Credit Monitoring Credit Monitoring

Muslim Commercial BankMuslim Commercial Bank

Credit Monitoring

• process of periodically reviewing your credit• reports for accuracy• changes that could be indicative of fraudulent

activity

Goals and Objectives of Monitoring:

The main objectives of credit monitoring are following.For checking the utilization of fund which are syndicated by bank.To see the terms and condition as stipulated at the time of sanction of funds.For checking the implementation of project in time to avoid time and cost over-runs.For evaluating the performance in term of production, sales, profit etc.For checking the management effectiveness and staff motivation.For assessment of industrial climate and general and external environmental factors like Govt. policies, availability position of inputs like power, raw material etc.To detect signals and symptoms of sickness for corrective action.To check the accumulation of statutory dues, creditor, old stocks of finished goods etc.

Muslim Commercial Bank

Muslim Commercial Bank

• 4th largest bank of Pakistan with A1+ rating• Assets based of USD 7 billion• 1190 Branches network all over the Pakistan• 22 Islamic branches all over the World• First Privatize bank of Pakistan• Business strategies • Information technology

Stages of Credit Monitoring

There are two stages of credit monitoring • Pre-operational stage • Post operational stage

Pre-operational stage of MCB

MCB branch

Legal advisor

y departm

ent

branch

Credit review

department

branch

Credit Risk

Control division

branch

A

Remote commercial branch

• Loan application Form • Basic borrower Fact sheet• Credit information bereaue

Legal advisory Department

• Review the documents • Check the previous performance • Monitor the legal requirements • Send back to remote branch

Credit Review department

• Review all the documents • Loan Limits (MCB providing 50% against

collateral)• Payback tenure • Approval sheet • Internal conditions• Send back to remote branch

Credit Risk Control Department

• Review the borrower performance in depth• Check borrower over due and right off • Facility advisory letter • Formal credit book• IB bonds 12,25,26,29• Send back to remote branch

Remote branch

• Disbursement authorization certificates• Approved all the documents by the borrower• Check to CRC division • Issuance loan after approval

Factors consider under loan issuance • Time over run• Cost over run • Roll back • PERT and CPM techniques • Clean up period• Vender management unit

MCB Regulators

• Assets evaluation • Vender management unit • Clean up period• MUQADUM • Regional and local reviews committee

Post operational stage

• Monitoring the credit • Control the risk factor• Inspection and audit reports

SBP requirements

• Personal details timely • Stock securities (through MUQADAM )• Insurance • Payback installment time• Authority visits

MCB other tools

• Recovery notifications• Warning Calls• Authority Visit• Recovery Agencies • Legal Action

Credit Facilities of MCB

• Bridge financing• Overdraft• Cash finance• Letter of credit• Bank grantees• Demand finance