Chapter 1:

TITLE OF THE REPORT

An Analysis on Credit Procedure of
Retail Finance Center-The City Bank Ltd."

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Chapter 2:
Introduction to the Report

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Introduction
2.1 Rationale of Study:
Education is the tool to understand the real world and apply knowledge for the betterment of the
society as well as business. Now a day, education is not just limited to books and classrooms.
From education the theoretical knowledge is obtained from courses of study, which is only. In
todays world, education is the half way of the subject matter. Practical knowledge has no
alternative. The perfect coordination between theory and practice is of paramount importance in
the context of the modern business world in order to resolve the dichotomy between these two
areas.
So clearly we realize only the academic education is not enough to handle the real corporate
environment therefore it is an opportunity for the students to know about the field of business
through the internship program. As internship program is a perfect blend of the theoretical and
practical knowledge. The BBA program is designed to focus on theoretical and professional
development of people open to take up business as a profession as well as service as a career.
The Internship program is designed with an excellent combination of theoretical and practical
aspects. This internship provides the students to link up their theoretical knowledge into practical
fields.
In this connection, I was assigned to Retail Finance Center- Asset Operation department of The
City Bank Ltd. under the guidance of Senior Manager of that particular department. I am
proposing this study. As I am a student of BBA and moreover my major is in Accounting &
Finance, this study is very much related to my future career. While making the report, I will be
able to learn about preparing Disbursement documents, Preparing & sending Business
Arrangement Letter & No Objection Certificate, Learn about secure vault management and learn
about the core financial software of CBL- Finical. The proposed study can enhance knowledge
about retail loan processing procedure of CBL which is covering a wide range of tasks in
organization. At the other hand this chapter will give a brief idea about my duties and
responsibilities over the three month in the City Bank Ltd. Through this internship program I
have gathered practical knowledge about the corporate world.

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2. 2 Background of The City Bank Limited

2.2.1 About -The City Bank Limited
City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top
bank among the oldest five Commercial Banks in the country which started their operations in
1983. The Bank started its journey on 27th March 1983 through opening its first branch at B. B.
Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around 13
local businessmen who braved the immense uncertainties and risks with courage and zeal that
made the establishment & forward march of the bank possible. Those sponsor directors
commenced the journey with only Taka 3.4 crore worth of Capital, which now is a respectable
Taka 330.77 crore as capital & reserve.
City Bank is I s among the very few local banks which do not follow the traditional, decentralize,
geographically managed, branch based business or profit model. Instead the bank manage its
business and operation vertically from the head office through 5 distinct units namelyi.

Business Unit

ii.

Branch Banking

iii.

Risk Unit

iv.

Operation Unit

v.

Support

Under a real-time online banking platform, these 5 distinct Units are supported at the back by a
robust service delivery or operations setup and also a smart IT Backbone. Such centralized
business segment based business & operating model ensure specialized treatment and services to
the bank's different customer segments.
The bank currently has 90 online branches and 1 SME service centers and 11 SME/Agri branch
spread across the length & breadth of the country that include a fully fledged Islamic Banking
branch. Besides these traditional delivery points, the bank is also very active in the alternative
delivery area. It currently has 163 ATMs of its own; and ATM sharing arrangement with a
partner bank that has more than 550 ATMs in place; SMS Banking; Interest Banking and so on.

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It already started its Customer Call Center operation. The bank has a plan to end the current year
with 200 own ATMs.

2.2.2 Vision, Mission and objectives of The City Bank Limited

Vision:
The financial supermarket with a winning culture, offering enjoyable experiences.

Mission:

Offer wide array of products and services that differentiate and excite all customer
segments.

Be the Employer of choice by offering an environment where people excel and leaders
are created.

Continuously challenge processes and platforms to enhance effectiveness and efficiency.

Promote innovation and automation with a view to guaranteeing and enhancing

excellence in service.

Ensure respect for community, good governance and compliance in everything we do.

Objectives of The City Bank Limited

Highly personalized service.

Customer-driven focus.

Total commitment to quality.

Contribute in the economy.

Quality of human resources.

Commitment to its clients at each level.

2.2.3 Different Banking Sector of The City Bank Limited

Retail Banking
Deposit :( Current Account, Saving Account, City Onyash, City Somridhdh, City Projinmo, City
Icchepurion, City Youth School & College plan, Fixed Deposit)
Loan: (City Drive, City Solution, City Express, City Double, City Scholar)

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NRB: Foreign Remittance Service

NFB: (City Student File, City Medical File, City Wallet, i-Banking, Locker Service)
Card: (Debit Card- Visa & MasterCard, Credit Card- AMEX & Visa)

Corporate Banking
The City Bank Limited is a major player in Bangladesh wholesale banking industry to offer the
full scope of innovative, customized solution and services. The bank aims to be a one-stop
gateway for corporate and financial institutions looking to facilitate its clients growing trade and
investment flows and supply chain financing needs across our business footprint. It focuses
exclusively on corporate and institutional clients domiciled or conducting business in our
footprint, offering clients access to our extensive branch network and award-winning suite of the
art services.
SME Banking
SME Banking of The City Bank Limited is assuming a new and modern dimension. It is entering
in to a wider horizon. The philosophy of extending banking services to SMEs of the country is
to meaningfully push every one of then up to the next level of respective business operations.
The upward push would be meaningful as they would be business wise competitive for a
sustainable future. It, therefore, would be turning in to an abode of SMEs to grow to the next
level. Hence, the bank has named it City Business for taking SMEs to the next level
Islamic Banking
City Bank introduces City Manarah - Islamic Banking. City Manarah is here to guide you and
manage your finances in a fully Islamic Shariah Compliant way. It offers a wide variety of
deposit and investment products such as Manarah Savings, Manarah Current, Manarah Term
Deposit and Manarah Monthly Deposit Schemes. Each account is designed to meet your
financial needs with best value for your money.
Trea

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2.3 Objectives:
2.3.1 Broad Objective:
The main purpose of the report is to get a clear idea about the retail loan processing procedure of
The City Bank Limited.

2.3.2 Specific Objectives:

The primary objective in this study is to fulfill the partial requirements in the Bachelor of
Business Administration (BBA) degree.

Besides fulfilling the degree requirement, this report intends to cover the retail loan
processing activities of The City Bank Ltd.

To know about the different banking sectors in Bangladesh by knowing about The City
Bank Ltd.

To explain my duties and responsibilities in The City Bank Ltd.

To give a brief idea about daily activity of RFC of The City Bank Ltd.

To give a brief idea about Asset Operation Department, how it work.

The report is aimed at studying and understanding the financial decisions is taken by
Asset operation- City Bank Ltd.

How Much Loan processing department is important for City Bank Ltd.

To determine the retail business condition of City Bank Ltd.

To determine the factors that influences the choice of the organization.

The personal loan files assessment procedure and disburse management process.

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Chapter: 3
ACTIVITIES UNDERTAKEN

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3. ACTIVITIES UNDERTAKEN
A. Work-Related
3.1 JOB AS AN INTERN
During the internship period at The City Bank Ltd, I was placed in RFC- Asset Operation
Department. From first day I start learning about the procedure and terms of asset operation
department. It was a great experience for me to work in this department.

3.1.1 Introduction to Credit Procedure of Retail Finance Center

Retail lending has been zooming ahead, driving a banking-sector boom since the beginning of
the decade. Retail Finance Center (RFC) is the innovation of The City Bank Limited which deals
with retail lending. Retail lending has changed dramatically in the last couple of decades, moving
from a largely intuitive process to an increasingly automated one. The City Bank Limited is
becoming more and more successful in managing a retail loan portfolio by properly developing,
deploying, and integrating a wide range of risk management and operation models with the help
of RFC. These modeling activities are coordinated across a range of loan products and across
marketing, credit, collection, operations, and MIS. Retail loan is offered to individuals for some
prearranged purposes and is to be repaid by equated monthly installments. Retail finance is one
of key business pillar of retail banking which can assist retail lending. The City Bank Limited is
operating RFC, centralized retail risk management body to ensure streamlined credit process for
retail loan products; proposed credit process guideline will pay a significant role.

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3.1.2 Interrelation among RFC and other departments

RFC running as a separate department dealing only with retail lending is interrelated with other
departments like Card Division, Collection Department and distribution. Any application is
distributed through branch or direct sales team. They are mainly the communicator of consumers
and RFC. In case of loan, after the processing it is distributed through branches or sales teams.
On the other hand, in case of credit cards, distribution is dealt by card division. After the
processing repayment issues are dealt by Collection Department.

Customer
Direct Sales Team
Branch

Distribution

Diagram:
Interrelation

Retail Finance Center

In case of
credit card

among

RFC

and

other

departments

Card Division
In case of loan

Collection Department

Dealing with repayment

3.1.3 Target Customer and Market

Target Customer
The name list of the target market includes:
Salaried Executive: Corporate executives of Multinationals, UN bodies, Large Local corporate,
Medium and Small corporate bodies, diplomatic houses, government bodies, Private entities etc.
Businessperson: Applicants may be proprietor of sole proprietorship firm, partner of partnership
firm and/or director of a private and public limited company.

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Self Employed: Individuals making a living from their technical expertise, i.e. medical
practitioner, engineers, architects etc and free lancers like consultants, landlords etc, who have an
established source of income.
Non Target Customers:

THE CITY BANK LIMITED Negative listed individuals

Journalist of reasonable lower level and non reputed publications and Lawyers

Employees of the firm which has a poor repayment history on business loan with us

Officials of law known criminal records

Politicians and Individuals having politically affinity

Travel agents and C and F agents of lower level

Defense officials below major level and Mariners

Individuals whose personal and business loan performance is poor

Public Figures and media personality

3.2 Distribution Channel and Sourcing Method

3.2.1 Distribution Channel
All loan applications are mainly sourced through following distribution channels:
A. Directs Sales Team
B. Branches/Kiosk

3.2.2 Methodology for Sourcing the Customer

Direct Sales Team:
Customers in this segment are tracked by DSE themselves. Sales Officer/Manager obtain list of
local corporate and multinational corporate bodies and hand over to DSEs. DSEs set up
appointments in these companies and visit the appropriate department from where a list of
employees is obtained. Potential Customers are tracked down from the obtained list of
employees and they are contacted either through phone calls or when the DSE visits the
organization. DSEs reach the customers by making phone calls or by random visits to various
Operations, factories, trading agencies, business firms, consulting firms etc. Those customers are
located by DSEs, when they visit various individual professionals at their chambers. Many

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customers are located through references from existing customers in this segments rack the
customer by making cold calls, through references from existing customer or by random
selection.

Branch:
Customer visits the Branch and approach for the loan/finance. Customer is contacted by
CSO/RM/SSM over phone and approached for the loan/finance. Later customer visits the branch
and performs necessary formalities to take the loan/finance.

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3.3 Application Process Flow

RFC LAP Process Flow

Application received from customers

by Direct Sales Executive (DSE)

Application received from customers

by RM

DSE forwards the application to

Sales Manager for securitization of
the loan docs and the application

RM securitizes loan docs and the

application

No
Return to the
Source

Application meets the basic PPG criteria

Yes
MIS officer
sends daily
status

With the recommendation of line Manager (Sales Mgr / SSM) forward to RFC

RFC MIS Receives the LAP from the source, inputs LAP information in MIS,
gives a tracking number and gives copy to CPV agents for verification. MIS
generates daily status and send to source on daily basis
MIS officer updates
the MIS and keeps
the LAP in the vault

RFC MIS allocates LAPs to Credit Analysts

CA/SCA Assess the LAP, checks

whether LAP meets all PPG and BB
Prudential Regulations

No
Decline

Yes
CA / SCA forwards the LAP to RFC Manager with recommendation

Approve

Loan is approved by RFC manager if falls under his DLA, otherwise

forwards to DLA holder. If RFC Mgr. differs with the CA/SCAs
decision he can decline the LAP

Decline

MIS will update the status and inform the Branch through mailing daily
status. MIS will keep all the LAPs in the vault.
Branch will send all docs to Asst. Ops to fulfill approval condition
Asst Ops Officer checks the documents, if meets all requirements then
forwards the LAP to loan disbursement officer, otherwise informs the
souse about discrepancy
Loan Disbursement Officer disburses the loan and informs the RFC MIS
about the LAP
LAP is kept in the vault

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3.3.1 Application Process by Branch and Sales

Customer completely fills-up the loan application pack (LAP) and drop it to the sources who
forward the same to RFC. Respective Managers of sourcing channels takes extra measures to
check whether the application from is fully up without overwriting or amendment without
customer signature. Mangers of sourcing channel verifies customer signatures in the application
from, mark original seen in the photocopied documents before sending the LAP to RFC and
fulfills the documentation checklist attached in the LAP through branch. Fresh application from
all sources is forwarded to credit MIS, RFC through application tracking sheet.

3.3.2 Application Process by MIS, RFC

MIS Officer, RFC receives the application and gives input in the daily MIS. He puts unique
serial or tracking number on the application and hand over the application to Contact Point
Verifications (CPV) agents for verification. He sends daily status report to sourcing channels via
e-mail. MIS Officer receives loan application from source and distributes the LAPs to credit
analysts. He handovers the copy of LAPs to the CPV agents for verification purpose and receives
the same from CPV agents. The officer sends back the LAPs to the source as and when advised
by credit analyst.

3.3.3 Application Assessment

Analysts pre-screen the LAP and if any discrepancy is found send back to source for further
review. They analyze whether application meets PPG criteria, documents requirements and
prudential regulations of Bangladesh Bank and recommend for approval of the applications on
appropriate cases otherwise recommend for decline. Credit Analysts perform duplication and
negative check list, prepare approval sheet. They can return the LAP back to source for any
documents deficiency and can send any query or ask for any clarification from source. Manager
of RFC or the Head of RFC or the Head of Retail Banking provides final approval decision as
per their DLA Manager of RFC or the Head of RFC or the Head of Retail Banking will approve
or decline the applications as per delegation of lending authority (DLA).

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3.3.4 Approval status and MIS

MIS updates the status of LAPs if any loan is approved or declined by the appropriate DLA and
MIS informs the branches accordingly vie daily status. MIS informs the branches application
approval status along with loan amount, tenor and approval condition to source on daily basis.
3.3.5 At Asset Operation
Once any credit facility is approved, sourcing channels and asset operation will get through
disbursement process. Source arranges to meet approval conditions and send all aforesaid
disbursement to Asset Operations for disbursement. Officer, loan documentation receives loan
documents from the branch. Officer, loan documentation is authorized to review documents to
ensure that all documents and sign are in order. A diagrammed detailed flow of application is
shown in the next page.

3.4. Credit Assessment Process

3.4.1 Credit Decision
The Credit Analyst will assess the income of the applicant based on the income assessment
guideline provided on Annexure-III. However a credit Analyst may also decide to defer an
application back to the source or the source or hold prior to make any approve/decline decision.
So, in effect a credit analyst can recommend any one of three decisions:
A. Approval
B. Decline
C. Return to Source/Hold
A. Approval
After assessment if it is found that a loan application meets all the PPG criteria, no default
history and complied with BB guide line, Credit Analysts prepare approval sheet considering all
the product parameters as detailed in PPG. MIS officer receives the LAP from the approval
authority and update the MIS and preserve the LAP in vault. As soon as Auto Loan is approved,
officer loan documentation will prepare four sets of Purchase Order (facility confirmation
letters) following the approved loan amount and will get the same signed by concern credit
analyst. Addressed to customer, vendor and BRTA, and Forwards it to the source by maintaining
tracker sheet. One office copy of the same will be kept in the Lap. The letters are later received
by the vendors or authorized representatives through the Branch.

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B. Decline:
Credit Analyst may decline the loan application on the ground of non compliance with PPG
criteria, poor repayment history of loan/credit card, presence in negative list and duplication,
providing fraudulent documents or negative information.
C. Return to source/Hold/Deferral:
If an application is sent to RFC without all necessary documents credit analyst can return the
LAP back to source or can hold the LAP by sending mail to the respective manager (RM/STM)
of sources informing the query or discrepancy. The source contacts the customer to collect the
required documents or foe the query. If the defer reasons are addressed, the source will re-send
the document back to RFC for further processing. After fulfillment of the query and address of
discrepancy, credit analyst will further process the lap for credit decision.
3.4.2 Multiple Exposures and Top up Criteria

Multiple Exposures: Aggression of multiples retail loan exposures is regarded as multiple

exposures. For example, customer enjoying a Car Loan of Tk. 15 Lac. Applied for a personal
loan of Tk 15 Lac. Multiple exposures will be Tk 20 lac.

Top up: A top-up loan is an additional loan extended to the borrower under same product
nature. For example, a customer availed personal loan of Tk 5 lac and now he/she applied for
another Tk 3 lac. This additional amount will be treated as top up loan. All unsecured loan
will be treated as similar product excepting Auto Loan. When applying for a multiple
exposure and top up, the following criteria will apply:

Customers must pay minimum 6 installments of existing loan to avail top up loan

For multiple exposures, customer availing car loan may apply for personal loan (life style
loan, salary loan, professional loan) regardless of time of application of top up or multiple
exposure

Maximum 60+ DPD in last 6 months

Note: Any deviation from the above should be approved by through L-2 exception

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3.5. Security and Disbursement Management

3.5.1 Process Flow for Loan Disbursement:
In the event of approved sourcing channels collect UDCs issued against retail SB/CD account of
The City Bank Limited and other documents (charge document, CIB, sanction letter etc),
required for disbursement. For auto loan copy of registration and comprehensive insurance
policy in joint name of customer and bank, copy of accepted car per price quotation, and money
receipt of insurance premium are to be sent to Retail Finance Center. Managers of sourcing
channels send all the documents to Officer Loan Documentation. Upon receipt of disbursement
documents from sources, officer, Loan Documentation retrieves the respective LAP from the
archive, verifies Credit approvers signature and authority, and checks all documents, credit
conditions and other conditions, if any. For approved auto loan, Officer of Loan Documentation
will ensure that the car has been registered and insured in joint names favoring the applicants and
the bank (hire purchase) as per the purchase order. Branch RO/RM/STM will physically verify
the car and confirm the particular of vehicle to asset Operations through mail. If Officer of Loan
Documentation becomes satisfied with the all the documents, he/she forwards the LAP to officer
disbursement. Otherwise he/she will inform the source vie e-mail about the discrepancy. Officer,
disbursement transfers the loan proceeds to customers mother account and realizes the
Management fee, VAT and Stamp charges from mother account and set standing instruction in
mother account to realize the EMI on regular basis. Officer of Disbursement arranges to send
Banking Arrangement/Sanction Letter to customer. Officer disbursement and authorizer jointly
sign in the BA letter.
3.5.2 UDC Management
Asset Operations receives the UDC for any loan as per The City Bank Limited UDC policy. On
loan closing, Officer Disbursement will retrieve the LAP from the vault and will cancel the UDC
and send back to sources to return back to manager of sourcing channels for onward delivery to
customer.
3.5.3 Acceptable Types of Security
A. Unsecured Retail Loan:
Personal Loan is an unsecured product hence, no financial security or collateral is taken from
customers.

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B. Secured Auto Loan

Following securities may be accepted for auto Loans, either partially or fully cash/cash
equivalent secured:
I. Fixed Deposit with The City Bank Limited
II. Fixed Deposit with other schedule banks and NBFLs
III. Savings scheme with The City Bank Limited
IV. Wage Earners Development Bond
V. ICB Certificates

3.5.4 Lien Marking on Security

The lien marking procedure is carried out by Asset Operations. For the various types of security
are as follows:
Fixed Deposit (FD) and Saving Scheme (SS) with The City Bank Limited
Officer, disbursement checks the existence of FD/SS in the Finacle system and will also check
whether all securities are discharged by the customer. Officer loan documentation will mark lien
in the system by getting authorization from the authorized and put lien mark seal in the front of
FD/SS receipt. Marker and authorizer will put their signatures under lien mark seal.
Wage Earners Development Bond (WEDB), ICB certificate, and FDs of other FIs, NBFIs
I. In the case of WEDB bonds issued by The City Bank Limited, Asset Operations arranges to
mark lien from the service delivery/Central Processing Center of The City Bank Limited
otherwise respective branch will mark lien instrument. Officer of Disbursement marks lien on the
system, confirming that the instrument is properly discharged by the security holder (in case of
3rd party FDR, FDR holder discharges and provides duly signed security document by the 3rd
party). After the securities have been lien marked, a printout is taken and reference of the loan
which it has been lien marked is written on the printout.
Following documents is required along with Lien confirmation letter:

MODS duly signed by the security holder

For WSDB- DB-19 from signed by the security holder two copies for each registration.

For ICB Unit certificate-Surrender from signed by the security holder (any other required
forms for USD Bond)

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3.5.5 Security Replacement

During the tenor of the loan, the client may wish to replace the existing security (s) with another
form of security acceptable by The City Bank Limited. Under such circumstance, the client
contacts the source and sends a request to replace the security to RFC. The source forwards the
request to Asset Operations, who upon receiving the request ensures that sufficient security (i.e.
at least original LTV of current outstanding is to be maintained) is being offered as replacement
for existing facilities. If all are in order, Manager RFC will approve the request and forwards it to
Asset operations. Asset Operations receives the approval from Manager, RFC and accordingly
marks lien on new security (and release the existing security). The lien marking procedure is the
same as described in the previous section.
3.5.6 Security Release
A customer may wish to take back the securities held by The City Bank Limited for various
reasons as follows.

Replacement the existing security with different security.

The facility has been repaid fully in due course of time.

The client has settled all dues prematurely through own funds and wishes to release the
securities.

Process releasing security

For release, when all dues to all bank have been repaid and no other facility has been provided
against the security, officer of Assent Operations to ensure that all dues to the bank have been
cleared by the customer. In the case of The City Bank Limited FD and deposit, Officer of
Disbursement removes the lien mark in the system by getting authorization of from the
authorizer. Mark lien withdrawn seal of FD/SS receipt. Officer of loan documentation will
arrange the sign of the maker and authorizer and hand over the securities to the client. In the case
of bonds and ICB unit certificates issued by The City Bank Limited, Officer of Disbursement
removes the lien mark in the system by getting authorization from the authorizer. He or she
issues lien withdrawn letter signed by the Disbursement Officer and Management of Asset
Operations jointly to the issuing Branch/Service Delivery for withdrawal of lien marking from
the book maintained by respective Branch/Service Delivery. For release of securities issued by
other banks or NBFIs, Asset Operations issues the lien withdrawal letter jointly signed by

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Disbursement Officer and Manager Asset Operations to receive banks or NBFIs and send the
securities to source maintaining tracker sheet for onward delivery to customers. No approval is
required for full release of security resulting from loan closure at maturity or early settlement of
loan through customers own fund or through.

Partial release of Security

When the outstanding of loan reduced through repayment, customer may ask for partial release
of security though sourced. Officer Disbursement checks the repayment history, outstanding etc.
Manager of RFC approves the partial release of security after keeping at least the original LTV
of the loan. After approval, Asset operations releases the specific security as per approval after
withdrawing the lien (as per the procedure detailed in full release of security) and send the
released security to source who later hand over the security to the customer after keeping and
acknowledgement.
3.5.7 Security Enhancement
Security Enhancement can be done under the following circumstances:
A. Customer Instruction
The customer may wish to encash the securities held with The City Bank Limited for following
reasons.

Loan closure by security enhancement

Partial enhancement of excess securities

Enhancement after loan is fully repaid

Full Encashment of Security

All the instructions are forwarded by the customer via searching channels in the appropriate
format. In case of loan closure at maturity after repayment of all the installments or clearly
repayment of loan maturity, customer may wish to encash the security due to the maturity of
security, fund requirement etc., Asset Operations encash the security and credit the proceeds to
customer as per instruction. In case of loan closure after encashment security, the source will
send the instruction directly to Asset Operations. Asset Operations ensures that the securities
value meets or exceeds the value owed to the bank. Under such cases, the securities are encashed

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as per customer instruction and all dues to The City Bank Limited are adjusted. After adjusting
the loan if any excess value is left, the amount is credited to the customers account.
Partial Encashment of Security
In case of partial encashment, the source forwards the request to Asset Operations. Asset
Operations calculates the values of securities held and amount of loan outstanding. If the
repayment history is satisfactory, Manager RFC approves the encashment of the excess securities
held with The City Bank Limited (maintaining the LTV condition of the original approval).
However, if Manager RFC is not satisfied with the repayment history of the customer, the
request may be declined.
B. Collection Instruction
In the case of delinquent loan accounts, Collection Manager requests Asset Operations to encash
the securities held against the loan. Asset Operations encashes the securities and adjust all due to
the bank. Any excess value of securities will be credited to the customers account.

3.5.8 Cross Collateralization of Security

Cross collateralization of security is allowed for auto loan only against The City Bank Limited
FD and SS. In this regard, a clear written consent should be taken from customer as well as third
party where security belongs to third party. Excess security of Cash/Partially Cash Secured
Facility is allowed for cross collateralization of auto loan provided the original LTV (on which
the existing facility is sanctioned) is maintained. Cross collateralization of security is clearly
marked in credit approval sheet. Asset Operations retrieves the loan file (security of which is
cross collateralized) and mark cross collateralization on it. Asset Operations inputs the cross
collateralization in the system while opening the loan.
3.5.9 Procedures for partial settlement of Loan
During the loan period customer may ask for prepayment of loan outstanding. Branch receives
the application for partial payment and forwards the same to RFC asset operations. Officer
Disbursement will get approval from manager Asset Operations. After getting approval, officer
Disbursement will go for partial payment.

Officer Disbursement will go for partial payment transaction:

Officer Disbursement verifies the signature and retrieves the file

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 If customer instructs to settle the loan partially by debiting his or her mother account, officer
then checks if sufficient fund is available with partial settlement fee and VAT, if fund is
available officer disbursement then settle the loan partially by debiting mother account.
Officer then realize the partial settlement fee and VAT from the mother account.
Officer prepares the voucher for the above transaction.
In the following day, officer Disbursement will reschedule the loan account and send the
reschedule sanction letter to the customer. Officer Disbursement and manager Asset Operations
will jointly sign the letter.

3.5.10 Procedures for Early Settlement of Loan

During the loan period, customer may ask for early settlement of loan. Branches receive the
application for early settlement and forward the same to RFC Asset Operations. Officer
Disbursement will get approval from manager Asset Operations if there is no exception (early
settlement fee). After getting approval, disbursement will go for settlement. Officer
Disbursement will verify the signature and retrieves the file. If customer instructs to settle the
loan by debiting his mother account, officer then checks if sufficient fund is available with early
settlement fee and VAT or not. If fund is available Officer of Disbursement then close the loan
by debiting mother account. If the customer instructs to settle the loan by security encashment,
Officer withdraws lien from the system by getting approval from approver and sends security
encashment letter to service deliver or branch instructing to credit the sale proceeds to mother
account. Disbursement marks NO Debit in the mother account after getting confirmation that
the encashment proceeds has been credited to mother account. Officer of Disbursement
regularizes the mother account and arranges to close the account. In case of third banks security,
Officer deposits the Bankers Cheque or Pay Order issued against lien marked securities in
customers mother account and mark No Debit to the mother account. After getting
confirmation that bankers cheque or PO has been cleared, Officer Disbursement will regularize
the mother account and arrange to close the account. Authorizer authorizes the transactions.
Officer then realizes the early settlement and VAT from the mother account. He prepares the
voucher for the above transaction. In the following day Officer Disbursement will check the
status of the loan account and after being confirmed that the loan account has been closed, he or
she will issue loan closing letter and will send it along with the cancelled UDC to the sources for

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refund to the customer. Officer Disbursement and Manager Asset Operations will jointly sign in
the closing letter. For Deferral and follow up Security officer will keep the MIS of deferrals and
follow up with the Branch.

3.6. Loan Balance Transfer or Take over Process

Customers enjoying EMI based personal loan may enjoy the facility of Loan Balance Transfer.
Regular loan application process will be followed in this case.
Feature and eligibility of balance transfer is as follows.

Minimum six loan EMI repayment with existing bank.

Existing loan status must be regular and account status never went to 30 DPD+ during last
six months.

Approved loan amount may be higher than take over loan amount

Take over amount will be equivalent to existing loan outstanding with other bank and is to be
transferred by respective branch through issuance of bankers cheque or pay order in favor of
customers existing bank.

All income and DBR criteria as per guideline mentioned at later section.

3.7 Loan KYC

Loan KYC (know the customer) will be required for any unsecured retail loan. Purpose of loan
KYC is to focus on the following key areas:

Background (family/parents/education)

Job or business standing (job position and job history/nature of business in details)

Life style (marriage record/children/travel record/quality of life/taste of car/dress/residence)

Loan behavior and willingness to repay (loan repayment record and seriousness/commitment
to repay proposed loan)

Net worth of the applicant (cash/deposit/shop ownership/vacant land/investment in business

etc. i.e. total assets less liability)

Guarantors status (social standing, willingness and ability to stand as guarantor where
applicable)

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3.8 Income Assessment

3.8.1 Gross monthly income
Gross Monthly Income (GMI) is defined as the total income of an applicant including all
legitimate earning sources which have reflection on the bank statement on a regular basis or
supported by income documents. Requirements for minimum gross monthly is determined based
on the eligibility criteria of individual products.

3.8.2 Average Balance

EMI percentage to average balance ratio must not cross 33%.
3.8.3 Credit Card Limit
3% of the credit card limit will go into DBR calculation if the applicant owns a credit card.

3.8.4 Debt Burden Ratio (DBR)

Formula for establishing capacity to pay (Debt Burden Ratio)
DBR = (Summation of all EMI payable towards loans + monthly personal OD interest + 3% of
credit Card Limit) / Gross Monthly Income)

Income Wise DBR Slabs

Income 15,000-29,999; DBR 35%
Income 30,000-49,999; DBR 40%
Income 50,000-99,999; DBR 50%
Income 100,000+; DBR 55%

3.9 Guarantor
Personal Guarantee will be required for any unsecured The City Bank Limited retail loan.
3.9.1 Eligibility of guarantor

Any salaried executive deemed acceptable to The City Bank Limited

Professionals (Doctors, Chartered Accountants and Engineers etc) or

Reputed Businessman acceptable to The City Bank Limited Limited

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A guarantor can provide personal guarantee up to Tk 10 lac for unsecured loan (excepting car
loan) including his or her own exposure.

The City Bank Limited staff cannot give guarantee against any retail loan.

For auto loan, spouse or immediate relatives will be preferred.

3.9.2 Required guarantors Documents

TIN

Photograph and business card

In case of immediate relative, TIN related document will not be required

.3.9.3 Waiver of Guarantor

Guarantor will not be required for the following segments

The City Bank Limited staff

Employees of POL lost and intended to loan amount not exceeding BDT three lacs.

100% cash secured loan facility.

3.10 Turn Around Time (TAT)

RFC ensures approval decision of personal loan within seventy two hours and auto loan for forty
eight hours. However, this will not be applicable if CPV of bank statement cannot be done and in
case authorization is unreasonably withheld by the statement issuing bank. TAT will be counted
from the receiving time of applications as RFC end TAT for application received after 3 pm will
be counted from the next working day.

3.11 CIB Process

Source obtained undertaking from applicant to request for CIB report from the Central Bank and
submits the same to Credit Administration CIB section.

Credit Administration forwards the request to the Central Bank.

Upon receiving a reply from the Central Bank, Credit Administration forwards a copy of CIB
to the source or RFC.

Officer at Asset Operations after receiving the CIB report from the source, get the clearance
from the respective credit analyst. If found clean or nil and all other documents are in order,
loan is disbursed as per the disbursement process.

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3.11.1 Negative CIB report

As a part of credit approval condition, if the CIB status is anything other than Clean or
Nil (e.g. Bad Loss, Doubtful etc.), the credit analyst will subsequently declined the application
and ask the MIS to black-list the customer depending on the severity of report.

3.11.2 CIB Report-Dispute Resolutions

Dispute
Sometimes customer may challenge CIB report which may not be related to him due to different
reasons. The reasons for dispute may be inclusive (but not exclusive) of the following:

Different persons in the same name

CIB report is related to customers previous organization which was not updated in Central
Banks report.

Loan was regular but reported as irregular.

Resolution

Source will ask Credit Admin as to the name to the bank, branch etc which reported the
negative status.

After obtaining information from the Credit Admin, source will inform this to the customer.

Customer will contact the particular bank or branch and request to rectify the mistakes

Bank or branch will investigate the matter and if it is found that customers claim is genuine,
bank will request Central Bank to withdraw the name from the negative status.

Central Bank after getting the request from the Bank updates the record in CIB.

Customer will inform this to the source and source will discuss with the Credit Admin and
forward the application.

Another CIB report will be obtained as per CIB report process.

If CIB report is found to be positive, the loan may be approved.

Credit will contact respective bank over phone or in writing to get their view with regard to
the incorrect reporting of the account. If it turns out that the credit facility was actually
irregular at the time of application, but regularized to get a clean CIB report, then Credit will
decline the application.

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3.12 Contact Point Verification (CPV)

While considering proposals for any exposure, The City Bank Limited considers the CPV report
of the borrowers personal, work or business details and some of the guarantors. This
CPV is conducted by market tested and reliable third party agents. To organize and streamline
the CPV report following six types of verifications guidelines details the process for CPV report.
CPV policy and process guideline describe the whole process.

Contact Point Verification

Bank Statement Authentication

Credit Report

Rent Verification

Guarantors Information

Car value Information

3.13 Negative List Checking and Withdrawal

Employer Negative List:
To withdraw from employer negative list, SSM or the Head of sales recommendation is required
with proper justification if the negative listing was due to some employee related problem. After
proper investigation, if it is not found to be genuine, the head of RFC may withdraw the
employer from negative list with proper steps to mitigate lists i.e. provide loans against EOSB,
lower tenor, lower loan size, high security ratio, low LTV etc.

Individual Negative List

Customer may be withdrawn from negative list for different reasons as follows.

Wrong bank statement verification report

Wrong of negative CIB report

Wrong CPV report

Previous poor borrowing history that is not related to customers willingness etc.

For the cases from one to three, customer is withdrawn from negative list, if it found that
customers claim is genuine investigation, the customer is withdrawn from negative list. For the
case four, Credit takes the feedback from Collection and if it found that customers claim is

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genuine i.e. failure of payment is due to customers visit in abroad or his illness etc., but kept the
promises whenever he made so and later became regular in repayment etc. if Collection feedback
is in favor of customer, Credit withdraws the customer from negative list. For all cases, Credit
withdraws the customer from negative list depending on the issue.
Automobile dealer negative list
Automobile dealer may be withdrawn from the negative list. The process will be as follows.

Owner of Automobile Dealer will send an apology letter to the Head of Sales/SSM
describing the position and confirm that they will not do the bad practice in future.

The Head of Sales/SSM if satisfied will recommend withdrawing from negative list with
detailed justification and forward to the Head of RFC.

The Head of RFC may withdraw the dealer from the negative list based on the
recommendation from the Head of Sales/SSM.

3.14 Insurance Policy

Insurance policy will followed as per Circular No: CRM/2008/02 issued by CRM
3.14.1 Insurance Renewal Procedure
Officer of Asset Operation informs the customer through mail informing the renewal of the
insurance before expiry. Comprehensive insurance renewal is done by the customer and a copy
of insurance renewal is provided to RFC Asset Operations. Renewal cost will be completely born
by the customer.
3.14.2 Insurance claim process in case of car accident
After occurrence of accident, customer informs the insurance company about the accident and
claims insurance. Insurance company completes their formalities and delivers respective form for
owners signature. Customer duly completes his/her part and Operations then forms with the
branch. Branch then sends them to RFC Collection. Manager of RFC Collection will sign on
behalf of the bank.

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B. Organization-wide Activities:
Disbursement & Documentation:
Asset operation department is combined of two parts, Documentation & Disbursement I was
place in both section. There I did different jobs as per the officials requirement. Though I was
not assigned for specific responsibilities, but I did disbursement & vault management related
jobs. My job descriptions are mentioned below:

Recheck & sending Business Arrangement Letter (BA Letter).

Preparing & sending No Objection Certificate (NOC).

Maintaining management procedure in File Vault.

C.

Other relevant activities:

With the general task of the Department I also do some undefined valuable task of the
organization. Such:

Handle the filing procedure.

Do a lot of photocopies and scan.

Attend their some meeting.

Having lesson about finical software.

Help them in daily activities.

Fill up the BA Letter from.

Handle the procedure with courier service.

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Chapter 4:
CONSTRAINTS/CHALLENGES AND
PROPOSED COURSE OF ACTION FOR
IMPROVEMENT.

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4.0Constraints/challenges and recommendations for improvement:

Every research work has to face some limitations while conducting various research activities in
various extents. There was no exception in the case of me while I was pursuing my internship
program. I had to come across many challenges to acquire the exact outcome from my activities.
Basically the challenges I faced could be categorized in two types.
a. Problems identified in the organization.
b. Problems due to lack of adequate and appropriate academic preparation.

4.1 Problems identified in the organization:

There were some constraints or limitation inside the organization and they could be categorized
as,
i. Limitations faced by me, and,
ii. Limitations of the organization

4.1.1 Limitations faced by me:

While working in the CBL, sometimes this place seemed to me as very challenging place to
work for me. I experienced the reality of current challenge of the present job market which
moves on more intensely due to the increasing competition. This part of the report wills
emphasis on the factors of challenges faced in the organization.

The City Bank is a big organization in general term and there are lots to be considered to
study their general retail lone activities thoroughly. However, picking all the aspects of
their overall activities and covering everything precisely was a real challenge for this
report.

Regular interaction with the officials was the pre-condition of getting various information
about banking activities. As the bank officials were busy in their own role, it was difficult
to discuss with them about various important things.

A company should obey its policy and therefore, City Bank has to maintain the secure
and restricted internal environment for the safety of the company. Getting access to the

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people is a matter of maintaining great precaution for their safety, and hence, there will
be many restrictions for a student or intern for getting to them as an outsider. On the top
of this it, keeping the banks various information or data secured is one of the most
important issues.

A study on like this topic may take significant amount of time where this internship had
to be accomplished within limited three months of time as required by the university. The
university requires much amount of work within such a short time and this was a great
challenge for me and providing with all required information was impossible in some
extents.

Recommendation for Improvement:

Although there are various problems or limitations faced by me during my internship inside the
organization, there could be some dedicated research divisions to collaborate with the
researchers whether they could be from the bank inside or students or any researchers from
outside.
The short span of time for such a big research is not always enough therefore the University
could consider the time duration for the internship program.

4.1.2 Limitations observed in the organization:

In the middle of twenty first century, here we are facing a heavy competition with each other, at
every single point. If anyone has a week point than the rival party will take the opportunity and
make a problem for the week intuition. After complete my internship in The City Bank limited I
realized that there are many problems like low promotional activity, High interest rate, lack of
new product, poor and analog vault management procedure etc. this may be a cause of huge loss
or create a barrier for the future prospect. So the bank should take care of it very seriously.

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 Findings of the study :

a. The main objective of The City Bank Limited is to maximize profit by utilizing its
resources at the optimum level and to ensure the best possible service towards the
customers. RFC is always providing the best support to ensure the quality of service
and always aware about the ultimate goal of the organization.
b. The City Bank Limited disburses all loans through the bank stuffs and all bank stuffs
emphasize on the banks goals and objectives.

Other Findings.................
(i) In a developing country like Bangladesh the need for domestic resource mobilization is of
special importance. Loan held by the financial intermediaries constitutes the major part of
domestic financial resources of the country. The other activities of the bank are chiefly
dependent upon the lone. The higher the amount of loan, the better is the position banks in
financing business projects, especially large-scale projects. The size of lone shows that CBLs
growth in loan is notable over the years indicating a growth rate of 67.47%.

4.1.3 Problems due to lack of adequate and appropriate academic preparation:

The main objective of an internship program is to make the bridge between the theoretical
knowledge and implication of it in the practical professional life. There are number of courses
have been undertaken during my BBA program in AIUB and I have chosen accounting and
finance as major because of great importance of this field in the current professional life.
Nevertheless, all the courses I have undertaken might not match precisely in the practical field
and I have come across a numbers of relevance and mismatches during pursuing my internship
program.

4.2 Mismatches with my academic preparation:

In many cases, I have experienced mismatch with my academic courses while I was doing
internship program. This is because the university does not always provide the practical

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knowledge and I found a few courses those focus on banking activities solely. In my BBA course
I had to gain knowledge in various broader aspects including finance, accounting, budgeting,
capital management, taxation, auditing where very few of them deeply focuses on banking
activities. Also, the university always emphasis on the theoretical knowledge and I had not much
scopes for gaining much practical knowledge on banking activities.

Some Recommendations:
To equip a student with more practical knowledge, a university could provide with some
practical knowledge with some precise and specific courses or training which will be more
effective for the student for his/her professional life.

4.3 Relevance of the academic preparation or major to the present assignment

and future job requirement of the organization:
Despite many mismatches with my academic preparation, I found some courses those were really
useful as I needed the theoretical knowledge of those course while I was doing the internship
program on banking activities of The City Bank. From all the courses few could be mentioned
and they are:
i

Financial Institutions and Markets:

This course was basically about various characteristics of financial institutions and market
including banks. I found this course useful for the internship program, as I have acquired
knowledge about how a financial institution i.e. bank plays vital role in the financial market
through its day to day banking activities.
ii

Bank Fund Management:

This course provided me with the knowledge on the financial management of a bank

to protect

a bank from bank liquidity and failure. While I was doing my internship program, I had the
chance to look into the activities of CBL and their financial management was a fundamental part
of these activities. The knowledge I gained from the course assisted me evaluating their financial
management system.

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iii

Investment and Portfolio Management:

A bank always focuses on investment fund management to derive the maximum benefit from it. I
gain not only the knowledge about investment management of a bank but I also studied on
market settings, industry analysis, company analysis and technical analysis. It was useful in the
sense that I had to analyze the overall banking activities of the City Bank Ltd. and that included
various analysis of this bank upon which their current and future strategies to be set.

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Chapter 5:

Lessoned Learned from the Internship

Program

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Lessons learnt from the Internship Program:

The lesson about the organization I have learnt from the entire internship program was really
important. I had the opportunity during the program to get a closure look at the retail loan
processing along with all other retail financial activities of the The City Bank Limited(RFCAsset Operation). All I have learnt is about various departments of the RFC, their management,
general activities, operation and so on. Overall, the whole program helped me both
understanding the banking activities and making the report smoothly required by the department.

5.1 Implications to organization/company:

Multi-dimensional Task Accomplishment:
It is required that an intern will deal with various sectors and departments of an organization.
The variety of task I have performed in the Branch was not of the same taste; however, I felt that
I have achieved some more dimensions while I was studying on the various sectors of the
organization. These multi-dimensional pieces of work could be valuable for my career ahead of
me.

Adjustment with the work place and Socialization:

Organizational socialization means the adjustment of the skill, academic knowledge and
behavior with the working environment in the working place. While I was performing my
internship program within the bank, I was being treated as an employee like others in the
organization. I got sufficient assistance from the working people in terms of acquiring enough
idea about their working strategy. This enhanced my knowledge, skill and the power of
implementing of my academic knowledge workplace. I believe this is much quite important and
also the whole program made me ready for starting my professional career in the same
environment.

Enhancement of Communication Skill:

As a fully customer oriented organization, the The City Bank Limited operates great customer
service where the communication skill is one of the fundamental factors. Treating every

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customer in banks customized unique way is a challenging thing as I observed while working
with the staffs of the department. I have achieved significant amount of knowledge about
customer service and I have realized that great communication skill is the fundamental
requirement of serving the customers with great service.

Motivation of the employee within the organization:

Besides doing my program, the bank provided me some compensational benefits and I felt more
courage for performing my study. I found that this is an effective way adopted by an
organization to motivate its people whether they could be interns or staff of itself.

Implications to Universitys Internship Program:

This internship is a part of our BBA program. AIUB has given us this opportunity to have a
practical job experience before getting into a permanent job as a full time employee. Definitely
this internship program will help us a lot in job sectors. Internship helps us to learn lots of things
which will be very effective for the near future.
From universitys internship program I have learned
1. How to give a companys portfolio in the report
2. How to present work experience in the report
3. Cooperative education experience
4. Concern for integrating experiences and external experiences
5. Way of communication.

5.2 Others:
While doing this internship I have learned lots of new things, which was totally unknown for me.
Besides learning from the organization and the university I have also learned some other things
which are very essential for me.
1. Increased trust, confidence and professionalism
2. Improved subject area and discipline knowledge
3. Increasing sophistication
4. Developing skills and competencies
5. Symbolic capital and meaning, conceptual familiarity.

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Chapter 6:
Concluding Statement

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6.0 Concluding Statement:

6.1 CONCLUSION:
Banks and financial institutions play an important role in the process of economic growth of a
country. Given their considerable economic potential, these institutions have a far reaching
impact on the development and welfare process of the surrounding societies. These financial
institutions depend, in accumulating their financial resources, basically on the inflow of deposits.
In order to survive and achieve success, these banks endeavor to attract clients in search of loans
to finance their different activities according to the banks established terms and conditions.
These banks, which are called commercial banks, depend in their transactions on the interest
rate, as the driving factor, which stimulates all their dealings.
In a developing country like Bangladesh, banking business is very much competitive. More than
fifty banks are operating at this moment and competing to hold maximum market share. For a
smoothen operation every bank must have the capability of managing asset/liability, liquidity
and credit.
The financial performance evaluation demonstrates that the profitability of the bank has a
positive trend. Profitability is an indicator of a bank's capacity to carry risk and / or to increase its
capital. The income statement, a key source of information on a bank's profitability, as well as
the analysis reveals that The City Bank Ltd. has - attained significant amount of profitability over
the years. With a enough number of branch network it has recorded positive growth in net profit
because of proper management and right selection of investment criteria. The bank has strong
core deposit signifying sound liquidity position and maintaining an ideal scenario in advancedeposit ratio. The loan selling position is also very strong. Overall financial picture of The City
Bank Ltd. for the last five-year period shows that it has positively set its root in the financial
arena of Bangladesh. The figures do not tell the story of failure. The trend is in favor of The City
Bank Ltd. and the management should take initiative to keep the banks way to the success.

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6.2 RECOMMENDATION:
In my short span of internship program, I have gained practical experiences about Asset
Operation activities from starting a deal to preparation of monthly report about it. I had
discovered few things from day to day operations. In light of that I make following
recommendations:

I.

Routine & specific timing for daily work should be maintained to avoid excessive stress.

II.

Regular performance appraisal and assurance of promotion/reward should depend on that

they will resist the employees switching tendency.

III.

Software up gradation is a necessity to enhance performance and to compete with other

PCBs.

IV.
V.

File providing speed of vault management should be increase.

Yearly financial report has to be published only for retail loan activities in details.

VI.

The City Bank has to present new retail product to satisfy the needs of various customers.

VII.

The file vault must be computerized and barcode system for each file should be
implemented immediately.

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Bibliography
I.
II.

Intranet Data of the City Bank Ltd. http://click.thecitybankltd.com

Internal delinquency data of the organization from the MIS department of the city bank
ltd.

III.

http://thecitybank.com

IV.

http://www.fair-debt-collection.com/fair-debt-act.html

V.
VI.
VII.
VIII.

www.debtcollectionsteps.com/successful-debt-collection-techniques-in-banking.html
Collection Manual of the city bank of collection department
PPG of the city bank.
Rose Peter S. (2005), Commercial Bank Management Fifth Edition, New York,
McGraw-Hill/Irwin.

IX.

Annual Report of City Bank

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