Borrowing Information's Introduction

Before developing a credit relationship with any customer, a banker finds out every posswible details about the borrower.Regarding borrower information, study of six Cs i.e character,capacity,
capital,collateral,conditions and compliance is made.Under C6, credit worthiness of the borrower,
payment capacity, managerial capacity,security, sensitivity of the cash flows to markets situations
and the corporate governance with the compliance of rules and regulations formulated by the government etc. are studied.

In the borrowing process, there are so many methods some of them are as follows:

1. C6 Analysis: It covers character, capacity, capital, collateral, condition and compliance.
2. Credit Agencies: It reflex that in foreign countries there are specialized agencies which collect status reports of businessmen.They collect market report from sources such as market place, private agencies and various newspapers.
3. Status Reports: It consists of credit inquiry loan application,market report, study of account, financial statements,other sources and personal interview etc.

However, while assessing the credibility b of the borrower one must be free from biases or undue influence.Hence, as a lending officer one must evaluate all information independently.
It is always advisable to keep space with people having doubtful character or whose intention is not clear.