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Ajman Bank > Home > Investor Relations > Corporate Governance > Credit and Investment Committee Charter
 Credit and Investment Committee Charter

The Credit & Investment Committee Charter has been created to provide the strategic framework to govern credit and investment activities of the bank, manage the risk of the loan and investment portfolio, assure sufficient returns on the portfolio...
 
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Purpose
  • Establish policies, limits and guidelines within which credit and investment strategies are to be executed (within limits set by Board)
  • Approve or recommend individual or group credits and investments within the authorities delegated from the Board
Authority
  • Credit and Investment Committee is primarily a decision making body for executing the Credit and Investment decision of the Bank within the authorities delegated from the Board
  • All decisions are to be taken by a simple majority vote. The casting vote in the event of a tie will be that of the Chairman of the Committee.
Composition
  • The Composition of the Credit and Investment Committee will be determined by the CEO and will include representatives of the relevant divisions
  • Other members of the management can be invited on a case by case basis, however, they will not constitute a part of Credit and Investment Committee
Meetings
  • The Committee shall meet monthly or as required for individual credit approval.
  • The Committee shall meet in person or telephonically, or by circulation of documents.
  • Majority of the members must be present in order for a quorum to be achieved at the meeting.
  • Meeting will be held after the monthly results are available for review

Responsibilities: The Committee shall be responsible for:
  • Establishing policies, limits and guidelines within which credit and investment strategies are to be executed (within limits set by Board) in order to:

    • Ensure implementation of policies and procedures for the extension of credit and investments that will produce reasonable returns at acceptable levels of risk and are in line with "best practice"
    • Ensure the portfolio does not exceed acceptable levels of risk
    • Ensure that returns from the extension of credit and investments are sufficient to cover the risk assumed
    • Ensure that credit authority is granted in a way that balances credit control and levels of customer service
    • Ensure that investments are made in line with the Bank's investment philosophy
    • Ensure that credit and investment authority is granted only to qualified people
    • Ensure problem loans and bad debts are dealt with expeditiously to minimize credit loss and maximize recoveries

  • Review AB's portfolio trends - growth, target market composition, risk quality rating, and tenor and, when necessary, direct actions and adjust targets when risk is becoming unacceptable and make revisions to:

    • Target Market definitions
    • Target Market composition goals
    • Risk Acceptance Criteria
    • Loan Quality Rating system
    • Portfolio Quality goals

  • Establish pricing policies that are risk based
  • Establish procedures for the approval of exception pricing of credits
  • Establish credit authority range guidelines that concentrates sufficient control over the portfolio at senior levels
  • Review credit authorities and their impact on customer service and AB workloads; make recommendations for adjustments if needed
  • Establish credit authority range guidelines for each job in the bank
  • Establish minimum qualifications required for individuals to be granted each level of credit authority
  • Receive recommendations for individual credit authority evaluate, and grant individual additional or reduce authority where warranted
  • Establish investment guidelines and monitor these investments made within these guidelines on an ongoing basis
  • Establish criteria and formula for provisions for bad debt (or investments) and for writing off bad debt (or investments)
  • Establish criteria for transferring bad debt to recovery agencies
  • Receive and approve recommendations for loan write-offs within delegated limits
  • Review recovery performance for problem loans and adjust procedures as needed