Module 1 - Pre-Sanction Process

Objectives
On completion of this module, you will be able to describe the first stage of the
Credit Process i.e. the Pre-Sanction Credit Process.
Overview to the Pre-Sanction Process
The sequence of steps performed after receiving an application to grant a loan
till the loan is sanctioned constitutes the Pre-Sanction Credit Process. The credit
process has been broadly divided under two heads:
Pre-Sanction
Post-Sanction
For the purpose of assigning responsibilities to various designated officials of the
B ank, the pre- and post-sanction formalities have been treated as two distinct
processes.
B oth the stages are discussed in detail subsequently.
Pre-Sanction Process
The Pre-Sanction Process consists of the activities that are carried out by the
B ank, when an applicant approaches it for credit facilities. Following steps are
carried out at the Pre-Sanction stage:

Appraisal and Recommendation

Assessment
Sanction

Post-Sanction Process

The second stage of the credit process is the Post-Sanction Process. The
responsibility of the bank does not end after sanctioning of the credit. Rather it
increases as the loan has been granted but the recovery of the loan has to be
made from the applicant. The post-sanction process comprises of those activities,
which are carried out by the Bank after sanctioning the credit.
Fol lowing are the steps carried out in the Post-Sanction Process:

Fol low-up
Supervision
Monitoring and Control