Ledger Folio No._________ A/c No.

_______
Security Register Folio No. ______________
Insurance Register Folio No._____________
Title Deed Register Folio No. _____________

एमएसई ऋण के मूल्यांकन ह ेत
APPRAISAL FOR MSE LOAN
(मल
ू ्यांकन फामर- क्रे�डरे �टंग -PRE स्वीकृ�त यात्रा और मूल्यांकन �र )
(APPRAISAL FORM – CREDIT RATING –PRE SANCTION VISIT & VALUATION REPORTS )

एम डी पी / ZMDP सं:
MDP/ZMDP NO. ____________________ dt___ ______________
डी पी सं:
DP NO. ____________________ dt __________________
पुनरोद्धार पत्र क�
DATE OF REVIVAL LETTER ________________________________________
�वतरण क� �त�थ
DISBURSED ON Dt . _______________________________________
उधारकतार्का नाम
BORROWER NAME ________________________________________
टे ल� / मोबाइल नंबर
TELE/MOB. NO. ________________________________________
ऋण रा�श
LOAN AMOUNT ________________________________________
आरओआई बीआर +
ROI BR +_____________________________________
पुनः भुगतान कायर्क
REPAYMENT SCHEDULE:
कायर्शील पूंज
WORKING CAPITAL _________________________________________
साव�ध ऋण रुपय
TERM LOAN Rs____________________________________p.m.
1st / अं�तम INST क� तार�ख
DATE OF 1st/LAST INST. _________________________________________
बीमाकतार् का ना
INSURER NAME _________________________________________
बीमा क� �त�थ
DATE OF INSURANCE _________________________________________
 INDEX

Sr.No. Particulars

1. APPRAISAL FORM

2. CREDIT RATING

3. PRE SANCTION VISIT REPORT

4. VISIT CUM VALUATION REPORT

 PUNJAB & SIND BANK

APPRAISAL FORM -MSE LOAN

S. No Particulars Details Document from which

verified/calculated
1. Name of the Borrower/Co-Borrower
Address

2. Constitution (with name of 1.

proprietor partners/directors with
address:
(Both Official and Residential)
2.

3.

3. Date of Establishment
4. Affiliation to Group, if any

5. Details of branch/identical /associate concerns

Name of concern Nature of association Place of Business Details of credit

facilities , if any enjoyed
from our bank

6.CIBIL score and Table for summary as per CIBIL Report(commercial)

CIBIL Report
No. of Credit Grantors No. of Credit Facilities No. of Facilities closed No. of standard a/cs

Balance in standard a/cs A/cs other than No. of laws suits No. of willful default
standard

7. Nature of Business/Specific activity :

8. Dealing with the bank since ?

 9. Whether the party will deal exclusively with our bank?

10. Nature of Proposal :Fresh/Enhancement/Reduction

(Strike out whichever is not applicable)

11. Nature and Details of credit facilities applied for:

(a) Term Loan

Amount of Cost of the Margin Rate of Nature and Remarks

credit facility project Interest as per value of
applied for Credit rating security

(b) Cash credit

Amount of Existing limit Proposed Security Rate of Margin Value of

credit facility ( if any) Limit Offered Interest as Security
per credit
rating

(c) Bills/ Cheque purchase

Amount of Existing limit Proposed Security Rate of Margin Value of

credit facility ( if any) Limit Offered Interest as Security
per credit
rating

12.Nature of collateral Security (if Any)

01. Detail of Property

02. Name of Owner
03. Area

04. Legal opinion, Index inspection

and CERSAI Search report of the
property
05. Certified copy on record and the
same has been compared with the
original and found in order
06 Date of purchase of Property
07. Consideration amount paid
08. Date of Valuation
09. Name of Valuer
10. Value at Circle Rate
11. Market Value
12. Realisable Value
13. BM/Actt. Valuation
14. Whether the property is properly
demarcated?

In case date of purchase of property is less than one year as on the date of appraisal, lower of value of
registration or circle rate is to be considered.

Description of Security :

Value of Security as on (Date) : Rs

Clear title/Free from encumbrances : Yes/No

Whether SARFAESI Act Applicable : Yes/No

CERSAI search done and found :Yes/No
Satisfactory
Certified copy of Title deeds : Yes/No
Obtained and got compared with
original

13.Guarantor’s(s) :

Name & Address DOB PAN No. Net Worth Business/Profession

lakhs

CIBIL score and Table for summary as per CIBIL Report(commercial) of all the guarantors.

CIBIL Report
No. of Credit Grantors No. of Credit Facilities No. of Facilities closed No. of standard a/cs

Balance in standard a/cs A/cs other than No. of laws suits No. of willful default
standard

Please enclose a list of assets and liabilities of the guarantors/all partners along with documentary
evidence duly signed by the guarantor(s) /partner(s) and verified by the Manager.

14. SUMMARY OF BALANCE SHEET AS ON _____________________

S.No. LIABILITIES Rs ASSETS Rs

1. Term Liabilities (Give Fixed Assets, Give details and
Details) Exclude shares of minors if
any (Give complete address in
respect of immovable
property)

2. Bank Borrowings Long Term investments

(Give particulars)

3. Current Liabilities Current Assets

(a) Creditors (a) Cash & Bank

Balance
(b) Others (b) Stock in trade
(c ) Sundry Debtors
(c) Others

4. Liabilities on account Other Assets (give details &

of IT/SR do not include intangible
assets, if any

Total: Total:
5. Net Worth: Assets – Liabilities : Rs

15. FINANCIAL ANALYSIS:

(Balance sheet of three years in case of trading concerns and two years actual and one year projections in
case of manufacturing concerns)
(Rs in lacs)
S.No. Particulars Year ______ Year _______ Year _______
1. Domestic Sales
2. Export Sales
3. Gross Sales
4. Less :Excise Duty
5. Net Sales
6. Other Income
7. Net Sales plus other Income
8. Net Profit after Tax
9. Net Worth(including unsecured
loans)
10. Capital incl. Share Application
money
11. Securities Premium
12. Reserves (incl. Profit/Loss)#
13. DTL/(DTA)
14. Unsecured Loan
15. Net Worth(Excluding unsecured
loans)
16. Gross Block
17. Depreciation
18. Net Block
19. Capital WIP
20. Currrent Assets
21. Current Liabilities(Excluding
current maturities of TL)
22. Current maturities of Term Loan
23. Current Liability(including current
maturities of TL)
24. Current Ratio
25. Term Liabilities (Excluding
current maturities of TL)
26. Total outside Liabilities
27. TOL/TNW Ratio @

# Reserves which represents notional reserves created on upward revaluation of fixed assets have not
been considered as part of Reserves & Surplus not as part of Gross Block.
@ TOL/TNW has been calculated considering unsecured loans as part of net worth.

Note: Fill the columns applicable to individual cases.

16. CALCULATION FOR WORKING CAPITAL FACILITY:

(a) WORKING CAPITAL NEED & PERMISSIBLE BANK FINANCE
(To be calculated on the basis of projected sales for the next quarter/year, whichever is applicable)

Projected sales of the next quarter/year:

Projected Profit of the next quarter/year

Current Liabilities Current Assets
Particulars Actual for the Projected Particulars Actual for the Projected
last year last year
Creditors Inventory
(Other than ----
-----------
Bank’s Receivables
borrowings
Others Balance
l others
Total Total

(b)Permissible Bank Finance: Up to Rs. 500.00 lakhs MPBF is to be calculated on the basis of turnover
method ( based on RBI’s Nayak Committee recommendations)
As per Nayak committee

Based on Turnover Method

( Rs. In lacs)
Year 1 Year 2 Year 3
1. Turnover/Projected Turnover
2. 25 % of Turnover
3. 5 % of Turnover as Margin
4. NWC
5. 2-3
6. 2-4
7. MPBF ( Lower of 5 & 6)

Note: If there is significant variation in the actual figures and projected figures the reasons for the same be
given below:
______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

17.CALCULATION FOR TERM LOAN FACILITY:

(a) (In case of term loans complete cost of equipment/project and its sources should be given)

Cost of Equipments Amount in Rs Means Amount in Rs

/Project
Complete cost of Own funds
equipment/project
Any other source
Bank finance required
Total Total

Projected Interest and Repayment on Term loan

Term Loan
Principal amount out standing
Interest charged
Total amount due since
repayment started
Repayment
Balance
DEBT SERVICE COVERAGE RATIO

PART A

YEAR
Profit after Tax
Depreciation
Interest
Total A

PART B

YEAR
TL repayment
Interest
Total B

DSCR (A/B)

Average DSCR

(b) Mode of Repayment ____________________________________________________

Moratorium Period

______________________________________________________________________

18. Category to which unit belongs on the basis of activity and investment in Plant and Machinery:

(a) Manufacturing Unit :

Micro Enterprise :Amount of Investment in Plant & Machinery: Rs _________

Small Enterprise:Amount of Investment in Plant & Machinery :Rs _________

(b) Service Unit:

Micro Enterprise :Amount of Investment in Plant & Machinery : Rs -------------

Small Enterprise :Amount of Investment in Plant & Machinery : Rs _________

19.BRIEF COMMENTS ON ABOVE PARTICULARS:

(a) On Balance Sheet: __________________________________________________________

__________________________________________________________
__________________________________________________________
__________________________________________________________

(b)Ratio and Financial Health: __________________________________________________________

__________________________________________________________
__________________________________________________________
__________________________________________________________

(c ) Permissible Bank Finance: __________________________________________________________

__________________________________________________________
__________________________________________________________

(d) Mode of payment with

reference to source

20. COMMENTS ON EXISTING ACCOUNT

1.Credit Rating(if Applicable)

2.In case of OD & CC accounts

Total credit received during audited period

Audited Sales

Variance

Any indication of diversion of funds

from operation of account

3. In case of loan accounts

Amount of loan sanctioned :

Date of advance :

Amount of instalment :
Due date of 1st instalment
 No. and amount of instalments
Due during the last one year :

No. & amount of instalments received:

during the last one year

No. & amount of instalments in arrear :

Debit balance as on date of proposal :

4. In case of bills account

No. of bills purchased/discounted :

Amount of such bills :

No. & amount of bills returned unpaid:

Percentage of bills returned unpaid to

Total amount of bills
(During the last one year)

5. In case borrower is dealing with any other branch of our bank/some other bank. Name of
branch/bank. Nature and amount of credit facilities availed and its confidential opinion.

Name of the Nature of Limit Date of Debit Balance Remarks

Branch/bank Facility Sanctioned sanction

6. Comments of internal inspector/Concurrent Auditor/Vigilance Officer/RBI

as per Last inspection report and counter comments of Manager :

_____________________________ _______

_____________________________________

------------------------------------------------------------
21. Is the borrower facing any problem in:

PRODUCTION : ______________________________________

MARKETING : ________________________________________

_______________________________________
 FINANCE : ______________________________________

_______________________________________

ANY OTHER MANAGEMENT PROBLEM : _______________________________________

_______________________________________

22. Whether Borrower/Guarantors name appeared

in the list of defaulters circulated by RBI/CIBIL/ECGC :
(To attach copies of CIBIL Report)
Recommendations/Comments :

a) The proposed facilities are being considered for sanction after conducting due diligence and
verification of KYC norms, financials submitted by the applicant and guarantor & verification of
statements made by the applicants.

b) Visit to Unit has been conducted in terms of H.O:ID Circular No.1657 dated 29.05.2012 ,H.O:Credit
Monitoring & Policy Deptt. Circular No.1580 dated 31.12.2013 & accordingly recommendation are
being given.

c) Legal opinion / Index Inspection has been obtained from approved bank’s counsel and personal
verification thereof has been done in terms of Law circular no. 183 dated 12.05.2006 and 196 dated
13.10.2009.

d) Instructions given in respect of properties vide ID circular No.1/2008 dated 11.01.2008 and Head
Office vigilance letter No.HOV/452 dated 24.03.2011 and H.O:Credit Monitoring & Policy Deptt
circulatory letter No.32/2013-14 dated 23.10.2013 have been duly complied with.

e) Genuineness of the statutory permissions / authorization / CLU etc. as received from the applicant
stands duly confirmed.

f) If it is a take over account, whether HO guidelines on take over of loans in terms of HO:CMD Circular
No.1659 dated 22.06.2012 complied with.

g) Pre sanction visit Report:Comments on the date of visit/findings/viability of the project/reputation and
financial outstanding of the party.How long the party is residing in the area..Position of
factory/shop/business/crops.
We have examined the projections of the borrowers and are fully satisfied that they are in line with the
actual of the past and reasonable of achievements in future.

(i)In view of our appraisal, we consider a loan/limit for Rs _________________________________

reasonable and justified.
(ii)As examined by us, the purpose of the advance is ____________________________________

(III) We have examined and found the borrower credit worthy for loan/limit of Rs ______________
as per above.

(iv) Any other comments :

In view of the above ,the proposal is sanctioned/recommended for sanction at ROI ( BR+… ) having Credit
Rating….
(Tick whichever is applicable)
Dated:

OFFICER MANAGER SENIOR MANAGER CHIEF MANAGER ASSTT. GENERAL MANAGER

 CREDIT RATING

CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

A) INDUSTRY RISK

1) Market potential/ Demand of the Product

Market potential/Demand of the product is very good, Demand much higher than supply 4
Market potential/Demand of the product is good, Demand higher than supply 3
Market potential/Demand of the product is moderate, Demand in line with supply 2
Market potential/Demand of the product is low, Supply is higher than demand, overcapacity 1
Market potential/Demand of the product is poor, Supply likely to remain much higher than 0
demand, serious overcapacity

2) Sensitivity to Government Policies (i.e. impact of Government policies)

Nil Low Moderate High Very High

4 3 2 1 0

3) Extent of Competition (Domestic and/or International – Threats of imports/ substitutes/ organized/

unorganized sector etc.)
Nil Low Moderate High Very High
4 3 2 1 0

4) Input related Risk (Availability of Raw material)

Abundant & easily available/ assured 4

Generally available, almost assured 3
Available subject to tie ups 2
Not easily available/ assured, prices could fluctuate widely 1
Quite difficult & supplier determines prices 0

5) Impact on Industry performance of cyclical fluctuation

No effect Minor Moderate High Very High

4 3 2 1 0

6) Segment under which the industry/ sector falls, as per Bank’s Loan Policy

Preferred Segment Normal Segment Caution List

4 2 0
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE
Additional parameters for exposure above Rs.5 crore (industry aggregates)

(Ratios given below can be sourced from data-base like CMIE, CRISIL,ICRA, any reputed publication etc. If
not available, may be sought from HO RMD, which will be provided on availability)
7) Return on capital employed (3 year industry average) *

> = 15 % > = 10 % < 15 % > = 5 % < 10 % >= 1%<5% <1%

4 3 2 1 0

8) Operating profit (before interest) margin (3 year industry average) *

> = 10 % > = 7 % < 10 % >=3%< 7% < 3% Negative

4 3 2 1 0

Note :- PBIT (Profit before interest & tax) margin may be used, if Operating profit margin is not available
(scoring guide will remain same)

9) Net profit margin (3 year industry average) *

> =5% >=3%<5% >=2%< 3% < 2% Negative

4 3 2 1 0

* if 3 year industry average is not available, latest year data may be relied upon

(B) BUSINESS RISK

a) Growth Parameters

1) Increase in Net sales over last year

> = 15 % > = 10 % < 15 % > = 5 % < 10 % < 5% Decrease

4 3 2 1 0

2) Increase in Operating profit margin (Operating profit before interest / Net Sales x 100) over last year

> = 3% >=2%<3% >=1%< 2% < 1% Decrease

4 3 2 1 0

3) Increase in Net profit margin (Net profit/Net Sales x 100) over last year

>=2% >=1%<2 % > = 0.5 % < 1 % < 0.5 % Decrease

4 3 2 1 0
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

EXAMPLE :- How to work out increase in Operating profit margin & increase in Net Profit margin over
last year
Previous Current FY Remarks
FY
Net Sales (a) 1000 1100 Net sales has increased by 10 %
Operating Profit (b) 100 115 Operating profit has increased by 15 %
Net Profit (c) 50 56 Net Profit has increased by 12 %
Operating profit margin 10 10.45 Increase in operating profit margin is (10.45 –
(b/a x100) – in % age 10)÷ 10 x100 = 4.5 % (qualifies for 4 marks)
Net profit margin (c/a 5 5.09 Increase in Net profit margin is (5.09-5)÷ 5 x 100
x 100) – in % age = 1.8 % (qualifies for 3 marks)

However, in case for 2011 - Operating profit is 109 & Net profit is 54, Operating profit margin will be 9.91
% (109/1100 x 100) & Net profit margin will be 4.91 % (54/1100 x 100). In this case, the Operating profit
margin & Net profit margin have decreased over the last year (2010), therefore both these ratios will
qualify for 0 marks

4) Debtor's velocity (Debtors/Credit Sales x 360 days)

= < 30 days > 30 < = 75 days > 75 < = 135 days > 135 < =180 days > 180 days
4 3 2 1 0

b) Select 4 most appropriate parameters, applicable for the business of the borrower, out of following 6
parameters (in case of few borrowers, less than 4 parameters may be applicable) :-

1) Technology (adopted by the borrower)

Excellent/ Very Good Contemporary/Good Old Technology- Technology is

Best technology – no technology but likely Improved version/ Outdated/obsolete
technology major changes to undergo changes substitutes available
likely in medium
term
4 3 2 1 0

2) Distribution set up, support/ after sale services etc. of the borrower

Excellent Good Average Below Average Poor

4 3 2 1 0
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

3) Pricing flexibility (Flexibility to increase prices in line with costs vis-à-vis the competitors)

Very High High Average Low Negligible

4 3 2 1 0

4) Product Range (single product dependence or wide range of products)

Risk of product range is negligible due to wide range of products 4

Risk of product range is low due to reasonable range of products 3
Risk of product range is moderate due to limited range of products 2
Risk of product range is high due to very low range of products 1
Risk of product range is very high due to single product dependence 0

5) Geographical distribution of markets (Domestic & international – Geographical

diversification of market of borrower's products)

Excellent Good Average Below average Poor

4 3 2 1 0

6) Locational advantage, Availability of utilities – power, water etc.

Excellent Good Average Below average Poor

4 3 2 1 0

(C) MANAGEMENT RISK

(In takeover / merger cases, applicable parameters for ‘Management Risk’ may be considered based on New
Management)

1) Promoters/Partners/Proprietors experience in the business/ industry (experience in group account(s)

may also be considered, if nature of business is same)
Years > = 10 > = 7 < 10 >=4<7 >=2<4 <2
Marks 4 3 2 1 0

Note :- Years of experience should be counted from date of commencement of business and not merely
from the date of incorporation/ establishment of a company/ firm

2) Credibility
For existing borrowers, Bank's past experience may be taken into account. For New borrowers, inputs may
be derived from other Banks/FIs, market reputation, published material, CIBIL etc.

If integrity, commitment, sincerity is good & no adverse record is found 4

If integrity is good but some record of failing in commitment 3
If there is some information about lack of commitment & sincerity but not fully substantiated 2
If acceptable integrity but there is definite record of failure in commitment 1
If Integrity not reliable due to repeated failure in commitment 0
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

3) Payment record to Banks/FIs, including our Bank (for new borrower, payment record to other
Banks/FIs may be taken into account)
Early/Normal/Regular repayment 4
Regular repayment with occasional delay 3
Frequent delays in repayment 2
Delays in repayment leading to reschedulement, restructuring etc. 1
Default – Account likely to become NPA, as per RBI guidelines 0

Note :- For Newly established firm/Co., Payment record to Banks/FIs of borrower's group/ sister concerns
(if any) may be taken into account. For borrowers not availing credit facilities from any Bank/FI or not
having any group/sister concern, this parameter will not be applicable

4) Ownership pattern/ Management

1 - Central Govt. Accounts, Maharatna/ Navratna PSUs, Banks with Basel II CRAR > = 12 %; 4
Statutory corporations (public enterprises into existence by a Special Act of the Parliament)
like Airport Authority of India, National Highway authority of India, Food Corporation of
India etc.

-Companies/firms/Societies/Trusts/NBFCs having Top 2 Long term rating grades (‘AAA/ AA’ -

not older than 15 months) of any debt instrument/ Bank Loan Rating from RBI accredited
rating agencies like CRISIL, ICRA, CARE, FITCH AND BRICKWORK (*)
2 - State Govt. Accounts, Mini Ratna PSUs, Banks with Basel II CRAR > = 11< 12 %; 3
-Companies/firms/Societies/Trusts//NBFCs having Long term rating grade ‘A’ (not older
than 15 months) of any debt instrument/ Bank Loan Rating from RBI accredited rating
agencies like CRISIL, ICRA, CARE, FITCH AND BRICKWORK (*)
3 - Banks with Basel II CRAR > = 10< 11 %; 2
-Companies/firms/Societies/Trusts/NBFCs having Long term rating grade ‘BBB’ (not older
than 15 months) of any debt instrument/ Bank Loan Rating from RBI accredited rating
agencies like CRISIL, ICRA, CARE, FITCH AND BRICKWORK (*)
4 - Banks with Basel II CRAR > = 9< 10 %; 1
-Companies/firms/Societies/Trusts/NBFCs having unrated claims/ not having any rated long
term debt instrument (*)
5 - Banks with Basel II CRAR < 9 %; 0
-Companies/firms/Societies/Trusts/NBFCs having Long term rating grade ‘BB’ and below
(not older than 15 months) of any debt instrument/ Bank Loan Rating from RBI accredited
rating agencies like CRISIL, ICRA, CARE, FITCH AND BRICKWORK (*)
* In case of New Company/ SPV/firm, Rating of Promoter, if available may be taken into consideration for
giving marks
* In case of MSMEs, equivalent SME rating grades of above agencies along-with other agencies like SMERA
may be considered.
* If rating of 2-3 rating agencies/ Long term debt instruments is available, then the lowest rating of any
instrument (not older than 15 months) by any of the above agencies should be taken into account, for
giving marks
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

Projections Vs Achievements (comparison of actual results with estimates/ projections submitted

normally a year back, at the time of last sanction/renewal/reviewal)
5) Percentage achievement of Sales projections
> = 100 % > = 85 % < 100 % > = 75 % < 85 % > = 60 % < 75 % < 60 %
4 3 2 1 0

6) Percentage achievement of Net Profit projections

> = 95 % > = 80 % < 95 % > = 65 % < 80 % > = 50 % < 65 % < 50 %
4 3 2 1 0

7) Percentage achievement of Net Working Capital (NWC) projections

> = 100 % > = 85 % < 100 % > = 75 % < 85 % > = 60 % < 75 % < 60 %
4 3 2 1 0

(D) FINANCIAL RISK

(a) In case of existing companies/ firms, the applicable parameters are to be worked out based on past
financials. However, in case of existing companies/ firms undertaking New projects, the applicable
parameters are to be worked out based on both past financials as well as future projections

(b) For newly established firms/companies and existing companies/ firms, which have not carried out
operations since inception, with no past financials, applicable parameters will be worked out based on
projections accepted by the Bank

(c) Companies/ firms, which are taken-over by New Management (in take-over/ merger cases) - In such
cases, applicable parameters are to be worked out based on both past financials as well as future
projections. In such cases, applicable parameters for ‘Management Risk’ may be considered based on New
Management.
1) Operating profit margin (Operating profit before interest/ Net Sales x 100)

> = 10 % > = 7 % < 10 % >=3%< 7% < 3% Negative

4 3 2 1 0

2) Net profit margin (Profit after tax/ Net Sales x 100)

> =5% >=3%<5% >=2%< 3% < 2% Negative

4 3 2 1 0
3) Return on Capital Employed (Profit before tax + Interest) ÷ (Tangible Networth + Term Liabilities
including unsecured loans + Bank borrowings) x 100

> = 15 % > = 10 % < 15 % > = 5 % < 10 % >= 1%<5% <1%

4 3 2 1 0
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

4) Current ratio (Current Assets/ Current Liabilities)

> = 1.33 > = 1.25 < 1.33 > = 1.17 < 1.25 > = 1.10 < 1.17 < 1.10
4 3 2 1 0

Current ratio for Sugar Industry

> = 1.00 > = 0.95 < 1.00 > = 0.92 < 0.95 > = 0.88 < 0.92 < 0.88
4 3 2 1 0

5) Ratio of Total Outside Liabilities to Tangible Net worth (TOL/TNW)

<= 2 > 2 < = 2.50 > 2.50 < = 3 > 3 < = 3.50 > 3.50
4 3 2 1. 0

Note :- In case borrower is not availing any working capital facility, Current liabilities may be excluded from
TOL for working of this ratio

TOL/TNW in case of Infrastructure projects & NBFCs

<= 3 > 3<= 4 > 4<= 5 > 5 < =6 > 6
4 3 2 1 0
Note :- In case of NBFCs, Net owned funds (NOF) may be used instead of TNW

6) Interest Coverage ratio - (Profit after tax + Interest + Depreciation) ÷ Interest

> = 3.00 > = 2.50 < 3.00 > = 2.00 < 2.50 > = 1.50 < 2.00 < 1.50
4 3 2 1 0

7) Debt Service Coverage ratio - (Profit after tax + Interest + Depreciation)÷ (Interest + Repayments due)
> = 2.00 > = 1.75 < 2.00 > = 1.50 < 1.75 > = 1.25 < 1.50 < 1.25
4 3 2 1 0
Note :- Repayments due covers Deposits/Debentures/Instalments under term loans, DPGs
etc. - refer this column under Current liabilities in CMA data. This ratio is not applicable if
there are no repayments due

8) Contingent liabilities as a percentage of Tangible Net worth (Contingent liabilities/

Tangible Networth x 100)
Nil < 5% > = 5 % < 15 % > = 15 % < 25 % > = 25 %
4 3 2 1 0
Note :- Contingent liabilities normally appear under “Notes to accounts” in Audited B/S

REGARDING OPERATING PROFIT MARGIN (UNDER BUSINESS & FINANCIAL RISKS) In case where
Operating profit cannot be properly worked out from the Balance Sheet & CMA data is not available, PBIT
margin (Profit before interest & tax/ Net Sales x 100) may be used/ worked out (scoring guide will remain
the same for both these ratios)
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

(E) SECURITY RISK

a) Primary Security (Property) may be added to collateral security (if any), only for the purpose of working
of marks for Security Risk/credit rating, in cases ODP/ LAP

b) In case of Term Loan against Land and/ or Fixed Assets/ construction/ project financing etc.,
where Land/building/Plant & machinery/other fixed assets etc. are proposed as Primary Security,
100 % value of Land, 75 % value of Building & 50 % value of Plant & Machinery (valuation of all
as per extant Bank guidelines) may be added to collateral security (if any), only for the purpose of
working of marks for Security Risk/Credit rating. Any other type of assets proposed as primary
security may not be added to collateral security for this purpose

c) Security Risk may be treated as ‘Not applicable’ for the purpose of working of credit rating in
case of Central/ State Govt. accounts, Statutory Corporations, whether collateral security is
available or not

d) Exposure of Non- fund limits may be reduced to the extent of cash margin available, for the
purpose of working of marks for Security Risk/credit rating

e) Annuities under build-operate-transfer (BOT) model in respect of road/highway projects and

toll collection rights may be treated as tangible securities, for the purpose of giving marks under
‘Security Risk’, subject to conditions being met as per RBI guidelines given below.

In terms of RBI guidelines vide RBI/2009-10/421, DBOD No. BP.BC. 96 / 08.12.014/ 2009-10, dated
April 23, 2010, on ‘Prudential norms on Advances to Infrastructure Sector’, it has been decided
that banks may treat annuities under build-operate-transfer (BOT) model in respect of
road/highway projects and toll collection rights, where there are provisions to compensate the
project sponsor if a certain level of traffic is not achieved, as tangible securities subject to the
condition that banks’ right to receive annuities and toll collection rights is legally enforceable and
irrevocable.

f) In case of Unsecured loans,Security Risk may be treated as ‘Not applicable’ in following cases :

i) If the borrower (or its promoter, in case of new company/ SPV/ firm) has top 2 Long term rating grades
(‘AAA/AA’ - not older than 15 months) of any debt instrument/ Bank Loan Rating from RBI accredited
rating agencies like CRISIL, ICRA, CARE & FITCH AND BRICKWORK.

In case of MSMEs, equivalent SME rating grades of above agencies along-with other agencies like SMERA
may be considered.

ii) Banks with Basel II CRAR >=12 %

iii) Maharatna/Navratna/Miniratna PSUs

CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE

Scoring guide for Security Risk

(Value of collateral security as a percentage of total proposed funded & non funded exposure)
> = 150 % 10
> = 100 % < 150 % 09
> = 90 % < 100 % 08
> = 75 % < 90 % 07
> = 60 % < 75 % 06
> = 50 % < 60 % 05
> = 40 % < 50 % 04
> = 30 % < 40 % 03
> = 20 % < 30 % 02
> = 10 % < 20 % 01
< 10 % 0

(F) OPERATIONAL RISK

1) Conduct of account

Excellent (interest/ instalment on time, no overdrawing, No return of Cheque/ bills purchased or 4

discounted, No devolvement of LC/invocation of BG, no cash withdrawal etc.
Generally interest/ instalment on time but sometimes delayed (not beyond a week), Return of 3
cheques/bills purchased or discounted, cash withdrawal – 1-2 such instances only
Generally interest/ instalment on time but sometimes delayed (not beyond 2 weeks), Return of 2
cheques/bills purchased or discounted, cash withdrawal – 3-4 such instances only
Delay in payment of interest/ instalment upto a month, Return of cheques / bills purchased or 1
discounted, cash withdrawal – more than 4 such instances
Frequent delay in payment of interest/ instalment, Frequent cases of Return of cheques/bills 0
purchased or discounted, cash withdrawal, any devolvement of LC/invocation of BG

2) Turnover in the account (i.e. Business income/sales routed in the account)

> = 90 % > = 75 % < 90 % > = 60 % < 75 % > = 50 % < 60 % < 50 %

4 3 2 1 0
Note :- applicable in case of borrowers availing working capital limits from our Bank only
3) Submission of QIS/ MSOD/ Stock/Book Debts Statements

Timely submission 4
Delayed submission upto 2 occasions 3
Delayed submission upto 4 occasions 2
Delayed submission upto 5 occasions 1
Delayed submission above 5 occasions 0
CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE
4) Submission of Renewal data/Financial Papers etc.

Timely submission 4

Delayed submission upto 15 days 3

Delayed submission beyond 15 days & upto 30 days 2

Delayed submission beyond 30 days & upto 45 days 1

Delayed submission beyond 45 days 0

5) Length of past relationship with Bank (Point no. 1,2,3,4 under this head, compliance of terms &
conditions of sanction etc. over the years, may be considered to assess whether the relationship is
satisfactory or not)

Satisfactory relationship with the Bank for duration > = 5 years 4

Satisfactory relationship with the Bank for duration > = 3 < 5 years 3

Satisfactory relationship with the Bank for duration > = 1 < 3 years 2

Not very Satisfactory relationship in the past (irrespective of any duration) 1

Unsatisfactory relationship in the past (irrespective of any duration) 0

Note :- The above parameter will not be applicable for borrowers having satisfactory relationship with the
Bank for less than 1 year. However, if relationship with such borrowers is not satisfactory, this parameter
becomes applicable & such borrowers be given 0 mark

For Consortium Accounts :- For borrowers availing facilities under Consortium banking arrangement
(having at least 3 member banks, including our Bank), 10 % marks may be added to the total marks
obtained under Operational Risk however, weighted score not to exceed 20 i.e. maximum weight for
Operational Risk
Weights assigned to different risk modules

Module Score Maximum Weight (3) Weighted

obtained score* score

RISKS (1) (2) (a) (b) New (c) Newly (1 ÷ 2) x 3

Existing account established
account firm/ co.
INDUSTRY 05 10 15

BUSINESS 15 25 25

MANAGEMENT 15 20 25

FINANCIAL 35 35 20

SECURITY 10 10 15

OPERATIONAL 20 0 0

TOTAL SCORE 100 100 100

* for the parameters applicable in the account
NAME OF THE BORROWER/ BRANCH :___________________________________

CREDIT RISK RATING FORMAT (FOR CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2
CRORE & ABOVE)

A INDUSTRY RISK MAXIMUM SCORE REMARKS (IF ANY)

SCORE AWARDED
1 Market potential/ Demand of the Product 4

2 Sensitivity to Government Policies 4

(i.e.impact of Government policies)

3 Extent of Competition (Domestic and/or 4

International – Threats of imports/
substitutes/ organized/ unorganized sector
etc.)

4 Input related Risk (Availability of Raw 4

material)

5 Impact on Industry performance of cyclical 4

fluctuation

6 Segment under which the industry/ sector 4

falls, as per Bank’s Loan Policy

Additional parameters for exposure above Rs.5 crore (industry aggregates)

7 Return on capital employed 4

8 Operating profit margin 4

9 Net profit margin 4

TOTAL (INDUSTRY RISK)

B BUSINESS RISK MAXIMUM SCORE GIVE COMPUTATION &

SCORE AWARDED REMARKS, IF ANY
1 Increase in Net sales over last year 4

2 Increase in Operating profit margin over last 4

year

3 Increase in Net profit margin over last year 4

4 Debtor's velocity 4
NAME OF THE BORROWER/ BRANCH :_____________________________________________

B BUSINESS RISK MAXIMUM SCORE REMARKS (IF ANY)

SCORE AWARDED
Select 4 most appropriate parameters, applicable for the business of the borrower, out of following 6
parameters (in case of few borrowers, less than 4 parameters may be applicable)
5 Technology (adopted by the 4
borrower)

6 Distribution set up, support/ after sale 4

services etc. of the borrower

7 Pricing flexibility (Flexibility to 4

increase prices in line with costs vis-à-
vis the competitors)

8 Product Range (single product 4

dependence or wide range of
products)
9 Geographical distribution of markets 4
(Domestic & international –
Geographical diversification of market
of borrower's products)

10 Locational advantage, Availability 4

of utilities – power, water etc.
TOTAL (BUSINESS RISK)

C MANAGEMENT RISK* MAXIMUM SCORE REMARKS (IF ANY)

SCORE AWARDED
1 Promoters / Partners / Proprietors 4
experience in the business/ industry

2 Credibility 4

3 Payment record to Banks/FIs, 4

including our Bank

4 Ownership pattern/ Management 4

*In takeover/ merger cases, applicable parameters for ‘Management Risk’ considered, based on New
Management.
NAME OF THE BORROWER/ BRANCH :_____________________________________________

C MANAGEMENT RISK MAXIMUM SCORE GIVE COMPUTATION &

SCORE AWARDED REMARKS, IF ANY
Projections Vs Achievements (comparison of actual results with estimates/ projections submitted normally a
year back, at the time of last sanction/renewal/reviewal)
5 Percentage achievement of Sales 4
projections
6 Percentage achievement of Net Profit 4
projections
7 Percentage achievement of Net 4
Working Capital projections

TOTAL (MANAGEMENT RISK)

D FINANCIAL RISK MAXIM SCORE SCORE TOTAL GIVE

(Based on Audited/ Provisional/ UM AWARD AWARD SCORE COMPUTATION
SCORE ED – A ED - B AWARDED- OF RATIOS &
Projected Financials for
(#) (*) (A + B) REMARKS, IF
___________________) ANY
1 Operating profit margin 4

2 Net profit margin 4

3 Return on Capital Employed 4

4 Current ratio 4

5 Ratio of Total Outside Liabilities to 4

Tangible Net worth
6 Interest Coverage ratio 4

7 Debt Service Coverage ratio 4

8 Contingent liabilities as a 4
percentage of Tangible Net
worth
TOTAL (FINANCIAL RISK)
NAME OF THE BORROWER/ BRANCH :_____________________________________________

(#) applicable ratios under this column are to be worked out based on past financials, preferably Audited
B/s – this column (A) is applicable in case of existing companies/ firms

(*) applicable ratios under this column are to be worked out based on projections accepted by the
Bank –this column (B) is applicable in case of newly established firms/companies and existing
companies/ firms, which have not carried out operations since inception, with no past financials.

• (A) + (B) – both these columns are applicable in case of existing companies/ firms undertaking
New projects and in case of companies/ firms, which are taken-over by New Management (in
take-over/ merger cases) - In such cases i.e. applicable ratios are to be worked out based on both
past financials as well as future projections. In such cases, Maximum score for each applicable
ratio will be 8 (i.e. 4 for past financials + 4 for projections)

E SECURITY RISK MAXIMUM SCORE GIVE COMPUTATION OF

SCORE AWARDED COVERAGE OF EXPOSURE &
REMARKS, IF ANY
TOTAL (SECURITY RISK) 10

F OPERATIONAL RISK MAXIMUM SCORE GIVE COMPUTATION FOR

SCORE AWARDED PARAMETER 2 & REMARKS,
IF ANY
1 Conduct of account 4

2 Turnover in the account 4

3 Submission of QIS/ MSOD/ 4

Stock/Book Debts Statements
4 Submission of Renewal data / 4
Financial Papers etc.
5 Length of past relationship with Bank 4
TOTAL (OPERATIONAL RISK)

Note – Use separate sheet for computation of ratios and remarks, if required
NAME OF THE BORROWER/ BRANCH :_____________________________________________

WEIGHTS ASSIGNED TO DIFFERENT RISK MODULES

(FOR CREDIT RISK RATING MODEL FOR ADVANCES OF RS.2 CRORE & ABOVE)

Module Score Maximum Weight (3) Weighted

obtained score* score

RISKS (1) (2) (a) (b) New (c) Newly (1 ÷ 2) x 3

Existing account established
account firm/ co.
A) INDUSTRY 05 10 15

B) BUSINESS 15 25 25

C) MANAGEMENT 15 20 25

D) FINANCIAL 35 35 20

E) SECURITY 10 10 15

F) OPERATIONAL 20 0 0

TOTAL SCORE 100 100 100

* for the parameters applicable in the account

TOTAL WEIGHTED SCORE CREDIT RATING NOMENCLATURE

 CREDIT RISK RATING
CREDIT RISK RATING MODEL FOR ADVANCES OVER RS. 2 LACS BUT LESS THAN RS.2 CRORE
(A) MANAGEMENT RISK
(In takeover/ merger cases, applicable parameters for ‘Management Risk’ may be considered based on New
Management)
1) Promoters/ Partners/ Proprietors experience in the business/ industry (experience in group account(s)
may also be considered, if nature of business is same)

No. of Years > = 10 > = 7 < 10 >=4<7 >=2<4 <2

Marks 4 3 2 1 0
Note :- In case of promoters/ partners have technical qualification i.e., degree/ diploma related
to the concerned trade/ industry, 1 additional mark may be given, however, maximum score not
to exceed 4
Years of experience should be counted from date of commencement of business and not merely from the
date of incorporation/ establishment of a company/ firm

2) Credibility (For existing borrowers, Bank's past experience may be taken into account. For New
borrowers, inputs may be derived from other banks, market reputation, published material, CIBIL etc.)
If integrity, commitment, sincerity is good & no adverse record is found 4
If integrity is good but some record of failing in commitment 3
If there is some information about lack of commitment & sincerity but not fully substantiated 2
If acceptable integrity but there is definite record of failure in commitment 1
If integrity not reliable due to repeated failure in commitment 0

3) Payment record to Banks/FIs, including our Bank (for new borrower, payment record to other
Banks/FIs may be taken into account)

Early/Normal/Regular repayment 4
Regular repayment with occasional delay 3
Frequent delays in repayment 2
Delays in repayment leading to reschedulement, restructuring etc. 1
Default – Account likely to become NPA, as per RBI guidelines 0
Note :- For Newly established firm/Co., Payment record to Banks/FIs of borrower's group/ sister concerns
(if any) may be taken into account. For borrowers not availing credit facilities from any Bank/FI or not
having any group/sister concern, this parameter will not be applicable

Projections Vs Achievements (comparison of actual results with estimates/ projections

submitted normally a year back, at the time of last sanction/renewal/reviewal)
4) Percentage achievement of Sales projections
> = 100 % > = 85 % < 100 % > = 75 % < 85 % > = 60 % < 75 % < 60 %
4 3 2 1 0

5) Percentage achievement of Net Profit projections

> = 95 % > = 80 % < 95 % > = 65 % < 80 % > = 50 % < 65 % < 50 %
4 3 2 1 0
CREDIT RISK RATING MODEL (For Advances over Rs. 2 lacs but less than Rs. 2 crore)
(B) FINANCIAL RISK
(a) In case of existing companies/ firms, the applicable parameters are to be worked out based on past
financials. However, in case of existing companies/ firms undertaking New projects, the applicable
parameters are to be worked out based on both past financials as well as future projections

(b) for newly established firms/companies and existing companies/ firms, which have not carried out
operations since inception, with no past financials, applicable parameters will be worked out based on
projections accepted by the Bank

(c) Companies/ firms, which are taken-over by New Management (in take-over/ merger cases) - In such
cases, applicable parameters are to be worked out based on both past financials as well as future
projections. In such cases, applicable parameters for ‘Management Risk’ may be considered based on New
Management.

1) Percentage increase in Sales/ Income over last year

> = 15 % > = 10 % < 15 % > = 5 % < 10 % < 5% Decrease
4 3 2 1 0

2) Percentage increase in Net profit over last year

> = 10 % > = 7 % < 10 % >=3%< 7% < 3% Decrease
4 3 2 1 0
Note :- If Net profits are showing an increasing trend for past 3 years, 1 additional mark may be given,
however, maximum score not to exceed 4

3) Operating profit margin (Operating profit before interest/ Net Sales x 100)
> = 10 % > = 7 % < 10 % >=3%< 7% < 3% Negative
4 3 2 1 0
Note :- In case where Operating profit cannot be properly worked out from the Balance Sheet & CMA data
is not available, PBIT margin (Profit before interest & tax/ Net Sales x 100) may be used/ worked out in
place of Operating profit margin (scoring guide will remain the same for both these ratios)
4) Net Profit margin (Profit after tax/ Net Sales x 100)

> =5% >=3%<5% >=2%< 3% < 2% Negative

4 3 2 1 0

5) Return on Capital Employed - (Profit before tax + Interest) ÷ (Tangible Networth + Term Liabilities
including unsecured loans + Bank borrowings) x 100

> = 15 % > = 10 % < 15 % > = 5 % < 10 % >= 1%<5% <1%

4 3 2 1 0

6) Current ratio (Current Assets/ Current Liabilities)

> = 1.33 > = 1.25 < 1.33 > = 1.17 < 1.25 > = 1.10 < 1.17 < 1.10
4 3 2 1 0
CREDIT RISK RATING MODEL (For Advances over Rs. 2 lacs but less than Rs. 2 crore)

7) Ratio of Total Outside Liabilities to Tangible Networth (TOL/TNW)

<= 2 > 2 < = 2.50 > 2.50 < = 3 > 3 < = 3.50 > 3.50
4 3 2 1. 0
Note :- In case borrower is not availing any working capital facility, Current liabilities may be excluded from
TOL for working of this ratio

8) Debt Service Coverage ratio - (Profit after tax + Interest + Depreciation) ÷ (Interest + Repayments due)
> = 2.50 > = 2.00 < 2.50 > = 1.75 < 2.00 > = 1.50 < 1.75 < 1.50
4 3 2 1 0

Note :- Repayments due covers Deposits/Debentures/ Instalments under term loans, DPGs etc. - refer this
column under Current liabilities in CMA data. This ratio is applicable (for both term loan & working capital)
even if there are no repayments due, in which case, it will assess interest coverage

9) Contingent liabilities as a percentage of Tangible Net worth (Contingent liabilities/

Tangible Networth x 100)
Nil < 5% > = 5 % < 15 % > = 15 % < 25 % > = 25 %
4 3 2 1 0
Note :- Contingent liabilities normally appear under “Notes to accounts” in Audited B/S

(C) SECURITY RISK (Value of collateral security as a percentage of total proposed funded & non
funded exposure)

1) - For Advances over Rs.25 Lacs but less than Rs.2 crore
> = 150 % 10
> = 100 % < 150 % 09
> = 90 % < 100 % 08
> = 75 % < 90 % 07
> = 60 % < 75 % 06
> = 50 % < 60 % 05
> = 40 % < 50 % 04
> = 30 % < 40 % 03
> = 20 % < 30 % 02
> = 10 % < 20 % 01
< 10 % 0

2) - For Advances over Rs.2 Lacs upto Rs.25 Lacs

> = 150 % 04
> = 100 % < 150 % 03
> = 75 % < 100 % 02
> = 50 % < 75 % 01
< 50 % 0
CREDIT RISK RATING MODEL (For Advances over Rs. 2 lacs but less than Rs. 2 crore)

Note :-

a) Primary Security (Property) may be added to collateral security (if any), only for the purpose of working
of marks for Security Risk/credit rating, in cases ODP/ LAP

b) In case of Term Loan against Land and/ or Fixed Assets/ construction/ project financing etc.,
where Land/building/Plant & machinery/other fixed assets etc. are proposed as Primary Security,
100 % value of Land, 75 % value of Building & 50 % value of Plant & Machinery (valuation of all
as per extant Bank guidelines) may be added to collateral security (if any), only for the purpose of
working of marks for Security Risk/Credit rating. Any other type of assets proposed as primary
security may not be added to collateral security for this purpose

c) Security Risk may be treated as ‘Not applicable’ for the purpose of working of credit rating in
case of Central/ State Govt. accounts, Statutory Corporations, whether collateral security is
available or not

d) Exposure of Non- fund limits may be reduced to the extent of cash margin available, for the
purpose of working of marks for Security Risk/credit rating

e) Annuities under build-operate-transfer (BOT) model in respect of road/highway projects and

toll collection rights may be treated as tangible securities, for the purpose of giving marks under
‘Security Risk’, subject to conditions being met as per RBI guidelines given below.

In terms of RBI guidelines vide RBI/2009-10/421, DBOD No. BP.BC. 96 / 08.12.014/ 2009-10, dated
April 23, 2010, on ‘Prudential norms on Advances to Infrastructure Sector’, it has been decided
that banks may treat annuities under build-operate-transfer (BOT) model in respect of
road/highway projects and toll collection rights, where there are provisions to compensate the
project sponsor if a certain level of traffic is not achieved, as tangible securities subject to the
condition that banks’ right to receive annuities and toll collection rights is legally enforceable and
irrevocable.

f) In case of Unsecured loans,Security Risk may be treated as ‘Not applicable’ in following cases :

i) If the borrower (or its promoter, in case of new company/ SPV/ firm) has top 2 Long term rating grades
(‘AAA/AA’ - not older than 15 months) of any debt instrument/ Bank Loan Rating from RBI accredited
rating agencies like CRISIL, ICRA, CARE, FITCH AND BRICKWORK.

In case of MSMEs, equivalent SME rating grades of above agencies along-with other agencies like SMERA
may be considered.

ii) Banks with Basel II CRAR >=12 %

iii) Maharatna/Navratna/Miniratna PSUs
CREDIT RISK RATING MODEL (For Advances over Rs. 2 lacs but less than Rs. 2 crore)

(D) OPERATIONAL RISK

1) Conduct of Account

Excellent (interest/ installment on time, no overdrawing, No return of Cheque/ bills purchased or 4

discounted, No devolvement of LC/invocation of BG, no cash withdrawal etc.
Generally interest/ instalment on time but sometimes delayed (not beyond a week), Return of 3
cheques/bills purchased or discounted, cash withdrawal – 1-2 such instances only
Generally interest/ instalment on time but sometimes delayed (not beyond 2 weeks), Return of 2
cheques/bills purchased or discounted, cash withdrawal – 3-4 such instances only
Delay in payment of interest/ instalment upto a month, Return of cheques / bills purchased or 1
discounted, cash withdrawal – more than 4 such instances
Frequent delay in payment of interest/ instalment, Frequent cases of Return of cheques/bills 0
purchased or discounted, cash withdrawal, any devolvement of LC/invocation of BG

2) Turnover in the account (i.e. Business income/sales routed in the account)

> = 90 % > = 75 % < 90 % > = 60 % < 75 % > = 50 % < 60 % < 50 %

4 3 2 1 0
Note :- applicable in case of borrowers availing working capital limits from our Bank only

3) Submission of QIS/ MSOD/ Stock/Book Debts Statements

Timely submission 4
Delayed submission upto 2 occasions 3
Delayed submission upto 4 occasions 2
Delayed submission upto 5 occasions 1
Delayed submission above 5 occasions 0

4) Submission of Renewal data/Financial Papers etc.

Timely submission 4
Delayed submission upto 15 days 3
Delayed submission beyond 15 days & upto 30 days 2
Delayed submission beyond 30 days & upto 45 days 1
Delayed submission beyond 45 days 0
CREDIT RISK RATING MODEL (For Advances over Rs. 2 lacs but less than Rs. 2 crore)

5) Length of past relationship with Bank (Point no. 1,2,3,4 under this head, compliance of terms &
conditions of sanction etc. over the years, may be considered to assess whether the relationship is
satisfactory or not)

Satisfactory relationship with the Bank for duration > = 5 years 4

Satisfactory relationship with the Bank for duration > = 3 < 5 years 3
Satisfactory relationship with the Bank for duration > = 1 < 3 years 2
Not very Satisfactory relationship in the past (irrespective of any duration) 1
Unsatisfactory relationship in the past (irrespective of any duration) 0
Note :- The above parameter will not be applicable for borrowers having satisfactory relationship with the
Bank for less than 1 year. However, if relationship with such borrowers is not satisfactory, this parameter
becomes applicable & such borrowers be given 0 mark
Weights assigned to different risk modules

Module Score Maximum Weight (3) Weighted

obtained score * score

RISKS (1) (2) (a) (b) New (c) Newly (1 ÷ 2) x 3

Existing account established
account firm/ co.
MANAGEMENT 20 30 40
FINANCIAL 40 40 20
SECURITY 20 30 40
OPERATIONAL 20 0 0
TOTAL SCORE 100 100 100
* for the parameters applicable in the account

TOTAL WEIGHTED SCORE CREDIT RATING NOMENCLATURE

NAME OF THE BORROWER/ BRANCH :_____________________________________________

CREDIT RATING FORMAT (FOR CREDIT RISK RATING MODEL FOR ADVANCES OVER RS.2 LACS BUT
LESS THAN RS.2 CRORE)

A MANAGEMENT RISK* MAXIMUM SCORE GIVE COMPUTATION

SCORE AWARDED FOR PARAMETERS 4 & 5
AND REMARKS, IF ANY
1 Promoters / Partners / Proprietors experience 4
in the business/ industry
2 Credibility 4

3 Payment record to Banks/FIs, including our 4

Bank
Projections Vs Achievements (comparison of actual results with estimates/ projections submitted
normally a year back, at the time of last sanction/renewal/reviewal)
4 Percentage achievement of Sales projections 4
5 Percentage achievement of Net Profit 4
projections
TOTAL (MANAGEMENT RISK)

*In takeover/ merger cases, applicable parameters for ‘Management Risk’ considered based on New Management

B FINANCIAL RISK MAXIMUM SCORE SCORE TOTAL SCORE GIVE

(Based on Audited/ Provisional/ Projected SCORE AWARDED AWARDED - AWARDED- (A + COMPUTATION OF
Financials for ___________________) –A B B) RATIOS &
(#) (*) REMARKS, IF ANY
1 Percentage increase in Sales/ Income over 4 NA
last year
2 Percentage increase in Net profit over last 4 NA
year
3 Operating profit margin 4
4 Net profit margin 4
5 Return on Capital Employed 4

6 Current ratio 4

7 Ratio of Total Outside Liabilities to Tangible 4

Net worth
8 Debt Service Coverage ratio 4

9 Contingent liabilities as a percentage 4

of Tangible Net worth
TOTAL (FINANCIAL RISK)

NA – Not applicable in case of projections

NAME OF THE BORROWER/ BRANCH :_____________________________________________

C SECURITY RISK MAXIMUM SCORE GIVE COMPUTATION OF

SCORE (#) AWARDED COVERAGE OF EXPOSURE &
REMARKS, IF ANY
TOTAL (SECURITY RISK) 10 / 4

(#) for Advances over Rs.25 Lacs (less than Rs.2 crore), Maximum score is 10

(#) for Advances over Rs.2 Lacs upto Rs.25 Lacs, Maximum score is 4

D OPERATIONAL RISK MAXIMUM SCORE GIVE COMPUTATION FOR

SCORE AWARDED PARAMETER 2 AND
REMARKS, IF ANY
1 Conduct of account 4

2 Turnover in the account 4

3 Submission of QIS/ MSOD/ Stock/Book 4

Debts Statements

4 Submission of Renewal data / Financial 4

Papers etc.

5 Length of past relationship with Bank 4

TOTAL (OPERATIONAL RISK)

Note – Use separate sheet for computation of ratios and remarks, if required
NAME OF THE BORROWER/ BRANCH :_____________________________________________

WEIGHTS ASSIGNED TO DIFFERENT RISK MODULES

(FOR CREDIT RATING MODEL FOR ADVANCES OVER RS.2 LACS BUT LESS THAN RS.2 CRORE)

Module Score Maximum Weight (3) Weighted

obtained score * score

RISKS (1) (2) (a) (b) New (c) Newly (1 ÷ 2) x 3

Existing account established
account firm/ co.
A) MANAGEMENT 20 30 40

B) FINANCIAL 40 40 20

C) SECURITY 20 30 40

D) OPERATIONAL 20 0 0

TOTAL SCORE 100 100 100

* for the parameters applicable in the account

TOTAL WEIGHTED SCORE CREDIT RATING NOMENCLATURE

CREDIT RISK RATING MODEL FOR PSB’s DOCTOR’S SPECIAL SCHEME

GUIDELINES

1. Necessity of Credit Risk Rating Model for PSB Doctors Special Scheme – As some features
of the PSB Doctors Special Scheme are unique, a separate model is necessary for this scheme.

2. Risk Management Tool – It would be a risk management tool for borrowers at the pre-sanction
stage. As soon the loan application form under this scheme is received along with all the complete
relevant papers, credit risk rating should be done simultaneously along with processing of proposal
and before sanction of loan.

3. Pricing – Credit rating for Doctors covered under this scheme will not be linked to pricing i.e.
fixation of rate of interest.

4. Applicability – The credit risk rating model will be applicable for Doctors availing credit
facilities under the above scheme only.

5. Credit Rating scale & nomenclature will be same as applicable for existing Credit Risk Rating
models for Corporate Loans, to maintain uniformity :-
RATING SCALE NOMENCLATURE
Weighted score Credit Rating (CR)
>= 90 1 Minimum Risk
>=80 < 90 2 Marginal Risk
>=70 < 80 3 Modest Risk
>=60 < 70 4 Below Average Risk
>=50 < 60 5 Average Risk
>=40 < 50 6 Above Average Risk
< 40 7 Caution
8 NPA – sub-standard assets
9 NPA – Doubtful & Loss assets
 PUNJAB & SIND BANK
Branch : __________________________

CREDIT RISK SCORING/ RATING SHEET FOR PSB DOCTOR’S SPECIAL SCHEME

Name of applicant & branch

Application No. (if any)
Date of application
Amount of Loan proposed
Date of scoring/ Rating

BREAK –UP OF MARKS SCORED BY THE BORROWER VIS-À-VIS MAXIMUM SCORE ELIGIBLE FOR
EACH PARAMETER

Sr. Parameter Maximum Score

No. Marks (*) obtained
1 Qualification 4

2 Length of experience in the occupation 8

3 Credibility 4

4 Payment record to Banks/FIs, including our Bank 4

5 Total Exposure to Average Income 8

6 Coverage of security 10

7 Income to Instalment Ratio (IIR) 12

TOTAL 50

(*) for applicabe parameters

Credit Risk Rating = Score obtained/ Maximum Marks (*) x 100

Hurdle Points

a) If the score obtained under any of the parameters i.e. ‘Credibility’ and ‘Payment record to
Banks/FI’ is 0, any Credit Rating obtained be downgraded to 6. However, if Credit Rating obtained
is 6, the same be downgraded to 7.

b) If the score obtained under any of the parameters i.e. ‘Credibility’ and ‘Payment record to Banks/FI’ is 1,
any Credit Rating obtained may be downgraded by one notch (except Credit Rating 7).
DETAILS OF PARAMETERS/ SCORE FOR PSB’S DOCTORS SPECIAL
1 Qualification Score to be Score
awarded obtained
Maximum Score : 04

MD, MS or equivalent 04
MBBS/ BDS 02

2 Length of experience in the occupation Score to be Score

Maximum Score : 08 awarded obtained

> = 10 years 08
> = 7 years < 10 years 06
> = 4 years < 7 years 04
> = 2 year < 4 years 02
< 2 years 01

3 Credibility Score to be Score

Maximum Score : 04 awarded obtained

If integrity, commitment, sincerity is good & no adverse 04

record is found
If integrity is good but some record of failing in 03
If therei is some information about lack of commitment & 02
sincerity but not fully substantiated
If acceptable integrity but there is definite record of failure 01
in commitment
If Integrity not reliable due to repeated failure in 00

Note :- For existing borrowers, Bank's past experience may be taken into account. For New borrowers,
inputs may be derived from other Banks/FIs, market reputation, published material, CIBIL etc.

4 Payment record to Banks/FIs, including our Bank Score to be Score

Maximum Score : 04 awarded obtained

Early/Normal/Regular repayment 04
Regular repayment with occasional delay 03
Frequent delays in repayment 02
Delays in repayment leading to reschedulement, 01
restructuring etc.
Default – Account likely to become SMA/ NPA, as per RBI/ 00
Bank guidelines
Note :-

- For new borrower, payment record to other Banks/FIs of the borrower and / or its group may be taken into account

- For borrowers not availing credit facilities from any Bank/FI or not having any any group/sister concern, this
parameter will not be applicable
 5 Total Exposure (*) to Average annual Income (based on Score to be Score
Income tax returns) awarded obtained
Maximum Score : 08
> = 5 times 02
> = 4 < 5 times 04
> = 3 < 4 times 06
> = 2 < 3 times 07
Below 2 times 08
(*) including proposed exposure from our bank

6 Coverage of Security * Score to be Score

(Value of Security/ Loan amount x 100) awarded obtained

Maximum Score : 10
> = 150 % 10
> = 100 % < 150 % 09
> = 80 % < 100 % 08
> = 70 % < 80 % 07
> = 60 % < 70 % 06
> = 50 % < 60 % 05
> = 40 % < 50 % 04
> = 30 % < 40 % 03
> = 20 % < 30 % 02
> = 10 % < 20 % 01
< 10 % 00

* In case of CGTMSE cover, 75 % value may be taken as value of security.

* In case of Term Loan against Fixed Assets/ construction/ project financing etc., where Land /
building, Equipments, other fixed assets etc. are proposed as Primary Security, 100 % value of
Land, 75 % value of Building and 50 % value of equipments, vehicles etc. may be added to
collateral security, if any, for the purpose of working of score for coverage of security. Any other
type of assets like furniture/ fixtures, computers etc. proposed as primary security may not be
taken for this purpose.

7 Income to Instalment Ratio (IIR) * Score to be Score

(Income/ Instalment) awarded obtained

Maximum Score : 12
>=5 12
> = 3.33 < 5 10
> = 2.50 < 3.33 08
> = 2.00 < 2.50 06
> = 1.66 < 2.00 02
< 1.66 00
* Income would mean the total income of the borrower (including co-borrower, if any) and Instalment
would mean total deductions including proposed loan (s).
PUNJAB & SIND BANK
(Govt. of India Undertaking)
Branch Name:_____________
Branch Code:______________

UNIT VISIT REPORT - (Pre- Sanction)

S.No. Particulars
01. Name of Branch
02. Name of Party
03. Constitution
04. Name of
Proprietor/Partners/Director
05. Unit Address
06. Party premises (Unit) visited on
07. Name of Official contacted
08. Activity
09. Condition of the Unit
-Building – Class of construction

Plant & Machinery

( Detail of Machineries installed)

10. During the visit to the unit, whether

the unit was working , if so,give
details;
Installed capacity
Present capacity utilization
Production during last 3/6 months
No. of Units
Amount
Comments on capacity utilization
Whether unit working for activity
financed
Any change in activity observed
PUNJAB & SIND BANK
(Govt. of India Undertaking)
Branch Name:_____________
Branch Code:______________

UNIT VISIT REPORT- ( Pre- Sanction)

S.No. Particulars
11 How the unit is managed
Skilled / Unskilled staff employed
12. Water, Electricity, power, raw
material readily availble
13. Is proper transportation for
distribution channels etc available
14. Whether system of disposal of waste
material exist and functioning
properly
Comments on pollution control from
hazardous material in vicinity
15.. Whether any adverse features
noticed at the time of visit
If so details of such features be given
16. Whether Stock as per Books of the
Company
Movement of the inventory
Whether Stock constituted any old
stock/unwanted stock
If so, percentage of such stock to
total stock
Are any long overdue bill outstanding
Whether there are any pressing
creditors
What is the position of receivables /
Sundry debtors, classification and
age of major debtors
17. What is the condition of the godown?
18. Whether the Fire fighting
arrangements available.
19. Overall comments on performance of
the unit
Compraison with such like units in
the area and industry

Branch Manager
 PUNJAB & SIND BANK
B.O.__________________
_______________________

VISIT CUM VALUATION REPORT

(To be given by officer and Branch In charge)

Name of the account ………………………………………………………

1. Name and address of landlord/landlady:
2. Whether self occupied or in possession of tenant:
3. Whether Agriculture /Residential/ Industrial/ Commercial:
4. Date of purchase of property:
5. Particulars of property:
A. Land
(i) Area in square meters:
(ii) Rate per square meter in that area:
(iii) Rate per square meter:
(iv) Total value of land:

B. Building (if already constructed)

(i) Value of building keeping in view the built up area, no. of stories & Type of super structure
etc. ………………………………………………………

6. Total value of land & building (a+b):

7. Municipal revenue No.:
8. Date to which taxes paid:

Certified that I/We have personally visited on ………………………… the site (s) of the
property (ies) and have discreetly and with due diligence verified the market value of the
said property (ies) after taking into account the factors such as depreciation, distress
sale, unauthorized construction, lack of legal mortgage, third party claims etc. is not less
than Rs. ……………… Lacs (rupees).………………………….............................................

ACCOUNTANT/ MANAGER BRANCH MANAGER

Name: Name:

Date: Date: