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Lecture Note-Credit Approval Process-Work Flow-SS

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17 views2 pages

Lecture Note-Credit Approval Process-Work Flow-SS

Uploaded by

Munjur Rahman Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lecture Note:

MD. SHAHJAHAN SARKER


Senior Vice President
Credit Risk Management Division
Southeast Bank Limited
Head Office, Dhaka

CREDIT APPROVAL PROCESS -

a) Head of Corporate / Commercial Banking/ Retail Banking/Credit Card


(Credit Marketing/Relationship Manager)/ Project finance/ others)
b) Head of Credit Risk Management (Approval Authority):
(i) Head of Credit Approval (sanctioning authority)
(ii) Head of Credit Administration (Disbursement / Custodial Duties /
Monitoring &
Compliance)

Work flow of Approval Process:


i. The Branch Credit Review Committee (BCRC) will review and recommend the
deserving client for approval of the credit/investment facility to the respective
Head of Branch.
ii. Beyond the delegation of the Head of Branch, a full dressed proposal
embodying comments and recommendations of the BCRC is to be forwarded
to Corporate Banking /Islamic Banking/SME and Agri Finance Division to Head
Office for approval.
iii. After receiving proposals from the branches, all the credit proposals (except
retail banking and credit card facilities) will be scrutinized, analyzed and
processed by the respective Divisions keeping conformity with Credit Risk
Management (CRM) policy guidelines of Bangladesh Bank and our Bank and
forward the memorandum embodying their recommendations to the Head of
CRM for scrutiny and to ensure that all regulatory procedures / rules &
regulations etc. are complied with.
iv. After exercising due diligence by CRM, they will convey their observations, if
any formally to Corporate Banking /Islamic Banking/SME & Agri Credit Division
and they will give utmost emphasis to meet the observations of CRM.
v. The Credit Officer (CO)/Relationship Manager (RM)/Relationship Officer (RO) of
Corporate Banking/Islamic Banking/SME & Agri Credit Division will then
further process the proposal embodying and complying the observations of
CRM, if any and place the proposal to Head Office Credit Review Committee
(HOCRC) for consideration/decision.
vi. The credit memorandum will contain all required information including the
executive summary of the proposal based on which the members of the
committee will make prudential decision of lending/investment.
vii. The CO/RO will incorporate the decision of the committee on the issues and
comply with the instruction/observations/justifications before placing it to the
competent authority for approval (Head of CRM/DMD/AMD/MD).
viii. An MIS is to be prepared for all credit proposals (approved, declined or any
other decisions of the committee).
Flow Chart of approval process*

BRANCH MARKETING TEAM


(EXECUTIVES & OFFICERS)

HEAD OF BRANCH
(APPROVAL/ DECLINE)
AS PER DELEGATION

BOARD OF DIRECTORS
(APPROVAL/ DECLINE)
BEYOND AUTHORITY
RECOMMENDED TO

HEAD OF CORPORATE/ BEYOND AUTHORITY


COMMERCIAL BANKING RECOMMENDED TO
(MARKETING)

EXECUTIVE COMMITTEE OF
FORWARDED TO
DIRECTORS
(APPROVAL/ DECLINE)
AS PER DELEGATION
HEAD OF CRM
For Scrutiny / recommendation &
returned to Head of Corporate
BEYOND AUTHORITY
RECOMMENDED TO
Head of Corporate Banking
Division
Placed to
MD
(APPROVAL/ DECLINE)
HOCRC-1/HOCRC-2 AS PER DELEGATION
Recommendation for approval/
observation

BEYOND AUTHORITY
Delegated Executives of CRM. RECOMMENDED TO
Approval / declined

DMD
BEYOND AUTHORITY (APPROVAL/ DECLINE)
RECOMMENDED TO AS PER DELEGATION

The approval process involves the following:

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