1. General Provisions
1.1. The Credit Committee (hereinafter referred to as “the Committee”) is a permanent collective body of EVROFINANCE MOSNARBANK (hereinafter “the Bank”), set up by the resolution of the Management Board and authorized to make decisions on matters placed within its competence by the present Regulation on the Credit Committee (hereinafter “the Regulation”).
1.2. The present Regulation determines the status, procedure of establishment, powers, authority, rules of procedure and decision-making process of the Credit Committee.
1.3. The objective of the Credit Committee is coordination and control to ensure that all the business units of the Bank pursue a common policy in the sphere of lending and liabilities, organization of the credit process, mitigation of credit risk, enhancement of efficient use of the Bank’s resources.
1.4. The operation of the Committee is governed by the present Regulation, the current legislation of the Russian Federation, regulations of the Bank of Russia, and resolutions of the Management Board of EVROFINANCE MOSNARBANK.
2. Competence of the Credit Committee
2.1. The Committee has the power to take decisions on the following matters:
(a) on granting to corporate customers loans, credit facilities, unsecured guarantees or letters of credit, and on performing other operations classified as lending transactions under the effective Regulation on the Procedure and Standards of Corporate Lending of EVROFINANCE MOSNARBANK (hereinafter “the Instruction”);
(b) on establishing or changing credit risk limits for transactions with financial institutions (lending agencies, insurance organizations or investment companies) or for transactions with stock market debt securities;
(c) on approving the Credit Product Rating, as defined in the Instruction, for each lending transaction;
(d) on approving proposals for elaboration and adjustment of the credit policy of EVROFINANCE MOSNARBANK, in particular, in terms of regions, industries, types of credit product, timing of lending transactions, etc.;
(e) coordinating internal documents of the Bank that determine the procedure and the standards of performance of lending transactions by the Bank;
(f) on approving standard forms of agreements, contracts and other documents to be used for performance of lending transactions and other operations involving credit risk.
2.2. The decision of the Committee shall be final and not subject to approval by the Bank’s Management Board in the following cases:
(a) for lending transactions in the amount not exceeding USD 2 million (or an equivalent in other currencies) for the period of not more than 1.5 years, provided that the total amount lent to one Borrower or a group of related borrowers after the lending transaction is performed does not exceed USD 5 million (or an equivalent in other currencies);
(b) for lending transactions with “Complete Cash Security”, as set forth in the Instruction, for the period not exceeding 24 months, within the total limit for such transactions of USD 10 million (or an equivalent in other currencies);
(c) for retail lending transactions, in compliance with effective internal regulations.
(d) for lending transactions performed within the “Credit Risk Limits” approved by the Bank’s Management Board for corporate customers;
(e) for modification of the terms of lending transactions determined by paragraphs (a), (b), (c) of the present section;
(f) for modification of the terms of lending transactions approved by the Management Board, if they do not affect material terms of such transactions (subject to coordination of the above matters with the Bank’s business units participating in the lending process in compliance with the Instruction), namely:
- Extension of the validity period of the lending documentation established by the Instruction, but not more than for 30 days;
- Modification of preliminary lending conditions without increasing the lending transaction risk;
- Reduction of the loan amount/drawdown limit;
- Extension of the Availability period for not more than 2 months;
- Increase of the interest rate and/or charging extra fees;
- Replacement of the insurance company (within the limits of the List approved by the Bank’s Management Board);
- Unpledging part of the security for the reason of partial repayment of the loan, subject to preservation of all loan to value ratio in compliance with the initially approved conditions;
- Alteration of the security composition for effective lending transactions;
- Granting consent (approval) for the Borrower to perform financial transactions involving borrowed funds as well as change of key financial ratios stipulated by the terms of the lending transaction, if this does not result from deterioration of the Borrower’s financial standing;
(g) for prolongation of limits for any banks and counterparts, earlier established by the Bank’s Management Board, without changing their values;
(h) for other lending transactions and credit risk limits, if authorised accordingly by a resolution of the Bank’s Management Board.
However, the Credit Committee still has the right, if necessary, to submit the above-mentioned matters to the Bank’s Management Board for approval.
3. Powers of the Credit Committee
3.1. The Committee shall have the power to:
(a) hear periodic reports of the Bank’s customer management and lending units, as defined in the Instruction, on the progress of their implementation of the Bank’s (subsidiary’s) commercial strategy.
(b) request from the Bank units any information that may be necessary for decision-making with regard to lending activities, the status of assets and liabilities, profitability and commercial effectiveness of the transactions under consideration;
(c) give instructions to the Bank services and units with regard to matters listed in section 2 hereof.
(d) submit for the consideration of the Management Board any matters within its competence.
4. Persons participating in meetings of the Committee
4.1. The Committee shall consist of not more than seven permanent members. The Committee must at all times include representatives of the Customer Unit, Risk Management and Analysis, Treasury, and Credit Division. The membership of the Credit Committee shall be approved by the Bank’s Management Board and declared by the order of the President – Chairman of the Management Board. The person nominated the Chairperson of the Committee is usually the Deputy Chairman of the Management Board. The Chairperson of the Committee must have a deputy who will replace the Chairperson when the latter is absent.
4.2. The Bank’s Management Board, alongside with approval of the Committee members, shall appoint the Secretary of the Committee, who shall keep the minutes of meetings and, together with the Chairperson of the Committee, shall be responsible for their conformity to the decisions made. The Secretary of the Committee, on the instructions of the Chairperson of the Committee, shall ensure resolution of technical and administrative issues related to the operation of the Committee. In case of absence of the Secretary of the Committee, the latter shall be replaced by an employee of the Bank appointed by the Chairperson of the Committee.
4.3. Bank employees can be invited to meetings of the Committee for presentation of items submitted for consideration of the Committee or for provision of necessary information (without any voting rights).
5. Rights and responsibilities of persons participating in meetings of the Committee
5.1. The Chairperson of the Committee shall:
(a) organize the work of the Committee in compliance with the present Regulation and other regulatory and administrative documents of the Bank;
(b) preside over meetings of the Committee;
(c) approve the agenda of the Committee meeting;
(d) ensure conformity of the decisions made and the contents of the minutes of the relevant meetings of the Committee;
(e) sign the minutes of the Committee meetings.
5.2. Permanent members of the Committee shall
(a) attend meetings of the Committee and participate in discussion of items on the Committee agenda;
(b) bear responsibility for compliance with and performance of the requirements of the present Regulation;
(c) bear responsibility, together with other members of the Committee, for decisions made at the meetings of the Committee;
(d) have the right to express their dissenting opinion on matters discussed at the meeting and demand that it is recorded in the minutes of the Committee meeting.
5.3. The Secretary of the Committee shall:
(a) accept from the performer the set of documents for presenting a matter at the Committee, and check the compliance of the submitted documents with the requirements for such documents stipulated by the Instruction, in particular, with regard to sufficiency of such documents;
(b) prepare the agenda for the Committee and submit it to the Chairperson of the Committee for approval;
(c) notify the participants of the upcoming meeting of the Committee;
(d) give all members of the Committee an opportunity to familiarize themselves with the submitted materials within the timelines set forth by the Committee Rules of Procedure;
(e) keep record of those present at the Committee meeting (or their proxies), and the presence of quorum necessary for making decisions;
(f) ensure compliance with the procedure of presenting transactions at the Committee;
(g) keep the minutes of the Committee meeting;
(h) prepare draft minutes of meetings for further approval at the Committee meeting, and, together with the Chairperson of the Committee, sign the approved minutes;
(i) properly organize the document flow and be responsible for communicating the Committee decisions to relevant units of the Subsidiary;
(j) keep a file of all documents submitted to the Committee for discussion at a meeting (agendas, minutes and appendices thereto);
(k) provide permanent members of the Committee and the Bank units with a new version of the present Regulation within three days after its approval by the Management Board.
5.4. An employee submitting a matter to the Committee for consideration shall:
(a) prepare materials and draft decision on the matter submitted. A draft decision on matters listed in subparagraph (а) paragraph 2.1. hereof shall be drawn up according to the form contained in Appendix 1 to the present Regulation;
(b) submit to the Secretary of the Committee the draft decision on the relevant matter and the set of documents necessary for consideration of the matter at the Credit Committee.
6. Rules of Procedure of the Committee
6.1. Holding the Credit Committee meetings in the Portal.
a) for the purpose of streamlining the process of decision-making, meetings of the Credit Committee can be held by means of absentee vote in the Bank Portal, and then by holding a meeting in presentia on those matters that require face-to-face consideration; the possibility of considering matters in the Portal shall be determined by the Chairperson of the Credit Committee;
b) the Secretary of the Credit Committee shall be responsible for completeness of information furnished in the Portal only to the extent in which such information was provided thereto by the Bank units;
c) documents on matters to be considered in the Portal shall be accepted until 04:00 p.m. on the day preceding the meeting of the Credit Committee in presentia;
d) discussion of and voting on items of the agenda of a regular meeting of the Credit Committee in the Portal shall normally start in the evening of the day preceding the meeting of the Credit Committee in presentia;
e) discussion and voting in the Portal shall be closed by the Secretary of the Credit Committee at 02:00 p.m. on the day of the meeting in presentia. Before this time, members of the Credit Committee have to make a decision on the basis of the information contained in the forum and to vote “for”, “against”, “for, subject to condition” (the condition shall be included in the minutes by the Secretary) or request that the matter be put to voting in person;
f) after closing the Portal voting, the Secretary of the Credit Committee shall promptly notify the members of the Credit Committee of matters standing for voting in person, as a result of Portal discussion and voting, and shall specify the time of the meeting in presentia.
6.2. Organization of meetings in presentia:
(a) materials for presentation at the meeting have to be submitted to the Secretary of the Committee before 04:00 p.m. Moscow time on the day preceding the meeting day.
(b) the Secretary of the Credit Committee shall accept the documents and put the item on the agenda of the Committee meeting only if all the documents and consents required by the Instruction are present;
(c) the Secretary of the Committee shall provide the Members of the Committee with the materials and the agenda no later than 06:00 p.m. Moscow time on the day preceding the meeting day;
(d) meetings of the Committee shall be held at least once a week, on Tuesdays. Meetings shall begin at 03:00 p.m. Moscow time;
(e) the Chairperson of the Committee shall have the right to call an extraordinary meeting of the Committee or adjourn the meeting for another day;
(f) a meeting of the Committee must ensure clear and specific decisions on matters submitted for its consideration in compliance with the business strategy and lending policy of the Bank, on the basis of comprehensive analysis of transaction risks on the one hand and financial and business effectiveness for the Bank on the other hand;
6.3. Participation in the Committee meetings:
(a) members of the Committee must attend all the Committee meetings, except for situations when they are absent for good and valid reasons;
(b) if a member of the Committee is unable to attend a meeting, he/she has to notify the Secretary of the Committee thereof, stating the reason of such absence and the name of the proxy who must at all times come from the same business unit. Decisions made by the proxy at the Committee meeting shall be within responsibility of the Committee member who authorized said proxy;
(c) in the situation when, in order to make a decision on a matter under discussion, it is necessary to obtain additional information within the competence of certain specialized Bank units, the head /an employee of the relevant unit may be invited to the Committee meeting for consultation and/or expression of their opinion on the subject.
6.4. Representation of lending transactions at Committee meetings in presentia:
(a) lending transactions shall be presented at Committee meetings by an officer of the lending unit that prepared the materials submitted for the Committee consideration;
(b) at the same time, the Committee meeting shall be attended by the head and/or an officer of the customer unit working with the relevant corporate customer involved in the lending transaction.
6.5. Considering matters in the regular course of business:
(a) considering matters in the regular course of business (without holding a meeting of the Committee) is allowed in exceptional circumstances, when calling an extraordinary meeting of the Committee is not expedient;
(b) the decision to consider a matter in the regular course of business shall be made by the Chairperson of the Committee, and in the absence of the latter – by the Deputy Chairperson of the Committee;
(c) when a decision to consider a matter in the regular course of business is made, the Secretary of the Committee shall promptly prepare a questionnaire report form containing draft decision on the matter, sign it and hand over to the employee presenting the matter for consideration.
7.1. Decisions shall be made by the Committee in a meeting or in the regular course of business by voting. The Committee shall be competent to make decisions only in the presence in the relevant meeting of no less than 2/3 of its permanent members (or persons duly authorized by them), with mandatory participation of the Committee Chairperson or Deputy Chairperson who shall preside. When considering matters in the regular course of business, each of the Permanent Members of the Committee has to vote, except for those who are on vacation, on a business trip or on a sick leave.
7.2. Decisions shall be made by simple majority of votes. Members of the Committee may vote either “for” or “against” the decision; in case of equality of votes, the Chairperson (and in the absence of the latter – the Deputy Chairperson of the Committee) shall have a casting vote.
7.3. Should the Committee consider a transaction in which a permanent member of the Committee may be deemed interested, they have to promptly notify the other permanent members of the Committee thereof.
7.4. Any permanent member of the Committee, when considering a matter, may express a “dissenting opinion” that has to be stated orally (when the matter is considered in a meeting) or in writing (when considered in the regular course of business) and recorded by the Secretary of the Committee.
7.5. If a decision of the Committee, under the present Regulation, is subject to approval by the Bank’s Management Board, the matter shall be submitted by the Committee for consideration at the nearest meeting of the Management Board under the procedure set forth by internal regulatory and administrative documents of the Bank.
8. Documents of the Committee
8.1. Any documents submitted to the Committee for discussion should meet the requirements of effective regulatory and administrative documents of the Bank, both in form and in substance.
8.2. Members of the Committee should be given sufficient time to study the documents submitted to the Committee for discussion. To that effect, documentation shall be provided to members of the Committee no less than 20 hours before the beginning of the meeting.
8.3. The responsibility for collecting documents for those present in a meeting is imposed on the Secretary of the Committee. All documents must be submitted to the Secretary no less than 23 hours before the Committee meeting.
8.4. A set of documents for members of the Committee should contain: the agenda, draft minutes of the previous meeting of the Committee, materials on matters submitted for discussion, and draft decisions of the Committee on these matters.
8.5. The results of each meeting of the Committee shall be recorded in the minutes indicating:
(a) the date of the meeting;
(b) the names and titles of those present;
(c) the agenda of the meetings;
(d) items put to vote, and the vote results (including “dissenting opinions”);
(e) decisions made, worded on the basis of the draft decision submitted and the discussion held.
The minutes shall be signed by the Chairperson (or Deputy Chairperson) and the Secretary of the Committee and distributed within 3 days to permanent members of the Committee.
8.6. Upon expiration of two calendar years, the Secretary of the Committee shall file in archives the following documents: original signed minutes of the Committee meetings and original materials prepared for the Committee meetings.
9. Final Provisions
9.1. Any amendments to the present Regulation shall be made as follows:
(a) any amendments to the present Regulation shall be made via approval of its new version by the Bank’s Management Board;
(b) the old version of the present Regulation shall become void after the new one comes into effect;
9.2. Safekeeping of the present Regulation.
(a) The original of the present Regulation in hard copy shall be kept in the Documentation Activities Department of the Office of the President – Chairman of the Management Board. The information file with the text of the present Regulation shall be kept by the Secretary of the Credit Committee.
(b) Copies of the Regulation shall be distributed to permanent members of the Committee, subsidiaries and Regional Business Development Division.
Appendix 1 to the Regulation
on the Credit Committee of
Draft decision of the Credit Committee
1. To approve the proposal [name of the unit presenting the matter] regarding [subject matter of the transaction] on the following basic conditions:
[name and line of business of the Borrower]
[type of credit product: loan, credit facility, overdraft, unsecured letter of credit or guarantee, etc. as per the Instruction, purpose of borrowing, brief description of the transaction]
[loan amount, overdraft credit limit, debt ceiling and/or drawdown limit for credit facility; in case of syndication, it is also necessary to indicate participation shares, limit of liability on the guarantee, and the letter of credit amount]
[final maturity date, repayment schedule, procedure for repayment of amounts paid by the Bank on unsecured letters of credit and guarantees, schedule of security generation, guarantee period, etc.]
[interest rate, interest period, maturity dates]
[types, amounts and maturity dates of fees charged for the Transaction]
[types of security provided for the Transaction, and their descriptions]
[period within which the Borrower shall be entitled to obtain money within the framework of the credit product or the period of issuing an unsecured guarantee or a letter of credit]
2. Voted: [the list of voting members of the Committees, the list of those absent, reasons for their absence, and opinions expressed]. [Besides, indicate whether it is necessary to submit the matter to the Bank’s Management Board for consideration and recommendations as to the lending transaction rating to be determined in compliance with the Instruction, and the amount of provisions to be created for possible losses].