PPT Consolidated credit monitoring presentation uploaded

Ppt

1. CREDIT MONITORING DEPARTMENT
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2. INTRODUCTION
•Credit Monitoring involves follow-up and supervision of Bank’s exposures
with a view to maintain the asset quality at the desirable level, through
proactive and corrective actions, aimed at controlling and mitigating the
credit risk to the Bank.
•The main objectives of credit monitoring are:
i.To ensure compliance with the terms and conditions of the credit
sanctioned, monitoring and highlighting of covenant breaches, if any;
ii.To ensure that there is timely recovery of principal and interest from
Borrower;
iii.To ensure end-use of funds by the borrower is as per the approved purposes
and prevent diversion of the funds for unauthorized purposes;
iv.To assess the health of the borrower units at periodic intervals with
reference to the key indicators of performance such as activity level,
profitability and management standards;
v.Ensuring compliance with all internal and external reporting requirement
for credit discipline.
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3. Monitoring at Pre-Disbursement Stage
Pre-disbursement monitoring and compliance to policy and scheme guidelines
related to sanction and disbursement is undertaken by Credit Department.
Some of the activities undertaken are given below:
•Compliance to KYC norms
•Scrutiny of loan application, credit reports, Income Tax Returns and other
documents
•Site Visit Reports, Search on CIBIL, wilful defaulter list, ROC, CERSAI etc.
•Legal opinion/Non-encumberance certificate.
•Valuation report of properties offered as security.
•Acceptance of Terms and Conditions of Sanction by Borrower;
•Compliance of T&C of sanction, to be submitted to concerned sanctioning
authority;
•Documentation and Legal compliance Certificate;
•Vetting of security documents etc.
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4. Monitoring End-Use of Funds
•Monitoring of end-use of funds is an important aspect of Credit Monitoring,
as it mitigates the risk of diversion of funds other than for the intended or
stated use resulting in the increased credit risk of the borrower. End-use of
funds is monitored based on the following techniques:
i.Periodic inspection of borrowers’ assets charged to Bank as security;
ii.Obtaining Chartered Accountant/Empaneled Valuer/LIE/Self-declaration
from the borrower certifying that the funds have been / would be used for
the purpose for which they have been obtained;
iii.In case of non-retail products, periodic visits to the assisted units by Branch
Manager/ Credit officer to understand the activities of the borrower and
the manner in which the funds are being utilized and reporting the status
to Credit Monitoring Department, CHQ.
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5. Monitoring of Securities charged to the Bank
•As per internal guidelines of the Bank, Valuation of land and building, plant
and machinery etc. charged to the bank is to be done by a panel valuer at
the initiation and after every three years thereafter.
•More frequent monitoring of collateral should be undertaken where the
market value of the collateral is subject to significant changes for example
in situations where the value of the property gets substantially impaired by
an event like earthquake or any other natural calamity.
•Valuation details need to be updated periodically as per the internal
guidelines defined by Bank.
•The revaluation needs to be completed within a period of three months
from the date of expiry of the respective security.
•Data of expired valuations is made available to operative levels through MIS
portal.
•Review note on expired valuations is submitted to Top Management on
quarterly intervals.
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6. Monitoring of Renewal of Working Capital Advances
•Operative levels are required to initiate the process of renewal of credit
limits well before the limit expiry date, preferably three months before the
due date of renewal, so that sanctioning authority gets sufficient time to
conduct review of the account(s) on merits.
•The job relating to renewal of credit facilities is closely monitored by
officers at Credit Departments of concerned Cluster Offices, Zonal Offices
& CHQ.
•In order to facilitate timely renewal of accounts, a list of accounts falling
due for renewal in a particular month is mailed to all branches on the 1
st

date of every month.
•The report of accounts due for renewal is also available to all operative
levels on MIS portal.
•Review Note on expired working capital limits is submitted to Top
Management on a quarterly basis.
•Further pendency in renewals is an agenda item in monthly review
meetings.
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7. Monitoring of Exposure to Capital Market and Sectoral Concentration
•In order to ensure that exposure to capital market is within the statutory and
regulatory limits, exposure to Capital Market (through credit as well as
Investment route) is monitored by Credit Monitoring, CHQ and a review note
is submitted to Audit Committee of Board on quarterly basis.
•In order to mitigate concentration risk, Credit Policy of the bank stipulates
exposure limits in respect of various sectors. Sector wise exposures are
monitored by Credit Monitoring, CHQ, particularly in respect of those
industries having reached a trigger level of at least 85% of exposure limit, so
that instances of breach of ceiling could be averted.
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8. Monitoring of Early Warning Signals
•Early Warning Signals (EWS) are indicative of potential problems in the loan
accounts. It enables bank to identify the borrower accounts that show signs
of irregularities or credit deterioration and need immediate remedial
measures.
•Bank has fixed a threshold limit for an exposure of Rs.3.00 Crores and above
for monitoring of EWS.
•Based on the illustrative list of EWS of RBI, the Bank has formulated 47 Early
Warning Signals to monitor the portfolio of accounts with exposure
of Rs.3.00 Crores and above.
•For monitoring EWS, Bank has procured a software solution from SysArc
Infomatix Pvt. Ltd. who have automated 9 signals for which data is available
from CBS. Rest of the signals are manual and can be punched at ay level.
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9. Monitoring of Early Warning Signals (Contd…)
•There are 47 (Forty Seven) signals of EWS in total, out of which 9 (Nine)
signals have been automated and integrated with CBS. Another 12 signals
shall get Automated from Loan Automation Processing System (LAPS) once
the SME and Corporate Module of LAPS application are made operational.
Until then 38 EWS needs to be captured/added manually by the operative
levels. 
•The list of 9 automated signals is available in the General-Alerts-Inbox,
Home-page of ‘EWS Module’ which will be generated automatically in
Finacle/CBS. 
•The data in respect of all remaining 38 signals yet to be
automated/integrated is required to be punched/added manually by the
operative levels by selecting the Signals from drop-down among ‘Manual
EWS’. However, once the SME and Corporate Module of LAPS application is
integrated with CBS, the manual EWS will get reduced to 27. 
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10. Monitoring of Early Warning Signals (Contd…)
•Early Warning Signals are monitored at Branch level, Cluster level, Zonal
level as well as at CHQ level.
•Depending upon the severity of irregularity/default/fraud, different Signals
have different priority of ‘Very High’, ‘High’, ‘Medium’ and ‘Low’. After
escalation of EWS, depending upon the priority, number of days available for
its closure vary from minimum of 1 day to maximum of 20 days for a Branch.
Similarly, number of days for Cluster Office vary from 1 day to 10 days, and
at Zonal Office and CHQ level it is 1 day to 7 days. 
•The number of EWS automated or added manually by the operative levels
needs to be commented by Branch Manager within its period of closure. In
case, EWS is left unattended within its period of closure, the same is
escalated to next higher hierarchy, first to Cluster Office and then to Zonal
Office and finally CHQ. 
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11. Monitoring of Early Warning Signals (contd…)
•At CHQ level, Early Warning Signals observed are discussed every month with
the CCMC(Fraud Monitoring Group of the Bank) who provide immediate
remedial measures for safeguarding the interest of the bank.
•Some of the Early Warning Signals monitored are given below:
i.Bouncing of high value Cheques
ii.Frequent TOD Sanctions
iii.Delay observed in Repayment of outstanding dues
iv.Heavy Cash Withdrawal in the loan accounts
v.Frequent invocation of BG and devolvement of LC
vi.Funds coming from other banks to liquidate the outstanding loan amount
unless in normal course
vii.Foreign bills remaining outstanding with the bank for a long time and
tendency for bills to remain overdue.
viii.Funding of interest by sanctioning additional facilities
ix.Not routing of sale proceeds through the account
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12. Account Conduct Monitoring
•Credit Monitoring Department, CHQ monitors the account conduct of the
borrowers, quarterly based on the repayment data received.
•Bank follows RBI guidelines to recognize incipient stress in loan accounts,
immediately on default, by classifying such assets as special mention
accounts (SMA).
•Follow Up of large value loan accounts with exposure of Rs.5.00 Crores and
above in SMA Category is undertaken by Credit Monitoring Department,
CHQ.
•Follow-up in respect of accounts having exposure below Rs.5.00 Crore is
undertaken by Credit Monitoring cells at all Zonal Offices who report daily
progress to Credit Monitoring Department, CHQ.
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13. MANAGEMENT OF SMA PORTFOLIO
•Alerts by way of SMS and e-Mails are being sent to all the borrowers
irrespective of their exposure on a monthly basis before application of
interest to keep their accounts adequately funded for timely servicing of
their interest/principal.
•SMS and Email intimations are also sent to borrowers falling in SMA category
along with the amount in default with the request to clear overdues.
•Large SMA2 Borrowers (with exposure of Rs.5.00 Crores and above) are being
sensitized through Zonal Offices by means of a soft letter about the
repercussions of being reported to CRILC RBI.
•Vigorous follow up is being done across all levels for minimizing the SMA
portfolio of the Bank.
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14. Actions for reducing SMA Portfolio
In case of borrowers classified under the SMA-2 category several punitive
actions are stipulated in the credit policy of the bank. An indicative set of
actions is as provided below:
i.Sanction by higher approval authority in case of renewals/subsequent cycles,
application for additional funding

i.Higher pricing
ii.Stringent monitoring
iii.Higher margin requirements (wherever applicable)
iv.Higher collateral and guarantee requirements (wherever applicable)
v.Additional Provisioning
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15. Actions for reducing SMA Portfolio (contd…)
•The Bank has created a separate SMA Monitoring Team within Credit
Monitoring Department at Corporate Headquarters with SPOC’s at Zonal Office
level who are entirely entrusted with the job of follow up of stressed
portfolio.
•The IT Department of the Bank has developed an in-house web based
application-SMA Tracker for tracking SMA portfolio of the Bank. The SMA
Tracker provides a single window for all accounts which are in SMA1 and 2
portfolio. Low turnover CC/OD as well as accounts pending for renewal and
non-submission of stock statements are also tracked through the SMA Tracker.
•The SMA Tracker Application will help reduce the Stressed portfolio of the
bank.
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16.  
Actions for reducing SMA Portfolio (contd…)
•Bank has continuously been re-engineering its business processes to attain
greater efficiency and productivity in operations. Towards this objective, the
existing Credit Structure of the Bank has been revamped in line with best
practices in the banking industry. As per the new credit structure, all large
borrowers having aggregate credit exposure exceeding Rs.5.00 crores shall
be catered through designated Branches referred to as “Large Credit Units
(LCUs)”. One of the objectives of establishment of the LCUs is to increase
the surveillance and monitoring of large ticket size advances. With the
establishment of LCUs, the, large ticket sized advances are being proactively
followed up.
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17.  
Directions of Managing Director & CEO for decreasing SMA portfolio
•De-incentivizing the borrowers who frequently depict delinquent behaviour
by levying higher interest rates, restrictions on grant of
incremental/additional facilities, repeat SMS/ email alerts after the account
slips in SMA category, obtaining debit authorities from the borrowers to
recover the delinquent amount from their deposit accounts.
•Sensitizing Trade/Industry bodies/organizations about the ramifications of
delayed repayments and advantages of maintaining a good payment record.
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18.  
CRILC Reporting
CRILC Main Return consists of 4 Sections as detailed below:
 
•Section 1 - Exposure to Large Borrowers (Global Operations, i.e.,
Domestic Operations and/or Overseas Operations of Indian Banks, if any)
•Section 2 - Reporting of Technically/Prudentially Written-off Accounts.
•Section 3 - Reporting of Balance in Current Account
•Section 4: Reporting of Non co-operative Borrowers
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19.  
CRILC Reporting (contd…)
•Section 1 - Exposure to Large Borrowers
Large Borrowers are reported as “borrowers/parties having aggregate fund-
based and non-fund based exposure of Rs.5 crore and above”.
 
Besides exposures, current account balance (irrespective of debit/credit
balance) and partial technically/prudentially write-offs amounts, if any, are
reported.
 
If PAN and Borrower Group Code/Name is/are not available in the
PAN/Borrower Group master of RBI, Bank has to submit details of such
PAN/Borrower Groups and other details to RBI through separate module
(XBRL Platform) for the purpose of updating RBI PAN Master & GROUP Master.
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20.  
CRILC Reporting (contd…)
•Section 1 - Exposure to Large Borrowers (contd…)
Internal Rating: composite rating of the borrowers is reported. In case the
borrower is NOT rated, it is  reported as 'UNRATED'.
 
External Rating: The rating used by the bank for capital adequacy compilation
is reported. In case the borrower is NOT rated, it is reported as 'Not-Rated'.
 
Asset Classification: Standard, Non-CDR Standard Restructured, Standard
Restructured under CDR, Sub-standard, Substandard Restructured, Doubtful
Restructured, Doubtful 1, Doubtful 2, Doubtful 3, Loss is reported as
applicable to the borrower as on reporting date.
 
Borrower Classified as RFA / Fraud: One of the options – “RFA, Fraud, Not
Applicable” is reported as applicable to the borrower & if the borrower is
RFA or Fraud, then the date of such classification is also provided.
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21.  
CRILC Reporting (contd…)
•Section 1 - Exposure to Large Borrowers (contd…)
Borrower Classified as Wilful Default: One of the options – “Wilful Default, Not Applicable” is
reported as applicable to the borrower & if the borrower is Wilful Default then the date of
classification of Wilful default is also provided.
 
Special Mention Accounts (SMA): “SMA-0” [Principal or interest payment not overdue for more than
30 days but account showing signs of incipient stress], “SMA-1” [Principal or interest payment
overdue between 31-60 days], “SMA-2” [Principal or interest payment overdue between 61-90
days], and “NA” incase the borrower is non SMA Standard is reported as per applicability to each
borrower. In case of multiple overdues, worst overdue position is reported.
 
Banking Arrangement: Solo, Multiple Arrangement, Consortium, Solo and Multiple Arrangement, Solo
and Consortium, Multiple Arrangement and Consortium, and Solo, Consortium and Multiple
Arrangement is reported as applicable to each borrower.
 
In case, there is no distinct limit for funded & non-funded exposures and/or there is common limit for
funded/non-funded exposures, the limit reported is the maximum amount that can be availed by
the borrower underfunded facilities and/or non-funded facilities (Example: Limit-Total=Rs.10,
Limit-Funded=Rs.X, Limit-Non-Funded =Rs.10-Rs.X.).
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22.  
CRILC Reporting (contd…)
•Section 1 - Exposure to Large Borrowers (contd…)
Fund Limit / Balance Outstanding for each borrower is reported for all the
facilities (CC/OD, WCDL, Inland Bills, Packing Credit, Export Bills, Term
Loans and others if any), as applicable to each borrower.
 
Non Fund Limit / Outstanding for each borrower is reported for all the
facilities (LC, BG, Acceptances, Foreign Exchange Contracts etc.,), as
applicable to each borrower.
 
Both Fund & Non fund Exposures are reported as per extant norms on
Exposure.
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23.  
CRILC Reporting (contd…)
•Section 1 - Exposure to Large Borrowers (contd…)
(Logic used: FUND Exposure:
EXPOSURE IS >=50000000
EXPOSURE IS =LIMIT FOR ACCOUNTS IN CREDIT BOS WHERE CREDIT BOS >LIMIT   FOR CC/OD/PCA/BIA/FBA (PCA
=PACKING CREDIT,BIA =BILLS FBA FOREIGN BILLS)
EXPOSURE IS ZERO IN CC/OD WHERE LIM_EXP_DATE>180 DAYS & BOS is in Credit.
EXPOSURE IS =IS MAXIMUM OF LIMIT OR BALANCE FOR  CURRENT ACCOUNTS/CREDIT CARD  WITH DEBIT BOS
EXPOSURE IS =IS BOS+UNDISBURSED AMOUNT FOR ACCOUNTS IN DEBIT BOS  FOR TERM LOANS
EXPOSURE IS =IS UNDISBURSED AMOUNT FOR ACCOUNTS WITH CREDIT BOS FOR TERM LOANS
EXPOSURE=BOS FOR NPA ACCOUNTS)
(Logic used: Non FUND Exposure:
MAX OF LIMIT OR BALANCE WHICHEVER IS HIGHER )
Investment Exposure, if any to the borrowers is reported.
Total Exposure reported is the sum of Fund, Non Fund & investment exposure.
Total Provisions held for each NPA Borrower is reported.
Balance in Current Account (debit or credit) is reported irrespective of whether the debit balance is included in
funded exposure.
Amount technically/prudentially Written Off - Outstanding in memo/shadow heads, are reported accordingly along
with date of Written Off.
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24.  
CRILC Reporting (contd…)
•Section 2 - Reporting of Technically/Prudentially Written-off Accounts.
•All borrowers whose Total Write off amount is Rs.5.00 crore or more and not reported in
section 1 is reported in this section.
 
•Write offs where bank has entered into a settlement with the borrower in regard to
outstanding payment is reported under "Write offs through settlement“
•Section 3 - - Reporting of Balance in Current Account.
 
•The bank reports the data on Current Account holders whose  either of (i) balance (either
credit or debit) in current account as on reporting date is 1 crore and above or (ii) total of
₹
credit summation (sum of all credit transactions) during the reporting month is 5 crore and
₹
above or (iii) total of debit summation (sum of all debit transactions) during the reporting
month is 5 crore and above.
₹
 
•Section 4: Reporting of Non co-operative Borrowers:
 
•Borrowers which are classified as Non-co-operative Borrowers are reported in this section.
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25.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS
•From a broader perspective, the accounts at Bank are to be classified as
Standard or NPA.
•An account is identified as Standard if the Main classification of the account
is 001.
•An account is identified as NPA if the Main classification of the account is
002.
•Accounts can be further classified under standard and NPA categories,
through levels in Sub classification codes given below. Sub classification
codes are derived / calculated based on the duration since when irregularity
persists in the account.
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26.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
•The Standard category has been classified into SMA-0 , SMA-1 and SMA-2 .
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27.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
•The Sub-Standard category has been classified into Doubtful-1, Doubtful-2,
Doubtful-3 and Loss.
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28.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
•SLAC is a full-fledged module developed in CBS  for tracking NPA slippages and
downgradation / upgradation of accounts. Everyday SLAC process is being
executed centrally and report is being shared with Branches and concerned
Zonal/monitoring offices. SLAC provides the beforehand deficiency of the
accounts wherein business units can take recovery measures accordingly.
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29.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
•Downgradation Process
•To accomplish the purpose, a Centralized Batch Job has been created in
system so that the Process gets executed automatically without human
intervention every day.

•After completion of SLAC Process, report is kept available which can be
accessed by MIS as well as Branches. Branches can access SMA accounts
report as well as downgraded accounts report via options SLAC and NPARPT
from CBS.
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30.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
REPORTS
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31.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Interest Reversal Process
•Before EOD, interest reversal process (REVINT) is being executed
centrally on the downgraded accounts, wherein un-serviced interest is
being reversed and GL of the account gets changed to NPA GL and also
account gets marked as Past Due.
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32.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Interest Reversal Process (Contd…)
•REVINT process updates the Past-due flag of account to Y.
•Un-serviced interest is being reversed from income head to Unapplied head.
•GL subhead of account gets changed from standard GL to NPA GL.
Upgradation Process
•Upgradation process is also being executed centrally. Branches can only run HSASCL
option in trial mode in which system helps them out in correcting the discrepancies.
Later on, Upgradation process gets executed automatically every day before EOD and the
up gradation reports are being kept available to MIS, Monitoring Office and Branches in
NPARPT option. Also reasons for non-up gradation of accounts has been kept available to
Branches so that they can take corrective measures accordingly
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33.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Interest Recovery Process
•After Centralized Upgradation Process gets completed, RECINT process gets
initiated on Upgraded accounts to realize the unapplied interest and transfer
the account back to normal GL.
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34.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Interest Recovery Process (Contd…)
•RECINT process updates Past-due flag of account to N
•Unapplied Interest is being booked as income and transferred from Unapplied
head to Income received head.
•GL subhead of account gets changed from NPA GL to standard GL.
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35.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Provisioning Process
•Extract Liability / unapplied interest and CGTMSE/ECGC amount of the NPA
account.
•Total outstanding Amount eligible for provisioning = Loan Liability – Unapplied
Interest – CGTMSE/ECGC.
•For Staff Loans Interest pending in Route Account is added to the total
Outstanding amount.
•Extract Collateral Security of the Account.
•If outstanding amount is less than total security amount then total outstanding
amount is secured.
•If outstanding amount is greater than total security amount then secured
amount= outstanding amount – secured amount. Rest is unsecured amount.
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36.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Provisioning Process (Contd…)
•Provisioning is not done on Restructured accounts and RLA accounts.
•Based on the Asset Classification of the account.
If Account is Sub-Standard (002) then provisioning amount = 15% of secured
amount + 25% of unsecured Amount.
If Account is Doubftful-1(003) then provisioning amount = 25% of secured
amount + 100% of unsecured Amount.
If Account is Doubftful-2(004) then provisioning amount = 40% of secured
amount + 100% of unsecured Amount.
If Account is Doubftful-3(005) then provisioning amount = 100% of secured
amount + 100% of unsecured Amount.
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37.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Provisioning Process (Contd…)
If Account is Loss Asset (006) then provisioning amount = 100% of secured
amount + 100% of unsecured Amount.
For Technical Write-Off accounts 100% provisioning is done.
For Credit card accounts 100% provisioning is done as the asset is unsecured.
Once Accounts are Upgraded, a menu option is available in CBS that reverses
the provisioning amount.
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38.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation
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39.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of CCA/ODA
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40.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of CCA/ODA (contd…)
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41.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of CCA/ODA (contd…)
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42.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of CCA/ODA (contd…)
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43.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of TERM LOANS
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44.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of Loan against Deposits
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45.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of Loan against NSC/KVP (LTV)
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46.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of Loan against Gold
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47.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of Loan against Gold (LTV)
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48.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS SAVING & CURRENT
ACOUNTS (Contd…)
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49.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS PCA ACOUNTS
(Contd…)
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50.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS BIA/FBA COUNTS
(Contd…)
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51.  
SYSTEM LEVEL ASSET CLASSIFICATION PROCESS (Contd…)
Process Flow of Downgradation of Project Loans (DCCO)
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52.  
Other Monitoring Tools and Functions of Credit Monitoring
Department
•Stock Audit: Annual stock audit (including book debts) is conducted for all
eligible accounts availing fund-based working capital limit of Rs.5.00 crore
and above.
•Credit Audit: Credit Audit is conducted by SC and Audit Vertical for loans
above 5.00 crores immediately after disbursement. The objective of credit
₹
Audit is to ensure due diligence in respect of sanction, documentation,
disbursement etc. and identify deficiencies, if any.
•Rating Downgrade: Monitoring of ratings downgrade is done at Credit
Monitoring Department and a review note is submitted to CRMC on quarterly
basis.
•Provisioning on stressed sectors, accounts frequently classified as SMA and
borrowers whose non-funded accounts have not been devolved/invoked but
funded exposure has been classified as NPA.
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53.  
Other Monitoring Tools and Functions of Credit Monitoring
Department (Contd…)
•Monitoring of Priority Sector Lending to ensure achievement of set targets
and sub targets in Priority Sector.
•Placement of funds with NABARD/SIDBI/NHB etc. in case of shortfall in
achievement of Priority Sector targets.
•Monitoring of CERSAI Charge Creation.
•Monitoring of Exposure of Term Loans: Credit Policy has set a exposure limit
of 65% of Gross Advances on term loans. The exposure limit is monitored at
CHQ level by Credit Monitoring Department. There are sub-limits set on
direct and indirect exposure in Housing Sector which is monitored by Credit
monitoring Department.
•Monitoring of Unsecured Exposure: Credit Policy of the Bank sets a limit of
25% of Gross Advances on Unsecured Exposure. The exposure is monitored by
Credit Monitoring Department and breach, if any, is brought in to the notice
of Top Management.
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54.  
Other Monitoring Tools and Functions of Credit Monitoring
Department (Contd…)
•Follow Up and reporting with regard to RBI instructions on
opening/maintaining of current accounts by Borrowers of the Bank.
•Monitoring of DCCO of Project Loans.
•Submission of quarterly note on non-co-operative borrowers to the top
management.
•Interest Capitalization of WCTL & CTL Flood & Disturbance Accounts.
•Monitoring of Restructured Portfolio and Submission of Quarterly Board note
on performance of restructured accounts;
•Empanelment of Valuers for valuation of Land & Buildings, Plant and
Machinery and Gold.
•Monitoring of Moratorium of Term Loans.
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55. THANK
YOU
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