Professional Documents
Culture Documents
The primary purpose of this report is to get an idea about the operations of Credit
Performance of Janata Bank Limited. Credit Performance plays an important role in the
balance of trade in our economy. In this regard Credit Performance of Bangladesh, Banks
plays an vital role. The word Bank refers to the financial institution, which deals with money
transaction.
This report is an attempt to reflect the position of Credit Performance of Janata Bank Limited
side by side Bangladesh.
Origin of the Report
BBA program is designed with an excellent combination of theoretical and practical aspects.
As the classroom discussion alone cannot make a student perfect in handling the real
business situation, so it is an opportunity for the students to know about real life situation
through this internship program. This internship program provides the students to link up their
theoretical knowledge with practical fields. In this connection, I was assigned to Janata Bank,
Sheraton Hotel Corporate Branch, Credit department for my practical orientation.
I am required to prepare an internship report under the supervision of our honorable teacher
Mahmood Osman Imam on Credit Performance analysis of Janata Bank Limited to conduct
a depth analysis on this subject matter. I have tried my level best to present my experience of
the practical orientation in this report.
Objectives of the report:
Determine the ways of measuring the creditworthiness of potential borrowers.
Assessing the performance of different types of Loan products.
Identification of weaknesses and problems regarding Credit management system.
Analyzing Loan disbursement and collection procedure as well as their effectiveness and
efficiency.
Assessing existing Loan innovation system and practices.
The report intends to cover Janata Bank Limiteds company profile, historical background,
organizational overview, management, capital structure, products and functions regarding
social responsibilities performed by the bank.
Main focus will be given to Credit performance analysis.
Rationale of the study
Bangladesh is one of the developing country in the world. The economy of the country has a
lot left to be desired and there are lots of scopes for massive improvement. In an economy like
this, Credit Performance can play a vital role to improve the overall economic condition of the
country. The banks by playing the role of an intermediary can mobilize the excess fund of
surplus sectors to provide necessary finance, to those sectors, which are needed to promote
for the sound development of the economy.
This report is an effort to reflect a clear idea about the strategies, activities, and performance
of Bangladesh regarding Credit Performance Business.
Limitations
To prepare this report, I have faced some limitations, which are mentioned below.
Limitation of time: It was one of the main constraints that hindered to cover all aspects of
the study.
Lack of Secondary Information: The secondary source of information was not enough to
complete the report.
Limitation of the Scope: Some confidential information was not disclosed by various
personnel of their respective department.
Techniques of Analysis
Secondary Data will be collected from different sources. Then those data includes
repayment pattern, disbursement pattern, recovered amount, amount due to be recovered,
loan overdue amount of different types of loan will be collected. The necessary information
need to be collected to calculate Cost of Capital of the Branch.
Data Required
To prepare this report I have mainly focused on numerical data. I have also used theoretical
portion as reports demand. Because to analyze Credit Performance of a bank both theoretical
and technical knowledge are necessary. Then based on everything I have analyzed and made
conclusion.
Sources of Data
Sample Information
Information is mainly collected from annual report of Janata Bank Limited, annual meeting
report, brochures and web sites. The information incorporated in this report is also collected
both from the primary sources and as well as from the secondary sources.
Primary Source of Data
I collect data directly from the practical field of different sectors that is Janata Bank head
office. This data is called primary source of data.
Secondary Sources of Data
The secondary data is also collected from annual report, different conceptual matters, internet
and different articles published in different sessions.
Secondary Sources are:
Internal Reports
1 Organizational Profile
Historical Background of the organization
Janata Bank Limited is the 2nd largest state owned commercial bank in Bangladesh.
Immediately after the emergence of Bangladesh in 1971, the erstwhile United Bank Limited
and Union Bank Limited were named as Janata Bank. It was established under the
Bangladesh Bank order 1972. During the privatization process it was incorporated as a public
Limited Company on 21, May 07 vide certificate of incorporation No-C66933(4425)07. The
Bank has taken the over the business of Janata Bank at a purchase consideration of Tk.
2593.90 million as a going concern through a vendor agreement signed between the Ministry
of Finance of the Peoples Republic of Bangladesh and the Board of Directors on behalf of
Janata Bank Limited on 15th November 2007. Janata Bank Limited operates through 851
branches including 4 overseas branches at United Arab Emirates and a subsidiary company
named Janata Exchange Company Srl in Italy. It is linked 1202 foreign correspondents all
over the world.
Objectives of the organization
Mission:
To be recognized as the leading commercial bank in the Bangladesh market providing retail
and corporate banking services and as a trusted and respected partner in the social and
economic development program of our nation.
Vision:
To become effective largest commercial bank in Bangladesh to support socio-economic
development of the country and to be a leading bank in South-Asia.
Services of the organization
Besides normal banking operation, Janata Bank Limited offers special services to a large
number of clients/agencies throughout the country. Under the network of utility service,
Town
Rural zone
Total
162
82
244
100
88
188
80
131
211
22
36
58
Khulna
75
71
146
443
408
851
Overseas
Total
City
No of Branch
Status
Abu Dhabi
01
Foreign
Al-Ain
01
Foreign
Sharjah
01
Foreign
Dubai
01
Foreign
02.
03.
04.
Total
04
5. New Credit Product will start in a large scale by name of BMRE Loan for export project to
expand factory, import machineries, purchase transport among exiting parties.
6. To take the competitive position charge, decrease commission and other facilities will continue.
7. To increase export business monitoring system has made stronger in head office and
respective branches.
8. To increase export business has appointed sufficient manpower, providing special services and
related different training program of officers has been will be started.
income, Besides, foreign exchange business is also highly remunerative. The bank will not
enter into a transaction unless a fair return from it is assured.
Intent:
Banks sanction loans for productive purpose. No advances will be made by bank for
unproductive purposes though the borrower may be free from all risks.
Security:
The security offered for an advance is an insurance to fall bank upon in cases of need.
Security serves as a safety value for an unexpected emergency. Since risk factors are
involved, security coverage has to be taken before a lending.
National interest:
Banking industry has significant role to play in the economic development of a country. The
bank would lend if the purpose of the advances can contribute more to the overall economic
development of the country.
Pre-disbursement Compliance
When the credit proposal are approved the credit officer must have to be ensured that the
disbursement of the credit facilities must comply with the directions written in the credit policy
and circular made by time to time along with checking all the following terms and conditions.
Steps Involved in Credit Processing
Application for loan:
Applicant applies for the loan in the prescribed form of bank. The purpose of this forms is to
eliminate the unwanted borrowers at the first sight and select those who have the potential to
utilize the credit and pay it back in due time.
Getting Credit information:
Then the bank collects credit information about the borrower from the following sources:
1. Personal Investigation
2. Confidential report from other bank/ Head office/Branch/Chamber of commerce
3. CIB report from central bank
Scrutinizing and Investigation:
Bank then starts examination that whether the loan applied for is complying with its lending
policy. If comply, than it examines the documents submitted and the credit worthiness. Credit
worthiness analysis, ie. analysis of financial conditions of the loan applicant are very
important. Then bank goes for Lending Risk Analysis (LRA) and spreadsheet analysis, which
are recently introduced by Bangladesh Bank. According to Bangladesh Bank rule, LRA and
SA is must for the loan exceeding Dhaka core.
If these two analyses reflect favorable condition and documents submitted for the loan
appears to be satisfactory then, bank goes for further action.
Existing process of handling loans:
The process of sanctioning loans is as follows:
The Cs of Good & Bad Loan:
The Branch manager of DBL try to judge the possible client based on some criteria.
These criteria are called the Cs of good and bad loans. These Cs are described below:
Character
The outcome of analyzing the character is to have overall idea about the integrity, experience,
and business sense of the borrower. Two variables; Interaction/interview, and Market
Research are used to analyze the character of the borrower.
1. Interaction/interview: the indicators are
a) Prompt and consistent information supply, information given has not been found false
(Willingness to give information).
b) CIB also reveals business character.
c) Willingness to give owns stake/equity & collateral to cover.
d) Tax payer.
2. Market Research:
a) Information on business is verified.
b) Dealing with supplier and or customer as supplier is also a kind of lender; the payment
character can also be verified.
Capital
For identifying the capital invested in the business can be disclosed using the following
indicators.
a) Financial Statements
b) Receivable, Payable, statements to practically assess the business positions. Net worth
through financial statements or from declaration of Assets & Liabilities.
Capacity (Competence)
Capability of the borrower in running the business is highly emphasized in the time of
selecting a good borrower. As the management of the business is the sole authority to run the
business that is use the fund efficiently, effectively and profitably. The indicators help to
identify the capacity of the borrower.
a) Entrepreneurship skills i.e. risk taking attitude shown by equity mobilization.
b) Management competencies both marketing and products detail, ability to take decision.
c) Resilience or shock absorption: Connection, Back up (if first time falls second lines come to
help.)
Collateral
Make sure that there is a second way out of a credit, but do not allow that to drive
the credit decision.
Cash Follow:
Cash flow is the vital factor that is used to identify whether the borrower will have enough cash
to repay the loan or advance. Cash keeps the liquidity to ensure repayment. The relationship
manager try to identify the annual cash flow from the submitted statements.
Conditions:
Understanding the business and economic conditions can and will change after the
loan is made.
Complacency:
Do not rely on past history to continue. Stay alert to what can go wrong in any loan.
Carelessness:
Remember that documentation, follow-up and consistent monitoring are essential to
high quality loan portfolios.
Communication:
Share credit objectives and credit decision making both vertically and laterally within
the bank.
Contingencies:
Make sure that you understand the risks, particularly the downside possibilities and
that you structure and price the loan consistently with that understanding.
Competition:
Do not get swept away by what others are doing.
Credit Query:
The loans and advance department gets a form filled up by the party seeking a lot of
information.
The officer of Loan Administration must collect the acceptance of the customers of
the terms and conditions on the duplicate copy of the sanctioned advice.
They will thoroughly examine and ensure that the subject credit facility does not
contradict to any law, rules and regulation of the country, Bangladesh Bank and
Deed of the Mortgage and power of the Attorney to be drafted and executed under the
Supervision of the Banks Legal Advisor.
Lawyers certificate to the effect that all the legal formalities (Equitable/ Registered
Mortgaged) has been properly created on the land and building in favor of the bank &
bank has acquired the effective title of the property.
Registered power of attorney has been collected form the borrower (contractor)
assigning the work order favoring the JBL and the power of attorney has been
registered with the work order given agency and they have agreed that they will issue
all the cheques favoring JBL.
The legal documents of the vehicle have been obtained.
Collection of the satisfaction certificate in respect of all the documents both legal and
banking from the lawyer.
Entry has been made in the Safe -in and Safe-out register and the documents are
preserved.
After being satisfied all the above terms and conditions the credit in-charge will
disburse the loan amount to the client.
Documentation of the Loan:
Documentation is obtaining such agreement where all the terms and condition and securities
are written and signed by the borrower. It specifies rights and liabilities of both the banker and
the borrower. In documentation each type of advances requires a different set of documents.
It also differs with the nature of securities. The documents should be stamped according to the
stamp Act. There are no hard and fast rules of documentation and it varies from bank to bank.
Generally, the documents are taken in the case of a secured advance by JBL:
i. Demand promissory note: Here the borrower promises to pay the loan as and when demand
by bank to repay the loan.
ii. Letter of arrangement.
iii. Letter of continuity.
iv. Letter of hypothecation of goods and capital machinery.
v. Stock report: This report is used for OD and CC. In this report, information about the quality
and quantity of goods hypothecated is furnished.
vi. Memorandum of deposit of title deed of property duly signed by the owners of the property
with resolution of Board of Directors of the company owning the landed.
vii. Personal guarantee of the owners of the property.
viii. Guarantee of all the directors of the company.
ix. Resolution of the board of directors to borrow fund to execute documents and completes
other formalities
x. Form no. XVII/XIX for filling charges with the register of joint stock companies under
relevant section.
xi. Letter of Revival
xii. Letter of lien for advance against FDR.
Loans and Credit Facilities:
Credit Facilities and Program
General Credit Line:
v The main focus of Janata Bank Limited Credit Line/Program is financing business, trade and industrial
activities through an effective delivery system.
v Janata Bank Limited offers credit to almost all sectors of commercial activities having productive purpose.
v The loan portfolio of the Bank encompasses a wide range of credit programs covering about 200 items.
v Credit is also offered to 15 (fifteen) thrust sectors, as earmarked by the Government., at a reduced interest
rate to develop frontier industries.
v Credit facilities are offered to individuals, businessmen, small and big business houses, traders, manufactures,
corporate bodies, etc.
v Loan is provided to the rural people for agricultural production and other off-farm activities.
v Loan pricing system is customer friendly.
v Prime customers enjoy prime rate in lending and other services.
v Quick appreciation, appraisal, decision and disbursement are ensured.
v Credit facilities are extended as per guide-lines of Bangladesh Bank (Central Bank of Bangladesh) and
operational procedures of the Bank.v This rate may change from time to time depending on the level of
competition in the financial sector.
2.
3.
(a)
(b)
(c)
4.
Objectives:
v To increase agricultural production and improvement its quality.
v To gear up socio-economic activities among rural people.
v To create employment opportunities among rural people through providing economic support.
v Creating confidence among the beneficiaries on institutional credit and their access to improved production
practices / activities.
v To build up asset by creating saving habit among the rural population.
v Poverty reduction.
The main features of the major agricultural / rural credit programmes are narrated
below:
1. Special agricultural credit program / Short term crop production loan programme:
01.
Purpose of loan
02.
Area of operation
03.
Eligibility of loanee
04.
Sanctioning Authority
05.
Security
06.
Rate of interest
8%.
07.
Duration of loan
08.
Mode of disbursement
09.
Repayment of loan
Purpose of loan
To extend financial help to the farmers who are interested to cultivate betel-leaf,
banana, pine apple etc.
02.
Area of operation
03.
Eligibility of loanee
Genuine farmer.
04.
Sanctioning Authority
05.
Security
06.
Rate of interest
8%.
07.
Duration of loan
08.
Mode of disbursement
09.
Repayment of loan
marketing
Purpose of loan
:To increase fish production in pond and to create employment opportunity for pond owners
and lease holders by providing credit for pond re-excavation and fish cultivation.02.Area of
operation :Allocated unions under Lead Bank System.03.Eligibility of loanee :a) Pond owner
b) Lease holder of pond.04.Security :Pond, in case of pond owner and other properties in
case
of
lease
holder
are
being
taken
as
registered
mortgage.05.Rate
of
Purpose of loan
:To encourage the shrimp cultivator to produce more shrimps by utilizing modern production
practices in order to earn more foreign exchange.02.Eligibility of loanee :Individual / Group /
Cooperative society are eligible for loan.03.Security :Hypothecation of produced shrimp.
Collateral security such as land & building are being taken as a registered mortgage.04.Rate
of interest :8%.05.Duration of loan :10 months.06.Mode of disbursement :(a) Loan is
disbursed
(b)
Cash
in
2/3
credit
(C/C)
installments
is
disbursed
from
as
per
January
usual
to
practice
March.
of
bank
for the10 (ten) acres of land or above.07.Repayment of loan :(a) Loan is repaid by 4 equal
monthly
installments
from
July
to
October.
Purpose of loan
Loan is given for the purchase of irrigation equipments i.e Shallow Tube Well (STW),
Low Lift Pump(LLP), Deep Tube Well (DTW) etc & Agriculture equipment i.e Tractor,
Power Tiller etc. to increase agricultural production.
02.
Area of operation
03.
Eligibility of loanee
Owner of at least 0.5 acre of land in case of irrigation equipment loan and genuine
farmer in case of agricultural equipment loan are eligible.
04.
Security
05.
Rate of interest
8%
06.
Mode of disbursement
07.
Repayment of loan
Entire loan amount with interest is repayable by 11 equal half yearly installments within
6(six) years with a grace period of 6(six) months.
: 5,81,801
: 844
: 555
: 2% to 14%
: 40
: 29
Area of operation
Activities &
Appraisal
Approach
Individual.
Term
ST & MT.
Security
Disbursement
Repayment
Rate of interest
11%
Delegation
Related
Circulars/Letters
Gr-4
Gr-3
Gr-2
Gr-1
0.20
0.30
0.40
0.50
RM
AGM
DGM
GM
2.00
3.00
4.00
5.00
Collaborating
agency
Activities
Approach
Term
ST.
Security
a) Hypothecation of goods.
b) Group guarantee.
11%
Disbursement
Repayment
Delegation
Related
Circular/letter
(Fig. in Lac.)
Branch
RM
AGM
DGM
GM
DMD
MD
Max.0.80
per
group
2.00
3.00
4.00
5.00
5.00
5.00
c bs Fwe-4/GmGdwWwc Kvt
Swanirvar Bangladesh
Area of operation :
Major activities
under credit :
Off-farm IGAs..
Approach :
Appraisal :
Security :
a) Hypothecation of goods.
b) Group guarantee.
c) Lien of Group savings.
Rate of Interest :
11%
Disbursement :
Repayment :
Delegation :
Related
circular/letter :
agency
Area of operation
Objectives
Major activities
under credit
Proposal
Appraisal
Crop- as per credit norms of SACP & other short term credit- on
the basis of production plan prepared as per market price.
Irrigation & Ag.Implements- on the basis of actual market price.
Maximum 80% loan is sanctioned. i.e. minimum down payment
is 20%.
Security
Disbursement
Delegation
Reference
circular/letter
Area of
operation
Objectives
Eligibility
Proposal
(a) Any one can apply for loan from the command area of branch.
(b) Loan application to be duly & correctly filled in along with the
production plan ( in a prescribed form).
(c) By conducting survey group pass book to be issued for the
eligible family members
Appraisal
Sanction
Loan size
Security
(c) Under this program security has not been given priority. Importance has been given on
close supervision , monitoring and evaluation. Disbursement:Disbursement is made in cash
or
kind
through
single
or
installments.
Target Group
Purpose of loan
Eligibility of clients
Sanction/Delegation
Head Office and field level sanction the loan on the basis of
market price, P.P and equity of the entrepreneur. Minimum
equity/margin is 25%
Security
Disbursement
Delegation
Rate of interest
10%
Repayment
Reference
circular/letter
2.Cyber Cafe
Target Group
Area of operation
Objectives
Eligibility
Proposal
Appraisal
Sanction
Security
Documentation
Disbursement
Delegation
Delegation of
power without
collateral
Delegation of
power with
collateral
MD
3.00 Lacs
10.00 Lacs
DMD
3.00 Lacs
7.00 Lacs
GM
3.00 Lacs
5.00 Lacs
Rate of interest
12%
Repayment
Reference
circular/letter
Area of operation
Objectives
Eligibility
Proposal
Appraisal
Debt-Equity Ratio
80:20(Minimum).
Security
Sanction
Documentation
Disbursement
Delegation
Designation
Delegation of Power
Without
collateral
With collateral
MD
DMD
4.00
,,
8.00
,,
GM
3.00
,,
6.00
,,
DGM
2.00
,,
4.00
,,
AGM(Corp.2, Regional
Office)
1.00
,,
2.00
,,
Rate of interest
13%
Repayment
Reference
circular/letter
Area of operation
Objectives
Eligibility
Proposal
Appraisal
Sanction
Security
Debt-Equity Ratio
70:30
Documentation
Disbursement
Repayment
11%
Delegation
Without
Collateral
(a)
MD
25.00 Lac
Taka
(b)
DMD
15.00 Lac
Taka
(c)
GM (HO/DO)
10.00 Lac
Taka
(d)
DGM
(AO/RO/Corp.-1)
(e)
DGM
(AO/RO/Corp.-1)
Major activities
under loan
Reference
circular/letter
Area of operation
Objectives
Eligibility
Proposal
Appraisal
Sanction
Security
Documentation
Disbursement
Debt-Equity Ratio
75:25
Delegation
DGM
(b)
GM
(c)
DMD
(d)
MD
Repayment
Loan for each crop shall be repaid within 9 months from the
date of disbursement of that item. If any FSC for genuine
reasons is not able to repay the loan in time, the branch may
allow a grace period of maximum 3 months.
Major activities
under loan
Credit will be provided for mainly- Wheat, Boro, Aus ,Paddy and
other potential crops of the locality.
Rate of interest
10%
Collaborating
agency
Reference
circular/letter
Area of operation
Objectives
Proposal
(a) Loan application to be duly & correctly filled in along with the
production plan ( in a prescribed form).
(b) By conducting survey pass book to be issued for the eligible
people.
Appraisal
Eligibility
Documentation
Disbursement
Repayment
Rate of interest
10%
Major activities
under credit
Reference
circular/letter
Agro-based projects.
The agro-based projects (e.g. dairy, poultry, hatchery, fishery, mixed projects, agricultural
processing units, agri.- products storing and marketing etc.) have been considered as thrust
sector.
Financing in this sector following aspects are to be considered:
(a)
Selection
of
entrepreneurs-
-solvency,
-good
will,
-professional
and
technical
experience,
Selection
-cost-suitable
of
effective
in
respect
of
projects&
communication
and
viable,
infrastructural
facilities,
b. W/C Loan
AGM
DGM
GM
DMD
MD
250.00
200.00
Individual
20.00
30.00
50.00
60.00
150.00
30.00
50.00
75.00
200.00
20.00
30.00
40.00
40.00
Individual
15.00
20.00
30.00
30.00
Ref:
Circular/Letter:
Ins.
Circular
3401
Dt:
05/03/02
Objectives
Eligibility
Appraisal
Sanction
Security
Rate of interest
13.50%(Changeable)
Repayment
Reference
circular/letter
To meet up nutritional requirement of most of the people of the country, Creation of selfemployment and reducing of poverty.
Area of operation
Eligibility
Trained/Experienced people in mushroom cultivation and will be capable of building room in own
home land.
Selection of borrower
Prescribed form for crop loan (except the un useful part). Loan application form to be used as
per given proforma (RCD Cir.No.293 dt:05-04-2007). No. application fee is required.
Mushroom varieties
Loan limit
Security &
Documentation
Rate of interest
Repayment schedule
Sanction
Disbursement period
Reference
Financing IT Sector
Financing of Industries
Ready Cash
A)
Financing IT sector :
The importance of Information Technology and the role it can play in the socio-economic
development of a nation cannot be over emphasized. The world has witnessed a phenomenal
growth in IT over the last two decades, and the countries, which made a conscious decision to
take advantage of such growth, have made unprecedented progress. To day we are living in
the Internet world. To hasten the growth of information Technology and to attract young
energetic IT professional Janata Bank Limited has launched a credit scheme titled Financing
Computer Software Development & Data Export. The maximum loan amount is Tk. 10
million, with debt to equity ratio being 80 : 20. The rate of interest is 11%. But anybody with
export market exposure can get the benefit at 7% interest rate plus 1% service charge. The
main feature of this scheme is to set up industrial based IT projects for development of
software for data export and that too on a very soft term. Janata Bank Limited has issued
detailed guidelines for facilitating IT entrepreneurs.
IT Related Field And Experience:
Computer Software Development and data export is a specialized job and requires skill, knack
& innovative traits of an individual.
Vision of Promoters:
Besides, sponsors willing to apply loan above TK.10 million ( around US$ 1,44,000) may
apply to our normal window instead of the existing scheme.
Janata Bank Limited has entered into an agreement with American International Investment
(AII) to provide financial plastic card services to Janata Bank Limiteds clients. This product is
a Debit Card called the Ready Cash.
Currently, the Ready Cash system is operating in Dhaka and will soon be expanded to other urban areas of
Bangladesh.
Cardholders primary benefits are Safety, Shopping at a wide merchant network, Payment of Utility Bills, flexible
saving plan and the convenience of not having to carry cash.
As the only micro-processor chip based debit card available in Bangladesh for financial payment, the Ready
Cash card is very reliable and secure.
It combines the most desirable aspects of the credit card, together with the advantages of the Debit or ATM card.
It is the first step that most Bangladeshi citizens will take on the path to a cashless economy.
Ready Cash is a debit card as it allows the cardholder to spend no more money than he/she has in his/her Bank
account unless a credit line has been extended.
It increases the consumption base and allows the cardholder to establish a credit history.
For these and many other reasons, the Ready Cash card is the fastest growing system in Bangladesh.
Loan Sanction
Nature of Loan
: CC(HYP).
Purpose of Loan
Rate of Interest
: 15%
Security
Collateral to be
twice the value of the loan
Mode of repayment
Nature of Loan
: CC(HYP).
Purpose of Loan
Rate of Interest
: 15%
Margin
: 40%
Security
Term 2 years
2005
2006
2007
2008
2009
Interest Income
2,05,231
2,16,227
1,85,658
2,59,327
2,76,064
Term 2 Years.
Year
2005
2006
2007
2008
2009
Interest Income
15223
20130
14698
19356
15567
Security Overdraft :
Term 1 years
Year
2005
2006
2007
2008
2009
Interest Income
154871
167243
174589
200310
185916
2005
2006
2007
2008
2009
Interest Income
13,52,345
12,96,841
1324723
13,97,220
13,89,496
Term 1 Years
Year
2005
2006
2007
2008
2009
Interest Income
4,32,507
3,93,070
4,00,880
4,11,309
4,76,392
2005
2006
2007
2008
2009
4374025
4500952
5114200
5308490
4978951
5419
5715319
6002111
6294417
6613515
6851883
7094
0.765316
0.749895
0.812498
0.802673
0.726654
0.763
skillfully and kept the classified loan at a very lower rate thanks goes to the standard and
stringent credit appraisal policy and practices of the bank.
But all things around us are changing at an accelerating rate. Today is not like yesterday and
tomorrow will be different from today. Given the fast changing, dynamic global economy and
the increasing pressure of globalization, liberalization, consolidation and disintermediation, it is
essential that Dhaka bank limited has a robust credit risk management policies and
procedures that are sensitive to these changes. To improve the risk management culture
further, Dhaka bank limited should adopt some of the industry best practices that are not
practiced currently. These are
Dhaka Ban should have a clear written lending guideline. The lending guideline should
include Industry and Business Segment Focus, Types of loan facilities, Single Borrower and
group limit, Lending caps, Discouraged Business Types, Loan Facility Parameters and Cross
boarder Risk.
It should adopt a credit grading system All facilities should be assigned a risk grade. And the
borrowers risk grades should be clearly stated on credit application.
Approval authority should be delegated to individual executives rather than Executive
Committee/ Board to ensure accountability. This system will not only ensure accountability of
individual executives but also expedite the approval process.
All lending functions should be segregated in the following way
* Credit Approval / Risk Management
* Relationship Management / Marketing
* Credit Administration
The segregation of duties will improve the knowledge levels and expertise in each
department
The organization structure should have to be changed to put in place the segregation of the
Marketing/ Relationship Management function from Approval / Risk Management /
Administration function.
The responsibilities of the key persons of the above function must also be clearly specified.
An Early Alert Account system should be introduced to have adequate monitoring,
supervision or close attention by management.( An early Alert Account is one that has risk
and potential weaknesses of a material nature)
There should be a Recovery Unit to manage directly accounts with sustained deterioration.
To encourage Recovery Unit incentive program may also introduced.
It is clear that the Janata Bank Limited Credit Performance department has ensured both
quality and services which helps to improve the overall status of the Bank. For this reason
Janata bank Limited has able to achieve second position in country and top position among
public banks in export sector in 2009. However the branch may have scope to improve in a
few areas. Such as01. The number of exporter and importer who operate through this bank is not enough to
achieve the goal. So JBL should offer more facilities to attract their clients.
02. In addition with the present services they should include more services. It is badly needed
to provide more quality services to their clients in order to compete in the market.
03. Credit Performance department should be fully computerized that the exchange process
would be convenient for both the bankers and the clients.
04. Bank should offer more facilities to the customers such as debit card, credit card, ATM
machine etc. to survive in the competition.
05. One of the business strategies is promotion. Successful business depends how they can
promote their products or services to the customers. In this connection to improve the
business status the JBL should introduce more promotional programs.
Lastly it can say that there are a lot of opportunities for increasing Credit Performance in
Bangladesh if stay political stability. The Human Resources are cheapest here which play an
important role in any business. Bangladesh government should take proper steps to maintain
congenial atmosphere for sustainable Credit Performance business in the country.