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Project Paper on Credit Management of Prime Bank Limited

A bank with a difference1.1 Background of the StudyThe bank plays an important role in the economy of any country. The banking system of Bangladesh is composed of variety of banks working as nationalized commercial banks, Private Banks, foreign banks, specialized banks & development banks. However there are many private banks in Bangladesh. At present, among other banks prime bank limited plays as a leading banks to provide efficient banking service with a view to accelerating socio-economic development of the country. Day by day, new competitors appear with better ideas & Products as well as service. "Consumer credit scheme" one of the new innovative idea which cater to the credit needs of the low & middle income groups for household durables. In a present time, few banks operate this scheme with short volume. Only Prime Bank limited & a very few banks operate this scheme in a large volume. To make its position more strong, PBL wants to make this scheme more attractive to the customer. In this regard, the management of the PBL assigned a comparative analysis on this scheme & to find out its position than that of private banks & to ensure efficient & effective banking operation in a sound manner.

1.1 Objectives of the Study

The main objective of the study is to gather practical knowledge regarding the Performance of loans and advance operation and management of a commercial bank. This practical orientation gives us a chance to co-ordinate the theoretical knowledge with the practical experience. Following are the objectives of this practical orientation in a bank: To have an overall idea regarding the Loans and advance of a commercial bank.

To gather knowledge about loan and advance.

To identify sectors where the bank is giving loan and advance.

To identify the Documentation & Guideline for Loan & Advances.

To have some practical exposure that will be helpful in the practical life.

To apply theoretical knowledge in the report writing time.

To observe the working environment in commercial banks.

To study existing banker-customer relationship.

To recommend the bank in managing credit more effectively and efficiently based on the findings in the bank.

1.2 Origin of the report:

This report originates to fulfill the requirement of studying BBA Program of Northern University Bangladesh. This program has been designed to facilitate the students with basic theoretical and practical knowledge in the job activities in the context of Bangladesh as well as worldwide.

Since the BBA program is an integrated ,practical and theoretical method of learning , the student of this program are required to have practical exposure in any kind of business organization last term of this program. This report has been prepared on practical orientation.

1.3 Rationale of the Study

Three types of schedule commercial banks are in operation in our economy. They are Nationalized Commercial Banks, Local Private Commercial Banks and Foreign Private Commercial Banks. PBL has introduced a new horizon in the field of banking area, consumer credit scheme which offers loan to fixed income people. So I have decided to study on the topic Consumer Credit Scheme of Prime Bank Ltd.. As the Internship program of the university is an integral part of the BBA program, it is obligatory to undertake such task by the students who desire to complete and successfully end-up their BBA degree. This also provides an opportunity to the students to minimize the gap between theoretical and practical knowledge. During the internship program the teachers of the department are attached to actively and constantly guide the students. Students are required to work on a specific topic based on their theoretical and practical knowledge acquired during the period of the internship program and then submit it to the teacher. That is why I have prepared this report.

1.4 Scope of the ReportThis internship Project Paper covers the Loans and Advance of the Prime Bank Ltd.

This report has been prepared through discussion with bank employees and with the customers. While preparing this report, I had a great opportunity to have an in depth knowledge of the Loans and Advance management activities practiced by Prime Bank Ltd. It also helped me to acquire a firsthand perspective of a leading private Bank in Bangladesh. Specifically the report covers the following areas: Background of Prime Bank Ltd.

My Work Experience.

Consumer Credit Scheme of Prime Bank Ltd.

1.5 Methodology of the Study

The study is performed based on the information extracted from different sources collected by using a specific methodology. This report is analytical in nature. The methodology is as follows.

Population: All the Branches of PBL located in everywhere in Bangladesh has been taken into consideration as population. Special focus is given on Karwan Bazar Branch where I have completed Project Paper.

Data collection: Source of data of this report can be divided into two categories:

Primary Sources

Conversations with officers & employees of the branch.

Interactions with the customers at PBL.

Face to Face conversation with the respective officers and staffs.

Sharing practical knowledge of officials.

Relevant file study provided by the officers concerned.

In-depth study of selected cases.

Secondary Sources

Annual Report of PBL

Audit Reports

Website of PBL

Internet and Study of selected reports.

Different Circulars of Bangladesh Bank.

Work procedure of the study in metaphorical arrangement:

Time Frame: The report has been prepared by taking 8 weeks.

Tasks \ Week123456

Preparing a Research Proposal

Developing Interview Guideline and Negotiation

Completion of Literature Review

Data Collection

Data Transcription

Data Analysis

Completion of Report Writing, Preparing Recommendation and Submission.

1.6 Problems faced:During the time of conducting the report, the problems faced by me were as follows:

Only 8 weeks of internship was a limitation for the completion of an exclusive study and to get in depth knowledge.

Preparation of the report before completing the scheduled time in the credit division.

Both the head office and the branch, the officials are preoccupied with their duties. Most of the relevant information about the topic was secret from the view point of the organization, so some of them were collected with a great difficulty.

Sufficient and updated records, publications, facts and figures were not available which have narrowed the scope of real analysis.

1.6 Limitations of the Study

From the beginning to end, the study has been conducted with the intention of making it as a complete and truthful one. However, many problems appeared in the way of conducting the study. During the study, it was not possible to visit the whole area covered by the bank although the financial statements and other information regarding the study have been considered. The study considers following limitations:

All the branches of the bank were not physically visited.

All the concerned personnel of the bank could not been interviewed.

Lack of experience.

The time period for this study was short.

Inadequacy and lack of availability of required current data.

An Organizational Profile OF

Prime Bank Ltd.

2. Details of Prime Bank Ltd.

2.1 Historical Background of Prime Bank Limited:

The banking system plays a critical role in underpinning economic development. Against the background of liberalization of economic policies in Bangladesh, Prime Bank Ltd. has resulted in great success in all areas of operation of its bank with a view to improve the Socio-economic development of the country.

Prime bank ltd. (PBL) was incorporated on 17th April 1995 with an authorized capital of Tk. 1000 million & Tk. 100 million of paid up capital by a group of successful entrepreneurs. It is not a conventional Bank. Its a modern, dynamic private Commercial bank & plays a constructive role in the economic development of the country. Prime Bank is the first private bank to introduce lease finance, Hire Purchase & Customer Credit Schemes in the banking sector in order to bring about qualitative changes in the lives of people of Bangladesh. PBL through its steady Progress & continuous success has, by now, earned the reputation of begin one of the leading private sector Banks of the country.

2.1.1. Vision of PBL:

To be the best Private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity.

(Source: Annual Report 2008 of PBL)

2.1.2. Mission of PBL:To build Prime Bank Limited into an efficient, market driven, Customer focused institution with good corporate governance structure. Continuous improvement in our business policies, procedure and efficiency through integration of technology at all levels.

(Source: Annual Report 2008 of PBL)

2.2. Objective & Goals:PBL is ready to improve the highest quality customer service through new IT products & services such as ATM. ONLINE BANKING & POINT OF SALES transaction.The Major objective of PBL is to maximize profit through customers satisfaction.

The bank plays a vital role in socio-economic development of B