Banking Credit Analysis Process (for Bankers)

Course for Bankers, Consultants and managers to Understand Credit Analysis Process from Indian Context.

4.53 (3271 reviews)
Udemy
platform
English
language
Investing & Trading
category
17,703
students
44.5 hours
content
Jul 2023
last update
$129.99
regular price

What you will learn

Understand What is Credit Analysis

How to evaluate Credit Proposal

How to analyse Financial Statements

How to analyse Term loan Projects

Understand What is Project Financing

How to arrive at Working Capital

What is Working Capital Cycle

What is letter of Credit

What is Bank Guarantee

Understand, Detailed Process of Credit Analysis

Description

Are you struggling in understanding banking credit related matters like Financial Ratio Analysis, Cash Flow and Fund Flow Analysis, Working Capital Assessment and products like Cash Credit, Letter of Credit, Bank Guarantee, Buyers Credit, Term Loan appraisal covering Debt Equity Analysis, DSCR, FOIR, etc.?

Are you a Finance Professional working on Project Funding for your clients?

Are you finding it difficult to write down a comprehensive loan proposal?

Are you a Banker aspiring to rise to top in your career?

Then this course is for you - Banking Credit Analysis Process.

Why you should take this course?

  • Credit Analysis is the core process adopted by any Bank to understand, evaluate and appreciate about the Customers Identity, Integrity, Financial Position, - Repayment Capacity, Etc.         

  • Every Banker should be thorough with Credit Analysis Process because day in day out they have to deal with new customers and before sanctioning any new loans to them, Banker should have made detailed study of their customers.

  • No Banker can raise to top unless he becomes conversant with Credit Analysis Process. 

  • Bank would generally throw employees on to the job before they get opportunity to be trained. This is with more specific reference to Credit Analysis where Bankers should under detailed learning process, else their mistakes in the process will be Very Costly beyond their manageable Position.

  • Hence, this course will provide platform to Bankers to have fall back reference on the Critical Aspects of Credit Analysis Process.  Banking/ Management Consultants can also use this course for the equipping themselves to the expectations of the Bankers while handling Credit Proposals. 

  • By taking this course, you will be able to Write Bank Loan Proposals with better clarity and confidence.

  • You will understand various technical matters written in Bank Loan Proposals.

What you will learn by taking this course?

By taking this course, you will be exposed to

Sec 1 - Introduction to Credit Analysis

Sec 2 - Financial Statements reading skill

Sec 3 - How to write Loan Proposal - Introduction

Sec 4 - Financial Ratio Analysis

Sec 5 - Performance and Financial Indicators Analysis in Loan Proposal

Sec 6 - Fund Flow Analysis for Identifying Diversion of Funds

Sec 7 - Cash Flow Analysis for Understanding Cash Generation and Movement

Sec 8 - Inter-firm Comparison, Internal & External Rating and Review of Conduct of Accounts

Sec 9 - Review of Audit Reports, Compliances, Contingencies and Risk Factors

Sec 10 - Finer Pricing, Review of Defaulters List & Loan Polichy

Sec 11 - Types of Business Loans

Sec 12 - Working Capital

Sec 13 - Cash Credit

Sec 14 - Non Fund Based Credit Facilities

Sec 15 - Letter of Credit

Sec 16 - Bank Guarantee

Sec 17 - Project Report

Sec 18 - Term Loan Appraisal

Sec 19 - DSCR & FOIR Computation in Term Loan

Sec 20 - Break Even Analysis

Sec 21 - Sensitivity Analysis

Sec 22 - Credit Rating

Sec 23 - Credit Scoring

Sec 24 - Key Analysis by Bankers

Sec 25 - Marginal Cost of Funds based Lending Rate (MCLR)

Sec 26 - Export Credit

Sec 27 - Terms of Payment in Export Transactions

Sec 28 - Export Finance

Sec 29 - CMA  (Credit Monitoring Arrangement)

Sec 30 - Computerised Accounting System

Sec 31 -  Banking Operations

Sec 32 -  Operational Aspects of KYC

Sec 33 - Loan Accounts

Sec 34 -  Quiz

Sec 35 - Import Finance

Sec 36- Other Banking Products

How this course is structured?

This  course is structured in self paced learning style. Each and every section of this course is broken down as various micro lectures and then they are substantiated with examples and case studies. Several real world examples are used in this course through case studies. You'll gain authority on each and every topic as i take you through lectures one by one. This  course is presented in simple language with examples. This course has  video lectures (with writings on Black / Green Board / Note book / Talking head, etc).  You would feel you are attending a real class.

What are the pre-requisites for taking this course?

You would require  good internet connection for interruption free learning process - You can approach this course with fresh mind.

How this course will benefit you?

At the end of the course, you will be able to approach credit related matters in your bank with high level of confidence and solve real life problems at ease.

Content

Introduction to Banking Credit Analysis Process

Why Credit Analysis Required
Know Your Customers
Know Customer Integrity
Know Performance Efficiency
Know Financial Position and ability to Pay Back
Know about Industry
Legal and Valuation of Securities
Why Past Loans Matter

Financial Statements Reading Skill

Financial Statements
Income Statement and Balance Sheet
Sources and Uses of Funds
Financial Statement Making Process
Difference between Income, Liability, Expense and Assets
Profit and Cash
Structure of Balance Sheet
What is important in Reading Balance Sheet
Second Balance Sheet Reading Skill Understanding Liquidity Position
Third Balance Sheet Reading Skill - Performance Measurement

How to write Bank Loan Proposal - Introduction

Introduction
Capture Borrower Profile
Write Brief Background of Borrower
Industry / Sector of Borrwer Write Up
Proposal request Template Format
Credit Limits Table Formulation
Group Exposure Table and Interpretation
Banking Arrangement and Sharing Pattern

Analysis of Financial Ratios

Introduction to Ratio Analysis (Talking Head)
Classification of Ratio (Talking Head)
Introduction to Liqudity Ratio (Talking Head)
Classification of Liqudity Ratio (Talking Head)
Current Ratio (Talking Head)
Quick Ratio (Talking Head)
Ideal Current Ratio and Quick Ratio (Talking Head)
Absolute liqudity Ratio (Talking Head)
Basic Defense interval Ratio (Talking Head)
Capital Structure Ratios (Talking Head )
Turn over Ratio (Talking Head )
Inventory Turn over Ratio (Talking Head )
Debtors Turn over Ratio (Talking Head)
Creditors Turn over Ratio (Talking Head)
Inventory Holding Period (Talking Head)
Debtors Collection Period (Talking Head)
Creditors Payment Period (Talking Head)
Case Study 1 Ratio Analysis (Talking Head)
Case Study 2 Ratio Analysis (Talking Head)
Case Study 3 Ratio Analysis (Talking Head)
Case Study 4 Ratio Analysis (Talking Head)
Debt Service Coverage Ratio (Talking Head)
Interest Coverage Ratio (Talking Head)
Preference Dividend Coverage Ratio (Talking Head)
Capital Gearing Ratio (Talking Head)
Profitability Ratio (Talking Head)
General Profitability Ratio (Talking Head)
Return on Investment Ratios (Talking Head)
Various Ratio for Equity Share holders (Talking Head)
Market Value Ratios (Talking Head)
Summary and limitation of Ratio Analysis (Talking Head)

Performance and Financial Indicators Analysis in Loan Proposal

Sales Movement Analysis while writing Loan Proposal
Export Sales Movement
Analysis of Raw Material Cost
Analysis of Power Cost
Analysis of Direct Labour Cost
Analysis of Selling, General & Admin Cost
Analysis of Operating Profit
Analysis of Profit and Profitability
Analysis of Cash Accruals
Analysis of PBDIT and Interest Coverage Ratio
Analysis of Paid Up Capital
Analysis of TNW, Adjusted TNW and TOL / TNW in Loan Proposal
Analysis of Current Ratio and Net Working Capital in Loan Proposal
Analysis of Debt Service Coverage Ration (DSCR) in Loan Proposal
Analysis of Efficiency Ratios in Loan Proposal
Comments on Performance and Financial Indicators

Fund Flow Analysis for Identifying Diversion of Funds

Introduction to Fund Flow Analysis (Talking Head)
Importance of Fund Flow Analysis (Talking Head)
Fund Flow Through some Numbers (Talking Head)
Fund Flow Through Digram (Talking Head)
How to identify long term Sources and Uses (Talking Head)
Example of Long Term Source And Uses (Talking Head)
Standard Format of Fund Flow Statement (Talking Head)
Fund Flow Analysis Case Study
Fund Flow Statement Analysis of Real Case
Deficit Analysis in Fund Flow Statement
Estimate vs Actuals analysis in Fund Flow Statement
Comprehensive Analysis 1 of Fund Flow Statement
Comprehensive Analysis 2 of Fund Flow Statement
Comprehensive Analysis 3 of Fund Flow Statement

Cash Flow Analysis for Understanding Cash Generation and Movement

Cash Flow Statement Introduction (Talking Head)
Cash Flows from Various Activities (Talking Head)
Cash Flow Statement Direct Method (Talking Head)
Cash Flow Statement Indirect Method (Talking Head)
Case Study 1 Cash flow study (Talking Head)
Case Study 2 Cash flow study (Talking Head)
Case Study 3 Cash flow study (Talking Head)
Cash Flow Analysis in Loan Proposal
Cash Flow Analysis in Loan Proposal 2
Cash Flow Analysis in Loan Proposal 3
Cash Flow Analysis in Loan Proposal 4

Interfirm Comparison, Internal & External Rating and Review of Conduct of Accoun

Inter firm Comparison in Loan Proposal
Inter firm Comparison in Loan Proposal Case 1
Internal Rating in Loan Proposal
Internal Rating in Loan Proposal - More Insights
External Rating in Loan Proposal
Review of Conduct of Accounts in Loan Proposal
Review of Cash Credit Account
Review of Term Loan Accounts
Review of Letter of Credit Facility
Review of Bank Guarantee

Review of Audit Reports, Compliances, Contingencies and Risk Factors

Review of Warning Signals and Audit Reports in Loan Proposal
Review of Compliance of Financial Covenants & Sanction Conditions
Review of Contingent Liabilities and Statutory Dues
Addressing Risk and Mitigating Factors

Finer Pricing, Review of Defaulters List & Loan Policy

Finer Pricing
Defaulters List
Loan Policy

Types of Business Loans

Types of Bank Loans for Business
Bank Loans for New Projects
Loans available in banking channel

Working Capital

Working Capital Loans
Working Capital Cycle
Tandon Committee Recommendations on Working Capital Assessment
Working Capital Assessement as per Nayak Committee
Review of Assessed Bank Finance
Working Capital Cycle Analysis

Cash Credit

Understanding Cash Credit
Cash Credit Example
Cash Credit
Assessment of Cash Credit - ABF Method
Assessment of Cash Credit - Conservative Method
Drawing Power Computation from Stock Statement
Assessment of CC Book Debts

Non Fund Based Credit Facilities

What and Why of Non Fund Based Credit Facilities?

Letter of Credit

Letter of Credit
Documents involved in Letter of Credit
Types of Letter of Credit
General aspects related to LC
Assessment of Letter of Credit
Letter of Credit (Old Lecture)
LC Computation (Old Lecture)
Assessment of Letter of Credit Limit

Bank Guarantee

What is Bank Guarantee?
Types of Bank Guarantee
Bid Bond Guarantee
Advance Payment Guarantee
Appraisal and Assessement o BG Limits
Bank Guarantee (Old Lecture)
Types of Bank Guarantees (Old Lecture)
What is Bid Bond Guarantee?
Maintenance bond / guarantee
What is Retention Money Guarantee?
What is Advance payment Guarantee?

Project Report

Basics of Project Report

Term Loan Appraisal

Why Business entities should go for Term Loan?
Term Loan Appraisal By Banks
Term Loan - Nature of Project
What is TEV Study?
Technical Viability of Project
Financial Viability of Project
Economic Viability of Project
Commercial Viability of Project
Managerial aspects of Project
Compliance aspects of Project
Cost of Project and Means of Finance under Term Loan Appraisal
Land Cost and related inputs under cost of Project - Term Loan Appraisal
Building Cost and related inputs under cost of Project -Term Loan Appraisal
Plant and Machinery Cost and related inputs under cost of Project -Term Loan App
Technical Know how and related inputs under cost of Project -Term Loan Appraisal
Preliminary Expenses and related inputs under cost of Project -Term Loan Apprais
Pre-operative Expenses and related inputs under cost of Project -Term Loan Appra
Provision for Contingencies and related inputs under cost of Project -Term Loan
Working Capital Margin and related inputs under cost of Project -Term Loan Appra
General aspects related to estimation of Cost of Project - Term Loan Appraisal
Introduction of Sources of Finance - Term Loan Appraisal
Share Capital as source of Finance - Term Loan Appraisal
Internal Accruals as source of Finance - Term Loan Appraisal
Subsidies as source of Finance - Term Loan Appraisal
Debenture as source of Finance - Term Loan Appraisal
Term Loan as source of Finance - Term Loan Appraisal
Unsecured Loans as source of Finance - Term Loan Appraisal
Project Implementation Schedule
Production Factors - Term Loan Appraisal
Manufacturing Process - Term Loan Appraisal
Other Production Factors - Term Loan Appraisal

DSCR & FOIR Computation in Term Loan

DSCR Computation in Term Loan
Analysis of DSCR (Gross Average & Net Average)
Analysis of DSCR 2 (Gross Average & Net Average)
Term Loan Eligibility Calculation
FOIR Computation in Term Loan
Project Viability - Case Study

Break Even Analysis

Break Even Analysis
Break Even Point Example
Break Even Point Graph
Break Even Test by Bankers
Cash Break Even Analysis
Break Even Analysis Case 1 in Term Loan Appraisal
Break Even Analysis Case 2 in Term Loan Appraisal

Sensitivity Analysis

Sensitivity Analysis in Term Loan Appraisal
Sensitivity Analysis Sales Drop Testing Case 1 in Term Loan Appraisal
Sensitivity Analysis Variable Cost Increase Testing Case 2 in Term Loan Appraisa
Sensitivity Analysis Material Cost Increase Testing Case 3 in Term Loan Appraisa
Sensitivity Analysis DSCR Testing Case 4 in Term Loan Appraisal

Credit Rating

ECRA
Default
Credit Rating Scale
Importance of Credit Rating Scale

Credit Scoring

Credit Scoring & Credit Score
What is Good Credit Score?
What is CIBIL?
Factors affecting CIBIL Score
How to improve Credit Score?
What is CIBIL Score?
Reasons for Poor Credit Score
Mistakes in Credit Scoring
How to correct your Credit Score?

Key Analysis by Bankers

Why Bankers reluctant to sanction Working Capital Facility?
Why Bankers are running after seeing this Balance Sheet?
Why Current Ratio of atleast 1.33 is insisted by Bankers?
What are Current Assets and Current Liability?
How Bankers Understand Long Term Stability of Business?
Return on Investment Case Study
Importance of Debt to Equity Ratio
Preference Share Capital
Why Banks are insisting on Margins on Loans
Why Banks insist on Financial Statements
How Sales analysis made by Banker

Marginal Cost of Funds based Lending Rate (MCLR)

What & Why of MCLR
Calculation of MCLR
Misc. Items related to MCLR

Export Credit

Export Credit
Preshipment Credit
Assessment of Preshipment Credit

Terms of Payment in Export Transactions

Introduction to Terms of Payment
Advance Payment
Documentary Credit
Parties in Documentary Credits
Details included in Letter of Credit
Practical Mechanism in Letter of Credit
Different Kinds of Letters of Credit

Export Finance

Introduction to Export Finance
Preshipment Finance - Packing Credit
Advance against Incentives
Preshipment Credit in Foreign Currency
Postshipment Finance
Negotiation of Export Documents under Letter of Credit
Purchase or Discount of Foreign Bills
Advance against bills sent on collection
Advance against goods sent on consignement
Advance against Export Incentives
Advance against undrawn balances and retrention money
Post shipment credit in Foreign Currency

CMA

CMA Introduction
CMA - Operating Statement
Capturing Past Data from Audited Financial Statements
Analysing Previous Years Income Statement
Analysing Previous Year Liability Statement
Analysing Previous Years Asset Statement

COMPUTERISED ACCOUNTING SYSTEM

Introduction
Classification of comp
Features
Terms used
Differences
Adv and Disadv
Functions of CAS
Comp scope in banking
Why compl automation
Centralised Infra
Core bank and benefits
Tech architecture CBS
Flow of transaction
Information Security
SOP PC LAPTOP
Pwd Mgmt Policy

BANKING OPERATIONS

Introduction
Functions of bank
Main functions of bank
Front office and Back office
Outsourcing activities
Operational Instructions in Banks
Banking Operations Manual

OPERATIONAL ASPECTS KYC

Operational aspects of KYC Norms
KYC Norms - Customer Acceptance Policy
KYC Norms - Customer Identification Procedure
KYC Monitoring Transaction
KYC Risk Management
Selecting Additional information KYC
Norms for Periodic Updation of KYC
KYC Relaxatio
eKYC
Customer Service in Banks
ATM Transactions
Recent Changes in customer Service - RBI
BCSBI

LOAN ACCOUNTS

Introduction
Technical Term
Technical Term 2
Priority Sector 3
Technical Term 4
Basic Rate
Fixed & Floating Rate
Penal Rate of Interest
Security
Document of title to Goods & Bankers General Lien
Negative lien , Restriction Advances, Rehabilitation & Recovery
Operational Process of loan in Banks
Methods for Assessment of loans
Accounting aspects of loan Products
Basic Operating Instructions on Loan Products
Operating Manual for C & A
Simple Operating Procedure
Documentation & Margin
VALUATION
Marketability
Insurance
Godown Pledged Accounts
Pledging of stocks
Unpledged Goods Stored in Pledged Goods Godown
Delivery of Stock Pledged
Submission of Stock Statements
Goods Hypothecated lying with Unhypothecated Goods
Inspection of Stock
SIP
Inspating official comment in SIR
SA
Inspection Charge

Quiz

Test your knowledge in Understanding financial statements- A Conceptual Approach
Test your knowledge in Financing Working Capital Requirements
Test your knowledge in Fund Flow And Cash Flow Analysis
Test your knowledge in Understanding profit and loss account items
Test Your knowledge in Understanding Balance sheet
Test your knowledge in Analysis of financial statement

Import Finance

What is Buyers Credit
Discontinuation of Letter of Undertaking / Letter of Comfort for Trade Finance

Other Banking Products

What is Stand By Letter of Credit?
Bonus Lecture

Screenshots

Banking Credit Analysis Process (for Bankers) - Screenshot_01Banking Credit Analysis Process (for Bankers) - Screenshot_02Banking Credit Analysis Process (for Bankers) - Screenshot_03Banking Credit Analysis Process (for Bankers) - Screenshot_04

Reviews

Akash
October 5, 2023
Superb knowledge sharing. Nothing like available anywhere else. I would request to Sir to publish detailed modelling videos for fund raising with Fund based and non fund based facilities including commissions, margins, processing charges etc.
Lerato
August 9, 2023
The course gave me so much knowledge on the credit analysis process. I will be taking up more analytical courses
Tanya
July 11, 2023
The course so far is good. Am able to know to how evaluate a customer before lending them money. The key factors i have to look at.
Deepak
July 1, 2023
I appreciate the way of teaching. The contets are excellent and very clear in all respect. Illustrations are fully conversant with the topic and in sync with the requirement.
Anand
March 12, 2023
Contents are very clear and to the point, even someone with no finance background will understand at ease.
Jay
March 4, 2023
way he taught us in very simple langauge so we can understand easily.other things is whatever sir is teaching its a part of real work of credit analysis
Terri
February 20, 2023
This training is excellent for me as I work in the banking industry and would like to transition into lending in near future
Khanyisile
November 3, 2022
This info is very useful especially if you’re new to the credit analysis field. It’s the “Ahhaa” to your questions.
Juma
October 21, 2022
Being a corporate banker, i found this course an elaborative and easy to follow. I advise people to take this course to learn credit appraisal and enhance their financial knowledge.
A
October 21, 2022
The course has been excellent so far. Looking forward to complete it and will sit through it one more time for better understanding
Awesh
October 21, 2022
The course is very good but the only thing is it is too lengthy for a working professional to complete it.
Kelvin
September 8, 2022
The course is real an eye opener and a refresher for me. The course is really conclusive and hope to learn more in the remaining parts. The facilitator is well informed and articulate in the field.
S
August 23, 2022
Till now session were very simple and easily understandable and also the speaker way of putting across the course is very effective.
Utkarsh
June 6, 2022
Well structured course taught with Layman language even if you do not have any experience or prior knowledge with the subject you'll get each and every concept right away.
Zaki
March 25, 2022
Comprehensive course with details…you need to prepare yourself on peace place and commitment to finish it.

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260066
udemy ID
7/12/2014
course created date
2/6/2020
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