Loan and Advance Activities of Uttara Bank Limited, Moghbazar Branch

Uttara Bank Ltd

May 10, 2013

Loan and Advance Activities of Uttara Bank Limited, Moghbazar Branch

Prepared by:
Towhidul Alam ID No.: BBA 110103944 Major: Finance Email: pavelalam@ymail.com Department of Business Administration Northern University Bangladesh

Submitted to:
Northern University Bangladesh Department of Business Administration

May 10, 2013

TABLE OF CONTENTS
Topics DECLARATION BONAFIDE CERTIFICATE INTERNSHIP CERTIFICATE ACKNOWLEDGEMENT LIST OF ABBREVIATIONS OVERVIEW OF UTTARA BANK LIMITED EXECUTIVE SUMMARY Page I II III IV V VI XII

Chapter-1 Introduction 1.1. Introduction of the Study 1.2. Problem Statements 1.3. Background of the Study 1.4. Objective of the Study 1.5. Significance of the Study 1.6. Methodology of the Study 1.7. Scope and Limitation of the Study 2 2 3 3 4 4 5

Chapter-2 Data Collection, Analysis and Findings 2.1. Loans and Advances of UBL 2.2. Types of Loan of UBL 2.3. Cash Credit (Hypothecation) 2.4. Cash Credit (Pledge) 2.5. Secured Overdraft 2.6. SBL (Small Business Loan) 2.7. Uttaran Consumer Credit Scheme (CCS)

8 9 10 10 11 13 14

2.8. Uttaran House Repairing Loan (UHRL) 2.9. Inland Bill Purchase (IBP) 2.10. Loan against Trust Receipt (LTR) 2.11. Women Entrepreneur's loan Scheme 2.12. Different Interest Rate of UBL (Moghbazar Branch) 2.13. Total Procedure of Loan 2.14. Procedure of sanction of loan 2.15. Loan Disbursement 2.16. Total Loan Disbursement from January to April 2013 2.17. Problem with Advances of Moghbazar 2.18. Calculation of Overdue Payment of Moghbazar Branch 2.19. Correlation between deposits and Loan 2.20. Non performance Loan to Total Loan Ratio 2.21. Classified Loan and Provision 2.22. Credit management and recovery of Classified Loans 2.23. Maintenance of Provision 2.24. Major problems of Loan 2.25. Precaution while sanction of new loans 2.26. SWOT analysis of UBL, Moghbazar Branch

16 18 19 20 24 25 27 28 29 30 31 32 33 33 34 35 37 38 39

Chapter-3 Conclusion and Recommendations 3.1. Conclusion 3.2. Recommendations References Appendix 41 42

List of Tables
Table 1 2 3 4 5 6 7 8 9 10 Scenario of Cash Credit from January to April Scenario of Small Business Loan Calculation of overdue payment Position of Loans and Advances of UBL Interest rate of Loan and Advance Account Total Loan disbursement from January to April 2013 Calculation of overdue payment of Moghbazar Branch Correlation between Deposits and Loans over four months Credit performance Ratio Classified Loan and Provision Page
10 13 14 22 24 29 31 32 33 33

List of Figures
Figure 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Cash Credit Account balances over four months Overdraft Balance outstanding over four months Small business Loan over four months Graph showing outstanding loans of CCS Position of Uttaran House Repairing Loan Graphical presentation of NSRP over last four months Category wise Percentages of Loan Accounts Category wise Number of Loan Accounts over four months Total loan Disbursed from January to April at UBL Moghbazar Branch Calculation of overdue payment of Moghbazar Branch Correlation between Deposits and Loans Credit performance Ratio Position of Outstanding Loan and Classified Loan Special provision and General provision over four months Page 11 12 13 15 17 21 22 23 29 31 32 33 35 36

CHAPTER-1

1.1. INTRODUCTION OF THE STUDY

Bachelor of Business Administration (BBA) Program requires a three months attachment with an organization followed by a report assigned by the supervisor in the organization and endorsed by the faculty advisor. I took the opportunity to do my Internship at Uttara Bank Limited which is the largest and oldest private-sector commercial bank in Bangladesh. This internship report has prepared as the degree requirement of BBA, Northern University Bangladesh. As practical orientation is integral part of BBA, I was sent to the Uttara Bank Ltd., Moghbazar Branch to have real life exposure on a 90 days internship program (from January 30 to April 29, 2013).

Loans and Advances comprise the most important asset as well as the primary sources of earning of the bank .On the other hand loan is also the major sources of risk for the bank management A prudent bank management should always try to make an appropriate balance between return and risk involved with the loan portfolio and unregulated bank might be fraught with unregulated risk for maximizing its potential return. In such a situation, bank might find itself in a serious financial distress instead of improving its financial health. Consequently not only the depositors but also the general shareholders will be deprived of getting back their money from the bank. Loans and advances mean lending made by the bank to weak clients for earning interest. Main objective of the loans and advances is to earn profit for the bank. On an average of 75%to 80% of the banks earning come from interest received against the loans and advances of a bank. Considering all these importance of Loans and Advances, I have decided to take my internship title as Loan and Advance Activities of Uttara Bank Limited, Moghbazar Branch. a) Problem statement 1. What are the key problems for default loan? 2. What should be considered for loan sanction? 3. How a bank should screen appropriate client for Loans and Advances? 4. How bank maintains its credit health? 5. How a bank can be more efficient at credit management?

b) Background of the study The academic study has a great value when it has practical application in the real life. Theoretical knowledge has little significance unless it is applicable in the practical life. In order to consolidate the theoretical learning some practical exposure is need. With this motive in view this intern report titled A Study on Loans and Advances Activities of Uttara Bank Ltd. is prepared to show the reporting, analyzing and analytical ability of the individual knowledge seeker.

1.2. OBJECTIVES OF THE STUDY

a) Main Objective: The objectives of practical orientation on bank are to get a clear idea about banks, how it runs and what function it does, that is, how an account is opened, how remittance is sent, how various Department of bank performs their functions specially Loan department. Again, as the environment of a bank is totally new, the trainee gets a chance to familiarize himself with a new situation. Furthermore, the orientations is very useful to detect whether the theoretical knowledge match with real life scenario or not.

b) Supporting Objectives: To understand the terms and conditions of various loan schemes provided. To study and evaluate the performance of each loan scheme. To study about the respondent and their varying interest. To identify the existing procedures and techniques of loans and advances of UBL, Moghbazar Branch. To identify the credit effectiveness of UBL, Moghbazar Branch. Critically analyze the functions and the operations of credit management of UBL. To find out the various types of problems of UBL, Moghbazar Branch. To suggest suitable measures to remove the existing problems and improvement of credit services of UBL, Moghbazar Branch.

1.3. SIGNIFICANCE OF THE STUDY

The significance of the report is multi-dimensional. This kind of research is pretty much applicable for all. Firstly, I would be benefited by gaining a firsthand experience into the corporate world and learning how to measure something so abstract like quality. Also engaging in conversation with the corporate people as well as the customers was improvised on my interaction capability that is of so much importance to any business graduate. Daily scrutiny of the Bank also helped to understand the cultural attributes and the reasons behind how they became so successful. My Internship report helped the bank as they can take my findings into account and assume their current standing. All in all, anyone in the society who is interested in this arena should find my report interesting and something to learn from as have tried my level best to make it a qualitative work.

1.4. METHODOLOGY
This internship report has been prepared on the basis of on the job experience with the Uttara Bank Ltd., Moghbazar Branch. In spite of the scarcity of published data, it has been tried to make the report informative and handy. The data used in the report have been complied through different complicated ways- direct questionnaire to executives, continuous search on the ongoing accountants, and interview with internal auditor and external auditors report. Working with the organization for a meager period of three months is the main aspect of acquiring data and information to evaluate the culture, working environment and similar sort of affair of the organization. a) Data collection procedures: i) Primary Sources. This study required a lot of primary data. For the analysis a lot of secondary resources also needed. This have been provided theoretical basis of the report. Such data has been collected mainly from the bank as well as the Internet. Interviews have been conducted on the managers of the bank for insights and clarification. The clients of the bank have been interviewed as they are one of the primary data sources. There are four items of primary sources which are below: Face to conversation with the respective officers and stuffs of the branch. Discussing with my supervising manager of the bank. Practical work experience in the different desk of the department of the branch. In-depth study of selected cases.

ii) Secondary Sources. As for secondary resources, I used relevant journals and various publications of UBL. Also, I have collected data from the NUB library, newspaper and the Internet. Also, some of the published statistics by the Bangladesh Bank and Uttara Bank Limited (UBL) has been used. There are some secondary sources: Annual Report of Uttara Bank Ltd. Website of the Uttara Bank Ltd. Several books and periodicals related to the banking sector. Bangladesh Bank Report Different circular sent by the head office of Uttara Bank Ltd. Various documentary file of Uttara Bank Ltd. Prior research report.

b) Data analysis In order to analyze gathered data, I have used statistical software like SPSS and Microsoft Excel for Data analysis and presentations. The data have been presented in graphs for better understanding and clarity. c) Final format of the report The report is containing mainly two parts. The organizational part shall give the idea about Uttara Banks historical background, different divisions, banking services and branches. And the project part shall contain research part with two researches; one is about the General Banking and the other is the Loans and Advances of Uttara Bank Limited, literature review and hypothesis development and lastly data analysis part. There is also a segment where my point of view is expressed along with some conclusions and recommendations to ensure their quality service.

1.5. SCOPE AND LIMITATION OF THE STUDY

As I was sent to the Uttara Bank, Moghbazar Branch, the scope of the study is only limited to this Branch. The report covers its overall department wise function, structure and performance.

The report covers the topics Loans and Advances Activities of Uttara Bank Limited I have gathered valuable information from the bank as well as web site, annual performance report and news papers. There were some problems while I conducting the orientation program, a whole hearted effort was applied to conduct the orientation program and to bring a reliable and fruitful result, in spite of having the whole hearted effort, there exit some limitation which acted as a barrier to conduct the program. The limitations werea) Lack of Information or Data: The Bankers are very busy with their jobs, which lead me little time to consult with. Adequate and in-depth well-organized literature was not available because a few researchers endeavored to work on such project in the past. Though the officials tried to assist, sometimes their working pressure couldn't give me proper assistance what I needed. There is some information which needed special permission from top level, is not always achievable. b) Time Constraint: Three months time is not enough for such an extensive study. It is very difficult to collect all the required information in such a short period of time. c) Comparison Status: I have had no opportunity to compare the Loans and Advances activities of the Uttara Bank Ltd. with that of other contemporary and common size banks. It was mainly because of the shortage of time and Internship nature. In spite of all the drawbacks, everything has been managed well at the end. d) Confidentiality Another limitation of this report is banks policy of not disclosing some data and information for obvious reason. Due to some legal obligation and business secrecy banks reluctant to provided data. For this reason, the study limits only on the available Published data and certain degree formal and informal interview.

CHAPTER-2

2.1. LOANS AND ADVANCES OF UTTARA BANK LIMITED

Many people think that loan and Advances is almost same. Both means when a person borrows the money from other, both loan and Advance to be repaid in monthly installments of equal amounts. But in true sense, it has many differences. Loan is against security but Advances is based on relationship. There is a sense of debt in loan, where an Advance is a facility being availed by the borrower. Banks grants advances in large amount for short term but loan could be for any period. Loans and Advances comprises the most important asset as well as the primary sources of earning of the bank .On the other hand loan is also the major sources of risk for the bank management. A prudent bank management should always try to make an appropriate balance between return and risk involved with the loan portfolio and unregulated bank might be fraught with unregulated risk for maximizing its potential return. In such a situation, bank might find itself in a serious financial distress instead of improving its financial health. Consequently not only the depositors but also the general shareholders will be deprived of getting back their money from the bank. Loans and advances mean lending made by the bank to weak clients for earning interest. Simply its an arrangement in which a lender gives money or property to a borrower and the borrower agrees to return the property or repay the money, usually along with interest, at some future points in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk). Main objective of the loans and advances is to earn profit for the bank. On an average of 75%to 80% of the banks earning come from interest received against the loans and advances of a Sector wise allocation of advances revealed a well- diversified portfolio of the bank with balanced exposure in different sectors. Uttara Bank Limited Moghbazar branch is situated at New Circular Road, Moghbazar, Dhaka, which is a profitable and important branch of UBL. The Branch give various Kinds of Loan to the borrower like CC Hypo ( Cash Credit Hypo), CC Pledge ( Cash Credit Pledge),Overdraft (Secured Overdraft),UHRL (Uttara House Repairing Loan),SBL (small Business Loan),PLS (Personal).

2.2. TYPES OF LOANS OF UBL, MOGHBAZAR BRANCH

Loans and Advances of UBL

Small and Mediam Enterprise Loan(SME)
Women Entreprenaures Loan scheme(Nari Swanirvar Reen Prokalpa)

Continuous Loan

Demand Loan

Term Loan

CC Hypo(Cash Credit Hypo)

PAD (Payment against Document)

UHRL ( Uttaran House Reparing Loan)

CC Pledge(Cash Credit Pledge)

IBP (Inland Bills Purchased)

Comsumer Credit Scheme

Uttaran Small Business Loan(USBL)

Overdraft (Secured Overdraft)

LIM (Loan Against Imported Merchandise)

Loan for service concern

LTR ( Loan against trust)

Loan for Manufactureing concern

Loan for trading and other concern

2.3. CASH CREDIT (HYPOTHECATION)

Cash Credit allowed against hypothecation of good is known as Cash Credit (HYPO). In case of hypothecation, the borrower retains the ownership and possession of goods on which charge of the lending bank is created. Charge of Uttara bank limited, Moghbazar Branch is 14%. The bank takes the following precaution to avoid bad loan. The banker carefully verifies the stocks of hypothecated goods and their market price. Periodical statement of stock duly signed by the borrower is obtained. Stocks are duly insured against fired, burglary. Bank try to obtain sufficient collateral security The goods are readily saleable and have good demand in the market. The borrower should be trustworthy and prudent customer. The price of the goods, offered as security, is to be calculated as per purchase price or market price whichever is lower. The price of goods is steady etc.

2.4. CASH CREDIT (PLEDGE)

Cash credit allowed against pledge of good is known as Cash Credit (Pledge). In case of Cash credit (Pledge), the borrower pledge his goods to the bank as security against the Credit facility. Banks retain the effective control of the pledged goods. Pledge goods may be stored in a go down of the borrower but under lock and key of the bank. Banks guards are posted to protect the go down sometimes; pledges goods are in Banks go down. Table 1: Scenario of Cash Credit over January to April 2013 at Moghbazar Branch Particulars Balance(Amount) Numbers of New A/C
Balance(Number of A/C) Source: Monthly statement of CC, MoghBazar Branch, 2013

January 2903141.12 3

February 3201203.02 2

March 3052343.73 4

April 3047972.17 2

25

28

33

35

CC A/C Balance(Amount)
3300000 3200000 3100000 3000000 2900000 2800000 2700000 January February March April

Figure 1-Cash Credit Account balance over four months Interpretations: From the chart we can say that Cash Credit Account was boomed at February. CC A/C is demanded by customers so it is difficult to encourage these types of account. It has an unpredictable behavior. It increases and decreases but some external factors may be indicate the pick and off pick of the Account like before Eid demand of the loan increases in a good amount.

2.5. SECURED OVERDRAFT

An overdraft facility allows you to write cheques or withdraw cash from your current account up to the overdraft limit approved. It is a short-term (usually up to 12 months) standby credit facility which is usually renewable on a yearly basis. It is repayable on demand by the bank at any time.The overdraft limit is the maximum amount that you can overdraw. You pay interest only on the amount that you overdraw. Interest is calculated on the daily balance overdrawn and debited to the account monthly. Any unpaid amounts of interest are added to the overdrawn amount in the following month. The interest rate on an overdraft account is usually charged at a percentage over the banks prime lending rate A secured overdraft is one where you pledge an asset to the bank as security. The asset could include deposits in the bank, property or shares. Approved credit limit: Every overdraft facility has an approved credit limit

Repayable on demand at any time: An overdraft facility is not subject to any repayment as long as the amount used is within the overdraft limit. But, it is repayable on demand by the bank at any time. No minimum monthly payment: There are no minimum monthly repayments for an overdraft facility as long as the amount you owe is within the credit limit. But, if the account goes into excess you need to repay the excess amount immediately. If the excess is not paid immediately, the bank can stop the overdraft facility and require you to repay the full outstanding amount within a given time. If the bank recalls your overdraft facility, your credit record will be adversely affected. Joint borrowers allowed: As a joint applicant of an overdraft facility, you and your joint applicants are equally liable for the outstanding debt. You will be liable for the debt even if it was the other applicant who used the facility. The bank can choose to recover the total outstanding debt from all account holders, partial amounts from each account holder, or the total amount from any one account holder.

60,000,000.00 59,500,000.00 59,000,000.00 58,500,000.00 58,000,000.00 57,500,000.00 Jaruary February March April

Figure 2: Overdraft Balance outstanding over four months. Interpretation: Here we can see the chart showing overdraft was minimum on January after January the overdraft was increased due to withdrawal of current account holders. It indicates the branch has earned a good interest on these three months from overdraft.

2.6. SMALL BUSINESS LOAN (SBL)

Theoretically, a small business loan is an amount of money borrowed by a small business person to start or run a small business. In case of SBL the borrower will get loan from the bank against his business. Here the bank will charge against the amount of loan. Maximum limit of the loan is TK 5 lac. Uttara bank Ltd Charges 15% interest against the amount. Bank will obtain following documentation from the borrower: Photographs of borrower. Photocopy of Commissioner Certificate/ ID card/ Passport for identification Photographs of the mortgage property. Documentation of property (Dalil, Parcha, Khajnarasit etc. Valuation of the property. Audit report of the property. Six months bank statement. Report of CIB. Table 2: Scenario of Small Business Loan of UBL Moghbazar Branch Particulars January February March April 64.234 24.087

Amount 83.344 74.232 88.321 outstanding Increase and 11.561 -9.112 14.089 decrease SOURCE: MONTHLY STATEMENT OF SBL AS ON 30-04-2013

Taka in Lac
83.34 74.23 88.32 64.23

January

February

March

April

FIGURE 3: Scenario of Small Business Loan over four months

2.7. UTTARAN CONSUMER CREDIT SCHEMES (CCS)

Consumer credit is basically the amount of credit used by consumers to purchase non-investment goods or services that are consumed and whose value depreciates quickly. This includes automobiles, recreational vehicles (RVs), education, boat and trailer loans but excludes debts taken out to purchase real estate or margin on investment accounts. For example, a mortgage for purchasing a house is not consumer credit. However, the 52 inch television you put on your credit card is Consumer credit The Bank distributed loan of Tk.6.4 million and 886.7 million during the year 2011 under two special project namely Uttara Consumer Loan Scheme and Uttaran House Repairing and Renovation Scheme respectively . The outstanding balance of the same stood at Tk. 84.1 million and Tk 4,315.5 million respectively at the end of the year 2012. It may be mentioned here that the recovery rate in these schemes are satisfactory. Prudential Regulations for Consumer Financing Regarding financing the purchase of used vehicles Bangladesh Bank, Banking Regulation & policy Department, Head office, Dhaka issued a BRPD Circular letter No. 15 dated 20/12/2012 in relation with financing on Auto vehicles loan which is respected below, for meticulous compliance, Banking Regulation & policy Department Bangladesh Bank, Head Office, Dhaka-1000. Prudential Regulation for consumer Financing please refers to Regulation 21 of Guideline for Regulation for Auto (Loan) Circular vides BRPD Circular No.33 dated November 2012. UBL started Uttaran Consumers Credit Scheme from 1996.UBL offers opportunity of financial assistance for

Motor cycle/car- New or re-conditioned. Refrigerator/ Deep Freeze. Television/ VCR /VCP/VCD Radio/ Two-in-one/ Three in one

Air-Conditioner/ Water Cooler/ Water Pump Washing Machine. Personal Computer/ UPS/ Printer/ Type writer Sewing Machine. House hold furniture- Wooden & Steel. Cellular Telephone. Fax Photocopier. Electric Fan- Ceiling/ Pedestal/ Table. Dish Antenna. Baby Taxi, Tempo/Microbus (For self employed persons)

Special Features:

No collateral security is required. Simple rate of interest. Quick sanction. Maximum Loan amount Tk.3,00,000/5% incentive on total interest charged

Required Documents:

Documents related to applicant's job to prove himself. Two copies passport size photographs. Photograph of nominee (if any) duly attested by the account holder.
35 30 25 20 15 10 5 0 January February March April 12.543 32.642 27 30.764

Figure 4: Graph showing Outstanding Loan of CCS for last four months (Amount in Lac)

Interpretation: the chart indicating the amount of CCS is dramatically increased on February to April. The reason behind the increase was sanction of new loan account on this category. The increase and decrease is happened for two reasons one is if new loan account is sanctioned and other is if regular payment is remain due. But the overdue will not create a huge change in the graph.

2.8. UTTARAN HOUSING REPAIRING LOAN

In case of UHRL the borrower will get loan from the bank by giving mortgage of his property. Here the bank will charge against the amount of Loan. Maximum limit of the loan is TK.25 lac. Uttara bank Ltd charges 15% interest against the amount. Bank will obtain following documentation from the borrower: Photographs of Borrower. Commissioner Certificate/ ID card/Birth certificate/ Passport photocopy as the identity of the borrower. Photographs of the mortgage property. Documentation of property (Dalil, Parcha, Khajna, Rasid etc.) Valuation of property Audit report of the property Six months bank statements Report of CIB.

INTEREST AND OTHER CHARGES Interest: 14.00% per annum with yearly rest subject to change that may be made by the Bank from time to time. Processing Fees: @TK 1000.00 (Taka One Thousand) only per lac to be realized before processing of loan.

 Processing fee to be refunded deducting TK.500.00 (Taka Five Hundred) only as service. Charge per proposal in case of it is rejected. Cost of Application form & Prospectus: TK 200.00 (Taka Two Hundred) only. If loan installments are regularly & timely paid without any default, the borrower will be allowed incentive at the rate of 5% of the total interest charged which will be refunded on full adjustment of the account.

ELIGIBILITY OF THE CLIENT Any owner of House/ Building/ Flat aged between 30 to 55 years will be eligible to get loan under this scheme who are financially capable to repay the loan having income or additional income from own source and added rental income to be guaranteed after utilization of the proposed loan. In case of age bar of applicants the proposals may be considered for sanction if the guarantor is found good or other source of income of the applicant covers the installment of the loan. The House/ Building/ Flat to be repaired and / or renovated by the loanee should not be older than 20 years. The employees or their dependent of Uttara Bank Ltd. Are not eligible to get loan under this scheme. The applicant must have a saving Account with the branch of the Bank from where he / she want to avail of the loan. Bank reserves the right to accept or reject any application without assigning any reason whatsoever.

Total Limit 41200000

outstanding 29659763

Value of Collateral 207642400

overdue amount 759599

Figure 5: Position of Uttaran House Repairing Loan, Moghbazar Branch.

Interpretation: This chart indicating the UHRL have 296 lac outstanding amount and only 759599 overdue which is classified as Irregular. The collateral amount is 20 crore. From all this information we can say the condition of UHRL account is satisfactory.

2.9. INLAND BILL PURCHASE (IBP)

Uttara Bank Limited started granting of credit facility against Inland Bill Purchase by issuing the Instruction Circular No.243 date. 17-01-99. subsequently certain amendments have also been made there to vides Credit Division. All concerned are hereby instructed to observe the following procedure for granting of credit facility against Inland Bill Purchase (IBP): Only those bills will be purchased which arise out of genuine business transactions of manufacturing units/concerned. The concerned branch allowing IBP facility must see that the bill has been drawn by the party himself and he is not the purchaser of goods/services or endorser of the bill.

 The applicant requesting for IBP facility will have to submit all the shipping documents as required in the ILC opened by buyer's bank. On receipt of acceptance and maturity date for payment of the bill from ILC opening bank, our concerned branch will invariably verify, by physical contact with concerned ILC issuing bank, the genuineness of the said acceptance letter by relationship Manager/ second Officer/ Dealing officer (not bellow Principal Officer) with authorized signature to be counter signed by the branch incumbent. The branches must not purchase Bill against ILC opened by any of our Bank branches. In case of any need for purchasing against ILC of our bank, prior permission from Head Office is to be obtained. The loans under IBP will be allowed by the concerned Branch Manager as per his above discretionary power. The loans falling beyond his discretionary power will be allowed only on sanction from the concerned Zonal Head or Head Office as the case may by. In case the liability against any IBP is not adjusted even within 30 days after due date of payment, the matter shall be referred to Head Office, International Division giving full particulars of bills/LCs for taking up the issue by them for settlement. The following charges and interest are to be realized: a. Handing Charge: 0.25% of bill value with minimum TK.25.00 and maximum TK.2000.00 b. Rate of interest: 13.00% per annum with quarterly rest subject to change that may be made by the bank from time to time. a. Revival Letter Form-II (where guarantor exists) All concerned must comply the instructions of this circular meticulously while granting credit facility against IBP.

2.10. LOAN AGAINST TRUST RECEIPT (LTR)

On the arrival of goods and lodgment of import documents, importer may request the bank for clearance of goods from the port (custom) and keep the same to bank go down. Proper sanction from the competent authority is to be obtained before clearance of consignment. For giving these types of loan, officer makes loan proposal and sends it to H/O for approval. After getting approval from H/O, bank grants loan in the form of LTR.

 Advance against a Trust Receipt obtained from the Customers are allowed to only first class tested parties when the documents covering an import shipment or other goods pledged to the Bank as security are given without payment. However, for such advances prior permission/sanction from Head Office must be obtained. The customer holds the goods or their sale-proceeds in trust for the Bank, till such time, the loan allowed against the Trust Receipts is fully paid off. The Trust Receipt is a document that creates the Bankers lien on the goods and practically amounts to hypothecation of the proceeds of sale in discharge of the lien.

2.11. WOMEN ENTREPRENEURS LOAN SCHEME(NARI SWANIRBOR RIN PROPOLKO)

Economic development is closely related to the empowerment of Women. In Bangladesh the number of Women owned companies / firms continues to grow. To ensure smooth credit flow for Small women enterprise Uttara Bank Limited is decided to help the genuine women entrepreneur having sincerity, honesty and strong deliberation to improve the banking habit of self employed women entrepreneurs to run any legitimate business smoothly with the help of bank finance by offering a special business loan product named Nari Swanirbor Rin Prakalpo

1. Nature of Loan 2. Loan size

Term Loan

Minimum Loan : Tk 1.00 lac (Taka one lac) Maximum Loan : Tk 15.00 lac ( Taka Fifteen lac)

3. Purpose

To meet up the financial requirement of the business. ( Working Capital / expansion of business )

4. Tenor

Minimum : 1 (one ) year Maximum : 3 (Three) years

5. Interest rate 6. Security

10.00 % per annum (subject to change by management ) i) Hypothecation of goods in trade ii) (a) Upto Tk 5.00 lac ( Taka Five Lac) against acceptable 3rd party Guarantee or collateral security (b) Above Tk 5.00 lac (Taka Five Lac) Collateral in the form of FDR/ Registered Mortgage of collateral security. iii) Guarantee of Spouse/ parents / other family members.

Source: Website of Uttara Bank Limited<www.uttarabank-bd.com> accessed on April 2013 Eligibility: Applicant age should be minimum 21 years. and maximum 55 years. Any women entrepreneur having the experience of successfully managing the business at least two years may apply for the loan. The applicant must have a current deposit account with the branch of the bank.

Required Documents: Trade License at least 2 (two) years old. Business Cash Flow to support repayment The applicant shall have at least 6 ( six) months latest Bank Statement

600000 500000 Amount in Taka 363534.465 400000 300000 200000 100000 0 January February March 434523.345 383453.9863

538793.345

April

Figure 6: Graphical presentation of NSRP over last four months

Interpretation: NSRP are increasing gradually, it is a specialized loan to facilitate women empowerment and Bangladesh bank has declared certain ratio of Loan should be on this Account. So the bank is currently encouraging women entrepreneurs to take the loan without any collateral as well as interest rate is lowest.

Table 3: Position of Loan and Advances Position of Loans and Advances A/C
As on 31/04/2013

Types Cash Credit (Hypo + Pledge) Secured Overdraft Loan Account General Small Business Loan (SBL) Uttaran Consumer Credit Schemes (CCS) Inland Bill Purchased Agricultural Loan Uttaran House Repairing Loan Nari Swanirvar Reen Prokalpa Loan against financial obligation Total Loan and Advance

No of A/c 17 67 47 33 3 21 0 32 4 61 285

Amount in taka 31,128,176.00 59,886,877.95 1,999,956.00 34,564,350.00 16,343,127.00 29,659,763.56 0 29,659,763.56 348,672.00 61,128,175.95 264,718,862.02

Percentage 0.117589566 0.226228224 0.007555019 0.130570031 0.06 0.112042502 0 0.112042502 0.001317141 0.230917342 1

Source: Statement of Loan and Advances, April 2013

0.25 0.2 0.15 0.1 0.05 0 Cash Credit (Hypo + Pledge) Loan Account General Uttaran Consumer Credit Schemes (CCS) Uttaran House Repairing Loan Loan against financial obligation Secured Overdraft Small Business Loan (SBL) Agricultural Loan Nari Swanirvar Reen Prokalpa

Figure 7: Category wise Percentages of Loan A/C Interpretation: This bar chart indicates that the bank has invested a good amount in Secured overdraft. Its good but the bank should emphasize on other category and should create a portfolio

for loan disbursement. We can see that many segments have a poor distribution like- general account, Agricultural loan and NSRP.

Loan against financial obligation, 61

Cash Credit (Hypo + Pledge), 17

Secured Overdraft, 67 Nari Swanirvar Reen Prokalpa, 4

Uttaran House Repairing Loan, 32

Loan Account General, 47

Agricultural Loan, 0 Uttaran Consumer Credit Schemes (CCS), 21

Inland bill Purchased, 3

Small Business Loan (SBL), 33

Figure 8: Category wise number of Loan Accounts

Interpretation: In this chart this is very clear that the bank have the highest number of loan account opened in Loan against financial obligations during this period which is 61 and 67 account has been opened on Secured overdraft. The reason behind this are loan against financial obligation is opened by the household people for meeting their crisis and Cash credit is opened by the business person who deals with money almost every day.

2.12. DIFFERENT INTEREST RATE OF UBL (MOGHBAZAR BRANCH)

Table 4: Interest rate of Loan Accounts Sl. No 01 02 03 04 05 06 O7 08 09 10 11 Loans Interest rate %

Cash Credit (CC) Personal Loan Small Business Loan Over Draft: Loan against DPS, MDS. Loan against FDR(our bank) Loan against DBDS Loan against share/securities Loan against wage Earners Development Bond Loan against work order Uttaran House Repairing Loan

14% 16% 15% 15% 2% plus FDR rate 15% 15% 15% 16% 15%

Import(PAD.LTR,&LIM)For importing essential items 12% (rice, wheat, Edible oil, dal, Chola, Onion, Dates, and Suger etc,) Lease Financing For importing all other items. Consumer (Household Durables) IBP(Inland Bill Purchase) Nari Swanirbhor Rin Prokalpa 15% 15% 13% 15% 10%

12 13 14 15 16

Source: Website of Uttara Bank limited< www.Uttarabank-bd.com> accessed on April 2013

2.13. TOTAL PROCEDURE OF LOAN

Consultation with Relationship Manager

Fill up the Application form

Submit all documents

Valuation of Asset

Personally visit and Inspect genuiness of Asset

Prepare proposal for Loan and forward to Zonal Head office

If exceed discretionary power of zonal Head then forward to Head office

Sanction copy receieved at Branch form Head office

Disbursement of Loan

Periodicaly collection of Installment of Loan

At Maturity termination of Loan Account

The following procedure is followed by Moghbazar Branch while preparing proposal for loan First, borrower has to apply to UBL for their loan by filling up of a specific application form given by the bank in respect of their own status (individual/proprietorship/public/private ltd.etc.).A very efficient team of employee is working under the supervision of sales manages to help the borrower in this regard. In case of individual loan, an applicant has to submit at least 6 month latest financial statement of their own bank account along with his photocopy of passport or ID card or any other documentation, as his personal identification. If the loan is for house repairing then the borrower has to submit various documents of existing house as an evidence of house owner. Thereafter, he has to submit price quotation accepted and signed by the borrower, a salary certificate given by the organization (if borrower is a service holder) and with all other necessary documents. But in the case of business person, some excess documents are required. Borrower has to submit at least 12 months latest financial statement of their own bank account. They are also required to submit the names of all board of direct of the organization. The following papers will have to be submitted while applying for loan: Application in prescribed form duly filled in all the columns and signed by the applicant. Two passport size photographs of the applicant duly attested by manager/ relationship manager of the branch. A photograph of the house/ building/ flat is to be sent with the proposal. Estimate of the proposed expenditure to be incurred for the repairing and or renovation of the house/ building/ flat to be submitted of the application. Personal Net Worth statement of the client. Banks Statement for minimum last 6 (six) months of the account of the client. Contact Point Verification Report by banks authorized officer. Lawyer's opinion on the documents of the properties. After that, the applicants for loan has to fill up a CIB (Credit Information Bureau) form and must be verified by Bangladesh Bank whether the applicant has any irregularities in repayment of loan or any other credit records.

After that the employee of Moghbazar branch cheeks all documents provided by the borrower the following documents are checked: Application and passport size photograph Passport /voter ID / office ID/ other ID Salary Certificate Photocopy of latest trade license Photocopy of registered/Notarized partnership deed Tax documents Bank statement Checking duplicity and regular liabilities with Uttara Bank Checking proper filling up of the application After that, Moghbazar Branch sent a very efficient team for the verification. If the team is satisfied by all aspects, then they report to the branch manager. If the branch manager agrees, then he gives order for preparing proposal for loan. After getting the permission from manager the employees team prepares loan statement of Moghbazar Branch By adding all the documents, submit it to head office and zonal office.

2.14. PROCEDURE OF SANCTION OF LOAN

i. The branch Relationship Manager will process the loan applications and the Zonal Head will sanction the loan within his discretionary power on inspection of the House/ Building/ Flat and on verification of possible rental income and the branch Manager will disburse the loan on completion of all formalities against the allocation.

ii.

Ceiling of the loan for individual party will be considered based on 50% to 60% of the Forced Sale Value (FSV) of the properties (Land+ building).

iii.

On receipt of application with all the required papers, the Relationship Manager (RM) will verify the genuineness of the information & particular of the application by deputing

an inspecting official of the bank. He will also ensure geniuses of the same by applying his dust prudence. If all the paper are found all right and genuine and he is fully satisfied about the geniuses of the applicant, the RM will process the loan and get the same sanctioned by Zonal Head within 15 days from the receipt of the application complete in all respect. If it exceeds discretionary power of Zonal Head he will immediately forward it through respective Zonal Office to Head Office for consideration. A copy of sanction letter to be sent to the Uttaran Consumer Credit Cell, CRM Division, Head Office immediately after sanction by the Zonal Head to Zonal Head to Record the same in the computer.

2.15. LOAN DISBURSEMENT

Having permission from head office and completed accurately prepare the necessary loan documents; the employee team disburses the loan to the borrowers accounts. if the borrower has no account in Moghbazar Branch, then the team opens and account (current/savings)for the borrower. then bank start to collect installment with regular basis and monitoring weather client it or not if client tend to be defaulter ,bank remind frequently by phone ,sending letter and communicate directly. Having permission from head office and completed accurately prepare the necessary loan documents; the employee team disburses the loan to the borrowers accounts. If the borrower has no account in MoghBazar Branch, then the team opens an account (current/savings) for the borrower. then bank start to collect installment with regular basis and monitoring weather client it or not if client tend to be defaulter ,bank remind frequently by phone ,sending letter and communicate directly.

2.16. TOTAL LOAN DISBURSED FROM JANUARY TO APRIL 2013 AT UBL,

MOGHBAZAR BRANCH
Table 5: Loan disbursement Taka in Million Changes 6.12 5.41 7.23 8.49 0 -0.71 +1.82 +0.53

Years January February March April

Source: Monthly statement of financial position

10 8 Taka in Million 6.12 6 4 2 0 0 -2 January -0.71 February Taka in Milion March Changes 1.82 0.53 April 5.41 7.23 8.49

Figure 9: Total loan Disbursed from January to April 2013 at UBL Moghbazar Branch

Interpretation: Total disbursement of UBL is showing different characteristics from February to April on the aspect of changes compared to the previous month. Here in February total disbursement was less than January, which is -0.71 million and for March and April respectively 1.82 and 0.53 Million. From this we can say the disbursement process of Loan should be monitored more frequently and should fix target disbursement at the beginning of every month. 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 cheque with signature (one cheque for full amount and others same as no of installment on Favor of Dhaka 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)

2.17. PROBLEM WITH ADVANCES OF MOGHBAZAR BRANCH

In case of advance in different project, the interest rate is too high Maximum parties have no financial strength In terms of law and order situation sometime it is very difficult for the bank to liquidate the collateral when the party is unable to pay the debt. Most of the parties are creating some sort of pressure to get the loan. There are some mortgage problem such as, acquisition and proprietorship, problem of asset. In the advance department they have the mortgage of skilled manpower.

2.18. CALCULATION OF OVERDUE PAYMENT OF MOGHBAZAR BRANCH

Table 6: OVERDUE PAYMENT For the year of 2012

Particulars Irregular
Amount Outstanding Percentage

Sub-standard

Doubtful

Bad Loan

Total 5153031 100%

3873240.237 398292.483 75% 7.73%

57658.548 823840.23 1.1% 15.99%

80% 70% 60% 50% 40% 30% 20% 10% 0% Irregular Loan Sub-standard loan Doubtful Loan Bad Loan

Figure 10: Percentage of Overdue payment according to category

Interpretation: The main problem of Moghbazar Branch is overdue payment. Most of the clients are not paying their payment timely. So the branch needs to calculate payment as the requirement of head office. Normally the installment of payment is started after three months of loan disbursement. After three months the installment of payment is due. By that time the due payment is calculated. If client do not pay their installment, bank remain frequently by phone, Sending letter and communicate with directly. After that Moghbazar Branch calculates the overdue payment and sent to the head office. Then head office takes necessary actions.

2.19. CORRELATION BETWEEN DEPOSITS AND LOAN-ADVANCES (IN MILLIONS)

Table 7: Correlation between deposit and Loan (Amount in Millions) Months January February March April Deposit
44.12 52.04 63.52 65.11

Loan
6.12 5.41 7.23 8.49

Loan/Deposit Correlation %
0.1387126 0.1039585 0.1138224 0.1303947 0.80260056

Source: Statement of Loan and Advance, UBL, 2013

Correlation Coefficient

80 60 6.12 40 20 0 January February March 44.12 52.04 63.52 65.11 7.23 5.41 8.49

April

Figure 11: Correlation between Deposit and Loan Interpretation: The loans and Advances of UBL have a positive correlation between Deposit and Loan which is 0.8026 for January to April 2013. It indicates that if Deposit increases 100% then Loan should increase 80.26%. The Bank should increase its Loan deposit ratio to increase Income through distributing more loans and get a perfect positive correlation of 1 between deposit and Loan. We know deposit is Liability for a bank so it should keep in mind that more deposit means the bank should invest more in different Income generating area.

2.20. CREDIT PERFORMANCE RATIO

Non performance loan to Total loan = Non-performance Loan/Total Loan Particulats Classified/Total loan January 0.017784732 February 0.012783749 March 0.011953817 April 0.011862638

Source: Monthly affairs of classified loan

0.02 0.015 0.01 0.005 0 January February March April

Figure 12: Non performance loan to Total loan Ratio

Interpretation: This chart is showing that Non performance loan to total loan for January to April respectively was 0.01778, 0.0127, 0.01195, and 0.0118. We know the less the Nonperformance loan to total loan ratio indicate the classified loan are decreasing.

2.21. CLASSIFIED LOANS AND PROVISION

Classified loans

Irregular loan (Loan overdue for 3 months but less the 6 months)

Sub-standard loans (Overdue for 6 months but less than 9 months)

Doubtful debt (loan overdue for 9 months but less than 12 months)

Bad debt (Overdue for 12 months or more)

2.22. CREDIT MANAGEMENT AND RECOVERY OF CLASSIFIED LOANS

As classified loans increase provision rate, create adverse effect on investment .In order to accelerate the investment, reduce inflation and to attain target growth rate the following guideline have to be follow: Undertaking step for recovering of all classified money. Properly audit creditor financial situation, willingness of repayment of loans money, creditor sources of income property. Bank must take urgent measure for recovery of loan money. Examining properly all documents and charges documents. And submitting to harm dept. takes immediate legal action by examining the accurateness of all the documents and amended documents by the direction of head office. Employing well-qualified advocates for UN recovered loans money collection against powerful and large amount creditor. Branch manager have to be concern regarding quick settlement of all suit cases, in the case date bank representative must present in the court and provide information to the competent authority. Strictly follow guideline of Bangladesh bank while sanction loans. Take accurate guarantee from the creditor so that creditor get no provision/ evasion of not pay bank due money. Branch must achieve annual and half yearly budget target so that amount of classified loans may be concern by higher authority and take appropriate action. Bank have to be set up a more strengthen R&M department. Branch manager have to be directly consult with the Deputy GM of R &M. Head office has to employee a former D.C. as a legal advisor in order accelerated recovery of classified loans.

 Measure must be taken all debts before they are being classified or before expiry dates that loans not be classified. Precaution must be taken while approval of loans proposal in H.O. must justify real situation of using loans granted loans, incase e of any discrepant document or any claim against loans must inform H.O. for not sectioning loans to that applicant.

Position of Outstanding Loan and Classified Loan

140000000 120000000 Amount in Taka 100000000 80000000 60000000 40000000 20000000 0 January February March April Outstandings Classified

January February March April Outstandings 120627741.8 120,804,316.21121,569,788.45122,026,569.68 Classified 2145332 1,544,332.00 1,453,223.00 1,447,557.00

Figure 13: Comparison of Outstanding and Classified loan

Interpretation: It seems Outstanding amount of the year is increasing month by month but classified loan is decreasing. The bank has a good condition of classified loan. Here we can hardly see the bar of Classified loan besides the Out standings as well as the classified loan is decreasing. So its a good sign for the Bank. It may be the result of strict inspection at the time of loan sanctions. We know if the input is good than the output should also be good.

2.23. MAINTENANCE OF PROVISION:

General Provision: Banks will be required to maintain General Provision in the following way:

1. At the rate of 0.25% against all unclassified loans of Small and Medium Enterprise (SME) as defined by the SME & Special Programmes Department of Bangladesh Bank from time to time and At the rate of 1% against all unclassified loans (other than loans under Consumer Financing, Loans to Brokerage House, Merchant Banks, Stock dealers etc., Special Mention Account as well as SME Financing.) 2. At the rate of 5% on the unclassified amount for Consumer Financing whereas it has to be maintained At the rate of 2% on the unclassified amount for (i) Housing Finance and (ii) Loans for Professionals to set up business under Consumer Financing Scheme. 3. At the rate of 2% on the unclassified amount for Loans to Brokerage House, Merchant Banks, Stock dealers, etc. 4. At the rate of 5% on the outstanding amount of loans kept in the 'Special Mention Account'. 5. At the rate of 1% on the off-balance sheet exposures. (Provision will be on the total exposure and amount of cash margin or value of eligible collateral will not be deducted while computing Off balance sheet exposure.) Specific Provision: Banks will maintain provision at the following rates in respect of classified Continuous, Demand and Fixed Term Loans: (1) Sub-standard: 20% (2) Doubtful: 50% (3) Bad/Loss: 100% Provision for Short-term Agricultural and Micro-Credits: (1) All credits except 'Bad/Loss' (i.e. 'Doubtful', 'Sub-standard', irregular and regular credit accounts): 5%

(2) 'Bad/Loss:100%

Special Provision
100% 50% 5% 0% Irregular Sub-standard Doubtful 20% 100%

50%

Bad/Loss

Figure 14: Special Provision for Classified Loans

General Provision
30% 20% 10% 0% Unclassified SME Consumer Financing 1% 5% 25%

5% Series1 Special Mention A/C

Figure 15: General Provision for Loan Accounts

Interpretation: These two charts showing the percentages of provision the bank keep for the weak and risky loans. Special provision is for the classified loans which are already fall in classified category and the general provision for risky loan accounts which does not include in the classified category but they are not strong enough due to weak collateral or establishment of new business like SME, Agricultural, and Women Entrepreneurs etc.

2.24. MAJOR PROBLEMS OF LOANS

Loans are un-recovered as these are sanctioned against improper documents. Loans are given as the order of direct higher authority. Loans are not properly utilized, loans was cautioned for one sector but used in other sector. Lack of sufficient interest. Financial loss in business of the creditor. Loans are given without proper inspection of pledged assets or hypothecation. Loans are un-recovered due to value of the collateral assets are not properly assessed. Maximum loans are cash credit instead of collateral credit. Loans are un-recovered due to present govt. policy has lacks to take legal action against loan defaulter. Loans are sanction-limited sector. Maximum loans are c.c. / abnormal money excess of c.c. Loans are sanctioned against discrepant documents/ documents are not properly examined. Loans are given loans are given without following Bangladesh bank B.P.R.D. Creditor is not available found in the country.

2.25. PRECAUTION WHILE SANCTION OF NEW LOANS:

Banker must analysis borrower nature of business, experience in business, qualification, and goodwill. Income sources, profit from invested money, ability to repayment of loans money. Before submit loans proposal banker must properly examine risk and guaranteed value from loans.

 With a view to properly assessed the proposal of the borrower banker must filled application including borrower cash flow, personal net worth, description of mortgage assets, assets and liability ratio and submit the proposal to H/O. Banker must be insuring that borrower mortgage property is not pledged to other bank. While sanction loans above 10-lac proposal must be submitted to Bangladesh bank with details description of use of loans money. Lending risk must analysis before sanction Tk. 50 lac. Banker must inspect practically while renews of loans with a view to Asses property actual market value.

2.26. SWOT ANALYSIS OF UTTARA BANK LTD, MOGHBAZAR BRANCH.

Strengths 1. The branch has a good number of loyal customers. 2. Old generation and Lower class people are highly satisfied with their services 3. The interest rates and charges are comparatively lower than other competitors bank. 4. The staffs of the branch are very friendly & help the customers in all cases. They provide services along with bonding & personal relationship with the customers 5. Many customers have a misconception that the bank is government owned.

Weaknesses 1. Their banking system is not fully automation system. 2. The bank does not provide any promotional activities for customers. 3. Inadequate number of employee results customer dissatisfaction 4. The working system is also manual system. 5. Some of the PCs in this branch have very outdated hardware which is very slow and affects the customers and hence the performance of the bank as a whole

Opportunities 1. With small modification it can boost its profit. 2. The branch is situated in a dense area. 3. Depositors can be increased through promotional activities. 4. Bangladesh is a developing country to satisfy the needs of the huge population, a large amount of investment is required. Threats 1. Huge number of competitors in the market who are providing better and fast services. 2. The problem of non-performing loans or default loans is very minimum or insignificant. However, this problem may rise in the future thus; UBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem. 3. New competitors are entering the market.

Chapter-3

3.1 Conclusion
Banking sector of Bangladesh consists of several nationalized and Private Bank .They are doing their activities and highly contribute to the national economy. Among them Uttara Bank Limited also makes significant contribution to the economy. They are performing their activities, as a result not only the bank but also the economy is benefited. The bank is performing Loan Advance, foreign exchange, general banking activities etc, as a result they are mobilizing the money and do well for the economy. Although they have some limitation in their service, they are doing job for the economy. If they can reduce their limitation and introduce new ideas, they can do better in the banking sector of Bangladesh.

The branch is performing well in Loan and Advance but they should concentrate on some weak points like their Loan Amount is very few in compare of Deposits. They should outflow more loan to increase interest income. On the other hand the branch should reduce the time needed for loan sanction. From the finding I can conclude that the bank is less or more like a government bank. Their management system is not decentralized which makes it more time consuming. The credit management does not monitor loan Account and overdue regularly and sometimes the borrowers are not selected in appropriate way. During my internship I have conducted all the activities of a particular loan account from the beginning to end. It gave me a clear view of loan procedures. I also did some analysis on existing loan and Advance condition of the bank and try to depict the area where the bank can improve their performance.

From the discussion it can be concluded that UBL, Moghbazar Branch playing an important role in the economic development of the country and it has a prospect future to have a very good position as a whole in the banking sector. To do this it should increase promotional activities to reach to the people easily. From the learning and experience point of view I can say that I really enjoyed my internship at Uttara Bank Ltd, Moghbazar Branch from the very first day.

3.2 Recommendations
Uttara Bank Limited, Moghbazar Branch has a good number of clients. To keep pace with the competitive banking services it should improve some weak points to cope with Advance banking competitors who are continuously improving their infrastructure, Manpower, Technology, Security, Services and Promotional activities. From my internship I have realized that the bank should focus on these following recommendationsUBL should reduce its dependency on CC and Secured Overdraft. The branch should encourage clients to take loans from other categories. Loan & Advance department should be automated; as a result sectioning of loan will be less time consuming. The loan management should be much sincere; so that the bank can minimize its bad debt Documentation of loans should maintain properly. Highly efficient employee should take responsibility for loan and advance section. The bank should give reminder to the borrower to pay their payment timely. Credit Section procedure should be made quicker since Competition is very high in todays banking sector in Bangladesh. The Bank Should introduces new Loan products with minimum interest rate according to changing of diverse needs of clients by conducting huge research and study. Employee of the bank should try to create personal relationship with the borrowers to maximize the monitoring, supervising and recovery effort. More loans should be disbursed in different categories.

References

REFERENCES
Bodie, Zvi, et. al., 2010, Investments, Sixth Edition, McGraw-Hill/Irwin, New York, USA. Bangladesh Bank, Banking Regulation and Policy Department, Viewed on 30 March 2013, <http://www.bangladesh-bank.org/mediaroom/circulars/brpd/sep232012brpd14e.pdf> Hudgins, Sylvia C., and Rose, Peter S., 2010, Bank Management and Financial Services, Fifth Edition, McGraw-Hill/Irwin, New York, USA. Ministry of Finance Bangladesh, General Financial Rules, Viewed on 2 April 2013,

<http://mof.gov.bd/en/budget/gfr/ch13.pdf> Rose, Peter. S, 2006, Commercial Bank Management, Fifth Edition, McGraw-Hill/Irwin, New York, USA.

Safari

Books

Online,

Loans

and

Advances,

Viewed

on

08

April,

2013,

<http://my.safaribooksonline.com/book/business/9788131730690/2-establishing-a-businessand-entrepreneur-heuristics/ch02_sd2_9_xhtml> Uttara Bank Limited, Consumer Loan, Viewed on 09 April, 2013, <http://www.uttarabankbd.com/HTML/consumerloan.htm> Wiki Answers, Difference between Loan and Advances, Viewed on 05 March 2013, <http://wiki.answers.com/Q/What_is_the_difference_between_loan_and_advance>