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  • RM-2.7 RM-2.7 Developing a Sound Credit Culture

    • RM-2.7.1

      Credit culture is defined as the sum total of a licensee's approach to managing credit risk, including business strategy, credit policy, shared assumptions about credit, the effectiveness of communications, and the composition and quality of the resulting loan portfolio.

      July 2014

    • The Role of the Board of Directors

      • RM-2.7.2

        The board must review and reassess the credit policies of the licensee (including collateral, provisioning and concentration policies) on at least an annual basis. The board must also review overdue facilities in terms of performance on a quarterly basis.

        July 2014

    • The Role of Senior Management

      • RM-2.7.3

        Senior management must be involved in the credit review process of existing facilities, including visiting clients, assessing the financial status of the borrower and verifying the appropriateness of collateral.

        July 2014

    • Effective Internal Systems and Controls

      • RM-2.7.4

        Licensees must utilise internal grading systems (as outlined in Paragraph RM-2.4.3) to manage credit risk and to set adequate provisions on a timely basis.

        July 2014

      • RM-2.7.5

        Policies and procedures must include the requirement for a thorough understanding of the customer, the purpose of the credit facility and the source of repayment. This data must be reviewed as part of the risk management framework in any assessment of the customer for risk profiling purposes.

        July 2014