CRITICAL AREA’S OF INSPECTION CREDIT MONITORING

Dipesh Kumar

CREDIT MONITORING It is a process of safe guarding and keeping healthy advance portfolio.

It is also very helpful in mitigating Risk in the area of Credit.

There are various tools through which quality of credit portfolio can be improved.

Tools of Credit MonitoringPost Sanction ReviewPost Disbursement/Periodical Inspection & ValuationMonthly Stock & BD StatementMMR/QMR/QIS/Quarterly CA Certified BD

StatementsStock Audit & Credit Audit InsuranceReviewCredit RatingEnforcement of DocumentsRegistration of ChargesASCROM

Post Sanction Review (PSR)

Timely Submission for PSR / Reporting of sanctions to the controlling office.

PSR Observations are received and rectification thereof

Whether all the terms and conditions of sanction / disbursements are complied .

Whether disbursement authority has been obtained from appropriate authority .

Disbursement/ release made according to terms of sanction / Bank’s guidelines

Vetting of documents done as per banks guidelines

Post Disbursement /Periodical Inspection & Valuation of Securities

Periodic inspection of Primary and collateral securities to be done as per guidelines.

Periodic valuation of securities as per guidelines and necessary steps are taken in case of erosion in value of securities.

Stock & Book Debt Statement (DP Statement)

Timely submission of DP statement as per sanction.

Fixing of DP is done on monthly basis and correctly fed in CBS system. (DP indicator i.e. Equal / Derived / Parent / Maintained, to be correctly selected)

MMR / QMR /QIS / Qtly CA certified BD Statement

Whether quarterly CA certified book debt statement & QIS statements are submitted in time / regularly

Proper Scrutiny of QIS / Compare with the Projection

Monthly Monitoring reports / QMR are submitted to Controlling Authority in time.

All field in MMR/QMR to be correctly fed

Stock Audit & Credit AuditWhether Stock audit is conducted as per

Bank’s guidelines, deficiencies rectified & Rectification Certificate submitted

Credit Audit reports are available in all eligible accounts as per banks guidelines and deficiencies rectified & Rectification Certificate submitted

Insurance whether due date diary for

insurance is maintained and fed in system

Insurance covers for full value / insurable value has been obtained and in force

Insurance with bank clause.

ReviewTimely receipt of renewal proposal (Financial

Papers) from Borrower. Timely Renewal of limits, and submission of

proposal/ recommendation for renewal to higher authorities in applicable cases.

Short review / Technical review conducted as per guidelines.

Timely submission of reviewed proposal for PSR to higher authorities.

Credit RatingWhether Internal credit rating in appropriate

model i.e. BOBRAM / MSME/ Retail credit has been carried out as per latest credit policy guidelines.

Credit Rating to be done timely and ROI to be reset accordingly.

Reviewing and obtaining fresh external ratings in applicable cases as per guidelines

Enforcement of DocumentsWhetherAcknowledgement Of DebtsRevival LettersRenewal of documents Renewal of Mortgages have been obtained within time as per

guidelines / Limitation Act Documents / mortgages are in force .

Registration of Charges Whether charge created with ROC at the time of

fresh /enhancement of limit /disbursement.Whether Search / Verification of charge conducted

with ROC once in a yearIn respect of Equitable Mortgage / bank’s lien is

notified to Central Registry/ Revenue Authority .In case of vehicles / other retail Loans banks lien /

charge is to be registered with RTO / concerned authorities and all necessary compliances made as per guidelines.

ASCROMWhether the classification of assets as NPA in

ASCROM & FINACLE are common in both the lists & there is no divergence.

Obtaining the potential NPA A/cs list generated in ASCROM and recovery of CADU amount.

Preparation of ASCROM data input sheet in eligible accounts as per the guidelines.

THANKS