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ADMINISTRATION OF LOAN (COMPREHENSIVE RISK MEASUREMENT & EVALUATION…
ADMINISTRATION OF LOAN
POLICIES AND PROCEDURES
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Lending policy
The policy will establish the authority, rules and framework to operate and administer its loan portfolio effectively.
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Collateral Policy
banking institution should have in place clear policies for the establishment of acceptable collateral arrangements
In assessing the acceptability of collateral, banking institutions should take into consideration the following:
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CREDIT GRANTING CRITERIA
Banking institutions must operate under sound, well-defined credit-granting criteria.
These should set out the qualifying criteria for:
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:fire: Banking institutions should have a clearly established formal evaluation and approval process for new credits and the extension of existing credits. : :fire:
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Managing credit problems
Structure of limits,
Guidelines and
Other parameters
Limiting risk
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Portfolio concentration
Concentration risk can be defined any single exposure and group exposure with the potential to produce losses large enough to threaten an institution's ability to its core business
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Breaches in limits
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If limits are exceeded, it should
be made known to management
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