Regulatory Alerts2021-02-28
Added
DFIM Circular No. 02: Ensuring Proper Utilization of Loan/Lease/Advance
The circular mandates financial institutions to implement regular monitoring, verify the proper use of previous installments before releasing subsequent ones, and immediately investigate and prevent the diversion of funds to other sectors or the settlement of other debts. Institutions must incorporate these utilization safeguards into their internal credit policies, maintain inspection reports in loan files, and promptly report any serious irregularities to the Department of Financial Institutions and Markets. These instructions are issued under Section 18(6) of the Financial Institutions Act, 1993, and take immediate effect.
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