Departmentalization
and Structure for Credit Department
Departmentalization is defined as a
process that groups activities into different departments. These departments
are created so that tasks can be performed by specialization within the
organization.
Departmentalization also refers to an organization’s formal
structure that includes several departments and positions and their respective
relationship with each other.
Every organisation as per the nature, objectives, as per their
available resources creates their department. Regarding to bank, various bank
have created their own department.
Every organisation used
their own model in various departments. Departmentalization is a continuous process.
As per the nature of organisation, its needs and as per the change in the environment,
Structure, Authority Responsibility departmentalization model gets change. Regarding
to Risk Department following Departmentalization model can be used for efficient
process.
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1. At
First RO will prepare CA and shall be forwarded for review to BM. After proper
correction of CA and giving proper recommendation BM will forward CA to Risk
Analyst or Credit Manager.
2. As
bank has set their own standard upto which limit file has to be forwarded to credit
manager/ line manger directly and upto which file has to be forwarded to risk.
( Example in some bank, file is send to risk department from 2 crore and above.
Below it direct credit manager review file. While in some bank, all file is is send to risk)
a. File
Send to Credit Manager: - Loan amount in lower size, ADC Product, Time extension,
Full loan settlement can be direct send to Credit Manager from Branch.
b. File
send to Risk Department: - File of Funded and Non funded Loan (New or renew,
enhancement) can be send from Branch . Limit can be set from which Limit file
has to forward to Risk. If File is reviewed by RA than it shall be forwarded to
credit Manager or Senior Risk Analyst.
Note
:- In Risk Department , RA shall be segregated as per ( Retail , SME, Corporate
, Project Finance). RA which has been segregated for Retail will only review
Retail file, RA which has been segregated to SME will only review SME File.
3. File
Send to Senior Risk Analyst :- File of large size or complicated in nature or
within some amount ( where secondary REC is not there or loan above 5 crore).
Loan given on basis of Primary collateral or on the basis of PG , should be again reviewed by
Senior Risk Analyst. If file is reviewed than it shall be forwarded to Credit
Manager.
4. File
Send to Credit Manager :- Credit Authority ( Limit) should be provided to
Credit Manager. Credit Manager shall be different for Retail, SME, Corporate and Project Finance. As
per the Limit provided, Authority Delegation Credit Manager shall review or approved File
and If the file which are not in their limit . It shall be forwarded to Head of
Department.
Note :- If Credit Manager feel discomfort
in proposal or felt any dought on file/ Business/ party. Credit Manager Can
Communicate with Province Head to review Business / REC. In this Province head
have to give their view for the unit/ party with written memo.
Province Head Delegation :- Approving authority of ADC Product , time
extension of loan 5 Million, approval of special memo ( Professional loan of school
teacher as per approved memo, Army loan, Microfinance subsidy loan, can also be
given).
5. Head
of Department :- As per the nature of File ( Consumer, SME, Corporate, Project
finance), Department will be assign. Authority and various deviation can be
provided to them. As per the assign Authority CA shall be Approved from Head of Department. Further as if approval need from higher authority it shall be forwarded to DCEO, CEO and Board.
6. DCEO,
CEO and Board :- As per the assign authority file will be approved.
Departmentalization facilitated to maintain coordination, communication and control among all the mechanisms of the organisation. It creates separate units with some independent responsibilities to departmental manager who in term improve their working efficiency and effectiveness. The above model presented can provide,
Specialization
of Work and synergy effect in process with accuracy:-
As Department is segregated and work is assign differently for each department.
Each individual ( RA, line Manager)
shall be specialized in their task and if an individual gets specialized in
their task, there shall be synergy effect in process ( fast process with more
accuracy).
Date :- 11.05.2022
Time: 11.24 pm.
Anamnagar- Kathmandu
By :- Krishna Raj Bhatta
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