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a synopsis on


Working capital management And introduction of Term loan financing Assistance provided by Punjab national bank

Supervisor Submitted by Mr.Aman Gupta Richa sharma Remarks of Evaluator Approved / Disapproved (I Evaluation) Approved / Disapproved (II Evaluation)

sessi on 2009-2011 directorate of distance education guru jambheshwar university of science and technology, hisar


GURU JAMBHESHWER UNIVERSITY OF SC. & TECH., HISAR RESUME OF SUPERVISOR/GUIDE 1. 2. 3. 4. 5. 6. 7. 8. 9. NAME DESIGNATION QUALIFICATION AREA OF SPECIALIZATION Experience OFFICIAL ADDRESS TELEPHONE No. MOBILE E-MAIL : : : : : : : : : Mr.Satish Puri Senior Manager MBA (finance) Finance and Marketing 9 years HO,PNB,7 bikaji cama place 011-64523109 9999376111

I am willing to supervise Ms. Richa Sharma Enrolment No. 09061203011 On the topic

Working capital management And introduction of Term loan financing Assistance provided by Punjab national bank
(Signature) with seal

Countersigned by the employer Countersigned by Director of Study Center with SEAL

Executive Summary
This project explains various credit facilities and policies followed by one of the most reputed banks in the country, Punjab National Bank. Each bank has its own set of policies within the overall RBI guidelines that must be followed while sanctioning a loan and care must be taken that the money provided by the bank is being used up for the intended purpose only. The task ranging from acceptance of loan proposal to sanctioning of loan is carried out at Credit Division of the bank. Moreover, each loan proposal falls under powers at different hierarchical levels for adequate decentralization & faster decision making depending on the size of the proposal. The objective of the study is to analyze in depth, the Loan Policies and its sanctioning for corporate bodies. Different corporate bodies require funds for various functions & mainly for: To finance their new projects. To meet their working capital requirements. So this project is undertaken to understand the various aspects of processing/appraisal of Term Loan, working capital assessment and Credit Risk Management carried out at PNB. With a developing economy and many multinational companies coming up, new projects are being undertaken. These projects require huge amount of fund and thus banks come forward to finance these projects depending on the feasibility of the project. PNB carries out an extensive study of the project and checks for its feasibility such as Technical, Economic and Financial Feasibility and if the project seems to be feasible, a decision is taken. This process of carrying out the feasibility test of the project is called Project Appraisal. Various companies require fund for daily operations. In order to finance these needs, a company approaches bank for credit facilities. CD at PNB takes care of these facilities and based on the credit worthiness and other useful parameters, the bank sanctions it at a particular rate of interest. In order to understand this, one must be clear with basic topics such as working capital management, balance sheet analysis and forecasting, and cash budget. However in case of working capital financing the basic task for the bank and the company is to evaluate the Net Working capital, which is done through working capital assessment. Further, the project also covers the Credit Risk Rating carried out at Integrated Risk Management Department (IRMD) of the bank. Rating is done in order to find out the capability or the willingness of the

company to pay its debt. PNB uses its own model to rate a company and this model is one of its kind in the country. Depending on the type of project, a suitable model is chosen and based on financials of the company and the track record of the management, rating is done. This rating also helps in determining the rate of interest at which the loan should be given. Generally, a company with good ratings is gives loan at a lower ROI since the risk involved is lower.

In this report we shall discuss the various aspects that PNB took into consideration before granting term loan and enhancing working capital limits through 1 case studies how Working capital loan appraisal a PBF note based on the CMA data given by the company is prepared based on which the bank decides how much contribution is to be brought in by the borrower and how much is the permissible bank finance.

To gain insights into the Credit Administration processes of the banks.
2) To understand the intricacies of working capital assessment. 3) To understand the various appraisal system adopted by the banking followed by live case studies.

4) To Analyze the balance sheet.


With the opening up of the economy, rapid changes are taking place in the technology and financial sector, exposing banks to greater risks. Thus, in the present scenario efficient project appraisal has assumed a great importance as it can check and prevent induction of weak accounts to our loan portfolio. All possible steps need to be taken to strengthen pre sanction appraisal as prevention is better than cure.

reserach design and methodology

WEBSITES DBOD/ RBI/ECGC/FEMA notification/policies http:// http:// dia_banking_2010.pdf BOOKS, PUBLICATIONS & MAGAZINES Book of Instruction on Loan Accounts PNB, Internal Circulation. Project Appraisal by Prasanna Chandra. PNB Annual Report 2009-10. Internal Files of PNB. PNB Monthly Review January 2011.

chapterization scheme
Executive summary Chapter 1 Introduction
Significance of the Study Objectives of the Study Scope of the Study

Limitations of the Study

Chapter 2 Research Methodology

Sampling Plan Hypotheses Data Collection

Chapter 3 Theoretical data Chapter 4 Data Analysis and Interpretation Chapter 5 Findings and Conclusions Bibliography Annexure