This module-wise syllabus is designed to help candidates prepare the most relevant technical and practical topics for the exam.
Complete exam syllabus, module by module.
Prepared by: Ramandeep Singh
Syllabus Overview
- Credit Appraisal and Lending
- Financial Statement Analysis
- Working Capital and Credit Facilities
- Term Loan and Project Finance
- Security, Documentation and Legal Aspects
- IRACP, Stressed Assets and Recovery
- Insolvency and Bankruptcy Code
- Credit Risk, Rating and Basel Norms
- Corporate Finance, Accounting and Audit
- MSME, Priority Sector and Trade Finance
- Current RBI and Banking Updates
Module 1: Credit Appraisal and Lending
- Principles of lending and the 5 Cs or 7 Cs of credit
- Credit appraisal process and borrower or promoter assessment
- Management, business and industry risk
- Credit proposal preparation and sanction terms
- Consortium lending, multiple banking and syndicated loans
- Lead bank responsibilities and inter-creditor agreements
Module 2: Financial Statement Analysis
- Balance sheet, profit and loss account, cash-flow statement and funds-flow statement
- Auditor's report, notes to accounts and contingent liabilities
- Related-party transactions and window dressing
- Trend analysis, cash profit and EBITDA
- Tangible net worth and adjusted tangible net worth
- Key ratios, including current ratio, quick ratio, debt-equity ratio and TOL/TNW
- Interest coverage ratio and debt service coverage ratio
- Return on assets and return on equity
- Turnover ratios for inventory, debtors, creditors and working capital
- Operating cycle
Module 3: Working Capital and Credit Facilities
- Gross working capital, net working capital and working-capital gap
- Operating-cycle method and turnover method
- Nayak Committee method and MPBF or Tandon Committee methods
- Projected balance-sheet method and cash-budget method
- Drawing power and assessment of stock and receivables
- Cash credit, overdraft and working-capital demand loan
- Bills purchased or discounted, ad hoc limits and temporary limits
- Fund-based and non-fund-based facilities
- Letters of credit, bank guarantees and deferred payment guarantees
- Packing credit, post-shipment finance, factoring and supply-chain finance
Module 4: Term Loan and Project Finance
- Cost of project and means of finance
- Promoter contribution and debt-equity structure
- Repayment schedule, moratorium and door-to-door tenor
- Technical and financial feasibility
- Break-even analysis, payback period, net present value and internal rate of return
- Debt service coverage ratio, average DSCR and sensitivity analysis
- Infrastructure finance and project cash flows
- Escrow mechanism and Debt Service Reserve Account
- Take-out finance and refinancing
Module 5: Security, Documentation and Legal Aspects
- Primary security and collateral security
- Pledge, hypothecation, mortgage and assignment
- Lien, set-off and personal or corporate guarantees
- Pari passu charge, first charge and second charge
- Loan agreement, demand promissory note, letter of continuity and revival letter
- Limitation period and registration of charges with ROC or CERSAI
- Legal verification and title verification
- Companies Act, borrowing powers and board resolutions
- Partnership Act, LLP Act and Contract Act
- Transfer of Property Act and Negotiable Instruments Act
Module 6: IRACP, Stressed Assets and Recovery
- Income recognition and standard asset classification
- SMA-0, SMA-1 and SMA-2 classifications
- Out-of-order concept
- Non-performing assets: substandard, doubtful and loss assets
- NPA classification date and provisioning norms
- Interest reversal and upgradation of accounts
- Restructuring, resolution plans and one-time or compromise settlements
- Sale of stressed loans, asset reconstruction companies and security receipts
- Wilful defaulters and diversion or siphoning of funds
- Fraud-risk management, red flags and forensic audit
- SARFAESI procedures, including demand notice, possession and sale of assets
- Debt Recovery Tribunal, Debt Recovery Appellate Tribunal, recovery certificates and Lok Adalats
Module 7: Insolvency and Bankruptcy Code
- Financial creditor, operational creditor and corporate debtor
- Corporate Insolvency Resolution Process
- Moratorium and resolution professional
- Committee of Creditors and resolution plan
- Liquidation and the waterfall mechanism
- Personal guarantors and avoidance transactions
- Pre-packaged insolvency
- Role of the National Company Law Tribunal, National Company Law Appellate Tribunal and Insolvency and Bankruptcy Board of India
Module 8: Credit Risk, Rating and Basel Norms
- Credit risk, default risk, concentration risk and counterparty risk
- Probability of default, loss given default, exposure at default and expected loss
- Internal and external credit ratings
- Rating migration
- Credit-risk mitigation
- Basel I, Basel II and Basel III
- Capital adequacy ratio
- Common Equity Tier 1, Additional Tier 1 and Tier 2 capital
- Risk-weighted assets, Liquidity Coverage Ratio and Net Stable Funding Ratio
- Large Exposure Framework and single-borrower or group exposure
- Commercial real estate, NBFC and infrastructure exposure
Module 9: Corporate Finance, Accounting and Audit
- Time value of money, cost of capital and weighted average cost of capital
- Capital structure and operating or financial leverage
- Capital budgeting
- Enterprise value and equity value
- Discounted cash-flow valuation
- Price-to-earnings ratio and EV/EBITDA
- Mergers, acquisitions and debt restructuring
- Revenue recognition, inventory valuation and depreciation
- Borrowing costs, impairment and provisions
- Related-party disclosures and consolidated financial statements
Module 10: MSME, Priority Sector and Trade Finance
- MSME classification and Udyam registration
- MSME working-capital assessment
- Priority-sector lending targets and weaker sections
- Agriculture, MSME, housing and education loans
- Priority Sector Lending Certificates, CGTMSE and TReDS
- Factoring and rehabilitation of MSMEs
- MUDRA and Stand-Up India
- Letters of credit under UCP 600
- Bills for collection and export or import finance
- Packing credit, post-shipment credit and buyers' or suppliers' credit
- Export Credit Guarantee Corporation, FEMA basics and external commercial borrowings
- Foreign-exchange risk management through forward contracts, options and swaps
Module 11: Current RBI and Banking Updates
- Latest RBI credit directions and IRACP updates
- Project-finance and stressed-asset resolution guidelines
- Wilful-defaulter and fraud-risk-management directions
- Transfer of loan exposures
- Digital lending and co-lending
- MSME and priority-sector updates
- Basel and exposure-norm updates
- Recent Insolvency and Bankruptcy Code and SARFAESI amendments
- Recent banking and financial-sector developments
Important: This module should be studied using the latest RBI circulars, directions and regulatory updates applicable to the examination.
Most Important Modules
Prioritise the following modules for maximum score impact:
- Credit Appraisal and Lending
- Financial Statement Analysis
- Working Capital and Credit Facilities
- Term Loan and Project Finance
- IRACP, Stressed Assets and Recovery
- Security, Documentation and Legal Aspects
- Credit Risk, Rating and Basel Norms
- Current RBI and Banking Updates
Expected Question Style
- Concept-based questions
- Numerical calculations
- Financial-ratio interpretation
- Credit-appraisal case studies
- NPA classification cases
- Working-capital assessment
- RBI guidelines
- Recovery and legal provisions
Exam tip: Prepare both conceptual topics and practical case-based applications, especially ratio analysis, working-capital assessment, NPA classification and credit appraisal.
