LIC Housing Finance Credit Appraisal Interview Questions, Process, and Tips

General Banking , Maths, And reasoning

Q1. How do u analyse CIBIL
Ans. 
CIBIL analysis involves reviewing credit history, credit score, loan repayment behavior, and credit utilization ratio.
• Review credit history and identify any past defaults or delinquencies

• Check credit score and ensure it meets the minimum requirement for loan approval

• Analyze loan repayment behavior to determine if the borrower is likely to repay the loan on time

• Evaluate credit utilization ratio to ensure the borrower is...read more
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Q2. What is Loan to value ratio
Ans. 
Loan to value ratio is the ratio of the loan amount to the appraised value of the collateral provided by the borrower.
• It is used by lenders to determine the risk of lending money to a borrower.

• A higher LTV ratio indicates a higher risk for the lender.

• Lenders usually have a maximum LTV ratio that they are willing to lend.

• For example, if a borrower wants to buy a house worth $200,000 and the lender has a maximum LTV rati...read more
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Q3. What is Monthly income to installment ratio (MLSC)
Ans. 
MLSC is the ratio of monthly income to monthly installment paid towards a loan.
• MLSC is used by lenders to determine the borrower's ability to repay the loan

• A higher MLSC indicates a better ability to repay the loan

• MLSC is calculated by dividing monthly income by monthly installment

• Ideally, MLSC should be less than or equal to 50%

• For example, if a borrower's monthly income is $5000 and monthly installment is $2000, MLSC
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Q4. Resume based questions
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Q5. What is Zero coupon bonds
Ans. 
Zero coupon bonds are bonds that do not pay interest during their term but are sold at a discount and redeemed at face value.
• Zero coupon bonds are also known as discount bonds.

• They are issued at a price lower than their face value.

• They do not pay any interest during their term.

• The return on investment is the difference between the purchase price and the face value.

• They are often used for long-term investments or to fun...read more
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Q6. Indian Accounting standards
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Q7. What are the NPA norms of RBI.
Ans. 
NPA norms of RBI refer to the guidelines set by RBI for classification of non-performing assets.
• NPA is an asset that ceases to generate income for the bank

• RBI has set different norms for classification of NPAs based on the duration of default

• For a standard asset, if interest or principal is overdue for 90 days or more, it is classified as NPA

• For a sub-standard asset, if interest or principal is overdue for 90 days or m...read more
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Q8. What is SARFAESI ACT
Ans. 
SARFAESI Act is a legal act that allows banks to recover their non-performing assets without court intervention.
• SARFAESI stands for Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

• It was enacted in 2002 to enable banks to recover their bad loans without the intervention of courts.

• Under this act, banks can take possession of the collateral security and sell it without the i...read more
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