A Study on Credit Risk Management and Appraisal Process at Punjab National Bank, Nagpur
During the study the researcher learnt how the theoretical financial analysis aspects are used in practice during the loan assessment. The credit appraisal is a process of appraising the credit worthiness of loan applicants. Thus it extremely important for the lender bank to assess the risk associated with credit; thereby ensure the security for the funds deposited by the depositors. There are clear guidelines on how the credit analyst or lending officer has to analyse a loan proposal. For credit risk assessment only financial estimation is not sufficient. Borrower's credit worthiness, industry type, product length, etc. is also considered. Estimating financial growth of the firm is key factor in credit assessment. It depends on market condition, industry growth and managerial control. From all the above mentioned factors credit decision is made. Among all these factors, financial analysis is most important for which ratio analysis is done.