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Credit Management

Program : MBA Class of : 2007


Semester : IV Sessions : 33
Course Code : BKG 607 Credit : 3 Units

Objective
The objective of this course is to provide the students with adequate knowledge about the management of
Credit portfolio in banks. It will provide sufficient inputs to enable the student to develop an insight
regarding the different phases of Credit management.

Reference Books Author / Publication


Credit Management ICFAI
Practical Banking Advances H.L.Bedi and V.K. Hardikar/ UBS Publishers
The Bank Credit Analysis Jonathan Golin/John Wiley & Sons
Frontiers in Credit Risk Gordian Gaeta/ John Wiley & Sons
Money, Credit and Capital James Tobin/McGraw
Credit Risk Michael Hanke/Springer
Credit and Banking K.C.Nanda/Response
Credit Appraisal, Risk Analysis & Decision Mukherjee/Snow White
making

Detailed Curriculum Sectors – Credit Deployment Scenario – Post


Financial Sector Reforms.
Overview: Lending Activity – Basic
Requirements for Lending. Prudential Norms: Capital, Adequacy of Banks
– Prudential Norms for Ensuring Greater
Principles of Credit Management: Principles
transparency – Capital Tiers.
of Lending – Evaluation of Borrower – The 6 Cs
– Fair Practices Code. Types of Borrowers: Various Categories –
Features of a Company as a Borrower – Special
Objectives of Credit Management: Credit
Types of Customers.
Allocation – Credit Evaluation – Credit
Discipline – Credit Monitoring. Documentation: Importance of Documentation
– Security of Documentation – Renewal of
Credit Policy in Banks: Need for Credit Policy
Documents – Security Offered for Documents.
– Components of Credit Policy – Credit Policy
Pursued by the Government – Credit Culture. Credit Evaluation: Term Loans: Sources of
Finance – Term Loans – Project Appraisal –
Regulatory Framework: Government
Capital Budgeting.
Regulation of Banks – Institutional Structure –
Need for Statutory Reserves – Cash Reserve Credit Evaluation: Working Capital Finance:
Ratio (CRR) – Statutory Liquidity Ratio (SLR). Concept of Working Capital – Factors
Determining Working Capital – Working Capital
Credit Deployment: Role of Bank Credit –
Cycle (Operating).
Types of Credit – Bank Credit for Various
Credit Monitoring: Financial Supervision –
Financial Follow-up – Financial Follow-up
Reports –Physical Follow-up.
Follow up and Recovery Management: Credit
Risk – Identifying Problem Loans – Loan
Classification – Contingent Risk.
Debt Recovery Tribunals: Origin and Object of
the Act – The Functioning of Debt Recovery
Tribunal – Modes of Recovery – Jurisdiction,
Powers and Authority of Tribunals – Authority
of Debt Recovery Tribunal.
Securitization Act: Securitization Company –
Functions of Assets Reconstruction Company –
Powers of Central Registry.

Suggested Schedule of Sessions


No. of
Topic
Sessions
Overview 1
Principles of Credit Management 2
Objectives of Credit Management 2
Credit Policy in Banks 3
Regulatory Framework 2
Credit Deployment 3
Prudential Norms 2
Types of Borrowers 2
Documentation 2
Credit Evaluation: Term Loans 3
Credit Evaluation: Working Capital 3
Finance
Credit Monitoring 2
Follow up and Recovery 2
Management
Debt Recovery Tribunals 2
Securitization Act 2
Total Sessions 33
Note: Screen indicates syllabus for Mid-Semester
examination.