Core function of the Bank and Financial Institutions (BFIs) is to collect deposit and from the public and extend the loan to meet different financial needs of the costumers. While providing loan that requires assessment of the costumers from different perspectives to ensure about proper utilization of loan in one hand and to make secure the Bank in distress situation. Legal risk should be one of the major aspect for BFI while credit appraisal.
Broadly, Bank and Financial Institutions Act (BAFIA) recommends securities based financing in Nepal. Further Banking Offences Act imposes sanctions if legal aspect breached during lending.
So, assessing legal aspect of credit appraisal, validity testing of collaterals, and proper credit documentation are crucial.
So, it would be beneficial to gather legal issues while apprising credit files and equally to know about proper legal documentations. This course is designed with objective to give legal view on credit appraisal and credit administration.