Banking presented by "Financial Skills "

Banking Terms for Outstanding Advances and NPA rule

STANDARD ASSETS              -  REGULAR PAYMENT RECEIVED BY BANK

                    SMA- (SPECIAL MENTIONED A/C)

SMA- 0                                    - IST INSTALLMENT O/S (0 - 30 DAYS)

SMA- 1                                    - IIND INSTALLMENT O/S (31 - 60 DAYS)

SMA- 2                                    - IIIND INSTALLMENT O/S (61 - 90 DAYS)

NPA- NON PERFORMING ASSET - AFTER 90 DAYS LOAN A/C TURNS TO NPA BY BANK

SUB STANDARD ASSETS                - AFTER 12 MONTHS FROM NPA 

DOUBTFUL -                                      - AFTER 12 MONHS FROM SUB STANDARD

BANK WILL CONDUCT AUDIT - 

LOSS ASSETS =             DECLARED AFTER AUDIT - 

RECOVERY PROCESS -  AFTER DECLARATION RECOVERY PROCEEDING STARTS

Review related docs asked by bank -

1. Audited / Provisional Balance sheet for the company as on date.

2. Copy of all the licenses 
3. ROC Search Report
4. Due Diligence Certificate.
5 Form no. 135 for all the directors and guarantors along with all requisite documents
7 CA certified Investment certificate ( Plant and Machinery & investment in Building) for your new unit .
8 All bills/ Receipts as per details mentioned in investment certificate
9 GST related statements/ return/ challans etc.
13 Month Wise sale record / statements
14. Income Tax/Other authority dispute status (if any)

15 TEV study report from Banks empanelled associates (Case to case may be vary)

16. Property valuation report (if 3 year has been completed from last valuation or as the case may be asked by Bank)

17. NEC report (if 3 year has been completed from last valuation)

18. Insurance receipts etc. 

19. Valuation report of Plant and machinery/building of the new project if any from valuers. 

19. pay review charges as applicable. (example in at present Bank of Baroda, Rs.350 / per 100000 on CC Limit outstanding amount and 0.5% on TL. )

Personal Loan by bank -

The Terms and condition vary Bank to Bank basis (Private Banks and Govt. Banks), 

however, major requirement by all the banks are as below:

For Salaried Employees

1. ITR of last 3 years or Salary Slips/form 16

2. Pan Card, Adhar Card

3. They will check CIBIL report, and it should not be less than 710 (it may vary also Bank to Bank)

For Others

1.CA certified - ITR and Profit and Loss Accounts etc.

2. Pan Card, Adhar Card

3. They will check CIBIL report, and it should not be less than 710 (it may vary also Bank to Bank)

Banker may ask for collateral security- like , Life insurance policy, FDRs etc. to be endorsed with the Banks. 

CC limit or Od limit or Working capital loan from Banks

1.CA certified - 3 years ITR and Profit and Loss Accounts etc. (Audited Balance sheet required- depend on case to case basis) + GST registration certificate, GST returns etc.

2. Projected Balance Sheet / CMA data for further 5 years at least / Project report (if any)

3. Pan Card, Adhar Card of owner /partners/directors + net worth certificate along with singed form 135 from all the partners / directors / guarantors 

4. They will check CIBIL report of firms if not proprietorship as well as of all partners, directors and Grantors.  

5. Primary Security & Collateral security against loan. i.e, property, FDR, etc. 

(If property is Land and Building- Valuation report, Title deed, NEC report etc to be submitted to Bank from Empanneled value/advocate of Bank)

Bank must check the following Ratio as per the audited/provisional/projected Balance sheet provided to the Banks:- 

1. Current Ratio  (Minimum 1.5 is required)

2  Debt Equity Ratio (Maximum 4 :0 is acceptable or 3 )

3 DSCR (Debt service coverage ratio) - Avg. DSCR  (Minimum 1.0)

Bank will keep margin example - Bank may contribute 75% in working capital requirement 

"Primary security"Primary security is the asset created out of the credit facility extended to the borrower and / or which are directly associated with the business / project of the borrower for which the credit facility has been extended.

 Please note:- Primary security should be clear, absolutely unencumbered and marketable to the satisfaction of the Bank

Example: Land, Plant & Machinery or any other business property in the name of a proprietor or unit, if unencumbered, can be taken as primary security.

"Collateral security" means the security provided in addition to the primary security, in connection with the credit facility extended by a lending institution to a borrower.  

Example:- Land and buildings, jewelry, House  property etc