CREDIT MANAGEMENT
Objective:
The objective of this program is to provide the participant with basic foundation of knowledge and skills that help them to reach sound, reliable judgment of company credit worthiness.
Background:
Credit management is the process of granting credit, setting the terms it's granted on, recovering this credit when it's due, and ensuring compliance with company credit policy, among other credit related functions. This program provides the participant with basic foundation of knowledge and skills that help them to reach sound, reliable judgment of company credit worthiness.
This program will lay emphasis on training credit officers to process credit appraisal note with complete understanding- quantitative and qualitative analyses of the credit proposal. Programme will also include all the components of credit management with the help of case studies.
Hence, the programme will have a structured and systematic approach to evaluate the credit standing of a company and a financial institution.
Workshop Coverage:
Meaning, Importance & Types
- Overview of Credit
- Reasons for Credit
- Benefits of Credit
- Insight on impact of right & wrong credit decision
- Credit Types: Funded & non-funded, Working capital
Introduction to Accrual Accounting
- Introduction
- Primary Financial Statements
- Accrual Accounting
- Cash Tracing Techniques
- Connecting the Statements
- The Accounting Process
- Journal Entries
Credit Policy
- Meaning
- Objective
- Components
Credit Appraisal (5Cs of Credit)
- Character, Collateral, Condition, Capital, Capacity Credit Appraisal (Major Components)
- Business Risk Analysis (Including Industry Analysis)
- Financial Analysis: Ratios (Efficiency of Operational Management, Financial Management, Debt service management)
- Cash flow statement & Sensitivity Analysis.
- Loan repayment Method
- Approval / Rejection Decision
Industry Risk Analysis
- Introduction
- Industry Risk Characteristics
- Cost Structure
- Industry Maturity
- Industry Cyclicality
- Profitability, Dependence, Substitutes and Regulation.
- Case Studies
Business Risk Analysis
- Introduction
- Business Analysis Perspective
- General Characteristics and Goals
- Product-Market Match
- Supply and Production Analysis
- Distribution and Sales
- Management Analysis
- Drawing Conclusion
- Case Study
Loan Structure and Documentation
- Introduction
- The Decision
- Loan Structure: Choosing the Right Facility
- Short-Term Credits
- Long-Term Credits
- Disbursement, Term, Repayment Schedule and Support
- Loan Agreements and Covenants
- Case Study
Loan Management
- Introduction and Overview
- Monitoring Customer Performance
- Identifying Trouble Signs
- A Strategy for Problem Loans
- Practice Exercise
NRBs Major Prudential Norms/ Regulations
- Capital adequacy
- Single obligor limit
- Sectorial limit
- Priority / deprive sector
- Loan classification & provisioning
- Defaulter / black listing
- Credit facility to shareholders
- Directors and employees
- Capital requirement on various types of loan
How to handle problem loans
- Insight on NPA
- Reasons for credit turning to NPA
- Ways to get rid of NPAs: Rescheduling/ restructuring, liquidation etc.
Target Audience:
Assistant / Mid-level employees