INTERNSHIP REPORT

ONCredit Analysis of Bangladesh Development Bank Ltd.

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INTERNSHIP REPORT

ONCredit Analysis of Bangladesh Development Bank Ltd.

SUPERVISED BY:

Md. Shofiqul IslamAssistant Professore

Accounting & Information SystemJagannath University

PREPARED BY:

Nasrin JahanID: 084624, Section: C

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MBA, 2nd BatchAccounting & Information System

Jagannath University

Date of Submission: February 26, 2012.

Letter of Transmittal

Date- February 26, 2012

ToMd. Shofiqul Islam

Assistant ProfessorAccounting & Information SystemJagannath University

Sub: Submission of Internship Report on “Credit Analysis of Bangladesh Development Bank Ltd.”

Dear Sir,

It is my great pleasure to submit you my internship report on “Credit Analysis of Bangladesh Development Bank Ltd.”. I have tried my best to complete this report properly following the guidelines provided by you and concerned organization.

I have confidence that the internship program has increased both of my practical

experience and of theoretical knowledge largely. I will be obliged to answer any query

that may arise during the evaluation of this report. Therefore, I am eagerly requesting and

hope that you would be kind enough to accept my report and oblige thereby.

Sincerely Yours,

--------------------------Nasrin JahanID: 084624, Section: C

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MBA, 2nd BatchAccounting & Information SystemJagannath University

SUPERVISOR’S DECLARATION

This is to certify that the internship Report on “Credit Analysis of Bangladesh Development Bank Ltd.” has submitted for the award of the degree of Masters of Business Administration (MBA) major in ACCOUNTING & INFORMATION SYSTEM (AIS) from Jagannath University, carried out by Nasrin Jahan of 2nd Batch bearing ID: 084624, under my supervision. To the best of my Knowledge and as per his declaration, any part of this report has not submitted for any degree, diploma or certificate.

He is permitted to submit the Internship Report.

-------------------Md. Shofiqul Islam

Assistant ProfessorAccounting & Information SystemJagannath University

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STUDENT’S DECLARATION

I, Nasrin Jahan, the student of Masters of Business Administration (MBA) 2nd Batch

bearing ID: 084624, major in Accounting & Information System (AIS) from Jagannath

University, would like to soberly declare here that an internship report on “Credit

Analysis of Bangladesh Development Bank Ltd.” has been authentically prepared by

me. While preparing this internship report, I did not breach any copyright act

intentionally. I am further declaring that, I did not submit this report anywhere for

awarding any degree, diploma or certificate.

-------------------------- Nasrin JahanID: 084624, Section: CMBA, 2nd BatchAccounting & Information SystemJagannath University

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Preface

Internship program is a sophisticated way for acquiring practical knowledge. The

main objectives of the MBA program are to create skilled professional for various

sectors. The department of accounting and information system is arranged this

program for MBA students.

This program is designed to meet the needs of each student who want to develop

their career as executives in the field of different business areas as well as teaching

and research positions in different institutions. But perfection dose not come only

form theoretical knowledge. To reinforce the theoretical knowledge acquired,

practical internship of three months in private business organizations, government

offices, public sectors, corporation, banks and non-bank financial institution is to

expose as in the organizational work situation.

After completion this program each student will submit a report on a particular topic on

the basis of their observation, experience and analysis. My selected topic is the “Analysis

of Credit Performance & Operational Aspects of Bangladesh Development of Bank

Limited.” My honorable supervisor & my favorite teacher Md. Shofiqul Islam also help

me to select this topic.

This report encompasses five chapters including a section of appendix. I have tried to

cover all aspects of BDBL to prepare an effective and useful report. I have enjoyed every

step in conducting the study. These Pragmatic knowledge and experience will help me in

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my practical life. I expect that this report will be accepted as a true picture of Bangladesh

Development Bank Ltd. If any lacking prevails in my report, I have no objective to accept

it sincerely

ACKNOWLEDGEMENT

At first I would like to express my gratitude to almighty Allah for enabling me with the strength and opportunity to complete the report within the schedule time successfully.

I feel proud to express my gratitude from the core of my heart to Department of Accounting and Information System for granting me the permission to take up practical orientation in BDBL. I also feel proud to express my gratitude from the core of my heart to my honorable teacher and supervisor of the internship program, Assistant Professor Md. Shofiqul Islam, And my honorable Chairman Professor Dr. Md. Ali Noor, Department of Accounting & Information System, Jagannath University for his stimulating inspiration, proper guidance, valuable criticism, sagacious advice’s and whole-hearted supervision to me in preparing this report.

I am also grateful to my host supervisor of the internship program Md. Abdul Awal Chowdhury, Deputy General Manager, Training department of Bangladesh Development Bank Ltd. for his cordial help and co-operation during the internship program.

I am also grateful to all departmental heads and all other officials of various department of BDBL for their co-operation, spontaneous help and cordial assistance in preparing of the report.

Finally, I am grateful to Department of Accounting & information System, Jagannath University, for giving me the opportunity to work outside for attaining practical knowledge.This report suffers from shortcomings but I have tried my level best to bring about all the facts in comprehensive manner.

Thanks for all from core of my heart.

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

Nasrin JahanID: 084624, Section: CMBA, 2nd BatchAccounting & Information SystemJagannath University

EXECUTIVE SUMMARY

In the backdrop of growing competition among commercial banks, Bangladesh Development Bank Ltd. is one of the leading banks in the local market of our country. Hence, this internship report is aimed at discussing the General Banking Activities & Credit Practices on of Bangladesh Development Bank Ltd.

This report is broadly classified in six different parts. In part one introduction, Statement of the research problem, Objective of the study, Methodology of the Study, Definitions of terms used in the study, Literature review and Limitations of the study is discussed. Part Two narrates the company profile including Background of BDBL, Corporate Information, Organization Structure, Name of the Branches, Number of the employee, their mission and vision, Services of the Bank, Principal Activities, SWOT Analysis, Shares incorporated Bangladesh Development Bank Ltd. on September 29, 1999 under the Companies Act 1994 as a Public Company Limited for carrying out all kinds of banking activities. The Company issued Certificate for Commencement of Business on the same day, granted license on October 05, 1999 by Bangladesh Bank under the Banking Companies Act 1991, and started its banking operation on October 24, 1999. Outside regular activities BDBL also takes part in different community services and environmental management programs.

Part three forces on the Credit performance. It includes Sanction of term Credit, Sanctions and Disbursement of Working Capital / Commercial Loan and Credit Recovered by the bank.

In part four, Definition of loan performance and Sector wise loan performance analysis

BDBL describe briefly.

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In part five, Practical Experiences Gathered through doing Internship in BDBL are

discussed.

After that, in part six, I discuss about the Findings & Analysis of the organization’s performance. . Finally, I proposed some recommendation to improve the customer service which will help the bank to survive in the competitive market.

TABLE OF CONTENTS

Particular Page no.Title Page iiLetter of Transmittal iiiSupervisor’s Declaration ivStudent’s Declaration VPreface viAcknowledgement viiExecutive Summary

viiiCHAPTER-ONE- INTRODUCTION

1.1 Statement of the research problem 021.2 Objective of the study 031.3 Methodology of the Study 041.4 Definitions of terms used in the study 041.5 Literature review 061.6 Limitations of the study 09

CHAPTER TWO- ORGANIZATIONAL OVERVIEW2.1 Background of BDBL 102.2 Corporate Information 122.3. Organization Structure 132.4 Name of the Branches 152.5 Number of the employee 172.6 Vision of the BDBL 172.7 Mission of the BDBL 182.8 Services of the Bank 182.9 Principal Activities 202.10 SWOT Analysis 21

CHAPTER THREE- MAIN ACTIVITIES OF THE INTERNSHIP REPORT

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3.1 Sanction of term Credit 243.2 Credit Application Received 24

3.3 Disbursement of Term Credit 243.4 Sanctions and Disbursement of Working Capital 253.5 Others investments 253.6 Projects implementation 253.7 Credit portfolio 263.8 Credit Recovered 273.9 Credit Sanction Form 28

CHAPTER FOUR- ANALYSIS OF LOAN PERFORMANCE4.1 Definition of loan performance 304.2 Sector wise loan performance analysis BDBL 304.2.1 Food and allied products 304.2.2 Jute and allied fiber 314.2.3 Cotton and Woolen Products 324.2.4 Paper and Paper products 334.2.5 Forest and Wood Products 344.2.6 Transportation 354.2.7 Miscellaneous 354.2.8 Classified and unclassified loan at glance 374.3.1 Total Findings in brief 37

CHAPTER FIVE- PRACTICAL EXPERIENCES GATHERED THROUGH DOING INTERNSHIP IN BDBL

5.1. Loan Operation Department 385.2. Project Implementation Department 39

5.3. Loan Recovery Department 39

5. 4. Law Department 395.5. Central Accounts Departments 40

5.6. Human Resource Management Department 40

CHAPTER SIX- FINDINGS & ANALYSISGiven data for finding lack of credit range? 44

Problem in repayment period 45Conclusion 47Recommendation 47Bibliography 49APPENDIX-A1

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Chapter - 1INTRODUCTION

Present world is changing rapidly to face the challenge of competitive free market economy. To keep pace with the trend banks need executive with modern knowledge. Provide fresh graduate with modern theoretical and professional knowledge in banking sector. Under this phase the students are sent to gather practical knowledge about organizational environment and activities. The students also have to submit a report on practical orientation in the respective organizations.

At first BDBL was started his activities in loan sector. But now organization increases departmental activities. Now start commercial banking.

The low rate of economic growth, high rate of unemployment, illiteracy, growth rate of population, low rate of credit recovery etc. are the impediment factor of economic development of a country. Despite of this obstructed BDBL has shown a mediocre performance.

Finally the bank try to establish profitable organization and contribute the social activities by provide Banking service. It carefully listen to the market and business potentials, It is assisting stakeholders to build a progressive, healthy, democratic and poverty free Bangladesh.

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1.1 Statement of the research problemThe internship program of MBA student of the faculty of business studies is a vital part of MBA program. So we need proper application of our knowledge to get some benefit from our theoretical knowledge to make it more effective.

We engage ourselves in such field to make proper use of our knowledge in our practical life. Only when we come to know about the benefit of the theoretical knowledge, such an application is made possible through internship. After compliance of the program period a student must present the report on assigned topic to the supervisor and the department. The program period is three month. During this period I worked with employees of the organization. In consulting with my supervisor of the department and bank employee I have selected a topic. My internship topic is “Credit management of Bangladesh Development Bank Limited”

When start my work in credit sector create some Question. In the following given the question list

What is the current position in credit sector? What is the technological system? What is the position of loan recovery? What is credit performance of growing sector?

The purpose of BDBL is not only grant credit but also to develop the country economic. So BDBL start general banking activities like another commercial bank. Not only industrial development bank provide all social responsibilities.

1.2 Objective of the study:In the following given the objective of the study. The objective of the study is to find out the Loan Performance and general banking of BDBL

To know the loan and advance product of BDBL. To know the Credit Grading Rating (CGR) System of BDBL. To know the principles of lending. To know the processing system of loan proposal To justification Credit Information Bureau (CIB) Report. Processing of loan sanction and disbursement. Performing and Non-performing loan justification. To gather practical knowledge about the loan performance of a financial

institution. To develop knowledge about the reasons of making loan default by the

sponsors. To identify the lending risk of bank. To know the bank performance & efficiency in the field of Loan & advance

management. To identify the problems face by the bank in credit management. Suggest several guidelines to overcome these problems. To taking knowledge about general banking. To get an idea about the foreign banking system. To get a knowledge about bank performance in the social sector. To fulfill the requirement of the internship program under MBA program.

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1.3 Methodology of the Study For the prepare report collect more information from various sources. Such like Primary source, Secondary source, Personal interview, Group interview And another source.

In the following given the Primary source Data… Collect data from face to face communication in the loan department. Observe the loan holder behavior. Conversation with the Bank officers and staffs. To ready question for the clients collect primary data.

In the following given the Secondary source of data Annual report of the BDBL. Financial statement of the previous year of BDBL. Credit rating report of Bangladesh bank. Annual report of Bangladesh Bank. Banking journal and magazine. Daily news paper and financial journal. Previous internship report of the BDBL students. Web side of the Bangladesh bank Web side of the finance ministry. Web side of NBR. Web side of BDBL.

1.4 Definitions of terms used in the studyGiven the details about terms and topics definition of the study in the bellow.

Bangladesh Bank.Bangladesh bank is our central Bank. It was established in 16 December 1971.All

banking sector are control by the Bangladesh bank. A part from the head office in Dhaka it has nine more branches of which two Dhaka another are in divisional level .There are more function of BB. Those functions are

Issue of Banknotes Acting as banker to other bank Acting as banker to Govt. Credit control Money market control

Governor is the chief of Bangladesh Bank. First governor of the BB was A.N.M.Hamidulla and current governor of the Bangladesh bank Dr. Atiur Rahman.

Working Capital Working Capital is current assets less current liabilities .When a company takes on new projects the balance in the current assets accounts will often increase.

Preparation of appraisal report:The bank authority makes the report, which consists of three (3) types of analysis, is as follows:

(a) Technical analysis(b) Financial analysis. (c) Economic analysis/market analysis

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Continuous Loan: The loan Accounts in which transactions may be made within certain limit and have

an expiry date for full adjustment will be treated as Continuous Loans. Examples are: CC, OD etc.

NBR (National Board of Revenue)The NBR is the central Authority for tax administration in Bangladesh.

Administratively it is under the internal resources Division (IRD) of the ministry of Finance (MOF). MOF has 4 Division namely the Finance Division the Internal Resources Division.

Demand Loan:

The loans that become repayable on demand by the bank will be treated as Demand Loans. If any contingent or any other liabilities are turned to forced loans (i.e. without any prior approval as regular loan) those too will be treated as Demand Loans. Such as: Forced LIM, PAD, FBP, and IBP etc.

Fixed Term Loan: The loans, which are repayable within a specific time period under a specific

repayment schedule, will be treated as Fixed Term Loans.

Export cash credit :Advance allowed as ash credit for processing goods for exports. The advance is

usually adjusted from export proceeds. The term PC (Packing Credit) is also used for such advance.

EBP : Post export credit allowed against export bills. If the bills are drawn as per terms of the L/C, the bank purchases the same and pay equivalent amount of the bill to the credit of the client’s account. The advance is adjusted on realization of export proceeds through foreign agent.

Local Bill purchase:Advance allowed against bills drawn under an inland L/C opened and accepted by

a local bank. Such local L/C is usually opened as back to back L/C against export L/C.

Micro Credit:BDBL Bank launched a Micro credit Scheme in 1994. Micro credit scheme provides

for the poor for generation of employment and income on a suitable basis particularly in urban and suburban areas. The bank follows two systems of credit delivery.

Litter of credit:An undertaking by the bank to make payment to the seller subject to submission of

documents drawn in strict compliance with the stipulated terms giving title to goods to the buyer/ bank.

Credit Rating report:Credit report should obtain for all sort of credit proposal. Single credit proposal

should not approve without having Clean CIB Report from Bangladesh Bank. In

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compliance with the Bangladesh Bank, BDBL appointed credit Rating Information and Service Limited to evaluate the Credit Rating of the bank.

1.5 Literature review At the beginning of BDBL it name was Bangladesh Shilpa Bank it was the only institution without whose support industrial project was impossible to build up. About the entire industrial unit established up 1990 is the output of Shilpa Bank. It is the bank whose main objective is to encourage and motivate the potential entrepreneur to setup the new industry in the various part of the country. Bangladesh Shilpa bank offers loan with the most attractive terms and condition for setting up industrial come forward and can plays significant contribution in the development of the country.

Following signing of two vendor’s agreements with the Government in December 2009 BDBL established as a public limited company took over the undertakings and the business of statutory bodies namely BSB and BSRS with all their assets.When establish BSB their activities only limited by loan section. Then BSB and BSRS made new bank Bangladesh Development Bank. Now BDBL increases are working area. Now they are start general activities.For my credit Analysis and my topics research follow previous some activities and found out some statement .In the following given the main points of researcher view.

In the competitive environment of retail banking there is constant pressure to innovate and develop new ways to improve Credit Management service. In the context of Credit management service is “the long-term person-to-person relationship between a financial institution, its distributors and its customer” (Wong & Perry, 1991). Credit management service is considered as an important factor if a retail bank is to achieve a competitive advantage (Kelley, 1990; Javalgi, 1992). The term “Credit management service” is used today in the field of loan service management to describe a host of different but critically interrelated activities. Some authors view loan service as all activities which bind a corporation and its customers together to further a sales relationship (Hopkins & Bailey 1970; Christopher & Wills, 1974).

Lewis (1989) stated that in the financial services industry, the marketing key is now face credit problem like the amount of consumer loans in a short-term basis.

Lehtinen and Lehtinen (1982) published some credit problem in the following show

Always keeps the goal of loan workouts firmly in mind: to maximize the bank’s chances for the full recovery of its funds.

The rapid detection and reporting of any problems with a loan are essential: delay often worsens a problem loan situation.

Keep the loan workout responsibility separate from the lending function to avoid possible conflicts of interest for the loan offers.

Estimate what resources are available to collect the troubled loan. Loan workout personnel should conduct a tax and litigation search to see if the

borrower has other unpaid obligations and many other processes.

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Risk

Safety Purpose

NationalInterest

Security

Profitability

Assignment

Personal Security

Liquidity

6 C’s Other Factors

Diversification

Primary AndCollateral

Pledge Hypothecation Mortgages

Lien Set off Guarantee Insurance

According to the International Organization for Migration (IOM, 2004) there are about three million Bangladeshi migrants working abroad sending remittances more or less regularly to their families and friends at home. They are published some problem about remittances, when this remittances deposited in bank and provide like loan.

.

There is always a requirement for banks to systematically and realistically identify their problem assets and provide adequate reserves for possible losses. To accomplish this, Bangladesh Bank issued guidelines in 1989 (vide BCD Circular No. 34, dated 16.11.89) regarding classification and provisioning procedure. Subsequently, a revised policy was introduced in 1994 (vide circular No. 20, dated 27.12.94) to be implemented by banks in five phases commencing 31st December 1994. The introduction of this program was aimed at bringing loan loss provisioning and classification in line with international standards by the end of 1998. Prior to 1989, there were no clear-cut policy guidelines to enforce adequate provision by the banks. In the majority of cases, banks simply did not identify problem assets, establish realistic provisions for potential losses or suspend interest on non-performing assets. As a result, the balance sheet did not reflect the bank's actual condition and the income statement overstated profits upon which dividends and taxes were paid. However, during the mid-eighties a norm was fixed by the Central Bank to raise the level of provisions by 0.5% of total loans each year till it reached 4%. Obviously, it had no relation to loans classified. Interestingly, the banks on the whole did not comply with this requirement. The situation ultimately led to unreasonable developments regarding keeping of provisions by the bank CHOUDURY ct al .1997 PP 43-4

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Some of the researcher of Bangladesh bank and SEC .They are found out some credit management problem area Those area are ● Economical sector ● Capital sector ● Labor sector ● Raw material sector ● Market ● Social condition ● Marginality ● Security ● Psychological sector ●Governmental sector ●Political sector

When BDBL was established only their activates area limited by loan sector. So all researcher find out the loan term problem. Now a day BDBL starts their mission in general banking. So I am a new researcher of the general banking in BDBL. Our team works in the BDBL head office and branches and find out some problem in the general banking. Those problems are

Lack of proper management and efficient management for credit system. Their operational system is manual so loan section face problem. Lack of modern technology Limited employee for general banking Transaction system is old method Lack of proper advertisement Lack of experience of foreign banking Limited branches

The financial analyst should have a clear idea as to what is intended to be achieved through the financial report .The financial appraisal is directed to examine mainly the following two aspects .Fund requirement to bring the project in to existence and the probable sources from which the required funds will it goes into operation and likely position of the concern with regard to its actual cash generation and its probable impact upon the financial condition .The first aspect deals with the estimation of total of the project and a suitable financial arrangement .The second aspect relates to the analysis of production cost profit at different volume of production carried up to the year the project attains its normal capacity operation.

1.6 Limitations of the study:As a student prepare Banking report is so much difficult. Then I am trying to best performance. But internship time is limited so learning scope is little. After completing the institutional experience, practical performances in the formal stage become difficult. So in performing this report my lack of proper knowledge greatly influenced in this performance. Besides above, every study has some limitations. When I conduct my study 1 also had some problems. Those are as follows:

Lack of proper knowledge about banking sector. Lack knowledge about modern technology. Such as Software ,core banking, and

another banking system Co-operational problem. Security problem. Lack of available information and documents to support our study. Unwillingness to give information

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Limitation of time was one of the most important factors that shortened the present study. Due to time constraints, many aspects could not by discuss in the present study.

Lack of comprehension of the respondents was the major problem that created many confusions regarding verification of conceptual questions

Up-to-date information was not available Lack of problem to my site because now I am student so I have no details clear

idea about BDBL.

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CHAPTER – 2

An Overview of the Organization

2.1 Background of DBBL

With decision of the Government, Bangladesh Development Bank Limited was

incorporate on 16 November 2009 as a Limited Company under the companies Act 1994

by merger of former Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rain

Sangstha (BSRS).Bangladesh Shilpa Bank was established in October 31, 1972 And

BSRS was established in October 31, 1972 according to President order No 129 and 128

of 1972.

In order to carry on business activities of BDBL Bangladesh Bank issued banking license

on 19.11.2009.

Tow vender agreements were singed between the government of the peoples Republic of

Bangladesh and the BDBL on 31 December 2009 to acquire and take over all of their

(BSB AND BSRS) assets benefits, rights, power, authority’s privileges,

liabilities .borrowings and obligations and carry on with the same business.

As a public limited company BDBL formally embarked its journey on January 03, 2010.It

extended financial assistance for set ting up industrial and provides all kinds of

commercial banking services to its customers through its branch network in Bangladesh

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Corporate Information at Glance

(Information as per December 2010)

1. Name Bangladesh Development Bank Limited.2. Legal Status Public Limited Company3. Date of incorporation November 16, 20094 Banking Licensee obtained November 19, 2009 issued by

Bangladesh Bank5 Vendors’ Agreement Signed December 31, 2009 between the

Government and Board of Directors of BDBL nominated by the Government

6 Formal Inauguration January 03, 20107 Registered Office BDBL Bhaban, 8, Rajuk Avenue,

Dhaka-10008 Authorized Capital TK 1000 crore9 Paid up capital TK 100.00 crore 10 Reserve TK. 2270 million11 Total Assets TK 16747 million12 Total human Resource 102513 Number of Zonal Office 414 Number of Branch Office 2115 .Membership Dhaka Stock Exchange & Chittagong

Stock Exchange Ltd16 Launching of retail banking April 201017 Corporate Tax Rate 42.50 %18 Auditors MESSERS ACNABIN AND HUDA

VASI CHOWDHURY & CO19 Legal Adviser & Consultant A. K. M. Nazrul Islam ,Bar-AT-Law20 Credit Rating Agency CRISL21 Income Tax Advisor K. M. HASAN & CO 22 Face Value per share TK.100.0023 Web Site www.bdbl.com.bd

Note-All of the information are collect from HR Department and Economics Department at 15 February 2012.

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2.2 Corporate Information

Given the bellow whole list of the Board of Directors

S. No Name Position

1. Prof.Shanti Narayan Ghosh Chairman (acting)2. Mr. Dewan Nurul Islam Director3. Mr. Niaz Rahim Director4. Mr. Amalendu Mukherjee Director5. Mr. Md.Khalil Rahman Siddiqui Director6. Mr. M Ishaque Bhuiyan Director7. Mrs. Selima Ahmad Director8 Krishibid Moshiur Rahman (Humayun) Director9. Md. Fayekuzzaman Director10. Dr. Md.Zillur Rahman Director11. Abdur Rahim Khan G.M. & Company

Secretary

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Deputy Managing Director

General Manager(Administration)

General Manager(Operation)

DGM

AGM

Senior Principle Officer

Principle Officer

Senior officer (IT)

Officer

Officer(Cash)

Managing Director

Assistant officer Grade-1

Assistant officer Grade-2

Assistant officer grade-3

Supporting Staff

Supporting Sub Staff

Chairman

Management Hierarchy of BDBL

2.3 Organization Structure

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Another Organization Structure

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2.4 Name of the BranchesThere are twenty one branches of BDBL. In the following given the branches list and address

Branch Name Address

Principal Branch 8,Rajuk Avenue, Motijheel, Dhaka.Motijheel Branch, DhakaMotijheel, Dhaka.Karwanbazar Branch, Dhaka

12, karwanbazar, Dhaka.

Bogra Branch Khan Plaza (2nd Floor), Chakjadu Road, Badurtola, Bogra.

Pabna Branch Bhai Bhai Super Market,Abdul Hamid Road, Pabna.(Current Charge)

Dinajpur Branch Abedin Complex, Gonesh Tola, Dinajpur.Barisal Branch Dr. Sobhan Complex, 130, C, Sadar Road (2nd

Floor), Barisal.Faridpur Branch Mojib Sarak Chamber Building, Nilltoli, Faridpur.Mymensingh Branch 6, Samcharan Rai Road, Mymensingh.Comilla Branch Samobay Bank Bhaban, kandir par, commillaNoakhali Branch 460, Dakhin Bazar, Choumohoni, NoakhaliSylhet Branch 1375-kha Syed Complex 3rd Floor, Amborkhana,

Sylhet.Rangpur Branch Asir Building, Station Road, Rangpur.Jhenidah Branch 18, Moulana Bhasani Sarak, Jhinaidha.Chitagong Branch Quecort' 106, Agrabad C/A, Chittagong.Rajshahi Branch 108/6, kumerpara, RajshahiKhulna Branch 25/26,KDA Commercial Area, Uper Jessor Road,

Khulna.Narayanganj Branch (Opening Soon)

10, S M Maleh Road( 1st and 2nd Floor), Tan Bazar, Narayanganj.

Elephant Road Branch (Opening Soon)

99, Elephant Road, Dhaka.

Khatungang Branch (Opening Soon)

6 Ramjoy Mohajan Lane, Asadgang, Khatungang, Chittagong

Ashuganj Branch (Palli Branch, Opening Soon)

Holding No-117, Station Road, AShuganj, Brahmanbaria.

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2.5 Number of the employee

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We know that Present BDBL come from BSB and BSRS. When BSB operate their banking activities only Loan section. And same activities were BSRS. So their employee condition is limited size. But now they are start commercial activities. So need their more employees. On the basis of HR Department of we know that their current employee number is 1025. In the following given the details description of the BDBL employee list.

Name of the post Head office

Zonal office

Branch office

Total

Managing Director 1 0 0 1Deputy Managing Director 1 0 0 1General Manager 6 0 0 6Deputy General Manager 18 4 1 23Assistant General Manager 19 0 27 46Senior Principle officer 32 4 44 80Principle Officer 57 4 75 136Senior Officer 101 8 141 250Senior Officer (I.T) 16 0 9 25Officer 59 8 83 150Officer (Cash) 2 0 23 25Assistant officer Grade-1 28 4 20 52Assistant Officer Grade-2 9 0 0 9Assistant Officer Grade-2(c 0 0 11 11Supporting Staff Grade-1 24 0 0 24Supporting Staff Grade-2 43 3 20 66Supporting Sub Staff 54 6 60 120Total 470 41 514 1025

2.6 Vision of the BDBL

To emerge as the country’s prime Financial Institution for supporting private sector industrial and other projects of great significance to the country’s economic development. Also be active participant in commercial banking by introducing new lines of product and providing excellent services to the customers.

2.7 Mission of the BDBL

In the following given the list of mission of BDBL

To be competitive with other Banks and Financial Institutions in rendering services ;

To contribute to the country’s socio-economic development by identifying new and profitable areas for investment ;

To mobilize deposit for productive investment ; To expand branch network in commercially and geographically important places ;

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To employ quality human resources and enhance their capability through motivation and right –type of training at home and abroad.

To delegate maximum authority ensuring proper accountability ; To maintain continuous improvement and up-gradation in business policies and

procedures ; To adopt and adapt to new technology ; To maximize profit by strong, efficient and prudent financial performance ; and To introduce new product lines according to market needs.

2.8 Services of the BankThe bank is always committed to serve the clients with the best values and innovative products and services to enrich its portfolio.The Service list of Bangladesh Development Bank Limited is stated below:

1. DEVELOPMENT BANKING Industrial loan with emphasis on syndicate arrangement. Example-Power and

Energy, Telecommunication, Fiber Optic cable etc. Public private partnership (ppp) Project. Small & Medium Enterprise (SME) IT industry Development of Hardware and Software. Agro –based venture development on indigenous Green Banking ● Lease Financing ● Real Estate

2. COMMERCIAL AND FOREIGN EXCHANGE BUSINESS (a) Deposit Service ●Savings Deposit Account-with cheque ●Savings Deposit Account-without cheque

Current Deposit Account ● Short Term Deposit Account Convertible Taka Account ● Non-Convertible Taka Account Exporter's FC Deposit Account (FBPAR) Current Deposit Account-Bank Shor Term Deposit Account-Bank

● Fixed Deposit ● Other Special Saving Deposit ● 5 year term BDBL Sanchay Scheme (BDBLSS)

10 Year term Shikkha Sanchay Scheme (SSS) 10 Year term Chickisha Sanchay Scheme (CSS)

(b) Term Deposits Monthly Term deposits Term Deposit for 3 Months Term Deposit for 6 Months Term Deposit for 12 Months Term Deposit for above 12 Months

(c) Short term Loan ● Cash Credit (Hypothecation) ● Cash credit (Pledge)

Secured Advances (General) ● Secured Advances (Financial Obligation)

Retail Banking Consumer credit ● Personal Loan

● Trade/ Foreign Trade Financing # Export Cash Credit # Packing Credit

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# Purchase of local & Foreign Documentary Bill o Payment Against Development (PAD)o Loan Against Imported Merchandise ( LIM)o Loan Against Trust Receipt (LTR)

(d) Foreign Exchange # Local L/C # Import L/C # Export L/C # Bank to Bank L/C # Foreign Remittance # Foreign Exchange Buy and Sale(e) Other Banking Service

# Demand Draft Issue # Payment Order Issue # Selling of Prize Bond # Selling of Saving Certificates etc

(3) Capital Market # Share /Security # Under writing of public Issues # Brokerage Fund Service # Mutual Fund Operation # Bankers to the Public Issues (4) Loans & Advances

* Loan against Trust * Consumer Credit Scheme * Loan Against Accepted * Industrial Term Loan

* Agricultural Term Loan * Lease Finance * Other Term Loan * Small Shop Financing Scheme

* Overdraft * Secured Overdraft (SOD) 2.9 Principal ActivitiesThe principle activities of the bank are banking and banking related activities. The banking business includes obtain deposits through account opening, offer credit to corporate organizations, as well as retail and small & medium enterprises, trade financing, project financing, lease and hire purchase financing. The mode of banking included conventional banking. It also performs merchant banking function under the license by Securities and Exchange Commission, Dhaka, Bangladesh.

Another Principle activities of BDBL are # Loan operation maintenance # Economics and Research # Documentation of data # Procurement implementation # Loan Recovery # Compliance # Law maintenance # Central Account Control # HR maintenance # Provide MIS service # General activities implementation

2.10 SWOT Analysis of BDBL

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The SWOT Analysis identifies the strength, weakness, opportunities, and threats. This analysis identifies these four elements to help to formulate strategy of a bank. SWOT analysis also can use to understand the overall position of a financial organization.

SWOT analyses of BDBL Bank Ltd are as follows:

STRENGTHS: The following issues are key strength of BDBL Bank Ltd

BDBL Bank is unique in its nature having both specialized and commercial operation it is regarded as a Development Bank as well as commercial one.

One of the fundamental objectives of BDBL Bank is to boost up small & medium scale industries, which makes a special perception about the bank.

Due to become a 100% government own bank it gets different facilities in home and abroad.

BDBL Bank Ltd has a veteran management team. Branches of BDBL Bank Ltd are located in important commercial areas. Online banking operation & any branch banking facility BDBL Bank follows supply leading finance. After merger BDBL recruit young and energetic person who are capable to

maximize use of bank resource. Govt. Support and Encouragement

Weakness: Decision making process is lengthy.

Lack of competitive banking.

Lack of promotional activities.

Shortage of branches.

Less diversified product and service line. The salary structure of BDBL is not high enough related other commercial bank operating in Bangladesh.

MIN/Internet/on-line service in BDBL is not upgraded, many of their works through manually.

OPPORTUNITIES OF BDBL

There are huge demand of micro-credit, small and medium scale finance.

Bangladeshi economy is expanding rapidly, so the need of bank is growing up.

There are opportunities of innovation in the Banking industry

THREATS OF BDBL

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● More and less all the competitors in the baking industry are competent, so to survive BDBL Bank need to do many more. In BDBL no. of defaults loan is 37% which is real threats of bank business.● Due to governmental institution many of banking decision bias by political government.● Too much interrupted by international assistance institution like World Bank, IMF, WTO

Bangladeshi economy is getting more engaged with the global economy, so any recessionary condition can hit the banking industry first.

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CHAPTER- Three

Main activities of the internship report

This report prepare on the basis of Loan performance and General banking activities. In following given the details loan performance and General Banking activities

Credit performance3.1 Sanction of term Credit:The bank has kept on sanctioning term loans during FY 2009-10 also. This is long term local currency loan of taka 7285 million has been sanctioned to 55 projects and short term loan of taka 1100 million to 215projects. Of the total sanctioned long term loan, taka 4928 is for 37 new projects and an additional loan of taka 2385 for 13 existing projects.

Table-1Sanction of term loans

(million TK)2009-2010 2010-2011

Nature ofthe

project

Numberof

projects

LocalCurrency

ForeignCurrency

Total Number ofthe project

LocalCurrency

Foreigncurrenc

y

Total

New projects 46 1188 1183 37 6581 6581Existingproject

(BMRE)

6 - 6 -

AdditionalLoans

8 102 - 122 13 704 - 704

Rehabilitation

- - - - - - - -

Total 54 1296 - 1311 52 7285 - 7285

Source: Annual financial report 2010-11

3.2 Credit Application Received: In FY 2010-11 , the bank has received 46 new proposals with loan amount of taka 181.12 core after proper scrutinizes. The bank received 96 loan proposals with loan amount of taka 166.47 crore in FY 2009-103.3 Disbursement of Term Credit: In FY 2010-11 , the Bank has disbursed term loans of taka 564 million in local currencies to 53 projects registering an increase in terms of number of projects and amount of loan disbursement 23 and 10 percent respectively over the previous financial year.

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Table-2Commitment and disbursement of term Credit

(Million TK)Commitment/Disbursement

2009-2010 2010-2011

Number ofprojects

LocalCurrency

Foreigncurrency

Total Number ofprojects

LocalCurrency

Foreigncurrency

Total

Commitment 35 714

Disbursement 43 485 - 485 53 534 - 534

Source: Annual financial statement 20010-11

3.4 Sanctions and Disbursement of Working Capital / Commercial LoanDuring FY 2010-11, the bank sanctioned Working Capital loans of taka 105 million to 15 projects and disbursed TK.196million to 13 projects. The bank sanctioned TK.232 million to 9 projects and disbursed TK.32 million to 7 projects in 2007-08.The financial year under review has witnessed a fall in sanction but a rise in the disbursement of working capital

3.5 Others investments:During FY 2009-10 the bank has invested TK. 50.36 million to purchase shares from the primary and secondary market which is higher by TK 15.55 million than those of the previous financial year. During the same financial year, the Bank has earned an amount of TK 27.16 million as capital gain, dividend and commission from share trading. In FY 2007-08, it was TK 10.53 million, showing a rise of 158 per cent 2009-10.

3.6 Projects implementation:The bank intensively monitors and supervises implementation of its financed projects. During FY 2009-10, 8 projects commenced trial run and commercial production and 30 projects are under different stages of implementation .Of these, 14 projects are under construction, 4 have completed loan agreement and 12 projects are awaiting documentation.

Stages of implementation of projectsDifferent stages of project implementation 2009-2010 2010-2011

Start of commercial operation 12 08

Position of projects under implementation:

Under construction 25 14

Documentation completed 24 04

Awaiting documentation 11 12

Total: 60 16

Source: Annual report 2010-11

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3.7 Credit portfolio:A t the year end of 2010 the total number of projects in the portfolio stood at 205 with total loan outstanding of TK 725.63 crore. The total projects included 61 export oriented 85 import substitute and 59 service industries. In 2010, 38 projects with loan liabilities of TK 118.30 core were liquidated. Among these 25 projects were from normal portfolio while 13 projects were from the write off portfolio. During the reporting year 27 new projects entered into the loan portfolio with loan liabilities of Tk.25.26 core in 2010. The sector wise position of Banks loan portfolio was shown below in following table

Sector Wise Position Of Banks Loan PortfolioFor the year ended December, 2010

Sector No of projects Total loan Outstanding (crore)Food and Allied Products 55 48.14Jute and Allied Products 3 26.61Cotton, Woolen and synthetic textiles 60 535.63Textiles 8 12.34Paper, paper products and printing 8 13.02Printing 2 31Tannery and leather products 3 8.04Non-Metallic mineral Products 1 1.68Forest Wooden Products 1 2.51Rubber and rubber products 8 0.19Metal Products 1 11.37Electrical Machinery and Goods 8 4.47Machinery and Spare parts 2 0.12Water Transport 2 0.90Chemical and Pharmaceuticals 15 41.17Petro Chemical Products 2 5.03Service Industries 33 18.61Miscellaneous 9 8.14Total 221 768.97

3.8 Credit Recovered:

Recovery of loan is a crucial index to measure the success of a lending organization. Like previous years, this year too. the Bank has strengthened its recovery drive realizing loans and dues from its borrowers and notable success has achieved. Total recovers)' target of loans during the FY 2010-11 is TK. 163.08 crore against which actual cash recovery is TK. 170.52 showing about 106.54 per cent up to the target. During the reporting year, outstanding loan of TK. 39.85 crore. Tk 23.56 crore classified loan and Tk 24.64 crore from written off

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RECOVERY OF LOANS DURING 2010 (in core)Category of loans Recovery Target Amount Recovered

Unclassified 96.80 122.32Classified 26.28 23.56

Written-off 40.00 24.64Total 163.08 170.52

3.9 Credit Sanction Form:

For loan section must fill up following form with honestly and effective data.Bangladesh Development Bank Ltd

Head office, Dhaka.

Loan operation Department01. Project related information :01.1 Name of the Project & Address : a. Office: b. Factory:01.2. Organization Structure :01.3. Product Mix :01.4. Trade License No. & Date01.5. TIN & Date01.6. Capital Structure of the company a. Authorized Capital:………… b. Paid up Capital:………. c. Value of each Share:………..01.7. Amount Application For 02. Management Aspect02.1 Particulars of Directors/Shareholders/Owners/Partners:SL. No

Name of the sponsors with father& mothers name

Educational qualification

% of share Position Declared Net worth

03. Sponsors: SL. No Name, Age &

TINAddress Relation Experience

Present Permanent

04. Sponsors(s): 05. Sponsors(s) Liability:06. Net worth in Tk…….. (Sl.No.4-SL. No. 507, CIB Report08. Proposed Project Cost & Means of Finance:

(Tk. In “000”)

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Sl No Items Sponsor(s) Equity Bank Loan Total(a) Land(b) Civil Construction(c) Machinery(d) Others

Total:

09. Details of Machinery:Name of Machinery Country Origin Price

10. Profitability:Particular 1st Year 2nd Year 3rd Year 4th YearCapacity Utilization :Net Sales revenue :Gross Profit :Net profit before interest & Tex :Net Profit after tax :

11. Ratio:Particular 1st Year 2nd Year 3rd Year 4th Year

Gross profit to sales :Net operating profit to sales :Net profit after tax to sales :

11.1 Debt- Equity11.2. Fixed Assets Coverage Ratio11.3. Debt Service Coverage Ratio11.4. Break Even Analysis 11.5. Financial Rate of return12. Cash Credit Loan 12.1. Amount of cash credit loan to be required12.2. Description of Collateral Security 13. Source of Equity14. Remarks

Authorized Signature

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Chapter-4

Analysis of Loan Performance

4.1 Definition of loan performance:

Financial soundness of all banks depends on the performance of its disbursed loan on various sectors. Loan performance means how the loans were scheduled to act and how they are actually acting. It is closely associated with timely and steady repayment of interest and principal of a loan. A loan is said to be well performed when its repayment is duly made. If a loan fails to be repaid duly for some consecutive period or installments, it falls under the classification criteria.

4.2 Sector wise loan performance analysis BDBL:

4.2.1 Food and allied products:Food and allied product sector is one of the improving sectors of BDBL. In the financial year 2009-10, food and allied sector got 4% concentration of its total loan outstanding amounting to a total of TK224 million.

Status of classified loan:For the year 2009-10 food and allied sector classified TK38 million as bad loans, representing 17%percent of the total outstanding whereas TK185 million is still unclassified. Percentage of classified and unclassified loan is presented in the following pie chart:Graph:

Findings of the sector:Though the percentage of classified loan is 17% but the total outstanding is still too high in 2009-10, this sector got some improvements over the last couple of years. The following chart shows the improvements

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Graph:

Total bad loan of this sector in 2009-10 was TK 423 million but it was reduced to TK 172 million in 2008-09 and got a dramatic improvement in 2009-10 with a 78%fall to Tk.38 million. This sharp and continuous reduction in Bad loans indicates better loan monitoring and administration in this sector.From unclassified loans point of view, this sector also conveys some positive signal. Unclassified loans with the reduction in bad loans, goes up from 66 million in 2007-08 to 185 million in 2009-10. In short, loans of this sector are performing better year to year and demands constant concentration.

4.2.2 Jute and allied fiber: Jute and allied fiber is that sector with which BDBL is going to close its operation. Already bank has stopped sanction and disbursement in this sector only job of the bank is to recover the amount of loan money which was given before. In 2009-10 this sector got 9%concentration and its loan outstanding amount is 535 million.

Status of classified loan:

For the financial year 2009-10this sector has classified TK 416 million as bad loan which is 78% of total outstanding whereas TK 118 million is still unclassified. The view of the classified and unclassified loan is given below:

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Findings of the sector:

This sector has 78% bad loan comparing with the total outstanding, though it is 78% and seems too high hut if we analyze the previous year's data we will get some different idea about this sector.Graph:

If we start talking about bad loan or classified section we see the difference year to year. In 2008-09 the amount of bad loan was TK 530 million, in 2007-08 the amount was TK 424 million and in 2009-10the amount is TK 412 which is comparatively low than previous years. But the decreasing speed is slow here.If we see the diagrams here we see the amount of unclassified loan is increasing and its growth rate is good enough. It was only TK 7 million in 2008-09 there was huge change, it was TK 112 million which is 16 times more than previous year. And in 2009-10 TK 118 million is also good if we apply the growth of unclassified loan point of view.4.2.3 Cotton and Woolen Products: This is the prime sector among the sectors with those BDBL deals. Sanction, disbursement and recovery all is good in this sector. This is the sector by which the country earns most of its foreign income and it is playing a vital role since couple of years. This sector is getting more concentration year to year 69% of outstanding in this sector.

Status of classified loan:

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In the year 2009-10the percentage of classified loan is TK818 million which is 19% of total outstanding and 81% of total outstanding is unclassified which sounds good is of TK 3504 million.

Findings of the sector: In 2009-10 the amount of bad loan was of TK 1588 million and in the year 2008-09 that was of TK 948 million and in the year 2009-10it is of TK 818 million. So here

If we talk about substandard loan in the diagram, we see in 2008-09 it was of TK 110 million and in 2008-09 it was of TK .158 million and in 2009-10 no existence of this class. So it indicates well because a class has dropped out.In the consecutive years there is no significant change among the amount of unclassified loan, which really proves better performance of this sector better planning, monitoring and controlling of the bank.

4.2.4 Paper and Paper products: Only 2%of total outstanding exist in this sector. This is the sector which is very important for a country, if the sector falls then the country become dependent on import which may not be good for a country.

Status of classified loan: In this sector here the percentage of bad loan is 10% which is relatively low comparing with other sectors and with total outstanding. The amount of bad loan is of TK 14 million in 2009-10 where unclassified loan is 90% and it is of TK 125 million.

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Findings of the sector:In this sector the data gives us that kind of information which can be matter of hope. Here he see, in 2007-08 bad loan was of TK 54 million, in 2005-06 the amount was TK 22 million and in 2009-10the amount is only 14 million. So the falling rate of bad loan is 60% and 37% in two consecutive years, a positive change in unclassified section.

Though in 2008-09 unclassified section showed negative signals and there was also a big amount of doubtful loan but the bank has crossed the session and now is in good position. In 2009-10 the unclassified loan is of TK125 million which is 76.8% more than the last year, so it proves the great performance of the bank and demands such kind of performance in all sectors.

4.2.5 Forest and Wood Products:Though it is an important sector of the country but BDBL is not currently dealing with this sector.

Status of classified loan:There is no amount of outstanding loan in last two years and also classified and unclassified loans.Findings of the sector:In 2008-09 there was only of TK 6 million bad loans in this sector. After that we see no activities of this sector. BDBL need to consider the sector again not only for its profitability but for the people who deals with this sector.

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4.2.6 Transportation:One of the most important sectors with which BDBL deals. This sector has a great utility for communication purpose.Status of classified loan:19% of total outstanding is not bad when the amount of bad loan is falling year to year. In 2009-10the amount of classified loan was 13 million and the unclassified loan was almost 56 million.

Findings of the sector:In 2008-09 the total outstanding amount was bad loan. the amount of bad loan was 15 million which was 26% of total outstanding and that year unclassified loan was 44 million, which was 78% of total outstanding and in 2009-10the difference between classified and unclassified loan improved and turned into the proper way.

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4.2.7 Miscellaneous:When the outstanding amount of a section is 2% of total outstanding and the total amount are classified then the sector is bad can be easily said.

Status of classified loan:In the year 2009-10the total outstanding amount is 97 million and 96.5 million is bad loan, so this is the section which is in danger.

Findings of this sector In 2007-08, the amount of bad loan was 12 million; the amount of substandard loan was 69 million and the unclassified loan was 14 million which only 19% of total outstanding was. In the year 2008-09, the classified loan was 76 and unclassified was 6 million only and the final year the situation is 96 million bad loan and unclassified loan is only 7 million, and the ratio is 14:1. So BDBL need to take quick and effective initiative to bring the sector from this kind of bad situation.

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4.2.8 Classified and unclassified loan at glance:BDBL deals with 18 sectors. 1 or 2 sectors are going to close by the bank because of loan default, government policy, donor pressure etc, but the remaining sectors will run. So if we look at the chart, we see 22% of outstanding amount is bad loan or we can say the portion under classified section and the rest amount is unclassified.

4.3.1 Total Findings in brief:In the year 2008-09, bad loan was 2975 million, doubtful loan was 46 million, substandard loan was 193 million and unclassified loan was 4226 million, go by ratio the situation was 1.3:1. substandard loan was 1.9 million and unclassified loan was 4122 million, the ratio was 2:1, and in the recent last year 2009-10 , the ratio is 2.63:1, so considering the previous situations, comparing the performance of year to year, the bank is performing good now and their loan performance is coming in control

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CHAPTER-5

Practical Experiences Gathered through doing Internship in an Organization.

1. Loan Operation Department This Department is the first day of BDBL.A Senior Principle Officer is my guide officer for day working.As a development bank, BDBL primarily remains committed to committed to provided industrial financing. Bank formulated a lending policy with a view to providing speedy & efficient services to clients in a consistent manner.Loan Section # At first an Application form is supplied to the entrepreneur for tk 3000 only. # After filling up Application form And ready Project Appraisal letter.For achieving loan an investor must fulfill two stepsStep -1

1. Information form (Particulars) for issuing loan application form, an investor must fulfill this from and then submitted it loan operation department. If all required information fulfilled correctly by investor as required of department, department judge this given information within their rules & regulation.

2. Loan application from if investor given information in particulars form are correction then he/she collect loan application form paid of Tk.3000. Investors then fulfills all required information needed in application form and submitted it department along with a feasibility report of his/her proposed project.

Step – 2In this step department judge application form information given by investor and make a project appraisal fill (including technical aspect, market condition, financial ratio, management information) and also judge different ratio related to project. Department also ensure utility service availability that’s why they informed an enquiry committee which committee judge all information given in application form (land position, management position, utility service availability, CIB report etc). After judging all information and if given information are correct for sectioning loan, loan operation department then pass loan fill next department along with all documents and their approved signature.Loan section power of different persons is distinct in policy For private ltd. CompanyMD – 5 corers, DMD – 3corers, GM – 2.5 corers, 4 Zonal DGM – 1.5 corers, Branch manager – 1 corer, Above 5 corers loan consider by board of directorsFor proprietorship/partnership companyMD – 2.5 Corers, DMD – 1.5 corers, GM – 1.25 corers, DGM – 75 laces, AGM – 50 laces, Above 2.5 corers loan consider by board of directors.SMEBank also provided SME loan with a 12% interest rate for manufacturing company and 14% interest rate for service and trading company. Amount of SME loan 50 thousand to 50 laces which is approved by credit committee consists of 4 GM as consultant officer.

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For SME loan investor need to provide application form along with TIN number and treading certificate.

2. Project Implementation Department In this department our guide teacher is Md.Khalid Hossain (D.G.M).After all documental worked completed by documentation department, documentation department then pass application form in favour of procurement & implementation department for final approval. Procurement & implementation department then done all necessary work, and sing an agreement paper. In an agreement paper normally following thing are include:

Definition of the project ● Scope of the agreement Reference ● Price Modes and terms and payment ● Re-inspection Operation and putting into force of the contract ● Liabilities Submission of document ● Termination ● Arbitration

Procurement & implementation closely observed all work of the project in whole life and section loan, implement project work.

3. Loan Recovery Department This is the important department for loan section. Our guide teacher name is Md.Yaqub Ali, Deputy General Manager. He is more cooperative personLoan recovery is held responsible for recover amount of loan along with interest of loan. Loan recovery remove hurdle related to recovery amount. This department always maintains connection with investor for loan recover. Any investor if failed to paid any amount of loan this department communicate them and inform them for collecting loan & interest amount as per rules of loan recovery. Some time an incumbent situation recovery department gives an opportunity to investor for paying his/her portions some time delay. But if an investor modes of payment always delay then recovery department deals with him/her according rules & regulation, if recovery department failed to recover their amount under their rules & regulation they will pass it Law department to deals with investor. 4. Law Department Md. Anisur Rahman who is my guide teacher. When department loan recovery department failed to collects their amount of loan in normal procedure then law department negotiate the situation with clients with the help of court or by law.BDBL has 47 advocate panels for different who are experienced in different Act. To deals with all the case of BDBL in court, lead by a barrister. To collect borrowed fund BDBL normally applied following Act.

1. The Money Laundry Act.2003 2.The Bankruptcy Act. 19973. Public Demand Recovery Act. 1987 4.Negotiable Instrument Act. 1881

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5. Central Accounts Departments For proper functioning accounts department complete their work by 11 sections, each section done separate jobs for complete accounts department works.

Not due section Accurately list prepare list of balance sheet. Advice sending to borrower Quarterly , Monthly, Half yearly, Yearly by interest charge. Policy & General section – (make policy different kinds of policy. Accounts section – (financial statement) Salary section – (salary sheet, welfare fund) Investment section – (loan, SME, bridge, debenture, school banking, deposit,

Green banking, equity loan, support) Provident fund section ● Pension section Bill section ● BBR (Bangladesh Bank Return section) Reconciliation section (inter branch transaction) Treasury & fund management – everyday transaction

Accounts department collects information/data time to time those department and makes final statement of BDBL.

6. Human Resource Management Department Ashraful Islam (Manager) ,BDBLTo assess & collect compatible personal who will be perfect for the bank

To prepare & implement policy about human resources & related activities To take program & implement for developing human resources To control the administration of human resources of the bank To make appointment, promotion & appraising skill of officer & staff To make service rules, administration rules & others rules for proper

controlling of staff To communicate stakeholder or interested party for proper implementation of

labor law To section of staff loan for house building motorcycle and monitor thus loan To assess & grant retirement facilities at the time of retirement

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CHAPTER-6Finding of analysis

The 3 (three) month internship program has been going to be finished through writing a report. During the time of internship I have tried with my best to acquire theoretical and practical knowledge banking business and the investment Sector.While working at Bangladesh Development Bank Limited, Head office and Principal Branch I have attained a newer kind of experience with credit procedure and general banking as well. After collecting and analysis data I have got some findings and recommendations. These findings are completely my personal view of point, which is given below:

● Bank’s gives loan depends on customer relationship with the bank; otherwise in case of new client they take more time to understand client’s activities.

● There is some problem in maintaining the IT support to Banking activities. ● The total number of branches of BDBL Bank limited are fewer then their position in the banking area. Though BDP support is a plus point of them but they have to pay a huge amount for each transaction. So they need to increase the branches in all over the country that they can able to earn more profit.

● Given data for finding lack of credit range?Credit Range Tally Absolute

FrequencyRelative Frequency in Percentage (%) form

Below 50,000 /////// 7 18%50,001-5,00,000 ///// 5 12%

5,00,001-10,00,000 //////////////// 16 40%

10,00,001-100,00,000

//////////// 12 30%

Findings: From the question no.8 highest 40% respondents have taken loan within range Problems Tally Absolute

FrequencyRelative Frequency in Percentage (%) form

Lengthy loan sanctioning process

/////// 7 18%

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High Mortgage Charges //// 4 10%Both lengthy loan sanctioning process and high mortgage Charges

////////////////////////

24 60%

No problem faced ///// 5 12%Others 0 0%

Findings: It is found that highest 60% respondents had faced problem of both lengthy loan sanctioning process and high mortgage charges. Only 12% respondents did face any problem during availing the credit. Normally it takes three weeks to eight weeks to sanction a loan which very lengthy indeed. The loan sanctioning is a long procedure. So many customers are unsatisfied. The bank mortgage charges are very high. It takes more than ten thousand taka to one-lac taka mortgage charges and other cost for making deed also includes insurance charges depend on the value of the property. The customers of small loan might get demoralized● Problem in repayment period.

Repayment Period Tally Absolute Frequency

Relative Frequency in Percentage (%) form

12 Month //////////////// 17 42%24 Month ////// 6 15%36 Month ///// 5 13%48 Month ////// 6 15%60 Month ////// 6 15%

Finding: It is found that highest 42% respondent’s repayment period is one year; 15% respondent’s repayment period is 24 month; 13% respondent’s repayment period is 36 month; 15% respondent’s repayment period is 48 month and the rest 15% respondent’s repayment period is 60month.

● The bank provided most of the credit facilities in the large loans BDBLally for long terms and also gave some personal loans too. It mainly focuses on these sectors because of high profitability and security. But if one of the clients fails to repay the loan then the bank will be in serious trouble.

● The bank’s overall recoveries in different sectors are very encouraging. But recovery from the working capital & import sector and from transport loans, staff loans, and secured overdrafts etc. sector is much higher than the large loan and other sectors ● Some common problem in our country basis on Banking sector. Those Sectors are

To abuse Political power for loan sector. BDBL all of the management and employee are old model basis and manual basis. Lack of problem about GOVT policies. Loan recovery policies are not strong. Lack of Law for credit recovery and credit distribution More corruption

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CHAPTER –SEVENConclusion and Recommendation

Bank and financial institutions can be compared with the heart of an economy, if the circulation of money is not normal the economic growth will be hurdled. Bangladesh is a growing economy, it is growing in every aspect in every day, to help to continue this growth credit flow, credit circulation, and credit recovery should be smoothen. In order to increase more employment, set up new industrial unit, boost up export earning, increase the inflow of FDI, Diversify export, and increase the productivity credit facility must be extended. Proper credit management can give the strength a bank to increase the flow of credit facility, so in coming days I hope bank and financial institutions of Bangladesh will be more efficient in managing credit risk, and will be able to extend the credit facility to different sectors.

If this report can improve the existing condition of sanctioning procedure, and is implemented, my little initiatives will get a breathed satisfaction because I poured effort which I could.

Recommendation Recommendations of these report has been made on the basis of the research findings of the credit facilities of BDBL.It is very difficult to recommend about this topic because of research restrictions and unavailability of data. Despite these problems there is something that the credit department of BDBL,Head Office should look at.

To create better client the bank should increase the amount of consumer loans in a short-term basis.

Most of BDBL loans are in the large sector. If the performance of that sector crash then the bank will fail to continue though the profit is very high. So, the bank should provide more loans of small scale in different sectors though it will decrease the profit a little. But it will be very safe.

In the bank there is a credit risk analysis division. But their activities are rarely seen. This division has to work more and have to point out which sectors are profitable and which sectors are risky.

In case of loan against mortgage, the client should register the land to the bank in the terms that if the client fail to pay off the loan than the bank can capture the land without notifying the court.

In case of mortgage loan, if anybody sues against the land the person should put 50% of the land value to the court.

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The person, who works in Special Asset Management Department, should include in credit approval board.

Credit approval board should include Bangladesh Bank person. More training should be conducted for the bankers to improve their analytical ability

and professional standard and other tools and techniques in selecting the borrowers and analyzing the loan proposals.

Authority should be delegated to the lower level with adequate measures for the necessary control and follow-up for making the lending decision and recovery

One proper standard procedure should be developed for all types of clients and no interpersonal relationship should be involved in approve a loan

Bank should fixed-up specific types of client strategy according to the different character of client.

Interest income occupies the major part of the total earnings of a bank and bank’s profitability mainly depends on interest earning capacity, so bank should establish a research and development cell for the purpose of lending analysis and recovery of loans.o The bank should go for long-term investment. o If possible the credit limit of C.C.S should be increased.o The bank should take much lower security if possible.o Reduce the all political power capacity.o Reduce corruption o Increase HR capacity in credit section.o To prepare new credit policy.o Loan recovery system is manual basis so prepare new process. o Change old model technology system and introduce modern technology.

Chapter-Eight

Reference

1. http:// www. bdblcom.bd 2. Bangladesh Bank guidelines on loan classification. 3. Different Project Appraisal report of BDBL. 4 .Loan sanctioning letter of BDBL. 5. Bangladesh Development Bank Ltd. Ordinance 1972.

6. http://bdbl.com/company_profile.php 7. Human resource manual from BDBL8. Several Booklets & Newspapers, Leaflets, Brochures, Synopsizes etc from

BDBL.9. Ricky W. Griffin, “Management”, 9th Edition10. David A. DeCenzo & Stephen P. Robbins (1999), “Personnel/Human Resource

Management”, Third edition, Prentice Hall: Londo.

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Appendix

Appendix No -1

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Bangladesh Development Bank Limited Highlights on the overall activities of the bank for the year 2010 SL.N. Particulars Amount in Taka 01 Paid up Capital 4,000,000,000 02 Total Capital 15,637,252,156 03 Capital Surplus (Deficit) 6,632,500,000 04 Total Assets 27,518,805,883 05 Total Deposit 3,254,038,394 06 Total loans and Advances 9,906,002,302 07 Total Contingent Liabilities and

commitments 621,557,574

08 Credit Deposit Ratio(%) 304.42% 09 Percentage of classified loans against

total loans advances 31.31

10 Profit after Tax and provision 644,450,574 11 Amount of Classified Loans during

current year 124,293,000

12 Provisions kept against classified loans 1,388,167,767 13 Provision Surplus (Deficit) 280,923,134 14 Cost of Fund(%) 8.91% 15 Interest Earning Assets 11,463,600,000 16 Non interest Earning Assets 16,055,205,883 17 Return on Investment (ROI)(%) 52.75 18 Return on Assets (ROA)(%) 2.34 19 Incomes from Investments 837,929,718 20 Earning Per Share 16.11 21 Net Income Per Share 16.11 22 Price Earning Ratio N/A

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Bangladesh Development Bank Limited Closing Balance with NOSTRO Account As on 31 December 2010

As on 31.12.2010 As on 31.12.2009 Name of the bank

Name of the country

Currency Name

Amount FC

Conversion Rate per unit FC

Amount BDT

Amount In FC

Conversion Rate per Unit FC

Amount in BDT

Standard Chartered Bank

USA USD 121,227.15 70.4650 8,542,271 113,709.27 68.8400 7,827,746

BHF Bank AG

Germany EUR 19,680.61 93.1893 1,834.41 19,687.41 98.5214 1,939,630

Sonali Bank

India ACU 16,595.80 70.4650 1,169,424 16,595.80 68.8400 1,142,455

Dresdner A.G. London

U.K USD 1310.00 70.4650 92,309 1310.00 68.2300 89,381

Dresdner A.G. London

U.K GBP 1000.18 109.2691 109,289 1000.18 109.9364 109,956

Commerz Bank A.G

Germany EUR 7501.94 93.1893 699,101 8996.63 92.3662 875,968

UBAF Japan JPY 75382.00 0.8642 65,145 75382.00 0.7472 56,325 Grand Total 12,511,561 12,041,461

Appendix No -2

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Appendix No -3

For the practical problem overcome and my report prepared create some question .When create any question then my BDBL all officers solve my problem. Some time communicate bank client for specific for data or question. In the following given the important question for internship purpose

Question for customer.Q.- Are you satisfy in BDBL technological support?Q.- What is your Statement about change structure from BSB and BSRS?

Question for bank officer and ManagementQ - What do you think about their training programs? Q.- Are you satisfy in your changing process .Q - How satisfied are you with the salary? .Q - How do you feel about working in this environment? Q.- What is the source of capital of BDBL.Q.- What is the method of their accounting system? Q - How do your colleagues feel about Management?Q.- What is the source of worker? Q.- What is the other income source of the bank?

Questionnaire for Customers

Dear Sir/Madam,

I need your valuable opinion for my internship research project that I am currently doing in Bangladesh Development Bank Limited. It will be an immense help if you take the time to fill in this questionnaire. This study will be used to improve the service quality of Bangladesh Development Bank Limited and my academic purposes. I thank you in advance for your kind cooperation.

General Information

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Name: _____________________________________________ Age:

____________

Address:

_____________________________________________________________

Occupation:

Dear Sir/Madam, Please fill the following questions accordingly

Perception Statements in the Reliability Dimension

Strongly Strongly Disagree agree

1. When your bank promises to do something by a certain time, it does so. 1 2 3 4 5 6 7

2. When you have a problem, your bank shows a sincere interest in solving your problems. 1 2 3 4 5 6 7

3 Your bank performs the right service at first time. 1 2 3 4 5 6 74 Your bank provides its services at the time it promises to do so. 1 2 3 4 5 6 7

5. Your bank keeps you informed about when services will be performed. 1 2 3 4 5 6 7

STATEMENT IN THE RESPONSIVENESS DIMENSION

Strongly Strongly Disagree agree

6. The employees in your bank give you prompt service. 1 2 3 4 5 6 77. The employees in your bank always willing to help you. 1 2 3 4 5 6 78 The employees in your bank are never

too busy to respond to your request. 1 2 3 4 5 6 7

Statements in the Assurance Dimension

9. The behavior of the employees of the bank inspires confidence in you. 1 2 3 4 5 6 7

10. You feel safe in your transactions with your bank. 1 2 3 4 5 6 7

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11. The employees in your bank consistently courteous with you. 1 2 3 4 5 6 712. The employees in your bank have the knowledge to

answer your questions. 1 2 3 4 5 6 7

Statements in the Empathy Dimension

13. Your bank gives you individual attention. 1 2 3 4 5 6 7

14. Your bank has employees who give you individual attention. 1 2 3 4 5 6 7

15. Your bank has your best interests at heart. 1 2 3 4 5 6 7

16. The employees in your bank understand your specific needs. 1 2 3 4 5 6 7

Statements in the Tangibles Dimension

17. The bank has modern-looking and hi-tech equipments. 1 2 3 4 5 6 7

18. The bank’s physical facilities are visually appealing. 1 2 3 4 5 6 7

19. The employees of the bank appear neat. 1 2 3 4 5 6 7

20. Materials associated with the service (such as signs or statements) are visually appealing at the bank. 1 2 3 4 5 6 7

21. Your bank has convenient business hours. 1 2 3 4 5 6 7

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