Professional Documents
Culture Documents
ON
Credit Analysis of Bangladesh Development Bank Ltd.
Page | 1
INTERNSHIP REPORT
ON
Credit Analysis of Bangladesh Development Bank Ltd.
SUPERVISED BY:
Md. Shofiqul Islam
Assistant Professore
Accounting & Information System
Jagannath University
PREPARED BY:
Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University
Letter of Transmittal
Date- February 26, 2012
To
Md. Shofiqul Islam
Assistant Professor
Accounting & Information System
Jagannath University
Sub:
Dear Sir,
It is my great pleasure to submit you my internship report on Credit Analysis of
Bangladesh Development Bank Ltd.. I have tried my best to complete this report
properly following the guidelines provided by you and concerned organization.
I have confidence that the internship program has increased both of my practical
experience and of theoretical knowledge largely. I will be obliged to answer any query
that may arise during the evaluation of this report. Therefore, I am eagerly requesting and
hope that you would be kind enough to accept my report and oblige thereby.
Sincerely Yours,
--------------------------
Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University
Page | 3
SUPERVISORS DECLARATION
This is to certify that the internship Report on Credit Analysis of Bangladesh
Development Bank Ltd. has submitted for the award of the degree of Masters of
Business Administration (MBA) major in ACCOUNTING & INFORMATION SYSTEM
(AIS) from Jagannath University, carried out by Nasrin Jahan of 2nd Batch bearing ID:
084624, under my supervision. To the best of my Knowledge and as per his declaration,
any part of this report has not submitted for any degree, diploma or certificate.
Assistant Professor
Accounting & Information System
Jagannath University
Page | 4
STUDENTS DECLARATION
I, Nasrin Jahan, the student of Masters of Business Administration (MBA) 2nd Batch
bearing ID: 084624, major in Accounting & Information System (AIS) from Jagannath
University, would like to soberly declare here that an internship report on Credit
Analysis of Bangladesh Development Bank Ltd. has been authentically prepared by
me. While preparing this internship report, I did not breach any copyright act
intentionally. I am further declaring that, I did not submit this report anywhere for
awarding any degree, diploma or certificate.
--------------------------
Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University
Page | 5
Preface
Internship program is a sophisticated way for acquiring practical knowledge. The
main objectives of the MBA program are to create skilled professional for various
sectors. The department of accounting and information system is arranged this
program for MBA students.
This program is designed to meet the needs of each student who want to develop
their career as executives in the field of different business areas as well as teaching
and research positions in different institutions. But perfection dose not come only
form theoretical knowledge. To reinforce the theoretical knowledge acquired,
practical internship of three months in private business organizations, government
offices, public sectors, corporation, banks and non-bank financial institution is to
expose as in the organizational work situation.
After completion this program each student will submit a report on a particular topic on
the basis of their observation, experience and analysis. My selected topic is the Analysis
of Credit Performance & Operational Aspects of Bangladesh Development of Bank
Limited. My honorable supervisor & my favorite teacher Md. Shofiqul Islam also help
me to select this topic.
This report encompasses five chapters including a section of appendix. I have tried to
cover all aspects of BDBL to prepare an effective and useful report. I have enjoyed every
step in conducting the study. These Pragmatic knowledge and experience will help me in
my practical life. I expect that this report will be accepted as a true picture of Bangladesh
Development Bank Ltd. If any lacking prevails in my report, I have no objective to accept
it sincerely
ACKNOWLEDGEMENT
Page | 6
At first I would like to express my gratitude to almighty Allah for enabling me with the
strength and opportunity to complete the report within the schedule time
successfully.
--------------------------
Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University
Page | 7
EXECUTIVE SUMMARY
In the backdrop of growing competition among commercial banks, Bangladesh
Development Bank Ltd. is one of the leading banks in the local market of our country.
Hence, this internship report is aimed at discussing the General Banking Activities &
Credit Practices on of Bangladesh Development Bank Ltd.
This report is broadly classified in six different parts. In part one introduction, Statement
of the research problem, Objective of the study, Methodology of the Study, Definitions of
terms used in the study, Literature review and Limitations of the study is discussed. Part
Two narrates the company profile including Background of BDBL, Corporate
Information, Organization Structure, Name of the Branches, Number of the employee,
their mission and vision, Services of the Bank, Principal Activities, SWOT Analysis,
Shares incorporated Bangladesh Development Bank Ltd. on September 29, 1999 under
the Companies Act 1994 as a Public Company Limited for carrying out all kinds of
banking activities. The Company issued Certificate for Commencement of Business on
the same day, granted license on October 05, 1999 by Bangladesh Bank under the
Banking Companies Act 1991, and started its banking operation on October 24, 1999.
Outside regular activities BDBL also takes part in different community services and
environmental management programs.
Part three forces on the Credit performance. It includes Sanction of term Credit, Sanctions
and Disbursement of Working Capital / Commercial Loan and Credit Recovered by the
bank.
In part four, Definition of loan performance and Sector wise loan performance analysis
BDBL describe briefly.
In part five, Practical Experiences Gathered through doing Internship in BDBL are
discussed.
After that, in part six, I discuss about the Findings & Analysis of the organizations
performance. . Finally, I proposed some recommendation to improve the customer service
which will help the bank to survive in the competitive market.
Page | 8
TABLE OF CONTENTS
Particular
Title Page
Letter of Transmittal
Supervisors Declaration
Students Declaration
Preface
Acknowledgement
Executive Summary
Page no.
ii
iii
iv
V
vi
vii
viii
CHAPTER-ONE- INTRODUCTION
1.1 Statement of the research problem
02
1.2 Objective of the study
03
1.3 Methodology of the Study
04
1.4 Definitions of terms used in the study
04
1.5 Literature review
06
1.6 Limitations of the study
09
CHAPTER TWO- ORGANIZATIONAL OVERVIEW
2.1 Background of BDBL
10
2.2 Corporate Information
12
2.3. Organization Structure
13
2.4 Name of the Branches
15
2.5 Number of the employee
17
2.6 Vision of the BDBL
17
2.7 Mission of the BDBL
18
2.8 Services of the Bank
18
2.9 Principal Activities
20
2.10 SWOT Analysis
21
CHAPTER THREE- MAIN ACTIVITIES OF THE INTERNSHIP REPORT
3.1 Sanction of term Credit
24
3.2 Credit Application Received
24
3.3 Disbursement of Term Credit
3.4 Sanctions and Disbursement of Working Capital
3.5 Others investments
3.6 Projects implementation
3.7 Credit portfolio
3.8 Credit Recovered
3.9 Credit Sanction Form
24
25
25
25
26
27
28
Page | 9
Page | 10
Chapter - 1
INTRODUCTION
Present world is changing rapidly to face the challenge of competitive free market
economy. To keep pace with the trend banks need executive with modern knowledge.
Provide fresh graduate with modern theoretical and professional knowledge in banking
sector. Under this phase the students are sent to gather practical knowledge about
organizational environment and activities. The students also have to submit a report on
practical orientation in the respective organizations.
At first BDBL was started his activities in loan sector. But now organization increases
departmental activities. Now start commercial banking.
The low rate of economic growth, high rate of unemployment, illiteracy, growth rate of
population, low rate of credit recovery etc. are the impediment factor of economic
development of a country. Despite of this obstructed BDBL has shown a mediocre
performance.
Finally the bank try to establish profitable organization and contribute the social activities
by provide Banking service. It carefully listen to the market and business potentials, It is
assisting stakeholders to build a progressive, healthy, democratic and poverty free
Bangladesh.
Page | 11
The purpose of BDBL is not only grant credit but also to develop the country economic.
So BDBL start general banking activities like another commercial bank. Not only
industrial development bank provide all social responsibilities.
Continuous Loan:
The loan Accounts in which transactions may be made within certain limit and have
an expiry date for full adjustment will be treated as Continuous Loans. Examples are: CC,
OD etc.
Demand Loan:
The loans that become repayable on demand by the bank will be treated as
Demand Loans. If any contingent or any other liabilities are turned to forced loans (i.e.
without any prior approval as regular loan) those too will be treated as Demand Loans.
Such as: Forced LIM, PAD, FBP, and IBP etc.
Always keeps the goal of loan workouts firmly in mind: to maximize the banks
chances for the full recovery of its funds.
The rapid detection and reporting of any problems with a loan are essential: delay
often worsens a problem loan situation.
Keep the loan workout responsibility separate from the lending function to avoid
possible conflicts of interest for the loan offers.
Estimate what resources are available to collect the troubled loan.
Page | 15
Loan workout personnel should conduct a tax and litigation search to see if the
borrower has other unpaid obligations and many other processes.
According to the International Organization for Migration (IOM, 2004) there are
about three million Bangladeshi migrants working abroad sending remittances more or
less regularly to their families and friends at home. They are published some problem
about remittances, when this remittances deposited in bank and provide like loan.
Risk
.
Safety
Liquidity
National
Interest
Personal
Security
Assignment
Purpose
6 Cs
Primary And
Collateral
Lien
Profitability
Security
Pledge
Set off
Hypothecation
Guarantee
Diversification
Other
Factors
Mortgages
Insurance
There is always a requirement for banks to systematically and realistically identify their
problem assets and provide adequate reserves for possible losses. To accomplish this,
Bangladesh Bank issued guidelines in 1989 (vide BCD Circular No. 34, dated
16.11.89) regarding classification and provisioning procedure. Subsequently, a revised
policy was introduced in 1994 (vide circular No. 20, dated 27.12.94) to be implemented
by banks in five phases commencing 31st December 1994. The introduction of this
program was aimed at bringing loan loss provisioning and classification in line with
international standards by the end of 1998. Prior to 1989, there were no clear-cut policy
guidelines to enforce adequate provision by the banks. In the majority of cases, banks
simply did not identify problem assets, establish realistic provisions for potential losses or
suspend interest on non-performing assets. As a result, the balance sheet did not reflect
the bank's actual condition and the income statement overstated profits upon which
dividends and taxes were paid. However, during the mid-eighties a norm was fixed by the
Central Bank to raise the level of provisions by 0.5% of total loans each year till it
reached 4%. Obviously, it had no relation to loans classified. Interestingly, the banks on
the whole did not comply with this requirement. The situation ultimately led to
unreasonable developments regarding keeping of provisions by the bank CHOUDURY
ct al .1997 PP 43-4
Page | 16
Some of the researcher of Bangladesh bank and SEC .They are found out some credit
management problem area Those area are
Economical sector
Capital sector
Labor sector
Raw material sector
Market
Social condition
Marginality
Security
Psychological sector
Governmental sector
Political sector
When BDBL was established only their activates area limited by loan sector. So all
researcher find out the loan term problem. Now a day BDBL starts their mission in
general banking. So I am a new researcher of the general banking in BDBL. Our team
works in the BDBL head office and branches and find out some problem in the general
banking. Those problems are
Lack of proper management and efficient management for credit system.
Their operational system is manual so loan section face problem.
Lack of modern technology
Limited employee for general banking
Transaction system is old method
Lack of proper advertisement
Lack of experience of foreign banking
Limited branches
The financial analyst should have a clear idea as to what is intended to be achieved
through the financial report .The financial appraisal is directed to examine mainly the
following two aspects .Fund requirement to bring the project in to existence and the
probable sources from which the required funds will it goes into operation and likely
position of the concern with regard to its actual cash generation and its probable impact
upon the financial condition .The first aspect deals with the estimation of total of the
project and a suitable financial arrangement .The second aspect relates to the analysis of
production cost profit at different volume of production carried up to the year the project
attains its normal capacity operation.
Page | 18
CHAPTER 2
Page | 19
Name
Legal Status
Date of incorporation
Banking Licensee obtained
6
7
Formal Inauguration
Registered Office
8
9
10
11
12
13
14
15
Authorized Capital
Paid up capital
Reserve
Total Assets
Total human Resource
Number of Zonal Office
Number of Branch Office
.Membership
16
17
18
19
20
21
22
23
Note-All of the information are collect from HR Department and Economics Department
at 15 February 2012.
Page | 20
Name
Prof.Shanti Narayan Ghosh
Mr. Dewan Nurul Islam
Mr. Niaz Rahim
Mr. Amalendu Mukherjee
Mr. Md.Khalil Rahman Siddiqui
Mr. M Ishaque Bhuiyan
Mrs. Selima Ahmad
Krishibid Moshiur Rahman (Humayun)
Md. Fayekuzzaman
Dr. Md.Zillur Rahman
Abdur Rahim Khan
Position
Chairman (acting)
Director
Director
Director
Director
Director
Director
Director
Director
Director
G.M. & Company
Secretary
Page | 21
2.3
Organization Structure
Management Hierarchy of BDBL
Chairman
Managing Director
Deputy Managing Director
General Manager
(Administration)
General Manager
(Operation)
DGM
AGM
Officer
Officer(Cash)
Assistant officer Grade-1
Assistant officer Grade-2
Assistant officer grade-3
Supporting Staff
Supporting Sub Staff
Page | 22
Page | 23
Branch Name
Principal Branch
Motijheel Branch,
Karwanbazar Branch,
Dhaka
Bogra Branch
Pabna Branch
Dinajpur Branch
Barisal Branch
Faridpur Branch
Mymensingh Branch
Comilla Branch
Noakhali Branch
Sylhet Branch
Rangpur Branch
Jhenidah Branch
Chitagong Branch
Rajshahi Branch
Khulna Branch
Narayanganj Branch
(Opening Soon)
Elephant Road Branch
(Opening Soon)
Khatungang Branch
(Opening Soon)
Ashuganj Branch (Palli
Branch, Opening Soon)
Address
8,Rajuk Avenue, Motijheel, Dhaka.
DhakaMotijheel, Dhaka.
12, karwanbazar, Dhaka.
Khan Plaza (2nd Floor), Chakjadu Road,
Badurtola, Bogra.
Bhai Bhai Super Market,
Abdul Hamid Road, Pabna.
(Current Charge)
Abedin Complex, Gonesh Tola, Dinajpur.
Dr. Sobhan Complex, 130, C, Sadar Road (2nd
Floor), Barisal.
Mojib Sarak Chamber Building, Nilltoli, Faridpur.
6, Samcharan Rai Road, Mymensingh.
Samobay Bank Bhaban, kandir par, commilla
460, Dakhin Bazar, Choumohoni, Noakhali
1375-kha Syed Complex 3rd Floor, Amborkhana,
Sylhet.
Asir Building, Station Road, Rangpur.
18, Moulana Bhasani Sarak, Jhinaidha.
Quecort' 106, Agrabad C/A, Chittagong.
108/6, kumerpara, Rajshahi
25/26,KDA Commercial Area, Uper Jessor Road,
Khulna.
10, S M Maleh Road( 1st and 2nd Floor), Tan
Bazar, Narayanganj.
99, Elephant Road, Dhaka.
6 Ramjoy Mohajan Lane, Asadgang, Khatungang,
Chittagong
Holding No-117, Station Road, AShuganj,
Brahmanbaria.
Page | 24
We know that Present BDBL come from BSB and BSRS. When BSB operate their
banking activities only Loan section. And same activities were BSRS. So their employee
condition is limited size. But now they are start commercial activities. So need their more
employees. On the basis of HR Department of we know that their current employee
number is 1025. In the following given the details description of the BDBL employee list.
Head
office
Zonal
office
Branch
office
Total
1
1
6
18
19
32
57
101
16
59
2
28
9
0
24
43
54
470
0
0
0
4
0
4
4
8
0
8
0
4
0
0
0
3
6
41
0
0
0
1
27
44
75
141
9
83
23
20
0
11
0
20
60
514
1
1
6
23
46
80
136
250
25
150
25
52
9
11
24
66
120
1025
Retail Banking
Consumer credit
Personal Loan
Page | 28
Weakness:
Decision making process is lengthy.
Lack of competitive banking.
Lack of promotional activities.
Shortage of branches.
Less diversified product and service line. The salary structure of BDBL is not
high enough related other commercial bank operating in Bangladesh.
MIN/Internet/on-line service in BDBL is not upgraded, many of their works
through manually.
OPPORTUNITIES OF BDBL
There are huge demand of micro-credit, small and medium scale finance.
Page | 29
THREATS OF BDBL
More and less all the competitors in the baking industry are competent, so to
survive BDBL Bank need to do many more. In BDBL no. of defaults loan is 37%
which is real threats of bank business.
Due to governmental institution many of banking decision bias by political
government.
Too much interrupted by international assistance institution like World Bank, IMF,
WTO
Bangladeshi economy is getting more engaged with the global economy, so any
recessionary condition can hit the banking industry first.
Page | 30
CHAPTER- Three
Main activities of the internship report
This report prepare on the basis of Loan performance and General banking activities. In
following given the details loan performance and General Banking activities
Credit performance
3.1 Sanction of term Credit:
The bank has kept on sanctioning term loans during FY 2009-10 also. This is long term
local currency loan of taka 7285 million has been sanctioned to 55 projects and short term
loan of taka 1100 million to 215projects. Of the total sanctioned long term loan, taka
4928 is for 37 new projects and an additional loan of taka 2385 for 13 existing projects.
Table-1
Sanction of term loans
(million TK)
2009-2010
Nature of
the
project
2010-2011
New projects
Existing
project
(BMRE)
46
1188
6
Additional
Loans
Rehabilitatio
n
Total
6581
Total
37
1183
6
6581
102
122
13
704
704
54
1296
1311
52
7285
7285
Page | 31
Table-2
Commitment and disbursement of term Credit
Commitment/
Disbursement
(Million TK)
2010-2011
2009-2010
Numbe Local
Foreign Total
r of
Currency currency
projects
Commitment
35
Disbursement
43
Number of Local
Foreign Total
projects
Currenc currency
y
714
485
485
53
534
2010-2011
12
08
Under construction
25
14
Documentation completed
24
04
Awaiting documentation
11
12
Total:
60
16
534
Page | 33
Recovery Target
96.80
26.28
40.00
163.08
Amount Recovered
122.32
23.56
24.64
170.52
:
: a. Office:
b. Factory:
:
:
03. Sponsors:
SL. No
Name, Age & Address
TIN
Presen Permanen
t
t
Relation
Declared
Net worth
Experience
04. Sponsors(s):
05. Sponsors(s) Liability:
06. Net worth in Tk.. (Sl.No.4-SL. No. 5
07, CIB Report
08. Proposed Project Cost & Means of Finance:
(Tk. In 000)
Page | 34
Sl No
(a)
(b)
(c)
(d)
Items
Land
Civil Construction
Machinery
Others
Total:
Sponsor(s) Equity
1st Year
Bank Loan
Total
Price
4th Year
:
:
:
:
:
11. Ratio:
Particular
1st Year
:
:
4th Year
Page | 35
Chapter-4
Analysis of Loan Performance
4.1 Definition of loan performance:
Financial soundness of all banks depends on the performance of its disbursed loan on
various sectors. Loan performance means how the loans were scheduled to act and how
they are actually acting. It is closely associated with timely and steady repayment of
interest and principal of a loan. A loan is said to be well performed when its repayment is
duly made. If a loan fails to be repaid duly for some consecutive period or installments, it
falls under the classification criteria.
4.2 Sector wise loan performance analysis BDBL:
4.2.1 Food and allied products:
Food and allied product sector is one of the improving sectors of BDBL. In the financial
year 2009-10, food and allied sector got 4% concentration of its total loan outstanding
amounting to a total of TK224 million.
Status of classified loan:
For the year 2009-10 food and allied sector classified TK38 million as bad loans,
representing 17%percent of the total outstanding whereas TK185 million is still
unclassified. Percentage of classified and unclassified loan is presented in the following
pie chart:
Graph:
Page | 36
Graph:
Total bad loan of this sector in 2009-10 was TK 423 million but it was reduced to TK 172
million in 2008-09 and got a dramatic improvement in 2009-10 with a 78%fall to Tk.38
million. This sharp and continuous reduction in Bad loans indicates better loan
monitoring and administration in this sector.
From unclassified loans point of view, this sector also conveys some positive signal.
Unclassified loans with the reduction in bad loans, goes up from 66 million in 2007-08 to
185 million in 2009-10. In short, loans of this sector are performing better year to year
and demands constant concentration.
4.2.2 Jute and allied fiber:
Jute and allied fiber is that sector with which BDBL is going to close its operation.
Already bank has stopped sanction and disbursement in this sector only job of the bank is
to recover the amount of loan money which was given before. In 2009-10 this sector got
9%concentration and its loan outstanding amount is 535 million.
Status of classified loan:
For the financial year 2009-10this sector has classified TK 416 million as bad loan which
is 78% of total outstanding whereas TK 118 million is still unclassified. The view of the
classified and unclassified loan is given below:
Page | 37
Statusof Clasifiedloan in
2009-2010
22%
0
Unclassified
Substandard
78%
500000
400000
300000
Unclassified
200000
Classified
Bad & Loss
100000
0
2009-2010
2010-2011
If we start talking about bad loan or classified section we see the difference year to year.
In 2008-09 the amount of bad loan was TK 530 million, in 2007-08 the amount was TK
424 million and in 2009-10the amount is TK 412 which is comparatively low than
previous years. But the decreasing speed is slow here.
If we see the diagrams here we see the amount of unclassified loan is increasing and its
growth rate is good enough. It was only TK 7 million in 2008-09 there was huge change,
it was TK 112 million which is 16 times more than previous year. And in 2009-10 TK
118 million is also good if we apply the growth of unclassified loan point of view.
4.2.3 Cotton and Woolen Products:
This is the prime sector among the sectors with those BDBL deals. Sanction,
disbursement and recovery all is good in this sector. This is the sector by which the
country earns most of its foreign income and it is playing a vital role since couple of
years. This sector is getting more concentration year to year 69% of outstanding in this
sector.
Status of classified loan:
Page | 38
In the year 2009-10the percentage of classified loan is TK818 million which is 19% of
total outstanding and 81% of total outstanding is unclassified which sounds good is of TK
3504 million.
Findings of the sector:
In 2009-10 the amount of bad loan was of TK 1588 million and in the year 2008-09 that
was of TK 948 million and in the year 2009-10it is of TK 818 million. So here
If we talk about substandard loan in the diagram, we see in 2008-09 it was of TK 110
million and in 2008-09 it was of TK .158 million and in 2009-10 no existence of this
class. So it indicates well because a class has dropped out.
In the consecutive years there is no significant change among the amount of unclassified
loan, which really proves better performance of this sector better planning, monitoring
and controlling of the bank.
4.2.4 Paper and Paper products:
Only 2%of total outstanding exist in this sector. This is the sector which is very important
for a country, if the sector falls then the country become dependent on import which may
not be good for a country.
Status of classified loan:
In this sector here the percentage of bad loan is 10% which is relatively low comparing
with other sectors and with total outstanding. The amount of bad loan is of TK 14 million
in 2009-10 where unclassified loan is 90% and it is of TK 125 million.
Page | 39
Though in 2008-09 unclassified section showed negative signals and there was also a big
amount of doubtful loan but the bank has crossed the session and now is in good position.
In 2009-10 the unclassified loan is of TK125 million which is 76.8% more than the last
year, so it proves the great performance of the bank and demands such kind of
performance in all sectors.
4.2.5 Forest and Wood Products:
Though it is an important sector of the country but BDBL is not currently dealing with
this sector.
Status of classified loan:
There is no amount of outstanding loan in last two years and also classified and
unclassified loans.
Findings of the sector:
In 2008-09 there was only of TK 6 million bad loans in this sector. After that we see no
activities of this sector. BDBL need to consider the sector again not only for its
profitability but for the people who deals with this sector.
Page | 40
4.2.6 Transportation:
One of the most important sectors with which BDBL deals. This sector has a great utility
for communication purpose.
Status of classified loan:
19% of total outstanding is not bad when the amount of bad loan is falling year to year. In
2009-10the amount of classified loan was 13 million and the unclassified loan was almost
56 million.
Page | 41
4.2.7 Miscellaneous:
When the outstanding amount of a section is 2% of total outstanding and the total amount
are classified then the sector is bad can be easily said.
Page | 42
Page | 43
Page | 44
CHAPTER-5
Practical Experiences Gathered through doing Internship in an
Organization.
1. Loan Operation Department
This Department is the first day of BDBL.A Senior Principle Officer is my guide officer
for day working.
As a development bank, BDBL primarily remains committed to committed to provided
industrial financing. Bank formulated a lending policy with a view to providing speedy &
efficient services to clients in a consistent manner.
Loan Section
# At first an Application form is supplied to the entrepreneur for tk 3000 only.
# After filling up Application form And ready Project Appraisal letter.
For achieving loan an investor must fulfill two steps
Step -1
1. Information form (Particulars) for issuing loan application form, an investor
must fulfill this from and then submitted it loan operation department. If all
required information fulfilled correctly by investor as required of department,
department judge this given information within their rules & regulation.
2. Loan application from if investor given information in particulars form are
correction then he/she collect loan application form paid of Tk.3000. Investors
then fulfills all required information needed in application form and submitted it
department along with a feasibility report of his/her proposed project.
Step 2
In this step department judge application form information given by investor and make a
project appraisal fill (including technical aspect, market condition, financial ratio,
management information) and also judge different ratio related to project. Department
also ensure utility service availability thats why they informed an enquiry committee
which committee judge all information given in application form (land position,
management position, utility service availability, CIB report etc). After judging all
information and if given information are correct for sectioning loan, loan operation
department then pass loan fill next department along with all documents and their
approved signature.
Loan section power of different persons is distinct in policy
For private ltd. Company
MD 5 corers, DMD 3corers, GM 2.5 corers, 4 Zonal DGM 1.5 corers, Branch
manager 1 corer, Above 5 corers loan consider by board of directors
For proprietorship/partnership company
MD 2.5 Corers, DMD 1.5 corers, GM 1.25 corers, DGM 75 laces, AGM 50
laces, Above 2.5 corers loan consider by board of directors.
SME
Bank also provided SME loan with a 12% interest rate for manufacturing company and
14% interest rate for service and trading company. Amount of SME loan 50 thousand to
50 laces which is approved by credit committee consists of 4 GM as consultant officer.
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For SME loan investor need to provide application form along with TIN number and
treading certificate.
Reference
Price
Re-inspection
Liabilities
Submission of document
Termination Arbitration
Procurement & implementation closely observed all work of the project in whole life and
section loan, implement project work.
4. Law Department
Md. Anisur Rahman who is my guide teacher.
When department loan recovery department failed to collects their amount of loan in
normal procedure then law department negotiate the situation with clients with the help of
court or by law.
BDBL has 47 advocate panels for different who are experienced in different Act. To deals
with all the case of BDBL in court, lead by a barrister. To collect borrowed fund BDBL
normally applied following Act.
1.
3.
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Pension section
Bill section
BBR (Bangladesh Bank Return section)
Reconciliation section (inter branch transaction)
Treasury & fund management everyday transaction
Accounts department collects information/data time to time those department and makes
final statement of BDBL.
CHAPTER-6
Finding of analysis
The 3 (three) month internship program has been going to be finished through writing a
report. During the time of internship I have tried with my best to acquire theoretical and
practical knowledge banking business and the investment Sector.
While working at Bangladesh Development Bank Limited, Head office and Principal
Branch I have attained a newer kind of experience with credit procedure and general
banking as well. After collecting and analysis data I have got some findings and
recommendations. These findings are completely my personal view of point, which is
given below:
Banks gives loan depends on customer relationship with the bank; otherwise in
case of new client they take more time to understand clients activities.
There is some problem in maintaining the IT support to Banking activities.
The total number of branches of BDBL Bank limited are fewer then their position
in the banking area. Though BDP support is a plus point of them but they have to pay a
huge amount for each transaction. So they need to increase the branches in all over the
country that they can able to earn more profit.
Given data for finding lack of credit range?
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Credit Range
Tally
///////
/////
Absolute
Frequency
7
5
Below 50,000
50,001-5,00,000
5,00,001-10,00,000
////////////////
16
40%
10,00,001100,00,000
////////////
12
30%
Findings: From the question no.8 highest 40% respondents have taken loan within range
Problems
Tally
Absolute
Relative Frequency in
Frequency Percentage (%) form
Lengthy loan sanctioning
process
High Mortgage Charges
Both lengthy loan
sanctioning process and high
mortgage Charges
No problem faced
Others
///////
18%
////
///////////////////////
/
4
24
10%
60%
/////
5
0
12%
0%
Findings: It is found that highest 60% respondents had faced problem of both lengthy
loan sanctioning process and high mortgage charges. Only 12% respondents did face any
problem during availing the credit. Normally it takes three weeks to eight weeks to
sanction a loan which very lengthy indeed. The loan sanctioning is a long procedure. So
many customers are unsatisfied. The bank mortgage charges are very high. It takes more
than ten thousand taka to one-lac taka mortgage charges and other cost for making deed
also includes insurance charges depend on the value of the property. The customers of
small loan might get demoralized
Problem in repayment period.
Repayment Period
Tally
Absolute
Frequency
12 Month
24 Month
36 Month
48 Month
60 Month
////////////////
//////
/////
//////
//////
17
6
5
6
6
Relative Frequency
in Percentage (%)
form
42%
15%
13%
15%
15%
Finding: It is found that highest 42% respondents repayment period is one year; 15%
respondents repayment period is 24 month; 13% respondents repayment period is 36
month; 15% respondents repayment period is 48 month and the rest 15% respondents
repayment period is 60month.
The bank provided most of the credit facilities in the large loans BDBLally for long
terms and also gave some personal loans too. It mainly focuses on these sectors because
Page | 49
of high profitability and security. But if one of the clients fails to repay the loan then the
bank will be in serious trouble.
The banks overall recoveries in different sectors are very encouraging. But recovery
from the working capital & import sector and from transport loans, staff loans, and
secured overdrafts etc. sector is much higher than the large loan and other sectors
Some common problem in our country basis on Banking sector. Those Sectors are
To abuse Political power for loan sector.
BDBL all of the management and employee are old model basis and manual basis.
Lack of problem about GOVT policies.
Loan recovery policies are not strong.
Lack of Law for credit recovery and credit distribution
More corruption
CHAPTER SEVEN
Conclusion and Recommendation
Bank and financial institutions can be compared with the heart of an economy, if the
circulation of money is not normal the economic growth will be hurdled. Bangladesh is a
growing economy, it is growing in every aspect in every day, to help to continue this
growth credit flow, credit circulation, and credit recovery should be smoothen. In order to
increase more employment, set up new industrial unit, boost up export earning, increase
the inflow of FDI, Diversify export, and increase the productivity credit facility must be
extended. Proper credit management can give the strength a bank to increase the flow of
credit facility, so in coming days I hope bank and financial institutions of Bangladesh will
be more efficient in managing credit risk, and will be able to extend the credit facility to
different sectors.
If this report can improve the existing condition of sanctioning procedure, and is
implemented, my little initiatives will get a breathed satisfaction because I poured effort
which I could.
Recommendation
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Recommendations of these report has been made on the basis of the research findings of
the credit facilities of BDBL.It is very difficult to recommend about this topic because of
research restrictions and unavailability of data. Despite these problems there is something
that the credit department of BDBL,Head Office should look at.
Chapter-Eight
Page | 51
Reference
1. http:// www. bdblcom.bd
2. Bangladesh Bank guidelines on loan classification.
3. Different Project Appraisal report of BDBL.
4 .Loan sanctioning letter of BDBL.
5. Bangladesh Development Bank Ltd. Ordinance 1972.
6. http://bdbl.com/company_profile.php
7. Human resource manual from BDBL
8. Several Booklets & Newspapers, Leaflets, Brochures, Synopsizes etc from
BDBL.
9. Ricky W. Griffin, Management, 9th Edition
10. David A. DeCenzo & Stephen P. Robbins (1999), Personnel/Human Resource
Management, Third edition, Prentice Hall: Londo.
Appendix
Appendix No -1
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Page | 53
Appendix No -2
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Appendix No -3
For the practical problem overcome and my report prepared create some question .When
create any question then my BDBL all officers solve my problem. Some time
communicate bank client for specific for data or question. In the following given the
important question for internship purpose
Information
Perception
Strongly
Statements
in
Strongly
the
Reliability
Dimension
Disagree
agree
in
the
agree
1
1
2
2
3
3
4
4
5
5
6
6
7
7
Assurance
Dimension
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
6
6
6
7
7
7
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Statements
13.
in
the
Empathy
Dimension
14. Your bank has employees who give you individual attention.
Statements
in
the
Tangibles
Dimension
Page | 57