Answer to Question #318104 in Finance for Naveen

Question

Credit appraisal is a critical analytical tool of bank. Largely the profitability of bank

hinges on this tool. Any weakness on this front is reflected on the profitability of banks

and it also results in accumulation of stressed assets. BASEL-II has given strong

recommendations to check this menace. Elaborate in details the important

recommendations of this committee.

Answer 1

It reduces risks in the loans provided for the project

Increases confidence among the corporate bankers and improved bank relations

Reduces non performing assets and possibility of financial losses

Ensures different opinions with proper assessment.