Agencies for Specialized Monitoring (ASM) (Large Value Accounts)

The year 2019 was a year of reckoning for the Indian banking sector. Indian Banks were reeling under a distress debt of around USD 200 Billion and were in dire need of debt restructuring and infusion of fresh capital. The Govt, of India, in order to keep a latch on fraudulent activities and to prevent diversion of funds, has introduced the concept of ASM (Agency for Specialised Monitoring). Under the ASM, Banks will now appoint Specialized Monitoring Agencies to closely track the activities of the debtors (borrowers) including purchase/invoices, actual production vis-a-vis projections, high value transactions/payments as regards beneficiaries and purpose, cash inflow/outflow. The appointment of Specialised Monitoring Agencies by Banks for post-sanction credit monitoring has created vast opportunities for the Cost Accountants in the Banking industry. Post-sanction credit monitoring is vital to maintain a healthy credit portfolio. Lack of post-sanction credit monitoring could turn an otherwise good credit selection, into an unviable proposition.