In the recent past many instances of frauds have been reported under gold loan portfolio across banking industry. On the basis of our internal incidences & after diligent analysis of fraud cases reported by various banks, we have made various systemic improvements under our gold loan portfolio such as Enhanced Due Diligence,Introduction of Super appraiser concept, installation of karatometer at various branches etc.
Systemic Improvement- Gold Loan Portfolio
1. Enhanced Due Diligence of Gold Appraiser:
2. Empanelment a pool of gold appraiser:
3. Concept of Super Appraiser:
4. Installation of Karatometer on pilot basis:
5. Special Gold Loan Audit:
6. Training of Staff for Gold Appraisal:
In overseas branches traders are availing trade finance facility in the form of trust receipts/invoice financing. It is observed that while they avail import limit from a particular Bank, the export proceeds are routed by them through other Bank therefore having no control on the receivables.After diligent analysis of portfolio, systemic improvements suggested to make the monitoring system with respect to TR & IF more effective.
Systemic Improvement- Trust receipt & Invoice financing Portfolio
Vehicle loans comprises substantial part of retail portfolio. Many instances of frauds have been reported under vehicle loan portfolio. In majority of the cases, the quotation was issued from a fake dealer & amount remitted to their account was siphoned off & no asset created. To have more robust system of monitoring of retail portfolio systemic improvement implemented under vehicle loan portfolio.
Systemic Improvement- Vehicle Loans
Bank sanctions credit facilities to their customers based on their eligibility & nature of business. Though any type of excess over limit is normally discouraged by the Bank, however to tide over the difficulties,based on request of borrower Bank sometimes grants excess over limit/TOD as an exception. To monitor & restrict the grant of ELO/TOD within delegation, suitable checks were incorporated in CBS to check EOL/TOD as per delegation in CD/OD/CC accounts. It was further observed that some branches started giving OD in SB accounts of borrower & in CD accounts also even when there was a sanctioned limit to the customer, to check this anomaly systemic improvement is proposed in this area.
Systemic Improvement- Overdraft in SB/CD accounts
During settlement of NPA accounts, borrowers are hesitant in depositing their offer amount due to fear of appropriation of amount by the bank in the event of not accepting the borrower’s offer of settlement by the Bank. Further Bank park this amount in a sundry A/c which is open room for misuse of funds. To overcome this situation systemic improvement proposed for proper & transparent accounting of amount offered for OTS by the borrower.
Systemic Improvement- Keeping upfront amount offered for OTS in 'Escrow/No lien account
Letter of thanks is effective tool for KYC compliance, however it is not being used effectively leading to various frauds.So, to prevent KYC related frauds we have undertaken systemic improvement initiative in this area to make our KYC process more robust…
Systemic Improvement- Letter of thanks on opening of SB/CD accounts
Surprise verification of cash is important to check the functioning of the branches & ATMs to prevent any untoward incident of fraud or embezzlement of cash. We have undertaken systemic improvement in this area to have robust monitoring of cash management of branches & ATMS.
Systemic Improvement- Surprise Cash check in Branches & ATMs
Shell companies are operating to evade taxes or indulge into money laundering practices. To prevent opening of new accounts of shell companies by the branches systemic improvements proposed in this area.
Systemic Improvement- Identification of Shell Company
Transgression of delegated authority is being seen in the branches. Where an officer process & sanctions the loan alone, compromising many rules/guidelines of the Bank. For effectiveimplementation of maker checker concept systemic improvement undertaken in this area.
Systemic Improvement- Four Eye Principle/ Two Mans Rule
To mitigate the risk involved by the reckless finance of the delegatee who is about to retire in next 6 month, systemic improvement is proposed to protect interest of the bank as well as retiring official.
Systemic Improvement-Delegated power in case of officers due for retirement within 6 months
Many instances of misbehaviour of recovery agents have been reported. To bring uniformity in empanelment of recovery agents & to adopt fair practice code systemic improvement proposed in empanelment of recovery agents
Systemic Improvement: Empanelment/Engagement of Recovery Agents
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