Bank Theory

Home Loans: Appraisal, Documentation, Monitoring & Fraud | Bank Theory Additional Reading Material on Home Loans Lender’s Appraisal Procedure The lender's appraisal procedure ensures that a borrower's request for a home loan is viable and secured. This includes evaluating repayment capacity, the property's legality, market value, and documentation compliance. Application Form The borrower submits a loan application with personal, income, and property details. Documents to be Submitted Identity proof and address proof Income proof (Salary slips, ITRs) Bank statements Title deed of property Property valuation and legal reports Loan Application Received Through Agent Applications sourced by agents require additional due diligence to prevent misrepresentation or fraud. Appraisal of Loan Request This involves evaluating: Income and repayment capacity (DSCR, EMI/NMI ratio) Loan-to-value (LTV...

Recovery of Retail Loans - Banking Notes Recovery of Retail Loans and Related Processes 1. Repayment in Retail Loans Repayment in retail loans refers to the scheduled payment of principal and interest by the borrower. It is typically done through Equated Monthly Installments (EMIs). 2. Default and Rescheduling in Retail Loans Default occurs when a borrower fails to repay on the due date. Rescheduling involves altering repayment terms to ease borrower’s burden due to financial stress. 3. Monitoring of Loan Accounts Banks regularly monitor loan accounts through system-generated alerts, overdue reports, and account performance reviews to ensure timely repayments. 4. Classification of Irregular Loan Accounts Accounts are classified as SMA (Special Mention Accounts) or NPAs based on the number of days past due: SMA-0: 1–30 days SMA-1: 31–60 days SMA-2: 61–90 days NPA: >90 days 5. Recovery Policy...