White vs Black!!

The art of appraising a credit request is quite tricky. There are simple premises that need to be defined. For example, what u consider as income available for repayment - the present or the projected income? What shall be given priority - the track record of the borrower or the valuation of security being offered for mortgage? The declared income or the undisclosed inflows....... And the payoff is majorly defined in terms of overall picture emerging out of combination of all these factors.

We have an interesting case - A borrower with more than sufficient cash flow - he has cash worth Rs. 400 Lakhs with him, but all in black. Now, he needs to repay installment on our loan (Rs. 4 Lakhs only). He says he can't, till he gets some white entry. He is offering to pay penalty, but we will have to be patient.

What do the CAs do, if the black market is omnipresent and perhaps bigger than white market economy!!