SME Products of BRAC Bank Limited

Chapter -1
Background of the Report
Origin of the Report:

As a mandatory requirement of the BBA program under United International University, I
was assigned for doing my internship in The BRAC Bank Limited (BBL). Based on my
experience and congregated practical knowledge I have prepared this report entitled Analysis of SME loan in BRAC Bank Limited ". this report is a connived illustration of
my knowledge acquired from my four months (July 15, 2007 to November 14,2007) long
internship program at Risk Management Department in The BRAC Bank Limited.
Objective of the Study:

Broad Objective
To know detail about SME loan in BRAC Bank Ltd.
Specific Objectives
To know the SME loan activities in BRAC Bank.
To find out basic appraisal of SME loan.
To know the enterprise selection criteria to provide SME loan.
To know the terms and conditions of SME loans.
To analyze the Marketing Procedure of SME loans of BRAC Bank.
To know the internal strength of SME related services of BRAC Bank Ltd.
To know the disbursement and recovery procedures of SME loans.
To make some recommendations and conclusion to further the development of
SME loan products of BRAC Bank Ltd.
Scope of the study:

This study will deal with the Company Secretariat and SME loan Management activities
undertaken by BRAC Bank Ltd. The scope of the report comprises the organizational
structure, background, functions and business performance in BBL. This study will be a
guideline for other commercial banks operating in our country. And especially this study
will provide the scopes of knowing the following:
The total concept of SME loan.
BRAC Banks specialty in SME loan to promote small entrepreneurs all over the
country.
Characteristic of SME loan as a sophisticated area of finance.
Recent performance level of the BRAC Bank SME loan in the country.
Entry of commercial banks into SME banking industry in Bangladesh.
Small entrepreneurs of rural urban spectrum are enjoying the BRAC Bank loan
facility without coming in the bank
Methodology of the Study:

The study has used both primary data and secondary data. The information for the
Organization part of the report was collected from secondary sources like books,
published reports and web site of the BRAC Bank Limited (www.bracbank.com). For
general concept development about the bank short interviews and discussion session were
taken as primary source.
For gathering concept of SME loan, the Product Program Guideline (PPG) thoroughly
analyzed. Beside this, observation and discussion with the employee of the SME
department and loan administration division was also conducted. To identify the
implementation, supervision, monitoring and repayment practice- interview with the
employee and extensive study of the existing file was done.
Primary Data Sources:
Direct working with officials of BRAC Bank Ltd.
Face to face conversation with officials of Risk Management Department and
SME Banking Department.
Practical deskwork.
Observations from the total internship period.
Secondary Data Sources:
Prospectus of BRAC Bank Ltd.
Banks other published information.
Annual report of the bank.
Previous research books and journals.
BRAC banks website.
Limitations of the Report:

Due to time constraint the report was prepared just in few weeks.
The informations in this report are limited to CSD, Uttara Branch.
Part of organizational culture was written from individuals perception and may
vary from person to person.
In many cases, up to date information is not published.
Getting Relevant papers and documents were strictly prohibited.

To protect the organizational loss in regard of maintaining confidentiality, some
parts of the report are not in depth.
The duration of our exposure to this practical field was short enough to cover all
aspects of banking.
Chapter -2
Organizational Overview of BRAC Bank Limited.
Historical Background of BBL:
BRAC Bank Limited is a scheduled commercial bank established under the Banking
Companies Act, 1991 and incorporated as a public company limited by shares on 20 May
1999 under the Companies Act, 1994 in Bangladesh. The primary objective of the Bank
is to carry on all kinds of banking businesses. The Bank could not start its operations till
03 June 2001, since the High Court of Bangladesh suspended the activity of the Bank.
Subsequently, the judgment of the High Court was set aside and dismissed by the
Appellate Division of the Supreme Court on 04 June 2001 and accordingly, the Bank has
started operations from 04 July 2001.
BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance
Corporation (IFC) and Shorecap International, has been the fastest growing Bank in
2004, 2005 and 2006. The Bank operates under a "double bottom line" agenda where
profit and social responsibility go hand in hand as it strives towards a poverty-free,
enlightened Bangladesh.
As a fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored
market niches in the Small and Medium Enterprise Business, which hitherto has
remained largely untapped within the country. In the last five years of operation, the Bank
has disbursed over BDT 10.70 billion in loans to nearly 70,000 small and medium
entrepreneurs. The management of the Bank believes that this sector of the economy can
contribute the most to the rapid generation of employment in Bangladesh.
Since inception in July 2001, the Bank's footprint has grown to 36 branches, 450 SME
unit offices and 19 ATM across the country, and the customer base has expanded to more
than 400,000 deposit and 50,000 advance accounts through 2007. In the years ahead
BRAC Bank expects to introduce many more services and products as well as add a
wider network of SME unit offices, Retail Branches and ATMs across the country.
Corporate Vision of BBL:
Building a profitable and socially responsible financial institution focused on Markets

and Business with growth potential, thereby assisting BRAC and stakeholders to build
a just, enlightened, healthy, democratic and poverty free Bangladesh.
Corporate Mission of BBL:

BRAC Banks mission is to be the absolute market leader in the number of loans given to
small and medium sized enterprises through out Bangladesh. It will be a world class
organization in terms of service quality and establishing relationships that help its
customers to develop and grow successfully. It will be the Bank of choice both for its
employees and its customers, the model bank in this part of the world.
Goals of BBL:
Sustained growth in Small & Medium Enterprise sector.
Continuous low-cost deposit growth with controlled growth in Retail Asset.
Corporate Asset to be funded through self-liability mobilization. Growth in Assets
through Syndications and Investment in faster growing sectors.
Continuous endeavor to increase fee based income.
Keep their Debt Charges at 2% to maintain a steady profitable growth.
Achieve efficient synergies between the Banks branches, SME unit offices and
BRAC field offices for delivery of Remittance and Banks other products and
services.
Manage various lines of business in a fully controlled environment with no
compromise on service quality.
Keep a diverse, far flung team fully motivated and driven towards materializing
the Banks vision into reality.
Objectives of BBL:
The objectives of BRAC Bank Limited are specific and targeted to its vision and to
position itself in the mindset of the people as a bank with difference. The objectives of
BRAC Bank Limited are as follows:
Building a strong customer focus and relationship based on integrity, superior

service.
To creating an honest, open and enabling environment
To value and respect people and make decisions based on merit
To strive for profit & sound growth
To value the fact that they are a member of the BRAC family committed to the
creation of employment opportunities across Bangladesh.
To work as a team to serve the best interest of our owners
To relentless in pursuit of business innovation and improvement
To base recognition and reward on performance
To responsible, trustworthy and law-abiding in all that we do
To mobilize the savings and channeling it out as loan or advance as the company
approve.
To establish, maintain, carry on, transact and undertake all kinds of investment
and financial business including underwriting, managing and distributing the issue
of stocks, debentures, and other securities.
To finance the international trade both in import and export.
To develop the standard of living of the limited income group by providing

Consumer Credit.
To finance the industry, trade and commerce in both the conventional way and by
offering customer friendly credit service.
To encourage the new entrepreneurs for investment and thus to develop the countrys
industry sector and contribute to the economic development.
Nature of business
A fully operational Commercial Bank focuses on pursuing unexplored market niches in
the Small and Medium Enterprise Business, which hitherto has largely untapped within
the country. The Bank is also actively involved in retail banking and has a broad range of
consumer loans ranging from personal loans up to auto loans to debt & credit cards.
Furthermore the Bank has gained a strong market share in the global money transfer
market or remittance through significant tie-ups with major international money transfer
agencies. In the last two years, BRAC Bank has also participated in providing large
syndication loans in association with other National Commercial Banks in the country.
Today BRAC Bank is considered as fourth generation bank extending full range of
banking facilities by providing efficient, friendly and modern fully automated on line
service. Since its inception, it has introduced fully integrated online banking service to
provide all kinds of banking facilities from any of its conveniently located branches.
Corporate Social Responsibility

BRAC Bank Ltd has not just a corporate identity; it has a social identity too. As a bank
they are socially responsible. Fifty percent of the Loan portfolio is diverted to Small and
Medium Enterprise banking, and as a financial intermediary they channel funds from the
surplus ends to the needy. Countrywide network of SME Units cater to the needs of
small entrepreneurs to help them build their asset base. BRAC Bank Ltd is the market
leader
in
SME,
striving
for
socio-economic
upheaval
in
Bangladesh.
BRAC Bank Ltd does not support any finances that are detrimental to our environment.
A portion of the revenue is channeled to support BRAC schools, where children study
for free. 70% of these children are female.
Company Profile
BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance
Corporation (IFC) and Shorecap International, has been the fastest growing Bank in
2004, 2005, 2006 and 2007. The Bank operates under a "double bottom line" agenda
where profit and social responsibility go hand in hand as it strives towards a povertyfree, enlightened Bangladesh.
A fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored
market niches in the Small and Medium Enterprise Business, which hitherto has
remained largely untapped within the country. In the last five years of operation, the
Bank has disbursed over BDT 1500 crore in loans to nearly 50,000 small and medium
entrepreneurs. The management of the Bank believes that this sector of the economy can
contribute the most to the rapid generation of employment in Bangladesh. Since
inception in July 2001, the Bank's footprint has grown to 36 branches, 450 SME unit
offices and 19 ATM sites across the country, and the customer base has expanded to
250,000 deposit and 60,000 advance accounts through 2007. In the years ahead BRAC
Bank expects to introduce many more services and products as well as add a wider
network of SME unit offices, Retail Branches and ATMs across the country.
BRAC
BRAC, a national, private organization, started as an almost entirely donor funded,
small-scale relief and rehabilitation project initiated by Fazle Hasan Abed to help the
country overcome the devastation and trauma of the Liberation War and focused on
resettling refugees returning from India. Today, BRAC has emerged as an independent,
virtually self-financed paradigm in sustainable human development. It is one of the
largest Southern development organizations employing 97,192 people, with 61%
women, and working with the twin objectives of poverty alleviation and empowerment
of the poor.
International Finance Corporation

International Finance Corporation (IFC) is the commercial wing of World Bank. Using
certain channels and overseas representatives, IFC helps local financial institutions find
profitable ways to target small and medium sized companies. Funding comes from the
Asian Development Bank, Canada, the European Commission, the Netherlands, Norway,
the United Kingdom and IFC itself.
IFC is a 19% shareholder in BRAC Bank. A new assistance program signed in August
2005 aims to double the banks number of small and medium enterprise clients in 18
months through campaigns to target women entrepreneurs and rural clients, introduce
new products and train branch managers. And finally the project has wrapped up with the
achievement of more than 95% of its goal.
ShoreCap International:
ShoreCap International Ltd. is an international private non-profit, equity company
seeking to invest in small business banks and regulated micro finance institutions in
countries with developing and transitional economies. Founded in mid 2003, ShoreCap
has a current base of $28.3 million in capital commitments and seeks to support the
growth of development finance institutions in Africa, Asia and Eastern Europe. The
institution has made investments totaling $7 million in Bangladesh, India, Cambodia,
Armenia, Mongolia and Kenya. ShoreBank is a 9% investor of ShoreCap and runs the
management company, which oversees investment activities.
ShoreCap typically invests between $500,000 and $2 million for an ownership position
of 10-25% of a company. As a minority shareholder, ShoreCap seeks financial
institutions with a strong, experienced management team and a committed set of local
development-minded investors. ShoreCap currently owns 18% of BRAC Bank Limited.
Management of BRAC Bank Limited

Boards of directors are the sole authority to take decision about the affairs of the
business. Now there are 5 directors in the management of the bank. All the directors have
good academic background and have huge experience in business.
Mr. Fazle Hasan
Abed is the chairman and A. E. A. Muhaimen is the managing director and CEO of the
bank. The board of directors holds meetings on a regular basis.
BRAC Bank Limited -at Present:

The financial performance of BBL is found to be satisfactory. During the year 2006 the
Bank reported Tk 334.26 million. Profit After Tax (PAT). The growth rate of PAT during
this period was 73.48%. Financial performance in 2007 is also found to be increasing
trend. It is noteworthy here that the Bank has turned into a profitable organization in the
year 2003 after making loss in first two years of its operation. The above performance of
the Bank was based on the higher growth rate of business activities during the period.
Net interest income of the Bank has increased Tk. 1157.62 million in 2006 from Tk.
612.93 in 2005 from Tk. 374.81 in 2004, representing growth rate of 88.92% and
63.53% respectively. On the other hand; growth of investment income and fee base
income was 74.92% and 97.55% respectively. Operating profit of the Bank increased to
Tk. 1050.41 million in 2006 from Tk 585.91 million in 2005 from Tk 320.84 million in
2004, representing growth rate of79.23% and 82.62% respectively. Earning Per Share
(EPS) of BBL has increase the same manner from Tk 23.16 in 2004 to Tk. 38.54 in 2005
and Tk. 63.31 in 2006 per share, representing increase of 64.43% and 66.41%
respectively.
While analyzing the financial performance related ratios it has been found that financial
performance of BBl was very satisfactory for the last two years. However finacial
performance during 2005 was low compared to preceding year. BBLs Net Income
Margin (NIIM) during 2005 was decreased to 5.46%from 6.85 % in previous year.
Return on average asset (before provision & tax) was 3.96% in 2005 against previous
years return of 4.41%. Return on average equity (after tax) was 26.25% in 2006 (20.04%
in 2005). The above return of BBL was higher than the return of peer average.
Income portfolio of BBL is yet to be diversified. Interest income has been dominating as
single source of income in the portfolio. Contribution of interest income was 55.72% of
income portfolio in 2006 (51.76% in 2005), indicating huge dependence on interest
income.
Internal and External source of Cash

(As per Audited Accounts amount in TK)
(1) Internal Source of Cash
31-03-06
Ordinary Share
500,000,000
Capital
Preference
150,000,000
Shares
Statutory
135,564,816
Reserve
Surplus in
Profit & Loss
226,006,069
Account
Total
1,011,570,885
31-12-05
31-12-04
31-12-03
500,000,000
500,000,000
405,020,000
58,396,570
19,860,550
224,490,340
70,346,259
(9,095,940)
782,886,910
590,206,809
395,924,060
(2) External Source of Cash

Borrowing from
Bangladesh
Bank, other
Banks &
Financial
Institutions
1,473,608,334
1,473,391,667
568,208,333
415,650,000
Deposits And
Other Accounts
14,752,674,457
13,409,010,390
8,168,978,866
3,497,302,616
Other Liabilities
1,375,084,794
1,210,720,172
688,541,752
233,166,593
Total
17,601,367,585
16,093,122,229
9,425,728,951
4,146,119,209
Grand Total
18,612,938,470
16,876,009,139
10,015,935,760
4,542,043,269
Source: BRAC Bank Prospectus
The emergence of BRAC Bank Limited is an important event in the countrys financial
sector at the inception of financial sector reform. The authorized capital of PBL is Tk.
1000 million and paid up capital of the same bank is Tk. 500 million.
Shareholding Structure:
Shareholders
Percent
BRAC
31.74%
IFC
9.50%
Shore Cap International
8.76%
General Public through IPO
40%
Non-Residents Bangladeshis
5%
Mutual funds through IPO
5%
Total
100%
The Chairman of the Bank is Mr. Fazle Hasan Abed. Now the Managing Director of the
bank is Mr. A. E. A. Muhaimen. The bank has made a reasonable progress due to its
visionary management people and its appropriate policy and implementation.
A COMPARATIVE STATEMENT OF INCOME & EXPENDITURE

Income:
A comparative income position of the Bank for years ended 31 st December 2006 & 2005
are as follows:
DESCRIPTION
Net Interest Income
Income from Investment
Commission,
Brokerage
Exchange
and
31-03-2006
31-12-2005
1,157,615,437
607,331,119
400,080,011
292,067,158
515,404,192
271,073,023
Other operating income

Total operating income
4,325,882
2,846,359
2,077,425,522
1,173,317,659
Expenditure:
A comparative operative expense position of the Bank
for the years ended 31 st
December 2006 & 2005 are as follows:
Description
31-03-2006
31-12-2005
Total operating Expenses
1,027,018,495
592,999,647
Profit before provision
1,050,407,027
580,318,012
344,920,600
239,413,598
125,300
544,313
705,361,127
340,360,101
Provision for loans & advances

Provision for other
Total Profit before Tax
Source: BRAC Bank Prospectus
Departments of BBL
Human Resource Department
This department is the heart of BRAC Bank Ltd. Ms. Tahnyat A. Karim is the Head of
HR. There are two wings of the bank one being the business and the other one being
operation. Our managing director and CEO Mr. A. E. A. Muhaimen directly looks after
the business whereas Executive Vice President and COO Mr. Kaiser Tamiz Amin directly
monitors the operations. In the top management team there are 3 senior Vice Presidents, 2
Vice Presidents, 7 Senior Assistant Vice Presidents, 2 First Assistant Vice Presidents and
about 5 Assistant Vice Presidents. With this rich management structure BBL has
continued to keep its image as the fastest growing bank for the past 3 years. The HR
department mainly deals with the supply of efficient and adequate manpower to various
departments. They religiously and tactfully undergo different innovative recruitment
processes deemed to cater the growing demands of the bank.
Secured Remittance Services Department (SRS)

BBLs main target market is SME and remittance. Owing to fact that RMG and
remittance are to booming factors in the economy in recent times, BBL efficiently strives
to tap this sector. Thus this shows how important is this department for the bank. Mr.
Naushad Hosain is the head of this Department. They take into account all the cash
inflow and outflow. Now, considering the actual meaning of remittance it is seen that
Remittances are transfers of money by foreign workers to their home countries.
Remittances contribute to economic growth and to the livelihoods of needy people. As
remittance receivers often have a higher propensity to own a bank account, remittances
promote access to financial services for the sender and recipient, an essential aspect of
leveraging remittances to promote economic development.
Payment Service Department (PSD)

Essentially it is the back office of SRS Mr. Syed Omar Faisal Omar is the senior manager
of this department. This department closely monitors secured transfer of fund. Western
Union Money Transfer is another key part. Via this service people from any part of the
world can transfer money. This process needs Nostro accounts for smooth operation. At
the same time with the help of corresponding banks to all the unreachable locations can
be covered. BRAC BDP offices also act as channels for faster delivery. Basically, the
payments that done over the counter are dealt at the BRAC BDP offices. Among many
things Nostro accounts managements with their mother accounts is one of the major
challenges. Some times cash delivery and other such inconvenience cause severe
harassment and prove to be quite a challenge. But the efficient people of this department
face all those situation very bravely.
Corporate Department
The corporate Banking Division provides a full range of commercial banking products
and services. BBLs corporate department exists to provide both banking services and a
financial partnership with local large and medium corporate partners, trading houses and
joint ventures. The head of this department is Mr. Khwaja Shariar. BBLs corporate
segment has created its market niche by providing high quality service, value of
innovative solutions, level of trust with its clients are Debt Capital, Equity Capital,
continual relation support and financial markets.
The main object is to provide a large range of financial services professionally, efficiently
and competitively to achieve pre-eminent position in chosen market. By adapting certain
business strategies this department plans to capture the market. At this point in time they
plan to concentrate business in areas like Motijheel, Nawbabpur Gulshan, Dhanmondhi,
Uttara, Karwan Bazar and in two cities of Chittagong. They have set their target market
too and they are namely:
1.
Pharmaceuticals, toiletries, chemicals, and pesticides.
2.
Power generation, oil exploration.
3.
Edible oil.
4.
Bulk trading.
5.
Cement.
6.
Garments and all its backward and forward linkage.
7.
Food processing and beverage industries.
8.
Cables and cable wares.
9.
Information Technology.
10.
Health Service Industries.
11.
NGOs
12.
Import/Dealers of machineries.
13.
Educational institutions.
14.
Telecommunication.
15.
Tea.
16.
Ship breaking.
Financial Administration Department (FAD)

The major activities of FAD are as follows:
1.
Maintains the General Ledger and other books of accounts.
2.
Prepare financial statements like Balance a Sheet, Profit & Loss Account, Cash
Flow statement of Changes of equity, Liquidity statement etc.
3.
Payment of employees: bonus, conveyance, and staff provident fund.
4.
Payment to suppliers.
5.
Tax issues for Bank: Corporate tax, Personal (Staff) tax.
6.
VAT payment.
7.
Inspection and Audit management.
8.
Generation of MIS reports.
9.
Budgeting and financial planning, usually of 5 years.
10.
Periodic Bangladesh Bank returns submission.
11.
Reconciliation.
12.
Chart of accounts management.
Risk Management Department
By definition risk is a concept used to express uncertainty about events and their
outcomes that could have a material effect on goals of the organization. Since liabilities
comes before asset so banks should constantly be aware that it is not their money or asset
that are dealing with. It is actually publics property and asset. This department looks into
different legal issues such as regularity compliance with Bangladesh Bank, internal
compliance and so on.
Types of risks for BBL defined by this department are as follows:
1.
Asset liability management risk.
2.
Foreign exchange dealing risk.
3.
Credit management risk.
4.
Money Laundering Risk.
5.
Internal Control & Compliance risk.
SME Banking Department

The most valuable natural resource of Bangladesh is its people. As a nation we struggled
for our independence and now the attainment of economic uplift is the main goal. This is
one of the most important departments of the bank with the objective of giving loan to the
low yet dedicated entrepreneurs, however it is noted that not all entrepreneurs are
encouraged equally such as cigarette or alcohol business are not entertained. Ms. Farzana
Chowdhury is the Head of SME. This department includes about 31 unit offices and 4
team leaders. More precisely the importance of SME can be stated and they are: firstly
employment of medium to low skilled workers, secondly increase cash flow in rural or
semi urban areas, thirdly poverty reduction, fourthly reduce urban migration and finally
development and formulation of linkage. For constant monitoring purpose there are zonal
officers under whom there are 4-5 unit officers. SME unit follows decentralized banking
that is all loan are disbursed in the field.
Retail Banking Department

Along with SME, SRS, Corporate, treasury and direct sale the Retail division plays a
very vital role in the success of BRAC Bank. The head of this department is Mr.
Saifuddin M. Naser. Its noted that Retail Banking brings in the most fund in the bank and
BRAC Bank is the pioneer of this type of banking. This year they have a target of 44
crores excluding sales.
Customer Service Delivery Department (CSD)

This department caters to the needs of the clients in various manners. It can be considered
as the direct product delivery source of the banks its deals with production of
chequebook, ATM cards, salary disbursements etc. The head of this department is Mr.
Siddique Bin Zia. They essentially focus on customer orientation. Some of the functions
of this department are as follows:
1. Data Entry: here all the information of accounts opening forms is entered into the
database. This bank uses Millennium Banking Software for its daily operations
and database management. It is important to keep KYC in mind while opening
any account for any particular customer.
2. Chequebook publication: this department publishes all the requisite chequebooks
for its clients.
3. ATM Card Production: there are basically three types of ATM cards and all of
these are produced here as per the need of the bank. The cards are namely;
Classic, Co brand (ALICO, AARONG, DiaGold) and Bizness where up to Tk
50,000 can be drawn per day.
4. Signatures scan: In the accounts opening form a card it provided for the
customers signatures. This card is taken separately and the signature of the
customers is scanned along with his/her photograph. This ensures authentication
of the customers signature and enables banks complete security against any
signature forgery.
Asset Operation Department (AOD)

This department deals with disbursement of SME and act as beck office to Treasury
department. Loans thus essentially it performs a very crucial task for the bank. The head
of this department is Mr. Shah Alam abhuiyan. Now looking at the true meaning of
liabilities it is seen that it is the summation of stakeholders equity and depositors fund,
which in this case is big amount for the bank. And assets of bank include loan, banks
investments and advances. They borrow out idle fund to the clients with a margin kept
aside in the form of interest. Actually the business of bank is the spread between the
lending interest rate the borrowing interest rate.
There are certain things that are needed in order to get loan from BBL, the first and
foremost thing is a CIB report of the borrower by Bangladesh Bank. Based on this
document loan is sanctioned. There are three major issues related. First is loan
Application, second is the Borrowers deposit and third one the CIB report result can be of
the following forms:
1.
NIL:
2.
UC/ STD: the status is positive
3.
SMA: 3-5 installments defaulter
4.
SS: 6-12 installments defaulter
5.
DF: 12-18 missed installments
6.
BL: over 18 installments missed
Impaired Asset Management Department (IAM)

Where there is loan there is always a host of defaulters. This department deals with these
kinds of cases. This department has started its journey in recent times. The main purpose
of this department is to recover bad debt and in turn reduce loss of the bank. Essentially
after 6 installments failure or so the client is considered to be an IAM case. When a client
is seen to start to pay installments timely then this client is handed over to this
department. The first thing that this department does is to try to contact him. Letter is sent
to make him aware of the fact that he has become a defaulter. Next if he/she has become
a defaulter and if he/she does not respond or contact the bank then another legal notice is
sent. Many a times legal notice compels the client to make full payment however in worst
scenario case is used against the defaulter.
Treasury Department
Front
The main clients of treasury are as follows:
1.
Internal
2.
SME
3.
Retail
4.
Corporate
5.
Trade Finance
6.
External
7.
Central Bank and Scheduled banks
This is the backbone of the bank. This department plays the vital role in success of BBL.
Mr. Rahmat Pasha is the head of Treasury. This department basically deals with two types
of market namely money market and foreign exchange market. However, one of the
major tasks of treasury is to maintain relationship with the Central Bank.
Back
The whole objective of this section is to reduce risk. It is more formally known as
Treasury operations and Financial Institution. They consider retail and Corporate as
liability departments and thus buy from these departments. Whereas sells is occurred in
SME, and so on, this section essentially monitors and controls. They go about in taking
risk in a more calculated manner. Capital Allocacy rate (CAR) is calculated and
accordingly transactions are made.
The prime roles of treasury operations are:
1.
Monitoring Regulatory Limits
2.
Processing MM deals and FX deals
3.
Monitoring credit limits and fund movement
4.
Regulatory reporting and calculation of transfer pricing
Cards Department
It is a department with a high target this year. It has started its journey on April 05, 2002.
Lanka Bangla formally known as Vanik does all kinds of processing and preparing cards.
BBL uses VISA cards and it got membership in October 20, 2006. Types of membership
offered to the clients of BBL are either Primary membership or Associate Membership
Credit cards charge highest charge among all the banks products. Per cards production
cast around Tk. 80. This year their target is to introduce 40000 cards in the market. This
can be achieved by offering clients of the bank in different departments like SME, FDR
or DPS holders.
External Affairs Department

Mr. Imtiaz Ahmed is the head of external affairs. This department is essentially acts as the
face of the bank. All the external issues related to the outside world are all dealt here.
Starting from dealing with the media, promoting brand image, publicizing BBL in a much
broader sense and in turn dealing with journalists, newspapers and other social bodies all
are taken care of in this department. Along with these an extra effort is made to satisfy all
corporate social responsibilities and abide by all regulatory affairs. This department needs
to maintain compliance with Ministry of Finance, NBR and central bank regulations.
General Infrastructure Department (GIS)

This department supplies all essential things needed daily all throughout the bank.
Starting from pen, paper requisition to logistic support GIS deals with the essentials of
the bank. The main segments of GIS are operations, logistics, procurement, premises, and
maintenance and finally SME administration. In order to ensure proper standard there are
5 different levels of auditors namely Bangladesh Bank, BRAC, ShoreCap, and internal
audits.
The main operations of GIS are:
Security
Reception
Dispatch
Store
ID and Access control
Help Desk
PABX operation
GP corporate affairs
Telephone management
Opening of quotation.
Business Units
There are five different business units generating business BRAC Bank Limited:
i)
SME (Small & Medium Enterprise) Banking
ii)
Retail Banking
iii)
Corporate Banking
iv)
Probashi Banking
All the units are being operated in a centralized manner to minimize costs and risks.
Products and Services of these business units

BRAC Banks products and services are two prong. Bank has a strong SME focus and
thus developed a wide range of SME business products; these are customized for specific
localized small and medium business requirements across the country. The SME loan
products cover a range of rural, semi-urban & urban financial needs in the market. BRAC
Bank has pioneered the manner in which the SME finance business is conducted in this
country. The Bank has developed various innovative products that are of value for its
SME clients, such as offering collateral-free loans up to BDT 10lakh; developing a
special a loan (Aroggo) for doctors to purchase medical equipment Pathshala loan for
expansion of schools, etc.
In addition, BRAC Bank Limited, as a full commercial Bank, has various retail consumer
loans for the general public and corporate loans and services for its high-worth corporate
clients. The Bank has also brought about major innovation in its retail and savings
products too, namely the Interest First Deposit Scheme where the client can receive the
interest on the deposit scheme upon opening the account had created a sensation when it
was launched in the market. The product details of BBL are given below. The interest rate
of these products mostly varies for clients to clients.
SME Products:
Anonno Rin
BIZNESS Account
Apurbo Rin
Pathshala Rin
Aroggo Rin
Digoon Rin
Prothoma Rin
Cash Secured Loan
Bizness loan
Proshar:
Trade Plus
Super Supply Loan
SME products are discussed in details in the Analysis of SME loan of BRAC Bank
part of this report.
Retail Banking:
Loan Products:
Salary Loan
An individual having extra 15 month's salary can get BRAC Bank Salary loan, its
a loan against ones salary. He/she should be a salaried individual working in
Bangladesh.
NoW Loan
In case one needs to purchase home appliances, furniture, computer or other
consumer durables for personal use, BBL offers the most appropriate solution
with its NoW loan.
Car Loan
BRAC Bank offers car loan scheme for purchase a brand new car or a
reconditioned car.
Teachers Loan
BRAC Bank Teachers' Loan provides a wedding or a dream holiday, financing a
business or surviving an emergency.
Study Loan
If any one wants to go abroad for study then BBL provides them the money
supply by study loan. The parents of that student should have Tk 25000 earnings
per month.
Travel Loan
An individual with minimum monthly income of TK 15,000, aged between 25 to
53 can take this loan for making a trip abroad.
Credit Card Loan

Anyone can get a loan from BRAC Bank if s/he has a credit card. Loan can be
used for any reason from buying consumer goods, automobile to vacation
expenses.
Top Up Loan
BRAC Bank Top Up Loan is easy loan for good borrower. This unsecured loan is
designed to meet various personal needs without mentioning the purpose at all.
HighFlyer Loan
BRAC Bank's HighFlyer Loan is for airline, GSA & Travel Agency professionals
to make your long cherished desires an absolute reality. Minimum loan size is
BDT 50,000; loan is available up to BDT 500,000.
Secured Loan/ OD
This is a special scheme that allows people to avail cash at nominal interest rates.
This loan is for all BRAC Bank account holders aged from 21 to 65 defining all
income groups - salaried employees and self-employed business people with
security in their possession. Maximum amount of loan can go up to Tk 5 crores.
BBL even allows loans up to even 100% of the value of the clients securities
(conditions apply).
Doctor's Loan
BRAC Bank has introduced Doctor's Loan, an exclusive loan facility for the
Doctor's fraternity. Now practicing Doctor's can avail this loan very easily to meet
their professional needs.
Cards:
ATM/Debit Card:
Co-Branded Card (Aarong, Alico, DIA Gold)
Deposit Products:
Fixed Deposit
Opening Requirements
A Current Account or Savings Account
General Features
A term deposit with a guaranteed monthly return on investment
Competitive interest rates

Early encashment flexibility
Secured Loan and/or Secured Overdraft eligibility
Interest Features
Rate of interest on Deposits: With effect from 20.10.2006:
FDRs:
Tenor
1 month
3 months
6 months
12
months
24
months
36
months
100K999K
9.00%
11.00%
11.00%
Principal Amount & Rate of Interest

1000K5000K10000K50000K4999K
9999K
49999K
99999K
9.00%
9.00%
9.00%
9.00%
11.00%
11.00%
11.00%
11.00%
11.00%
11.00%
11.00%
11.00%
100000K
& above
9.00%
11.00%
11.00%
11.00%
11.00%
11.00%
11.00%
11.00%
11.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
100K999K

1000K5000K10,000K & +
4999K
9999K
10.75%
10.75%
10.75%
10.75%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
ABIRAM
Tenor
12
months
24
months
36
months
InterestFirst
Tenor
3 months
6 months
12 months

100K & Above
10.75%
10.75%
10.75%
ABIRAM
PLUS
Tenor
6 months
12
months
24
months

1000K4999K
11.50%
5000K9999K
11.50%
10000K9999K
11.50%
11.50%
11.50%
11.50%
11.50%
10.50%
10.50%
10.50%
10.50%
100000K & +
11.50%
Step Up FD
Tenor
1st year
2nd year
3rd year

100K & Above
10.00%
10.50%
11.00%
SAVINGS
Maximizer
Non-maximizer
Rate
7.50%
6.50%
Corporate
FDR
Tenor
3 months
6 months
12 months
24 months

5000K9999K
11.00%
11.50%
12.00%
10.50%
10000K49999K
11.00%
11.50%
12.00%
10.50%
50000K & +
11.00%
11.50%
12.00%
10.50%
* Interest Rate for FDR below Tk 1.00 lac will be 8%
Interest Calculation: on the basis of term (1month to 3 year) deposit amount

Interest Accrual: upon maturity
Interest Payment: upon maturity
Related Conditions and Charges

Early Encashment Charge: no penalty charge; interest will be paid at prevailing
Savings Account rate if FD is maintained for at least 3 months
Secured Loan and/or Secured Overdraft eligibility: up to 95% of Abiram value
Secured Loan and / or Secured Overdraft eligibility: up to 80% of IFFD value
InterestFirst
Fixed Deposit
In this scheme people don't have to wait till maturity to receive interest on Fixed
Deposit. BRAC Bank InterestFirst Fixed Deposit lets everybody draw the interest
instantly at the time of deposit.
Abiram Account
BRAC Bank 'Abiram' Account is a special type of Fixed Deposit scheme, which
offers the flexibility & comfort of having a guaranteed monthly return on the
investment. With BRAC Bank 'Abiram' Account, individuals can ensure a safe &
steady return on their investment.
EZee Account
BRAC Bank offers EZee Account, a non-cheque interest bearing account for
small savers who are in frequent need of transaction. People don't need to write a
cheque or stand in a long queue to draw their own money from BRAC Bank. they
can get an ATM card to operate their account round the clock.
DPS
BRAC Bank's Deposit Premium Scheme is a savings plan that adds value
Monthly Installment
Amount (BDT.)
500.00
1000.00
Maturity amount after completion of all regular

installments payment*
4 Years
28,667.00
57,334.00
7 Years
58,650.00
117,300.00
11 Years
116,603.00
233,207.00
14 Years
179,550.00
359,101.00
Savings Account
A regular savings account offering people interests on their deposit amount.
Short Term Deposit

Its a deposit scheme to give returns on savings. This scheme requires a minimum
balance of Tk. 100,000
Current Account
BRAC Bank's Current Account is a normal checking account, giving people the
option to deposit and withdraw money for their day-to-day needs.
Salary Account
BRAC Bank Salary Account is a payroll account for Employers and Employees.
Any organization can apply for Salary Account to enable easy disbursements of
salary and get other benefits.
Step Up Fixed Deposit

BRAC Bank 3-year Step Up Fixed Deposit works like normal Fixed Deposit
except with one unique feature added to it i.e. the customer will get a guaranteed
0.5% increase in the rate of interest upon completion of each year as per the
following schedule:
11.00% for the 1st year
11.50% for the 2nd year
12.00% for the 3rd year
Corporate Banking:
Corporate Loan Products:
Overdraft
This is an on-demand credit facility designed to meet day-to-day operational

activities of the business, including purchase of raw materials and expenses.
Term Loan
Short Term Loan/ Revolving Loan: This scheme is to meet different short-term
fund requirements of the client. Payment of duty, Tax, VAT and other expenses
related to the release of goods from customs through pay orders in the name of
customs authority or Bangladesh Bank cheque is payable through this scheme.
Lease Finance
This is one of the more convenient long-term sources of acquiring capital
machinery and equipment. The client is given an opportunity to have exclusive
rights to use an asset, for an agreed period of time, against payment of rent.
Loan Against Trust Receipt (LATR)

This is an advancement against a Trust Receipt provided to the client when the
documents covering an import shipment are given without payment. Under this
system, the client will hold the goods of their sale proceeds in trust for the bank,
until the loan allowed against the Trust Receipt is fully paid.
Work Order Finance

BRAC Bank provides Work Order finance facility for its valued clients. Through
this arrangement, clients can avail loan facilities against valid Work Orders up to a
certain proportion.
Medium Enterprise
The products offered under this sort of financing are versatile in nature and each
product is tailored according to the need of the borrower, under certain
parameters. The range of organizations this sort of financing caters to include
proprietorship concerns, private limited companies, educational institutions as

well as NGOs.
Trade Finance:
Letter of Credit (LC):

This facility is related to import or local purchase of different items. It is also
provided for the import and export of goods (such as raw materials, machinery,
equipment, any trading item).
Letter of Guarantee (LG):

To meet different contractual requirement such as participating in Bid,
Performance Guarantee and Advance Payment guarantee for different contractual
requirements.
Corporate Cash Management:
NCS
BRAC Bank will collect bills through its Bills Pay Machines in the strategic
locations of the city and also at the correspondent branches, where the BRAC
Bank branches are not available and at the booths.
PTS
PTS will allow people to disburse all kinds of payments anywhere in the country
through its own branch network in Dhaka, Chittagong, Sylhet, Savar, Feni and the
partner bank branches all over the country.
Advantages to Employers
Salary Upload: Salary upload through a single cheque. All that employers have
to do is give consolidated cheque of the total salary amount to BRAC Bank and a
break-up of the disbursements to the employees in soft and hard copy format.
Multi-Location Salary: Multi-Location Salary Disbursal is possible within
BRAC Bank Network. With BRAC Bank, salaries of all employees located
across Bangladesh can be uploaded from a single point upload.
Affordability: Have anyone ever thought about how much time an organization
spend managing payroll? This equates to time taken away from revenueproducing activities. Outsourcing with the right payroll service provider will save
its time and money.
Accuracy: Even with the simplest of payrolls, it's easy to make mistakes.
Without current and on-going training in payroll compliance, a company could
face unhappy employees to boot.
Privacy: It can be embarrassing and detrimental if the wrong eyes fall on the
salary cheques. Confidentiality is much easier to maintain when payroll is
outsourced.
MIS: Payroll companies offer a wide array of standard reports along with these
invaluable reports which are neat and concise.
Professionalism: What better way to show employees that their company is
professional and secure? By outsourcing payroll coupled with all benefits of
BRAC Bank savings accounts will enhance its successful image and will make
employees happy.
Cash Management Services

BRAC Bank's National Collection Services (NCS) is designed to assist corporate
with nation wide collection requirements by providing faster funds availability in
a cost- effective manner.
Cash Collection Services: Through BBLs Cash Collection Services they collect
cash directly from its clients offices/business premises. The whole process is
arranged with executive logistic services
Drop Box Facility: On request, BBL can install Drop Box at its clients office
which can be used for depositing cheques or any instruction. BBL representative
will visit those office and clear the box every day.
Probashi Banking:
Probashi Products:
Probashi Current Account

It is ideal for Probashi Bangladeshis who do not wish to earn interest due to
religious reasons. This account also comes with cheque book and ATM card and
is ideal for regular transaction.
Probashi Savings Account

This account provides interest which is paid in June and December of each year.
This account comes with a cheque book and ATM Card and is ideal for Probashi
Bangladeshies who want to save.
Probashi DPS
To secure Probashi Bangladeshis hard-earned money, BRAC Bank introduces
the ideal saving scheme for Probashi Citizens.
Probashi Fixed Deposit

A fixed deposit account allows Probashi Bangladeshis to deposit their money for
a set-period of time, there by earning a higher rate of interest in return. Fixed
Deposits can be made from 3 months to 3 years. Interest is paid on the maturity at
a very attractive rate.
Probashi Shubidha (NRB beneficiary) Account

This is a specialized account for Non-Resident Bangladeshis where the remitter
can open an account for the Beneficiary. The beneficiary can then avail all the
services offered by BRAC Bank such as: SMS Banking, Phone Banking, Internet
Banking etc. When the beneficiarys account is setup, the Remitter just requires
the account number, and amount of money to be sent to make a safe, fast and
efficient transaction. Transaction is completed within 6 hours of receiving
instructions.
Information Technology Of BBL

Within a short period of operation, BBL has built up satisfactory level of soft and hard IT
infrastructure for smooth banking business operation and quick decision- making process
of the management team. The company uses MBS banking software with required
modules. The above modules generate some MIS report for internal and external
purposes. In addition, the Bank uses the Phoenix Software for ATM and Access Card
management. The branches are linked with optical fiber or radio links. However, some
limitation has been found in MBS Banking Software for increasing demand of IT
support. The board already sanction fund for acquiring new powerful integrated banking
software from abroad.
Target Customer
As the main product of BRAC Bank Ltd is SME, BRAC Bank has a strong SME focus
and has developed a wide range of SME business products, these are customized for
specific localized small and medium business across the country. The SME loan products
cover a range of rural, semi-urban and urban financial needs in the market. Besides them,
industries, transport business, education institutions, medical centers, marine business,
any other high worth companies, individuals, etc are also the main customers of the bank.
The bank has the ATM card and Credit card facility, so the users of the same are also in
target.
Chapter -3
Analysis of SME loan in BRAC Bank
SME Banking
The most valuable natural resource of Bangladesh is its people. As a nation we struggled
for our independence and now the attainment of economic uplift is the main goal. Micro
lenders are working here in the financial field, providing very small amount and on the
other hand regular commercial banks have been providing bigger amount of loans to
larger industries and trading organizations. But the small and medium entrepreneurs were
overlooked. This missing middle group is the small but striving entrepreneurs, who
because of lack of fund cannot pursue their financial uplift, as they have no property to
provide as equity to the commercial banks. With this end in view-BRAC Bank was
opened to serve these small but hard working entrepreneurs with double bottom line
vision. As a socially responsible bank, BRAC Bank wants to see the emancipation of
grass-roots level to their economic height and also to make profit by serving the interest
of missing middle groups. 50% of our total portfolio usually collected from urban areas,
are channeled to support these entrepreneurs who in future will become the potential
strength of our economy. BRAC Bank is the market leaders in giving loans to Small and
Medium Entrepreneurs.
SME Products:
Anonno Rin
Anonno Rin is a business loan designed to finance small scale trading,
manufacturing and service ventures, especially to help small and medium
entrepreneurs to meet their short-term cash flow shortages and bridge the fundflow gaps.
Eligibility
Entrepreneurs with
Business must be a
minimum 2 years experience in the same line of business

going- concern with more than 1 year in operation
Loan Limit:
From BDT 3 lac to BDT 9.5 lac
Features
Loan without mortgage

Loan for Working Capital Finance and/or fixed assets purchase
Easy repayment system of monthly installment or Single Installment
For excellent borrowers who have paid or are paying in due times, BBL offers
discounted rates
Quick, quality banking throughout the country
BIZNESS Account
Bizness Account is an interest bearing current account for sole proprietorship
business Entrepreneur.
Eligibility
Small and medium sized business entrepreneur
Opening balance only BDT-10, 000.00
of a sole proprietorship business
Features
4% interest on daily balance

Smart Business Card
Cash withdrawal limit in ATM BDT 1,00,000 per day and any amount in POS
24 hour Access to ATMs/ POS
Tk-50, 000 withdrawn facility (per day) from ATM & Tk-100, 000 from POS
No Minimum Balance, No Ledger Fees, No hidden cost
Phone-Banking, Online Banking, SMS Banking, Internet Banking facility
Apurbo Rin
Apurbo is a loan facility for Small and Medium business. Apurbo loan has been
designed and targeted for relatively bigger business units requiring loan above Tk.
8 lacs to 30 lacs.
Eligibility
Entrepreneurs having a minimum of 3 years of some business
A business which must be a going concern for 3 years
activities
Loan Limit:
Starting from BDT 8 lac to maximum of BDT 30 lac
Features
Simple loan processing for expanding your business
Quick disbursement
Disbursement in one or two installments
Flexible monthly repayment plan
Pathshala Rin
Pathshala Rin is a loan designed to meet the needs of small and medium sized
private educational institutions, such as kindergartens, schools and colleges etc.
Eligibility
The
The
educational institution must be in operation for minimum 3 years

educational institute must be a profit making concern
Loan Limit:
Minimum
BDT 3 lac to maximum BDT 30 lac
Features
Loan upto 9.5 lacs without Mortgage
Loan for purchasing fixed assets
Easy monthly installment
Minimum documents
Easy & faster processing
Flexible interest rate based on security and loan amount
Aroggo Rin
Aroggo is a loan allowed to various Health service Provider like private clinics,
diagnostics centers and doctors' chambers. The product offers fixed assets
purchase financing under equated Monthly Installments.
Eligibility
Minimum 2(two) years in operation
Health center must be located in the same address for at least 6 months
Health center must be a profit making concern
Doctors having 5 years of experience can avail the loan in his/her personal
name
Loan Limit:
Minimum
of 3 lac to maximum of 30 lac
Features
Loan upto 9.5 lacs without Mortgage
Minimum documents
Easy loan processing
Loan repayment schedule is spread up to 3 years
Flexible interest rate based on security and loan amount
Digoon Rin
This is a double loan on your deposit. Now you do not need to encash your
savings rather you can take double amount of loan on your deposit for your
business expansion.
Eligibility
Entrepreneur
having minimum 2 years of business activities
The business which must be a going concern for 2 years

Cash security (BRAC Bank FDR) 50% of the loan amount.
Loan Limit:
Minimum
of 5 lac to maximum of 30 lac BDT
Features
Double amount of loan on your deposit
Attractive return against the deposit
Flexible repayment plan in monthly installment and single installments
Quick disbursement
Prothoma Rin
"PROTHOMA RIN" is a loan facility for small and medium sized business,
which are operated by women entrepreneur. The product offers terminating loan
facilities for the purpose of working capital finance and/or fixed assets purchase.
Eligibility
Entrepreneurs with minimum 2 years experience in the
Minimum 1(One) year of continuous business history
same line of business
Loan Limit:
From minimum
BDT 3 lac up to maximum of BDT 9.5 lac
Features
Loan without Mortgage
Easy repayment system
Minimum documents
Easy & faster processing
For excellent borrowers who have paid or are paying in due times, we offer
discounted rates
Cash Secured Loan
"Cash Secured Loan" is a loan facility for small and medium sized business.
There are two types of loan facility in the product i.e. Secured Loan and Secured
Overdraft. These facilities are fully secured by fixed deposit of BRAC Bank.
Eligibility
6 (Six) months experience in the same line of business
BRAC Bank FDR minimum 100% of loan amount
Loan Limit:
From minimum
BDT 3 lac up to maximum of BDT 30 lac
Features
Loan against FDR
Flexible interest rate based on FDR interest rate and loan value
Loan for starting new business
Bizness loan
Bizness loan is an equated monthly loan facility for all types of business who
have healthy bank transactions for the purpose of working capital finance and/or
fixed assets purchase.
Eligibility
Healthy bank transactions
Minimum 3 (three) years of continuous business history
BRAC Bank FDR 50% of the loan amount for new loan
and 30% of the loan
amount for repeat loan

Loan Limit:
From minimum
BDT 10 lac to maximum of BDT 50 lac
Features
Loan against FDR value
Monthly installment system up to 60 months
Borrower having loan with other financial institute can also avail Bizness Loan
Attractive rate of interest on FDR
Proshar loan
"Proshar" is a loan facility for small & medium sized manufacturing business. The
product offers loan facilities for working capital finance and/or fixed assets
purchase.
Eligibility
Entrepreneur
must have minimum 2 years experience in the same line of

business
Minimum 2 (Two) years of continuous business history of the enterprise
Loan Limit:
From minimum
Features
Without Mortgage up to Taka 9.50 Lacs
Easy Monthly Installment
Favorable Interest Rate based on amount and security
Easy & Faster Processing
Trade Plus
Trade plus is a composite facility for small & medium sized import-oriented
businesses to meet their trade finance requirements.
Eligibility
An
import oriented business having valid trade license, Import registration

certificate, V.A.T. Registration certificate & T.I.N. Certificate.
Loan Limit:
LC (One-Off): BDT 3.00 Lac BDT 30.00 Lac
LC (Revolving): BDT 5.00 Lac BDT 30.00 Lac
LATR: BDT 3.00 Lac BDT 30.00 Lac
Revolving Loan: BDT 5.00 Lac BDT 30.00 Lac
Overdraft: BDT 5.00 Lac BDT 30.00 Lac
Features
Two types of Letter of Credit Facilities One Off LC and Revolving LC
Two types of post import finance facility LATR & Revolving

Overdraft facility for day to day working expenses
Loan tenure of Letter of Credit 180 days
Flexible repayment system
loan
Super Supply Loan

Super Supply Loan is a loan facility for Suppliers of various large retailers,
marketing companies, manufacturing companies and various corporate houses.
This products main objective is to help various Suppliers to meet their financial
requirements.
Eligibility
Entrepreneur having 2 (two) years of experience in
Operating the current business for last 1 (one) year
the same line of business
Loan Limit:
From minimum
Features
Composite fatality of both Overdraft and Revolving limit
Customer can withdraw revolving loan amount as desired
Convenient repayment system of Revolving limit i.e. equal monthly installment
and single installment.
SME Network Coverage
Organizational layout of BRAC Bank SME loan

1. Credit Division
2. Business Development Division
3. MIS Division
Reason of SME program from the view point of BRAC Bank:

The main focus of BRAC Bank is to develop human and economic position of a country.
Its function is not limited only to providing and recovering of loan. But also try to
develop economy of the country. So, the reasons for this program from the viewpoint of
BRAC Bank Ltd. are:
a. Support Small Enterprise: The small enterprise which requires 2 to 30 lacks

taka loan, but these has no easy access to the banks/financial institutions. For
example: If a small enterprise requires 3 to 8 lacs amount of loans then no
organization is ready to provide that loan without any kind of mortgage.
b. Economic Development: Economic development of a country largely depends on

the small and medium seal enterprises. Such as, if we analyze the development
history of Japan, the development of small & medium scale enterprises expedite
the development of that country.
c. Employment Generation: The bank gearing employment opportunities by two

ways:
Firstly, by providing loan to the small enterprises expanding, these businesses
require more workers.
Secondly, Small & Medium Enterprise (SME) program requires educated and
energetic people to provide savories to entrepreneurs.
d. Profit Making: SME program is a new dimensional banking system in the

banking world. Most of the CROs are providing door to door services to the
entrepreneurs. The entrepreneurs are satisfied by the service of this bank and the
bank also makes more profit.
e. Encourage Manufacturing: A focus of BRAC Bank is to encourage

manufacturing by the entrepreneurs who are producing by purchasing various
types of materials. CROs try to educate them to produce material if possible
because if they can produce in line of purchase profits will be high.
f. Spread the experience: Another reason of BRAC Bank is to spread the

knowledge of regarding various businesses. The customer services officer get
knowledge from various businesses and try to help the entrepreneurs who have
shortage of the gathered knowledge by CROs.
The CROs who are the driving force of SME division of BRAC Bank also gather
knowledge about various businesses and make stronger knowledge base.
Selection of Potential Enterprise for SME Loan

Enterprise Selection Criteria
The success of SME will largely depend on the selection of a business and man behind it.
In terms of the business (Enterprise), the following attributes are sought:
1. The business must be in operation for at least one year
2. The business should be environment friendly, no narcotics or tobacco business
3. The business should be legally registered, i.e., valid trade license, income tax or
VAT registration, wherever applicable.
4. The business should be in legal trade, i.e.; smuggling will not be allowed or
socially unacceptable business will not be entertained.
5. The business must have a defined market with a clear potential growth
6. The business must be located ideally close to the market and the source of its raw
materials/suppliers. It should have access to all the utilities, skilled manpowers
that are required.
7. Any risk assessed by the management in turn will become a credit risk for the
bank. So effort should make to understand the risk faced by the business.
Entrepreneur Selection Criteria

In order to understand the capability of the management behind the business, the
following should be assessed:
1. The entrepreneur should be physically able and in good health, preferably
between the age of 25-50. If he/she is an elderly person closer to 50, it should be
seen what the succession process will be and whether it is clearly defined or not.
2. The entrepreneur must have the necessary technical skill to run the business, i.e
academic background or vocational training, relevant work experience in another
institution or years of experience in this line of business.
3. The entrepreneur must have and acceptable social standing in the community
(People should speak highly of him), he should possess a high level of integrity
(Does not cheat anyone, generally helps people), and morally sound (Participates
in community building).
4. The entrepreneur must possess a high level of enthusiasm and should demonstrate
that he is in control of his business (Confidently replies to all queries) and has the
ability to take up new and fresh challenges to take the business forward.
5. Suppliers or creditors should corroborate that he pays on time and is general in
nature.
6. Clear-cut indication of source of income and reasonable ability to save.
Guarantor Selection Criteria

Equally important is the selection of a guarantor. The same attribute applicable for an
entrepreneur is applicable to a guarantor. In addition he should posses the followings:
1. The guarantor must have the ability to repay the entire loan and is economically
solvent ( Check his net worth)
2. The guarantor should be aware about all the aspect of SEDF loan and his
responsibility
3. Govt. and semi-govt. officials can be selected as a Guarantor such as
schoolteacher, college teacher, doctor etc.
4. Police, BDR and Army persons, political leaders and workers, and Imam of
mosque can not be selected as a guarantor.
5. The guarantor should know the entrepreneur reasonable well and should
preferably live in the same community.
Basic Appraisal of Small &Medium Enterprise:

Business or project appraisal is a technique of evaluating and analyzing business from
various aspects, primarily the risks associated with that business enterprise. At the time of
appraisal of any manufacturing, trading or service related organization, factory or
industry; one has to perform a feasibility study on the different aspects. These are:
a. Management and Personal Aspects
b. Technical Aspects
c. Marketing Aspects
d. Financial Aspects
e. Social Economic Aspects
f. Security Aspect
a. Management and personal aspects: During the appraisal prosecute the Customer
Relation Officer (CRO) should endeavor to obtain details about the prospective
borrowers, some of which are:
i.
Business related information
ii.
Credit History
iii.
Liquidity Information
iv.
Management Background
In considering the above, one should look at the business is managed. The CRO should
also consider clients previous credit history like facilitates sought and availed, loan
repayment an overdue record, if any, etc.
One should also check the client bank account and amount of balance maintained.
Managements qualification, experience, successor and maintenance of records should
provided insight in to the business.
b. Technical Aspects: From a business perspective, this aspect deals with design of the
system in place, the operation of the business, the different type of physical resources
used, the technology used, the capacity to handle business and all other inputs (labor, raw
materials, utilities etc.)
Among the technical factors to be investigated during an appraisal are:
The size of project
The process, materials, equipment, and reliability of technical systems to be used
Location of projects
Sustainability of the plans, layout and design used
Total quantity of the goods /Service produced/Traded monthly
Environment of the business and its surrounding areas
Availability to various factors of production, both physical and human
Raw materials availability, price level and its variation to be considered
c. Marketing Aspects: A CRO should consider the following factors of a business before
making any loan commitment with a customer:
Total demand and supply of the products in the market that the business operates
in growth of sales and
Major marketing threats that the business may face.
d. Financial Aspects: This aspect allows us to check the financial health of a business,
through an analysis of the profit and loss account, balance sheet, cash flows, ratios and
requirement of working capital. If the collection of the financial data can be done
properly, then it may be able to make a somewhat realistic picture of the business
financial position. How ever, all the data collected must be cross-checked as much as
possible with the physical features of business.
The following things are considered and determined at the time of verifying the financial
feasibility of the business:
Current years profit/Loss of the business and probable profitability of business
after taking the loan
Determination of assets, liabilities and net worth of the manufacturing/ trading /
service institution before and after taking loan
Present net cash flow of the business after disbursement of loan is determined
The cash position of the institution
The source of income, production and other expenditure of the business probable
financial risks of the business
e. Socio Economic Aspects: Here the analyst like to observe the contribution of the
business to the countrys GDP, the employment generated, the sort of adverse impact of
the business on the environment, if an other benefit to the country.
f. Security Aspects: Along with observation of different aspects and views of the
projects, the CRO also see closely the aspects of the projects and ensure about the
reliability to the mortgaged property/assets.
Security Documentation against Loan

A document is a written statement of facts and a proof or evidence of particular
transaction between parties involved. While allowing any disbursements against credit
facilities to borrowers, it should be ensured that prior to any disbursements; security
documentation is fully and properly completed.
Purpose of Decorate Documentation and its Importance

Documentation is necessary for the acknowledgement of a debt and its terms and
conditions by the borrower and the creation of charge on the securities in favor of the
bank by the borrower. Correct and proper documentation allows a bank to take legal
measures against the borrowers in the time of non-payment of the debt.
If filing a suit with the courts against a default borrower becomes necessary, the court
will first review all documents. If any of the documents is found to be defect or
incomplete, the very purpose of security documentation will be defeated and a court
ruling in favor the bank can not expected. Proper care should, therefore, be taken while
completing security documentation.
Securities
The following listed securities may be obtained from borrower against loan to
enterprises, either individually or in a combination. It is really depends on the situation
and up to the bank what they would like to accept as security from the borrower as not all
the securities stated below are suitable:
Mortgage of loan and other immovable property with power of attorney to sell
Lien of Fixed Deposits receipts with banks and other non-banking financial
institutions, lined, these have to confirmed by the issuer ( Now these are rarely
accepted)
Lien of Pratirakshay sanchay patra, Bangladesh sanchay patra, ICB unit

certificates and wage earner development bond, all considered Quasi or near cash
items.
Lien of shares quoted in the stock exchange ( This is rarely accepted)
Pledge of goods (Banks are akin to stay away from such securities now a days)
Hypothecation of Goods, Book Debt & Receivables, Plant & Machineries
Charge on fixed assets of a manufacturing enterprise
Lien of cheque, Drafts and order
Lien of work orders, payment to be routed through the bank and confirmed by the
issuer.
Shipping documents of imported goods
Land related securities documentation process

Each SME unit office will lies with at least two local lawyers who will work on behalf of
the bank. These always will be employed whenever a loan sanction is accepted by a
borrower and where the security will be landed and immovable property.
Any one of the lawyers will be provided with photocopies of all the relevant land related
documents and while handing over show the original documents to them. The lawyers
will carry out checks of the originals and if satisfied returned to the borrower. The
documents generally provided are:
Title Deeds or Deed of conveyance otherwise known as Jomeer Dalil which

signifies ownership of a particular land.
Bhaya Dalil or Chain of Documents which signifies that the conveyance of titles
has been proper and legal.
Mutation Certificate if Khatian which signifies that the title if the land has been
duly registered in the Government/Sub-registerars records.
Duplicate Carbon Receipt or DCR
Latest Khajna or land rent receipt
Purchase such as CS Khatian, SA Khatian and BS Khatian
Mouja Map
Municipal rent receipts if the land falls within a municipal area
The lawyer will then carry out a search at the Sub-registrar of lands office to check if the
proffered land is actually registered in the name of the proposed mortgagor and whether
the said land is free from any encumbrances. The Sub-registers office, which means that
the land or immovable property can be mortgaged to the bank, then the lawyer will
provide his own opinion on the acceptability of the property, whether it is legally held
and explain the chain of ownership.
If all are acceptable, the lawyer will draw up the Mortgage Deed that will be registered,
the irrevocable power if attorney to sell the land and the Memorandum of Deposit of Title
Deed.
The lawyer will have the borrower or the Mortgagor, if different or 3rd party, sign the
documents in front of the Sub-registrar of land to register the mortgage, The CRO must
ensure that the receipt for the original Mortgage deed must be signed off (Discharged) at
the back of the receipt so that the bank may obtain the originals in the future. The
borrower will bear all the charges and will pay directly at the Sub-Registrars office
including the cost of the stamp paper required.
The cost of the lawyer will also be realized from the borrower be an account payee
cheque in favor of the lawyer and handed over to the lawyer straight away. The charges
related to the creation of mortgagee and other associated costs are incorporated in a
separated sheet and are attached herewith.
The CRO will have all other security documents, as sent by SME HO, signed by the
borrower and hand carry all the security documents including all the original land
documents and deliver those to the credit administration officer who will check the list of
documents and receive those through a check list in writing. The credit administration
officer once satisfied will prepare the disbursement memo to disburse the loan.
Type of mortgagees that are popular and usually accepted in Bangladesh:

I. Equitable Mortgage or Memorandum of Deposit of Title Deeds
It is created by a simple deposit of title deeds supported by a Memorandum of
Deposit of Title Deeds along with all the relevant land documents. All the searches
and verification of documents as stated above must be carried out to validate the
correct ownership of the property. This deed also provides the bank power to register
the property in favor of the bank for further security, if needed.
II.
Registered Mortgage
It is created by an execution of a Mortgage Deed registered irrevocably in favor of the
bank at the Sub-Registrar of lands office. This virtually gives the bank the right to
posses and self if accompanied with a registered irrevocable power of attorney to sell
the property executed by the owner of the property, in case of default.
Basic Charge Documents

Sanction Letter
Once a loan is approved, the borrower is advised by a Sanction or offer letter which
states the terms and condition s under which all credit facilities are offered and which
forms an integral part of there security documentation. If the borrower accepts, then a
contract between the bank and the borrower is formed and which both party are obligated
to perform. Accordingly, all other charge documents and securities are drawn up and
obtained. A standard sanction letter is attached herewith.
All documents shall be stamped correctly and adequately before or at the time of
execution. An un-stamped or insufficiently stamped document will not form basis of suit.
Stamps are of 4 (Four) kinds. These are Judicial, Non judicial, Adhesive and Embossed
impressed.
Documents to be executed (Signed) by the borrowers concerned must be competent to do
so in official capacity. Following precautions should be taken at the time of execution of
the security documents:
The signature on the documents should be made in the presence of the CRO. The
CRO should sign as witness on all charge documents.
The document are to be filled in with permanent ink or typed
If the document consist more than I page, the borrower should sign on each page
If the signature of any third party is required to be obtained whose specimen

signature is not available, then the main applicant should verity the specimen
signature of the third party
No document or column in any document should remain blank
As far as possible there should be no erasure, cancellation or alternation in the

document. If, however, there is any correction, overwriting or alteration, then that
must be authenticated by a full signature of the signatory.
After stamping and execution of documents, the question of registration comes up.
However, not all documents are required to be registered.
For the extension of any type of credit/loan facility, the following loan documents, which
are considered basic, should be obtained from all borrowers:
Demand Promissory Note
Letter of Continuity ( This is not always taken if there is only loan disbursement)
Letter of Arrangement
General Loan Agreement
Letter of Disbursement
General Loan Agreement
Letter of Disbursement; Basically a letter requesting disbursement of the loan
Letter of Installment, in case the facility is to be repaid in installment
Other Basic Charge Documents

i) Demand Promissory Note (DP Note)
It is a written promise by a borrower to pay the whole amount of existing or future
loans/credit facilities on demand. It also gives the banks power to ask the borrower to
repay the loan amount with interest without any prior notice.
Section 4 of the Negotiable Instrument Act 1881 defines a promissory note as an
instrument in writing, signed by the maker, to pay a certain sum of money only to, or the
order of, a certain person, or to the bearer of the instrument, following precautions are to
be taken while preparing a promissory note.
o Type the amount of the credit facility/loan in words and in figures,
o Type the rate of interest for the loan which the borrower will subject to verify the
signature of the borrower.
ii) Letter of Continuity

This instrument is used in conjunction with the demand promissory note. This is to secure
rights of recovery for existing and future credit facility, which are advanced in parts or on
a recovery basis. Loan accounts may from time to time be reduced or even the balance in
the said loan account may be in credit so this instrument, validates the said DP Note, for
making further drawings under the facility continuously possible.
iii) Letter of Arrangement
This is a right given by the borrower to the bank to cancel the facility at any time without
having to assign any reason. This is also an acknowledgement by the borrower that the
credit facility has been approved in his favor and the borrower has to execute all
necessary documents to avail credit facility.
iv) General Loan Agreement

A loan agreement is an agreement of contract stating the general terms for the extension
of a loan or credit facilities. The General loan agreement sets out the general standard
terms and conditions governing the existing or future extension of loan or erudite
facilities to the borrower.
v) Letter of Disbursement
This is simple a letter requesting disbursement of the loan/credit facilities at the agreed
rate of interest.
Other Security Documents:

i) Letter of Undertaking:
This is a Deed of agreement executed by the borrower agreeing to commit to carry out
any or a particular obligation to avail of loan/credit facility.
ii) Letter of Hypothecation of Goods & Stocks and Book Debt and
Receivable:
These letters Hypothecation are actually two different sets of documents but because of
their similarity, these are being explained together. These documents create an equitable
or floating charge in favor of the bank over the goods and services and/ or book debts and
receivables that are being financed where neither the ownership nor the possession is
passed to the bank. Under this agreement, the borrower undertakes to keep the percent
stock of goods and that which may increase from time to time in future in good condition.
This hypothecation gives the bank the power to possesses and sell the mentioned goods
and stocks or claims the book debts directly from the debtors in order to settle the
borrowers dues to the bank.
iii) Letter of Hypothecation of Plant & Machinery

Under this agreement, the Borrower undertakes to keep the present plant and machinery
at the present location in good condition and which gives the bank the power to posses
and sell the mentioned plant and machinery to meet the borrowers dues to the bank.
In case of limited company, both private and public, these Letters of Hypothecation with
schedules are usually registered with the Registrar of Joint Stock of Companies (RJSC)
which provides more security to the banks.
iv) Letter of Lien

A lien the right of one person to retain property in his hands belonging to another until
certain legal demands against the owner of the property by the person in possession are
satisfied. Thus a bank or a creditor who has in its possession a lien over the goods in
respect of the money due by the borrower, as a general rule has the right to exercise
certain powers to hold on to the security. In addition, if the bank has right to set off the
value of the said goods or instrument in its possession, then the bank can sell the goods or
encase the instrument to liquidate the dues by the borrower.
v) Right of Set Off

This deed of agreement gives the bank the right to offset the value of the goods or
financial instrument in its possession and which has been discharged by the owner of that
asset, against dues owned by the borrower.
vi) Letter of Disbursement
This agreement gives the bank the right to possess goods and other assets in rented or
leased premises of the borrower despite the fact that owner or the premises may be
unable to realize dues from the borrower himself.
vii) Personal Guarantees

This is a guarantee of a person or third who is not the direct beneficiary of the loan/credit
facility, but is equally liable for the loan. The involvement of a 3rd party creates additional
pressure on the borrower to minimize the risk. The guarantor has to pay the entire
outstanding loan and interest if the borrower fails to pay for any reason.
Terms and Conditions of SME Loan

The SME department of BRAC Bank will provide small loans to potential borrower
under the following terms and condition:
The potential borrowers and enterprises have to fulfill the selection criteria
The loan amount is between tk 2 lacs to 30 lacs.
SME will impose loan processing fees for evaluation / processing a loan
proposal as following;
Loan Amount
Loan Processing Fee
2 lacs to 2.99 lacs
Tk 5,000
3 lacs to 5 lacs
Tk 7,500
5.01 lacs to 15 lacs
Tk 10,000
15.01 lacs to 30 lacs
Tk 15,000
Loan can be repaid in two ways:

a) In equal monthly loan installment with monthly interest payment, or
b) By one single payment at maturity, with interest repayable a quarter
end residual on maturity
Loan may have various validates, such as, 3 months, 4 months, 6 months, 9
months, 12 months, 15 months, 18 months, 24 months, 30 months and 36
months.
The borrower must open a bank account with the same bank and branch where
the SME has its account.
Loan that approved will be disbursed to the client through that account by
account payee cheque in the following manner: Borrower name, Account
name, Banks name and Branchs name.
The loan will be realized by 1st every month, starting from the very next
months whatever the date of disbursement, through account payee cheque in
favor of BRAC Bank Limited accounts. With Banks named and branches
name.
The borrower has to issue an account payable blank cheque in favor of BRAC
Bank Limited before any loan disbursement along with all other security.
The borrower will install a signboard in a visible place of business of

manufacturing unit mentioned that financed by BRAC Bank Limited.
The borrower has to give necessary and adequate collateral and other
securities as per banks requirement and procedures.
SME, BRAC Bank may provide 100% of the Net Required Working Capital
but not exceeding 75% of the aggregate value of the Inventory and Account
Receivables. Such loan may be given for periods not exceeding 18 months.
Loan could also be considered for shorter periods including one time principal
repayment facility, as stated in loan product sheet.
In case of fixed asset Financing 50% of the acquisition cost of the fixed asset
may be considered. While evaluating loans against fixed asset, adequate grace
period may be considered depending on the cash generation after the
installation of the fixed assets. Maximum period to be considered including
grace period may be for 36 months.
Monitoring
Monitoring is a system by which a bank can keep track of its clients and their operations.
So monitoring is an essential task for a CRO to know the borrowers activities after the
loan disbursement. This also facilitates the build up of an information base for future
reference.
Importance of Monitoring
Through monitoring a CRO can see whether the enterprise invested the sanctioned
amount in the pre-specified area of his business, how well the business is running, the
attitude of the entrepreneur, cash credit sales and purchase, inventory position, work in
process and finished goods etc, This information will help the CRO/BRAC Bank to
recover the loan accruing to the schedule and to take the necessary decisions for repeat
loans. Moreover, monitoring will also help to reduce delinquency. Constant visit over the
client /borrower ensures fidelity between the bank and the borrower and tends to foster a
report between them.
Area of Monitoring
The purpose is to know the entire business condition and all aspects of the borrowers so
that mishap can be avoided.
a. Business Condition:
The most important task of the CRO to monitor the business frequently, it will help him
to understand whether the business is running well or not, and accordingly advice the
borrower, whenever necessary. The frequency of monitoring should be at least once in a
month if all things are in order.
b. Production:
The CRO will monitor the production activities of the business and if there is any
problem in the production process, the CRO will try to help the entrepreneur to solve the
problem. On the other hand the CRO can also stop the misuse of the loan other than for
the purpose for which the loan was disbursed.
c. Sales:
Monitoring sales proceed is another important task of the CRO it will help him to
forecast the monthly sales revenue, credit sales etc. which will ensure the recovery of the
monthly loan repayments from the enterprise as well as to take necessary steps for future
loans.
d. Investment:
It is very important to ensure that the entire loan has been invested in the manner
invented. If the money is utilized in other areas, then it may not be possible to recover the
loan.
e. Management of raw materials:

In case of a manufacturing enterprise, management of raw materials is another important
area for monitoring. If more money is blocked in raw materials then necessary, then the
enterprise may face a fund crisis. On the other hand the production will suffer if there is
not enough raw materials.
Monitoring System
a. The CRO can consider the following things for monitoring:
The CRO monitors each business at least once a month. He/she makes a monitoring plan/
schedule at beginning of the month
During monitoring the CRO must use the prescribed monitoring from and preserve in the
client file and forward a copy of the report to SME head office immediately.
b. A SME branch will maintain the following files:

The file will contain:
Purchase Receipt
Delivery Memos
Quotations and
All other papers related to furniture and fixture procurement
c. Other fixed assets and refurbishment

All fixed assets and refurbishment related papers such as purchase receipt,
Delivery memos, Quotation, Guarantee and Warrantee papers, Servicing related
papers and any other paper related to fixed assets are refurbishment will be in this
file.
d. Lease agreement file

This file will contain all papers related to lease agreement between the SESDS
office and owners of the leased premises.
e. Individual client file

Individual files are to be maintained for each borrower and will hold loan
application, Loan Proposal, Copies of Loan Sanction Letter, Disbursement Memo,
Monitoring Report, CIB application and Report, Credit report from other bank
and all other correspondents including bank receipt.
f. Statement file
All types of statement sent to SME head office will be kept in this file
chronologically.
g. Office instruction file

All kind of office instruction regarding administration should be kept in this file.
h. Operating instruction and guideline files
All kind office instruction and guidelines related to operating should be kept in
this file
i. New forms introduction file

All minutes of meeting, whenever held, should be kept in this file.
j. Security documents and legal aspect file

One set of security documents and lawyers opinions and suggestions regarding
issue will be kept in this file. The original should be send to SME head office on a
weekly basis
k. Survey form file

After conducting survey, all survey will be kept in this file chronological.
Banking
Every SME unit office will have a current account with a designated bank in the
area of a unit office. This bank account will be opened and operated by SME head
office.
To meet petty expense such as stationary, entertainment and other incidental
expense, all unit office will be allowed patty cash of Tk 2000/=.
The cheque of this patty cash will be issued from SME head office in the
beginning of the month. All vouchers relating to such expenses should be send to
the accounts from SME head office.
All the clients must open their account with the same bank account on the same
day after receiving those from the borrowers, who should given a received as
prescribed.
Cheques should be deposited to the SME unit office bank account on the same
day after receiving those from the borrowers, who should given a receipt as
prescribed.
Any loan installment credit should be transferred to the SME head office account
in Gulshan, Dhaka on the same day as per agreement with bank.
Every CRO should have an individual account in the same bank branch for their
personal use and to receive their salaries and other benefits.
Payment of lease rentals, utility bills and cheque drawn on the SME unit office
bank account and issued by SME head office should pay other expenses (Large
amount). If these bills are small amount, they should be paid from the patty cash
and replenished later.
All the financial accounting entries will be passed at the SME head office and will
maintained separately on the basis of the unit office.
Industry Analysis: SME facility of BRAC Bank Ltd.

New Entrants of the Industry
In every industry, there is a threat of new entry, which varies according to industry.
Similarly, the banking sector of Bangladesh also faces the threat of new entrants.
However, the threat comes from two directions. The first threat comes from the arrival of
the multinational banks and their branch expansion particularly due to the booming
energy sector. For example, Standard Chartered Bank has already inaugurated the SME
loan. Another threat comes from the emergence of new private commercial banks. For
example, Southeast Bank, Dhaka Bank & others, the countries traditional banks are
facing the threat of further competition and better quality service. Similarly, the potential
banks that may emerge in the next few years will further enhance the intensity of
competition and may pose further threat to the existing banks. At the same time, arrival of
the foreign banks is posing threat and pressure on the existing banks. At the same time,
arrival of the foreign banks is posing threat and pressure on the existing banks. Already
Standard Chartered Bank and Hongking Sanghai Bangking Corporation (HSBC) have
started to provide small loans to clients and they are also going to start door to door
services to clients.
Growth of the Industry

The rivalry among the competitors and the growth in the industry depends upon the
intensity of competition. If the industry has a high intensity of competition then the
industry will have a high growth rate, as all the firms will try to beat the others in order to
grab the market share. Similarly, the banking sector of Bangladesh is growing
considerably and at the same time competition is increasing. Currently BRAC bank SME
division is a pioneer one and carrying out Digital Technology Management Systems.
Competitors
Identifying the banks competitors
In terms of world bank advice, most of the private banks are now ready to provide small
or micro credit loan facility to the clients because small loans are less risky than the
corporate loan. At the recent trend, many banks like Standard Chartered, Islami bank of
Bangladesh, Southeast Bank, Datch Bangla Bank Limited etc are going to take many
aggressive steps in terms of small loan to clients.
Determining the competitors objectives
In our country, to provide big loans or long term loans are risky because Bangladesh
Bank is carrying out lots of defaulters list. So most of the banks are now interested to
provide small or micro credit lending in terms of small and medium enterprise business.
The objective of the competitors is to capture in the market by providing small loans
regarding and manufacturing business. But everyones common objective is economic
development of this country.
Identify the competitors strategy
Standard chartered bank already sent marketing troops surrounding the cities for
providing loans and deposits. CITI Bank is going to start retail service business for
capturing the market. So competitors analysis is important factor to carry out in the long
run business for any organizations. Among these banks, many of them have lower interest
rates but lots of hidden costs and services.
In terms of SME, a sample comparison between BRAC Bank Limited and Islami Bank of
Bangladesh has shown below:
BRAC Bank Ltd.
Provide online banking & services
Officers provide door to door services
Islami Bank
Provide manual banking services
Clients have to go to branch & then talk with
officer
BRAC Bank has 265 unit offices to bring It has almost 50 brunches around the country
clients
BRAC bank depends on other banks for Disburse the loan from its own brunch
disbursements
Collateral free 2-5 lacs
It has only term loan system
Networking with BRAC, IFC & Shore bank
It has goodwill & flexible interest rate
It has vast field employees to reach each and
Collateral free 2-5 lacs

It has overdraft & term loan facilities
No network
It has goodwill but higher interest rate
It has also vast employees but not in the
every client in terms of small & medium field level

enterprise
Marketing Strategies Related to SME

Basically strategic plans define the organizations overall mission and objective. Within
each business unit, marketing plays a role in helping to accomplish the overall strategic
objectives.
Market Segmentation
The market consist of many types of customers, products and needs and the marketer has
to determine which segments offer the best opportunity for achieving company
objectives. SME segments the market into three categories: Trading, Manufacturing and
Service. In trading business, there are different kinds like retailer, wholesaler, food
business, general stores etc. in manufacturing, there are mills, bakery, press business, etc
and also except purchasing manufacturer organization also take loans to meet the
working capital requirements. In service business, there are pathology, hospitals and
satellite business. Though in our country there is not much manufacturing organization,
so most of the demands go for trading business. Though it is a small and medium
enterprise therefore it focus on small loan clients that is small types of business like
trading , manufacturing and service. Basically manufacturing clients take medium or low
amount of loan during short period of time.
Small and Medium Enterprises
Trading
Whole sell
Retail
Garments
Departmental stores
Manufacturing
Mills
Bakery
Press
Retail
Factory
Service
Pathology
Satellite
Hospital
Fast food
Bases for Segmenting Consumer Markets

There is no single way to segment a market. A market has to try different segmentation
variables, alone and in combination, to find the best way to view the market structure.
Geographic segmentation: dividing a market into different geographic units such as
nations, states, region, countries, cities, or neighborhood. In terms of SME, it targets
every region around the country in terms of small business. Now the SME has almost 500
unit offices to provide credit facilities to the clients around the country. Each of the SME
unit offices mainly setup the district levels around the city but not in the rural or
undeveloped areas. BBL SME division is trying to develop unit office at that particular
region/ areas to capture the entire market.
Demographic Segmentation: Dividing the market into groups based on demographic

variables such as age, sex, family, income, education, religion and nationality. In terms of
SME, in some cases it is very strict. If some one who has Hindu religion and live close to
the border, SME would have very careful to provide loans to those clients. SME provide
loans 20-60 aged peoples. SME is restricted to provide loans more than age of 65.
Behavioral Segmentation: Behavioral segmentation divides buyers in to groups based
on their knowledge, attitude, uses or responses to a product. Many marketers believe that
behavior variables are the best starting point for building market segments. In terms of
SME, few clients would be found those who had done MS and most of clients are
secondary or higher secondary pass. But basically SME segments clients at least whether
the clients can understand his/her own business. SME gives very importance on attitude.
At the first sight if any client behave rough then CRO never go to that particular client.
Target Consumer for SME products

To succeed in todays competitive marketplace, organization must be customer centered
and keeping them by delivering greater value. But before it can satisfy customers,
organization must first understand their needs and wants. There are two many different
kinds of consumers with too many different kinds of needs and some organization in a
better position to serve certain segments of the market. In terms of SME loan, BRAC
Banks target customers basically small and medium enterprises. BRAC banks SME
targeted customers are those who have minimum income of 40-70 thousand taka per
month. Mostly, entrepreneurs in our country are illiterate. Some of them are higher
secondary and BSC graduate. So SME mainly targeted those clients who actually
understand his own business. There are three sectors of target customers which SME
follows: Trading, Service and Manufacturing. Basically according to the clients demand,
SME support them financially to enhance their business.
Marketing Analysis
Product
Marketing
Control
Price
Target
Consume
r
Place
Marketing
Plan
Promotion
Marketing Implementation
Factors Influencing Company Marketing Strategy
Market Targeting
the process of evaluating each marketing segments attractiveness and selecting one or
more segments to enter. In terms of SME, the scope is specified which the target market
is small and medium enterprise. But SEM is restricted on leather, jewelry and alcohol
business.
Differentiated marketing: using a differentiating marketing strategy, an organization

decides to target several markets or niches and designs separate offers for each. Basically
it provides the loan within 25 days and gives the highest months to repay the loan than
other banks. In terms of trading business, if the business is not too big then SME is not
allow to give more than 20 months to repay the loan. On the other hand, in case of
manufacturing business, if the business is too big then SME gives the client gross period
and more than 30 months to repay the loan. SME also categorizes the dealings with the
customers in A, B & C groups.
A-Categories officers are dealing with the high educated clients, like MBA or PhD holder
or highly social client.
B-Categories officers are dealing with the undergraduate or normal standard clients.
C- Categories officers are dealing with the non educated or illiterate normal clients.
Market Positioning
Arranging for a product to occupy a clear, distinctive and desirable place relative to
accomplish products in the minds of target consumers. Formulating competitive
positioning for a product and detailed marketing mix. To meet the customer demands,
SME already establish different offices across the country. Before taking the loan CRO
clearly defines to the clients regarding SME policies and repayment schedules. To
positioning in the market, SME not only provide loan but also they give some valuable
ideas to enhance the clients business and for economic development.
Once a company has decide which segments of the market it will enter, it must decide
what positions it wants to occupy in those segments. A products positioning in the way
the product is defined consumers mind relative to competing product. Main head office of
SME is in Dhaka city and rest of its unit offices are spread out surrounding the country.
Each unit office consist of 2 or 3 CRO who provides door to door services, they even
work at night. Many banks have field officers but could not carry out the unit office
facilities. So BRAC bank can reach to the potential clients at anywhere in the country.
The CRO of SME never say to the customer at the first impression that interest rate is
24%. They try to make understand to the clients mind that 2% per month or equal
monthly payment as well as many benefits.
Unique Selling Propositions:
Facilities- the main facility of SME is to provide quick service to the clients, which might
take 15 to 20 days. Hypothecation loans are collateral security free which other banks
take securities. If any clients got serious problem in business after taking SME loans then
it gives reschedule to repay the clients loan. While taking repeat loan SME provide
various facilities to the clients.
Different features- IFC and Shore banks are going to carry out equity participation with
BRAC bank. It will deposit more funds to provide more loans to the clients, which cover
around the whole country
Different services- to get the loan, client do not have to go in bank directly. All sort of
work are done by the CRO for clients to have the loan quickly. In terms of necessities
CRO go to clients home and bring repayments of the loan. In favor of clients, CRO also
work in holidays.
b. Price- is the amount of money customers have to pay to obtain the products. In terms
of SME of BRAC bank, clients have to pay a certain amount of processing fees and
stamp costs to get the loan. One of the factors that affect the companies own pricing
moves. For example- many banks have processing fees with 1% or 2% additional charge
and other miscellaneous costs. But BRAC bank has withdraws other costs and charges to
carry out in the competitive market.
Costly- BRAC bank SME interest rate is 24%. So it is little bit of costly by the
competitive edge but the client gets this loan within very short period of time. In
this situation client can not think about the interest rate because at the right time
they get the loan which they can exercise in their business can yields profits.
Easy sanction- If the CIB (Credit Information Bureau) is being cleared from
Bangladesh Bank and all information is being transparent from client then the
loan is become sanctioned in favor of client.
All time consultancy- without taking any money, the officer of this bank give
moral advices to clients to develop the business.
SWOT analysis
SWOT analysis is an important tool for evaluating the companys Strengths, Weaknesses,
Opportunities and Threats. It helps the organization to identify how to evaluate its
performance and scan the macro environment, which in turn would help organization to
navigate in the turbulent ocean of competition.
Strengths
Company reputation: BRAC bank has already established a favorable reputation in the
banking industry of the country particularly among the new comers. Within a period of 5
years, BBL has already established a firm footing in the banking sector having
tremendous growth in the profits and deposits. All these have lead them to earn a
reputation in the banking field
Sponsors: BBL has been founded by a group of eminent entrepreneurs of the country
having adequate financial strength. The sponsor directors belongs to prominent resources
persons of the country. The Board of Directors headed by its Chairman Mr. F H Abed.
Therefore, BBL has a strong financial strength and it built upon a strong foundation.
Top Management: The top management of the bank is also major strength for the BBL
has contributed heavily towards the growth and development of the bank. The top
management officials have all worked in reputed banks and their years of banking
experience, skills, expertise will continue to contribute towards further expansion of the
bank. At BBL, the top management is the driving force and the think tank of the
organization where policies are crafted and often cascaded down.
Facilities and equipment: BBL has adequate physical facilities and equipments to
provide better services to the customers. The bank has computerized and online banking
operations under the software called MBS banking operations. Counting machines in the
teller counters have been installed for speedy service ant the cash counters. Computerized
statements for the customers as well as for the internal use of the banks are also available.
]
Impressive branches: This creates a positive image in the minds of the potential
customers and many people get attracted to the bank. This is also an indirect marketing
campaign for the bank for attracting customers. 13 branches of the bank are impressive
and are compatible to foreign banks.
Interactive corporate culture: BBL, has an interactive corporate culture. Unlike other
local organization, BBLs work environment is very friendly, interactive and informal.
There are no hidden barriers or boundaries while interacting among the superior or the
subordinate. The environment is also lively and since the nature of the banking job itself
is monotonous and routine,BBLs likely work environment boosts up the spirit and
motivation of the employees.
Team work at mid level and lower level: At BBLs mid level and lower level
management, there are often team works. Many jobs are performed in groups of two or
three in order to reduce the burden of the workload and enhance the process of
completion of the job. People are eager to help each other and people in general are
devoted to work.
Weaknesses
Advertising and promotion of SME loan: This is a major set back for BBL and one of
its weakest areas. BBLs adverting and promotional activities are satisfactory but it SME
loan is not advertised well. It does not expose its SME product to general public and are
not in lime light. BBL does not have neon sign or any advertisement for SME loan in the
city. As a result people are not aware of the existence of this bank.
NGO name (BRAC): BRAC is one of the largest NGO of the world and it is operating
its activities in Bangladesh. BRAC bank is not a NGO bank but many people of them
country consider it as a NGO bank like Grameen bank which is not correct.
Low remuneration package : The remuneration package for the entry and the mid level
management is considerably low. The compensation package for BBL entry level
positions is even lower than the contemporary banks. Under the existing low payment
structure, it will be very difficult to attract and retain higher educated employees in BBL.
Specially CROs are not satisfied with compensation package provided to them.
Opportunities
Diversification: BBL can pursue a diversification strategy in expanding its current line
of business. The management can consider options of starting merchant banking or
diversify in to leasing and insurance. By expanding their business portfolio, BBL can
reduce their business risk.
Product line proliferation: In this competitive environment BBL must expand its
product line to enhance its sustainable competitive advantage. As a part of its product line
prolification, BBL can introduce the following products.
ATM: This is the fastest growing modern banking concept. BBL should grab this
opportunity and take preparation for launching ATM. Since BBL is a local bank, they can
form an alliance with other contemporary banks in launching the ATM.
Threats
Multinational banks: The emergence of multinational banks and their rapid expansion
poses a potential threat to the new growing private banks. Due to the booming energy
sector, more foreign banks are expected to arrive in Bangladesh. Moreover, the already
existing foreign banks such as Standard Chartered is now pursuing an aggressive branch
expansion strategy. This bank is establishing more branches countrywide and already
launched is SME operatin. Since the foreign banks have tremendous financial strength, it
will pose a threat to local banks.
Upcoming banks: The upcoming private local banks can also pose a threat to the
existing private commercial banks like BBL. It is expected that in the next few years
more local private banks may emerge. If that happens the intensity of competition will
rise further and banks will have to develop strategies to compete against an on slaughter
of foreign banks.
Contemporary banks: The contemporary banks of BBL such as Dhaka bank, prime
bank and Dutch Bangla are its major rivals. Prime bank and other banks are carrying out
aggressive campaign to attract lucrative clients as well as big time depositors.
Default culture: This is a major problem in Bangladesh. As BBL is a new organization
the problem of non-performing loans or default loans is very minimum or insignificant.
However, as the bank becomes older this problem arises and the whole community
suffers from this chronic diseases. BBL has to remain vigilant about this problem so that
proactive strategies are taken to minimize this problem if not elimination.
Procedures of BRAC Bank SME loan

Loan Sanction activities
Select potential enterprise: For SME loan, in this step the CRO conduct a survey
and identify potential enterprise. Then they communicate with entrepreneurs and
discuss the SME program.
Loan Presentation: The function of CRO is to prepare loan presentation based

on the information collected and provided by the entrepreneur about their
business, land property ( Where mortgage is necessary)
Collect confidential information: Another important function of a CRO is to

collect confidential information about the client from various sources. The sources
of information are suppliers regarding the clients payment, customers regarding
the delivery of goods of services according to order, various banks where the
client has account which shows the banks transactions nature of the client.
Open clients accounts in the respective bank: When the CRO decided to
provide loan to the client then he/she help the client to open an bank account
where BRAC bank has a STD a/c. BRAC bank will disburse the loan through this
account. On the other hand the client will repay by this account. Although there is
some exception occur by the special permission of the authority to repay by a
different bank account.
Filled up CIB form: CRO give a CIB ( Credit Information Burue) form to the
client and the client fill and sign in it. In some case if the client is illiterate then
the CRO fill the form on behalf of the client. Then CRO send the filled and signed
form to the SME, head office.
Sending CIB to Bangladesh Bank: The SME, head office collect all information
and send the CIB form to Bangladesh Bank for clearance. Bangladesh Bank
return this CIB form within 10-12 days with reference no.
CIB report from Bangladesh Bank: In the CIB report Bangladesh Bank use any
of the following reference no:
NIL: if the client has no loan facility in any bank or any financial
institution then BB (Bangladesh Bank) use NIL in the report
UC (Unclassified): if the client has any loan facility in any bank or
financial institution and if the installment due 0 to 5.99 then BB use
UC in the report
SS (Substandard): if the client has any loan facility in any bank or
SS in the report
DF(Doubtful): if the client has any loan facility in any bank or
DF in the report
BL (Bad lose): if the client has any loan facility in any bank or
financial institution and if the installment due 18 or above then BB use
BL in the report. This report indicates that the client is defaulter and
the bank should not provide loan the client.
Loan decision considering CIB report: Considering CIB report, BRAC bank
decide whether it will provide loan the client or not. If the bank decide to provide
loan then the SME of head office keep all information and send all papers to the
respective unit office to apply with all necessary charge documents.
Loan Sanction: The respective unit office sanction loan to the client if it is 2 to 5 lacs
and the send the sanction letter including all necessary charge documents to the loan
administration division for disbursement the loan. If the amount higher than 5 lacs then
the respective unit office send the proposal to SME, head office for sanction. The head of
SME sanction the loan and send the sanction letter including all documents to the loan
administration division for disbursement and inform the respective unit office regarding
sanction of the loan.
Disbursement of SME loan

Pre Disbursement Manual Activities
Prepare loan file: Receiving all documents, Loan Administration Division

prepare a loan file with all documents received from the unit office.
Charge documents checking: The loan administration division checks all charge
documents. following charge documents are checked:
Money receipt (Risk fund)
Sanction letter
Demand promising note (With stamp of Tk 20/=)
Letter of arrangement (With stamp of Tk 150/=)
General loan agreement (With stamp of Tk 150/=)
Letter of undertaken (With stamp of Tk 150/=)
Letter of stocks and goods (With stamp of Tk 150/=)
Letter of hypothecation book debt and receivable(With stamp of Tk 150/=)
Letter of disbursement
Photocopy of trade license (attested by CRO)
Insurance (Original copy)
Blank claque with signature (one cheque for full amount and others same
as no of installment on Favor of BRAC bank, no date, no amount)
Two guarantors ( one must be Spouse/parents)
If the loan provide for purchase of fixed assets or machineries and if the
loan amount is over Tk 50,000/= then the stamp of a certain amount is
require)
Documents deficiency and problem resolving: If there is any error found then it
informed to the respective CRO. If the application form is not filled properly then
the file send to the CRO to fill the application properly. If any document error
found then the loan administration division asked the CRO to send the require
documents and the file stored to the loan administration division.
Prepare disbursement list: The loan administration division lists all new
sanctioned clients details and send a request to the treasury through internal mail.
Disbursement of the amount: Sending the list to the treasury of BRAC bank for
disburse the amount, the treasury disburse the amount to the client through the
mother account of the clients bank. BRAC bank disburse amount through any of
the following banks corporate branch nearer the BRAC bank head office and the
corporate branch of the respective bank send the amount to the client account in
the respective branch. These banks are:
BRAC Bank Limited
The City Bank Limited
Janata Bank
Bangladesh Krishi Bank
Pubali Bank
Agrani Bank
Message sent to the unit office: Completing the disbursement, loan administration
division sent a SMS to the respective CRO informing the disbursement of the sectioned
loan.
MBS entries for loan disbursement
Initial ID generation: After sending the list to the treasury, the loan
administration division generates an initial ID against the borrower. Entering
required information, the banking software MBS automatically provide a ID no
for the borrower.
Loan account opening: According to the ID, the loan administration division
open a loan account in MBS against the borrower. Entering all required
information, the MBS automatically give an account no. for the borrower.
Cost center assign: The loan administration division enter the following
information in MBS:
Security details set-up
Guarantor details set-up
Loan other details set-up
Risk fund collection: The loan administration division opens a different account
risk fund of the client. This is known as loan processing fees. Receiving the risk
fund, the loan administration division print voucher and posting the voucher in the
MBS. The amount of risk fund is not refundable.
Activision of the loan: Loan administration division do the following tasks to

activate the loan
Loan sanction details set-up
Repayment schedule set-up and printing
Loan activation
Disbursement and CC wise voucher print
Disbursement voucher posting
Post Disbursement Manual Activities

Repayment schedule sent to unit office: Completing the disbursement of the sanctioned
amount the loan administration division prepare a repayment schedule in MBS and send
it to the unit office. CRO from the unit office collect it and reached to the respective
client. The client repays the loan according to this schedule.
Loan details MBS entry: The loan administration division enters details information
regarding the loan in MBS. Each officer has an ID no in MBS and if there is any error
found then the respective officer will be responsible for it. So every body remain alert at
the time of MBS entry.
Document stamp cancellation: The loan administration division cancels all document
stamps. In future if any client found defaulter and the bank file sued against him then
stamps of these document help to get the judgment favor of the bank. But If these stamps
are not canceled then the judgment may not on favor the bank.
Send the loan file to archive: completing all activities, loan administration division
sends the loan file to the archive for future requirement. In future if any document of the
loan account require then the bank can collect the file from archive and get the necessary
document. If the client take repeat loan then it is not require to apply all documents
because his all documents stored to the bank.
SME Loan Recovery Procedures

Receive SMS/Fax for installment deposits: When the borrower repays any installment
of the loan then he/she informs it to the unit office/CRO. Then the unit office/CRO send a
SMS through mobile phone or a Fax to the loan administration division informing the
repayment. Loan administration division collect these SMS /Fax and take a paper print of
these SMS.
Entry the installment information to MBS: Loan administration division entry the
repayment installment information to the banking software MBS.
Print Vouchers: Completing the entry, the loan administration division takes paper print
of all vouchers in a prescribed yellow paper.
Cross Check SMS/Fax and solve problems (If any): The loan administration is
responsible for all entry in MBS. If the there is any error found in future then the
respective officer who is entering these information in MBS will be liable for it. It will be
easily identified by user ID. So they always aware to ensure the correct entry. Completing
the entry of information, they print a hard copy and cross check it with the SMS/Fax. If
there any error found then it is solved and ensure the correct information entry.
Repayment voucher check and posting: If it confirmed that all entering information are
correct and there are no error, then the responsible officer of the loan administration
division post it to MBS. If one time posted, it is not rectifiable without permission of the
higher authority. So the loan administration is always aware regarding the recovery
procedures of SME loan.
Closing procedures of SME loan in BRAC Bank:

Pre-closing manual activities
Receive SMS/Fax requesting for closing: The borrower repay the loan as per repayment
schedule. When the repayment is being complete the borrower request the unit
office/CRO to close his loan account. The unit office/CRO sends a SMS/Fax the loan
administration division requesting to close the loan account of the respective borrower.
Print the SMS/Fax: Receiving the request from the respective unit office/CRO, the loan
administration division take a paper print and take necessary steps to close the account
Bring the loan file from archive: The loan account file of the respective borrower
brought from the archive. Cross checked the documents of file with MBS record.
Obtained approval from the concern authority: it is require the permission of
concerned authority to close the loan. If concerned authority approve the closing of the
loan account then next initiatives are taken.
Checking in MBS: The loan administration division checks the loan status in MBS. If
there is any difference found with the SMS/Fax from unit office and MBS then deposits
sleeps are re-checked. Then the loan administration division calculates the total balance
of the loan account (Ledger balance + buffer interest +Excise duty)
SMS sent to concerned CRO: Loan administration division sent an SMS to the
concerned CRO informing the current balance of the requested loan account.
Receive and print closing SMS/Fax checking & freezing: The concerned CRO send a
final SMS to loan administration division informing that the respective borrower cleared
all his liabilities regarding the loan. The loan administration division takes paper print of
the SMS, check it and finally close the loan account.
MBS entries for loan closing
Pre closing data entry: Completing the manual activities, the loan administration
division enter some information to MBS for future requirement and complete
following tasks:
Interest/provision charging & print voucher
Charges collection & print voucher
Final repayment entry & print voucher
Final repayment entry checking
Repayment voucher posting
Activate account closing in MBS: Completing above mentioned tasks, the loan
administration division finally close the requested loan account in MBS.
Post closing manual activities:

Re-checking with deposit slip: Completing MBS activities, the loan administration recheck all deposit sleeps of the loan account. If there is any error found then immediately
resolves it otherwise the file sends to the archive for future requirements. The client may
take repeat loan in future and then information from this file will help to approve and
disburse loan which will minimize risk. If the client asks to return security then the loan
administration releases security completing following tasks:
Documents photocopy before security release
Closing certificate issuing and security release
Daily MIS updating for loan closing:
Finally the authorized officer of the loan
administration division update the banking software MBS (Millennium Banking System)
by closing the respective loan account.
Bibliography:
Books, Publications and Journals of BRAC Bank Limited
Valuable discussion of supervisors during the period of internship
Schedule Banks Statistics, April- June 2004, Bangladesh Bank
Bangladesh Bank related websites
Marketing Management, Philip Kotler, The millennium Edition
Rose, Peter S. Commercial Bank Management, International Edition 1999, Irwin

Macgraw-Hill
Hemple, George H. Bank Management, 2nd edition, 1986, John Wiley & Sons.
Ahmed, Iftekhar Uddin. Crisis of Credit Management, Ruprekha Publisher, Mirpur,

Dhaka.
George Ruth. Commercial Lending, American Bankers Association, 1990
redit Management (Planning, Appraisal, & Supervision) edited by S.L.N Simha,

Indian Institute of Financial Management & Research.

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Chapter -1

Background of the Report

Origin of the Report:

Objective of the Study:

Scope of the study:

Methodology of the Study:

Limitations of the Report:

Getting Relevant papers and documents were strictly prohibited.

Organizational Overview of BRAC Bank Limited.

Historical Background of BBL:

Corporate Vision of BBL:

Building a profitable and socially responsible financial institution focused on Markets

Corporate Mission of BBL:

Building a strong customer focus and relationship based on integrity, superior

To creating an honest, open and enabling environment

To value and respect people and make decisions based on merit

To strive for profit & sound growth

To work as a team to serve the best interest of our owners

To relentless in pursuit of business innovation and improvement

To base recognition and reward on performance

To responsible, trustworthy and law-abiding in all that we do

To finance the international trade both in import and export.

To develop the standard of living of the limited income group by providing

Corporate Social Responsibility

International Finance Corporation

Management of BRAC Bank Limited

Mr. Fazle Hasan

BRAC Bank Limited -at Present:

Internal and External source of Cash

(2) External Source of Cash

Source: BRAC Bank Prospectus

Shore Cap International

General Public through IPO

Mutual funds through IPO

A COMPARATIVE STATEMENT OF INCOME & EXPENDITURE

Other operating income

for the years ended 31 st

December 2006 & 2005 are as follows:

Total operating Expenses

Profit before provision

Provision for loans & advances

Secured Remittance Services Department (SRS)

Payment Service Department (PSD)

Pharmaceuticals, toiletries, chemicals, and pesticides.

Power generation, oil exploration.

Garments and all its backward and forward linkage.

Food processing and beverage industries.

Cables and cable wares.

Health Service Industries.

Financial Administration Department (FAD)

Maintains the General Ledger and other books of accounts.

Payment of employees: bonus, conveyance, and staff provident fund.

Tax issues for Bank: Corporate tax, Personal (Staff) tax.

Inspection and Audit management.

Generation of MIS reports.

Budgeting and financial planning, usually of 5 years.

Periodic Bangladesh Bank returns submission.

Chart of accounts management.

Risk Management Department

Asset liability management risk.

Foreign exchange dealing risk.

Credit management risk.

Money Laundering Risk.