MANAGEMENT

Detailed explanation-1: -Priority Sector Lending – Targets and Classification In terms of the above Master Direction for RRBs, loans to individuals up to ₹ 20 lakh for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit does not exceed ₹ 25 lakh are eligible to be classified under priority sector.

Detailed explanation-2: -LTV (Loan to Value) Ratio In order to encourage individuals to own a home and to make home loans more affordable, RBI has increased the Loan to Value Ratio up to 90% in case the home loan is below Rs. 30 lakhs. Also, the LTV ratio for loans above Rs. 75 lakhs is up to 75%.

Detailed explanation-3: -Types of Credit Ratings However, the notations are very similar. Ratings are always grouped into two: an ‘investment grade’ and also a ‘speculative grade’.

Detailed explanation-4: -A risk rating model is a key tool for lending decisions and portfolio management/portfolio construction. They give creditors, analysts, and portfolio managers a rather objective way of ranking borrowers or specific securities based on their creditworthiness and default risk.