Part 07 — People & Org

Credit Risk Roles

Credit risk in SME lending is not one department. It is a chain of judgement, rules, fraud control, portfolio analytics and committee discipline. A lender can have excellent scorecards and still lose money if the local credit manager approves thin files, the risk control unit (RCU) is treated as a formality, or the national credit head never sees early warning signals from vintages. The credit organisation must therefore separate file underwriting from policy, fraud control, portfolio monitoring and audit challenge.

Underwriting Roles

The underwriting ladder usually runs as:

Level	Common titles	Typical authority
Analyst	Credit Analyst, Junior Credit Manager, Credit Processing Officer	Spreading financials, bureau reading, bank-statement analysis, credit appraisal memorandum (CAM) preparation.
Branch/location	Credit Manager, Branch Credit Manager, Location Credit Manager	Personal discussion (PD), local market assessment, low-ticket approvals or recommendations.
Cluster/area	Cluster Credit Manager, Area Credit Manager	Supervises analysts and branch credit managers, approves medium tickets, manages local TAT and portfolio.
Regional/zonal	Regional Credit Manager (RCM), Zonal Credit Manager	Complex deviations, high exposure, local policy interpretation, branch quality.
National	National Credit Manager, National Credit Head, Chief Credit Officer, Chief Risk Officer (CRO)	Credit policy, delegation of authority (DoA), committee oversight, portfolio quality.

Public job listings show the operating expectations. U GRO Capital’s Cluster Credit Manager posting for SME business lists underwriting to credit policy, portfolio quality at location level, detailed PD, credit approval note quality, TAT/productivity, MIS, DSA/sourcing-team training and credit-vendor management (U GRO Capital job listing via Glassdoor). That is a good summary of the role: a cluster credit manager is both an approver and a local control owner.

Credit Analyst And Credit Manager

The analyst’s job is to convert messy borrower material into decisionable evidence. In SME files, that means:

Entity and promoter mapping: PAN, GSTIN, Udyam, directors/partners, beneficial owners and related entities.
Bureau reading: consumer and commercial bureau, repayment behaviour, enquiries, write-offs, guarantees and group exposure.
Banking analysis: average bank balance, inward/outward patterns, cheque/mandate bounces, circular transactions, EMI obligations.
GST and financial statement reading: turnover trend, tax filing discipline, gross margin reasonableness, debtor/creditor days.
Eligibility calculation: fixed obligation to income ratio (FOIR), debt service coverage ratio (DSCR), turnover surrogate, loan-to-value (LTV) for secured loans.
Risk note: strengths, weaknesses, mitigants, deviations, conditions precedent and recommended structure.

The credit manager owns judgement. A good manager checks whether the numbers tell a coherent business story. A fabric trader with ₹8 crore GST turnover, ₹35 lakh average monthly bank credits and no stock insurance may be legitimate, but the CAM must explain the gap. A restaurant with stable card settlements but repeated unpaid statutory dues is a different risk from a manufacturing unit with lumpy receivables from one anchor.

See underwriting data and underwriting decisioning for the data and decision stages.

Credit Committee

Credit committees exist to approve risk, not to launder weak judgement. A useful committee pack includes borrower group exposure, product, amount, tenor, pricing, collateral, guarantors, bureau, financials, banking, GST, RCU, field investigation, legal/technical status, deviations and exit conditions. Minutes should record who approved, who dissented, which conditions are mandatory before disbursement, and whether an exception expires.

Common committee layers:

Committee	Typical cases
Location/regional credit committee	Ticket above branch authority, local deviations, higher LTV within caps.
National credit committee	Large LAP, working-capital limits, weak bureau with strong collateral, group exposure.
Product/risk committee	New programs, geography caps, negative industry lists, scorecard cut-off changes.
Board/Risk Committee	Risk appetite, concentration limits, policy exceptions beyond management authority.

Policy, Portfolio Risk And Analytics

Credit policy is second line. It writes the rulebook: product eligibility, minimum bureau score, vintage, negative industries, geography, collateral type, LTV, debt burden, documentation, DoA and deviation matrix. Portfolio risk tests whether the rulebook works after disbursement.

Key portfolio analytics:

Metric	Use
Vintage delinquency	Detect weak sourcing months, product launches or branches.
First EMI bounce / first-payment default	Early indicator of mis-sale, fraud or weak affordability.
Roll rates	Movement from current to 1-30, 31-60, 61-90 and NPA buckets.
Approval-to-disbursement pull-through	Shows whether credit conditions are realistic.
Deviation performance	Proves which deviations deserve policy change and which should be shut down.
Segment concentration	Industry, pincode, DSA, anchor, product, collateral, borrower group.

RBI’s income recognition and asset classification (IRAC) discipline still matters even when a lender also uses Ind AS 109 expected credit loss (ECL). A risk team that cannot reconcile monitoring and early warning signals with provisioning impact is flying blind.

RCU, FCU And Fraud

Risk Control Unit (RCU) and Fraud Control Unit (FCU) work is often underfunded because it does not book revenue. That is a mistake. RCU verifies whether the file is genuine: document authenticity, address, business existence, employer/supplier/customer reference, fraud database hits, negative-area flags, suspicious bank statements, manipulated GST, property-document tampering and repeat borrower patterns.

Public RCU job descriptions in Indian NBFCs commonly require field investigation, customer/dealer verification, fraud detection, document review, collaboration with credit, operations, collections and legal, and fraud databases. A 2026 RCU Manager listing for an NBFC two-wheeler portfolio, for example, specified field investigations and customer/dealer verification with 3-7 years’ RCU/FCU experience (RCU Manager listing via BeBee). A separate Risk Containment Unit role description listed pre- and post-disbursement verification, borrower credential checks, suspicious-behaviour investigation, report preparation and law-enforcement/legal coordination (Foundit RCU role).

RCU should report outside sales. It may sit under risk, credit control or fraud risk, but its negative findings must be hard to override. If an RCU negative can be cleared by the same sales head whose DSA sourced the file, the control is ornamental.

KPIs And Incentives

Credit incentives should be conservative. File volume and TAT matter, but paying credit managers for approvals creates adverse selection. Better KPIs:

Role	KPIs
Credit analyst	CAM quality, first-time-right data, TAT, error rate, audit observations, post-disbursement document exception rate.
Credit manager	Portfolio early delinquency, approval quality, deviation performance, TAT, PD quality, conditions precedent discipline.
Cluster credit manager	Branch portfolio quality, analyst productivity, training, vendor TAT/quality, override and exception trend.
Policy head	Policy hit rate, approval/loss trade-off, new-program performance, deviation closure, concentration caps.
Portfolio risk	Vintage loss, roll rates, early-warning accuracy, stress reporting, model monitoring.
RCU/FCU	Fraud-negative precision, sampling coverage, investigation TAT, confirmed fraud detection, false-positive learning, vendor quality.

Control function compensation should not be driven by sales targets. RBI compensation expectations for regulated entities include risk alignment and malus/clawback principles for senior management in NBFCs under SBR, while private-sector banks have specific RBI compensation guidelines for material risk takers and control function staff (RBI compensation clarification, August 30, 2021).