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bankable credit products from District Level Bankers'
committee or State Level Bankers' Committee and pass
on this information to the operating staff.
Market Research / Past Trend of Recovery:
Credit department officials should update skills in respect
of market information, market trends, failure rate bank
loans of other banks etc. This information is not only for
Business, Manufacturing and Service sectors but also Retail
loans of all financial institutions in the command area of
business.
This information is useful to the bank to withdraw some of
the existing products, where no demand / poor recovery or
excess supply than demand in the market. This information
should be made available to the operating staff from time
to time. Research on credit needs or requirements, unit cost not be repeated and it will improve the quality of lending.
of various products (maximum and minimum loan amount),
credit gaps should take place according to zone. All bank
products will not penetrate equally across the country. Some improving the quality of credit of bank advances. This is a
of the Products have more demand in certain parts of the
country than in other parts.
All commercial banks organization structure is more or less
similar i.e., Zonal Office or Regional Office. Zones or
Regions should study the demand of their bank loan
products. For example, Home Loans demand is not similar
across all places in the country. Wherever development
activities are more and employment opportunities are
available, home loans demand is more.
Banks should develop:
Zone-wise studies on bankable credit products.
Utilize the services of chamber of commerce and
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industries department located in the particular zone.
Government plans and development activities and
develop suitable bank products.
Suitable studies on agriculture, industries and service
sectors and its penetration levels are to be made by
the respective Zonal Office of the Bank or District
Bankers committee.
Branch-wise business dossiers are to be prepared which
helps as a tool in credit management of the bank
branches.
Scrutiny:
After appraisal of credit, the loan proposal is to be
sanctioned by higher ups as per delegation of financial
powers fixed by the Bank. While sanctioning proposals
either by Controllers or Committee Approach in case of
Large Proposals, scrutiny of proposals is very important. It
should not be a causal approach. It is as good as Quality
Control Check of credit product released by the Bank.
While sanctioning a credit proposal by the authority,
proposals should be thoroughly scrutinize. If any gaps, like
additional information required and wrong information,the
proposal should be send back to the appraiser with full
details for re-submission or rejection. Common irregularities
committed by operation staff from time to time should be
communicated to all branches. Thereby, same mistakes will
Scrutiny of proposals is an utmost important factor in
"second eye concept" of verification of proposal.
Disbursement:
End use of funds is one of the important aspects in the credit
management process. Purpose of the loan and utilization
of loan should be matched. Funds diversification is always
dangerous and advance account will turn into NPA. The
banker should ensure the objective of loan and it should not
be mis-utilized by the borrower. Credit officials should pay
more attention in disbursement stage.
How to ensure?
Credit officials should strictly implement the terms and
conditions of sanctioning a loan and disbursement
schedule without any deviation.
If the disbursements are in stages, it should be checked
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