Credit Union Annual Report 2021 V2 - Flipbook - Page 74
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2021
22. Financial risk management (continued)
The Supervisory Committee is responsible for the monitoring of any deviations from the Rules, established policies and
procedures via Internal Audit and Risk and Compliance. The activities of the Supervisory Committee include the
inspections of securities, cash and accounts of the Credit Union, examination of the affairs of the Credit Union and
investigating any complaints made by members affecting the proper running of the Credit Union. In the process of its
examinations and audits, the Supervisory Committee can examine all applications for loans made during the period
under examination and satisfy itself that the loans have been issued in accordance with the established policies and
procedures. The Supervisory Committee is required to send a report of its activities to the Board quarterly. These
responsibilities are substantively carried out by an Internal Audit Manager and Chief Risk and Compliance Officer who
report directly to the Supervisory Committee with administrative line to the CEO.
The Credit Committee is given the responsibility for the oversight of the Credit Union’s credit risk and the
development of credit policies. The Credit Committee through the Loans Officer shall enquire into the character and
financial position of each applicant for loan and sureties, if any, to ascertain the member’s ability to repay fully and
promptly the obligations incurred and to determine whether the loan sought is for a provident or productive purpose and
will be of probable benefit to the member. The Credit Committee shall also determine the amount of each loan and the
period of repayment based on the form and value of the security. The Credit Committee shall endeavour diligently to
assist applicants in solving their financial problems.
The Credit Committee shall hold meetings as the business of the Credit Union may require, and not less frequently than
once per month. Presently, the Credit Committee meets on a weekly basis. The Credit Committee records the actions of
each meeting through minutes which are forwarded to the Chief Executive Officer. The Chief Executive Officer sends a
report of the activities of the Credit Committee to the Board of Directors each month.
All Committee members are elected at the AGM of the Credit Union, where the supreme authority of the Credit Union
is vested in the General Meeting of members at which every member has a right to attend and vote on all issues. All
Board and Committee members come from a wide range of highly experienced positions within the Government,
Statutory bodies and the private sector.
ii.
Credit risk
Financial assets that potentially expose the Credit Union to credit risk consist principally of cash at bank, fixed
deposits, and loans.
The extent to which the Credit Union is exposed to credit risk in respect of these financial assets approximates their
carrying value as reflected in the Statement of Financial Position.
Cash at bank and fixed deposits
The Credit Union seeks to mitigate its credit risk by placing its cash at banks and fixed deposits with reputable
financial institutions. At July 31, 2021, all of the cash at bank and fixed deposits are placed with two unrated
financial institutions, being Cayman National Bank and Butterfield Bank (Cayman) Limited and one rated bank CIBC
First Caribbean Bank Limited. All Banks hold Class A banking licenses, which in the opinion of management, are
stable financial institutions and in addition are regulated by the Cayman Islands Monetary Authority.
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