Lesson No. 9 – Solvency Certificate

Ref No- Dated ...Pune

*TO WHOM SOEVER IT IS CONCERNED*
"Pandit Constructions Ltd are our client and are satisfactorily dealings for over 5 years.The Company is solvent to the extent of Rs250 lacs.This certificate is issued without any liability on the part of the bank or the signing authorities.
For CBI

B M

S made it ready and sent to BM for signing after putting his initials.
Of course he had several questions which was clarified by "P".
Let us go thru Q's:
Q 1 Can it be issued to any one for any amount ?
A: It is advisable to issue it to our customers;but it is a walk in opportunity to garner new customer and use it diligently. In general as per our banks directives we should prepare a Financial report (as discussed in earlier lessons) and based on it we can furnish Solvency to the extent of about 125% of Worth.
Q 2 Why FR is needed when we are denying our liability?
A : There are court cases where the Judge had sought the basis of issuing such a Cert as there were some litigations. Bankers being prudent issue Cert based on information. Failure may held banker responsible and hence the FR.
Q3 Some bankers insist for FDs ?
A: It is the FR and back papers those are essential.
Q4 What we gain from it.
A : We may add a new relationship and get commission on issue of cert as per our service charges circular.
Sandeep with a Smile handed the Solvency Certificate.

I close with this.Thanks

Waman Gokhale