Loan Amount 

The credit Officer/ BDO must be competent enough to identify the genuine need of the business/ borrower. He is conversant with the kind of business and borrower. The credit officer has already sufficient research in the industry and market intelligence that he can ascertain the need of the borrower. Excess/ less credit amount than the actual requirement is fraught with the risk of misuse and /or default. 

Loan Securities 

Loan security is no less important than any other factor in the processing of a credit proposal. This is the source of repayment in case of a normal course of default and a deterrent to willful default on the part of the borrower. The security may be evaluated on the following test/ grounds; 

1. Liquidity
2. Securities offered are marketable and there is an active market available.
3. The securities are transferable by ownership.
4. The securities are durable in nature and not obsolete or out of fashion.
5. The securities are free of any prior charge.
6. Controllability
7. Creation of charges in favor of the bank