Types of Risks & Risk Based Supervision
Micro Small and Medium Enterprises Development Act 2006 <ul><li>Module I: </li></ul><ul><li>Industry characteristics: </li...
Business Risk: Module II <ul><li>Operating efficiency: </li></ul><ul><li>Indigenization level </li></ul><ul><li>Integratio...
Financial Risk: Module III <ul><li>Past financials: </li></ul><ul><li>ROCE </li></ul><ul><li>PAT/Net Sales </li></ul><ul><...
Module IV: <ul><li>Management Risk: </li></ul><ul><li>Track record </li></ul><ul><li>Ability to meet profit projection </l...
Project implementation risk: PIR <ul><li>Expected Balance Project duration </li></ul><ul><li>Stabilization </li></ul><ul><...
<ul><li>Management Risk- Project </li></ul><ul><li>Experience in the industry </li></ul><ul><li>Managerial Competence </li...
SME Segment is broadly classified as under: Above Rs. 200 lakhs and upto Rs. 500 lakhs Above Rs.500 lakhs and upto Rs. 100...
Procedure of dealing with a case <ul><li>Application form </li></ul><ul><li>Checklist </li></ul><ul><li>Pre sanction inspe...
Upcoming SlideShare
Loading in...5
×

483f1 Types Of Risks And Rbs

405

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
405
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

483f1 Types Of Risks And Rbs

  1. 1. Types of Risks & Risk Based Supervision
  2. 2. Micro Small and Medium Enterprises Development Act 2006 <ul><li>Module I: </li></ul><ul><li>Industry characteristics: </li></ul><ul><li>Demand supply gap </li></ul><ul><li>Government policies </li></ul><ul><li>Extent of competition </li></ul><ul><li>Input related risks </li></ul><ul><li>Industry Financials: </li></ul><ul><li>Variability of operating margins </li></ul><ul><li>Return on capital employed: Industry </li></ul><ul><li>Operating margin: Industry </li></ul><ul><li>Growth of operating margin: industry </li></ul>
  3. 3. Business Risk: Module II <ul><li>Operating efficiency: </li></ul><ul><li>Indigenization level </li></ul><ul><li>Integration of operations </li></ul><ul><li>Multi- location advantage </li></ul><ul><li>Selling cost </li></ul><ul><li>Employee cost </li></ul><ul><li>Capacity utilization </li></ul><ul><li>Availability of raw materials </li></ul><ul><li>Energy Cost </li></ul><ul><li>Access to cost effective technology </li></ul><ul><li>Raw material usage </li></ul><ul><li>Management of price volatility </li></ul><ul><li>Product design and development </li></ul><ul><li>Adherence to environmental regulation </li></ul><ul><li>R&D activities </li></ul><ul><li>FDA/MCA approved plants </li></ul><ul><li>Efficiency of benefication process </li></ul><ul><li>Availability of skilled labour </li></ul><ul><li>Hygienic processing facility </li></ul><ul><li>Market Position: </li></ul><ul><li>Brand equity </li></ul><ul><li>Customization of products </li></ul><ul><li>Project management skills </li></ul><ul><li>Diversified markets </li></ul><ul><li>Replacement markets </li></ul><ul><li>After sales service </li></ul><ul><li>Proximity to market </li></ul><ul><li>Long term contracts/ Assured offtake </li></ul><ul><li>Distribution set up </li></ul><ul><li>Financial ability to withstand price competition </li></ul><ul><li>Access to patents </li></ul><ul><li>Consistency of quality </li></ul><ul><li>Product range </li></ul>
  4. 4. Financial Risk: Module III <ul><li>Past financials: </li></ul><ul><li>ROCE </li></ul><ul><li>PAT/Net Sales </li></ul><ul><li>Total outside liabilities/ Total Net worth </li></ul><ul><li>Net cash accruals/Total debt </li></ul><ul><li>Current ratio </li></ul><ul><li>Accounting quality </li></ul><ul><li>Interest coverage </li></ul><ul><li>DSCR </li></ul><ul><li>Net Worth </li></ul><ul><li>Contingent liabilities </li></ul><ul><li>Management of foreign exchange and fund </li></ul><ul><li>Repatriation Risk </li></ul><ul><li>Future financials: </li></ul><ul><li>Internet coverage </li></ul><ul><li>PAT/Net Sales </li></ul><ul><li>Net cash accruals/Total debt </li></ul><ul><li>Total outside liabilities/Total Net Worth </li></ul><ul><li>ROCE </li></ul><ul><li>DSCR </li></ul><ul><li>Effectiveness of projection </li></ul><ul><li>Current ratio </li></ul><ul><li>Net Worth </li></ul><ul><li>Financial flexibility: </li></ul><ul><li>Ability to raise debt from banks/Financial Institutions </li></ul><ul><li>Ability to raise debts: </li></ul><ul><li>Ability to raise debt from market </li></ul><ul><li>Ability to raise equity from own sources </li></ul><ul><li>Ability to raise equity </li></ul><ul><li>Ability to raise equity from capital market </li></ul>
  5. 5. Module IV: <ul><li>Management Risk: </li></ul><ul><li>Track record </li></ul><ul><li>Ability to meet profit projection </li></ul><ul><li>Ability to meet sales projection </li></ul><ul><li>Payment Record </li></ul><ul><li>Past payment record </li></ul><ul><li>Quality of information submitted by the company </li></ul><ul><li>Working Capital Management </li></ul><ul><li>Corporate Governance </li></ul><ul><li>Experience in the industry </li></ul><ul><li>Managerial Competence </li></ul><ul><li>Management Quality: </li></ul><ul><li>Business and Financial Policy </li></ul><ul><li>Management proactiveness </li></ul><ul><li>Group support </li></ul><ul><li>Strategic initiatives </li></ul><ul><li>Group support </li></ul><ul><li>Strategic Initiatives </li></ul><ul><li>Management Successions </li></ul><ul><li>Other factors: </li></ul><ul><li>Labour Relations </li></ul>
  6. 6. Project implementation risk: PIR <ul><li>Expected Balance Project duration </li></ul><ul><li>Stabilization </li></ul><ul><li>Project complexity </li></ul><ul><li>Clearances </li></ul><ul><li>Construction risk: </li></ul><ul><li>Expected time overrun </li></ul><ul><li>Financial flexibility </li></ul><ul><li>Funding risk: PIR </li></ul><ul><li>Financial closure </li></ul><ul><li>Project (post implementation) Financial risk-PFR </li></ul><ul><li>Cash Breakeven(% to sales of the optimum year of sales) </li></ul><ul><li>Sensitivity of average DSCR to 10% change in sales (Projected) </li></ul><ul><li>Project financial risk: </li></ul><ul><li>Interest rate of return-Project </li></ul><ul><li>Debt service coverage ratio- Project </li></ul><ul><li>Gearing </li></ul>
  7. 7. <ul><li>Management Risk- Project </li></ul><ul><li>Experience in the industry </li></ul><ul><li>Managerial Competence </li></ul><ul><li>Business and financial policy </li></ul><ul><li>Management track record- Project </li></ul><ul><li>Integrity </li></ul><ul><li>Ability to meet sales projection </li></ul><ul><li>Credibility- Project </li></ul><ul><li>Ability to meet profit projection </li></ul><ul><li>Payment record </li></ul><ul><li>Post payment record </li></ul><ul><li>Management proactiveness </li></ul><ul><li>Management succession </li></ul><ul><li>Labour relations </li></ul><ul><li>Group support </li></ul><ul><li>Other factors: </li></ul><ul><li>Strategic initiatives </li></ul><ul><li>Margin </li></ul><ul><li>(a) For term loan </li></ul><ul><li>(b) For working capital </li></ul><ul><li>Security </li></ul><ul><li>Primary security </li></ul><ul><li>Collateral security </li></ul>
  8. 8. SME Segment is broadly classified as under: Above Rs. 200 lakhs and upto Rs. 500 lakhs Above Rs.500 lakhs and upto Rs. 1000 lakhs Medium Enterprises Above Rs.10 lakhs and upto Rs. 200 lakhs Above Rs.25 lakhs and upto s. 500 lakhs Small Enterprises Upto Rs.10 lakhs Up to Rs.25 lakhs Micro enterprises Investment in equipments of service sector enterprises Investment in Plant & Machineries of Manufacturing Enterprise Particulars
  9. 9. Procedure of dealing with a case <ul><li>Application form </li></ul><ul><li>Checklist </li></ul><ul><li>Pre sanction inspection </li></ul><ul><li>Verification and scanning of the documents </li></ul><ul><li>Start appraisal of the company </li></ul><ul><li>Queries to the party </li></ul><ul><li>Receiving answers related to the queries </li></ul><ul><li>Interview or discussion with the key persons (party) </li></ul><ul><li>Interpretation of the analysis </li></ul><ul><li>Sanctioning of loan </li></ul>
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×