Abstract:

The project report titled Credit Risk Assessment & NBFC/ MSME Financing in Punjab
National Bank is related to the study of techniques and procedures followed by Punjab national
Bank to manage credit risk from the pre- sanction period to the post- sanction period of loans.
Credit Risk Assessment is a part of Credit Processing aspect of financing. The project also
focuses on financing of non banking financial corporations and medium and small scale
enterprises.
The Credit department of Punjab National Bank, Circle Office, Mumbai Suburb is the focal point
of its major operation. It appraises individuals and institutions which have taken or are willing to
take loan from the bank. While appraising a term loan, the bank would focus on evaluating the
credit worthiness of the company or individual and future expected stream of cash flow with the
amount of risk attached to them. This is done via Credit Risk Rating methodology.
The methodology used by Credit department incorporates both qualitative and quantitative
measures by weighing around 5 broad areas:
1. Financials
2. Business Performance
3. Industry Outlook
4. Quality of Management
5. Conduct of account
The branches falling under PNB Circle office, Mumbai suburb submit monthly Limit Sanction
Statements to the Circle office. These Limit Sanction Statements provide a gist of all loans
sanctioned by the branch to the borrowers. It also provides with other details pertaining to each
loan such as type of loan, nature of security, margin, rate of interest, etc.
Term loans are sanctioned by different hierarchical authorities ranging from COCAC to HOCAC
level III. On scrutinizing the proposals and analyzing the financials, the circle office raises
queries which are to be addressed by the concerned branch after taking up the matter with the
client. This is mainly done to ensure that loans have been sanctioned in compliance with various
guidelines and policies of Punjab National Bank.

Introduction
Banking sector is one of the major catalyst for the growth of the countrys economy as it
provides the financial resources to the capital intensive industries such as the automobile sector,
infrastructure and iron and steel industries. Since there exists a relationship between the growth
of the country and the banking industry of the country, the health of the banking industry is one
of the major issues for the government and the Central bank. The credit facilities the banks
provide to the Individual borrower and to large corporates are of much importance as it leads to
the overall growth of the economy. The project title was Credit Processing and Monitoring which
involves the steps to be followed before the disbursement of loan to the borrower, the types of
loans provided and the securitization of assets and monitoring of the previously disbursed loans
to reduce the NPAs in the banks portfolio.
About the Company:
Punjab National Bank is an Indian financial Services company based in India. The
bank which was found in 1894 has over 6300 branches, 7900 ATMs spread across
764 cities serving over 80 million customers. Punjab National Bank is one of the Big
Four banks of India, along with State Bank of India, ICICI Bank and Bank of Baroda. It
is the third largest bank in India in terms of asset size. Bank has its Corporate Office
at New Delhi that supervises 13 FGM offices and 69 Circle Offices under which the
branches function. The delegation of powers is decentralized up to the branch level
to facilitate quick decision making.

Vision:"To be a Leading Global Bank with Pan India footprints and become a household brand
in the Indo-Gangetic Plains providing entire range of financial products and services under one
roof"

Mission: "Banking for the unbanked"