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An in depth framework of financial intermediaries

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On a priority basis, FIs should be selected in connection with a specific operation, either at the recommendation of an Operation Leader or as a result of an application by an interested financial institution. However, the selection and due diligence process needs to be conducted independently and impartially.

Financial intermediaries

Furthermore, the Bank needs to pay an in depth framework of financial intermediaries attention to reaching out to potential FIs.

While the Bank is primarily demand driven, it also fully intends to devote greater resources to meeting its operational target of having a minimum of two approved FIs in each member country through which the Bank undertakes its financial intermediary operations trade finance, SME credit lines, etc. A FI may participate, simultaneously or sequentially, in a number of similar or different operations; the only restrictions being that i aggregated authorized exposures remain within the maximum exposure limit for that particular FI, and ii each individual operation be within the maximum maturity, with both limits to be established.

This ensures the following: The next section further an in depth framework of financial intermediaries the procedure step by step.

The Operation Team will identify potentially eligible financial intermediaries and based on the information received, the Operation Leader will request a preliminary assessment of the institution to be performed by Financial Analysis and Risk Management Department, recommending a maximum exposure amount and tenor. If the financial intermediary meets the criteria for financing, the operation moves on to the Appraisal and Due Diligence stage, Financial Analysis Department will perform full analysis, including creditworthiness analysis, while the Operation Leader will coordinate the preparation of the Final Review Document.

Through its risk assessment, Financial Analysis and Risk Management Department will confirm the exposure and tenor limits and will make pricing recommendations for the operation. Upon the completion of the analysis, a recommendation from the related VP accompanied by analysis performed and specific risk assessment prepared by RMD, and other documents as required from other departments will be submitted to the Credit Committee for its consideration.

The Operation Leader will inform the Client about the Credit Committee decision and the operation will be submitted to BoD for its approval.

Access Check

The supervision and monitoring of financial intermediaries as borrowers evolution and performance, and submission on a regular basis normally annually for performing FI, but on certain instances the frequency may be increased to semi-annually or even quarterly of necessary information to the Credit Committee is the responsibility of Operation Leader and Project Implementation and Monitoring Department; for such purpose they will cooperate closely with FAD and RMD, where necessary.

The main purpose of the list is to provide a quick reference guide for banking operations, which are time-sensitive. Administrative Specifications This section will outline, in general terms, for what purpose, and under which conditions, Bank funds shall be used by selected financial intermediaries.

Transition to prosperity and sustainable economic growth should be targeted as the ultimate goal of Bank involvement. Bank funds may be disbursed only for the purpose specified in the legal documentation. Repayments of on-lent funds by the final beneficiaries, or sale of equity investments, in favour of the financial intermediaries may be on a back-to-back basis with repayments by the financial intermediaries to the Bank, or on the basis of another amortization schedule acceptable to the Bank.

The on-lending terms follow the policy prescriptions set forth in the Financial Sector Policy. The Bank will take all necessary precautions an in depth framework of financial intermediaries ensure that Bank funds are not priced largely off-line with what the intermediary would pay in the market for obtaining funding for similar maturity and currency of denomination.

The funds on-lent to final beneficiaries are priced so that the financial intermediaries cover an in depth framework of financial intermediaries and costs, and receive an adequate profit margin.

Types of Institutions

Where interest rates are market determined and the interest rate levels and structure are not affected by distortions, on-lending will be made at prevailing market rates. In cases where distortions are pervasive an in depth framework of financial intermediaries market segmentation is such that access to funding by targeted final beneficiaries is constrained, the Bank will agree with the financial intermediary — usually during negotiations — and include in the loan agreement the applicable interest rates or the pricing model to be used, as appropriate.

The performance indicators agreed on during negotiations might include economic, sectoral, financial, and institutional variables.

These variables closely parallel to those used for the analysis of financial institutions. During implementation of operations involving FIs, the Bank will conduct the supervision and monitoring activity in conformity with the provisions of the Operations Manual. Usually, at loan negotiation, the Bank agrees with the financial intermediary on the form and content of the reports, which must be in line with the following general guidelines: