Committed to Responsible Underwriting

At LIC Housing Finance, we are well established with industry-best asset quality, underpinned by stringent credit appraisal mechanisms. A robust and stable asset quality helps drive business growth and maintain healthy capitalisation and profitability.

We are reputed for our best asset quality with 87% of our loans being Individual Home Loans. Our credit appraisal module passes through several stringent channels which reduce the scope of default. Various types of support measures from the authorities for borrowers have prevented a sharp deterioration of our asset quality.

STRENGTHENING OUR UNDERWRITING

By further strengthening underwriting procedures with improving operational flexibility, strengthening digital outreach and focussing on customer contact. Our robust in-house Credit Appraisal team carries out appraisals on the basis of well-defined Standard Operating Procedures (SOPs). Various risk factors such as Credit Risk and Fraud Risk are assessed at the appraisal stage. Internal Risk Management department conducts monthly meetings of the Risk Management Committee (RMC) in which points pertaining to Credit Risk form a key agenda for discussion.

The RMC comprises HODs from various verticals with a combined average experience of more than 25 years in the operations of the Company. Together they bring in a holistic approach to the Risk management process which helps in formulation of well-rounded risk mitigation plans. The Board-level Committee is also responsible for formulation and modifications in credit policies on recommendation of the concerned department.

STRINGENT CREDIT APPRAISAL

We conduct training programmes for appraising offices at regular intervals. The Early Warning Signals showcase vulnerable accounts on stress and help in conducting vigilance on new borrowers, taking utmost care in appraising them and adopting corrective actions.

We conduct regular Risk Management Committee meetings on Credit Risk, which is attended by the heads of all our verticals. The Back Offices or Appraising units follow SOPs, which are updated in the form of regular guidelines. Regular review meeting with the Back Office appraisal team takes place. Internal audit system ensures irregularities, if any, from the Back Offices are rectified.

ANALYSING PERFORMANCE

We are continuously tracking and analysing performance of our loan portfolio to identify potential areas of concern and taking corrective actions. The NPA Warrior Team is a Special Task Force set up for stringent monitoring and regular follow-ups from back office/corporate office/regional office, and helps maintain high collection efficiency.

We are shaping up these Task Forces and designated officers to imbibe in them a sense of accountability. The teams are being prepared to manage stringent monitoring, regular follow-ups and sustain asset quality. We also provide Early Warning signals to borrowers to help them understand the importance of timely repayment. We formed dedicated team for regular monitoring of day-to-day collections and also ensured a robust System Recovery vertical.

Future strategies in digitisation

Strong internal audit system