Page 29 - Banking Finance June 2021

ARTICLE

X Leveraging of single equity in multiple companies government notification which may have material impact
on borrowal company/industry/sector, all approvals and
4. Other Parameters: clearance, price escalation in capital items or raw materials
X Verify transaction involving substantial amount etc.
which are not of regular nature.
ASMs have to look on extent of involvement of promoters/
X Advice the bank based on monitoring based on top management of the company in day to day operations/
publicity available information from various sources
decision making as well as strategic decision making and
for initiating corrective steps to safeguard the
evaluation of the same. ASM is expected to monitor the
exposure.
purpose of advance vis-à-vis sanction by the lender/
X Any alienation/disposal of securities. consortium, in totality, with our any exceptions. For this post
X Verification of end use of funds deployed outside execution of non-disclosure agreement, ASM is required to
the country in respect of borrowing by offshore analyze, supervise monitor and suggest on the business
companies of parent entity activities, sanction of advance and its usage as per sanction.

Documents to be referred by ASM: Conclusion:
Y Sanction Note along with projected financials or financial Credit monitoring starts from the moment credit is
model for projects sanctioned to the borrower and ends only when the account

Y The sanction terms and condition letter duly is closed. Post sanction credit monitoring depends upon
acknowledged by the borrower factors such as the type of credit facilities, nature of activity,
purpose of loan, market dynamics and regulatory
Y The statements of account of the borrower
requirements and it has to be fine-tuned on a case to case
Y Details of promoter and the associate /sister/group basis. To make the credit monitoring more robust, the
concern of the borrower government has advised the banks to take the services of

Y Details of debtors and creditors of the borrowal audit firms as specialized monitoring agencies for clean and
company effective post sanction follow up on a common engagement
basis.
Y Project and its components, project implementation
schedule and its milestones
In case of large exposure or exposure of a specialized nature,
Y Documents and detail of the security offered to and such agencies provide inspection services, stock audit, cash
held by the bank flow monitoring and end use of funds. These agencies would
Y Availability of various approvals and clearance as monitor all the transaction of an account on a day to day
applicable basis at the back end for loan accounts of Rs.250 crore and
above and agencies are giving services by IBA approved list.
Y Insurance details and its status
Prompt identification and resolution of stress in accounts
Y All Inspection/regular audit/RBI audit reports etc.
having large credit exposure and exposure of a specialized
Y Summary of all observation and conduct of account nature and leading a helping hand in reviving the stressed
Y Details of letter of credit/letters of Guarantee opened accounts and initiating timely corrective action to resolve
by bank the stress and maintain the accounts in stress free
performing category.
Expectation from ASM:
References:
In a broader perspective ASMs is expected to monitor the
1. www.iba.org.in
account/activity onsite as well as offsite monitoring of the
business/account/analyze /evaluate and monitor the 2. Economictimes.com
borrowal account/project financially as well as technically. 3. The Hindubusinessline.com
ASMs are also expected to look into other aspects like 4. www.dnaindia.com T

BANKING FINANCE | JUNE | 2021 | 29