Role of a Credit Officer

Introduction

Mr. Arun has been posted as a Credit Officer at your

Mangalore branch.

He is a fresher and does not know much about his role.

You are the branch manager, and he approaches you for

the same.

This unit helps us understand the roles and responsibilities of the Credit Officer.

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Learning Objectives

At the completion of this unit, you will be able to:

• Outline the role of Credit Officer in the branch

• Explain the key responsibilities of a Credit Officer

• Identify the liaison role of Credit Officer with other stakeholders

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Role of a Credit Officer

Key Responsibilities of Credit Officer

1. Developmental and promotional:

This multifaceted role involves conducting market research to identify prospective clients, analysing competitors, and staying abreast of
industry trends.

2. Appraisal and assessment:

The Appraisal & Assessment of all loan proposals of all the proposed borrowers.

3. Follow-up actions and visits:

The Credit Officer must post-sanction follow-up of all loan portfolios of the branch and must visit the borrower’s factory, office, go down,
etc. Recovery of interest and instalment is the responsibility of the credit officer for both standard and stressed accounts.

4. Liaison:
Credit officers should have strong communication and negotiating skills to communicate between different parties.

5. Maintain records and registers:

Must comply with regulatory requirements like maintaining records and registers for several years ranging from one year to permanent,
viz., Loan application register, loan sanction register, NPA register, Title deed register, key register etc.
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Role of a Credit Officer

6. Developmental & Promotional Activity:

This includes surveying the operation area to assess potentials in his command area. This is to increase our bank's market share. The
credit officer may carry out the following developmental and promotional activities:
• Compare the Bank’s market share with other Banks in the area.
• Canvass proposals, particularly high-value proposals. This is to increase income from the credit portfolio. Conduct periodical
credit camps to augment the business.
• Special drive for opening new Loan accounts.
• Participate in meetings like BLBC, DCC, DLRM, etc. as liaison Officer.
• Visit RBI, NABARD, NHB sites and our other regulators.

7. Appraisal & Assessment:

A credit officer is required to undertake:
i. Collection of applications, maintaining loan disposal register for priority sector applications.
ii. Conduct pre-sanction inspection of farms/ business units as part of due diligence.
iii. Process applications on merit- The Bank focuses on need-based credit.
iv. Recommend, prepare sanction advice and forward to appropriate delegated authority for sanction for early disposal.

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Role of a Credit Officer

v. Preparation of credit reports on borrowers and guarantors.

vi. Advise the borrower to open SB A/c to deposit the margin money.
vii. Obtain Security documents as stipulated in sanction advice.
viii. Adhere to the disbursement schedule prescribed to avoid diversion of funds.

8. Follow-up visits:
Inspection of shop/godown/office during the course of disbursement
of loans as well as post disbursement is required to be done. The
end use of the loan amount is to be ensured by visiting the
customer's place.
This is to avoid diversion or misuse of funds. The Credit officer
should carry details of loans sanctioned, purpose, etc., at the time
of visits.
Inspection reports are to be kept on file to comply with the
regulatory and Bank requirements.

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Role of a Credit Officer
9. Recovery Steps:
The credit officer must keep a watch on loan disbursement and the final closure of the loan for timely repayment. He may use
the following steps for the same:
• Sending demand notices.
• Contact borrowers and guarantors regularly to recover bank dues.
• Taking recourse to various legal and other than-legal methods for recovery.
• To visit the borrowers for pre-sanction inspection, for end-use verification.
• Ensure timely repayment.
• Conducting periodical recovery camps and educating timely repayments.
• Using the help of Village heads /Sarpanch in the recovery.

10. Liaison with stakeholders:

By keeping a good rapport with key persons/departments, the branch will get more business, which will also help in the
recovery of advances.
The Credit Officer can make effective use of his position by building mutually beneficial relations with Government machinery BDO,
Panchayat officers, DRDA, Land Acquisition Officer, Fisheries, Agriculture, horticulture dept., Animal Husbandry Dept, Industries Dept,
Judiciary, Collector/DC, Revenue authorities, Registrar etc. and can bring valuable business for the Bank.

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Role of a Credit Officer

Stay connected with the Nodal Officer (IT), suppliers of computer consumables, AMC providers, binding agencies/persons, etc., to
ensure prompt service and solve IT-related problems at the branch. Monitor matters about the clearing house.

11. Canvassing deposits and other products:

In addition to being involved in advances, the credit officer needs to be involved in the bank's business development under deposits and
other products, enhancing the bank's non-interest income.
He should play an active role in the CASA campaign by opening Savings and Current accounts, garnering institutional deposits, and
facilitating non-interest income by marketing Life/ Non-life insurance, Demat, Mutual funds, Health care insurance, etc.

12. Maintenance of Registers:

The Credit Officer needs to maintain valuable records to comply with the regulatory requirements of the Bank for several years, ranging
from one year to permanent, viz.
• Loan application disposal register • Recovery register,
• Insurance register • Title deeds register, etc.
• Document register

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Role of a Credit Officer

13. Customer relations & service:

The credit officer should maintain good relationships with customers by maintaining effective Public Relations and courteous dealing,
effective delegation and supervision.

14. Internal Control and Submission of Returns:

• Prompt submission of control returns to the regional office and corporate office.
• Ensure smooth day-begin and day-end of the branch software systems.
• Scrutiny of daily vouchers, verification, protection, preservation of voucher bundles & records in use.
• Annual indent of stationery items and security items.
• Exceptional Reports verification.

15. Preventive vigilance:

The Credit officer must keep vigil on expenditures to avoid misuse of office accounts for personal gains. In Customer lobby
management, he must observe body language and deceptive behaviour.
Ensure proper control over restrictive and fraud-prone accounts, viz., suspense accounts, unclaimed deposits, non-operative accounts,
dormant deposits, sundry charges, interest on deposit accounts, clearing vouchers receivable, etc., with periodical review and
monitoring. Ensure requisite control as required on the daybook, general ledger, transfer scroll, sundry advances, etc., to avoid the
occurrence of fraud.
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Role of a Credit Officer

16. Payment of Bills and TDS:

Prompt payment of statutory dues like electricity, telephone bills, taxes, and rent for premises and
officers` quarters within the time stipulated for unwanted disruption during business hours.

17. Branch ambience & Day to Day functioning:

The credit officer should also contribute to maintaining branch ambience and day-to-day banking by:
• Ensuring proper maintenance of office premises by keeping it neat & tidy.
• Overall supervision and operations of safe deposit lockers.
• Monitor matters pertaining to the clearing house.
• Monitor the operation of our accounts with other Banks and ensure prompt reconciliation.

18. Staff Discipline:

A credit officer should ensure:
• Punctuality & discipline by all the staff members duly maintaining the movement register and attendance register.
• Handle all matters pertaining to staff administration, such as maintaining staff files, staff sundry advances, income tax deductions,
sanction of leave, etc. Maintaining staff leave records.

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Role of a Credit Officer

19. Key Responsibility Areas:

The key responsibility areas of Credit Officer includes:
• Providing efficient customer service to enhance the bank's image.
• Conversant with various Government schemes for the upliftment of the poor.
• Processing of credit proposals within TAT.
• Inspection / follow up of loans/ inspection of going down/stocks.
• Documentation and keeping all documents valid.
• Review/ renewal of credit facilities to avoid account slipping to NPA.
• Ensuring of availing refinance/subsidy from various agencies.

20. Other roles and responsibilities:

Besides the above roles and responsibilities, a credit officer should also contribute to:
• Ensure implementation of the Official Language Act as per the policy.
• Popularizing Debit / Credit Cards, ATMs & other delivery channels, Bancassurance.
• Ensure that the security alarm system and other Branch infrastructure are functioning and are in good condition. Maintain
vendor’s records with phone numbers and contact persons' contact numbers.

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How do you apply?

Mr. Tejas, a software engineer in Wipro earning a monthly salary of Rs.90,000/-, approaches you for a
personal loan and gold loan in your branch.

While discussing with him, you came to know that a number of employees of the company intend to
avail various retail loans and some of the nearby shops intend to avail a business loan.

What is Mr Tejas' role as a credit officer in these situations?

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Check Your Understanding

1. When a loan application is received, who must process the loan?

A. High net worth customer of the branch

B. Special Assistant of the Branch
C. Credit officer of the Branch
D. Branch Manager of the Branch

Correct Answer is: Credit officer of the Branch

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Check Your Understanding

2. Follow-up, sending due notices and recovery of loan is the primary job of:

A. Recovery agent
B. Credit officer of the Branch
C. Any officer of the Branch
D. Branch Manager of the Branch

Correct Answer is: Credit officer of the Branch

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Summary
In this session, we have discussed on:

1. The Credit Officer can make effective use of his position by building mutually
beneficial relations with Government machinery BDO, Panchayat officers, DRDA,
Land Acquisition Officer, Fisheries, Agriculture, horticulture dept., Animal Husbandry
Dept, Industries Dept, Judiciary, Collector/DC, Revenue authorities, Registrar etc.
and can bring valuable business for the bank.

2. The credit officer should maintain good relationships with customers by maintaining
effective Public Relations and courteous dealing, effective delegation and
supervision.

3. The credit officer should also contribute to maintaining branch ambience and day-
to-day banking.

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