An Internship Report

On
Credit Risk Management System
of
Export Import Bank Of
Bangladesh Limited (EXIM Bank)

Department of Business Administration

Stamford University Bangladesh
(Siddeswari Campus)

Date of submission: 07 September 2020

 An Internship Report
On
Credit Risk Management System
of
Export Import Bank Of
Bangladesh Limited (EXIM Bank)

Submitted To:

Farjana Yeshmin
Associate Professor,
Department of Accounting,
Stamford University Bangladesh

Shariah Based Islami Bank

Submitted By:

Tanjila Akter
ID No: BBA-06018170
Batch : 60(D)
Program: BBA

Major: Department of Accounting

Stamford University Bangladesh

Department of Business Administration

Stamford University Bangladesh
(Siddeswari Campus)
Date of Submission : 07 September 2020
i
 Letter of Transmittal

07 September, 2020

Farjana Yeshmin
Associate Professor
Department of Business Administration
Stamford University Bangladesh

Sub: Submission of internship report on Credit Risk Management System of Export

Import Bank Of Bangladesh Limited

Dear Madam,

With immense pleasure, I am submitting my internship report of “Credit Risk

Management System of Exim Bank” which was assigned me as a part of my BBA
Program. I have tried my level best to complete this report with the necessary
information and suggested proposal that you were provide me as your best as well.

I hope that the report will be completed as your expectations.

Thank you
Sincerely,

……………………………..
Tanjila Akter
ID No: BBA-06018170
Program: BBA
Department of Business Administration
Stamford University Bangladesh, Siddeswari Campus

ii
 Declaration

This is to certify that the internship report on “Credit Risk Management System of
Exim Bank” has been Submitted by Tanjila Akter, ID No: BBA-06018170, Batch- 60
BBA Program, as a partial fulfillment of the requirement of BBA degree from the
Department of Business Studies Stamford University Bangladesh, Siddeswari
Campus.

I also declare that this paper is my original worked and Submitted for academic
purpose which is a part of BBA and the paper may not be used in actual market
scenario.

Tanjila Bani
ID No: BBA-06018170.
Department of Business Administrator,
Stamford University Bangladesh, Siddeswari Campus

iii
 Certification

This is to certify that the Internship report entitled “Credit Risk Management
System of Exim Bank” Submitted for the award of the degree of Bachelor of
Business Administration in Accounting to the Stamford University Bangladesh,
Siddeswari Campus, is an authentic research carried out by Tanjila Akter under my
supervision. No part of this report has been submitted by her for any degree, diploma,
title or recognition before.

She is permitted to submit the Internship report & I wish his every success in life.

Farjana Yeshmin
(Internship Supervisor)
Associate Professor
Department of Business Administration
Stamford University Bangladesh

iv
 ACKNOWEDGEMENT

It is high time for me to express my deepest gratitude to the almighty Allah. Without
the support of Allah I would not be able to complete a huge task of preparing this
Internship Report within the scheduled time.

Internship report is an essential part of BBA program as one can gather practical
knowledge within the period of three months by observing and doing the daily works
of chosen organization. In this regard my internship has been arranged at Exim Bank,
Dhaka.

At first, I would like to give thanks to my supervising teacher Farjana Yeshmin,

Associate Professor, Department of Business Administration, Stamford University
Bangladesh (Siddeswari Campus) who instructed me in the right way and give me
proper guidelines for preparing this Internship Report.
[

I acknowledge my indebtedness to Md. Farhadur Rahman (Assistant Officer)

Investment and Mr. Mosfiqure Rahman(Principle Officer),Investment for their
constant guidance and valuable suggestion from time to time and I am also grateful to
Salma Akter(Executive officer), Md. Masud Rana, SPO and In-charge of Investment,
And also to the Manager Sir Md. Monowar Hossain for their personal guidance
during the internship.

I am also indebted to all of the officers and employees of the Exim Bank who
extended their wholehearted co-operation to me despite their huge workload during
my Practical Orientation.

At last I must mention the wonderful working environment and group commitment of
this bank that has enabled me a lot deal to do and observe the banking activities
during my internship period of three months.

Finally, I convey my sincere thanks to my friends who inspire in different ways to

complete the report and the course as well.

v
 Executive Summary
Commercial banks are one of the key contributors in the economy of developing
countries. They act as financial intermediaries by performing the function of
mobilizing the funds from one party and lending the same to another while making a
reasonable amount of profit. People and the government itself are very much
dependent on the services provided by the various banks in the financial market. Exim
Bank has started its journey as a private commercial bank on August 3, 1999. The
whole working process of the EXIM BANK Ltd. is divided into 3 sections. They are
1) General Banking, 2) investment and 3) Foreign Exchange. I have tried to make
acquainted with the bank and branch in this report.
General banking is the starting point of all the banking operations. This department
provides day to day services the customers. It includes new accounts, remit funds,
issue bank drafts and pay orders etc. provide customer through quick and sincere
service. The Islamic bank collects deposit from different viewpoint. The bank gives
the depositors the rate of profit they earn from their operation. Here the bank goes
with the client a type of business relationship. The various kind investment categories
under Islamic rules are also included in the report. Bank invests the deposit amount to
the client who provides effective efforts, energy and time to acquire profit. Here bank
acts as a Shahib AL Mal and client ac as a Mudarib. Foreign Exchange department
plays significant roles through providing different services for the customers. L/C is
the key part of foreign exchange business.
Shortly it can be say; this repot in its beginning introduced the EXIM Bank Ltd.
which shows its historical background, the vision, mission, corporate strategy and the
other aspect like the Banking with Shariah principles etc. Then it’s come with the
topic Credit Management System also my duties and responsibilities with that. From
the investment and general banking we got to understand the Islamic banking
concepts and the way the Islam thinks the interest and what a bank should be.
Different product/ services offered by EXIM Bank are shown in brief. “Exim Bank”
is shown, with SWOT analysis showing its strengths, weakness, opportunity and
threats. And at last recommendation also provided from my view point.

vi
Abbreviations

EXIM Exim Bank.

BB Bangladesh Bank
A/C Accounts
DD Demand Draft
FDR Fixed Deposit Receipt
SME Small & Medium Enterprise
NFCD Non Resident Foreign Currency Deposit account
PO Payment Order
STD Short Term Deposit
TT Telegraphic Transfer
TIN Tax Identification Number
NGO Non-government Organization
MICR Magnetic Ink Character Recognition
MSD Mudaraba Saving Deposit
MSTD Mudaraba Short Term Deposit
MSS Mudaraba Monthly Savings Scheme
MPSS Mudaraba Multiply Savings Scheme
IBDA Inter Branch Debit Advice
L/C Letter of Credit.

vii
 Table of Contents

Serial Page
Content
Number Number
Letter of Transmittal i
Declaration ii
Certificate iii
Acknowledgement v
Executive Summary v
Abbreviations vi

Chapter-1: Introduction 1-4

1.1 Introduction of the study 2
1.2 Objective of the study 2
1.3 Methodology of the study 3
1.4 Rationale of the study 4
1.5 Limitation of the study 4

Chapter-2: Overview of the Exim Bank 5-16

2.1 Historical background of Exim Bank 5

2.2 Nature of Business 5
2.3 Exim Bank at a Glance 7
2.4 Hierarchy Structure of Exim Bank 8
2.5 Corporate Vision 9
2.6 Corporate Mission 9
2.7 Corporate Strategy 9
2.8 Banking with shariah principles 10
2.9 Product or service offered by EXIM BANK OF 10
BANGLADESH bank
2.10 Branch Network 12
2.10.1 SME Branch Information 14
2.10.2 List of Exchange House in Abroad 14
2.11 Profitability Position of the Bank for Last 5 Years 14
2.12 Total Assets, Liability & Shareholder Equity Position for 15
Last 5 Years

Chapter-3: Credit Risk Management of Exim Bank. 17-36

3.1 Credit Division: 18

3.2 Loans & Advances 19
3.3 Retail Loans 21
3.4 Corporate Loans 22
3.5 SME Financing: 24
3.6 Agriculture loan: 26

viii
 3.7 General system & procedure related to credit: 27
3.8 Disbursement of Loan 31
3.9 Credit file management 32
3.10 Credit risk management: 33
3.11 Flow Chart of Disbursement 34
3.12 Flow Chart of Overall Loan processing 35
3.13 Credit File Maintenance 36

Chapter-4: Performance Analysis of Exim Bank

Regarding Credit Management
4.1 Analysis 40
4.2 Sector Wise Loan of EXIM BANK. 42
4.3 Type of Loan of EXIM BANK. 43
4.4 Geographical Location Wise Loan of EXIM BANK. 45
4.5 Deposit to Advance Ratio 46
4.6 Business Segment Wise Loan of EXIM BANK. 47
4.7 Degree of Operating Levarage & Degree of Financial Levarage 48
4.8 Performance Analysis of Exim Bank. 50
Strengths
Weaknesses
Opportunity
Threats
4.9 Findings 52

Chapter-5: Recommendation and Conclusion

5.1 Recommendation 54
5.2 Conclusion 55

Chapter-6: Internship duties and responsibilities

6.1 Duties and responsibilities as an Internee 57
6.2 Internship Accomplishment 57
6.3 Problem encountered 59
6.4 How internship will help my career 60
Bibliography/ References
References 68

ix
Chapter-01 Introduction
Introduction of the study
Present world is changing rapidly to face the challenge of competitive free market
economy. To keep pace with the trend every organization need executive with modern
knowledge. To provide fresh graduate with modern theoretical and professional knowledge
in banking and all other different institution management, International Islamic University
Chittagong of Bangladesh has assigned the internship program for the students to help
them out to have a practical knowledge to work in a real official environment. Under this
course the students are sent to gather practical knowledge about working environment and
activities.

As a pre-requisite for the Masters of Business Administration Degree I was required to

complete this internship program. I had been selected to work as an Internee in Export
Import Bank of Bangladesh Limited

Objective of the study

The main objective of the study is the evaluation of the different types of customer services
provided by the Export Import Bank of Bangladesh Limited and also to fulfill the
requirement of BBA program.

The objective of the study may be viewed as:

 General objective
 Specific objective

 General Objective

The general objective of the study is to prepare and submit a report on the topic of Credit
Management System of Export Import Bank of Bangladesh Limited.

 Specific Objective
To know the General Banking which include are as follows:

 Company Background.

 Company’s major functions.

 Types of Account.

 Paper/Documents required for opening & closing of various types of Accounts.

 Special cases in Account opening.
  Cash receive and payment.

 Procedures of PO, D.D.

 To know the organizational framework of the bank

 To know the work environment and organizational behaviors of the bank
 To get through all the departments of the bank and observe the
actual work done
 To find out how the general banking system works

 To understand the banking environment of Bangladesh.

 To submit the practical work as a paper work that I have learned

in my BBA program.

Methodology of the Study Primary Source:

For the organization part, much information will be collected from different published
articles, journals, brochures and web sites.

Secondary Source:
All the information incorporated in this report was collected from the secondary source. Its
include Official records and observing practical work, Face to face conversation with the
officer also included Website of Export Import Bank of Bangladesh Limited, Various
published documents.
Rationale of the Study
Bank is the heart of the economics and banking is the blood circulation of country’s
economic growth. Banks perform a significant role to serve the needs of the society in
different sectors, such as: capital formation, large scale of production, industrialization,
growth of trade and commerce etc. and banks are contributing a lot of aspect Export
Import Bank of Bangladesh Limited Bank of Bangladesh Ltd has already emerged as one
of the world wide recognized banks due to its foreign exchange, foreign trade trend and
better customer service according to the principles of Islamic Shariah. Islamic banking is a
new diminution of interest free banking where ‘Riba’ or interest is strictly prohibited. So I
have tried my best to represent my experience and learning about their performance and
problems and prospects on the ground of general banking.
 Limitations of the study
In spite of having the wholehearted effort, there were some limitations, which acted as a
barrier to conduct the program and for doing an empirical research work. The limitations
were:

 The study was limited only to the Export Import Bank of Bangladesh Limited.
 Another Problem was time constraints. The duration of my internship Program
was only three months. But this allocated time is not enough for a complete and
fruitful study.
 The Bank was a busy one having heavy rush of people, whom officers need to
deal with. So allocation of time for an internet is very much tough for the officers
of the bank
 I was not assigned for a specific task in each day. So I was not able to understand
banking activities deeply.
 Bank is a sophisticate business sector. So bank do not interested to provide me
confidential data. As a result in my report there is a confidential data limitation.
 Omission and error may be there due to my lack of experience in preparing a
professional report like this one.




Participants of a Daylong Workshop on Prevention of trade based money laundering are posing with the Chief Guest of the workshop
and Managing
Director & CEO of EXIM Bank Dr. Mohammed Haider Ali Miah at the EXIM Bank Training and Research Academy
 Chapter-2

Overview of
Export Import Bank of
Bangladesh Limited
 Historical background of Export Import Bank of Bangladesh Limited
Export Import Bank of Bangladesh Limited was established under the rules & regulations
of Bangladesh bank & the Bank companies’ Act 1991, on the 3rd August 1999 with the
leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of
floating a commercial bank which would contribute to the social-economic development of
our country. He had a long experience as a good banker. A group of highly qualified and
successful entrepreneurs joined their hands with the founder chairman to materialize his
dream. Indeed, all of them proved themselves in their respective business as most
successful star with their endeavor, intelligence, hardworking and talent entrepreneurship.
Among them, Mr. Md. Nazrul Islam Mazumder became the honorable chairman after the
demise of the honorable founder chairman.

Of its very beginning, Export Import Bank of Bangladesh Limited Bank Bangladesh
limited was known as Export Import Bank of Bangladesh Limited Bank, which stands for
Bangladesh Export Import Bank Limited. But for some legal constraints the bank renamed
as Export Import Bank of Bangladesh Limited Bank, which means Export Import Bank of
Bangladesh Limited.

The bank starts its functioning from 3rd August 1999 with Mr. Alamgir Kabir, FCA as the
advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have
long experience in the financial sector of our country. By their pragmatic decision and
management directives in the operational activities, this bank has earned a secured and
distinctive position in the banking industry in terms of performance, growth, and excellent
management.

Nature of Business
 The principal activities of the bank are providing all kinds of
commercial Banking Services to its customers.
 The other activities of the bank are providing of all kinds of
Islamic banking services to its customers.
Export Import Bank of Bangladesh Limited at a Glance

 Legal Status. Public Limited Company

 Establish 1999

 Incorporated 2nd June,1999

 Activity Starts 3rd August,1999

 Islamic Banking 1st July,2004

 Listing with Dhaka Stock Exchange September, 2006.

 Listing with Chittagong Stock Exchange September, 2006.

 Inauguration of First Branch 3rd August, 1999.

 Authorized Capital TK. 20000.00 million

 Operating Profit TK 5334.35 million

 Total Asset TK 167,056.63 million

 Shares TK 16,641.86 million

 Paid up Capital TK 10,514.86 Million

 Reserve Fund TK 4587.47 Million

 Number of Employees 2430 Persons

 No. of Branches 77

 Proposed Branches 03

01- Figure: Export Import Bank of Bangladesh Limited at a

glance.
Hierarchy Structure of Export Import Bank of Bangladesh Limited

02- Organ gram: Export Import Bank of Bangladesh Limited (Branch)

 Corporate Vision
Corporate Slogan of Export Import Bank of Bangladesh Limited Bank- “Together
Towards Tomorrow”:

Export Import Bank of Bangladesh as the name implies, is not a new type of bank in some
countries on the global, but is the first of its kind in Bangladesh. It believes in togetherness
with its customers, in its march on the road to growth and progress with services. To
achieve the desired goal, it has intention to pursuit of excellence at all stages with a climate
of continuous improvement. Because it believes, the line of excellence is never ending. It
also believes that its strategic plan and business networking will strengthen its competitive
edge over in rapidly changing competitive environment. Its personalized quality services to
the customers with the trend of constant improvement might be cornerstone to achieve its
operational success.
Corporate Mission
The Bank has chalked out the following corporate objectives in order to ensure smooth
achievement of its goals:
 To be most caring and customer friendly and service oriented bank.
 To create a technology based most efficient banking environment for its
customer.
 To ensure ethics and transparency at all levels.
 To ensure sustainable growth and established full value to the honorable
stakeholders and
 Above all, to add effective contribution to the national economy

Corporate Strategy
The corporate strategies of Export Import Bank of Bangladesh Limited bank are below:

 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 requirement.
 To review and update policies, procedures and practices to enhance the ability to
extend better services to customers.
  To train and develop all employees and provide adequate resources so that
customer needs can be responsibly addressed.
 To promote organizational effectiveness by openly communicating company plans,
policies, practices and procedures to all employees in a timely fashion.
 To cultivate a working environment that fosters positive motivation for improved
performance
 To increase direct contract with customers in order to cultivate a closer relationship
between the bank and its customers.

Banking with Shariah principles:

Export Import Bank of Bangladesh Limited is the 1st bank in Bangladesh that has
converted all of its operations of conventional banking into shariah-based banking since
July/2004. Export Import Bank of Bangladesh Limited bank offer various banking services
for Muslims and non- Muslims alike allowing our customers choice and flexibility in their
savings and investments. The products are approved by Shariah Board comprising of
veteran Muslim scholars of our country who are expert in all matters of Islamic finance.

Products of Export Import Bank of Bangladesh Limited Bank as the

Islamic Bank
The Export Import Bank of Bangladesh Limited (Export Import Bank of Bangladesh Ltd.)
offers their customers’ general banking facilities, which ensures the safety of their money
as well as the fair and smart return of their money. Following are the ways through which
Banks collects their deposits from the clients:
Investment/ Finance:
• Corporate Finance
• Industrial Finance
• Project Finance
• Syndicate Investment
• Mode of Investment
 Bai-Murabaha
 Bai-Muazzal
 Izara-Bil-Baia
 Wazirat-Bil-Wakala
 Quard
 Local Documentary Bill Purchased
 Foreign Documentary Bill Purchased

Foreign Exchange:
 Non Resident Foreign Currency Deposit account (NFCD)
 Foreign Currency Deposit Account
Deposit:
 Al-Wadia Current Deposit
 Mudaraba Savings Deposit
 Mudaraba Short Term Deposit
 Mudaraba Term Deposit

• One Month
• Three Months
• Six Months
• Twelve Months
• Twenty Four Months
• Thirty Six Months
 Foreign Currency Deposit
 Mudaraba Savings Scheme

• Monthly Savings Scheme (Money Grower)

• Monthly Income Scheme (Steady Money)
• More than double the deposit in 6 years (Super Savings)
• More than triple the Deposit in 10 years (Multiples Savings)
• Mudaraba Hajj Deposit.
 Branch Network
Branch Information (Export Import Bank of Bangladesh Limited Bank has 75 Branches in
Bangladesh)

Sl.No Branch Name

1 Motijheel Branch
2 Panthapath Branch
3 Agrabad Branch
4 Khatungonj Branch
5 Gazipur Branch
6 Imamgonj Branch
7 Gulshan Branch
8 Sonaimuri Branch
9 Sylhet Branch
10 Nawbabpur Branch
11 Narayangonj Branch
12 Shimrail Branch
13 Rajuk Avenue Branch
14 New Eskaton Branch
15 Uttara Branch
16 Laksam Branch
17 Mirpur Branch
18 Jubilee Road Branch
19 Elephent Road Branch
20 Mawna Branch
21 Bogra Branch
22 Jessore Branch
23 Malibagh Branch
24 Asulia Branch
25 Ashugonj Branch
26 CDA Avenue Branch
27 Chowmuhani Branch
28 Shatmosjit Rd Branch
29 Bashundhara Rd Branch
30 Fenchugonj Branch
31 Comilla Branch
32 Rangpur Branch
33 Mulvibazar Branch
34 Savar Branch
35 Karwan Bazar Branch
36 Mudaforgonj Branch
37 Kustia Branch
38 Rajshahi Branch
39 HO Corporate Branch
40 Golapgonj Branch
41 Chagolnaiya Branch
42 Noria Branch
43 Khulna Branch
44 Pahartoli Branch
45 Palton Branch
46 Board Bazar Branch
47 Bahaddarhat Branch
48 Shitakunda Branch
49 Faridpur Branch
50 Barishal Branch
51 Beani Bazar Branch
52 Nobigonj Branch
53 Panchoboti Branch
54 Feni Branch
55 Dinajpur Branch
56 Keranigonj Branch
57 Bishwanath Branch
58 Gola Bazar Branch
59 Thakur Bazar Branch
60 Sonargoan Branch
61 Banani Branch
62 Basurhat Branch
63 Dhanmondi Branch
64 DhopaDighir Par Branch
65 Mymensingh Branch
66 Tekerhat Branch
67 Garib-E-Newaz Branch
68 Cox.s Bazar Branch
69 Khulshi Branch
70 Nazirhat Branch
71 Dania Branch
72 Gouripur Branch
73 Sandwip Branch
74 Bagmara Branch
75 Satarkul Branch
76 Manikgonj Branch
77 Magura Branch
 SME Branch Information (Export Import Bank of
Bangladesh Limited Bank has 2 SME Service center in
Bangladesh)
 List of SME Service Center in Dhaka division

SL Center Information
1 BoardBazarSMEServiceCenter.
Board Bazar, Gazipur.

 List of SME Service Center in Chittagong division

SL Center Information
1 Shetakundo SME Service Center,
KDS Logistic Bhaban, Sonaichhori, Shetakundo,
Chittagong.

List of Exchange House in Abroad

SL Name of the Country
1 United Kingdom
2 Canada
3 United States of America

A view of the Meeting of Shariah Supervisory Committee

14
Profitability Position of the Bank for Last 5 Years
Export Import Bank of Bangladesh Limited Bank is a third generation bank. It
maintains good Profit position over the year. Export Import Bank of Bangladesh Limited
Bank has a consistence performance in the banking industry of Bangladesh. Last five
years performance Profit Performance of Export Import Bank of Bangladesh Limited
Bank and its graphical presentation given below:

Year 2016 2017 2018 2019 2020

Profit
after
Provision 3,458,015,132 2,017,715,667 2,083,081,259 1,885,608,260 2,480,927,888
and tax
(in Taka)

Fig 3: Graphical Presentation of last five years Profit

 Total Assets, Liability & Shareholder
Equity Position for Last 5 Years
Export Import Bank of Bangladesh Limited Bank is a third generation bank. It maintains
good balance sheet over the year. Export Import Bank of Bangladesh Limited Bank has a
consistence performance in the banking industry of Bangladesh. Last five years Asset and
liability position of Export Import Bank of Bangladesh Limited Bank and it’s graphical
presentation given below:

Year 2016 2017 2018 2019 2020

Asset
Position
(In Taka) 113,047,466,84 129,709,816,84 166,997,929,81 195,542,247,52 232,411,858,59
9 1 7 5 5
Liabilities
Shareholder
Equity 113,047,466,84 129,709,816,84 166,997,929,81 195,542,247,52 232,411,858,59
position 9 1 7 5 5
(In Taka)

Fig4: Graphical Presentation of last five years Asset & Liabilities Position
 Chapter-03

Credit Risk Management Of

Export Import Bank of Bangladesh
Limited
3.1. Credit Division:

Export Import Bank of Bangladesh Limited is a new generation bank. It is committed to

give high quality financial services / products to increase the GDP of the country by
prosperous industrial development, improve of the industry, increased export, and
employment opportunities for educated youth, poverty reduction, and quality
improvement .The livelihood of limited income groups and the overall sustainable socio-
economic development of the country.
The bank's credit performance is the most important reason to achieve the bank's top
goal, the highest percentage of the total revenue of the bank is made, based on the
maximum risk and even the existence of the bank depends on the intelligent system, the
failure of a commercial bank of its credit portfolio, usually with the problem of credit
portfolio. Are related to It is less likely to shrink the value of other property. For
example, the loan portfolio does not only affect the structure of the bank's property, it is
critically important for the success of the bank.

Nature wise loan:

3.2. Loans & Advances:
Export Import Bank of Bangladesh Limited is a new generation Bank. It is
committed to provide high quality financial services/products to contribute to the
growth of GDP of the country through stimulating trade & commerce, accelerating
the pace of industrialization, boosting up export, creating employment opportunity
for the educated youth, poverty alleviation, raising standard of living of limited
income group and over all sustainable socio-economic development of the country.
In achieving the aforesaid objectives of a Bank, Credit Management has paramount
importance as the greatest share of total revenue a Bank generates from it. Existence
of the bank depends on prudent management of its credit operation where maximum
risk is centered in it and. In most of cases, the failure of a commercial bank is usually
associated with the problem in credit management as well as the result of reduction in
the value of assets. Therefore, credit management has not only featured domination in
the assets structure of the bank but also critically important to the success of the bank.
The standards of credit relate to safety, liquidity and profitability whereas these
dynamic factors are also related to different aspects such as interest or margin, credit
spread nature and extent of risk and credit dispersal. In the Export Import Bank of
Bangladesh Limited Donia Branch’s Credit Department, there are 3 (Three) officials
are working continuously with great effort and teamwork and they have quite
efficient skills and talent to perform the jobs in this department. The Bangladesh
Bank, Credit Division at Head Office of Export Import Bank of Bangladesh Limited
and the respective officers of branch in the section control this credit department. The
officers believe in teamwork and extreme hard working. In all business dealings,
credit officers are guided by the principles of honesty, integrity and safe-guard the
interest of the depositors and credit customers of the bank. Credit officers principally
perform credit management task by providing loan (credit) to customers and
receiving loan back by charging interest along with installments with obeying rules
and regulations of the Bangladesh Bank and Head Office as well as maintaining the
best business practices in the Bank.
3.3 Retail Loans :
1. Consumer credit scheme: Consumer’s credit scheme is one of the popular areas of
collateral free finance of the bank. People with limited income can avail the credit facility to
buy household goods including computer and other durables. Maximum loan limit is 1 lac.
2. Lease finance: This scheme has been designed to assist and encourage the genuine
and capable entrepreneurs and professionals for acquiring capital machineries, medical
equipment, computers, vehicle and other items.
3. Car loan: Car loan has been introduced to enable middle income people to purchase
cars. Export Import Bank of Bangladesh Limited maintain some condition in car loan. Such
as, a car price is 20 lac. Here bank will provide 10 lac, because in car loan bank will give
loan 50% of the car. Maximum car loan limit is 20 lac.
4. Home loan: To meet the growing need of housing for middle and lower income
people, Export Import Bank of Bangladesh Limited has introduced home loan scheme. Such
loan will be available for purchase or construction of new apartments for self-residing
purpose. Bank will take mortgage against home loan.
5. Doctor’s credit scheme: Doctor’s credit scheme is designed to facilitate financing to
fresh medical graduates and established physicians to acquire medical equipment’s and set
up clinics and hospitals.
6. Any purpose loan (personal loan scheme): Personal loan scheme has been
introduced to extend credit facilities to cater the needs of low and middle income group for
any purpose. Maximum loan limit is 15 lac. Bank will not take any mortgage against this
loan.
7. Overseas employment loan scheme: This scheme is designed to facilitate the
Bangladeshi youths seeking employment aboard but who are unable to meet the expenses to
reach the workplace from their own sources. By availing loan under this scheme, the active
youths of middle and lower class can get overseas employment by avoiding borrowing from
the mohajon at high cost or selling their paternal properties.
8. Cottage loan: Women entrepreneurs’ development scheme has been introduced to
encourage women in doing business. Under this scheme, the bank finances the small and
cottage industry projects sponsored by women.
9. Rural development scheme: This scheme is targeted for the rural people of the
country to make them self-employed through financing various income generating projects.
This scheme is operated on group basis.
3.4 Corporate Loans :
A) Short term finance: Short-term loans are used to finance inventory, account
receivables or other current assets to finance the working capital requirement. The time
period of short term loan is 1 month to 1 year. Forms of short-term loan are given below:
 Cash Credit (CC): Cash credit account is like a current account with a limit up to
which one can withdraw from the bank. Cash credit is normally sanctioned for a
period of one year where a regular limit is sanctioned against goods to meet day to
day expenses of business.
 Secured overdraft (SOD): When overdraft is allowed against lien of FDR or
other financial instruments, it is termed as Secured Overdraft (SOD). Secured
Overdraft (SOD) facility to the borrower may be allowed generally in the
following ways:
i. Overdraft against guarantee
ii. Overdraft against FDR in the name of borrower
iii. Overdraft against savings certificate
iv. Overdraft against DPS
 Bill discounted and purchased: Mercantile Bank gives advances to customers by
discounting or purchasing their bills of exchange. Such bills of exchange arise out
of commercial transactions both in inland trade and foreign trade.
B) Long term finance: Long-term loans are used to finance equipment, real estate and
other fixed assets. The forms of long-term loan are given below:
 Lease financing: Under lease financing we cover equipment/vehicle financing. It
is a term financing repayable through lease rental in the form of equal monthly
installments. Ownership of the leased out vehicle under the lease agreement
covering comprehensive risks belongs to the Bank.
 Hire purchase: This is also given to procure equipment/vehicle. Ownership of the
equipment/vehicle to be purchased under the hire purchased agreement covering
comprehensive risks belongs to both the banker and customers. Hire purchase
facility is repayable by depositing equal monthly installments (including principal
and interest amount).
 Term loan: This facility is used to meet the expenditure of civil construction and
other infrastructure development. Term Loan facility is repayable by depositing
equal monthly installments.

C) Real Estate finance: This form of credit facilities is allowed to individual’s /groups/
Developers for construction of building and completion of finishing works to be used for
commercial purposes.

D) Import Finance: Importers are given this sort of facility to import different
commodity items, capital machinery and any other permissible items. L/C related
shipping document is kept as primary security. Cash margin and counter guarantee are
obtained from the customer to secure its position. Two types of L/C facility are provided:
 Sight L/C- payment should be made just after receiving the documents
 Deferred L/C-the beneficiary allows the importer time to pay the documents

Loan against trust receipt: Loan against Trust Receipt (LTR) is a funded facility
provided to importer to retire L/C related shipping documents. Advance against a LTR
obtained from the customer is allowed when the documents covering an import shipment
are given without payment. The customer holds the goods or their sale proceeds in trust
for the bank until the LTR is fully paid off. Letter of Trust Receipt is kept as primary
security, which creates the banker's lien on the goods. LTR facility is adjusted from sale
proceeds of Imported goods or cash from own sources of the customer within the validity.
Validity of the LTR A/C vary from 30 to 180 days depends on the nature and amount of
items imported or as per Bangladesh Bank guidelines.

E) Export finance: Mercantile Bank always gives priority to its export-oriented

customers. Export finance constitutes an important part of an exporter’s requirement of
finance. Exporters require finance at two different stages of their export operation. At
each phase, exporter’s need different types of finance:
 Back To Back L/C: The export letter of credit backs a second letter of credit which
is used to pay a supplier. When the exporter received a export letter of credit from the
overseas buyer for export of goods, but the concerned exporter are not the actual
manufacturer/ producer of the exportable goods. He is required to collect the goods/ raw
materials from the actual producer/ manufacturer. In such a situation the exporter request
his bank to open a letter of credit in favor of the actual producer against the export letter of
credit he has obtained. In this situation bank open a letter of credit in favor of the actual
producer of the goods keeping the export letter of credit as security. Since the letter of
credit on the strength of and backed by the export letter of, the second letter of credit
called back to back letter of credit. Bank may provide pre- shipment credit facilities up to
90% of export order including BTB LC. However banks are generally not in favor of
back-to-back letters of credit as a means of financing export transactions due to risk they
are exposed to.
Papillon knit composite ltd is the main exporter customer of Export Import Bank of
Bangladesh Limited Donia branch. When papillon found a LC from foreign importer, then
papillon take loan against this LC. This whole process is called export financing. Papillon
also give loan to other manufacturers against this L/C, it’s called Back to Back L/C.
3.5 SME Financing:
Product program guidelines for SME financing of Export Import Bank of Bangladesh
Limited are designed and developed to meet up all types of justified business requirement
of SME customers. However, the features of the products so far developed may be
changed, revised, while new products can also be developed to cope with the market
demand as per guidelines for Bangladesh bank and banks own policy. The existing
products are:
1) Chaka (Term loan) : The purpose of this loan are:
a) For expansion & smooth running of the existing business.
b) To purchase capital machinery or fixed assets of the business.
c) To purchase light or heavy vehicles for business use.
d) To set up financially, economically and commercially viable and justified
new business.
2) Anannya (Women entrepreneur’s loan): About 50% of our total populations
are women their active role as entrepreneur in not at all significant. For balanced
& sustainable economic growth with inclusiveness of all classes people of the
society, active involvement of women in the business in immediately required
and our bank has given highest priority for financing to the women entrepreneurs
offering a loan facility under the name “ANANNYA”.
3) Samriddhi (Continuous loan): Small and medium entrepreneurs need working
capital at anytime to penetrate into prevailing business opportunity and to run the
existing business smoothly. For thr purpose of helping SME customers to operate
their business uninterruptedly, Export Import Bank of Bangladesh Limited has
introduced “SAMRIDDHI”.
4) Mousumi (Short term single payment loan): Seasonal products or crops as well
as religious and cultural festivals create short term additional business
opportunity for small and medium entrepreneurs of our country. To fulfill SME
customers demand Export Import Bank of Bangladesh Limited provides
MOUSIMI loan.
 SME financing product at a glance:
Subject CHAKA ANANNYA SAMRIDDHI MOUSUNI
Size Tk .50-70 lac for Tk .50-50 lac for Tk .50-50 lac for Tk .50-50 lac for
SE SE SE SE

Tk 50-100 lac Tk 50-100 lac Tk 50-100 lac Tk 50-100 lac

for ME for ME for ME for ME

Tenure 1-5 years

Grace Maximum 6 Maximum 6 Nil Nil

months months
period

Interest rate 15%-16% 10% 15%-16% 15%-16%

Penal 2% higher on 16% on overdue 2% higher on 2% higher on

overdue amount amount overdue amount overdue amount
interest

Security PG, cheques PG, cheques RM, IGPA, PG, RM, IGPA, PG,
plus others as plus others as cheques plus others cheques plus others
applicable applicable as applicable as applicable

4. SME= Small & Medium enterprise Source : Annual Report

5. SE=Small enterprise
6. ME=Medium enterprise
7. PG=Personal guarantee
8. RM=Registered mortgage
9. IGPA= Irrevocable general power of attorney.
 3.6. Agriculture loan:
o Nabanno (Polli loan)
o Sakti (Solar energy loan/Bio gas)
Export Import Bank of Bangladesh Limited started agriculture credit disbursement
since 2010 by formation of a separate and dedicated department namely “Agriculture
credit department”. From the beginning Agriculture credit department is opening
Agriculture credit activities of the bank as per Bangladesh Bank’s Agricultural &
Rural policy and Guideline. Export Import Bank of Bangladesh Limited disbursed
agriculture credit under the following ways:
 Through partnership with NGOs
 Through contract farming with reputed companies
 Directly to farmers

The new circular of Bangladesh Bank is that each bank must be give agriculture loan.
The minimum loan limit is 50 lac.

Discouraging loan area:

Export Import Bank of Bangladesh Limited discourages lending to following areas of the
businesses:
 Military equipment/weapons finance
 Tobacco sector
 Companies listed on CIB black list or known defaulters
 Highly leveraged transactions
 Activity which is ethically or environmentally sensitive.
 Bridge loans relying on equity/debt issuance as a source of repayment.

3.7. General system & procedure related to credit:

To grant advances is one of the most important functions of a bank. The strength of
bank depends considerably on the quality of its advances and proportion of bearing to
the total deposits. Traditionally bank has been following three cardinal principle of
lending in different credit schemes, these are: safety, liquidity and profitability.
Another determination but not principle, the bank also consider humanity where bank
always looks for true entrepreneur who can really support society by establishing
own-self. Confidence in the borrower is the basis of secured advances. The
confidence is judged by five considerations- Character, Capacity, Capital, Collateral
and Condition.
Lending process of Export Import Bank of Bangladesh Limited goes through
different steps with complying terms and conditions of Bangladesh Bank. The Credit
department of Export Import Bank of Bangladesh Limited follows the following
steps in lending-

1) Application for loan proposal:

Firstly, the borrower who willing to make a commitment with bank by taking loan,
he must write an application through the ‘Head of Branch” of bank and submit it to
the officer at credit department.
On proper scrutiny of the application, branch will inform the initial decision
(acceptable for processing/decline) to the applicant within 3(three) working days
from the date of receiving application. Applicant must present the following
additional papers along with application-
 Trade license and TIN certificate for business
 Voter id card or birth certificate
 Details papers of business
 Salary certificate for service holders
 Bank statement of last six month
 Attested photocopy of current tax receipt, electric bill & lease agreement
when the sours of income is house rent as a landlord.
2) Selection of borrower:
The selection processes include identifying source of repayment and assessing customer’s
ability to repay, expected future cash flows, his / her past dealings with the bank, the net
worth and information from CIB. The Bank must identify the key drivers of the
borrower’s
business as well as the key risks to their businesses. There is an age limit for borrower,
age of the proprietor/partners/directors must be range between 21 years to 60 years.

3) Preliminary screening of credit proposal:

The management committee of credit department of bank gathers different documents and
then evaluates all of the papers, documents. The credit management committee obtains
these mandatory following documents-
I. Formal application for financing
II. Business plan
 III. Personal guarantee
IV. Appraisal of asset to be financed
V. Personal financial statement
VI. Business financial statement
VII. Purchase agreement
VIII. Cash flow projection
IX. TIH certificate
X. Bank solvency certificate
XI. Vat certificate
XII. Export license (applicable for export oriented business)
XIII. Market reputation

4) CIB (Credit Information Bureau) Inquiry:

A bank does not know full information about a customer. But knowing the customer’s
whole information is very important before giving loan. A customer all information is
store in Bangladesh bank. Such as a customer kept loan from BRAC Bank. This customer
came to Export Import Bank of Bangladesh Limited and applying for loan. When Export
Import Bank of Bangladesh Limited filled CIB form and send to the Bangladesh bank,
then Bangladesh bank will send all information about this customer and Export Import
Bank of Bangladesh Limited will know that this customer has loan in BRAC Bank. A
customers CIB report need to update after 2 month basis. When customers want to loan
above 5 lac, those customers need CIB report. Below 5 lac customers do not need CIB
report.
5) Security analysis:
To make the loan secured, charging security on the credit facilities is very important
because it represents commitment of the borrower; it protects the interest and ensures the
recovery of the money lent. The important modes of charging a security are the following:
o Lien: Here, bank will give loan against customers’ assets or properties.
o Pledge: A bank will give loan against customers’ products. Bank is Bailee and
customer is Bailor.
o Mortgage: A bank will provide loan against customer’s land, building, properties
etc. it is famous in Export Import Bank of Bangladesh Limited.. To make the loan
secured, Export Import Bank of Bangladesh Limited charging mortgage.
6) Site visit:
The bank management visits at borrower’s land, property which is placed as security
against credit. Here, Head Office Credit Team assists (on need basis) in site visitation.
After site visitation, Branch credit team forwards a detailed site visit report regarding the
project to the Head Office of Export Import Bank of Bangladesh Limited duly signed by
the officer and Head of Branch / Operation Manager.
Patwery Sir gave me an opportunity to go with him in site visit. We went Ponchoboti,
Narajangonj. Here we visit 3 borrower’s land. At first we analyses the business condition,
the products, products market price and inventory. Then we were analysis the mortgage
land and tried to calculate land’s market value.

7) Documentation:
Documentation can be described as a process or technique of obtaining the relevant
documents. When bank is going to lend to a borrower after inquiring the character,
capacity, collateral and capital of the borrower, the bank must obtain proper documents
which are executed from the borrower to protect against willful defaults. Moreover, when
money is lent against some security of assets, the document must be executed in order to
give the bank a legal and binding charge against those assets. Documents contain the
precise terms of granting loans and these serve as important evidences in the law courts if
the circumstances so desire. That’s why proper documentation must be completed prior to
the disbursement of the facilities. Charged documents as required for documentation are
mentioned bellow:
1. Demand promissory note signed on revenue stamp
2. Letter of arrangement
3. Letter of undertaking
4. Letter of installment
5. Letter of authority
6. Letter of disbursement
7. Balance confirmation slip
8. Letter of revival
9. Letter of hypothecation
10. Letter of continuity
11. Letter of guarantee
12. Legal documents for mortgage of property
 13. Valuation certificate of the collateral security in Bank’s form with photograph
14. Site visit report

8) Sanction of loans or advances:

When a branch manager writes letter to the customer accepting all terms and
conditions of loan, it is called loan sanction. The most important conditions which are
taken in loan sanction are given below:
 Limit of the loan amount
 Primary securities of the loan
 Rate of interest of the loan
 Expire date
 Repayment
 Documentation

Time requirement for approval of credit proposal:

 Brach authority as per their business delegation must take decision within
maximum of 3-7 days.
 The head office credit committee, executive committee of the board of
director, board of directors take decision within maximum of 5-7 days for
simple types of finance facility, 15-30 days for project loan, 30-60days for
loans under syndication
 Sanction letter to be issued within 1-2 days time from the date approval.
3.8. Disbursement of Loan :

Loan disbursement has to be made after completion documentation. Disbursements

of loan facilities are made when all documentation is in place. The steps of the
disbursement-
 Finally Credit Division at Head Office has completed documentation of the
loan that sanctioned by them.
 After completion of the documentation and sanction, Credit Division sends a
copy of “Disbursement Order” along with “Approval letter” to Head of Credit
Administration Division (CAD) & the respective branch for disbursement of
the loan.
 Security Documents of the loans sanctioned from Head Office are signed by
customer(s) in branch of disbursement and retained original. A set of
photocopy of originals is required to be sent to Head Office.
 A set of photocopy of loan documents is retained by Credit team at Head
Office, the disbursement branch retains the originals.
At the time of disbursement, the officer prepares the vouchers and writes the pay
order slip that is signed and approved by the Second Officer and the Manager. The
accounting treatment of disbursing the loan is given below:
Loan Account ................ Dr. Or
Pay order .................... Cr. Loan Account ...............Dr.
Saving Account .........Cr.

Apart from sanctioned the loan amount, the client is to incur some incidental charges
for the loan, like stamp fee and service charge and risk fund charge. Accounting
treatment of these charges are given below:
Savings Account or Current Account ................. Dr.
Risk fund… ........................................................... Cr.
Service charge ....................................................... Cr
3.9. Credit file management:

After completion of all steps in lending, the bank makes and reserves a ‘Credit File’ of the
respective customer. The maintenance of credit files is disciplined to force the lending
officer to obtain all relevant documents and encourages him to consider all relevant
information when analyzing customer risk. Primary items in credit files include:

a) Credit application & Credit approval notes/analysis. The analysis contains

information about the borrower, credit purpose, credit repayment sources, details
of collateral security with valuation and guarantee. It also contains an assessment
of the competence and quality of the borrower’s management, the general
economic and competitive environment of the borrower’s industry and any other
pertinent factors, which present the borrower’s ability to repay the facility.

b) All supporting data such as financial statements, reference, credit investigation

results, CIB & other Bank reports and notes of all discussions with the borrower
and other relevant parties with paper clipping.

c) Correspondences, call reports, site visit reports stock reports etc. Each credit file is
maintained in a secured location and access restricted to authorized personnel.

d) Evidence of credit approval and data upon which approval was granted together
with any comments, if appropriate. Copy of sanction & disbursement letter, a
check list along with copies of all Legal & Banking documents.
3.10. Credit risk management:
There are many reasons to default a loan. Uncertainty, political bad condition, natural
disaster can create huge losses for any business. Sometime loan holder willingly breaks
the installment rules. When a loan holder failed to pay monthly installment, in this time
bank take some steps:
 Such as the installment date is 30th January. But loan holder did not pay the
installment. After 3 days of the installment date (2nd February) bank officer will
call the loan holder and ask him to pay the installment immediately.
 If the loan holder did not pay after telephone him. Then MLB send (10-15
days later) an official letter and call him again.
 After all those process, if the loan holder did not take seriously then Export
Import Bank of Bangladesh Limited will go to the loan holder organization(1-2
month later) and give him 2 days extra time for installment payment.
 If the loan holder failed to installment payment or do not want to pay the
installment then Export Import Bank of Bangladesh Limited will take a lawyer
and go to the organization and take the mortgaged property. Then Export Import
Bank of Bangladesh Limited can sale this property for cash.

But if the loan holder is good person and he personally come to bank and discussed his
business problem with credit officers. At this time, credit officer will send a letter in
Head Office for requesting extend some time for installment payment. Head Office will
discuss this issue in board meeting. In this condition, bank will give opportunity of 3
month to the loan holder. In this 3 month loan holder will focus in his business and try to
earn profit. After 3 month the regular installment payment will continue. If the loan
holder did not make any success in 3 month then bank will take his mortgaged property
and can sale any time for cash.
3.11. Flow Chart of Disbursement :

APPROVAL AUTHORITY

(Head Office)

DISBURSMENT ORDER

&

APPROVAL LETTER

COPY

Head of Head of

CAD BRANCH

Ensuring compliance with terms and

condition of the approval letter and
completion of documentation
DISBURSEMENT LETTER UPTO TK.
5.00 CRORE

Recommendation
BEYOND TK. 5.00 CRORE
RECOMMEND TO DMD

36
3.12 Flow Chart of Overall Loan processing :

Application for loan

proposal

Credit Team scrutinizes the

application & necessary documents

Applicati NO
on
meets Application is declined
basic and returned to
criteria customer
Yes

Security analysis and Site visit

Credit Officer/Manager recommends for

loan and sends for Credit Approval

Application is received and

assessed by Credit Division

Application is sent
No back to source
Documents
in order

Yes

Completed proper
‘Documentation’

Application is sent
back to source
Credit
Approval
NO

Yes

37
3.13 Credit File Maintenance :
After completion of all steps in lending, the bank makes and reserves a ‘Credit File’ of the

respective customer. The maintenance of credit files is disciplined to force the lending officer

to obtain all relevant documents and encourages him to consider all relevant information

when analyzing customer risk.

Primary items in credit files include:

1. Credit application, Credit approval notes/analysis. The analysis contains information about

the borrower, credit purpose, credit repayment sources, details of collateral security with

valuation and guarantee. It also contains an assessment of the competence and quality of the

borrower’s management, the general economic and competitive environment of the

borrower’s industry and any other pertinent factors, which present the borrower’s ability to

repay the facility.

2. All supporting data such as financial statements, reference, credit investigation results, CIB

& other Bank reports and notes of all discussions with the borrower and other relevant parties

with paper clipping.

3. Correspondences, call reports, site visit reports stock reports etc. Each credit file is

maintained in a secured location and access restricted to authorized personnel.

4. Evidence of credit approval and data upon which approval was granted together with any

comments, if appropriate. Copy of sanction & disbursement letter, a check list along with

copies of all Legal & Banking documents.

38
 Chapter: 04

Performance Analysis Of
Exim Bank Regarding Credit
Management

39
4.1 Aanalysis :
Profitability ratios
1 Gross profit margin=Gross profit/Sales Taka In Core

Year Gross profit Sales Gross profit margin

2014 87.39 198.97 0.4392
2015 120.86 271.76 0.4447
2016 148.53 347.25 0.4277
2017 196.88 463.14 0.4251
2018 240.16 556.09 0.4319

It indicates the extent to which debt financing is used relative to equity financing. After the
year 2010 the trend is decreasing. This decreasing trend indicates the firm is using less debt
financing. In 2010 the trend is increased because Export Import Bank of Bangladesh Limited
has much higher debt in 2010. But in 2008 they have less debt that’s why ratio is much lower
in 2008.

2 Debt-to-total asset = Total debt /Total asset Taka in Core

Year Total debt Total asset Debt-to-total asset

2014 136.36 183.24 0.7442
2015 124.56 247.05 0.5042
2016 219.45 288.90 0.7596
2017 283.51 371.59 0.7630
2018 336.85 449.40 0.7496

40
Shows the extent to which the firm is using borrowed money. In the year 2007 their short
term debt was higher but it is decreasing. The decreasing trend indicates that the firm is using
less borrowed money.

3 Interest coverage ratio (Earning basis)=EBIT/Interest expense Taka In Core

Year EBIT Interest expense Interest coverage

2014 87.39 111.58 0.7832
2015 120.86 150.89 0.8010
2016 148.53 198.71 0.7475
2017 196.88 266.25 0.7394
2018 240.16 315.92 0.7602

It indicates the ability to cover interest charges. The increasing trend after 2010 suggests that
the company has ability to cover interest charges.
Financial leverage is decreased in 2011 relative to 2010 which is good for bank.
Measures relative efficiency to total assets to generate sales is efficient to generate sales. But
the growth is not that significant.
Measures ability to meet current liabilities with current asset the standard ratio of current
ratio is 2:1. in 2011 Export Import Bank of Bangladesh Limited has 1.8 ratio that indicates
they have sufficient current asset to meet their current liability but it decrease relative to
previous year.

41
4.2. Sector Wise Loan of Export Import Bank of Bangladesh Limited:

Export Import Bank of Bangladesh Limited provides different types of loan. Those loan products are
given bellow:
As on December 31, 2016-2018 is as under;
BDT in crore
SL Particulars 2016 2017 2018
1 Continuous Loan 5603.528 6233.068 6,857.06
2 Demand Loan 6223.612 6922.817 7,615.86
3 Term Loan 6491.349 7220.632 7,943.49
4 Short Term Agro Credit and
Micro Credit 5.43432 6.04485 6.650
Total 18,323.87 20,382.5 22,423.06
Source: Annual Report

As on December 31, In 2016, total loan outstanding is TK 18,323.87 crore. In 2017, total
loan outstanding is TK. 20,382.5 crore & In 2018, total loan outstanding is 22,423.06 crore.
Sector of disbursed loan has been given below;

Figure-2: Sector Wise Loan of Export Import Bank of Bangladesh Limited.

As per figure we see that the rate of increasing sector wise loan is increase 8-10% every year
.Which is very positive sign for Export Import Bank of Bangladesh Limited as well as our
national economy. On basis of adobe graph we can assume that Export Import Bank of
Bangladesh Limited are willing to increase their loan volume in different sector in future.

42
4.3. Type of Loan of Export Import Bank of Bangladesh Limited:
There are 23 type of loan product are available in Export Import Bank of Bangladesh Limited. As
on December, 2016-2018, the product wise loan type of Export Import Bank of Bangladesh
Limited are given below;
BDT In Crore

SL Particulars 2016 2017 2018

1 Term Loan 4650.781 5173.283 5,691.18
2 Time Loan 2051.525 2282.008 2,510.46
3 Packing Credit 213.0989 237.0399 260.77
4 Loan against Trust Receipt
702.9559 781.9309 860.21
(LTR)
5 Lease Finance 76.20306 84.76425 93.25
6 EDF Loan 1054.111 1172.537 1,289.92
7 Loan General 22.9549 25.53381 28.09
8 House Building Loan 451.7432 502.4952 552.80
9 Hire Purchase 825.4119 918.1445 1,010.06
10 Payment Against Documents
68.1619 75.81969 83.41
(PAD)
11 Cash Credit (Hypo) 1038.919 1155.639 1,271.33
12 Overdraft 2769.101 3080.201 3,388.56
13 Home Loan Scheme Refinance 0.21247 0.23634 0.26
14 Personal Loan 24.73637 27.51543 30.27
15 Consumer Credit Scheme 0.490315 0.5454 0.6
16 Consumer Finance 176.2436 196.044 215.67
17 Other Credit Scheme 0.318704 0.35451 0.39
18 Staff Loan 92.48151 102.8715 113.17
19 Credit Card 33.91343 37.7235 41.50

20 Small and Medium Enterprise

2471.937 2749.652 3,024.92
(SME) Loan
21 Agricultural Credit 263.16 292.7253 322.03
22 Bill Purchased and Discounted-
368.5286 409.9317 450.97
Inland
23 Bill Purchased and Discounted-
966.8759 1075.502 1,13.17
Foreign
Total 18,323.87 20,382.5 22,423.06
Source: Annual Report

This figure gives us clear idea about loan product and outstanding of Export Import
Bank of Bangladesh Limited..

43
 Figure-3 : Type of Loan Product Available in Export Import Bank of Bangladesh Limited

According this figure we see that, Export Import Bank of Bangladesh Limited provide 23
types of credit facility through 140 numbers of Branch’s around the nation. Where Term laon,
Time Loan , CC(Hypo), Overdraft ,HBL, SME loan are in top.

44
4.4. Geographical Location Wise Loan of :
As on December, 2016-2018, geographical location wise loan of Export Import Bank of
Bangladesh Limited are given below;
SL Particulars Percentage
2016 2017 2018
(2018)
1 Dhaka 13220.6 14705.89 16,178.10 71.88%
2 Chittagong 3272.229 3639.854 4,004.24 17.79%
3 Rajshahi 1084.388 1206.216 1,326.97 5.90%
4 Sylhet 139.5926 155.2754 170.82 0.76%
5 Khulna 175.9821 195.7532 215.35 0.96%
6 Rangpur 277.5017 308.6782 339.58 1.51%
7 Barisal 195.3332 217.2783 239.03 1.06%
8 Mymensingh 28.09503 31.25142 34.38 0.15%
Total 18,323.87 20,382.5 22,423.06 100%
Source: Annual Report

Figure-4 : Geographical Location Wise Loan of Export Import Bank of Bangladesh Limited., as on December,
2018

From this figure we see that, Export Import Bank of Bangladesh Limited are not only providing
all the credit facility only in Dhaka City but also around the 8 division of our country. Dhaka
division has 17 District and Dhaka city has most populated city so the rate of credit facility in
this area is high (72%).

45
4.5. Deposit to Advance Ratio:
Total Asset :
The Bank has a healthy Balance sheet size with BDT 291,385.65 million assets base as on 31
December 2018. Loans and advances contribute major part i.e.76.95 % of total assets.
Investments stand the second largest part i.e.13.38 % of total assets.

Figure-5: Deposit to Advance Ratio

46
4.6. Business Segment Wise Loan of Export Import Bank of Bangladesh
Limited.
BDT In Crore

SL Particulars 2016 2017 2018

1 Retail Loan 3868.22 4332.65 4512.68
2 SME 9802.87 11192.25 12507.89
3 Corporate 4652.83 4857.66 5402.49
Total 18,323.87 20,382.5 22,423.06
Source: Annual Report

Figure- 6 : Business Segment Wise Loan of Export Import Bank of Bangladesh Limited .

From this figure we see that Export Import Bank of Bangladesh Limited provide near about
50-55% loan in SME sector where has corporate has 24-26% and retail loan is 20-25% from
total loan amount. So we can easily say that Export Import Bank of Bangladesh Limited
emphasize SME sector for providing credit facility. Its positive sign for small and medium
enterprise for enhance their business which can increase our national economy.

47
4.7. Degree of Operating Leverage :
Operating leverage is the firm’s ability to use operating costs to magnify the effects of
changes in the sales on its operating profit or profit before interest and taxes (EBIT).
Every company has fixed operating cost then, if the capacity or production or sale changes
then EBIT will changes disproportionately then operating leverage will be created.
Year 2014 2015 2016 2017 2018
Particulars
Sales 198.97 271.76 347.25 463.141 556.09
EBIT 87.39 120.86 148.53 196.88 240.16

Degree of Operating Leverage Taka in Core

Year 2014 2015 2016 2017 2018

Sales 198.97 271.76 347.25 463.141 556.09
% change in 36.59% 27.78% 33.37% 20.07%
Sales
EBIT 87.39 120.86 148.53 196.88 240.16
% change in 38.31% 22.89% 32.55% 21.98%
EBIT
DOL= (% change in EBIT) / (% change in Sales)
1.05 0.82 0.98 1.10

So the degree of operating leverage (DOL) is defined as the percentage changes in operating
profit (EBIT) associated with a given percentage changes in sales. Here in the year 2008 the
percentage changes in operating profit EBIT is higher than percentage in sales which is
38.31%. In the year 2009 the sales changes more than EBIT that’s why it decreased. DOL
riches up to 1.10 in 2011 which is good for the company.

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Degree of Financial Leverage (DFL) :
Financial leverage is created when a firm has fixed financial cost associated with its financing
characteristics. That is, the potential use of fixed financial cost to magnify the effect of
changes in earning before interest per share.
Year 2014 2015 2016 2017 2018
EBIT 87.39 120.86 148.53 196.88 240.16
Interest 111.58 150.89 198.71 266.25 315.92
expenses
Degree of -3.61 -4.02 -2.96 -2.84 -3.36
Financial
Leverage

The degree of financial leverage is defined as the percentage changes in earning per share that
results from a given percentage changes in earning before interest and tax. Here we got
negative DFL, which is not indicate good position of the company in financial leverage.
Business Risk
Year 2014-2018
Std 60.65
Mean 158.76
C.V. 0.38

Business risk indicates the fluctuation in operating profit. Though it is 0.3820 in the actual
year 2007 to 2011, which is very much risky.

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4.8 Performance Analysis of Export Import Bank of Bangladesh Limited
SWOT Analysis is the detailed study of an organization’s exposure to customers and
potential in perspective of its strength, weakness, opportunity and threat. This facilitates the
organization to make their existing line of performance and also forces to improve their
performance in future in comparison to their competitors. As through this tool, an
organization can also study its current position, it can also be considered as an important tool
for making changes in the strategic management of the organization. I prepare that SWOT
analysis on the basis of present condition of the bank.

Strength:
The strength of Export Import Bank of Bangladesh Limited that can be find out from the
SWOT analysis that are bellow:
 Export Import Bank of Bangladesh Limited has already established a favorable
reputation in that area. It is one of the leading private sector commercial bank in Bangladesh.
The bank has already shown a tremendous growth in the profits and deposit sector.
 Export Import Bank of Bangladesh Limited has provided its banking service with a
top leadership and management position.
 Export Import Bank of Bangladesh Limited has already achieved a high growth
rate. The number of deposits and the loans and advances are also increasing rapidly.
 Export Import Bank of Bangladesh Limited has an interactive corporate culture.
The working environment is very friendly, interactive and formal. And there are no hidden
barriers or boundaries while communicate between the superior and the employees. This
corporate culture provides as a great motivation factor among the employees.
 Export Import Bank of Bangladesh Limited has the reputation of being the provider
of good quality services to its customers.
Weakness
The weakness Export Import Bank of Bangladesh Limited that I identified that are bellow:

 The bank location of Export Import Bank of Bangladesh Limited is not on a suitable place.
 The service quality of Export Import Bank of Bangladesh Limited is
poor with regard to Multinational Banks located here.
 In terms of promotional sector, Export Import Bank of Bangladesh Limited is not in a
strong position.
 The bank branches are not able to find out necessary document at demandable time.

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Opportunity
The opportunity that is available for Export Import Bank of Bangladesh Limited to explore
itself is given bellow:

 In order to reduce the business risk, Export Import Bank of Bangladesh Limited has to
expand their business portfolio. The management can consider options of starting merchant
banking or diversify into leasing and insurance sector.
 A large number of private banks coming into the market in the recent time. In this
competitive environment Export Import Bank of Bangladesh Limited must expand its
product line to enhance its sustainable competitive advantage.
 They can improve their marketing side to focus out the branch..
 In addition of those things, Export Import Bank of Bangladesh Limited can introduce
special corporate scheme for the corporate customer or offer who have an income level
higher from the service holder. At the same time, they can introduce scheme or loan for
various service holders. And the scheme should be separate according to the professions,
such as engineers, lawyers, doctors etc.
 Opportunity in the retail banking lies the fact that the country’s increased population is
gradually learning to adopt consumer finance. The bulk of our population is middle class.
Different types of retail leading products have a great appeal to this class. So a wide variety
of retail lending products has very large and easy pregnable market.
Threats
The availability of threats for Export Import Bank of Bangladesh Limited bank in the market
is bellow:
 All sustaining and upcoming multinational, foreign and private banks pose enormous
threats to Export Import Bank of Bangladesh Limited.
 The default risks of all terms of loan have to be minimized in order to sustain in the
financial market because the default risks lead the organization toward bankruptcy. Export
Import Bank of Bangladesh Limited will have to remain vigilant about this problem so that
proactive strategies are taken to minimize this problem.
 The low compensation package of the employees from the mid level to lower level
position threats the employee motivation. As a result good quality employees leave the
organization and its effects the organization as a whole.
So these are all about the SWOT analysis of Export Import Bank of Bangladesh Limited
Here Strength and Weakness is internal environment. And on the other hand Opportunity and
Threat is external environment.

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4.9 Findings

* The general banking process of Export Import Bank of Bangladesh Limited is not fully

systematic and monitoring process is not maintained regularly.

* The documentation of everything is properly maintained.

* Sometimes the investment & deposit ratio goes very close which is very risky for the bank.

* The overall monitoring system is completely network dependent, so if the network fails for

some reason all the operation will stop.

* Customer satisfaction level is quite good but sometimes the conversation with some

customers goes negative because of the shortage of well experienced customer service

officials.

* Export Import Bank of Bangladesh Limited bank follows the Shariah rules & regulations

which are not known to the customers.

* The service quality of Export Import Bank of Bangladesh Limited is poor with regard to

Multinational Banks located here.

* In terms of promotional sector, Export Import Bank of Bangladesh Limited is not in a

strong position.

* The low compensation package of the employees from the mid level to lower level

position threats the employee motivation. As a result good quality employees leave the

organization and its effects the organization as a whole.

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 Chapter: 05

Recommendation &
Conclusion

53
Recommendation

Export Import Bank of Bangladesh Limited is one of the most potential Banks in the banking
sector. It has a large portfolio with huge assets to meet up its liabilities and the management
of this bank is equipped with the expert bankers and managers in all level of management.
So it is not an easy job to find out the drawbacks of this branch. I would rather feel like
producing my personal opinion about the ongoing practices.
For more improvement of the service the following measures may be taken

* Continuous improvement of the identified problem.

* Ensure Proper Maintenance of Files.
* Ensure Proper Communication System and Maintenance of Machineries.
* More Gifts and Discounts for the Marginal Customers.
* The bank location of Export Import Bank of Bangladesh Limited is not on a suitable place.
So it has to shift in a suitable place.
* In terms of promotional sector, Export Import Bank of Bangladesh Limited has to more
emphasize on that.
* The general banking process of Export Import Bank of Bangladesh Limited should be fully
systematic and monitoring process must maintained regularly.
* We should appoint few experienced customer service officials to satisfy the customers.
* We must careful about the investment & deposit ratio.
* The latest technology & an uninterrupted network system have to be ensured. It will save
the officials from much hassle and will save time.
* Decision making process can be made more decentralized. Participative approach should
be adopted to gain prompt and effective result.
* The Shariah based business term & conditions should be introduced to the customers.
* The compensation package of the employees should be attractive to motivate the
employees.
So these are all about the recommendation to improve the weakness of Export Import Bank
of Bangladesh Limited.

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 Conclusion

From the practical implementation of customer dealing procedure during the whole
period of my practical orientation in Export Import Bank of Bangladesh Limited I have
reached a firm and concrete conclusion in a very confident way. Performance of Export
Import Bank of Bangladesh Limited during the last five years has proved that with strong
desire and will power one can achieve whatever target he may have. The bank has
succeeded in achieving more customer than many other competitors.

In my study I have found that Export Import Bank of Bangladesh Limited has reached
this position by its excellent customer’s service, commitment, people’s love and
dedicated human resources. Export Import Bank of Bangladesh Limited showed its
supremacy in all kinds of banking operations in our country.

Bank is the largest organization of mobilizing surplus domestic savings. Attractive

Savings Schemes are offered by Export Import Bank of Bangladesh Limited like
MSS, MSD, MTDR, MSTD etc. Schemes are designed concentrating in different
purposes to help the fixed income group people to help in need. Branch-Officials are also
whole-hearted and dedicated to serve their customer with utmost care. The officials
follow the policy very strictly. They are choosy and conservative in sanctioning loan. The
proposal is thoroughly scrutinized by the loan sanctioning authority. The total function of
the investment division is monitored periodically Export Import Bank of Bangladesh
Limited always tries to increase foreign exchange through import, export and remittance.
This bank always conceives amicable behavior with exporters and helps them in their
business activities as a trustee friend. It encourage importer to import goods in legal
procedure and provide financial assistance for doing business smoothly.

Export Import Bank of Bangladesh Limited is going well. Though there are some
drawbacks in implementing the different tasks manually, it can be overcome through the
involvement of more experts in decision making process and utilizing the tools to judge
integrity of the customers. Finally it can be argued that through the results achieved so far
are not satisfactory, why not the bank using a modern scientific technique for enhancing
its strength and there lies the opportunities to make it more effective in the future for their
own benefit.

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 Chapter: 06

Internship duties
And
Responsibilities

56
6.1 Duties and responsibilities as an internee
As a student of BBA with the requirement of my course I was assigned Export Import
Bank of Bangladesh Ltd. (Export Import Bank of Bangladesh Limited) Dhaka for my
internship. I was assigned to work on General Banking. So my duties are on general
banking activity.
In the internship period it is very important for anyone where practical experience
gathered. In the period of three months internship program I have learn many thing about
General Banking. Every employees on their helped me so much so understand the work
easily. During my internship period, I have worked in different sections like Accounts
Opening, Clearing, remittance and dispatch of the General Banking Department. During
my three months internship programs I have worked 10.00am to 6.00pm at every day.

6.2 As an Intern my Accomplishments are as Follows

 Account Opening
I worked first in Export Import Bank of Bangladesh Limited Bank in the account opening
department. Here I learnt the procedure for opening an account. The documents that are
need for opening an account. In Export Import Bank of Bangladesh Limited there are
various types of account. Here I have worked at least 20 days. This is important section of
the bank. It deals with the different products. These products are the core sources of
deposit. Here I have acquainted with different products that the bank offers to acquire
deposit. I also have acquainted with the checklist of the account opening. Based on the
account operating mode the bank sets various requirements for its clients. This is called the
checklist. I have also learned the important steps regarding account opening and account
closing.

 Clearing Section and posting Clearing Cheque (NIKASH)

Every day I received several cheques from clients. I also initial it the deposit slip and put
branch seal and endorsement seal in the cheques. My responsibility ensures account
number, account’s holder name. In this section my last duty posting the clearing cheque in
the computer.

 Provide information any type of customer

I also provide any type information to the customer. A tried my best to give the right
information to the customer. When any customer does not understand anything tried to
help them. Most of time I gave them information about account opening.

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  Pay order issue
I issued more than 3 or 4 pay order every day. At first customer is supplied with PO form.
After filling the form, the customers pay the money in cash or cheque. The officer then
issues PO on its specific block. The block has three parts one for bank; other two parts for
customer.

 Demand Draft
The demand draft is written order by one branch of a bank to pay a certain sum of money
to or to the order of a specific person.
Making Outward Bill for collection.
A cheque come from other bank for clearing then the cheque sent to the manager by letter
to save cash client’s account.

 Receiving & Sending Letters

There are two type letters on the branch. The letter come from outside or another branch
those are received in inward book and a serial number put in the letter. And the other one
is Banks letter that sends to another bank or branch by putting also a serial number.

 Issuing Cheque Book

Fresh checkbook is issued to the account holder only against requisition on the prescribed
requisition slip attached with the checkbook issued earlier, after proper verification of the
signature of the account holder personally or to his duly authorized representative against
proper acknowledgment.
I issue more than 50 or 60 cheque to the customer. It’s not so easy to issue a cheque book.
Have to find out here the demanded cheque and then have to record it. And finally give the
cheque book to the customer and customer signature in the cheque discount file.

Monthly activities
The sequence of my Monthly activities can be summed up as under:

Department Monthely
Dispatch (in,out) 300
Account Opening 90
Account Closing 20
Issuing Cheque Book 150

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6.3 Problems Encountered
During the internship period there are various problems. From the
beginning the problem were started but at ending the problem is being
solved and the problems are given bellow:
 Main problem is to adjust with the office environment.
 Problem is how to open account.
 Also how to close account.
 At the first time I can’t issue checqe book so it’s a problem.
 At the beginning I don’t know how to record inward or outward.
 At the early day I don’t know what dispatch is. What have to do with that.
 Etc.
But after day by day all of the above problems are become in solution by
the help of the employee of Export Import Bank of Bangladesh Limited
Bank. They are kind full to help me to give answer of my question.

59
6.4 How Internship Experience Impacts My Career
I have learnt much necessary information about the banking sector and their activity. As
my focus concern was General Banking so I was more involved with that, than other
department. Now, it is very clear to me how Export Import Bank of Bangladesh Limited
operates their operation on the ground of general banking in this country. The internship
experience will help me much to build my career. My learned experiences are as follows:
 I learned the formalities to open several account in Export Import Bank of
Bangladesh Limited.

 I got information about the requirements for opening account

 I also observe the procedures to close an account.

 As I also work at clearing so I closely experience clearing house operation.

 Providing information to their client is an important activity for a bank. I

learned the way about how Export Import Bank of Bangladesh Limited Bank
provides the information to their client.

 Verify signature in different issue was one of my learning’s from the Bank.

 I learned the process to renew FDR account at the Bank.

 I experienced the formalities to issue a Pay Order.

 I learned the procedures to issue Demand Draft.

 I learned how to issue check book.

 I issue and receive Mail for Main Branch with others.

 Finally, I learned how to prepare an internship report.

 Learned about the office environment.

All this above learning point will be helpful for my future. Those will be helpful for my
career. As I have learned many things I can use them on my future to improve my
position to run faster on job market.

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Bibliography/References

61
References

1. Export Import Bank of Bangladesh Limited Bank Website-WWW.exiBBAnkbd.com

2. Prospectus of Export Import Bank of Bangladesh Limited Bank.

3. Export Import Bank of Bangladesh Limited Bank annual report from 2007 to 2014

4. Daily Statement Affairs of Export Import Bank of Bangladesh Limited.

5. A Way to Islamic Banking: Customs & Practice By Dr. Mohammed Haider Ali
Miah

6. Kabir Hassan (2003) , Islamic Banking, Islamic Economics Research Bureau

Islamc Banking

7. Rahman A. A. M Habibur (2010),Islami Banking, 4th Edition, Halal Parvin,

Bangladesh

8. Newsletters, Journals of Export Import Bank of Bangladesh Limited Bank.

9. Bangladesh Bank website- www.bangladesh-bank.org

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