Top insights into the domain of credit audit

Financial institutions with splendid portfolio attempts to improve quality of the same by getting credit audit conducted for accurately mapping risk profile and gain practical insights to plug the loopholes.

Financial institutions with splendid portfolio attempts to improve quality of the same by getting Credit Grading System conducted for accurately mapping risk profile and gain practical insights to plug the loopholes. The Audit ascertains compliance with existing sanction and post sanction procedures adopted by the bank.

Objectives of audit

•To improve the credit portfolio quality

•Reviewing of sanction procedure of large loans and compliance status

•Receive feedbacks on regulatory compliance

•Get credit risk assessment done independently

•Detect early warnings and adopt suitable remedial measures

•Get corrective actions recommended for improving credit quality,

administration of credit and competence of staff

Functions of credit audit agency

•Processing credit audit reports

•Analyzing audit findings and advising concerned functionaries

•Following up with controlling authorities

•Apprising higher management

•Processing responses received and arranging for closure of relative audit

reports

•Maintaining repository of advances subjected to audit

Scope and coverage of audit

•Portfolio review: Examining credit and investment portfolio quality, and

suggesting improvement steps involving slashing of concentration in

particular sectors as stipulated in loan policy or limits suggested by highest

regulatory body

•Loan review: Reviewing sanction procedures and post loan sanction

processes of the entire array of fresh loan proposals, renewal proposals,

randomly selected procedures, and accounts of sister , group or associate

concerns

•Action points review: Verifying compliance to policies framed by bank and

checking sanction approval compliance with regulatory stipulations,

examining sufficiency of documentation, conducting credit risk assessment,

examining line functionaries roles in the perspective of conduct of account

and follow up, overseeing action initiated by line functionaries to tackle

serious irregularities, and detecting signals of early warning and suggesting

suitable remedial measures

Review frequency

The review frequency is assessed based on the risk magnitude with high

risk accounts requiring review at shorter intervals compared to low risk

ones. The review frequency is also based on certain other factors like

•Examining sufficiency of policies, practices and procedures

•Feedback to be provided to ascertain regulatory compliance

•Reviewing of credit risk assessment techniques

•Examining adequacy of reporting system and pointing out exceptions

•Recommending of corrective actions for proper credit administration

•Forecasting happenings in near future

Procedure for credit audit

The audit will be conducted on site at the bank’s branch which has

evaluated the advance and makes available primary operative credit

limits.

Credit audit will seek to iron out any irregularities in the system. It is

imperative for the overall health of the financial institutions.

To learn more about credit analysis and credit audit at

http://www.ceisreview.com/pages/Services/2/109/Credit_Analysis. Call us

at Toll Free at 888.967.7380.

NEW YORK20 West 33rd Street,Suite# P3New York, NY 10001TEL Toll Free 888-967-7380