Credit function can be called the earning child of a bank or a lending institution. Just like an earning child commands respect and importance in a family so does Credit function in the bank/ lending institution. With bank credit witnessing phenomenal changes and touching dizzy heights the role of Credit Department of a bank or lending institution has assumed added significance. With lots of guidelines from the Government and RBI on financing the weaker sections of society and hitherto neglected but emerging sectors of the economy, the role played by Credit Department becomes pivotal. Under such conditions it is thus natural that banks require knowledgeable Credit Officers who are well versed with credit products, their delivery process, the risks involved and credit management at large.
The position of a Chief Credit Officer (CCO) in a bank is an important one as it is he/she who handles one of the most sensitive and income generating products all banks actively promote through calls, advertisements, messages, emails, etc. — credit/ loans. Not very long ago, Credit only meant Cash Credit, Overdraft, Demand Loan and Term Loan. But as the economy is growing so are the complexities in transactions and customer needs, giving rise to quasi credit facilities like Letters of Credit, Bank Guarantees, Co acceptances, Buyer’s Credit and Supplier’s Credit. With multi layered credit function it requires banks to employ Credit Officers who have the skill set and expertise to perform different credit functions across banks and have the experience to handle credit management issues. Indian Institute of Banking & Finance (IIBF) has designed a blended course called “Certified Credit Professional Course” looking to the dire need to have well trained Credit Officers in banks and most of the banks in India have made passing this Blended Course mandatory for their Credit Professionals. But before we elaborate on “How to become a CCO”, let us first dive into and understand the roles and responsibilities of a CCO in a bank.
The role of a Chief Credit Officer (CCO) is very crucial in the Bank. It requires advanced skills in handling credit management issues covering Loan Policy, Project Finance, Export Finance, Working Capital Management, Credit appraisal which also involves using tools of analysis of financial statements of the prospective or existing borrower, Credit Monitoring, , Management of Impaired Assets, etc. The CCO is responsible for measuring and managing the overall risk involving the Bank’s loan portfolio. He also oversees the Bank’s commercial credit and collection policies, procedures, and processes ensuring all risks are addressed appropriately through evaluation and approval of loan applications.
To understand a CCO’s role better, it is imperative to know the definition of banking. Under section 5(a) of the Banking Regulation Act, 1949 banking means ‘acceptance of deposits for the purpose of lending and investment’. Deposits are sources of funds while lending and investment constitute uses of funds. The job of a credit officer, before he/ she becomes a CCO, in a bank is to be a part of the Credit or Lending department of the bank and ensure lending is done for genuine purposes in line with RBI norms and ensure prompt recovery. You will learn more in this important area as you enroll for the Certified Credit Professional examination conducted by IIBF.
Credit constitutes the most vital organ of banking. It is the portfolio which generates income for the bank besides meeting credit requirements of the vital sectors of the economy like agriculture, MSE, Export, Infrastructure, Housing etc. Being a very dynamic aspect of banking Credit area constantly needs periodic updation and highly skilled manpower. To fulfill this need, IIBF is offering a Blended Course called Certified Credit Professional Examination for bankers. Let us understand what this course is all about and how it can help you become a CCO.
In your zeal to become a CCO, it is essential to first grasp the concepts of Credit Management like, Loan Policy, Credit Monitoring, Project Finance, Management of Impaired Assets, etc. Conceptual understanding is always very crucial at the beginning. However, basic understanding of the banking sector is a must. Along with that, some knowledge about the procedure for giving loans, type of loans, priority sector lending, financial and ratio analysis, important ratios for determining the funding of a project, etc. Most of it is covered under the blended specialist course offered by IIBF in credit management to present a chance to bankers to upgrade their knowledge and help in their skill development.
Credit Management being a dynamic area is subject to frequent changes which is why it is essential to carefully choose candidates with in-depth knowledge and understanding of the subject. Besides that, communication is another key skill that you will need in this job. It is essential to evaluate how well you can explain the loan process or other credit functions to a client; your interpersonal skills – sending notifications to client regarding loan processing; sales and negotiation skills – closing hard sales; as well as to measure your ability to comply with bank regulations and best practices in terms of keeping client information confidential and following the prescribed norms.
The level of subject knowledge and confidence comes from how well a banker is trained in handling credit management issues. That is exactly why banks and financial institutions are encouraging their credit professionals to take the Certified Credit Professional Examination, conducted by IIBF. It is being offered as part of a blended course by IIBF for Credit Officers in banks to effectively perform different credit functions. Initially the bankers need to clear the online examination which prepares them for the classroom training which is integral part of the Certified Credit Professional Course. To qualify for this course, you can easily clear the exam with the help of NBTI Distance Learning Kits for Certified Credit Professional Examination designed strictly as per the syllabus prescribed by IIBF. You must enroll for this Course if you aspire to be part and parcel of the Credit portfolio of the bank.
Now you have all the details you need to chase your dream of becoming a Chief Credit Officer. Without further ado, visit www.nbti.in to get your study kit and begin your exam preparation. This exam is conducted every month, so it is never too late to apply if you have not done that already. The exam schedule for 2020 is available on the IIBF website. As always, NBTI is there to help you get ready and succeed in your banking career as a Credit Officer.