In SME and corporate lending, the Credit Appraisal Memorandum (CAM) plays a critical role in shaping credit decisions. Traditionally, creating a CAM required analysing extensive documentation — often hundreds of pages spanning financial statements, auditor reports, ratings, compliance records, and covenants. This process involved careful data extraction, validation, and narrative building, demanding significant time and effort from credit teams.

As portfolios scale and regulatory expectations evolve, Tata Capital recognised the opportunity to reimagine this workflow — allowing credit professionals to focus more on risk insights and judgment, rather than manual compilation.

“The process was highly people driven, with significant dependency on individual interpretation, It could take more than two days just to collate documents, extract the right information, and draft the credit approval note,” says Ekta Rijhwani, AVP – Digital, Tata Capital.

AI at the core 

To address this, Tata Capital introduced an intelligent AI layer at the heart of CAM creation. “We envisioned an AI engine that could identify relevant information from a defined set of documents, extract and classify it into structured sections, and deliver a standardised output,” explains Ms Rijhwani.

The AI powered CAM generation system leverages OCR, NLP, and advanced AI models to analyse input documents, extract key data, and generate a structured 20+ pager CAM report. It includes CIBIL summarisation, highlights policy deviations, supports product level customisation, and enables real-time risk checks aligned with credit policies. Key sections such as borrower and group profiles, financial analysis, auditor comments, strengths, risks, and deviations are generated with speed and consistency.

“Once the required documents are uploaded, the AI model processes them in the background, creates structured datasets, and generates a complete CAM — entirely through AI — in about 20 minutes,” adds Ms Rijhwani.

Implemented for SME and corporate credit underwriting from September 2024 and scaled across products through 2025, the solution has delivered tangible impact. “Turnaround time has reduced from nearly two days to just 20 minutes for CAM creation, and credit productivity has increased by over 30–35%,” she notes.

This innovation marks a significant leap in speed, accuracy, and scalability, setting a new benchmark for AI-driven excellence in SME and corporate credit underwriting at Tata Capital.

- Sharmistha Choudhury