Retail banking & corporate banking Loans

Learn how banks lend to individuals, partnerships, trusts, and societies, and distinguish fund-based facilities from non-fund based facilities with examples like demand loans, overdrafts, and letters of credit.

Demand loans provide short-term funding with open-ended or on-demand repayment and no early repayment penalty, while term loans offer fixed or floating rates with set repayment and asset security.

Cash credit accounts provide a running credit facility with open cash credit and key cash credit, using drawing power and hypothecation of raw materials and book debts.

Bill discounting provides short-term finance by selling unpaid invoices to banks at a discount, enabling quick cash flow and improved working capital without disturbing the balance sheet.

Explore buyer's credit and supplier's credit as financing options for international purchases, including how overseas banks fund importers, ensure immediate payment to exporters, and compare with the letter of credit.

Explore leasing finance and hire purchase as asset financing, detailing lessor and lessee roles, asset use, installments, and ownership transfer upon final payment.

Enables short-term capital to cover working capital needs until long-term funding arrives, including IPO-related financing. Expect high costs and default risk, with collateral requirements and high origination fees.

Learn how a syndicated loan pools funds from a group of lenders, with an arrangement bank administering the facility, and contrast its advantages and risks with consortium financing.

Bank guarantees provide payment assurance to the beneficiary if the buyer fails to meet contract terms, issued against margin money, and are non-fund based facilities involving debtor, creditor, and guarantor.

Describe how a bank guarantee's liability depends on the amount and validity period, including counter guarantees and the deferred payment guarantee in capital goods financing, with invocation rules.

Letters of credit, or documentary credit, settle international trade through bank payment on compliant documents. Key players include issuing, advising, conforming, nominated, reimbursing, and transferring banks.

Explore types of letters of credit, including revocable and irrevocable LCs, and revolving LCs, examining exporter risk, confirmation options, and renewal of drawings in import and local trade.

Explore the different types of letters of credit, including transferable, back-to-back, red clause, three-class, payment, deferred payment, negotiation, conforming, and standby credits, and how each secures and finances international trade.

Understand how banks verify letter of credit documents, including bill of exchange, commercial invoice, bill of lading, transport documents, insurance, and origin certificates under ucp 600 guidelines.

Learn to assemble a complete draft letter of credit format, detailing applicant and beneficiary information, irrevocable and transferable terms, currency, amount, shipment terms, required documents, and presentation period.

Learn how letters of credit act as non-fund based facilities, how banks verify documents from application to purchase order, and how they guard against accommodation and import LC risks.

Identify fraud indicators in letters of credit, such as sellers not listed, related party transactions, or warehouses in the same area, and conduct sanction-limit based due diligence.

Discover vehicle loans, including car and two-wheeler financing, with EMI, principal, interest, term, down payments, and ownership transfer, plus reverse mortgage options for seniors.

Explore home loan procedures, including application, verification, offer letters, disbursal, and top-up options, plus personal loans and related eligibility criteria and repayment terms.

Learn how the installment to income ratio, or IRR, expresses a borrower's monthly loan installment as a percentage used to determine loan eligibility, with banks typically using 33.33% to 40%.

Bridge loans, also known as gap financing or interim financing, provide short-term, secured funding to cover funding gaps in acquisitions or invoice timing, repaid after invoices are paid.

Learn bill discounting as a short-term loan against discounted bills, with various credit periods and interest per bank guidelines, and cash credit facilities with limits and collateral options.

Define interest as a payment from borrower or bank to the lender at a rate, distinguish it from dividend and profit, and compute the rate as interest divided by principal.

Explore how interest serves as the price of credit and the cost of capital in economics, driven by supply and demand, and how banks charge predefined rates.

Define the interest rate as a proportion of the principal with annual rates, compounding, and time shaping total interest. Examine why rates change: inflation, risk, liquidity, taxes, and government directives.

Explore simple and compound interest, focusing on simple interest as a flat rate for short-term loans, using the principal, rate, and time formula P × R × t ÷ 100.

Understand compound interest, earned on principal plus accumulated interest through periodic calculations (monthly to annually), and compare it with simple interest for savings and loans.

Learn the compound interest formula a = p(1 + r/n)^{nt}, with definitions for principal p, rate r, compounding frequency n, and years t, to compute future value and total interest.

This lecture applies the simple interest formula to compute interest, rate, and principal from given amounts and times, including doubling and a six-year example.

Explain how a 20,000 fixed deposit at 10% annual interest, compounded quarterly for ten years, yields about 53,700 using the compound interest formula.

Calculate the present value of 25,000 after four years at 8 percent with monthly compounding, yielding 18,173.01, and note emi calculation for a 10 lakh loan at 11 percent monthly.

Define EMI as equated monthly installments and apply the standard formula to compute fixed payments that cover interest and principal based on principal, monthly rate, and number of installments.

Calculate the EMI for a loan with rupees ten lakh principal at 11% annual interest over 15 years, converting to monthly rate and months, using the standard EMI formula.

Calculate the EMI for a two lakh loan at 10% annual interest over 18 months using the monthly rate 0.00833; the fixed EMI of 12,011.42 covers interest and principal.

Understand fixed interest rate, an unchanging rate applied to loans or mortgages, including hybrids with fixed and adjustable portions, and risk, higher fixed costs, and locking in during low rates.

Floating interest rates are not fixed and track a benchmark rate like the repo rate or mclr, changing with market conditions and potentially altering loan tenure while keeping emi constant.

Explore how annuities provide guaranteed income via cash flows at equal intervals after an accumulation period, with fixed, variable, life, and perpetuity types.