Credit policy of the bank

The credit policy of the bank is the development of measures aimed at improving the balance of risk and profitability from operations to provide loans to individuals and other business entities.

The credit policy is developed on the basis of macro- and microeconomic factors. That is, a specialist conducts an assessment of the country's situation at the macro level, concludes that the stability of the national economy and the degree to which the state supports this or that branch. An important role is played by the rate of inflation, the dynamics of interest rates and the ability to compete with other lending institutions at the international level. In this case, it is precisely those factors that banks can not change that are considered.

Microeconomic, or internal, factors can be attributed to the study of intra-bank processes or relations between individual lending institutions. At the same time, such factors as the volume of attracted funds, solvency, liquidity, profitability are subject to study. These indicators characterize the bank's success in working with counterparties. And this requires a high-quality staff selection, because a qualified employee, being the face of the bank, creates his reputation.

The credit policy is carried out with the purpose of achievement of set of tactical results, but the highest possible reception is the greatest possible income. Profit multiplying is the main objective of the functioning of any commercial enterprise. Focusing on the developed strategic plans, the credit policy is based on specific tasks, including close supervision and control over the implementation of measures to expand creditworthiness, as well as the choice of the purpose of the loan or loan.

When the monetary credit policy of the bank is drawn up , there is a division into work with business entities and individuals. The highest level of income is brought by legal persons, therefore the employee of the credit institution should make maximum efforts to conclude long-term cooperation. However, not all organizations can become first-class clients, because banks have their own list of requirements for this category of consumers. As a rule, the most important criteria are reliability, solvency, transparency of reporting, an exceptionally positive reputation in the market, the size of own capital, the level of liquidity and profitability.

If a loan is required for an individual entrepreneur, the credit policy is aimed at studying the personal qualities of the manager, revealing the degree of trust on the part of counterparties. The determining story, of course, is the credit history of the founder of the company.

The issuance of loans to individuals is made by other criteria. The Bank proposes many different proposals for lending. Due to this, the client gets an opportunity to choose the best conditions for granting and paying a loan. Often, the size and terms of lending are determined on the basis of the level of wages, the age of the payer and the reliability of guarantees or sureties.

The most important thing is to understand that credit policy is necessary to minimize the risk of the parties. After all, the bank, carrying out operations for borrowing funds, has a risk of non-return due to unwillingness or inability to pay the body of the loan and interest on it. Accordingly, the higher the level of risk, the greater the percentage of the transaction will receive a credit institution. The staff's task is to rationally combine these two factors.

With a well-organized banking system, credit policy is subject to regular review, as the changing market conditions require flexibility in the behavior of banks. The popularity and competitiveness of the organization depends on the speed of their response to a particular problem.