The Hindu Business Line : Credit paradigm

In the matter of credit appraisal and management, instead of being responsive and reactive to the happenings, it is time the bankers take suo motu action in credit management and sharpen credit appraisal skills, factoring in the risk identification, measurement and controlling techniques as well as tools.

In banks, credit and investment portfolios take away the major share as far as funds deployment is concerned. However, very few personnel, forming an insignificant percentage of total staff strength, are made to handle these portfolios. That is to say, more than 80 per cent of the working funds — consisting predominantly of depositors' money — are handled by hardly 10 per cent of the staff.

It is also noticed that the blame is generally attributed to the bank officials, when an account turns into non-performing assets. This is in sharp contrast to the strict and similar vigilance angle approach adopted against the officials of financial institutions.

What is required is a paradigm shift in the credit appraisal skills in the banking system, and the attitude to manage the same.

R. S. Raghavan

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