Letter of Submission

15th March, 2012ToDr. Nazmul Karim ChowdhuryProfessorDepartment of Management StudiesUniversity of Dhaka.

Subject: Submission of internship report.Dear Sir,I have the pleasure to submit my internship report after a successful Forty-five days Internship at the Agrani bank Limited, National Mesume Branch. The Internship report is on the topic of An Evaluation of the Credit Performance of Agrani Bank Limited, National Mesume Branch.This report covers the comprehensive Credit Systems of Agrani Bank Limited which is followed by all branches to evaluate, choose and provide credit to customers. Finally, the report tried to analyze the credit performance of National Mesume Branch and gives few recommendations.I have concentrated my best effort to achieve the objectives of the assignment and hope that my endeavor will serve the purpose. I will be obliged if you kindly approve this endeavor.

Thanks and RegardsYours Faithfully

...S.M. Rayhan SiddiqueBBA Program (14th Batch)Roll No. 131, Section-B Department of Management StudiesUniversity of Dhaka

Date: 15th March, 2012

Supervisors Certification

It gives me much pleasure to certify that S.M. Rayhan Siddique, Roll No.-131, Section-B, BBA 14th Batch, Department of Management Studies, University of Dhaka, has successfully completed his Internship report on An Evaluation of the Credit Performance of Agrani Bank Limited, National Mesume Branch.

During the this time period starting from 25th August 2010 to 10th October 2010, I have found him sincere, hard working and devoted to his duty while he was preparing the internship report under my supervision and guidance. I am satisfied with his performance.

....Dr. Nazmul Karim ChowdhuryInternship SupervisorDepartment of Management StudiesUniversity of Dhaka

Declaration

I affirm that the Internship report titled An Evaluation of the Credit Performance of Agrani Bank Limited, National Mesume Branch being submitted for the internship part of BBA program is the original work carried out by me. It has not formed the part of any other reports submitted as internship report either in this or any other University.

Thanks and RegardsYours Faithfully

............S.M. Rayhan SiddiqueBBA program (14th Batch)Roll No. 131, Section-B

I certify that the declaration made above by the candidate is true.

Dr. Nazmul Karim ChowdhuryProfessorDepartment of Management StudiesUniversity of Dhaka

Acknowledgement

Any comprehensive work such as this must owe credit to a multitude of people. A number of individuals encouraged, suggested & counseled me significantly to prepare this report. Although a single sentence hardly suffices, I would like to thank several of the key people, namely, Dr. Pradanendu Bikash Chakma, Professor, Department of Management Studies, University of Dhaka provided me all guidance and support that I needed to prepare it. His sincere guidance, untiring co-operation and valuable suggestions and inspirations of creating unique report made me able to overcome all the problems during my study and reach the successful completion of the report.

In preparing the report, I received active-co-operations from the Branch Manager (Mr.Md.Noor Hossain), Assistant Officer (Usuf Haydar), and other officers of National Mesume Branch, Agrani Bank Limited. I sincerely express my heart-felt gratitude for their co-operation, which help me to conduct and complete this report.

At last I am also grateful to my department for giving me the opportunity to work outside and preparing report for attaining practical knowledge.

.S.M. Rayhan SiddiqueBBA Program (14th Batch)Roll No. 131, Section-B Department of Management StudiesUniversity of Dhaka

Abbreviation

ABL= Agrani Bank Limited CC = Cash Credit DPS = Deposit Pension Scheme APS = Agrani Pension Scheme ABS = Agrani Bank Scheme PF = Provident Fund HBL = House Building Loan OD = Overdraft DL = Demand Loan CLS = Consumer Loan Scheme

Executive SummaryAgrani Bank is one of the leading commercial banks with 877 outlets strategically located in almost all the commercial areas throughout Bangladesh. The Bank provides all kinds of commercial banking services to its customers. Among them, the day-to-day services provided to the customers are known as General Banking Activities which include collection of deposits, honoring checks, keeping records and so on.Deposits are life-blood of a commercial bank. Agrani Bank collects deposits through demand and time deposits. Demand deposits can be withdrawn without any prior notice and the Bank accepts demand deposits through the opening of current account, SB account & SND account. In contrast, a deposit which is payable at a fixed date or after a period of notice is called time deposit and the Bank accepts time deposits through FDR, DPS & ABPS. In addition, the Bank maintains sundry deposits for several purposes.To receive and make payment of cash is an important function of a bank. Every day, Agrani Bank receives cash from the customers and records the transaction appropriately. On the other hand, the Bank makes payment of cash by honoring checks and produces records of those transactions.Moreover, Agrani Bank provides various facilities to its customers to avoid risk arising out of theft or loss in carrying cash from one place to another or making payment to someone in another place. The Bank takes the risk and ensures payment to the beneficiary through DD, MT, TT and PO. Here, DD, MT and TT are used to transfer cash outside the clearing house area. Among the three, TT is the fastest means of transferring cash. However, PO can be used only within the clearing house area.Every day, the Bank receives checks and honors them. Before honoring check, the Bank considers several factors to avoid forgery. Besides, the accounts department keeps record of all the transactions of every department. This department verifies all financial amounts and contents of transactions. Every working day all the accounts are balanced and reconciled to remove any discrepancy.Agrani Bank is performing well in the market. Collection of savings deposits, fixed deposits and current deposits has been increasing over the years. In 2011, deposit growth rate for Agrani Bank was 24.08% comparing to growth rate of 21.63% for other National Banks. Moreover, operating profit of the Bank has been increasing every year. In addition, the credit rating of Agrani Bank in both long term and short term has been satisfactory over the years. In 2009, Agrani Bank achieved three awards for best published accounts & reports and corporate governance disclosure.However, a customer satisfaction survey on general banking activities of National Museum Branch of Agarni Bank was conducted. The survey shows that most of the customers get average level of satisfaction from the Branch services i.e. they are neither satisfied nor dissatisfied. Some customers are satisfied and a few customers are dissatisfied with the Branch services.It is true that Agrani Bank is facing some problems to meet up customer demands. Due to unattractive salary package, the Bank fails to recruit expert and skilled personnel. In addition, Agrani Bank is not well-equipped with the modern technology to provide high class customer service.Nevertheless, if the management of Agrani Bank tries hard to overcome the drawbacks and come-up with effective human resource and financial strategies, the Bank will soon turn into a strong opponent in the banking sector of Bangladesh.

Chapter 1: Introduction

CHAPTER ONE

INTRODUCTION

1.1 ORIGIN OF THE REPORTAs an indispensable part of BBA program, Department of Management Studies, University of Dhaka, all the students have to undergo an internship program of three months duration in any organization with a view to acquiring practical knowledge. Theoretical Knowledge is not enough for a business student. There is a gap between the theoretical knowledge and practical knowledge. Our internship program has been launched mainly to bridge the gap. Under this program the students are required to write study based on observation and experiences during the course of work. I have completed my internship program in Agrani bank Limited, National Mesume Branch. I worked in the Loan department and I observed closely credit and advances operation in this branch. So the topic of my internship study is on An Evaluation of the Credit Performance of Agrani Bank Limited, National Mesume Branch.Agrani Bank Limited is one of the leading banks and third generation market leader in Banking and Financial sector in Bangladesh. ABL has completed successful 52 years of dedicated customer service. Credit and advances is viewed as a top priority. Quick processing and dedicated customer service is the key of success for this bank. Agrani Bank Limited offers students the perfect opportunity to gain on-the-job experience by supporting and guiding them during their internship program in many business areas. After all they know that todays students can be tomorrows most efficient employees. Through internship, students become aware of organizational culture and learn how to show professional excellence to a great extent. This learning helps them when they finally enter into practical field.I have tried to highlight the whole activities of the loan department (Attitudes of the employees toward the customer, various activities of various sections, corporate image, and financial performance of ABL etc).

1.2 OBJECTIVES OF THE STUDYBBA program is designed to produce banking, financial, pharmaceuticals and various executives who are capable to handle 21st century corporate sector. So, as a student of this program, I must have to know what is happening in practice. So one may feel difficulty if he does not know what is happening in bank and other organization. To eradicate this shortcoming, every student of the BBA program is placed in various institutions like Banks, Non-Banking financial institutions, Pharmaceuticals etc. after the completion of theory. Here, I can identify the objectives of this study as follows:

Broad Objective: To gather an overall idea about Agrani bank limited (ABL). To evaluate the efficiency and effectiveness of the Credit system of Agrani Bank Limited and credit performance of National Mesume Branch.

Specific Objective: To observe and analyze the performance of credit and advances of National Mesume Branch, Agrani Bank Limited over a 5 years periods. To describe how the Credit System of Agrani Bank works. To know the Bank Management and credit system of ABL. To find-out the level of credit performance of Agrani Bank Ltd. To detect the attitude of the employees of credit division Agrani Bank Ltd. To know about the various types of loans and the formalities to get those loans. To have better orientation on credit management activities of ABL.

1.3 SCOPE OF THE STUDYAlthough operational activities are very vast of the Agrani bank limited, this study is limited to the credit system of Agrani bank limited and credit performance of National Mesume branch. Functions covered by the National Mesume Branch of Agrani Bank Limited have been chosen as a model case of this study. As the main objective of this study is to describe the credit system and credit performance of National Mesume Branch, it does not go to the other functions. The first part covers the overall credit systems followed by all of the Branches of Agrani Bank Limited and then the second part cover the credit practice and performance of National Mesume Branch.

1.4 LIMITATIONS OF THE STUDYThough internship program is a practical oriented program, it faces some difficulties. The major difficulties faced during the study are as follows:

At the initial stage, it was a problem for the researcher to adjust with a new environment such as a corporate environment. It was difficult to make information based rich study in a short time period. Like any other research, this study is limited to the time constraints. The employees in Agrani Bank Limited are so much busy in their responsible fields; they could hardly provide time to discuss. Banks often try to hide their internal information to maintain secrecy. Banks often feel reluctance to give the correct information related to this department and their thoughts about the performance of the services. Information relating to financial institutions is very sensitive that is why published data (secondary sources) have been used as base for analyzing the performance.

1.6 LAYOUT OF THE STUDY

The sequence in which the internship study materials are arranged is as follows:The chapter one includes in Origin of the Report, Objectives of the Study, Scope of the Study and discusses about how this study is completed also mentions Limitation of the Study and Layout of the Study.Methodology of the study includes Primary sources and Secondary source and Methods of data collection and Data Analysis of the study are discussed in chapter two.Agrani banks Vision, Mission, Corporate Objectives, Banks History, Management Team, Bank Services, Financial Performance, Capital Structure and Credit Rating Report are given in chapter three.The main part of the study Credit Management System of ABL, Credit sanction process and Documentation of Credit are discussed in chapter five.Chapter six is Analysis part of the study and includes Credit Performance of National Mesume Branch. Here also includes Findings and Recommendations part of the study.Last part of the study is Conclusion which has been given in the chapter seven

Chapter 2: Methodology

CHAPTER TWO

METHODOLOGY OF THE STUDY

2.1 SOURCES OF DATABoth the primary and secondary forms of information have been used to make the study more meaningful and presentable. The details of these sources are given below:

(A) Primary Sources:Major sources of information ware discussions with Mr.Noor Hossain (Branch Manager, National Mesume Branch), Mohammad Usuf Ahmed (Officer), Mr. Zubayer Siddique (Officer) of Agrani Bank Limited, National Mesume Branch, Dhaka.The credit statements of each clients of the National Mesume Branch were used to prepare the credit-performance evaluation of this branch.Besides, much information was gathered by Informal conversation with the clients, Observation of banking activities, Appointment with the officials of the Bank. Relevant file study as provided by the officers concerned.

(B) Secondary Sources:To prepare the final part: Credit Systems of Agrani Bank, different types of secondary data was used. Especially following sources deserve mentioning: Ledger of the Borrowers. Annual report of Agrani Bank Limited. Website of Agrani Bank Limited. Different newsletters of ABL. Prior research study. Different books and periodicals related to this department.

2.2 METHODS OF DATA COLLECTIONAs mentioned earlier, two sources of data and information have been used widely, to make the study more meaningful and presentable:

Source of Data

PRIMARY DATASECONDARY DATA

Figure 1.1: Sources of data

a) Primary source: primary data have been collected by- Interview Observation & work with them.b) Secondary source: secondary information has been collected through review of the following: Ledger of the Borrowers. Annual report of Agrani Bank Limited. Website of Agrani Bank Limited. Different newsletters of ABL. Prior research study. Different books and periodicals related to this departmentsBoth primary and secondary data sources were used to generate the study.

2.3 DATA ANALYSISThe study was aimed at depicting the credit activities of Agrani Bank Limited. The data gathered from both primary and secondary sources have been arranged orderly to get a clear idea about various activities and services of Agrani Bank Limited. Various statistical measures like (ratios, percentage, trend analysis etc.) have been used to analyze the data. The data have been presented by using graphs, charts, diagrams etc.

Chapter 3: Organizational Profile: Agrani Bank Limited

CHAPTER THREE

ORGANIZATIONAL PROFILE

3.1 AGRANI BANK LIMITEDAgrani Bank Limited (the Bank) has been incorporated as a Public Limited Company on May 17, 2007. The Bank has taken over the business of Agrani Bank (emerged as a Nationalized Commercial Bank in 1972) on a going concern basis through a Vendor Agreement signed between the Ministry of Finance of the Peoples Republic of Bangladesh on behalf of Agrani Bank and the Board of Directors on behalf of Agrani Bank Limited on November 15, 2007 with a retrospective effect from July 01, 2007. The Banks current shareholdings comprise Government of the Peoples Republic of Bangladesh and other 12 (Twelve) shareholders nominated by the Government. The Bank has 867 branches as on December 31, 2010. The Bank, however, has four wholly-owned subsidiary Companies named (a) Agrani Exchange House (Pvt.) Ltd. in Singapore, (b) Agrani Remittance House SDN, BHD in Malaysia, (c) Agrani Equity and Investment Limited and (d) Agrani SME Financing Company Limited.The principal activities of the Bank are providing all kinds of commercial banking services to its customers and the principal activities of its subsidiaries are to carry on the remittance business and to undertake and participate in any or all transactions, and operations commonly carried or undertaken by remittance and exchange houses. To separate the Micro credit activities over the country the Bank has decided to open a subsidiary company named Agrani SME Financing Company Limited which has got registration from Registrar of Joint Stock Companies on October 27, 2010. The company has also got permission from Bangladesh Bank to start the operation as a nonbanking financial institution. The Bank has also open another subsidiary company named Agrani Equity and Investment Limited for providing necessary support to develop the capital market of the country which has been incorporated as a Public Limited Company on March 16, 2010.

3.2 BANKS HISTORY

Agrani Bank is a state-owned commercial bank of Bangladesh established in 1972. Its headquarter is situated at Motijheel in Dhaka, Bangladesh. Agrani Bank Limited, a leading commercial bank with 867 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents, came into being as a Public Limited Company on May 17, 2007 with a view to take over the business, assets, liabilities, rights and obligations of the Agrani Bank which emerged as a nationalized commercial bank in 1972 immediately after the emergence of Bangladesh as an independent state. Agrani Bank Limited on behalf of the government, former Agrani Bank and the Board of Directors of Agrani Bank Limited on November 15, 2007 with retrospective effect from 01 July,2007. It started functioning as nationalized commercial bank taking over assets and liabilities of the erstwhile Habib Bank Limited and commerce Bank ltd in the East Pakistan. The authorized capital of the Bank is Tk. 800 crore.

Agrani Bank Limited is governed by a Board of Directors consisting of 13(thirteen) members headed by a chairman. The Bank is headed by the Managing Director & Chief Executive Officer; Managing Director is assisted by Deputy Managing Directors and General Managers. The bank has 7 Circle offices, 30 Divisions in head office, 52 zonal offices and 877 branches including 10 corporate and 40 AD( authorized dealer) branches. The corporate and AD branches are authorized to deal in Foreign exchange business.

3.3 Board of Directors

Chairman1 Dr. Khondoker Bazlul Hoque Directors2. Mr. Ranjit Kumar Chakraborty 3. Mr. Shekhar Dutta4. Mr. Nagibul Islam Dipu5. Mr. Md. Abdus Sabur 6. Barrister Zakir Ahammad7. Mr. Sahzada Mohiuddin 8. Mr. Abduz Jahir Chowdhury (Sufian) 9. Mr. K.M.N. Manjurul Hoque Lablu10. Mr. A.K. Gulam Kibria 11. Luna Shamsuddoha 12. Mr. Syed Bazlul Karim

Managing Director & CEOMr. Syed Abdul Hamid

Graphical presentation at performance

CHAPTER FOUR

CREDIT MANAGEMENT SYSTEM OF ABL

4.1 CREDIT SYSTEM OF AGRANI BANK LIMITEDThe total function of credit system contains Divination of Various credit scheme, the evaluation of credit proposal, procedure of credit appraisal, Selection of borrowers, Various Steps of sanction procedure, Documentation, valuation of securities, lending risk analysis, sanction-documentation and disbursement process of credit system, supervision and monitoring, early warning system of loan reviewing and monitoring, loan recovery early warning system in loan recovery, procedures of filling of suit in the court.The functions of credit System are monitored through four divisions. They are 1. Credit Division2. Consumers Credit Division3. Credit Monitoring & Recovery Division4. Law DivisionThe credit system is performed step by steps. The following extracts of this chapter will discuss the total credit system elaborately.

4.2 LOAN AND ADVANCES OF AGRANI BANK LIMITED

Agrani Bank mainly provides the following Loans and Advances to its customers. These loans and advances are briefly explained below:Cash Credit (CC): ABL provides it for higiest12 month for business purpose. They fix the maximum limit of amount can be borrowed for a certain period. Interest charged on the days the loan kept. It uses fixed asset as collateral. Normal interest rate is 14%.Demand Loan: Normally demand loan provides on DPS but it is not in work now thats why ABL providing this loan on PPS at 12%. Here the deposit of PPS works as collateral. Nowadays, ABL provides demand loan against PF, HBL General, HBL Staff, DPS (continuing), PPS and Other Securities.Over Draft (OD): ABL also provide overdraft loan against this account for maximum one week but it sometime requires close intimacy with the officials to be reliable.4.3. CONSUMER LOAN SCHEME ABL provides CLS as Staff-loan, Non-staff loan, Car-loan, Household durable and for medical instrument.Loan Schemes: The bank has the following Loan Schemes under which it provides loans and advances to its customers:[4] General Loan Scheme Lease Financing Demand Loan ( House Building / Apartment Loan ) House Building General House Building Commercial House Building / Construction Apartment Project Loan

Agricultural Loan ( Production ) Loan to Primary Procures Loan for tea crop production

Term Loan Small Industries Medium Scale Industries Large Scale Industries

Working Capital For Jute Mills For other Industries

Export Financing Readymade garments / others Jute products and other export goods

Commercial Loan Financing towards the agro based businessmen Loans to agricultural inputs traders Fertilizer dealers / distributors Jute trading Other commercial loans

Other Loans Loan against FDR of Agrani Bank Limited Loan against FDR of other banks Loan against DPS account balance Loan against Sanchaya Patra, Wage Earner Bond, Surrender Value of Life Insurance Policy etc. Loan against Share Certificate Special Program and any other loans not covered in the loan categories

4.4 CREDIT APPRAISAL PROCEDURECredit system is the main concerning portion for a commercial bank because it is risky and maximum of profit comes from this banking-part. This procedure needed to be maintained effectively and stepwise. Credit system includes pre-sanction; sanction & disbursement; monitoring of recovery activities; supervision and control over the borrower.

Selection of BorrowersSelection of borrowers refers to the identification of suitable or appropriate borrowers whom loan can be sanctioned or credit can be provided. The borrowers range from individuals to partnership, companies, societies, corporations etc. A banker must be careful in selecting borrowers and their projects. Right type of borrowers and right type of projects can ensure safety lending. It is the most crucial task of credit system to have selection of borrowers. In the lending process, before sanction of credit the banker should get conformed that about 5 Cs which are as follows:1. Collaterals: It needs to consider that the value of the collaterals and the maximum amount of loan can be given against this. The validity and legality of the collaterals are another concerning matter of selecting the borrower.2. Character: In order to have select of the borrowers of loan, bank should judge the intension of the borrowers whether he will repay the loan.3. Capacity: It refers to the borrowers capabilities of using the amount of loan perfectly thereby repay the loan with least cost.4. Conditions: It refers general business conditions those are required to maintain while to borrow fund from the bank. So the bank needs to judge the ability and capacity of the borrower whether he could maintain the requirements.5. Capital: The banker must require judging the financial strength of the individual or corporation that it can handle any uncertain situation as well as repaying lending.

Or about 5 Ps needed to consider which are as follows:1. Person: The banker needs to judge about the personal information about the borrowers businesses, capital, experience, etc.2. Price: The considerable demanding amount of loan is refers as price here.3. Products/Place: It refers the company, its location, product, marketing etc. information required for giving the advance against.4. Purpose: Here the required matter is the issue for which the borrower is demanding loan. He could ask loan for expansion, install renewed technology, working capital etc. purpose.5. Profit: The banker must judge the profit of the existing firm before extending any credit facilities to him.

Or about 5 Ms needed to consider which are as follows:1. Man: The banker needs to judge about the personal information about the borrowers businesses, capital, experience, etc.2. Money: The demanding amount of loan is refers as money here.3. Materials: It refers the company, its product etc. information required for giving the advance. 4. Market: It refers the company, its location, marketing etc. information required for giving the advance.5. Management: Management refers to the governing bodies of the company that are demanding advances. It refers the background of them also.

Or about 5 Rs needed to consider which are as follows:1. Responsibility: Generally the borrower has to perform the planning, organizing, staffing, motivating, controlling, marketing etc. responsibility.2. Reliability: It refers the previous attitude of the borrower towards the bank or having any reliable guarantor.3. Respectability: It refers the reputation of the borrower. 4. Resources: The banker must judge the resources or collateral offered by the borrower.5. Returns: The banker must judge the profit or return of the existing firm before extending any credit facilities to him.

By any of the above method a borrower can be selected. But effective selection refers the banker must see educational background, family background, past experience, training acquired, reputation in the society, integrity. These are the factors, which help to judge the borrowers ability to direct a business effectively.

4.5 SANCTION PROCEDURECompletion of credit sanction is a stepwise procedure and a matter of hazard. A lot of documents need to prepare for this. The steps of the credit procedure are describing bellow:

Step 1: (Loan interviewing / Selection of borrower): In order to have the interviewing for loan it requires judgment of the following: Borrowers identity. Family background. Reputation in business circle. Friends Competitors Employees Qualification. Experience physical fitness Earnings Security offered against the loan. Own stake in business Eagerness Expected term of repayment Other sources of income Normal expenditure of maintaining his family Knowledge / Experiences to run the business.

Beside these things a banker must know the following things related to business_ Whether the borrower is going to do any speculative business. When do he is going to start the business. Does he have any assumption about the popularity and marketability of the products? Estimation about the availability of raw materials. Whether the raw materials is produced in our state. If raw materials are imported then how friendly relationship exists between our and that states. Transport and communication costs. Liabilities and involvements in other businesses.

Keeping these, fundamental points in mind the banker need to form a balanced opinion on the following issues like moral ethics which refers moral risk in respect of bank about borrowers reliability on character. And business ethics of the borrower so that as a social element any hazard is not creating. Lastly property risk, which refers borrowers capital and capabilities, needed to be judged. If the bankers opinion is favorable, banker will step in the starting point of lending that of giving a application form to the borrower.

Step 2: (Borrower submits application form):This step starts when the clients submits formal loan application form to the bank along with the necessary formal documents.

Step 3: (Bank evaluate the loan case):In this step the banker scrutinizes the loan case, evaluate and correlate the collected information about the party. The sources from which the banker can get information has been described in the phase of Borrower judgment of Loan application, Financial statements, Study of account, Market reputation, Project proposal, Registration of Joint Stock Company, study from CIB, Revenue municipal, VAT return.

Step 4: (Preparation of credit study / Project proposal):This project proposal is mainly expresses for which the loan is demanding on side by side the overall position of the firm. All the elements that exist in a project proposal are as follows: Name Address. Date of compilation of study. Nature of the firm and date of establishment. Nature of business. Investment in the business. Allied or subsidiary concern, if any. Brief history regarding the proprietors or owners. Annual income. Sales. Market reputation. Means. Bank account in this bank and experience. Bank accounts in other banks and their experience. Preparation and signing of the credit study. Revision of the credit study

Whenever the credit study or the project proposal will be ready it needs to submit to the bank manager.

Step 5: (Submit the project proposal):In this step the manager of the bank decides about the suitability of the proposed loan. If the manager found or decide the proposal suitable then the sanction procedure will get progressed to the next step.

Step 6: (Assessment):After the manager of the bank found that the proposal is suitable to make loan to it, now in the step 6 it need to check the feasibility of all aspect of the firm likes: Commercial feasibility: Whether the product has demand on the market and to what extent. Management / Organizational feasibility: Whether the firm has suitable managers who can manage the firm strongly. Technical /Production feasibility: This refers whether the firm can produce the expected production limit. Are the spare parts are available. And other technical problems are concerned here. Financial feasibility: This is the most important aspect for the bank. Financial capability is evaluated here. Economic feasibility: This part describes whether the state will be benefited to the firm if the firm gets the loan. For example 100 Person can get job here thereby employment rate will be increased in this state. LRA: This refers lending risk analysis about the concerning business firm.

While assessing the credit the banker needs to keep in mind the following points: Borrowers own investment Actual valuation of land / building; cost of machineries, quality of machineries etc. Availability of raw materials, power, fuel, accessories. Marketing of product, present and future competitors thereby profit Will the advance be recovered? Has the knowledge, skill, tact and foresightness been applied sincerely? Is the advance goes against banks policy, government policy and central banks credit restriction policy?

This assessment will confirm eventually about the prospect of the firm. If the firm is found satisfactory then the sanction process can progress further.

Step 7: (Recommendations):This assessment will confirm eventually about the prospect of the firm. If the firm is found satisfactory then the sanction process can progress further.

Step 8: (Sanction): If recommendation is positive then the bank sanction loans.Step 9: (Sanction advance and other terms and conditions): Here all the terms and condition are given.

Step 10: (Repayment and repayment schedule): Repayment and repayment Schedule are given here.

Step 11: (Interest rate):Bank charges the specific interest rate to the firm against its loan. When the interest rate is fixed up and the firm agrees to pay then the company becomes ready to get loan from the bank.

4.6 DOCUMENTATIONWhile to make arrangement of the credit procedure there required to prepare some documents which are as follows:

Documents should be hand written with indelible ink Documents should be executed in the presence of branch manager or responsible officer. Documents should be signed with full signature. Any cutting, alteration and erasing is prohibited. Signature of loans in all pages of documents should uniform. Each and every page should be signed. Executors signature should be verified by the manager or authorized officer. No document or column of any documents should leave blank. All documents should be recorded in register or security register serially and properly. Manager himself must authenticate guarantors signature. Full address of the guarantor is recorded in the letter of guarantee forms. Lawyers opinion kept allows with original set of loan document.

Proper and correct stamping is strongly recommended, which are: Judicial stamp Non-judicial stamp Adhesive Special adhesive Embossed stamp Embossed stamp

4.7 SECURITYSecurity is an important matter for a bank because in case of any uncertainty of the borrower, the bank can withdrawal its loaned capital. So it has become a vital issue for the bank. And whenever the bank evaluates the security, it checks it very carefully. There are several procedures of calculating and value judgments of the securities. Here are all about securities:

4.7.1 Types of SecuritiesSecurities are basically two types, which are as follows:

1. Intangible securities: Borrowers liability (If the borrower itself a reputed person) Guarantee of a respectable third party

2. Tangible securities: Primary security Collateral security / Goods or properties Movable security Immovable security

4.7.2 Valuation of SecuritiesValuation of securities is an important aspect for the banker since the advance value or withdrawal limit is fixed on the basis of value of securities less specific stipulated margins. There are several methods of valuing securities depending upon the type of security offered. Valuation may be based on market value, invoice value or controlled value.

4.8 LENDING RISK ANALYSISBank lends money to have the responsible investment of depositors money. The other objectives of lending are: To make good loans to protect depositors investments. To prevent good loans from becoming bad. To recover / collect / strengthen deteriorating / bad / classified loans. To earn a profit on loans made to ensure the ongoing viability of the bank.Here the banks follow the strategy like funding to the profitable enterprises to have growth. And thereby loss-making firms are refused funding to out of business. We all know that lending for future period involves a great deal of uncertainty. Here the bank considers the risk that it will not recover the lending capital totally. Bank analyzes the risk by the following way:1. Business risk: It refers the risk of insufficient cash flow. That is, complete repayment will not occur and repayment will not be occurred in time.

2. Security risk: It refers the risk against the collateral. In case of any uncertainty bank needs to sell the collateral and recover its money. But it could happen that the value of the collateral has declined. Or the collateral that deposited is false. Here the risks that of the both business and security risks are described bellow with all its components chronologically:

4.9 DISBURSEMENT PROCESS OF CREDIT SYSTEMWe all know the common thing of banks operation of borrowing money from public and lending it to the people. But in the prospective of bank, it is a business enterprise and it always tends to earn profit. Thereby the bank collects money by accepting deposits from the public at a rate of interest and this money is lent to the public for trade, commerce, industry and agriculture at a higher rate than it is collected. As the differences of two interest rates will be higher as higher would be the profit of bank.

4.9.1 DisbursementBefore release of the sanctioned loan or advance, all terms and conditions as laid down in the sanction letter are to be compiled with. To that an effect the following are the basic requirements: Loan effectively terms conditions as to collateral security & equity of the borrower shall be fully met. Specified documentations must be completed(mortgage, hypothecation etc) Verification of encumbrances of security property Creation of charge on the collateral l security Insurance for security properties. Strictly following the disbursement schedule. End use verification

4.10 SUPERVISION AND MONITORINGFor both at the pre-sanction and post-sanction stages supervision is necessary in order to ensure the safety of money lent. It is as important as the collateral. It can be classified into 3 steps.Supervision: Supervision starts right after the selection of the borrower.Monitoring: Monitoring starts when the project / activity enter implementation phase.Follow-up: Follow-up starts just after disbursement of loan.These things are necessary for problem solving like loan to be doubtful; check regular return of fund; check about compliances of terms and conditions etc. And in case of any deviation, necessary correction can be taken to recover the problem. There methods to make supervise and monitor are:Desk supervision / off-site: This method operates through checking periodic study s, discussion, operating statements and cash flow statements.Field supervision / On-site: This method operates through visiting and based on nominee directors.When to supervise, it needs to consider the following things Stock statements (Hypothecation and pledge) Operation of customers accounts Financial position of borrowers and guarantors Purpose of loan Confirmation letters of balance and securities Diary notes Other accounts Miscellaneous

4.11 EARLY WARNING SYSTEM OF LOAN REVIEWING AND MONITORINGEarly warning system is a loan monitoring and recovery system. The objectives of this system are as follows:Address problems while adequate alternative action exists.Prevent loan to be bad, interest revenue loss and loan provisions.

4.11.1 Warning signals: The warning signals are as follows: Material changes Industry pattern changes Management composition Economic trends (Local, international) Client performance vs. budget Bank vs. client relationship Evidence of weakness in borrower.

4.11.2 Prevention: The prevention and control elements of early warning system are as follows: Understand clients business Analyze clients financials Frequent visits to client Perfected legal documentation 100% security cover for banks risk Investigate market rumors Use credit bureau cheekiness

4.11.3 Corrective measures: The elements of corrective measures are as follows: Legal review of documents and situation Workout strategy and action Loss evaluation vs. security cover Stay or leave decision and reclassification Continuous visits to the client (Defaulter) Negotiation vs. court action Legal expenses multiplying

4.12 LOAN RECOVERYRecovery plan is one of the components of performance plan. It is a future intended action in respect of recovery. In other words, it is a conscious and deliberate effort to recover all current dues and overdue loans.4.12.1 Steps for recoveryLoan recovery procedure is a stepwise procedure. The steps are as follows:Step 1: (Existing loans and advances): Make due dates of repayment Regular follow-up Periodical inspection Supervise visit Other necessary steps

Step 2: (Overdue loans and advance): Preparation of quarterly lists likes branch copy, controlling office copy and head office copy. Attempts are to be made for adjustment of loans before application of quarterly interest. Loans must be adjusted before classification. Target for recovery. Steps for declassification. Other necessary steps for recovery of overdue loans.

Step 3: (Provision for classified loan): Un classified = 1% Substandard = 10 ~ 20% Doubtful = 50% Bad / Loss = 100%

Step 4: (Interest exemption): Finding out the legitimacy of interest exemption it needs to follow the instruction of Bangladesh Bank and head office.

Step 5: (Write off):Finding out the legitimacy of writing off for a particular loan case it needs to follow the instruction of Bangladesh Bank and head office.

Step 6: (Others):In case of any other situation, recovery will be happened as the requirements of the Bangladesh Bank and as the requirements of this Agrani bank.

4.12.2 Early warning system in loan recoveryThis system can also be applied when reviewing a borrowers performance. The factors are more subjective than the quantitative criteria just described but generally considered to be more important in identifying problem loans at an early stage.Substandard: Loans would tend to reflect a borrower with the following things: Adverse tends in sales and earnings Labor problems Lack of management depthless Over reliance on a single product or customer Products subject to intense competition or technological obsolescence Unfavorable regulatory, political or market environment Balance sheet deterioration Inductee or outdated financial data Qualified auditors opinion Debt restructuring problems

Doubtful: Loans would have the foregoing characteristics but even more adverse conditions would exist: Uncertain collateral coverage Negative net worth and working capital Fill recovery dependent upon unlikely events Ineffective borrowers recovery allots Consistent failure of borrower to meet commitmentsBad / Loss: Loans would show that the possibility of the recovery is virtually nil. The banks actions would then be confided to filling suits against the borrower / guarantor and quantifying the security and collateral shortfall vis--vis the borrowers outstanding and the banks costs. It is this shortfall, which will determine the ultimate loss to the bank.

4.13 PROCEDURES OF FILLING OF SUIT IN THE COURTFilling of suit is the final step for recovery of loans and advances. There are three types of acts usually on which suits can be filed like: P. D. R. act July 1, 1913 Money Loan court act, 2003 Bankruptcy act, 1997

The acts operated in banking sector are as follows: Contract act Sales of goods act Partnership act. Companies act. Transfer of property act. Negotiable instrument act 1881 Foreign exchange regulation act Banking company act Public demand recovery act, 1990 Bankruptcy act, 1997 etc.

Through These act, the bank file sue against the defaulter client. The court decides how the defaulting client will be penalized. With the help of these laws Bank can recover the defaulting money.

Chapter 5: Credit Performance Evaluation

CHAPTER FIVE

CREDIT PERFORMANCE EVALUATION

5.1 CREDIT PERFORMANCE OF NATIONAL MESUME BRANCHNational Mesume Branch provides various types of credit to different class of the society. They provide Cash Credit (CC) to the business class people. Loan against provident fund (PP) are for the service class people. And the lower income people get Flood loan or any types of especial loans recommended by the government.

5.2 CREDIT PROVIDEDBY NATIONAL MESUME BRANCHNational Mesume Branch, Agrani Bank provides CLS as Staff-loan, Non-staff loan, Car-loan, Household durable and for medical instrument. The bank has the following Loan Schemes under which it provides loans and advances to its customers:5.2.1 General Loan SchemeCash Credit (CC): Cash credit is provided against the current account of the account holders. Mainly the recurrent client who have a good dealing with the bank and have Business renowned will get the facility of cash credit. In cash credit the customer fix a limit within which any amount of money can be withdrawn. The limit is fixed for a certain time period (known as expired date) .The time period and the Limit can be renewable. Loan Against Provident Fund (PF): Agrani Bank Limited provides loan against the provident fund. And this bank includes these types of load in the Demand loan Accounts.Agrani Pension Scheme (PPS): This loan is provided against the Pension fund.Flood Loan (FL): In any especial situation this bank provides loans to the people. Flood loan is one of these types of loan.

5.2.2 Lease Financing:Lease means a contractual relationship between the owner of the assets and its user for a specified period against mutually agreed upon rent. The owner of the assets is called the lesser and the user is called the lessee.

Lease finance is one of the most convenience sources of financing of assets viz. machinery, equipment vehicle etc. The user of the assets i.e. lessee is benefited through tax advantages, conserving working capital and preserving debt capacity. Moreover lease financing is an off balance sheet item i.e. lease amount is not shown in the balance sheet of the lessee and does not affect borrowing capacity.

Lease enables the lessee to avail the services of a plant and equipment without making the investment or incurring debt obligation. The lessee can use the assets by paying a series of periodic amounts called Lease payment or lease Rental to the owner of the assets at the predetermined rates and generally in advance. The payments may be made monthly or quarterly.

Agrani Bank limited, the highly capitalized private commercial bank in Bangladesh has introduced lease finance to facilitate funding requirement of valued customers and growth of their business houses.

Lease Items: Vehicles like luxury bus, Mini Bus, taxicab, Pick up CNG etc. Factory equipment Medical equipment Machinery for agro based industry Construction equipment Office equipment Generators, Lifts and Elevators for commercial places Sea or river transport Computer for IT education center.

Lease Period:SectorsYears

Vehicles like luxury bus, Mini Bus, taxicab, Pick up CNG etc.Up to 4

Factory equipmentUp to 5

Medical equipmentUp to 5

Machinery for agro based industryUp to 5

Construction equipmentUp to 3

Office equipmentUp to 3

Generators, Lifts and Elevators for commercial placesUp to 3-5

Sea or river transportUp to 4

Computer for IT education center.Up to 2-3

Table 8: Lease Period Maximum Limit: 70% of acquisition cost.

Security/ Collaterals:The following securities are acceptable: Ownership of lease assets i.e. the lease assets will remain in the name of the bank; in addition the following collaterals are acceptable to the bank. Collateral securities in the form the land and building, fixed deposits, other cash collateral, wage earners development bond having liquidation value covering at least covering 100% of the amount of finance. Deposits of listed A category share, national saving certificates, ICB unit certificates, assignment of life insurance policies; bank or insurance guarantee will also be acceptable as collateral securities. Creation of charge of the fixed assets of the existing industrial unit requiring BMRE.

Charges Collectable from the Lessee1. Tk. 50 for the application from2. Service Charge at the rate of 0.15% on lease value (Non refundable and Compulsory) Minimum TK 3,000 and Maximum tk. 10,000 in the case of acquisition of machinery and equipments. (In the case of Automobile, a service charge of tk. 500 is payable when the Acquisition cost is below tk. 10 lac and an amount of tk. 1000 is payable when the Acquisition cost is tk. 10 lac and above)3. Documentation Charge: At the of 0.15% on the lease value (Non refundable and compulsory)4. Project Examination Fee: At the 0.15% on the sanctioned amount.

In the case of machinery/ equipment: Maximum Tk. 10,000 Minimum Tk. 3,000 In the case of Vehicle: Tk. 500(for Acquisition cost below tk. 10 lac) Tk. 1000 (for Acquisition cost of Tk. 10 lac and above)

Lease Deposit:Before disbursement of lease finance, the lessee shall have to deposit 3 months rentals non-interest bearing in advance, which will be adjusted at the end of the lease period.Grace Period:In case of capital machinery and equipment, maximum grace period of six month may be allowed.Payment Date:Rental payment shall be made every month and there shall be three payments date as detailed bellow: If lease is executed: Between 1st to 10th payments date will be 5th of subsequent months. Between 11th to 20th payments date will be 15th of the subsequent months. After 20th payment date will be 25th of subsequent months.

Insurance Coverage:The vehicle or equipment or lease assets shall have to cover by a comprehensive insurance policy throughout the whole lease term at lessees own cost in the name of Agrani Bank Limited. The premium shall be on account of the lessee.Repair and Maintenance of Lease items: The lessee is obliged to maintain the vehicle or equipment in good working order and is solely responsible for any loss or damage as long as it is her or his possession. Repair and Maintenance cost for taking care of normal wear and tear and keeping it in good running condition during the lease period shall be the responsibility of the lessee.

Transfer Price or lease renewal Rental:On final adjustment of the lease finance, the lessee may have an option to purchase the equipment at the prescribed rate. Besides the above option, the lessee may renew the lease on year-to-year basis or return the equipment to the bank5.2.3 Demand Loan (House Building / Apartment Loan)Normally demand loan provides on DPS but it is not in work now thats why ABL providing this loan on PPS at 12%. Here the deposit of PPS works as collateral. Nowadays, ABL provides demand loan against PF, HBL General, HBL Staff, DPS (continuing), PPS and Other Securities. House Building General House Building Commercial House Building / Construction Apartment Project Loan

5.2.4 Term Loan Small Industries Medium Scale Industries Large Scale Industries 5.2.5 Working Capital For Jute Mills For other Industries5.2.6 Export Financing Readymade garments / others Jute products and other export goods

5.2.7 Commercial Loan Financing towards the agro based businessmen Loans to agricultural inputs traders Fertilizer dealers / distributors Jute trading Other commercial loans

5.2.8 Other Loans Loan against FDR of Agrani Bank Limited Loan against FDR of other banks Loan against DPS account balance Loan against Sanchaya Patra, Wage Earner Bond, Surrender Value of Life Insurance Policy etc. Loan against Share Certificate Special Program and any other loans not covered in the loan categories

5.3 AMOUNT OF LOAN PROVIDED BY ABL NATIONAL MESUME BRANCH

YearLoan ProvidingIncrease/ Decrease

200697,313,223Nil

200799,547,1212.30%

2008102,212,3262.60%

200998,239,568-3.89%

201095,789,234-2.50%

2011103,897,3878.45%

Table 9: Total amount of loan provided by Agrani bank of National Mesume branch (year wise)The above table shows that Agrani bank limited, National Mesume branch provided loan in the year 2006 tk. 99,547,121 and the loan providing is increase 2.24% from the year of 2005.So we can say that tk.2.30 is increased in every tk.100 in loan providing by Agrani bank limited, National Mesume branch.In the same way 2007 had increased 2.60 %. So here the increased loan providing is satisfactory than the previous year.In 2008 the percentage was -3.89% which shows that the loan providing is decreased from the previous three years. So we can say that the bank performance is not satisfactory.In 2009 the percentage became -2.50% which shows that the loan providing is decreased from the previous years. So we can say that the bank performance is not satisfactory. In 2010 the percentage became 8.45% which shows that the loan providing is increased from the previous years. So we can say that the bank performance is more satisfactory

The scenario will be more clear and understandable by the following figure-8:

Figure 8: The rate of increase or decrease loan providing by Agrani bank of National Mesume branch

The above figure shows that the year-2006 the loan providing is increased. In 2007 loan providing is also increased. But in 2008 and 2009 outstanding loan providing are decreased. In 2010 loan providing is more increased from previous years. So we can say that loan providing performance is not consistent so bank performance is not satisfactory.In the figure we can verify easily that the increase and decrease situation of loan providing.

5.4 LOAN REPAYMENT OF ABL NATIONAL MESUME BRANCH:

YearLoan DisbursementsLoan RepaymentDefault Loan

200699,547,12187,486,32412060797

2007102,212,32696,452,3695759957

200898,239,56893,235,2875004281

200995,789,23491,368,2344421000

2010442100099,780,2764117111

Table 10: Total amount of loan repayment during the years (2006-2010)

The above table shows that Agrani bank limited National Mesume branch loan disbursements in the year 2006 tk. 99,547,121 and the loan repayment is 87,486,324. So the table shows default loan 12060797. In the same way 2007 default loan is 5759957 which show the default loan is less than the previous year. So here the default loan decreased and bank performance is satisfactory. In the same way 2008 default loan is 5004281 which is less than the previous year. So here the default loan decreased and bank performance is satisfactory. In the same way 2009 default loan is 4421000 which is less than the previous year. So here the default loan decreased and bank performance is satisfactory. In the same way 2010 default loan is 4117111 which is less than the previous year. So here the default loan decreased and bank performance is more satisfactory.

The scenario will be more clear and understandable by the following figure-2:

Figure 9: loan disbursement, repayment and default loan during the years (2006-2010)

The above figure shows that the loan disbursements, the loan repayment and the default loan. Here loan disbursements, the loan repayment are increased from previous years. But the default loan is decreased from previous years. So we can say that credit performance is satisfactory. So bank performance is satisfactory.In the figure we can verify easily that the credit performance of the Agrani bank limited, National Mesume branch.

5.5 SCHEDULE OF LOAN REPAYMENTS:

AmountsMonthly Installment(In Case of 12 months)Monthly Installment(In Case of 24 months)Monthly Installment(In Case of 36 months)

25,0002,2921,248-

50,0004,5842,496-

75,0006,8763,7442,711

100,0009,1684,9923,615

150,00013,7527,4895,423

200,00018,3369,9856,7230

250,00022,92012,4819,038

300,00027,50414,97710,846

Table 11: Schedule of Loan repayments of ABL

Chapter 6: Analysis, Findings & Recommendations

CHAPTER SIX

ANALYSIS, FINDINGS & RECOMMENDATIONS

6.1 ANALYSISIn this section five years data are analyzed to measure the loan recovery performance of that branch. The sample of raw data and parts of less important analysis are presented in the appendix part. The analysis which directly related to measure the credit-performance of that branch is given below:Table 12: Expired demand loan (Year wise) S.L. YearAmount of Expired CreditAmount of Outstanding CreditPercentage of Expired on Credit (%)

1 2006

335431.6 3583469.6 9.36

2 2007

105464 3310437.63.19

3 2008

325397 2582830.612.598

4 2009

90705 2025713.64.48

5 2010

34692 1125862.63.08

** (The relevant data of the year Amount expired are given in the Appendix-B.)

The above table shows that the year-2006 had outstanding credit amount of 3583469.6 Taka and amount of expired amount (The amount which were not repaid within the definite duration by the borrowers) was 335431.6 Taka. So here the percentage of expired credit on outstanding amount is 9.36%. So we can say that each 9.36 taka out of 100 taka was not repaid by the borrower within time period. And the Bank had to take others measure to recover these loans.In the same way 2007 had 3.19 %. So here the expired amount is more satisfactory than the previous year.In 2008 the percentage was 12.589% which are above the previous two years.In 2009 the percentage became 4.48% so the borrowers repaid.In 2010 the percentage became 3.08% so the borrowers repaid.The scenario will be more clear and understandable by the following Chart-1:

Figure 10: Illustration of Default Loans-Demand loans.

The above chart shows that the year-2006 had outstanding credit amount of 3583469.6 Taka and amount of expired amount was 335431.6 Taka. So here the percentage of expired credit on outstanding amount is 9.36%. So we can say that each 9.36 taka out of 100 taka was not repaid by the borrower within time period. And the Bank had to take others measure to recover these loans.6.2 FINDINGS

In our country, banking sector introduced the credit system at the beginning. Mainly bank operates its operation based on credit and deposit. Credit activities are one of the major activities of every bank. Agrani bank also Focuses this activities for better performance.

In this study about Agrani bank limited, I have identified some problems in credit performance evaluations of National Mesume branch of Agrani bank. This problem interrelated with Agrani bank and the National Mesume branch. The major findings of this study are as follows: The National Mesume Branch credit expired amount has been gradually reducing. But in the same time the amount of outstanding is also reducing. If the bank can issue more credit and can recovery these credits within time limit, its performance will be quite satisfactory. The Management of that branch and Zonal Monitoring head put emphasis on recovering credit before expired. That is why the bank prefer risk free borrowers and give them the loan. Because of this reason the Amount of credit are decreasing than the previous years. There are some negative sides in Agrani Bank that are given below: Some customers do not understand account opening form & credit opening process. Some customers are not interested or not able to write D.D., Check, pay order voucher. In the present market situation, where the competition among all private commercial banks are very intense and high, the management of Agrani Bank is failing to find out its major weaknesses. The major weakness of Agrani Bank Limited is its unattractive salary package. The salary package that Agrani Bank Limited offers to the employees is relatively poor comparing to other competing banks in the market. ABLs banking strategy is not arranged in such way that provides excellent service to its customers and employees. They have to transfer data from branch to branch and branch to head office by using peon and others. According to some clients opinion introducer is one of the problems to open an account. If a person who is new of the city wants to open account, it is a problem for him/her to arrange an introducer of SB or CD accounts holder. Agrani Bank Limited fails to recruit expert and skilled person because of this low salary structure. There are some congested branches where modern technical equipment such as computer and manpower are not sufficient. As a result banking activities are not done properly. Agrani Bank doesnt give their attention on advertisement. As a competition market it is too much important for any organization to increasing their advertisements procedure. Agrani Bank Limited cannot provide A.T.M service to its customers properly.

6.3 RECOMMENDATIONS

After analysis above findings I think Agrani Bank should take some decisions to overcome the problems that are given below:

The Branch should not only put emphasis on the recovery of the credit within expire date. Rather it should extend its markets by providing loans and advances various potential sectors of that location. Trying to make those people understand who do not know how to open a bank account. ABLs human resources management policy has to identify the right combination of skills, knowledge, behavior and values and utilize them for the welfare of the bank. If they are established strong networking system with their branches then it can easily transfer data within short time. If they cancel the introducer system then they can collect more deposit through new account and it also satisfied the customer. To make the process easy and quick the whole system should be computerized and take modern communication media for example e-mail, fax, Internet should be used. Its has to adopt the most recent technologies to improve the quality of service. A group well-trained and expert work force is dedicated to render the best service to the customers. Its working environment has to excellent for its employees and customers The management has to introduce the overtime facility for the employees who work hard extra hours after their office time. The management of Agrani Bank Limited has to give their attention to take necessary steps to improve salary structure. The management of Agrani Bank Limited must be identified the weakness point to have in competition in banking sector.

Chapter 7: Conclusion

CHAPTER SEVEN

CONCLUSION

A Lot of new commercial bank has been established in last few years and these banks have made this banking sector very competitive. So, now banks have to organize their operation and do their operations according to the need of the market. Banking sectors no more depends on a traditional method of banking. In this competitive world this sector has trenched its wings wide enough to cover any kind of financial services anywhere in this world. The major task for banks, to survive in this competitive environment is by managing its assets and liabilities in an efficient way.

As an internee student in Agrani Bank Bangladesh Limited at National Mesume Branch, Dhaka, I have truly enjoyed my internship from the learning and experience viewpoint I am confident that 1.5 month internship program at Agrani Bank Bangladesh Limited will definitely help me to realize career in the job market.

During the course of my practical orientation I have tried to learn the practical banking to realize my theoretical knowledge, what I have gathered and going to acquire from various courses. It is great pleasure for me to have practical exposure of Agrani Bank Limited, because without practical exposure it couldnt be possible for me to compare the theory with practice.Through the departments and sections are covered in the internship program, it is not possible to go to the depth of each activities of branch because of time limitation. So objectives of the internship program have not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objectives of the internship program.So in conclusion it can be said that every organization have its positive as well as negatives aspects and in case of Agrani Bank Bangladesh Limited has large number of customer as well as large amount of capital. For this reason bank can increase credit service and new products for the existing customer & forthcoming customer.

APPENDED PART

Appendix-ASample of raw data sheet used to analyze the credit-performance of the National Mesume Branch.From These data of 2006 to 2010 appendix B type table were created.

Appendix-BExpired Demand LoansThe defaulter of the credit after the expiry of definite period of National Mesume Branch and their outstanding amounts are:Table-13: Expired Demand loan for the year of 2006Expired Demand loan For The year of 2006

CASEA/CNAMEOutstanding Balance

11001MD.RAFIQUZZAMAN (EX EMPLOYEE)2215.6

21002MD.ALI ASGER7293

31015JALAL UDDIN247332

4107MR. REZAUL KARIM40693

5103AURUN MIAH23459

6108ABDUL AZIZ14439

TOTAL335431.6

Table-14: Expired Demand loan for the year of 2007Expired Demand loan For The year of 2007

CASE NUM.A/CNAMEOutstanding Balance

1113MD.MOBARK HOSSAIN46163

2129ANOWRUL ISLAM KABIR59301

TOTAL105464

Table-15: Expired Demand loan for the year of 2008Expired Demand loan For The year of 2007

Case NumberA/CNAMEOutstanding Balance

198KALPANA RANI16112

2122JUIL AHMED14767

3146MD. KAWSAR BHUIYAN46817

4167KAJAL RANI11883

5168SIPA BEGUM29192

6173RASHED42253

7178MR. PROVIR48019

8179BABUL59094

9197SAIDULLA57260

Total325397

Table-16: Expired Demand loan for the year of 2009Expired Demand loan For The year of 2009

Case A/CNAMEOutstanding Balance

1134MRS. RUMI69662

2187MRS. FARZANA5558

3196MOJIBUR15485

TOTAL90705

Table-17: Expired Demand loan for the year of 2010Expired Demand loan For The year of 2010

Case A/CNAMEOutstanding Balance

1201MAHBUBUR23379

2203NIGAR LAILA11313

TOTAL34692

From these table the Expired Demand loan Table and the Graphs are Prepared

Appendix-C

Figure-12: Expired Demand loan for the year of 2006

Figure-13: Expired Demand loan for the year of 2007

Figure-14: Expired Demand loan for the year of 2008

Figure-15: Expired Demand loan for the year of 2009

Figure-16: Expired Demand loan for the year of 2010

BIBLIOGRAPHY

Books: Ahmed, Faruquddin, Banking in Bangladesh-Evolution and present Status, Volume-II, No-3. Debnath, Romini Mohan, Business of Banking, Lutas Publication, First Edition- February, 2004.174-227pp. Faser, Donald R, Commercial Banking, 5th Edition, West Publication Company, 2002.

Periodicals: Agrani Bank Limited "Annual Report 2010 Agrani Bank Limited "Annual Report 2011

Miscellaneous: Hoque, Syeda Farzana, Banking With Agrani Bank Limited and its Credit Systems. Miscellaneous Brochures of Agrani bank Limited. Credit Manual: Published by: Head office of Agrani Bank Limited. Managing core risk of financial institutions Industry best practices, 21 July, 2010, Bangladesh Bank. Analytical approach to assessing credit risk, CRISIL, September 2010.

Web site: www.agranibankltd.com.bd www.bangladesh-bank.com www.wikipedia.org,

Search engine: www.yahoo.com www.google.com

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