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A junior analyst needs to write CAMs quickly and consistently but has no standard one-page format for small business loans.
A defensible CAM has fixed boxes: applicant and request, income, obligations, ratios, flags, mitigants, recommendation, conditions and sign-off, each tied to a source document.
Fill each box from the named source, compute FOIR from eligible income and total obligations including the proposed EMI, and refer detailed workings to an annexure.
A one-page memo where every figure is traceable and the recommended amount follows from the ratios and flags.
A usable credit appraisal memo (CAM) fits on one page. It holds the applicant and request, income and obligations from the bank statement, ratios (FOIR, and DSCR where relevant), risk flags, mitigants, the recommendation and the conditions. Detailed workings go in an annexure the page refers to.
What goes in each box?
| Template section | Field to fill | Source document | Sample entry |
|---|---|---|---|
| 1. Applicant | Name, constitution, vintage, activity | KYC, Udyam | Proprietorship, 6 years, kirana wholesale |
| 2. Request | Amount, product, tenure, purpose | Application | ₹7,50,000 term loan, 36 months, shop fit-out |
| 3. Bureau | Score, active loans, overdues | Bureau report | No overdues, 2 active loans |
| 4. Income | Average monthly credits, eligible credits | Bank statement (pages cited) | ₹1,35,000 total, ₹1,08,000 eligible |
| 5. Obligations | Existing EMIs | Statement, bureau | ₹22,000 a month |
| 6. Proposed EMI | At proposed rate and tenure | Calculated | About ₹27,870 |
| 7. Ratios | FOIR, DSCR if used | Calculated | FOIR 46.2 percent |
| 8. Conduct | Returned debits, minimum balance | Bank statement | 0 returns in 12 months |
| 9. Risk flags | Cash share, own transfers, loan apps | Bank statement | Own transfers ₹27,000 a month |
| 10. Mitigants | What reduces each risk | Analyst | Steady 12-month conduct |
| 11. Recommendation | Amount, rate band, tenure | Analyst | Sanction as requested |
| 12. Conditions | Pre- and post-disbursal | Analyst | NACH mandate; invoices for fit-out |
| 13. Sign-off | Analyst, reviewer, approver, dates | — | Names and dates |
What must never be blank, and how do you keep the CAM defensible?
Never leave these empty: assessed income with its source, existing obligations, FOIR, risk flags, conditions and sign-offs. A blank box looks like a skipped check.
To keep a CAM defensible in an internal audit or an RBI inspection:
- Cite the source page for every figure, such as “Statement p. 14, March credits”.
- Explain every adjustment, such as why some credits were excluded.
- State why the recommended amount differs from the request, if it does.
- Get the right sign-off: the approver must hold the authority for that amount under the lender’s delegation of powers.
There is no official RBI CAM format. Each lender designs its own within its credit policy.
Worked example: the template filled for a ₹7,50,000 loan
A wholesale trader asks for ₹7,50,000 over 36 months at an illustrative 20 percent a year.
- Total monthly credits: ₹1,35,000.
- Own transfers removed: ₹27,000 a month from the owner’s savings account.
- Eligible credits: ₹1,35,000 − ₹27,000 = ₹1,08,000.
- Existing EMIs: ₹22,000.
- Proposed EMI: about ₹27,870 at 20 percent over 36 months.
- Total obligations: ₹22,000 + ₹27,870 = ₹49,870.
- FOIR: ₹49,870 ÷ ₹1,08,000 = about 46.2 percent.
In this example the lender measures FOIR against eligible business credits; other lenders use assessed net income instead. Many lenders look for FOIR at or below about 50 percent, but each lender sets its own policy. With no returned debits in twelve months, the analyst recommends sanction as requested, with a NACH mandate and fit-out invoices as conditions.
What happens when 40 files a week are filled by hand?
At 40 files a week, an analyst who spends two hours on each statement spends 80 hours a week on statement work alone, more than one person’s working week. That is where errors creep in: a missed own transfer changes eligible income, which changes FOIR, which changes the amount. Teams typically handle this by splitting work into preparation and review, and by automating the statement read.
What to read next
- Next in this series: Bank statement analysis for credit underwriting
- How the review step is structured: manual vs automated bank statement review
- The background: what is a CAM report?
- For lenders: bank statement analysis for NBFC lending
TransactIQ is a managed service on Terra Insight’s AWS Mumbai infrastructure that reads PDF and scanned statements and produces 40+ engineered credit signals, so boxes 4, 5, 8 and 9 start from categorised data.