Credit & Investment Committee Charter

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