Credit Risk Management System Of IPDC Finance Ltd
Jahin, Sahira Yasmin
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IPDC finance is one of the best non financial banking institutions in Bangladesh. The main difference between a bank and a non bank institution is that a non bank financial institution never deals with cash but bank does. IPDC finance provide Home loan, Auto loan, Personal loan, Deposit schemes, Saving schemes, SME (small and medium enterprise) loan, Leasing, Corporate loan, they specially care for women entrepreneurs. By their work IPDC stay besides many peoples’ dreams and help to develop industries of Bangladesh. As they work with loans there are issues of risk, basically the credit risk. Credit risk means the risk of default of the borrower. For this organization follows special risk management system. In this report I will try to describe the credit risk management process of IPDC finance. In short I will give a brief of the whole process now, Firstly they fill up the application with the help of the client, collect necessary papers like salary sheet, bank statement, NID, E-Tin etc. They download the CIB (credit information bureau) report, Check the authenticity of collected papers. Their own team members visit and verify the address and signature. After that Credit Analysts check the file very carefully, analyze the financial condition, how much loan should be given etc. Approval Authority then checks through a software and finalize the approved amount of loan. There are amount limitations to minimize the risk, particular authority group can approve up to 5, 10, or 20 crores. It varies; the larger the amount the higher the concern, huge amount loan approval needed the board of directors’ consent. Then operation department do the processing of the loan, giving the money. For home loan they check the square feet of the house, land and land documents. Personal loan is given only to permanent job holders. They remind their client for interest and repayment of the loan through phone and mail. All these things they do for ensuring the repayment and lower the possibility of default. After all these if anything happened the special asset management team take legal steps.
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