1. Default
in payment to the banks/ sundry debtors and other statutory bodies, etc.,
bouncing of the high value cheques.
2.
Raid
by Income tax /sales tax/ central excise duty officials.
3.
Frequent
change in the scope of the project to be undertaken by the borrower.
4.
Under
insured or over insured inventory.
5.
Invoices
devoid of TAN and other details.
6.
Dispute
on title of the collateral securities.
7. Costing
of the project which is in wide variance with standard cost of installation of
the project.
8.
Funds
coming from other banks to liquidate the outstanding loan amount.
9.
Foreign
bills remaining outstanding for a long time and tendency for bills to remain
overdue.
10.
Onerous
clause in issue of BG/LC/standby letters of credit.
11.
In
merchanting trade, import leg not revealed to the bank.
12. Request
received from the borrower to postpone the inspection of the godown for flimsy
reasons.
13.
Delay
observed in payment of outstanding dues.
14.
Financing
the unit far away from the branch.
15.
Claims
not acknowledged as debt high.
16. Frequent
invocation of BGs and devolvement of LCs.
17.
Funding
of the interest by sanctioning additional facilities.
18. Same
collateral charged to a number of lenders.
19.
Concealment
of certain vital documents like master agreement, insurance coverage.
20.
Floating
front / associate companies by investing borrowed money.
21.
Reduction
in the stake of promoter / director.
22.
Resignation
of the key personnel and frequent changes in the management.
24.
Large
number of transactions with inter-connected companies and large outstanding
from such companies.
25.
Significant
movements in inventory, disproportionately higher than the growth in turnover.
26. Significant
movements in receivables, disproportionately higher than the growth in turnover
and/or increase in ageing of the receivables.
27.
Disproportionate
increase in other current assets.
28.
Significant
increase in working capital borrowing as percentage of turnover.
29.
Critical
issues highlighted in the stock audit report.
30. Increase
in Fixed Assets, without corresponding increase in turnover (when project is
implemented).
31.
Increase
in borrowings, despite huge cash and cash equivalents in the borrower’s balance
sheet.
32.
Liabilities
appearing in ROC search report, not reported by the borrower in its annual
report.
33.
Substantial
related party transactions.
34.
Material
discrepancies in the annual report.
35.
Significant
inconsistencies within the annual report (between various sections).
36.
Poor
disclosure of materially adverse information and no qualification by the
statutory auditors.
37.
Frequent
change in accounting period and/or accounting policies.
38.
Frequent
request for general purpose loans.
39.
Movement
of an account from one bank to another.
40.
Frequent
ad hoc sanctions.
41.
Not
routing of sales proceeds through bank.
42.
LCs
issued for local trade / related party transactions.
43.
High
value RTGS payment to unrelated parties.
44.
Heavy
cash withdrawal in loan accounts.
45.
Non
submission of original bills.
Based on the
Master Circular of 1/7/15.
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