Read The Incredible Banker for Free Online Page A

'Bhisham, do you actually think our credit underwriters across the board will be able to stand up to sales bludgeoning?'
    'I would guess so. Why? You think differently?'
    'Don't know, Bhisham. Maybe it is a good idea to find out. To do a stress-test on our system. I was talking to Sanjit and even he was worried about what goes on at the month-end.' He knew that Bhisham was too scared of the Deputy CEO to go and ask him. Deepak had become adept at name-dropping.
    'Why did you speak with Sanjit on this?' There was a tinge of annoyance in Bhisham's tone.
    'He had called me to talk about some other issues. This just came up during the discussion.'
    'Hmm...ok.' Bhisham didn't have much to say.
    'So, Bhisham, I am going to go ahead with my investigations unless you have any reservations. I wish to critically review each and every loan that has been disbursed on the last few days of the previous months. Is that ok with you?' Deepak delivered the final blow.
    'It's ok. Go ahead,' is all he could say. If Deepak had Sanjit's approval, there wasn't much he could do about it.

 
     
     
    August 2007

Mumbai
GB2 Offices
     
     
    D EEPAK began to review in earnest the mortgage loans booked during the month-end. He wasn't going to make it any easy for Karan. Deepak was not going to let this opportunity pass without throwing his weight around and getting even with Karan.
    A three-member team was put on the job to review all the loan files from end to end. Since Deepak did not have enough capacity within his team, he had arranged staff from the branch-banking side to work on the review project for four weeks. He carefully chose people who were aligned to him. They were given a deadline of three weeks to complete the audit. Deepak himself spent over three hours a day nitpicking with the team, trying to find fault with the entire mortgage process. Deepak was out on a witch-hunt. What started as ordinary corridor banter had now turned into a full-blown battle. Karan could only watch it unfold from the sidelines. (See box on p.38)
    As a part of the audit, Deepak's team checked all the application forms. They went through all the verification reports with an intensity never seen before. All loan files were checked for adherence to predefined credit policy. The legal and valuation reports were read again and again to see if there was any laxity in following what the lawyers had asked for and if there were any slips. The legal kits were looked at through a microscope to make sure everything was in order. Not a single thing was left out.
     
    The approval process for mortgage loans is a fairly involved process. Banks normally collect a host of documents from the customers, prior to sanctioning a loan, which include:
Income documents like pay slips/Income tax returns, to demonstrate that the customer has the income and employment to pay the instalments every month.
Identity proof and address proof- documents like passport copy, driving license, ration card are used as residence proof. Despite taking these documents most banks conduct an independent verification wherein they send agents to the customer's office and residence to verify the veracity of the details provided by the customer. These documents, also referred to as the Know Your Customer (KYC) documents, are mandatory documents as per guidelines laid down by the RBI.
Documents related to the property being bought – a housing loan is a loan provided against the collateral of the property being bought. Hence, it is important that banks satisfy themselves that the seller has the right to sell the property. They conduct a tide search on the property being funded, for which the documents related to the property are taken. An empanelled lawyer then peruses these documents and gives the bank a legal report on the title of the property. This helps the banks in making sure that the property they are funding is a legally tenable property bereft of any encumbrances and in case the customer defaults,