B
8. What is the time limit prescribed by the DRT act for final disposal of
application filed for recovery of dues
A. 180 Days from date of receipt of application
B. No such limit is fixed
C. 180days for clean loans and 240 days for secured loans
D. 180days from close of evidence of both the sides
E. 60 Days from date of receipt of application
Ans A
9. The DRT are constituted by
A. RBI
B. Supreme court
C. High courts of respective states
D. Central Government
E. Lok adalats
Ans D
10. What is the minimum pecuniary jurisdiction of DRT
A. There is no such minimum stipulation
B. Rs.10 lacs
C. Rs.100 lacs
D. Rs.5 lacs
E. Rs.25 lacs
Ans B
11. With regard to DRT, find the incorrect-
A. The act extends to the whole of India except the state of Jammu
and Kashmir
B. Debts secured by mortgage of immoveable property are not
covered under DRT
C. The presiding officer of the tribunal is appointed by the Government
of India
D. The RRBs’ can also file suit with DRT for recovery of debt.
E. The minimum pecuniary jurisdiction of DRT is Rs.10 lac
Ans B
12. With regard to DRT an appeal to the Appellate Tribunal is to be made
within -----days of the order of the DRT.
A. 30 days
B. 45 Days
C. 60Days
D. 90Days
E. 120Days
Ans B
13. Which types of accounts fall under the CDR category
A. Standard,substandard,doubtful
B. Substandard only
C. Any kind of NPA account

D. Standard and doubtful only
E. Standard and substandard only
Ans A
14. The following organisations purchase non-performing assets from
Banks with a purpose to resolve the same.
A. Asset Management Companies
B. Asset reconstructuin companies
C. Asset recovery companies
D. Debt Recovery tribunal
E. DRAT
Ans B

Credit Management overiew

OVERVIEW CREDIT MANAGEMENT:::

Credit plays an important role in driving the national economy. It provides leverage to an entrepreneur to
undertake a project larger than what he could have undertaken without availability of credit. This results in
accelerated industrial production/services. It also enables individuals to first purchase/create assets and
repay the loan from their future earnings. Credit enables a consumer to spend more than what he would
have otherwise spent. The increased demand drives the producers to step up the production. Thus,
adequate and cheap availability of credit propels the economy to higher growth trajectory. But, there is
always a time lag between increase in demand and creation of supply to meet that demand. That is why
excessive availability of credit, specially, for non-productive purposes, puts inflationary pressure of the
economy.
Principles of Credit: (a) safety of funds (b) purpose (c) profitability (d) liquidity (e) security (f) risk spread
Types of Borrowers: A borrower can be (a) An individual (b) Sole proprietary firm (c) Partnership firm and
joint ventures (d) Hindu undivided family (e) Companies (f) Statutory corporations (g) Trusts and co-operative

Credit mangement

Certified credit professionals::

(Simple and nice read every one)

Credit management is one of the core processes for all banks and therefore, the
ability to manage its process is essential to augment interest income and to enhance
its profitability. The success of a bank crucially depends how it manages its Asset
Portfolio as it is the major source of income and has direct bearing on the bottom-
line of the Bank. This demands an ability to perceive the early warning signals, which
necessitates control of both the quantitative and qualitative aspects of credit
evaluation. Thus, managing credit risk plays an important role and its effectiveness
lies in proper identification of borrower and appraisal besides adopting an efficient
recovery and exit strategy.

MSME :: ( Most imp Exam point of view)

MSME :: ( Most imp Exam point of view)

1. A Small Manufacturing Enterprise unit is considered as Sick Industrial Unit: when account remains sub
standard for more than six months or there is erosion in the net worth due to accumulated cash losses to
the extent of 50% or more of its net worth during the previous accounting year and the unit has been in
commercial production for at least two years
2. A small scale unit (manufacturing) can be treated as micro unit if the original investment in plant and
machinery does not exceed : Rs.25 lac
3. A unit in service enterprise is considered as medium if the investment in equipment is: more than Rs 2
crore but up to Rs 5 crore.
4. A Unit will be called as Small Service Enterprise if investment in equipments is up to: Rs 2 crore.
5. Amount of maximum loan given to micro and small enterprises that is covered under-CGFTMSEscheme
: Rs.200 lac

Digital Banking Recollected questions:::

Digital Banking Recollected questions:::

1.CTS abbreviation cheque truncation system
2. What is firewall?: A software programme for protecting against unauthorized access to the information.
3.BBPS … Bhatart Bill payment sytem
4.MDR: merchant discount rate
5. minimum amount which can be remitted under RTGS by a customer: Minimum Rs. 2 lac and no Maximum.
6.Max amount of NEFT can be remitted ..no limit
7. AEPS stands for : Aadhar Enabled Payment System.
8. CPPC stands for : Central Pension Processing Cell.
9. IBPP stands for : Internet Bill Presentation & Payment.

Digital banking MCQs

Q1.The situation of reading of a data by someone other than the intended recipient is referred to as:

 a: impersonation b:eavesdropping *c: data alteration d: denial-of service attack

Q2.Hot listing of Credit card means:

 a enhancement of amount of limit in the card ,b blocking the operations of the card,* creducing the amount of limit in the card d listing the card on more than one network, e. none of the above

Q3.In a MICR cheque, which of the following code does not match the 'description:

a. first 6-digit code - cheque number, b central 09-digit code — city, bank and branch code

c. last 2-digit code — transaction code such as saving or current account, d none of the above*


Q4.The electronic system through which a company or a mutual fund can make payment of dividend to a large number of
shareholders or unit-holders: a MICR b truncation c debit clearing system, d credit clearing system*

Q5.The committee that suggested the cheque truncation system for inter-bank transactions:
a Rangarajan Committee b Shere Committee, c Vasudevan Committee d Saraf Committee*, e. None

Current Affairs on June 28th 2018

Today's Headlines from www:

*Economic Times*

📝 Disney wins US antitrust approval to buy Fox assets for $71.3 bn

📝 Bharti Airtel, Reliance Jio set for home broadband war

📝 McAfee reports 629% increase in coin miner malware in Q1 2018

📝 HCL acquires German IT firm H&D

📝 China to reduce tariffs on 8,549 types of goods from India, 4 other Asian countries

📝 Govt bonds decline, call rates finish lower

IT Security and ISB

IT Security and ISB::

Backup site: Is a location where an organisation can easily relocate following a disaster,
such as fire, flood, terrorist threat or other disruptive event. This is an integral part of the
disaster recovery plan and wider business continuity planning of an organisation. A backup
site can be another location operated by the organisation, or contracted via a company that
specialises in disaster recovery services. In some cases, an organisation will have an
agreement with a second organisation to operate a joint backup site.
There are three main types of backup sites:
• cold sites
• warm sites
• hot sites
Differences between them are determined by costs and effort required to implement each.
Another term used to describe a backup site is a work area recovery site.
1. Cold Sites: A cold site is the most inexpensive type of backup site for an organisation to
operate. It does not include backed up copies of data and information from the original
location of the organisation, nor does it include hardware already set up. The lack of
hardware contributes to the minimal start up costs of the cold site, but requires additional
time following the disaster to have the operation running at a capacity close to that prior to
the disaster.

KYC MCQs

KYC AML::

1) The Government had amended the Prevention of Money Laundering (Maintenance of Records) Rules,
2005, for setting up of the :
a) Central KYC Records Registry (CKYCR).
b) Centralised KYC Records Registry (CKYCR)
c) Core KYC Records Registry (CKYCR)
d) Common KYC Records Registry (CKYCR)
2) The _______ would receive, store, safeguard and retrieve the KYC records in digital form of a client, for
Compiled by Sanjay Kumar Trivedy, Divisional Manager, Govt.Link Cell, Nagpur 54 | P a g e
which necessary amendments to the Rules have been made. The KYC records received and stored could
be retrieved online by any reporting entity across the financial sector for the purpose of establishing an
account based relationship:
a) CRILC b) CKYCR c) CERSAI d) None

KYC AML Obligation of Reporting Entity

Obligation of Reporting Entity:::( Maintenance of records)

Section 12 of the Prevention of Money Laundering Act, 2002, makes it mandatory for every reporting entity to maintain a record of all transactions and submit to Director such reports at such intervals as prescribed by Rules 3,4,5,7 and 8 of Prevention of Money Laundering (Maintenance of Records) Rules, 2005.

Rule 3 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 prescribes the kind of report which need to be submitted by the Reporting Entities.

" 3. Maintenance of records of transactions (nature and value)

(1) Every reporting entity shall maintain the record of all transactions including, the record of—

(A) all cash transactions of the value of more than ten lakh rupees or its equivalent in foreign currency;

AML KYC Important

Aml kyc short notes::: (Most imp points) ( Read everyone not only for exam useful for everyday banking Knowledge)

1. Beneficial Owners shall mean the natural person who ultimately owns or or controls a client
and/ or the person whose behalf a transaction is being conducted , and includes a person
who exercises ultimate effective control over a juridical person.
2. " controlling ownership interest " means ownership of or entitlement to more than 25 %
shares or capital for company , more than 15 % of capital or profits of the partner for
partnership firm, more than 15% of the property or capital or profits for unincorporated
association , 15 % or more in case of trust.
3. where the client or the owner of the controlling interest is a company listed on the stock
exchange , or it is a subsidiary of such company , it is not necessary to identify and verify the
identity of any shareholder or beneficial owner of such companies.
4. maintenance of record of prescribed transaction , furnishing of information of prescribed
transaction to the specified authority , verifying and maintaining records of the identity of its
clients , preserving records for 5 years : section 12 of pml act 2002.
5. According to Rule 2 (h) of PMLA rule " transaction " means a purchase , sale , loan , pledge ,
gift , transfer etc.
6. Non profit organisation ( npo ) no governmental organisation ( ngo ) promoted by united
nation (UN) or its agencies will be classified as low risk customers,

JAIIB results May 2018

JAIIB results announced

Link here
https://iibf.esdsconnect.com/result/jaiibdbf118

International Trade finance PDF

International Trade finance

Download link here

https://drive.google.com/file/d/1kVkiBckEQlVCowLh2hXfpH0xRNc07Rm4/view?usp=sharing

ISB Recollected Questions and Exam Ti

ISB Recollected Questions and Exam Tips::::



Function of modem, which is not an OOP Lang.

 C C++ Java C#, questns abt DRP,

Trojan horse, sniffing, spoofing, availability, integrity, DBMS, preventive, corrective, detective controls, BCP

International trade finance recollected

International Trade finance recollected questions::
2 marks qstn from ecgc,export promotion capital goods scheme. exim ,lc, eefc, urr725 ,pcfc
1 marks from forfating, factoring, pre and post shipment ,Fedai dutydrawback urc522 heckscher ohlin theory buyers and suppliers credit forward contract , lc., channel financing merchanting trade as well these topics in .5 marks qstn bid bondand performance guarantee currency and credit risk , wharfage documentry credit time period related qstn , status holder starhouse . SEIS , liberalized remittance . NEIA (national export insurance account), ssp, src. Scp related to ECIE-ST red clause

Very important IT guidelines

Banking Sector IT guideline

The Reserve Bank of India issued new guidance in April 2011 for banks to mitigate

the risks of use of information technology in banking operations. RBI guidelines are

result of the Working Group's recommendations on information security, electronic

banking, technology risk management and cyber fraud. The Working Group was formed

under the chairmanship of G. Gopalakrishna, the executive director of RBI in April 2010.

Current Affairs on June 26 '2018

Today's Headlines

*Economic Times*

📝 Railways to place mother-of-all bulk orders worth Rs 7,000 crore

📝 Tata Steel plans to raise Rs 12,000 crore via NCD issue

📝 UltraTech Cement plans to raise Rs 9,000 crore

📝 Government-appointed panel to suggest employment-based sops for SEZ

📝 Jio signs $1 billion loan facility with ​Korea Trade Insurance

White & Brown Label ATM

White Label ATM

White Label ATMs are purely managed by third party service providers and have their label. These are branded non
bank ATM machines. Cash handling, management and logistics are provided by third party. Debit cards of all banks can be
operated through these machines. The role of the concerned bank is only limited to provide account information and back
end money transfers to the third parties managing these ATM machines. This initiative will enable the excluded segments
to avail ATM services as at present majority ATMs are confined to Urban/Metro areas only.
However, service provider levy charges which are to be either bear by the Bank or the customer. RBI has allowed
white label ATM's in India to have more penetration of ATM machines. Tata Communications Payment Solutions has
become the first company to launch this service in India under the brand name "Indicash". It has a tie up with
majority commercial banks and now you will soon see branded non bank third party white label ATM machines in
your vicinity.