Credit Policy of Ghana Commercial Bank

In: Business and Management

Submitted By ferobo
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Credit Policy of Ghana Commercial Bank
THE CREDIT POLICY

The credit policy of Ghana Commercial Bank Ltd is aimed at maintaining acceptable credit standards by holding reasonable risk limits, evaluating new business opportunities, complying with regulatory requirements and providing adequate liquidity for the effective running of the bank. This aim is achieved through the following objectives:

1. Attract and maintain a High Quality Portfolio of Assets
2. Efficiently manage its assets to ensure liquidity
3. Finance the needs of Corporate, medium and small scale as well as individual clients.
4. Join syndicates with other banks and financial institutions.

The importance of these objectives is to ensure that clients who borrow from the bank have the ability to repay the funds they borrow on schedule and with interest. Businesses that borrow from the bank should demonstrate an ability to repay from their current and future net cash flows of the business. Individual client's repayments depend also on their personal cash inflows basically being their salaries.

Another importance is the need to avoid bad debt as much as possible by not giving credit to clients who are likely to be unable to repay due to their peculiar circumstances.

Also the bank must ensure that at all times it is able to meet its obligations to depositors since its stock in trade is money. This it does by diversifying loans it has given (assets) to have a wide array of maturity profiles. Also it ensures that its assets are properly matched with its liabilities to avoid the situation where it borrows short term from depositors and lends out long term to needy units.

SOURCES OF FUNDS
The sources of funds for the banks business are mainly deposits, shareholder's equity and retained earnings, sale of liquid assets and borrowing from offshore financial markets.

USES OF FUNDS
The funds…...

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