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Library Overview

This e-learning course on Introduction to Bank Lending Environment is designed to help users understand the lending aspect of a bank. The course covers the principles of lending, the various forms and types of commercial lending by a bank. An in-depth discussion about the concept of working capital and the various methods of assessing the working capital is provided.

Learning Objective

Overview of the lending function of a bank
Principles of lending and the characteristics of a good collateral
Various forms of bank lending
- Lending against shares
- Lending against real estate
- Term loans
- Letters of credit
The concept of working capital and the method to work out optimum working capital

1. Credit and Economic Growth

Topics covered include:

The effect of credit and inflation on the economic growth of an economy
The various factors responsible for creating a credit crunch in the economy and its consequences
The importance of credit in stabilizing the financial system

Duration: 1 hour

2. Commercial Lending

Topics covered include:

The important functions of commercial banks viz. lending and accepting deposits
The principles of lending and the eligibility criteria for grant of loans
The three C's of credit and the enhanced 3C's of credit
The different types of loans and advances that are granted by banks
The various characteristics of a good collateral

Duration: 1 hour

3. Lending Against Real Estate

Topics covered include:

The challenges faced by the housing finance industry
The different types of housing loans
The importance of credit appraisal before disbursing a housing loan
The different types of mortgages

Duration: 1 hour

4. Bills and Letter of Credit

Topics covered include:

The various types of bills and letters of credit
The methodology to scrutinize bill

Duration: 30 Minutes

5. Lending Against Shares

Topics covered include:

The concept of market capitalization
The various types of ratios
Operations of primary and secondary market

Duration: 1 hour

6. Overview of Term Loans

Topics covered include:

The components of capital
The various types of leverage
The concept of cost of capital and valuation
The types of long-term sources of fund

Duration: 1 hour

7. Working Capital

Topics covered include:

The concept of working capital and net working capital
The concept of current assets and current liabilities
The method to work out optimum working capital
The various methods of assessing the working capital
The kinds of credit limits available under working capital

Duration: 1 hour