To understand the credit culture we can say that it is the bondage which keeps united the credit method and forms the crucial foundation of credit discipline. Each bank has a credit culture which may be defined by their senior manager or it might have been conceptualized overtime informally. It can be intact or divided. It must be remembered in this regard that the credit culture is the combination of the practices, policies and experiences of the banking institution. By this the lenders are given a same compass to aid them. If the credit culture of the bank is strong it strengthens the lenders to act consistently along with the banks expectations and policies. Moreover, it allows all to march forward in the similar path.
Developing a productive credit culture within a bank is similar to nourishing a child. Therefore we must very well know what we need to do to raise a child or nurture a credit culture? In this context we should not forget the four important foundations like: Communication, Training, incentives and the vital point is the Leadership are necessary.
Remember: It remains a difficult job because it needs discipline and very rigid consistent commitment because mingled messages cannot be passed on to the lenders or your children.
The reason why Leadership is considered the most important factor is that TOP-DOWN method is the norm of the development of a fruitful consistent credit culture.
Now, let us discuss some main statements needed to be incorporated from the senior managers. They are:
1. Which drives the credit culture is the Principles of the bank:
The culture of the bank is formulated when each person knows what the bank is functioning for, what their objectives are and each knows what goal they are working towards which results in creating the credit culture.
2. What matters for everyone in the bank is personal Integrity:
The appropriate atmosphere in a bank is formed what the CEO does and says. So, the ancient old adage “Say what you mean and mean what you say “is the order everyone in the bank need to follow.
3. What is essential in a bank is - Accountability:
Good or bad: whatever decisions you take, as a good leader; you need to come forward and shoulder for the responsibility for the decisions taken irrespective of the favorable or adverse results.
It must not be forgotten that a bank whose credit culture stands as one in which the people feel pride in the ability of their credit skills. Where they shoulder the responsibility of the recommendations they make is always the one which is marked as successful.
It must be remembered that to develop a strong credit culture it needs and takes huge perseverance, nourishing and an in-depth understanding of the institution’s magnificent personality. Though it is not really difficult to make it happen because it is technical. It appears hard because it needs discipline and a total commitment to consistency in the process of all communication, training rewards, metrics and vitally, Leadership.
Please remember that the expression “Brutal consistency breeds believability” can never be much truer than for Corporate Leadership or Parenting.