Financial analysis for bank lending in liberalised economy

The book is divided into three parts. The Part I deals with basic concepts required for beginners such as Industrial Finance Scenario in India and the task before the banks, Fundamental Accounting Principles, Structure and Analysis of Profit and Loss Account and Balance Sheet, Ratio Analysis, Accounting Flows, Break-even Analysis, Appraisal of Capital Projects and Conceptual Framework for Appraisal and Management of Working Capital Finance by the banks. These topics have been so selected that they cover foundation courses of financial and cost accounting for MBA/Post-graduate Diploma in Business Management, B.B.A., B.Com., M.Com. and A.C.A. students of various Business Schools and Universities in India and abroad.
Part II of the book comprises three chapters. The first chapter (Chapter 12) deals with new focus of Bank Lending under the liberalised era in a historical contest. The next chapter (Chapter 13) deals with the "Management of Working Capital by Strategic Choice". The last chapter (Chapter 14) explains the concepts of financing working capital in general and its evolution in historical and statistical context in particular. It also visualises the emerging scenario of working capital financing in India in the near future.
Part III of the book comprises as many as eight chapters and they mainly deal with the latest application of the financial tools in financing and management of various aspects of working capital finance by banks and financial institutions. Chapter 15 deals with the latest and most vital central aspect of Credit Appraisal and that is "Credit Worthiness and Credit Rating" of bank borrowers. It also discusses the need for product and price-differentiation by the banks on the basis of risk assessment.
The next three chapters deal with various aspects of Working Capital Finance. Chapter 16 discusses MPBF (Maximum Permisable Bank Finance) system of assessing working capital needs of a borrower and also bifurcation of the credit limits into "Loan" and "Cash Credit" components as per latest Reserve Bank's guidelines. It also ventures to guess the likely scenario of the entire MPBF to be delivered in the form of Loan component only and how banks can react to this situation by devising several new products like long-term credit, medium-term credit (less than 36 months), short-term credit (upto 12 months) or cash credit at varying rates of interest and floating rate credit linked with bank rate. The Chapter 17 relates to Post-Kanan Committee scenario where banks are free to have their own system of assessing the working capital requirements of borrowers, with alternate methods of appraisal Chapter 18 deals with the various facets of post-sanction activities like follow-up, supervision of credit and reviews.
The next four chapters (19, 20, 21 and 22) relate to some other vital area of Bank Lending like appraisal of new projects, different types of problem accounts, management of non-performing assets (NPA), and rehabilitation of sick units which highlighting the main provisions of new SICA Bill, 1997 which is yet to be passed by the parliament. In addition, there are three appendices for reference purposes.