Credit Appraisal System
SME/ Corporate lending unlike retail lending is a full relationship banking where the credit appraisal process is much more detailed. There is more emphasis on financial analysis, collateral valuation and legal documentation. Unlike the retail credit process where the process is uniform and the decision can be on the basis of a rule engine, the SME / Corporate credit appraisal is much more detailed and more subjective.
The customer is assessed in detail basis his financials, projections and personal meetings. On the basis this assessment a total risk appetite of the bank is determined towards the Customer in form of multiple products the limits for which can be defined by credit policy. This becomes a maximum credit exposure that the bank is comfortable with for that customer. The legal documentation is also more comprehensive. There is a facility agreement which usually covers the entire facility amount and is more generic in nature. In addition to this there are legal agreements depending upon the product and collateral and post disbursal activities related to collateral, limits and documents that need to be defined at the time of approval.
The objective of this system is to simplify credit submission process through modifiable workflow procedures. Its aim is to introduce systems which can more robustly support these processes, streamline them where necessary and deliver improvements in data capture and quality. It supports a complex process that is more subjective and has many times bound follow up actionable
- Aids Audit of the Customer related information
- Workflow based (Easy Modifiable)
- History Maintenance
- Easy to Maintain
The data from the Credit Appraisal system then flows to the Credit Facility Monitoring System for post disbursal activities related collateral, limit and document.