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Appraisal and Assessment of Credit Facilities
What is credit appraisal in the context of bank lending?
Credit appraisal is the process by which a bank evaluates the creditworthiness of a borrower, including character, capacity, capital, and the overall risk in the proposal before sanctioning a facility.
How many C's are used in the comprehensive credit appraisal framework described in JAIIB PPB?
7 C's: Creditworthiness, Character, Capacity, Capital, Collateral, Conditions, Cash flows
Which of the four 'C's in credit appraisal refers to the borrower's willingness to repay?
Character refers to the borrower's willingness and intention to repay, reflecting their track record, integrity, and past credit behavior.
Under the Tandon Committee First Method, what percentage of Working Capital Gap must the borrower bring as margin?
25% of Working Capital Gap
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