Ever wondered how banks decide whom to lend money to? Or what goes behind the scenes of a home loan approval? If you’re a banker preparing for JAIIB or CCP certification, or simply curious about banking credit procedures — this session is tailor-made for you!
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Whether you’re just starting in banking or refreshing your knowledge, this guide helps you understand, apply, and ace your exam.👇
👉 Before we dive in, watch this video for a complete breakdown:
Loan Origination: The Journey Begins
Loan origination begins when a borrower applies for a loan. The bank processes the application, verifies documents, and assesses the borrower’s credibility.
- Information Acquisition – Personal and financial data collection
- Credit Appraisal & Sanction – Risk and eligibility evaluation
- Loan Disbursement – Funds transferred to borrower/dealer
Credit Appraisal Techniques – How Risk is Assessed
Credit officers use techniques like:
- Policy-based checks
- Credit scoring models (CIBIL)
- Loan-to-value and debt-to-income ratios
Pro Tip: Higher score = better interest rate!
Disbursement: How Does Money Actually Reach the Borrower?
- Direct Bank Transfer
- Cheque Issuance
- Third-party Payment (e.g., Builder)
Final agreements are signed, EMIs scheduled, and collateral verified before disbursement.
Home Loan Documentation: What You Really Need
Documents needed include:
- Aadhaar, PAN (ID proof)
- Salary slips, ITRs, bank statements
- Sale deed, title documents
Legal Verification of Property
Lawyers verify ownership, titles, tax receipts, and encumbrances.
- Sale & Parent Deeds
- Encumbrance Certificate
- NOCs, approved building plans
Property Valuation & Technical Checks
- Market value estimation
- Construction feasibility
- Boundary clarity
All verified through a valuation report.
Power of Attorney – When the Borrower Can’t Be There
Used in NRI cases or when the borrower is unavailable. Verified for authenticity.
- General POA
- Special POA
- Irrevocable POA
Home Loan Eligibility Calculation
Two methods:
- Gross Income: 36x Monthly Gross Income
- Net Income: 60x Monthly Net Income
Choose the higher value. Apply bank margin rule (~80-90%).
Example: Property cost ₹9 lakh, margin ₹1 lakh ⇒ Bank funds ₹8 lakh
EMI Details, Rate of Interest & Repayment Terms
- Fixed vs Floating ROI
- Moratorium/Holiday Period
- Start date, EMI type, fees
[FREE EPDF] JAIIB RBWM Hindi | Other Financial Services Provided by Banks | Chapter 26
Pre-EMI Interest & EMI Reset
Before full disbursement, only interest is paid — called Pre-EMI.
Floating loans → EMI resets based on interest rate changes (increase in tenure or EMI).
Conclusion
You’ve now unlocked the mystery behind Lender Appraisal Procedures! Whether it’s origination, risk assessment, legal checks, or eligibility – you’re now equipped with actionable insights.
Next step? Apply what you learned, comment below with your questions, and don’t forget to like, share, and subscribe for more content!
📥 Download PDF Notes
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