RISK VS. OPPORTUNITY: CREDIT EVALUATION OF JP FLOUR MILLS

As the morning sun filtered through the blinds of his office, Adesh Jain, a seasoned credit officer at Eastern Commerce Bank (ECB), reviewed the latest proposal that had landed on his desk. JP Flour Mills Pvt. Ltd., a long-standing client of the bank, had approached the Silchar Branch for an enhancement of its working capital limit from ₹900 lakhs to ₹1500 lakhs. The company, a well-established flour milling business in Assam, cited rising wheat prices and increased production costs as the primary reasons for the request. Adesh knew that his task was not just to evaluate the financial viability of the proposal but also to assess the company’s creditworthiness, analyse its working capital needs, and scrutinize the security coverage for the proposed enhancement. The management at the branch and zonal office were hopeful for a positive recommendation, as the loan, if sanctioned, would contribute significantly to the bank’s MSME and priority sector lending targets. However, for Adesh, the decision could not be based on targets alone—he needed to conduct a thorough credit analysis, weigh the risks, and ensure that the bank’s exposure remained secure before making his recommendation.