New Delhi, June 2025 : The credibility of Techno Economic Viability (TEV) Study Reports, a crucial document in bank loan evaluations, is under serious scrutiny as industry insiders raise alarm over increasing cases of inexperience among analysts and procedural irregularities during report preparation.
A TEV Study Report serves as an independent third-party assessment of the
viability of a proposed new project or a restructuring proposal submitted by a
borrower. Mandated by the Reserve Bank of India (RBI) for public sector banks
in high-value credit proposals, the report often becomes a deciding factor in
whether a loan gets sanctioned or rejected. While private sector banks conduct
TEV assessments using their internal teams, many still engage third-party
agencies for external validation in selected cases.
However, experts from within the sector now point to a disturbing trend — TEV
assessments being conducted by analysts with little to no relevant experience
or sectoral understanding.
"To get empanelled with banks, many TEV agencies display experienced
operations teams on paper, but the actual analysis is carried out by junior or inexperienced
staff," said an industry insider on condition of anonymity. "Some
even use employees from subsidiary or Group companies who have no direct
expertise in the domain."
Lack of Capability, Rushed Reports, and Conflict of Interest
The problem escalates when experienced analysts exit such agencies. Despite the
exit, these firms continue receiving assignments based on their empanelment,
with no real effort to rebuild competent teams.
Another major concern is the lack of time allocated for proper analysis.
Agencies are often pressured by banks and borrowers to submit reports within
just 5 days, compromising the depth and accuracy of the analysis. In many
cases, no site visit is conducted—not even when the customer is bearing the
visit costs.
“How can anyone objectively analyze a project’s technical and economic
viability in five days, without even visiting the project site?” the insider
questioned.
The situation is
further exacerbated by institutional pressure to show viability, even in doubtful
or borderline cases. Analysts who provide honest, unviable assessments often
face pressure to revise the report from banks, borrowers, and even their own
superiors.
Call for Stronger Oversight by RBI
Experts are now urging the RBI to introduce stricter monitoring mechanisms
without interfering in the analyst's judgment. Suggestions include:
Requiring banks to verify the names and employment details of the active TEV
analysts (on payroll) before assigning new studies.
Mandating minimum timeframes and procedures, such as site visits, for all TEV
assignments.
Enabling anonymous reporting mechanisms for analysts facing unethical pressure.
While TEV Reports are meant to ensure responsible lending and protect public
funds, procedural lapses, lack of analyst capability, and external pressure
undermine their purpose.
A robust framework from RBI—ensuring transparency in agency staffing,
procedural compliance, and timelines—could restore confidence in TEV studies
and ensure they continue serving as a true safeguard in the loan sanction
process.