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Thursday, September 3, 2009
Any typical loan processing involves decisions at different levels. How is information managed in such a situation?
Srivastava says it is a workflow-based system. A loan proposal based on parameters set in the system can be decided by a branch manager, or it can if necessary go to a regional office or to the central office or to the board of directors. The concerned panel of bank officers can rate the application and record their views in the form of minutes and sign the minutes. This document is scanned and uploaded in the system. The application can be accepted and the loan sanctioned, or it can be rejected. The whole process is facilitated through a mailbox system.
"In case a particular loan is sanctioned in exceptional circumstances - we call it a case of deviation - there are provisions in the system to record the deviations to the parameters and have it approved by the concerned authorities," he adds.
Kalia of Vijaya Bank says information flow is automated in the loan automation system, through workflow mechanisms. "Automation does help in expeditious decision making as physical movement of papers is curtailed to a large extent."
Does an automated system bring in efficiency through centralization and speed to the lending process?
Arivazhagan cites the instance of HDFC: "Over the years, we have recorded an annual growth of 25% to 30%, while the growth in our manpower has been insignificant. Secondly, our assets to expenses ratio is one of the lowest in the world, that is 0.4%. This is proven efficiency and this has been possible through automation."
"A loan automation system is ideally an end-to-end integrated system, starting with lead management. In our case, even documentation is stimulated by the system, starting with collection and verification of documents, their safekeeping and their return to the customers upon completion of the loan tenure. The system generates MIS reports as well as compliance and regulatory reports for the regualtor, in our case, the National Housing Board."
Shanmugam of Mahindra Finance says surely the model
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