Annual Report 2007-2008

1.00 ESTABLISHMENT

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2.00 FUNCTIONS

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Rajshahi Krishi Unnayan Bank (RAKUB) was

established by the President's Ordinance No.58
of 1986 with the aim of providing institutional
agricultural credit for optimum utilization of
agricultural potentials of Rajshahi Division.
Taking over all the 253 branches and other
offices along with assets and liabilities of the
Bangladesh Krishi Bank within Rajshahi
Division, RAKUB started functioning on 15
March 1987.

3.00 CAPITAL

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As the largest development partner in the

northwest
region
Rajshahi
Krishi
Unnayan
Bank
aims
at
overall
development of the farmers and all the
sectors and sub-sectors of agriculture in this
region. Besides catering to agricultural
credit, financing agri-business and agrobased industries, activities related to socioeconomic
development
and
poverty
alleviation programs, the bank performs
most commercial banking functions.

0 QAt the time of establishment authorized capital of

3
>

the bank was Tk. 1500.00 million which was

raised do Tk. 1800.00 million during the
-$'@
financial year 2005-2006. During fiscal 20073
2008 the bank under look a plan, approved by
7
the ministry of finance, to raise authorized
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capital of the bank in the four consecutive years
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and lift it to Tk. 7500.00 million. Accordingly
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authorized capital stood at Tk. 2200.00 million
on 30.06.2008. Paid up capital was Tk 2200.00
million and reserve amounted to Tk. 208.40
million on 30.06.2008.

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4.00 MANAGEMENT

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A seven-member Board of Directors is entrusted

with the responsibility of policy formulation
for attainment of growth in agriculture leading
to economic development of the country
through agricultural credit support. The
government appoints all the directors of the
board. An executive committee constituted of
the Chairman and two other directors
including the Managing Director is there for
taking emergency decisions. The Managing
Director is the chief executive of the bank.

5.00 ORGANIZATIONAL STRUCTURE

The Head Office of the bank is stationed at
Rajshahi. The branch network comprises 364
branches including one in Dhaka. One
General Manager's office at Rangpur and one at
Rajshahi eighteen zonal offices stationed at
district headquarters control branches under
them. There are 18 independent regional
audit offices under direct control of the head
office for conducting regular audit in branches as
well as in zonal offices. The bank has a
training institute at Rajshahi. Out of total
workforce of 3,448 officers counted 1,419
and other staff 2,029 as on 30 June 2008 against
approved strength of 4236 including 2110
officers and 2126 others staff.
Board of Directors

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Board Secretariat

Administration
Division

MDS Vigilance Cell

Operation Division

MDS Secretariat

Audit, Accounts &

Recovery Division

Public Relation Cell

Divisional Office Rangpur

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Training Institute

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Loan & Advance-2
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ID Cell
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Budget& Expenditure
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Engineering,
Procurement &
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LPO Rajshahi
Dhaka Branch
ZM Office Rajshahi
ZM Office Naogaon
ZM Office Chapai
ZM Office Natore
ZM Office Pabna
ZM Office Sirajganj

GMs Office
Central Accounts-1
Central Accounts-2
Recovery-1
Recovery-2
Law Department
Audit & Inspection Dept

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ZAO Naogaon
ZAO Chapai
ZAO Natore
ZAO Pabna

ZM Office Bogra (N)

ZM Office Bogra (S)
ZM Office Joypurhat
ZM Office Rangpur
ZM Office Gaibandha
ZM Office
Nilphamary
ZM Office Kurigram
ZM Office
Lalmonirhat
ZM Office Dinajpur

6.00 NATIONAL ECONOMIC TREND1

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Source: Bangladesh Bank, Annual Report 2006-2007

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6.1 The world economy that registered an

unprecedented average growth of 5.0 percent a
year for consecutive four years entered a major
down turn in the face of the most severe shock in
mature financial makes since 1930s. The major
advanced economics were already in recession
while a number of emerging and developing
countries were under inflationary pressure. The
downturn in advanced economics were triggered
by collapse of the US sub prime mortgage
following major corrections in housing markets
is US and a number of advanced economics.
Advanced economics were protected to grow by
1.5% percent while the emerging market and
developing countries were projected to grow at
6.9 percent in 2008.
6.2 During FY08, the Bangladesh economy
showed signs of resilience by maintaining a
satisfactory growth momentum in the face of
repeated floods and cyclone sidr, and spike
prices of oil, rice and most commodities in the
global market. The Government and Bangladesh
Bank continued to adopt policies in bringing the
economy back in its growth momentum. The
Governments growth stimulating and poverty
reduction programmes coupled with prudent
monetary policies of B.B contributed toward a
strong real growth of 6.2 percent in FY08,
slightly lower than 6.4 percent of FY07.
Economic growth was also aided by rapid
growth in exports and surging remittances.
Inflation was on uptrend during FY08 due
mainly to rising import prices of fuel oil, food
grains and some other essentials in the
international markets; and lower growth of crop
production. The annual average inflation
increased to 9.9 percent in June 2008 from 7.2
percent in June 2007.

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6.3 The 6.2 percent real GDP growth in FY08

was under pinned on the supply side, by a
moderate growth in agriculture sector and
continued strong growth with industry sector and
in the services sector. Growth rate in the
agriculture sector achieved a moderate growth of
3.6 percent in FY08 following two consecutive
floods, cyclone sidr and an wide spread out break
of the avian the in the country, resulting mainly
from a lower growth in animal farming, and
crops and horticulture sub-sector. Forest and
related services sub-sector attained a slightly
higher rate of growth in FY08. The industry
sector attained a growth of 6.9 percent in FY08,
which was lower than 8.4 percent in FY08. The
growth was supported by sustained growth in
export oriented manufacturing activity an
expansion in domestic demand. Overall services
sector grew by 6.7 percent in FY08, slightly
dower than 6.9 percent of FY07.

>ER

6.4 The agriculture sector achieved a moderate

growth of 3.6 percent in FY08 against 4.6
percent of FY07. The deceleration in this sector
was mainly due to lower growth in crops and
horticulture sub-sector and animal tarming subsector. Overall output of food grains increased by
6.4 percent from 28.0 million metrictons in FY07
to 29.8 million metrictons in FY08 mainly due to
higher Boro production. Aus output remained at
the previous years level. Aman output decreased
due to severe damage caused by two rounds of
flood and devastating cyclone sidr. Wheat and
maize production increased significantly

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6.5 Agriculture and rural finance programme

seemed to have boosted up as the private
commercial banks began to participate along
with State-owned commercial banks. The private
and foreign banks also came forward in
distributing agricultural credit in collaboration

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with NGOs. SCBs and specialized banks still

played dominant role for the growth of
agriculture and rural economy with disbursement
of Tk. 61.67 billion.

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8
6 's + %
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The actual disbursement of TK. 61.67 billion in
eN B. !
6
^' 0
CJ 7 FY08 against target of 69.78 billion was 16.51
percent higher than 52.93 billion of FY07. Two
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5
specialized banks Viz BKB and RAKUB, four
SCBs and BRDB although played key role in
q'
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disbursement of agricultural and rural finance,

the contribution of foreign and private
commercial banks was also remarkable.

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6.6 Recovery of agricultural credit during FY08

decreased by 6.44 percent to Tk. 43.75 billion
from the recovery made in FY07 mainly due to
consecutive floods and cyclone sids causing
huge damage to agriculture throughout the major
part of the year. The incentive measures
introduced previously for recovery of stuck-up
loans also continued in FY08.

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6.7 Inward remittances from Bangladesh

nationals working abroad increased by 32.4
percent to USD. 7914.80 million during FY08
from 5978.50 million in FY07. Total foreign
exchange reserves stood at USD 6149 million as
at the end of June 2008.

Performance of RAKUB: 2007-08

7.00 RAKUBS Work Strategy:
The bank introduced a five year reform program
for 1999-2004 and long term respective plan for
2001-2010, with the aim of offsetting large
QX Q .' !
5 '
amount of accumulated loss of the bank by
A ' ' ( ===
R .! 1x practicing progressive and profit oriented
banking business and earning real profit in the
-!$A 8
!culminating
year. These programs included
A *y f A @ z
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strategy and policy for prudent utilization of
m
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12
banks existing workforce and also left scope for
' ( !7 6 !Q O
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v# 6
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credit
management
and
UV%
7' 6 -\ 7
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IT ' ( commendable
maximizing
profit.
Measures
like
MBO
!7
6 !Q O
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(Management by Objectives) and PARL
management by objectives (MBO) 8 !
(Participation of all in recovery of total loans)
O
PARL Bparticipation of were on effect for stimulating activities and
all in recovery of total loans)
D augmenting over all operation at field level as
. <%
+ %
t! 6 0 <%
+%
IT well and in the controlling officess. Banks
attention and activities were concentrated on

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important aspects like reducing rate of classified

loan and raising rate of unclassified loan for
increased performing asset of the bank,
enhancement of commercial banking activities,
expansion of branches network, raising skill and
efficiency of the bank employees, efficient fund
management and effective utilization of banks
assets. In order to counter balancing shortfall in
annual income emanating from reduced rate of
interest on loans the bank set harmonized yearly
target of loan disbursement and recovery and
paid special attention to increased deposit
collection for maintaining liquidity of fund. The
bank could uphold expected momentum in
disbursement and recovery of loan and also
succeeded in substantial recovery of classified
loan during the year under report.

Table 1: Position of outstanding loan, classified loan

and recovery of classified loan.
Tk million
FY

Outstanding
loan

Classified
Loa n

1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

12135.33
12944.20
14062.10
15677.06
17410.00
20398.00
23509.89
24470.09
25578.00

7760.51
7849.72
7614.80
7465.03
7302.00
6425.00
6716.25
8063.60
9334.10

Percent Recovery of CL
age Of
CL

64
61
54
48
42
31
28
33
36

1071.48
858.26
1001.70
1070.80
1150.00
1107.10
1171.00
1780.40
1612.60

(*Excluding Staff Loan)

8.00 Loan Disbursement

0L M

-'
+ %

+%
M'
D
S-%
7S -

8.1 Against the lending target of Tk. 8000.00

million for financial year 2007-2008 the bank
disbursed Tk. 7650.30 million (96 percent of the
target) among 229341 borrowers. With the rapid
growth of population in the country agricultural
land is decreasing day by day. In this context the
bank formulated suitable lending policy and laid
out necessary credit norms to facilitate effective
F 7 8'
.7 credit supply on area approach basis and
.! ! ' /
emphasised financing in local potential sectors
and
also provided credit facility as forward
8! ' - P
linkage and backward linkage in this sectors to
'
6
a ensure enhanced production. Local credit needs,
economically viable sectors of finance and credit
%
D!
policy of the government were better considered
'
towards fulfilling yearly disbursement target of
% -$' / !-$ Tk. 8000 million in the under mentioned main
5 +%
% sectors of lending.

% '( - n
%
>3 E4 - ' 5 7 '( - n
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A ' .( n Area Aproach
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Sub-sector

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Table 2: Comparative position of sub-sector

wise loan disbursement during financial year
2006-07 and 2007-08.
Tk million

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2006-2007
Target Achieve Borrower Target Achieve Borrower
ment
s
ment
s
4262.50 3565.10 147477 4000 3390.0 143569

Fishery
69.00 50.20
Livestock 451.50 377.80
Farm
118.00 56.40
machinery
Agro400.00 268.34
based
industries
Cash
1680.00 1747.50
Credit
Poverty
177.50 155.60
Alleviation
Others
841.50 1429.36
Total
8000.00 7650.30

286
11643
306

0
80 45.00
341
450 507.00 13147
100 92.00
551

765

250 342.00

188

8604

2250 1796.00

8761

15967

270

16751

152.00

44293 600 1047.00 40923

229341 8000 7371.00 224231

R43>=
4R
4 R

(Tk in million)
Crop

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33

Fishery
Livestock

19%

2%

46%

Farm
machinery

Agro based
industries
Cash Credit

E3

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3=>

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> 3

Provrety
Alleviation
Others

22%
4%

R E3

R =E4>

RR =4

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5%

1%

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8.2 Recently Introduced Loan and Deposit

Programs: During financial year 2007-2008 the
bank introduced the following sub-sectors
entitled new products for providing necessary
credit support.
(a) Revolving crop credit program: with a
view to strengthening and augmenting
RAKUBS usual crop-loan disbursement
program the bank introduced revolving crop
credit programme. Primarily this programme was
introduced in the districts of Rajshahi, Naogoan,
Borga, Pabna, and Dinajpur. Later on it was
extended in the remaining districts of Rajshahi
division. Credit norms of Bangladesh Bank are
followed while sanctioning loans for cultivation
in 2.5 acres of land.
(b) RAKUB Fish-village for intensive fish
Production: In the fish cultivation rules of the
government cultivation of fish is given prime
importance. Aim of the programme is to raise
production
of fish,
achieve
economic
development and generate employment by
producing fish by using modern and scientific
technics (in the small ponds and water
reservoirs). A fish-village to be established
taking together 8 to 10 small ponds or water
reservoirs owned by different persons but of the
same locality. Six models, namely (1) cultivation
of Pangus (2) Pangus and Carp-type fish (3)
Carp-type fish (4) Mono-sex Tilapia fish (5)
Thai-kai cultivation (6) Cultivation of Pangus
and carp-fish in nursery ponds has been set up
for cultivation of fish under thorough
supervision, experiment and observation of the
farmers with consultation and guidance of the
fish research institute.

(c) Financing small and medium enterprises:

Rajshahi Krishi Unnayan Bank extends financial
( q<6 - p 0
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assistance for establishing small and medium
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enterprises following all rules and regulations in
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this regard. Objectives of financing SMEs are (i)
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production and sector for poverty alleviation and
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dynamic SMEs entrepreneurs through necessary

credit support (iii) Ensure extended scope of
employment generation (iv) Extending credit be
treated as relationship Banking to generate speed
in disbursement and repayment of credits (v)
Service asset be treated as substitute of venture
capital and find out technics of financing new
and dynamic entrepreneurs.

(d) Cash Credit loan in High-breed Nursery:

Nursery plays important role in producing forest
and fruit plants. Keeping this in view many
nursery were established in the country. As per
demand of time production of high-breed plants
by using developed technics has surpassed
importance of plant production through days old
bed-system plantation procedure. Though
commercial cultivation of high-breed mango and
jujube started in different parts of Rajshahi
division production of high-breed plants has not
yet started for establishing high-breed plant
nursery. The objective of the program is to
establish nursery for production of hish-breed
amropaly, mallika, vastara, chosa, seedless
mango and also bao-kul, apple-kul and narikelkul plants.
(e) Special Credit program for government
primary school Teachers:
Teachers of the schools lead their lively hood
with limited source income. Most of them render
service but reside at their own native homes or in
the same locality. So they can engage themselves
in some other income generating activities easily.
They need financial support for such activities
and also in educating their children. In this
context RAKUB introduced the above credit
program for primary school teachers who draw
their salary through bank accounts with RAKUB.
Under the program bank finances for purposes
like maintaining kitchen-garden, milch cow
rearing, beef fattening, poultry and duckery
maintenance, fishy culture, establishment of
nursery, small business related to computer,
business related to phone-fax, sewing machine,
marketing of agro-product, solar-power plant,
bio-gas plant, education and higher education of
children etc. Solar-power plant and bio-gas plant
are preferred sectors.

= .'0 ! "

(*+

#Consumer Credit Scheme)

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Development of Small Holding Tea Cultivation
in Northern Bangladesh
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8.3 Special Credit Programs

Consumers'Credit Scheme
The bank coined a new credit scheme entitled
Consumers Credit Scheme for the fixed
income target group permanent staff of
government agencies, autonomous bodies and
semi-government organizations. The aim of the
scheme is to empower them to purchase means
of transportation, electronic gadgets and
furniture etc. for improvement their of living
standards. Maximum credit limit under the
scheme has been fixed at Tk 300 thousand for
vehicles, 100 thousand for electronic gadgets
and furniture. Rate of interest under the scheme
is 12 percent per annum. Branch managers are
delegated with the business power to sanction
the loans irrespective of amount. The loans are
repayable in equal monthly installments in four
years. Tk 91.52 million has been disbursed
among 1249 borrowers up to 30-06-2007.
During 2006-2007 sixteen district level
branches disbursed loan under the Credit
Scheme.
Credit for Small Holding Tea Plantation
Tea plantation in Tetulia under Panchagarh
district began just 4 years back. RAKUB has
been with the program since then. During fiscal
2007-2008 the bank reargued percale credit
norms from TK. 48344.00 to TK. 62728.00 and
approved TK. 1,50,000 per hectare to disbursed
in four years. Besides, the bank under took a
plan to expand area of tea cultivation by
including the districts of thakurgaon and
Lalmonirhat for financing in tea cultivates
under the programme Development os small
holding tea cultivation in Northern Bangladesh

Potato Seeds Production

The bank has been financing under the joint
credit program to Contract Growers of
BADC for potato seeds production. Sixteen
branches of the bank spread over nine zones
disburse credit at 8 percent interest per
annum under the program. BADC supplies

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inputs like seeds, fertilizer, and pesticide to

the farmers and provides extension services.
RAKUB, on the other hand, provides crop
hypothecation credit at moderate terms.
Harvest is collected from the farmers by
BADC as potato seeds and helps recover
bank loans. An amount of Tk 19.36 million
was disbursed among 446 borrowers during
the year under report.
The Production of import substitutes:
The bank finances at the rate of two percent
per annum for production for import
substitutes. 19-agri-crops like various type of
pulses, oil seeds, maize etc. and farmers are
being inspired for cultivating such import
substitute
agri-crops
under
joint
collaboration of agriculture extension and
RAKUB.
8.4 Poverty Alleviation Credit Programs
The bank has been disbursing micro-credit
for poverty alleviation in the 16
northwestern districts since inception.
Besides, the bank finances short-term
collateral-free
credit
under
selected
individual or group-based programs for
income generating activities among poor
and unemployed youths in compliance with
government policy.

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1) RAKUB Self-help Credit Program (RSCP)

RSCP is RAKUB's own group-based credit
program introduced in 1994 in all the districts
of Rajshahi division except Kurigram. The
bank provides collateral-free small loans to poor
and unemployed persons for income generating
activities under the program through 129
branches. Rate of interest under the scheme is
12 percent per annum. Outstanding loan under
the project amounted to Tk 153.46 million on 3006-2008.

5 D

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Intensification Project (MSFSCIP Kurigram)

The project meant for Kurigram district aims at

increasing productivity in farm as well as off+ % !Q
farm activities, helping target group people
+ % achieve sustainable development, resist the
increasing trend of losing land under cultivation
and attain self-dependence. MSFSCIP, the
ministry of agriculture assisted project, was
originally funded by IFAD and technically
supported by German agency GTZ. Rate of
interest under the scheme is 12 percent per
annum. Outstanding loan as on 30-06-2008
amounted to 98.19 million taka.
3) Swanirvar Credit Program
5 / The bank has been implementing RAKUB+ % 7S - Swanirvar joint credit program since 1988
6 !-- through its 77 branches in nine districts. The
% program finances Tk15,000 collateral-free credit
k ' per group of poor borrowers at 10 percent, per
annum in such income generating activities as
! @
food processing, tree-farming, fishery and
D
livestock farming. Outstanding loan as on 30-06/ +%
2008 amounted to Tk 295.62 million.

. @ 6
I

The bank financed Tk 155.60 million against Tk

270.00 million annual disbursement target
poverty alleviation credit programs during the
year under report. Following are the banks
poverty alleviation credit programs:

). '() 2) Marginal & Small Farm System Crop

6 2 345 G
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forward linkage

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4) Shogorip (Food grain go-down credit

program)

#' ! &

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!Q_! RAKUB has been implementing the program

under Swiss government assistance since 1988 as

support to the sharecroppers and marginal and
A ' small farmers opportune, so that they can sell
/ their produces at favorable price. Seventeen
warehouses are managed in 10 districts under the
program. Rate of interest under the program is 11
percent. Outstanding loan as on 30-06-2008
amounted to 15.82 million taka.

8 + % -!$A A 'Q

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5) Semi-intensive Goat-rearing Program

The bank introduced the special credit program of
semi-intensive goat rearing for poverty alleviation
in 2002. The program extends collateral-free
credit up to Tk15,000 for one to four years'
term at eight percent per annum. The bank
disbursed Tk 16.36 million under the program
during fiscal 2007-2008.

6) Medicinal Plants /Orchids Nursery

Rajshahi Krishi Unnayan Bank launched a credit
.
1?O
( .
)
-! 12 !I;J program for entrepreneurs of traditional
!
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8 0 Q 6 Ayurvedic and Unani medicine nursery of
_
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%
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6 medicinal plants, growing orchids and producing
trees for fruits and timbers with a view to making
.
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tree plantation program of the government a
12
+%
-!$A I
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success
and
creating
self-employment
!Q !
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5 8
opportunities for the less educated and
unemployed youths. The bank provides credit
8
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5
7U9 + %
D
of
Tk 20,000 per bigha (0.33 acre) and Tk
0L M
m
RE - ' 5 + %
54,000 per acre for nursery at eight percent
MD 4 >
/
+%
interest per annum. An amount of Tk 4.02
- % >E > - ' 5 D
million has been disbursed among 16 borrowers
during the year under report.

# & .>0 A MN4 6

: ( <A4)

7) Credit Program for the Disabled Persons

RAKUB provides credit to the disabled persons
for alleviation of poverty, creation of selfemployment opportunities and development of
socio-economic condition. The bank extends
collateral-free credit up to Tk 50,000 for poultry,
duckery, goatery, dairy, beef fattening, sewing
machine, computer and small trading. An
amount of Tk 0.43 million has been disbursed
among 44 disabled persons during the year
under report.
8) Zero Poverty Loan Scheme
# & 4 45P ) .'0 ! " (*+
35
< N .'
QJ qN -J The bank initiated a special group-based micro_ g J 'h - 6 ' '5 8 43 5
' credit program in 2005-2006 entitled "Zeropoverty Loan Scheme" for the extreme poverty
R5 / -@ <
) 0 -! 12 6
stricken 35 upazilas of greater Rangpur district.
< $ % '(
- .-K!QThe program implemented through 104 branches
<k
+ % -!QA 0 6
+%
%
is expected to generate emply must land
alleviatepoperty during monga seasam. Rate of
D !Q
>
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interest
is 6 percent. Outstanding loan as on 308_/ >>4
!Q @
- p =E= - ' 5
06-2008 amounted to Tk 65.64 million including
+%
%
MD 4 >
/
Tk 29.90 million disbursed among 663
+%
- % >3E>R - ' 5 D
borrowers during 2007-2008.
8.5 Agro Based Industries:
; B0 > Q '
The
bank undertook special scheme to intensify
.
F G-H '
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financial support for establishment and
0 \ 6
%
!Q7 !Q @ !&
expansion
of agro-based industries and
,
8/
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exploiting
infrastructural
advantage
and
! A;
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8/
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% availability of huge raw materials of the northe A- ' *
!Q A 8 west region of the country. The government also
0H '
% ! (% 6 S
% O approves establishment of ago-based industries

# &

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. ( ( $1 + A$ $W 6 [
9+] : ] ^ ]_ .

C .8 $) ] ^ ]_ .
; ' $ ] ^ ]_ .

#
#

MD and provides additional fund to banks and

financial institutions. To best utilize the above

opportunities
the bank has taken pragmatic steps
}MD 8
to enthuse potential entrepreneurs for
@
7' J
establishing
agro-based
industries
for
!"
\
19
preservation and processing of agricultural
MD 0 ' A 0L M
produces of this region of the country, famous
% '( - n R E
for
production of quality raw materials. The bank
O 12
emphasises financing in small industries instead
MD
of a few large ones. Recently set three tier credit
committee at the head office, divisional office
and zonal offices provide necessary support and
advice to the intending entrepreneurs. An amount
of Tk. 268.34 million was disbursed against
target of Tk. 400.00 million for setting up
different type of industries
. % Table 3: Select Agro-based Industries
financed by RAKUB during 2007-2008

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2.

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5.

Name of the project

Naboti
Industries
Natore
M/s Mallick Chaulkal,
Naogaon
A.H.Z cold storage
(pvt.) Ltd. Bogra
Homeland cold storage
(pvt.) Ltd. Rangpur
Shapla cold storage
(pvt) Ltd. Rangpur

Purpose
Production agri
equipments
Production of rice
Preservation of
potato
Preservation of
potato
Preservation of
potato

8.6 Foreign Aided Projects

Small Enterprises Development Credit
Project (SECP)
Small Enterprises Development Credit Project
(SECP) has been launched under Norwegian
assistance to promote new small enterprises and
streamline existing ones in fifty one upazilas of
greater Rajshahi, Bogra and Pabna and
Kurigram districts. The project, under active
supervision of the ministry of finance, aims at
disbursement of security free credit from Tk
25,000 to Tk75,000 during the project
period of five years. The project expected to
create
68,000
new
jobs
through
entrepreneurship development and income
generating activities. Twenty percent of total
credit was earmarked for women entrepreneurs.
Outstanding loan as on 30.6.08 was TK 136.35
million and borrowers counted 2854.

AQ
8

a '() b @G

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" 5 (NCDP)
BADBC 0 L !

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The bank undertook a project named North-west

D Crop Diversification Project (NCDP) under

!" ! % financial assistance of Asian Development

Bank. The project under implementation by the

Department of Agricultural Extension (DAE)
%
RBA C 5 under the Ministry of Agriculture in sixty one
8
8h 8 upazilas of sixteen districts of Rajshahi
division aims at production of high value
> 5 / ( q<
crops by small and marginal farmers and
! *
6
expansion of agri-business. Four NGOs, BRAC,
.
- p + % PROSHIKA, GKF & RDRS provide necessary
support. Outstanding loan as on 30.06.2008 stood
/ 8/ + % 12
at TK. 22.99 million.

O 06
O 0

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North West Crop Diversification Project (NCDP)

}A -$'

8.7 Interest rate

!
! !
. /
+% <
' In line with government policy the bank
lowered interest rate on loans and advances
,
+ % !Q
during the last year to smarten up credit
8 - @ ! - T /D
<k
flow in the agricultural sector. Interest rate on
+ % -!$A 0 6
%
+ % !Q
M' loans and advances remained within eight to
>
8 0O
% .7twelve percent during the year. The bank
@ % a 'J w ' J -!'
h!' 6 0 charged six percent interest, for Zero Poverty
0 A' 0L
h!' *
IT
!
+ % Credit Program. To increase production of
!Q
D
import substitutes, 19 crops like various type of
pulses, spices, maize etc. the bank extends credit
only at two percent interest rate.
9.00 LOAN RECOVERY
c
!" 4
c
0 'A M
3 E
- ' 5 + % 9.1 The bank recovered Tk 8447.90 million
during the year against target of Tk 8250.00
0
'( - n
RR E= - ' 5 0
million hitting 102 percent.
M7
'( - n
D

(@.4 8

c
@ 0L M 0 .7 6 . <%
+%
0
'( I
's/ 7
( !-$ M'f
M
"#_ . !-$
IL
. <%
+%
0 J aJ p 0 6 .F +%
0
8
. <%
+ %
<% % '( - n !
; +% 0
'( - n
D /
F d5
'( - n 0
G
7
O
J + % ./'
'
'
% $ +%
0
! '
. 5 _!Q !- Z %J .7Km
% + % Qf h ' % 8 !Q 0
@
IT %J
M
Qf h '
+ % 7L !0 J Untouched 6 0
0 7
+% !

>

Work strategies followed during the year for

recovery of outstanding loans were: setting
specific zonal target for recovery of classified,
WC, SME and over due loan and declassification
of classified loan at the very outset of the fiscal
year, evolving effective work plan to achieve
100% target by branches, updating borrowers
list, issuing necessary notices, rescheduling of
loan accounts to widen scope of interest income,
ensure recovery from loan accounts rescheduled
during the previous year, address cases with no
repayment, keeping constant touch with top
twenty defaulters of field workers, branch and
zonal levels, write off target amount of loan
accounts, disapprove interest remission proposals
and entertain justified ones only to ensure

A
%J - \ - J / 6 .
7
+%
/'
!
N .7 7
(J
F '( - n
0 Q7 + % 0 ' J $ 0 '
+%
F
'( - n 0 Q7 0
%J ! @
!Q -6 Qh
[*!
% 6 . ' - n 7 .( n !Q -6 qh
7
. <%
+% 0
G
%J 0L + %
0 ' 0 _ 8 !\
G
%J 0 :
- -' !-$ . 5 _ 6 . 5 0 U9 <[ :F
12 % 6 !
+% !
6 . @ O
!- U? A; % 8
m ! ' 7S - w d
0
- 5 ! !Z
6 -!
F
0
@ % 6 7 ( % S 0 Q! %D
%
<

recovery
of classified loan, ensure proper
application of Arthareen adalat
law, take
initiatives for early disposal of certificate and
arthareen cases in and outside the court and
prevent loan cases from being time barred by law
of limitations and follow procedure of
monitoring daily performance, maintaining and
observing weekly and monthly progress.

10000

Recovery of Classified Loan

Tk in milion

1000

+% 0

100
>
R
-' 5

10

>

08

07

20

06

20

05

20

04

20

03

20

02

20

01

20

20

>

20

00

c = .'5" B ! " 4 .
). (@4
L- 6 @ d
. L8
4.2 ( *8
+ % !Q
t! 6
@ 0L
M !Q 0
t! . @ O
O
I
D !Q 0
IT 6 -Q h 0
,
/
12
6 -\ - %
7L 7L
6
! 7
/
12 6 - \ - %
( % . !J M
+% 0
": 6 + %
.-' 0
D ' A
T 0 Q7
'
k
'/
0 Q) J W ) -@Q- ! 6
0

' ( +% 0
":J ": 6
!0
7/
J0
%8
@
7'
.
.- _' 5 - ! ! %
12 .L
/
12
6 -\ -A %
!
! 7
D + % .-' 6 + % 0
": !-$
!":
6 Q
+%
@
q + % !Q @
% !Qh ' 0 Q@ 6 0 !
- @ - !H
%
N . '
%
*!
D

9.3 Initiatives undertaken for recovery of

classified loan and profit earning of the bank: the
bank had to work out plans to buttress deficit of
interest income in the wake of lower interest rate.
Training courses were designed for managers,
other officers and field staff to impart guidelines
for enhancing interest income and profit earning
at branch level. Reen mela, recovery camps and
super camps were arranged to observe shuvo
halkhata on bangla nababarsha, modhumas in
jaistha and nabannya in agrahayon where top
executives of the bank one members of mobile
team from the head office were present to
encourage

the

managers

and

field

staff.

Borrower- friendly atmosphere of reenmela and

camps encourages customers to repay earlier
loan and enroll as fresh borrowers.

! % Rz

0L M . <%

+% 0

! h'
B-'

5 C
-%
R E
> E>

!/

%<
<%

+% 0
'( - n
+% 0
<%
+% !
g '( - n
<%
+% !
g !/
g !.
0
0
0
M U !

! % 3z <%

6 0 <%

>3
R =3
g R

=E
344ER

+% 0

q' -$' 0 12
B-'

0L M

'( - n . %<
+ % 0. <%
+% - 5 0
0
0
== == R
3 E
4 3ERR
333E3R
===

43

ER

3 E >

=E=

5 C
0
>4

R 4 E

4 43E

R 4>E

4 3

R43=E

3R =E

4 R >

3 E

> > E

> =E4

> ==E

==

ER

> 4 E

3 4E

>

> 43E4

RR E=

3 >

>
3

> E>

==

R
=

(S 8
0 L 0 12 !QIy %J
' ! 5
$ % 6 12 '
7
' !I;
,
0!
&
^ [ Y *!
! A
D
4 R5 / ! .- 5 4>R 5 /
0!
0
/ MD 0 F !Q
I D 8
%
.7
0!
- !Q
0!
0 @ ^ [ Y . D 0n
-\ - %
-% 0 !
0 Q $' @
0!
0@
*!
,
Q1x
12 /
D 0 ' A 0L M 0 !Q
M'
4E3
E 3
7U9D

0L M 0 -

Item
Target of CL recovery
Achievement
Target of closing CL account

'( - n

Number Amount
2420.00
1612.60
65000
-

Number of closed CL account

Recovery against
closed accounts.

48958
-

1079.20

Partly recovered cases,

42183

533.40

Table 5: Comparative position of classified

and unclassified loan recovery
FY

E4=

44 =E=3

R 3

Table 4: Classified loan recovery position during

2007-2008
Tk million

1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

Tk million

Recover Recovery Recover Total

y Target of CL y of UC recovery
loans
4000
3500
4200
4700
5000
6000
7000
7500
8000
8250

250.10
1071.48
858.26
1001.70
1070.80
1150.00
1107.10
1171.00
1780.40
1612.60

2305.44
2809.91
3379.95
3735.00
4359.00
5110.20
5722.20
6299.00
6732.70
6835.30

2555.54
3881.39
4238.21
4736.70
5429.80
6260.20
6829.30
7470.00
8513.10
8447.90

63
110
99
100
108
104
98
99
106
102

10.00 DEPOSIT MOBILIZATION

10.1 Deposit is considered as the second

important source for ready to invest fund,

maintaining liquidity and strengthening
financial condition of the bank. 364 branches
including 304 in the rural areas are engaged for
collecting deposit. Interest paid on deposit
occupies largest part of the banks total
expenditure. For curbing expenditure, besides
collecting deposit for investment, the bank
paid importance to collecting low cost deposit.
Intensive tour of the field officers broaden
scope of collecting deposit so provision of
incentive was there for big deposit collecting
employees. Rate of interest on deposit was
within 3.50 percent to 8.75 percent during the
year.
10.2 The bank secured deposit of Tk 1454.48
million against annual target of Tk2500.00

3 E -' 5
R3RER - ' 5
0- ! I
D4 >
/ .- 5
0- % e N 4=3 E - ' 5 8
0! / M'
R D
! % >f4 E >E

0-

million. Deposit as on 30.06.2008 amounted

to Tk 13958.10 million and number of
depositors reached 1217084.

%
B-'

5 C

4 E >E
4 E >E
0! !/
-%
! !/
-%
+$
4>
4> E=
RR
3>E4>
!H
4=
4
E 4
4=
>R3E==
12
3
343 E=
3 3
R> =E
a 8! 4 3
>=E=4
4R
34E
))
4
33 E=
R >
3 E=3
.- 5
R 3R E3
> =
4=3 E

Table 6:Deposit mix on 30 June 2008

Tk million
Type As on 30.06.2008 As on 30.06. 2007
Number Amount Numbe Amount
of
r
deposit 28136 1360.97 28044
1256.36
Curren
Saving 887390 3000.73 882390 2645.99
Fixed 15280 5352.98 15052 4689.80
3050
169.93 3400
153.00
DPS
283228
5527.97
277406
5212.95
Other
Total 1217084 15412.58 1206292 13958.10
Tk in million
16000

Position of Deposit
14000

$ %
12000

. He

>

10000

8000

6000

4000

>
2000

R
2008

2007

2006

2005

2004

2003

2002

2001

>

2000

Table 7: Year wise position of deposit

! % z 0L M

F 0-

q' -$'

Tk million

%
B-'

0L M

"# 12 '( - n

0
B!Q

== ==
===

4
4 R
R 3
3 >
>

4 =3E3=
4> 3E =
3 3 E=R
> E
= 3 E
>3 E
E4R
3>>E 4
4E
4=3 E

R
3
3
>3
3
3

E
E
E
E
E
E
E
E
E
E

C
4E>
E4
E R
3RE >
=E
> E
3>E>
4 >E=
==4E
R3RER

5 C

M .
12 B!Q! C
4> 3E =
3 3 E=R
> E
= 3 E
>3 E
E4R
3>>E 4
4E
4=3 E
3R E3

Actual
Financia Initial Target
Balance at
achievement the end of
l year balance
excluding
the year
interest

1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

3195.591100.00
3675.891100.00
5051.941210.00
6702.881400.00
9052.101500.00
10658.211700.00
10820.341500.00
11566.032650.00
12883.002500.00
13958.102500.00

173.60
1018.38
1182.74
1754.06
1289.77
162.10
756.60
1316.97
993.10
1454.48

3675.89
5051.94
6702.88
9052.10
10658.21
10820.34
11566.03
12883.00
13598.10
15412.58

=
_

( q< ( q< 0 $ A 'Q

( q<0 !H

0L M 6

{J 6 3

.-

B0 8!8!C
0-

! ' 19

( !H
O 6
7

OJ
Y!H

M'D 8M N A'

1?O 0

4 { J3 { J

O .7-

!H

0L M !-!

!H

OJ

!U9 {!U9
O

- F 10.3 Some new deposit schemes like Rakub

.!

{J

{ 5

{J 4
- .7

B! C M
!H

- 8 5 Q 1 - A 'Q

1x- !-$

{J
1xD ( q<

MD

Grameen pension Scheme, Hajj Savings Scheme,

Rural Pension Savings Scheme and Education
Savings Scheme coined during 2005-2006 for
extending service to the small depositors
continued during the fiscal year 2007-2008 too.
In addition, the bank introduced a new deposit
scheme during year entitled RAKUB Sanchay
Scheme (RSS) for all levels and low income
members of the society. One can deposit TK.
300, 500, 1000, 2000, 3000, 4000 or 5000 per
month for 7 (seven) years under the deposit
scheme. Such small deposit schemes succeeded
inviting attention of common people

11.00 LONG TERM FUND MANAGEMENT

As comprehensive refinance facilities from
/
0L
( n Qf0L! 12 !Q @
Z for investment in agriculture was not easily
accessible the head office off the bank
! !@
6
0 ' A 0L M
@
7'
could not provide adequate fund to the field
+%
%
' !
6 !
M' D .
dies for investment. Zonal offices were
!-$
1? *!
+% 0
6 0!
advised to ensure recovery of loans and
sufficient
collect deposit for ready to invest
- .
D 0 'A M
'
.
fund. The bank repaid dues of Bangladesh
4 E>> - ' 5 8
'
Bank to the tune of TK. 1831.60 million and
.
E
-' 5
@
D4
Bangladesh Krishi Bank TK. 82.02 million.
>
/
) bQ5
5
. 12 Dues to these Banks stood at TK. 18511.99
million and TK. 82.02 million respectively
M' 7L S - 3 E== - ' 6 E
-' 5 D
30.06.08. Borrowing through refinance
@ M
'
I
$f % window amounted to Tk 1989.91 million
during the year
- % = =E= - ' 5 D

i12 0 L

! % z M
0L M
== ==
===

4
4 R
R 3
3 >
>

12

F +%
+%

%J
%

4 >>E
4>> E4
R 4 E
R = E
3 RRE4R
> > E4
>=>E
=E
4 E
>3 E4

h c

%6
@
B-' 5 C
h c %
h c
@
=>=E
>E
4 E
4RRE>
E
> =ER=
3 E
> E4=
=E>
>34ER
= E
3=>E
43 RE3
> E
= E
=E
= RE
>R E
= =E=
4 E>>

Table 8: Position of loan disbursement,

refinance drawn and repaid (1998-99 through
2007-08)
Financial
year
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
206-07
2007-08

Tk million

Loan Refinance Refinance

disbursed drawn
repaid
3166.10
1969.80
826.10
3661.32
312.00
344.60
4238.21
1.28
679.49
4790.70
1751.88
862.39
5744.34
2009.60 1653.40
6767.30
2290.70 1596.00
8696.80
3514.50 1681.00
8879.00
2890.00 1109.00
7371.00
924.10 1642.00
7650.30
1989.91 1831.66

(fg4 A `
!Q)q)

.
!":
@
7'
0 'A M
- T M'f

!":
12
!h'
0
O
19
!":
!":

6 -A
% -@
0 Q '
!I;D
( % -@ - .

Q7

(%

12.00 HRD PROGRAM

12.1 Effective human resource management and
6 - !":
.7 development is indispensable for success of any
institution. The bank opened a separate Human
0
7D Resource
Development
Department
for
Y U?
' ( accelerated human resource development
/'
D planning of the bank. Human resource
development
planning of the bank was
O
underpinned by
Enhancing self-motivation of the bank
1? %
!I; D
employees
Creating congenial work atmosphere
Increasing professional skill through
(
ITD
effective training programs
6 - D
Introducing need-based and updated
training.

(*+

12

12.2 Yearly training programs were tailored to

(% _ ` 5 5!
6 '
Q
! 7
6
! 6 + % cope with the objectives of successful
implementation of the bank's programs and
12
-A 8
0 U9 % 7S - expansion of business as well as to
!
!
$%
(%
O
%
D familiarize the participants with new rules
and regulations relating to banking business
! s;
IT 8
( %
and credit management system introduced by
'
' ( uu. <_ ; - .! A '
D

= A'
F
-

M
45
-A 0

Asset

M'

( % _ ` 5 5 0 Q)
( % . ! 6 - ' >=
%
D 's/ 7 . !!-$
&

Liabilites

Management,

Foundation Training, Computerized Branch

banking, Law and Regulations in BanksJ -*!
A J

kJ

e !-Q

0L

Financing Small & Medium Enterprises, Credit

Risk Managment, CIB, Lending Recovery &
Deposit Collecting strategies in Banks, Branch
Management Training,
!
8

- 6 peQ

12 D

Bangladesh bank and the government. Brain

storming sessions were held for implementation
of the techniques narrated in the training courses.
12.3 During the year 692 officers and staff
participated in 23 training courses and
workshops held at the training institute on
different professional fields like Asset &
Liabilities Management, Foundation Training,
Computerized Branch banking, Law and
Regulations in Banks, Financing FisheryJ Dairy,
Poultry, Ducking & NurseryJ Financing Small &
Medium Enterprises, Credit Risk Management,
CIB, Lending Recovery & Deposit Collecting
strategies in Banks, Branch Management
Training, Accounting Procedure in Bank &
Roles of audit in prevention of different
irregularities and risks in banking sector.

C 0 ' A 0L M
0 _ 8-J
'
J 12.4 During the financial year 169 officers
1?
'
J ] O!": (
J
6 participated in training courses on different
professional fields at the Bangladesh Institute
'
A . a <-' 8
(% . d< >
of Bank Management (BIBM), Bangladesh Bank
F
( %0
%
D
Training
Academy
(BBTA)
swanirvar
Bangladesh Dhaka, Shilpa Samparko sixaoton,
Rajshahi and Bangladesh Tea Board Srimangal.
12.5 Transparency in administration
! 1?}M
! ' 19 1?}M 6
G
% 6 In order to increase quality of operational
@
7'
k [
12
5 efficiency and affirm internal control MBO
(management by objectives), a management tool
19
6 -A
%
A'
(
IT 6
for ensuring quantifiable and participative
0 U9
UV%
) G
'(
- .7
performance of the employees was followed
6 0
% -$'
12
T
MBO meticulously both in the head office as well
as at the field level.
(management by objectives) A 'Q MD

;
!

d( .% . '
J @
7' 8 5 !
6
!/
": 5 !-U? /0i !-IT ": 5
7S - A 'Q MD
7' 6
5 . '
7 ' _d5 5 ! 7 !
": 5
7S -6 A 'Q
MD
1?6
! _5 www.rakub.org.bd
7S - A
D
4>R 5
/
7 S - ": 5
/
A 'Q
- F 0L -UV% ' 0 Q0 _ ! 5f
>
0 Q
-7
": 5 !":
.' '
.
}M 8
'
": 5 !-IT
'(
0 U9 6
)
-@ ( %
12
}MD
J ]
/ J 8' 6J 8
! IF 3 5
.' /
": 5
A 'Q MD
C
' G (f ( "
4 >
/
.- 5 / ! / M'
4>R 5
@ <- % / ! / M' 4 R 5D

13.00 OFFICE AUTOMATION

Computerized work atmosphere compoized of a
server, necessary number of computers at all here
departments under LAN(Local area network)
connectivity is these at the head office of the
bank. Dinsional and Zonal offices also posses of
crop uterized work system with internet
connectivity under the ministry of finance
approved ICT plan 2006-2011 for introducing
computerized branch banking in 364 branches
computer based manpower are being recounted
and the bank is also kin to impart computer
literacy to us existing work forces of the bank.
Computeriszed branch banking has been
introduced Dhaka branches , LPO, Rajshahi,
Rangpur, Bogra, Pabna and Dinajpur branch.
14.00 BRANCH EXPANSION
Number of branches of the bank as on 30 June
2008 was 364 including 304 branches in the
rural areas.

15.00 CERTIFICATE & ARTHA REEN CASES

;
( % d. % ] ( 6
!" $
During the year 2306 certificate cases were
0 'A M
4 > 5 ! 5 h 5 ! :F - @ - disposed off effecting realisation of classified
= E
-' 5
. <%
+% 0
D 4
Q loans amounting to Tk 98.17 million. An
amount of Tk 772.15 million was involved
8 >>4 5 0 1: ! 5 h 5 . !
against 17663 unsettled certificate cases as on
30 June 2008. During the same period 875 Artha
0
7 . <%
+ %
- % M'
E 3 -'
Reen cases were settled against which an
5 D
3 5 0L + % - -' 1:F - @ amount of Tk 222.70 million was realised.
Pending
4595 Artha Reen cases involved Tk.
E
- ' 5 +% 0
MD 4 Q
1214.83 million as on 30 June 2008.
8 0 : R3=3 5 0L+ % - -'
0
7
+%
- % M'
RE 4 - ' 5 D

2 6
)

4'

.( n
( 6
$'
L D
8
( 6
.( n m ' 0 U9 %
UV% 12 S
'D
19 0 -J '
6
% i5
i 5 6 Q IF . @ O
1? 7S - M N 6
M!
%
(J
'
6 f (D
! % =z 0 a5 0

1?}M 6
^ [ Y $%

Table 9: Position of audit objections

F 0 12

0L M

4
4 R
R 3
3 >
>

0 U9 %

=4443
> 3
=RR
4 R
3=>
R43
43 >3
3 =

34
4
4 4>

F!/
F
f f

R R
>=4
3
4
3 4
4= >
>
>

=3
4
34>
R3

0L M
!
! .-! !
d5d5!J] 8 !
d5d5!]
/'
(
5
S - -UV% ' . %
D
(
A5a 8
A5a 8

+$

(
/
- QA'

-5

:
0 F

=> =
R
4 R
43 R
R = 34R 3
>3 3 4 =
R >
=4RR
4=
> R 4

!
8P .
8P .
D .
0

0.4 (>

0 'A M
A'
A'
!
5 7 -@ I
5D

16.00 AUDIT & INSPECTION

Internal audit and inspection plays an important
role in ensuring transparency and affirming
accountability of the bank's accounting
system. Besides, banks own procedures there
are commercial audit, Bangladesh Bank
Inspection and external audit for detecting and
checking repetition of irregularities, frauds and
forgeries, if any, in different levels.

5 ! 0 Q)
8 P !/
5J 19

FY

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

Number of objections
Raised
Interna Commerci BB
Total
l audit al audit inspectio
n
93335
100615
94471
70374
59680
43522
35865
15009

11537
11113
13236
1288
1095
1123
1536
145

14747
18693
17185
7038
5083
3976
1611
1670

119619
130421
114892
78700
65858
48621
39012
16824

Settled

17428
35114
53415
28001
31889
19344
8200
13271

f The government appointed M/s Kazi Zohir Khan

": J & Company Chartered Accountants and M/s
": J Saha Mojumder Rahman & Company,
":
Chartered Accountants for conducting audit for
Qthe financial year 2007-2008. The audit report
submitted by them was sent to the ministry of
finance on 27.04.2008 after approval of the
Board of Directors.
17.00 THE BOARD OF DIRECTORS'MEETINGS
D 170 memoranda were presented before the board
of directors in 12 meetings held during the year.
M' The board gave decisions on 170 and all 170
M decisions have already been implemented
during the year.

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18.00 PROFIT & LOSS

Total income during the year was Tk 1975.00
million and expenditure Tk 2616.00 million
resulting in net loss of Tk 641.00 million.
Accumulated loss at the year ending amounted to
Tk 3274.78 million.
Table 10: Position of income and expenditure
Heads of Income/ 2007-2008
Expenditure
Income
1975.00
Income
from 1875.00
loans & advances
Other Income
100.00
Expenditure
2616.00
Revenue
1145.00
expenditure
Financial
1471.00
expenditure

Tk. million
2006-2007
1940.00
1831.00
109.00
2356.00
1016.00
1340.00

Table 11: Income-expenditure and profit & loss

Tk. million
FY

1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

Income

Expenditure

655.26
1199.03
1134.37
1462.65
1650.10
1756.16
1602.97
1735.69
1940.00
1975.00

1272.53
1177.68
1110.45
1309.30
1535.35
1707.90
1969.36
2157.20
2356.00
2615.00

Profit/
(Loss)

Accumulated
loss a

(617.27) 3071.10
21.35 1780.60b
23.92 1756.68
153.35 1603.33
114.75 1488.58
48.26 1440.30
(366.39) 1806.69
(421.51) 2228.20
(416.00) 2644.20
(641.00) 3284.78

a) It was decided that for agricultural loans up to

!- - % !Q
0 m A
!Q
!
+ % Tk 0.30 million principal and equal amount of
interest would be realized and rest interest
12
-7 Dh'
- % = >E> - '
would be waived. Accordingly Tk 976.60
5
t!
J 7 QX Q .' !
!
!-U?
million of provision and accumulated loss was
D
reversed.

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b)Tk 1,269.10 million ,interest remitted on dues

!Q QX $ .' !

to BKB adjusted against the accumulated loss.

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c) An amount of Tk 457,400,000 was received as

subsside against reduction of rate of interest
during 2003-2004 & 2004-2005.

MD

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-200

-300

-400

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3
>

Tk in million

100

Profit & Loss

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Table 12: Summary of approved budget for

2007-2008 financial year.
Tk. million
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01.
02.

Revenue Income
Revenue Expenditure
a) Administrative
Expenditure
b) Operational Expenditure
c) Others Expenditure
d) Incidental Expenditure
Total : (a+b+c+d)
Profit/Loss
Capital earned
Capital expense
Total (Revenue & Capital)
Income
Total (Revenue & Capital)
expense

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03.
04.
05.
06.
07.

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Approval
Budget of
financial
year
2007-08

Actual
Expense of 200708 financial
year

2576.00 1974.72
770.80 660.80

117.90
1490.50
163.34
2542.54
32.26
13650.00
11278.80
16225.80

92.76
1478.72
383.30
2615.58
(640.86)
12158.38
9938.60
14133.10

13820.80 12554.18

19..00 RAKUBS PERSPECTIVE PLAN: 2001-2010

The bank, at the very outset of the fiscal, set
annual loan disbursement, loan recovery and
deposit collection target, along with detailed
instruction and guidelines to reduce rate of
classified loan, emphasise disbursement of small
and medium size loan instead of big size term
loan, to collect low cost deposit and to ensure
profit making by improved commercial banking
activities. On the back drop of negative impact
upon over all income and profit earning of the
bank due to reduced interest rates on investment
and payment of larger amount of interest on
deposit on the contrary, the bank took
precautionary, measures for counterbalancing the
shortfall by enhancement of disbursement of new
loan,
rescheduling
of
classified
loan,
enhancement of credit flow in more profitable
sectors, refixing interest rate of investment by
analysing cost of land and cost of lending, and
paying kin attention to five risk factors identified
in the banking sectors. Inspite of all such
initiatives the bank could not achieve expected
success. Repeated occurrence of flood,
devastating natural calamities, continued socioeconomic unrest in the country, scarcity in

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timely supply of adequate agricultural inputs like

quality seeds, fertilizer and diesel fuel and
electricity
for
irrigation,
and
other
disadvantageous environment largely damaged
agricultural production causing in-capability the
borrowers to repay banks dues and above all
abnormal rise in field worker-borrower ratio
(1:350 to 1:632) due to workforce shortage of the
bank affecting close credit supervision impeded
expected operational activities and profit making.
In addition want of efforts to settle court cases
out-side the court, social resistance to initiate
legal action against defaulters, dependence upon
high cost deposit to meet credit demand due to
inadequate refinance support thwarted net profit
earning of the bank.
After threadbare analysis of all such problems
the bank management has thrown a Longer term
management plan; 2008 to 2013 containing
strategic guidelines and work plan, meant to be
followed at all levels of bank management. The
management specially focused on improvement
of loan disbursement, loan recovery and deposit
plan collection activities, expansion of foreign
exchange business, fulfillment workforce
shortage, branch computerization and monitoring
yearly profit-loss and looks forward for effective
and improved business performances to attain
desired height of dynamic and profit oriented
banking business to off set total out-standing loss
and earn real profit in the culminating year.