Pre-Sanction Appraisal

When a credit proposal is received from a prospective borrower for sanction by an

appropriate authority, the appropriate authority on the basis of careful analysis of
various facts and data presented by the borrower may either sanction or reject the
proposal.
Such an in-depth study is called the pre-sanction credit appraisal.

Borrower Appraisal
Technical Appraisal
Management Appraisal
Financial Appraisal

Credit Rating Process:

Borrower Rating and Facility Rating
Borrower rating indicates risk of default associated with a borrower.
Facility rating depends on type of collateral offered and its coverage.

TECHNO-ECONOMIC VIABILITY (TEV) ANALYSIS

After a Credit Rating report is generated, the loan proposal is sent for TEV analysis.
In TEV analysis the project report submitted by the borrower is thoroughly studied
by the industry manager. The TEV analysis either done internally by the officers in
the bank or it can be done externally also through some hired agency. In this
analysis each and every aspect of the proposal is verified and necessary documents
are gathered.

Technology and Manufacturing process

Marketing and Selling Arrangement
Risk factors and Mitigating factors
Project Implementation Schedule
Financials
Raw material and consumables
SWOT analysis

Sanction and Disbursement

Any advance sanctioned needs to be availed within four months from the date of
sanction else the facility would not be allowed .Stipulated terms and conditions of
the sanction are to be conveyed to the borrower in writing and on acceptance; the
disbursement would take place after due execution of necessary documents,
compliance of various terms and conditions of sanction.

Post sanction monitoring

It is obligatory on the part of the authorities concerned to keep a close watch on
account like diversion of funds, proper utilization of funds, frequent excesses, and
stock inspection remarks etc. Such controls would provide advance information for
taking appropriate decision in order to avoid slippage of the account.