Help! Does banks have a credit committee and if so, what is its function?

Question

Help! Does banks have a credit committee and if so, what is its function?

Answer 1

Most banks have credit committees. Their principal functions are:

1. To create a set of guidelines, or parameters, for initial consideration of granting a loan

2. To provide input as a group to determine a potential borrower's creditworthiness.

3. To periodically review outstanding loans in order to weed out non-performing borrowers and take any necessary action to avoid future losses.