Delegated lending authority (DLA)
What is delegated lending authority in a bank?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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Delegated lending authority is the personal limit a bank gives a named person — or a committee — to approve credit, set by the size of the exposure, the risk grade and whether the proposal sits inside policy. A decision above the holder's authority goes up a level, and anything unusual escalates regardless of size: an exception to policy, a watch-list client, a related party, a sector new to the bank. The structure is the point: every credit decision has a person who made it and answers for it later, which is also why an approval is not something software can hold.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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