“Indian Banks would need to pro-actively assess borrowers’

21 February, 2017 Bahwan CyberTek, a leading global provider of innovative software products and solutions, has launched a report based on India’s first ever survey on ‘Credit Monitoring Practices of Indian Banks’; the report titled ‘Practitioners’ Insights on Credit Monitoring’. This was part of an event organized by the company where industry leaders and practitioners from private and public sector banks shared their experiences, both from a regulatory and a banker’s viewpoint and the latest regulatory developments in the Indian banking system, for credit monitoring.

The survey was conducted between October 2016 andFebruary 2017, amongst senior bankers spearheading the credit risk monitoringor are part of the management unit, spread across 25+ public and private sectorbanks in India of varying asset sizes; this included banks whose total assetsize comprised 42% of the combined asset size of all Indian scheduledcommercial banks, as of March 2016.

Commenting on the launch of the report, JayaVaidhyanathan, President – BFSI & Strategic Business Initiatives, BahwanCyberTek said, “We at Bahwan CyberTek believe in proactive action asopposed to merely reacting to an action. As a key priority for 2017 and yearsto come, we think it is important for Indian banks to make full use of thetechnology which will help automate and therefore improve their creditmonitoring techniques, given that the health of our country’s economy dependson it.

“This therefore brings about the need for anEarly Warning System where bankers can predict and assess the health of aborrower, for instance, and take necessary measures. Moreover, such a systemshould help gauge the performance of all critical sectors that contributetowards the growth of the Indian economy”, she added.

Some of the key findings from the survey include:

· Nobank has completely automated the SMA (Special Mention Accounts) monitoringprocess

·Bankslargely rely on internal data to monitor the borrower health that might causetrouble in the future; the absence/ minimal use of external data (from anavailability and quality point of view) doesn’t help in taking sound decisions

·Majorityof the responding banks (>70%) see a need for a separate Early WarningSystem rather than making modifications to the existing systems, and haveplanned for one

·Withregard to reporting, data collection is fully manual for 40% of the respondingbanks

o   For over 75% of the banks, reportgeneration, dissemination and follow up actions is either fully manual or justpartially automated 

Speaking at the launch, T. N. Manoharan,Chairman, Canara Bank, said, “I would like to congratulate Bahwan CyberTekfor undertaking this survey. I am sure that the findings will be of immensevalue to both banking personnel and the BFSI industry as a whole, and Ipersonally hope to be enriched by the insights presented in the report. Withregard to the banking industry, the two major challenges faced by the sector inthe last one year have been the Asset Quality Review issued by the RBI, anddemonetization. However, the banking industry is returning to normalcy, afterhaving faced these hurdles.” 

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