53307-002: Diagnostic Study and Strategy Development for ...

Technical Assistance Consultant’s Report

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Project Number: 53307-002 November 2020

Kingdom of Bhutan: Diagnostic Study and Strategy Development for Rural Finance Sector Development

Prepared by Pramod Pandeya

Thimphu, Bhutan

For Ministry of Finance

2020

Final Report

30 NOVEMBER 2020

PRAMOD PANDEYA

Deliverables as per the Terms of Reference (ToR): Sr. No. Task

Expected Delivery Date

1 Draft report on BDBL’s FY2015–2019 Business Plan Evaluation 30 November 2020

2 New loan appraisal templates 30 November 2020

3 TOR for BDBL’s Deputy Chief Executive Officer 30 November 2020

4 Other required documents which support the Program’s first tranche release 30 November 2020

Progress against Deliverables:

Sr. No.

Task Progress

1 Draft report on BDBL’s FY2015–2019 Business Plan Evaluation

Submitted to the BDB

2 New loan appraisal templates

Credit appraisal templates have been prepared, discussed with the BDB credit team and presented to the BDB management for approval and implementation. Following credit appraisal templates are prepared/or updated (Detailed credit appraisal templates in Annexure I):

a. Agriculture loan b. Consumer loan c. Corporate loan d. Home Loan e. SME Loan f. Group loan (Micro loan): existing template updated

3 TOR for BDBL’s Deputy Chief Executive Officer [Credit] Completed (Annexure II)

4 Other required documents which support the Program’s first tranche release

• The BDB Board of Directors during the 160th Board Meeting has approved the formation of Sub Board committee by strengthening the Board Governance and Risk Committee with an additional board member to oversee the implementation of the BDB Restructuring Plan.

• HRM Committee Meeting convened on 30th October 2020 approved the establishment of Project Implementation Unit (PIU) and the appointment of the following focal persons:

1. Yezer Peldon as the Project Manager for the PIU and focal

person for the group loans 2. Phuntsho Choden as the Environment and Social Safeguard

Officer 3. Tshering Choden as the Gender focal person 4. Tshering Dukpa as the focal person to report to the Chief

Executive Officer on the implementation of restructuring plan and monitoring the progress

• NPL Resolution Framework submitted to the BDB

Annexure I

Annexure II: Credit Appraisal Formts

BHUTAN DEVELOPMENT BANK LIMITED C O N F I D E N T I A L

CREDIT APPRAISAL FOR AGRI ENTERPRISE LOAN (AGRICULTURE, FISHERIES &

LIVESTOCK)

New Reschedule Enhancement Restructure

1. CLIENT DETAILS

Name of the Customer :

CID no.

Address of the Customer:

Present Address

Permanent Address

Village

Gewog

Dzongkhag

Client Code : (CIF)

Project Location

Internal Credibility Rating (ICR) :

(2) PRESENT REQUEST(s):

A. New Loan

P Activities Requested

Limit

Interest

Rate

Tenure

(Debt)

(Equity)

Total

3) NATURE OF THE BUSINESS:

(4) CORPORATE AND CAPITAL STRUCTURE: (wherever applicable)

Corporate Structure : Partnership/Pvt. Ltd/Limited/……

Authorized Capital :

Issued Capital :

Paid Up Capital :

(5) SHAREHOLDING: (wherever applicable)

S. N. Main Shareholders/Directors Designation Shareholding

1.

2.

Total 100%

(6) BACKGROUND OF COMPANY / PROMOTER/:

Background of Company/Business:

a) Registration Details:

b) License no:

c) Name of Company:

Background of Promoters/ /Partners;

(7) BUSIENSS TO BE MANAGED BY :

(8) QUALIFICATION /EXPERIENCE OF THE PERSON MANAGING BUSINESS:

(9) INITIAL CREDIT FACILITY SANCTIONED:

Activities Sanction

Amount Sanction Date Remarks (Reasons for additional loan)

(10) Existing Loans/ Guarantees/ Guarantor with BDB

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(11) PAST PERFORMANCE OF CLOSED ACCOUNTS ( ………..

(12) LOANS/ GUARANTEES/ GURANTOR WITH OTHER BANKS/FINANICAL

INSTITUTIONS (CIB REPORTS):

We use CIB reports

FI Loan Type sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(13) SECURITY/COLLATERAL details on existing loans of all FIs:

Sl # Collateral

details

Collateral

value

Ownership

details

Financial

Institution

OTHER SECURITIES:

• Personal Guarantee:

(14) BUSINESS ANALYSIS :

Conducive Climate and Weather to Undertake Proposed Business:

Land for Proposed Agriculture /Infrastructure for Livestock/Fisheries :

Irrigation for Proposed Agriculture Activities:

Seed and Other Raw Materials:

Technical Support Available :

Post-Harvest Storage or Collection Facilities :

Good Agriculture Practices (GAP) Adopted:

Market for the Product:

Sales Channels:

Major Competitors :

Other Relevant Factors:

Conclusion:

(15) SITE VISIT Report (summary)

Project Location :

Conducted on :

Comments :

(16) STOCK VERIFICATION (wherever applicable)

Conducted on :

Comments

(17) FEES AND OTHER CHARGES:

Sl.

no

Fees/charges Amount

(18) SPECIAL COVENANTS/WAIVER IN THE PROPOSAL:

(19) SOURCE OF REPAYMENT

(20) A. CONCENTRATION RISK (Bank Level):

Sector/

Activity

Name Code % of Total Exposure (As on ………) %

Remarks:

Exposure Funded

% of Core Capital (year

end)

Remarks:

(21) PROPOSED SECURITY/IES:

21.1 Fixed Assets Security/ies:

Sl.

No Collateral Details Collateral Value

Ownership

Details

Collateral

Ratio

21.2 Other Securities:

a) Personal Guarantor

b) Insurance

c) Share/ equity

d) Fixed Deposit

(22) DISBURSEMENT CRITERIA (Facility-wise):

(23) REPAYMENT SOURCEAND SCHEDULE:

(24) KEY RISK AND MITIGATION:

Climate and Weather Risk:

Seasonality Risk:

Market Risk:

Management Risk and or Business Continuity Risk:

Harvest and Post-Harvest Storage Risk:

Financial Risk:

Legal Risk:

AML/CFT Risk:

Other Risk

Risk Mitigation Strategy for Identified Risks

(25) SWOT ANALYSIS :

Strength -

Weakness

Opportunity -

Threats -

(26) CREDITWORTHINESS OF THE BORROWER (FIVE PILLARS ANALYSIS):

Credit Pillars Maximum Score Inferences &

Comments

Score Allocated

Character 30

Capacity 25

Capital 20

Condition 15

Collateral 10

Overall Credibility Rating (Average of above

scores)

(33) RECOMMENDATIONS/COMMENTS:

(34) Recommended/Approved/ Declined:

Credit Committee: Branch Credit Committee Regional Credit Committee Main Branch

Credit Committee Head Office Credit Committee II Head Office Credit Committee I Executive

Credit Committee Board Credit Committee

Date:


DATE:

CREDIT APPRAISAL FOR PERSONAL (EMPLOYEE, CONSUMER, ETC) LOAN


1. CLIENT DETAILS

Name of the Borrower :

CID Number of Borrower:

Present Address of the Borrower:

Permanent Address of the Borrower:

Village:

Gewog:

Dzongkhag:

Contact Person:

Contact Number :

Client Code (CIF):

Internal Credibility Rating (ICR) :ONLY FOR

PERSONAL LOAN

(2) LOAN AMOUNT REQUESTED:

(3) CUSTOMER BACKGROUND:

Applicant/

Professional /Business

Background

Name of Current

Organisation /Agency

(WHEREEVER APPLICABLE)

Nos. of Years in Service 30

Remaining years of

service(loan term should

not exceed the remaining

years of service)

Position/Designation

Grade

Provident Fund No. and

amount

(4) Existing Loans/ Guarantees/ Guarantor with BDB:

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(5) (a)PRESENT SECURITIES: to obtain PF certificate to confirm balance

(6 b) Personal Guarantor’s Details (Wherever applicable)

Name of Guarantor

Name of Organization/Agency

Position/Designation

Grade

Nos. of Service

Other Securities:

Sl.

No

Collateral

Details

Collateral

Value

Ownership

Details

Collateral

Ratio

(6 c) Insurance:

(7) LOANs/ Guarantees/ Guarantor WITH OTHER BANKS/FINANCIAL INSTITUTIONS (CI B

REPORTS):


Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(8) SOURCES of INCOME

A. Sources:

S.N Particulars Amount

i

ii

iii

Total Income

B. Applicant’s Expenses:

S.No

.

Particulars Amount

i.

ii.

iii.

Total Family Expenses

C. Total Monthly Surplus Available (A-B)

Salary Statement (Wherever applicable)

Particulars Amount (Nu.)

Gross Salary (Latest/previous month of application)

Less: (Statutory Deductions+ Loans and Advances+ Claims)

Net Disposable Income after Statutory Deduction

Loan Amount Requested

Equated Monthly Installment (EMI)

Loan to Income:

(9) PRESENT PROPOSAL

Type of facility :

Loan Requested :

Loan Approved :

Interest Rate :

Type of Interest Rate :

Proposed Tenure of Loan :

EMI Amount :

Loan Processing Fee :

CIB Charge :

:

:

Loan to Value (LTV) Ratio :

Loan to Income (LTI) Ratio :

LTCV (Loan to Collateral Value Ratio ) :

(10) MODE OF DISBURSEMENT: Disbursement through savings account

(11) CONCENTRATION RISK (Bank level):

Sector/

Activity

Name Code % of Total Exposure

Exposure Funded

% of Core Capital (year-

end)

Remarks:

(12) TOTAL EXPOSURE OF THE CUSTOMER

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(13)CREDITWORTHINESS OF THE BORROWER (FIVE PILLARS ANALYSIS):


Comments

Score Allocated

Character 30

Capacity 25

Capital 20

Condition 15

Collateral 10


scores)


(15) Recommended/ Approved/ Declined:


Credit Committee Head Office Credit Committee II Head Office Credit Committee I Executive


Date:


DATE:

CREDIT APPRAISAL FOR CORPORATE/BUSINESS LOAN

New Reschedule Enhancement Restructure Renewal (OD)

1. CLIENT SETAILS

Nature of Business (Individual or Joint owners)

Name of borrower:

CID number of borrower

Name of Company:

TPN/License no.:

Name of Joint owner (If applicable):

1)

2)

Present Address of borrower:

Permanent address:

Village:

Gewog:

Dzongkhag:

Contact Person:

Contact Number :

Email:

Project Location:

Internal Credibility Rating (ICR)

(2) PRESENT REQUEST/PROPOSAL(s):

B. New Loan

P Activities Requested

Limit

Interest

Rate

Tenure

(Debt)

(Equity)

Total

B. Renewal (only for OD)

Activities Activity

Status

Approve

d Limit

Outstanding Interest

Rate

(Existing)

Interest Rate

(Proposed)

Tenure

Total Funded

Total N-Funded

Total

(3) NATURE OF THE BUSINESS

(4) CORPORATE AND CAPITAL STRUCTURE:



Issued Capital :

Paid Up Capital :

(5) SHAREHOLDING:


1.

2.

Total 100%

(6) BACKGROUND OF COMPANY / PROMOTER/:

Background of Company:

Registration Details:

Location of Company:


(7) MANAGEMENT OF THE COMPANY/BUSIENSS :

(8) COMPOSITION/QUALIFICATION /EXPERIENCE OF THE MANAGEMENT TEAM:

(9) OTHER COMPANY/BUSINESS IN THE NAME OF BORROWER/JOINT OWNERS :

S. No. Name of the Company Nature of Business Main Person

(10) LOANs/ Guarantees/ Guarantor WITH OTHER BANKS/FINANCIAL INSTITUTIONS (CIB REPORTSOF BORROWER AND JOINT OWNERS:

Financial

Institute

Loan Type sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(11) Existing loans/ Guarantees/ Guarantor of the borrower and Joint owners with BDB :

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(12) EXISTING SECURITY/ COLLATERAL details on existing loans of all FIs:

Sl # Collateral Details Collateral Value Ownership details Financial

Institute

Personal Guarantee: (wherever applicable)

(13) PAST PERFORMANCE OF Closed loans (BORROWER):………..

(14) PAST PERFORMANCE OF Closed loans (JOINT OWNERS):…………

(15) PESTLE ANALYSIS OF THE BUSINESS :

Political Analysis:

Economic Analysis:

Social Analysis:

Technological Analysis:

Legal Analysis:

Environment Analysis:

Conclusion:

(16) FIVE FORCE ANALYSIS FOR BUSINESS ATTRACTRIVESS AND PROFITABILITY :

Competitive Rivalry:

Threat of New Entry:

Bargaining Power of Supplier:

Bargaining Power of Buyer:

Threat of Substitution :

Conclusion:

(17) BUSINESS ANALYSIS:

Production Details:

Technology Details:

Marketing and Sales Strategy:

Conclusion:

(18) SITE VISIT REPORT (summary)

Project Location:

Conducted on :

Comments :

(19) STOCK VERIFICATION

Conducted on :

Comments :


(21) SPECIAL COVENANTS /WAIVER IN THE PROPOSAL:


Sector Name Code % of Total Exposure (As on ………)

%

Remarks:

Exposure Funded Non-Funded


end)

Remarks:

(23) PROPOSED COLLATERAL/SECUTITIES:

23.1 Fixed Assets Security:

Sl.


Ownership

Details

Collateral

Ratio

23.2 Other Securities:

a) Personal Guarantor

b) Insurance

c) Share/ equity

d) Fixed Deposit

(24)

Total Collateral Requirement :

Total Collateral Provided/Proposed :

Excess/ (Shortfall) :

Comments on shortfall of Collateral, if any and Recommendations:


(26) REPAYMENT SOURCEAND SCHEDULE

(27) KEY RISK AND MITIGATION -

Industry Risk:

Technological Risk:

Market Risk:

Supply Risk:

Management Risk:

Financial Risk:

Environmental Risk: ESMS

Social Risk:

Legal Risk:

AML/CFT Risk:

Other Risk:

Risk Mitigation Strategy for Identified Risks:


Strength -

Weakness

Opportunity -

Threats -



Comments

Score Allocated

Character 30

Capacity 25

Capital 20

Condition 15

Collateral 10


scores)


-

Recommended/ Approved/ Declined:


Credit Committee Head Office Credit Committee II Head Office Credit Committee I

Executive Credit Committee Board Credit Committee

Date:

APPRAISED BY:

DATE

APPROVED BY:

DATE:


DATE:

APPRAISAL FOR EDUCATION LOAN


2. CLIENT DETAILS

Name of the Customer :

NID no. :

Address of the Customer:

Present Address

Permanent Address

Village

Gewog

Dzongkhag

Contact Person:

Contact Number :

Email:

Client Code (CIF):

Project Location


(2) LOAN AMOUNT REQUESTED :

(3) CUSTOMER BACKGROUND:

Applicant/ Co-Applicant

Family Background

Academic Background

Professional Background

(4): Existing Loans/ Guarantees/ Guarantor with BDB

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(5) PAST PERFORMANCE OF CLOSED ACCOUNTS

(6) LOANs/ Guarantees/ Guarantor WITH OTHER BANKS/FINANICAL INSTITUTIONS (CIB

REPORTS):

Financial

Institutions


Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(7) PRESENT SECURITIES:

Sl.

No Collateral Details Collateral Value Ownership Details

Collateral

Ratio

(7 b) Other Securities: Personal Guarantee

(7 c) Insurance:

(8) SOURCES AND APPLICATION OF MONTHLY INCOME OF THE APPLICANT/CO-APPLICANT

(Repayment Source)

B. Sources:


i

ii

iii

Total Income

B. Application (Expenses):

S.No

.

Particulars Amount

i.

ii.

iii.



(9) COST ESTIMATION FOR EDUCATION LOAN SUBMITTED BY THE CUSTOMER:

S.N. Description Amount

1. Total Estimated Cost of Study (As per Table 11)

2. Equity Injection by the Customer (Own Sources):

3. Loan Amount Requested by the Customer:

4. Debt to Equity Ratio for Proposed Loan:

(10) DETAILS OF COURSE OF STUDY

Course of Study/Academic Institution Country

(11) DETAILS OF COST OF STUDY

Cost Estimation Amount

Total

(12) PRESENT PROPOSAL

Type of facility :

Loan Requested :

Loan Approved :

Interest Rate :


Tenure of loan :

EMI Amount :


CIB Charge :

:

Loan to Value (LTV) Ratio :

Loan to Income (LTI) Ratio :

LTCV (Loan to Collateral Value Ratio ) :

(13) MODE OF DISBURSEMENT:

First Instalment

Second Instalment

Third / Final Instalment

(14) JUSTIFICATION FOR PRESENT PROPOSAL:

(15) CONCENTRATION RISK (Bank Level):

Sector Name Code % of Total Exposure



end)

Remarks:

(16) PROPOSED SECUTIRY/IES:



Comments

Score Allocated

Character 30

Capacity 25

Capital 20

Condition 15

Collateral 10


scores)


Recommended/Approved/ Declined:

Credit Committee: Branch Credit Committee Regional Credit Committee Main Branch Credit

Committee Head Office Credit Committee II Head Office Credit Committee I Executive


Date:

APPRAISED BY:


DATE:

CREDIT APPRAISAL FORHOME LOAN


2. CLIENT SETAILS

Type of borrower (Individual or Joint owners)

Name of borrower

CID number of borrower

Name of Joint owner (If applicable):

3)

4)

Present Address of borrower:

Permanent address:

Village:

Gewog:

Dzongkhag:

Project Location:

Contact Person:

Contact Number :

Email:

Project Location:


(2) Purpose of loan :

BDB Home Loan Purpose of housing Loan:

House/Apartment Purchase:

House/Apartment Construction :

House/Apartment Renovation:

(3) CUSTOMER BACKGROUND :

(4) Existing loans/ Guarantees/ Guarantor of the borrower and Joint owners with BDB:

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

Applicant/Co-

applicant :

Family Background:

Professional/Business

Background:

B. Existing loan/ guarantees/ guarantor of Joint owner

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(5) LOANs/ Guarantees/ Guarantor WITH OTHER BANKS/FINANCIAL INSTITUTIONS (CIB REPORTS):


Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(6) SECURITY/COLLATERAL details on existing loans of all FIs (existing):

Sl # Collateral

details

Collateral

value

Ownership

details

Financial

Institution

PRESENT SECURITIES (for new loan):

Sl.


Ownership

Details

Collateral

ratio

S.N. Description Amount

1 Land Value

2 Civil structure

3 Site development

4

5 Interest during grace period

6 Total Estimated/ Project Cost (1+2+3+4+5)

7 Equity Injection by the Customer (Own Sources):

8 Loan Amount Requested by the Customer:

9 Debt to Equity Ratio for Proposed Loan/Loan to Value:

10 Property Status:

(7) SOURCES of INCOME OF THE APPLICANT/

7.1 Projected Income from Project (Commercial Housing Loan)

Floor Description Unit Rent Per unit Rent per Month

Total

EMI

Loan to

Income

7.2 Income from other sources (Home loan)

C. Sources:


i

ii

iii

Total Income

B. Application (Expenses):

S.No

.

Particulars Amount

i.

ii.

iii.



(8) MODE OF DISBURSEMENT:

(9) JUSTIFICATION FOR PRESENT PROPOSAL

(10) SPECIAL COVEANTS/ WAIVER:

(11) CONCENTRATION RISK (Bank Level):

Sector Name Code % of Total Exposure



end)

Remarks:



Comments

Score Allocated

Character 30

Capacity 25

Capital 20

Condition 15

Collateral 10


scores)

(13) EXPECTED INCOME FROM THE PRESENT LOAN:

Estimated Earnings in the First Five Years:

(14) PRESENT PROPOSAL;

Type of Loan :

Loan Requested :

Loan Approved :

Interest Rate :


Tenure of Loan :

EMI Amount :


CIB Charge :

Technical fees :

:

Loan to Value (LTV) ratio :

Loan to Income (LTI) ratio :

(15) RECOMMENDATIONS/COMMENTS: Recommended/ Approved/ Declined:

Credit Committee: Branch Credit Committee Regional Credit Committee Main Branch Credit

Committee Head Office Credit Committee II Head Office Credit Committee I Executive


Date:


DATE:

CREDIT APPRAISAL FOR SME LOAN


1. CLIENTS DETAILS

Name of the Borrower:

CID number :

Present Address of the Borrower:

Permanent Address:

Village:

Gewog:

Dzongkhag

Contact Person:

Contact Number :

Email:

Client Code (CIF) :

Project Location


(2) PRESENT REQUEST(s):

C. New Loan

Activity/ies Requested

Limit

Interest

Rate

Tenure Purpose of the

Loan

Debt

Equity

Total

(3) CORPORATE AND CAPITAL STRUCTURE:



Issued Capital :

Paid Up Capital :

(4) NATURE OF THE BUSINESS:

(5) SHAREHOLDERS DETAILS


1.

2.

Total

(6) BACKGROUND OF COMPANY / PROMETER/:

Background of Company/Business:

d) Registration Details:

e) License no:

f) Name of Company:

Location of Company:


(7) BUSIENSS BEING MANAGED BY :

(8) QUALIFICATION /EXPERIENCE OF THE PERSON MANAGING BUSINESS:

(9) INITIAL CREDIT FACILITY SANCTIONED:

Nature of

Facility/ies Limit Sanction Date Remarks

(10) LOANs/ Guarantees/ Guarantor WITH OTHER BANKS/FINANCIAL INSTITUTIONS (CIB REPORTSOF BORROWER AND JOINT OWNERS

Financial

Institution


Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

Existing loans/ Guarantees/ Guarantor of the borrower with BDB :

Activity Account

Number

sanctioned

Amount

Sanction

date

Outstand

ing

Maturit

y date

Past

Performa

nce

Current

status

(11) EXISTING SECURITY/ COLLATERAL OBTAINED

Sl

#

Collateral details Collateral

value

Ownership

details

Financial

Institution

Other Securities:

• Personal Guarantee:

(12) PAST PERFORMANCE OF closed loans(CUSTOMER): ……….. (13) BUSINESS ANALYSIS (wherever APPLICABLE) :

Technical /Production Details : Raw Material : Key Suppliers : Key Buyers : Market for the Product : Sales and Distributions Strategy : Major Competitors :

Conclusion:

(14) SITE VISIT Report (summary)

Project Location

Conducted on :

Comments :

(15) STOCK VERIFICATION (wherever APPLICABLE)

Conducted on :


(17) SPECIAL COVENANTS/WAIVER IN THE PROPOSAL:

(18) TOTAL EXPOSURE OF THE BORROWER INCLUDING PRESENT PROPOSAL WITH BDB:

Facilities Present limit Present Proposal Total

Limits

Total Outstanding

1.

2.

Total Funded


Sector Name Code % of Total Exposure (As on ………)

%

Remarks:



end)

Remarks:

(20) PROPOSED SECURITY/IES:

25.1 Fixed Assets Security/ies:

Sl.


Ownership

Details

Collateral

Ratio

20.2 Insurance:

(21) SECUTITIES REQUIREMENT COMPUTATION:

Total Collateral Requirement :

Total Collateral Provided/Proposed :

Excess/ (Shortfall) :

Comments on shortfall of collateral, if any and recommendations :

(22) BUSINESS GIVEN BY THE CUSTOMER :

A. Account Turnover

Particulars Debit Amount Credit Amount

Account Turnover

B. Earnings (till date): Interest Gross

Commission / Fees

Others

Total :

General Comments on Income from the Customer:


(24) REPAYMENT source AND SCHEDULE:

(25) KEY RISK AND MITIGATION:

Market Risk:

Management Risk and or Business Continuity Risk:

Financial Risk:

Legal Risk:

AML/CFT Risk:

Other Risk:

Risk Mitigation Strategy for Identified Risks


Strength -

Weakness

Opportunity -

Threats -



Comments

Score Allocated

Character 30

Capacity 25

Capital 20

Condition 15

Collateral 10


scores)


Recommended/ Approved/ Declined:


Credit Committee Head Office Credit Committee II Head Office Credit Committee I

Executive Credit Committee Board Credit Committee

Date:

Annexure II: Terms of Reference for Deputy CEO

Position Title: Deputy Chief Executive Officer

Reports to: Chief Executive Officer

Reporting Department / Division: Credit, Banking, ICT, Finance and Treasury, Legal,

Customer Care, Thimphu Main Branch, Regional Office

Position Summary:

The role of the Deputy Chief Executive Officer (CEO) is to support the Chief Executive Officer

(CEO) in:

• Strategy development and implementation

• Overall management and administration

• Achieve sustainable business growth

• Improve BDB’s financial performance • Improve portfolio quality with Non-Performing Loan (NPL) management strategy

• Digitalization of services and delivery channels to reduce operational cost and expand outreach

• Enhancing operational efficiency with optimal uses of available resources and process improvement.

The Deputy CEO will closely work with the CEO with the following responsibilities and also

assume the CEO’s responsibilities in his / her absence.

Primary Responsibilities:

Organization Leadership:

The Deputy CEO will support the CEO to align BDB team around the strategic objectives of

the BDB. The Deputy CEO will:

• Support the CEO to develop strategic plan and implementation

• Support the CEO to manage the BDB as per the plans, programs and policies approved by the board of directors

• Support the CEO to design an appropriate management structure

• Formulate, review and implement department / division / project plans and programs

• Periodic review of the BDB’s performance along with the pre-defined KPIs. Identify the shortfall on the performance and implement corrective measures

• Ensure that strategic and operational plans are implemented accordingly and pre-defined KPIs are achieved

• Ensure that BDB’s adopts clear and consistent management practices to ensure an effective and cohesive management team.

• Lead the implementation of BDB’s institutional strengthening and restructuring plan, monitor the progress and report to the CEO.

• Regularly report the CEO and board of directors on BDB’s overall operations, credit portfolio including portfolio quality and NPL management.

Financial Management and General Administration:

The Deputy CEO will support the CEO in day to day operations of the BDBs. He/ She is also

responsible to implement an appropriate financial management practices and controls to

ensure sound financial management practices and internal controls mechanism in the BDB.

The Deputy CEO will:

• Support the CEO to prepare and implement BDB’s financial goals including the dividend policy to the shareholders as per the BDB’s vision and consistently meet the key performance indicators set by the board of directors

• Support the CEO to improve BDB’s financial performance while meeting the social mandate

• Ensure that BDB’s financial statement are prudently prepared adhering regulatory norms and disclosure requirements

• Ensure that the interest of depositor are secured • Develop and maintain good relationship with stakeholders and business partners to

remain competitive in the market

Credit Process and NPL Management:

The Deputy CEO will support the CEO to improve the credit process and NPL

management. The Deputy CEO will:

• Lead BDB’s effort to improve portfolio quality in line with its objective and regulatory requirement by streamlining credit process, and implementing an effective portfolio monitoring and supervision mechanism

• Train and provide strategic support to BDB’s credit staffs on credit process management including credit appraisal, portfolio monitoring and supervision

• Streamline existing credit products, identify BDB’s competitive strengths and align products portfolio accordingly.

• Led BDB’s endeavor on NPL management. Prepare a NPL management strategy and implement it as a top priority.

ICT and Digital Drive:

The Deputy CEO will also support the CEO to improve current ICT infrastructure and led BDB’s digital journey. The Deputy CEO will:

• Prepare and implement well-structured strategy to lead BDB’s digital drive • Ensure that ICT function efficiently and effectively by adopting the latest technology • Introduce innovative and cost effective digital channels to serve current clientele • Introduce innovative and cost effective digital channels to reach the unbanked or

poorly banked rural population. • Use or improve ICT infrastructure to reduce operational cost and improve

operational efficiency Governance, Internal Control, Risk Management and Compliance:

The Deputy CEO will also support the CEO to ensure corporate governance, improve internal

control, risk management and compliance in the BDB. The Deputy CEO will:

• Serve as a Member of the Board Credit Committee

• Serve as the Chairperson of HO Credit Committee 1

• Serve as the Chairperson of HO Loan Recovery Committee

• Serve as a member of the other relevant committees and provide strategic directions for appropriate decision making

• Review and assess existing internal control mechanisms and institute effective measures to address identified gap. Implement internal control framework to prevent frauds and embezzlements

• Ensure that strong risk management, compliance and governance framework are embedded across different functions of the BDB

• Adhere and implement the findings and observations of audits and compliance as a top priority.

• Implement Risk Based Audit system and IS audit in the BDB Business Development and Customer Care:

The Deputy CEO will also support the CEO in business development and formulation of a well

-defined customer care strategy. The Deputy CEO will:

• Support the CEO to streamline existing products and services to enhance strategic competitiveness

• Support the CEO to prepare and implement short term and long term business plan

• Introduce new banking products and services to the rural clientele through efficient delivery channels

• Support the CEO to foster a customer oriented business approach and “customer first policy”

• Identify new business avenues which align with BDB’s strategic plan and mandate

• Institutionalize corporate relationship with key stakeholders including customers, governments, private sectors, international agencies to achieve strategic objective

• Support CEO to improve international banking services Human Resource Management:

The Deputy CEO will also support the CEO to create a conducive working environment in the

BDB. The Deputy CEO will:

• Review the existing recruitment policy, process and procedures. Streamline the recruitment process if necessary to attract the best talents

• Develop proper retention strategy

• Create a culture of “ mentoring the talents” within the BDB for the higher responsibilities

• Ensure that Human Resources Management (HRM) is effectively and efficiently managed including recruitment process and incentives plans

• Position BDB as the “best place to work” in Bhutan Qualification and Work Experience:

• The candidate should hold a minimum of a bachelor’s degree from a recognized college / university.

• At least 15 years of senior executive experience in a banking and finance environment, with a diverse set of experiences associated with the management of financial services products and distribution.

• Extensive cross-functional banking and finance experience including credit management, risk management (credit, operational, balance sheet, reputational etc), asset/liability management, operations, business development and product development.

Desired Skills:

• Highly organized, motivated and self-starter with the proven ability to manage bank operations efficiently and effectively.

• Prior experience in bank restructuring

• Strong skills on credit process management including credit risk management and NPL (distress assets) management

• Strong leadership, management, supervision, and interpersonal skills

• Excellent communication and presentation skills

• Demonstrated ability to work collaboratively with diverse stakeholders including government, regulators and international agencies

• Excellent analytical, problem solving, and evaluation skills.

53307-002: Diagnostic Study and Strategy Development for ...

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