monitoring and follow up (supervision) in Indian banking

1. TOPIC:

2. What is Monitoring?
 Monitoring is the regular observation and recording of activities taking place in
a project or program . It is a process of routinely gathering information on all
aspects of the project.
 To monitor is to check on how project activities are progressing. It is
observation; ─ systematic and purposeful observation.
 Monitoring also involves giving feedback about the progress of the project to
the donors, implementers and beneficiaries of the project.
 Monitoring basically involves 3 steps such as 1.measuring , 2.reviewing and
3.reporting

3. Purposes of monitoring :
 Analyzing the situation in the community and its project;
 Determining whether the inputs in the project are well utilized;
 Identifying problems facing the community or project and finding solutions;
 Ensuring all activities are carried out properly by the right people and in time;
 Using lessons from one project experience on to another; and
 Determining whether the way the project was planned is the most appropriate
way of solving the problem at hand.

4. What is Follow-up?
 Monitoring a job, enquiry, sale, etc., to get feedback on the schedule,
requirements, effectiveness, or other such factors. Follow- up is a part of
following through.
 Supervision and follow up are closely related. supervision gives more emphasis
on proper end use and follow up gives more emphasis on timely recovery of
advances.
 Follow up includes efforts to ensure that the terms and conditions of advances
at 1.pre-disbursement 2.disbursement and 3.post-disbursement.

5. Objective of follow up and supervision:
 Basic objective of supervision and follow-up system is to ensure that advances
granted by bank are safe as the funds lent by banks belong to depositors and
bank management has tremendous responsibility in safeguarding the interest of
millions of depositors.
 Supervision work of loan starts right from the stage of selection of a borrower.
 Whereas, follow up work of loan starts immediately after disbursement of the
loan.
 Supervision and follow up of advances are the direct responsibilities of the bank
branch.

6. Bank branches responsible for supervision and
follow up have to follow the following:
Bank branches is a unit wherefrom the proposal is made for any advances and disbursement is made.
The borrowers maintain has account with the branch, operations are conducted through the account,
reports, and returns are submitted, by the borrower to the branch. So success depends on how
effectively the branch ensures supervision and follow up of the advances.
Bank branches responsible for supervision and follow up have to follow the following:
 To ensure that operations of accounts are regular, bad indications warrant greater supervision.
 To keep watch over the inflow and outflow of fund.
 Maintenance of production and sales record.
 To verify proper end use of funds for purpose for which loans was given.

7. Contd.…
 Progress made in construction and operations.
 Inventory position and turnover rate observation.
 Ensure that security have been obtained as per terms and condition.
 Ensure that documents have been obtained as per terms of sanctions.
 Regular inspection of security and verification of documents.
 Appropriate actions are taken in time to regularize the irregulates and recover as per schedule.
 Ascertain financial position of borrowing concern from time to time through the study of audited
balance sheet/ financial statements.
 Obtain stock statement as per terms of sanction against hypothecation and pledge of goods.
 Non compliance of any term and conditions of loan.