Supervision and Follow up

Supervision & Follow-up forms important part of NPA management

It is a continuous process begins with the accepting proposal for financing till the dues are recovered in full

Pre sanction
Post Sanction

Pre-Sanction Survey:
Field inspection

Verification of documents
Availability of forward & backward linkages Availability of inputs Marketing facilities Concurrent borrowings Experience & expertise

Appraisal of proposal
Ascertain Means of funds

Proper assessment of loan requirement

Legal opinion Valuation of collateral security Sanction from appropriate authority creation of charge (EM/RM) Appropriate application & documentation Arrangement letter with necessary terms conditions

 Realistic repayment schedule based on the cash flow of activity (DSCR) Due importance for gestation period Explaining the terms & conditions to the borrower Timely disbursement

Payment to suppliers wherever necessary

Post sanction inspections / follow-up

Agri-finance is supervised credit Post Sanction inspections are conducted to Ensure creation of assets and periodic verification thereof Intensifying recovery efforts in respect of irregular crop loans & term loans Maintaining contacts with borrowers with twin objectives Assessing and catering the genuine needs of borrowers Collecting market intelligence

Revised inspection norms

Crop loans: At harvest time visits are to be made for
recovery

However branch officials should maintain contact with the borrowers on an ongoing basis, at least once in a quarter. Irregular crop loans (any amount) monthly visits for recovery should be undertaken
When there are natural calamities in the area inspections should be conducted immediately

Revised inspection norms (cont)

Agri Term Loans (all limits) A) Where movable assets are created:
with one month after disbursement Creation of asset to be ensured and recorded

Regular Term loans (any amount), once in six months for verification of asset (preferably at harvest time)
However branch official should maintain contact on an ongoing basis, at least once in a quarter Irregular Term Loans (any amount) monthly for recovery

Revised inspection norms (Cont.)

B)Where immovable assets are created:
Regular post disbursement inspections till grounding of asset should be undertaken.

Grounding of assets need to be ensured and recorded

Further inspections at annual intervals preferably at harvest time Irregular Term Loans (any amount) monthly visits for recovery

However branch official should maintain contact on an ongoing basis, at least once in a quarter

Responsibility for conducting inspections (All types of loans under Agri- Segment)

A)Branches where MRT services NOT provided:

a) Branches where Field Officer is posted
i) F.O is responsible for inspection of all the borrowal accounts
i) This does not preclude the BM / MOD to take proactive action on irregular features coming to his notice

Responsibility for conducting inspections (All types of loans under Agri- Segment)

Branches where Field Officer is NOT posted Branch Manger / Manager of Division will conduct inspections

Responsibility for conducting inspections (All types of loans under Agri- Segment)
B) Branches where MRT services are provided:
i) Cluster Branches with out Field Officer

B M will allot certain specific villages to MRT, in consultation with C/A and recorded officially All members of MRT can carry out post sanction inspection up-to any limit This does not preclude the BM to take proactive action on irregular feature coming to his notice Those villages which are not allotted to a MRT will be inspected by BM/DM as per specified periodicity

ii)Cluster Branches having Field Officer

It is desirable to
remove the FO and attach to MRT If retained at branches these FOs are responsible for inspections

Specific responsibilities of BMs / MODs in protecting the health of advances

Death of borrower Disposal of assets Units requiring rehabilitation/ nursing/ restructuring Affected farmers Serious deviation in gestation / repayment norms Initiation of legal action Frauds

Govt. sponsored schemes

Inspection should be carried out by the BM / MOD /FO only Not to be entrusted to MROs

Thank you