Credit Policy

Study of existing portfolio of the bank with risk analysis on

Purpose wise distribution of advances

Size wise distribution of advances

Geographical distribution of advances

Sanctioning authority wise distribution of advances

Preparing the risk assessment model for each area and devise a credit rating model for various areas of finance.

The credit rating model can be useful for

Pricing of the products (ROI based on rating)

Delegation of powers to various levels of authorities

Creating internal incentives and disincentives for the areas identified for appropriate growth.

Devising credit monitoring prescriptions at various levels of danger zone.

The good “Credit Policy” would help the bank in following areas

Quicker appraisal of proposals. Since in the areas of portfolio where the rate of default is low the appraisal will be done in easier model and vice versa.

Pricing models would help bank in attracting more borrowers from the welcome category while simultaneously it will send a “NO” message to categories where bank intends to restrict exposure.

The delegation model would simplify the sanctioning of advances and the higher authorities can spend more time on productive work on scrutinizing the proposals in their ambit.

Cost of delivery of credit will go down.

Better credit monitoring and lesser Nonperforming Assets.

We would be supplementing our policy with appropriate training inputs to various authorities responsible for the implementation.