Factors that a Banker/Bank Considers While Approving the Loan

The banking industry is known to many as the most reliable institution for fetching loans for various personal and professional financial needs. A loan is temporary provision of money usually at interest which has to be paid in a designated amount of time. While the job oriented banking courses in India do provide all the important educational aspects of banking, they also give some special insights about the entire loan processing and approval process as this department handles quite a lot of arduous tasks which include the screening of the borrowers, the documents furnished and even the credentials with regard to timely payment. Let’s discuss them all in detail:

ASSK-Academy

  • Credit history- As a professional with completed banking training courses, it becomes extremely important to check the credit history as it is indicative of your future repayment behavior such as the punctuality in repaying the loans. The longer the delay, the lower the score will be. Also, credit card score should also be maintained with no default in repayment. Generally, a credit score between 700 and 800 is positive whereas the credit score of less than 300 will increase the likelihood of your application being rejected.
  • Age- The age of a loan applicant is directly related to his loan getting approved. Generally, the applicant in the age group of 20’s and 30’s with a job or business of their own stand a higher chance for loan approval since they are financially stable and also have the potential to climb up the corporate ladder.
  • Income- The income is very much a reflection of your repayment capacity. Banks assess the income capacity in the backdrop of existing debt obligations, dependents, source, and duration. In this context, one of the many things the bank checks is sufficient surplus after EMI payments. If this is found wanting, the bank infers that you’re spread far too thin and likely to default. However, if the ratio is five times and above, the bank will consider you financially healthy. To strengthen your eligibility, they can also show additional sources of income, such as your spouse’s salary
  • Repayment: The banking professionals must check whether the eligible person is choosing a shorter repayment period as it stands a better chance of getting the loan approved. Several banks favor applications for a repayment period of up to five years. As the repayment period increases in five-year slabs – 10, 15, 20, and 25 years – the score reduces. So, keeping it short is the mantra in seeking that approval from a bank for a loan.
  • Margin money- This is one of the more crucial factor that the banking professionals finishing the short term banking courses in Delhi need to be absolutely sure about. Generally, banks are willing to fund up to 80% of the cost of purpose of the loan and expect the borrower to arrange for the balance. Moreover, the banking professionals also need to see if the borrower has a good existing relationship with the particular branch of the bank.

Know about All the Rates of Banking in India

If you are one of the aspirants willing to make big in the banking sector after finishing the job oriented banking courses, you must keep yourself informed about a few fundamentals in banking. Interest rates and price stability are the two such components of banking which must be studied to detail. As we all know, it is the monetary policy aimed at the supply of money in its economic system by its control over interest rates which maintain price stability and perform to achieve high economic growth.

In India, such apex bank is the Reserve Bank of India (RBI). It is responsible to maintain the price stability in India. Besides, there are many other objectives of the monetary policy of India, which are governed and performed by the RBI. Out of them, there are various types of rates which are variable as per the economic scenario of the country and are decided by the RBI time to time.

Repo rate 

Repo rate is the rate at which banks borrow money from the RBI to meet their deficiencies. Banks do pledge their holdings of government bonds as collateral and in against of it, banks borrow from the Reserve Bank of India. When the RBI decides to reduce the borrowing by the banks it increases the repo rate. This is done when the economy is overheated and needs to be cooled. Similarly, when the RBI wants to make it cheaper for banks to borrow the money, it reduces the repo rate. This is done when the economy is not doing too well. To put it simply, the reduction in Repo rate enables the commercial banks get funds at cheaper rates whereas the increase in repo rate discourages the commercial banks to get money due to the increase in rates making it expensive.

ASSK-Academy

Reverse repo rate

 Reverse Repo rate is RBI’s borrowing rate from the commercial banks. The RBI uses this tool when there are more than enough money floating in the banking system. This rate encourages the banks to give money back to RBI and earn some interest on it. This happens when banks don’t have enough consumers/ companies to lend the money to and money is lying idle with the banks. When the reverse repo rate is increased, RBI borrows money from the banks and offers them at a lucrative rate of interest. Hence, banks prefer to keep their money with the RBI which is absolutely risk-free in comparison to lending anywhere else.

Bank Rate

Bank rate is the rate of interest charged by the RBI against the funds lent to the banking system. This banking system incorporates commercial and co-operative banks, Industrial Development Bank of India, etc. If there is a hike in bank rate, the cost of borrowing of the commercial bank’s increases which results in the reduction in credit volume to the banks and hence declines the supply of money. When RBI increases the bank rate, it means it’s a symbol of tightening the monetary policy

A change from low to high Bank rate means the economy needs cooling down. In other words, the RBI would like to reduce inflation. A change from high to low Bank rate means the economy needs a boost. In other words, the RBI would like to increase inflation.

5 Factors To Choose The Best Course in Finance

121

With the rise and importance and need to study a program to specialize and obtain specific knowledge and skills that open the way to the business world, competitiveness makes this a perfect way to excel. Therefore it is essential to find the best Master and the job oriented banking program in India.

What factors can guide us when deciding the best courses in banking and finance? In this article, we leave you 5 Factors to choose the best banking courses.

Know the Objectives

It is very important to know where we are going. Therefore, whenever you are going to face an important decision in life, you must be very clear about the objective you want to achieve. Time is the most precious value you will invest in your entire life and managing it is not an easy task.

Facing a courses in banking and financemeans working to achieve the understanding and application of financial theory, understand and know how to use the management tools or enhance the management performance of the participants. Improve decision-making capacity in any field. Response to the needs and demands demanded by the market, in search of talented professionals like you.

Program and Modules.

If the objectives are important, the program and its modules will Continue reading

Why go for Career Opportunities in Private Banks?

Career Opportunities in Private Banks

Indian banking sector in the recent times has become a hub for new opportunities and economic development. Career in banking has become a hot topic of discussion in the country. The career prospects and recognition in the banking sector has made it the first choice of individuals all over the country. Today various institutions in the country provide certified banking courses that secure your place. Here are some of he best reasons that justify that career in banking is a great option.

Continue reading

Crack Banking Entrances to Become Reputed Officer

assk

Banking professionals deals with the funds possessed by the clients and assists them in managing it. These bank officials hold great communication skills and mastered the art of customer service. They deals with the clients and helps them to choose the benefiting investment plans, thus they need to have a detailed knowledge of the banking services.

Every year more number of students completing their graduation are opting for these lucrative jobs. This scenario has created an extremely competitive environment for getting selected in bank entrance exams. To serve this purpose various coaching institutes are providing courses not only to crack these competitive exams but guide its students to get job in private banks as well. These coaching academies offers courses such as professional program in commercial banking and Financial Market Wizard, which would guarantee a high profile job to you. Some of these highly paid jobs are:

Bank Officer

Bank officers do not only manage financial transactions in a bank but they are also required to process loans, oversee the operation of a branch or supervise bank employees. In order to execute their responsibilities well, they need to have a good perception of their banks’ objectives. The minimum academic requirement for bank officers is a Bachelor’s degree in banking, economics or finance but some banks are willing to take individuals who holding an Associate’s degree in accounting.

Loan Officer

Loan officers are accountable for finding people who are keen in getting loans and serving them apply for the loans. These officers also have to evaluate the abilities of individuals and businesses to repay their loans. They are required to provide proposal for borrowers who have difficulty securing traditional loans. Few of the places that provide employment for loan officers include financial institutions, banks, credit unions and loan companies. The minimum educational requirement for this post is usually a high school diploma, but for commercial loan officer post one may need a Bachelor’s degree in economics or finance.

Financial Analyst

Financial analysts research investment alternatives and provide advice for investors. They can work for mutual fund companies, banks or insurance companies. If one wants to apply for this post then Bachelor’s degree in accounting, finance, statistics or business is must. For excelling in this career one must pursue a Master’s degree in business administration.

Corporate Treasurer

Corporate treasurers manage financial commodity to raise business development. Their work include managing their companies’ cash and capital flow, making investments, analyzing and establishing financial management policies and managing risks. The basic academic requirement for this post is a Bachelor’s degree in business management, economics, audit or finance.

These banking courses provide an excellent learning environment and making its student aware about private job working. Thus, grooming its students as sound professionals always ready to face any kind of challenges.