Principles of Sound Lending



Different kinds of borrowing facilities such as loans, cash credit, overdraft, temporary overdraft, clean advances, bridge loans, participation loans, purchase of bills, bill discounting, letters of credit, etc.Working capital finance and term loan finance– sources, appraisal of proposals for working capital finance and term loan finance consumer finance & calculation on interest on different types of loans (EMI, SI and compound interest) Margins and Drawing Limits.


Types of Securities & Modes of Creating Charge:  

Types of securities: 
Personal and tangible security, primary and collateral security; suitability and valuation, measures to ensure good title. Different modes and methods of creating charge – lien, pledge, hypothecation, mortgage, assignment, set-off, guarantees and indemnities, advances against documents of little to goods, advances against stock exchange securities, advances against Fixed Deposit receipts, advances against insurance policies, advances against supply bills, land and building.

Bank Documentation:

Need for Documentation, types of documents for loans, other documents and deeds (Mortgage, Pledge, Hypothecation, types of letters (Guarantee, balance confirmation, Letter of undertaking). Stamps (importance & types), legal formalities for documentation, Execution, Attestation, Registration, Effects of Non-registration, precautions to be taken by banks with respect to documentation.


Leave a Reply

Your email address will not be published. Required fields are marked *