Majeedullah Baig

The Aliabad Cooperative Thrift & Credit Society Credit Policy 2019 The Aliabad Cooperative Thrift & Credit Society Credit Policy Approved by: Board of Directors On Near Aga Khan Tower, Aliabad Hunza, District Hunza The Aliabad Cooperative Thrift & Credit Society Credit Policy 2019 Contents 1. INTRODUCTION .................................................................................................................................................. 3 2. ELIGIBLE CUSTOMERS ...........................................................................................Error! Bookmark not defined. 3. CREDIT EXTENSION AND RESTRICTIONS ...............................................................Error! Bookmark not defined. LENDING METHODOLOGY ...........................................................................................Error! Bookmark not defined. 5- CREDIT AMOUNT ...............................................................................................Error! Bookmark not defined. 6. CREDIT TENORS AND REPAYMENT TERMS ...........................................................Error! Bookmark not defined. 8. COLLATERALS ........................................................................................................Error! Bookmark not defined. 9. CREDIT DOCUMENTATION....................................................................................Error! Bookmark not defined. 10. CREDIT AUTHORITY...............................................................................................Error! Bookmark not defined. 11. CREDIT PROCESS ...................................................................................................Error! Bookmark not defined. 12. RECORD MANAGEMENT .......................................................................................Error! Bookmark not defined. 13. CREDIT TURN-AROUND TIME ...............................................................................Error! Bookmark not defined. 14. RISK MANAGEMENT .............................................................................................Error! Bookmark not defined. 15. REVIEW AND REPORTING ON PRODUCT PORTFOLIO............................................Error! Bookmark not defined. 16. EXCEPTIONAL APPROVALS ....................................................................................Error! Bookmark not defined. Near Aga Khan Tower, Aliabad Hunza, District Hunza The Aliabad Cooperative Thrift & Credit Society Approved by: CREDIT P0licy 2019 Board o f D irecto rs 1. INTRODUCTION 1.1 The Aliabad Cooperative Thrift & Credit Society has been established in 1962, since then it has played a key role in enhancing the living standards of its members. Pak China Economic Corridor (PCEC) has open many business opportunities linking cross border trade, many large commercial banks, societies and other lending financial institutions affected the performance in lending monies and fostering deposits. Preamble The board of directors of Thrift & Credit Society recommended developing a credit policy which should be coherent with current economic situation and ensuring the future growth of society. In May 2019, the Board of Directors of The Thrift and Credit Society (Coop) approved the Credit policies and procedures for the Society as contained in the document titled Credit Policy (Volume I), This Credit Policy has been designed to serve as the basic framework for all credit services currently offered, as well as the new services to be offered by the Society in future. Vision Statement 1.2 Mission Statement 1.3 I. Members Savings towards shaping future The Board of Directors may recommend to make changes where deem II. Enhancing Profitability necessary and will distribute to its shareholders accordingly. I. II. III. Scope of Credit Policy 1.4 To promote thrift among its members by affording them an opportunity for accumulating their savings and deposits and providing them with credit to enhance the living standards through investment in businesses, agriculture, education and to meet the health issue at fair and reasonable rate of interest; To ensure personal growth through the introduction of new products and services that will promote the economic base of the members; Providing a platform to deliberate the emerging issues of society & its remedial. Credit is the core function of the Society. The Credit Policy has been formulated keeping in view the mission and vision of the Society to: I. provide credit services to members of the society, and being respectful of their evolving needs; II. facilitate a diversified credit portfolio to achieve the business objectives of the Society; III. Provide a framework to manage credit risk, minimize associated costs, and control defaults/losses. Near Aga Khan Tower, Aliabad Hunza, District Hunza The Aliabad Cooperative Thrift & Credit Society Objectives of Credit Policy 1.6 a. b. c. CREDIT P0licy 2019 Standardized credit process and uniformity of operations in all branches; Measure of quality performance; Internal controls and risk management. The format is intended to assist the user by presenting key elements of credit policy in a concise, tabulated format for easy reference. Product Program 1.7 Separate Product Programs shall be developed for different purposes of Financing. Product programs shall include specific parameters, terms and conditions, under which financial facilities shall be extended to clients. However, all product programs shall be governed by the overarching parameters contained in the Credit Policy. Review and Updating 1.8 This is the first edition of the Credit Policy. As there shall be changes in Policy, product Programs or procedures, the Policy is designed to be updated on a regular basis. The issue date appears at the top right of each page. The Policy shall be reviewed and updated by February every two years. Product Programs developed shall be reviewed and updated once in two years, i.e. be February every two years. Any circulars issued during the year, for any changes made during the two years as and when required, shall be incorporated in the revised product Programs. Any changes in and relating to the Credit Policy and Product Programs shall be the responsibility and domain of Board and shall be signed off by President and GM. Near Aga Khan Tower, Aliabad Hunza, District Hunza The Aliabad Cooperative Thrift & Credit Society 1.9 CREDIT P0licy 2019 Procedure for Change in Credit Policy and Product Programs a. Changes shall be made on the basis of direct feedback/suggestions from functional departments and field offices; b. Feedback, if not provided during the year, shall be sought from the respective functional departments and Branch Managers in the first week of November. Board Committee shall send a standardized format for feedback; c. Once the feedback is received, together with any circulars issued during the year or need assessments conducted, the Board Credit Committee shall evaluate and assess, and thereafter revise the Credit Policy and Product Programs accordingly; d. The draft revised Credit Policy and Product Programs shall be circulated to the Senior Management and Regional Branch Managers for comments on the programs, in the third week January ; e. Upon receipt of comments, the revised Credit Policy and product programs shall be submitted to the Board Credit Committee (CCC) for approval; f. Thereafter, product Programs shall be submitted to President, Registrar for final approval. It shall be endeavored that Registrar’s approval is obtained before the end of the first quarter; Near Aga Khan Tower, Aliabad Hunza, District Hunza