Promotion 2026: Circulars At Your Finger Tips - Loans & Advances

Practice flashcards covering the Integrated Risk Management Division circulars, digital lending policies, credit risk assessments, and statutory exposure limits for the PNB Promotion 2026 exam.

Digital Lending

A remote and automated lending process largely utilizing seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service.

Default Loss Guarantee ($DLG$)

A contractual arrangement where a third party guarantees to compensate the Bank for losses due to default, up to a specified percentage of the Bank's loan portfolio.

Lending Service Provider ($LSP$)

An agent of the Bank that performs one or more digital lending functions, such as customer acquisition or monitoring, on behalf of the Bank in conformity with outsourcing guidelines.

Cooling off period

An explicit option for a digital loan borrower to exit the loan by paying the principal and proportionate $APR$ without penalty; it range between a minimum of $3$ days and a maximum of $15$ days.

Banking Regulation Act, 1949 - Section $20(1)$

A statutory provision that prohibits a Bank from granting any loans and advances on the security of its own shares.

Banking Regulation Act, 1949 - Section $19(2)$

A statute stating the Bank shall not hold shares in any company exceeding $30$ percent of the company’s paid-up share capital or $30$ percent of the Bank's own paid-up share capital and reserves, whichever is less.

Internal Exposure Ceiling on Shareholding

The Bank's internal limit which restricts holding shares in any company to $28$ percent of the company's paid-up share capital or $28$ percent of the Bank's own paid-up share capital and reserves.

Large Exposure Framework ($LEF$) - Large Borrower

Defined as a counterparty or group of connected counterparties where the sum of all exposure values is equal to or above $10$ percent of the Bank’s Tier-I Capital.

Unsecured Exposure

An exposure where the realizable value of tangible security is not more than $10$ percent, ab-initio, of the outstanding exposure.

Simplified Method of Lending (Working Capital)

A method based on turnover used for assessing working capital finance for $MSME$ units for amounts up to $₹5$ crore.

Second Method of Lending

A methodology where the borrower is required to contribute a minimum of $25$ percent of total current assets from long-term sources as Net Working Capital ($NWC$).

Assessed Bank Finance ($ABF$)

A method where the assessment of working capital is computed based on the borrower’s projected balance sheet, planned funds flow, and examination of financial parameters.

Investment Grade (Internal Rating)

An internal credit risk rating of $B2$ and above with a total score of more than $46.00$.

Borderline Risk Grade

An internal credit risk rating of $B3$ characterized by a score more than $40.00$ and up to $46.00$.

High Risk Grades

Internal credit risk ratings categorized as $C1$, $C2$, and $C3$ with scores up to $40.00$.

$SMA-2$ (Special Mention Assets)

A classification for loans (excluding revolving facilities) where the principal, interest, or any other amount is overdue for more than $60$ days and up to $90$ days.

Micro Enterprise (Revised Definition)

An enterprise where investment in plant and machinery/equipment does not exceed $₹2$ crore and turnover does not exceed $₹10$ crore.

Small Enterprise (Revised Definition)

An enterprise where investment in plant and machinery/equipment does not exceed $₹25$ crore and turnover does not exceed $₹100$ crore.

Structured Financial Messaging System ($SFMS$)

A mandatory messaging system prescribed by the Ministry of Finance for issuing $LC$s and sending/receiving $BG$ messages and amendments.

Legal Entity Identifier ($LEI$)

A $20$-digit unique code that identifies every legal entity or structure globally that is party to a financial transaction.

Pre-shipment Credit / Packing Credit

Export finance extended as working capital for the purchase of raw materials, processing, packing, transportation, and warehousing of goods intended for export.

$PNB$ SAJAG $2.0$

A fully digitized and automated Early Warning Signal ($EWS$) system that monitors eligible borrowal accounts through $130$ indicators powered by internal and external data.

Lead Nurturing Cell ($LNC$)

A concept implemented for processing Retail Loan leads received through various digital modes such as Missed Call, SMS, or Mobile Banking.

Affordable Housing (Infrastructure Definition)

A housing project utilizing at least $50$ percent of the Floor Area Ratio ($FAR$)/Floor Space Index ($FSI$) for units with carpet area not exceeding $60$ square meters.

Viability Gap Funding ($VGF$)

A scheme where the Government of India provides one-time or deferred grant support to specific $PPP$ infrastructure projects to make them commercially viable.

Risk Underwriting Model ($RUM$)

A model developed by the Bank for the assessment of credit card applicants, including $GO-NOGO$ screening and limit assessment.