An Analysis of Performance Evaluation of Credit Operation System (Prat - 1)

Internship Report ON
An Analysis of performance Evaluation of Credit Operation System A study on Dutch-Bangla Ban !td"
Su#mitted $o
School Of Business %niversity of Information $echnology & Sciences"
Su#mitted By
Na'i#ur Rahman BBA (rogram ID NO-)*+,),).a/or- 0inance
Department of Bachelor of Business Administration %niversity of Information $echnology & Sciences Decem#er1 2),,
www.AssignmentPoint.com
Date: December 10, 2011
Na'ia Na#i
Assistant Professor Department of Business Administration University of Information Techno o!y " #ciences$ Su#/ect3 Su#mission of Internship Report"
Dear Sir4.adam1 %ith due respect " honor, I am submittin! my Internship &eport 5An Analysis of (erformance Evaluation of Credit Operation System6 A Study on Dutch-Bangla Ban 1 Comilla Branch1 as a part of my Bache or of Business Administration 'BBA( pro!ram$ The report contained ) chapter about DBB* overa Ban+in!, ,redit operation " performance -va uation of DBB*$ It .as a !reat opportunity for me to ac/uire practica +no. ed!e of the process of credit operation and eva uation by .hich a reno.ned ban+ i+e the Dutch0Ban! a Ban+ imited faces .ith the dua cha en!es of findin! suitab e out ets for endin! money .hi e, at the same time ensurin! the safety of the funds it emp oys$ I have concentrated my best effort to achieve the ob1ectives of the report and hope that my endeavor .i serve the purpose$ I be ieve that the +no. ed!e and e2perience I have !athered durin! my report preparation .i immense y he p me in my professiona ife$ I .i be ob i!ed if you +ind y approve this effort$ Than+in! you$ #incere y yours,
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Na'i#ur Rahman BBA (rogram ID NO-)*+,),).a/or- 0inance %niversity of Information $echnology & Sciences" www.AssignmentPoint.com
Declaration of Authenticity:
3a4ibur &ahman a student of Bache or of Business Administration 'BBA( ma1or in 5inance of University of Information Techno o!y " #ciences, do hereby that the internship report on 6An Analysis of (erformance Evaluation of Credit Operation System7 %hich main discuss matter is credit operation " performance -va uation of DBB*$ This is my ori!ina .or+ and has not been submitted by me before any de!ree$ It is persuade under the supervision of 5Rahma A ter6 *ecturer, Department of Business Administration, University of Information Techno o!y " #ciences$
Na'i#ur Rahman BBA (rogram ID NO-)*+,),).a/or- 0inance %niversity of Information $echnology & Sciences"
Acknowledgement
At first I present my due re!ards to a mi!hty 8od, .ho provided us the bri iant opportunity to bui d " comp ete this Internship &eport on 6An Analysis of (erformance Evaluation of Credit Operation System in Dutch-Bangla Ban !td6" I am deep y indebted to my supervisor 5Rahma A hter6 *ecturer, #choo of Business 6University of Information Techno o!y " #ciences7 for her .ho e0hearted supervision durin! my or!ani4ationa attachment period$ 9is su!!estions and comments .ere rea y a !reat source of spirit to ma+e the report a !ood one$ :y heartfe t !ratitude !oes to my supervisor in the or!ani4ation 6 .r" Na'rul Islam6, 5irst Assistant ;ice President '5A;P( " :ana!er of Dutch0Ban! a Ban+ *td$',omi a Branch( for his continuous !uidance durin! my or!ani4ationa attachment period$
*ast y, I am deep y indebted to a officers and senior officers of the comi a branch for their friend y and sincere cooperation durin! my <r!ani4ationa attachment period$
In 6Internship Pro!ram7 course #tudents have to prepare an Internship &eport at the end of the semester$ This report based on activities of the 8enera Ban+in! system in Ban! adesh$ The report is prepared on 6,redit operations and -va uation of Dutch Ban! a Ban+ *td7$ I try to hi!h i!ht the ,redit operation and -va uation at Dutch0Ban! a Ban+, ,omi a Branch and a so the activities of Dutch0 Ban! a Ban+ *imited$ I try my best to hi!h i!ht every activities of different department that I earn durin! the preparation of my report$ But there is some imitation to co ect the brief information about each and every department$ 9ere I sho. the history and bac+!round of DBB* their different division and the activities$ By preparin! the report I sa. there are some imitations$ At ast I try my best to ma+e the report more effective, and than+s to a mi!hty 8od .ho create me and !ives us sound mind and hea th, and to my parents .ho !ave birth to me and a .ays inspire me$ I try my best to hi!h i!ht every activities of different department that I earn durin! the preparation of my report$ But there is some imitation to co ect the brief information about each and every department$ 9ere I sho. the history and bac+!round of DBB* $A +inds of Deposits i+e #avin!, ,urrent, #hort Term Deposits, 5i2ed Deposits, ,ertificate of Deposits are accepted from resident and non0resident customers can deposit their money in 5orei!n currency Account both in convertib e and non0convertib e account, inc udin! on ine ban+in!$ <n ine ban+in! are !reat y emphasi4ed and .e can ca a these of the =9eart= of the ban+ because they are the ma1or source of the Ban+>s <peratin! #ystem " the performance of the credit operation system$ The first part of my report is about the introduction of my report$ 9o. I prepared this report$ The #econd part of my report is about overvie. of DBB*, <r!ani4ationa profi e, Departments of DBB*$ The Third part of my report is about overa Ana ysis of credit operations of DBB*$ The fina part of my report is about -va uation of DBB* accordin! to the findin!s$
Table of Contents
1. Introduction
1$1 Bac+!round of the study 1$2 <b1ective of the study 1$? :ethodo o!y of the study 1$@ *imitations of the study
2 ? ? @ A
2" !iterature Revie7 8" A #rief idea a#out DBB! +" Organi'ational (rofile of DBB! @$1 #trate!ies of DBB* @$2 8oa s of DBB* @$? Business ob1ective of DBB* @$@ :ana!ement Aspect of DBB* @$A -2ecutive committee of DBB* @$) Ban+in! Product of DBB*
B C 10 10 11 11 11 11 1?
-" Departments of DBB! A$1 ,ustomer #ervice Division A$2 ,ard Division A$? , earin! " co ection section A$@ &etai Division A$A ,ash section A$) Deposit section A$B &emittance section A$D Dispatch #ection A$C Persona " -stab ishment #ection www.AssignmentPoint.com
1) 1) 1C 21 2? 2? 2A 2A 2D 2D
9" Analysis credit Operations of DBB! )$1 Princip es of *endin! )$2 :odes of ,redit )$? *oan c assification " provisionin! )$@ *oan *oss provision )$A Processin! of ,redit Proposa s )$) #ectors covered in credit proposa )$B #upportin! Documents )$D Ana ysis of , ientEs Accounts )$C Pro1ect 5inancin! )$10 ,redit Investi!ation " #e ection of sponsors )$11 #ecurities a!ainst various types of Advance )$12 #ummari4ed Description of securities " documentation )$1? Approva process of ,redit )$1@ Insurance )$1A :onitor of credit operations )$1) ,ontro s of other credit faci ities )$1B 9and in! of De in/uent *oan )$1D ;aries types of &eturn " statements )$1C Disbursement of *oan )$20 ,redit &is+
?0 ?? ?? ?A ?) @1 ?D @2 @2 @A A1 A? A) )1 )? )A B0 B2 B) BB
:" 0indings of the study

B$1 8enera Ban+in! Department of DBB* B$2 ,redit <peration " performance -va uation of DBB* B$? #%<T Ana ysis of DBB* D0 D0 DD
*" Recommendations ;" Concluding Remar s ,)"Bi#liography ,," Appendi<
C0 C1 C2 C?
1. Introduction
1.1 Background of the study 1.2 Origin of the study 1.3 Objecti e of the study 1.! "ethodology of the study 1.# $i%itations of the study
1. Introduction
Banking system plays a very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. In a developing country like Bangladesh the banking system as a whole play a vital role in the progress of economic development. A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain ound and healthy. If the blood is not supplied to any organ then that part would become useless. o if the finance is not provided to agriculture sector or industrial sector! it will be destroyed "oan facility provided by banks works as an incentive to the producer to increase the production. Banking is now an essential part of our economic system. #odern trade and commerce would almost be impossible without the availability of suitable banking services. $irst of all! banking promotes savings. All manner of people! from the ordinary laborers and workers to the rich land owners and businessmen! can keep their money safely in banks and saving centers. econdly! banking promotes investments. Banks easily invest the money they get in industry! agriculture and trade. They either invest it directly or advance loans to other investors. Thirdly! it is most through banks that foreign trade is carried on. %hether we e&port or import! it is through banks that money is transferred from one country to another. $or e&ample! bills of e&change and letters of credit are the regular ways banks use to transfer money. A number of recent studies! however! indicate that the banking sector plays a more important role than it was believed earlier. 'utch(Bangla Bank "imited )the Bank* is a scheduled commercial bank. The Bank was established under the Bank Companies Act +,,+ and incorporated as a public limited company under the Companies Act +,,- in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed with 'haka tock .&change "imited and Chittagong tock .&change "imited. 'BB"( a Bangladesh .uropean private joint venture scheduled commercial bank commenced formal operation from /une0! +,,1. 'BB" is most widely recogni2ed for its donations to social causes and its IT investment )largest AT# network*. 3owever it has recently stated that it will stop e&pansion on its AT# network as the current numbers have e&ceeded demand and hence diminishing returns )if any*. Although it is widely believed it is a loss( making4subsidi2ed unit which 'BB" rationali2es as 5uasi C 6. The bank is often collo5uially referred to as 7'BB"7! 7'utch Bangla7 and 7'utch Bangla Bank7.
1.1 Background of the study

All over the world the dimension of Banking has been changing rapidly due to deregulation! technological innovation and globali2ation. Banking in Bangladesh has to keep pace with the global change. 8ow! Banks must compete in the market place both with local institution as well as foreign ones. To survive and thrive in such a competitive banking world! two important re5uirements are9 'evelopment of appropriate financial infrastructure by the central bank and 'evelopment of :professionalism; in the sense of developing an appropriate manpower structure and its e&pertise and e&perience. To produce skilled Banker! only theoretical knowledge in the field of banking studies is not sufficient. An academic course of the study has a great value when it has practical application in real life situation. o! I need proper application of my knowledge to get some benefit from my theoretical knowledge to make it more tactful. %hen I engage myself in such fields to make proper use of my theoretical knowledge in my practical life situation such an application is made possible through internship. %hen theoretical knowledge is obtained from a course of study at only the half way of the subject matter Internship implies on other the full application of the methods and procedures through rich ac5uired of subject matter can be forcefully applied in my day to day life situation. uch a procedure of practical application is known as internship. To relate the theoretical knowledge with the practice we the student of BBA were assigned in the practical orientation in bank. 'uring my learner period! I was attached with 'utch(Bangla Bank "td! Comilla Branch located in Chwak Ba2ar. The <fficer of this Branch help me to perform practical jobs in different department at different desk which help me to gather some practical knowledge for various banking functions and completed this report.
1.2 Objecti es of the study

&he s'ecific objecti es of the study are as follo(s:
= To present an overview of 'utch(Bangla Bank "T'. ) To know the >eneral Banking practices. = To observe banker(customer relationship = To understand the role of banks in "oans and Advances. = To appraise the Credit operation .valuation of 'utch(Bangla Bank "T'.
= To recommend remedial measures for the development of 'utch(Bangla Bank "T'. = To present performance .valuation of 'utch(Bangla Bank "T'.
1.3. "ethodology of the study

The study re5uires a systematic procedure from selection of the topic to final report preparation. This overall process of methodology is given in the flowchart below9
Selection of the Topic
Identifying Data Sources
Collection of Data
Classification, Analysis, Interpretation and Presentation of Data
Findings of the Study
Final Report Preparation
Data *ollection +rocedure

Infor%ation collected to furnish this re'ort is both fro% 'ri%ary and secondary sources.
&he 'ri%ary sources are:

Practical desk work $ace to face conversation with the officers $ace to face conversation with the clients 6elevant file study as provided by the concerned officer
&he secondary sources are:

'ifferent circulars issued by the 3ead office of 'utch(Bangla bank ltd. 'ifferent :procedure manual;! published by Annual reports )?@@, A ?@+@* of 'BB". www.AssignmentPoint.com
Publications collected from different libraries and from internet. Bnpublished data received from the Comilla Branch. 'ifferent te&t books.
1.! $i%itations of the study

The main constraint of the study was insufficiency of information which is highly re5uired for the study. uch a study was carried out by me for the first time. o! in(e&perience is one of the main factors that constituted the limitation of the study.
The duration of our orientation was not enough to cover all aspects of banking for this reason it is too difficult to cover all functions of the different desk to make understandable.
2. $iterature ,e ie( 3. A brief idea about DBB$ !. Organi-ational +rofile of DBB$ A. "ission B. .ision *. *ore Objecti es !.1 /trategies of DBB$ !.2 0oals of DBB$ !.3 Business objecti e of DBB$ !.! "anage%ent As'ect of DBB$ !.# 12ecuti e co%%ittee of DBB$ !.3 Banking +roduct of DBB$
2. $iterature ,e ie(
%ith respect to the Performances of Ban! adeshi ,ommercia Ban+in! sector, forei!n and nationa e2perts undertoo+ number of studies$ #ome of the notab e ones areF Bhattacharya '200B(, ,ho.dhury and Is am '200B(, Gahan!ir, #hi and 9a/ue '200B(, ,ho.dhury '2002(, #iddi/ue and Is am '2001(, A 0#hamrnari and #a irni '1CCD(, Av+iran '1CCB(, Bhatt " 8hosh '1CC2(, 9ossain " Bhuiyan '1CC0(, #.amy " ;asudevan '1CDA(, Ahmed " Gamshedu44aman '1CDA( Bhattacharya '200B( pointed out that si2 ma1or recent po icy measures inc ude: reduction of ban+ rate and endin! rate, in+in! c assified oans to ar!e oan sanctionin!F rationa i4ation and mer!er of ban+ branches, measures for oan recovery, and demarcation of responsibi ities bet.een the mana!ement and the board and decision on cash reserve ratio$ ,ho.dhury and Is am '200B( stated that deposits and oan advances of 3ationa i4ed ,ommercia Ban+s '3,Bs( are ess sensitive to interest chan!es than those of #pecia i4ed Ban+s '#Bs($ #o #Bs shou d not ma+e abrupt chan!e in endin! or deposit rates by fo o.in! the 3,Bs$ If 3,Bs chan!e their endin! or deposit rates, their deposits or oans and advances .i be affected ess than those of #Bs$ :oreover, deposits of 3,Bs have hi!her vo ume and hi!her vo ati ity than those of #Bs$ <n the other hand, oans advances of 3,Bs sho. a hi!her vo ume and hi!her vo ati ity than those of #Bs$ 9o.ever, #Bs offer hi!her deposit rates and char!e hi!her endin! rates than 3,Bs$ That is .hy the interest rate spread of #Bs .as hi!her than that of 3,Bs$ Gahan!ir, #hi and 9a/ue '200B( stated that the traditiona measure of profitabi ity throu!h stoc+ho derEs e/uity is /uite different in ban+in! industry from any other sector of business, .here oan0to0deposit ratio .or+s as a very !ood indicator of ban+s> profitabi ity as it depicts the status of asset0 iabi ity mana!ement of ban+s$ But ban+s> ris+ is not on y associated .ith this asset iabi ity mana!ement but a so re ated to !ro.th opportunity$ #mooth !ro.th ensures hi!her future returns to ho ders and there ies the profitabi ity .hich means not on y current profits but future returns as .e $ #o, mar+et si4e and mar+et concentration inde2 a on! .ith return to e/uity and oan0to0 deposit ratio !rab the attention of ana y4in! the ban+sE profitabi ity$ ,ho.dhury '2002( observed that the ban+in! industry of Ban! adesh is a mi2ed one comprisin! nationa i4ed, private and forei!n commercia ban+s$ :any efforts have been made to e2p ain the performance of these ban+s$ Understandin! the performance of ban+s re/uires +no. ed!e about the profitabi ity and the re ationships bet.een variab es i+e mar+et #i4e, ban+>s ris+ and ban+>s mar+et si4e .ith profitabi ity$ Indeed, the performance eva uation of commercia ban+s is especia y important today because of the fierce competition$ The ban+in! industry is e2periencin! ma1or transition for the ast t.o decades$ It is becomin! imperative for ban+s to endure the pressure arisin! from both interna and e2terna factors and prove to be profitab e$ www.AssignmentPoint.com
#iddi/ue and Is am '2001( pointed out that the ,ommercia Ban+s, as a .ho e, are performin! .e and contributin! to the economic deve opment of the country$ The avera!e profitabi ity of a Ban! adeshi ban+s co ective y .as 0$0CH durin! 1CD0 to 1CCA .hich means that a profit of TI 0$0C .as earned by uti i4in! assets of TI 100$ In every aspect of profit, ban+in! sector contributes the nationa economy as .e as to the individua or!ani4ation$ Despite overa !ro.th of the ban+in! sector bein! positive, the performances of different cate!ories of ban+s .ere not e/ua y attractive$ Accordin! to A 0#hamrnari and #a irni '1CCD( profitabi ity ratio especia y return on e/uity '&<-( si!na s the earnin! capabi ity of the or!ani4ation$ They a so su!!est that hi!her return on e/uity '&<-( ratio is appreciab e as it is the primary indicator of ban+>s profitabi ity and functiona efficiency$ Av+iran '1CCB( stated that the detai s the process .hereby mu tivariate interdiscip inary measures of potentia to perform are inte!rated .ith performance measures to deve op mode s of retai performance for ban+ branches$ The predictive mode s use the +ey business drivers of a ma1or tradin! ban+ as dependent variab es$ Independent variab es e2p ainin! business drivers are the theori4ed potentia variab es that measure the capacity to !enerate retai business$ The mode s a o. a comparison bet.een the predicted and actua eve s of +ey business diverts, thus measurin! unrea i4ed performance$ 5indin!s can assist decision ma+in! durin! restructurin!, branch c osures or do.nsi4in!$ The variab es presented shou d be re!arded as e2amp es rather than universa y accepted measures of branch performance$ Bhatt " 8hosh '1CC2(, observed that the profitabi ity of commercia ban+s depend on severa factors some of them are endo!enous and some e2o!enous$ The endo!enous factors represent contro of e2penditure, e2pansion of ban+in! business, time y recovery of oans and productivity$ The e2o!enous factors consist of direct investments such as #*& '#tatutory *i/uidity &atio(, ,&& ',ash &eserve &atio( and directed credit pro!rams such as re!ion .ise, popu ation .ise !uide ines on endin! to priority sectors$ The re!u ated and restricted re!ime in the operation of ban+in! system in terms of investment, credit a ocation, branch e2pansion, interest rate determination and interna mana!ement eroded the productivity and profitabi ity of commercia ban+s$ 9ossain and Bhuiyan '1CC0( stated that there is no universa y accepted operationa definition of performance measures$ In broad sense performance eve of an enterprise can be measured by the e2tent of its or!ani4ationa effectiveness$ In the conte2t of services rendered to.ards pub ic the performance of an or!ani4ation can be 2 vie.ed as Jthe e2tent to .hich its .or+ is carried out .ithin estab ished specifications for !oods and services produced, to the !enera satisfaction of the c iente e served, .ithin !iven cost and time constraints, and in such a manner as to support or contribute to the achievement of the or!ani4ation ob1ectives$ In measurin! performance eve of a ban+ #.amy and ;asudevan '1CDA( used per emp oyee, deposits, advances, profits, etc$ www.AssignmentPoint.com
3. A Brief Idea about DBB$
4istory of DBB$:
'utch(Bangla Bank "imited a Bangladeshi(.uropean joint venture scheduled bank with e5uity participation from the 8etherlands 'evelopment $inance Company. It started banking operations in Bangladesh on 0 /une +,,1. The authori2ed and paid up capital of the bank is Tk -@@ million and Tk +C@ million respectively. The paid up capital represents the face value of +.C million ordinary shares of Tk +@@ each and is fully paid by the sponsors. The e5uity of the bank was Tk ?--.,1 million in +,,, and its reserve fund was Tk ??.D- million in ?@@@. The ban+ conducts a types of commercia ban+in! activities inc udin! customer services re ated to oca and forei!n remittances but its core business is trade financin!$ It a so e2tends short and medium0term oans to industria underta+in!s on a imited sca e$ Innovative products on credit and deposit scheme introduced by the ban+ are commission free remittance, the >:oney P ant> scheme, month y term deposits, and sma credit faci ities for shop o.ners, sma 0sca e ta2i cab oans, sma 0sca e transport oans and consumer credit$ 5orei!n -2chan!e business dea t by the ban+ .as e/uiva ent to T+ A,D1B mi ion in 1CCC and the transactions inc uded e2port servicin! 'T+ 1,1BB mi ion(, import financin! 'T+ @,@1? mi ion(, and remittance services 'T+ 22B mi ion($ The ban+ has correspondent re ationships .ith 1B forei!n ban+s$ In addition to its ban+in! activities, Dutch0Ban! a Ban+ *imited ta+es part in different nationa activities promotin! sports, cu ture, socia a.areness, etc$ Participation in these activities as sponsors is part of its business deve opment po icy$ An D0member board of directors comprisin! a chairman and four representatives from oca sponsors and three representatives from the 3ether ands Deve opment 5inance ,ompany oversees the mana!ement of the ban+$ The mana!in! director is appointed by the board .ith the approva of Ban! adesh ban+$ 9e runs the ban+>s day0to0day business .ith the assistance of its 2@D other emp oyees .or+in! in various !rades$ In December 2000, the ban+ had C branches in different to.ns of Ban! adesh$ As on ?1 December 200C, tota deposits mobi i4ed by the ban+ amounted to T+ ),0B?$? mi ion and tota oans and advances stood at T+ @,ADD$1 mi ion .as disbursed main y to sma and medium si4ed enterprises$ <n that date, its c assified oan .as T+ ?? mi ion www.AssignmentPoint.com
'0$B2H of tota ($ In 2000, the ban+>s investment .as T+ D@2$?1 mi ion, .hich comprised T+ B10 mi ion in treasury bi s, T+ 1$1A mi ion in shares and securities, T+ ?0 mi ion in debentures of Investment ,orporation of Ban! adesh 'I,B( and T+ 100 mi ion in other !overnment securities$ <n the other hand, the ban+ borro.ed T+ C0 mi ion in 2000 from the inter0ban+ ca mar+et$ Tota assets of the ban+ in that year .ere va ued at T+ B,000 mi ion and its off0ba ance sheet activities accounted for T+ ?,?)2 mi ion$ Durin! 2000, the !ross income of the ban+ .as T+ B))$) mi ion a!ainst !ross e2penditure of T+ A2?$A mi ion, resu tin! in an operatin! profit of T+ 2@?$1 mi ion and a net profit of T+ D)$) mi ion$ &eturn on e/uity of the ban+ in 1CCC .as 1?$BBH$
!.
Organi-ational +rofile
Dutch0Ban! a Ban+ *imited 'DBB*( is Ban! adeshEs most innovative and techno o!ica y advanced ban+$ DBB* stands to !ive the most innovative and affordab e ban+in! products to Ban! adesh$ Amon!st ban+s, DBB* is the ar!est donor in to socia causes in Ban! adesh$ It stands as one of the ar!est private donors invo ved in improvin! the country$ DBB* is proud to be associated .ith he pin! Ban! adesh as .e as bein! a eader in the country>s ban+in! sector$ A. #ission9 'utch(Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social responsibility. 7Profits alone7 do not hold a central focus in the BankEs operationF because 7man does not live by bread and butter alone7.
B. Gision9
'utch(Bangla Bank dreams of better Bangladesh! where arts and letters! sports and athletics! music and entertainment! science and education! health and hygiene! clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. 'BB"Es essence and ethos rest on a cosmos of creativity and the marvel( magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development.
*. Core <bjectives9
'utch(Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue from its pool esteemed clientele! 'utch(Bangla Bank intends to pave the way for a new era in banking that upholds and epitomi2es its vaunted mar5uees 56our &rusted +artner5 Dutch0Ban! a Ban+ is the first ban+ in Ban! adesh to be fu y automated and introduce - ectronic Ban+in!$ The automation .as comp eted in 200?, but further additions and features are continuous y bein! added and up!raded$ DBB* has adopted the same e2act automation so ution used my many internationa ban+in! !iants$ A thou!h this .as si!nificant y more e2pensive than other so utions, it is a sma price to pay for a c ient>s peace of mind$
!.1 /trategies of the Bank

&he %ajor strategies of the bank are outlined belo(:
K K K ynchroni2ed and steady growth of the bank Btili2ing all available resources to develop various plans! policies and procedures in each of the objective and goal areas. Implementation of the plans! policies and procedures. www.AssignmentPoint.com
K K K
'raw upon the connections! advice! etc. of the foreign partners. Btili2e a team of professional employees. earch for a total customi2ed solution of I.T. for the purpose of full automation step by step. &o de elo' L L L L L L L L L L L L L L L L a realistic deposit mobili2ation plan an appropriate lending risk assessment system capital plan a system to make good advances a recruitment! compensation! training and orientation plan a plan for offering better customer services appropriate management structure! system! procedures and approaches cientific #I to monitor Bank;s activities. build up a low cost fund base make sound loans and investments meet capital ade5uacy re5uirement at all the time ensure +@@H recovery of all advances ensure a satisfied work force $ocus on fee(based income Adopt appropriate management technology Install a scientific #I to monitor bank;s activities
!.2 0oals of the Bank
!.3 Business Objecti es of the Bank
!.! "anage%ent As'ect

Board of 'irectors is the sole authority to take decision about the affairs of the business. 8ow there are I directors. All the directors have good academic background and have huge e&perience in business. #r. hahabuddin Ahmed is the founder Chairman of the bank. Present Chairman is #r. Jahid 3ossain khan. The board of 'irectors holds meetings on a regular basis.
!.#.1 12ecuti e *o%%ittee:

The .&ecutive Committee consists of the members of the Board of 'irectors. This committee e&ercises the power as delegated by the Board from time to time and approves all matters beyond the delegation of #anagement.
!.#.2 "anage%ent *o%%ittee:

The #anagement Committee consists of the #anaging 'irectors and 3ead <ffice .&ecutives. They discuss about the progress on portfolio functions. 'ifferent ideas and decisions! guidelines regarding deposits! lending and management of 3uman and #aterial resources are the main concern of this committee. www.AssignmentPoint.com
All these committees meet on a regular basis for discussing various issues and proposals submitted for decisions.
"anage%ent hierarchy of Dutch7Bangla Bank $i%ited9

1. "anaging Director 2. De'uty "anaging Director 3. /enior 12ecuti e .ice +resident !. 12ecuti e .ice +resident #. /enior .ice +resident 3. 8irst .ice +resident 9. .ice +resident :. /enior Assistant .ice +resident ;. 8irst Assistant .ice +resident 1<. Assistant .ice +resident 11. /enior 12ecuti e Officer 12. 12ecuti e Officer 13. /enior Officer 1!. Officer 1#. Assistant Officer 13. &rainee Officer
!.9 Banking +roducts:

!.9.1 De'osit: De'osit: !.9.2 &er%
= /a ings De'osit Account ="onthly &er% De'osit = *urrent De'osit Account =&er% De'osit 3 "onths = /hort &er% De'osit Account =&er% De'osit 3 "onths = ,esident 8oreign *urrency De'osit =&er% De'osit 12 "onths = 8oreign *urrency De'osit =&er% De'osit 2! "onths = *on ertible &aka Account =&er% De'osit 33 "onths = >on7*on ertible &aka Account = 12'orter?s 8* De'osit @8B+A,A = DBB$ De'osit +lus /che%e @D+/A = DBB$ Bochore Dergun /che%e @BD/A = DBB$ *hildren 1ducation /a ings /che%e @*41//A = DBB$ +ension 'lus @++A = DBB$ +ension Benefit /che%e @+B/A
!.9.3 $oan B Ad ances:

K $oan against. &rust ,ecei't = &rans'ort $oan = *onsu%er *redit /che%e = ,eal 1state $oan @,es. B *o%%.A = $oan Against. Acce'ted Bill = Industrial &er% $oan = Agricultural &er% $oan = $ease 8inance www.AssignmentPoint.com
= Other &er% $oan = $ife $ine @a co%'lete series of 'ersonnel credit facilityA = 8"O $ocal currency $oan for /"1 = 8"O 8oreign currency $oan = *ash *redit @4y'othecationA = /%all /ho' 8inancing /che%e =O erdraft
&y'es of $oan B Ad ances 'roducts: *or'orate Banking +roduct:

= +roject 8inance = Corking *a'ital 8inance =/yndications B /tructured 8inance =&rade 8inance =/ocial B 1n iron%ental Infrastructure 8inance
/"1 Banking +roduct:

=/%art /"1 ter% loan = /%art /"1 /%all /ho' = /%art /"1 *ash *redit
,etail Banking +roduct:

$ife7line +roducts @Dn7/ecuredA: = *redit 8acility fro% Debit *ard = *lean *redit +roducts /ecured *redit +roducts: = Auto $ine = 4o%e line
$etter of *redit7trade Business:

= I%'ort 8inance www.AssignmentPoint.com
= 12'ort 8inance
#. De'art%ents of DBB$ #.1 *usto%ers /er ice Di ision #.2 *ard Di ision #.3 *learing B collection section #.! ,etail Di ision #.# *ash section #.3 De'osit section #.9 Dis'atch /ection #.: +ersonal B 1stablish%ent /ection
#.
De'art%ents of DBB$
'utch(Bangla Bank ltd Comilla Branch is non A' Branch! so in this branch occurs general banking. The >eneral Banking 'epartment does the most important and basic works of the banks .All other department are linked with this department. It also plays a vital role in deposit mobili2ation of the branch. $or proper functioning and e&cellent customer service this department is divided into various sections namely as follows9
#.1
*usto%er ser ice di ision:

This section deals with opening of different types of accounts. It is also deals with issuing of check book and different deposits book to the different accounts opener. A customer can open different types of accounts through this department such as9
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Current account aving bank deposit account $i&ed deposits account #onthly saving scheme pecial deposits scheme
Re=uirements of opening an accounts There are some re5uirements have to be completed for opening an account . -","2 Current Account Current account is an account where numerous transactions can be made by the accounts holders within a working day. There is no restriction on the number and the amount of withdrawals from the current account within availability of funds. As the banker is under this obligation to re pay this deposit on demand. 8< interest is paid in this A4C. >enerally! current account is opened for businessmen and traders for easy transaction. But a person can open C' A4C for special purpose. 6e5uirements for the different types of accounts holder are discussed below9 -","8 (roprietorship 0irm There is a different account opening form for proprietorship firm provided by the 'utch (Bangla Bank "td.! Comilla BranchF 6e5uirements of opening C' A4C for proprietorship are mentioned below9 Trade license eal of the firm www.AssignmentPoint.com
Attested photograph )? copies* 8ational I' Card -","+ (artnership 0irm There is a different account opening form for partnership firm. Instruction for running an account is given in this form documents re5uired to open these types of account as follows9 Attested Photographs )? copies* of those who will operate the account. Partnership deed. 6esolution of the firm regarding account opening should be given. Trade license. $or opening every types of account a signature card and different register for different types of account is maintained in the bank. An account number is given in each account and the description of the account is entered in the computer. -","!imited Company A separate account opening form is used for limited company. The banks always take precautions for opening account these types of customer. everal documents are submitted by them which should be checked carefully by the bank to be legally in a safe position. 6e5uirements to open an account as follows9 -","9 #emorandum of association Article of association. Attested photographs )two copies each* of those who will operate the account. "etter of commencement )for public ltd co.* "etter of incorporation. "ist of the directors and their number of share and status. 6egistration9 the company must be registered and certificate related to this issue is obtained from the registered office of /oint tock Company. 6esolution9 specimen of resolution to be passed by a limited company for opening an account with the bank. Saving Ban Deposits Account B account is meant for the people of the lower and middle classes who wish to save part of their incomes to meet their future needs and intended www.AssignmentPoint.com
to earn to an income form their savings. Therefore! the banks impose certain restriction on the savings bank account also offer reasonable rate of interest. The cash reserve maintained by the bank against these deposits is comparatively smaller than current account. -",": Restrictions on SB account
The saving bank deposits are subject to the following restrictions regarding withdrawals9 The number of withdrawals over a period of time of time is limited. Three withdrawals per week are permitted .but more then that no interest will be paid on rest amount for that month. The total amount of one or more withdrawals of any date should not e&ceed ?DH of the balance in the account unless Idays advance notice is given. 0i<ed Deposit Account These are deposits which are made with the bank for a fi&ed period specified in advance. The banks do not maintain cash reserves against these deposits and therefore. The bank offers higher rates of interest on such deposits. These deposits generally constitute D@H or more of the total deposits. Bsually customers are allowed to open this A4C for a certain period. The rate of interest varies in accordance with the terms of the deposit. The amount of $'6 is payable once at a time. After the term of which the A4C was opened the $'6 gets its maturity. The claim is then fulfilled by paying the principle amount plus interest and bank deduct the Income ta& on interest amount. -","; Opening of 0DR There is prescribed form for openin! 5D&$ 3o introducer is re/uired for openin! this AM,$ A minimum amounts as determined by the 9$<$ is re/uired to open such AM,$ -",",) Dormant Account Accounts in which no operation either deposit or withdrawal takes place for period of one year should be treated as 'ormant Account. uch account should be transferred to a separate Au&iliary ledger called L'ormant Account "edgerM. As a measure of precautions against a fraud the specimen signature cards of all the dormant accounts should be also www.AssignmentPoint.com
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be removed from the bo& of active account signature cards and kept in a separate signature card bo&. The first withdrawal from such account should be allowed with closing and other incidental charges and surrender the unused check leaves. The account should be debited for the account closing charges etc. and unused check leaves should destroyed by the authori2ed officer of the bank. In case of /oint A4C the application for closing the account should be signed by the entire /oint A4C holder. -",",, (rocedures of Closing Account A customer may c ose out his account any time by submittin! an app ication to the branch$ The customer shou d be as+ed to dra. the fina chec+ for the amount standin! to the credit of his account ess the amount of c osin! another incidenta char!e and surrender the unused che/ue eaves or the customer .i pay throu!h pay order$ The account shou d be debited for the account c osin! char!e etc$ and unused che/ue eaves shou d be destroyed by the authori4ed officer of the ban+$ In case of 1oint account the app ication for c osin! the account shou d be si!ned by the 1oint account ho der$
-"2 Card division3
Automated trailer machine >A$.?

AT: card service is the specia ty of Dutch0Ban! a Ban+ *TD$ ItEs the most popu ar service of the ban+$ The ban+ provides a hu!e number of AT: booths the country .ide .ith a different types of card services such as DBB*03-NU# :aestro card, DBB*03-NU# ;I#A - ectron card, DBB*03-NU# #i ver <D card " DBB*03-NU# 8o d <D card$ ItEs to mention here that a these cards are debit type$ 9ere I present a comp ete amount of the cards fees: Charges A $ees for 'ebit Card9 &y'e of ser ices *lassic /il er 0old "aestro .isa 1lectron st Issuance fee@1 year 8ree 1<<< 1#<< #<< #<< onlyA Annual 8ee@2nd year 2<< 1<<< 2<<< #<< #<< on(ardA ,e'lace%ent 8ee 2<< #<< 9<< #<< #<< +I> *hange 8ee 2<< 2<< 2<< 2<< 2<< In AT# service a customer can punch the card D times in a day to draw from taka +@@ up to taka D@!@@@ only.
A&" $ocations of DBB$: $ist of DBB$ A&" @Area CiseA

Dutch0Ban! a Ban+ operates the arest AT: net.or+$ DBB* c ients have un imited and free access to a DBB* AT:s nation.ide$ , ients of member ban+s 'not DBB*(, may be char!ed a transaction fee as determined by the member ban+$ 3o. TI$ 1000 note is avai ab e at DBB* AT:s$ There are ? !roups of AT:s for dispensin! ? combination of notes as under: 8roup01: T+$ 1000 " T+$ A00 notes <n y 8roup02: T+$ 1000 " T+$ 100 notes <n y 8roup0?: T+$ A00 " T+$ 100 notes <n y P ease consider the !roup and currency notes .hi e imputin! amount to .ithdra.$ AT#9 )Total N +01I* 'haka 9 ) I+1 * Chittagong 9 ) +-+ * Bogra 9 ) 0? *
*o%illa : @ 12 A
Co&Es Ba2ar 9 ) C * Barisal 9 ) ?1 * 'inajpur 9 ) I * $eni 9 ) +D * www.AssignmentPoint.com
>aibandha 9 ) 0 * >a2ipur 9 ) 0, * /essore 9 ) ?@ * Ohulna 9 ) 0C * Oishorganj 9 ) - * Oushtia 9 ) +? * #adaripur 9 ) D * #anikganj 9 ) C * #oulviba2ar 9 ) ++ * #ymensingh 9 ) ?@ * 8arayanganj 9 ) 0C * 8arsigndi 9 ) +0 * 8ilphamari 9 ) C * 8oakhali 9 ) , * Pabna 9 ) ++ * 6ajshahi 9 ) +0 * 6angpur 9 ) +D * atkhira 9 ) 1 * irajganj 9 ) D * ylhet 9 ) +@+ * Tangail 9 ) +- * B Baria 9 ) ? * #unshiganj 9 ) D * $aridpur 9 ) D * 3abiganj 9 ) D * $ast Track9 )Total N I+* 'haka 9 ) -1 * Chittagong 9 ) C * Bogra 9 ) ? *
*o%illa : @ 1 A
Barisal 9 ) ? * /essore 9 ) + * #ymensingh 9 ) ? * www.AssignmentPoint.com
8arayanganj 9 ) + * ylhet 9 ) C *
DBB$ A&" Booth
#.3 *learing B *ollection /ection

5or safety and security in financia transaction, peop e use financia instruments i+e DD, P<, ,he/ue, P#, etc$ It is the duty of ,ommercia ban+Es to co ect this financia instrument on beha f of their customer$ This process that the ban+s use is +no.n as c earin! and co ection$
-"8", Clearing Section

If a che5ue! P<! ''! P of a bank comes from another bank within the range of the local clearing house it is sent for collection through clearing house to the respective branch. The 'BB"! Comilla Branch deals with clearing house on like of all branches within the range of the local clearing house. It collects all kinds of instruments on behalf of customers and sends it to the local office of 'BB". The local office then sent it to the respective branch for collection. It also deposits all kinds of instruments to the clearing house for collection on behalf of all branches. Essential things for clearing the instruments There are four essential things re5uired for clearing the instruments9 Crossing seal .ndorsement seal Clearing seal ignature of Authori2ed <fficer
-"8"2 Collection Section

The clearing and collection transactions are handled in various ways9 www.AssignmentPoint.com
<utward clearing che5ue Inward clearing che5ue <BC )<utward Bill Collection* "BC ) "ocal Bill Collection * IBC ) Inward Bill Collection*
-"8"8 Clearing and Collection (rocess Garious types of clearing and collection processes are briefly discussed below9 -"8"8", Out7ard Clearing Instruments @andling (rocedures If any Che5ues is deposited by any account holder which is not drawn on 'ilkusha Branch )'B* in remittance department )8ote9 the che5ue which is not drawn on 'B and e&pected to be in process of collection of money from another bank can never be placed for Lover the counterM )<TC* payment. This che5ue must be placed by the account of 'B at first! in 6emittance 'epartment with the deposit slip. In that deposit! the account number in which the collected money will be kept! the che5ue number against which the collection of money from the paying banker will be happened! the name of the account(holder! the signature of the depositor etc should be stated clearly. The process of <utward Clearing Che5ues starts from here. The se5uence is as follows9 6eception of che5ue by the officer and special crossing to be given on the che5ue. pecial crossing means the crossing in which the name of national bank! 'ilkusha Branch! is stamped. 6egister .ntry to be given on the <utward Clearing 6egister. Clearing seal to be given )"BC for che5ue! the money of which will be collected from the bank e&ists in 'haka city or local area and <BC for the che5ues! the money of which will be collected from outside the 'haka city of local area*. .ndorsement to be given at the back of the che5ue. The language of the endorsement is like this( Che5ue chedule )it is the computer posting for each outward clearing che5ue* should be attached with each outward clearing che5ue along with the $orwarding )it is the computer posting of the sum total of all che5ues drawn on a particular bank* and be sent to the clearing house with a view to be cleared.
-"8"8"2 In7ard Clearing Instruments @andling (rocedures *i+e the out.ard c earin! che/ues, there are some che/ues, .hich are dra.n by the account ho ders of DB and !iven to other parties .ho are maintainin! www.AssignmentPoint.com
accounts .ith other ban+s$ They p aced the che/ues on their respective ban+Es branch and thereby come to the DB for co ection of money$ The treatments for these che/ues are as fo o.s: Gerification of the position of the account of the account( holder to know whether the che5ue can be honoured or not. 6egister entry in the Inward 6egister Book. If there any returns then it should be marked separately. orting of various types of inward clearing vouchers is happened ne&tF demand draft! foreign demand draft! pay slip and pay order are kept with the remittance department and some of the rest are sent to the deposit department and some to "oan and Advance department. 3ere there happens an effect on IBTA )Inter Bank Transaction Account* in accounts department where the particular client account is debited and the collecting bank is credited by the amount of the che5ue. -"8"8"8 Out7ard Bill for Collection >OBC? %hen Comilla Branch send any che5ue drawn on another branch outside Comilla city )say ylhet Branch* of 'BB" for collection on part of its account holder! then this collection procedure will be treated as <BC. <BC happens when the che5ue would be drawn ob another branch of 'BB" which is outside the Comilla city. $he se=uence of OBC procedures is as follo7s3 6eception of the che5ue from account holder. eal of the Comilla Branch to be given on the che5ue! special crossing! and seal of <BC to be given in front of che5ue and the endorsement to be on back of the che5ue. .ntry is taken on the <BC register. IBCA )Inter Bank Credit Advise* is prepared and sent to ylhet Branch along with respective instruments. ylhet Branch 'r. ,omi a Branch ,r$ 'ispatch to the deposit department for posting favoring the particular client account. At last! it will be posted in the account department.
#.! ,etail di ision:

These are deposits .hich are made .ith the ban+ for a fi2ed period specified in advance$ The ban+s do not maintain cash reserves a!ainst these deposits and www.AssignmentPoint.com
therefore$ The ban+ offers hi!her rates of interest on such deposits$ These deposits !enera y constitute A0H or more of the tota deposits$ Usua y customers are a o.ed to open this AM, for a certain period$ The rate of interest varies in accordance .ith the terms of the deposit$ The retai division a so !ives one to the customer$ Demand oan, *etter of ,redit, Import oan 9ome oan, 9ea th oan, 5estiva one, ,ar one, -ducation oan etc are !iven to the customer$
,eEuired Docu%ent:
$rade !icense Articles of Association and memorandum $otal investment details (roduct details Sales and mar eting plan >details of main #uyers? Details of imported items and main suppliers CIB underta ing of all directors .anagement details Ban account statements for the past one year Details of .aster !Cs & BB !Cs for the past one year
-"- Cash Section

There severa counters .or+ simu taneous y in cash section of DBB*, ,omi a Branch$ There is a so some e ectronic countin! machines by .hich a hu!e amount of cash money can be counted .ithin a fe. minutes$ This branch a so a o.s evenin! hour transaction on y in case of deposit of money$
-"-", Cash Receiving (rocedures

The .or+ of cash receivin! counter is e2aminin! deposit s ips$ Depositor .i use the prescribed deposit s ip supp ied by the ban+ to deposit cash, che/ue, draft, pay order, etc$ In a types of deposit the te er must chec+ the fo o.in! thin!s:
&he sli' has been 'ro'erly filled7u'. &he title of the account and its nu%ber. &he a%ount in figure and in (ords is sa%e. Instru%ent signed by the de'ositor. Date of the instru%ent. After chec+in! a these thin!s the te er .i accept cash, che/ue, draft, pay order, etc$ a!ainst deposit s ip$ The Te er .i p ace the cash in the cash dra.er accordin! to denominations$ The te er .i p ace si!n and affi2 6cash receipt, rubber stamp7 and return the customerEs copy to the customer$
-"-"2 Cash payment (rocedures -"-"2", (recaution
In order to safe guard his positionF the paying banker has to observe the following precaution before honouring a che5ue9 A che5ue must be looked whether it is an open or crossed che5ue. The paying officer should see whether the che5ue is drawn on his4her branch. 3e must see the che5ue is post dated or pre dated. A teller must not pay any post dated che5ue. The officer must carefully see the apparent tenor of the che5ue. If it is mutilated or materially altered then the officer must not honour it. The officer must compare the signature of the che5ue with the signature on the specimen signature card. The officer must verify the regularity of the endorsement. The officer may allow overdue against a che5ue if prior arrangement is done with the bank.
-"-"8 (assing the Che=ue

If the che/ue has no defect and it is payab e, the in char!e .i si!n in the che/ue affi2in! si!nature verification sea a on! .ith hisMher initia and .i cance the che/ue by stri+in! it .ith pen$ The officers .i handover the payment to the appropriate payee$
8"-"+ Dishonour of Che=ue

A banker can dishonour a cheEue in follo(ing situation 9 www.AssignmentPoint.com
Insufficient fund +ay%ent sto''ed by dra(er Alteration reEuired dra(er signature 1ffect not clear in cheEue 12ceed arrange%ent in cheEue 8ull co er not recei ed +ayeeFs endorse%ent irregularGillegibleGreEuired Dra(er signature differed and reEuired *heEue is 'ost datedG%utilatedGout of date *rossed cheEue %ust be 'resented through a bank *learing sta%' reEuired cancellation *heEue crossed HAccounts 'ayee onlyI *ollecting bankFs discharge irregularGreEuired
-"9 Deposit Section

The function of the Deposit section is very important$ It is fu y computeri4ed$ The officer of the deposit section maintains account number of the a customers of the ban+$ They are used different code number for different account$ By this section a depositorMdra.er can +no. .hat the present position of his account is$ The officer ma+e postin! three types of transaction, such as: ,ash, Transfer and , earin!$ This section performs fo o.in! tas+s: O'en a ne( account +ost all kind of transactions +ro ide on de%and re'ort *heEue %aintenance +re'aration of day transaction 'osition +re'aration of closing %onthly transaction 'osition
-": Remittance Section

Banks have a wide network of branches all over the country and offer various kinds of remittance facilities to the public. The remittance of the funds by banks is made through different methods. They are9 De%and Drafts +ay Order +ay /li' "ail &ransfer &elegra'hic &ransfer www.AssignmentPoint.com
Above all this service is performed by the 6emittance department efficiently.
-":", Demand Drafts >DD?

'emand draft is an order to pay money! drawn by one branch of a bank upon another branch of the same bank for a sum of money payable to order on demand. A draft cannot be drawn payable to named payee. 'raft may be purchased by customer or non(customer of the banks. The purchaser of the draft must fill in the relative application form with his name! amount! name of the payee! the branch on which draft is desired! sign it. 3e has to tender the amount in cash for the draft and bank charge! if any .If the purchaser has an account to the bank can debit '.' amount. The draft is prepared with care regarding the name of the payee! the amount and the office on which it is drawn. In order to ensure safety! the purchaser is advised to cross the draft and the bank given test number. The issuing officer send to the drawee branch an advice containing the particulars of the draft.
-":"2 (ay Order >(O?

Banks payment order is an instrument which contains an order for payment to the paid to effect local payment whether on behalf of the bank or its constituents. In the beginning stage! P< was issued only to effect local payment of banks own obligations .But at present it is also issued to the customers which they can purchase to deposit as secondary money of carnets money. The banks payment offers are in the form of receipts and issued by the joint signature of two officials. It ensures payment to the payee as the money deposited by the purchaser of P< is kit in the banks own APC named. Payment of the instrument to be made from the branch it has been issued. It is not transferred and therefore it can only be paid to9 &he 'ayee in identification &he 'ayeesF bankerJ (ho (ould certify that the a%ount (ill be credited to 'ayees account. A 'ersonJ holding the latter of authority fro% the 'ayee (hose signature %ust be authenticated by the 'ayee. &he 'urchaserJ by cancellation 'ro ides the original +O is surrendered by hi% to the bank.
-":"8 (ay Slip >(S?

Pay slip is one kind of instrument provided by the remittance section to the applicants for making payments certain sum of money to the name mentioned in the pay slip.
-":"+ .ail $ransfer >.$?

#ail transfer is an advice regarding remittance of funds sent by one branch to another branch of the same bank! at the written re5uest of applicants. The mail transfer contains9 &he na%e of the beneficiary Address of the beneficiary +articulars of the account of beneficiary >a%e of the re%itter
It is a non(negotiable instrument and generally it is not handed over to the customer rather than send through post office to the concerned branch for credit to the respective account.
-":"- $elegraphic $ransfer >$$?

Telegraphic transfer is the 5uickest methods of transferring funds from one place to another place. The remitter branch sends a telegraphic message to the others branch! to pay a certain sum of money to a named payee. uch a message is usually sent in coded language. There are two procedures should be followed for TT.
#.9.3 8oreign ,e%ittance through 12change 4ouse:

At the be!innin! of the year 200A, our Ban+ has been e2ertin! much emphasis on INAARD RE.I$$ANCE$ By this time the Ban+ estab ished e2tensive dra.in! arran!ement net.or+ .ith Ban+s and -2chan!e ,ompanies ocated in the important countries of the .or d name y in the United Arab -mirates, #tate of Iu.ait, #tate of Oatar, #tate of Bahrain, Ita y, ,anada and United #tates of America$ In the meantime, Dutch0Ban! a Ban+ *imited !ained the faith of the Ban! adeshi %a!e -arners in sendin! their hard0earned money to their respective beneficiaries in Ban! adesh in shortest possib e time$ -2patriates Ban! adeshi %a!e -arners residin! in those countries can no. easi y remit their hard0earned money to Ban! adesh .ith confidence, safety and speed$
#.9.9Cestern Dnion:
%estern Bnion $inancial ervices Inc. B. .A. is the number one and reliable money transfer company in the world. This modern .lectronic Technology based money transfer company has earned world wide www.AssignmentPoint.com
reputation in transferring money from one country to another country within the shortest possible time. 'utch(Bangla Bank "imited has set up a 6epresentation Agreement with %estern Bnion $inancial ervices Inc. B. .A. as on +-th $ebruary ?@@1. #illions of people have confidence on %estern Bnion for sending money to their friends and family. Through %estern Bnion #oney Transfer ervice! Bangladeshi %age .arners can send and receive money 5uickly from over ??D!@@@ %estern Bnion Agent "ocations in over +,I countries and territories world wide( the world;s largest network of its kind! only by visiting any branches of 'utch(Bangla Bank "imited in Bangladesh.
>a%e of the 12change *o%'anies and Banks:

/erial >o. <1 <2 <3 <! <# <3 <9 *ountry D.A.1. Ku(ait Italy Bahrain Latar *anada D./.A. >a%e of the 12change *o.GBank Al Ahalia "oney 12change Bureau DA1 12change *entre $.$.*. Ku(ait Asian International 12change *o. Al7"oosa 12change *o%'any Dnicredito Italiano /.'.A. Dalil 12change Doha Bank 1ast Bengal 12change Inc. Manata 12'ress
-"* Dispatch Section

The literal meaning of the term L'ispatchM is to send away hostile45uickly or to receive an official message. There are two types of dispatch maintained by the dispatch section. Dis'atch of $etter Dis'atch of &elegra% 5or convenient of the .or+ dispatch of etter has been c assified into t.o !roups main y: In(ard "ail Out(ard "ail <ut.ard mai is a!ain c assified into: Ordinary $etter www.AssignmentPoint.com
,egistered $etterG,egistered +arcel Comilla branch will maintain a deposit account with the local telegram office to which the amount of initial deposit will be paid by debiting to the Charge Account under advice to accounts division. %here a record of all such deposit paid by branches are maintained. The receipt for the deposit will be recorded in the comilla branch document register and retained with other documents.
-"; (ersonal and Esta#lishment section

This section is under general banking department. The function of the Personal and .stablishment section is as follows9 /u''ly of office stationary and furniture B fi2ture "aintenance of all fi2ed assets +lace%entJ transferJ 'ro%otion letter issuing to the e%'loyees *orres'ondence (ith different de'art%ent and e2ecuti es "aintenance of stores +re'aration of e2'ense bill for all kind of e2'enses "aintenance of all e2'enditure register
3. Analysis of credit O'eration of DBB$
3.1 +rinci'les of $ending 3.2 "odes of *redit 3.3 $oan classification B 'ro isioning 3.! $oan $oss 'ro ision 3.# +rocessing of *redit +ro'osals 3.3 /ectors co ered in credit 'ro'osal 3.9 /u''orting Docu%ents 3.: Analysis of *lientFs Accounts 3.; +roject 8inancing 3.1< *redit In estigation B /election of s'onsors 3.11 /ecurities against arious ty'es of Ad ance 3.12 /u%%ari-ed Descri'tion of securities B docu%entation 3.13 A''ro al 'rocess of *redit 3.1! Insurance 3.1# "onitor of credit o'erations 3.13 *ontrols of other credit facilities 3.19 4andling of DelinEuent $oan 3.1: .aries ty'es of ,eturn B state%ents 3.1; Disburse%ent of $oan www.AssignmentPoint.com
3.2< *redit ,isk
9" Analysis of credit operation of Dutch-Bangla Ban !td

In a financial system of any economy! we know! financial surpluses mobili2ed from surplus economic unit and transferred to the deficit economic unit. In the banking world! the bank acts as an intermediary in between deficit economic unit A surplus economic unit. Bank mobili2es the fund from surplus economic unit as deposit A makes the fund available to the deficit unit. The style of making the fund available to the deficit unit is nothing but creation of credit.
3.1 +rinci'les of $ending

&he 'rinci'les of lending %ay be considered under the follo(ing heads: 3.1.1 +rofitability 3.1.2 /ource of re'ay%ent 3.1.3 *haracter and ability of the borro(er 3.1.! +ur'ose of the facility 3.1.# &er%s of the facility 3.1.3 /afety 3.1.9 Infor%ation ,eEuire%ents
3.1.1 +rofitability:
All credit facilities granted to the Bank;s customers must produce profit! either directly or indirectly. preads are normally associated with the element of risk undertaken and the period and nature of the facilities. %hen judging a credit proposal! concerned officer should take a comprehensive view of other allied business that will be received by the branches.
9","2 Source of repayment3

After satisfying that the transaction will be profitable! ne&t attention to be given to the cash flow situation of the borrower. The Bank;s advances can be classified into three main categories! as follows9 A very short(term advance which will be li5uidated by funds received in the very near future9 e&amples are advances against foreign or local bills or bridge financing where evidence of credit sanction from another financial institution is availableF provision for current assets9 this type of facility is needed for trading and 4or manufacturing activities9 the capacity and the potential for adjustment of the facility will depend on the nature of the borrower;s trade and the market in which he operatesF Term advance4 lending over + )one* year9 e&amples of such facilities are investment in plant and machinery! building! a farm or a shop9 generally! a long(term loan is repaid out of future earnings generated by the business. Before granting a facility! it should be ensured that a reliable source of repayment e&ists and that the advance will be paid within the agreed www.AssignmentPoint.com
period. %hen considering the period of repayments! re5uired margin should be provided for unforeseen circumstances such as downward market trend! or the general economic condition of the country. Besides payment of interest and installments and other charges! the funds generated by the business should preferably leave ade5uate margin for meeting needs for future e&pansion or other business contingencies. %here the facilities are secured by fi&ed assets! the sale proceeds of such security should not be considered as a prime source of adjustment of the facility. In order to ascertain the capacity of the business to meet the obligations! the cash flow projections should be e&amined. If such e&amination calls for a revision of the repayment schedule! the credit facilities should be re(e&amined and their viability should be determined.
3.1.3 *haracter and ability of the borro(er:

The branch mana!er shou d +no. his customer .e and shou d be ab e to 1ud!e his intentions and abi ity to use the credit faci ities to his advanta!e$ Advance shou d be !ranted on y to those borro.ers in .hom the branch mana!er has fu confidence$ Inte!rity of the borro.er and his abi ity to conduct business are of paramount importance and ta+e precedence over the va ue of the securities offered$ Director's( or partner's( of imited companies or partnerships shou d be man havin! !ood mar+et reputation, business e2perience and drive$ Assessment of the companyEs operations and information about the directors can be !ained by studyin! the past yearEs financia statements of the company, its !enera reputation in business circ es, and by reference to the companyEs ban+ers$ %hen recommending a review or e&tension of a limit! branch managers should invariably ascertain the past performance from the branch records. The levels of ma&imum and minimum balances! turnover! the average debit balance! and timely receipt of the installments provide an ade5uate basis on which to judge the health of the account. The borrower should possess good trade e&perience! business acumen! initiative and drive. 3e must have ability to control the finances of his business. "ack of financial control may ruin an otherwise successful business! particularly when the business faces adverse economic conditions. It is imperative that the branch manager should be able to form a favorable impression about the integrity and business ability of his prospective borrower before initiating the loan application.
3.1.!+ur'ose of the facility:

The purpose of advance should be studied with a view to understanding whether it is within the policy of the Bank. )If it is outside the Bank;s policy! the proposal should not be given further consideration*. .ach proposal should be considered on its merits. Consideration should of course be given to the nature of business and certainty with which the business or the project will yield results. Comilla Branch manager should www.AssignmentPoint.com
e&ercise their judgment and should avoid granting advances for speculative projects. The general test! which should be applied by the comilla branch manager! is whether the Bank is called upon to finance a reasonable business project or whether the borrower will utili2e the finance for speculative purposes. In the case of corporate borrowers! the purpose of borrowing must be consistent with the objectives of the company. The objectives laid down in the #emorandum and Article of Association or bye(laws of the company must be carefully e&amined before considering any credit facility for limited companies.
3.1.#&er%s of the facility:

Credit facilities are #roadly divided under the follo7ing categories: a* facilities needed for very short term re5uirementsF b* facilities needed for current assets re5uirementsF c* $acilities needed for long(term4investment re5uirements. $acilities covered under category )a* above are generally re5uired for a short period of up to three to si& months. uch facilities include packing credits! advances against salaries! advances against purchase4discount of bills and bridging finance facilities. $acilities covered under category )b* are generally for a slightly longer period! say up to one year. %hen considering a facility of this nature! a feasibility study of the project should be made and a repayment schedule should be agreed. 3aving agreed the period of repayment! the comilla branch manager must ensure that repayment is received within stipulated period. It is prudent to take corrective action when the first default is made. Caution at an early stage prevents accumulating heavy debit balances and possible bad debts.
3.1.3 /afety:
To safeguard Bank;s interest over the entire period of the advance! a comprehensive view of the character of the client! capital! capacity of the client! ade5uacy and nature of security! compliance with all legal formalities! completion of all documentation and finally a constant watch on the account is called for. All advances will be against ade5uate security. %here advances are granted against the guarantee of a third party! that party must be subject to the same credit assessment as made for the principal borrower. The basis of security valuations will be e&pert third party assessments at two levelsF current market price and forced sale value. In the case of property! valuations should be done by enlisted surveyor of the Bank. Inventory valuations may be taken at the balance sheet values hown in www.AssignmentPoint.com
un5ualified audited accounts after the branch manager has carried out his own investigation into the composition of the inventory. pecialist values may be re5uested by the branch to provide other assets valuation )if re5uired* such as machinery and e5uipment. The value of the debtor may be taken from the balance sheet. The cost of the valuation )if any* will be borne by the client.
9",": Information re=uirements3

To satisfy the ma1ority, if not a , of the princip es of endin! detai ed above, the branch shou d co ect information on the fo o.in! /uestions, before considerin! .hether credit faci ities shou d be !ranted to the borro.er: i( %ho is the borro.erP %hether any specia characteristics of the borro.er need particu ar attention$ 5or e2amp e, if the borro.er is a trust, this ca s for e2amination of the trust deed$ ii( Is the branch satisfied about the character, abi ity, inte!rity and e2perience of the borro.erP Is the branch confident about the borro.erP iii( Is the purpose of borro.in! consistent .ith the ob1ectives of the companyP iv( Is the purpose e!a P Does it contravene any a.P Advances shou d not be considered for i e!a purposes$ v( %hat is the amount re/uiredP Is it sufficient for the purpose mentionedP vi( Is the security offered acceptab e and ade/uateP 9as sufficient mar!in been maintainedP ,an a va id char!e be obtained on the securityP vii( %hat is the period of advanceP %hat are the sources of repaymentP Is there reasonab e certainty that the stipu ated insta ment .i be recoveredP viii( %hat is the rate of interest char!edP %i it be profitab e to the Ban+P In assessin! the profitabi ity of the account, a o.ance must be made for any anci ary business i+e forei!n e2chan!e, business of !roup accounts, contin!ent business etc$ .hich may be avai ab e to the Ban+ from the borro.er$ Branches shou d a so consider .hether there is any onerous or difficu t .or+ invo ved in maintainin! the account$
3.2 "odes of *redit

'ifferent kinds of lending were subdivided into I categories by the Bangladesh Bank for fi&ation of rates of interest by the individual banks on competitive basis depending on the cost of funds! prevailing market condition and monetary policy of the country. These are9 Agriculture &er% $oan for $arge B "ediu% /cale Industry &er% $oans to /%all B *ottage Industries www.AssignmentPoint.com
Corking *a'ital 12'ort *redit *o%%ercial $ending Others
3.3 $oan classification B 'ro isioning

All loans and ad ances are classified into four categories de'ending on their status. &hese are: Dnclassified /ubstandard Doubtful BadG$oss This classification is done based on objective criteria or 5ualitative judgment Irregular: 8e&t day after the date of e&piry! if not adjusted4renewed at e&piry date. /ubstandard9 B8 recovered for more than 0 months but less than 1 months . Doubtful: B8 recovered for more than 1 months but less than +? months. BadG$oss9 B8 recovered for more than +? months. All loans and advances will be divided in four categories9 )a* Continuous "oanF )b* 'emand "oanF )c* $i&ed Term "oanF and )d* hort(term Agricultural and #icro(Credit.
@aA *ontinuous $oan:

The "oan! which has no particular repayment schedule! but contains date of e&piry! credit limit etc. will be termed as Continuous "oan e.g.! CC! <' etc.
@bA De%and $oan:

"oan and $orced "oan then it will be termed as the loan! which is considered repayable only after it is claimed by the banks! will be termed as 'emand "oan. If contingent or any other liability is converted to Compulsory 'emand "oan e.g. $orced "I#! PA'! $BP! IBP etc.
@cA 8i2ed &er% $oan:

The loan! which is repayable within a particular period of time as per repayment schedule! will be termed as fi&ed term loan. If any installment is left un recovered within the scheduled date! the amount falling due on account of un recovered installment will be classified as 7<verdue Installment7.
K
8i2ed &er% $oan (hich is re'ayable (ithin a %a2i%u% 'eriod of # www.AssignmentPoint.com
years
/ubstandard9 <verdue installment e5uals or e&ceeds the amount repayable within 1 months. Doubtful9 <verdue installment e5uals or e&ceeds the amount repayable within +? months. BadG$oss9 <verdue installment e5uals or e&ceeds the amount repayable within +C months.
K
8i2ed &er% $oan (hich is re'ayable after # yearsN /ubstandard: <verdue installment e5uals or e&ceeds the amount repayable within +? months. Doubtful9 <verdue installment e5uals or e&ceeds the amount repayable within +C months. BadG$oss9 <verdue installment e5uals or e&ceeds the amount repayable within ?- months. If any fi&ed term loan is repayable in monthly installment then the amount of recoverable installment will be e5ual to the sum of 1 installments )monthly*. imilarly! in case of 5uarterly repayable installment total amount repayable within 1 months will be e5ual to the amount of the total of ? 5uarterly installments.
= /hort7ter% Agricultural and "icro7credit: hort(term Credit will include credit e&tended to Agricultural sector and it is repayable within a period not e&ceeding +? months. The short Term #icro(Credit will be that which will not e&ceed an amount of Tk +@!@@@.@@ and will be repayable within a period not e&ceeding +? months . Irregular: If not recovered within the scheduled date as per contract of the credit. /ubstandard9 After e&ceeding +? months as irregular credit. Doubtful9 After e&ceeding 01 months as irregular BadG$oss9 <verdue installment e5uals or e&ceeds the amount repayable within 1@ months.
= Lualitati e Mudg%ent:
If the recovery of the credit becomes uncertain resulting from change of circumstances under which credit was e&tended or the borrower sustains loss of capital or the value of security decreases or any adverse situation arises then the credit will be classified on the basis of Qualitative /udgment. Besides! if the credit is e&tended without any logical basis or the credit is fre5uently rescheduled or the rules of rescheduling are violated or the trends of e&ceeding credit limit observed fre5uently or a suit is filed for recovery of the credit is e&tended without the approval of the competent authority! then the loan will be classified on the basis of Qualitative judgment. Bnder this judgment the loans will be classified as under9
/ubstandard: 'ue to reasons stated above or for any other reason if in spite of possible loss of any credit! there is any probability of changing the present situation through taking proper steps. Doubtful: .ven after taking proper steps! if the full recovery is not ensured. BadG$oss: If the probability of recovery becomes totally nil. If any improvement achieved in the accounts classified it will again be declassified. 3owever! the credit once classified by inspection team of Bangladesh Bank! that will be treated as final classification and before any subse5uent inspection is conducted by Bangladesh Bank or without prior approval of Bangladesh Bank the credit will not attain any merit of declassification. .ligible ecurities as stated above will include the following securities9 R ecurity in respect of lien against loan9 +@@H R ecurity in respect of gold or gold ornaments kept in the bank as per present market value9 +@@H R ecurity against value of >ovt. Bond4 anchaya patra under lien9 +@@H R Guarantee made by the >ovt. or Bangladesh Bank9 +@@H R#arket value of easily marketable goods preserved under the custody of Bank9D@H R#arket value of the #ortgaged "and A Buildings9 #a&imum D@H In respect of hort Term Agricultural "oan and #icro(Credit! the 6eservation of provision will be made as under9 Credits other than Bad "oan )i.e. 'oubtful! ub( tandard! Irregular and 6egular* NDH and in case of Bad "oan N +@@H
3.! $oan $oss 'ro ision

.very bank is re5uired to maintain provision for reserve for their classified or unclassified loans9 Provision for reserve for classified loans will be kept at the following scale9 /ub7/tandard Doubtful BadG$oss 9 2<O : #<O : 1<<O : Interest will be imposed on that credit account such interest will not be transferred to the Income Account. Instead the interest will be kept in Interest uspense. : Imposition of interest on Bad4"oss account will suspended. If any suit is re5uired to recover such credit! the suit will be filed on total amount www.AssignmentPoint.com
/ub7standard or Doubtful but
BadG$oss be
of principal included interest calculated up to the period before the suit is filed. uch interest will be kept on interest suspense. In case of any special reason if interest is imposed on Bad4"oss account then such interest will be reserved on suspense account. If any classified loan or part thereof is recovered i.e. actual deposit on account of recovery is made in the credit account! then recovery of non(imposed as well as imposed interest will be made first from such deposit. Then original loan will be adjusted.
3.# +rocessing of *redit +ro'osals

3.#.1 *redit ,e'ort 3.#.2 *IB ,e'ort 3.#.3 .isiting *lient 3.#.! *redit $ine A''lication 8or%
3.#.1 *redit ,e'ort:

The comi a branch mana!er shou d ensure preparation of credit report on the c ient to determine its past record, business performances, mar+et reputation etc$ The credit report shou d contain the fo o.in!: i. ii. The nature of client;s business. The names of owners and details of their associated business concerns. iii. 8et worth of the individual person owning the firm 4company )obtain through declaration at the time of submission of loan application*. iv. The financial health of the business concern. v. Assessment of managerial capability through analy2ing the up to date financial statements and market report! previous bank;s transaction record.
3.#.2 *IB ,e'ort:

In the recent past! to stream line credit discipline in banking sector and for meticulous adherence to the treatment of delin5uent borrower by the commercial banks and '$Is as per stipulation of Bank Companies Act +,,+! Bangladesh Bank has introduced a credit port folio data base www.AssignmentPoint.com
naming Credit Information Bureau )CIB*. $or processing credit proposals )both funded A non(funded* banks and '$Is need to obtain mandatory satisfactory CIB report from Bangladesh Bank. Present criteria for obtaining mandatory CIB report may be changed from time to time at the discretion of Bangladesh Bank. Any change in this regard shall be notified to the banks vide Bangladesh Bank CIB Circulars. Branch manager must obtain satisfactory CIB report prior to processing of credit proposals and mention the status of the client and its allied concerns 4persons of the borrower in the credit line proposal as it is revealed in the latest CIB report.
3.#.3 .isiting *lient:

A visit to the c ientEs business premises, factory can be a very usefu avenue to !ather information for preparation of credit proposa $ This visit and meetin! the c ient at their door0step may he p to confirm the business decision reach by the mana!er .ith re!ard to the c ientEs financia status, mana!ement efficiency and technica detai s about the !oods and services in .hich the c ient dea s$ 'uring the visit particularly to the factory! go down! the manager of the comilla branch can get an idea about the client;s investment! condition of the machinery and client;s stock movement. This will also help to judge its 5uality and acceptability as a reliable security. A set of 5uestion! which may be asked! should be prepared before hand.
3.#.! *redit $ine A''lication 8or%:

A credit proposal is its funds or non(funds based at the stage of primary scrutiny! credit officers prime consideration is to ascertain with reasonable accuracy! due date li5uidation of loan 4credit e&posure. The main feature of any credit proposition is9 i. A%ount and ty'e of credit line ii. +ur'ose of the facility iii. /ource of re'ay%ent 'lan i . /ecurity su''ort a ailable to the bank. In evaluating credit line proposals! credit officers must e&amine in depth li5uidation of outstanding in the normal course of business. This means understanding of clients business! management capability and integrity of the owners. It is e5ually important to see that ade5uate security are available to the bank! if the client fails to repay owing to fall in business or any other adverse factors. imilarly! in e&amining a credit proposal it is also e5ually important to see the profitability of the proposition and credit officers should structure the credit line in such a manner that the bank;s earning is ma&imi2ed. www.AssignmentPoint.com
The branch manager 4 credit officer of comilla branch should therefore! start processing of regular credit limit for approval of the competent authority of 'BB". Provided! the following conditions 4 steps are taken9 i. ii. +re'aration of the credit re'ort on the client Obtaining third 'arty G %arket in estigation. Also obtaining *IB re'ort fro% Bangladesh Bank
iii. Inter ie(ing the client i . Analysis of financial state%ents The branch manager 4 credit officer must see that credit line proposals are prepared in with standard credit proposal format in this regard which may be referred to the Anne&ure to this manual.
3.3 /ectors co ered in credit 'ro'osal

3.3.1*lient introduction 3.3.2 +articulars of o(ners 3.3.3 Allied concerns 3.3.! *redit facility fro% other banks 3.3.# Account %aintained (ith DBB$ 3.3.3 12isting credit lines 3.3.9 +ro'osed credit line 3.3.: Analysis of credit 'ro'osal 3.3.; &hird 'arty infor%ation 3.3.1< 8inancial infor%ation 3.3.11 +ros'ects 3.3.12 Assess%ent of financing reEuire%ent 3.3.13 InadeEuacy in the docu%entation
3.3.1! *ollateral security 3.3.1# ,isks Analysis 3.3.13 AccountsG business 'erfor%ance 3.3.19 BankFs earning 3.3.1: ,eco%%endation 3.3.1; +ro'osed facility
There are different sections covered in the credit proposal format which is e&plained below9
3.3.1 *lient introduction:

>iving the e&act name and style of the client as per registration in case of limited company. Also indicate the nature of the proposal L8ewM or L6enewal4 6evisionM. Bse figures in denomination of Taka in million tate e&act nature of business4description of the project. Provide business capital 4e5uity capital of the owner based on financial statements.
3.3.2 +articulars of o(ners:

tate whether proprietor! partners or directors how the percentage of the shareholdings of the directors as per record. Provide declared assets 4 net worth as the case may be by individually.
9"9"8 Allied concerns3

Provide name of a ied business concern of the o.nersM c ient, their nature of business and their investment interest in the business$
3.3.! *redit facility fro% Other banks:

<btain declared statement from the client. Also refer to CIB report of Bangladesh Bank.
3.3.# Account %aintained Cith DBB$:

tate all accounts including $i&ed 'eposit! if any! showing average deposit4 current deposit.
3.3.3 12isting credit lines@sA:

>ive details and nature of facility. The amount of respective limit and the outstanding on the date of the proposal tate validity4 maturity. tate primary and collateral security in brief. In footnote! please provide overdue status of PA'4T64"oan and whether Term "oan repayment is regular.
3.3.9 +ro'osed credit line@sA:

In case of renewal 4revision! this section should be completed only after careful review of the conduct of the account. Client;s financial re5uirement. #anaging of business affairs in terms of available facility. In case of fresh proposal! and after having a preliminary discussion with the client to have a clear view of client;s account! his future plans and financing re5uirements! the si2e of limit! period and proposed security to be structured. www.AssignmentPoint.com
3.3.: Analysis of credit 'ro'osal:

In this section! provide general background of the client! business profile! details and management aspect the business house4industry. >ive views on 5ualification! e&perience and past history of the owners.
3.3.; &hird 'arty infor%ation:

Provide status of up to date CIB report. Credit checking with other sources. Previous banks account transaction.
3.3.1< 8inancial infor%ation:

This section reflects the financial soundness of the business concern and information to be collected 4 prepared from spreadsheet analysis on the basis of client;s management certified financial statements or audited financial reports. $urnish comments on the li5uidity! profitability and leverage position of the client. This e&ercise 4 assessment should be done carefully pinpointing the strong and weak areas.
3.3.11
+ros'ects:
3ere business prospects! market outlook of the product to be given. alient features of the products! pricing! market strategy to be provided in case of manufacturing products.
3.3.12 Assess%ent of financing reEuire%ent:

Client;s financing re5uirement to be assessed on the basis of business cash flow 4 working capital assessment future plans. .&act re5uirement to be assessed and recommended after preliminary discussion with the client.
3.3.13 InadeEuacy in the docu%entation:

#ention non(fulfillment of any documentation 4 mortgage perfection etc. Also indicate audit objection on client;s account.
3.3.1! *ollateral security:

>ive details of security in the form of land! building! machinery! its written down value or surveyed value. Also show nature of marketable securities! its face value and average market value.
3.3.1# ,isks Analysis:

$urnish comments on "6A e&ercise! if done! and indicate the "6A rating. Indicate possible risks in the business and its mitigation. www.AssignmentPoint.com
3.3.13 AccountsG business 'erfor%ance:

>ive details of client;s deposit4 loan accounts performance during last +? months. how debit4 credit summation! minimum4 ma&imum balances! "4Cs opened! e&port documents negotiated during last +? months.
3.3.19 BankFs earning:

>ive break(up of earnings from the relationship.
3.3.1: ,eco%%endation:
>ive meaningful comments! consideration of the business line with clear recommendation.
3.3.1; +ro'osed facility :

>ive facility wise proposed4renewed4restructured loan4 credit limits! purpose of the facility! mode of repayment! pricing of the facility! security support and validity of the facility. <ther conditions4 special conditions including re5uirement of Bangladesh Bank approval to be highlighted.
3.9 /u''orting Docu%ents

3.9.1 *redit re'ort on the client 3.9.2 8inancial state%ents 3.9.3 /'readsheet analysis 3.9.! >et (orth analysis 3.9.# Acce'table security details
3.9.1 *redit re'ort on the client:

,redit report on c ient is a prime re/uisite for assessin! his Mtheir creditabi ity, mana!eria abi ity and past historica records$ This report shou d be updated .hen rene.a of credit faci ities are considered$ Third party credit report M ,IB report a on! .ith credit report on the c ient shou d be +ept in the fi e at the branch$ Business4 financial performance analysis to be based on audited accounts if they are available. <therwise! management certified financials could be used. The spreadsheet analysis should include last three years financial accounts. preadsheet is the easy method of analy2ing the financial results of the client;s business on a going concern basis. The balance sheet analysis involves re(arranging the figures in the annual accounts into a form which will reveal the working capital of the business! its net worth! and its dependence on the borrowed fund. www.AssignmentPoint.com
The second part of the spreadsheet is ratio analysis. Interpretation of the ratios re5uires analytical skill on the part of the branch manager4 credit officer. 8et worth statement may be produced straight away from audited balance sheets. Branch manager may also construct the net worth statement from declared statement or from information regarding assets and debts obtained through intervene of the client.
Analysis of *lientFs account:

The ob1ective of ana y4in! financia statements from the point of vie. of the ban+ is to understand the manner in .hich c ientEs o.n resources are emp oyed, its i/uidity position, the ratios of net .orth to borro.in! and of current assets to current iabi ities$
3.: Analysis of *lientFs Accounts

Borro(erFs net (orth Corking ca'ital +rofitability *a'ital 0earing *ash flo(
$he analysis should provide ans7ers to follo7ing areas3
>I?" Borro7erBs net 7orth3 To see if the borro.erEs net .orth 1ustifies the eve
of credit faci ities bein! re/uested$ 3et .orth is ca cu ated by tota debt iabi ities from tota assets$ 5rom another point of vie., the net .orth is the o.nersE tota interest in the business made up of paid up capita and Accumu ated surp us consistin! of .ritten earnin!s and reserves$ >II? Aor ing capital3 To see .hether the current assets are sufficient to meet the c ientEs current commitments and iabi ities$ %or+in! capita is arrived at by deductin! the current iabi ities from the current assets$ -
>III? (rofita#ility3 To see .hether sufficient earnin!s from the operation of the
business are there to repay the ban+ debts ivin! sufficient ba ance Mreturn on e/uity$
>IC? Capital Dearing3 To see ho. much amount of e/uity is in the business
compare .ith the borro.ed funds$ As a !ood ban+in! proposition substantia e/uity investment shou d be ensured$
>C? Cash flo73 %hen assessin! the c ientEs i/uidity position and profitabi ity, the
timin! of c ientEs commitment must be considered$ 9is commitments must be spread in such a .ay that the business .ou d never face a cash shorta!e in the foreseeab e future$
3.; +roject 8inancing

The Ban+ primari y invo ves in commercia ban+in! activities$ But sub1ect to avai abi ity of credit ine and o.n resources, the Ban+ may provide term oan specia y to industries .ithin the frame.or+ of industria po icy of the 8overnment and credit norms set by Ban! adesh Ban+ and the 8overnment from time to time$ #ystematic ana ysis is re/uired to be underta+en to provide a rationa basis for decision ma+in!$ #ocio0economic ob1ectives of the country needs to be considered in addition to the soundness of the pro1ect in terms of technica , commercia , financia and mana!ement considerations .hi e ma+in! investment decision$
3.;.1+roject 1 aluation:
The proposa may be for a ne. pro1ect or an e2istin! pro1ect re/uirin! Ba ancin!, :oderni4ation, &ep acement and -2pansion 'B:&-($ The proposa to be deve oped in the fo o.in! areas:
i? ,ost of the pro1ect and means of financin!F ii? 5inancia pro1ections coverin! sa es, cost of production, profitabi ity, cash
f o. etc$
iii? Ana ysis of past financia operation in respect of e2istin! concerns on the
basis of financia statements of the concern$
3.;.2 *ost of the 'roject:

The cost of the pro1ect represents a fi2ed capita e2penditures incurred or to be incurred for ac/uisition of its fi2ed assets and the net .or+in! capita to run the pro1ect$ Proper assessment of the cost of the pro1ect is very important for fi2ation of debtMe/uity contribution of the Ban+$ After determinin! cost of the pro1ect, financin! p an sha have to be .or+ed out on rea istic basis$
3.;.38i2ed cost of the 'roject:
The fi2ed cost of a pro1ect is the a!!re!ate cost of and, bui din!, construction, p ant, machinery and e/uipment, pre iminary and pre0operative e2penses 'inc udin! interest durin! construction period
3.;.!"eans of financingG Debt7eEuity ratio:

,ontribution from the sponsors in the form of paid up capita , directorEs oan etc$ form part of the e/uity$ ,ontribution from the ban+ is considered as debt$ Debt e/uity ratio shou d be set in a manner that the sponsors have reasonab e sta+e in the pro1ect$ In case of B:&- pro1ect, debt e/uity ratio sha be fi2ed on incrementa cost of the pro1ect$ Debt0e/uity &atioQ Tota iabi itiesM #hareho ders -/uity The ma2imum imit of term oan to a pro1ect is essentia y depend on the debt repayment capacityMcash f o. of the pro1ect$ Ban+Es po icy, nature of business, entrepreneurEs bac+!round, mar+et condition, e2tent of ris+ associated .ith the business etc$ inf uences in determinin! debt e/uity ratio$ The o.nerEs e/uity shou d form a ar!er part in the fo o.in! cases: i" ii" A speculative industry A seasonal industry 7ith periodical s7ings in production
iii" An industry 7hich is competitive domestically and internationally iv" An industry that lac s Dovernment encouragement for economic reasons v" In case 7here the sponsors are ne7 in the field and the capacity is yet to #e tested"
3.;.#+roject on rented 're%ises:

In case the pro1ect is ocated on rented premises, advance rent 'if any( sha be inc uded in the cost of the pro1ect as prepaid e2penses and ade/uate co atera security coverin! the oan amount shou d be obtained$
9";"9 Aor ing Capital3

Apart from the investment in the fi2ed assets, funds are re/uired for investment in current assets i+e stoc+s of ra. materia s, .or+0in0process, finished !oods, stores and spares, debtors etc$ The portion of funds, .hich remain invested in current assets of a concern, is ca ed .or+in! capita $ A portion of .or+in! capita remains tied up in the business over the years, ca ed fundin! from on! term source$ The other portion of .or+in! capita varies from time to time, !enera y met from short0term sources i+e commercia ban+ borro.in! and creditors$ The net .or+in! capita may a so be termed as e2cess of current assets over current iabi ities$
3et .or+in! capita is a on! term re/uirement of a pro1ect$ #o, it is to be met thou!ht on! term sources i+e e/uity or on! term oan$
Computation of 7or ing capital

The fo o.in! factors !enera y inf uence in the computation of .or+in! capita : i? ii? Deneral nature and type of #usiness Capacity utili'ation of the pro/ect
iii? Span of production process iv? Sales volume v? $erms of sales and purchase vi? Inventory turnover vii? Receiva#le turnover viii? Business cycle i<? Seasonality of product <? Seasonality of ra7 materials
%hi e computin! .or+in! capita re/uirement, apart from the above factors, Ban+s po icy and Ban! adesh Ban+Es instruction from time to time to be +ept in mind$ 9o.ever, fo o.in! are the !enera y accepted !uide ine for ca cu ation of .or+in! capita :
i? Capacity utili'ation
a( b( -2istin! unit uti i4ation 3e. unit : AH above the ast yearEs actua capacity : )0H of attainab e capacityMrated capacity
ii?Inventory
a( b( c( d( e( Imported ra. materia s *oca ra. materia s %or+0in0 process 5inished !oods #tores and spares : C0 days 'cost at factory site( : ?0 days 'cost at factory site( : ? days 'at production cost( : 1A days 'at production cost( : C0 days for imported spares
?0 days for oca spares ',ost at factory site(
iii? iv?
Receiva#les Cash in hand
: 1A days 'at production cost( : ,ash re/uirement of ?0 days for other day to day e2penses i+e sa ary, transportation, etc$
5or computation of Ban+ faci ity, receivab es and cash in hand is !enera y e2c uded and the mar!in from the c ient depends on the ban+ c ient re ationship .hich shou d not be ess than 20H in any case$
3.1< *redit In estigation B /election of s'onsors

The tas+ before the ban+ is to choose ri!ht type of entrepreneurs .ho can be trusted .ith the money !iven for settin! up an industria unit$ :oney can be created on y .hen it is hand ed by peop e possessin! business acumen, +no. ed!e and s+i re/uired to imp ement and run the industry profitab y$ An industria pro1ect satisfyin! the re/uirements of technica soundness, commercia , financia and economic viabi ity .i a most invariab y fa if .ron! persons are chosen to e2ecute and run the industry$ It is, therefore, obvious that choice of customer constitutes one of the most important factors to .hich a Ban+ must !ive !reat emphasis$ The credit investi!ation conducted by a ban+er see+s to eva uate the entrepreneuria abi ity, mana!eria e2perience, business acumen, inte!rity, reputation and financia .orth of promoters app yin! for Ban+Es financia assistance for settin! up industries or B:&- of a pro1ect$ In order to judge the sources of information may be divided broadly into two categories namely documentary and non(documentary. Client;s financial worth can be assessed with reasonable accuracy based on the following documentary sources of information9 i( Any c ient .ho ho ds assets in a form other than hard cash, !o d or 1e.e ry shou d be in a position to produce documentary evidence$
ii( 5or fi2ed assets there .i be ori!ina Tit e Deeds, structura ayout p an, .hich .ou d !ive the detai s of the properties such as area, ocation, nature and va ue$ iii( 5or deposit .ith ban+s there .ou d be ban+ statement of deposit$ iv(If the customer is in business, he is in a position to produce Income Ta2 ,ertificate$ This document .i provide re iab e indication of cash f o. sources of income$ #oreover! investigation often reveals that the declared properties are jointly owned with others which necessitate scrutiny of the Title 'eed. $urther! the properties owned and declared by the clients may have liabilities on account of unpaid balance of purchase price of the properties or loans obtained on their security. The credit investigation of the clients also look for their individual liabilities for a realistic assessment of their worth. The particulars of assets and liabilities furnished by the sponsors should! therefore! be analy2ed and assessed in the following manner9 i( The va uation shou d be assessed +eepin! in vie. the va ue they are i+e y to fetch in a forced sa e conditions$ ii( In order to assess if the properties are free from encumbrances, a search in the office of sub &e!istrar, Goint #toc+ ,ompanies shou d be conducted$ %here this is not possib e at a , the investi!ation officerMthe e!a adviser of the ban+ shou d e2amine Tit e Deeds of and, and other documents$ As re!ard other movab e assets i+e shares in Goint #toc+ ,ompanies, shareMdebentures of Pub ic *imited ,ompanies, 8ovt$ securities etc$ the c ient shou d have no difficu ty in providin! the documentary evidence$
3.1<.1 Balance sheet and state%ent of accounts:

The ana ysis of financia statements of a concern .ou d provide information on i/uidity, activity and profitabi ity position of the concern$ The financia soundness of a business can be determined by usin! different indicators from the Ba ance #heet and Profit and *oss Account .hich is +no.n as the ratio ana ysis$
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Ban Bs past e<perience3

In many cases, the app icant may have a ready avai ed oans either for the pro1ect or for some other purposes from DBB* or from different financia institutions$ In such cases, the credit in/uiry .i provide va uab e information about their .orth, dea in!s and present status of the iabi ities$ #ome times the sponsors may concea their iabi ities .ith other financia institutions$ Therefore, even if, the sponsors dec are their iabi ities or not a ,onfidentia ,redit Investi!ation &eport shou d be obtained from other Ban+s as .e as from other divisions of the same ban+$ The credit in/uiry sha inc ude such www.AssignmentPoint.com
detai s as date of sanction, amount of oan sanctioned, repayment performance, outstandin! as on date, overdue if any, securities avai ab e etc$
3.1<.3 0o t. re'ort 'ublications:

There is another documentary source of information name y the officia !a4ette, press reports re!ardin! suits by or a!ainst persons and parties inso vency and i/uidation of particu ar individua or enterprise, b ac+ istin! andMor simi ar punitive action a!ainst individua s, firms etc$ by the 8ovt$MAutonomous bodies etc$ .hich are very va uab e and re iab e and .hich the ban+er can not afford to over oo+$
3.1<.! Banking &ransaction:

, ients carry on norma business, maintain deposits and a so avai overdraft faci ities$ A detai ed revie. of these accounts .i !ive very va uab e information about the financia standin! of the c ients$
3.1<.# ,e'ort fro% &rade *ircle:

:ore information re atin! to sponsorEs .orth, si4e of business, turnover, inte!rity, reputation, honesty, business mora ity conduct etc$ of the c ients can be obtained from other traders in the same ine$ A c ient en!a!ed in a manufacturin! business must invariab y have constant trade in+s .ith the .ho esa e mar+et$ The credit investi!ation officer has to ma+e an independent in/uiry and ta + to a cross0section of traders to co ect as much unbiased opinion as possib e$
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Source of e=uity3
The c ient may o.n ot of properties and assets but these do not ensure cash avai abi ity for investment .ithin short span of time avai ab e for construction and imp ementation of the pro1ect$ It may be necessary to raise cash either raisin! of e/uity throu!h borro.in! on the security of the sponsorEs property or throu!h sa e of property$ Borro.ed fund .i be discoura!ed, if the borro.ed fund thus raised is to be paid bac+ out of earnin!s of the ne. pro1ect$ The sponsors may have severa other sources of mobi i4in! e/uity e$!$, cash in hand, ban+ deposits, dividend income, mar+etab e securities, interna cash !eneration of the e2istin! business etc$ A these sources shou d be thorou!h y e2amined$
3.1<.9 "arket A''raisal:

#arket in a broader sense! is termed as the sum of contracts between buyers and sellers of a product or service! the price and 5uantity e&changed and which are determined by the forces of demand and supply. $ollowing areas need to attended in the market appraisal9 iA A''lication of 'roduct and ser ices iiA &arget %arket Q $ocalG12'ort iiiA De%andG/u''ly analysis i A /ubstitute and co%'etitors www.AssignmentPoint.com
A iA iiA iiiA
+ro'osed %arketingGDistribution Arrange%ents +ro'osed Buyers +rice co%'etiti eness +ro%otional As'ects
3.1<.: 8inancial +rojections and analysis:

Investment proposal may be for an e&isting unit or for a new project. In case of e&isting project! analysis of past performance will give some indication for undertaking the investment proposal and justification for financing from the bank. But for the proper analysis! financial forecasting is re5uired. In case of new project! financial forecasting is a basic and widely used tool for making investment decision. Apart from cost estimation! financial forecasting basically involves developing three inter(related statements namely the following9 iA 1arning forecast iiA *ash flo( state%ent and iiiA +rojected Balance /heet
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1arning forecast:
The earnings forecasts measure cost of production and profitability relating to a particular period or a number of periods as may be used for the purpose of forecasts. A three(year period is needed to be seen by the Bank to arrive at an investment decision. The earnings forecast involves the estimation of sales and estimation of associated costs that shall have to be incurred to achieve the projected sales.
1sti%ation of sales:
In estimatin! sa es, the /uantity to be so d is to be determined first and then the se in! price to be app ied to estimate the sa es in monetary terms$ 5actors inf uencin! the physica and monetary va ue shou d be carefu y e2amined, so that sa es are not overestimated$
1sti%ation of cost of sales:

#ajor items of costs should be identified and highlighted in estimating the total cost of sales. ome cost items such as those relating to raw materials! rent! ta&! insurance! water! power! fuel! interest etc. can be estimated at actual with great deal of accuracy. <n the other hand many of the administrative and sales e&penses can be estimated only with rough appro&imation. Attention to be given to the effect that costs is not underestimated. The difference between the sales estimates and the cost estimates is the estimated profit. www.AssignmentPoint.com
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*ash flo(:
<ne of the major tasks in financial forecasting is to assess the re5uirement of funds and to find out how those re5uirements can be met. It involves estimation of cost and sources of fund! estimation of income from future operation! liabilities that shall have to be incurred and the proposed investment in future assets.
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Balance sheet
The projected balance sheet is prepared at the end because figures for developing this statement are derived directly from the cash flow statement. At any point of time the assets of a concern must e5ual its liabilities. Therefore! if the calculations at the stage of preparing the earning forecasts and the cash flow forecast are correctly made then two sides of projected balance sheet must agree. In essence the projected balance sheet shows the impact of various assumptions and calculations relating to sales! costs! and uses of fund etc. upon the proposed assets! liabilities and e5uity of the concern.
3.1<.; Objecti es:

$inancial $orecasting will suggest determining the following9 i* A suitable financial structure! ii* An acceptable repayment schedule! and iii* uitable terms and conditions to guard against the weak areas so that the payments to the bank for interest and installments of the principal do not go by default and the stipulated security during the currency of the loan does not face dilution. As a on! term financier, Ban+Es attention shou d be on the earnin! of the pro1ect$ -arnin!s shou d be sufficient to cover the payment of interest and repayment of insta ments of the principa 'Debt service covera!e($ The actua cash !eneration throu!h operation shou d be ade/uate to meet not on y the ob i!atory payments to ban+ but to sustain in any contin!ency as may arises and retain sufficient earnin!s to the o.ners$
3.1<.1< Analysis:
In case of B#6. loan proposal! the project will have relevant operating past. The analysis of the past operation of an e&isting concern is of great usefulness in predicting! with a fair degree of accuracy! the future results of business activity and the future ability of an enterprise to meet www.AssignmentPoint.com
its credit obligation. In such cases! the financial statement of the concern for the past three consecutive years should be reviewed to form a correct opinion. An analysis of the past operation of the enterprise will give indication about the following9 i* The ability of the sponsors to implement and run the projectF ii* The capability of the sponsors to mobili2e funds from the current operation of the enterprise or from outside sources as re5uired for the projectF iii* The basis for forecast for improved ability4or enhanced capacity of the project. iv* /udging the profitability of operation during the past periodF v* Indicating the trends which may reveal future probabilitiesF vi* 'etermining the financial condition at a specific dateF vii* Predicting the future ability to meet the e&isting or anticipated credit obligationF and viii* /udging the capability of the management in meeting the changing conditions arising out of implementation of the proposed project or on(set of a bad business time.
3.1<.11
,atio analysis:
The financial statement of an e&isting concern or future projections for a proposed investment may be analy2ed through calculation of a number of financial ratios. #any types of financial ratios may be calculated and used. But the purpose for which the analysis is made will suggest emphasi2ing one set of ratios in preference to another. $or e&ample! for short term credit! emphasis should be given on current position of the borrower. Profitability of the project is somewhat less important in such cases. $or long term loan emphasis should be given on earning power of the assets rather than on the mortgage of such assets. The ratios can be classified into the following four fundamental categories9 iA $iEuidity ratios iiA $e erage ratios iiiA Acti ity ratios i A +rofitability ratios
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$iEuidity ratio:
"i5uidity ratios are designed to measure the ability of the concern to meet its immediate and maturing debt obligations. 6atios in these
categories will provide some indications in this regard. $ollowing are the most commonly used ratios9 aA *urrent ratio R &otal current assets G&otal current liabilities This ratio measures the margin of safety to allow for unevenness in the flow of funds through current assets and current liabilities. 8ormally the current ratio should not be below ?9+. 3owever! if the project enjoys a rapid turnover of inventories or can collect its receivable 5uickly! a lower ratio of +.D9+ may be considered satisfactory. In interpreting this ratio! reference should! however be made to the proportion of various types of current assets and their relative 5uality. bA &he Euick ratio R @*urrent Assets7In entoriesAG&otal current liabilities.
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$e erage ratios:
i* 'ebt(.5uity ratio N "ong term debt4.5uity ii* 'ebt ervice Coverage ratio N )Profit after ta& S Interest on long term loan S 'epreciation*4)Installments S Interest on term loan* iii* $i&ed Assets Coverage ratio N 8et tangible fi&ed assets4"ong term debt.
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Acti ity ratios:

i* Inventory turnover ratio N Cost of goods sold or sales4 Average inventory )Average of opening and closing stock* ii* Accounts 6eceivable Turnover ratio N 6eceivables4 ales per day or per week
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+rofitability ratio:
i* Profit margin N 8et profit before ta&4 ales ii* 6eturn on Investment N )Profit after ta& S interest on long term loan*4 ).5uity S "ong term loan* iii* 6eturn on .5uity N 8et profit after ta&4 Average .5uity )Average of opening and closing e5uity*
3.1<.12
Break7e en analysis:
The basic stren!th of a pro1ect ies in its overa profitabi ity$ But it is e/ua y important to +no. the point of sa es, capacity uti i4ation, eve of production or www.AssignmentPoint.com
price to cover the e2penses and starts profit earnin!$ The point of activity at .hich the pro1ect .ou d neither earn profit nor incur oss is ca ed Brea+0even point$ Profit Golume )PG* ratio N Gariable cost4sales Breakeven point N $i&ed cost4PG ratio
3.1<.13 Internal rate of ,eturn @I,,AJ 8inancial ,ate of ,eturn @8,,A:

Internal 6ate of 6eturn )I66* is that rate of return at which the 8PG from the above investments will become 2ero. It is that rate of interest that makes the sum of all cash flows 2ero! and is useful to compare one investment to another. 5inancia rate of return measures the potentia earnin! po.er of a pro1ect considerin! time va ue of money coverin! entire ife of the pro1ect$ This is nothin! but a discountin! factor at .hich the va ue of tota inf o. of cash e/uates the va ue of tota outf o. of cash, i$e$, net present va ue '3P;( is 4ero$ The 5&& is found out by interpo ation of t.o discountin! factors as under: 5&& Q *o.er discountin! rate R '3P; at o.er discountin! rateM'3P; at o.er discountin! rate minus 3P; at hi!her discountin! rate( N '9i!her discountin! rate minus o.er discountin! rate((
3.11 /ecurities against arious ty'es of Ad ance

$and and buildings:7
"and and buildings have become increasingly more acceptable securities in the recent past in many countries! mainly due to steady inflation. These assets assume special importance as securities where the borrower has already tied up his other tangible assets for other advances. "and and buildings are accepted as collateral with increasing reliance! in modern banking to strengthen the bank;s security and reduce the risk factor considerably. The borrower wishing to charge land as security will usually have legal estate being either a freeholder or leaseholder. The procedure to be adapted to perfect security over freehold or leasehold land will depend on whether the title is9
,egistered B Dnregistered
It should always be remembered that the word land denotes not only the ground but also any building or fi&tures upon it. Conse5uently! if the borrower creates a mortgage of his land in the Bank;s favor and then proceeds to build a factory on that land! the building automatically becomes part of the Bank;s security. Branches should obtain as near an accurate valuation as possible of the real estate offered as security. 3ouse9 Accurate valuation should be done by comilla branch manager4 credit officer and also by the enlisted surveyor of the bank. The valuation will be influenced by the type of title! i.e. freehold or leasehold! the type and si2e of the property! the state of repair! amenities etc. Agricultural land9 A few additional factors should be taken into consideration other than above ones. $or e&ample! the acreage! the 5uality of land! accessibility to markets etc. $actories and other industrial buildings9 These are e&tremely difficult to value separately! even by the professional values. As a general rule! the more speciali2ed the building! the more conservative should be the valuation when making the allowance for a forced sale. The comilla branch #anager should be confident that the advance would be repaid by the borrower by the regular generation of ade5uate cash surplus from the business. An absolute reliance on land as security for the repayment of the loan should be avoided as the reali2ed value of the security may deviate from the valuation or prove to be time consuming to materiali2e. Garious statutes e.g. Transfer of Property Act! 6ent acts! town and Country planning Acts! must be taken into account before accepting land as security. It should be checked whether the proposed mortgage has already created any tenancy. The right to create a legal tenancy should be restricted by the Bank;s mortgage term under which the Bank;s prior permission will be re5uired. P "ethod of charging In most cases! the Bank should obtain a certificate from a Panel lawyer certifying the authenticity of the documents. The genuineness of the owner and the validity of the documents for creating a mortgage. The branches should ensure that the property is not in any dispute encumbered and that there are not dues outstanding against it %here the repayment is e&pected from the rent of the property! the Bank should obtain a power of attorney from the owner to collect rent on his behalf. Also! where feasible! the Bank should obtain a letter from him addressed to the tenant re5uesting the latter to deposit the rent with the Bank. A separate letter should be obtained from him authori2ing the appropriation of the rent received towards the adjustment of the advance. The necessary list for documentation is generally the same e&cept that the mortgage procedures might slightly vary. 3ere is the list. www.AssignmentPoint.com
Docu%entation
= De%and 'ro%issory >ote = $etter of Arrange%ent = /ub%ission of original &itle DeedsS = 12tracts fro% the +ro'erty registerJ = 0round ,ent ,ecei'ts
3.12 /u%%ari-ed Descri'tion of securities B docu%entation

3.12.1 Ad ance against 8i2ed De'osits ,ecei'ts 9 *harge docu%ents reEuired:
'.P. 8ote ) ingle '.P. for individual and proprietorship concerns! /oint A everal '.P. for joint accounts and partnership business concerns and /oint '.P. for "imited liabilities companies! clubs! co(operatives! corporations etc.* = 8i2ed De'osits ,ecei'ts duly discharged by the o(ner@sA = $etter of $ien on 8D, @1st 'arty or 3rd 'arty as the case %ay beA = $etter of *ontinuity @for continuing facilityA = $etter of Disburse%ent @for loanA = $etter of Install%ent @for loanA = $etter of Arrange%ent @for all ty'es of credit facilitiesA = $etter of +artnershi' along (ith registered 'artnershi' deed in case of 'artnershi' account. = ,esolution along (ith "e%orandu% and Articles of Association in case of accounts of $i%ited co%'any and in case of cor'oration ,esolution of Board along (ith *harter. = +ersonal 0uarantee of the 8D, holder@sA in case of 3 rd 'arty lien. 3.12.2 Ad ance against B/+sG +/+sG other /anchay +atrasGC1DBG I*B unit certificatesG shares of listed co%'anies: '.P. 8ote ) ingle '.P. for individual and proprietorship concerns! /oint A everal '.P. for joint accounts and partnership business concerns and /oint '.P. for "imited liabilities companies! clubs! co(operatives! corporations etc.* K B P4 P P 4$i&ed 'eposits duly discharged by the owner)s* along with original identity slip K "etter of "ien on B P4 P P 4 tock 4 hare 4 ICB Bnit K "etter of Continuity )for continuing facility* urrender $orm and Transfer $orm duly signed by the owner of ICB Bnit certificates and signature verified by the issuing authority. K #emorandum of 'eposit of hares signed by the borrower)s* www.AssignmentPoint.com
$orm 8o. ++I )transfer form for shares* signed blank and signature verified by the concerned company;s share department K "etter of Authority for encashment signed by the owner of B P4P P4 %.'B4 ICB Bnit K "etter of 'isbursement )for loan* K "etter of Installment )for loan* K"etter of Arrangement )for all types of credit facilities* K "etter of Partnership along with registered partnership deed in case of partnership account. 6esolution along with #emorandum and Articles of Association in case of accounts of "imited company and in case of corporation 6esolution of Board along with Charter. K Personal >uarantee of the $'6 holder)s* in case of 0 rd party lien.
3.12.3 Ad ances @loansGODG**A against 'ledge of goodsG stock7in7trade:

'.P. 8ote ) ingle '.P. for individual and proprietorship concerns! /oint A everal '.P. for joint accounts and partnership business concerns and /oint '.P. for "imited liabilities companies! clubs! co(operatives! corporations etc.* = $etter of 'ledge = $etter of Arrange%ent = $etter of *ontinuity @for continuing facilityA = $etter of +artnershi' along (ith registered 'artnershi' deed in case of +artnershi' account. 6esolution along with #emorandum and Articles of Association in case of accounts of "imited company and in case of corporation 6esolution of Board along with Charter. Personal >uarantee of the 'irectors in case of "imited liability company and of the partners in case of partnership business concerns. "etter of disclaimer in case of goods are stored 4kept in a rented place or in a place not owned by the borrower.
3.12.! Ad ance against hy'othecated stock:

'.P. 8ote ) ingle '.P. for individual and proprietorship concerns! /oint A everal '.P. for joint accounts and partnership business concerns and /oint '.P. for "imited liabilities companies! clubs! co(operatives! corporations etc.* = $etter of hy'othecation of goods = $etter of Arrange%ent = $etter of *ontinuity @for continuing facilityA = $etter of +artnershi' along (ith registered 'artnershi' deed in case of 'artnershi' account. 6esolution along with #emorandum and Articles of Association in case of accounts of "imited company and in case of corporation 6esolution of Board along with Charter. Personal >uarantee of the 'irectors in case of www.AssignmentPoint.com
"imited "iability Company and of the partners in case of partnership business concerns. "etter of disclaimer in case of goods are stored 4kept in a rented place or in a place not owned by the borrower.
P,egistration of *harge:
In case of limited companies where the Cash Credit facilities are allowed against hypothecation of stock! the following procedure is to be adopted for getting the +st charge favoring bank registered with the 6egistrar of the /oint tock Companies and $irms as per Companies Act +,,-9 ubmit $orm TGIII duly filed in and signed by the borrower along with "etter of hypothecation This charge must be created within ?+ days from e&ecution of the letter of hypothecation by the borrower
P Cithdra(al of charge:
Bank withdraws charge created earlier with 6/ C after the advance is adjusted in full and the limit is cancelled. ubmit $orm 8o. TTGIII along with the prescribed fee before the 6egistrar! who will issue a certificate to the effect that banks charge has been satisfied. = Ad ance against I%%o able 'ro'erties = *harge docu%ents = In case of eEuitable %ortgage 'eposit of original Title 'eed )in case the original deed is not prepared bank must obtain duly discharge delivery receipt of the original deed along with certified copy of the deed. In no case only the certified copy is acceptable*. #emorandum of 'eposit of Title 'eeds to be e&ecuted by the mortgagor)s* embodying the amount and nature of the loan 4facility against which the mortgage has been considered. In addition the #emorandum shall also have to cover an undertaking on the part of the mortgagor to complete registered mortgage as and when the same has been asked by the bank. Bp to date non encumbrance certificate from the competent authority is to be submitted. Certified #utation along with 'C6 in the name of the mortgagor to be submitted. Certified C. .! .A.! 6. . Parcha is to be submitted to ascertain the chain of ownership. Bp to date "and Ta& Payment receipt. All relevant BIA deeds )certified copy and4 or photocopies are acceptable in case of indubitable customers. Bp to date #unicipal Ta& Payment receipt )for the immovable property situated within municipal area*.
In case of ,egistered "ortgage:
'eed of 6egistered mortgage to be e&ecuted )as per draft of 'BB";s "egal Advisor* to be registered with the respective 'ist.4 ub(6egistrar;s office. 6egistered Power of Attorney to sell the mortgage property without intervention of the court to be e&ecuted in favor of bank by the mortgagors. All other documents mentioned under e5uitable mortgage e&cepting memorandum of 'eposit of Title 'eed to be obtained in this regard. In addition to the documents mentioned above! branch shall obtain following charge documents before the advance is allowed9 K De%and +ro%issory >ote = $etter of Arrange%ent = $etter of *ontinuity = $etter of re i al = $etter of +artnershi' along (ith ,egistered +artnershi' Deed in case of +artnershi' accounts. 6esolution alongwith #emorandum and Articles of Association in case of accounts of "imited company and in case of corporation 6esolution of Board along with Charter. "etter of >uarantee signed by the partners of the firm and 4or the directors of a company in their personal capacity.
3.13 A''ro al 'rocess of *redit

3.13.1 0eneral o er ie( on a''ro al 'rocess:
A Credit "ine Proposal is prepared for every borrower. If the credit facility is a revolving short(term facility! then the facility will be renewed every year and a new credit line proposal will be prepared annually to provide the basis for the renewal. If the facility is medium(term then an annual review of the facility will be re5uired. 3owever! in cases where the Bank has decided to adjust the facility up or down! a revised credit line proposal will be prepares whenever the need to adjust the facility has been agreed between the borrower! the comilla branch #anager and the 3ead <ffice Credit 'ivision. The credit "ine Proposal originates in the branch and is completed by officer dealing with advances after the branch #anager has interviewed the borrower. The branch #anager and the credit officer both sign the Credit line Proposal when it has been completed to their satisfaction. <ther additional information is also prepared to support statements made in the credit "ine proposal and the whole LpackageM is either preserved on www.AssignmentPoint.com
the customer file at the branch if the advance is within the branch #anager;s sanctioning authority! or if it is beyond his authority! a copy of the LpackageM is sent to 3.<. The package normally contains the following papers! in addition to the Credit "ine Proposal9 K &he s'read /heet. = *o'y of the latest audited accountsJ if a ailable. = &he *redit ,e'ort. = *o'ies of any other rele ant corres'ondence (ith the custo%er. The credit "ine Proposals which are sanctioned within the branch #anager;s discretionary powers a copy of the proposal is to be sent to 3< Credit 'ivision and "oan Administration #onitoring 'ivision for information. 3< ensures that the credit line is within the Bank;s policy and fulfils all other conditions. The Credit "ine Proposal which re5uires approval of the #anaging 'irector or the .&ecutive Committee of the Board will be sent to the 3< Credit 'ivision with recommendation of the Branch #anager. After review! the 3< Credit 'ivision prepares a brief for each credit line and presents it to the 3< Credit Committee. If the amount is not within the powers of the #anaging 'irector and falls under purview of the .&ecutive Committee of the Board! the Committee will add its recommendations and the proposal is sent to the .&ecutive Committee of the Board for approval as a memo of the #anaging 'irector.
3.13.2 +ost sanctions 'rocess:

After the credit "ine Proposal has been finally approved by the appropriate sanctioning authority in the Bank;s credit organi2ation structure it enters the post sanction processing stage. At this stage the signed credit line proposals is returned to the branch4 credit officers! following four further steps are to be taken by the branch manager before the borrower can use the credit lines that have been sanctioned to him. These steps are as follows9
*on ey offer Gsanction letter to the borro(er:

Branch credit officers perfect the security and charge documents considering the nature and the terms of facility and the securities and in accordance with the laws of the land. 3ead <ffice will provide guidance to branches from time to time in this regard. %here considered necessary advice of 'BB";s panel lawyers should be obtained. An account number is allocated to the new credit facility. The account record is set up and borrower;s file is prepared. %hen these four steps have been complied with! the post sanctioning process is completed and the borrower can draw on his account. $rom www.AssignmentPoint.com
this point onwards the borrower;s account will be subject to the control procedures outlined later in this manual. The instruction in the ne&t sections must be followed by all branch #anagers. #oreover! in some areas! for e&ample perfection of security! the instructions are of a general nature. 3ead <ffice will need to issue detailed instructions in these areas.
*O>.16I>0 O881, &O BO,,OC,:

The offer4facility letter is sent out to the borrower whenever the Bank sanctions or renews a credit facility in his favor. The facility letter is prepared at the branch after the signed credit line Proposal has been returned to the comilla branch #anager. The offer4 facility letter must be signed by the branch #anager before it is sent to the borrower. The precise format of the offer4facility letter is to be determined by the branch to conform to legal re5uirements and will appear in the detailed 3< instructions covering the completion procedures for security documents. 3owever! the following re5uirements are common to all branches. Branch may also need to add special paragraphs in some cases.
a* Borrower 9 ( Correct full name)s* of the borrower)s* with up to date recorded address should be written. b* ubject 9 ( Brief but precise details of each advance may be given. c* 8ature of facility9 ($acility as per bank;s account head to be incorporated. d* Amount 9 ( The amount of each credit facility would be provided e* 'isbursement9( 'isbursement instruction 4schedule )essential for term lending* to be incorporated. f* 6epayment 9( i* in the case of term loans the following terms and conditions must be included the number of years over which repayments are to be spread. The amount of each repayment installment inclusive of interest fre5uency of )usually monthly* repayments the date of first repayment installment due ii* In the case of overdrafts9 6epayment on demand review of the facility i& months or a year from the date of the facility letter iii* In the case of letters of Credit4letter of >uarantee or other facilities9 %hen due may be indicated. g* Interest 6ates9(The letter must include the following terms and conditions 6elating to Interest rate. &he interest rate should be stated in the for% TO '.a.
Interest will always be calculated on daily outstanding balances and charged to the borrower monthly or 5uarterly or yearly as the case may be )8ormally interest to be charged on calendar 5uarterly basis*. A statement must be included in the interest section of the offer4facility letter to safe guard the Bank;s right to revise the rate at bank;s discretion from time to time. h* $ees 8egotiation fees! #anagement fees! commitment fees and other fees may be charged to the borrower and to be incorporated as per terms of sanction. i* ecurity ( A full and accurate listing of all security to be charged to the bank must be included in the offer4facility letter. j* .&piry( $acility e&piration date to be incorporated k* pecial conditions Also a general statement should be included to inform the borrower that all clauses! terms! conditions! covenants etc. of the Bank;s standard charge forms apply to him unless e&pressly modified or varied by reference in the offer4facility letter to numbered clauses or paragraphs in the charge forms. pecial clauses may have to be included in some offer4facility letters to protect the Bank in cases where there are legal comple&ities relating to certain types of security! particularly property.
3.13.3 0uidelines for a''lication of delegated authority for sanction of credit facilities:
A''lication of delegated authority:
<fficers having delegated authority shall e&ercise the same with reasonable care4caution! keeping in view the interest of the Bank. The approving authority shall adhere to the regulations of the Bank! the Bank Companies Act +,,+! Bangladesh Bank;s circular4 directives and instructions issued from time to time on credit restrictions! margin restriction! credit rules! credit duration and its repayments and other >ovt. directives.
A''lication of authority by authori-ed officer:

.&ecutives4<fficers shall e&ercise their authority only when they shall be holding related positions or shall be posted in the related 'ivision in 3ead <ffice.
/'ecial features:
a* Credit approval authority must be delegated in writing from the Board and acknowledged by recipients! and records of all delegations retained in C6#F www.AssignmentPoint.com
b* 'elegated approval authorities must be reviewed annually by #'4C.<4BoardF c* The role of Credit Committee may be restricted to only review of proposals i.e. recommendations and review of bank;s loan port( folioF d* Approvals must be evidenced in writing! or by electronic signature. Approval records must be kept in file with credit applicationsF e* All credit risks must be authori2ed by e&ecutives within the authority limit delegated to them. The LpoolingM or combining of authority limits should not be permittedF f* The aggregate e&posure to any borrower or borrowing group must be used to determine the approval authority re5uiredF g* #'4A#'4'#'43ead of Credit 6isk #anagement must approve and monitor any cross(border e&posure riskF h* A monthly summary of all new facilities approved! renewed! enhanced! and a list of proposals declined stating reasons thereof should be reported by C6# to #'4C.<. i* The #anaging 'irector! if deem necessary! may suspend4 decrease the delegated authorities of the subordinatesF j* Prime and other Banks to be listed with prior internal approval! k* ecurity and 4 or collateral are to serve as .C<8'A6U source of payment. The underlying risk should be commercially viable and the P6I#A6U source of repayment for facilities is to be clearly identified from the borrower;s asset conversion 4 operating cash flow of the business! l* The approval authorities will be subject to e&isting standard approved pricing structures of 'BB" for lending! m* 'eviation of criteria and 4 or set policies! even if the facility is otherwise covered by these delegated authorities shall have to be referred to the .&ecutive Committee of the Board on pre(facto basis. 3owever! authority level for approval of waiver for risk coverage on stock and other assets which are taken as security against credit facilities! on a case to case basis and pursuant to merit of each case shall be e&ercised by the #anaging 'irector! not withstanding! such facilities may have been approved by the .C of the Board or at other levels. The #anaging 'irector will e&ercise such authority after having reviewed by Credit Committee! n* %here facilities were approved by an authority but as per revised delegated approval authorities! such facilities and any enhancement 4 additional facility fall within the delegated authority of the lower tier! the latter shall e&ercise his authority for renewal 4 approval of such facilities without referring to higher tierF o* %ith regard to facilities such as "'BP! <' 4 "oan against $inancial <bligation! Advance Against Cash Incentives and 3ousing $inance www.AssignmentPoint.com
under $#< "oan cheme! an authority is free to approve such facilities within his delegated authority irrespective of e&istence of other facilities to the same client which were approved by a higher authorityF p* %here facilities were approved by a higher authority! any other facility! notwithstanding such other facility may fall within the delegated authority of lower tier! shall be referred to the same approving authority or beyond! if so re5uired! e&cepting! however! facilities such as "'BP! <'4 "oan )against $inancial <bligation*! "oans Against Cash Incentives and 3ousing $inance under $#< "oan chemeF 5* %here an authority is delegated with an :open limit; for any particular type of facility! he is free to e&ercise such authority irrespective of e&istence of other facilities to the same client which were approved by a higher tier. The delegated authority shall be e&ercised by the authority concerned provided9 i* tandard Banking practices and procedures vis(V(vis lending norms have been applied to the credit approval process! ii* 'ue credit evaluation process has been carried out. iii* All proposals falling under the delegated authority of #anaging 'irector and above have been reviewed by the Credit Committee before approval. 3owever! proposals falling under the delegated authority of Additional #anaging 'irector and below may not be re5uired to be reviewed by the Credit Committee. iv* All powers e&ercisable by an <fficer 4 .&ecutive in the lower rank shall be e&ercisable by the <fficer supervising his work as and when re5uired. r* At any point of time! the authority can not e&ercise total delegated approval authorities e&ceeding the amounts as under e&cept open limit! "'BP! Advance against Cash Incentives! ecured <verdraft 4 "oan against $inancial <bligation and 3ousing $inance under $#< "oan cheme per client 4 group.
&his 8igure sho(n on A''endi2 71

.erification of &itle Deeds of +ro'erties to be %ortgaged @*redit Ad%inistration Di isionA:
In case of advances allowed against mortgage of properties! title deeds and related documents like C. .! .A.! 6. . Parcha! Ohatian.! #utation Certificate! ite Plan of land! 6ent 6eceipt )up(to(date*! 8on(encumbrance Certificate! etc. are to be verified by panel lawyer or legal advisor of the Bank and possession of the owner over properties! its suitability as security and market value are to be verified. In case of advance against www.AssignmentPoint.com
hypothecation and pledge of goods "etter of 3ypothecation4Pledge! "etter of 'isclaimer etc are to be obtained.
.aluation of 0oods under +ledged B 4y'othecation @*or'orate Di isionG *redit Ad%inistration Di isionA:
Galuation of goods and inventory under pledge or hypothecation shall be done under the following methods9 a* In case of imported goods landed cost or market price! whichever is lower. b* In case of domestic goods .&(#ill 4 $actory price or market price whichever is lower. c* %here applicable! government fi&ed wholesale price or market price! whichever is lower.
Disburse%ent @*redit Ad%inistration Di isionA:

The disbursing officer shall follow the Bank;s instructions relating to security of advances meticulously.
In estigation ,ules @*or'orate Di isionA:

$inancial soundness of borrower 4 proposed borrower! appraisal of advance proposal! Credit report and its preservation and obtaining of other important documents shall be done in strict compliance with the Bank;s rules and regulations.
Issuance of /anction Ad ice and obtaining the borro(erFs acce'tance of ter%s and conditions of /anction Ad ice:
Corporate 'ivision shall convey the terms and conditions to the borrower in writing within 0 )three* days of receipt of anction Advice from Credit 'ivision and shall obtain acceptance of the terms and conditions within I )seven* days in writing.
1ndorse%ent of co'y of /anction Ad ice:

Credit 'ivision shall send original copy of anction Advice to Corporate 'ivision and endorse copy to Credit Administration 'ivision for necessary action.
"aintenance of credit /anction ,egister @*redit Di isionA:

anctioning <fficer shall maintain a LCredit anction 6egisterM in their respective office and record all information of credit sanction chronologically. All rules! procedures and instructions of the Bank governing sanction and disbursement of advances to be followed 4 carried out meticulously. The chedule of properties is to be obtained from the Borrower.
3.1! Insurance
3.1!.1 4y'othecatedG 'ledged goods to be insured:
3ave all the goods hypothecated or pledged to the bank! insured against all risks unless otherwise specified by 3ead <ffice. In case where borrower has filed Cover 8otes pending submission of Insurance Policies! the Cover 8otes must accompany stamped receipts for premiums paid.
3.1!.2 Assign%ent of 'olicy:

.nsure that the policy is taken out either in the name of the bank or it is assigned to the bank. If an Insurance Policy has already been taken out by the borrower! endorsement of the policy in favor of the Bank and insertion of Bank #ortgage Clause must be ensured. %here assignment is not taken! Insurance Policies should be taken out in the following manner.
DD&*47BA>0$A BA>K $I"I&1D 7 Account #esser;s 'BTC3(BA8>"A BA8O "I#IT.'. ((((((((((((((((((((((((((((#ortgagee #esser;s ((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((( #ortgagors )In both the cases Bank #ortgage Clause should be inserted*. At no stage the goods should be allowed to remain uncovered against insurance risks.
3.1!.3 ,ene(al of 'olicy:

If any insurance policy has e&pired! take immediate steps to get it renewed either through the customer or directly by the Bank. In case of direct renewal by the Bank debit the amount of insurance premium to the account of the customer. www.AssignmentPoint.com
3.1!.! ,isk 'olicy:

6isk policies shall be obtained from Insurance Companies! approved by the Bank up to ceiling fi&ed for each risk.
3.1!.# Insurance of full alue:

>oods stored in goodowns must always be insured for their full value plus +@H irrespective of the amount of advance.
3.1!.3 ,ene(al of facilities @in case of +ri ate $td. *o.G8ir%sGIndi iduals onlyA:
+. 6enewal of revolving credit limits up to an aggregate amount of Tk0@@.@@ million )within which funded facility of a ma&imum of Tk+D@.@@ million* favoring a single client4group in the private sector! which are4were approved by the .C of the Board4Board as per current policy! shall be e&ercised by the #anaging 'irector! for ,1>1CA$ only for another term! provided! the authority is e&ercised pursuant to fulfillment4compliance of the following9 The account conduct and business transactions of the client for the relevant period of facility are to the satisfaction of the bank as per lending norms and standard banking practicesF The renewal is solicited on e&isting terms and conditionsF 6egulatory re5uirements are duly complied withF 'ocumentation formalities are perfected to the satisfaction of the bankF $acilities to single client4group which fall within the large loan category as per Bangladesh Bank rule shall not be eligible for renewal under this delegated authorityF 'eviation to criteria and4 or set policies shall have to be referred to the .C of the Board on pre(facto basisF In each of these cases review of Credit Committee is re5uired.
?. The e&isting delegated authority levels of the #anaging 'irector! Additional #anaging 'irector and 'eputy #anaging 'irector shall be e&ercised at one step lower tier for renewal of facilities only pursuant to provisions at serial no. + above and fulfillment4compliance of the terms mentioned thereto with e&ception! however that! such cases may not need to be reviewed by the Credit Committee.
3.1# "onitor of credit o'erations

Advance allowed should be very closely watched to see whether the same are being conducted in accordance with the terms and conditions under which the limits were sanctioned or not. The result of the inspection should be an effective guide in sorting out the measures to be adopted in respect either of correcting the unsatisfactory operation of the advances or recovery of the same. In order to ensure safety of advances! all advances shall be kept under supervision and thereby under control. This will include supervision at the time of disbursement to ensure proper utili2ation of bank credit! to supervise end use during the tenure of advance and to ensure that the repayment is regular.
3.1#.1 *ontrol of loans:

The procedures for controlling loans are e&plained in two parts9
@B.1A Branch control of loansJ and @B.2A 4ead Office controls of loans.
@B.1A Branch control of loans:

Branch control of loans has three main elements as follows9
@iA /etting u' of the loan accounts:

The setting up of the loan accounts proceeds in the same way as the overdraft account. A loan account form as described in the case of overdraft account is filled in at the branch level for each new loan after the signed Credit line proposal is received from the 3ead office. In addition! the following information are re5uired for loans9 = Install%ent a%ountJ = Install%ent freEuencyJ = 8irst install%ent due onJ and = 8irst re'ay%ent7 "aturity date.
@iiA ,e ie( of loan accounts:

After the loan has been set up! it is reviewed monthly by the Comilla branch. The purpose of the review is to ensure that the monthly interest charges are being paid up and that repayment of principal are being made on time. Interest is charged on the unpaid installment and also on the payable but unpaid loan and interest amount during the overdue period and is included in ne&t month;s interest charge. www.AssignmentPoint.com
The monthly review of loans takes two forms dependent on whether the borrower has a current account with the bank or not. If the borrower has a current with the bank! a voucher can be raised by the branch each month! debiting the borrower;s current account and crediting his loan account with the amount of interest and the repayment installments. If this procedures is followed! control of the loan is e&ercised through the over draft account. If the borrower does not have an account with the Bank! then he must transfer funds from another bank to meet the monthly interest charges and periodic repayment installment. In such cases! branch credit officers should carry out the following procedure9 'iari2e the repayment installmentF on the due date! check if the installment has been received by the Bank from the borrowerF if the installment has not been received! contact the borrower by letter or phone or physically meeting re5uesting paymentF and charge the borrower interest on the overdue interest and the unpaid installment for the period of the delay. %hen reviewing the loan accounts! the branch officer should! as a matter of priority! concentrate on the loan accounts where the borrower is defaulting on interest payments and loan installments. %hen a borrower defaults! the officer will immediately notify the branch manager. .ither the branch manager or his assistant will contact the borrower to ascertain9 %hether the default is due to an oversight on the borrower;s part : if this is the case! a revised date for payment of outstanding and installments can be arranged. The borrowers have to pay interest on the outstanding installment as well as the interest for the period of the delayF %hether the default is due to temporary cash flow problems affecting the borrower;s business: In this situation! the branch manager may have to consider rescheduling the loan installmentsF whether the default is due to serious financial problems which could lead to li5uidation of the borrower;s business9 In this case! the borrower may not be able to repay the loan and it may be treated as a doubtful and all necessary steps should be taken conse5uent upon itF and %hether the default is due to willful attitude of the borrower9 In this situation! branch should take immediate steps at the beginning of the problems! identified by the branch. At the end of each month! the branch is re5uired to prepare a monthly "oan 6eport and the report containing all kinds of loans and advances is sent to 3ead office for review. The report contains the following information9 a. Borro(er b. ,e ie( Date The name of the account The date by which the ne&t review of the loan %ill be carried out. c. /anctionJ ,eference B date 9 'ate and reference number of the approved Credit www.AssignmentPoint.com 9 9
d. +resent li%it Credit e. Dra(ing +o(er f. Balance dateF g. /ecurity e.g.
9 9 9 9
"ine Proposal. <riginal amount of the loan approved in the "ine Proposal. <nly applies to overdraft9 used by regions where reporting of overdrafts is on a manual basis. <utstanding balance on the account at the report hort description of the type of security provided first charge over property. The current value of the security. Percentage of margin. Amount of loan being repaid per month! 5uarter! months or year! inclusive or e&clusive of interest. 'ate when insurance on secured assets e&pires. 'efaults are identified in this column9 e&cesses limits are also identified. hort description of borrower;s business.
h. *ollateral security alue 9 i. "argin @if anyA 9 j. ,e'ay%ent arrange%ent 9 si& k. Insurance 12'ires on l. ,e%arks and %. $ine of Business 9 9 9
@B.2A 4ead office control of loan:

The controls e&ercised by 3ead <ffice are as follows9 #onthly review of the "oan tatement by officers in concerned divisionF a program of regular branch4project visits by officers from concerned division. .ach of the officers in concerned division of 3ead office is responsible for reviewing the loan portfolios of branches. By comparing the statements with previous month;s statement they check the progress4 deterioration in repayment of loans and report to the competent authority. In cases where there are apparent defaults on capital repayments or interest payments! the monitoring officer of 3< should contact the branch to find out the reasons for the apparent defaults. 3e will ascertain9 the borrower;s habits in repaying installment9 in practice his repayments may vary from the scheduleF The borrower;s financial position9 has the borrower run into financial difficultiesW %ill a recycling of loan repayments be necessaryW The credit officer of 3ead <ffice will also ensure that the monthly grand total of all balances on each of the various types of loan account reported by each branch agrees with the total shown in the monthly statement of affairs. The check must always be carried out because it varies whether the branches in the monthly "oan 6eport have included all loans.
3.13 *ontrols of other credit facilities

This section deals with the controls over the following other types of credit facilities which form an important part of the Bank;s advances port folio9
3.13.1 Bills 'urchasedG discounted
3.13.2 $etters of credit and +ads 3.13.3 $etters of 0uarantee 3.13.! *ash credit.
3.13.1 Bills 'urchased:

The term Lbills purchasedM is used to describe short(term loans granted against documentary or clean bills. Thus the branch LbuysM the bill! its LpriceM being the amount of the loan granted against the bill. The term Lbills discountedM is used to describe short(term loan granted against the security of bills where interest amount on loan is deducted from the face value of the bills at the time of discounting the bill. Thus net amount is credited to the borrower;s account. The loan is li5uidated through the proceeds of the bill. A bill purchased 4 discounted facility is subject to an approved limit! which is reviewed annually through the Bank;s sanctioning system. The Bank will purchase 4 discount bills from the drawer up to the limit approved by the credit line proposal. The bills can be denominated in any of the major trading currencies. The controls over the bills purchased 4 discounted e&ercised by the branch manager are as follows9 report on the creditworthiness of the drawerF report on the creditworthiness of the drawersF consideration as to the type and 5uality of the goods! if any! covered under the billsF level of margin allowed on bills9 the higher the margin! the lower the Bank;s assessment of the risk of the lending to the customer against the security of the billF comparison of the value of bills outstanding within the approved limitF investigation of bills that are outstanding for an unreasonable period or have matured but have not been paidF A Gerification of the Bank;s legal title to the goods. The report on the creditworthiness of the drawer of the bill is completed at the time of the preparation of the credit line proposal. Credit reports on the drawers of the bills must be obtained every 1 months by the branch manager from the correspondent bank or a local branch of the Bank. The branch manager will not purchase any further bills if the credit reference is unfavorable. The level of margin allowed on bills besides other factors depends on the type and 5uality of goods covered under the bill. The margin is calculated as a percentage of the face value of the bill. The limits of bills purchased 4 discounted that are sanctioned in the Credit "ine Proposals are compared with actual outstanding whenever a new bill is submitted to the Bank for purchase. %hen an .<" occurs! approval must be given to the purchase action by the branch manager and! if www.AssignmentPoint.com
necessary! by appropriate sanctioning authority. All .<" on bills purchased 4 discounted must be reported monthly by each branch to 3ead office like .<"s in case of other types of advances. The branch manager must also report the position each month to 3ead office. The monthly reports carry the following details9 'ate of purchase 9 'ate of purchase of bill Customer 9 Borrower;s full name "imit )if any* 9 Amount of sanctioned limit Bill amount )$oreign or "ocal Currency* 9 elf(e&planatory Bsance A 'ue date 9 Period of usance and due date! if known To whom sent for collection 9 $ull name of corresponding bank to which the bill is sent for collection. >oods( description A 5uality 9 elf(e&planatory Consigned from4to 9 8ames of places from where the goods are shipped and their destination #argin held )if any* 9 Percentage of margin 6emarks 9 elf(e&planatory The branch manager must follow up on all overdue bills by writing to the borrower each month! listing all bills! which have not been paid on their due date. Collection of bills will often depend on the e&change control and import policies that will be operative in the countries of the drawer. It is for 3ead office to decide the length of the credit period to be allowed to the drawer and to decide when to consider a bill purchased 4 discounted as an over due bill! take appropriate action! etc. %hile purchasing 4 discounting a bill the branch manager must carefully e&amine the document of title to goods accompanying the bill to ensure that the Bank has a legal title to the goods covered under the bill of e&change.
3.13.2 $etters of credit:

i* The documentary "etter of Credit )"C* is an important method of setting debts in international trade and is a main source of short term import finance for many of the Bank;s customers. This section concentrates on the various controls over the opening and settlement of "Cs that are operated by the Bank at branch and 3ead office levels. A typical "C transaction involves the following main steps9 The applicant! who is importing goods from a foreign country! re5uests the Bank to open an "C in favor of the e&porter )the beneficiary*9 the applicant may have an "C credit line approved by Credit "ine Proposal or the "C may be a single transaction approved by a sanctioning authority at an appropriate level. The applicant must be a known good customer of the www.AssignmentPoint.com
R R
R R
Bank or at least his background references should be indubitably good. 3e must fill in the standard application form re5uesting the bank to issue a "C. The branch manager reviews the "C application and decides whether to agree the re5uest9 in making this decision! the branch manager should make several checks )e&plained later*. If the applicant;s re5uest is approved by the branch manager! the "C is issued by the Bank. Two things can then happen to the "C9 either the e&porter makes the shipment before the e&piry date of the "C or he does not make the shipment X in the later cases the "C is void and ceases to be a contingent liability of the bank. If the goods are shipped before the e&piry date! the e&porter will produce the documents re5uired by the "C as evidence of shipment to the negotiating bank who will then forward the documents to the bank9 >overnment import regulations the advising bank may pay the beneficiary on sight of the bill! on its acceptance or on negotiation of documents depending on the terms of the "C. In some cases where a term bill is drawn by the e&porter the bill may be accepted and the face value of the bill will be payable to the holder when the bill matures. The Bank as the issuer of the "C settles the payments with the negotiating bank. $inally the bank advises the negotiation of the bill to the customer and obtains reimbursement in one of the following ways9 'ebit the customer;s current account! if held at the branch! when sufficient credit balance e&istsF 'ebit the customer;s overdraft facility if it is under limitF Bse a PA' account! the PA' account is subject to strict control at the branch and at 3ead office )e&plained later*. The checks applied by the branch manager before opening a "C are as follows9 If an "C credit line limit has been granted! the outstanding balance of "Cs opened! outstanding balance of the bills received against "Cs previously opened! and the amount of new application! must be compared against the approved limit! separate limits must be maintained for sight and usance "Cs. If the total balance after adding the new application is under the limit! the "C will be approved if it satisfies the other control criteria e&plained below. If the limit would be e&ceeded and an .<" would occur after approval of the application! the opening of "C needs further analysis. If the "C is a one(time transaction with a customer who does not have a credit limit! the following checks must be applied9 The credit worthiness of the customer must be checked by obtaining reliable credit references from the other banks or reputable credit agenciesF the customer;s recent financial accounts! preferably audited! must be obtained and analy2ed if they are availableF before approving the "C application! the branch manager very carefully assess the risk to the www.AssignmentPoint.com
ii* iii*
bank in the "C transaction9 in order to minimi2e the risk! he must decides the proportion of the value of the "C that must be paid by the importer before he can take the possession of the goodsF The branch credit officers must check all details of the "C transaction! particularly the nature of the goods! their marketability! the countries involved in the transaction! the conditions for setting the "C! and the since which must not e&ceed the period approved in the Credit line proposal. $rom time to time! International 'ivision will issue instructions naming countries and goods! which! in the opinion of the bank involve e&cessive financial riskF these instructions must be very strictly adhered to by all branches. The branch manager must also decide the margin at which he is prepared to conduct the "C transaction9 this consideration applies e5ually to one time transaction and to "C transaction with established customers under a credit limit. As in the case of cash against documents! the branch manager must take an assessment of the level of risk to the bank in the "C transaction. The "C application must be completed in full and the signatures of the branch manager! his assistant! the applicant and the guarantor must appear on the back of the form. %hen the Bank issues an indemnity! the Bank;s liability should be recorded by passing the following entries9 = D,. *usto%erFs liability for letters of credit issuedJ = *,. BankerFs liability for letters of credit issuedJ The entries are reversed when the Bank receives documents from negotiating Bank or the "C e&pires. %hen the documents arrive! the branch must check them to ensure that( they conform to the "C issued by the Bank : all documentation must be consistent with the original applicationF all documents that are re5uired to comply with the importing country;s regulations have been provided. In cases where the discrepancies occur! the branch manager must inform the negotiating bank immediately! and within -C hours from the receipt of documents! that the documents are being held at the disposal of the negotiating bank or are being returned. If reimbursement has already been obtained by the negotiating bank! a demand for the fund should be made. The ne&t control point is at the time the customer pays the Bank. As mentioned earlier! there are the following main ways that a customer can pay9 R 'ebit the customer;s current account! R 'ebit the customer;s overdraft facility! A R 'ebit the payment against documents )PA'* account. The above first two methods will be used when there are sufficient funds in the customer;s account or sufficient room in his overdraft limit to accept the debit without causing an .<". The concerned officer of the branch must check the customer;s balance before debiting his account to ensure that an .<" will not occur. www.AssignmentPoint.com
3.13.3 $etters of 0uarantee:

If an .<" would occur as a result of this debit! the branch manager should process the transaction as in the case of .<" in other types of advance account. anction at the appropriate level should be obtained. 'ocuments supporting the debit to PA' account should be kept in the Bank;s custody. Ade5uate follow up should be made with the customer to retire the bill as soon as he can. The branch should also ascertain the e&pected date of arrival of goods. This date should be diari2ed. If the customer fails to retire the bill before the arrival and delivery of goods! arrangement may be made to clear and store the goods safely. Arrangement for insuring the goods should also be made. uch cases should be immediately reported to 3ead <ffice for necessary instructions. 'ocuments must not be parted with until the customer pays in full for the bill. In the case of usance "Cs! the customer will have! in effect! been allowed some period of credit in which to settle the "C. The branch manager must ensure that diary records are maintained for each customer opening since "Cs at his branch. The diary records should show "C numbers! due date of each "C! and the amount to be paid by the customer. <n due date! the customer;s current account or overdraft facility should be debited. If an .<" occurs the branch manager will follow the procedures already described earlier.
3.13.! *ash *redit:

The procedures for controlling cash credits are two parts9 R Branch control of cash credit accounts. P "onthlyG Euarterly control at 4ead Office.
P *ontrol at Branch:
The control procedure for cash credit at the branch level is similar to control procedure for overdraft accounts. An account is set up and its details are checked through the relatives; reports. 'aily control is essential while posting in che5uesF similar to overdraft accounts. 'ebit balance is matched with the drawing power available in the account. The branch should do proper control of security and its periodical checks.
P *ontrol at 4ead office:

At monthly intervals the branch manager should provide the tatement of Cash Credit facilities which will include! among others! the following9 8ame of the client! "imit sanctioned with sanction and e&piry date! 'etails of security held with present value! Account performance )including debit balance! credit balance! average balance etc. www.AssignmentPoint.com
The concerned divisions of 3ead office will analysis4 review the above statements and report to the competent authority with findings.
Ins'ection by 4ead office for all facilities

To have a full control over the client and its business undertaking4 project! inspection is a must. The purpose of the visit will be! among others! the following9 'eviation! if any! from the assumption based on what the facilities were e&tended and reasons thereof! /ustification for renewal4 enhancement of the facilities! if anyF Careful analysis of the up dated financial statements of the business undertaking4 projectF A whether there are any default4 past dues in loan tenure. If any such event occurs! then to identify the reasons therefore.
3.19 4andling of DelinEuent $oan

'espite the e&treme care e&ercised in the sanctioning and control procedures! it is still possible that some advances may become doubtful because of adverse changes in economic conditions seriously affecting the borrower;s business or his personal financial position. All lending decisions involve an element of risk to the Bank! because future economic conditions cannot be predicted e&actly. Therefore! an important area in advances control is( identification of delin5uent advances! and monitoring of the delin5uent accounts
3.19.1 Identification of DelinEuent Ad ances

The identification starts with the branch manager. As part of the control mechanism! the branch manager is monitoring advances regularly during the weekF he or his assistant may check on large accounts daily and review the smaller accounts at weekly intervals. The branch manager will be looking at the health of the account and will use the following criteria9 in the case of overdraftsF turnover! Conduct of the account against the limit sanctioned by the Bank at the last credit line review. In the case of loansF adherence to the repayment schedule agreed with the borrower! either when the loan was sanctioned! or at the last rescheduling in the case of bills purchased and letters of creditF Payment of the bill by the drawee at the destination on the maturity date or in the event of non(payment by the drawee! by recovery from the drawer of the bill )borrowed* in the case of contingent facilities9 letters of credit should be checked to ensure the reliability of the seller of the goods and the legality of the transactionF in the case of letters of guarantee! the details of the contact and the period over which the guarantee is valid should be checked9 performance bonds and bid bonds also involve additional checks to ensure that the contractor has carried out similar work previously.
In addition the branch manager should also keep a watch on declining sales! reducing profits and profitability! deterioration in the financial ratios! if any. 3e should remain vigilant of e&ternal factors such as non( availability of a particular raw material! delays in payment by >overnment Agencies! declining market for a particular product! financial weakness of a guarantor etc. These factors have a direct bearing on the health of a borrowing account. %hen he carries out his daily and weekly reviews! the branch manager will first look at the latest balance sheet on the account. If this balance meets his control criteria! no further investigation of the account will be necessary. 3owever! there will be some accounts whether further detailed e&amination is called for! either because the account has already been identified as an irregular account! or because the balance on the account has not moved in an e&pected manner since the last review. In these cases! the branch manager can call up the following data for further investigation of the account9 customer statementsF recent transactions on selected accountsF weekly report on .&cess over "imitF weekly temporary overdrafts reportF monthly loan reportF Credit line review report. This report gives a very comprehensive view of the account in terms of transaction value and of ma&imum! minimum and average balances each month and also provides a clear indication of the trend in the turnover and balances on the borrower;s account over a period of time. Therefore! the branch manager has a range of 5uantitative information to help him identify potential bad debts. The branch manager will be looking for three signals that either confirms that the borrower is in the doubtful category or indicate that he may be moving into this category9 persistent e&cess over limit ).<"* on the borrower;s overdraft account indicating that he may be over tradingF a fall in turnover! indicating that the business is in decline9 in some instances the turnover may be cease altogether and this could indicate that the borrower is in serious financial difficultiesF 'efaulting on loan repayments or on repayment of bills payable at their maturity date! indicating that a business may be in financial difficulties. %hilst any of the above signals must be treated as an important indication of possible problems with a particular account that must be followed up! sometimes further investigation will reveal that the account is not moving in to the doubtful category. $or e&ample! a persistent e&pansion! which re5uires an increased overdraft limit! justifiable in terms of gearing between internally generated capital and borrowed funds. Alternatively! a persistent .<" may indicate that the borrower;s credit facilities need to be restructured! the Lhard coreM part of the overdraft being converted in to medium term loan. Also turnover reductions must be interpreted carefully. A complete stop in turnover may mean that the borrower has gone to another bank! not that he is going out of business. 3owever! it is part of the branch manager;s review function to ascertain the true status of each account so that he is well prepared for 3<Es periodic review. Also these signals from the control system must be followed up discreetly with the www.AssignmentPoint.com
borrower. The branch manager must use them as a basis for discussion with the borrower about the present state of his business and future prospects. Besides these 5uantitative indicators! the branch manager must also have 5ualitative information on all borrowers obtained from third party sources so that he has a complete view of his clients. The 5ualitative information may take the form of periodic market reports. The branch manager! being an important figure in the local business community! should develop ready access to information of this sort through his network of contacts in the area. o! any advance account where any one or more of the following features is present should be categori2ed as a delin5uent account9 8o turnover on the account for a period which e&ceeds the normal cash flow profile of the borrower;s business and the borrower has not co( operated in regulari2ing or adjusting the accountF persistent e&cess over limit ).<"* which are not e&plained by healthy business growthF repeated defaults on loan repayments which have occurred after reschedulingF apprehension of financial weakness of the borrower4guarantor)s* or danger to Bank;s security or collateral which may jeopardi2e Bank;s ability to recover in full its dues at any stageF account is showing signs of weakness for other reasons! e.g. non co(operation on the part of the borrower in completing 4 regulari2ing charge documents! security or adverse trends in the balance sheet and profit and loss accountF legal notice has been served by the Bank on the borrower4guarantor)s* recalling the advanceF a lawsuit has been filed by the Bank against the borrower or guarantor)s* for recovery of the advanceF notice has been served about bankruptcy or li5uidation proceedings against the borrower. It has not been possible to locate the borrower.
3.19.2"onitoring of the delinEuent accounts:

After a delin5uent advance has been identified by the branch manager and confirmed by 3ead <ffice! it must then be monitored through monthly and 5uarterly reporting to 3ead <ffice. The first stage in the monitoring system is to meet the borrower and give him the opportunity to regulari2e his account. 8ormally he will be given a time limit to regulari2e his affairs and to provide plans for solving his financial problems. Branch office! in consultation with the borrower and with the permission of the 3ead office! will make a recovery plan. This recovery plan and4 or restructuring of the facilities may be either accepted or rejected. If the recovery plan is rejected or if the recovery plan previously accepted by the Bank does not work! then the borrower may be given some more time to solve his financial problems if they appear to be temporary and if e&tra time is all that the borrower needs to develop a practical solution. 3owever! if the problems appear intractable! then either of the two things may happen9 the bank may file a lawsuit against the borrower as well as www.AssignmentPoint.com
the guarantor to attempt to recover the outstanding balance on the advance accountF and The borrower may be declared bankrupt through law proceedings. In either of these cases! interest on the advance will not be credited to the Bank;s income account! but will be credited to interest suspense account instead. The borrower;s loan overdraft account will debit with the interest charge as usual.
3.1: .aries ty'es of ,eturn B state%ents

'etailed credit information is e&tremely important for #anagement Information purpose and a statutory re5uirement from the regulatory authority i.e. Bangladesh Bank. The branches are the basic sources of such information. The information will be compiled finally at the head office 6eturns4 tatements section under "oan Administration and #onitoring 'ivision. ubse5uently! the 3ead <ffice after fulfilling all regulatory re5uirements sends the statements depicting a picture of the entire bank. The timely reporting of credit information will not only help in streamlining all sorts of credit data but also help in getting loan applicantEs information from the Central Bank database and e&pedite approval process. The statements will of two types9
12ternal B Internal
3.1:.1 12ternal P /tate%ent of $arge $oan:

$rom Tk. +.@@ crore to below Tk. +@.@@ crore Tk. +@.@@ and above. $re5uency of the statement9 #onthly. 'ue date for submission to 3ead <ffice9 %ithin -th of the month following the respective month. 'ue date for submission to Bangladesh Bank9 %ithin I th of the month following the respective month.
R /tate%ent of reco ery of o erdue and classified loan:

$re5uency of the statement9 #onthly. 'ue date for submission to 3ead <ffice9 %ithin -th of the month following the respective month. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the respective month.
R /tate%ent of *redit @rescheduledGincreasedGne(ly sanctionedA schedule of &k. 1.<< core and abo e:
$re5uency of the statement9 #onthly. 'ue date for submission to 3ead <ffice9 %ithin +@th of the month following the respective month. 'ue date
for submission to Bangladesh Bank9 %ithin ?@th of the month following the respective month. P /tate%ent of $oans and Ad ances %ade to 0o t. InstitutionGAutono%ous *or'.G%ajor non7financial 'ublic enter'rises and their unitsGother non7financial 'ublic enter'risesGlocal authoritiesGother financial institutions @e2cluding 'ublic de'osit %oney banksA etc.: $re5uency of the statement9 #onthly. 'ue date for submission to 3ead <ffice9 %ithin +@th of the month following the respective month. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the respective month. P /tate%ent of Ad ances and Inland Bills +urchasedGdiscounted: $re5uency of the statement9 #onthly. 'ue date for submission to 3ead <ffice9 %ithin +@th of the month following the respective month. 'ue date for submission to Bangladesh Bank9 %ithin ?@th of the month following the respective month. P *redit Infor%ation Bureau @*IBA 8or%7<1 @to be sub%itted on 'rescribed for% as (ell as in disketteA: $re5uency of the statement9 #onthly. 'ue date for submission to 3ead <ffice9 %ithin 0rd of the month following the respective month. 'ue date for submission to Bangladesh Bank9 %ithin +@th of the month following the respective month. P *redit Infor%ation Bureau @*IBA 8or%7<1 @to be sub%itted on 'rescribed for% as (ell as in disketteA: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin 0rd of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin +@ th of the month following the end of the respective 5uarter. R /tate%ent of Industrial *redit: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin Ith of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the end of the respective 5uarter.
P $oan e2tended to Directors of DBB$Gbusiness establish%ents (here directors of DBB$ ha e interest:
$re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin Ith of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the end of the respective 5uarter. P $oan e2tended to Directors of other banksGbusiness establish%ents (here directors of other banks ha e interest: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin Ith of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the end of the respective 5uarter. P /B/73: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the end of the respective 5uarter. P/tate%ent of /uit 8iled and /uit /ettled in Artha ,in Adalat: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the end of the respective 5uarter. P /tate%ent of O erdue $oans Ad ances: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin 0@days of the following the end of the respective 5uarter. P /tate%ent of /ector7(ise Outstanding $oan: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin 0@days of the following the end of the respective 5uarter. P $oan *lassification and 'ro isioning @All basic for%s and for% *$<17 *$<3A: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the end of the respective 5uarter. 'ue date for submission to Bangladesh Bank9 %ithin 0@ days of the following the end of the respective 5uarter. P /tate%ent of Irregular $oans /anctioned and Disbursed: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the end of the respective 5uarter. www.AssignmentPoint.com
'ue date for submission to Bangladesh Bank9 %ithin 0@ days of the following the end of the respective 5uarter. P /tate%ent of Outstanding and *lassified $oans B Ad ances: $re5uency of the statement9 3alf Uearly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective half(year end. 'ue date for submission to Bangladesh Bank9 %ithin 0@ days of the following the respective half(year end. P+ersonal $oan /che%e to 'urchase consu%er goods: $re5uency of the statement9 3alf Uearly due date for submission to 3ead <ffice9 %ithin +Dth of the month following the respective half( year(end. 'ue date for submission to Bangladesh Bank9 %ithin 0@ days of the following the respective half(year end. P /tate%ent of /uit filed (ith t(o additional Mudge *ourtJ Bankru'tcy and 3 Artha ,in Adalat in Dhaka and *hittagong: $re5uency of the statement9 3alf Uearly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective half(year end. 'ue date for submission to Bangladesh Bank9 %ithin +D th of the month following the respective half(year end. R *IB @Outstanding #< thousand to belo( 1< $acA: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the respective 5uarter end. 'ue date for submission to Bangladesh Bank9 %ithin ?@ th of the month following the respective 5uarter end. R Bank refor%s +rogra%s and I%'ro e%ent of $oan Luality: $re5uency of the statement9 3alf Uearly due date for submission to 3ead <ffice9 %ithin +Dth of the month following the respective half(year end. 'ue date for submission to Bangladesh Bank9 %ithin +month following the respective half(year end.
3.1:.2 Internal:
P /tate%ent of $arge $oan @8or &k. 1<.<< %illion and abo eA: $re5uency of the statement9 #onthly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective month. P/tate%ent on $iability +osition of 0ar%ents Industries: $re5uency of the statement9 #onthly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective month. P /tate%ent of O erdue Accounts :
$re5uency of the statement9 #onthly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective month. R /tate%ent on 8acilities /anctioned under Delegated Authority: $re5uency of the statement9 %eekly due date for submission to 3ead <ffice9 %ithin 0rd day of the week following the respective week. P +osition of $oans and Ad ances: $re5uency of the statement9 #onthly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective month. Position of Accounts under various chemes like9 'uranta! 6ider! Comfort Cab! mall hop R 8inancing and *onsu%er *redit /che%e: $re5uency of the statement9 #onthly due date for submission to 3ead <ffice9 %ithin of the month following the respective month. P +osition +a'er on *redit +ro'osals ,ecei ed A''ro edJ DeclinedG8or(arded to 4ead Office: $re5uency of the statement9 #onthly due date for submission to 3ead <ffice9 %ithin Ith of the month following the respective month. P+osition +a'er on *lassified Accounts: $re5uency of the statement9 Quarterly due date for submission to 3ead <ffice9 %ithin +@th of the month following the respective 5uarter.
3.1; Disburse%ent of $oan

3.1;.1. $oans:
Advance made in a lump sum repayable either on fi&ed installment basis or in lump sum having no subse5uent debit e&cept by way of interest! incidental charges! etc. is called a loan. After creation of loan! there will be only repayment by borrower. The whole amount of loan is debited to the customer;s name on a loan account to be opened in the ledger and is paid to the borrower either in cash or by way of Credit to his current or savings account.
3.1;.2 *ash *redit:

Cash credit as a form of advance is a separate account by itself and is maintained in a separate ledger. The borrower may operate the account within stipulated limit as and when re5uired. The drawings are subject to drawing power. Cash credit is an active A running account to which deposit and withdrawals may be made fre5uently. The debit balance of the account on any day cannot e&ceed the agreed limit.
3.1;.3 $oan against i%'orted "erchandise @$I"A

%hen the importer fails to retire the documents or re5uests for clearance of goods! the outstanding under PA' or B4. is transferred to L"oan against www.AssignmentPoint.com
imported #erchandise )"I#* accountM and! the overdue interest from the date of accompanying Bill of .&change or negotiation date to the date of transfer to "I# account is charged. The advances against merchandise account is a loan account and only amounts for clearance charges! such as! custom duty! sales ta&! etc. are allowed to debited.
3.1;.! $ong &er% loan

"ong(term loan is meant for setting up of a project4 industrial undertaking! i.e. financing for the development of the infra structural facilities including procurement of machinery! either from abroad or from local market 'isbursement may be made in one installment depending on the item for which financing is being offered or more than one installment matching with the e5uity investment of the borrower. 'isbursement of e5uity and loan shall be made strictly in accordance with the disbursement schedule incorporated in the loan sanction advice for implementation of the project within the stipulated period. 'isbursement of each phase is always subject to satisfactory utili2ation of previous phase. Btili2ation of phase wise disbursement must be verified by an <fficer and .ngineer of the Bank. In addition! branch must closely supervise the utili2ation of disbursement amount from time to time.
3.2< *redit ,isk

Credit risk is the most significant and inherent risk in banking business. .very loan e&posure or transaction with counterparty involves the Bank to some degree of credit risks. Credit 6isk #anagement is at the heart of the overall risk management system of the Bank. It is designed and continuously updated to identify! measure! manage and mitigate credit risk to maintain and improve 5uality of loan portfolio and reduce actual loan losses and to ensure that approved processes are followed and appropriate due diligence are made in approving new credit facilities and renewals.
3.2<.1 1arly (arning syste%:

<peration and performance of loans are regularly monitored to trigger early warning system to address the loans whose performance show any deteriorating trend enabling the Bank to grow its credit portfolio in a sustainable way to ensure higher 5uality and lower risk with the ultimate objective to protect the interest of depositors and shareholders.
3.2<.2 *redit 'olicy a''ro ed by the Board:

The Board approves the major policy guidelines! growth strategy! e&posure limits for particular sector! product! individual company and
group! keeping in view regulatory compliance! risk management strategy and industry best practice.
3.2<.3*redit a''ro al is delegated 'ro'erly:

Credit approval authorities are carefully delegated to the .&ecutive Committee of the Board and appropriate level of management to strike a balance between ade5uate control and fle&ibility in credit operations to ensure full transparency and accountability at all levels.
3.2<.! Inde'endent *redit ,isk "anage%ent Di ision:

There is an independent risk management division to assess credit risks and suggest mitigations before recommendation of every credit proposal.
3.2<.# /e'arate *redit Ad%inistration Di ision for docu%entation

A separate Credit Administration 'ivision confirms that perfected security documents are in place before disbursement. 'BB" is continuing a uni5ue process of rechecking security documentation by a second legal adviser other than the lawyer who vetted it originally.
3.2<.3 Inde'endent *redit "onitoring B ,eco ery Di ision and "anage%ent ,eco ery *o%%ittee:
An independent and fully dedicated credit monitoring and recovery division monitors the performance and recovery of loans! identify early signs of delin5uencies in portfolio and take corrective measures to mitigate risks! improve loan 5uality and to ensure recovery of loans on time including legal actions. This department also monitors risk status of loan portfolio and ensures ade5uate loan loss provision. There is a dedicated and high( level management recovery committee to deal with the problem loans for early and most appropriate settlements.
3.2<.9 AdeEuate 'ro ision B sus'ension of interest:

Interest accrued on classified loan is suspended and ade5uate provision is maintained there(against as per Bangladesh Bank;s >uidelines.
3.2<.: *redit o'erations are subject to inde'endent Internal Audit:

Internal Control A Compliance 'ivision independently verifies and ensures! at least once in a year! compliance with approved lending guidelines! Bangladesh Bank guidelines! operational procedures! www.AssignmentPoint.com
ade5uacy of internal control and documentation. Internal Control A Compliance 'ivision directly reports to the Audit Committee of the Board.
9. 8indings of the /tudy 9.1 0eneral Banking De'art%ent 9.2 *redit O'eration B 'erfor%ance of DBB$ 9.3 /CO& Analysis
9. 8inding of the study:

The findings of the credit analysis and performance of 'BB" have been outlined Below9
9.1 0eneral Banking De'art%ent:

The location of the 'BB"! Comilla Branch is 5uite awkward for deposit mobili2ation! and the e&ternal and internal appearance is that much attractive. Though the space of the branch is much e&tended! so different function can be done very easily but I think the overall decoration of the entire branch is necessarily to be reconstructed for attracting actual and potential customers in competitive market. Accounts opening department is re5uired to be well furnished with modern desk. #ost of the officers! who work with computer! are not so well trained. If sometimes any problem arises they take time to overcome it. Payments against instruments are faster. $ront 'esk needs another permanent officer to perform the job 5uickly. The bank use software named $le&(cube 6etail which is good but it needs lots of improvement to perform better and provide faster service to the customer. Though the bank personnel are very busy with their own activities! even then I found them 5uit co(operative while completing this report.
9.2 *redit o'erations B 'erfor%ance 1 aluation of DBB$

In terms of classified loan to total loan ratio 'BB" is in a better position in the banking industry. The amount of unclassified loan of 'BB" is significantly higher. ubstandard category of classified loan of 'BB" is almost lower than others bank. In 'oubtful category of loan 'BB" is much ahead of the others. %hile 'BB" improved its position from ?@@, to ?@+@. 'BB" maintains general provision on unclassified "oans and Advances Y 0H instead of minimum re5uirement of +H as set forth by Bangladesh Bank;s regulatory provision.
'BB" provides ?IH of its total advances as Term "oan and a substantial amount as working capital loan to support industrial development and boost up e&port earnings of the country. Percentage of Bad4"oss loans of 'BB" has been decreasing. In terms of the ratio of total loans A advances to total deposit 'BB" is behind the aggressive position. In terms of interest earning 'BB" is ahead of the others for the last three years. In terms of 6eturn on Investment )6<I* 'BB" is ahead of the others and in terms of 6eturn on Asset )6<A* 'BB" is behind the others. 'BB";s sponsoring shareholders did not take any dividend for the initial D years in order to increase the capital base of the Bank. 'BB" has been keeping higher amount of provisions for loans A advances but this is because of the increase in amount of loans A advances disbursed! not because of increase in amount of classified loan. This fact is revealed from the picture of specific provision which is kept for classified loan. The amount of specific provision of 'BB" is much lower than the others and has been constant throughout the last three years. 'BB" has set up the 'utch(Bangla Bank $oundation for carrying out social and charitable activities. $rom the last year! DH of the Bank;s annual operating profit is earmarked for the $oundation which was ?.D@H earlier. Considering all the findings from the credit operations it seems that 'utch(Bangla Bank "imited is in a better position in banking industry.
+1,/O>A$ $OA>
1$I0IBI$I&6 : Any salaried person alary range 9 ZTO+I!@@@4(per month /ob e&perience 9 ? years /ob status 9 Permanent pecial Condition 9 Corporate customers should be preferred 1T+1*&1D $OA> A"OD>& : *usto%er /alary ,ange &y'e >eneral TO?D!@@@4( TO?D!@@@4( To D@!@@@4( TOD@!@@@4( Power TO?D!@@@4( TO?D!@@@4( To D@!@@@4( TOD@!@@@4( Power Plus TO?D!@@@4( 12'osure A%ount D Times I Times +@ Times 1 Times +@ Times +? Times CTimes
TO?D!@@@4( To D@!@@@4( TOD@!@@@4
+@Times +?Times
,A&1 O8 I>&1,1/& :
>eneral "ine Power "ine Power Plus "ine 9 +I.D@H 9 +D.D@H 9+-H
,1LDI,1"1>& :
Photograph Copy of TI8 certificate Copy of Passport A 8ational I' A Business card 4 <ffice I' Proof of residence Bank statements for last 1 months If salaried! latest original salary certificate 4 pay slip If self(employed! copy of trade license >uarantor
8O,1I0> 1DD*A&IO> $I>1

A,1A O, &A,01&1D *D/&O"1, :
Any A4C holder who want to go abroad for any purpose 8eed solvency certificate A bank statement for .mbassy facing C@H of customerEs A4C balance.
1T+O/D,1 $OA> A"OD>& : ,A&1 O8 I>&1,1/& A>D &1>O, :

+1H A 1 months with renewal facility.
*4A,01/ :
+H of "oan amount. AD&O $OA>

+D,+O/1 :
Purchase of new and reconditioned vehicles for personal use only And post financing of availed car purchased within a year.
&A,01& *D/O"1, :
Any credit worthy individuals like ( www.AssignmentPoint.com
alaried e&ecutives 'octors! architects! engineers! Chartered Accountant! Consultant and IT professionals etc. Business person #a& ,@H of the car value.
"ATI"D" .A$D1 : &6+1 O8 *A, :

then D ,A&1 O8 I>&1,1/&: In case of reconditioned vehicle the car will not later years from the date of manufacture.
0eneral +o(er $ine +o(er +lus $ine 6egular 9 Y+D.@@H Y+-.D@H Y+-.@@H %ith ?DH security 9 Y+-.D@H Y+-.@@H Y+0.D@H %ith D@H security 9 Y+-.@@H Y+0.D@H Y+0.@@H
Cith 1<<O security : U13.<<O @or &D rate V2O s'readA
+,O*1//I>0 811 : >eneral 9 Y+.DH of the loan amount Power "ine 9 Y+H of the loan amount Power Plus "ine 9 Y@.DH of the loan amount
Cith 1<<O $iEuid security : 8lat &k.2J<<<G7
,1+A6"1>& &1>O, :
+? to 1@ months
BO,,OC1, 1$I0IBI$I&6 :
A01 : #inimum Age of applicant X ?0 Uears #a&imum age of borrower at the end of loan tenure! 1D years or retirement age whichever is earlier.
"I>I"D" "O>&4$6 I>*O"1 : alaried9 TO?D!@@@4()>ross monthlyIncome* elf(employed4businessman9 TOD@!@@@4 )Average #onthly Income* Additional Income 9 6ental Income 9 TOC!@@@4( and above )1@Hwill be considered with valid income proof* www.AssignmentPoint.com
Co(applicant )$amily members only* 9 at least TO 0@!@@@4( together with valid income proof* ,1LDI,1D DO*D"1>& : Passport or Goter identity or driver license or %ard Commissioner;s certificate Bill Copy of TAT or mobile phone to verify current address Photograph Business card 4 <ffice I' "etter of introduction as per our format alary lip or account payee salary account statement in case of salaried e&ecutives 6ent or "ease Agreement of house 4 property )if applicable* Ta& documents! if any )ITCC! TI8 certificate etc.* Copy of Trade "icence! #emorandum of Articles of Association etc. Bank tatement for minimum 1 months for professionals4businessman +D,+O/1 : (To buy new or old house4 flat (To construct house4 apartment. ($or renovation4alteration4e&tension of e&isting house4 flat 7Taking over of the e&isting housing loan from other Bank4 $inancial Institution &A,01& *D/&O"1, : Any credit worthy individuals like 9 alaried e&ecutives 'octors! architects! engineers! Chartered Accountant! Consultant and IT professionals I>&1,1/& ,A&1 : 6egular %ith ?DH security %ith D@H security %ith +@@H security +,O/1//I>0 811 B &1>O, : +H of the loan amount 9 Y+-.D@H +-.@@H 9 Y+-.?DH +0.IDH 9 Y+-.@@H +0.D@H 9 Y+0.@@H )T'S?H spread* Business person
4O"1 $I>1
8ew $lat 4 Construction Uears <ld $lat43ouse Uears 6enovation Uears 1$I0IBI$I&6 :
9 #a&imum +D 9 #a&imum +? 9 #a&imum @D
A01 : #inimum Age of applicant X ?D Uears #a&imum age of borrower at the end of loan tenure! 1D years or retirement age whichever is earlier. I>*O"1 A"OD>& : alaried9 TO-@!@@@4()>ross monthly Income* elf(employed4businessman9 TOD@!@@@4( )Average #onthly Income* Additional Income 9 6ental Income9 TO+@!@@@4( and above )1@H will be considered with valid income proof* Co(applicant 9 at least TO D@!@@@4( together with valid income proof.
DO*D"1>&A&IO> :
Passport or Goter identity or driver license or %ard Commissioner;s certificate Bill Copy of TAT or mobile phone to verify current address Photograph Business card 4 <ffice I' "etter of introduction as per our format alary lip or account payee salary account statement 6ent or "ease Agreement of house 4 property )if applicable* Ta& documents! if any )ITCC! TI8 certificate etc.* Copy of Trade "icence! #emorandum of Articles of Association etc.
Bank tatement for minimum +? months for professionals4businessman #ortgage document.
/"1 *A/4 *,1DI&

+D,+O/1 :
To meet up working capital re5uirement of Business )Any valid business reason*
&A,01& *D/&O"1, :
mall or #edium .ntrepreneur like 9 an entity! ideally not a public limited company! does not employ more than +D@ persons )if it is a manufacturing concern* and D@ persons )if it is a trading concern* and D@ persons )if it is a service concern* and also fulfils the following criteria 9 A service concern with total assets at cost e&cluding land and building from Tk.D@!@@@ to Tk. +@ Crore. A trading concern with total assets at cost e&cluding land and building from Tk.D@!@@@ to Tk. +@ Crore. A manufacturing concern with total assets at cost e&cluding land and building from Tk.D@!@@@ to Tk. ?@ crore. #inimum TO. +@@!@@@4( #a&imum TO.D!@@@!@@@4( *lean *ollaterali-ed "a2i%u% $oan A%ount D' to &k. #.<< $ac D' to &k. #<.<< $ac
$OA> A"OD>& :
I>&1,1/& ,A&1 :
Clean 9 Y+-.@@H Collaterali2ed 9 Y+0.@@H Collaterali2ed with [0@H Cash ecurity 9 Y+0.@@H %ith +@@H cash security 9 YT'S?H spread )considering 'BB" T'* Y+-H p.a. considering other cash security4other bank T'.
+,O*1//I>0 811 :
+H of the anctioned "imit.
1$I0IBI$I&6 :
8ationality Bangladeshi by birth .&perience www.AssignmentPoint.com
As an entrepreneur must have e&perience at least ? )Two* years. Age9 #inimum ?+ years to ma&imum 1D years. $or renewal purposes ma&imum age may be considered upto I@ years.
DO*D"1>&A&IO> : 0eneral reEuire%ents:

+. Passport or Goter identity or driver license or %ard Commissioner;s certificate ?.Bill Copy of TAT or mobile phone or .lectricity bill to verify current address 0.Photograph -.Business card 4 <ffice I' D.6ent or "ease Agreement of business house. 1.Ta& documents! if any )ITCC! TI8 certificate etc.* I.Copy of Trade "icense! #inimum 0 years C.Bank tatement for minimum 1 months for professionals4businessman ,. If trading corporation ! last 1 months purchase voucher A sales voucher +@. >uarantor
/ecurity Docu%ent
Photocopy of original title deed. C. ! .A! 6. ! 'C6! #utation and latest math Porcha #utation Ohatian duly certified by AC "and. Photocopy of #ou2a #ap Photocopy of bia deeds. Bp to date 8on(.ncumbrance Certificate. Bpto date ground rent receipt. 8o <bjection Certificate from the concerned authority for mortgaging property )if applicable*
/"A,& &1," $OA>

PB6P< . 9
To meet up fund re5uirement of Business set up.
TA6>.T CB T<#6 9
mall or #edium .ntrepreneur like 9 an entity! ideally not a public limited company! does not employ more than +D@ persons )if it is manufacturing concern* and D@ persons )if it is a trading concern* and D@ persons )if it is a service concern* and also fulfils the following criteria 9
A service concern with total assets at cost e&cluding land and building from Tk.D@!@@@ to Tk. +@ Crore. A trading concern with total assets at cost e&cluding land and building from Tk.D@!@@@ to Tk. +@ Crore. A manufacturing concern with total assets at cost e&cluding land and building from Tk.D@!@@@ to Tk. ?@ crore.
$OA> A"OD>& :
#inimum TO. +@@!@@@4( #a&imum TO.D!@@@!@@@4( Clean Collaterali2ed #a&imum "oan Amount Tk. D.@@ "ac Tk.D@.@@ "ac
I8T.6. T 6AT. 9
Clean 9 Y+-.@@H Collaterali2ed 9 Y+0.@@H Collaterali2ed with [0@H Cash ecurity 9 Y+0.@@H %ith +@@H cash security 9 YT'S?H spread )considering 'BB" T'* Y+-H p.a. considering other cash security4other bank T'
+,O*1//I>0 811 :
+H of the loan amount T.8<6 9 1 to 1@ months
."I>IBI"ITU 9
8ationality Bangladeshi by birth .&perience As an entrepreneur must have e&perienced at least ? )Two* years. Age9 #inimum ?+ years #a&imum age of borrower at the end of loan tenure! I@ years.
'<CB#.8TATI<8 9
0eneral reEuire%ents:
+. Passport or Goter identity or driver license or %ard Commissioner;s certificate www.AssignmentPoint.com
?.Bill Copy of TAT or mobile phone or .lectricity bill to verify current address 0.Photograph -.Business card 4 <ffice I' D.6ent or "ease Agreement of business house. 1.Ta& documents! if any )ITCC! TI8 certificate etc.* I.Copy of Trade "icense! #inimum 0 years C.Bank tatement for minimum 1 months for professionals4businessman ,. If trading corporation ! last 1 months purchase voucher A sales voucher +@. >uarantor
/ecurity Docu%ent
Photocopy of original title deed. C. ! .A! 6. ! 'C6! #utation and latest math Porcha #utation Ohatian duly certified by AC "and. Photocopy of #ou2a #ap Photocopy of bia deeds. Bp to date 8on(.ncumbrance Certificate. Bpto date ground rent receipt. 8o <bjection Certificate from the concerned authority for mortgaging property )if applicable*
I.0 /CO& Analysis of Dutch7Bangla Bank $td:

9.3.1 /trengths of DBB$:
'BB" is the first Bangladeshi(.uropean /oint venture Bank in Bangladesh. 'BB" directors do not avail of any facility or even any fee4remuneration from the Bank for attending #eetings of the Board4.&ecutive Committee4Audit Committee. 'BB" allows all local remittances such as TT! ''! and P< etc. free of cost. 'BB" e&tends free medical facilities under its L6ural 3ealth ervice ProgramM to the members of the general public around the rural branches. 'BB" supports humanitarian and charitable activities and causes and spends a substantial amount from its income for these purposes. 'BB" promotes different socio(cultural and sports activities. 'BB" awarded D@@ scholarships to meritorious and needy students of the country till this year. $rom the year ?@@,! the number of scholarships will be +?D@ for which the Bank will need to provide Taka 0.ID Crore each year. 'BB" distributes up to ?.D@H of its annual profit among its employees as profit sharing.
'BB";s objective is not only to make profit! but also simultaneously contribute towards social and human development through various generous activities.
9.3.2 Ceaknesses of DBB$

"ower rates of 'P A $'6 ometimes AT# booth does not properly work The poor 5uality of the AT# card 'BB" is online based Bank! if sometimes occurs system problem! then most of the banking activities has been stop "ack of computers A others necessary instruments.
9.3.3 O''ortunities of DBB$

The branch of 'BB" increase very fast. Attract by the customer established huge number of AT# booth at different place. 'BB" doing various types of social work A established their well reputation within the country.
9.3.! &hreats of DBB$

In the CA#." rating of 'BB" down their rating. #ost of the private bank 'P A $'6 rate is higher than 'BB". ometimes occurs online problem of the bank! so in this situation customer can deposits their money in another bank. $rom my %<T I found some Advantage and 'isadvantage of this Bank. The overall performance of 'BB" is moderately well! but if the bank gets outstanding performance then re5uires more emphasis the weakness points of the Bank.
:. ,eco%%endations ;. *oncluding ,e%arks 1<.Bibliogra'hy 11.A''endi2 @<17<;A
;. ,eco%%endations:
No7 some recommendations #ased on the findings of the study are given #elo7:
In cash department to ensure more prompt service and to reduce risk an electronic scanning machine should be installed to verify signature on the che5ues. The officer of front desk should well mannered and of pleasing personality. They should be more professional in their work. The officers of the different department should be well trained. The organisation could arrange training program for them in their training institute. Transfer of internal instruments should be done 5uickly on the same day. Clearing che5ues should be presented and collected on the following day receipt of such che5ues. <ut(station che5ues and other instruments should be sent for collection on the same day by registered post. In case of instruments received for collection from outstation branches! payment should be effected by the following working day. Intermission4advice thereof should be communicated promptly. Balance confirmation on 5uarterly basis must be sent to C'4 B Account holders. tatement of accounts and passbook! if re5uested for! must be provided to clients. Bank personnel should come to office! at +D minutes before commencement of business hour. This will enable them to plan their work for the day and to attend the clients at +@ A.#. sharp. At the peak(banking hour! #anager should move around C'4 B 'epartments and counters for overall supervision and smooth functioning of the branch. Counter should be neat and clean and counter personnel should be smart! tidy and well groomed. %hen customer approaches bank personnel with a problem! which is not actually related to him! the customer should not be avoided. 6ather he should be guided to the relevant person. pecial emphasis must be given for collecting credit report and status report of the borrower when loan e&ceeds more than fifty thousand. trict supervision must be adopted in case of high(risk borrowers. Time to time visit to the project should be done by the bank official. As the office deals with a huge number of clients in a day. Therefore! most efficient employees of this bank should send to this branch for greater work force productivity. www.AssignmentPoint.com
hould place an electronic display board whereby the important information related to the banks products A schemes would be displayed. Put display on $ront desk! cash! in5uiry! retail loan etc. All the PC;s should be more moderni2ed. To print the important A confidential office documents there should be at least one laser printer.
1<. *oncluding ,e%arks:

$rom the close practical inspection of customer dealing procedures during the whole period of my practical preparation in 'BB"! Comilla Branch I have reached in firm and concrete conclusion in a very confident way. I believe that my reali2ation will be in harmony with most of the banking thinkers. It is 5uite evident that to build up an efficient and effective banking system to the highest desired level computeri2ed transactions is a must and 'BB" used computer for the daily transaction but the speed of computer is not so high. Besides! every bank has to survive amidst of a large number of banks including local and foreign banks. That;s why to keep pace with e&pected profit margin of the time being and for the future every bank should try heart and soul to please customers in a smart and trustily way and during my preparation time I talk with some client and they said they are happy with the service but to provide better and faster service more people needed. Because I saw a huge number of transactions occur daily in Comilla Branch. But 5uite regretful to mention that most of our bank face decreasing profit trend due to switch over of their present customers to those foreign with higher customer service facilities. o! timely decision for introducing sophisticated banking instruments should be taken as early as Possible. After taking effective and time defeating measures regarding efficient employees and instruments will help the 'BB" to reach the summit of success with high profit and productivity A increase 'BB" performance day by day.
Bibliogra'hy:
Bangladesh Bank Prudential >uideline( +,,@
www.dbbl.com.bd Annual 6eports of 'utch(Bangla Bank "td. )?@@I(?@+@* Bangladesh Bank %ebsite 'ifferent statement of branch Circulars issued by the 3ead <ffice of the 'utch(Bangla Bank "td. 'BB" credit manual urvey instrument9 a. In(depth interview b. econdary data collection c. Telephone survey Basudevan! .G. Theories of Commercial Banking! 6eading #aterials on Theory A Practice of Banking )B( +@+*! Bangladesh Institute of Bank #anagement )BIB#*! ?@@@. >ordon! .. A 8atarajan! O. Banking9 Theory! "aw A Practice! 3imalaya Publishing 3ouse! #umbai! +,,1. >ulshan! . . A Oapoor! >.O. Banking "aw and Practice! Company! 8ew 'elhi! +,,-. Chand A
@<17<;A
8igure:7*redit A''ro al 8eature

@A%ount in thousand &akaA
/l. >o. Authority >ature of client 8acility 8unded Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations Private "td. Co.4$irms4 Individuals Public "td. Co. >ovt.4 emi >ovt.4 Autonomous Corporations +@!@@@ +?!D@@ ?@!@@@ I!D@@ +@!@@@ +D!@@@ D!@@@ I!D@@ +@!@@@ >on funded D@!@@@ ID!@@@ +@@!@@@ -@!@@@ 1@!@@@ C@!@@@ ?D!@@@ 0@!@@@ -@!@@@ +@!@@@ ?!D@@ +?!D@@ +D!@@@ D!@@@ +!D@@ I!D@@ +@!@@@ ?!D@@ +!@@@ D!@@@ I!D@@ +!@@@ D@@ ?!D@@ D!@@@ Aggregate authority @for ne( sanctionA D@!@@@ ID!@@@ +@@!@@@ -@!@@@ 1@!@@@ C@!@@@ ?D!@@@ 0@!@@@ -@!@@@ +@!@@@ +?!D@@ +D!@@@ D!@@@ I!D@@ +@!@@@ ?!D@@ D!@@@ I!D@@ +!@@@ ?!D@@ D!@@@ Authority @for rene(alA 8unded >on funded +D@!@@@ ( ( +@!@@@ ( ( I!D@@ ( ( D!@@@ ( ( ?!D@@ ( ( +!D@@ ( ( +!@@@ ( ( 0@@!@@@ ( ( D@!@@@ ( ( -@!@@@ ( ( ?D!@@@ ( ( +@!@@@ ( ( D!@@@ ( ( ?!D@@ ( ( Aggregate Authority @for rene(alA 0@@!@@@ ( ( D@!@@@ ( ( -@!@@@ ( ( ?D!@@@ ( ( +@!@@@ ( ( D!@@@ ( ( ?!D@@ ( (
#anaging 'irector
Additional #anaging 'irector 'eputy #anaging 'irector )<peration*
.GP4 .GP
GP
$GP
GP
A''endi271
8igure: 1cono%ic alue addition by DBB$
A''endi272
A''endi273
8igure: 4ighlights on the o erall acti ities of the Bank for the years 2<<; and 2<1<
A''endi27!
A''endi27 #
8igure: /u%%ary of total ca'ital and ca'ital adeEuacy ratio of DBB$ is as follo(s @In %illion &akaA
A''endi273
12tending technology dri en ser ices to custo%ers at affordable cost
8igure9 12tending technology dri en ser ices to custo%ers at affordable cost
A''endi279
8igure /u%%ary of o'erating ,esults:
8igure /u%%ary of loans B Ad ances (ith the risk status
8O,1I0> ,1"I&&A>*1
I>CA,D ,1"I&&A>*1 OD&CA,D ,1"I&&A>*1 facility following 9 'raft )P.<F '.'* 9 %e provide 6.#ITA88C. to our client through e&change house. I'.8TI$I.' C<'. 8B#B.6 +@ 'I>IT)#TC8* AGAI". C<B8T6U
" .TCC3A8>. 3<B . 8A#. 8< @+ %. T.68 B8I<8 @? @0 @@D @1 @I @C @, +@ ++ T(P6. #<8.U
C3<IC. #<8.U P6<GB #<8.U OB%AIT A IA8 I8T.68ATI<8A" B8IT.' T6A'.6 "T' A" JA#A8 .TC3A8>. %A"" T6..T A" A3A"IA #<8.U .TC3A8>. .A T BA8>"A .TC3A8>. '<""A6 C< .TC3A8>.
A"" <G.6 T3. %<B6"' +1 'I>IT)TPI8* BA.! CA8A'A! #I''"..A T! #A"AUA IA ,! +@! ++ 'I>IT)C#T* A#.6ICA! CA8A'A +? 'I>IT B8IT.' TAT. ! #A"AUA IA +@ )OA* OB%AIT @1'I>IT B8IT.' OI8>'<# @I'I>IT BA. ++!+?!+0'I>IT B A! CA8A'A @I'I>IT BA. @-'I>IT CA8A'A @C'I>IT OB%AIT

An Analysis of Performance Evaluation of Credit Operation System (Prat - 1)

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An Analysis of Performance Evaluation of Credit Operation System (Prat - 1)

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Internship Report ON

Date: December 10, 2011

:" 0indings of the study

*" Recommendations ;" Concluding Remar s ,)"Bi#liography ,," Appendi<

1.1 Background of the study

1.2 Objecti es of the study

1.3. "ethodology of the study

Selection of the Topic

Identifying Data Sources

Classification, Analysis, Interpretation and Presentation of Data

Findings of the Study

Final Report Preparation

Data *ollection +rocedure

&he 'ri%ary sources are:

&he secondary sources are:

1.! $i%itations of the study

3. A Brief Idea about DBB$

!.1 /trategies of the Bank

!.2 0oals of the Bank

!.3 Business Objecti es of the Bank

!.! "anage%ent As'ect

!.#.1 12ecuti e *o%%ittee:

!.#.2 "anage%ent *o%%ittee:

"anage%ent hierarchy of Dutch7Bangla Bank $i%ited9

!.9 Banking +roducts:

!.9.3 $oan B Ad ances:

&y'es of $oan B Ad ances 'roducts: *or'orate Banking +roduct:

/"1 Banking +roduct:

,etail Banking +roduct:

$etter of *redit7trade Business:

*usto%er ser ice di ision:

-"2 Card division3

Automated trailer machine >A$.?

A&" $ocations of DBB$: $ist of DBB$ A&" @Area CiseA

DBB$ A&" Booth

#.3 *learing B *ollection /ection

-"8", Clearing Section

-"8"2 Collection Section

#.! ,etail di ision:

-"- Cash Section

-"-", Cash Receiving (rocedures

-"-"2 Cash payment (rocedures -"-"2", (recaution

-"-"8 (assing the Che=ue

8"-"+ Dishonour of Che=ue

-"9 Deposit Section

-": Remittance Section

Above all this service is performed by the 6emittance department efficiently.

-":", Demand Drafts >DD?

-":"2 (ay Order >(O?

-":"8 (ay Slip >(S?

-":"+ .ail $ransfer >.$?

-":"- $elegraphic $ransfer >$$?

#.9.3 8oreign ,e%ittance through 12change 4ouse:

>a%e of the 12change *o%'anies and Banks:

-"* Dispatch Section

-"; (ersonal and Esta#lishment section

3. Analysis of credit O'eration of DBB$

3.2< *redit ,isk

9" Analysis of credit operation of Dutch-Bangla Ban !td

3.1 +rinci'les of $ending

9","2 Source of repayment3

3.1.3 *haracter and ability of the borro(er:

3.1.!+ur'ose of the facility:

3.1.#&er%s of the facility:

#.3 learing B ollection /ection

Corking a'ital 12'ort redit *o%%ercial $ending Others