CRML1 - PRE SANCTION MONITORING

1. Post Sanction Pre Disbursement Scrutiny (PSPDS):

1.1 With a view to strengthen the risk management and mitigation processes in the
Bank, a Committee for Post Sanction Pre Disbursement Scrutiny (PSPDS) was
constituted to scrutinize the commercial credit loan proposals, sanctioned by
CLCC / ZLCC / Branch, having aggregate borrower wise exposure of Rs.1 crore &
above (both fund based & non-fund based), involving any of the following
sanction/s:
i) Fresh sanction.
ii) Enhancement, upon which total exposure increases to Rs.1 Crore and above.
iii) Release of existing guarantee in case of credit limits of Rs.1 Crore and above.
iv) Release of existing security in case of credit limits of Rs.1 Crore and above.

1.2 PSPDs Committee:

a) GM-CRMD, GM-IRMD and one executive each from CRMD, IRMD, MSME /
Priority / Retail Lending Division and Credit Division.
b) Senior most GM shall be the chairman of the committee.
c) Executive from CRMD shall be the convener.
d) The minimum quorum of the committee shall be three, of which one must be
GM.

1.3 The standard operating procedure of PSPDS Committee is given here below
a) Once the Competent Authority (CLCC / ZLCC / RLC / Branch) sanctions the
proposal, a soft copy of the following documents / papers shall be sent to
HO-CRMD mailbox (scrutiny@corpbank.co.in)
i) Copy of the Appraisal Note placed before Sanctioning Authority.
ii) Copy of the Minutes of the Meeting (duly signed).
iii) CSI copy (duly signed).
b) A team of three officials (one each from CRMD, Credit and Retail Lending
Divisions) shall be formed for scrutiny of the proposals received for approval
of PSPDS Committee.
c) The convener of PSPDS Committee shall distribute the proposals among the
said officials as and when the proposals are received.

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 d) The said officials shall scrutinize the proposals allotted to them and place the
observations before the Committee.
e) Committee shall endeavor to meet every day and deliberate upon the
observations made by the CRMD officials and convey its decision to the
concerned sanctioning authority for implementation.
f) The decision will also include non-approval of the proposal and / or further
advise risk mitigation measures to be taken before disbursement.
g) Observations / directions of PSPDS together with feedback on compliance /
action taken shall be placed before Sanctioning Authority, before issuing CSI
to the Branch.
h) Any communication to the borrowers with regard to sanction shall be sent
only after the process of scrutiny as above is completed.
2. Valuation:
a) Valuation report on the land and buildings and other movable assets shall be
obtained from the Bank’s approved valuer. Valuation reports shall contain market
value, realizable / distress sale values.
b) In case of borrowers under multiple / consortium lending, the Bank may accept
valuation report obtained by the lead Bank / other member Banks.
c) In case of CB1 to CB4 graded borrowers for loans with credit limits Rs.50 Crore
and above, valuation shall be obtained from two independent approved valuers.
In case of CB5 to CB8 graded borrower, such two independent valuations are to
be carried out in respect of credit limits of Rs.25 Crore and above.
d) In case of Plant and Machinery taken as primary / collateral securities, branches
may consider the written down value for arriving at the value of securities.
However, if the borrower makes available the latest valuation report of Plant and
Machinery by the approved valuer of the Bank at the time of submission of the
proposal, then lower of the written down value or the value as per the latest
valuation report can be considered for the purpose of assessment.
e) All securities charged to the Bank in the standard asset category shall be valued
by the approved valuer / chartered engineers once in 3 years and the details
thereof shall be entered in the system.

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3. Take-Over Norms:
a) Care should be taken by branches to ensure that all the stipulated takeover norms
are duly complied with in all the takeover cases.
b) After take over, endeavor shall be made to switch over their entire dealings to
our Bank. However, in the case of consortium / multiple banking arrangements,
endeavor shall be made to switch over proportionate share in their entire dealings
to our Bank. In case it is observed that short term fund such as bills portfolio /
non-fund based liability is outstanding with the transferor Bank at the time of
takeover, issue of counter guarantee to the transferor Bank may be considered
for the said non-fund liability strictly on merit. However, the transferor Bank
should undertake that immediately on receipt of counter guarantee from the
transferee Bank, they will release the security document held by them directly
to our Bank.
c) The Mid-Term review of all take-over of borrowal accounts shall be conducted
immediately after completion of six months from the date of disbursement to
ensure satisfactory conduct of the borrowal account. Thereafter, these borrowal
accounts shall be subjected to review on annual basis.
d) IRMD at HO reviews the credit portfolio under take over accounts on yearly basis
and such review note shall be placed before the Board for information / direction.
4. Unit Visits:
a) In case of fresh sanctions, unit visit is mandatory and should not be older than
one month for consideration. For borrowal accounts of Rs.10 Crore and above,
unit / collaterals visit to be conducted by two persons at different points of time.
Branches are advised to ensure that inspection of unit / collateral securities is
conducted by different officials of the branch and/or the officials of Zonal Office
/ Circle Office. One such visit shall be made and visit report shall be submitted
along with the proposal to the respective sanctioning authority and another visit
shall be made before obtention of documents / release of the limits.
b) In case of existing accounts, unit visits shall be carried out at quarterly intervals
in respect of all Standard Assets which are classified as A1 and at monthly
intervals in respect of all standard assets that are classified as A2 and A3.
c) A report on visit shall be submitted to the Sanctioning Authority in the prescribed
format.

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d) In case of borrowal accounts of Rs.10 Crore and above, unit visit shall be
conducted by an Official from the Zonal Office / Official of other Branch once in
a year and report shall be submitted to the Zonal Head and Sanctioning Authority.
Zonal Head shall ensure the same.
e) Discrepancies / irregularities observed, if any, during the inspection shall be
rectified before release of fresh / enhanced / additional credit facilities.

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