70+ Branch Credit Manager Interview Questions and Answers

A 13-year legal search report is required in mortgage to ensure the property's legal status and minimize risks.

• A 13-year legal search report provides a comprehensive overview of the property's legal history.

• It helps identify any potential legal issues or encumbrances on the property.

• Lenders require this report to assess the risk associated with the mortgage.

• It ensures that the property has a clear title and is free from any legal disputes.

• Examples of information included in t...read more

Underwriting is the process of assessing the creditworthiness of a customer and determining the terms and conditions for providing finance.

• Underwriting involves evaluating the financial and personal information of a customer to determine their ability to repay a loan.

• The credit manager analyzes factors such as income, credit history, employment stability, and collateral to assess the risk associated with lending to a customer.

• Based on the underwriting process, the credit mana...read more

Leasehold property is leased for a specific period while freehold property is owned indefinitely.

• Leasehold property is leased for a specific period of time, usually decades.

• Freehold property is owned indefinitely by the owner.

• Leasehold property may require payment of ground rent to the freeholder.

• Freehold property does not require payment of ground rent.

• Leasehold property may have restrictions on alterations or use.

• Freehold property generally has no such restrictions.

The Branch Credit Manager handles various financial products and services.

• Loans and credit facilities

• Credit cards

• Mortgages

• Overdrafts

• Trade finance

• Asset-based lending

• Working capital financing

I will check the applicant's credit score, income, employment history, and debt-to-income ratio.

• Credit score

• Income

• Employment history

• Debt-to-income ratio

Before disbursements, due diligence should be done to ensure the borrower's creditworthiness and ability to repay the loan.

• Verify the borrower's identity and credit history

• Assess the borrower's income and expenses to determine their ability to repay the loan

• Check for any outstanding debts or liens on the borrower's assets

• Evaluate the purpose of the loan and the borrower's business plan

• Ensure compliance with all regulatory requirements and internal policies

• Obtain collateral or...read more

DPD, STD, SMA, LSS are different categories of overdue payments in CIBIL credit report.

• DPD stands for Days Past Due and indicates the number of days a payment is overdue.

• STD means Standard and indicates that the payment is being made on time.

• SMA stands for Special Mention Account and indicates that the payment is overdue for 1-90 days.

• LSS means Loss and indicates that the payment is overdue for more than 180 days and is considered a bad debt.

Documents required for legal in builder cases include title deed, approved building plan, NOC from relevant authorities, sale agreement, etc.

• Title deed showing ownership of the property

• Approved building plan from local authorities

• NOC (No Objection Certificate) from relevant authorities

• Sale agreement between builder and buyer

• Occupancy certificate if available

Credit is crucial for any institution as it enables them to provide financial assistance and grow their business.

• Credit allows institutions to provide loans and other financial services to customers.

• It helps institutions to generate revenue and grow their business.

• Credit also helps to build trust and establish long-term relationships with customers.

• Without credit, institutions may not be able to meet the financial needs of their customers and may lose business to competitors....read more

Business vintage & stability spoof refers to the falsification of business history and financial stability to deceive lenders. Reasons to reject files include inconsistencies in business profile, banking statements, and technical reports.

• Business vintage refers to the length of time a business has been operating. Lenders look for established businesses with a proven track record.

• Stability spoof involves presenting false information about the financial health and stability of ...read more

Reserve capital is the amount of funds set aside by a company for specific purposes, while capital reserve is the profit earned by a company that is not distributed to shareholders.

• Reserve capital is a part of the company's share capital that cannot be distributed as dividends to shareholders.

• Capital reserve is created from profits earned by a company and is not distributed to shareholders but kept for specific purposes.

• Reserve capital is a regulatory requirement for companie...read more

If assessee has filed his return in 44AD

• 44AD is a presumptive taxation scheme for small businesses

• The assessee can declare income at 8% of gross receipts

• If the assessee has filed under 44AD, the credit manager should verify the income declared and ensure it is in line with the business activities

• If the income declared is significantly lower than expected, further investigation may be required

I handle the tea at down trend scenarios by closely monitoring the situation, analyzing the root causes, and implementing strategic solutions.

• Monitor key performance indicators to identify trends

• Analyze the root causes of the down trend

• Implement strategic solutions to address the issues

• Communicate effectively with team members and stakeholders

Leaving job and RBI guidelines are important factors in microfinance banking.

• Leaving a job may be due to career growth opportunities or better work-life balance.

• RBI guidelines are crucial for ensuring compliance and stability in the microfinance sector.

• Family in microfinance bank refers to the close-knit team of employees working towards a common goal.

• Supportive work environment and strong team dynamics are key aspects of family in microfinance bank.

Yes, I know how to prepare cash flow statements.

• Cash flow statements show the inflow and outflow of cash in a business.

• They are prepared using the indirect or direct method.

• The indirect method starts with net income and adjusts for non-cash items and changes in working capital.

• The direct method lists all cash receipts and payments.

• Cash flow statements are important for assessing a company's liquidity and financial health.

Knowledge of secured loan vertical involves understanding the process of lending money with collateral as security.

• Understanding the concept of collateral and its importance in securing loans

• Knowledge of different types of collateral that can be used in secured loans, such as real estate, vehicles, or investments

• Familiarity with the legal aspects of secured loans, including the rights and responsibilities of both the lender and the borrower

• Ability to assess the value of colla...read more

Credit visit involves assessing customer income and cibil score to determine loan eligibility.

• Credit visit involves meeting the customer in person to verify income and other financial details.

• Assessing customer income involves reviewing pay stubs, bank statements, and tax returns.

• Cibil score is a credit rating provided by Credit Information Bureau (India) Limited, indicating creditworthiness.

• A loan can be prepared on assessment basis if the customer's income and cibil score m...read more

Customer business analysis involves evaluating their stock, sales, and purchases.

• Collect and analyze data on customer's inventory levels and turnover rate

• Evaluate sales trends and patterns to identify opportunities for growth

• Assess purchasing habits and patterns to identify potential risks or opportunities

• Use financial ratios and other metrics to evaluate the customer's financial health

• Develop strategies to mitigate risks and capitalize on opportunities

To analyze a loan file before disbursement, one should check the borrower's credit score, income, employment history, and collateral.

• Check the borrower's credit score to determine their creditworthiness

• Verify the borrower's income to ensure they can repay the loan

• Review the borrower's employment history to assess their stability

• Evaluate the collateral to determine its value and ensure it can cover the loan amount

• Check for any red flags such as past delinquencies or bankruptci...read more

A credit manager is responsible for assessing and managing the creditworthiness of individuals or businesses.

• They evaluate credit applications and determine the risk involved in lending money or extending credit.

• They set credit limits and terms of payment.

• They monitor credit accounts and ensure timely payments.

• They work closely with sales teams to ensure credit policies are followed.

• They may also negotiate payment plans with delinquent customers.

• Examples of industries that em...read more

Contingent liabilities appear in the financial statements as a footnote or disclosure.

• Contingent liabilities are disclosed in the notes to the financial statements.

• They are potential liabilities that may arise in the future based on certain events.

• Examples include lawsuits, warranties, and guarantees.

• They are not recorded on the balance sheet but can have a significant impact on the company's financial health.

Car loan is a secured loan.

• Car loan is secured by the car itself as collateral.

• If the borrower defaults on the loan, the lender can repossess the car.

• Interest rates on secured loans are generally lower than unsecured loans.

• Examples of unsecured loans include personal loans and credit cards.

Legal refers to laws and regulations while technical refers to the practical application of knowledge and skills.

• Legal pertains to the rules and regulations set by the government or other governing bodies.

• Technical refers to the practical application of knowledge and skills in a specific field.

• Legal and technical aspects are often intertwined in various industries such as healthcare, finance, and engineering.

• For example, a medical device must comply with both legal regulation...read more

My monthly processing cases count is approximately 150.

• My monthly processing cases count ranges around 150

• I handle an average of 150 cases per month

• The monthly processing cases count is typically around 150

Assessing income of a Vada Pav vendor involves evaluating daily sales, expenses, location, customer base, and competition.

• Calculate average daily sales by observing customer traffic and pricing.

• Consider expenses such as ingredients, rent, utilities, and labor costs.

• Evaluate the location's foot traffic and potential for growth.

• Assess the vendor's customer base and loyalty.

• Analyze competition in the area and pricing strategies.

• Look for opportunities to increase sales through pr...read more

Suit filed refers to a legal action taken by a plaintiff against a defendant in a court of law.

• It is a formal legal complaint filed by a plaintiff against a defendant.

• It initiates a civil lawsuit and sets the legal process in motion.

• The plaintiff must provide evidence to support their claim.

• The defendant has the opportunity to respond and defend themselves.

• Examples include breach of contract, personal injury, and property damage cases.

CIBIL check includes credit score, credit history, loan repayment behavior, defaults, and outstanding debts.

• Credit score

• Credit history

• Loan repayment behavior

• Defaults

• Outstanding debts

Penal interest is an additional interest charged by lenders on overdue payments.

• Penal interest is a penalty charged by lenders on overdue payments.

• It is an additional interest rate that is added to the original interest rate.

• The purpose of penal interest is to encourage borrowers to make timely payments.

• Penal interest rates vary depending on the lender and the type of loan.

• For example, credit card companies may charge penal interest rates of up to 30% on overdue payments.

Evaluate customer credit worthiness by analyzing financial history, credit score, income, and payment behavior.

• Check credit score and credit history

• Analyze income and employment stability

• Review payment behavior on previous debts

• Consider debt-to-income ratio

• Look for any outstanding loans or bankruptcies

• Evaluate the length of credit history

Yes

• Yes, I have experience in conducting credit assessments and determining the probability of default (PD) for customers.

• I have analyzed customer financial statements, credit reports, and payment histories to assess their creditworthiness.

• I have used statistical models and risk assessment tools to calculate PD and make informed lending decisions.

• I have also monitored customer accounts for any signs of financial distress and taken appropriate actions to mitigate credit risks.

• F...read more

Ownership documents are legal papers that prove ownership of a property or asset.

• Ownership documents can include deeds, titles, and certificates of ownership.

• These documents are important for establishing ownership and transferring ownership to another party.

• Examples of ownership documents include a car title, a property deed, and a stock certificate.

• Ownership documents may also include information about any liens or mortgages on the property or asset.

• It is important to keep ...read more

Legal and Technical refer to the two aspects of credit analysis that are considered while evaluating a borrower's creditworthiness.

• Legal aspect involves analyzing the legal documents related to the borrower's business such as MOA, AOA, Partnership Deed, etc.

• Technical aspect involves analyzing the borrower's financial statements, cash flow, profitability, etc.

• Both aspects are equally important in determining the borrower's creditworthiness.

• For example, if a borrower has a stro...read more

Representing the customer requires empathy, active listening, and a willingness to understand their needs and concerns.

• Put yourself in the customer's shoes

• Listen actively to their concerns and needs

• Ask questions to clarify their situation

• Be empathetic and understanding

• Provide solutions that meet their needs

Funded customers are provided with in-house loans through a thorough evaluation process.

• Customers are evaluated based on their credit score, income, and other financial factors.

• The loan amount and interest rate are determined based on the evaluation results.

• The loan is then funded by the company's own resources.

• Regular payments are required from the customer to repay the loan.

• Late payments or defaulting on the loan can result in penalties or legal action.

RERA stands for Real Estate (Regulation and Development) Act, which aims to regulate the real estate sector and protect the interests of homebuyers.

• RERA was enacted in 2016 to bring transparency and accountability in the real estate sector.

• It mandates the registration of real estate projects and real estate agents.

• RERA also establishes state-level Real Estate Regulatory Authorities (RERAs) to oversee the sector.

• The Act requires developers to disclose project details, adhere t...read more

I look for collateral property that is valuable, easily marketable, and has a clear title.

• Value of the property should be sufficient to cover the loan amount

• Property should be easily marketable in case of default

• Clear title ensures smooth transfer of ownership in case of foreclosure

FSI stands for Financial Stress Index. 13 years trace is required to analyze long-term financial trends.

• FSI is a measure of financial stress in the economy, taking into account various indicators such as interest rates, credit spreads, and market volatility.

• Analyzing a 13-year trace allows for a comprehensive understanding of long-term financial trends and patterns.

• This long-term data helps in identifying potential risks and vulnerabilities in the financial system.

• For example...read more

To verify a house, one can use various methods such as conducting a physical inspection, checking property records, and verifying ownership documents.

• Conduct a physical inspection of the house to ensure its condition and authenticity.

• Check property records at the local government office or online to verify ownership details and any existing liens or encumbrances.

• Verify ownership documents such as title deeds, sale agreements, and property tax receipts.

• Cross-reference the prop...read more

The COVID-19 pandemic has affected various industries, with some being hit harder than others.

• Travel and tourism industry has been severely impacted due to travel restrictions and lockdowns.

• Hospitality industry has also suffered due to closure of restaurants, bars, and hotels.

• Retail industry has seen a shift towards online shopping, with brick-and-mortar stores struggling.

• Entertainment industry has been hit hard with movie theaters, concert venues, and theme parks closed.

• Oil ...read more

Primary KYC (Know Your Customer) is the initial process of verifying the identity of a customer before providing financial services.

• Primary KYC involves collecting basic information such as name, address, date of birth, and identification documents.

• It is a mandatory process for financial institutions to prevent money laundering and fraud.

• Customer due diligence is also conducted during primary KYC to assess the risk associated with the customer.

• Examples of primary KYC document...read more

Assessing loan worthiness involves analyzing credit history, income, debt-to-income ratio, and collateral.

• Review credit history and credit score

• Evaluate income and employment stability

• Calculate debt-to-income ratio

• Assess collateral value

• Consider borrower's payment history and financial behavior

• Verify identity and personal information

Current ratio is a financial metric used to evaluate a company's ability to pay its short-term obligations.

• Current ratio is calculated by dividing current assets by current liabilities.

• A current ratio of 1 or higher indicates that a company has enough assets to cover its short-term liabilities.

• For example, if a company has $100,000 in current assets and $50,000 in current liabilities, its current ratio would be 2.

Secured loans are backed by collateral while unsecured loans are not.

• Secured loans require collateral such as a house or car to be pledged as security for the loan.

• Unsecured loans do not require collateral and are based solely on the borrower's creditworthiness.

• Secured loans typically have lower interest rates than unsecured loans.

• Examples of secured loans include mortgages and auto loans, while credit cards and personal loans are examples of unsecured loans.

The role of a credit manager is to assess and manage the creditworthiness of individuals or businesses applying for loans or credit.

• Evaluating credit applications and determining the creditworthiness of borrowers

• Analyzing financial statements, credit reports, and other relevant information to assess risk

• Setting credit limits and terms for approved borrowers

• Monitoring and managing the credit portfolio to minimize risk and maximize profitability

• Collecting overdue payments and m...read more

Microfinance was established in the 1970s as a way to provide financial services to low-income individuals and communities.

• Microfinance originated in the 1970s as an initiative to alleviate poverty and promote financial inclusion.

• The Grameen Bank in Bangladesh, founded by Muhammad Yunus in 1976, is often credited as the pioneer of modern microfinance.

• Microfinance institutions offer small loans, savings accounts, and other financial services to individuals who lack access to t...read more

The most important part of a technical report is the executive summary.

• Provides a concise overview of the report's key findings and recommendations

• Helps busy stakeholders quickly understand the main points without reading the entire report

• Should be written last after the rest of the report is completed

Income of borrower can be assessed through various documents and verification methods.

• Reviewing pay stubs and tax returns

• Verifying employment status and income with employer

• Analyzing bank statements for regular income deposits

• Considering other sources of income such as rental properties or investments