A guest lecture was held for SY B.Com Macroeconomics students on the 30th of August 2018 from 08:45 to 09:45 am on the topic Lending Practices in Banks for Economic Growth. The resource person for the guest lecture was Mr. Suparn Deshpande, Chief Manager and Branch Head at Corporation Bank, Vidhyanagar branch, Margao. He has completed his M.Sc. in Agricultural Economics and has an MBA. He has 19 years of banking experience. The resource person was introduced and welcomed by Asst. Prof. Averyl Pires.
Mr Suparn started by discussing the role of banking in economies. The banking system is central to a nation’s economy as it caters to the needs of credit for all sections of society. Modern economies of the world have developed primarily by making best use of the credit availability in their systems. The role of banks has always been important, but it is going to be even more important in the future. He discussed the role of banks in lending for various reasons, priority lending by banks, income as an important factor, how banks look for profitable loans etc. He explained how banks identify borrowers based on 3 C’s i.e. character, capacity and capital which are based on the income of the borrower. He highlighted the importance of KYC norms and how banks interview the prospective borrower thoroughly while accepting loan applications and how banks conduct pre-sanction visits or enquiries through third parties.
The resource person explained the concept of CIBIL, Credit Information Bureau (India) Limited, which is India’s first Credit Information Company or Credit Bureau. It maintains records of all credit-related activity of individuals and companies including loans and credit cards. He explained the various documents for loan processing and their importance. He classified types of loans into personal, term loans, working capital loans and non-fund based loans which include Letter of credit and bank guarantee. He discussed the importance of primary and collateral security. He explained the quantum of loan, appraisal and sanction of loans with the help of numerical examples. He discussed the disbursement of loans; monitoring, review and renewals of loans; recovery of loans/ NPA’s and inspection and audit of banks. He concluded by stating that the banking system is an important channel through which financial development exerts an effect on economic growth. The banking sector is particularly important for small economies and developing countries.
Students raised several queries about educational loans, collateral security for educational loans, outcome of non-payment of educational loan, Non-Performing Assets before financial crisis, effect of demonetization on banks etc. The vote of thanks was proposed by Mr. Siddhant Masurekar. This lecture was attended by a total of 61 students. The session was informative, and a good learning experience for students.
