Make notes on the Lending and Credit Policy in detail • Principles of lending • Credit policy and lending skills • Consumer and commercial lending • Credit administration • Nonperforming loans • Collection and recovery

Principles of Lending:

• Safety: Loans should be given to those who have the ability to repay them. This is assessed by evaluating the borrower's creditworthiness.
• Liquidity: The lender should ensure that the borrower can repay the loan within a reasonable time frame.
• Profitability: The lender should make a profit from the interest and fees charged on the loan.
• Security: The lender should have some form of collateral to secure the loan.
• Diversity: The lender should diversify its loan portfolio to spread risk.

Credit Policy and Lending Skills:

• Credit policy outlines the criteria for granting loans, including the evaluation of creditworthiness, collateral requirements, and interest rates.
• Lending skills involve the ability to assess the borrower's ability to repay, negotiate loan terms, and manage risk.

Consumer and Commercial Lending:

• Consumer lending involves providing personal loans for consumer purchases such as cars, homes, or education.
• Commercial lending involves providing business loans for purposes such as starting a business, expanding operations, or purchasing equipment.

Credit Administration:

• This involves managing the entire loan process, from application to repayment. It includes assessing creditworthiness, approving loans, monitoring loan performance, and managing delinquent loans.

Nonperforming Loans:

• These are loans that are in default or close to being in default. Many banks classify a loan as nonperforming if it has not been serviced for 90 days.

Collection and Recovery:

• Collection involves pursuing delinquent borrowers to repay their loans.
• Recovery involves taking steps to recover the amount owed if the borrower defaults. This could involve seizing and selling collateral or taking legal action.