Abstract:
Purpose- The aim of this research is to identify the worthiness of various credit
documents which are acquired by the banks before sanctioning of the loan with respect to
the safeguarding the bank interest
Methodology/sample- The banks under the scope of this research are NBP, UBL, HBL
and MCB which are operating in the Karachi. Head offices and branches of these banks
are reached. The relationship managers of these are the population for this research. The
sample size is 120 for this research. The data would be collected by the research
questionnaire. The collected primary data would be integrated with SPSS. The collected
qualitative factors would be ranked and assigned value on the SPSS. Such then would be
analysis both through descriptive and inferential statistics. In descriptive statistics the
data would be analyzed through graphs and frequency table in order to know about the
worthiness in detail. For testing the hypothesis the inferential statistics is applied. In this
regression and t test would be applied.
Findings- The tabulated critical t value at degree of freedom 119 (n-1) and 95%
confidence level is 1.984. The calculated t value from the SPSS at t value 3 the t value of
bank statement, salary slips, facility acceptance letter, obligor risk rating is less than the
tabulated t value which means that these lies in the rejection region. All except above
lies in the acceptance region, such documents are loan application, legal agreement, CIB
report, Company synopsis sheet, Credit application and memorandum, financial
statement, certificate of registration and valuation report. Thus the later documents place
a vital role in securing the banking interest in case of loan default.
Practical Implications- This research is of significant worth for the banking sector of
Pakistan through which they may reveal the real worth of the credit documentations in
securing the banking credit. By knowing this banks and relationship managers may put
their efforts in the correct direction for securing the interest of bank.
