INTERNSHIP REPORT

ON

Loans and Advances Management Activities of

Jamuna Bank Limited : A Study on Progoti Shoroni
Branch
Submitted to the Department of Business Administration, Daffodil International
University as a partial requirement for MBA degree completion

Submitted By :

Name : Mehedi Islam Sohan

MBA Program (Major in Accounting)
ID : 152-14-596
Daffodil International University
 INTERNSHIP REPORT

ON

Loans and Advances Management Activities of

Jamuna Bank Limited : A Study on Progoti Shoroni
Branch

Supervised By:

Ms. Tanzina Hossain ( Asst. Professor )

Department of Business Administration

Daffodil International University

Submitted By :

Name : Mehedi Islam Sohan

MBA Program (Major in Accounting)
ID : 152-14-596
Daffodil International University

Submission: 2016
 Letter of Transmittal

To

Tanzina Hossain

Assistant Professor

Department of Business Administration

Daffodil International University

Subject: Submission of the MBA internship report.

Dear madam,

With due respect I would like to state that I have completed the internship program with
Jamuna bank. It is a pleasure for me to be able to present my internship report on Loans
and Advances Management Activities of Jamuna Bank Limited : A Study on Progoti
Shoroni Branch . I express my gratitude to you for your continuous support that made me
possible to complete the report. I remember that you inspired me a lot to complete this report.
I would like to express my heartiest gratitude to you for your full hearted inspiration,
instructions and valuable advices.

Thank you for accepting the report. I am glad to submit the report to you.

Yours Sincerely,

----------------------

Name : Mehedi Islam Sohan

MBA Program ( Major in Accounting)

Daffodil International University

ID : 152-14-596
 Declaration

I was assigned to complete my internship in the Progoti Shoroni branch of Jamuna Bank Ltd.
During my internship I tried to understand the idea of the banking practices in Bangladesh.
Internship for a period of 12 weeks is not at all enough to grab all the features of a bank but I
tried my best to make myself enriched. I do hereby declare that the report on Loans and
Advances Management Activities of Jamuna Bank Limited: A Study on Progoti Shoroni
Branch is prepared by me. The report is a genuine one. This report has not submitted
anywhere for any degree or diploma ever before.

----------------------

Name : Mehedi Islam Sohan

MBA Program ( Major in Accounting)

Daffodil International University

ID : 152-14-596
 Letter of Acceptance

This is to certify that Mehedi Islam Sohan bearing ID no 152-14-596, student of MBA
Program, Daffodil International University, has completed the internship report under my
supervision. He has worked with Jamuna Bank Limited as an internee and completed the
report entitled Loans and Advances Management Activities of Jamuna Bank Limited :
A Study on Progoti Shoroni Branch as a partial requirement for obtaining MBA Degree.
He has completed the report by himself. He has been permitted to submit the report.

Mehedi Islam Sohan bears a strong moral character and a very pleasing respon sibility. It has
indeed been a great pleasure working with her. I wish her all success in life.

------------------------------

TanzinaHossain
Assistant Professor & Supervisor
Department of Business Administration
Faculty of Business & Economics
Daffodil International University
 Acknowledgement

It is a pleasure for me to present the internship report on Loans and Advances Management
Activities of Jamuna Bank Limited: A Study on Progoti Shoroni Branch The report is
prepared solely for the purpose of completion of the MBA under the University of
development Alternative.

The report is prepared on the basis of the facts available for general use. I have gone through
the functions of the bank practically in a Jamuna Bank Ltd Progoti Shoroni branch. I also
studied annual reports for the year 2013, 2014 & 2015. With due apology I would like to
mention that the analysis & comment made in the report is absolutely my personal view. In
any case the report should not be considered as an official report of Jamuna Bank Ltd.

I express my gratitude to the authority of the Jamuna Bank Ltd. for allowing me to conduct
my internship with them. I would like to thank the officials of Progoti Shoroni branch for
extending warm cooperation in every respect. I would like to express my sincere gratitude to
the Manager, Progoti Shoroni branch.

I am indeed grateful to our respected course coordinator Mr. Mehedi Islam Sohan, MBA
program & my supervisor Ms. Tanzina Hossain (Asst. Professor) for their continuous support.
 Executive Summary

Jamuna Bank Ltd. is a third generation bank in Bangladesh. It is playing an important role to
develop the business sector. Jamuna banks made more profit than the major publicly traded
supermarket companies added together.

In chapter one, Describe about my internship project because it is the introductory part of my
report. In this part, And to explain the reason why I have undertaken the project and what
results I would expect from my study. Discuss about the importance of my study and from
which sources collected the data.

In chapter Two, Given Jamuna Bank historical background, nature of business because it the
Organizational part of my report. Discuss about the mission, vision, rule and regulation,
strategies of JBL.

In Chapter Three, I try to give a clear idea about Loan and Advance management in details. I
discuss about Different Types of Credit Facilities, Interest Rates of Loans & Advances,
Securities against Advances, and Classification of Loans and advances Sector

In Chapter Four, I discuss about the Loan and advances management procedure of JBL. From
this part, try to get an idea about the Loan processing steps of JBL in details. Discuss on this
part Wise payment of Loans, Loan recovery management on JBL, Problems in Loan
Recovery, and Overall Procedure for Sanctioning Loan.

In chapter five, I use trend analysis, ratio analysis to describe the Loan and performance
analysis of JBL. Here, all sorts of analysis have been executed, in order to analyze how
efficient, liquid, secure and desirable the bank is in terms of its finance.

At the end of the report, I include some Findings and Recommendation; I provide findings
and conclusion on overall consumer Loan and advances management of Jamuna Bank Ltd.
and evaluating performance of my study.
 Table of Content

Chapter Topic Page no.

Letter of Transmittal
Declaration
Supervisor's Certificate
Acknowledgement
Executive Summary
Introduction
One Introduction
Origin of the report
Objectives of the report
Scope of this report
Significance of the Study
Method of data collection
Limitations
Organizational overview
Two Background of Jamuna Bank Limited
Mission of Jamuna Bank Limited
Vision of Jamuna Bank Limited
Corporate Strategies & Objectives
Corporate Profile of Jamuna Bank
Board of Directors
Corporate Culture
Theoretical Aspects
Three Loan

Loans and Advances

Sanctioning Loans and Advance

Classification of Loans and advances

Loan and advance management of JBL
Four Loans and Advances Management
Management Criteria of JBL
Credit Evaluation Principle
Different Types of Credit Facilities
Interest Rates of Loans & Advances
Securities against Advances
Sector Wise payment of Loans
Loan recovery management on JBL
Problems in Loan Recovery
Overall Procedure for Sanctioning Loan
Analysis
Five Loans & Advances Analysis
Sector wise distraction loan and advertences
Location wise loans & Advances
 Credit to deposit Ratio Analysis
Return on Asset (ROA)
Net Interest Income
SWOT Analysis
Findings Recommendations and Conclusions
Six
Findings

Recommendation
Conclusion
Bibliography

Chapter 1: Introductory part

Introduction

We can simply say that Bank is financial organization that deals with money. But it is the
precise most definition about bank. In modern age it is impossible to think a country without
bank. Banks play diversified role in an economy. The most important task that is done by a
bank is building of capital. That is the key factor of the development of an economy.
Industrialized nations build their industrial sector with the help of banking sector. The
growth of the economy also depends on the performance of the banking sector. Banks secure
money of the society. Government takes various monetary policies. These policies are
implemented with the help of banking sector. It is impossible to do foreign trade with the help
of bank. Banks provide services that help the business sector a lot to carry on the business.
For example giving guaranty, different types of certificate, and expertise advice to business
people. Banks also help to establish good faith among businesspersons. Bangladesh is a
developing country. The growth of her apparel sector is mentionable. Banks can play a strong
role to take the apparel sector into a stable position. The preset economic status of
Bangladesh demands immediate development of financial institutions. The key to success in
such demanding marketing situation is how automated the service is on a continuous real
time

Jamuna Bank Ltd. is a third generation bank in Bangladesh. It is playing an important role to
develop the business sector. The growth of this bank is very good. Its motto is to provide a
prompt and quick service to the clients. Jamuna Bank Ltd. has implemented well structured
online banking systems that make it easier to provide prompt services to the customer. The
report has been prepared in the light of practical as well as theoretical knowledge. Also it is
prepared under the guidance and supervision of the core teacher. During the internship
program I have got a good idea about the bank and that is depicted in the report.

Origin of the report

Only theoretical knowledge cannot make a person perfect enough to apply those in various
cases. Therefore the practical part of learning process is an important issue in any learning
procedure. If this truth is applied to the case of Jamuna Bank Limited in light with the
theoretical knowledge of MBA program, it will make oneself be able to explore interesting
facts regarding its loan sanctions. It is a three credits hour course with the duration of twelve
weeks. Students who have completed all the required courses are eligible to for this course. In
this internship program, I was attached to do my internship by rotation to all departments of
Jamuna Bank Limited, Progoti Shoroni Branch. The supervisor assigned me on this project.
The report is on Loans and Advances Management Activities of Jamuna Bank Limited :
A Study on Progoti Shoroni Branch

Objectives of the report

To have idea regarding various types of Loan and Advances of Jamuna Bank Limited.

To identify the loan sanction procedure in different sectors in last some years.

To identify the credit approval, their securities and monitoring process of Jamuna
Bank Limited
To know the loan and advances activities of Jamuna Bank Ltd. at progoti shoroni
branch.
 To identify the recovery rates of the loans in different sectors in last some years and
have a comparison among them.

To identify the problems regarding loan and advances and give some
recommendations for improving the effectiveness and efficiency of Loan and
Advances services.

Scope of this report

The scope of the study includes the organizational structure, background and objective,
functional, departmental and business performance of Jamuna bank Limited as a whole and
the main part covers loan and advance of Jamuna bank Limited. As I have worked Load
section of Jamuna bank Limited , Progoti shoroni Branch, the topic of my internship is
Loans and Advances Management Activities of Jamuna Bank Limited : A Study on Progoti
Shoroni Branch. This report is only done for gathering information about Loan and Advance
management and performance of JBL (Jamuna Bank Limited) by focusing on the
performance and management of Loan activities alongside Loans and advances of JBL while
ignoring any other department of the bank.

Significance of the Study

The study is the report identifies Jamuna Bank Limited, progoti shoroni branch loan and
advantage. Inform about different type of loan and client problem recovery system. It helps to
understand how they deal with taken loan clients alongside the way of managing loan and
advance management. Loan section is a powerful sector of banking system having more
advances. The successful loan strategy will always have the management of these advances at
its heart. So, to improve a strong management policy should be followed. And it is important
for whole banking system activities.

Method of data collection

This report is the reflection of three months internship program at the Jamuna Bank Limited,
progoti shoroni branch.
Banking sector is a fast growing sector in Bangladesh. All banks specially the private sector
banks are facing tremendous competition from each other. So officers remain very busy to
provide prompt service to clients. As an internee I had to collect data and information from
that busy corporate environment. To prepare this internship report I have collected data and
information both from primary and secondary sources.

The primary sources are given below:

Face to face conversation with officers.
Taking initial lecture from senior officers.
Consulting with supervisor.
Practical work experienced in different desk.
Close observation of the task by different department officers.
The secondary sources of information are given below:
Annual report of the Jamuna Bank Limited.
Outlets of Bangladesh Institute of Bank Management.
Website of the Jamuna Bank Limited (www.jblbd.com).
Different publications of the Jamuna Bank Limited.
Theoretical books relating banking sector.

Limitations

Like any other study the limitations of the study is not out of questions. But the following
factors seem to me the main points of weakness of this study:

Some essential data could not be gathered because of confidentiality concerns.

The raw data available in the organizations database management system which was
also not properly organized.
Another limitation was that the data gathered could not be verified for accuracy.
Chapter 2: Organizational
part
Background of Jamuna Bank Limited

Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act,
1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank
started its operation from 3rd June 2001. The Bank undertakes all types of banking
transactions to support the development of trade and commerce of the country. JBL's services
are also available for the entrepreneurs to set up new ventures and BMRE of industrial units.
Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was
established by a group of winning local entrepreneurs conceiving an idea of creating a model
banking institution with different outlook to offer the valued customers, a comprehensive
range of financial services and innovative products for sustainable mutual growth and
prosperity. The sponsors are reputed personalities in the field of trade, commerce and
industries.

The Bank is being managed and operated by a group of highly educated and professional
team with diversified experience in finance and banking. The Management of the bank
constantly focuses on understanding and anticipating customers' needs. The scenario of
banking business is changing day by day, so the bank's responsibility is to device strategy and
new products to cope with the changing environment. Jamuna Bank Ltd. has already
achieved tremendous progress within only eight years. The bank has already ranked as one of
top quality service providers & is known for its reputation.
At present the Bank has real-time centralized Online banking branches (Urban & Rural)
throughout the Country having smart IT-Backbone. Besides these traditional delivery points,
the bank has ATM of its own, sharing with other partner banks & Consortium throughout the
Country.

Mission of Jamuna Bank Limited

To satisfying diverse needs of its customers.

To array of products at a competitive price.
To using appropriate technology and providing timely service.
Contribution to the development of the country.
Ensured with a motivated and professional work force

Vision of Jamuna Bank Limited

To become a leading banking institution.

To play a pivotal role in the development of the country.
One of the Best Performing Banks in Bangladesh
The Bank of Choice
A Truly World-class Bank

Corporate Strategies & Objectives

Strategies for Jamuna Bank Ltd.

To manage and operate the Bank in the most efficient manner to enhance financial
performance and to control cost of fund
 To strive for customer satisfaction through quality control and delivery of timely
services
To identify customers' credit and other banking needs and monitor their perception
towards our performance in meeting those requirements.
To review and update policies, procedures and practices to enhance the ability to
extend better service to customers.
To train and develop all employees and provide them adequate resources so that
customer needs can be reasonably addressed.
To diversify portfolio both in the retail and wholesale market
To increase direct contact with customers in order to cultivate a closer relationship
between the bank and its customers.

Objective of Jamuna Bank Ltd.

To earn and maintain CAMEL Rating 'Strong'

To establish relationship banking and improve service quality through development of
Strategic Marketing Plans.
To keep risk position at an acceptable range (including any off balance sheet risk).
To maintain adequate liquidity to meet maturing obligations and commitments.
To maintain a healthy growth of business with desired image.
To maintain adequate control systems and transparency in procedures.
To develop and retain a quality work-force through an effective human Resources
Management System.
To ensure optimum utilization of all available resources.
To pursue an effective system of management by ensuring compliance to ethical
norms, transparency and accountability at all levels.

Corporate Profile of Jamuna Bank

Registered Office
Chini Shilpa Bhaban

3, Dilkusha C/A, Dhaka-1000.

Company Registration Number

C-42780 (2139)/2001

External Audior(s)

Howladar Yunus & Co

Chartered Accountants

67, Dilkusha C/A (2nd Floor), Dhaka-1000

Legal Advisor

Mr. Habibul Islam Bhuiyan

Senior Advocate

Bhuiyan Islam & Zaidi

Advocates and Barristers

H# 29, Rd# 9/A, Dhanmondi R/A, Dhaka

Number of Branches & SME/ Agri Branches / Centers

Total Branches: 52

SME/ Agri Branches: 3

SME/ AgriCenters: 1

Allied Concern

Jamuna Bank Foundation

HadiMansion (4th Floor), 2, Dilkusha C/A, Dhaka

Subsidiary Company

Jamuna Bank Capital Management Ltd (Proposed)

Chini shilpa Bhaban

3, Dilkusha C/A, Dhaka-1000

Branch Information

Branch: 52 & SME / Agri Branch : 4

Number of employees

Number of employees in the main branch of Jamuna bank is 65

Board of Directors

The Board of Directors consists of 15 members elected from the sponsors of the Bank.
The Board of Directors is the apex body of the Bank.

Chairman

Vice Chairman

Directors & Sponsors

Managing Director
 Company Secretary

Chief Adviser

Tax Advisor

Auditors

Corporate Culture

Employees of JBL share certain common values, which helps to create a JBL Culture

The Clint comes first.

Search for professional excellence.
Openness to new ideas & new methods to encourage creativity.
Quick decision- making.
A sense of professional ethics
Chapter 3: Theoretical
Aspects
Loan
In finance, a loan is the lending of money from one individual, organization or entity to
another individual, organization or entity. A loan is a debt provided by an entity (organization
or individual) to another entity at an interest rate, and evidenced by a promissory note which
specifies, among other things, the principal amount of money borrowed, the interest rate the
lender is charging, and date of repayment. A loan entails the reallocation of the subject
asset(s) for a period of time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender
at a later time.

Loans and Advances

This section lends the fund what the bank mobilizes through its various deposit accounts.
This is the second function of banks two generic function deposit mobilization and credit
creation. The major part of banks income is derived from credit and since the banks credit is
customers fund, bank takes extreme caution in lending.

Sanctioning Loans and Advance

To have a clear idea about the credit management of JBL the following points are essential:

a. Credit Policy of the Bank

b. Credit Sanctioning Authority of JBL and

c. Processing and Screening of Credit Proposal

Credit Policy of the Bank

JBL Credit Policy contains the views of total macro-economic development of the country.
As a whole by way of providing financial support to the trade, commerce and industry
throughout its credit operation JBL goes to every possible corners of the society. They are
financing large and medium scale business house and industry. At the same time they also
take cares entrepreneur through its operation of lease finance and some micro credit, small
loan scheme etc. The bank has come up with a scheme where women will be given financial
support for their self-employment and development.

Credit Sanctioning Authority of JBL

Delegated powers are expected to be exercised by the authorized executives sensibly keeping
the banks interest in mind. In exercising the power so delegated authorized executives shall
also have credit restriction, tools and regulations as governed by Banking Company Act,
Bangladesh Bank, and other usual credit norms.

However, the following guidelines are laid down before the executives of JBL for exercising
the delegated power.

The borrower must be a man of integrity and must enjoy good reputation in the
market.
The borrower must have the capacity and capability for utilizing credit .properly and
profitably.

The enterprise of the borrower must be viable and profitable i.e. proposal of the borrower
must be evaluated properly and carefully so as to ascertain its profitability. The enterprise
must generate sufficient fund for debt and servicing.

A customer to whom credit is to be allowed should be far as possible within the

command area. .
No sanctioning officer can sanction any credit to any of his near relatives and to any
company where his relatives have financial interest.

Tools for Appraisal Credit

The 10 Cs of Good and Bad Loan- In addition to the formal credit appraisal, the credit an
official of JBL tries to judge the possible client based on some criteria. These criteria are
called the Cs of good and bad loan. These are described below:

Character: Make sure that the individual or company they are lending has outstanding
integrity.

Capacity: Make sure that the individual or the company they are lending has the capability
of repaying the loan.

Condition: Understanding the business and economic conditions that whether it will change
after the loan is made.

Capital: Make sure that the individual or the company they are lending has an appropriate
level of investment in the company.

Collateral: Make sure that there is a second way out of a credit but do not allow that to
drive the credit decision.

Complacency: Official do not rely on past. They remain alert every time whether any
mistake is taking place or not.

Carelessness: They believe that documentation, follow up and consistent monitoring is

essential to high quality loan portfolio.

Communication: They share credit objectives and credit decision making both vertically
and laterally within the bank.

Contingencies: Make sure that they understand the risk, particularly the downside
possibilities and that they structure and price the loan consistently with the understanding.

Competition: They do not get swept away by what others are doing

Credit Risk Grading (CRG)

Credit Risk Grading is a. financial tool to analyze the risk associate in a loan proposal.
According to Bangladesh Banks order every bank has to conduct CRG for every loan
amounting. JBL is frequent user of this technique.

Credit Monitoring and Supervision Cell

JBL is a unique characteristic in its loan management to make sure that there will be no bad
loan in its-loan portfolio, JBL established a loan monitoring and supervision cell headed by a
First Assistant Vice President. He along with other official frequently visits customer
premises or business whether loan amount, which is taken is used properly or not. Sometimes
customer need more fund or ether types of facilities to run business profitably, then the
monitoring authority takes necessary steps to meet customers need

Processing and Screening of Credit Proposal

There are some common regulations governed by Banking Company Act, 1991 Bangladesh
Bank and the law of the State which has to be followed strictly at the time of screening a
credit proposal. In addition credit proposals are appraised critically by JBL credit officials
from various angles to judge the feasibility of proposal.

The customer at the branch of the bank place credit proposals. When a customer comes with
accredit proposal, the credit department officials of the branch make an open discussion with
the customer on different issues of the proposal to judge worthiness of the proposal and
customer. If the proposal seems worthwhile in all aspect then the proposal is placed before
credit committee of the bank. After threadbare discussion, if the committee agrees in
principle the proposal is sanctioned as per the delegated business power of the branch.

However, if the magnitude of the proposal is beyond the delegated business power of the
branch they forward it to the Head Office with recommendation for sanction or approval.

On receiving the proposal, the Credit Division of Head Office places the proposal in the Head
Office Credit Committee. The committee further analyzes proposals critically and if agree in
principle they sanction the same as per delegated business power. Again if the merit and
magnitude of the proposal is beyond the delegated business power of the Head Office Credit
Committee or Managing Director they forward proposal to the Board of the Bank with
recommendation for approval.

If the proposal is found unviable at the branch level they decline the same from their desk. In
the same way, proposals are also declined from the Head Office Credit Committee and from
Board if it is not feasible.

Securities

It is essential that the proposals define clearly the purpose of the facility, the sources of
repayment, the agreed repayment schedule, the value of security (land, machinery, security
papers, bond, etc.) and the customer relationships consideration implicit in, the credit
division. Where the security is to be accepted as collateral for the facility all documentation
relating to the security shall be in the approved from.

All approval procedures and required documentation shall be completed and all securities
shall be place prior to the disbursement of the facility.

For creation of mortgage on the property-JBL requires the following documents:

Original sale deed favoring owner of the land

Certified copy of the sale deed of the previous owner of the same property.
Duplicate Carbon Receipt (DCR)
Up to date rent receipt and Municipal Tax Receipt
Certified copy of C.S.S A. and R.S. Khatians
Up to date Non-Encumbrance Certificate
Valuation Certificate
Clearance from RAJUK/WORKS MINISTRY
RAJUK approved plan of the building with the approval letter.
Photograph of the property from three different angles and the owner of the property
Site Plan/ Map
Board Resolution for mortgaging property if the same belongs to any Limited
Company.

The borrower is requested to submit the above-mentioned papers in original for verification
by the Bank lawyer and creation on the property intended to mortgage against advance.
Classification of Loans and advances

When loans become irregular in repayment, these loans are called classified loans.
Classification of loans is the process of identifying those loan accounts and giving special
attention to those loans by separating those loan accounts. Classification of loans also
measures the level of risk associated with it. Every banks give loans and advances. But not all
the loans are repaid by the borrower in specific time. There are some loans, the repayment of
which is irregular. Banks find out these loans and give special treatment to these loans.

Classification of loans is of two types

Classified Loans: Loans, the repayment of which is irregular.

Unclassified Loans: Loans, the repayment of which is regular.

Classified loans are of three types again

Substandard: Repayment is irregular, but it can be improved.

Doubtful: Unlikely to be repaid but special collection efforts may result in partial recovery of
the loan amount.

Bad or Loss: No chance is left for recovery of loan.

 Chapter 4: Loans and
Advances Management
Activities of Jamuna Bank
Limited
Loans and Advances Management

The main focus of Jamuna Bank Limited is financing business, trade and industrial activities
through an effective delivery system.

Jamuna Bank Ltd. offers Loans to almost all sectors of commercial activities having
productive purpose.
The loan portfolio of the Bank encompasses a wide range of credit programs.
Credit facilities are offered to individuals including housewives, businessmen, small
and big business houses, traders, manufactures, corporate bodies, etc.
Loan is provided to the rural people for agricultural production and other off farm
activities.
Loan pricing system is customer friendly.
Prime customers enjoy prime rate in lending and other services.
Quick appreciation, appraisal, decision and disbursement are ensured.
Credit facilities are extended as per guidelines of Bangladesh (Central Bank of
Bangladesh) and operational procedures of the Bank.

Management Criteria of JBL

Entrepreneur has to be creditworthy and competent enough to run the proposed industry. The
project should be viable from organizational technical, commercial, financial and economic
points of view.

Technical Viability

The project should be technically sound and environment friendly.

Technology transfer in case of borrowed know-how ought to be ensured.
Building should be well planned and well constructed.

Commercial viability

Market prospect and potential for the product has to be fully assured at competitive
prices.
 Marketing channel for the product should be accessible to the entrepreneur.

Financial Viability

There should be reasonable debt equity ratio as determined by the Bank on case basis.
Debt service coverage ratio should be at least 2.5 times at the optimum of production.
IRR should preferably be not less than 20%

Economic Viability

The project should ensure benefit to sufficient employment.

Credit Evaluation Principle

Some principles or standards of lending are maintained in approving loans in order to keep
credit risk to a minimum level as well as for successful banking business. The main principles
of lending are given below:

Liquidity

Liquidity means the availability of bank funds on short notice. The liquidity of an advance
means it repayment on demand on due date or after a short notice. Therefore, the banks must
have to maintain sufficient liquidity to repay its depositors and trade off between the liquidity
and profitability is must.

Safety

Safety means the assurance of repayment of distributed loans. Bank is in business to make
money but safety should never be sacrificed for profitability, to ensure the safety of loan. The
borrower should be chosen carefully. He should be a person of good character & capacity as
well as bank must have to maintain eligible number of security from borrower.

Profitability

Banking is a business aiming at earning a good profit. The difference between the interest
received on advances and the interest paid on deposit constitutes a major portion of the bank
income, besides, foreign exchange business is also highly remunerative. The bank will not
enter into a transaction unless a fair return from it is assured.

Intent

Banks sanction loans productive purpose. No advances will be made by bank for
unproductive purposes though the borrower may be free from all risks.

Security

The security offered for an advance is an insurance to fall bank upon in cases of need.
Security serves as a safety value for an unexpected emergency. Since risk factors are
involved, security coverage has to be taken before a lending.

National interest

Banking industry has significant role to play in the economic development of a country. The
bank would lend if the purpose of the advances can contribute more to the overall economic
development of the country.

Different Types of Credit Facilities

Credit The word "Credit" is derived from the Latin word Credo or Krado meaning I believe.
It is usually defined as one's ability to buy to a promise to pay. From the Banker's point of
view Credit is the confidence of the lender on the ability and willingness of the borrower to
repay the debt as per schedule of repayment. A bank provides loan to a company, with a fixed
maturity and often featuring amortization of principal. If this loan is in the form of a line of
credit, the funds are drawn down shortly after the agreement is signed. Otherwise, the
borrower usually uses the funds from the loan soon after they become available.

Types of loan of Jamuna Bank Limited:

Depending on the various nature of financing, all the lending activities have been brought
under the following major heads:

Loan (General)

Short term, Medium term & Long term loans allowed to individual/firm/industries for a
specific purpose but for a definite period and generally repayable by installments fall under
this head. This type of lending is mainly allowed to accommodate financing under the
categories

Large & Medium Scale Industry and

Small & Cottage Industry.
Very often term financing for (i) Agriculture & (ii) Others are also included
here.

House Building Loan (General)

Loans allowed to individual/enterprises for construction of house (residential or commercial)

fall under this type of advance. The amount is repayable by monthly installment within a
specified period. Such advances are known as Loan (HBLGEN).

House Building Loan (Staff)

Loans allowed to our Bank employees for purchase/construction of house shall be known as
Staff Loan (HBL-STAFF).
Other Loans to Staff

Loans allowed to employees other than for House Building shall be grouped under head
-Staff Loan (Gen).

Cash Credit (Hypo.)

Advances allowed to individual/firm for trading as well as wholesale purpose or to industries

to meet up the working capital requirements against hypothecation of goods as primary
security fall under this type of lending. It is a continuous credit. It is allowed under the
categories.

"Commercial Lending" when the customer is other than a industry and

"Working Capital" when the customer is an industry.

Cash Credit (Pledge)

Financial accommodations to individual/firms for trading as well as for whole-sale or to

industries as working capital against pledge of goods as primary security fall under this head
of advance. It is also a continuous credit and like the above allowed under the categories.

"Commercial Lending" and

Working Capital".

Hire Purchase

Hire-Purchase is a type of installment credit under which the Hire Purchaser agrees to take
the goods on hire at a stated rental, which is inclusive of the repayment of Principal as well as
interest for adjustment of the loan within a specified period.
Lease Financing

Lease Financing is one of the most convenient sources of acquiring capital machinery and
equipment whereby a client is given the opportunity to have an exclusive right to use an asset
usually for an agreed period of time against payment of rent. It is a term financing repayable
by installment.

Time Loan

This is one time financial accommodation for short period maximum 12 months to meet some
specific purpose. The loan is adjustable within the validity and not renewable and no
transaction is allowed.

Consumers Credit Scheme

It is a special credit scheme of the Bank to finance purchase of consumers' durable to the
fixed income group to raise their standard of living. The loans are allowed on soft terms
against personal guarantee and deposit of specified percentage of equity by the customers.
The loan is repayable by monthly installment within a fixed period.

SOD (General)

Advances allowed to individual/firms against financial obligation (i.e. lien on FDR/PSP/

BSP/Insurance Policy/Share etc). This may or may not be a continuous Credit.

SOD (Others)

Advances allowed against assignment of work order for execution of contractual works falls
under this head. This advance is generally allowed for a definite period and specific purpose
i.e. it is not a continuous credit. It falls under the category "Others".
SOD (Export)

Advance allowed for purchasing foreign currency for payment against L/Cs (Back to Back)
where the exports do not materialize before the date of import payment. This is also an
advance for temporary period which is known as export finance and falls under the category
"Commercial Lending".

PAD

Payment made by the Bank against lodgment of shipping documents of goods imported
through L/C falls under this head. It is an interim advance connected with import and is
generally liquidated against payments usually made by the party for retirement of the
documents for release of imported goods from the customs authority. It falls under the
category "Commercial Lending".

LlM

Advances allowed for retirement of shipping documents and release of goods imported
through L/C taking effective control over the goods by pledge in go downs under Bank's lock
& key fall under this type of advance. This is also a temporary advance connected with
import which is known as post-import finance and falls under the category "Commercial
Lending".

LTR

Advance allowed for retirement of shipping documents and release of goods imported
through LC falls under this head. The goods are handed over to the importer under trust with
the arrangement that sale proceeds should be deposited to liquidate the advances within a
given period. This is also a temporary advance connected with import and known as post
import finance and falls under the category "Commercial Lending".
IBP

Payment made through purchase of inland bills/cheques to meet urgent requirement of the
customer falls under this type of credit facility. This temporary advance is adjustable from the
proceeds of bills/cheques purchased for collection. It falls under the category "Commercial
Lending".

Export Cash Credit (ECC)

Financial accommodation allowed to a customer for exports of goods falls under this head
and is categorized as "Export Credit". The advances must be liquidated out of export
proceeds within 180 days.

Packing Credit (PC)

Advance allowed to a customer against specific L/C/firm contract for processing/packing of

goods to be exported falls under this head and is categorized as "Packing Credit". The
advances must be adjusted from proceeds of the relevant exports within 180 days. It falls
under the category "Export Credit". IDBP Payment made against documents representing sell
of goods to Local export oriented industries which are deemed as exports and which are
denominated in Local Currency / Foreign Currency falls under this head. This temporary
liability is adjustable from proceeds of the Bill.

Interest Rates of Loans & Advances

SL Type of Landings Interest Rate

1. Agriculture Loan 10% (Mid Rate)
 2. Term Loan to Large & Medium Scale Industry 14.00% (Mid Rate)
3. Term Loan to Small Industry 13.50% (Mid Rate)
4. Working Capital to Industry 14.00% (Mid Rate)
5. Export 7.00%
6. Trade/Commercial Financing 14.00% (Mid Rate)
7. Housing Loan 14.00% (Mid Rate)
8. Consumer Loan 14.00% (Mid Rate)
9. Credit to Non-Bank Financial Institution 13.00%
10. Others 114.50% (Mid Rate)

Securities against Advances

Generally JBL receives different types of securities against different types of credit facilities
from which some of are as follows:

Types of Credit Securities

House building loan Primary securities: mortgage of the land or any property.
Car loan Primary securities: joint registration and comprehensive insurance
policy. Two valuable guarantors.
Collateral securities: mortgage of land or any property. Any type
financial obligation. Auto loan Primary securities
Auto loan Primary securities: joint registration and comprehensive insurance
policy. Two valuable guarantors and post dated cheques.
Any purpose loan Primary securities: Two valuable guarantors and post dated
cheques.
Payments against Pledge or hypothecation of stock-in trade, goods, produce and
documents(PAD merchandise, machineries, land or building on which machineries
are installed.
Loan against imported Pledge of imported merchandise.
merchandise

Loan against trust Trust receipt lieu import document.

receipt
Local bills purchased Bill itself
Foreign bill purchased Shipping document for export
Over draft Primary securities: Hypothecation of book depth.
Collection securities: Mortgage of landing property and IPA.
Cash credit Primary securities: Hypothecation of stock of goods in trade duty
 insured produce merchandise
Collection securities: Mortgage of land and building any financial
obligation.

Sector Wise payment of Loans

Sl. No Sector Structure of Lending Outstanding As % of Total Loans

as % of on & Advances
31.12.2015
1. Agriculture And Agro - based Industry 106.68 1.94%
2. RMG 350.77 6.39%
3. Textile 156.10 2.84%
4. Ship Breaking 41.61 0.76%
5. Other Manufacturing Industry 41.61 0.76%
6. SME Sector 987.70 18.00%
7. Construction 313.13 5.70%
8. Power, Gas 12.52 0.23%
9. Transport, Storage and Communication 166.55 3.03%
10. Trade Service 1689.62 30.78%
11. Commercial real estate financing 83.27 1.52%
12. Residential real estate financing 85.85 1.56%
13. Consumer Credit 109.58 2.00%
14. Capital Market 87.58 1.60%
15. Credit Card 12.90 0.24%
16. Non - bank financial institutions 21.49 0.39%
17. Bank Acceptance ( i.e. LDBP, FDBP ) 767.28 13.98%
18. Others 188.04 3.43%
Total Loans & Advances 5488.70 100.00%

Loan recovery management on JBL

When Jamuna Bank sanctions loans and advances to its customers, they clearly state the
repayment pattern in the loan agreement. But some credit holders do not pay their credit in
due period. The nationalized and private sector commercial banks have to face this sort of
problems. This situation is also found in Jamuna Bank. To overcome the problem of overdue
loan, the bank has taken particular loan recovery programs. Recovery Programs taken by
Jamuna Bank Limited:
 Establishing credit supervision and monitoring cell in the bank.
Re-structuring the loan sanctioning and distributing policy of the bank.
Sanctioning loans and advances against sufficient securities as best as possible.
Giving more powers to the branch manager in credit management decision making
process.
Offering a package of incentives to the sound borrowers.
Giving more emphasis on short term loans and advances.
Imposing restrictions on loans and advances for sick industries.
Taking legal actions quickly against unsound borrowers as best as possible within the
period specified by the law of limitations.

Problems in Loan Recovery

Though Jamuna bank is performing better in managing loan and advances, still 12.39% of
total loan and advances are classified. There are a lot of reasons for which the loan recovery
of the bank is still now defective. In most cases, problems may be raised from sanctioning
procedures of loan, investigation of the project, and investigation of the loans etc. that is, the
problem in loan recovery proves the outcomes of the default process in loan disbursement.
The main reasons of poor loan recovery are categorized in four broad types as follow:

Problems created by economic environment

The following problems arise from the effect of economic environment:

Changing in the management pattern: Changing of management patterns may delay

the recovery of mature loan.
Changing in industrial patterns: The banks sometimes sanction loan to the losing
concern for further improvement of the respective sector, but in most cases, they fail
to achieve progress.
Operation of open market economy: In our country mainly industries become sick and
also close their business on account of emerging of open market economy. The cost of
 production is high and the quality of goods is not of required of standard. As a result,
they become the losing concerns and the amount of bad loan increases.
Rapid expansion of business: There are many companies which expand their business
rapidly, but the expansion is for short time. In the long run, the amount of classified
loan increases.

Problems created by government

The following problems are arisen by the government:

External pressure: Jamuna Bank has also faced many problems in the loan recovery
process as a part of continuous pressure from various interested groups.
Legal problems: Existing rules and regulations are insufficient to cover the legal
aspects of loan recovery. As a result, defaulters can get release easily from all charges
against them.
Instability of Govt. policy: Frequent changes in government policies in regard to
recovery of loan.

Problems created by the bank

The following problems are created by the banks:

Lack of analysis of business risk: Before lending, Sometime Jamuna Bank fails to
properly analyze the business risk of the borrowers and the bank cannot forecast
whether the business will succeed or fail. If it fails to run well, the loan becomes
classified.
Lack of proper valuation of security or mortgage property: In some cases, bank fails
to determine the value of security against the loan. As a result, if the loan becomes
classified, the bank cannot recover its loan through the sale of mortgage.

Overall Procedure for Sanctioning Loan

The following procedure need to be followed for giving advances to the customer. These are:

Partys application
Filling form-A
Collecting CIB report from Bangladesh Bank
Processing loan proposal
 Project appraisal
Head office approval
Sanction letter
Documentation
Disbursement

Partys application

At first borrower had to submit an application to the respective branch for loan, where he has
to clearly specify the reason for loan. After receiving the application form the borrower Bank
officer verifies all the information carefully. He also checks the account maintains by the
borrower with the Bank. If the official becomes satisfied then he gives form-X (prescribed
application form of Bank) to the prospective borrower.

Filling Form -X

After satisfying with partys application the applicant need to fill Form-X. It is the prescribed
form provides by the respective branch that contains information of the borrower. It contains-
Name with its factory location, Official address and telephone number, details of past and
present business, its achievement and failures, type of loan needed etc

Collecting CIB Report from Bangladesh Bank

After receiving the application for advance, Jamuna Bank sends a letter to Bangladesh Bank
for obtaining a report from there. This report is called CIB (Credit Information Bureau)
report. Jamuna Bank generally seeks this report from the head office for all kinds of
investment. The purpose of this report is to being informed that whether the borrower has
taken loan from any other Bank.

Processing loan Proposal

After receiving CIB report from Bangladesh Bank, then respective branch prepare an
Investment proposal, which contains terms and conditions of Investment for approval of
Head Office. Documents those are necessary for sending Investment proposal are:

Necessary Documents

While advancing money, banks create a lot of documents, which are required to be signed by
the borrowers before the disbursement of the loan. Of them some are technically called
charge documents. Necessary steps and documents:

Loan application form duly signed by the customer.

Acceptance of the term and conditions of sanction advice.
Trade license.
In Case Of Partnership Firm, copy of registered partnership deed duly certified as true
copy or a partnership deed on non-judicial stamp of taka-150 denomination duly
Notarized.
Demand promissory notes.
Letter of hypothecation of stocks and goods.
Letter of hypothecation of books debts and receivable.
Letter of hypothecation of plant and machinery.
Personal letter of guarantee.

Project Appraisal

It is the pre-investment analysis. Project appraisal in the Banking sector is important for the
following reasons:

To achieve organizational goals

To recommend if the project is not designed properly
To justify the soundness of an investment
To ensure repayment of Bank finance

Techniques of Project Appraisal

An appraisal is a systematic exercise to establish that the proposed project is a viable

preposition. Appraising officer checks the various information submitted by the promoter in
first information sheet, application for Investment and Investment proposal. The Head Office
(HO) mainly checks the technical, commercial and financial viability of the project. For
others, HO is dependent on branchs information. But when the investment size is big, then
the HO verifies the authenticity of information physically.

Head Office Approval

When Head office receive appraisal from the branch then, Head Office again appraises the
project. If it seems to be a viable one, the HO sends it to the Board of Directors for the
approval of the Investment. The Board of Directors (BOD) considers the proposal and takes
decision whether to approve the Investment or not. If the BOD approves the investment, the
HO sends the approval to the concerned branch.

The respective officer of Head Office appraises the project by preparing a summary named
Top Sheet or Executive Summary and then he sends it to the Head Office Credit Division
for the approval of the Loan. The Head Office Credit Division considers the proposal and
takes decision whether to approve the Investment or not. If the committee approves the
investment; the HO sends the approval to the concerned branch.

Sanction Letter

After getting the approval of the HO the branch issues sanction letter to the borrower. A
sanction letter contains:

Name of borrower,
Facility allowed,
Purpose,
Rate of interest,
Period of the Investment and mode of adjustment,
Security and Other terms and condition.

Documentation

If the borrower accepts the sanction letter, the Documentation starts. Documentation is a
written statement of fact evidencing certain transactions covering the legal aspects duly
signed by the authorized persons having the legal status. The most common documents used
by the Jamuna Bank for sanctioning different kinds of Investment are:
 Joint Promissory Note,
Letter of Arrangement,
Letter of Disbursement,
Letter of Installment,
Letter of Continuity,
Trust Receipt,
Counter Guarantee,
Stock Report,
Letter of Lien,
Status Report,
Letter of Hypothecation,
Letter of Guarantee
Documents Relating to Mortgage.

Disbursement

After sanction and completion of all formalities the respective officer disburses the loan. The
officer writes cheque and provides it to the borrower. For this borrower has to open an
account through which he/she can withdraw the money.

Strategies for Recovery: Recovery of loan can be made in the following three methods:

Persuasive Recovery: The first step in recovery procedure is private communication

that creates a mental pressure on borrower to repay the loan. In this situation bank can
provide some advice to the borrower for repaying the loan.
Voluntarily: In this method, some steps are followed for recovering loan.
Legal Recovery: When all steps fail to keep an account regular and the borrower does
not pay the installments and interests then the bank take necessary legal steps against
the borrower for realization of its dues. In this case Artha Rin Adalat Law 2003
plays an important role for collecting the loan.
Chapter 5: Analysis
Loans & Advances Analysis

From previous 5 year annual report I have analyzed some important data which is related to
credit activities of JBL. The analyzed information is shown below by creating different chart
graphs etc.
(Tk. In million where applicable)

Year Total Deposit

2011 21037
2012 32288
2013 49735
2014 56612
2015 54887
Chart: Loans & Advances Analysis

70000

60000

50000

40000
Total Deposit
30000 Year
20000

10000

0
2011 2012 2013 2014 2015

Figure: Loans & Advances Analysis (in millions)

Sources: Annual report (2011-2015)

Here we see that total loans & advances of JBL are increasing 20011 2014. This is because
of their attractive and flexible loan packages. But in 2015 their total loans and advances is
decreased by 3.14% compare to 2014. The main reason of decreasing loans and advances, the
competitive bank come up with a new loan policy which is more attractive than our loan
policy.

Sector wise distraction loan and advertences

 Item Percentage
Agriculture And Agro-based Industry 1.64%
RMG 3.69%
Construction 5.70%
Bank Acceptance 13.98%
small and cottage industries 10.46%
SME 18.00%
trade service 30.78%
Chart: Sector wise distraction loan and advertences

Sactoral Distribution Of Advances

Agriculture and agro

2%4%
based
7%
RMG
Constriction
37%
17% Bank acceptance
small and cottage
industries
SME
trade service
12%

21%

Figure: Sector wise distraction loan and advertences

Sources: Annual report 2015

From the figure it can easily be said that JBL provides more loan in Trade service sector. In
2015 it provided 30.78% of total loan and advances to Trade service sector. But in agriculture
sector they discourage to sanction loan because they think this sector is risky, in 2015 JBL
provide loan in agriculture sector only 1.64%. In SME sector it was 18%.

Location wise loans & Advances

Division Percentage
Dhaka Division 64.78%
 Chittagong Division 18.39%
Sylhet Division 1.25%
Rajshahi division 11.59%
Rajshahi division 1.03%
Khulna Division 2.67%
Barishal Division 0.29%
Chart: Location wise loans & Advances

Location wise loans & Advances

Dhaka Division
0% Chittagong Division
12% 1%3%
1% Sylhet Division
Rajshahi division
18%
Rajshahi division
65%
Khulna Division
Barishal Division

Figure: Location wise loans & Advances

Sources: Annual report 2013

In above chart we see that JBL provide huge amount of loans and advances in Dhaka
division. They provide 64.78% loans and advices in Dhaka division. JBL also provide their
loans and advances 18.39% in Chittagong division and 11.59% in Rajshahi division. And the
others division they provide fewer percentage of loans and advances.

Credit to deposit Ratio Analysis

Credit deposit ratio measures the portion of deposit used for credit. The more the ratio the
more the bank is capable to uses its deposit as credit.

Credit to deposit ratio= Total Credit/ Total Deposit

 (Tk. In million where applicable)
year total Credit total deposit Credit/deposit Ratio
2011 21036.86 27307.94 77.04%
2012 32287.66 42356.20 76.23%
2013 49734.80 60673.56 81.97%
2014 56611.79 70508.05 80.29%
2015 54887.03 79623.13 68.93%

Chart: Credit to deposit ratio

Credit/deposit Ratio
82.00%
80.00%
78.00%
76.00%
74.00%
72.00%
70.00%
68.00%
66.00%
64.00%
62.00%
2011
2012
2013
2014
2015

Figure: Credit to deposit ratio

Sources: Annual report (2011-2015)

From the figure it can be said that the credit to deposit ratio of JBL is fluctuating year by
year. The main reason of fluctuating credit to deposit ratio was JBL unable to utilize their
credit. Here we see that year by year JBL total deposit are increasing but credit are not that
much increased. As a result we see that in 2015 JBL credit to deposit ratio was 68.93%. This
is decreased by 14.15% compare to 2014.

Return on Asset (ROA)

Year 2011 2012 2013 2014 2015

Return On Asset (ROA) 1.65% 2.30% 1.78% 1.72% 1.06%

Chart: Return on Asset (ROA)

 Return On Asset (ROA)
2.50%

2.00%

Return On Asset (ROA)

1.50%

1.00%

0.50%

0.00%
1 2 3 4 5

Figure: Return on asset

Source: Annual report (2011-2015)

Return on Asset basically measures that how much profit a bank can generate by utilize their
assets. Here the more utilization of assets can create more profit which will be better for a
bank. Here in this scenario we can see that Jamuna Bankis utilizing their assets proper way in
2011-2012. After that in 2014-2015 it is decreasing. After in 2014 to till 2015 they are unable
to generate higher profits because of not utilizing their assets in a proper way.

Net Interest Income

(Tk. In million where applicable)
Year Total Interest Income Total interest expense Net interest Income
2011 2890.65 7787.48 4896.83
2012 3788.90 6310.59 2521.69
2013 5207.52 3726.52 1481
2014 8473.44 2888.74 5584.70
2015 9626.68 2321.88 7304.80
 Chart: Net interest income

Net interest Income

8000

6000

4000
Net interest Income
2000

0
2011 2012 2013 2014 2015
-2000

-4000

-6000

Figure: Net interest income

Source: Annual report (2011-2015)

From 2011-2012 the net interest income was negative and after that in 2013-2015 it was
increasing. Net interest income mainly generates by providing loan & security to the
customer. The condition of net interest income of JBL is in a good position and there have
positive trend up to 2015. Here we see that JBL gradually increase their Net Interest Income.

SWOT Analysis

SWOT analysis refers to analysis of strengths, weaknesses, opportunities and threats of an

organization. This facilitates the organization to make its future performance improved in
comparison to its competitors. An organization can also study its current position through
SWOT analysis. For all of these, SWOT analysis is considered as an important tool for
making changes in the strategic management of an organization. Through direct observation
and discussion with the JBL officials I am able to point out some major strength and
weaknesses as well as some threats and opportunities regarding the various issues of the Bank
such as

Organizational identity.
Service level.
Operational efficiency.
Technology.
Employee efficiency etc. along with many other issues.

Strengths Weaknesses
Top management Dependent on fixed deposits
Corporate culture Moderate risk management system
Various Products and Services Absence of strong marketing
Strong employee bonding
activities
Efficient Performance Not enough innovative products
Strong financial position Discouraging small entrepreneurs

Opportunities Threats
Country wide network Similar products are offered by others
Introducing more branches Default Loans
Introducing special corporate scheme Industrial Downturn
Real time online banking Increased competition in the market
Creation of brand image

Strengths

Top Management

The Jamuna Bank Limited is operated by a very efficient management group. The top
management officials have all worked in reputed banks and their years of banking
experience, skill, and expertise will continue to contribute towards further expansion of the
bank. So, the top management of the bank is the major strength for JBL.

Corporate Culture
JBL has an interactive corporate culture. The working environment of JBL is very friendly,
interactive and informal. And, there are no hidden barriers or boundaries while communicate
between the superior and the employees. This corporate culture works as a great motivation
factor among the employees of the bank.

Various Products and Services

JBL offers various types of products and services to their clients. So those, Customers can
choose the right products that will fulfill their needs.

Strong employee bonding and belongings

JBL employees are one of the major assets of the company. The employees of JBL have a
strong sense of commitment towards organization and also feel proud and a sense of
belonging towards JBL. The strong organizational culture of JBL is the main reason behind
its strength

Efficient Performance

It has been seen from customers opinion that JBL provides hassle-free customer services to
its client comparing to other financial institutions of Bangladesh. Personalized approach to
the needs of customers is its motto.
Strong Financial Position

It has been seen that the net profit has been gradually rising over the years. Furthermore, JBL
is not just sitting on its previous years success, but also taking initiatives to improve. One of
the employees has said,

Weakness

Dependent on fixed deposits

Jamuna Bank heavily dependents on fixed deposit. The bank have to pay large amount of
interest for the just because of highly depend on fixed deposit.

Moderate risk management system

JBL risk management system is not that much secured. They need to develop their risk
grading system.

Absence of strong marketing activities

JBL currently don't have any strong marketing activities through mass media e.g. Television.
TV ads play vital role in awareness building. JBL has no such TV ad campaign. Although
they do a lot of CSR activities compared to other banks.

Not enough innovative products

In order to be more competitive in the market, JBL should come up with more new attractive
and innovative products. This is one of the weaknesses that JBL is currently passing through
but plans to get rid of by 2015.

iscouraging small entrepreneurs

JBL provides clean Import Loan to most of its solvent clients. But they usually do not want to
finance small entrepreneurs whose financial standing is not clean to them.

Opportunities

Country wide network

The ultimate goal of JBL is to expand its operations to whole Bangladesh. Nurturing this type
of vision & mission & to act as required, will not only increase JBL's profitability but also
will secure its existence in the long run.

Introducing more branches

There are many important places in Bangladesh, where customers are eagerly waiting for
doing banking transactions. But no existence of banks is in those places. Although JBL
already has 65 branches to provide services to its customers, it must also open more branches
in those places where people needs banking facilities.

Introducing special corporate scheme

JBL can introduce special corporate schemes for the corporate customers or officers who
have an income level higher from the service holders. At the same time, they can introduce
schemes or loans for various service holders. And the schemes should be separate according
to the professions, such as engineers, lawyers, doctors etc.

Real time online banking

Today online banking is the best way to earn profit for the bank. So JBL have to earn more
profit by developing online banking system.

Creation of brand image

As we know that brand creates value. So JBL need to develop their brand image by
developing their products and services.

Threats

Similar products are offered by other banks

Now-a-days different foreign and private banks are also offering similar type of products with
an almost similar profit margin. So, if all competitors fight with the same weapon, the natural
result is declining profit.

Default Loans

The problem of non-performing loans or default loans is very minimum or insignificant.

However, this problem may rise in the future thus; JBL has to remain vigilant about this
problem so that proactive strategies are taken to minimize this problem

Industrial Downturn

Bangladesh is economically and political unstable country. Flood, draught, cyclone, and
newly added terrorism have become an identity of our country. Along with inflation,
unemployment also creates industry wide recession. These caused downward pressure on the
capital demand for investment.

Increased competition in the market

In banking sector day by day competition are increased and lots of new bank are coming into
the competition. So it is big threat for JBL.
 Chapter 6: Findings
Recommendations and
Conclusions
Findings
While working at JBL Progoti shoroni branch, I have attained a newer kind of experience.
After collecting and analysis data I have got some problem of the JBL. These problems
completely from my personal viewpoint, which is given below:

1. Lack of update products is a drawback of the general banking area of the

JAMUNA Bank. New products such as student loan, medical loan, marriage loan
are not available in JBL.

2. From the clients view introducer is one of the problems to open an account. It is
general problem to all commercial bank.

3. They face troubles with those clients who have not any knowledge in banking
transactions and banking rules.

4. Lack of proper training arrangement of employees. As a result of technological

change such as use of new software There are few staffs who have lacking in
computer knowledge are not efficient enough to finish every task immediately so
before utilizing new technology proper training should be arrange.

5. As the deposit is heart of running the banking activities JAMUNA Bank Deposit
growth not good. Because JAMUNA Bank deposit rate is low other than
commercial bank such as Dhaka Bank, Prime bank Mercantile Bank, HSBC Bank,
Bank Asia etc.

6. The recovery of capital in small business loan section is threatened.

7. Clients generally complain that rate of interest for various type of credit is quite
high. In many cases productivity from loaned investment is inadequate that
borrower become incapable in repaying loan.

8. JBL provide huge amount of loans and advances in Dhaka division. They provide
64.78% loans and advices in Dhaka division. JBL also provide their loans and
advances 18.39% in Chittagong division and 11.59% in Rajshahi division. And the
others division they provide fewer percentage of loans and advances.
 9. JBL provides more loan in Trade service sector that is be major problem on
distraction loan and advertences

Recommendation

Some necessary steps are recommended bellow on the basis of collected data, observation,
expert staffs opinion and my knowledge and judgments. For the probable solutions of the
identified problems ensure better process to JAMUNA Bank in future.

1. In the face of competitive and customer dominated scenario JBL must come up
with innovative products to meet up the demand of time. Such as study loan,
medical loan, debit card, dual currency credit card etc.

2. The branch manager should ensure proper distribution of works responsibility

among personnel strictly and monitor the activities of the officer so that the clients
get efficient service.

3. JAMUNA Bank should develop effective online banking system to compete with
other commercial banks.

4. Job description should be clarified and proper training facilities should ensure to
improve the performance of bottom line management.

5. JAMUNA Bank should give more attention to advertisement for creating more
attraction among its customers, which is helpful to collect more deposits and
increase investments scope. Thats why bank should give emphasis on
advertisement in various media live TV, News Paper, Internet and Billboard.

6. JBL should be take strong policy to recovery small business loan section is
threatened.

7. A complain box for the customer, each and every complaint form the customer has
been received and find out the problems and therefore try to eliminate the
problems of the customer as soon as possible.
 8. JBL should be changing amount of loans and advances in Dhaka division and rise
on the others division changing amount of loans and advances.

9. Should be focus on other sector like Agriculture And Agro-based Industry, RMG,
Construction, small and cottage industries, SME, Bank Acceptance

Conclusion

There are a number of Private Commercial Banks, Nationalized Commercial Banks and
foreign Banks operating their activities in Bangladesh. The JAMUNA Bank Ltd. is one of
them. For the future planning and the successful operation for achieving its prime goal in this
current competitive environment this report can be helpful guideline.

To compete in the environment of advancing technology and faster communication the JBL
should depend more heavily on the quality service and information technology. No doubt
about it that JBL achieve superior position in our banking industry but to cope with customer
JBL should think how to make it services proactive. To compete with other banks operation
in Bangladesh, JBL should introduce easier way for faster processing of credit analysis. As a
leading bank of Bangladesh, JBL contributes in the business with promising future. I can
hope that JBL can spread their business with increasing various scheme and other utility
services
Bibliography

Websites

www.jamunabankbd.com
www.bangladesh bank.org

Annual Reports

Jamuna Bank Limited (2011-2015)

Published Document & Banking manual

Credit Division Manual of JBL

Several Booklets from Jamuna Bank Limited
Other internship reports of JBL