Practices and Policies in Credit Management of Rupali Bank

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In order to know about a financial organization like a bank, a person should know all section of the financial organization in times. so I think that credit management system is an important topic. This section is intended to provide minimum background and procedural guidelines to examiners, responsible for evaluating a banks credit management system within Individual bank and global banks.
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oan is the main component of a bank. It is the lending of a sum of money by a lender to a borrower to repay with a certain amount of interest. oans refer to a formal agreement between a bank and borrower to provide a fixed amount of credit for a specified period.
!o as a profit oriented business organization , if a bank gives its resources temporarily under certain conditions and for a specific duration , it will be called loan time to time , the term loan , credit and advance are used separately in different spheres
Origin of the Study

The ""# program of !haikh "urhanuddin $ost %raduate &ollage 'nder (ational 'niversity is designed with an excellent combination of theoretical and practical aspects. Internship provides the students to link up their theoretical knowledge into practical fields. #fter the completion of the course re)uirement for the ""# program, students are sent to various organizations where they are assigned to one or more task to get three months practical experience. *uring this program, supervisor guides each student one from the university and the other from the organization. In this connection, I was assigned to +upali bank "angladesh ,ohnson +oad &orporate "ranch for my practical orientation. #t the end of the program, the internships are re)uired to place the accomplishments and findings of the pro-ect through the writing of the internship report covering the relevant topics td,
Justification of the Study

Internship $rogram is a mandatory program for all students of ""#. $ractical orientation is a positive development in professional area. +ecognizing the importance of practical experience. *epartment of /arketing has introduced a one t three months practical exposure as a part of the curriculum of "achelor of "usiness #dministration. 0or the completion of this internship program I have chosen a bank named 1+upali "ank imited2 and my internship report is based on 13$ractices and $olicies 0ollowed by +upali "ank In &redit /anagement !ystem. I have prepared this report under Nazmun Nahar Shanta, ecturer *epartment of "usiness administration 4""#5 of !haikh "urhanuddin $ost %raduate &ollage under (ational 'niversity. In the study period, mainly student gain theoretical knowledge but now a day, in the -ob market there is no substitute of practical work experience. Therefore, before getting into -ob, students should.
1.4 O !ecti"es of the study

To find out the d have some real world experience in the ma-or field of study on the career choice that interest him7her strength, weakness, opportunity and threat. To present the financial performance of the bank. To $inpoint The operational procedure of the bank To know the management skillness To get the ways for solving the problem !trengthen the banks brand recognition To know about the products regarding the deposit, loan and advance
1.# $imitations of the study

*uring the study, I have faced the following limitations8 Three months time is not enough for such an extensive study. It is very difficult to collect all the re)uired information in such a short period. #nother limitation of this report is "anks policy of not disclosing some data and information for obvious reason, which could be very much useful. The bankers are very busy with their -obs, which lead a little time to consult with.
*ue to some legal obligation and business secrecy banks are reluctant to provide data. 0or this reason, the study limits only on the available published data and certain degree of formal and informal interview. In case of performance analysis secondary data are used.
This is my first experience on -ob, so there may arise some faults though I have tried my level best.
%ha&ter 'wo
(ethodo)ogy
*.1 (ethodo)ogy
+esearch methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. The study will focus on deposit and loan scheme and foreign exchange of banking and customer satisfaction through practicing modern <=business systems. There is a growing independence between business strategy, rules > procedures on the one hand > marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value on the other
*.* +ata co))ection and ana)ysis

(ethod of data co))ection There are two types of data8 $rimary data and !econdary data. Primary +ata %o))ection 0or this study, at first I selected the primary sources of data and collected data through interview. In selecting the primary sampling units, $$! 4$robability proportion to size5 sampling method is implemented. I took interview different executives of /I!, ?+ > #dmin, #ccounts, *evelopment, !/< departments of the +upali bank ltd. Secondary +ata %o))ection I collected previous and current data from different levels of employee of +upali bank ltd and from different types of customers. I also went through different books, -ournals and internet data > information. &ollecting the information it is entered into computer and /! word > /s
<xcel is used to analyze the data. The steps of processing data is included the following steps. &ollection &lassification !orting, adding, merging > so on !ummarizing !toring +etrieval *issemination
%ha&ter 'hree
Organizationa) Profi)e
,.1 -istorica) .ac/ground

+upali "ank td. was constituted with the merger of 6 4three5 erstwhile commercial banks i.e. /uslim &ommercial "ank td. #ustralasia "ank td. and !tandard "anks td. operated in the then $akistan on /arch .;, 1B@. under the "angladesh "anks 4(ationalization5 Crder 1B@. 4$.C. (o. .; of 1B@.5, with all their assets, benefits, rights, powers, authorities, privileges, liabilities, borrowings and obligations. +upali "ank worked as a nationalized commercial bank till *ecember 16, 1BA;. +upali "ank td. emerged as the largest $ublic imited "anking
&ompany of the country on *ecember 19, 1BA;.
,.* 0ision
+upali "ank td. dreams poverty free "angladesh, where sports > athletics, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality make all our lives worth living.
,., (ission
The "ank participates actively in socio=economic development of the country by performing commercially viable and socially desirable banking functions. *evelop ong=term relationships that help our customers achieve financial success. Cffer rewarding career opportunities and cultivate staff
commitments.
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,.4 %ore 0a)ues

1 !ocial +esponsibility E $erformance E Integrity E +espect E Innovation E Teamwork
,.# 2uide)ines Princi&)es of 3u&a)i .an/ $td.

Transparency and accountability. Fero tolerance on corruption and inefficiency 0lexibility in operation &onstant review of clients performance Cther guiding principles includes decentralization and devolution, defining roles and responsibilities, use of state of art modern technologies, bottom=up approach in planning, partnership etc.
,.4 Strategic O !ecti"es

*evelop a customer oriented service culture with special emphasis on customer care and convenience. Increase our market share by following a disciplined growth strategy. #chieve a significant share of deposit and credits from the existing and niche markets.
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everage our technology platform and pen scalable systems to achieve cost=effective operations, efficient /I!, improved delivery capability and high service standards.
*evelop innovative products and services that attract our targeted customers and market segments. /aintain a high )uality assets portfolio to achieve strong and !ustainable returns and to continuously build shareholdersG value. !trengthen the banks brand recognition. <xplore new avenues for growth and profitability, particularly by diversifying loan portfolio through structured finance and expansion of retail and !/< financing.
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,.5 Organization Structure
%hairman
H (anaging +irector H Additiona) (anaging +irector H Assistant (anaging +irector H 2enera) (anager H +e&uty 2enera) (anager H Assistant 2enera) (anager H H Senior Princi&)e Officer Princi&)e Officer H
Officer
,.6 +i"isions of 3u&a)i .an/ $imited

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+upali "ank
imited. has some ma-or divisions comprising of various
*epartments, The ma-or divisions are as follows8 7n"estment +i"ision8 This division has the authority to determine the party or the client who will get the credit facility from the bank. The credit clients are selected according to the criteria of credit policy. 9inancia) Administration +i"ision8 This division can handle the credit proposal, disbursement, monitoring and credit recovery position that is given by all branches. Audit and 7ns&ection +i"ision8 This division can control all the financial position, activities of overall organization. They provide the total budgetary limitation to every department for the respective year. (ar/eting and Pu )ic 3e)ation +i"ision8 This division mainly works for improving the marketing network, Implementing the marketing strategies and the concept of Trade /arketing. %ommon Ser"ice +i"ision8 This division can handle all the genera activities except the credit and financial sector. #ll the administration activities are designed and implemented by this division. -uman 3esource +i"ision :-3+;8 This division deals with the employees as the core resources of the organization. %om&uter :7'; +i"ision8 This division can handle the IT activities. <ach branch has their own IT division and all branch= wise activities are reported to the head office IT division.
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,.< 9inancia) Ana)ysis

'ota) Assets Total asset of +" stood at Tk 1.996.9: crore in .D1D from Tk A@@B.19 crore in .DDB registering a growth of 91.@6 percent. The increase in asset of +" was mainly driven by growth of customer deposits. The growth of deposits was used for funding growth in credit and holding of securities for ! + purpose. The economy witnessed a lower growth scenario in credit and deposits mobilization. 2rowth of .a)ance Sheet 7tems Cutstanding Tk in crore .D1D #ssets 1.996.9: *eposits B11..6A oans > #dvances ;;D9.BD %rowth of +" I .DDB A@@B.19 91.@6 @6AD.69 .6.9; :.69.9. .;.1A
%ash and .a)ance with .ang)adesh .an/ +" Gs position increased from Tk :.A.;9 crore in .DDB to Tk @:9..; crore in .D1D showing a growth of 9..;A percent. The growth in deposits increased the &ash +eserve +e)uirement of the "ank which is maintained with "angladesh "ank and its agent. &++ was maintained ade)uately through out the year. .a)ance with other .an/s and 9inancia) 7nstitutions +" Gs position increased from Tk .D;.B@ crore in .DDB to Tk .;A.A: in .D1D registering a growth of ;1.AA crore. #de)uate funds were also
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maintained with correspondent banks for payment against commitments. (oney at %a)) = Short Notice
&
E This was the ma-or area of operation of the +" Gs Treasury *ivision. The total money at call and short notice of +" stood at Tk.6.D.DD crore in .D1D from Tk.6@D.DD crore in .DDB. 7n"estment +" Gs investment increased during the year by Tk. 191.9. crore and stood at Tk 1:@1.@1 crore as at 61 *ecember, .D1D. $oans and Ad"ances>7n"estments oans and advances of +" +" increased by Tkl6@D.9A crore showing a growth of .;.1A percent during .D1D. Jield on loans and advances of decreased to D1.11 percent due to reduction of lending rates on corporate and medium scale financing as imposed by "angladesh "ank. &oncentration of loans and advances was well managed and details of credit are given at notes to accounts no @.DD. +atio of non performing loan of +" previous year. $ia i)ities The total liabilities 4excluding e)uity5 of +" stood at Tk 11D.A.6D crore in .D1D from Tk.B66@.6. crore in .DDB registering a growth of 1A.11 percent. The increase in liability was mainly due to growth in deposits. .orrowings from 9inancia) 7nstitutions and Agents The borrowing represents, +" Gs borrowing against refinance from "angladesh "ank. +efinance was taken for rural financing and against nostro accounts in abroad. decreased to 11.B; percent as against 1B.9A percent of
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+e&osits The deposits of +" grew by .6.9; percent in .D1D &ustomer deposits of the "ank grew by ...B: percent. The growth was supported by branch network and high standard service provided to customers along with liability. +e&osit (i? &ampaign carries out by retail liability team for mobilization of no cost and low cost deposits. (o cost and low cost deposits comprised of 1; percent of the deposits as against 1: percent in the previous year indicated significant improvement of deposit mix. ?owever, fixed deposits remained the main component of deposits contributing about .; percent of the total deposits. Interest cost of deposit decreased to 9.1; percent as against 9.:. percent of previous year. The clientele group of the "ank was individualsG corporation, (%C, ("0I, government and private bodies etc.
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Types of *eposits
Cutstanding in crore Taka .D1D .DDB &urrent > &ontingent B...@9 @1@..1 "ills payable 1.B.;@ B..6; !avings 66.9.6; .B9:.D9 !hort term deposits 1669.9. A1;.@9 0*+ .6AA.6. 1@:A.;6 !cheme *eposits :D@.B: ;B1.D1 Cther deposits :D9.B. 6:B.6: Total *eposits B11..6A @6AD.69
%rowth $ercentage 4I5 .A.;: 9D.6B 1..AA ;6.6A 6:.A 4.;.9B5 9D.:1 .6.9;
Source8 Annua) 3e&ort *@1@
Shareho)dersA 9und +" Gs !hareholdersG fund position is Tk 1,B@6.66 crore by during .D1D. $aid=up capital of +" is Tkl.:.DD crore during .D1D. The !tatutory reserve increased by Tk .A.:1 crore during the year and stood at Tk 1:6.:9 crore. *istributable profit stood at Tk 61.:1 crore during the year. The strong growth in !hareholdersG fund will help the "ank to expand its business.
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Ana)ysis of 7ncome Statement of 3.$ Taka in crore S$No 1 . 6 9 : ; @ A B 1D 11 1. 16 19 Particu)ars (et interest income Investment income (on interest income Total operating income Total operating expenses $rofit before tax and provision %eneral $rovision on loans $rovision for classified loans %eneral provision on Cff= "alance !heet Item
$rovision for diminution in value of investments
Cther provisions (et profit before tax $rovision for tax (et profit after tax
*@1@ .DA.AA 1@;..A B6.A. 9@A.BA .69.6D .99.;A K K :D.1; A.DD 1D..11
*@@< 1@6.BA 1::.BD @.... 9D..1D 1B...6 .DB.A@ = . D.1@ K 9..A:
19..:@ 1;;.A: A..:9 K ;D.D6 1;;.A:
Net 7nterest 7ncome +" Gs net interest income grew by .D.D; percent during .D1D. Interest earned from loans and advances and profit earned on investment remained the principal component of interest income. ?owever interest cost of deposits was the main component of interest expenses. (et interest income was the highest contributor to total income,
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7n"estment 7ncome +" Gs investment income consists of interest earned on treasury bills > bonds and dividend received on shares. Investment income increased by Tk .D.6A crore during the year registering a growth of 16.D@ percent over the previous year and became the main contributor to total income, accounting for @..D9 percent of the operating income. NonBinterest 7ncome The non=interest income of +" is .B.B1 percent from the previous year. 0ees and exchange based income of the "ank grew by 9.:. percent during the year. Cther charges and recoveries increased during the year Taka in crore $articulars &ommission <xchange !ervice &harge /iscellaneous Cther operating income Total ( o n =in te re s t In c o m e .D1D 1D.B9 99.D: .6.A. 16.:; 1.9: B6.A. .DDB 1D.;6 91.BB 11.;6 @.;A D..B @....
'ota) O&erating C?&enses
.D
Total operating expenses increased by 9..D@ crore during the year mainly due to increase in personnel and other operating expenses. To match with the growth of !/< and retail business and "ranch expansion substantial number of manpower was recruited especially in !/< and retail segments will benefit the "ank in broad spectrum. +" also made donation amounting to Tk ..:9 crore to carry on various &!+ activities. +" also focused on developing brand image and increased promotional and advertisement expenses. This strategy added value to the business. The "ankGs cost income ratio is @D.6: percent in .D1D from A..B; percent in .DDB. &onsidering these factors, the ratio indicates the satisfactory operating efficiency of the "ank. The productivity of the employee continued to grow which is evident from the following ratio8 Taka in crore
Particu)ars Income per employee $rofit before tax per employee Pro"ision for %)assified $oans
*@1@ D.1A D.D6
*@@< D.1; D.D9 1.B9
#sset per employee 4excluding contingent5 ..@6
Total provision against classified loan was Tk 680.87 crore as against Tk 852.86 crore of previous year.Provision against unclassified loans was made to Tk 62.00 crore during 2010 as against Tk 5.5! crore of previous year. "eneral provision re#uirement on off$%alance s&eet outstanding &ad to %e provided Tk 81.70 crore as against Tk !1.5 crore of previous year. T&e %ank &as provided Tk 8.8! crore as provision for diminution in value of investments. T&is is to %e noted t&at general provision is regarded as Tier$ii capital of t&e
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'ank and provides safeguard against future default as well supports %usiness growt& %y strengt&ening t&e capital %ase.
($ ratio Industry #verage of ($ $rovision Industry average
.D1D 1..1:I B..DI 11...AI 1D..6DI
.DDB 1B.9AI 1D.ADI 1AB.B6I B..@BI
3eco"ery against %)assified and DrittenBoff $oans +" was able to recover Tk .;;.91 crore against classified loans and Tk .@.:1 crore against witten=off loans during the year .D1D. Net Profit efore 'a? #fter making above provisions, net profit before tax of +" stood at Tk 19..:@ crore. ?igher investment income especially from treasury increased the net profit before tax. Pro"ision for 7ncome 'a? $rovision against current year income tax of +" was Tk A..:9 crore. Net Profit after 'a? (et $rofit afte Tax stood at Tk ;D.D6 crore during the year .D1D.The calculated <arning per !hare 4<$!5 is Tk 9A.D. at *ecember 61, .D1D. #verage +C# and +CI stood at 1.1: percent and 11... percent respectively.
Statutory 3eser"e #s per "ank &ompany #ct 1BB1, .D percent of operating profit before tax is re)uired to be transferred to !tatutory +eserve. #s such an amount of Tk .A.:1 crore has been transferred to !tatutory +eserve.
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+i"idends Thus fund available for distribution is Tk 61.:1 crore from current year profit. In order to maintain a satisfactory capital ade)uacy ratio of the "ank, the "oard decided to recommend 1D percent stock dividend for the year .D1D. !atisfactory &apital 0und will enable the "ank to increase business activities. Shareho)dersA 0a)ue +" remains fully committed to delivery of higher shareholder value. The high profitability track record underpins the value, the shareholdersG derived from investing in the shares of +upali "ank imited. The earning per share stood at Tk 9A.D. on .D1D. ,.1@ %or&orate Socia) 3es&onsi i)ity :%S3; +upali "ank td. +" has been rendering various services for attaining greater social goals and ob-ectives. In this process, we aim to the development of the society as a whole and fulfillment of corporate social obligation in particular. To reinforce &!+ activities, the bank has undertaken fresh initiatives in line with "angladesh "ank guidelines in the areas of social service. Internship employment of poor, sports and culture, banking for the disadvantaged group, disaster and relief and activities.
,.11 3u&a)i .an/ 'raining 7nstitute

!ince .DDB, as many as ;D. officers were imparted training by +upali "ank Training Institute through .9 courses7 workshops including 1D foundation courses to the newly -oined probationary officers throughout
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the month and the course relating to 0ake (ote *etection, "#&? program, /oney aundering $revention #ct, &ore +isk, 0oreign <xchange and &omputer. #s many as 1D: trainees have participated in 96 courses in "I"/. In addition to this, 1A trainees took part in 1. courses conducted by "angladesh "ank and other institutions outside.
,.1* %om&uter O&eration and A&&)ication of 7nformation 'echno)ogy
<xtensive activities on computer technology and their implementation have been undertaken by this bank during the year in )uestion. Till .DDB, the number of computerized branches stood at 19:. The work relating to change of old computers in previously computerized 61 branches is in progress. +emittance and <0T !ystem have been modernized and arrangement for /oney Transfer through Lestern 'nion in @1 branches has been made operative. Cn=line "anking with foreign <xchange "ranches at *haka and #grabad "ranch of &hittagong has been introduced. The vendor institution has started preliminary activities to introduce Cn= ine banking operation on test basis in 1D more branches of the bank. The information of .: *ivisions of ?ead Cffice are being publicized through "anks own website 4www.rupalibank.org5. In order to expedite the flow of information 1D Internet of ;9 kbps 4shared line5 and 1D Internet line of .:; kbps 4dedicated line5 have been installed in ?ead Cffice. The supply and installation of necessary hardware and software including communication link with "angladesh "ank have been made. !IT 4!ystem Integrity Test5 with "angladesh "ank is in completion and prepared to operate in live at any time as per instruction of "angladesh bank.
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,.1, $ega) Acti"ities

#s regards the recovery of default loans, the number of the suits such as original suits under trial, execution suits, appeal7 others and suits in "ankruptcy &ourt field by the "ank stood at 9:@D with an involvement of Tk. 1;D6..B crore. The number of the suits in which the certificates issued for possession and en-oyment of the mortgaged property by the court is :D1 involving Tk. A..D6 croreM the suits field against the bank were 1:; involving Tk. 6.@.B6 croreM the I+C suits 11DM the suits disposed of .B9 involving Tk. .....A crore. The suits newly filed 9. involving Tk. AB.1A crore and the recovery through suits amounts to Tk. .....A crore. The number of lawyers conducting the suits in *haka /etropolitan area is 11D and in other areas .6;. "esides these, the number of writs arising from #rtha +in #dalat #ct, .DD6 pending for disposal is 6D9 at the end of the year in )uestion.
,.14 Other .an/ing Acti"ities

B9 branches of our bank are engaged in works relating to the payment of portion of salaries afforded by the government to the teachers and employees of registered non=government educational institutions including teachers of non=government educational institutional, BA branches relating to the payment of scholarship and stipends to the girl students at primary and secondary levels and ;B branches relating to the payment of stipends to the girl students at primary and higher secondary level. In addition to those, almost all the branches of +upali "ank are engaged in work relating to the payment of pension bill to the retired government, civil and military personnel and the receipt of utility bills such as $*", *<!#, +<", L#!#, %#! > Telephone etc. including
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other service=related work of the government 4such as receipt of /unicipal Tax and and *evelopment Tax, purchase and sale of $rize "onds, receipt of ?a-- money etc5.
,.1# Products and Ser"ices

+e&osits &urrent *eposit 4&*5 &all *eposit 4&*+5 !pecial (otice *eposit 4!(*5 !avings *eposit 4!"5 !avings *eposits <arned from 0oreign +emittance 4!"5 0ixed *eposit 40*+5 6 months and above but less than ; months ; months and above but less than 1 year 1 year and above but less than . years . years and above but not more than 6 years +e&osit Schemes8 +upali *eposit $ension !cheme 4+*$!5 +upali *eposit $ension !cheme=. 4+*$!=.5 +upali *eposit !cheme 4+*!5 +upali /onthly <arning !cheme 4+/<!5
$oans and Ad"ances General Products &ash &redit4?ypothecation5

.;
&ash &redit 4$ledge5 Cverdraft 4C*5 oan against 0*+ oan against *eposit !chemes
Industrial $ro-ect oan 4 ong and /id Term5 !hort Term oan !C< oan !yndicate oan ?ousing $ersonal oanN %eneral and &ommercial oan7 $rofessional oan
?ousehold oan !elf +eliance and !pecial$rogram oan ocal "ank %uarantee oan under <)uity <ntrepreneurship 0und 4<<05
!tudent oan Small and Medium Enterprise Loan SME! > !?C?C, O !?' CP O "'!I(<!! O /#,?#+I Small Enterprise "inancin# Manufacturing E 0ixed #ssets 0inancing E Lorking &apital 0inancing 'rading and Ser"ices E 0ixed #ssets 0inancing E Lorking &apital 0inancing $ural and A#ro Credit Joung 0armersG oan
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!olar=<nergy and "io=%as $lant <stablishment oan 0ishery oan !hrimp &ultivation oan %oat7!heep +earing oan $oultry oan *airy oan oan #gainst &rop !torage in !ilos
!mall oan /icro=&redit /icro=&redit for the ?andicapped oan for Tree $lantation
$eas, "ean, /aze and !pices oan Cther Other $oans E "ank=(%C inkage &redit E oan #gainst !hare7*ebenture E oan #gainst "rickfield7 %old Crnaments E oan for $reservation of $otatoes in the &old !torage E Transport oan7&ar oan E Loman <ntrepreneur 0inancing $rogram E &onsumer &redit7Travel #gency and *iagnostic &entre "usiness oan
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9oreign C?change .usiness #ll sorts of 0oreign <xchange Transactions are made in +upali "ank imited following G%uidelines for 0oreign <xchange Transactions 4%0<T=.DDB5 by "angladesh "ank such as= 9oreign %urrency Accounts 0oreign &urrency #ccount +esident 0oreign &urrency *eposit #ccount (on +esident 0oreign &urrency *eposit #ccount <xportersG +etention Quota #ccount 7m&ort 9inance E etters of &redit E oan #gainst Imported /erchandise 4 I/5 E oan #gainst Trust +eceipt 4 T+5 C?&ort 9inance Pre-shipment Credit &ash &redit #gainst ?ypothecation of +aw /aterials7<xportable %oods &ash &redit #gainst $ledge of +aw /aterials 7<xportable %oods $acking &redit 4$&5 "ack to "ack 7& "ack to "ack 7& under <xport *evelopment 0und 4<*05 PostBshi&ment %redit (egotiation of <xport *ocuments &ollection of <xport *ocuments 0oreign "ills $urchased 40"$5 Inland "ills $urchased 4I"$5
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.ond Lage <arners *evelopment "ond Investment "ond $remium "ond 2uarantee "id "ond $erformance %uarantee Larranty %uarantee !hipping %uarantee %uarantee #gainst 0oreign "ankGs &ounter %uarantee #dvance $ayment %uarantee &ustoms and <xcise %uarantee 9ore? and 9und (anagement #ll sorts of *ealing +oom Cperation 9oreign 3emittance 0oreign &urrency <ndorsement Issuance and <ncashment of TravelerGs &he)ue 0oreign &urrency <ncashment Issuance and <ncashment of 0oreign *rafts Cpening of !tudent 0ile and remittance there against 'reasury Treasury "ills Treasury "onds
6D
+<$C +everse +<$C /oney /arket Cperation 9und 'ransfer Inter="ranch /oney Transfer Telegraphic Transfer (odern .an/ing Ser"ices !LI0T #T/ !ervice o *ebit &ard 0a)ue Added Ser"ice E ocker !ervice New Products and Ser"ices /erchant "anking !ervices < *C+#*C <0T !ystem 4will be introduced soon5 1. ocal +emittance .. 0oreign +emittance ,.14 SDO' ANA$ES7S +upali "ank td. is a !tate=owned &ommercial "ank. +upali "ank came into being in 1B@. with the integration of /uslim &ommercial "ank, #ustralasia "ank and !tandard "ank td. 0rom the very inception of its birth, this "ank, as a prospective bank, has been passing its time through diverse !trengths, Leaknesses, Cpportunities and Threats. The present "oard, on assuming the responsibility, has identified those strengths, Leakness, Cpportunities and Threats the "ank possess for the year .D11
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in the following manner and chalked out all plans purely on the basis of the same.
Strengths 1. The "ank has well=arrayed network with 9B. branches in rural, semi=urban and urban areas for rendering services throughout the country. .. The "ank has reputation and tradition for a long time. 6. The "ank has well=ac)uainted and independent brand. 9. The "ank has sound, reliable and extensive deposit base of long duration. :. The "ank has worldwide 1;6 correspondence arrangement and .. exchange houses through which foreign trade transactions and remittance activities are accomplished. ;. The "ank has a huge number of tested customers. Dea/nesses 1. ack of long=term business planning .. Leakness in credit management. 6. Tangle of a huge number of suits. 9. *efaulted loan for a colossal amount. :. "locked loan at interest free rate or nominal rate of interest. ;. Leak automation and lack of application of modern information technology. @. ack of efficient and experienced officers. A. Training weakness.
6.
B.
ack of marketing planning.
1D.#bsence of time suited products. 11. ack of foreign branches and a limited number of correspondents and exchange houses. 1..#bsence of sub-ect related and specialized 4such as &#, lawyer, IT !pecialist etc.5 officers. O&&ortunities 1. "ranch modernization and automation. .. Introduction of Cn= ine banking and delivery of #T/ services. 6. +elocation of branches in commercially important locations. 9. !trengthening of marketing activities. :. Introduction of competitive modern banking products. ;. <xpansion of local and foreign remittance business through vast branch network. @. Introduction of mobile banking service. A. Introduction of /erchant "anking. B. !etting up of /ini branches at the outlying areas of the country under G/ini "ankingG programme. 1D.<xpansion of corporate branches. 11.<xpansion of #* branches.
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'hreats &ompetitive !tate=owned &ommercial "ank. &ompetition with private > foreign commercial banks working in "angladesh. ack of competitive pay > allowances and facilities for the officers7staff.
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%ha&ter 9our
%redit (anagement
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4.1 %once&tua) 9ramewor/

&redit is general sense means an act of allowing person or persons immediate use of money with payment deferred until an agreed future date Ste&s in %redit O&erations a. &lient of the bank #7& b. +eceiving loan application c. &ollecting necessary information d. &redit analysis e. Taking final decision f. $reparing documents g. !ign of agreement and loan disbursement h. monitoring and supervising the implementation of loan agreement %onsidera )e factors of sanctioning ad"ances 1. i)uidity .. !afety 6. !olvency of &lient 9. ?onesty of &lient :. $rofitability ;. Qualities of !ecurity @. /arketability of !ecurity A. "usiness efficiency of client
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'wo Finds of Securities fo))owed y 3u&a)i .an/ 1. $rimary !ecurity 8 0ive &s #pproach to follow the +upali "ank oan !anction 8 &haracter &apital &ollateral &apacity &apability .. &ollateral !ecurity E and E $ledge E /ortgage E ?ypothecation imited in
4.* Sma)) and (edium Cnter&rise

!mall and medium <nterprise 0inancing contributes to a positive impact in the economy of the country. In developing countries like "angladesh, the demand for expanding !/< business is increasing day by day. <ven the donors are also encouraging to expand the volume of such kinds of business to face the challenge of poverty and to create employment opportunities in the country. +upali "ank td. also play a vital role in this sector and can help to promote the expansion of !/< business in the country.
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Acti"ities = Achie"ing of S(C in *@11 !/< circular issued for extending !/< $ublishing loan policy guideline brochures and booklest
encompassing the procedure for entrepreneurs seeking loan, loan proposal preparation, sanction and disbursement of !/< loan. 0ield level executive and officers have been empowered for approval loan within short time Joung officers have been trained in !/< program and services to proper entrepreneurs 0ormation of !/< monitoring cell in all divisional workstation and corporate branches for running !/< activities In the year .D11 TR .@9.:. crore has been disbursed to ..A@ clients $ro-ect supported by +upalis !/< financing support are supposed to generate ;;1D permanent and 6D1A temporary employment position !uccessful participation of +" on several !/< fair conducted by (#!I" in collaboration with "angladesh "ank 'arget for S(C )oan dis ursement in the year *@1* The !/< sector loan disbursement target set by +upalis board for .D1. is taka@.: crore The plan aim at promoting women entrepreneurs increasing loan distribution to the manufacturing sector and reaching the target through prompt activities financial solvency of the low income peoples alleviate poverty and increase employment with the help of !/<
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!trengthening 9: clusters for cluster based financing development of f sustainable and competent opportunities through technology development and expansion development of entrepreneurs experience reducing risk of loan and in general starting from introduction of product development $lanning for special upgraded training for development of bank officials in the year .D1.
4., 'here are four Product under S(C financing.

These are !aha- +in !ulav +in "usinessman +in /a-hari 4medium5 +in Saha! 3in oan facilities up to ..DD 4two5 lac
$roprietorship and partnership firm only included in this scheme oan will be approved by branch manager 4"ut loan information must be furnished by weekend5 $ersonal guarantee of a solvent family member and 6 rd party guarantee of an acceptable individual or collateral security of e)ual value of loan will be taken against this loan. # plan about the use of loan will be taken by borrower. #nd how much worker 7 employee 40ull time or part time5 will be employed should be mentioned in this plan.
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$ost dated che)ues e)uivalent to loan installment with interest and one che)ue covering full loan from borrower. oan processing fee TRS 1DDD7S4(onrefundable5
Trade license, photograph, partnership deed 4if applicable5 stock report, Income> <xpenditure statement will be taken from borrower. Term loan 41=65 year by monthly or )uarterly installment and exiting rules will be applicable in case of working capital 7 continuous loan. Interest rate 1: I 4changeable5, 1I rebate in case of regular payment. Interest rate 19I in following specialized sectors.
!olar installation. "io=gas based pro-ect. #gro T based pro-ect. !killness 4at least three months Training from government approved institution
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Lomen enterprenure can get loan up to1D,DD,DDD4ten lac5without any security> interest rate is 19I oan facilities up to :.DD 4five5 lac $roprietorship > partnership firm included in this scheme. "esides professionals 4engineer, doctors, lawyers etc.5 will be given priority.
Inially branch manager will approve and Fonal head will counternigh after verification
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$ersonal guarantee of a solvent family member and *eclaration of asset 4e)uimlent to loan amount5 must be given. 6rd party guarantee of an acceptable individual to "ank will be taken.
# plan about the use of loan will be taken by borrower. #nd how much people 4full time or part time5 will get employment opportunity should be mentioned in plan.
borrower.
$ost dated che)ues e)uivalent to loan installment with interest and one che)ue covering full loan will be taken from oan processing fee TR S :DDD7S4(onrefundable5 Trade license, +upali "ank account, photograph, partnership deed 4if applicable5 stock report will be taken Term loan 41=95 years by monthly or )uarterly installment and exiting rules will be applicable in case of working capital 7 continuous loan.
Interest rate 1: I 4changeable5, 1I rebate in case of regular payment.
Interest rate 19I in following specialized sectors. !olar installation. "io=gas based pro-ect. #gro T based pro-ect. .usiness 3in
oan facility up to 6 4three5 crore. #pproval authority
0emale entrepreneur will get 1D.DD lac loan facilities under this scheme by complying same formalities.
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/anaging director 8 #bove 6D.DD to 6.crore *%/ 4Fonal head58 'pto 6D.DD lac #%/8 'pto .D.DD lac
$ersonal guarantee of a solvent family member and collateral security of forced sole Palue e)uivalent to loan. # detailed plan about the ob-ective, uses and payment of loan must be submitted. ?ow much people will get employment opportunity 4full time or part time5 must be mentioned in this plan.
$ost dated che)ues e)uivalent to loan installment with interest and one che)ue covering full loan will be taken from borrower.
oan processing fee TR S 1DDDD 7S 4(onrefundable5 "usiness license, trade license, +upali "ank account, photograph, partnership deed 4if applicable5 Income expenditure statement, stock report, and personal networth statement will be furnished.
Interest rate 1: I 4changeable5, 1 I rebate in case of regular payment Interest rate 19I in following specialized sectors. !olar installation. "io=gas based pro-ect. #gro T based pro-ect.
(azhari :medium; 3in oan facility above 6.DD core to .D.DD core. #pproval authority T board of directors
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$ersonal guarantee of a solvent family member and collateral security of force sale value 181..:U # plan about the ob-ective, use and payment of loan will be taken from borrower. ?ow much people 4full time or part time5 will work in this pro-ect must be mentioned in this plan.
$ost dated che)ues e)uivalent to loan installment with interest and one che)ue covering full loan will be taken from borrower.
oan processing fee TR S 1:DDD 7S4(onrefundable5 "usiness license, trade license, +upali "ank account, photograph, partnership deed 4if applicable5, profit and loss statement, memorandum or article of association, audited balance sheet, financial statement, stock report, and other related paper will be furnished.
In case of term loan period will be 1 T : years by monthly or )uarterly installment and in case of working capital, existing rules will be applicable.
Interest rate 1: I 4changeable5, 1 I rebate in case of regular payment. Interest rate 19I in following specialized sectors. !olar installation. "io=gas based pro-ect. #gro T based pro-ect.
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4.4 -ouseho)d )oan :consumer financing;

$eople of developing countries like "angladesh earn low income. They can not purchase household item like TP, refrigeration, #ir cular etc. in spite of being necessary. 0or this reason they cannot improve their life standard. In order to help people specially limited income service holder to buy household item +upali "ank td. introduce this loan scheme. O !ecti"es of scheme To help people 7 service holder in buying house item. To help people 7 service holder in improving life standard.
Gua)ification of a&&)icant <mployee of government institution, semi government, sector, corporation and autonomous body, state owned commercial banks and insurance company, universities, government college, government school and madrasha , teacher of government primary, member of armed forces 4military, "%", $olice and #nsar5 "esides <xecutives of (%Cs, professional 4doctor, engineer, lawyers, chartered accountant, -ournalist etc.5 and business. #ge of applicant8 #ge limit will be from .1 to :: years. Hsages of )oan Cnly in buying household item= such as refrigerator, TP, *P*, motorcycle, washing machine, ac, sewing machine, personal computer.
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'y&e of househo)d item = highest )oan )imit S). No. 1 . 6 9 : ; @ 'y&es of item +efrigerator &olor TP /otorcycle, $ersonal computer Lashing /achine 0urniture #ir &ooler -ighest )imit .:DDD .DDDD :DDDD @:DDD .DDDD 6;DDD 6DDDD +own &ayment .:I .:I .:I .:I .:I .:I .:I 7nterest 1;I 1;I 1;I 1;I 1;I 1;I 1;I Period . years . years . years . years . years . years . years
Princi&)es of .orrower Se)ection Incase of borrower mentioned in ..1 serial, personal guarantee of employer7departmental head must be taken, loan proposal will be considered according to their recommendation and guarantee. $ersonal guarantee from an acceptable person to bank in case of borrower mentioned in .... 3u)es of a&&)ication #pplicant must apply with prescribed bank form mentioning name, address, monthly salary etc. #t least 6 )uotations of desired articles will be submitted with application. $rice of articles will be paid to seller7 supplier through bank draft7che)ue7pay order. &ash memo will be in the name of bank and it will be changed in favour of client after realizing payment of bank. $oan a&&ro"a) &ower +esignation H& to 'F.
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/anager 4!$C5 /anager or Fonal ?ead 4#%/5 *%/ Security etter of hypothecation and undertaking
D.:D ac D.@: ac 1.DD ac
<mployers undertaking in case of service holder *$ note V &.0. 11 3u)es Installment size should not above :DI of monthly salary 1I rebate in case of timely payment #ny damage or repairing of product must be born by borrower. +egistration cost or license of product will be at the expense of borrower. Cnly borrower will be articles7product, he has no right to rent or hand over product without bank permission.
4.# C?&ort financing

#n exporter re)uires finance at two stages, namely= $re T shipment stage > $ost T shipment stage Le may classify export finance into two categories $re T shipment credit > $ost T shipment credit PreBshi&ment %redit
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$re T shipment credit, as the name suggests, is given to finance the activities of an exporter prior to the actual shipment of goods for export. The purpose such credit is to meet working capital needs starting from the point of purchasing of raw materials to transportation of goods for export to foreign country. "efore allowing such credit to the exporters the "ank takes into consideration the credit worthiness export performances of the exporters, together with all other necessary information re)uired for sanctioned the credit in accordance with the existing rule sand regulations. $re T shipment credit is given for the following purposes8 &ash for local procurement and meeting related expenses $rocuring > $rocessing of goods for export $acking > transporting of goods for export $ayment of Insurance $remium Inspection fees 0reight charges etc. #n exporter can obtain credit facilities against lien on the irrevocable, confirmed, and unrestricted export letter of credit. Pre I shi&ment credit ta/es the fo))owing forms <xport cash credit 4?ypothecation5 <xport cash credit 4$ledge5 <xport cash credit against trust receipt. $acking credit "ack to back letter of credit &redit against #nticipatory letter of credit
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4.4 C?&ort cash credit :-y&othecation;

'nder this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods intended for export. !uch facility is allowed to the first class exporters. #s the "ank has got no security in this case, expect charge documents and lien of export 7 & contact, "ank normally insists on the exporter in furnishing collateral security. The letter of hypothecation creates a charge against the merchandise in favor of the "ank but neither the ownership not the possession is passed to it.
4.5 C?&ort cash credit :P)edge;

!uch credit facility is allowed against pledge of exportable goods or raw materials. In this case cash credit facilities are extended against pledge of goods to be stored in go T down under "anks control by singing letter of pledge and other pledge documents. The exporter surrenders the physical possession of the goods under "anks effective control as security for payment of "ank dues. In the event of failure of the exporter to honour his commitment, the "ank can sell the pledge merchandise for recovery of the advance.
4.6 C?&ort cash credit against trust recei&t

In this case, credit limit is sanctioned against trust receipt 4T. +.5.In this case also unlike pledge, the exportable goods remain in the custody of the exporter. ?e is re)uired to execute a stamped export trust receipt in favor of the "ank. Lhere in a declaration is made that goods purchased with financial assistance of "ank are held by him in trust for the bank. This type of credit is granted when the exporter wants to utilize the credit for
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processing, packing > rendering the goods in exportable condition when it seems that exportable goods cannot be taken into "anks custody. This facility is allowed only to the first class party and collateral security is generally obtained in this case.
4.< Pac/ing %redit

In this case credit facilities are extended against security of railway receipt7 steamer7receipt7barge receipt7 truck receipt evidencing transportation of goods to the port for shipment of the goods in addition to the usual charge documents and lien of export letter of credit. This type of credit is sanctioned for transitional period from dispatch of the goods till negotiation of the export documents. The drawings under export cash credit limit are usually ad-usted by drawings in packing credit limit which is in turn li)uidated by negotiation of export documents.
4.1@ .ac/ to ac/ )etter of credit8

'nder this arrangement the bank finances export business by opening a letter of credit on behalf of the exporter who has received a letter of credit from the overseas but is not actual manufacturer or producer of the exportable goods. The letter of credit is opened in favor of the producer or supplier within or outside of the country. !ince the letter of credit is opened on the strength of and of and backed by another letter of credit it is called 1"ack to "ack credit2. The need for the "ack to "ack credit arise the beneficiary of the original 4export5 letter of credit may have to procure the goods from the actual producer who may not supply the goods unless its payment is guaranteed by the bank in form of letter of credit collateral security before opening the letter of credit. The back to
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back letter of credit must conform the terms and conditions of the original letter of credit with the following exceptions8 1. .. (ames of the original beneficiary shall be submitted by that of the actual supplier. The credit amount shall normally be lower than that of the original letter of credit, the difference being the amount of profit the exporter exports to earn from the deal. 6. The back to back letter of credit shall be made valid for shipment and negotiation prior to expiry of the corresponding date. 4.11 Ad"ance against Antici&atory )etter of credit :3ed %)ause $ > %; 'nder +ed clause letter of credit, the opening bank authorizes the #dvising bank 7 negotiating bank to make advance to the beneficiary prior to shipment to enable him to procure his exportable goods in anticipation of his effecting such authority is printed 7 typed in red ink and in green ink on the top of the 7& is called +ed clause 7&. The following documents papers are usually called for depending on the nature of the export credit facility to be provided at the $re T shipment stage8 ien on confirmed irrevocable and unrestricted letter of credit from a first class "ank. etter of ?ypothecation duly stamped etter of pledge duly stamped
*etailed stock statement duly verified by "ank officials Insurance coverage under "ank mortgage clause etter of disclaimer to be signed by the owner of the go T down in case of rented go T down
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*ocuments of little to goods Trust +eceipt <xport &redit %uarantee !cheme <xport from duly signed by the exporter <$& 7 <+0 duly certified by "angladesh "ank &hange and other documents, if any
4.1* Post Shi&ment %redit

This type of credit refers to the credit facilities extended to the exporters by commercial banks of the goods against export documents. (ecessity for such credit arises as the exporter can not afford to wait for a long time for payment to local manufacturers7 suppliers. "efore extending such credit, it is necessary to obtain report on creditworthiness the exporters and financial soundness of the buyers as well as other relevant documents connected with the export in accordance with the rules and regulations in force. "anks in our country extend post=shipment credit to the exporters through8 1. (egotiation of *ocuments under 7&. .. $urchase of *$ > *# bills. 6. #dvance against <xport "ills surrendered for collection 1. (egotiation of *ocuments under 7& 'nder this arrangement, after the goods are shipped, the exporter submits the concerned documents to the negotiating bank for negotiation. The documents should be negotiated strictly in accordance with the terms and conditions and within the period mentioned in the letter of credit.
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*. Purchase of +P =+A i))s. In such a case, the banks purchase7 discount the *$ 4*ocuments against payment5 and *# 4documents against #cceptance5 bills at rate published by the <xchange +ate &ommittee of authorized dealers. Lhile doing so, the "ank should scrutinize all the export documents separately and minutely and clear instructions are to be obtained from the drawer of the bill in regard to all important issues related to the negotiation of the bills. ,.Ad"ance against C?&ort .i))s for co))ection "anks generally accept export bills for collection of proceeds when they are not drawn under a against an 7& or when the document, even though drawn 7&, 7& contains some discrepancies. "ills drawn under
without any discrepancy in the documents, are generally negotiated by the bank and the export gets the money from the bank immediately. ?owever, if the bill is not eligible for negotiation, he may obtain advance from the banks against the security of export bills. "anks may give advance ranging from :D to AD percent of the documents value. In addition to the export bills, banks may ask for collateral security like a guarantee by a third party and e)uitable7 registerd mortgage of property. +ate of interest AI
4.1, 7m&ort 9inancing

Cne of the important functions of the commercial banks in the world is to undertake import of merchandise into the country and payment of foreign exchange towards the cost of the merchandise to foreign suppliers. In such an international trade, because of distance involved, buyers and
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sellers do not know each other. Therefore, assure these things to happen simultaneously by opening letter of credit guaranteeing payment to seller and goods to buyer. Lhile opening letter of credit at the re)uest of buyer, bank normally examines8 4i5 4ii5 "uyers creditworthiness. Import Trade +egulations. !uppliers &reditworthiness +eport. 4iv5 /arketability of goods. The buyer must submit the following papers at the time of opening a letter of credit. i5 ii5 i5 ii5 iii5 7& application 4 a guarantee executed by third party is also insisted5 Import icense7 Import #uthorization from or Indent7 $erforma Invoice. Insurance &over (ote. I/$ form and other documents7 papers etc. Import +egistration certificate as the case may be.
4iii5 <xchange &ontrol +egulations.
Payment against documents :PA+; The negotiating bank, on receipt of the shipping documents from the exporter, scrutinizes the documents to ensure that they are in strict conformity with the terms of 7&. If the documents are in order, the payment is effected by the negotiating "ank to the beneficiary 4exporter5 and debit the opening "anks account with it or claim reimbursement from the designated 7 reimbursing bank as instructed by the opening bank
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and in fact, the amount so debited or lodging claim for reimbursement stands advanced on behalf of the importer. The shipping documents along with debit advice are thereafter forwarded to the opening bank by the designated 7 reimbursing bank. If the shipping documents are found in order, the opening bank will lodge the documents to their book by converting the foreign currency representing the bill and foreign correspondent charges etc., and will respond to the debit entry originated there against by the designated 7 reimbursing bank to the debit of 1$ayment #gainst *ocuments 4$#*52 account or 1"ill of <xchange 4" 7 <52 account as the case may be and an intimation is sent to the importer asking him to retire the import bills immediately sending there with a cost memo indicating the amount payable by the importer under different heads. Thus, liability under the letter of credit is converted to banks advance. It is a prac ice to allow the importer to retire the documents till the ship carrying the goods arrives. (ormally, ontstanding under $#* should not take more than .1 days for ad-ustment. If the importer retires the import bill against payment, the transaction ends there and the outstanding under $#* stands li)uidated. $oan against 7m&orted (erchandise :$7(; #t the time of opening the letter of credit the banks obtain from the importer an agreement on stamped paper which provides for financing and, if necessary, clearance and storage of goods by debiting importers account at his risk and responsibility.
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Importer may also re)uest the bank on banks prescribed form for clearance of goods from the port when the consignment arrives. In most of the cases, banks extend credit facility to the importer for retirement and clearance of the consignment. In that case, the bank recovers further margin from the importer to cover the customs duty, sales tax or P#T etc. # definite repayment schedule is also given to the importer to take delivery of the goods from banks custody against payment. In case the importer does not come forward to retire the documents inspite of repeated reminders, it is in the interest of the credit issuing bank to take proper care of the goods and, on forced circumstances, clear the imported consignment on arrival of the same for fear of heavy demurrage at the which adds to the burden of commitment. In both the cases, whether the importer re)uests the bank for clearance of goods or fails for retirement of documents against payment, the liabilities under $#* or "7< is converted to 1 oan against Imported /erchandise 4 I/5 account2 and the overdue interest from the date of accompanying "ill of <xchange or negotiation date to the date of transfer to liability. The advances against merchandise account is a loan account and only amounts for clearance charges , such as, customs duty, sales tax or P#T etc., are allowed to be debited to I/ account. #fter clearance, consignments are stored in banks go T down under its effective control waiting for taking delivery by the importer on full payment of banks liability. (ormally part delivery is not allowed while on I/ account. Lhen the delivery in part is desired by the importer, the I/ is converted into &ash &redit account retaining proper margin and I/
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executing proper charge documents. The delivery is effective there after on obtaining pro rata payment till ad-ustment of the entire liability. +ate of interest 19I *ocuments 1. *emand promissory note .. etter of continuity 6. etter of agreement of opening letter of credit 9. etter of ien :. etter of indemnity 4in case of clearance of consignment5 ;. etter of guarantee
4.14 -ouse .ui)ding $oan

Princi&)es of se)ection of orrower Individuals, partnership firm, public > private td. company will be eligible for receiving such loan for the purpose of general house building 4+esidential 5, commercial house building , residential cum commercial house building, 0lat house building for sale > for buying flat. /inor will not be eligible for this loan. #pplicant must be owner of land and client of bank. and location should be in &ity &orporation or in any commercial place. If land is allotted by +#,'R or any divisional development authority, approval letter should be taken by such authority for giving registered mortgage in favor of bank.
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There should be at least 1. feet road and connection with proposed building. #nd utility facilities 4eg. <lectricity, gas, water supply5 must be available. The area of land must be at least . katha 46.6D decimal5 and proposed land must be viti. #pplication for <xtension of old building can also be accepted if previous construction is strong. In case of married borrower his wife or her husband must be guarantor. #pproved design of house by authority, approval letter for house building, estimated cost of house and expected sent for house and other related paper should be enclosed with loan application.
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+is ursement mode #t least four installments in case of residential house building. Cne time payment through pay order in case of flat buying. "efore *ishousement of every installment, progress report from branch manager and engineer about proposed house building must be kept in loan file. Seria) no. 1 . +esidential house building loan &ommercial house 6 building to 'y&e of )oan -ighest 3ate of Period of )oan 1: years 1. years
)imit interest ..DD crone 1.I #ccording 16I case to 1.I
loan case <xtension of old .D.DD lac house 4with strong foundation5 "uying ready flat to
1: years
#ccording 16I case to
1: years
case "uilding flat to #ccording 16I sell to case to
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case +ebate8 1.:DI on interest if all installments are paid within stipulated time.
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4.1# Student )oan

The purpose of this loan is to co=operate student specially those who want to study abroad .They 4student or %uardian5 need bank solvency certificate in studying abroad. Gua)ification for a&&)icant !tudent who is willing to study abroad, they are )ualified to get this loan. #pplicant must be resident of "angladesh. #pplicant must be student. #dmission seeking student should possess )ualification according to re)uirements of foreign 'niversities7&olleges. 3u)es of a&&)ication #pplication in white paper with resent two photographs should be taken. Cffer letter from foreign 'niversities7&olleges with other related papers will be taken. #ll educational certificates with passport. !tatement of education expenditure. $hotocopy of national I* card.
&haracter certificate from local authority. #pplicant must have a saving s account in related "ank branch and money of 1:I margin must be deposited. $oan )imit ?ighest 6D.DD lac under 1:I margin
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+ate of interest T 16I 4changeable5 $eriod of loan8 ?ighest ;4six5 months. (ot renewable. Securities of )oan &0, 1, 11, 1B should be taken before loan disbursement. /oney of loan with margin must be deposited in saving account. This account should be under lien. from applicant. #fter expiry loan will be ad-usted by debiting saving a7c. etter of lien, letter of agreement and letter of authority must be taken with consulting legal adviser. %onditions (o other student can apply for this loan without abroad going student. (o &he)ue "ook will be issued in lien savings certificate. To serenities whether all conditions are met according to offer letter. #pproval authority of loan8 "ranch manager. etter of lien must be taken
4.14 'he 3eco"ery system of credit

+upali "ank &onsiders the 0ollowing &riteria to recover the credit from the client 8 a; .usiness )oan 8 #t first +upali "ank finds out a good borrower in loan sanction.
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$rimary !ecurity 8 five &s #pproach to follow the +upali bank. !uch as 8 &haracter &apital &ollateral &apacity &apability Ne?t 3u&a)i .an/ is ta/en another ste&s in )oan sanction &ommodity of business !ize of business #ge of business "usiness out ook Industry growth /arket competition &ollateral !ecurity 8 and
$ledge /ortgage ?ypothecation In this !tage the +upali "ank is taken to examine the good securities features. !uch as 8
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1. #cceptability .. /arketability 6. i)uidity 9. Cwnership :. $rice ;. !tability of price @. (on=encumbrance A. Quality and possession ; -ouse .ui)ding )oan Security 8 In case of /arried "orrower his wife or husband must be guarantor #pproved design of house by authority #pproval etter for house building Criginal *eed of "uilding $ower of deed +egistered of deed is prepared for bank name c; -ouseho)d )oan Security 8 #ccount of the client etter of hypothecation
*$ (ot V &.0.II d; Student $oan Security 8 #ccount of the client

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&0, 1,11,1B should be taken before loan disbursement etter of lien etter of agreement etter of authority must be taken with consulting legal adviser.
e; 9inancia) 3is/ management 8 everage i)uidity
$rofitability &overage f; 3e)ationshi& 3is/ (anagement $ersonal deposits account conduct 'tilization of limit
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%ha&ter 9i"e
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#.1 9indings
0rom general point of view, I gathered a lot of experiences in credit management system of banking while working at +upali "ank imited as an intern 8 Lorked in a corporate environment and interacted with employees from different hierarchies %ained ability to interact with client of the bank +upali "ank has already established a favorable reputation on the banking industry of the country. It is one of the leading nationalized sector commercial bank in "angladesh. The bank has already shown a tremendous growth in the profit. oan facilities are very attractive for the employees
The bank is highly li)uid and earns much profit on advances The interest of banking loan is 1;I The loan interest is very high than other banking sector. oan department is very careful to sanction any loan. so they have taken more security. oan department uses their own lawyer to -ustify the and, $lace and *eed of building
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+upali bank has own training institute for its employees, so that they dont re)uire to train them from other training institutions. +upali bank has 9:. branches which have #d licenses. #s a result it total foreign exchange business is very large in respect of total market. The most number of branches is sufficient to cover credit management system oan recovery system is very fast than other banking sector.
lengthy process. The record keeping system is also backdated, not followed computerized system properly. The transfer and promotion process is fair but the promotion is not faster. oan facilities are very attractive to the employees of "angladesh bank. The employees of outside of head office deprive of foreign training facilities only 1D to 1: percent employees can get the opportunities of foreign training. Cn the other hand we have seen that the bank profit increasing rate is poor but increasing. The bank is highly li)uid and earns much profit on owners e)uity. "anks operating efficiency is good. <$! is increasing every year. <arning spread is also increasing. !o after all we can say that as a nationalized bank commercial bank +upali "ank imited is a bank earning better.
#.* 3ecommendations
The Top management of +upali "ank imited should be more effective to the employee then current situation. "ecause they
www.AssignmentPoint.com ;A
should
take
care
the
branch
level
employees
benefits,
opportunities etc. The bank has highly skilled employee in the branch level. "ut the bank should be able to utilize these employees at appropriate way to take out the banks output. The website design is need to improve. Therefore, the website should be changed and can put more information about the bank. The existing design cannot capture the customers attention. The che)ues design is poor. The good looking che)ue design can motivate the customer. The human resource division can be more effective. "ecause this human resource department should think about the employee benefit much. In the training institute, the training process should be used latest technology to provide to the trainee. The bank should give training about the office package, basic idea on computer and internet. The higher management should be more effective about the employee, to take right strategy, right decision making. In the branch level employee is working so many extra time, so management should provide some extra incentives to motivate the employee. Cn=line banking is coming soon so the responsible employee should be trained effectively.
;B
The training evaluation process and form is to be more modernized. Infrastructure should be modernized.
@D
%onc)usion
#s a bank +upali "ank imited has to do a lot of things for the betterment of the country. The "ank is strongly positioned in the market and with its core strengths it can match shareholders expectations and thus raise their wealth in future through ethical banking and best pricing. Thus, it has to take initiative so that it can fulfill the desire of the govt. as well as people. It will enhance more public services and build up working teams to provide the best services to its valuable customers. It must be run in organized way and discipline must be ensured in all sphere of its performance. <fficient export team, import team and remittance team must be formed and perform duties properly. /ore training, computerization, data collection, market analysis and swiftness in servicing are essentially re)uired. To do these the recommended suggestions can be used. #lthough it is theoretical suggestions, it is not valueless. It has great impact on the banking business and other sectors of the economy. 0or this, govt. help is essential and it is expected that govt. will broaden its hand for implementing the recommendations for the welfare of the people of "angladesh.
@1

Practices and Policies in Credit Management of Rupali Bank

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Origin of the Study

Justification of the Study

1.4 O !ecti"es of the study

1.# $imitations of the study

*.* +ata co))ection and ana)ysis

,.1 -istorica) .ac/ground

&ompany of the country on *ecember 19, 1BA;.

,.4 %ore 0a)ues

,.# 2uide)ines Princi&)es of 3u&a)i .an/ $td.

,.4 Strategic O !ecti"es

,.5 Organization Structure

,.6 +i"isions of 3u&a)i .an/ $imited

imited. has some ma-or divisions comprising of various

,.< 9inancia) Ana)ysis

Source8 Annua) 3e&ort *@1@

*@@< 1@6.BA 1::.BD @.... 9D..1D 1B...6 .DB.A@ = . D.1@ K 9..A:

19..:@ 1;;.A: A..:9 K ;D.D6 1;;.A:

'ota) O&erating C?&enses

*@1@ D.1A D.D6

*@@< D.1; D.D9 1.B9

#sset per employee 4excluding contingent5 ..@6

($ ratio Industry #verage of ($ $rovision Industry average

.D1D 1..1:I B..DI 11...AI 1D..6DI

.DDB 1B.9AI 1D.ADI 1AB.B6I B..@BI

,.11 3u&a)i .an/ 'raining 7nstitute

,.1, $ega) Acti"ities

,.14 Other .an/ing Acti"ities

,.1# Products and Ser"ices

$oans and Ad"ances General Products &ash &redit4?ypothecation5

ack of marketing planning.

4.1 %once&tua) 9ramewor/

4.* Sma)) and (edium Cnter&rise

4., 'here are four Product under S(C financing.

Interest rate 1: I 4changeable5, 1I rebate in case of regular payment.

4.4 -ouseho)d )oan :consumer financing;

D.:D ac D.@: ac 1.DD ac

4.# C?&ort financing

4.4 C?&ort cash credit :-y&othecation;

4.5 C?&ort cash credit :P)edge;

4.6 C?&ort cash credit against trust recei&t

4.< Pac/ing %redit

4.1@ .ac/ to ac/ )etter of credit8

4.1* Post Shi&ment %redit

4.1, 7m&ort 9inancing

4iii5 <xchange &ontrol +egulations.

4.14 -ouse .ui)ding $oan

)imit interest ..DD crone 1.I #ccording 16I case to 1.I

#ccording 16I case to

case "uilding flat to #ccording 16I sell to case to

4.1# Student )oan

4.14 'he 3eco"ery system of credit

*$ (ot V &.0.II d; Student $oan Security 8 #ccount of the client

e; 9inancia) 3is/ management 8 everage i)uidity

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. +ata co))ection and ana)ysis