PIB 4.3.2

The Credit Risk management framework of an Authorised Firm must have at least the following principal elements effectively implemented to ensure that the Credit Risk Exposures of the Authorised Firm are of a sufficiently good quality:

(a) an appropriate Credit Risk environment, defined by a documented Credit Risk strategy and a documented Credit Risk policy;
(b) application of the Credit Risk strategy and policy, where appropriate, on a consolidated basis and at the level of individual subsidiaries;
(c) sound processes for assuming and managing Credit Risk;
(d) prudent lending controls and limits, including policies and processes for monitoring Exposures in relation to limits, and approvals of exceptions to limits;
(e) adequate appropriately skilled human resources to manage the Credit Risk function;
(f) independence of credit approval and review functions from credit initiation functions to avoid any real or potential conflicts of interest;
(g) prudent procedures for approving credits, defined by a documented credit procedures manual;
(h) effective systems for credit administration, measurement and monitoring; and
(i) adequate controls over Credit Risk.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]