Full Report 2

7/23/2019 Full Report 2

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General Banking Service & Credit Management of

Dutch-Bangla Bank Limited


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United International University

Internshi !eort

on"General Banking #ctivities & Credit Management of

Dutch-Bangla Bank Limited$%# Study on lehant !oad Branch'

Su(mitted to)

James Bakul Sarkar

Assistant ProfessorSchool of Business

Su(mitted By*

Name : Md. Shahid HossainID : 111-11-!!"

De#artment : BBA in AIS

Date of Su$mission:

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Letter of +ransmittal

No%em$er !& !1"

'oMr. James Bakul SarkarAssistant ProfessorSchool (f Business)nited International )ni%ersit*House + ,!& oad + ,A& Mir/a 0olam Hafi/ oad&Dhanmondi& Dhaka-1!& Ban2ladesh.

Su(,ect* Su(mission of Internshi !eort on "General Banking #ctivities & Credit

Management of Dutch-Bangla Bank Limited$Dear Sir

It is m* 2reat #leasure that I ha%e 2ot the o##ortunit* to su$mit an ela$orate re#ort on

#ractical kno3led2e in $ank as #er the re4uirement of MBA #ro2ram. I ha%e $een assi2ned to

3ork at Dutch-Ban2la Bank 5imited 6le#hant oad Branch from No%em$er !1& !1"& 3here

I ha%e o$ser%ed closel* and studied different #ractical as#ects of the $ankin2 institute. I

3ould like to sa* it has $een a 2reat e7#erience for me to 3ork in the 8oint %enture $ank&

DBB5& 3hich enrich m* #ractical kno3led2e of $ankin2 sector in Ban2ladesh. I ha%e tried

m* le%el $est to #ut meticulous effort for the #re#aration of this re#ort. An* shortcomin2 or

fla3 ma* arise as I am a no%ice in this as#ect.

It 3ould $e #leasure for me if this re#ort can ser%e its #ur#ose and I 3ill $e a%aila$le to

e7#lain an* of *our 4ueries if *ou feel necessar*.

'hank *ou.

Sincerel* *our

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

Md. Shahid Hossain

ID: 119-11-!!"

BBA in AIS

School of Business And economics

)nited International )ni%ersit*

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Student.s Declaration

I here$* declare that the re#ort entitled e#ort on the "General Banking Service & Credit

Management of Dutch-Bangla Bank Limited$& 6le#hant oad Branch is su$mitted as the

#artial fulfillment of the de2ree of Bachelor of Business Administration of )nited

International )ni%ersit* of Ban2ladesh.

It is m* ori2inal 3ork and is not su$mitted for the a3ard of an* other de2ree& di#loma& and

fello3shi# and that the 3ork has not $een #u$lished in an* 8ournal or ma2a/ine.

;;;;;;;

Md. Shahid Hossain

ID No.: 119 11 !!"Pro2ram: BBA in AIS



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Suervisor.s Certification

It is m* #leasure to certif* that Md. Shahid Hossain& ID.119 11 !!"& student of Business

Administration of )nited International )ni%ersit* ?redit

Polic* of Dutch-Ban2la Bank 5imited@& 6le#hant oad [email protected] has com#leted this 3ork

under m* su#er%ision and #re#ared this re#ort accordin2 to direction and 2uidance.

As far I kno3 he tried his $est to conduct this successfull*. I think this 3ill hel# him in the

future to $uild u# his career.

I 3ish his e%er* success in life.

Mr. James Bakul SarkarAssistant Professor

School (f Business)nited International )ni%ersit*

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Certificate

'his is to certif* that Md. Shahid Hossain& ID No.: 119 11 !!", BBA in AIS& student of



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General Banking #ctivities & Credit Management of


+a(le of Content

Chater /ne* Introduction 11-1

1.1 Introduction 111. 'he Internshi# 1

1. (ri2in of the e#ort 1

1.9 ($8ecti%es of the stud* 1

1.9.1 Primar* ($8ecti%e 1

1.9. Secondar* ($8ecti%e 1

1." Methodolo2* (f 'he Stud* 1

1.".1 Primar* Source 19

1.". Secondar* Source 19

1. Sco#e (f 'he Stud* 19

1.E 5imitation of 'he Stud* 191., ?o%era2e of 'he stud* 1

1. ational of 'he Stud* 1

1.1! (r2ani/ational Pers#ecti%e 1

?ha#ter '3o: Back2round of 'he Stud* 1,-

.1 Histor* of Bank 1,

. Bankin2 Histor* (f Ban2ladesh 1,

. ?ondition In Bankin2 Sector In Ban2ladesh 1

.9 'he Histor* of DBB5 1

." Mission of Dutch-Ban2la Bank

. Fision of Dutch-Ban2la Bank

.E Slo2an

., Business Philoso#h*

?ha#ter 'hree: 0eneral Bankin2 Ser%ice of DBB5 "-

.1 A$out 'he D$$l 6le#hant oad Branch "

. 5ocation (f 6le#hant oad Branch "

. 0eneral Bankin2 Acti%ities

..1 Account (#enin2 Section

.. emittances Products 91

. D$$l Ser%ices (ffered 9

.E Atm Net3orkD$$l Ne7us Partici#atin2 Banks 9

., Gast 'rack 9

. 'he ?ards 9

.1! ?or#orate Social es#onsi$ilit* (f D$$l 9E.11 Social 3ork 9,

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.1 Dutch-Ban2la Bank esearch ?enter 9,

?ha#ter Gour: ?redit Mana2ement of Dutch-Ban2la Bank 5td. ,-9!

9.1 Definition of ?redit: "!

9. Gactors elated 3ith ?redit "!9. ?redit flo3 of DBB5 "1

9.9 '*#es of loans and ad%ances offered $* DBB5 "1

9.9.1 ?or#orate ?redit Scheme "1

9.9. etail ?redit Scheme "

9." 5endin2 Policies (f Dutch-Ban2la Bank 5td "

9. 5endin2 Procedure of Dutch-Ban2la Bank 5td "

9.E 0eneral Procedure for 5oans and Ad%ances "

?ha#ter Gi%e: isks Associated Cith ?redit".1 isk

". isks in Bankin2 Business "..1 Business isk

".. Mana2ement risk: E

".. Securit* isk: E

". isk Mana2ement Process E

".9 isk Mana2ement E

"." 5endin2 isk Anal*sis


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0CU+I1 SUMM#!2

'his #a#er has attem#ted to hi2hli2ht on an e%aluation of 0eneral Bankin2 Ser%ices and

?redit Mana2ement of Dutch-Ban2la Bank 5imited in the conte7t of Dutch-Ban2la Bank

5imited& ele#hant road $ranch. Dutch-Ban2la Bank 5imited is amon2 the leadin2 commercial

$anks of the countr*. 'he first #art of the re#ort discusses the 2eneral ser%ices offered in the

$ank and the 3hole #rocess it 2oes throu2h to ser%e its customers in a 3ell-disci#lined

manner. I ha%e 2i%en m* $est effort to include all the necessar* #oints in order to 2i%e a clear

understandin2 a$out the 0eneral Bankin2.

5endin2 is one of the #rinci#al functions of the $ank. Sound lendin2 #ractice therefore& is

%er* im#ortant for #rofita$ilit* and success of a $ank. Gor the sake of sound lendin2& it is

necessar* to de%elo# a sound #olic* and modern credit mana2ement techni4ues to ensure that

loans ad%ances are safe and the mone* 3ill come $ack 3ithin the time set for re#a*ment. Gor

this #ur#ose& #ro#er and #rior anal*sis of credit #ro#osals is re4uired to assess the risk. ?redit

risk 2radin2 is one of the $asics for risk mana2ement and control& as it is the risk factor

inherent in e%er* $ank $usinesses and as the 4ualit* of credit is essential for sound $ankin2

and its re#utation. Gor the effecti%e a##lication of ?0& e7#ertise and 3illin2ness as 3ell as

moti%ation of the $ankers are needed. And to do that stron2 criterion must $e follo3ed assuch in DBB5. 'his re#ort should $e a$le to 2i%e a clear idea a$out ho3 and 3hat ste#s a

$ank has to 2o throu2h in order to sanction a loancredit to a com#an*.

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C3#4+!- /5

I5+!/DUC+I/5

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66 I5+!/DUC+I/5

0enerall* the 3ord Bank@ 3e can easil* understand that the financial institution dealin2

3ith mone*. But there are different t*#es of $anks like ?entral Banks& ?ommercial Banks&

Sa%in2s Banks& In%estment Banks& Industrial Banks& and ?o-o#erati%e Banks etc. But 3hen

3e use the term Bank@ 3ithout an* #refi7& or restriction& it refers to the ?ommercial $anks.

?ommercial $anks are the #rimar* contri$utors to the econom* of a countr*. So 3e can sa*

?ommercial $anks are a #rofit-makin2 institution that collects the de#osits from the sur#lus

unit of the societ* and then lend the de#osits collected to the deficit unit of the societ*. So the

#eo#le of the societ* and the 2o%ernment are %er* much de#endent on the commercial $anks

as the financial intermediar*. As $anks are #rofit-earnin2 concern the* collect de#osit at the

lo3est #ossi$le cost and #ro%ide loans and ad%ances at hi2her. 'he differences $et3een t3o

are the #rofit for them.

6conomic histor* sho3s that de%elo#ment has started e%er*3here 3ith the $ankin2 s*stem

and its contri$ution to3ards financial de%elo#ment of a countr* is the hi2hest in the initial

sta2e. Modern $anks #la* an im#ortant #art in #romotin2 economic de%elo#ment of a

countr*. Bank #ro%ides necessar* funds for e7ecutin2 %arious #ro2rams in the #rocess of

economic de%elo#ment. 'he* collect sa%in2s from lar2e masses of #eo#le scattered

throu2hout the countr*& 3hich in the a$sence of $anks 3ould ha%e remained ideal and

un#roducti%e. 'hese scattered amounts are collected& #ooled to2ether& and made a%aila$le to

commerce and industr* for meetin2 the financial re4uirements.

Bank #la*s a %ital role in the econom* $* #ro%idin2 means of #a*ment and in mo$ili/in2

resources. Bank is the most im#ortant financial institution in the econom*. 'he economic

de%elo#ment of a countr* de#ends on the de%elo#ment of $ankin2 sector. 'oda*s modern

$anks are not onl* #ro%idin2 traditional $ankin2 $ut also e7#andin2 the man* financialser%ices. Bankin2 sector is e7#andin2 its hand in different e%ents e%er* da*. As the demand

for $etter ser%ices increases da* $* da*& the* are comin2 3ith different inno%ati%e ideas and

#roducts.

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67 +3 I5+!5S3I4

Ce the students of Bachelor of Business Administration


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6:6 4rimary /(,ective

'he #rimar* o$8ecti%e of the stud* is to com#lete the #artial re4uirement of the a3ardin2 of

the BBA in AIS de2ree from the school of $usiness > economics& )nited International

)ni%ersit*. 'he o$8ecti%e is to #re#are > su$mit a re#ort on the to#ic of General Banking

Services and Credit Management of Dutch-Bangla Bank Limited . 'he #rimar* #ur#ose

of this re#ort is to 2et an idea a$out the 2eneral $ankin2 #ractices on the $ankin2 sector of

Ban2ladesh.

6


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ele%ant file stud* as #ro%ided $* the officers concerned.

6=7 Secondary Sources*

Annual re#orts of Different Banks !11& !1&!1&!19&!1". Periodical #u$lications $* DBB5.

Different $ooks& trainin2 #a#ers& manuals& Ne3s#a#ers and Journals.

Ban2ladesh Bank Annual e#ort-!1" and 3e$site of Ban2ladesh Bank.

Article #u$lished $* DBB5.

6< SC/4 /9 +3 S+UD2

#rea of the !eort* the $asic area for the re#ort is anal*/in2 the acti%ities and

#erformance of 2eneral $ankin2 and credit mana2ement o#eration of Dutch-Ban2la

Bank 5imited considerin2 6le#hant oad Branch. In this 3ork the o%erall %ie3 of

the 2eneral $ankin2 s*stem& histor* and Mechanism& #olicies and a##raisal of Dutch-

Ban2la Bank 5imited and other acti%ities are e7tensi%el* anal*/ed and the findin2 s

are clarified alon2 3ith de#th stud*.

+ime and Duration* 'he time of m* internshi# has started from No%em$er !1& !1"

and I 3as a##ointed for or three months internshi# #ro2ram. 'here 3as also a

#lacement of different de#artments 3ithin the time. 'here I had to 3ork in credit >

2eneral $ankin2 de#artment desks as a routine 3ork. It 3as difficult to collect the

information rele%ant m* re#ort& $ecause the #eo#le of this Bank 3as so $us* 3ith

their dut* that the* cannot $e a$le to 2i%e me much time. Here I tr* to co%er the

acti%ities and rules and re2ulation related to m* re#ort.

6> LIMI+#+I/5S /9 +3 S+UD2

Althou2h I ha%e o$tained 3holehearted coo#eration from em#lo*ee of Dutch-Ban2la Bank

5td& 6le#hant oad $ranch $ut the* 3ere e7tremel* $us*. So the* 3ere not a$le to 2i%e me

much time& as the* and I 3ould like. Besides& total duration of internshi# is not sufficient to

2i%e me more than a su#erficial idea of the functionin2 of the %arious de#artments. I 3as

rotated throu2h on the 3a* of m* stud*. I ha%e faced the follo3in2 #ro$lems& 3hich ma* $e

termed as the limitationshort comin2 of the stud*. 'hese are as follo3s:

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It 3as %er* different to collect the information from %arious #ersonnel for the 8o$

constrain.

Bank #olic* 3as not disclosin2 some data and information for o$%ious reasons.

Due to time limitation man* of the as#ects could not $e discussed in the #resent

re#ort.

Since the $ank #ersonnel 3here %er* $us*& the* could #ro%ide me little time.

Another si2nificant #ro$lem faced durin2 the #re#aration of this re#ort 3as the

contradictor* e7#lanation of a sin2le su$8ect $* different em#lo*ee.

Because of the limitation of information some assum#tion 3as made. So there ma* $e

some #ersonal mistakes in the re#ort.

'he time months out of months onl*& 3hich is in sufficient to kno3 all acti%ities

of the $ranch are #re#are the re#ort.

'he insufficienc* of information 3as not ade4uatel* a%aila$le. Moreo%er& the sources

3ere ha/ardous and in-disci#line. 'herefore the #ro%idence of insufficient

information came out as a constraint.

5on2 internshi# 3as not a$le to #ro%ide us 3ith ade4uate time to im#ose more

data$ases so#histic to the formulation of this re#ort.

Durin2 the internshi#& in man* #art of our en4uir*& our #erformance 3as hindered $*

some sort of ine7#erience of some of the #ersonnel of the $ank due to lack of

orientation to the #rocedure of such internees.

'here 3as no remuneration for our internshi# that demorali/es our moti%ation to kee#

consistenc* in our e7tensi%e stud*.

Sometimes 3e had to face une7#ected conduct on the #art of some of the #ersonnel

that 3as su##osed to $e a little $it more cordial.

'he stud* 3as limited onl* to the Dutch-Ban2la Bank 5td.

Another Pro$lem 3as time constraints. 'he duration of m* 3ork 3as onl* three

months. But this time is not enou2h for a com#lete and fruitful stud*.

0ettin2 financial information is %er* hard 8o$.

'he Bank 3as a $us* one ha%in2 hea%* rush of #eo#le& 3hom officers need to deal

3ith. So allocation of time for an internet is %er* much tou2h for the officers of the

$ank.

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Althou2h there are a lot of limitations& I ha%e tried to #ut m* $est effort as far as

#ossi$le to #re#are the re#ort.

6? C/1!#G /9 +3 S+UD2

'o o$tain #ractical e7#erience a$out forei2n e7chan2e acti%ities $* in%ol%in2

Internshi# #ro2ram.

'o $uild #rofessional carrier in the $ankin2 sector as 3ell as an* financial institution.

'o kno3 a$out the 2eneral $ankin2 acti%ities in Ban2ladesh.

6@ !#+I/5#L /9 +3 S+UD2

Ban2ladesh is one of the underde%elo#ed countries in the 3orld. 'he com#an* of the countr*

has a lot left to $e desired and there are lots of sco#es for massi%e im#ro%ement. In an

econom* like this& $ankin2 sector can #la* a %ital role of an intermediar* can mo$ili/e the

e7cess fund of sur#lus sector to #ro%ide necessar* finance& to those sectors& 3hich are needed

to #romote for the sound de%elo#ment of the econom*. 5ike in man* other emer2in2 market

economies& commercial $anks in the Ban2ladesh econom* are to face an increasin2

com#etition for their $usiness in the comin2 da*s. 'heir $usiness 3ill no lon2er remain eas*

as the* had earlier the real chan2e in the $ankin2 $usiness has started to come 3ith 2o%t.s

decision to allo3 the $usiness in the #ri%ate sector in the middle of the ei2hties. 'his re#ort is

an effort to reflect a clear idea a$out the strate2ies& acti%ities and #erformance of Dutch-

Ban2la Bank 5td Ban2ladesh 5td. e2ardin2 Gorei2n e7chan2e $ankin2 #ractices in

Ban2ladesh- A case stud* of Dutch-Ban2la Bank 5td


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international s#onsor of the Bank. 'he GM( is the Dutch De%elo#ment Bank of the

Netherlands s#eciali/ed in financin2 of #ri%ate enter#rises in Asia& Africa& 5atin America and

6astern 6uro#e. )nder a technical assistant 2rant from the GM(& ABN-AM( Bank of the

Netherlands #ro%ided technical assistance to Dutch-Ban2la Bank 5td.

C3#4+!- +/

B#CG!/U5D /9 +3 3IS+/!2

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76 3IS+/!2 /9 B#5

A $ank is a financial institution licensed $* a 2o%ernment. Its #rimar* acti%ities include

#ro%idin2 financial ser%ices to customers 3hile enrichin2 its in%estors. Man* financial

acti%ities 3ere allo3ed o%er time. 'he le%el of 2o%ernment re2ulation of the $ankin2 industr*

%aries 3idel*& 3ith countries such as Iceland& ha%in2 relati%el* li2ht re2ulation of the $ankin2

sector& and countries such as ?hina ha%in2 a 3ide %ariet* re2ulations $ut no s*stematic

#rocess that can $e follo3ed t*#ical of a communist s*stem. 'he name $ank deri%es from the

Italian 3ord $anco desk$ench@& used durin2 the enaissance $* Je3ish Glorentine $ankers&

3ho used to make their transactions a$o%e a desk co%ered $* a 2reen ta$lecloth. Ho3e%er&

there are traces of $ankin2 acti%it* e%en in ancient times.

In fact& the 3ord traces its ori2ins $ack to the Ancient oman 6m#ire& 3here mone*lenders

3ould set u# their stalls in the middle of enclosed court*ards called macella on a lon2 $ench

called a $ancu& from 3hich the 3ords $anco and $ank are deri%ed. As a mone*chan2er& the

merchant at the $ancu did not so much in%est mone* as merel* con%ert the forei2n currenc*

into the onl* le2al tender in omeLthat of the Im#erial Mint. 'he earliest e%idence of

mone*-chan2in2 acti%it* is de#icted on a sil%er drachm coin from ancient Hellenic colon*

'ra#e/us on the Black Sea& modern 'ra$/on& and c. "!" B?& #resented in the British

Museum in 5ondon. 'he coin sho3s a $ankers ta$le


19/80



'he insurance $usiness 3as also nationali/ed and $ecame a source of #otential in%estment

funds. ?oo#erati%e credit s*stems and #ostal sa%in2s offices handled ser%ice to small

indi%idual and rural accounts. 'he ne3 $ankin2 s*stem succeeded in esta$lishin2 reasona$l*

efficient #rocedures for mana2in2 credit and forei2n e7chan2e. 'he #rimar* function of the

credit s*stem throu2hout the 1E!s 3as to finance trade and the #u$lic sector& 3hich to2ether

a$sor$ed E" #ercent of total ad%ances. 'he 2o%ernments encoura2ement durin2 the late

1E!s and earl* 1,!s of a2ricultural de%elo#ment and #ri%ate industr* $rou2ht chan2es in

lendin2 strate2ies. Mana2ed $* the Ban2ladesh Krishi Bank& a s#eciali/ed a2ricultural

$ankin2 institution& lendin2 to farmers and fishermen dramaticall* e7#anded. 'he num$er of

rural $ank $ranches dou$led $et3een 1EE and 1,"& to more than &!. Denationali/ation

and #ri%ate industrial 2ro3th led the Ban2ladesh Bank and the Corld Bank to focus their

lendin2 on the emer2in2 #ri%ate manufacturin2 sector. Scheduled $ank ad%ances to #ri%ate

a2riculture& as a #ercenta2e of sects oral 0DP& rose from #ercent in G 1E to 11 #ercent

in G 1,E& 3hile ad%ances to #ri%ate manufacturin2 rose from 1 #ercent to " #ercent. 'he

transformation of finance #riorities has $rou2ht 3ith it #ro$lems in administration. No sound

#ro8ect-a##raisal s*stem 3as in #lace to identif* %ia$le $orro3ers and #ro8ects.

5endin2 institutions did not ha%e ade4uate autonom* to choose $orro3ers and #ro8ects and

3ere often instructed $* the #olitical authorities. In addition& the incenti%e s*stem for the

$anks stressed dis$ursements rather than reco%eries& and the accountin2 and de$t collection

s*stems 3ere inade4uate to deal 3ith the #ro$lems of loan reco%er*. It $ecame more common

for $orro3ers to default on loans than to re#a* themO the lendin2 s*stem 3as sim#l*

dis$ursin2 2rant assistance to #ri%ate indi%iduals 3ho 4ualified for loans more for #olitical

than for economic reasons. 'he rate of reco%er* on a2ricultural loans 3as onl* E #ercent in

G 1,& and the rate on industrial loans 3as e%en 3orse. As a result of this #oor sho3in2&

ma8or donors a##lied #ressure to induce the 2o%ernment and $anks to take firmer action to

stren2then internal $ank mana2ement and credit disci#line. As a conse4uence& reco%er* rates

$e2an to im#ro%e in 1,E. 'he National ?ommission on Mone*& ?redit& and Bankin2

recommended $road structural chan2es in Ban2ladeshs s*stem of financial intermediation

earl* in 1,E& man* of 3hich 3ere $uilt into a three-*ear com#ensator* financin2 facilit*

si2ned $* Ban2ladesh 3ith the IMG in Ge$ruar* 1,E. (ne ma8or e7ce#tion to the

mana2ement #ro$lems of Ban2ladeshi $anks 3as the 0rameen Bank& $e2un as a 2o%ernment#ro8ect in 1E and esta$lished in 1, as an inde#endent $ank. In the late 1,!s& the $ank

Page 19


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continued to #ro%ide financial resources to the #oor on reasona$le terms and to 2enerate

#roducti%e self-em#lo*ment 3ithout e7ternal assistance. Its customers 3ere landless #ersons

3ho took small loans for all t*#es of economic acti%ities& includin2 housin2. A$out E!

#ercent of the $orro3ers 3ere 3omen& 3ho 3ere other3ise not much re#resented in

institutional finance. ?ollecti%e rural enter#rises also could $orro3 from the 0rameen Bank

for in%estments in tu$e 3ells& rice and oil mills& and #o3er looms and for leasin2 land for

8oint culti%ation. 'he a%era2e loan $* the 0rameen Bank in the mid-1,!s 3as around 'k

&!!!


21/80



concession loans& #ri%ate creditors accounted for onl* a$out #ercent of outstandin2 #u$lic

de$t. 'he e7ternal #u$lic de$t 3as )S.9 $illion& and annual de$t ser%ice #a*ments 3ere

)S9E million at the end of G 1,.

78 C/5DI+I/5 I5 B#5I5G SC+/! I5 B#5GL#DS3

Bankers $elie%e that the Ban2ladesh Bank is entirel* res#onsi$le for such condition in the

$ankin2 sector. As #er their o#inion& in the #ast se%en months of !1! Ban2ladesh Bank

increased the ? -- 'he $anksQ mandator* rate of reser%e to the central $ank t3ice. Because

of this& a##ro7imatel* 'k 9! $illion came to the central $ank from the $anks. As a result

li4uidit* crisis $e2an in the $ankin2 sector. As a result& in the first month of this *ear the rate

of interest in the call mone* market clim$ed u# to 1E! #ercent that is recorded as the hi2hest

until no3 Dr Saleh )ddin Ahmed& former 2o%ernor of the Ban2ladesh Bank& said that the

initiati%e of the central $ank to increase ? 3as not #ro#er and 3as not a timel* ste#. He

said that the reason 3as that in Decem$er& the $anks ad8ust their entire *earQs transaction. In

this time& the* normall* dis$ursed less amount of credit and collected 2reater amount of

de#osits& he stated.

As a result& their $alance sheet remained in 2ood sha#e& he said. But as ? rate 3as

increased at that #articular time& $anks had to kee# their de#osited mone* 3ith the central

$ank on mandator* $asis& he stated. He said that the result had $een as it 3as #redicted.

Accordin2 to the anal*sts& the central $ank has to take res#onsi$le decisions for 2ettin2 rid of

this situation occurred in the $ankin2 sector. (ther3ise the* are antici#atin2 that the crisis in

the $ankin2 sector 3ill ha%e a ne2ati%e im#act on the o%erall econom*.

7: +3 3IS+/!2 /9 DBBL

Dutch-Ban2la Bank 5imited is a $rainchild of its chairman Mr. Mohammed Shaha$uddin

Ahmed. He dreamed it lon2 $ack& 3hen he had $een tr*in2 to arran2e fund for 'ami8uddin

'e7tile Mills 5imited


22/80



$ankin2 #ro8ect in 1,. Mr. 0roosman & a $rilliant officer of GM( %isited Ban2ladesh and

3rote to Mr. G. J. Smit& De#ut* Mana2in2 Director of GM( a$out Mr. Ahmeds #ro#osal.

GM( sent fact findin2 terms that initiall* res#onded ne2ati%el* and commented that is little

sco#e in Ban2ladesh to float a $ankin2 $usiness. But Mr. Ahmed dont 2i%e u#& rather he

started e7#lorin2 more %i2orousl*. At last Mr. 6. H. J. 0root of small scale de#artment of

GM( in his letter dated Decem$er !E& 1 res#onded #ositi%el* indicatin2& Small

6nter#rises De#artment of GM( is in a #osition to finance intermediar* $ank@ and

accordin2l* asked for a $usiness #lan. In the *ear 1"& Ban2ladesh Bank in their letter no.

DB(D


23/80



kind in Ban2ladesh. It $elie%es in to2etherness 3ith its customers& in its march on the road to

2ro3th and #ro2ress 3ith ser%ices. 'he* focus on trust customer to $ank. 'o achie%e the

desired 2oal& it has intention to #ursuit of e7cellence at all sta2es 3ith a climate of continuous

im#ro%ement. Because it $elie%es& the line of e7cellence is ne%er endin2. It also $elie%es that

its strate2ic #lan and $usiness net3orkin2 3ill stren2then its com#etiti%e ed2e o%er in ra#idl*

chan2in2 com#etiti%e en%ironment. Its #ersonali/ed 4ualit* ser%ices to the customers 3ith the

trend of constant im#ro%ement mi2ht $e cornerstone to achie%e its o#erational success.

7? BUSI5SS 43IL/S/432

'he DBB5s cor#orate #hiloso#h* is to $uild its non-funded face and commission income

stream& thus reducin2 its reliance on interest income alone. B* #ro%idin2 a one 3indo3

ser%ice to its customers- the Bank is committed to $ein2 a so#histicated& #rominent and

#rofessional institution. Durin2 the first fi%e *ears Dutch Ban2la Banks strate2* 3as focused

on continuin2 in #ro%ident of internal #rocedures and o#eratin2 structures& to ha%e a 2reater

control on the 4ualit* of its $usiness and to #ro%ide $etter mana2ement direction.

DBB5s focus is to #ro%ide one counter ser%ice to its clients co%erin2:

?ommercial Bankin2


24/80



C3#4+!-+3!

G5!#L B#5I5G S!1IC /9 DBBL

Page 24


25/80



86 #B/U+ +3 DBBL L43#5+ !/#D B!#5C3

Dutch-Ban2la 6le#hant oad Branch is located at 11,&Dr. Kudrat-6-Khuda oad& 6le#hant

oad& Dhaka-1!". 0eneral $ankin2 is the startin2 #oint of all the $ankin2 o#erations.

0eneral $ankin2 is the front-side $ankin2 ser%ice de#artment. It #ro%ides those customers

3ho come fre4uentl* and those customers 3ho come one time in $ankin2 for en8o*in2

ancillar* ser%ices. In some 2eneral $ankin2 acti%ities& there is no relation $et3een $anker and

customers 3ho 3ill take onl* one ser%ice from $ank. 6%er* da* it recei%es de#osits from the

customers and meet s their demand for cash $* honorin2 che4ues. It o#ens ne3 accounts&

remit funds& issues $ank drafts and #a* orders etc. Since $ank is confined to #ro%ide the

ser%ices e%er* da*. 0eneral $ankin2 is also kno3n as retail $ankin2. (n the other hand&

there are some customers 3ith 3ho $ank are doin2 its $usiness fre4uentl*

87 L/C#+I/5 /9 L43#5+ !/#D B!#5C3

Address:11,&Dr. Kudrat-6-Khuda oad&

6le#hant oad& Dhaka-1!"

Phone No :


26/80



88 G5!#L B#5I5G #C+I1I+IS

0eneral $ankin2 is the startin2 #oint of all the $ankin2 o#erations. It is the de#artment& 3hich

#ro%ides da*-to-da* ser%ices to the customers. 6%er* da* it recei%es de#osits from the

customers and meets their demand for cash $* honorin2 che4ues. It o#ens ne3 accounts&

close accounts& reacti%e accounts& and counsels for the ne3 de#ositor* accounts. It also remits

funds& transfers funds $* #a* order and eas* #a*. Since $ank is confined to #ro%ide the

ser%ices e%er*da* 2eneral $ankin2 is also kno3n as retail banking.@

Account o#enin2 section

emittances Pa*-(rder


27/80



a2ainst such de#osit. 'here are t3o facilities for the #erson 3ho o#ens a current account.

'he* are:

(%erdraft facilit*

?ollection of check transfer of mone* renderin2 a2enc*& 2eneral utilit* ser%ice.

A #erson can o#en a current account or an* entit* the entr* can $e a #artnershi# firm& 5td&

com#an*& #ro#rietorshi# firm& association& clu$s etc. for o#enin2 a current ac of the a$o%e&

the re4uirements and ste#s& 3hich are follo3ed $* this $ranch are the follo3in2

9or a erson*

'here is an indi%idual a##lication from for o#enin2 #ersonal current account. 'he #erson&

3ho 3ants to o#en this t*#e of ac& is said to fulfill the follo3in2 re4uirements:

Name& fathershus$ands name

(ccu#ation

Mandate in 3ritin2

Declaration of nominee< Nominee should $e first $lood=

5etter of introduction

Introducer S#ecimen si2nature

'3o co#ies of #ass#ort si/e #hoto2ra#hs

Initial de#osit of 'k 1!!!.

9or ;oint stock comanies) #ssociation) Clu(s etc*

In case of o#enin2 a current ac of 8oint stock com#anies& association& clu$s etc& the follo3in2

re4uirements are said to fulfill: 'rue co#ies of certificate of incor#oration or re2istration

'rue co#ies of certificate of commencement of $usiness


28/80



'rue co#ies of resolution of the $oard of Directors of Mana2in2 committee0o%ernin2

$od*& re2ardin2 conduct of ac.

?ertificate list containin2 names and si2nature of Directors(fficer $earers.

9or 4artnershiE4rorietorshi Comany*

'o o#en a current ac on the name of an* #artnershi# or #ro#rietorshi# com#an*& the

follo3in2 documents are re4uired:

Gilled u# a##lication from statin2 a$out the name and address of the firm.

Partnershi# deed.

'rade license.

Introducer Si2nature $oth form and #ass#ort si/e #hoto.

'3o co#ies of #hoto2ra#h.

6ndorsement of an ac holder on the same $ranch.

)ndertakin2 declaration a$out the #artnershi# is taken $* the $ank in a 3rite #a#er

< for #ro#rietorshi# firm=

9or u(lic and rivate limited comany*

'he documents re4uired to o#en a current ac 3ill $e:

?o#* of certificate of incor#oration or re2istration& trade license.

?o#ies of the ?ertificate of Business.

'rue co#* of memorandum of association and articles association a$ide $* the la3.

'rue co#* of resolution of the $oard of Directors Mana2in2 Directors 0o%ernin2

Bod* re2ardin2 conduct of the ac.

?ertificate list containin2 names and si2nature of Directors(fficer $earers.

In order to o#en an account& the customer is first of all asked to fill u# the a##lication

form 2i%en from the $ank. 'he $ank re4uires fe3 documents of the client due to the

#rocedure& such as #ro#osal for o#enin2 an account& name and full address&

occu#ation.

Saving #ccount /ening*

Page 28


29/80



A sa%in2 is meant for the #erson of the lo3er and middle classes 3ho 3ishes to sa%e a #art of

their income to meet their future needs and intend to earn an income from their sa%in2.

0enerall* DBB5 offers 9 on interest rate of sa%in2s account. A #erson cans transaction

easil* da* to da* and sa%e their mone* to the $ank.

'he Procedure of Sa%in2s Account (#enin2 is as follo3s:

'he $ank offers a reasona$le rate of interest.

'he necessar* ste#s for o#enin2 a sa%in2 ac.

Names and Addresses of the #art*.

(ccu#ation.

?o#* of utilit* $ills most recent

Gathers Hus$ands name

Mandate in 3ritin2.

Declaration of nominee


30/80



!euirement for oening Fcel #EC

A##licants t3o co#ies of #ass#ort si/e #hoto2ra#hs from indi%idual are taken.

A##licants must su$mit their citi/enshi# certificates: %alid #ass#ort or NID co#* or

S.S.? re2istration card.

Student ID card coy

Introducers si2nature and accounts num$er and A? name %erified $* le2al officer.

Nominee name& NID card& si2nature and #hoto2ra#h one co#*.

Nominee must $e first $lood.

A##licant also su$mit a co#* of utilit* $ill that means 6lectricit* $ill or 0as $ill or

Cater $ill for mention the #resent address.

If )I) student the utilit* $ill co#* is not needed.

4oHer #EC*

'he Po3er account also name is called salar* account .'he #erson 3ho are in%ol%ed 3ith

ser%ice the* can o#en salar* or #o3er account. 6le#hant oad Branch the* are linked u# 3ith

different or2ani/ation to o#en a #o3er account. 'he* are also linked u# 3ith )I). 'he code

of #o3er account is 1!.!euirement for oening 4oHer #EC

A##licants t3o co#ies of #ass#ort si/e #hoto2ra#hs from indi%idual are taken.

6m#lo*ees DBB5 ID card co#*

A##licants must su$mit their citi/enshi# certificates: %alid #ass#ort or NID co#* or

S.S.? re2istration card.

9orHarding letter must (e needed

Introducers si2nature and accounts num$er and A? name %erified $* le2al officer.



887 !emittances %Local and 9oreign'

'he 2eneral $ankin2 of 6le#hant road $ranch has included the emittance section .In this

section the officer #ro%ide mone* to the customers. 'he total amount of mone* 3hich is

comes from forei2n countr*. 'here are some issues that are 2i%en $elo3:

Page 30


31/80



Demand Draft


32/80



Issuin2 $ranch re4uests another $ranch to #a* s#ecified mone* to the s#ecific #a*ee on

demand (y +elegrah E+elehone. Pa*ment is made from ordered $ranch. '' can $e remit

an*3here in the countr*. Bank char2e a commission #lus tele#hone char2e. Ho3e%er this

ser%ice is a%aila$le onl* for a limited num$er of customers. Chere the remitter desires the

$anker to remit the funds to the #a*ee instead of #urchasin2 a draft himself& the $anker does it

throu2h a Mail 'ransfer Ad%ice. 'he transfer is so called as the ad%ice is dis#atched to the

#a*in2 office $* ordinar* mail. 'he #a*ee must ha%e an account 3ith the #a*in2 office as the

amount remitted in such a manner& is meant for credit to the #a*ees account and not for cash

#a*ment.

+elegrahic +ransfer

'' is affected $* tile $ank throu2h tested tele7 messa2e attested $* secret check Si2nal on

recei#t of 3hich tile #a*in2 officer #a* the amount to the #a*ee in cash throu2h a tele2ra#hic

#a*ment order or credit his account& as the case ma* $e.

DBB5 follo3s the follo3in2 #rocedures:

i= 'he customer de#osits mone* 3ith DBB5 to $e sent.

ii= 'he customer o$tains a cash memo containin2 '' serial num$er.

iii= '' serial num$er& notif*in2 #art name is mentioned in the tele7 messa2e.

i%= 'he 'ele7 De#artment confirms transmission of the tele7.

+ransfer of account

In this section the Account holder can transfer hisher account from one $ranch to another

$ranch. Gor this transfer of account he she must a##l* to the mana2er of the $ranch 3here

he is maintainin2 his account. 'hen the mana2er sends a re4uest to the mana2er of the $ranch

3here the account holder 3ants to transfer to his account. Cith his re4uest& he sends ori2inal

co#* of account o#enin2 a##lication and s#ecimens si2nature sheet and the #hotoco#* of

a##lication for transferrin2 the account 3ith the $alance remained in the account.

888 Card) Sms #lert) Cheue Book Section

In this section the officer #ro%ide the card to the customers. ?ustomers can $e ne3 account

holder so after the o#enin2 account a customer 2ets the card instantl*. 'here are some issues

that are in%ol%ed in this section:

Page 32


33/80



Pro%idin2 ne3 A'M card

'o 2i%e ne3 ?he4ue $ook

'o 2i%e ne3 Pin Num$er

SMS alert

Internet Bankin2

Cheue (ook

'o facilitate 3ithdra3als and #a*ment to third #arties $* the customer& DBB5

#ro%ides che4ue $ook to the customer ?D account che4ue $ook contains ! and "! leaf& 3hile SB account che4ue $ook

has 1! leafsBank maintains a se#arate re2ister in this re2ard e4uisition sli# is #ro%ided to the customer in che4ue $ook to issue ne3 che4ue

$ook A ne3 che4ue $ook should $e deli%ered onl* to the account holder (ther3ise&

authori/ation letter is needed from client for deli%er* to other #erson

Issuance of Cheue Book*

0eneral Ser%ice Di%ision of Head (ffice 3ill su##l* re4uired ?he4ue Books to $ranches

a2ainst their re4uisition from time to time. (n recei#t of these che4ue $ooks other securit*

stationer*& the $ranch shall record the stock in the Securit* Stationer* Stock e2ister. Chile

recordin2 the stock& the Prefi7 num$er shall in%aria$l* $e mentioned.

A fe3 ?he4ue Books re4uired for current consum#tion of the De#osit De#artment

shall $e taken out from the main stock under control of an authori/ed officer. 'he

concerned issuin2 officer 3ill kee# these che4ue $ooks in a $o7 under lock and ke*

and issue the same to the clients durin2 the da*. 'he ?he4ue Books 3ill $e entered in

the ?he4ue Book Issue e2ister and $e issued to clients a2ainst their

ackno3led2ement in the re2ister. Se#arate folios 3ill $e o#ened in the ?he4ue Book issue e2ister for ?D SB S'D

account che4ue $ooks. Chen a che4ue $ook is re4uired $* a ne3 customer& the che4ue re4uisition sli# #asted

on to# of each che4ue $ook is to $e 2ot si2ned $* him. 'he officer res#onsi$le for

issuin2 che4ue $ook shall 2et the si2nature of the account holder %erified from the

officer in-char2e of the De#osit De#artment and issue the che4ue $ook to the

Page 33


34/80



customer after #uttin2 his initial in the ca2e of che4ue series su$8ect to the condition

that account o#enin2 form is com#lete in all res#ects and other3ise in-order. 'he re4uisition sli# shall $e sent to the res#ecti%e ?om#uter 'erminal for #ostin2 in

the res#ecti%e account. All su$se4uent ?he4ue Books shall $e issued a2ainst ?he4ue e4uisition Sli#s

e7tracted from the #re%ious che4ue $ooks issued to the customerO ho3e%er& the

re4uisition sli# #asted 3ith su$se4uent che4ue $ook on its first #a2e shall $e

destro*ed. 'he che4ue re4uisition sli# dul* filled in $* the customer shall $e for3arded to

che4ue #ostin2 'erminal to ascertain :

The average balance maintained by the customer

Chether #re%ious che4ue lea%es are #ro#erl* consumed. ?he4ues are not fre4uentl* returned for insufficient funds in the account.

Pa*ment of ?he4ue is not fre4uentl* sto##ed.

'he manner in 3hich the account is o#erated.

'he account is not dormant.

If an* of the defects is noticed $* #ostin2 officer& he she shall make remark on the re4uisition

sli# and for3ard it to ?ancellation (fficer 3ho 3ill decide 3hether che4ue $ook should $e

issued to the customer.

In cases& 3here the account is found in order and the #art* is kno3n& the cancellation

officer shall %erif* the si2nature on the sli# and send it $ack to che4ue $ook issuin2

officer for issuance of the same.

In case of a Dormant Account& the #art* shall call on the Mana2er #ersonall* for

identification #ur#ose. 'he Mana2er on $ein2 satisfied a$out the confides of the

a##licant shall allo3 issuance of che4ue $ook.

In case of sli2htest difference in si2nature or sus#icion aroused a$out the confides of

the #erson #resentin2 the che4ue re4uisition sli#& #ro#er in4uiries shall $e made $*

contactin2 the account holder. 'he officer must $e satisfied $efore finall* issuin2 the

che4ue $ook.

In case 3here re4uisition sli# e7tracted from a #re%ious che4ue $ook is not #resented&

e%er* #ossi$le care shall $e e7ercised to esta$lish the confides of the case& #articularl*

3hen address of a constituent has $een recentl* chan2ed and or a simultaneous

re4uest to chan2e the address is made.

Page 34


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hen Cheue Book is Lost

A 2uarantee form is taken from the account holder 3hen his $ook is lost& 3here he

indemnifies the $ank in this re2ardA ne3 re4uisition slee# is 2i%en to him for a ne3 che4ue

$ook(nl* a %er* senior officer 3ill a##ro%e the case

Crediting interest

?reditin2 interest im#lies that so for interest accrued is attached 3ith the #rinci#al amount In

#ractice of DBB5

a. GD interest is credited at the maturit* date

$. Gor SB account the creditin2 season is si7-month #eriod

c. Interest of S'D is credited after each *ear

+aF

Chate%er the amount of interest is accrued 1! ta7 is de$ited from the account at the time of

creditin2 interest.

88: Bills and clearing section

In this section the officer collect the che4ue and sent those che4ue to the Ban2ladesh $ank

house that is clearin2. ?learin2 is a s*stem $* 3hich a $ank can collect customers fund from

one $ank to another throu2h clearin2 house .?learin2 House is a #lace 3here the

re#resentati%es of different $anks 2et to2ether to recei%e and deli%er che4ue 3ith another

$anks. 'here are some t*#es of clearin2 section .'hese are as follo3s:

Clearing*

As far as safet* is concerned& customers 2et crossed che4ue for the transaction.As 3e kno3

crossed che4ue cannot $e encased from the counterO rather it has to $e collected throu2h$ankin2 channel i.e. clearin2. Gor e7am#le& a client of DBB5 Bank recei%ed a che4ue of

another $ank& 3hich is located 3ithin the clearin2 ran2eO de#osit the che4ue in his account at

DBB5 Bank. No3 DBB5 Bank 3ill credit his account and collected it. 'hou2h the amount is

credited in the customerQs account $ut he 3ill not 2et the mone* until he che4ue is honored.

+yes of Clearing

/utHard Clearing

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(ut3ard clearin2 means 3hen a #articular $ranch recei%es instrument dra3n on the other

$ank 3ithin the clearin2 /one and those instruments for collection throu2h the clearin2

arran2ement is considered as out3ard clearin2 for that #articular $ranch.

InHard Clearing*

Chen a #articular $ranch recei%es instruments 3hich on them and sent $* other mem$er $ank

for collections are treated as in3ard clearin2.

Clearing house

?learin2 House is a #lace in the ?entral Bank 3here different $anks come to settle their

interrelated lia$ilities. ?learin2 House S*stem 'he mechanism of 3orkin2 at a ?learin2

House in 2eneral is as follo3s:

6%er* ank of the localit*& 3hich is a mem$er of


37/80



88= 9D! & 4ay-/rder %4/'

A fi7ed de#osit account is re#a*a$le after the e7#ir* of a #redetermined #eriod fi7ed $* the

customer himself. 'he #eriod %aries from three months to three *ears. 'he customer ma*

o#en hisher account for different time #eriods& 3hich ma* $e for three months& si7 months&

one *ear& t3o *ears and three *ears.4ay /rder2i%es the #a*ee the ri2ht to claim #a*ment

from the issuin2 $ank. Pa*ment is made from issuin2 $ranch onl*. 0enerall* remit fund

3ithin the clearin2house area of issuin2 $ranch. Bank char2es onl* commission for this.

Ho3e%er #art* must ha%e an account 3ith the $ank& so that 3hene%er the fund refund the*


38/80



'hou2h GD is an Ac& it is somethin2 different from other ac. GD is a lon2 term de#osit.

)suall* customers are allo3ed to o#en this ac for a certain #eriod. 'he rate of interest %aries

in accordance 3ith the terms of de#osit.

!euirement for oening 9D!

A##licants one co#* of #ass#ort si/e #hoto2ra#hs from indi%idual is taken.

A##licants NID co#*.



/ening /f 9iFed Deosit #ccount %9D!'

'he de#ositor has to fill an a##lication form.

In case of a de#osit in 8oint name& DBB5 also takes the instructions re2ardin2

#a*ment of mone* on maturit* of the de#osit.

'he $anker also takes the s#ecimen si2natures of the de#ositor the date on 3hich the de#osit

3ill mature.

4remature ncashment of 9D!*

A de#ositor has the ri2ht to claim for refund of his de#osit $efore e7#ir* of the fi7ed term

thereof. Bank ma* in s#ecial consideration allo3 #remature encashment on a##lication of the

de#osit su$8ect to the under noted condition:

Gor GD 3hich are months maturit* no interest 3ill $e #a*a$le at #remature

encashment& onl* the #rinci#le amount 3ill $e refunded.

Chen #remature encashment is allo3ed of and GD 3ith tenure of o%er months&

interest 3ill $e #aid if enchased $efore e7#ir* of months at the rate of months

#rescri$ed interest rate.

Premature encashment is allo3ed of and GD 3ith tenure of o%er months& interest

3ill $e #aid if enchased $efore e7#ir* of o%er 1 months at the rate of months

Page 38


39/80



#rescri$ed interest rate and the same theor* 3ill also $e a##lica$le for #remature GD

encashment of *ears and *ears.

Short +erm Deosit*

S#ecial notice account 3hich is commonl* kno3n as short term de#osit ac 3ill kee# in the

short term led2er. 'he customer should dull* si2n ac o#enin2 form and s#ecimen si2nature

card. De#osits held in this account are #a*a$le on short notice. Normall* cor#orate $odies&

$ank and financial or2ani/ations in%est their funds tem#oraril*. No3-a-da*s& #ri%ate

indi%iduals ha%in2 sound financial means also o#en this t*#e of de#osit accounts.

?ustomers de#osit mone* for a shorter #eriod of time.

S'D account can $e treated as semi-term de#osit

S'D should $e ke#t for at least thirt* da*s to 2et interest.

'he interest offered for S'D is less than that of sa%in2s de#osit.

In #ractice& DBB5 offers ".!! rate of interest


40/80



If the instrument is lost from the #ossession of the holder& the holder is asked to fulfill the

follo3in2 re4uirements:

Part* should inform it to the $ank immediatel*O

Gurnish an Indemnit* BondO

(n fulfillin2 the a$o%e re4uirements& a du#licate GD is then issued to the

customer $* the $ank.

!eneHal of 9D!*

GD is automaticall* rene3ed 3ithin se%en da*s after the date of its maturit* if

the holder does not come to en-cash the instrument.

ene3al 3ill $e for the #re%iousl* a2reed maturit* #eriod.

88< Cash Division

?ash de#artment is the most %ital and sensiti%e or2an of the $ranch as it is deals 3ith all

kinds of cash transactions. 'his de#artment starts the da* 3ith cash in %ault. 6ach da* some

cash that is o#enin2 cash $alance are transferred to the cash officers from the cash %ault. Net

fi2ures of this cash recei#ts and #a*ments are added to the cash $alance. 'he fi2ure is called

closin2 $alance. 'his closin2 $alance is then added to the %ault. Chen the %ault e7ceeds thelimit& the e7ceed mone* send to #rinci#al office and 3hen there is found an* shorta2e the

$ranch re4uisites the amount from the Princi#al (ffice. In m* $ranch& there are ei2ht

em#lo*ees in cash and ?hief ?ash (fficer Mana2er monitors them.

Cash !eceits

Chen the client de#osited amount in the $ank& the cash officer follo3 the follo3in2 common

#recautions:

?heck and count the recei%ed cash

Make sure the amount in 3ords and num$ers in the de#osit sli# are same

?heck account title and account num$er

Cash 4ayment

Chen the client #ress the cash che4ue then the cash officer follo3 the follo3in2 common

#recautions:

'he date of the che4ue is not crossed the si7 month

Page 40


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Post dated che4ue

'aka in 3ords and and fi2ure are same

Balance in the account is a%aila$le

Si2nature is matched 3ith the card si2nature or account.

8: S+!#+GIC DCISI/5S /9 DBBL

/nline Banking*

Dutch-Ban2la Bank 5imited no3 usin2 localit* de%elo#ed Branch Bankin2 soft3are in

almost all its $ranches. But 3ith a %ie3 to #ro%ide 3orld class $ankin2 facilities to its

customer& DBB5 has undertook u#on an am$itious #ro2ram $* in%estin2 'k."!.!! million

for ac4uirin2 a state-of-the-art total automation #ro8ect 3hich DBB5 claimed to said as

'rul* (n 5ine Bankin2@. 'he decision of ac4uirin2 the automation #ro2ram has $een $ased

on the Banks o3n core com#etence in its I' di%ision& reinforced 3ith the site %isit of $anks

hi2hest mana2ement of similar installations of different $anks in India and Sri 5anka.

DBB5 choose /!#CL 9L0CUB$ from i-fle7 solution@& a 3orld leader in

technolo2* solutions for the financial ser%ices industr*& 3hich 3ill ena$le DBB5 to render a

full* automated real time an*-3here an*-$ranch $ankin2 ser%ices& co%erin2 9 hours a da*

and " da*s a *ear. As #art of the on-line $ankin2 #ro2ram& internet $ankin2& DBB5 Ne7us

De$it ?ard& DBB5 Maestro cirrus De$it ?ard and DBBl ?redit card 3ill also $e launched

shortl* and all #re#arations re2ardin2 this are in final sta2e.

'o fulfill this decision& DBB5 has set-u# a most modern and lar2est state of the art data centre

and ha%e assem$led a core 2rou# of com#etent I' #rofessionals and other #ersons. 'hese

#ersons ha%e under2one a t3o-month e7tensi%e trainin2 course in Ban2alore and Mum$ai&

India on G56T?)B6. 'he Data ?entre 3ill also ha%e an on-line Diaster eco%er* site


42/80



Deosits roduct Loan 4roducts ServicesInvestment

E 9inance

?urrent De#osit Secured o%erdraft?redit ?ardSer%ices

?or#orateGinance

Sa%in2s De#osit 0eneral 5oan De$it ?ardIndustrialGinance

Short 'erm De#osit House $uildin2 5oan emittancePro8ectGinance

'erm De#osit Staff 5oan Pa* order

Gorei2n ?urrenc*De#osit

'rans#ort 5oan Master card

Sa%in2s Scheme5oan A2ainst 'rustecei#t

Fisa ?ard

67#orterQs G? De#osit


43/80



SMS alerts for the customers. 'he* can al3a*s ena$le the o#tions $* 8ust fillin2 the ?ustomer

(#tions Gorm and an*time can disa$le it also. 6na$lin2 the internet $ankin2 and or the alert

$ankin2 3ill cost the customers a minimum cost #er *ear 3hich is afforda$le for the

customer.

8> #+M 5+/!EDBBL 50US 4#!+ICI4#+I5G B#5S

DBB5 maintains its o3n net3ork and automation

3ithout the in%ol%ementassistance of an* third

#art* com#anies. Access to A'M ser%ices fee is

BD' ! annuall* for DBB5 clients. Partner

$anks are char2ed a su$sidi/ed 'k. 1!& althou2hthe end #rice for the customer ma* $e hi2her due

to the e7tra char2es le%ied $* the #artner $ank. (n the di2ital da*


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De(it Cards

DBB5s card issuin2 #ortfolio is enriched 3ith $oth de$it and credit cards of %arious card

$rands. DBB5 is #ioneer in issuin2 de$it cards in Ban2ladesh. 'he first de$it card of the

countr*& the Ne7us de$it card 3as issued on Au2ust 19& !!9. Since then DBB5 has $een the

market leader 3ith the lar2est de$it card $ase. DBB5 issues $oth 6MF com#liant multi-

a##lication ena$led smart card and traditional ma2netic stri#e PIN-#rotected de$it cards. 'he

MF de$it card consisted of D*namic Data Authentication


45/80



an* FISA card acce#tin2 P(S terminal or A'M. Since this card is 6MF com#liant chi# $ased

card& the transactions of this card are more secured 3hich #rotects cardholders $* #re%entin2

co#*in2 of card data and ensures a lia$ilit* shift $enefit 3hich #rotects cardholders in non-

6MF terminals.

Issuance 9ee %6st 2ear'*)SD 1E."


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has a ma7imum of "! da*s interest free


47/80



su##lementar* card at a$solutel* free of cost. Moreo%er& no cash ad%ance fee is a##lica$le for

cash 3ithdra3al at Dutch Ban2la Bank A'Ms.

Credit Limit* BD' 1!!&!!! to BD' "!!&!!!

1irtual Card

Students #ursuin2 hi2her education andor scholarshi#s a$road are often re4uired to #a* the

fees and char2es online usin2 a credit card. Students are also re4uired to take %arious

e7aminations such as I65'S& '(6G5& 0MA'& 06 - all of 3hich re4uire them to re2ister

online for #a*in2 fees and char2es 3ith a credit card. Most students and their 2uardians

ho3e%er are not eli2i$le to ha%e a credit card from a $ank and thus do not ha%e one. 'o hel#

them& DBB5 introduced Firtual ?ard for the first time in Ban2ladesh in !11. 'his is not a

#lastic card - it is a #iece of #a#er inside a closed en%elo# 3hich carries %alid card num$er&

e7#ir* date and ?FF?F? 3hich can $e used for some s#ecific internet merchants related to

educational certifications authorities. 'he %irtual card is distri$uted from DBB5 $ranches

and the %alue is fi7ed as #er the re4uirement of the students. 'he DBB5 Firtual ?ard has

$ecome %er* #o#ular amon2st students.

Internet ayment

(n June !1!& Dutch Ban2la Bank 5td. announced to allo3 internet #a*ments s*stem.

)sin2 their Internet Pa*ment 0ate3a* merchants 3ill $e a$le to char2e their customersQ Fisa&

Masters& DBB5 Ne7us and Maestro cards. An* FisaMaster?ard cardholder


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ligi(ility

A##licants must $e #assed SS? or 64ui%alent e7am in !1. A##licants must ha%e 0PA ".!!

for under cit* cor#oration area SchoolInstitute& 0PA 9.E! for under district area

SchoolInstitute and 0PA 9."! for others remote area students


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Dhaka )ni%ersit*Qs lar2est e%er donation from a #ri%ate com#an*. 'he research center& 3hich

3ould $e the first of its kind in Ban2ladesh& 3ill $e su#er%ised $* reno3ned teachers&

scholars and researchers. It 3ill also a3ard scholarshi# to researchers and scholars at home

and a$road.

C3#4+!-9/U!

Page 49


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C!DI+ M#5#GM5+ /9 DBBL

Page 50


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:6 D9I5I+I/5 /9 C!DI+

'he 3ord credit comes from the 5atin 3ord ?redo meanin2 I $elie%e. It is a lenderQs trust in a

#ersonQs firmQs or com#an*Qs a$ilit* or #otential a$ilit* and intention to re#a*. In other 3ords&credit is the a$ilit* to command 2oods or ser%ices of another in return for #romise to #a* such

2oods or ser%ices at some s#ecified time in the future. Gor a Bank& it is the main source of

#rofit and on the other hand& the 3ron2 use of credit 3ould $rin2 disaster not onl* for the $ank

$ut also for the econom* as a 3hole.

'he o$8ecti%e of the credit mana2ement is to ma7imi/e the #erformin2 asset and the

minimi/ation of the non-#erformin2 asset as 3ell as ensurin2 the o#timal #oint of loan andad%ance and their efficient mana2ement. ?redit mana2ement is a d*namic field 3here a certain

standard of lon2-ran2e #lannin2 is needed to allocate the fund in di%erse field and to minimi/e

the risk and ma7imi/in2 the return on the in%ested fund.

?ontinuous su#er%ision& monitorin2 and follo3-u# are hi2hl* re4uired for ensurin2 the timel*

re#a*ment and minimi/in2 the default. Actuall* the credit #ortfolio is not onl* constituted the

$anks asset structure $ut also a %ital factor of the $ankQs success. 'he o%erall success in credit

mana2ement de#ends on the $anks credit #olic*& #ortfolio of credit& monitorin2& su#er%ision

and follo3-u# of the loan and ad%ance.

:7 9#C+/!S !L#+D I+3 C!DI+

isk

'ime

Interest rate

Securit* or ?ollateral

(#eratin2 67#ense

5e2al ?onsiderations

Inflation

Ginance ?har2e

Page 51


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88 C!DI+ 9L/ /9 DBBL

?redit isk Mana2ement is $asic to risk mana2ement and controllin2& as it is the ma8or risk

factor in most $ank $usiness. 'herefore& a $ank should assess the de2ree of risk associated 3ith

each loan and its #rofita$ilit*. In this connection #rior assessment of and follo3 u# on a loan

transaction constitute essential in2redients of the credit risk control #rocess. An in-de#th

anal*sis of the $orro3er financial conditions& e7#ected usa2e of funds& a$ilit* to re#a*&

3illin2ness to re#a* and sources of re#a*ment all to2ether constitute ste# one in the risk control

#rocesses. ?ontinuous su#er%ision& monitorin2 and follo3-u# are hi2hl* re4uired for ensurin2

the timel* re#a*ment and minimi/in2 the default. Actuall* the credit #ortfolio is not onl*

constituted the $anks asset structure $ut also a %ital factor of the $ankQs success. 'he o%erall

success in credit mana2ement de#ends on the $anks credit #olic*& #ortfolio of credit&

monitorin2& su#er%ision and follo3-u# of the loan and ad%ance.

:: +24S /9 L/#5S #5D #D1#5CS /99!D B2 DBBL

'he makin2 of loan and ad%ance is al3a*s #rofita$le to a $ank. As the $ank mo$ili/es sa%in2s

from the 2eneral #eo#le in the form of de#osit& the most im#ortant task of it is to dis$urse the

said de#osit as loan or ad%ance to the mass #eo#le for the de%elo#ment of commercial&

industrial 3ho are in need of fund for in%estment. 5ike other $usiness firm& the main #ur#ose

of the commercial $ank is to make #rofit. 'he #rofita$ilit* of the $anks de#ends on the

efficient manner and a%enues in 3hich the resources are em#lo*ed. DBB5 has made so far

efficient use of the de#osit and has the classified rates under control. 'he Bank dis$urses loan

in different form. It %aries in #ur#ose 3ise& mode 3ise and sector 3ide. 'he %arieties used $*

DBB5 are $riefl* descri$ed $elo3 3ith the common terms and condition and #erformance in

each mode.

Classification of #dvance* Commercial & Industrial Credit*

1. ?or#orate ?redit Scheme.. etail ?redit Scheme

::6 Cororate Credit Scheme

'he $ank is entrusted 3ith the res#onsi$ilit* of #ro%idin2 short& medium and lon2 term loans

and other financial assistance for #romotion of industrial sectors. 'here are t*#es of

Page 52


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cor#orate credit scheme:

!ash !redit

(%er Draft

Secured (%er draft

::7 !etail Credit Scheme*

'he $ank also #ro%ides retail loan to indi%idual customer. 'here are different t*#es of retail

loan 3hich hel#s customer to fulfill their dream. 5ike car loan& educational loan& tra%el loan

etc

:= L5DI5G 4/LICIS /9 DU+C3-B#5GL# B#5 L+D

A loan #olic* 2i%es loan officers& relationshi# mana2ers and the BankQs mana2ement s#ecific

2uidelines in makin2 indi%idual loan decisions and in sha#in2 the BankQs o%erall loan

#ortfolio. (ne of most im#ortant 3a*s a Bank can make sure its loans meet re2ulator*

standard and are #rofita$le is to esta$lish a 3ritten loan #olic*. Dutch-Ban2la Bank 5td. also

has a 2ood loan #olic* and the most im#ortant elements of the #olic* arc stated $elo3:

A 2oal statement for the BankQs loan #ortfolio


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A statement of 4ualit* standards a##lica$le to all loans.

A statement of the #referred u##er limit for total loans outstandin2


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Ste-8

If Ban2ladesh Bank sends #ositi%e ?IB re#ort on that #articular $orro3er and if the Bank

thinks that the #ros#ecti%e $orro3er 3ill $e a 2ood one& then the $ank 3ill scrutini/e the

documents. e4uired documents are:

In case of cor#orate client& financial documents of the com#an* for the last three to

fi%e *ears. If the com#an* is a ne3 one& #ro8ected financial data for the same

duration is re4uired. Personal net 3orth of the $orro3er


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Ste->

'he $ranch starts #rocessin2 the loan at this sta2e. Based on the anal*ses


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After issuin2 the sanction ad%ice& the $ank 3ill collect necessar* char2e documents.

?har2e documents %ar* on the $asis of t*#es of facilit*& t*#es of collateral.

Ste-67

Ginall* loan is dis$ursed $* the $ranch throu2h a loan account in the name of the $orro3er

and monitorin2 of the loan starts formall*.

+here must (e a deth study on the folloHing oints*

"hen the loan is to be given#

Ho3 the loan is to $e 2i%enO

Chat ma* ha##en after dis$ursement of the loanO

0enerall* 3hat ha##ens


58/80


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Caacity*'he customer re4uestin2 credit must ha%e the authorit* to re4uest such and

the le2al standin2 to si2n a $indin2 loan a2reement.

Cash*'he $orro3er should ha%e the a$ilit* to 2enerate enou2h cash flo3 to re#a* the

loan. 'his cash flo3 can $e 2enerated from sales or income from the sales or income&

from the sale of li4uidation of assets or funds raised throu2h de$t or e4uit* securities.

Collateral*'he $orro3er must #ossess ade4uate net 3orth or enou2h 4ualit* assets

to #ro%ide ade4uate su##ort for the loan. 'he %alue of the collateral securit* must

co%er the loan e7#osure.

Conditions*'he recent trend of $orro3erQs line of 3ork or industr* must $e taken into

considerations $* the lender.

Control*'he lender should $e careful a$out 3hether chan2es in la3 and re2ulations

could ad%ersel* affect the $orro3er and 3hether loan re4uest meets the BankQs and

re2ulator* authoritiesQ standards for loan 4ualit*.

:>: Collecting CIB !eort from Bangladesh Bank

After recei%in2 the a##lication for credit line& Bank sends a letter to Ban2ladesh Bank for

o$tainin2 a re#ort from there. 'his re#ort is called ?IB


60/80



#resented in a credit a##lication that ori2inates from the elationshi# Mana2er& and is

recommended $* Branch ?redit ?ommittee > !isk Grading

All Banks should ado#t a credit risk 2radin2 s*stem. 'he s*stem should define the risk #rofile

of $orro3erQs to ensure that account mana2ement& structure and #ricin2 are commensurate 3ith

the risk in%ol%ed. isk 2radin2 is a ke* measurement of a BankQs asset 4ualit*& and as such& it is

essential that 2radin2 is a ro$ust #rocess. All facilities should $e assi2ned a risk 2rade. Chere

deterioration in risk is noted& the isk 0rade assi2ned to a $orro3er and its facilities should $e

immediatel* chan2ed. Borro3er isk 0rades should $e clearl* stated on ?redit A##lications.

:>? 4ro,ect #raisal

It is the #re-in%estment anal*sis done $* the officer $efore a##ro%al of the #ro8ect. Pro8ect

a##raisal in the $ankin2 sector is needed for the follo3in2 reasons:

1. 'o 8ustif* the soundness of an in%estment

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. 'o ensure re#a*ment of $ank finance

. 'o achie%e or2ani/ational 2oals

9. 'o recommend if the #ro8ect is not desi2ned #ro#erl*

:>@ 3ead /ffice #roval

'he res#ecti%e officer of Head (ffice a##raises the #ro8ect $* #re#arin2 a summar* named

'o# Sheet or 67ecuti%e Summar*. 'hen he sends it to the Head (ffice ?redit

?ommittee


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9ig*

Loan

araisal and aroval rocess:>66 Documentation of loans and advances

In s#ite of the fact that $anker lends credit to a $orro3er after in4uirin2 a$out the character&

ca#acit* and ca#ital of the $orro3er& he must o$tain #ro#er documents e7ecuted from the

$orro3er to #rotect him a2ainst 3illful defaults. Moreo%er& 3hen mone* is lent a2ainst some

securit* of some assets& the document must $e e7ecuted in order to 2i%e the $anker a le2al

and $indin2 char2e a2ainst those assets. Documents contain the #recise terms of 2rantin2

loans and the* ser%e as im#ortant e%idence in the la3 courts if the circumstances so desire.

'hat is 3h* all a##ro%al #rocedure and #ro#er documentation shall $e com#leted $efore the

dis$ursement of the facilities. 'he documents for loans and ad%ances can $e classified into

t3o cate2ories& namel* ?har2e documents > Securit* documents.

:>67 Dis(ursement

After %erif*in2 all the documents the $ranch dis$urses the loan to the $orro3er. A loan

re#a*ment schedule is also #re#ared $* the $ank and 2i%en to the $orro3er.

:>68 9olloH-u

Page 62


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After the dis$ursement of the loan $ank officials time to time monitor the loan $* #h*sical

o$ser%ation of the acti%ities of the #art*. It is done in the follo3in2 manner.

!onstant su$ervision

Corkin2 ca#ital assessment

Stock re#ort anal*sis.

:>6: Loan classifications

1.Unclassified*e#a*ment is re2ular

. Su(standard* e#a*ment is irre2ular or sto##ed $ut has reasona$le #ros#ect ofim#ro%ement.

.Dou(tful De(t*)nlikel* to $e re#aid $ut s#ecial collection efforts ma* result in #artialreco%er*.

. BadEloss*Fer* little chance of reco%er*.

:>6= Credit Monitoring

Monitorin2 is a #rocess of takin2 case of loan cases starts from the selection of the $orro3er

and remains li%e throu2hout the life of a loan. 'o minimi/e credit losses& monitorin2

#rocedures and s*stems should $e in #laces that #ro%ide an earl* indication of thedeterioratin2 financial health of a $orro3er. At a minimum& s*stems should $e in #lace to

re#ort the follo3in2 e7ce#tions to rele%ant e7ecuti%es in ?M and M team:

Past due $rinci$al or interest $ayments% $ast due trade bills%

account e&cesses% and$reach of loan co%enantsO 5oan terms and conditions are monitored& financial statements are recei%ed on

a re2ular $asis& and an* co%enant $reaches or e7ce#tions are referred to ?M

and the M team for timel* follo3-u#. 'imel* correcti%e action is taken to address findin2s of an* internal& e7ternal

or re2ulator ins#ectionaudit. All $orro3er relationshi#sloan facilities are re%ie3ed and a##ro%ed throu2h

the su$mission of a ?redit A##lication at least annuall*. '3o #ossi$le

solutions to minimi/e the credit loss:

:>6< arly #lert 4rocess

Des#ite a #rudent credit a##ro%al #rocess& loans ma* still $ecome trou$led. 'herefore& it is

essential that earl* identification and #rom#t re#ortin2 of deterioratin2 credit si2ns $e done to

Page 63


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ensure s3ift action to #rotect the BankQs interest.

:>6> Credit !ecovery

?ommercial Banks sanction loan to different cate2ories of $orro3ers for %arious #ur#oses.

Before sanctionin2 of loans and ad%ances follo3 u#

is a##lied and #ro#er treatment is 2i%en as and 3hen #ro$lem arises. 'he )Qs #rimar*

functions are:

Determine Account Action Planeco%er* Strate2*

Pursue all o#tions to ma7imi/e reco%er*& includin2 #lacin2 customers into

recei%ershi# or li4uidation as a##ro#riate. 6nsure ade4uate and timel* loan loss #ro%isions arc made $ased on actual and

e7#ected losses. e2ular re%ie3 of 2rade or 3orse accounts.

'he loan classification #rocedure for all t*#es of loan is 2o%erned $* the 2uidelines

contained in BPD ?ircular no 1 dated !.1., issued $* Ban2ladesh Bank and

su$se4uentl* re%ised #artiall* throu2h BPD ?ircular no and 1! dated 19.!".!!!&

Accordin2 to this circular if an* $orro3er fails to re#a* his amount or installment 3ithin the

follo3in2 time #eriod then it 3ill fall under the follo3in2 classification status.

Page 64


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66/80



=6 !IS

V isk is the #ro$a$ilit* that the reali/ed return 3ould $e different from the

antici#atede7#ected return on in%estment.

V isk is a measure of likelihood of a $ad financial outcome.

V All other thin2s $ein2 e4ual risk 3ill $e a%oided.

V All other thin2s are ho3e%er not e4ual and that a reduction in risk is accom#anied $* a

reduction in e7#ected return.

V 'he uncertainties associated 3ith risk elements im#act the net cash flo3 of an*

$usiness or in%estment. )nder the im#act of uncertainties& %ariations in net cash flo3

take #lace. 'his could $e fa%ora$le or un-fa%ora$le. 'he un-fa%ora$le im#act is QISKQ of

the $usiness.

=7 !ISS I5 B#5I5G BUSI5SS

Bankin2 $usiness is $roadl* 2rou#ed under follo3in2 ma8or heads from isk

Mana2ement #oint of %ie3:

1. 'he Bankin2 Book

. 'he 'radin2 Book

. (ff-Balance-sheet 67#osures

=76 Business !isk

Business isk is concerned 3ith 3hether the $orro3in2 com#an* 3ould fail to 2enerate

sufficient cash out of $usiness to re#a* the loan. Business isk& the main com#onent of

lendin2 risk& consists of the Industr* isk and the ?om#an* isk.

A.Industry !isk: Due to some e7ternal reasons a $usiness ma* fail and the risk& 3hich

arri%es from e7ternal reasons of the $usiness& is called industr* risk. It has t3o

com#onents:

1=Suly risk: It indicates the risk of failure of the $usiness due to disru#tion in

the su##l* of in#uts resultin2 from their #rice& 4uantit* or 4ualit*. It is difficult to o$tain

ri2ht 4ualit* of su##lies& 3hen it is difficult to o$tain re4uired 4ualit* of ra3 materials

and 3hen there is a shorta2e of necessar* skilled la$or.

7' Sales risk: It is another com#onent of industr* risk. Chen the $usiness fails for

disru#tion in sales& this t*#e of risk 3ould 2enerate. Sales ma* $e disru#ted due to

chan2es in market si/e& increased com#etition& chan2es in re2ulations& losin2 of a sin2le

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lar2e customer etc.

B.Comany !isk: 6ach and e%er* com#an* holds a #osition 3ithin an industr*. 'his

#osition is %er* much com#etiti%e. Due to 3eakness in the com#an*Qs #osition in its

industr*& a com#an* ma* fail and the risk of failure is called com#an* #osition risk. It

de#ends on com#an* #erformance.

=77 Management risk:

If the mana2ement of a com#an* fails to e7#loit the com#an*Qs #osition effecti%el*& the

com#an* can fail to and this risk of failure is called mana2ement risk.

=78 Security !isk*

Securit* isk is the risk that the reali/ed %alue of the securit* does not co%er the e7#osure of

loan. 67#osure means #rinci#al #lus outstandin2 interest. Securit* risk can $e di%ided into t3o

#arts.

=8 !IS M#5#GM5+ 4!/CSS

'( ID6N'IG '( M6AS)6

'( M(DIG

'( MANA06

'( M(NI'(

=: !IS M#5#GM5+

?redit risk& arises from the $ankQs dealin2s 3ith or lendin2 to cor#orate& indi%iduals& and other

$anks or financial institutions. ?redit risk mana2ement needs to $e a ro$ust #rocess that

ena$les $anks to #roacti%el* mana2e loan #ortfolios in order to minimi/e losses and earn an

acce#ta$le le%el of return for shareholders. ?entral to this is a com#rehensi%e I' s*stem&

3hich should ha%e the a$ilit* to ca#ture all ke* customer data& risk mana2ement and

transaction information includin2 trade > Gore7. 0i%en the fast chan2in2& d*namic 2lo$al

econom* and the increasin2 #ressure of 2lo$ali/ation& li$erali/ation& consolidation and dis-

intermediation& it is essential that DBB5 ha%e a ro$ust credit risk mana2ement #olicies and

#rocedures that arc sensiti%e and res#onsi%e to these chan2es. 'he #ur#ose of this document is

to #ro%ide directional 2uidelines that 3ill im#ro%e the risk mana2ement culture& esta$lish

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e* management to assess their ability and integrity vie* the security 'rom your o*n im$ressions o'

Analyze

Pre$are )nancial s$readsheet

+naly,e s$readsheet

-atio

Pre$are su$$lementary

!om$lete lending ris. analysis 'orm



minimum standards for se2re2ation of duties and res#onsi$ilities& and assist in the on2oin2

im#ro%ement of our BankQs #erformances. ?redit risk mana2ement is of utmost im#ortance&

and as such& #olicies and #rocedures should $e endorsed and strictl* enforced.

== L5DI5G !IS #5#L2SIS %L!#'

(ne of the im#ortant functions of an* $ank is considered to $e lendin2. 'his is the main

source of income for the $ank. 'he modem conce#t of lendin2 has shifted from the 9

securit*-oriented a##roach to $usiness %ia$ilit* one. 'he em#hasis is 2i%en on the likelihood

of re#a*ment& $usiness %ia$ilit*& mana2ement com#etence and mana2ement inte2rit* of the

#ro#osed de$tor. As the #re%ailin2 le2al s*stem of the countr* often fa%ors the $orro3er $*

makin2 it difficult for the Bank to foreclose on collateral& the ultimate securit* of the Bank is

the ?ommercial success of the $orro3er. Ade4uate em#hasis of $usiness risk is more im#ortant

than anal*sis of securit* risk.

=< C!DI+ #SSSSM5+ #5D SLC+I/5 /9 B/!!/!

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?redit assessment hel#s the $anker to ensure selection of ri2ht t*#e of loan

#ro#osals#ro8ects%enturesenter#rise and ri2ht t*#e of $orro3er. Gor selectin2 the $orro3er

securit* should not the onl* thin2 to $e relied u#on. So res#onsi$ilities of the $ankers to

in%esti2ate the client from different %ie3 #oint i.e. the stren2th and 3eakness of the client so

that the client 3ill $e a$le to re#a* the $ank loan as re#a*ment schedule 3ith #rofit.

?redit risk assessment should $e conducted #rior to the 2rantin2 of loans& and at least annuall*

thereafter for all facilities. 'he result of this assessment should $e #resented in a credit

a##lication that ori2inates from the elationshi# Mana2er


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anal*sis should address the 4ualit* and sustaina$ilit* of earnin2s& cash flo3 and the

stren2th of the $orro3erQs $alance sheet. S#ecificall*& cash flo3& le%era2e and

#rofita$ilit* must $e anal*/ed.

4ro,ected 9inancial 4erformance*Chere term facilities


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assessed.

5ame Lending*?redit #ro#osals should not $e undul* influenced $* an o%er reliance

on the s#onsorin2 #rinci#alQs re#utation& re#orted inde#endent means& or their#ercei%e 3illin2ness to in8ect funds into %arious $usiness enter#rises in case of need.

'hese situations should $e discoura2ed and treated 3ith 2reat caution. ather& credit

#ro#osals and the 2rantin2 of loans should $e $ased on sound fundamentals&

su##orted $* a thorou2h financial and risk anal*sis. Gacilities 3ill onl* $e #ro%ided

after anal*sis of the risks associated 3ith the counter #arties. 'here are numerous risks

attached to e%er* transactionrelationshi# $ut there is a need for certain fundamental

risk as#ects to $e considered for e%er* relationshi#. ?ertain of these risks ha%e $een

identified 3hich 3ill $e re4uired to $e commented u#on on a mandator* $asis.

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C3#4+!- SI0

!C/MM5D#+I/5 & C/5CLUSI/5

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condition.

'he ser%ice of DBB5 is satisfactor*.

Modern technical e4ui#ment such as com#uter is sufficient in 2eneral $ankin2

de#artment.

5ocker ser%ice facilit* is much secured $ecause the* take an e7tra care for this ser%ice.

?har2es on %arious ser%ices are so com#etiti%e.

Interest rate #ro%ided for de#osit A? is attracti%e.

DBB5 local remittance $usiness is moderate $ecause em#lo*ees are train u# in usin2

technolo2*.

Uualit* of mone* transfer facilities is Satisfactor*

In addition& I ha%e identified some sort of information $* com#arin2 DBB5 3ith

others $ank.

'o a%oid e7cessi%e 4uer* its time to introduce call center for DBB5 3hich #ro%ide 9

hour ser%ice to clients.

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In Account& section 3here customer 2ets the o%erall im#ression a$out $ankin2 ser%ices

so as a Banker its %er* much im#ortant to ensure the 4ualit* ser%ices and this 3a*

also 2ood3ill and $rand ima2e ensured.

Ser%ices are the heart for $usiness $* #ro%idin2 $etter ser%ices 3ithin limited time

frame the customer 2ain lo*alt* to3ards DBB5.

Its $etter to introduce a sim#le A? o#enin2 form for all t*#e of A? and also

im#ortant to find out sim#le 3a* of re4uired documentation su$mission.

Its time to 2o 3ith inno%ati%e 3a* si2nature %erification takin2 so much time and in

case of not matchin2 one 3ould not $e a$le to 2et mone* so introduce the SSN or

fin2er #rint scan conce#t that easil* identif* the client and it 3ould $e hel#ful to run

ser%ice smoothl*.

Introduction of an Inno%ati%e De#osit #roduct 3ith a Suita$le name 2ain ad%anta2e to

$rin2 #eo#le in Bankin2.

De#osit Product for s#ecific tar2et 2rou# such as for 67ecuti%es& 'eachin2

Professional& la3*er& Doctor& 0arments Corker etc. 3ith s#eciali/ation feature need to

introduce to $rin2 them into DBB5 arena.

DB5 on the $asis different ser%ices and char2es

Chen a #erson o#en& closin2 a sa%in2& and current account A? a& heshe need to

de#osit a minimum $alance. If clients 3ant& o#en and closin2 a sa%in2 and current A?

in DBB5& it maintain lo3er amount that $elon2s to a #ositi%e si2n.

DBB5 maintenance char2e on sa%in2 A? is lo3er in com#are to others $anks.

6%er* $anks GD interest rate is more or less flat $ecause it is set $* the central $ank.

DBB5 A'M


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'heir A'M $ooth net3ork should $e im#ro%ed other3ise customer can easil*

s3itch to another $ank.

Ser%ices are the heart for $usiness $* #ro%idin2 $etter ser%ices 3ithin limited

time frame the customer 2ain lo*alt* to3ards DBB5.

Its time to 2o 3ith inno%ati%e 3a* si2nature %erification takin2 so much time

and in case of not matchin2 one 3ould not $e a$le to 2et mone* so introduce the

SSN or fin2er #rint scan conce#t that easil* identif* the client and it 3ould $e

hel#ful to run ser%ice smoothl*.

Introduction of an Inno%ati%e De#osit #roduct 3ith a Suita$le name 2ain

ad%anta2e to $rin2 #eo#le in Bankin2.

Gle7i$ilit* is %er* im#ortant in case of non-#a*ment of de#osit for one monthO

0i%e a chance to client for fill it u# in the ne7t month thats 3a* client 2ain

#ositi%e im#ression to Bank. Some re4uirement rela7 for *our client #ur#ose $ut

must $e ensure that this rela7 is not cause a $i2 affect to Bank.

A'M ser%ices should $e im#ro%ed. If the $ad ser%ice continue than the cli

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