Dissection of Bank Credit Facilities and Remedies

Abstract

The facilities given by banks such as loans and overdrafts are sanctioned for future use of the customers and accordingly projections are called from the customer and are accepted if no discrepancy is found in the paperwork and the bank finds the customer fit to repay the amount, while it should be thoroughly scrutinized in the light of monetary and economic cycles of the industry, growth of complementary and substitute products, new inventions in the field. The banks have to perform the Dissection of credit facilities extended to borrowers and have to analyze whether Fund Based and Non Fund Based  facilities extended are properly assessed and need based facilities are extended to borrower. It is utmost necessary to ensure end use of facilities extended, whether used for the business purpose or diverted to other areas.