You are on page 1of 48

PREPARATION OF PROPOSAL

The immense competition amongst Banks/Financial Institutions to grab quality credit portfolio
has resulted in Borrowers seeking speedier decisions on credit requests. Many a times
sanctioning authorities are not in a position to take quicker decisions as the credit proposals are
either incomplete or lack vital details or are not prepared with adequate care and preciseness.
This results in raising of queries or decisions being held up for want of more information which
result in avoidable delays.

Following Checklist, Dos and Don’ts may perhaps help the advances dealing officials to
combat the above situation

CHECKLIST

1. Take the previous sanctioned proposal and go through the same fully;
2. Ensure all terms are complied with;
3. Go through the Memos prepared since the last sanction in the account for any over limit/ad
hoc etc. granted;
4. Study CMA data/Financial Statements thoroughly- Read the Auditor’s Report and Notes on
Balance Sheet carefully;
5. Verify the sales trend in the past and confirm that the projections are done accordingly and if
not what the borrowers are to say and whether the reasons are cogent and acceptable;
6. Study the holding levels of inventory – past trend, actual, industry norms provided by RBI
etc.
7. Check turnover in the account – Ensure that the party has no banking relationship with other
Banks of which we are not aware/authorized by us /consortium;
8. Check on cheques returned for financial reasons – Both issued by the Company/Lodged by it.
Check devolvement of L/Cs, Invocation of Guarantees, Return of Bills Purchased in the
account,. Also check whether all commitments are met on due dates;
9. Check whether pro-rata business is routed through us in case of consortium accounts. Check
for consortium meetings held and minutes of meetings held are kept on record;
10. Check latest position of accounts – Reasons for overdue, if any;
11. Whether inspections are done as per stipulations and whether the findings are satisfactory;
12. Verify Internal Audit Report/Concurrent Audit Report etc. for comments on this account;
13. Look critically at profit/profitability;
14. In accounts having term loan component whether DSCR is calculated properly and the same
is acceptable to us;
15. Collect data on Bank’s exposure to the company/firm by way of credit facilities, as
investment in NCDs, Equity Shares, Underwriting obligations etc. Take a declaration to that
effect from the Borrower;
16. Collect data on Group Exposure along the same lines;
17. Verify credit rating sheet and confirm that the marks are awarded properly and the pricing
has been appropriately derived at;
18. While taking exposure, check for industry exposure and NPA levels in your Branch/Area;
19. Confirm that dues to the financial institutions /banks are repaid in time and accounts are in
order;
20. Confirm that the statement of basis of worth (CBD-23,IT/WT returns) is obtained
recently/updated;
21. Confirm that status reports on drawees etc. are updated;
22. Delegation – Verify as to which is the authority for the proposed sanction;
2

23. Check/Confirm that Technical Appraisal if needed is carried out. Study the report fully and
carefully. In case of doubts/clarifications feel free to contact the technical cell for more
details;
24. Confirm that the proponents/company/group does not come in any defaulters list;
25. Check as to when security charged to the bank was verified last;
26. Ensure security documents are in order. Confirm that renewal documents are obtained
recently;
27. Ensure Insurance Policy is obtained and coverage is adequate;
28. In case of Export Accounts, ECGC coverage is taken and proper reporting to ECGC in their
prescribed format has been done within the stipulated time frame;
29. In case of Corporate Borrower take search with ROC to ensure that all our charges are
properly registered with due priority;
30. In case of borrowers where stock audit has been done, whether irregularities/discrepancies
observed by stock auditors have been properly taken care of by the company and the bank;
31. In case of borrowers where Management Audit has taken place, whether the observations
have been appropriately dealt with.

DOs

1. Use prescribed formats for proposals and for reporting Ad hoc , Over limit etc.;
2. If you have given Ad hoc/Over limit on the basis of proposal due for review, get the review
done before the deadline for ad hoc expires;
3. For any reference (Review/Over limit/Ad hoc), please furnish:-
a) Present position of accounts in the format prescribed;
b) Position on compliance, if any pending;
c) If any promises were made either by Customer/Branch during previous sanction and
position on those promises;
d) Sales/purchase figures/performance up-to-date;
e) Last inspection date & adverse findings, if any.

4. Verify defaulters list of RBI, ECGC, FERA, COFFEPOSA, Bank's defaulters, list of
undesirable accounts etc. before considering credit proposals. Look out for name of the
company, its associates, directors, promoters and all persons associated with it in these lists;
5. Security - Give full details of the properties and see that it matches with the value given
elsewhere in the proposal. The details should contain the total value of security, residual
value etc. In case of consortium accounts, our share in security to be specifically stated;
6. Industry - Give a profile of the industry in your Zone/Area;
7. Obtain status report directly from the Bankers . Renew them periodically;
8. While commenting on performance, always provide explanation for variations in estimates
and actuals;
9. Avoid inconsistencies in various figures mentioned at various places in the proposal;
10. In case of term loan, present status of the project should be given;
11. Find out whether any of our subsidiaries or our investment department has taken any
exposure on the borrower;
12. Make assessment/recommendation crisp and to the point. Avoid repetition. Be specific on
return of cheques for financial reasons, devolvement of LCs or invocation of guarantees etc.;
13. Please check (if possible personally) marketability, condition etc. of collateral security;
14. Do read financial newspapers daily and build up market reports on companies banking with
us and mention the same in the proposal appropriately;
15. In case of adverse market reports, incorporate the actual position and corrective action taken
by you to protect the bank's interest.

DONT'S
3

1. Do not take over Substandard/Doubtful/Loss accounts and accounts which are in


negative/non-priority areas;
2. Do not allow customers to bring Status Reports from the Bank;
3. Do not allow ad hoc/over limits on a regular basis. Ensure regularization before expiry dates.
Do not allow ad hoc/over limits if the account is overdue for review;
4. Do not allow ad hoc/ over limit or any credit facility without any written application/request.
The repayment of the adhoc/over limit should never be linked to the sanction of
additional/regular limits;
5. Do not ask information/details/queries in piece-meal basis. Have a check list ready at the
time of first discussion itself to give the customer;
6. Do not structure the limits to fit any specific designated authority as per delegation. Always
make a realistic assessment first and then decide the authority;
7. Do not propose a security unless you verify its ownership and the possibility of creating our
charge on the security and the customers willingness to offer the same;
8. Do not exceed your delegated authority. In case the business requirements justify exceeding
the delegated authority the same should be immediately reported to the appropriate authority
with reasons/justification in writing and seek confirmation. Also follow the prescribed
procedure.

Specific Tips on Proposals/Memoranda:

The points mentioned below are illustrative and cover the deficiencies found in the
proposal at present. The dealing officials should bear in mind circulars issued on the
subject, Manual of Instructions and Proposal Format. The requirements are:

1. Latest audited financials with details of performance during current year

2. Value of security – Collateral-


¾ Details of collaterals proposed i.e. valuation, basis, ownership.
¾ In case of proposed mortgage availability of original title deeds and necessary
permissions to create mortgage.
¾ Fresh valuation in case the existing valuation is old more than 3 years.

3. Latest worth of partners/Directors/Guarantors (separate details of assets, liability and net


worth) and basis for the same.

4. Position of account with Asset Status with other banks.

5. In case of consortium account:


¾ Acceptance of assessment by consortium
¾ Position of sanction by other banks
¾ Reasoning in case enhancement is not shared amongst the members in their sharing
proportion
¾ Reasons in case Forex Turnover is not routed as per sharing pattern
¾ Details of tie up of limits
¾ Consortium views/decisions on company’s request.

6. Satisfactory reasoning/comments in case of performance vis-à-vis estimates

7. Reconciliation Net Worth

8. Comment on variation in Balance Sheet spread and its impact or working on MPBF and
financial ratios
4

9. In case of Term Loan furnishing DSCR for the company as a whole instead of giving it for
the particular project alone.

10. Furnishing Asset Coverage Ratio for the Term Loan

11. Comments on qualified statements/remarks by statutory auditors of the company

12. Obtention of Status Reports of Borrowers/Associates

13. Yield available in the account

14. In case of concessions:-


¾ Quantifying the concessions/sacrifice
¾ The concessions availed by the borrower with other bankers for their account/group
accounts

15. Credit Rating exercise – Must be done in proper format and allotting correct marks

16. Non compliance of terms & conditions, if any, of last sanction with reasons, present status
and proposed action

17. Audit irregularities, stock audit, inspection findings – Specific compliance and in case of
pending matters present position and proposed action
18. In case any condition is stipulated by the Branch/Zone, clear mention should be made that the
same is acceptable to the borrower

19. If any request involves legal opinion, the same should be obtained prior to recommendations
Justification in case of deviation from laid down norms/policy

In case of HUF being partner details of major coparceners and providing personal guarantee by
them.

General tips on Proposals/Memoranda

a) Proposals should be typed on Ledger paper-Green on A4 size in Tahoma/Arial font (size 12)
in MS Word format;
b) Bulky Project reports/technical reports/CBD-23 forms with enclosures, title deeds copies etc.
should not be forwarded to HO unless specifically called for. The same should be scrutinised
at the ZO level and ZO comments/recommendations thereon should be given in the proposal;
c) The ZO to ensure that all the columns/items are filled in/necessary information is given;
d) Figures in Balance Sheet spread etc. should be given correctly;
e) Proposal processing and other applicable charges should be recovered up-front/as per extant
guidelines and a confirmation to the effect be given in the proposal;
f) In case of adverse features like out of order position, expiry of PCB clearance, non-
observance of credit discipline, etc. comments should be offered on corrective action taken/to
be taken;
g) Assessment of NFBLs should be done/explained;
h) Comments on documentation/validity thereof should be given;
i) All the figures in the proposal must be mentioned in lacs of Rupees;
j) Latest worth of guarantors and basis thereof should be given;
k) Matters falling within the authority of ZO are not to be recommended for HO consideration.
The same should be considered at the ZO level and only the matters falling within the
authority of HO should be referred to HO;
5

l) While stipulating mortgage of the property the ZO should ensure that the said property is
mortgagable to avoid subsequent memo proposing waiver of mortgage and dilution in the
security;
m) Lengthy and disjointed recommendations should be avoided. Precise and to the point
recommendations should be given;
n) Before recommendations for waivers/concessions, ZO to ensure that the borrowers' requests
are reasonable and confirm to the Bank's policy broadly. Bank's interest and other benefits to
the Bank should be taken into account while recommending such requests. 'Borrower is very
old customer' should not be the only consideration;
o) HO correspondence on queries must be attended to and responded promptly;
p) ZO should dispose off the proposal received from the Branches within a reasonable time and
should allow reasonable time to HO to deal with the matter. Matters should not be submitted
to HO at last moment, seeking clearance/approval/sanction within few hours or same day
especially critical matters;
q) After sanction of proposal, various modifications are recommended in piecemeal basis one
after another. This should be avoided. Before submission of the proposal all the matters
should be discussed with the borrowers in order to avoid piecemeal references subsequently.
HO experience is that in some zones, the exact requirement of the borrower, rate of interest,
tariff etc. are not fully understood/anticipated.

Administrative/in-principle clearance:
a) Submitting a simple IOM without giving basic information on the proponents, bulky project
reports and other papers should be avoided. A small memorandum (preferably first 3 pages
of our usual proposal) containing basic information on the proponent should be submitted.
The ZO to offer comments on project reports etc. after scrutinizing the same;
b) In case of take over/new Term Loan, it is stated that other banks are vying for the business.
Branch/ZO to substantiate this;
c) When in-principle approval is given, a memo follows recommending waiver of various terms
of in-principle approval (waiver of mortgage, concessional ROI etc.) defeating the essence of
original approval. Such situation should be avoided.

BANK OF INDIA ______________________ BRANCH

CHECKLIST ON COMPLIANCE OF TERMS OF SANCTION

NAME OF THE A/C : ____________________________ LIMIT/S RS.____________


YES NO
1. Proper application duly filled in and signed by borrower is
obtained
2. Statement of Assets & Liabilities CBD-23 duly filled in
obtained from Borrower/Guarantor verified dated___________
3. Pre Sanction Inspection carried out – Report dated ________
kept on record.
4. Proposal No._________ prepared/sanctioned by __________
kept on record.
5. Acknowledgement of letter for sanction terms & conditions
obtained.
6. Special Adhesive Stamps on documents affixed & cancelled on
____
7. All documents as stipulated duly signed by
borrower’s/guarantor’s obtained on ___________
8. Firm’s/Companies Seal/Common Seal affixed on documents.
9. All documents duly filled in checked by Shri _____________
on_____
6

10. Collateral security obtained :


a) Term Deposit No._______ for Rs.______maturing
on___________
b) If equitable mortgage then search report for 30 years
obtained on ____________ & verified.
c) Valuation report obtained and verified- Inspection of the
property carried out on _____________
d) Equitable mortgage created on _________ Reg.Folio
_________
e) RTO Extract/Copy of Registration book obained- Bank’s
charge verified.
f) If Ltd.Co.then Board Resolution dated _________ is on
record.
g) If Ltd. Co.then Cerified Copy of Memo of Articles of
Association is on record.
h) If Ltd. Co.then search report from ROC’s office dated
_______ is on record.
i) If Ltd. Co.then charge on assets created on _____________
j) If Ltd. Co.then charge/modification of charge filed on
_________ and receipt from ROC office held on record.
11. List of documents entered in Security Register – Folio
________
12. Insurance obtained for Rs.___________expiring
on(date)________
13. Processing charges recovered on __________
14. Documentation charges recovered on
15. Administration charges recovered on
16. Vetting of documents done by ___________ advocate
17. C.P.A. – I carried out on ________________
18. C.P.A.- II carried out on _________________
19. Post Sanction Inspection carried out on ______________
20. Renewal document due on ________ Review of account due on
__________

_______________________
(Name ________________ )
Manager/Senior Manager
Signature Code _________
7

Common irregularities observed in the proposals/executive summary:

General Observations:
a) Form II (operating statement) and form III (balance sheet spread) based on CMA data
submitted by the company is not prepared/attached. Instead the relevant pages of CMA
data submitted by company are only attached. Audited/provisional balance sheet of
company is not forwarded. Annual report of the company to be perused.
b) Segmental revenue/profit etc. to be given in case of multi-unit companies.
c) Under page settings, A4 paper size is not observed.
d) Arial font with size 12 is not strictly observed.
e) Various tables in the proposal are exceeding left/right margins.
f) Some of the instructions given in brackets, some signs like *, # etc. are not deleted.
g) Formats/tables in the prescribed format are changed.
h) In para 25 (Financial position), amount is not specified in “lakhs” of Rupees. Amount in
decimal figures to be avoided. However, ratios are to be given upto two decimal points.
i) Figures in various table are not “right” aligned.
j) At same places figures are mentioned in lakhs and in crores in some places. All figures
should be in lakhs only.
k) Matters falling within ZO authority are also recommended for consideration at HO.
l) Phrase like “Reported”, “Reportedly” are used, which should be avoided.
Other deficiencies (Item-wise):
Item Deficiencies
1. Company’s name is written in Capital letters. In some cases old name (earlier partnership etc.)
is given.
2. It is not clearly mentioned whether the company is Public Ltd. or Pvt. Ltd. and whether listed
or un listed.
3. Lengthy description of activity is given. Details of company’s clients are given. BSR
occupation code (5 digits) is not mentioned.
4. Established in:
5. Advance since ----:
6. In case of new proposals, name of present banker is not mentioned here.
7. Pricing rating (as per old rating model) is not given correctly. Instead of giving overall rating,
marks for additional factors (20 marks) are only taken into account and rating based on it is
advised. Borrower risk grade, adjusted Borrower risk grade and pricing grade should be given
as per new credit rating model.
8. Asset code: Even now the earlier Health Code is given.
8

9. Names of other associate accounts are mentioned instead of giving name of the group
10. Designation of the Chief Executive/promoters is not given.
11. In case of sole banking, 100% is mentioned instead of writing “Sole Banking”. In case of
consortium/MBB, details of member banks, share, amount etc. are not given.
12. Instead of stating whether it is review/additional/reduction etc., other details like concessional
charges, ROI, deviations etc. are given.
Details of any approvals given after last sanction (modification in terms, other requests, if
considered) are not given.
13. Present request: Only major issues are to be highlighted.
14. In case there are more than one TL, the details are given on consolidated basis.
WC FBL/NFBL sub limits are not given. Limits in this item and annexure differ.
Rate of interest on various sub-limits is not clearly brought out.
ROI is not linked with BPLR when the rate is floating. Minimum interest clause is not
mentioned when ROI quoted is sub-BPLR. Any reset clause to be mentioned here.
Outstandings are of old date.
In case of overdues, relevant details like, overdue instalment, interest, date since
overdue etc. are not given.
If overlimit/adhoc limit is granted, details like authority, date, period of OL/adhoc are
not given.
Complete Repayment schedule of each term/demand/corporate loan is not given.
15. Value of stocks/bookdebts/P&M not advised separately.
Security is not advised limit-wise. This is important as some of the assets are charged to
specific limits only.
In case of proposed value, date of valuation is not given. Reason for large variation in value of
security is not brought out.
Value of stocks should not be more than one month old.
Under collateral, property-wise details in brief are not given. In case number of properties are
more, a schedule is not attached.
Value of security given in this item does not tally with value given in Annexure.
It is not stated whether the charge is 1st or 2nd charge.
In case of second charge, total value less 1st charge holders’ dues= (residual value) available
security is not given.
Our share of value of security is not given. Many times it is not clear whether value of security,
especially collateral mentioned, is our share or total value to the consortium.
In case of pari passu charge, total value is not advised.
Value of Escrow/TRA/negative lien/pledge of shares of unlisted company to be given as nil but
amount to be mentioned as footnote.
Though, last valuation is more than 2 years old, no comments are made on fresh valuation.
16. While calculating guarantors’ worth, assets charged to us and investment in the company is not
excluded.
Basis of worth is based on some statements other than CBD 23. Date of CBD 23 is not advised.
Moreover CBD 23 of latest date is not taken.
If statement of worth from lead bank is obtained, details as per CBD 23 should be available to
the Branch.
Assets and Liabilities columns are kept blank.
Promoter Directors’ guarantee is not proposed nor justification for not obtaining their personal
guarantees is given.
17. Instead of giving present exposure, proposed exposure is given.
FBL/NFBL are not shown separately.
NFBL-LC: Whether Inland or Foreign, DP/DA and DA usance is to be given.
NCBL-BG: Whether Inland or Foreign, to be given.
Outstandings of other bank/asset status is not given.
18. Under group exposure, outstandings of group accounts are not given. Sometimes, credit rating
or asset status is not given.
9

Date of last sanction and authority is not given in case of group account.
19. Under exposure to industry, Zone’s figures/NPA not advised.
20. Conduct of account item is kept blank.
Details of returned cheques, devolved LCs, invoked BGs are not given. Instead, a general
comment is given.
Even if the accounts are out of order, the conduct of account is stated as satisfactory.

21. Amount of utilisation is not mentioned correctly.


22. Export/import columns are kept blank.
23 Interest earnings are not in line with utilisation of limit and ROI applicable.
Other earnings are not given, even if the same are applicable.
LC/BG: Charges are not commensurate with utilisation of NFBLs.
Yield is shown lower than ROI. In case of variation in yield, no comments are given.
Under Para 23, deposit float, if any, of borrower/group to be mentioned.
24. Concessions are not advised in table format (Applicable, present, proposed, etc).
Details of float available are not given after item 24.
E&F Instead of giving company’s favourable factors/risk factors, benefit available to bank are
given. Risk mitigants are not advised.
25. Many financial indicators are overlooked or deleted from format. Further, annual report
should be perused. Copy of annual report should be sent to HO alongwith proposal.
Preference shares (redeemable in less than 12 years) are included in TNW as Equity. Instead
this should be shown in Medium and Long Term liabilities.
Terms of preference share to be given (maturity/coupon).
In case FCCB also, terms to be given.
Whether PS/FCCB treated as equity or debt to be mentioned.
Investment in sister concern is not given.
While giving yearwise financials, Audited figures for previous year, estimated and
audited/provisional financials for last year and estimated/projected financials for current
year/next year should be given.
If quasi DER is to be considered, figures of quasi equity are not given.
If quasi equity figures are given, quasi DER is not calculated taking into account only
100% of TNW.
Capital employed, NP/Capital employed, Inventory + receivables/sales figures are not
computed correctly. This should be in % only.
Adjusted TNW is not worked out properly.
Share price in case of listed companies is not given. Face value of shares is not
shown. Quarterly/Half yearly results are not given.
Other Income-If it is a major contributory factor to the profit, proper explanation be given
and how company can sustain profitability with its core activity.
Figures of profit/earnings given in DSCR working differ with the one given in financials.
In case of multi segments/products company, segmental revenue and PBIT should be given in
order to see whether every segment is profit making.
26. Reconciliation of TNW is not given. If given, it is not properly given i.e. sub-item of TNW
like capital, reserves, profit etc. advised.
Lengthy comments on financials are given instead of giving to the point comments.
Comments on variations in any financials/adverse financials are not given.
Instead of giving reasons of lower CR, DER it is stated that CR is low because current assets
are less and current liabilities are more etc.
Justifications for achieving estimates are not given. In case of achievability of estimated
sales, orders on hand, capacity utilisation etc. is not commented upon. Comments on not
achieving estimated sales/other projections are also not given.
Up-to-date sales figures are not given.
High increase in sales- Whether capacity is available is to be commented upon.
27. Inter company comparison.
28. Stock inspection date is old. Stock inspection findings are not given.
10

In case of new account, pre-sanction inspection date is not advised.


Financial year for which the stock audit is conducted is not given.
Stock audit date is old. No reasons are given for not carrying out stock audit.
Date of closure of stock audit is not advised.

29. It is not confirmed whether all the stock audit/internal audit irregularities are rectified.
Comments on non-provisioning of liability/contingent liability are not given.
Date of closure of CPA is also required to be mentioned.
29. Flow Chart: In case of review, date of application is not given. No explanation is given for
delay at various levels.
30. Under working capital assessment, holding level, assessment is not justified. Last accepted
holding levels are not given.
In case of consortium accounts, whether MPBF is approved by consortium is to be stated. If
not, to be stipulated.
Present limit and basis of assessment is not given. Age of bookdebts is not given.
In case of Bill business, DA period is not advised.
Margins are not advised.
Description of product/RM is given in abbreviated form.
31. NFBLs are not assessed on many occasions.
DA period is not advised in case of DA LCs. Whether Inland/Foreign, DP/DA facility, is not
mentioned.
32. Detailed assessment of term loan, project cost, capacity utilisation (present/proposed),
DSCR/Comments on DSCR, implementation schedule, present status of project etc. are not
given. Sensitivity analysis to be done.
TEV study requirement: If it is to be waived, proper justification to be given.
Detailed repayment schedule is not given.
BEP and IRR to be given with comments thereon.
In case of review of term loans, accounts are proposed to be reviewed at outstanding level,
instead of drawing limit level, though the accounts are out of order.
Purpose (purchase of machinery, etc.) of existing limit, original limit is not advised.
In case of restructuring, limits are not properly given. In case interest repayment is to be
done at a later date, interest is not capitalised and details regarding treatment to be given to
the same are required.
33. Confirmations------
34. Industry perceptions-------
K Comments are very lengthy. HO instruction mentioned in the format are not followed.
35. Comments on adverse features of account are not given.
No comments are given on cross selling.
No comments are given on any deviations from Bank’s/RBI norms.
All the proposed approvals/confirmations are not covered in detail in comments.
In concluding para, all the approvals/confirmations are not covered.
36. Delegated authority is mentioned as “Head Office”. Exact authority should be given.
Anx. Table is drawn by using drawing commands instead of using the table commands.
1A In case of consortium, the table is found incomplete.
1B Details of proposed limits are not given.
Some of the columns are kept blank.
1C ---do---
1D This is either ignored or just a dash is mentioned.
I Cash flow, wherever necessary, is not given.
In case, cash flow is given, no comments are offered thereon.
II Comments/justifications on holding levels are not given.
Sub-limits, justifications therefor are not given.
III Some of the items are kept blank.
11

IV Facility-wise margins are not given in some cases.


Confirmation re. discussion of terms with the proponents is missing in some cases.
Other terms and conditions are repeated from letter to be addressed to borrowers under
“Lenders liability” guidelines. While mentioning these terms proper care is not taken to
change the wordings. e.g. some times it is mentioned “You are liable to pay . . . .” etc.
V Security details are incomplete/inadequate.
Property-wise details are not given.
Valuation-initial date column is kept blank.
VI Basis of assessment of worth is not advised. Instead of CBD 23, some other basis is advised.
Sometimes date of CBD 23 is not given.
Share holding pattern column is kept blank or details are incomplete.
VII Sub-limit wise outstandings are not advised.
In case of out of order position, details of overdues are not given.
Earnings for last 4 quarters are not given.
VIII Insurance is inadequate.
Items regarding search, charge are not addressed properly.
Against audit irregularities it is stated that “all the major irregularities rectified”. However,
the confirmation should state that all the audit irregularities are rectified. If any irregularity
persists, it should be brought out clearly.
IX Some of the items are kept blank. It should be mentioned whether it is applicable or not.
Form Unusual variation in financials is not addressed.
II Proper classification of current assets/liabilities is not done. Advance for Capex/Advance of
& III deposit nature are classified as current assets.
NWC figures under financials differ from figures given in WC assessment.
Cr. Marks assigned are not as per the applicability/eligibility in some of the items in old credit
rating rating sheets.
In case of new credit rating model, amounts of financials are not mentioned properly in the
respective sheets.
Encl. Items to be enclosed:
- Annual report/audited balance sheet.
- CMA Data.
- Project Report/TEVS report (in case of term loans).
Items not to be enclosed:
- Copies/Originals of election photo Identity card, passport, CBD23,
application form, land/revenue records, agreements, valuation reports,
correspondence between branch/ZO/customer, newspaper cuttings.
12

Format for seeking administrative clearance from Head Office for the limits Rs.500lakh and
above:
Format for seeking In-Principle approval – New Business
With limits Rs.5 crores and above.

Zone: Branch:
Rs in lacs
1. Account
2. Place of business
3. Business Activity
4. Banking with us
since
5. Group
6. Principal Persons
7. If any of them under
RBI defaulters’ list
8. Asset Code
9. Present request Term Loan :
WC F B Limits :
NFBL LC: BG:
10 Security
11 Present bankers
12 Business referred by
13 Financials Give for existing units. For new units, give
projections for three years of project)

Rs in lacs
Year 2005-06 2006-07 2007-08
Capital
TNW
Sales
Net Profit
Profitability Ratio
(NP/Gross Sales)
DER
CR

Quarterly/Half Yearly unaudited sales, EBIDTA and NP to be given for current year.
14. Concession if any recommended:

RoI
BG/LC commission
Processing/TEVS fee
Others

15. In case of term loan:

Project appraised by:


Cost of project :
Means of finance :
13

DSCR (Average) :
Repayment period :

16. SWOT Analysis:

17. Recommendations of Zonal Office, in brief: (In case of takeover/corporate loan etc pl
specify whether applicable norms are satisfied)

Date: Zonal Manager

In principle approval is hereby given subject to entry level norms, bank’s


policy guidelines, the facilities being properly assessed/appraised and being
considered by the appropriate authority on merits.

Date: General Manager


Head Office

H:\COMMON\FORMATS\Common irregularities observed in the proposals.doc


14

CIC- L2

Proposal format for exposures up to Rs 100 lacs.

Proposal No.
Date
Branch : Zone :

A. BORROWER PROFILE :
1. Name of Account

2. Constitution

3. Business/Activity

4. Established in 5. Advance since:

6. If the account is new , name of the earlier Banker :


Present Proposed
7. a) Risk Rating* 8. Asset Code :
b) Pricing Rating * (No./Description)
c) External Credit
Rating
* Scoring Sheet to be attached
9. Group

10. Key person

B. ISSUE/S FOR CONSIDERATION :


11. Present Request : New/Review/Additional/Reduction/Change in Terms
12. Last Sanction / Review :

C. FACILITIES & SECURITY COVER :


(Rs. in lacs)
13. Existing Proposed Inc. (+) / Pricing* Present Over-
Limits (with Dec.(-) in ROI/ Outstand dues
purpose) limits Commission ing Date @
Term Loan**

Working
Capital (Fund
Based)

Non Fund
Based
15

Total
* Justification for proposed pricing (ROI/Commission) to be included under branch /Z.O.
comments.
@ Break-up of over dues into Principal and interest with date since overdue.
** Repayment Terms and Date of Original Sanction.

14 Security Value(Our share)


Particulars $ Date of (Rs. in lacs)
valuation
report Present
Proposed
Principal
Collateral #
$ First/ Second Charge(residual value to be given) and our share
#Names of title holder and his/her relationship with borrower
(Rs in lacs)
15 Partner/Guarantors' Name Assets Liabilities
With Address and telephone Net worth * Basis
no.

* should exclude the value of property/assets mortgaged to our Bank/ other Banks/FIs and also
investments made in the borrower company/firm. In case of corporate borrowers, the status of
guarantor with respect to the company should be given. (Technical/ Nominee Director etc)

D. CONDUCT/VALUE OF ACCOUNT :
16. Conduct of the account :(To cover financial discipline including return of cheques drawn
on/drawn by for financial reasons)

a. Cheques returned during the year under review for financial reasons :
No. Amount in lacs

b. Particulars of L.C./devolved and guarantees invoked along with their present position.
No. Amount Favouring Date of present position
in lacs Devolvement/
Invocation

L/Cs

Guarantees

17 Utilisation of :
Last Year Current Year

Amt. in lacs % Amt. in lacs %


a) Fund Based limits

b) Non Fund Based Limits


16

18 i) Export Turnover (Rs. in


lacs)
ii) Import turn over(Rs. in lacs)
19 Earning (Rs. in lacs) Last year(April-March) Current year (Estimates)
Interest
Other non-interest income No. Amt. Earnings No. Amt. Earnings
Bills Purchased/
collected
L.C.s opened
Guarantees issued
Any other Income*
Total
Yield %
Details of Retail Banking/any other business generated by cross selling of products to
the borrower and its employees under Bank's different schemes should be separately
given (aggregate limits and outstanding)
* to include all other income like processing/lead bank , technical appraisal
fee/documentation charges, service charges etc
20 Concessionary facilities : allowed/ proposed (Annualised Value)
Item Applicable charges Present charges Concessions
proposed
E. FINANCIAL POSITION
21. Rs. In lacs
Audited Estimated Audited Estimate Projected
Previous last year Last Current Next year
year year year
a) Paid up Capital :
- Equity
- Preference Share
b) Tangible Net worth
(Excl. rev. reserve & Net of
Intangible Assets)
c) Investment in cos.
Of which associated
companies/ subsidiaries
d) Adjusted TNW
e) Capital Employed*(total
funds employed)
f) Net Block
g) Net sales : Domestic
Exports
Total
h) Other Income
i) Depreciation
j) Gross Profit/Loss
k) Net profit/loss
l) Cash Accruals
(i + k)
m) Net profit/ Capital Employed
(%)
n) Current Assets
o) Current Liabilities
RATIOS :
17

p) Current ratio
q) Debt/Equity :
Total Term Liab./TNW
Total Outside Liab./ TNW
r) Profitability %: PAT/Net
Sales
s) DSCR a) Company as a
whole
b) For specific TL
t) Interest Coverage
u) Inventory + Receivables/
Sales
Workout (d) if item (c) is above 10% of Net Worth.
* Adjusted TNW plus M.T./ Current liabilities.
Details of quarterly published results, if any, in case of listed companies to be given as a separate
column.

22. Comments in brief on financial position (including Contingent Liabilities Annexed to


the company's balance sheet ). In case of contingent liabilities it should be clearly mentioned
whether it is under 1st or 2nd appeal.
F. AUDIT/INSPECTION/MEETINGS :

23 Last 3 Dates Remarks/observations & Br./Z.O. comments on


rectification
Stock inspection
24 Any adverse comments of Statutory/ Remarks/observations & Br./Z.O. comments on
Internal/Concurrent/revenue/RBI Auditors rectification
and Borrower's Auditors (as extracted from
the Balance sheet)

G. ASSESSMENT/JUSTIFICATION
25. Working Capital Assessment( should cover acceptability of projected sales ):
Previous year Current year
a. Gross Sales
b. 25% of Gross Sales
c. 5% of Gross Sales
d. Actual /Projected Net Working Capital
e. (b-c)
f. (b-d)
g. Permissible Bank Finance
(Lower of e & f)
26. Non Fund Based Limits Assessment : L.C.s – Guarantees

27. Project Finance/Term Loan Assessment:


For Term Loans/Demand Loans/Deferred Payment Guarantees
(Including where the company proposes to buy additional machines or balancing equipment.)

PROJECT APPRAISAL BY :
01) Project particulars :
18

02) Cost and source of finance,


tie up arrangement for gap, if any.

03) Amount of advance and :


purpose
19

04) Repayment schedule :

No. of Amount Frequency Whether EMI


Instalments Initial Date of
Moratorium commenceme
nt
Existing
Proposed
Interest during construction period i. will be serviced; or capitalised at the end of
moratorium period

05) Details of security/ :


value of security/margin
Basis of Valuation :

06) Comments on project :


appraisal, viability,
profitability, project-
ions, DSCR, etc.
(Cash flow statements
and projected P&L and
Balance Sheet to be
submitted)

07) Project implementation schedule :


along with present status of project

08) Availability of refinance:

28. We certify as under -

i) Method of Assessment: Turnover Method

ii) MSOD submission : Regular/ Irregular

iii) Current Assets/Liab. classification as per RBI Norms: Yes/No

iv) Borrower/Group Exposure within RBI norms : Yes/No

v) Conduct of Account: a) With our Bank :


b) With other Banks:

vi) Position of Accounts : In order/Not in order Since(Date)

vii) Compliance with terms of sanction : Yes/No


(If no, specify terms not complied with and status of release of sanctioned limits pending such
compliance)

viii) Security documents held in the account are valid and in force up to and the
necessary charges have been registered. The documents have been vetted by Shri
on .
A search was carried with ROC regarding the borrower co. by on and
there are no intervening charges registered which would jeopardise Bank's interests.
20

ix) Pollution Control Board clearance valid upto :

x) a)Is the company regular in : Yes/ No


repayment of its liabilities to the Banks/ Institutions

regarding Term Loans/Leasing/ Investments?

(If no, give details and indicate steps proposed to be taken)

b)Whether Company / firm is regular in payment of the statutory dues? If not the details of
arrears. In case of disputed liabilities are pending in the court, the particulars like since when
the dispute is pending, the impact of the case on the working/profitability of the company
are required to be given.

xi) a) Whether Company/Directors/Prop./Partners/Guarantors on ECGC caution list/Specific


Approval List, RBI Defaulters'/Caution List or Bank's own Defaulters' list. (If yes give
details)

xi)b) Whether Associate Companies/Partners on ECGC Caution List/ Specific


Approval List, RBI's wilful Defaulters List/CIBIL's list of defaulters/Caution List or
Bank's own Defaulters List. (If yes, give details).

xi)c) Whether Directors of the company are disqualified under Section 274 of
Companies Act.

xii) Any other features observed in the conduct of accounts not commented elsewhere in the
proposal including comments on legal cases of any nature filed against the borrower/
associates affecting the financial position substantially.

xiii) Details of ad-hoc /over limits allowed during year under review:
Date & authority Amount of ad-hoc/over Period of ad-hoc/over Present position
limit limit

What are the comments of the company's auditors regarding the Corporate Governance.
22

29. Group's liabilities with us (including this Borrower Company) ON GLOBAL BASIS ( In case of
exposures at our overseas branches the details should be given in both foreign currency and INR) :

(Rs. in lacs)
Name of Account Limits Conduct of Asset Code/ Our share in Our Investment Lease Total Maximum
(last San. & Funded Non- Account Credit Rating consortium/ in Equity/Deb. & Finance Exposure in Exposure as
Authority) Funded MBA advance CPs of the Co. Sanction. the Co. per norms *
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Bank's exposure to Company : Bank's exposure to Group :


Within Bank's Norms Within Bank's Norms
as per RBI Guidelines : Yes/No as per RBI Guidelines: Yes/No
(If not reasons for exceeding the norms) (If not reasons for exceeding the norms)

(Brief comments on conduct of Group accounts with us) Note: In case of specific category accounts viz.
N.B.F.C.s / S.C.C.s etc., compliance status of specific norms as per RBI/Bank's guidelines also to be
mentioned here.
23

30. Details of security (to be given facility wise - if common security is obtained for more than one
facility, suitable remarks to be incorporated)
PRINCIPAL SECURITY
Facility Nature of Value of Date of Date of In case of pari-
Security Security Valuation Creation of passu/ second
first/Second charge over
charge

COLLATERAL SECURITY
Nature of Owned by Location Valuation Date of In case
Security PreviousS Latest creation of of pari-
anc Date Date first/second passu/
& & Amount charge second
Amount charge
over

31. Position of Accounts as on (Rs. in lacs)


Facility Sanc. Value of Drawing Drawing O/S Amt.
Limit Security Power Limit
As on
_______
Fund Based

Non-Fund
Based
24

32 . BRANCH COMMENTS & RECOMMENDATIONS:

(Branch comments should be brief indicating reasons for slippage, if any, in any of the parameters,
how the same is proposed to be made up and whether necessary covenants stipulated by the Bank and
accepted by the borrower. In case of improvement in any parameters, particularly net worth,
substantive explanation to be offered. Reconciliation of Net Worth of last financial year to be given.
Recommendations on the basis of SWOT analysis bringing out exceptions, if any, being made in this
account.

Dy. Ch. Manager/Chief Manager/ Asst. Gen. Mgr. Ch. Mgr/Asst. Gen. Mgr./ Dy. Gen. Mgr.

FLOW CHART

Date application received at branch


Date of Branch Proposal
Date proposal received at Zonal Office
Remarks

33. Z.O. RECOMMENDATIONS (Comments to include)


• Evaluation of Management (Competence/Reputation, Movement of Key Managerial
Personnel, Market Knowledge/awareness, Succession Planning, Management Track
Record, Violation of loan agreement covenants)
• Business Risk (Demand-Supply Scenario, Competitive Position, Price Volatility,
Cyclicality, Dependence on Regulatory/fiscal concessions)
• Remarks on Techno- Economic Viability Study)

We confirm that the comments of the Auditors forming part of the Balance sheet of the borrower have
been studied and suitable comments made.

CHIEF MANAGER/JT.ZONAL MGR. ASSTT.GEN.MGR./ZONAL MANAGER

\\Boicic\DATA\COMMON\GRR\Proposal format for exposures up to Rs 100 lacs.doc


25

(PROPOSAL FORMAT FOR 100 LAKH AND ABOVE:)


MEMORANDUM FOR SANCTION/APPROVAL OF M.COM./CMD/ED/G.M./Dy.G.M.

Proposal No.
Date
Branch : Zone :

A. BORROWER PROFILE :

1. Name of Account

2. Constitution

3. Business/Activity

4. Established in 5. Advance since:

6. If the account is new , name of the earlier Banker :


Present Proposed
7. a) Risk Rating* 8. Asset Code :
b) Pricing Rating * (No./Description)
c) External Credit
Rating
* Scoring Sheet to be attached
9. Group

10. Chief Executive/


Promoter Directors

11 Consortium Yes/No Other (names of all


a Leader Our Banks/ banks &
/ Share Share shares)
Share
Multiple Yes/No Other (names of all
b Banking Main Our Banks/ banks &
Arrangements Banker/ Share Share shares)
Share

B. ISSUE/S FOR CONSIDERATION :

12. Present Request : New/Review/Additional/Reduction/Change in Terms


13. Last Sanction / Review :

C. FACILITIES & SECURITY COVER :


(Rs. in lacs)
14. Existing Proposed Inc. (+) / Pricing* Present Over-
Limits (with Dec.(-) in ROI/ Outstandin dues @
purpose)
limits Commission g Date
Term Loan**

Working
Capital (Fund
Based)

Non Fund
Based

Total
* Justification for proposed pricing (ROI/Commission) to be included under branch /Z.O. comments.
@ Break-up of over dues into Principal and interest with date since overdue.
26

** Repayment Terms and Date of Original Sanction.


15 Security Value (our share)
Particulars $ Date of (Rs. in lacs)
valuation Present Proposed
report
Principal
Collateral #
$ First/ Second Charge(residual value to be given) and our share#Names of title holder and his/her relationship
with borower 2
(Rs in lacs)
16 Partner/Guarantors' Assets Liabilities
name Net worth * Basis

* should exclude the value of property/assets mortgaged to our Bank/ other Banks/Fis and also
investments made in the borrower company/firm. In case of Limited Co-borrowers, the details of
guarantor Director as with financial stake/without financial stake should be given.

D. CONDUCT/VALUE OF ACCOUNT :

17. Conduct of the account :


(To cover financial discipline including return of cheques drawn on/drawn by for financial
reasons)
No. Amount in lacs
a. Cheques returned during the year under review for financial reasons:

b. Particulars of L.C./devolved and guarantees invoked along with their present position.

numbe amount favouring. Date of present position


r in lacs devolvement/i
nvocation
L/Cs
Guarantees

(Rs. in lacs)
18 Utilisation of :
Last Year Current Year

Amount % Amount %
a) Fund Based limits

b) Non Fund Based Limits

19 ii) Export Turnover (Rs. in lacs)


ii) Import turn over(Rs.in lakhs)
20 Earning (Rs. in lakhs) Last year(April-March) Current year (Estimates)
Interest
Other non-interest income No. Amt. Earnings No. Amt. Earnings
Bills Purchased/ collected
LCs opened
Guarantees issued
Any other Income*
Total
Yield %
Details of Retail Banking/any other business generated by cross selling of products.

Adhoc business : Advances to Employees of the Borrower:


27

* to include all other income like processing/lead bank , technical appraisal fee/documentation charges,
service charges etc
21 Concessionary facilities : allowed/ proposed (Annualised Value)
Item Applicable charges Present charges Concessions
proposed

E. FINANCIAL POSITION
22. Rs. In lacs
Audited Estimated Audited Estimate Projected
Previous Last year Last year Current Next year
year year
a) Paid up Capital :
- Equity
- Preference Share
b) Tangible Net worth
(Excl. rev. reserve &
Net of Intangible
Assets)
c) Investment in cos.
Of which associated
companies/
subsidiaries
d) Adjusted TNW
e) Capital
Employed*(total funds
employed)
f) Net Block
g) Net sales : Domestic
Exports
Total
h) Other Income
i) Depreciation
j) Gross Profit/Loss
k) Net profit/loss
audited estimates audited estimates projected
l) Cash Accruals
(i + k)
m) Net profit/ Capital
Employed (%)
n) Current Assets
o) Current Liabilities
RATIOS :
p) Current ratio
q) Debt/Equity :
Total Term Liab./TNW
Total Outside Liab./
TNW
r) Profitability %:
PAT/Net Sales
s) DSCR a) Company as a
whole
b) For specific
TL
t) Interest Coverage
u) Inventory +
Receivables/ Sales
Workout (d) if item (c) is above 10% of Net Worth.
* Adjusted TNW plus M.T./L.T liabilities.
Details of quarterly published results, if any, in case of listed companies to be given as a separate
column.
28

Share price : Rs. as on


(52 week's High/Low : Rs. /Rs. - Source:

23. Comments in brief on financial position (including cash flow and Contingent Liabilities
Annexed to the company's balance sheet ). In case of contingent liabilities it should eb
clearly mentioned whether it is under 1st or 2nd appeal.

24. Inter Company Comparison (as extracted from CRIS INFAC/Capital line wherever
available)

Name of Co. Year Sales PBT/Sales TOL/TNW C.R.

F. AUDIT/INSPECTION/MEETINGS :

25 Last Date Remarks/observations & Br./Z.O. comments


on rectification
Stock inspection
Stock audit
Consortium meeting
26 Any adverse comments of Statutory/ Remarks/observations & Br./Z.O. comments
Internal/Concurrent/revenue/RBI on rectification
Auditors and Borrower's Auditors (as
extracted from the Balance sheet)

G. ASSESSMENT/JUSTIFICATION
27. Working Capital Assessment( should cover acceptability of projected sales , inventory
and receivable holding levels and current liabilities including trade creditor levels):

28. Non Fund Based Limits Assessment : L.C.s – Guarantees

29. Project Finance/Term Loan Assessment:


(Comments should include remarks on Techno- Economic Viability Study)

H. EXPOSURE :

30. Borrower :
(Rs. in lacs)
Facility* Amount Outstandings/ Asset Status
(Brief details,
Date if any)
With Us
With Other Banks**
With FIs**
Under Lease Finance/Invt.
Total
* Details of facilities to be indicated WCL/TL/Lease Finance/Any Other
** Individual Bank/FIs to be listed

31. Group Account Exposure (including this proposal)


Rs. In lacs
29

Name of company/ Zone/ AC/ F.B. N.F.B. Out of Whether


firm with date and Branch CR Order, restructured
authority of last If any.
sanction

Total
(Rs. in lacs)
Maximum exposure (FBL+NFBL) based on capital Borrower Group
funds of the Bank as at the end of last year.
Cap. Cap.
Actual Actual

32. Exposure to Industry (including present exposure) (wherever applicable)


(Rs. in lacs)
a) Sectoral Cap for Industry :
b) Bank’s Exposure :
c) Zone’s Exposure* :
d) NPA Bank :
e) NPA Zone* :
*Z.O. should furnish these figures

33. Industry Perception : Business Scenario Perception (SWOT)


Industry average/benchmark (as extracted from CRIS INFAC/Capital line wherever
available)
Net Sales/ Bank Finance/ Inventory +
PBT/ Total Tangible Current Assets Receivables/
Net Sales Assets Net Sales

34. We certify as under -

i) Method of Assessment: Cash Flow/CMA/Turnover

ii) MSOD/QIS submission : Regular/ Irregular

iii) Current Assets/Liab.: classification as per RBI Norms: Yes/No

iv) Borrower/Group Exposure within RBI norms : Yes/No

v) Conduct of Account: a) With our Bank :


b) With other Banks:

vi) Position of Accounts : In order/Not in order Since(Date)

vii) Compliance with terms of sanction : Yes/No


(If no, specify terms not complied with and status of release of sanctioned limits pending such
compliance)

viii) Security documents held in the account are valid and in force up to and the necessary
charges have been registered. The documents have been vetted by Shri on
.
30

ix) Search for Mortgage/charge at ROC done by on . Any charge created


affecting our security cover.

ix) Pollution Control Board clearance valid upto :

x) a)Is the company regular in : Yes/No


repayment of its liabilities to the Banks/ Institutions (If no, give details and
indicate regarding Term Loans/Leasing/ Investments? steps
proposed to be taken)

b)Whether Company / firm is regular in payment of the statutory dues? If not the details of
arrears. In case of disputed liabilities are pending in the court, the particulars like since when
the dispute is pending, the impact of the case on the working/profitability of the company are
required to be given.

xi) a) Whether Company/Directors/Prop./Partners/Guarantors on ECGC caution list/Specific


Approval List, RBI Defaulters'/Caution List or Bank's own Defaulters' list. (If yes give
details)

xi)b) Whether Associate Companies/Partners on ECGC Caution List/ Specific Approval List, RBI's
wilful Defaulters List/CIBIL's list of defaulters/Caution List or Bank's own Defaulters List. (If yes, give
details).

xi)c) Whether Directors of the company are disqualified under Section 274 of Companies Act.

xii) Any other features observed in the conduct of accounts not commented elsewhere in the
proposal including comments on legal cases of any nature filed against the borrower/
associates affecting the financial position substantially.

xiv) Details of ad-hoc /over limits allowed during year under review:
Date & authority Amount of ad-hoc/over Period ofad-hoc/over Present position
limit limit

What are the comments of the company's auditors regarding the Corporate Governance.

xiv) Credit Delivery System :


(Comments on status)

CHIEF MGR/JT. ZONAL.MGR ASSTT.GEN.MGR./ZONAL


MANAGER

Note: In case of specific category accounts viz. NBFCs/SCCs etc., compliance status of specific
norms as per RBI/Bank's guidelines also to be mentioned here.
31

35. BRANCH COMMENTS & RECOMMENDATIONS:

(Branch comments should be brief indicating reasons for slippage, if any, in any of the
parameters, how the same is proposed to be made up and whether necessary covenants
stipulated by the Bank and accepted by the borrower. In case of improvement in any
parameters, particularly net worth, substantive explanation to be offered. Reconciliation of Net
Worth of last financial year to be given. Recommendations on the basis of SWOT analysis
bringing out exceptions, if any, being made in this account. Annual Cash Flow statement is
also to be obtained from the borrowers and commented upon by the Branch - as per Annexure
I E.)

Dy. Chief Manager/Chief Manager/ Asst. Gen. Mgr. Chief Manger/Asst. Gen. Mgr./ Dy. Gen. Mgr.

36. Z.O. RECOMMENDATIONS (on a separate page) (Comments to include)


• Evaluation of Management (Competence/Reputation, Movement of Key Managerial
Personnel, Market Knowledge/awareness, Succession Planning, Management Track
Record, Violation of loan agreement covenants)
• Industry Risk
• Business Risk (Demand-Supply Scenario, Competitive Position, Price Volatility,
Cyclicality, Dependence on Regulatory/fiscal concessions)
• Remarks on Techno- Economic Viability Study)

We confirm that the comments of the Auditors forming part of the Balance sheet of the
borrower have been studied and suitable comments made.

CHIEF MANAGER/JT.ZONAL MGR. ASSTT.GEN.MGR./ZONAL MANAGER


32

ANNEXURE I (A)
ACCOUNT :

BRANCH :

EXISTING AND PROPOSED SHARING PATTERN

(Rs. in lakhs)

Name of
Banks Fund-based limits Non-fund based limits
(including BOI) Existing Proposed Incr./Decrease Existing Proposed Incr./Decrease
% age Amt. %age Amt. %age Amt. %age Amt. %age Amt. %age Amt.

(Reasons for less than pro-rata share in non-fund-based facilities, if applicable, to be given)
33

ANNEXURE - IB
Group's liabilities with us (including this Borrower Company) ON GLOBAL BASIS ( Exposure at overseas branches may be mentioned in both domestic currency and Rupee
equivalent) :

(Rs. in lakhs)
Name of Account Limits Conduct of Asset Code/ Our share in Our Investment Lease Total Maximum
(last San. & Auth) Funded Non-Funded Account Credit Rating consortium/ in Equity/Deb. Finance Exposure in Exposure as
MBA advance & CPs of the Sanc. the Co. per norms *
Co.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Bank's exposure to Company : Bank's exposure to Group :

Within Bank's Norms Within Bank's Norms


as per RBI Guidelines : Yes/No as per RBI Guidelines : Yes/No
(If not reasons for exceeding the norms) (If not reasons for exceeding the norms)

(Brief comments on conduct of Group accounts with us)

CHIEF MANAGER ASSISTANT GENERAL MANAGER

* (100% funded limits & investment in Equity/Pref.Shares/Debentures, Lease Fin., CPs, etc. plus 100% of Non-funded limits)
** (Bank's Norms : as per RBI guidelines For Borrower : 15% (20% for infrastructure)of Bank's Paid up Capital & Free Reserves
For Group : 40%(50% for infrastructure) of Bank's Paid up Capital & Free Reserves)
34

ANNEXURE I (C)

GROUP LIABILITY - CONTD.

(Rs. in lakhs)

Name of the Year Ended Sales PBT/Sales DER CR Asset Code/


Account (%) Credit
Rating
35

ANNEXURE I (D)
ACCOUNT :

BRANCH :

Exposure of Bank's Subsidiaries on the Company and Group

(Rs. in lakhs)
Names of Subsidiaries Position as on Exposure in Exposure in Other Expenditure
(Date __________ ) Equity Debentures (To be specified)

1. BOI Finance (Kenya) Ltd.

2. BOI (U.K.) Nominees Ltd.

3. BOI Nominees (Singapore) Ltd.


36

ANNEXURE - I (E)

PROJECTED CASH FLOW


Q1 Q2 Q3 Q4

I. CASH FLOW FROM BUSINESS OPERATIONS:

A) Receipts

B) Payments:

CASH FLOW FROM BUSINESS OPERATIONS


i.e. Net of (A) and (B)

II. CASH FLOW FROM NON-BUSINESS OPERATIONS:

C) Receipts:

D) Payments:

CASH FLOW FROM NON-BUSINESS OPERATIONS:


i.e. Net of (C) and (D)

III. CASH FLOW FROM CAPITAL ACCOUNTS:

E) Receipts

F) Payments:

CASH FLOW ON CAPITAL ACCOUNT


i.e. Net of (E) and (F)

IV. CASH FLOW ON SUNDRY ITEMS:

G) Receipts:
37

H) Payments:

NET CASH FLOW ON SUNDRY ITEMS


i.e. Net of (G) and (H)

OVERALL POSITION OF CASH BUDGET


Opening Cash Balance

Add: 1. Net Cash Flows

Closing Cash Balance


38

ANNEXURE II

ASSESSMENT NOTE ON WORKING CAPITAL LIMITS -

I. Compliance with accepted levels of inventory and receivables -

Actual/Project levels
Previous Year Current Year Net Year
(in months)
Raw Material
Stock in process
Finished Goods
Receivables

Trade Creditors

II. Summary of Assessment of working capital requirements :

(Rs. in lakhs)
Previous Year Current Year Net Year
(Actuals) (Estimates) (Projections)
(a) Total Current Assets

(b) Other Current Liabilities

(c) Working Capital Gap (a - b)

(d) Minimum stipulated Net Working


Capital (25% of "a")
(e) Actual/Projected Net Working
Capital

(f) (c - d)

(g) (c - e)

(h) MPBF (lower of "f" and "g")

(i) Excess Borrowings, if any

III. Assessment under Turnover Method


39

(Rs. in lakhs)

Last Year Current Year


a. Gross Sales
b. 25% of Gross Sales
c. 5% of Gross Sales
d. Actual /Projected Net
Working Capital
e. (b-c)
f. (b-d)
g. Permissible Bank Finance
(Lower of e & f)

IV. Comments and recommendations :


(It should, inter alia, contain comments on deviations proposed and reasons therefor)

CHIEF/ ASSTT. GENERAL MANAGER ASSTT./ Dy.


GENERAL MANAGER

ANNEXURE III

For Term Loans/Demand Loans/Deferred Payment Guarantees


(Including where the company proposes to buy additional machines or balancing equipment.)

PROJECT APPRAISAL BY :

01) Project particulars :

03) Cost and source of finance,


tie up arrangement for gap, if any.

03) Amount of advance and :


purpose

04) Repayment schedule :

No. of Amount Frequency Whether EMI


40

Instalments Initial Date of


Moratorium commenceme
nt
Existing

Proposed

Interest during construction period

i. will be serviced; or
ii. will be capitalised at the end of moratorium period

05) Details of security/ :


value of security/margin
Basis of Valuation :

06) Comments on project :


appraisal, viability,
profitability, project-
ions, DSCR, etc.
(Cash flow statements
and projected P&L and
Balance Sheet to be
submitted)

07) Project implementation schedule :


alongwith present status of project

08) Availability of refinance:

CHIEF MANAGER/ASST.GEN.MGR. ASST./ Dy.GENERAL


MANAGER
41

ANNEXURE IV

ACCOUNT :

BRANCH :

LIMITS PROPOSED

Nature of Facility Existing Proposed Margin Effective ROI/


Commission
Fund Based
Limits

Non-Fund Based
Limits

ALL OTHER TERMS, CONDITIONS AND COVENANTS, INCLUDING SECURITY


(PRINCIPAL & COLLATERAL) APPLICABLE TO THE PROPOSED FACILITIES -

We also confirm that the proposed terms/conditions have been discussed with the borrowers and
the same are acceptable to them. (In case of any disagreement, appropriate comments should be
offered.)
42

CHIEF MANAGER ASSTT. GENERAL


MANAGER
43

SUPPLEMENTARY INFORMATION -
ANNEXURE V

Details of security (to be given facility wise - if common security is obtained for more than one
facility, suitable remarks to be incorporated)

PRINCIPAL SECURITY

Facility Nature of Value of Date of Date of In case of pari-


Security Security Valuation Creation of passu/ second
first/Second charge over
charge

COLLATERAL SECURITY

Nature of Owned by Location Valuation Date of In case of


Security Initial Latest creation of pari-passu/
Date Date first/second second
charge charge over

CHIEF MANAGER ASSTT. GENERAL


MANAGER

Note : In case of delay in creation of stipulated security, creation of first or second charge, suitable
explanation to be given and specific approval to be sought.
44

SUPPLEMENTARY INFORMATION - ANNEXURE VI

A) Particulars of Proprietor/Partners/Directors/Trustees etc.

Name Age Worth Basis of Address & Phone No.


*(Status) Worth Residentia Office E-mail
(latest) l Address

* Status will be one of these : Proprietor/Partner/Director/Trustees etc.

B) Particulars of Guarantors

Name Age Worth Basis of Address & Phone No.


Initial Date Latest Worth (latest) Residential Office
Date

C) Share holding pattern (in case of closely held company) as on

Name of the Shareholder No. of shares % holding Whether Guarantor


held
45

(Individual particulars of those holding 5% or more shares to be indicated)


46

SUPPLEMENTARY INFORMATION -
Annexure VII

Position of Accounts as on :

(Rs. in lakhs)

Facility Sanc. Value of Drawing Drawing O/S Amt. Out of Earnings


Limit Security Power Limit order by Last 4
As on Amount quarters
_______ *( )
Fund
Based

Non-Fund
Based

* ( Date since out of order along with break-up of overdues)

CHIEF MANAGER ASSTT. GENERAL MANAGER


47

SUPPLEMENTARY INFORMATION - ANNEXURE VIII

STATUS OF SECURITY DOCUMENTS, ADEQUACY AND VALIDITY OF


INSURANCE, REGISTRATION OF CHARGES

01) Whether security : Yes/No *


documents including the charge
documents are properly
executed and are in order

02) Validity of security documents :


Facility Existing Documents in
limit force upto
(Date)

03) Whether other documents/ : Yes/No *


undertakings/declarations,
obtained as per the terms
of sanction

04) Date of search in the :


files of Registrar of
Companies last taken

05) Whether all our charges : Yes/No *


are properly registered
with requisite priority and
certificates held by Branch.

06) Whether insurance cover for


assets including collateral security
charged to the Bank is
adequate, covers all required risks,
in force and assigned/obtained in
Bank's favour.

07) Irregularities reported :


by internal/external/
statutory auditors in
documentation, insurance,
registration of charges
48

and steps taken for


regularising the same.
Please also confirm that
deficiencies reported
will not affect safety
of Bank's funds.

* If not, indicate irregularities and steps taken for rectifying the same .

Dy. CHIEF MANAGER / CHIEF MANAGER / AGM

JT. ZONAL MANAGER/ZONAL MANAGER