ab presentation final.pptx
Post on 03-Apr-2018
220 Views
Preview:
TRANSCRIPT
-
7/29/2019 AB Presentation final.pptx
1/15
By
Boda .V .V Santosh Kumar
-
7/29/2019 AB Presentation final.pptx
2/15
Presented by Boda.V.V.Santosh Kumar, RollNo.51 , PGDM-FM, Under the
guidance of MR.G. Uma Maheswara Rao (senior manager) & Mr. Subbarao
Peteti (EX-ED of Punjab & Sind bank and Professor of ITM-IFM)
-
7/29/2019 AB Presentation final.pptx
3/15
Objective of the study
To understand Micro, Small and Medium enterprises.
To study the Credit Appraisal for working capital finance ofMSMEs.
To understand the role of banks in the financing of MSMEs.
To understand the importance of products offered by the bank formeeting the needs of MSMEs.
To understand the rationale behind various guidelines observed byAndhra Bank.
-
7/29/2019 AB Presentation final.pptx
4/15
OVERVIEW ABOUT MSME
Introduction
MSME Development Act 2006
Products Offered by the Bank to MSMEs
Two types of Enterprises
Manufacturing
Service
-
7/29/2019 AB Presentation final.pptx
5/15
Manufacturing Enterprises Service Enterprises
Micro Upto Rs.25lakhs Upto Rs.10 lakhsSmall
More than Rs. 25lakhs & upto 5crores More than Rs.10lakhs& up to 2crores
MediumMore than Rs.5crores & up
to Rs.10croresMore than Rs.2crores &
up to Rs.5crores
Investment in Plant and Machinery/equipment(Excluding Land and Buildings)
-
7/29/2019 AB Presentation final.pptx
6/15
CASE STUDY
Name of the Unit : XYZ Brands Ltd.
Line of Activity : Plain Gold Jewellery trading & manufactured on Job
basis.
Name of the Product : Diamonds and Jewellery
Facility : Open cash credit
Present Preference : Renewal of OCC limits from 20cr to 45cr.
Security : Hypothecation of stocks, book debts onPari-passu basis with member banks for
Consortium.
-
7/29/2019 AB Presentation final.pptx
7/15
Assessment of Limits
For Open Cash Credit Methods
Turn Over method
Inventory method
MPBF system
Cash Budget system
-
7/29/2019 AB Presentation final.pptx
8/15
Working Capital Details
Rs.in.Crores
Current Assets 31-3-11 Current Liabilities 31-3-11
Cash and Bank balance 3.59 Short term Borrowings
Fixed deposits with bank 20.20 (From Bank) 46.64
Receivables 231.96 Sundry Creditors 197.24
Finished Goods 87.00 Advances 0.54 Advances recoverable 9.53 Provision for Taxes 16.99
Advances to Income tax 13.73 Other statutory liabilities 1.37
Other current assets 0.08 Other current Liabilities 0.36
Total Current Assets 366.09 Total Current Liabilities 263.14
Net Working Capital : 366.09
263.14 = 102.95 Working Capital Gap : Current AssetsCurrent Liabilities(Excl Bank
Borrowings)
Working Capital Gap : 366.09216.5 = 149.59
Current Ratio : 366.09/263.14 = 1.39
-
7/29/2019 AB Presentation final.pptx
9/15
Assessment of Working Capital
Requirements under MPBF
Particulars 31.03.2011 Total Current Liabilities 263.14
Total Current Assets 366.09
(-)Excluding Exports Receivables -
Actual Current Assets 366.09
Minimum Stipulated NWC (A)
(@ 25% of C.A Excl Exports Receivables) 91.52
Actual NWC (C.AC.L) (B) 102.95
Working Capital Gap (C) 149.59 (D) item (C - A) 58.07
(E) item (CB) 46.64
(F) from the above two items which
ever is low 46.64
Rs. In Crores
-
7/29/2019 AB Presentation final.pptx
10/15
Financial Indicators
Particulars 31-3-2009(Audited)
31-3-2010
(Audited)31-3-2011
(Audited)Net Sales
PAT
Fixed Assets
Current Ratio
TOL/TNW
Actual Net Working Capital
EPS(Rs.5 as on
31.3.2011)
615.26
2.62
2.78
1.65
4.79
80.52
3.14
912.20
8.05
2.47
1.54
4.79
88.14
9.64
1341.10
22.07
2.21
1.39
4.60
102.95
13.21
(Rs.in crores)
-
7/29/2019 AB Presentation final.pptx
11/15
Credit Risk Assessment
CRS for Fund Based Limits of Rs.5.00lacs & above but less than
Rs.50lacs.
CRAS for Borrowal accounts with exposures of Rs.50.00lacs &
above and upto Rs.5.00crores.
CRRM for Borrowal Accounts with exposures of above Rs.5.00
crores. A separate CRRM Rating model for MSME borrowers with
exposures of above RS.5.00crores and above.
-
7/29/2019 AB Presentation final.pptx
12/15
Risk Rating Scale Under CRRM
Marks Secured Credit Rating Description5.40 to 6.00 A++ Exceptionally high position of
(90% & Above) strength.
4.90 to 5.39 A+ A high degree of strength among
(80% to 90%) the peers.
4.20 to 4.89 A A moderate degree of strength
(70% to 80%)
3.60 to 4.19 B++ A moderate strength with stable
(60% to 70%) out look.
3.00 to 3.59 B+ A moderate strength with marginal
(50% to 60%) negative out look.
2.40 to 2.99
(40% to 50%) B Weakness on a parameter to
comparison peers. Unstable out look
-
7/29/2019 AB Presentation final.pptx
13/15
Spread Applicable Under CRRM
Rating Applicable Spread
A++ -1.00
A+ -0.50
A -0.50
B++ NIL
B+ 0.50
B +1.00
C +1.00
Crediting Rating : B++
-
7/29/2019 AB Presentation final.pptx
14/15
Finding of the Study
The credit risk assessment of XYZ Ltd has resulted in grading
the unit as B++, which implies that the unit is moderate and is
capable of repaying the loan amount.
The XYZ Company is eligible for the credit limit up to
Rs.46.64crores so that the bank is enhancing their limit from
20crores to 45 crores based on the MPBF method.
-
7/29/2019 AB Presentation final.pptx
15/15
THANK YOU
top related