Site visit report for loan: how to write one well

Outcome

A good site visit report for a loan answers one question: does what you saw at the business support what the file claims? It records observations as counts, sets them against the documents, sizes every gap, and tells the sanctioning authority (the person or committee approving the loan) what changes as a result.

A reader who was not at the site should be able to tell what was seen, what was only said, and what you concluded from it.

Prerequisites

Know which rules apply. Chapter III of the RBI’s Commercial Banks Credit Risk Management Directions, 2025 (updated as on October 01, 2026) does not itself set a site visit format. Paragraph 6 of those directions requires commercial banks to follow the Guidance Note on Credit Risk Management, so check that note and your bank’s policy.

These directions cover banking companies other than Small Finance Banks, Payments Banks and Local Area Banks, along with corresponding new banks and the State Bank of India. They do not cover NBFCs, so other lenders should check the directions for their own lender type.

Whether a visit is mandatory, who makes it and the report format vary by institution. The steps below are general working practice, except where a paragraph is cited.

Have the file ready. Before you leave, you need:

• The application and the loan purpose
• Financial statements, GST returns and bank statements
• The Credit Information Report (CIR), a borrower’s credit history from a credit information company
• For a term loan, the quotation or project report for the asset
• Rent agreement or ownership papers for the premises

Know what this visit has to settle. The emphasis changes with the product.

Steps

1. List the claims to test. Pull the claims that drive the decision from the file: sales, capacity, workers, premises, loan purpose, own contribution. Note what would confirm or contradict each one. Paragraph 11 of the Credit Risk Management Directions requires commercial banks to provide for obtaining CIRs in their loan policies or appraisal processes, so read the CIR first and carry any questions it raises. What good looks like: a short list of specific questions, not a general intention to see the unit.

2. Record the visit facts. Note the date, time, full address, who visited, who you met and their role, and whether the visit was announced. Take photographs with location and time stamps where your institution allows it. What good looks like: a reviewer can tell who said what, and can match the address to the file.

3. Confirm the business is where the file says it is. Check the address against the GST registration, any Udyam registration the borrower has given you, and bank statements. Check the signboard and who occupies the premises. Note whether they are owned or rented, and when any rent agreement ends. What good looks like: any mismatch is stated and explained. If there are several units, each is identified, and any you did not visit is named.

4. Describe operations in counts. Record machines installed and running, shifts, workers present, raw material and finished goods, and dispatch records. Tag each statement as Seen, Told or Document, and name the person behind every Told item. What good looks like: numbers replace adjectives. Stock is described by count and estimated value, not as adequate.

5. Reconcile the site with the file. Set each claim next to the documents and your observation, then work out whether the output you saw could produce the sales claimed. Paragraph 7 of the Credit Risk Management Directions requires commercial banks to carry out independent and objective appraisal, and not to depend on reports by outside consultants, especially the borrower’s in-house consultants. Test a consultant’s numbers. Do not copy them. What good looks like: every gap has a size, a likely reason and a note on whether it is resolved.

6. Test the loan purpose and the own money. For a term loan, check that the asset fits the premises and that existing capacity leaves a reason to buy it. Paragraph 9 of the Credit Risk Management Directions requires commercial banks to ascertain the source and quality of equity brought in by promoters and shareholders, and lenders covered by it must ensure parent company debt is not infused as equity in a subsidiary or SPV. Ask where the money came from and match the answer to bank statements. Paragraph 12 of the Credit Risk Management Directions tells commercial banks to be guided by the RBI circular on End Use of Funds - Monitoring dated January 14, 2011, so note anything that would help track where the money goes after disbursement. What good looks like: the stated purpose matches what you saw, and the source of the own money is traced or marked open.

7. Note the risks the file cannot show. Paragraph 12A of the Credit Risk Management Directions requires commercial banks to factor the possible impact of calamities into credit assessments, so record low-lying land, water marks, how stock is stored and any past disruption. Paragraph 43 of the Credit Risk Management Directions bars commercial banks from financing new units that consume or produce ozone depleting substances, and from assisting small or medium scale units making aerosols with chlorofluorocarbons, so describe processes and inputs where that could be relevant. Also note power supply, housekeeping, dependence on a few customers and anything said that conflicts with the file. What good looks like: each risk is tied to an observation and to its effect on repayment.

8. Lead with the conclusion, then sign. Write the report the same day, while details are fresh. Open with what the visit supports, what it does not, what number or condition should change, and what remains open and with whom. The person who made the visit signs and dates it. What good looks like: the sanctioning authority can read the first paragraph and know what changes.

Worked example, made-up numbers

The firm, figures and findings here are invented. A plastic moulding unit in Gujarat seeks a ₹40 lakh term loan for a new machine costing ₹50 lakh, with ₹10 lakh of its own money.

Output check. The supervisor reports 400 kg per machine per shift, across 25 working days.

The observed output supports about ₹20 lakh, which is close to the GST figure and short of the claim.

Opening paragraph of the report:

Unit found operating at the stated address. Claimed sales of ₹25 lakh a month are not supported: 4 of 6 machines were running on a single shift, which supports about ₹20 lakh, and GST returns average ₹18 lakh. Use ₹18 lakh in the cash flow assessment until the ₹7 lakh gap is explained. With 2 machines idle, the case for a new machine needs justifying. Open items: source of ₹8 lakh of own money (borrower), rent agreement cover for the 60-month tenor (borrower), flood exposure and stock insurance (credit analyst).

Common errors