ABM Mock Test 1

My Quiz

1. 1. Which of the following is a key determinant of both supply and demand ?

Income
Future expectation
Tastes and preference
Sale tax


2. 2. Which of the following is a leading economic indicator ?

Average hour, manufacture
Money Supply
Stock prices
All


3. 3. Speculative Demand for money and interest rate are related

Inverse
Direct
Equal
None


4. 4. Transaction demand curve for money_______

It is parallel to X-axis
It moves upward with income
It moves downward
None


5. 5. What indicates zero primary deficit -

No fiscal deficit
Surplus budget
No borrowings
Borrowings only to make interest payments


6. 6. What type of budget is advocated for emerging economies

Surplus
Deficit
Balanced
Zero


7. 7. Which of the following leads to credit expansions

Increase in CRR
Increase in SLR
Increase in Bank rate
Increase in purchase of government securities by central bank


8. 8. Microeconomics deals with

Gross domestic Product
Unemployment rate
Prices indices
All the above


9. 9. Market economy is also known as

Mixed economy
Capitalistic economy
Command economy
Socialistic economy


10. 10. Ends refer to

Demand
Resources
Utility
Wants

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Dos and Do nots of Loan

Dos/ Do Nots of Loan

With fast promotions and less experience most managers/ officers find it tough to handle the advances pressure of the branch. Let me tell you advances or loans which are done in pressure normally turn bad/ NPA. So its better to have thorough knowledge of advances before going for the dip. Here I present you the checklist while doing documentation or appraising loan cases and NPA Prevention-.
1) KYC –

Yes KYC is must. You must first identify the customer. It is better to approach the customer rather customer approaches you. Sometimes borrower is not selected properly he is either new customer or introduced by another stranger or middlemen. Never involve middlemen, talk to customers directly. Avoid giving multiple loans to single party/ family or a group, to minors, lunatics or insolvents. It is compulsory to complete all the KYC norms before even thinking of giving loan.

For KYC the following things are to be taken care of-
a) Proof of Identity
b) Proof of residence
c) Proof of business address
d) PAN number
e) Photocopies of all these must be verified with original and also get them signed by the borrower and kept on record.

2) Understanding Credit Cycle

The credit cycle consist of credit opportunity -> Credit Creation -> Credit management -> Credit Completion -> Credit creation. Whichever branch you land at you will find loans in one stage or the other.

3) RBI’s Defaulter List-

It must be confirmed from RBI’s Defaulter’s list, available on RBI’s website. Confirm that borrower/guarantors name do not appear in the defaulters list and confirmation of same must be put on record.

4) CIBIL reports –

Next step is to search the CIBIL reports of the borrower and guarantors in all loan cases and commercial CIBIL report in case of firms/ companies. CIBIL reports should be analyzed thoroughly viz. whether borrower/ guarantors availed loans from other banks or financial institutions is there any overdue amount. There should be documentary proof to satisfy these irregularities.

5) Search CERSAI or CIBIL Mortgage site

If mortgage of property is involved in the loan then before proceeding further search should be made on CERSAI or CIBIL Mortgage site to ascertain that there is no mortgage outstanding against the property in any other bank/ FI.

6) Loan safety-

Safety of your loan is directly related on the basis on which decision to was taken, type and quantum of credit to be given and terms and conditions of the loan. But practically no loan is safe as we can’t see what is going on in the borrowers mind. Loans with all proper documentation and all due diligence paid also goes NPA. But still you can wisely apply points mentioned in article and save a going to be NPA loan.

7) Pre sanction Visit-

Next step is to visit the residence place of borrower, place of unit and property to be mortgaged. Pre sanction visit is basically to determine the “bank-ability” and access related riskiness of the proposal. Identification of borrower and site must be ascertained beyond doubt by inquiring from neighbors and other surrounding people. The whole observations must be noted down and to be placed on the record.

8) Assets and liabilities Reports

Assets and liabilities statements of all borrowers/ guarantors must be prepared on prescribed format mentioning full detail of assets & liabilities duly signed by borrower/ guarantor and accountant/ manager. You should also take necessary proof of asset and liabilities be taken.

9) Balance Sheets –

In case of working capital limits 3 years balance sheets of the unit along with income tax/ Sale tax returns etc.( for higher amount get audited balance sheets) projected balance sheets of next 2 years in cases of working capital limits and for the period of loan in case of term loan is mandatory. The balance sheets must be thoroughly analyzed and sanction-able limits be assessed.

 You should analyze the following points in balance sheet-

a) How capital or fund is raised?
b) How capital or fund is utilized?
c) Financial stability of firm.
d)Profitability?
e) Repayment capacity.
f) Expenditure analysis.
g) Sales achieved.
h) Existing loans and liabilities.

10)Project report-

Project report ( for the proposed project if term lending is required) containing details of the machinery to be acquired, price, name of suppliers, capacity utilization assumed, production , sales, projected profit and loss and balance sheets for the next 7-8 years till the proposed loan is to be paid. Project report should be analyzed and feasibility be ascertained.

11) Credit Rating-

Credit rating must be done in all the loan cases as per bank’s guidelines. Retail loans like Housing Loan, auto loan, and education loan should be done as per bank norms. Rate of interest should be fixed as per credit rating. In agriculture loans there is no need of credit rating. Credit rating should be done judiciously based on analyzing balance sheets. Always avoid sanctioning loan credit rating below 3.

12) Legal opinion

Verification of title deed of property to be mortgaged is utmost necessary. It must be ascertained that it is original not fake, scanned copy or duplicate one. In Legal opinion revenue authority should personally verify that title deed to be mortgaged tally with the one kept with revenue records. Must get certified copy of the title deed and tally it with original Title deed. Also take certificate from advocate that certified copy tallies with the original one. Thoroughly read the legal opinion given by the advocate and observe that there is no objectionable which goes against the bank’s interest. Also obtain all the documents mentioned in the legal opinion. Here it is also important to personally verify that submitted title deed belongs to the property you visited earlier. Also make sure that SARFAESI act 2002 is applicable on the property. Certificate of change of land must be took in case unit to be financed is to be built on agriculture land.

13) Any additional limit sanctioned against same securities already charged to the bank ensure-

a) To extend charge to such limits too.
b) All concerned should be kept informed.
c) Acknowledge debt / balance conformation with the borrower.

14) Valuation-

Valuation of property to be mortgaged is to be done from valuer on banks panel. Considered value is earlier circle rate or realizable value which ever is lower. After that realizable value can be considered. For agriculture land circle rate fixed by the collector revenue for the area/ Circle. Land revenue Authority/ Tehsildar/ DM/ or any other authority for determining the valuation of land should be considered. Valuation report of the valuer must be thoroughly analyzed that it should not contain any comment which may harm the bank’s interest on later stage. The title deed, revenue numbers, area of the land must tally with deed/ legal opinion and valuation report.

15) Filling of Appraisal note-

After verifying all the documents the appraisal note should be filled. Care should be taken that full detail should be filled and it should be complete in all respects. Appraisal should reveal whether proposal is fair banking risk. documentation forms the basis for legal relationship between bank and borrower. Following points should be taken care off:
A) Information of the borrower: name, full address, phone numbers, PAN no., date of birth and net worth and constitution should be given.
b) While processing credit processing figure out both positive and negative points on a piece of paper.
c) Now compare the proposal with circular of the bank. All circulars have checklist. Tick point by point and figure out gaps if any. Also jot the measures that you or the party needs to take to fill those gaps.
d) Get confidential reports from other bank and FI.
e) Amount of loan and purpose of loan should be given in full.
f) Constitution of account- whether account is individual/ joint/ co- borrower/ proprietorship/ partnership/ pvt ltd. Co/ ltd co.
g) Full details of his accounts with other banks, branches should be given in full detail.
h) Information of guarantors should be given in detail viz. name. address, PAN number, Date Of Birth, Phone no. , net worth etc.
i) Detail of Primary security should be given in full as related to the case e.g. if it is mortgage of property full address as mentioned in the legal opinion should be given along with date of legal opinion and valuation report and values viz. market value , realizable value and accountant/ manager with date. If hypothecation of vehicle – its RC no, date, engines no. value, date of insurance etc.
j) Similarly for additional security full detail should be given as the case may be.
k) Balance sheet figures should be given in full, preferable consisting of last 2 years audited figures, current year’s provisional figures and projected figures of next 2 years. Ratios like current ratio, debt-equity ratio etc. must be calculated and filled. Observation about balance sheet must be mentioned in the note.
l) Credit rating must be mentioned in the note and based on it rate of interest should be mentioned by quoting circular no on which it is based.

16) Repayment-

Detail of repayment mentioning amount of EMI, duration in months must be mentioned. If moratorium period allowed then it must be mentioned and also mention date of first installment.

17) Disbursement-

In case of term loan, disbursement should be as per schedule approved by the bank. In case of housing loans disbursement should be related to actual progress in implementation of project. For that you should visit the site periodically. For any delay in project you should seek the borrower’s arguments. Also monitor costs being incurred and scrutinize receipts being produce by the borrower.

TIP- “Never disclose the date of disbursement to borrower”

18) Role of periodic inspections

Periodical inspections enables bank to keep check on the stocks hypothecated to bank. Now what you should do in periodical inspections? –
a) Obtain basic info on the functioning of unit.
b) Do physical verification of the stock.
c) Match the stock with the stock statement given.
d) Do rough valuation of stock on MRP or market price.
e) Quality of stock hypothecated to bank. It should not be of inferior quality what is charged to bank or obsolete or rejected stock which is of no market value.
f) The bank’s name should be prominently displayed onsite the unit where goods are hypothecated to bank. E.g. *“OUR BANK , *********** bank* Board like this should be displayed outside.
g) In case of pledge- ensure that storage area is properly maintained, earthquake and flood resistant, goods are stored in a proper manner, stock audit is regularly conducted and a proper register is maintained.
h) Also note that the stocks or securities that are offered should be adequately insure and that too on continuous basis.
i) Branch should maintain a inspection register where all the findings at the site should be noted. It is a good idea to take 2-3 snapshots and paste them on register with signature of visiting officials.
j) Inspection should be done vigorously and not pre-informing the borrower and telling him to prepare tea/snack(on a lighter note). Inspection should be done without even making borrower know that you are going to visit and which date or time. Just caught the borrower red handed only then you will come to know how he behaves and looks in real life.
k) In case if housing loans, visit office of sub registrar or revenue office to verify charge of bank on the mortgaged property.

19) CERSAI

After disbursing the mortgage related cases the mortgage must be registered with the CERSAI within one month of mortgage. It is mandatory and registered number must be mentioned in the loan file.

20) Post sanction appraisal-

Post sanction appraisal generally deals with documentation of the facility and after care follow up. One must carefully view the transactions on the loan/ CC facility given. Non payment of interest on due date should be immediately followed up with the borrower. In case of CC frequent overdrafts should not be allowed. Also transactions with sister concerns should be monitored. Scrutinize the stock statements which are periodically submitted. Physically verify the securities and books of accounts of the borrower.

21) ROC

In case of pvt and public ltd. Companies, the banks charge on assets of the company must be registered with ROC within 30 days of creation of charge. The search report of this charge must be on the record.

22) Review of borrower’s account

Periodical review of borrower’s account is necessary for-
a) NPA control- if you can identify some odds during initial stages of account the you can easily minimize your future NPA.
b) Taking preventive measures for improvement in cash flow slippage into substandard/ doubtful category.
c) Necessary to ascertain if business is doing good or bad. If bad then take preventive measures.

23) Vetting

The executed documents of loans of larger amounts must be got vetted from advocate on the banks panel and certificate should be put on the record. In case of larger loans the documents must be got vetted second time from another advocate on the banks panel and certificate be put on record.

24) Post sanction follows up

For post sanction follow up ensure terms and conditions of sanction is intimated to borrower well in advance also ensure borrower advised the same. Ensure receipt of acceptance of terms and conditions and kept on record and are fulfilled before disbursement.

25) Post lending visit

This visit is very important to verify the end use of funds. Assets to be created by the loan sanctioned must be verified physically and facts noted in the visit report.

26) Renewal or revival

Renewal or revival of accounts must be done on due date on basis of latest financial documents.

The checklist is only indicative and not exhaustive. The guidelines may vary from bank to bank. But It will help people dealing in advances portfolio to take judicious and prompt decisions dealing loan proposals. The mantra for good credit is simple –

*“Good system of appraisal/ assessment of credit Needs and Effective supervision and follow up post sanction”*

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How to check the renewal of FDR in Finacle 10

In Finacle 7, we check the renewal of FDR through the Menu – ACI or ACLI then Ctrl+E, But in the Finacle 10 these menu are not working. So it is difficult the write the renewal update on FDR

 

In Finacle 10, By the use of following steps, we can write the renewal update on the FDR receipt:-

 

Step 1

Menu – HACMTD

Go

 

Step 2

Function : - Inquiry

A/C No. : - write FD a/c number.

Go  

 

Step 3

Go to Scheme

Here you see all the following detail:

Opening Date :

Principal Amount:

Period:

Maturity Amount:

Maturity Date:

Rate of Int.:

 

Now you can write the details on back side of Fixed Deposit Reciept

 

 

Thanks…!!!

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Process of RTGS/NEFT in Finacle 10

Finacle-10 is being introduce in some bank as the working software instead of previous version of finacle -7. We do RTGS/NEFT in Finacle-7 many time but there menu and process  is different as in Finacle 10. Here we learn how to do RTGS/NEFT in advance version of Finacle i.e Finacle 10

Lets Starts
1. Menu – HPORDM

2.  Function                  –   A – Add

     Payment Product     –  Customer Transfer

Then click on Go

3.  In Remittance Details (our customer details) fill the followings details -

Debit A/C. –

Instrument type –

Instrument Date -

Remittance CCY/Amt.  –

Instrument Alpha/Serial No. –

4. then in Beneficiary Customer (Other bank customer details)

A/c. ID –

Name –
Address line 1 –
Address line 2 –

5. Now in Account with Institution

BIC – Click on search

Note :- Here is two way to submit –

A. first ,
in Bank Identifier, write the complete IFSC , the submit

B. Second,

Write Bank Code & Branch Code then submit ( First way is more easier)

Then it show two code

RTGS

NEFT

Select what you doing i.e RTGS/NEFT

6. Now in Credit Details

Method of Payment – RTGS/NEFT (Either RTGS or NEFT)

Then click on Fetch

7. View Charges – Submit

8. Submit and write Pay Order ID for verification

(Note : In case of NEFT, Select Beneficiary Account Type – SB/CC/OD etc)

  

Thanks...!!!

You can also write your idea and feedback in our comments box

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Schedule of JAIIB/CAIIB examination for Nov/Dec 2017

Dear All, IIBF announce the schedule of JAIIB/CAIIB examination for November and December 2017. First time IIBF changes the following two major changes for Nov/Dec examination 2017 onward:-

1. Candidate have option to choose venue and time slot of his/her choice for each subject as per their preference on first-cum-first-serve basis

2. Institute will now collect examination fee for each attempt separately from the candidates. Therefore, candidates have to register for each attempt separately.

JAIIB/DB & F

Subject	Examination Date
Principal & Practice of Banking	12-11-2017 / Sunday
Accounts & Finance for bankers	19-11-2017 / Sunday
Legal & Regulatory Aspect of Banking	26-11-2017 / Sunday

REGULAR OPEN PERIOD FOR REGISTRATION (29-09-2017 TO 29-10-2017)

With Normal Examination fees

EXTENDED PERIOD FOR REGISTRATION (30-10-2017 TO 6-11-2017)

With Normal Examination fees plus LATE FEES of Rs 200/- (Plus taxes as applicable)

EXAM	ATTEMPTS	FEE* (For Member)
JAIIB	First	2400*
	Second	1000*
	Third	1000*
	Fourth	1000*

*Plus GST as applicable.

CAIIB /CAIIB Electives

Subject	Examination Date
Advance Bank Management	03-12-2017 / Sunday
Bank Finance Management	10-12-2017 / Sunday
Corporate Banking	17-12-2017 / Sunday
Rural Banking
International Banking
Co-operative Banking
Financial Advising
Human Resource Management
Informational Technology
Risk Management
Central Banking
Treasury Banking

REGULAR OPEN PERIOD FOR REGISTRATION (29-09-2017 TO 29-10-2017

With Normal Examination fees

EXTENDED PERIOD FOR REGISTRATION (30-10-2017 TO 6-11-2017)

With Normal Examination fees plus LATE FEES of Rs 200/- (Plus taxes as applicable)

EXAM	ATTEMPTS	FEE* (For Member)
CAIIB	First	2700*
	Second	1000*
	Third	1000*
	Fourth	1000*

*Plus GST as applicable.

For details, click on  IIBF official site.

Thanks...!!!

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