Preface

Rahul is the Principal Consultant — Data Analytics with Analytics Inc. Analytics Inc. are market leaders in the field of Governance, Risk Management and Control Analytics for the last 7 years. In a short span of 3 years this dynamic firm has managed to establish a footprint in the accounting and finance segment, which was the erstwhile arena for large Accounting and Audit majors. This fast-paced growth was fuelled by a small group of ‘dynamic’ smart professionals who delivered consistent value propositions to their clients by riding on the backbone of contemporary assurance technology.

Analytics Inc. leveraged audit technology like General Audit Softwares, Audit Administration Tools and Enterprise Risk Management Applications to deliver above-the-board, high-return results to all the clients from retail, to manufacturing, to logistics and healthcare.

Rahul was solely responsible for overseeing all Data Analytic projects, assignments and applied research projects for the firm.

In a recent Banking conclave, Rahul was presenting on the role of ‘The Power of Analytics’ and ‘Analytics made Simple’. Rahul spoke firmly, confidently and charismatically about his association with General Audit Tools and the outstanding benefits which accrued to him and the firm over the last 7 years through the power of analytics. There was a twinkle in his eye as he drew a colorful picture about his journey with General Audit Softwares. His oration captivated the audience and laid the foundations for prolific use of CAATs by all Bank Auditors and Investigators in the days to come.

Rahul wanted to drive home the simplicity and power of Audit Tools to the conclave of banking participants comprising auditors, investigators, risk managers, IT Security Professionals and more. He decided to leave a mark with an illustration from Bank Asset Classifications.

Bank Asset Classification is an area warranting special merit of mention and overview in view of the high composition of Non-Performing Assets (NPAs) in the banking channel. The Reserve Bank of India is making concerted efforts to control, regulate and treat high NPA levels in both nationalised and private banks within India.

He displayed a database from one of his numerous projects. The database contained credit risk scores awarded to various loan accounts over a period of review.

Database Structure for Asset Credit-Risk-Grading

Rahul went on to present the methodology followed for verification of ‘Assets Classification’ on a specific bank project. He raised certain basic questions on assets classification to the audience.

Single borrower having a different asset credit risk grade classification — could the same borrower have multiple loans with credit grade status performing and non-performing ? How do we conveniently cull out such cases ? How could such a situation occur ?

Procedure undertaken

The exceptions sighted in l) above should be shared with the Branch Manager. The Branch Manager should be advised to correct the disparate credit risk gradings through standardisa-tion and unification of risk scores customer-number-wise and report on action taken immediately.

Upgradation of asset accounts during the review period — could a branch user initiate movement of credit risk grades/scores from non-performing to performing for specific loans ? Would his action warrant investigation ? How do we identify such instances in a jiffy ?

Procedure undertaken