Bankers have to return to basics of credit appraisal. With increasing credit risks, banks have to ensure that loans are sanctioned to `safe' and profitable projects. For this they need to fine-tune their appraisal criteria. A mix of both formal and non-formal credit appraisal techniques will go a long way to ensure perfection in credit appraisal and ward off increasing default tendencies. While the formal methods have been often discussed, this article explores the non formal methods that are also equally important, though being subjective.

The fourth cover page of the 10^th Annual report (2002- 03) of the erstwhile Global Trust Bank (GTB) in its epilogue mentioned "Any business grows in an environment of credibility and confidence, especially a business involving trust and expectations. GTB believes good fundamentals need good foundation. Priorities have been hence set right. Reputation first. The rest will follow. Handsome earnings and wealth creation shall be built on a firmer ground. There is no short cut. Brand equity and credibility is earned through every transaction. For a customer-centric bank with some of the best human resources and skill sets, the task is not proving to be difficult." (Professional Banker September 2004)

It is quite ironic that GTB had written these remarks when the ground realties were altogether different and the ground was slipping. Thus, when a bank or for that matter any company or its unit is on the brink of a financial crisis, it leaves no stone unturned in issuing philosophical remarks and assuring its customers and employees that everything is normal. Although the situation may be contrary to what is being told. This was the case with GTB.

Professional Banker Magazine, Credit Appraisal, Global Trust Bank, GTB, Financial Crisis, Non-Performing Assets, NPAs, Credit Management, Economists, Banking Industry, Business Environment, Decision-Making Process, Appraisal Management.