3. Credit Decision – Making Process
Decision-making competencies in relation to the sale and acceptance of credit risk of individual transactions which are carried out by the business units and units of transactional credit risk are separated (including functional separation) from the activities in the area of credit policy creation and from the processes of development and validation of credit risk management supporting tools which are executed by the risk policy, modelingand reporting area. Risk is accepted by authorised persons.
The credit decisions are taken based on a comprehensive analysis of the risks of the transaction – in the adequate credit path, depending on the complexity and amount of the transaction. In case of the paths with a higher level of automation credit decision are taken based on clearly defined criteria, including behavioral criteria, and automatically calculated credit limit using the algorithm approved by the Credit Policy Committee. Acceptance of all transactions is done in accordance with clearly defined rules of credit approval authority. Personal responsibility of individual decisions makers for credit decisions taken is the rule.
The credit decisions in credit process for regular portfolio are exercised by two Approval Signatories (SAP) and taken in Signatory Approval Process shown in Credit Manual. Some exceptions apply to:
- decisions taken by Bank Credit Committee (KKB) – applying to the largest credit exposures mentioned in Credit Manual,
- decisions taken by one Approval Signatory – applying to “FAST TRACK” credit process.
The delegated authority level is co-related with the level of credit risk arising from the client risk and from the transaction risk. As the credit risk rises, the decisions are taken by collective individuals who – by their nature – have more extensive experience, and thus the ability of broad and thorough risk identification.
Decision-taking level for credit decisions concerning regular credit exposures is determined based on the client’s risk grade and the following elements:
- the total exposure of ING Group towards the debtor and the members of the capital group (within Article 3 paragraph 1 item 44 of the Accounting Act of 29 September 1994) of which the debtor is also the member, as well as entities related to the debtor by personal ties by spouses (only when the Bank funds an entrepreneur who is a private individual),
- the subject matter of the credit decision in question.
In the retail segment the decision may be taken on a one-person or two-persons basis. For specified situations decisions are taken automatically by informatics system. In the case of two-person basis, for positive decision, unanimous approval of both decision-makers is always required. The scope of decisions taken on a one-person or two-persons basis and rules of establishing, giving and reviewing of authorities to approval of credit decision are specified in General Terms and Conditions of Lending: “Rules of Taking Credit Decisions”.
An appropriate risk acceptance level depends on the overall exposure of the Bank (including entities of ING Bank Śląski S. A. Group) to the client who is obliged to repay the exposure. Each new exposure to a natural person involved in business operations in another form than a separate legal entity shall be approved at a level corresponding to the Bank’s overall exposure to the client as a natural person and in relation to his/her business operations.