Credits policies & contract guidelines
- Directors determine the commercial credit activity of ACBL
- Delegation of authority to credit committee
Policies are as follows
- Credit principles
- Credit portfolio limits
- Credit approval
- Credit administration
- Credit monitoring
Objectives
- Provision of suitable credit services and products
- extension of credit is out compromising the rules and regulations
Performance
The advancement shall focus on the development enhancement of customer relationship
Administration
Administration should insure compliance that is all laws and regulations of regulatory authorities loans / facilities and related security shall be closely and regularly monitored and reviewed at the branch level. By a separate unit unconnected it credit approval.
- Total facilities
They must confirm it to the regulatory requirements.
- Term facilities
Aggregate term facilities in excess of one year should not exceed 30% of the total credit portfolio
- Exposure to customer group
Credit facilities extended any one or group must not exceed the guidelines currently inforce by the regulatory authorities.
- Unsecured facilities
Similarly the aggregate of all advances to a single person should not exceed the guideline. Exposure against none funds based facilities. The aggregate of contingent or non-funds based facilities should not exceed ten times paid up capital and open all resources.
- Financing against shares
Unsecured credit facilities will not be extended towards floatation of share capital listed companies.
- Conditions
Borrowers liquidity ratio. The current ratio of the borrowers must be equal to or less then one. The debt to equity ratio should not exceed 60:40.
- Credit reviews
All limits shall be subject to at least an annual review.
