1Letter of Transmittal……………………………………………………………… i Declaration…………………………………………………………………………ii Letter of Authentication……………………………………………………………iii Acknowledgement……………………………………………………………….. iv Executive Summary………………………………………………………………..v Table of Contents…………………………………………………………………..vi Table of Contents Chapt er Particulars 2 Page Numb er Introduction 1.1 Introduction 1.2 Origin of the report 1.3 Rationale of the Study CHAPTER ONE 1.1 1.4 Objectives of the report 1.5 Scope of the study 1.6 Methodology of the study 1.7 Limitation of the Report 05 05 05 06 06 06-07 07 Literature Review 2.1 Credit Management CHAPTER TWO 2.2 Process of Credit Management 2.2.1 Policy guidelines 2.2.2 Management structures and 2.2.3 responsibilities Program guidelines 9 10 10-11 12 13 JANATA BANK LTD: AT A GALANCE 3.1 Services provided by Janata Bank Ltd. Chapter Three 15 3.2 Credit program 16-18 3.3 Performance of Janata Bank Ltd. 19-20 3.4 Loans and advances 21-22 Fund Invested by Janata Bank Ltd. CHAPTER Four 4.1 Introduction 24 4.2 Economic Sector Wise Distribution of Fund 24 4.3 Nature Wise Distribution of Loans and Advances 24 4.4 Maturity Grouping of distribution loans and advances 4.5 Securities in Credit Management 25 25-26 Loan Disbursement Procedure of Janata Bank Ltd. CHAPTER Five 5.1 Getting Credit Information 28 5.2 Information Collection 28 5.3 Analyzing These Information 28 5.4 Lending Risk Analysis (LRA) 29 5.5 Proposal Analysis 30 5.6 Collateral Evaluation 31 3 Chapter One 4 INTRODUCTION 1.1 Introduction 1.2 Origin of the report 1.3 Rationale of the study 1.4 Objectives of the report 1.5 Scope of the study 1.6 Methodology of the study 1.7 Limitations of the study 1.1NTRODUCTION Now a day, education is not just limited to books and classrooms. In today’s world, education is the tool to understand the real world and apply knowledge for the betterment of the society as well as economy. From education the theoretical knowledge is obtained from courses of study, which is only the half way of the subject matter. Practical knowledge has no alternative. The perfect coordination between theory and practice is of paramount importance in the context of the modern business world in order to resolve the dichotomy between these two areas. Therefore, an opportunity is offered by Dept. of Accounting & Information systems, Jagannath Univesity, for its potential business 5 graduates to get three months practical experience, which is known, is as “Internship Program”. For the competition of this internship program, the author of the study was placed in a bank namely, “Janata Bank Limited “internship Program brings a student closer to the real life situation and thereby helps to launch a career with some prior experience. 1.2 ORIGIN OF THE REPORT This paper is entitled “Credit Management of Janata Bank Limited” originated from the fulfillment of the internship program. For the internship program, each student is attached with an organization. My internship was at Janata Bank Ltd., Mugda branch,Dhaka. During my internship, I had to prepare a report under the supervision of Sajal Kumar dey, Lecturer,Dept. of Accounting & Information systems, Jagannath University. 1.3 RATIONALE OF THE STUDY Due to the increased competition of the increased number of commercial banks and the growing economy, the expectations of the customers have also increased than ever before. Realizing the present condition, banks, especially the commercial banks are trying to elevate their loan giving service as much as reachable to their customers. The most serious difficulty facing the financial sector is the high level of interest rate and inflation rate. So it is the duty of the top management of the commercial banks to work with the situation. 1.4 OBJECTIVES OF THE REPORT The objectives of the report are to determine how credit policy applied in sanctioning and recovering loans and advances. Credit policy varies in terms of loan sector, status of the organization, government policy, fiscal budget and guidelines etc. Specific objectives: To present an overview of Janata Bank Limited(JBL) ► To assess the credit structure of the JBLin practice. ► To measure the effectiveness of the bank in the utilization of available resources. pattern of loan recovery and the performance of the bank under study in loan recovery.6 METHODOLOGY OF THE STUDY The study is performed based on the information extracted from different sources collected by using a specific methodology. the definition of credit management. problems in loan in loan recovery. 1. ► To point out the problems in fund utilization and recovery thereon. Relevant file study as provided by the officers concerned. two sources of data and information have been used widely.6 ► To identify the recovery performance of JBL. The “Primary Sources” are as follows: I have made questionnaire survey of both managers of credit department and the customers who have taken loans from Janata Bank Limited. I would analyze the data on the bank and various programs for loan recovery. tools for managing credit etc. 1. And finally I would conclude with the critical evaluation of the credit management under the guidelines of the Bank Companies Act 1991. In this study I would try to concentrate on the theoretical aspect of credit management. the information in respect to the classification of unsound credit and provision thereon and also concentrates on the performance of the bank. To fulfill the objectives of this report total methodology has divided into two major parts: A) Data Collection Procedure: In order to make the report more meaningful and presentable. IAS#30 and a discussion on the major findings and recommendations. at Mugda Branch.5 SCOPE OF THE STUDY I am assigned to learn practical knowledge from Janata Bank Limited. policy of credit management. The “secondary Sources” are as follows: Annual report of Janata Bank Limited Periodicals Published by Bangladesh Bank . that is. Excel & other related computer software. which was required for the study. Detail explanation and analysis have also been incorporated in the report.7 LIMITATION OF THE STUDY To prepare a report on the topic like this in a short duration is not easy task. There are various information the bank employee cannot provide due to security and other corporate obligations. many of the aspects could not be discussed in the present report. In preparing this report some problems and limitations have encountered which are as follows: a) The main constraint of the study was insufficiency of information.the study has been conducted with the intention of making it as a complete and truthful one. they could not pay enough time. c) Due to time limitation. the bank failed to provide all information. are not in organized way. . Necessary tables have been prepared on the basis of collected data and various statistical techniques have been applied to analyses on the basis of classified information.7 Office files and documents b) Data Processing & Analysis: Collected information have then processed & compiled with the aid of MS Word. 1. in most cases. From the beginning to end. b) As the data. e) Lack of opportunity to access to internal data. d) Since the bank personnel were very busy. 3.8 Chapter Two LITERATURE REVIEW 2. Policy guidelines 2. Program guidelines .2 Management structure and responsibilities 2.2.1.2.1 CREDIT MANAGEMENT 2.2.2 PROCESS OF CREDIT MANAGEMENT 2. Principles of Credit A prudent Banker should always adhere to the following general principles of lending funds to his customers. Background. Character and ability of the borrowers Purpose of the facility. Safety. It is a fundamental precept of banking everywhere that advances are made to customers in reliance on his promise to pay rather than the security held by the banker. proper documentation.9 2. Credit: The word credit is derived from the Latin word “credo” which means “I believe” and is usually defined as the ability to buy with a promise to pay.1 CREDIT MANAGEMENT Credit management is the process of accomplishing various tasks relating to deciding grant or not granting credit to others. Source of repayment. Security. Diversity. Term of facility. determination of terms and conditions. Diversification of banking service has accelerated the use of credit in the expansion of business operation. frequent monitoring and reviewing the performance of borrowers and taking necessary steps to ensure smooth recovery of credit which ensure profit maximization of the bank. It consists of actual transfer and delivery of goods and services in exchange for a promise to pay in future. Profitability. .Loans or credits comprise the most important asset as well as the primary source of earning for the banking institutions. A prudent bank management should always try to make an appropriate balance between its return and risk involved with the loan portfolio. . It is simply the opposite of debt. 2.2.2 Management structure and responsibilities 2. establish minimum standards for segregation of duties and responsibilities.1. Lending guidelines: The lending guidelines include the following: Industry and Business Segment Focus Types of loan facilities Single borrowers/ group limits/ syndication Lending caps Discouraged business types As a minimum. Policy guidelines a.2.1 Policy guidelines: 2. The guidelines for credit management may be organized into the following sections: 2. . the followings are discouraged: o Military equipment/ weapons finance o Highly leveraged transactions o Finance of speculative investments o Logging. or other activity that is ethically or environmentally sensitive o Lending to companies listed on CIB black list or known o Counter parties in countries subject to UN sanctions o Lending to holding companies. and assist in the ongoing improvement of concerned bank. mineral extraction/ mining.2.2PROCESS OF CREDIT MANAGEMENT Credit management must be organized in such a process that the bank can minimize its losses for payment of expected dividend to the shareholders.3. Program guidelines: Now the guidelines are discussed in the following: 2. The purpose of this process is to provide directional guidelines that will improve the risk management culture.10 2. as a minimum. interest) Security arrangement Any other risk or issue Risk triggers and action plan-condition prudent. should be referred to Head Office for approval. Risk is graded as per Lending Risk Analysis (LRA).11 b. Bangladesh Bank’s Guidelines of classification of loans and advances. etc. . Approval Authority: Approval authority may be as the following: Credit approval authority has been delegated to Branch Manager. MD/ Board: Approvals must be evidenced in writing. Credit Applications should summaries the results of the risk assessment and include. Any credit proposal that does not comply with Lending Guidelines. repayment schedule. c. covenants. Credit Assessment and Risk Grading: A thorough credit and risk assessment should be conducted prior to the granting of loans. regardless of amount. Approval records must be kept on file with credit application The aggregate exposure to any borrower or borrowing group must be used to determine the approval authority required. and at least annually thereafter for all facilities. the following details: Environment or social risk inputs Amount and type of loan (s) proposed Purpose of loans Loan structure ( tenor. Credit Committee by the MD/ Board Delegated approval authorities shall be reviewed annually by MD/ Board. Loan Recovery . Internal Control and Compliance: Banks must have a segregated internal audit/ control department charged with conducting audits of all branches.2.12 d.2. Management structure and responsibilities The following chart presents an example of credit management structure: Managing Director HO Business Development / Corporate Banking / Marketing Credit Committee HO Credit / Risk Branch Manager Marketing Credit Officer Credit Admn. Segregation of Duties: Banks should aim at segregating the following lending function: Credit approval/ risk management Relationship management/ marketing Credit administration e. 2. The primary functions of recovery unit are: ▪ Determine account action plan/ recovery strategy .2. d. Credit administration: The credit administration function is critical in ensuring that proper documentation and approvals are in place prior to the disbursement of loan facilities. Program guidelines a.3. monitoring procedures and systems should be in place that provides an early indication of the deteriorating financial health of borrower. Approval process: The following diagram illustrates an example of the approval process: Credit application recommended by Branch Manager / Relationship Manager / Corporate Head Office. Credit recovery: The recovery unit of branch should directly manage accounts with sustained deterioration (a risk rating of sub-standard or worse). c. Credit monitoring: To minimized credit losses. Credit Division Head Office Credit Committee Executive Committee of Board of Directors b.13 2. 3 Performance of Janata Bank Ltd. 3.1 Services provided by Janata Bank Ltd. 3.14 ▪ Pursue all options to maximize recovery.2 Credit program 3.4 Loans and advances . Chapter Three JANATA BANK LTD: AT A GALANCE 3. including placing customers into receivership or liquidation as appropriate. has correspondent banking relationship with all major banks located in almost all the countries/cities. Mail Transfer d. Pay Order e. Telegraphic Transfer c.1 SERVICES PROVIDED BY JANATA BANK LTD. Janata Bank Ltd. Security Deposit Receipt f. has already established a world wide network and relationship in international Banking through its 4 (four) overseas branches and 1221 foreign correspondents. offers all the major banking facilities and services to its customers.15 3. Janata Bank Ltd. The Bank provides the following Internet facilities: Current/Savings/STD account status FDR account status Advance account status Loan account status Remittance services are available at all branches and foreign remittances may be sent to any branch by the remitters favoring their beneficiaries. Remittances are credited to the account of beneficiaries instantly or within shortest possible time. Demand Draft b. Janata Bank Ltd. The Bank with it's network spreading throughout the country has a unique feature of ploughing back savings from those places and then investing them into different loan portfolios. i) Normal transfer ii) Electronic transfer through Ready Cash Card. Expatriate Bangladeshis may send their hard earned foreign currencies through those banks or may contact any renowned banks nearby ( where they reside/work) to send their money to their dear ones in Bangladesh. The Bank has earned an excellent business reputation in handling and . with its wide ranging branch network and skilled personnel provides prompt and personalized services like issuing: a. Transfer of fund by special arrangement. Janata Bank Ltd. Major sectors include Jute. 2014as compared to BDT 138492. As a nationalized Bank it has a social responsibility to improve the financial condition of the poor/unemployed people. however. Credit facilities are extended as per guide-lines of Bangladesh Bank (Central Bank of Bangladesh) and operational procedures of the Bank. Prime customers enjoy prime rate in lending and other services. With a view to perform that social responsibility.4549 Rural Credit.45 million as of December 31.2 CREDIT PROGRAM General and Industrial Credit: Janata Bank Ltd. credit facilities have been extended to productive and priority sectors.9 121204. Bank has initiated rural credit program since 1974. Textile Ind. Year 2011 2012 2013 2014 Advance 107786 99748. and Export & Import etc. Food & Allied. The Bank finances exports within the frame-work of the export policy of the country. 3. change from time to time depending on the level of competition in the financial sector. Quick appreciation. & trade.The rates may. Following the guideline of Bangladesh Bank. Program Financing: Loan is provided to the rural people for agricultural production and other off-farm activities.5127 million in 2013. Increase rate is 6% compared to 2014. appraisal. In extending credit facilities. has formulated its policy to give priority to small and medium business while financing large scale enterprise through consortium of banks total loan and advance of the bank stood at BDT 121204. Now under this rural portfolio there are 33 products. the Bank has given due importance to sectoral needs and requirements of both public and private sectors. Micro Ent. Loan pricing system is customer friendly. Steel & Engineering.16 funding international trade particularly in boosting export & import of the country. & SP. decision and disbursement are ensured.7 101461. . 00 6 7 8 9 sheep farming Gharoa project Crop loan program Doctor’s loan Small business Dev.6 35 100 total A vast majority of the Bangladeshis live in the rural areas and their main source of income is agriculture and agro-business.17 Information related to important products under this program are shown below: Table: different products under the program Taka in million Sl.0 .0 9728.35 .8 1.8 20.7 3 horticulture nursery Credit program for 46312 1002.15 .50 5 entrepreneurship” Financing goat and 21109 131. 2321 335075 55 93 35. Apart from accepting deposits from the rich and .35 10 Loan Others 159335 565315 3374.25 1 2 Cyber-café loan Credit for forestry/ 36 754 2014 8.00 10 4 employees Financing “ women 225 44.40 52 .5 .6 19.3 5073. Name of product No. No of Outstanding % loanees Amount .8 18. Janata Bank Ltd. has opened branches in rural areas to cater to the banking needs of rural people. Tea Production & Processing Loan 10. Under this scheme. . crop loan project all are designed for this purpose. Janata Bank Ltd. Women Entrepreneurs Development Scheme: Women Entrepreneurs Development Scheme has been introduced to encourage women in doing business. 1.3 PERFORMANCE OF JANATA BANK LTD. has been financing agricultural production and poverty alleviation programs since 1977. Rural Transport 7. Total loan outstanding in 2014 was Tk 3552.00 (around US$ 200) and the number of borrowers under rural credit scheme is more than 500. So far lending in rural area is concerned. Irrigation and Agricultural equipment 3.000. Different Micro Credit Programs SME Financing Scheme: Small and Medium Enterprise (SME) Financing Scheme has been introduced to assist new or experienced entrepreneurs to invest in small and medium scale industries. credit for forestry/Horticulture/Nursery. Agri-business Loan 9. Janata Bank Ltd. of loaned were 31 3.07 crore The no. Short Term Crop Production Loan 2. The average loan size is about Taka 10. the bank finances the small and cottage industry projects sponsored by women. Weavers Credit 8. Fish/Shrimp Production 4. It also lends to the poor landless so that they can make a living. Horticulture Development 5.18 moderately well-off villagers. Doctors’ Credit Scheme: Doctors’ credit scheme is designed to facilitate financing to fresh medical graduates and established physicians to acquire medical equipments and set up clinics and hospitals. Gharoa project. Agro-based Industry 6. encourages the poor people to make small savings through different mechanisms.000. Small business development loan. The bank evolved a number of attractive deposit schemes to care to the requirement of small and medium services. Comparative interest rates deposit mobilization efforts of the bank and confidence reposed by the customer in the bank contributed to the notable growth in deposit.5359 million in 2013 . This improved not only the quantum of deposits.1912 182946.985159 59817. it also brought about qualitative change in the depositors structure.5359 As on 31-12-14 35510. is the second largest commercial bank in Bangladesh. protects depositor’s interest. It provides credit to deserving borrowers and at the same time. The aim of the Bank is to actively participate in the socio-economic development of the nation by operating a commercially sound Banking system. Deposit and Deposit Mix: Break-up of Deposit and Deposit Mix Taka in million Type Current and others account deposits Bills payable Savings Bank Deposit Term Deposit Total As on 31-12-13 28388.70393 98520.79648 62723.55685 198635.892 .635.89 million in 2014 as compare of BDT 182946. mobilized total deposit of BDT 198.83478 1880.2688 1558.08979 93182.19 Janata Bank Ltd. Deposits:Janata Bank Ltd. The investment portfolio of the Bank is comprised of Treasury bill. offers credit to almost all sectors of commercial activities having productive purpose. at a reduced . Credit Line/Program is financing business.38603 55862. Janata Bank Ltd.8 28375 24785.4 LOANS AND ADVANCES: The main focus of Janata Bank Ltd. in million) 20455. other bonds.20 Investment: To earn profit. Year wise investment of the Bank is shown in the following table: Year 2011 2012 2013 2014 Investments (Tk. Credit is also offered to 15 (fifteen) thrust sectors. trade and industrial activities through an effective delivery system.93039 3. The loan portfolio of the Bank encompasses a wide range of credit programs covering about 200 items. as earmarked by the govt. The Bank earns a handsome profit from this investment portfolio.. Shares etc. Debenture. the Bank Prudently invests its fund to different sectors. the Bank has given due importance to sectoral needs and requirements of both public and private sector.19 2140 1434 1596 .02 51.45 4 2.48% 2.19% 100. etc.7 12120.21 interest rate to develop frontier industries.2 . corporate bodies. traders.89% 300. Credit facilities are offered to individuals.43% 81. businessmen.00% 1% (Taka in crore) 1 2 3 4 5 Name of sector Bangladesh PC BJMC Steel & Engineering Food & allied Export credit 6 Import credit 7 Industrial credit Total 1545.204.0 . The elaborate status is as follows: (Figure in TK) BL DF SS SMA Standa Total rd 1577 108.36 156.90 9840.In credit facilities.31 293. credit facilities have been extended to productive and priority sectors.38% is classified. The outstanding advance of the bank is Tk121. small and big business houses. Sector wise Advances are shown below: Credit constitutes 50% of banks assets and this portfolio is the most important objective of the Bank of which 16.15 727.45 million on 31st December 2014.30 0 13. manufactures. Following the guidelines of Bangladesh Bank. 720 1020.38 .66 17216. ME & SP 983 Financing 9 Staff loan 10 General cerdit 11 BCIC Grand total 843 6.22 8 Rural. and yield earnings for the bank. .1 INTRODUCTION 4.1 INTRODUCTION The principal function of a bank is to lend.5 SECURITIES IN CREDIT MANAGEMENT 4. the principal of self-reliance.23 Chapter Four FUND INVESTED BY JANATA BANK LTD. has the greatest impact upon them.3 NATURE WISE DISTRIBUTION OF LOANS AND ADVANCES 4. therefore. 4. Lending is a dynamic activity. instills and encourages.2 ECONOMIC SECTOR WISE DISTRIBUTION OF FUND 4. at the individual level. It is through the medium of lending the banking industry promotes economic activity. It is lending alone that brings banking into a more meaningful and purposeful contract with public and.4 MATURITY GROUPING OF DISTRIBUTION LOANS AND ADVANCES 4. I would try to concentrate on Janata Bank Ltd. pattern. . advances and recovery rate etc. The bank under study has divergence in its investment portfolio.’s nature. 4. Only a small portion of the bank’s demand and time liability are advanced on long term basis where the banker usually insists on a regular repayment by the borrower in installments. and allocation of invested resources in this chapter. 4. sanctions loans under the above mentioned category.3 NATURE WISE DISTRIBUTION OF LOANS AND ADVANCES Sanctioning advances to customers and others is one of the principal services of a modern bank. is engaged in extending long. While lending fund. industrial credit program and commercial financing. therefore. As Janata Bank Ltd.24 Proper utilization of fund is an essential pre-requisite of successful bank management. follows a very cautious policy and conduct his business on the basis of well-known principles of sound lending in order to minimize the risk. extends its credit programs all over the economy such as agricultural credit program. Advances by the commercial banks are made in different forms: Loans Overdrafts CC LIM LTR Bills purchase and discounted Janata Bank Ltd. It usually grants short term advances which are utilized to meet the working capital requirements of the borrower.2 ECONOMIC SECTOR WISE DISTRIBUTION OF FUND Janata Bank Ltd. The procurements of funds supported by an efficient deployment of that procured fund lead a bank to the highest point of profitability. a banker. the bank tries to achieve significant profit from its operations and also to improve the economic conditions of the general public of the country. loan programs. medium and short term loans to various economic sectors in the country. 25 4. Security is obtained as a line of last defense to fall back upon. therefore.5 SECURITIES IN CREDIT MANAGEMENT One of the most important functions of a bank is to employ its fund by way of loans and advances to its customers and a bank’s strength depends considerably on the quality of its loans and advances. Janata Bank Ltd. Banks having a large number of officers over a wide area cannot allow loans and advances without retention of security in one form or the other. Short term loans ensure liquidity to a greater extent than long term loan. The position is quite different today. A banker would be failing in his duty to safeguard the interest of his depositors and shareholders if his credit policy does not provide a method of gradual repayment and final recovery of the money advanced. In order times.. Janata Bank Ltd. granted to meet the working capital requirements of the borrower rather than to meet the fixed capital requirement. But taking security. construction of building or purchase of fixed deposits. It is meant to be an insurance against emergency. security continues to be one of the most important factors which determines to a significant extent the banker’s willingness to lend money.4 MATURITY GROUPING OF DISTRIBUTION LOANS AND ADVANCES At the very beginning of taking decision for giving credit. A sizable portion of bank advances are. For liquidity reasons. bank acquires a claim upon the assets of . when the bankers knew the customers personally and intimately and had complete confidence in the integrity and honesty of a customer. they used to allow loans and advances without a security.is giving credit on short period basis and against security. Though the banks are now expected to lay greater emphasis on the purpose for which the borrower needs rather than security he can afford to give. i. As it is doing business by public deposits. We can classify the bank loans and advances under the following maturity stage: ► Payable on demand ► Payable within 3 months ► Payable within 3 months to 12 months ► Payable within 1 year to 5 years ► Payable in more than 5 years 4. it is bound to pay the money when people want. mainly concentrates mainly on liquidity.e. keeps sufficient security before final sanctioning of loans and advances. 17/1977 and also the negotiation of the respective branch to its borrowers.26 the borrower if repayment is not made as planned. The most significant categories of security lodged are as: Goods and commodities FDR Real estate Stock exchange securities Life insurance policies Gold and gold ornaments Documents of title of goods Supply bills Janta Bank Ltd. But what should be the significant securities of loans depends in the guidelines prescribed by the Bangladesh Bank through BCD circular no. Chapter Five . collects credit information about the applicant to determine the credit worthiness of the borrower.6 COLLATERAL EVALUATION 5. Confidential report from other bank Head Office/Branch/chamber of the commerce. CIB Report from Central Bank.8 PROPER SUPERVISION OF THE PROJECT 5.1 GETTING CREDIT INFORMATION 5. 5.4 LENDING RISK ANALYSIS (LRA) 5. The bank collects the information about the borrower from the following sources: Personal investigation.5 PROPOSAL ANALYSIS 5.3 ANALYZING THESE INFORMATION 5. .2 INFORMATION COLLECTION 5.27 LOAN DISBURSEMENT PROCEDURE OF JANATA BANK LTD.10 CREATION OF CHARGES FOR SECURING LOAN 5.1 GETTING CREDIT INFORMATION Janata Bank Ltd.7 FINAL DECISION ABOUT THE PROJECT 5.9 DOCUMENTATION OF THE LOAN 5. 000. partners and Directors. Janata Bank Ltd. then bank goes for further action. LRA and SA are a must for the loan exceed of one crore.2 INFORMATION COLLECTION The loans and advances department gets a form filled by the party seeking a lot of information. 00. i.4 LENDING RISK ANALYSIS (LRA) LRA is a very important and vital analysis for deciding whether the loan proposal is potential or not. Other relevant information. Financial Statement of the last three years. Nature and details of business/products. Details of securities offered. mathematical. According to Bangladesh Bank Rules. Data of establishment and place of incorporation. then bank goes for Lending Risk Analysis (LRA) and Spreadsheet Analysis (SA) which are recently introduced by Bangladesh Bank. Particulars of personal assets. Constitution or status of the business. 5. Details of liabilities in name of borrowers. Credit worthiness analysis. Particulars of properties. maintains a prescribed . name of subsidiaries.28 5. The information is listed below: Name and address of the borrower (present and permanent). then it examines the documents submitted and the credit worthiness. If comply. If these two analyses reflect favorable condition and document submitted for the loan appeared to be satisfactory. Background and business experience of the borrowers. statistical and managerial tools and devices are required to perform this analysis. Many types of scientific. Proposed debt equity ratio. percentage of share holding and nature of business. 5. then starts examination whether the loan applied for. in the name of any directors.3 ANALYZING THESE INFORMATION Janata Bank Ltd. analysis financial conditions of the loan applicant is very important.e. If loan amount is more than 50. is complying with its lending policy. Security Cover Risk. Company Position Risk: i. After preliminary appraisal of the loan project the final approval is obtain from the manager. Management Competence Risk.What is the risk of failure to disruption in the supply of input? ii.What is the risk of failure due to lack of management competence? ii. Lending Risk Analysis (LRA) a) Industry Risk: i.What is the risk of failure due to lack of resilience to unexpected external condition? 2. managers send the loan project to the principal office for final approval.What is the risk that realized security value is less than the exposure? 5. Supply Risk.What is the risk that the bank fail to realize the security? ii. Resilience Risk.29 format for Lending Risk Analysis. which includes a spreadsheet to analyze a lot of things.5 PROPOSAL ANALYSIS The Project Proposal is analyzed and decision about the project is taken. given expected external condition? ii. Performance Risk.What is the risk if the company position is so weak that it can not perform well enough to repay the loan. The experts in principal office find out different projected ratios and developed . If the loan amount crosses a certain amount (no found).What is the risk of failure due to disruption sales? b) Company Risk: 1. Security Control Risk.What is the risk of failure due to lack of Management Integrity? c) Security Risk: i. It is not possible to discuss the entire LRA in this report. The loans and advance department is responsible for the analysis. Management Risk: i. Sales Risk. Management Integrity Risk. is very cautious about valuation of the collateral.30 and understanding about the potentiality of the project. Safety is measured by the security offered by the borrower and repaying capacity of the borrower. Before approval of any loan project the bank authority has to ensure that the proposed project will be profitable venture. The sources of the payment of the project should be a feasible one. 5. So bank has to see that the collateral is easy to sale and sufficient to recover the loan amount. The profit is the blood of any commercial institution. Bank can not sanction loan by only depending on collateral. Bank evaluates a loan proposal by considering few predetermined variables. During sanctioning any loan Bank has to be attentive about diversification of risk. The bank officials simultaneously evaluate the collateral of the party offered by the private firm. All money must not be disbursed amongst a small number of people. Profitability is assessed from the projected Profit and Loss Statement. The valuation of the collateral increases the accuracy of its value estimated. The most important measure of appraising a loan proposal is safety of proposal. Three types of value of the collateral are assumed: Current market price . Liquidity means the inflow of cash into the project in course of its operation. The security is the only tangible asset remains with the banker. The attitude of the borrower is also important consideration.6 COLLATERAL EVALUATION: Janata Bank Ltd. Securing of collateral is the only weapon to recover the loan amount. These are: Safety Liquidity Profitability Security Purpose of the loans Sources of repayment Diversification of risk etc. In addition any project must be established for the national interest growth. 5. Guarantee of the Directors of the company. If no such clause to supervise the loan is added. the borrower withdraws his all claim on the property/mortgaged. 5.9 DOCUMENTATION OF THE LOAN These are the most frequently used and common documents of above mentioned charged and for other formalities for sanctioning the loan: Demand Promissory Note: Here the borrower promises to pay the loan as and when demanded by the bank to repay the loan. Personal guarantee: It is the additional confirmation of the borrower to repay. Letter of disclaimer: By this letter. Letter of Continuity: It is used to take continuous facilities as providing continuous securities.7 FINAL DECISION ABOUT THE PROJECT If the loan decision remains with the branch level. Stock Report: This report is used for SOD and CC. go to the project area to observe how the loan is utilized. Letter of Arrangement: Here the written amount of the loan sanctioned to the borrower is specified. that branch sanctions the loan and if the approving authority is Head Office then the decision comes to the branch by telex or fax.31 Distressed price Price after five years The legal officers of the bank check the document ascertain their impurity. 5.8 PROPER SUPERVISION OF THE PROJECT If such provision is kept in the sanction contracts. Letter of Hypothecation: It is the written document of the goods hypothecated thus to put in case of need. the Janta Bank officials Ltd. even then the bank can see the performance of the project. In this report information about the quality and quantity of goods hypothecated have furnished. Resolution of the board of directors: It is used to borrow the fund to execute documents and complete other documents. . Any document if described. as essential in the sanctioned advice sanctioned by the Head Office. Commitment of the borrower. Letter of Disbursement: This is the document through which the payment of sanctioned loan indicates. Letter of Pledge: It is the written document of the goods pledge thus the legality of holding the goods.10 CREATION OF CHARGES FOR SECURING LOAN For the safety of loan. . b) Collateral Security-Any type of security on which the creditor has personal right of action on the debtor in respect of advance.32 Letter of Acceptance: Letter indicating the acceptance of the sanction proposal by the borrower. Letter of Installment: The amount of installment that is to be paid at certain intervals. perfect complete. Letter of partnership: In case of partnership firm. requires security from the loaner so that it can recover the loan by selling security if borrower fails to repay. Ensuring the recovery of the money lent. Securities are of two types: a) Primary Security-Security deposited by the borrower himself to cover the loan such as FDR. the partnership deeds are to be provided. Creation of a charge means making it available as a cover for an advance. Janata Bank Ltd. 5. easily cashable items. Tax Paying Certificate. PSP. Provision against unexpected change. The method of charging should be legal. Importance of charging securities is as: Protection of interest. cash. PSS. 6.3 RECOVERY PATTERNS AND LOAN AND ADVANCES 6.4 PROBLEMS IN LOAN RECOVERY .33 Chapter Six RECOVERY PERFORMANCE OF JANATA BANK LTD.1 PROGRAMS FOR LOAN RECOVERY 6.2 RECOVERY PROGRAMS TO BE TAKEN BY JANATA BANK LTD. 6. Outstanding: Outstanding figures in the ledger at the end of the reporting period. Demand for recovery: overdue at the end of the reporting period plus recovery during the reporting period. they clearly state the repayment pattern in the loan agreement.1 PROGRAMS FOR LOAN RECOVERY When Janata Bank Ltd. 6. . This situation is. especially severe in Janata Bank Ltd.3 RECOVERY PATTERNS AND LOAN AND ADVANCES Generally Janata bank Ltd.34 6. But some credit holders do not pay their credit in due period. To establish credit supervision and monitoring cell in the bank To re-structure the loan sanctioning and distributing policy of the bank To sanction loans and advances against sufficient securities as best as possible to give more powers to the branch manager in credit management decision making process To offer a package of incentives to the sound borrowers To give more emphasis on short term loans and advances To impose restrictions on loans and advances for sick industries To take legal actions quickly against unsound borrowers as best as possible within the period specified by the law of limitations. The nationalized and private sector commercial banks have to face this sort of problems. sanctions loans and advances to its customers. Recovery: highest outstanding balance on any date during the reporting period minus outstanding balance at the end of the recovery period. we have to be familiar with some terms used in recovery performance: Disbursement: highest outstanding balance on any date during the reporting period minus outstanding balance at the end of the preceding period. Before going into details of recovery performance.2 RECOVERY PROGRAMS TO BE TAKEN BY JANATA BANK LTD. To overcome the problem of overdue loan. 6. sanctions loans and advances to every sector of an economy. Overdue: Demand for recovery minus recovery. the bank need take particular loan recovery program. Problems created by economic environment The following problems arise from the effect of economic environment: 1. the problem in loan recovery proves the outcomes of the default process in loan disbursement. . External pressure: Janata Bank Ltd. As a result. The cost of production is high and the quality of goods is not of required of standard. and investigation of the loans etc. 3. 2. In most cases.4 PROBLEMS IN LOAN RECOVERY There are a lot of reasons for which the loan recovery of the bank is very defective. is bound to sanction loan to government organization. has also faced many problems in the loan recovery process as a part of continuous pressure from various interested groups.35 6. problems may be raised from sanctioning procedures of loan. Changing in industrial patterns: The nationalized banks sometimes sanction loan to the losing concern for further improvement of the respective sector. In the long run. 2. the amount of classified loan increases. Problems created by government The following problems are arisen by the government: 1. Rapid expansion of business: There are many companies which expand their business rapidly. Loan to government organization: Janata Bank Ltd. though these are losing concern. Operation of open market economy: In our country mainly industries become sick and also close their business on account of emerging of open market economy. they become the losing concerns and the amount of bad loan increases. that is. For this reason. but in most cases. Changing in the management pattern: Changing of management patterns may delay the recover of mature loan. investigation of the project. 4. they fail to achieve progress. The main reasons of poor loan recovery are categorized in four broad types as follow: A. but the expansion is for short time. banks faced problems in loan recovery. B. 2. C. They are as: Loans are given under fictitious names and enterprise Loans are given without sufficient securities Approval of the loans in excess of the branch manager’s power Improper monitoring and supervision of credit Political misuse if loan programs operated by the public sector banks Lack of timely action against willful defaulter Loans are sometimes for economically unsound project. Janata Bank Ltd. the bank cannot recover its loan through the sale of mortgage. defaulters can get release easily from all charges against them. does not properly analyze the business risk of the borrowers and the bank cannot forecast whether the business will succeed or fail. Legal problems: Existing rules and regulations are insufficient to cover the legal aspects of loan recovery. Frequent changes in government policies in regard to recovery of loan. bank fails to determine the value of security against the loan. 4. if the loan becomes classified.36 3. Lack of proper valuation of security or mortgage property: In most cases. Problems created by the bank: The following problems are created by the banks: 1. All of these reasons discussed above are general reasons for problems loan recovery of Janata Bank Ltd. the loan becomes classified. As a result. there are some specific reasons for loan recovery problems faced continuously by Janata Bank Ltd. Besides these. . Problems in loan recovery are the outcome of the default on loans disbursements in the earlier period. If it fails to run well. As a result. Lack of analysis of business risk: Before lending. 37 Chapter Seven CLASSIFIED LOANS AND BANK’S PERFORMANCE 7.2 SIGNS FOR CLASSIFICATION 7. .3 LOAN CLASSIFICATION-GUIDELINES FROM BANGLADESH BANK 7.4 PERFORMANCE OF JANATA BANK LTD.1 INTRODUCTION 7. 2. 6. 4. Non payment of interest or principal or both on due dates or past dues beyond a reasonable period or recurring past dues. The Bank has to classify this loan.a-days commercial banks are not performing their activities smoothly for a large burden of default loan.2 SIGNS FOR CLASSIFICATION First and foremost requirement for any and all credit managers is to identify a problem credit in its earlier stages by recognizing the signs of deterioration.38 7. A shortfall in collateral coverage. In case of Overdraft no movement in the account beyond a reasonable period. distributes thousand crore taka among individuals. Such signs include but not limited to the following: 1. But now. Death or withdraw of key-owners or management personnel. 3. but a large sum of these distributed fund cannot be recovered in due time. Adverse market report about the company itself or its principal owners. RAKUB. performance of the bank regarding classified loan and recovery of such classified loan. In 1989. 7.1 INTRODUCTION Banks are financial service firm. 5. In this chapter I would like to concentrate on classification procedure. Bangladesh Bank issued BCD circular No.3 LOAN CLASSIFICATION-GUIDELINES FROM BANGLADESH BANK Classification of overdue loans and advances opened a new era in the credit management of commercial banks in Bangladesh. provision making for particular classification. Every year Janata Bank Ltd. producing and selling professional management of the public’s funds as well as performing many other roles in the economy. 7. Before 1989 no specific guidelines were followed by the commercial banks for this purpose. 7. as gathered from client’s latest financial statement. Company filing for bankruptcy or voluntary dissolution. and BSB would be responsible for its own loan classification according to the guidelines are presented in the following table: . After that each schedule banks except BKB. particularly if the collateral was a key factor in the decision-making. organizations etc.34/1989 stating specific rules and conditions of loan classification. Deterioration in financial condition of the client. ” which came into implementation from January 1.39 TABLE: LOAN CLASSIFICATION SYSTEM* Length of overdue Status of Rate of provision Frequency classification of classificatio n All loans except Annual provision Agricultural loans: Less than 1 year Loans overdue for 1 year Unclassified Substandard 1% 10% but less than 3 years Loans overdue for 3 years Doubtful 50% but less than 5 years Loans overdue for 5 years or Bad/loss 100% more For agricultural loan: Classified. This process was continued till 1994. years or more Loans overdue for 5 years or doubtful Bad/ loss 100% more *Source: BCD Circular no. The title of the circular was “Revised rules of classification and provisioning of loans and advances. Table: schedule of loan classification and provision program* a. Bangladesh Bank further issued a circular in1995 (BCD circular#20/1994). 1995. 5% Loans not overdue for 5 substandard. types of classificatio 1st stage 2nd stage 3rd stage 4th stage 5th stage Period Period Period Period Period overdue Less than overdue Less than overdue Less than overdue Less than 6 overdue Less than 3 18 months 12 months 19 months months months n Unclassified . 1989 According to this circular loans and advances were classified on a loan by loan basis rather sample classification. 40 18 months 12 months 9 months 6 months or more or more or more or more but less but less but less but less than 36 than 24 than 24 than 12 months 36 months months 24 months months 12 months months 9 months or more or more or more or more but less but less but less but less than 48 than 36 than 24 than 12 months More than months 36 months months 36 months months 24 months 12 months 48 months or more or more or more or more provision Unclassified Substandard Doubtful Bad c.09% of total credit is classified. 20 of 27/12/1994 7. . That is.71% of total credit is classified. That is 23. total loan of the bank was TK 52676 crore of which classified loan was TK 12163 crore. rates of basis basis basis basis *Source: BCD circular no. From my analysis it is found that during first phase (1998-2002) total loan of Janata Bank Ltd. During second phase (2009-2014). 15.4 PERFORMANCE OF JANATA BANK LTD. period of 1% 10% 50% 100% Annual 1% 10% 50% 100% Half yearly 1% 15% 50% 100% Half yearly 1% 15% 50% 100% Quarterly 1% 20% 50% 100% Quarterly classification basis Substandard Doubtful Bad 3 months or more but less than 6 months 3 months or more but less than 6 months b. was TK 51285 crore of which classified loan was TK 8055 crore. 8.1 INTRODUCTION 8.41 Chapter Eight CREDIT RATING OF JANATA BANK LTD.3 FACTORS OF CREDIT RATING .2 CREDIT RATING 8. 42 8. Owership ii.Funding & Leverage iv. 8.Quantitative Factors: i. Risk Management iv. Accordingly Janata Bank has appointed Credit Rating Agency of Bangladesh (CRAB) to conduct Credit Rating of the bank which completed invariably by 30th June 2007. Market Sensitivity B. Support etc. The first rating by an external independent rating agency will have to be completed by June 2007.Capital adequacy ii. With this end and view a memorandum of understanding has been signed in between Janata Bank and CRAB on 14th May 2007.1 INTRODUCTION Bangladesh Bank has made mandatory from January 2007 for all banks to have themselves credit rated by a credit rated agency vide BRPD Circular no.Earning Quality vi. Compliance with the Statutory v. 6 of July 2006 for all banks. Accounting Quality vi. .Govt. Size & Market Pressure vii.2 CREDIT RATING Credit Rating of Banks provides opinion on the types of risks associatesd with the relative ability of a bank for timely servicing its debts and other obligations.Liquidity Requirements v.Assets Quality iii. The rating exercise is done through a quantitative cum qualitative approach following a structured methodology. 8. Qualitative Factors i. Management Quality iii.3 FACTORS OF CREDIT RATING The major factors considered in rating analysis are as follows: A. 43 Chapter Nine Findings and Analysis . 2. If we look at the historical background of Janata Bank. has a significant role in long term project financing in both agriculture and industrial sectors.dressing that means accounts are so manipulated that the vital facts are concealed and facts presented are superficial. we see that. Private sector usually concentrates in the urban areas where as public sector i. But in most cases. the objective of JBL is to earn profit as well as to improve the economic welfare of the people as a whole. 7. In these cases. all banks must . This phenomenon is very common in the bank which hampers the spontaneous procedure of credit appraisal. So banks have to go through both quantitative and qualitative analysis. 3.44 Findings and analysis Every bank has its own credit procedure. proper appraisal is not possible as directors the most powerful persons and bank management must give priority towards the decision of the directors. Bank under study possesses a standard credit procedure. Based on the data generated during the study period I will sum up my findings here and I think this will help me to achieve my objectives. credit operation is started from the customer application to the branch for the loan. 5. 4. JBL has been maintaining its position in extending credit to government bodies.e. Though bank required both quantitative and qualitative analysis but for big loans bank emphasizes on the lending risk analysis (LRA). sector corporations and private enterprises. many customers go directly to the directors of the bank and directors send them to the branch offices with his/her reference. According to the standard and bank’s credit procedure. JBL spread their banking network all over the world. Janata Bank Ltd. Again JBL has a deep concern for rural farmers. With a view to implementing government policies. But LRA is not a perfect measure of credit analysis. Because businessmen in our society are usually tempted to take resort of window. Bangladesh Bank monitors all the policies of all the private and nationalized banks of the country. As the objective of Interns study is to make a comment on the credit management of Janata Bank Ltd. 6. According to the Bangladesh Bank’s strategy. 1. 8. 12. In that form all necessary information are required to fill up. JBL distribute loans without sufficient security in some cases. 9. This is violation of the Bangladesh bank order. Proper valuation means collateral will exactly cover the risk of bad loan. It hampers the normal procedure. On the other hand.45 possess the standard policies which are designed by the central bank. So Head office should not send any order to the branch office without prior appraisal.e. Branches always stay under pressure when they get order for disbursement from Head office. Most of the cases. moreover they do not do any future plan to maintain a well structured portfolio to decrease the possibility of classified loan. as private sector banks distribute more loans on short term basis and . Every bank has its own budget and plan regarding loan portfolio. Officials must do it with due care. The recovery performance of JBL is not in a satisfactory level at all and the position of those in that respect deteriorated heavily during last two phases. 10. This loan portfolio must be diversified so that bank could diversify its risk. A standard policy starts from the customer’s direct application for the loan in the branch office. The recovery performance in agriculture is worse than in other sectors. Janata Bank Ltd. The bank under study i. But in practice credit officers do not fill up the proposal form properly. But it’s a common phenomenon that most of the customers directly contact with Head office and Head office choose the branch offices to disburse the loan. This practice might end up with bad or classified one. A proper and preplanned portfolio can eliminate the risk of huge classified loan or bad loans as this aspect is very much sensitive toward many external and internal factors. also possesses a standard credit proposal form. In many cases bank face this problem because bank’s credit officer fails to value collateral property. This type of practice is working as an obstacle in smooth credit disbursement as well as in credit appraisal system. they use assumption rather than exact figure. 13. When branches get order from the head office. does not have any proper guide line where to invest. 11. then appraisal system loses its formal track. Most of the loans that JBL distributes are as cash credit hypothecation and JBL emphasizes less on demand loan. Janata Bank Ltd. 17. During first phase 15. JBL does not keep enough provisions against classified loans and advances. But if we compare it from the efficiency point. then it is clear that they are not still efficient in credit management as they are unable to recover half of their distributed loan in different sectors.46 relatively better than public sector. 16. 14. The credit management of JBL are not fully conformity with the guidelines prescribed in the bank companies Act 1991 and International Accounting Standerd30(IAS-30) . Private sector banks are relatively efficient in processing and executing legal actions against defaulters for their nonpayment of loans and advances in due time that of public sector bank.71% of the total loan of JBL became classified and this classified loan came down to 23% in the second phase. 15. 47 Chapter Ten Conclusion recommendation and . hence the recommendation given are not decisions rather they are only suggestions to improve the default rate. 1. proper and reliable data base at the public sector banks as well as private sector banks in Bangladesh. For my report. therefore. The recommendations are made on the basis of survey findings. Improvement of credit management depends on the development of relevant. A successful credit management is not only need for a bank’s own performance but also it is needed for the smooth development of an economy. adequate. .. JBL plays an important role in the banking sector as well as in our economy. I have selected Janata bank Ltd. it should require to introduce as improved information system within bank as well as among the borrowers. For developing a reliable credit management system for the commercial banks specially Janata Bank Ltd. 2. Central Bank should take proper actions for ensuring equivalent distribution of loans and advances. 4. Lending policies in our country should be geared to growth potential rather than being determined by the pre-existing collateral.48 Conclusion and recommendation I have discussed so far about the different aspects of credit management Janata Bank Ltd. what their opportunities and how fast they can move. Because ultimately it is what a borrower does with money that should guide the credit plan. Since this an exploratory research. it is essential to emphasize the evaluation of a sound and well integrated credit management system from the view point of both resources mobilization and efficient allocation of funds. In any strategy of economic development. Changes in lending policies will not suffice the purposes unless it is followed by a change in the attitude and out look of both the borrowers and the bankers. the borrowers also have to know exactly where they are going. 3. The success of a bank depends largely on the efficient credit management. 5. In conclusion it can be suggested a number of recommendations in order to overcome the problems and how to remove the causes of problem in credit management. 9. The attempt to encourage banks to require borrowers comply with banking laws and regulations and clear up industrial properties prior to granting a loan. Other such action as the specific circumstances may require. 17. Pressure from outsider and influence extorted by borrowers are also a great impediment in the smooth functioning of loan recovery process. 8. Competent executives will ensure the reduction of wrong appraisal and evaluation of projects. 16. The role of government in this case is the most important factor required to solve these sorts of problem. The formulation of a sound credit policy in the banking sector as a whole has to take into account all these factors and each bank has to attempt to work out for itself what it is capable of doing so as best as possible. The formulation of a sound credit policy in the possibility of default loans. JBL should follow some straight ward mechanical procedures in assessing the risk of a borrower. 15. More and more competent personnel must be recruited to reduce the weakness of credit management.49 6. 7. Publishing the names of defaulter as well as good and regular payers in various dailies and granting various sorts of facilities to good borrowers will create a moral persuasion on the borrowers. This may decrease the number of defaulters and the volume of large outstanding loan amounts as well. The security must be valued properly by the independent valuers and constantly watched so that the value of mortgage property becomes sufficient to recover the default loan. . 18. com . Peter. Janata Bank Ltd. Janata Bank Limited (1989): Memorandum and Articles of Association Janata Bank Limited. Chowdury. Paradise Printer. Annual Report. 1-18. 2014 Janata Bank Limited. Head Office. “A Textbook on Banker’s Advances”. 2008 Industry. Working Manual for Loan and Advances. Journal of Economic Policy-2013.50 Bibliography Annual Report of Janata Bank Ltd. 2013 Janata Bank Limited: Central Account Deposits. “commercial Bank Management”. Fourth Edition. 1999 WWW. Review. Dhaka Rose.janatabank-bd.P. Irwin-McGrawHill. Managing Core Risk in Banking: Credit Risk Management. 2007-2014 Bangladesh Bank BCD &BPRD circulars Bangladesh Laws on Banks and Banking. S. 7th Edition. Bank Book of Instructions (General Banking) – Janata. L. ? a) Business man b) Farmers c) Entrepreneurs d) Others 6. Who are the target customers of Janata Bank Ltd. What is the main objective of credit program? a) Only profit motive b) Profit motive as well as social welfare c) Others 2. What kind of loans is provided by Janata Bank Ltd. Would you think that the procedure is more familiar with the customers? a) Yes b) No 8.51 APPENDIX Questionnaire for Managements of Janata Bank: 1. Do you think that the credit policy is flexible to attract the customer? a) Yes b) No 5. What are the basic tools of credit management? a) GRG b) Financial spreadsheet c) Others 9) Is there any provision to calculate “N” score and “Z” score in case of choosing business or firm for giving loan? a) Yes b) No 10. Is there existence of delegation of authority in case of sanctioning loan? a) Yes b) No 4. Is there any option to sanction personal loan? a) Yes b) No .? a) General credit b) Rural credit c) Foreign commercial loan d) Special program financing 3. At what point / points will you give more emphasis in case of loan disbursement procedure? a) Credit information of the customers b) Nature of the security of the customers c) Lending risk analysis 7. Does Janata Bank Ltd. permit any loan without any collateral security? a) Yes b) No 14. Are the forms of financial statements prescribed by Bank Companies Act 1991 followed? a) Yes b) No 18. What are the main reasons to default loan? a) Loan given to fictitious name b) Loan given without sufficient securities c) Political misuse of loan program 16. Do you think that enough provision against classified loans and advances are kept? a) Yes b) No 19.52 11. May the loan disbursement procedure be hampered arising from any situation? a) Yes b) No . Standard Credit Proposal Forms designed by Central Bank are filled up Credit Officer with… a) Exact figure b) Assumed figure 21. Does the credit department supervise and monitor recovery performance of the distributed loans and advances? a) Yes b) No 15. What are the sectors in which JBL gives more priority? a) Industrial Financing Program b) Import and Export Financing Program c) Agricultural financing program d) General Credit Program 12. In what maturing stages JBL classifies the bank loans and advances? a) According to Bangladesh Bank b) Own procedure 13. Is IAS # 30 strictly followed in preparing financial statements? a) Yes b) No 17. Is there any latest loan program? a) Yes b) No 20. 53 .
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