What changed
The circular, issued under DBOD.No.BP.BC-104/21.04.048/2011-12 on May 10, 2012, introduces requirements for a Board-approved policy on take-over of accounts and mandates sharing of credit information in a prescribed format (Annex) between transferor and transferee banks, addressing complaints of inadequate due diligence.
What it means for you
Banks must establish a Board-approved policy for take-over of accounts, including norms on nature of accounts, authority levels, reporting, monitoring, credit audit, and staff accountability. Transferee banks must obtain credit information from transferor banks using the prescribed format before taking over an account, and transferor banks must share this information promptly.
What you must do
- Put in place a Board-approved policy for take-over of accounts from another bank
- Obtain credit information from transferor bank using prescribed format before taking over an account
- Share credit information promptly when requested by transferee bank
- Ensure policy covers norms on nature of accounts, authority levels, reporting, monitoring, credit audit, and staff accountability
Who it affects
Chairman and Managing Director/Chief Executive Officer of all scheduled commercial banks, Compliance and risk management teams handling account take-overs
What is the purpose of this circular?
To address complaints that critical information on borrowal accounts being taken over is not shared by transferor banks, and to mandate a Board-approved policy and credit information sharing in a prescribed format.
Who needs to take action on this circular?
Chairman and Managing Director/Chief Executive Officer of all scheduled commercial banks, along with compliance and risk management teams.
When was this circular issued?
May 10, 2012, under reference DBOD.No.BP.BC-104/21.04.048/2011-12.