IDFC FIRST Bank Merger Performance and Strategy Update
b. Retail, Rural & SME Loans
Section 7: Risk Management & Asset Quality
7
The Bank has a 10 Step Stringent Underwriting Process (2/2)
Industry Check
The Bank checks for further credit history and industry level exposure by doing CRILC checks and checks by external entities,
where required, to study financials, access to group companies whether legal cases have been filed against the company,
disqualification of directors, etc.
8
Cash Flow Analysis
6
10
10
Ratio Analysis
Title Deeds Verification
The bank statement of account is analyzed for business credits, transaction velocity, average balances at different periods of
the month, EMI debits, account churning, interest servicing, etc. This helps us understand the cash flow on the basis of
which we calculate the permissible EMI, loan amount, etc.
Detailed financial analysis is performed covering, Ratio analysis, debt to net-worth, turnover, working capital cycle,
leverage, etc.
Evaluation of title deeds of the property and collateral, legality validity, enforceability etc.,
Repayment: Bank takes standing instructions to debit the bank account of the customers on a monthly basis and thus pulls the EMI from the customers naturally operated account. The
cheque returns are low, but the returned cheques are subsequently followed up for collections.
Through this stringent underwriting process, the Bank rejects nearly 40% - 60% of the Loan Applications depending on the
product category. For some key products, the rejection waterfalls are provided in the annexure
Note: The underwriting process mentioned above, changes depending on product to product.
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IDFC FIRST
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