3. Credit Monitoring
Credit: Finance
Monitoring: To check
Credit Monitoring directly
links with loan
Credit monitoring is
considered as an important
integral part of a sound
credit management system
in banks as it helps in
keeping a watch on the
health and conduct of
borrowed accounts.
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4. Goals and Objectives of Monitoring
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One of the key objectives of the Bank is to have its footprint
strategically placed throughout the country enabling the public to
avail the benefits of Shariah-compliant Banking in their
neighborhood.
To detect signals and
symptoms of sickness at
the incipient stage for
initiating timely corrective
action.
To ensure that the
funds released are
utilized for the
purpose for which
the are sanctioned.
To see that the
terms and
conditions as
stipulated at the
time of sanction
are complied
with.
To keep a watch so that the
project is implemented in time
to avoid time and cost over-
runs.
To find out if the
management is
effective and the
staff is kept
motivated.
5. MEEZAN BANK
The Premier Islamic Bank
Incorporated
on 27th Feb
1995.
Largest Shariah
complaint
assets
management
company.
Al-Meezan is
registered as a
Non Banking
Finance
Company.
With over 500
branches in 99 cities
across
Pakistan, Meezan Bank
is the largest Islamic
Bank and the 8th
largest Bank (in terms
of Branch Network) in
Pakistan
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6. Main
Stakeholders
• Shamil Bank Bahrain
• Saudi Kaaf committee
• Noor Financial Investment company Kuwait
Regions
The Bank is currently segmented into three major regions of Pakistan.
• Southern Region - 21 cities
• Central Region - 51 cities
• Northern Region - 27 cities
Branches
• Currently there are 500 branches.
• In B/W 29-30th Dec 12-14 branches were opened
• Recently there are 20 branches dealing in Faisalabad
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9. Pre-Operational Stage of Monitoring
•Procedure adopted before sanctioning the finance
•Time over run
•Cost over run
•Bank terms and conditions
•requirements
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10. Meezan Bank Procedure
Applicatio
n Form
Requried
Documents
Address
Verificatio
n
Income
Estimation
Legal
Opinion
Collateral
Valuation
Credit
Approval
Signing
The
Agreement
Transfer of
Financing
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11. Meezan Procedure
• Application Form:
Submit a filled & signed application form to Meezan Bank.
Submit the required cheque for Processing Fee & External Agency costs.
• Required Documents
attach all the required documents, as mentioned below, along with your
Application Form:
Personal Information
Income Information
• Address Verification
Meezan Bank will verify residential & office addresses and the addresses
of references submitted.
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12. Meezan Procedure
• Income Estimation:
For Businessman / Self Employed professionals
For Salaried Individuals
Corporate and businesses
• Legal opinion:
legal opinion on the documents
provided by applicant.
• Collateral Valuation:
appointed Valuation Agency
evaluate the assets
determine its market value
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14. Meezan Procedure
• Transfer of finance and Disbursement
Approved and sign by the applicant
Give finance to the borrower.
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15. 15
Time
over-run
Cost
over-run
Over-Run
Many new projects get
into difficulties during
pre-operational stage
because of over-run and
this is generally due to
lack of project planning &
effective monitoring. The
term “over-run” is used in
two ways:
16. 16
Time over-run can be defined
as delay in implementation of
projects and in starting
commercial production within
stipulated time schedule by the
borrower.
Cost over-run can be
defined as delay in
implementation of projects
and in starting commercial
production, exceeding cost
estimate given by the
borrower.
17. The highest time & cost over-run have
been found to be in case of:
Projects located in
Non-backward
areas
New class
entrepreneurs
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18. Some important reasons for over-runs which can
lead any project to difficulties are as follows:
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Faulty projects planning and
subsequent change in the
initial plans during the
implementation stage.
Delays involved in acquiring
land and its development.
19. Post conventional stage
• Monitoring the credit
• Check and Control the risk factor
• Timely check the financial reports
• Timely pack back installment review
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20. Tools of monitoring
1. Recovery Letter
2. Telephone Call
3. Visits
4. Recovery Agency
5. Legal Action
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21. Monitoring/ Follow up
a) To watch physical progress of project.
b) To watch utilization of funds.
c) To initiate remedial measures
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22. List of Documents for Credit
Proposal which meezan requires
Letter of request describing the following
particulars:
i. Business profile/ History
ii. Business strategy
iii. Management Structure
iv. Product Mix
v. Distribution & Selling terms
vi. Liabilities with other banks
vii.Prime securities
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23. List of directors partners along with
signatures
Certified copies of ID cards of
Directors/Owners of properties.
Audited balance sheet for the last three
years & projected balance sheets for next
five years.
Copy of income tax
Copy of import/export registration.
Membership certificate
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24. List of Machinery
Competitors, Suppliers/Buyers
Affiliated companies & their liabilities
Certified copy of memorandum & article of
association.
Certified copy of certificate of
commencement of business
Resolution of Board of Directors
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25. Difference b/w PERT & CPM
CPM is activity oriented but PERT is event
oriented.
The Main and basic difference b/w the CPM &
PERT techniques is attaching of a single
duration of completion time to each activity in
the former while in latter, the following three
time durations are allocated to each activity.
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26. Products of Meezan Bank
• Mudharabah
• Musharakah
• Murabahah
• Ijara
• Wadiah
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27. Situational cases in post operational stage
• If borrower doesn’t payback loan on time
• If the borrower increase the time period of
remaining installments
• If the borrower pays some installments & is
not able to pay the remaining installments
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