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 .

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) 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).

at least once in a quarter . • 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.) B)Where immovable assets are created: • Regular post disbursement inspections till grounding of asset should be undertaken.Revised inspection norms (Cont.

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 .Segment) A)Branches where MRT services NOT provided: a) Branches where Field Officer is posted i) F.Responsibility for conducting inspections (All types of loans under Agri.

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 .

Segment) B) Branches where MRT services are provided: i) Cluster Branches with out Field Officer • B M will allot certain specific villages to MRT.Responsibility for conducting inspections (All types of loans under Agri. 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 .

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