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Introduction of HBL
HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,450 branches across the country and a customer base exceeding five million relationships. The Government of Pakistan privatized HBL in 2004 through which AKFED acquired 51% of the Bank's shareholding and management control. HBL is majority owned (51%) by the Aga Khan Fund for Economic Development, 42.5% of the shareholding is retained by the Government of Pakistan (GOP), whilst 7.5% is owned by the general public i.e. over 170,000 shareholders following the public listing that took place in July 2007. With a presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyzstan and rep offices in Iran and China, HBL is also the largest domestic multinational. The Bank is expanding its presence in principal international markets including the UK, UAE, South and Central Asia, Africa and the Far East. Key areas of operations encompass product offerings and services in Retail and Consumer Banking. HBL has the largest Corporate Banking portfolio in the country with an active Investment Banking arm. SME and Agriculture lending programs and banking services are offered in urban and rural centers.

HBL is currently rated AA (Long term) and A-1+ (Short term) and has a balance sheet size of over USD 11 billion. It is the first Pakistani bank to raise Tier II Capital from external sources.


HBL Brand
HBL brand identity is the outward expression of what we stand for as an organization. This is summarized in our vision, mission and is supported by our values.

Enabling people to advance with confidence and success

To make our customers prosper, our staff excel and create value for shareholders

HBL values are the fundamental principles that define our culture and are brought to life in our attitudes and behaviors. It is our values that make us unique and unmistakable. Our values are defined below:

This is at the core of everything we do. The markets in which we operate are becoming increasingly competitive, giving our customers an abundance of choice. Only through being the very best - in terms of the service we offer, our products and premises - can we hope to be successful and grow.

HBL is the leading bank in Pakistan and our success depends upon trust. Our customers and society in general - expect us to possess and steadfastly adhere to high moral principles and professional standards. 2


Customer Focus
HBL understand fully the needs of our customers and adapt our products and services to meet these. We always strive to put the satisfaction of our customers first.

HBL believe in giving opportunities and advantages to our employees on the basis of their ability. We believe in rewarding achievement and in providing first-class career opportunities for all.

HBL believe in the advancement of society through the adoption of enlightened working practices, innovative new products and processes, and a spirit of enterprise.

IMPORTANCE OF CREDIT POLICY For any business selling goods or services, giving credit to its customers is critical; its a catalyst for growth in the business. Extending credit is business for some (banks, credit card companies) and for some, one way to compete and stay in business.


Credit immediately increases the buying power of a consumer. Imagine an individual with not-so-good credit get a credit card with a $5,000 limit, or that you approved a modest credit limit to a firm with which you recently started working. The good part is that the credit generated an immediate sale, but the negative is that it could potentially result in bad debt. Uncontrolled credit could lead to collapse due to overbuying, overexpansion and overselling. The recent problems due to sub-prime loans are a case in point, as many in the stone industry from importer to distributor to fabricator can clearly attest. Its a good time to protect your company from major financial problems in the future. Cash-flow problems can be avoided by having a good credit policy in place. The purpose of a good credit policy is to lend to make a profitable sale, keeping in mind the businesss tolerance for risk. And since, by extending credit, youre essentially investing in your customers, you want to know if they are credit worthy. A good credit policy means increasing business with credit-worthy customers. Your companys credit policy involves identifying the market for sales growth looking at the potential customers that will be turned down if youre raising the credit standards, or potential customers you could get if you lower the standards. That credit standard depends on the businesss tolerance for risk. Liberalizing the credit policy may come from a need to increase market share or penetrate into new territory; when demand is decreasing; or when profit margins are high. Loosening the standards also may be advantageous when the inventory needs to be turned quickly, or when it may have a limited shelf-life or customer appeal. Conversely, it may be time to get conservative with credit when a product or service sells without much effort; is made as per customer specification (customized); when the profit margins are thin; and when general economic conditions arent favorable. Credit application is the foundation of a good credit policy It facilitates the process of determining whether or not to grant credit and to determine the limit. Credit application collects important information for review and can also be produced in court as evidence of the terms of sale and application of Credit /loan. (And, the information should always be treated as confidential.)



The Credit Risk Strategy reflects HBLs tolerance for risk i.e. credit risk appetite and the level of expected profitability. This, as a minimum, reflects HBLs strategy to grant credit based on various products, economic sectors, client segments etc, target markets giving due consideration to risks specific to each target market and preferred level of diversification/ concentration and specific long term and short term business opportunities in each target market, minimum risk acceptance criteria and exclusion markets considering the business, pricing, collateralization strategies and the effect of credit risk strategy on the market, liquidity and operational risks. Credit Risk Policies, therefore provide framework for the credit risk management process in the bank and all credit policies have to be aligned with this framework. This policy will be supplemented to meet any new requirement through Credit Bulletins. A complete review of the Credit Policy Manual will be required every three years.


Management Accountability
Business managers will be accountable for managing risk and, in conjunction with Risk Management, for establishing and maintaining appropriate risk limits and risk management procedures for their businesses.

Credit risk policies will be established by the Credit Policy Committee and approved by the Board through its Risk Management Committee. The Bank will have a system of checks and balances in place around the extension of credit which are:


An independent risk management function Multiple credit approvers An independent audit and risk review function There will be a single Control Unit for every client, responsible for approving or consenting to all credit extensions related to the client.


Credit Approval Authorities

The authority to extend or approve credit will be granted to individual Credit Officers based upon a consistent set of standards of experience, judgment, and ability.

Credit Officers will be appointed by the President and/ or the Chief Risk Officer (CRO) or an SCO designated by the President. The level of authority required to approve credit will increase as amounts and transaction risk increases as reflected in the risk ratings. Every extension of credit must be approved by at least three authorized credit officers. It is the responsibility of the Credit Officer to insure the integrity of the credit process and the proper documentation of the credit decision.


Credit Risk Measurement


There will be a single set of standards, as defined in this document for the measurement of credit risk in order to ensure consistency across businesses, stability in methodologies and transparency of risk.

Every obligor must be assigned a risk rating over a certain level (as defined in the Risk Rating Policy).

d) Credit Origination and Maintenance

There are consistent standards across HBL for the origination, documentation and maintenance of extensions of credit. For obligors to whom we have extensions of credit, there will be a consistent approach across the Bank toward problem recognition, the classification of problem exposures, and remedial action.


Credit Portfolio Management

Each business line will maintain a diversified portfolio of risk assets in line with the capital desired to support such a portfolio. Portfolio Credit risk limits, include but are not limited to, obligor limits and concentration limits by industry or geography, will be set by the Business in conjunction with Risk Management and will be reported to BRMC on periodic basis (frequency to be defined by BRMC).

In order to ensure transparency of risks taken, it is the responsibility of the Credit Administration to accurately, completely and in a timely fashion, report the comprehensive set of credit risk data into the independent risk system.

Objectives of Credit policy


Credit policies are based on past experience and reflect long-term expectations. The policies represent a key element of a uniform, constructive and risk aware culture throughout HBL. The credit culture relies upon the personal integrity of individuals and a commitment to discuss issues openly and to place the long-term interests of the bank ahead of the short-term interests of a particular business unit. Credit policies are formulated to support the Bank's business strategies. The objective is to achieve the earnings target with minimum volatility, based on a sound credit portfolio. In order to achieve this objective, the Bank must have: a clearly defined Business Strategy a focused Target Market approach which allows build up of strong customer relationships, through offering of a diverse product range to meet the customer needs a proactive Portfolio and Risk Management system checks and balances in the form of portfolio and process, evaluation and reporting systems which ensure compliance with the Policies and Procedures and corrective actions required thereof Credit quality must take precedence over business development. Process and

Management should be geared towards avoiding losses, but at the same time it should ensure efficiency both in terms of response time and market needs, and most importantly ensure an adequate return on assets employed. The Credit policies have been formulated keeping in view the above perspective, and provide a framework to help manage the risks in any business. Certain standards have been established and a set of policies and procedures defined to ensure that these standards are met.

Business/Line Management


Business managers will be accountable for managing risk and, in conjunction with Risk Management, for establishing and maintaining appropriate risk limits and risk management procedures for their businesses. The line management (Business Group), within the guidelines set by the Credit Policy Committee, develops and executes its own business plans, initiates and proposes credit which are jointly approved with the Credit Officer in the risk management organization (above the minimum threshold).and are responsible for credit quality through effective Risk Management systems. In short, in addition to setting and achieving business goals, Line Management is responsible for creating and managing risk in line with the concept of decentralization and responsibility. This may require setting up of additional policies and procedures to supplement those provided by Credit Policy Committee. Line Management is expected to play the following role in the entire credit process: Develop Target Market and Risk Acceptance Criteria and get CPC approval for compliance, within the MRC and BRMC guidelines on portfolio parameters; Monitor portfolio and process quality with the support and assistance of Credit Administration unit, which should ensure compliance with credit policies. Set standards for credit process management and portfolio quality, monitor deficiencies and ensure that appropriate corrective actions are implemented. Ensure that portfolios conform to approved target markets. Maintain a flow of information to ensure a hands-on approach to the adversely classified portfolio.

Line Management/Business Groups Credit Responsibilities

Corporate Banking Group (CBG)


Borrowers with aggregate borrowings in excess of criteria specified from time to time (depending on the market needs and requirements, HBLs target market and other factors) will qualify to be booked under the Corporate Banking Group's umbrella. If any constituent of a group of borrowers, falls into the specified category, regardless of whether the others do or do not, shall also qualify to be booked under the Corporate umbrella. The set of criteria will be specified by the CPC in consultation with the business heads and advised through various bulletins/ circulars. Any exceptions to the above, where relationships will continue to be domiciled in other business groups despite meeting the criteria, will require the approval of the CPC Head/ CRO.

Commercial Banking Group (CBD)

Borrowing relationships with a predefined set of criteria shall be domiciled at the CBD. Should any constituent of a group of borrowers breach these limits, that entire group should be transferred to the CBG for specialized handling of the relationship commensurate with their size and requirements. However, cases falling in the borderline area but otherwise in the CBG domain, should the relationship niceties demand particular handling, shall be domiciled under CBG. Broader target market parameters for CBD will be specified by the CPC in consultation with the business heads and advised through various bulletins/ circulars. Exceptions to this definition will be industry/ sectors (e.g. Rice/ Flour Mills), which are not Target Market of CBG or where CBG for geographical reasons cannot provide coverage.. However such exceptions must be pre-approved by the CRO.



International Banking Group (IBG)

All credit originating from the overseas branches of HBL will be handled under this business group.

Retail Banking Group (RBG)

Borrowing relationships not falling with in the Target market of CBG, CBD and Consumer banking based on exposure levels, Industry/product and/geography will be domiciled at the RBG. (Note: In case of any ambiguity regarding the ownership of a relationship within different business group, CRO will be final authority on assigning the control units responsibility)

Consumer Banking Group (Consumer)

This business group is involved with underwriting consumer-oriented risk. This may include credit cards, loan products to individual, consumer finance, vehicle finance, mortgage finance, etc. The Consumer Banking Group is responsible to formulate its risk strategy, Policy and other risk parameters, and have designed specific Product Programs for risk assets acquisition. Minimum Requirements for the approval of Credit/Product Programs are defined.



Financial Institutions (FID)

Within the HBL structure, Financial Institutions is a separate business unit set up to deal with matters relating to Domestic and Foreign Banks and Country Risk Management. These matters include setting up/proposing lines/exposures that may comfortably be underwritten on Fls and Countries. In addition establishment of relations with foreign as well as local correspondents and taking credit exposure on them with in the Limits approved by Risk Management Group.

Assets Remedial Management Group (ARM)

Assets that deteriorate to such an extent where recovery is jeopardized and requires special handling are transferred to the ARM Group. At ARM, focused attention is given on situation specific, and in cases, legal resort is also adopted. Criteria to qualify for transfer and functions etc. are authorized by the CRO.

Investment Banking Group (IB)

IB specializes in providing innovative and unique solutions to its clients to assist them in meeting the challenges in an ever changing market. Investment Banking of HBL either leads or participates in major transactions which include Syndicated Loans, Structured Finance, Leveraged Buyouts, Project Finance, TFCs, Quasi-Equity Products, Equity Underwriting, Equity Placements, IPOs, Independent Advice, Mergers & Acquisitions, Corporate Restructuring and other products.

Islamic Banking Division (IBD)



IBD has been established to provide Shariah compliant products and services in the Country operating through dedicated Islamic Banking branches. A specific policy/circular for Islamic Banking Products will be advised separately.

Treatment of HBL Subsidiaries

The CPM is applicable to the overseas branches and subsidiaries bring Habib Allied International Bank, UK. Any modifications in meeting local requirements shall be approved by the CPC. Efforts should be made to align the local policies with the CPM. Going forward, detailed policies will be incorporated in the CPM to deal with HBL Subsidiaries.

Credit Transactions
This approach focuses on the decision to extend credit to an individual customer or relationship. Generally, this is applicable when: customers cannot be considered homogenous credit requirements are specific, large or multiple, or involve complex corporate finance transactions risks require in-depth evaluation of each customer approval is based on detailed financial analysis and individual judgment of Credit Officers 13


there are multiple facility structures and forms of collateral risk is managed on an individual customer basis

Under this system, credit is approved using the credit proposal process. It may however be noted that credit transactions must follow the Target Market and RAC process.

Credit Authorities/ Limits

It is not necessary that all Credit Officers will be given credit limits. The level of authority will depend on experience and proven ability, taking the above criteria into consideration. These limits will be reviewed from time to time. It may be noted that these limits cannot be taken for granted and can be revoked if the officer is unable to meet the standards expected of him. To approve a credit proposal above the minimum threshold level, of the three credit officers required, one must have a credit limit equal to or greater than the amount of the credit being approved and at least one of them being a credit officer (CO) in the Risk Management Group. For example a proposal for PKR 100 mln (on a group basis) has to be signed by a Credit Officer with a credit authority of PKR 100 mln or more along with one credit officer in the area and another credit officer from the Risk Management Group. These limits are personal and cannot be delegated further. Other restrictions and limitations as specified may apply along with the credit authority.

Approval Procedure



Each Business Group is required to establish Credit Committees at the branch (designated lending units) regional or country (in the case of IBG) and Business Group levels. Approval at all these levels will depend on the amount of credit authority delegated to the individual heading the unit (or alternate) be it branch, region, country or Group. This has to be jointly exercised by the individual with two other Credit Officers, one of which must be a Credit Officer from the Risk Management Group so designated, in the approval chain for the particular business group. All credit proposals, whether initial, or for renewal of credits, must be initiated by the Relationship Manager. In case of Group relationships, All credits, particularly new initiations should be screened against the Target Market Criteria and should fit in the business strategy of the Group. In cases where credit does not meet all the terms and conditions, but the unit feels that the exceptions are justifiable, or can be rectified over a reasonable period of time, the RM may proceed with processing the credit proposal. It may be appropriate for the Relationship Manager to consult his Senior Marketing/ Credit Officer and seek their guidance prior to initiating the proposal. Relationship Manager should obtain all necessary information required to process the credit proposal.

Control Unit
Whenever the Bank deals with a customer and its related entities in more than one location, or when the customer deals with different business units within the Bank, i.e., RBG, CBG, CBD, IBG or ARM, it is important to designate a UNIT to take on primary responsibility for managing the relationship. This may also involve approval of credit at one business unit, whereas the facilities in full or part may be made available at a different business unit. This control function is critical for having marketing and credit synergies. The designation of Control Unit is also to ensure accountability for credit process on an overall Group basis.



Termination/ Liquidation
For all Credit Programs that are either terminating or liquidating, a memorandum must be prepared annually. It must include an action plan that describes how the risks in the Program are being managed throughout the termination / liquidation, and who is responsible for such. It must be approved as per the Credit Program, based on the remaining facilities at the time of the memorandum.

Lending without Financials

When a credit decision is based, not on review of disclosed financial statements but on an individual's or entity's reputation (general standing of the borrower), or when the financial statements are generally not available to the Credit Officers, such practice is to be highly discouraged. In Pakistan, SBP Prudential Guidelines require borrowers to provide financial statements. In other countries, in the absence of such rules, lending on the general standing of the borrower should be treated on an exceptional basis and requires a higher level of approval than is normally applicable. Exceptions may also be allowed to Government autonomous/ semi autonomous bodies, Defense establishments, SBP allocations etc. Limits for these will however, require approval at the CRO level.

Investment in TFCs



This is treated as a credit lending to the issuer by HBL, no different from secured Term Loans. While complying with SBP regulations in participation/TFC investment, it will be aggregated with the advances portfolio for determining the level of approval authority.

Real Estate Financings

(Excluding Mortgage financing under Consumer program)
All financings for which land and /property and /cash flows expected from these sources are primary source of repayment falls under this category. Property markets are exposed to sharp and unpredictable movements. This means that in a recession our customers, may be impacted by adverse movements in asset prices and rental income streams and/or suffer from low occupancy and illiquidity in the property sector. This will reduce their capacity to service debt or sell assets to repay loans. Where properties are developed for own use such adverse factors will usually be mitigated eg. business cash flows will be available to service debt.

Other Lending Activities

There are certain lending activities involving Investment Banking /Corporate finance expertise, like; Underwriting Acquisition Financing Leveraged buy-outs, management buy-outs, highly leveraged transactions, Provide finance by way of taking an equity stake or via venture capital activities. Structured finance including aircraft/ship finance (this does not prevent units from

extending short term facilities under the normal approval process). These are done on a selective basis by HBL and will be addressed through a separate Policy.



Target Market
The Target Market (TM) process follows the formulation of the overall business strategy for the Bank. It is the process employed to develop a focused marketing approach for each business group/country, in order to meet the targets/objectives set for them.

Risk Acceptance Criteria (RAC)

RACs represent the minimum conditions under which the Bank is prepared to enter into transactions bearing an element of credit risk.

Categories in the RAC should include Industry/Risk Level, maximum per borrower limits, product offering/tenor, security/documentation requirements, and pricing. Political and Macroeconomic Framework Analysis An understanding and analysis of the macro environment is necessary to decide on the overall growth strategy, balance sheet/earnings targets, risk tolerance, and resource requirement planning for each business group/sub-group in the domestic network and each country in the International Banking Group. a) Political Structure Form of government Key political forces/influencers Expected political changes and effect on economy/banking sector

b) Demographic and Economic Data



Area, population, population density, rural and urban population mix, literacy rate, GNP, GDP, GDP per capita, balance of trade, balance of payments, forex reserves, foreign debt, domestic debt, savings rate, inflation rate, etc. c) Economic Policy Role of the state Key features of fiscal policy Key features of monetary policy Expected changes and their projected effects d) Legal Environment Level of sophistication Degree of independence Enforceability of security/collateral e) Financial Services Industry Market size and level of sophistication Market segmentation Banks existing strategy and product offering in the market Segments that the Bank is targeting Identification of key players in those segments SWOT analysis

In conclusion:
TM screens should be clear, simple and objective The TM document should give conclusive recommendations on which type of customer the Bank should deal with and with which it should not The prospects/clients should be selected with the objective of meeting the Banks revenue goals, while not adding credit cost volatility



Risk Acceptance Criteria A RAC sheet containing the recommended industry RACs should form part of the industry study. A brief memorandum (with one or two paragraphs per criterion) detailing the reasons for the proposed criteria should accompany each RAC sheet.

The categories for RACs are detailed below:

a. Industry / Risk Level

Industry classifications should be as per Credit Policy Guidelines Based on financial strength, market share, management quality, etc., wherever relevant, TM names in respective industries should be sub-divided into a suitable number of risk levels.
b. Amount

Each RAC should include a limit on credit facilities

c. Tenor

For each tier, maximum tenor should be specified (this would often be related to the Risk Level) Certain products may only be proposed to be offered to Risk Level 1 names (for example), such restrictions (if any) should also be specified
d. Security / Documentation

Any additional security/support required due to the peculiar nature of an industry must form part of the RAC In certain cases, it may be made mandatory to obtain additional support such as personal guarantees (even when dealing with public limited companies) and/or additional tangible security from (say) Risk Level 4 names.



e. Pricing / Return

Multi-tiered pricing/return (related to the Risk Level) for industries/products.

In conclusion:
RACs are the standard terms and conditions that would be expected (keeping in view the environment and competition) in dealing with each Risk Level within the TM RACs should address eligible products, credit appetite, tenor, security, support, documentation, covenants, pricing, etc., for each type of client within the overall context of the industry

Credit Proposal form

This gives senior management a summary perspective of aggregate risk exposure/reward viz. the Group/Borrower. The CP form: states the purpose of the credit presentation lists important reference data necessary for maintaining a database of borrowing customers of the Bank for management information purposes gives a snapshot (where applicable) of Group exposure and earnings records the approval process

Profitability calculation
Profitability / yield calculation statement is being introduced to enable the RM to calculate the account profitability and yield of an obligor. The Profitability Sheet should be prepared for all obligors having exposures greater than Rs 10 mln. In case of a group, separate Profitability Sheets should be prepared for each individual



obligor with a weighted average yield to be calculated for the group, as per the annexed format.

In case of an existing relationship, actual profitability / yield of an obligor/group for the past twelve months should also be prepared.

Risk Rating Policy

Effective risk management requires an accurate and forward looking estimation of the probability of default over the next 12 months. This can be effectively achieved through allocation of an appropriate Risk Rating to all borrowers updated on a regular basis when new information is received. Risk Rating Scorecards have been developed for different types of borrowers in our portfolio that will be updated if needed. At present the following Risk Rating Scorecards are being launched: Corporate Banking Group (CBG) Scorecard is to be used for borrowers with sales of Rs 300 million and above. Commercial Banking Group (CBD) Scorecard is to be used for borrowers with sales between Rs 25 million and Rs 299 million. International Banking Group (IBG) will use the above two scorecards i.e. For borrowers with sales in excess of USD 5 million CBG Scorecard and for borrowers with sales between USD 0.5 million to USD 5 million CBD Scorecard. Group Risk Rating Scorecard is to be used for all borrowers risk rated by CBG, IBG and CBD. International Banking Group is to use these scorecards for customers where financials are disclosed.



Risk Rating Scorecards for RBG and FI borrowers shall be developed and advised in the future. This policy document sets out the key principles of Risk Rating appropriate to all scorecards when determining the most appropriate rating for both performing and nonperforming relationships.

Borrower Risk Rating Principles

A Risk Rating reflects the probability of a borrower defaulting on its financial arrangements in the 12 months after the date of rating such that the better the rating the lower the probability of default. The Risk Rating is determined at a point in time using all the information available at that time. Scorecards are tools to determine a borrowers Aggregate Score based on assessment of quantitative and qualitative factors. However, security will not form part of the rating decision as this influences actual loss not the probability of default. Security Indicators to reflect the likely value of security/ collateral taken in support of the borrowers debt shall be launched at a later date when the concept of Facility Risk Rating is introduced. Scorecards shall record the Assigned Rating determined through a combination of the Aggregate Score as well as exercise of judgment. Judgment plays an important role in the scoring of qualitative factors as well as recommendations made to change the risk rating in cases of disagreement. Industry Volatility is a key driver in the Risk Rating as it has been proven that the probability of default is higher in industries with higher volatility. Each industry has been assigned a volatility factor based on trends observed in the past. Risk Rating is a continuous process; not an annual event.

Group Risk Rating



A Group Risk Rating (GRR) Scorecard has been launched to enable the management to gauge the risk profile of various companies in a group by assigning a consolidated risk rating. The derived GRR is based on Risk Ratings of individual borrowers in relation to their weighted average exposures within the group. The Group Risk Rating Scorecards for all groups in CBG, IBG and CBD will be submitted annually to the SCO for approval. Where group exposure exceeds the discretionary authority of the SCO, approval should be sought from the CRO. While risk ratings for individual borrowers within a group would be reflected under the column BRR, the Group Risk Rating should be shown on all Credit Proposals, short forms and CLMRs under the head GRR. Half yearly reports of total limits and approved assigned Group Risk Ratings for all the groups must be submitted to the SCO.

Credit Administration
Scope and Objectives The primary objective of CAD is to monitor the Banks lending activity .To perform this function it must ensure that: proper checks and balances are maintained with regard to correct utilization (viz. amount, tenor, collateral, pricing, etc.) of credit facilities according to the terms and conditions of the credit approval all documentation relating to transactions is scrutinized & verified to be legally enforceable, all borrowing and security documents are lodged in the vault under dual control , collateral securities are effectively controlled and monitored 24


customers out standings are accurately reflected in the Banks books for monitoring and control purposes an effective follow-up system for routine actions (i.e., documentation, collateral, etc.) is in place, and all irregularities pertaining thereto are recorded and reported as required To maintain a set of standardized documents for similar type of risks/facilities and to critically review and update the same periodically in accordance with changes in Law or Bank practice