Credit Analyst

As a relationship person, when onboarding a new corporate client, the key ratios I would look into would primarily be liquidity and profitability ratios. Liquidity ratios such as the current ratio and quick ratio would help assess the company’s ability to meet its short-term obligations. These ratios indicate the availability of liquid assets to cover…...

In the banking industry, the roles of a credit manager and a relationship manager are distinct but interconnected. While both roles involve client engagement and managing client relationships, they focus on different aspects of the banking process. A credit manager primarily deals with the analysis and evaluation of creditworthiness and risk associated with lending activities…....

IRAC (Income Recognition, Asset Classification, and Provisioning) norms are guidelines issued by the Reserve Bank of India (RBI) to ensure prudent and transparent recognition of income, classification of assets, and provisioning for potential loan losses by banks and financial institutions. These norms play a crucial role in maintaining the stability and integrity of the banking…...

When assessing the creditworthiness of a company, several key ratios are commonly considered to evaluate its financial health and ability to repay its obligations. Here are some important ratios to consider when giving credit: 1. Current Ratio: This ratio indicates a company’s ability to cover its short-term obligations with its short-term assets. A higher current…...

Mr. Sashidhar Jagdishan is the Managing Director & Chief Executive Officer of the Bank. He succeeds Mr Aditya Puri, the iconic Managing Director who led the bank since inception and retired on October 26, 2020. Sashi as he’s known to his friends and colleagues, joined HDFC Bank in 1996 and has played a critical role…...

Mr. Sandeep Bakhshi is the Managing Director and CEO of ICICI Bank since October 15, 2018. Prior to his appointment as MD & CEO, he was a Wholetime Director and the Chief Operating Officer (COO) of the Bank. Mr. Bakhshi has been with the ICICI Group since 1986 and has handled various assignments across the…...

Amitabh Chaudhry is the Managing Director & Chief Executive Officer (MD & CEO) of Axis Bank Limited. Amitabh Chaudhry, is an Engineer from Birla Institute of Technology and Science, Pilani and has done his Post Graduate in Business Management from IIM, Ahmedabad. He joined the Bank as its MD & CEO on 1st January 2019,…...

RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) are both electronic payment systems used in India, but they differ in terms of transaction processing, settlement timings, and transaction limits. Here are the key differences between RTGS and NEFT: Transaction Processing: RTGS enables real-time and immediate transfer of funds on a gross basis,…...

CIBIL is also known as the Credit Information Bureau of India Limited. It plays a crucial role in the Indian financial setup. The organisation gathers information and calculates a CIBIL credit score for credit applicants. This score denotes the individual’s creditworthiness and ability to repay the loan. A person with a good CIBIL score is…...

Financial Institutions assign a credit score to borrowers after performing due deligence which includes ratio analysis. these are known as lending ratios. Ratios help to define whether borrower will be able to fulfill financial obligations or not. Some of the ratios to look at are: 1) Debt Service Coverage Ratio (DSCR) (ideal 1.5 but not…...

Leverage ratios link a company’s debt holdings to a particular cash flow indicator, most frequently EBITDA. The financing climate and the industry will have a significant impact on the leverage ratio parameters; nonetheless, the total leverage ratio in an LBO range from 4.0x to 6.0x, with the senior debt ratio normally being around 3.0x. Total…...

An Asset to Turnover Ratio is an efficiency indicator which shows what multiple is turnover of the total assets employed in a business. Favorite… To get access, please buy CA Interview Question Bank...

The role of Cash Flow lies in showing the movement of cash between two points of time. It shows where the cash had come from and where it was utilized. The Cash Flow Statement is an extremely effective tool for a business enterprise to determine: ▪ Whether the operations are resulting in cash generation. ▪…...

Long term debt may be defined as one which is used to fund the capital of a business. In other words, it is intended to be invested in long term assets, i.e., those assets which create revenue stream for the company. On the other hand, short term debt is one which is used primarily for…...

Credit risk is the risk taken by a bond investor that the bond’s issuer will default by failing to pay interest and repay principal on schedule. Favorite… To get access, please buy CA Interview Question Bank...

A financial instrument in a company that is near or is currently going through bankruptcy. This usually results from a company’s inability to meet its financial obligations. As a result, these financial instruments have suffered a substantial reduction in value. Distressed securities can include common and preferred shares, bank debt, trade claims (goods owed) and…...

A sudden drop in the general availability of loans or a sudden increase in the cost of borrowing from banks is known as a credit squeeze. Favorite… To get access, please buy CA Interview Question Bank...

A down payment is the amount of cash you pay upfront toward the purchase of a home. It’s often expressed as a percentage of the selling price of a home—typically 5–20% depending on the type of loan. The difference between your down payment and the price of the home is what you finance with a…...

Two categories of credit facilities exist: Quick loans, primarily for working capital requirements. Overdraft, letter of credit, factoring, export credit, and other short-term loans are only a few examples. Loans with a long duration are necessary for purchase or capex. It covers bridge loans, mezzanine loans, bank loans, notes, and securitization. Favorite… To get access,...

There are numerous things I would consider. First, examine the company’s financial performance over the last five years by looking at all four financial statements. Then consider the overall assets, and see what resources are available for use as collateral. Additionally, learn how the company has been using its resources. Next, determine whether the cash…...

One of the most significant interview questions for credit analysts is this one. A business must pay interest when it takes on debt. The interest coverage ratio demonstrates to the business their ability to handle their interest costs. Interest Coverage Ratio = [EBIT / Interest Expense] The greater the ratio better would be the company’s…...

Though it might sound complicated, underwriting simply means that your lender verifies your income, assets, debt, and property details to issue final approval for your loan. Underwriting happens behind the scenes, but that doesn’t mean you won’t be involved. Your lender might ask for additional documents and answers, such as where bank deposits came from,…...

These two are very commonly confused positions. The two may look similar but they are very different. While a loan officer helps the customers through the process of procuring the loan like explaining them various options, assisting with various documents etc., a Credit Analyst studies their case and decides if they can be granted the…...

Credit Analysis is the process of getting together the financial information about a customer (corporations and individuals) and evaluating it to assess their ability to repay a loan, they have applied for. To do this, various ratios are calculated and compared with the industry standards to ensure that while the customer gets the loan, the…...

One of the most significant interview questions for credit analysts is this one. A business must pay interest when it takes on debt. The interest coverage ratio demonstrates to the business their ability to handle their interest costs. Interest Coverage Ratio = [EBIT / Interest Expense] The greater the ratio better would be the company’s…...