Page 183 - A Banker Down the Rabbit Hole

53. Challenging the status quo-

Credit reports on overseas

importers

Very Revealing Credit Reports on financial affairs of
buyers of our exporter customers

I had an opportunity to head and manage Export Trade Finance
Department. We were new and hence were very eager to know the rules
and regulations and practices of the Overseas Centre. There was an
element of caution as well as apprehension as the clients were not well
known to us as we had joined the place very recently. The transactions
were large by value as well as volume and the speed of execution of
transactions was very fast to meet the high level of customer
expectations already set at this Centre.

Every customer who had trade finance credit lines sanctioned had been
given a sanction letter with terms and conditions for availing the credit
facilities. I started studying those sanction letters to see whether I was
allowing the clients to draw funds as per terms of sanction without any
violation. For any violation of terms and conditions of the loan and the
loan becoming irrecoverable, the dealing official would be held fully
accountable for the loss. There would be questions as to the reasons and
justifications for violating the terms of loan set by the bank. On failure
to justify, there would be charges of negligence, omissions and also
vested interests to defraud the bank against the loan disbursing officer.
That could result into some kind of punishment commensurate with the
loss suffered by the bank. The bank while asking for the explanation for
errors or omissions, usually quoted the violation of terms and conditions
from the Sanction Letter as well as the relevant clauses from the Loan
Manual of Instructions that were violated, resulting into loss.

I found a specific clause in terms and conditions in each and every

180 | A Banker down the Rabbit Hole