A typical credit administration unit performs following functions:
1. Documentation: To ensure that all security documentation complies with
the
terms of approval and is enforceable
2. Disbursement: To control facility disbursements only after all terms and
conditions of approval have been met, and all security documentation is in
place
3. Credit Monitoring: Keep track of borrowers’ compliance with credit terms,
identifying early signs of irregularity, conducting periodic valuation of
collateral and monitoring timely repayments.
4. Custodial Duties: Storage of
security documents should be centralized.
Appropriate insurance coverage should be maintained on assets pledged as collateral.
5. To maintain control over all security documentation
6. Compliance
monitoring: To monitor borrower’s compliance with covenants and agreed terms and conditions,
and general monitoring of account
conduct/performance