Role of Collateral Managers in Trade Finance
Collateral Management refers to the management of the collateral assets that the bank mortgage to secure loans to the individuals and institutions. The collateral manager is the individual who has the skill required to mediate between the borrower and the lender and takes the security of the asset which is up as collateral. Use of a collateral manager by the lending institutions ensure that the assets which have been mortgaged by the borrower to secure a loan are mobilized in a fast and correct manner in case of the delinquency in performance by the borrower.
Thus the role of the collateral manager involves the obligation in making the borrower understand the risk borne by the lender in securing the loan and the need for regular repayment, to secure the asset being held as a collateral, assignment of the asset to a suitable warehouse and issuing warehouse receipts, insurance of the secured asset and finally timely mobilization and sale of the asset in case of default to recover losses to the maximum.
