JAIIB | PPB | CASE STUDY ON APPRAISAL AND ASSESSMENT OF CREDIT FACILITIES

In Banking, the Appraisal and Assessment of credit facilities play a vital role in ensuring financial health and reducing the risk of non-performing assets (NPAs). This topic is a basic part of the Junior Associate of the Indian Institute of Bankers (JAIIB) examination under the Principles and Practices of Banking paper. Learning Sessions presents to you a case study that will explore the primary concept of credit appraisal and assessment, which are important for bankers to make informative lending decisions, assess borrowers’ creditworthiness, and safeguard the bank’s interests.

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Credit appraisal focuses on assessing a borrower’s ability to repay a loan. This includes financial analysis by reviewing financial statements, cash flows, and key ratios like the debt-equity ratio and current ratio. Afterwards this case study gives details about Purpose of Loan by evaluating whether the loan supports viable projects or personal needs. And last but not the least Creditworthiness by checking the borrower’s CIBIL score and repayment history. Learning Sessions is providing you the additional information about JAIIB AML CFT & Reporting of Transactions.

Moving further, Assessment of Credit Facilities regulate the loan structure and amount suited to the borrower’s needs. Types of Credit  Includes term loans, working capital loans, and trade finance. Loan Structuring ensures loan terms match the borrower’s cash flow and Collateral, assessing the LTV (Loan-to-Value) ratio to ensure proper security coverage. Details on JAIIB PPB Module Wise Syllabus Priority. 

This case study emphasizes real-life examples of Prakash Enterprises applying for a working Loan. It talks about the amount of gross working capital and the net working capital of the Parkash Enterprises and calculates the Finished Goods Periods and Raw Material Storage Period too. Here are the details of the YouTube link and Pdfs of this case study.

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Appraisal and Assessment of credit facilities are critical for reducing NPAs and ensuring responsible lending. For JAIIB candidates, understanding these processes helps in mastering essential banking practices.

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