Credit analysis, working capital assessment, term loan appraisal, NPA management, DSCR, and lending guides for bank credit officers.
Quick Answer The Union Cabinet approved ECLGS 5.0 on 5 May 2026 to address liquidity stress caused by the West Asia conflict. MSMEs get a 100% government-backed guarantee on additional working capital credit of up to 20% of their peak Q4 FY26 utilisation, capped at ₹100 crore per borrower. Non-MSMEs Read more…
Quick Answer CGFMU (Credit Guarantee Fund for Micro Units) covers only Mudra/PMMY loans up to ₹20 lakh under a portfolio guarantee model managed by NCGTC. CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) covers all MSE loans up to ₹10 crore under an individual loan guarantee managed by Read more…
When a bank borrower defaults, investigators and credit officers must determine how the money was used — and whether the default was wilful. Two specific terms defined by RBI in its Wilful Defaulters Directions, 2024 (effective November 1, 2024) are central to this determination: diversion of funds and siphoning of Read more…
Pari passu charge is one of the most commonly used security structures in consortium and multiple banking arrangements in India. When two or more banks lend to the same borrower against the same asset, understanding pari passu charge becomes essential for every credit officer, branch manager and JAIIB aspirant. This Read more…
Working Capital is a financial indicator of operational liquidity of a business organization. Working Capital is the short term assets to cover the short term liabilities of the organization. Working Capital is calculated as Current Assets – Current Liabilities, also represented as Net Working Capital. The Working Capital Ratio or Read more…
Letter of Credit (LC) and the ‘Standby Letter of Credit’ (SBLC) are used by Importers and Exporters in International Trade to ensure financial safety so that payment of the supplier is assured of payment once he has performed his obligation. While LC is used as a primary method of payment, Read more…
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) is a government-backed guarantee scheme that enables banks to extend collateral-free loans up to ₹2 crore to micro and small enterprises. It was established jointly by the Ministry of MSME and SIDBI in 2000 to remove the collateral barrier that Read more…
⚡ Quick Facts — Letter of Credit Governing framework UCP 600 (ICC Publication, effective 1 July 2007) — 39 Articles All LCs under UCP 600 Irrevocable by default — no revocable LC concept in UCP 600 Document examination period 5 banking days from presentation (Article 14b) Domestic LC governed by Read more…
Credit Appraisal is a process which require sufficient knowledge and proper due diligence. Credit involves risk of default, which can not be avoided but can be minimized. So you should minimize the risk. The first step is to act early and act fast. If you do not start your due Read more…
Infrastructure and core industries projects have a long gestation periods and large capital investments. The repayment period for loans to such sectors should be corresponding to their gestation period of cash flows. However, Banks were unable to provide such long tenor financing due to asset-liability mismatch issues. Banks were restricting Read more…