How does a corporate loan become a bad one? Or, have the loan appraisals at banks improved, or is it just plain luck that the level of non-performing assets in the financial sector has come down!
The process of loan evaluation is usually a black box. There are some exceptions. For instance, we know that the ratings of a company play a critical role in deciding the rates of interest that will apply. Or the classification of the sector as infrastructure. On the flip side, a high risk one affects the rates too. If it is the former, the rates dip even more.
From Business Standard, we asked officers of an all-India financial institution to walk us through a loan process for