Credit Monitoring and Compliance

Terence M. Yhip and Bijan M. D. Alagheband
Additional contact information
Terence M. Yhip: University of the West Indies
Bijan M. D. Alagheband: McMaster University and Hydro One Networks Inc.

Chapter 10 in The Practice of Lending, 2020, pp 421-430 from Springer

Abstract: Abstract This chapter shifts the spotlight away from credit origination to credit management, which essentially ensures that a borrower stays in compliance with the loan agreement and that any signs of credit quality deterioration are handled promptly. The chapter outlines the reasons for credit monitoring and discusses best practices that well-managed banks have in place, such as monitoring loan covenants, loan documentation and collateral, reviewing the borrower risk rating and credit exposures, and implementing a watch list process to flag deteriorating accounts. The chapter discusses the requirements of an effective monitoring system (e.g., enterprise-wide centralised data, accuracy, and timeliness) and the benefits from automating the process, one of which is detecting deteriorating credit trends for individual borrowers and for a loan portfolio.

Keywords: Credit management; Loan agreement; Watch list process; Effective monitoring system; Automating the process (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-32197-0_10

Ordering information: This item can be ordered from
http://www.springer.com/9783030321970

DOI: 10.1007/978-3-030-32197-0_10

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().