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Response to consultation Paper on draft Guidelines on loan origination and monitoring.
Go back5. What are the respondents’ views on the requirements for governance for credit granting and monitoring (Section 4)?
NA6. What are the respondent’s views on how the guidelines capture the role of the risk management function in credit granting process?
NA7. What are the respondents’ views on the requirements for collection of information and documentation for the purposes of creditworthiness assessment (Section 5.1)?
The guidelines in general and the requirements for collection of information and documentation in particular seem to be designed for high value lending at the bank counter. The credit banks have however specialized in small value lending via the internet or at the point of sale. Moreover, even “micro credits” are playing a substantial role for financing electronic devices like smartphones or white goods. We believe that a clear reference to the principle of proportionality is essential for preventing overly strict requirements to be imposed on low value lending. Furthermore, in the paragraphs 91 to 94, the term “at least” should be replaced by “for example”.8. What are the respondents’ views on the requirements for assessment of borrower’s creditworthiness (Section 5.2)?
As pointed out above, the requirements for assessing a borrower’s creditworthiness seem to be designed for high value lending. In order not to penalize low value lending, we strongly recommend to add references to the principle of proportionality to chapter 5 and each of the 3 subchapters. We believe that the assessment of an applicant borrower’s creditworthiness should provide sufficient flexibility in order to allow banks to take into account the type, value, risk and complexity of the transaction. This should be reflected in all relevant parts of the guidelines.9. What are the respondents’ views on the scope of the asset classes and products covered in loan origination procedures (Section 5)?
NA10. What are the respondents’ views on the requirements for loan pricing (Section 6)?
NA11. What are the respondents’ views on the requirements for valuation of immovable and movable property collateral (Section 7)?
NA12. What are the respondents’ views on the proposed requirements on monitoring framework (Section 8)?
NAName of organisation
Bankenfachverband
