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Credit Risk Management of
Commercial Banks in
Bangladesh
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1.0 Background of the thesis
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Today's business world is becoming very much comle! day by day. "ithout
su#cient ractical e!erience business becomes di#cult and in some cases
imossible. The whole world is moving because of business relation. Business lays
a very imortant role in develoing economy of a country. $o% in the business world%
ractical e!erience is regarded as a medium through which we can gain an
ac&uaintance with the real world. Through this Thesis an individual can e!ect to
command a good knowledge and understanding on the various methods of Credit
Risk Management erformed by Banks namelyJamuna Bank Ltd. , Brac Bank
Ltd. , Mercantile Bank Ltd., Prime Bank Ltd. and National Bank Ltd. Both
ublic and rivate (nancial information was used in rearation of this Thesis . The
information are then comared with each other from between banks and between
years ersective. The recovery rocess of these banks are also emhasi)ed. This
Thesis is reared only and solely for academic urose. * have collected all the
necessary and relevant data from various rimary% secondary and tertiary sources.
+fter weeks of long hard labor% it has become ossible for me to make this Thesis
comrehensive and factual. The information are beyond doubt con(dential and
strict verbal node inferred that no one can use its comonents in full or artial for
any business cometition urose. * would like to give thanks to everyone who has
heled and encouraged me in the rocess of rearing this reort.
1.1 Introduction to Risk
,rom a general oint of view Riskis the quantifable likelihood o loss or less-than-
expected returns. ,rom a much broader oint of view Riskis the potential o losing
something o value, weighed against the potential to gain something o value.
Values (such asphysical health, social status, emotional well being or fnancial
wealth can be gained or lost when taking risk resulting rom a given action, activity
and!or inaction, oreseen or unoreseen. "isk can also be defned as the intentional
interaction with uncertainty. "isk perceptionis the sub#ective #udgment people
make about the severity o a risk, and may vary person to person. $ny human
endeavor carries some risk, but some are much riskier than others.
Riskcan be de(ned in a variety of ways. -owever we de(ne risk as a characteristicof reality or risks as threatening agents% the essential feature here is uncertainty."ithout uncertainty there is no risk% only clear danger. et us then see some of themost common de(nitions.
http://en.wikipedia.org/wiki/Physical_healthhttp://en.wikipedia.org/wiki/Social_statushttp://en.wikipedia.org/wiki/Uncertaintyhttp://en.wikipedia.org/wiki/Risk_perceptionhttp://en.wikipedia.org/wiki/Physical_healthhttp://en.wikipedia.org/wiki/Social_statushttp://en.wikipedia.org/wiki/Uncertaintyhttp://en.wikipedia.org/wiki/Risk_perception8/11/2019 Thesis on Credit Risk Management of Bangladeshi Bank
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Basic denitions of risk from dierent perspectie
1. Risk is an uncertain event or condition that% if it occurs% has an e/ect on atleast one roect2 obective. 3This de(nition% using roect terminology% is
easily made universal by removing references to roects4.5. The robability of something haening multilied by the resulting cost or
bene(t if it does. 3This concet is more roerly known as the '6!ectation7alue' or 'Risk ,actor' and is used to comare levels of risk4
8. The robability or threat of &uanti(able damage% inury% liability% loss% or anyother negative occurrence that is caused by e!ternal or internalvulnerabilities% and that may be avoided through reemtive action.
9. In !inance"The robability that an actual return on an investment will belower than the e!ected return. ,inancial riskcan be divided into thefollowing categories: basis risk% caital risk% sovereign risk% default
risk% delivery risk% economic risk% e!change rate risk% interest raterisk% li&uidity risk% oerations risk% ayment system risk% oliticalrisk% re(nancing risk% reinvestment risk% counterarty risk and underwritingrisk.
. In !ood industr#"The ossibility that due to a certain ha)ard in food therewill be an negative e/ect to a certain magnitude.
;. Insurance"+ situation where the robability of a variable 3such as burningdown of a building4 is known but when a mode of occurrence or the actualvalue of the occurrence 3whether the (re will occur at a articular roerty4is not. + risk is not an uncertainty 3where neither the robability nor themode of occurrence is known4% a eril 3cause of loss4% or a ha)ard 3somethingthat makes the occurrence of a eril more likely or more severe4.
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current debt. *nvestors are comensated for assuming credit risk by way of interest
ayments from the borrower or issuer of a debt obligation. Credit risk is closely tied
to the otential return of an investment% the most notable being that the yields on
bonds correlate strongly to their erceived credit risk.
The higher the erceived credit risk% the higher the rate of interest that investorswill demand for lending their caital. Credit risks are calculated based on the
borrowers' overall ability to reay. This calculation includes the borrowers' collateral
assets% revenue=generating ability and ta!ing authority 3such as for government and
municial bonds4.
1.5Bank and its Bangladeshi perspectie
Bankis an establishmentauthori)edby a governmentto
accet deosits% ayinterest% clear checks% make loans% actas
an intermediaryin (nancial transactions% and rovideother (nancial servicesto
its customers.
ike any other country in the world following the +nglo=+merican banking system
there are mainly two tyes of Banks in our country. Commercial Banks and a Central
Bank.
&ommercial 'anksare mainly concerned with managing withdrawals and deosits
as well as sulying short=term loans to individuals and small businesses.
Consumers rimarily use these banks for basic checking and savings accounts%
certi(cates of deosit and sometimes for home mortgages. *nvestment banks focus
on roviding services such as underwriting and cororate reorgani)ation toinstitutional clients.
+ central 'ank% resere 'ank% or monetar# authorit#is an institution that
manages a state'scurrency% money suly% and interest rates. Central banks also
usually oversee the commercial banking systemof their resective countries.
1.5.1 Bangladeshi &ommercial Banks
State Owned Commercial Banks :
$tate=owned are functioning as nationalist. -ere is the list =
1. +grani Bank
5. $onali Bank
8. Ruali Bank
9. anata Bank
http://www.businessdictionary.com/definition/establishment.htmlhttp://www.businessdictionary.com/definition/authorization.htmlhttp://www.businessdictionary.com/definition/government.htmlhttp://www.businessdictionary.com/definition/deposit.htmlhttp://www.businessdictionary.com/definition/pay.htmlhttp://www.businessdictionary.com/definition/interest.htmlhttp://www.businessdictionary.com/definition/check.htmlhttp://www.businessdictionary.com/definition/loan.htmlhttp://www.businessdictionary.com/definition/act.htmlhttp://www.businessdictionary.com/definition/intermediary.htmlhttp://www.businessdictionary.com/definition/financial-transaction.htmlhttp://www.businessdictionary.com/definition/provide.htmlhttp://www.businessdictionary.com/definition/financial-services.htmlhttp://www.businessdictionary.com/definition/customer.htmlhttp://en.wikipedia.org/wiki/State_(polity)http://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Money_supplyhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Commercial_bankhttp://www.businessdictionary.com/definition/establishment.htmlhttp://www.businessdictionary.com/definition/authorization.htmlhttp://www.businessdictionary.com/definition/government.htmlhttp://www.businessdictionary.com/definition/deposit.htmlhttp://www.businessdictionary.com/definition/pay.htmlhttp://www.businessdictionary.com/definition/interest.htmlhttp://www.businessdictionary.com/definition/check.htmlhttp://www.businessdictionary.com/definition/loan.htmlhttp://www.businessdictionary.com/definition/act.htmlhttp://www.businessdictionary.com/definition/intermediary.htmlhttp://www.businessdictionary.com/definition/financial-transaction.htmlhttp://www.businessdictionary.com/definition/provide.htmlhttp://www.businessdictionary.com/definition/financial-services.htmlhttp://www.businessdictionary.com/definition/customer.htmlhttp://en.wikipedia.org/wiki/State_(polity)http://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Money_supplyhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Commercial_bank8/11/2019 Thesis on Credit Risk Management of Bangladeshi Bank
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Private Commercial Banks :
@rivate banks are the highest growth sector due to the dismal erformances ofgovernment banks .They tend to o/er better service and roducts. -ere is the list =
1. +B Bank imited
5. Bangladesh Commerce Bank imited
8. Bank +sia imited
9. BR+C Bank imited
. haka Bank imited
;. utch Bangla Bank imited
ational Bank imited
1CC Bank imited
1?.>RB Bank imited
1D.>RB Commercial Bank imited
50.>RB Elobal Bank td
51.Fne Bank imited
55.@rime Bank imited
58.@ubali Bank imited
59.$outh Bangla +griculture and Commerce Bank td
5.$outheast Bank imited
5;.$tandard Bank imited
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5ational Bank of @akistan
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(.).) &redit Risk Management Need
Credit risk refers to the robability of loss due to a borrowerIs failure to make
ayments on any tye of debt. Credit risk management% meanwhile% is the ractice
of mitigating those losses by understanding the ade&uacy of both a bankIs caital
and loan loss reserves at any given time J a rocess that has long been a challenge
for (nancial institutions.
The global (nancial crisis J and the credit crunch that followed J ut credit risk
management into the regulatory sotlight. +s a result% regulators began to demand
more transarency. They wanted to know that a bank has thorough knowledge of
customers and their associated credit risk. "hile the B+$6 ** regulation was
already in lace since 5010 and now the new Basel *** regulations will create an
even bigger regulatory burden for banks.
To comly with the more stringent regulatory re&uirements and absorb the higher
caital costs for credit risk% many banks are overhauling their aroaches to credit
risk. But banks who view this as strictly a comliance e!ercise are being short=
sighted. Better credit risk management also resents an oortunity to greatly
imrove overall erformance and secure a cometitive advantage.
Elobally% more than 0K of total risk elements in Banks and ,inancial *nstitution 3,*4
s are credit risk alone. Thus managing credit risk for e#cient management of a ,*
has gradually become the most crucial task. Credit risk management encomasses
identi(cation% measurement% matching mitigations% monitoring and control of the
credit risk e!osures.Credit Risk Managements for ublic and rivate commercial banks are suggested
by Bangladesh Bank by a number of BR@ circulars and @olicy Euidelines. $ome
BR@ circulars are mandatory to be followed by any and every banks whereas there
are suggestion under the head Managing Core risks of Banking ,inancial *nstitutions
or as such.
Credit risk management encomasses identi(cation% measurement% matchingmitigations% monitoring and control of the credit risk e!osures to ensure that:
314The individuals who take or manage risks clearly understand it
354 The organi)ationIs Risk e!osure is within the limits established by Board of
irectors with resect to sector% grou and countryIs revailing situation
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384 Risk taking ecisions are in line with the business strategy and obectives set by
BF
394 The e!ected ayo/s comensate the risks taken
34 Risk taking decisions are e!licit and clear
3;4 $u#cient caital as a bu/er is available to take risk
Credit risk management needs to be a robust rocess that enables ,*s to roactively
manage facility ortfolios in order to minimi)e losses and earn an accetable level
of return for shareholders. Central to this is a comrehensive *T system% which
should have the ability to cature all key customer data% risk management and
transaction information including trade L ,ore!. Eiven the fast changing% dynamic
global economy and the increasing ressure of globali)ation% liberali)ation% and
consolidation it is essential that ,*s have robust credit risk management olicies and
rocedures that are sensitive and resonsive to these changes.
(.* +'ectie of the report
The general obective of this reort is to understand the credit risk managementolicy% and also to know% how bank manages the credit risk% assess their otentialityand limitations% and try to minimi)e the risk of overall credit activities.
*t also has the following obectives:To introduce the Banks td.% their origins% functions and oerations.To describe the credit ractice of these Banks td.To describe the oeration of credit risk management division 3CRM4 ofthese Banks td.
To introduce the credit risk management olicy of these Banks td.To describe the credit rules and regulation recommended byBangladesh Bank% which these Banks td. must follow as a commercialbank of the country.To have an overview on credit risk grading 3CRE4 and lending riskanalysis 3R+4 of these Banks td.To describe the delegation and loan sanction rocedures and also toshow the strategic osition and the key resonsibilities andaccountability of the resective sanctioning authorities of these Bankstd.To have a brief overview on small and medium enterrise 3$M64lending.
To develo an accurate ro(le of borrowerIs behavior relative to theirlending re&uirement.To assess the borrowerIs knowledge% oinions about various creditolicies% rocedures and regulations to determine the borrowerIssatisfaction.To (nd out the bottlenecks and also recommend on the (ndings andalso to reach at the conclusion.
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(.- $cope of this hesis
@rivate commercial banks were subect to this Thesis because most $tate owned
commercial banks are reluctant to disclose their (nancial information to me and
those who reviously tried to obtain those information. This thesis characteristically
describes% comares and analy)e the credit risk management olicies of banksnamely amuna Bank td. % Brac Bank td. % Mercantile Bank td.% @rime Bank td.
and >ational Bank td. The thesis aims at the investigation %identi(cation and
usti(cation of their credit risk olicy management in line with the Bangladesh Bank
Credit Risk Management Industry Best Practicesand also in terms of the
B+$6 = ** and these banks' internal strategic stances.
(./ Methodolog# of this hesis
Methodolog#is the systematic% theoretical analysis of the methods alied to a
(eld of study. *t comrises the theoretical analysis of the body of methods andrinciles associated with a branch of knowledge. Tyically% it encomasses
concets such as aradigm% theoretical model% hases and &uantitative or
&ualitative techni&ues. Three tyes of Methodologies are available namely 314
6!loratory research 354,ield Research and 384 aboratory Research .
,or the urose of this thesis only 6!loratory research methodology and ,ield
research methodology were used. There was no roceedings taken under the
aboratory research methodology. The rocessing of the information were made
both on descritiveemirical and analytical standoint.
6!loratory research methodologies are the media to analy)e an emirical set of
information which can lead to obective and uni&ue outcome. ,or the urose of this
Thesis% this methodology was used to measure the e#ciency and validation of the
Credit risk management olicy and its maintenance in these banks. "here (eld
research methodology rovided me with the actual and e!eriential information to
rocess further.
Both rimary and secondary information have been used to reare this thesis.
$econdary information were collected from the +nnual Reorts of these banks and
also from various articles ublished by these banks and also from Bangladesh
banks' analysis of those annuals reorts. + number of ournals ublished by
Bangladesh Bank and di/erent (nancial analysts were considered in rearation ofthe thesis.
@rimary data has been collected through verbal commutation with the bank
emloyees and rimary record they rovided me taken the con(dentiality issue as
granted.
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$tandard editing and coding rocedures have been utili)ed. $imle calculation and
tabulation have also been done throughout the Thesis.
(.0 Methods of 1ata collection
@rimary data are measurements observed and recorded as art of an original study.
"hen the data re&uired for a articular study can be found neither in the internally
audited records of the enterrise% nor in ublished sources% may it become
necessary to collect original data. Most of the @rimary data were collected from the
Bank 6mloyees by using *nterview method. Gnstructured schedules were sent to
them through email to (ll out and send desired soft coy of the source documents.
The &uestions in the schedules were oen ended and unstructured.
$econdary *nformation are collected from *nternet such as the website of these
banks % Bangladesh Bank website% Ministry of ,inance website% C@'s website and
many more. $ome -ardcoies of +nnual reorts of these banks were collected from
bank emloyees.
(.2 Literature Reie3
Bangladesh inherited its banking system from the British colonial regime. Therewere 99 banks and (nancial institutions working in erstwhile @akistan before theartition of *ndo=@ak sub=continent in 1D9
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and rocesses of the banks and their a#liates create a great imact in the Aow of
the (nancial resources. -owever% various economic uncertainties% international
markets% or (nancial constraints can cause the (nancial status to be unstable. +side
from the (nancial de(ciencies% the other causes of the (nancial constraints are the
lack of con(dence among the (nancial market to rovide e!ternal hel for the
needed consumers% lack of caability to gather the information of the consumers%and the lack of ush to have an aggressive debt collecting.
Credit risk grading is an imortant tool for credit risk management as it hels the
Banks L (nancial institutions to understand various dimensions of risk involved in
di/erent credit transactions. The aggregation of such grading across the borrowers%
activities and the lines of business can rovide better assessment of the &uality of
credit ortfolio of a bank . The credit risk grading system is vital to take decisions
both at the re=sanction stage as well as ost=sanction stage.
*n order to make the banks in Bangladesh more shock absorbent as well as to coe
with international best ractice for risk management and% a sound and robustbanking industry% Bangladesh Bank has taken measures to imlement B+$6 ** from
anuary 5015.
B+$6 Committee on Banking $uervision ublished a more comrehensive new
ackage on caital ade&uacy re&uirement known as B+$6 ** for strengthening the
caital ade&uacy% imroving suervisory system to assess the ade&uacy of caital
based on a thorough review of risks% reinforce risk management system and market
disciline with the ultimate obective of having strong caital base that are
commensurate with risk ro(le of the Bank comrising credit risk% market risk and
oerational risk that can ensure long term stability and solvency of banking
comany and banking sector as a whole.
+ >ational $teering Committee comrising senior o#cials from banking industry%
Bangladesh Bank and Chartered +ccountant ,irms has been constituted.
,urthermore% a Coordination Committee and a Basel ** imlementation Cell have
been established. *n the meantime% Bangladesh Bank has done two studies one is
self=audit on Basel core rinciles for e/ective Bank suervision and the second one
is &uantitative imact study in order to assess readiness of the banks for
imlementation of Basel **.
*n line with Bangladesh Bank re&uirement% the Bank has already formed a Basel **
*mlementation Gnit to ensure smooth and timely imlementation of Basel **
+ccord. Caacity building measures are underway so that the Bank is fully reared
to adot the +ccord in 5015.
(.4 Limitation of this hesis
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$ince this Thesis is concerned with the comarison of credit deartment of Banks
only . Fther rublic and ublic commercial banks as well as the *slamic commercial
banks' credit management cannot be comrehensibly inferred from this Thesis. + lot
of information could not obtained because the banks were not interested to disclose
their information% olicy% and data to maintain their secrecy and cometitive
advantages. * had to deend on the websites of the resective banks for most of the
information . There are certain limitations regarding the studies that are
summari)ed below:
e(ciencies in data re&uired for the study. Many information were hidden
away and was not e!ressed verbally to me.
,ield ractice varies with the standard ractice that also created roblem.
Bangladesh Banks guidelines are sometimes misinterreted and some of its
suggestions are not followed in the credit management for business strategy
There was a roblem of time management % many information were not
rovided timely and * also had little time to collect all the information.
The emloyees in several of these Bank imited are so much busy in their
resonsible (elds they could hardly rovide any substantial time to
communicate with them.
The total thesis like 5&redit Risk Management of &ommercial Banks6is
vast and not ossible to reare in a week% month or even years. $o it is the
hard task to rove all the information on that necessary segment which might
make this Thesis more resourceful and e!cetional. * couldnIt reare the
reort as the best of my caability because much information could not
gathered for the recourses of con(dentially. uring the Banking hour there
were many customers who has to be served time o/ered er customer was
not ade&uate to ask about their satisfactory and dissatisfactory level in
connection with scheme related transactions which might have heled to
focus in more detail.
+ll of the information for a seci(c bank was gathered from only one branch
of the bank ltd. as at least 8 of them had no Management *nformation $ystem
deartment at those articular branch so information were collected in an
unstructured and unconventional way.
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*n case of erformance analysis secondary data are used.
Maor art of this reort is based on the face to face interviews% whichconsists of view and oinion of those eole. *n some cases some of them
were not able to rovide concrete facts or (gures. *n these cases as wellsome assumtion had to be made.
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).7 List of Banks in this hesis
314 amuna Bank td. %
354 Brac Bank td. %
384 Mercantile Bank td. %
394 @rime Bank td. and
34 >ational Bank td.
).( Jamuna Bank Ltd "
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Head Ofce % Chini $hila Bhaban% 08% ilkusha C+% haka=1000
e! : www.amunabankbd.com
amuna Bank td. 3B4 is a Banking Comany registered under the Bank Comanies
+ct% 1DD1 and incororated as a @ublic Comany limited by $hares under the
Comanies +ct% 1DD9 in Bangladesh. The Bank started its operation from *rd
June )77(as a scheduled Bank.
B came into being as a highly caitali)ed new generation Bank started its
oerations with an 8uthori9ed &apital and Paid:up &apital of k.)-)-.77
million and k.(*(*.77 million respectiel#.
Being a 8rd generation Bank of Bangladesh% it focuses on
Remaining with time
Managing change
eveloing human caital
Creating true customerIs value
The Bank rovides all tyes of suort to trade% commerce% industry and overall
business of the country. B's (nances are also available for the entrereneurs to set
u romising new ventures and BMR6 of e!isting industrial units. amuna Bank td.%
the only Bengali named 8rd generation rivate commercial bank% was established
by a grou of local entrereneurs who are well reuted in the (eld of trade%
commerce% industry and business of the country.
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The Bank o/ers both conventional and *slamic banking through designated
branches. The Bank is being managed and oerated by a grou of highly educated
and rofessional team with diversi(ed e!erience in (nance and banking.
The Management of the bank constantly focuses on understanding and anticiating
customers' needs. $ince the need of customers is changing day by day with the
changes of time% the bank endeavors its best to device strategies and introduce
new roducts to coe with the change. amuna Bank td. has already achieved
tremendous rogress within its ast 10 years of oeration. The bank has already
built u reutation as one of &uality service roviders of the country.
+t resent the Bank has real=time Fnline banking branches 3of both Grban and Ruralareas4 network throughout the country having smart *T=backbone. Besides
traditional delivery oints% the bank has +TMs of its own% sharing with other artner
banks and consortium throughout the country.
The oeration hour of the Bank is 10:00 +.M. To ;:00 @.M. from $unday to Thursday
with transaction hour from 10:00 +.M. to 9:00 @.M. The Bank remains closed on
,riday% $aturday and government holidays.
The motto of amuna Bank imited reAects the indomitable commitment and
conviction of the bank to ensure sustainable growth and advancement of our
customers. *ts greatest success is to ful(ll all the banking needs of eole from
di/erent sheres of the society and business of di/erent segments of the economy
of the country by o/ering diversi(ed roducts and suerior services. *t believes in
the comanionshi with its customers comrising eole of di/erent classes and
business house of di/erent segments in its never ending ourney of continuous
develoment and rogress. +s its customers endeavor to accomlish higher
roserity% B also strives to be the referred artner for their ascending growth.
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amuna Bank imited has slendid signi(cance behind its name. The name
de(nitely originates from the great river% NThe amunaO which does not only
reresent one of our greatest resources% but also reminds us about glorious culture
and heritage of the country. ike the mighty river amuna% amuna Bank reresents
@ersistence% Transarency and @roserity at one handP and Resilience% 6nthusiasm%
7astness and ,lourishing +ttitude on the other hand. The way the Ereat River
amuna incessantly and selAessly Aows ahead holding all the resources within it%
shaing and building u our lives and changing the course of our destinationP
amuna Bank imited also continues to enrich eolesI lives with its multi=urose%
countless bene(cial roducts and service which will change their destination
towards a better future.
).(.( ;ision of Jamuna Bank
To become a leading banking institution and to lay a signi(cant role in the
develoment of the country.
).(.) Mission of Jamuna Bank
The Bank is committed for satisfying diverse needs of its customers through an
array of roducts at a cometitive rice by using aroriate technology and
roviding timely service so that a sustainable growth% reasonable return and
contribution to the develoment of the country can be ensured with a motivated
and rofessional work=force.
).(.* $trategic Priorit# of Jamuna Bank
To manage and oerate the Bank in the most e#cient manner to enhance(nancial erformance and to control cost of fund.
To strive for customer satisfaction through &uality control and delivery oftimely services.
To identify customers' credit and other banking needs and monitor theirercetion towards our erformance in meeting those re&uirements.
To review and udate olicies% rocedures and ractices to enhance theability to e!tend better service to customers.
To train and develo all emloyees and rovide them ade&uate resources sothat customers' needs can be reasonably addressed.
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To romote organi)ational e/ectiveness by oenly communicating comanylans% olicies% ractices and rocedures to emloyees in a timely fashion.
To cultivate a working environment that fosters ositive motivation forimroved erformance
To diversify ortfolio both in the retail and wholesale market
To increase direct contact with customers in order to cultivate a closerrelationshi between the bank and its customers.
).(.- +'ecties of Jamuna Bank
To earn and maintain C+M6 Rating '$trong' To establish relationshi banking and imrove service &uality through
develoment of $trategic Marketing @lans.
To remain one of the best banks in Bangladesh in terms of ro(tability and
assets &uality.
To introduce fully automated systems through integration of informationtechnology.
To ensure an ade&uate rate of return on investment.
To kee risk osition at an accetable range 3including any o/ balance sheetrisk4.
To maintain ade&uate li&uidity to meet maturing obligations andcommitments.
To maintain a healthy growth of business with desired image.
To maintain ade&uate control systems and transarency in rocedures.
To develo and retain a &uality work=force through an e/ective humanResources Management $ystem.
To ensure otimum utili)ation of all available resources.
To ursue an e/ective system of management by ensuring comliance toethical norms% transarency and accountability at all levels.
).(./ ;alues of Jamuna Bank
Customer ,ocus *ntegrity
Quality
Teamwork
Resect for the individual
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-armony
,airness
Courtesy
Commitment Resectable Citi)enshi
Business 6thics
Gni&ue Culture
).(.0 1epartments of Jamuna Bank
Credit Risk management ivision
*slamic Banking ivision
+nti money aundering ivision
*nformation and Communication Technology ivision
*nternal Control and Comliance ivision
Car and +C ivision
,inancial +dministration ivision
$hare ivisionMonitoring ivision
Eeneral and Common $ervices ivision
Caital Market Feration ivision
$M6 ivision
Risk Management ivision
aw L Recovery ivision
Banking Feration ivision
Credit +dministration ivision
-uman Resources ivision
@R and Brand Communication ivision
Cororation Banking ivision
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+gricultural oan Gnit
>RB Banking and ,oreign Remittance ivision
*nternational ivision
Treasury ivisionTrade ,inance @rocessing Center
Retail Banking ivision
F/shore Banking Gnit
Marketing and eveloment ivision
).(.2 Num'er of Branches of Jamuna Bank
B% which started its oeration at ilkusha Branch on 5001% was the maor rivate
commercial Bank in Bangladesh oerating throughout the country as well as the
age of the Bank is 11 years. uring this eriod it has established total ?8 branches
over the country and made a smooth network inside the country as well as
throughout the world. The number of increasing branches as year wise is mentioned
in the table.
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).(.2 Num'er of >mplo#ees of Jamuna Bank
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).) Brac Bank Ltd.
Head Ofce % 1% Eulshan +venue% Eulshan 1% haka 1515
e! : htt:www.bracbank.com
BR+C Bank imited% one of the third generation of commercial banks started itsourney on uly 09%
5001. *t is an a#liate of BR+C 3Bangladesh Rural +dvancement Committee4% one ofthe world's
largest non=governmental develoment organi)ations founded by $ir ,a)le -asan+bed in 1D
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1%?00 remittance delivery oints and ?%80; human resources. *n addition to smallbusiness lending%
BR+C Bank has fast growing remittance% savings mobili)ation and consumer lendingbusinesses
BR+C Bank intends to set standards as the market leader in Bangladesh. The Bankwants to
demonstrate that a locally owned institution can rovide e#cient% friendly andModern full= service
banking on a ro(table basis. The Bank roduces earnings and ay out dividendsthat can suort the
activities of BR+C% the Bank's maor shareholder. eveloment and overtyalleviation on a
countrywide basis needs mass roduction% mass consumtion and mass (nancing.The goal of BR+C
Bank is to rovide mass (nancing to enable mass roduction and massconsumtion% and thereby
contribute to the develoment of Bangladesh.
).).( ;ision of Brac Bank
Building ro(table and socially resonsible (nancial institution focused on Marketand Business with Erowth otential% thereby assisting BR+C and stakeholders tobuild a ust% enlightened% healthy democratic and overty free BangladeshO.
).).) Mission of Brac Bank
Continuous low=cost deosit Erowth with controlled growth in retail assets.
Cororate +ssets to be funded through self=liability mobili)ation. Erowth in+ssets through syndications and investment in faster growing sectors.
Continuous endeavor to increase non=funded income
Hee our debt charges at 5K to maintain a steady ro(table growth
+chieve e#cient synergies between the bankIs branches% $M6 unit o#ces and
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BR+C (eld o#ces for delivery of remittance and BankIs other roducts andservices
Manage various lines of business in a full controlled environment with nocomromise on service &uality
Hee a divers% far Aung team fully controlled environment with no comromiseon service &uality
Hee a diverse% far Aung team fully motivated and driven towardsmateriali)ing the bankIs vision into reality$ustainable Erowth in small and Medium enterrise 3$M64 sector.
).(.* ;alues of Brac Bank
).(.- ?uman Resource of Brac Bank"
+t resent% there are total ?%80; emloyees at BR+C Bank imited. BR+C Bank
imited has a vertical organi)ational structure with total 1 designations at themanagement hierarchy. The management of BR+C Bank imited is consisted ofBoard of irectors% 6!ecutives and F#cers L $taves. The To management makesall the maor decisions at BR+C Bank imited. The Board of directors being at thehighest level lays an imortant role on the olicy formulation. The 6!ecutives andF#cers are directly concerned with the day=to=day oeration of bank.
).(./ &R8B Rating of Brac Bank"
7alue the fact that one is a member of the BR+C family
Creating an honest% oen and enabling environment
-ave a strong customer focus and build relationshis based on integrity% sueriorservice and mutual bene(t
$trive for ro(t L sound growth
"ork as team to serve the best interest of our owners
Relentless in ursuit of business innovation and imrovement
7alue and resect eole and make decisions based on merit
Base recognition and reward on erformance
Resonsible% trustworthy and law=abiding in all that we do.
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Credit Rating +gency of Bangladesh 3CR+B4 imited has retained ++8 rating inong Term and $T=5 rating in the $hort Term of BR+C Bank imited in view of theerformance of the Bank for year 5010. The ++8 rating refers that BR+C Bank td.has very strong caacity to meet bank's (nancial commitments. The Bank di/ersfrom the highest=rated Commercial Banks only to a small degree. ++8 is udged tobe of very high &uality and is subect to very low credit risk. The $TJ5 rating in the
short term refers that the Bank has strong caacity for timely reayment. Thisrating also refers that the Bank is characteri)ed with commendable osition interms of li&uidity% internal fund generation% and access to alternative sources offunds.
).(./ Mo'ili9ation of !unds in Brac Bank"
The main sources of fund for BR+C Bank imited are:
+. eosit: eosit is the mainstay of the Bank's sources of funds. ,ollowing usualractices%
the Bank collects deosit through:
3i4 Current eosit
3ii4 $avings eosit
3iii4 Term eosit
B. Borrowing : +art from deosit% BR+C Bank imited receives funds from other
Banks%
,inancial *nstitutions and +gents as borrowing which are in Bangladesh and alsooutside of
Bangladesh. *n 5011% BR+C Bank imited only receives funds as demand termborrowing
from
3i4 Bangladesh Bank.
3ii4 Gttara Bank imited.
Beside this% in revious years the Bank borrowed from other Banks% ,inancial*nstitutions and
+gents as demand term borrowing% short term deosit borrowing and (!ed deositborrowing
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in Bangladesh. The Bank also received funds as demand term borrowing 3non=interest
bearing4 from di/erent outside bank i.e. $tandard Chartered Bank JG$+% The Bankof >ova
$cotia= Canada% Citibank >+=G$+%*C*C*=*ndia% $tandard Chartered Bank=GH% -yo7ereins
Bank Eermany% -$BC=G$+%-$BC=GH% -$BC=+G$% -$BC=@akistan etc.
).* Mercantile Bank Ltd.
Head Ofce % ;1% ilkusha Commercial +rea% haka=1000
e! : www.mblbd.com
Mercantile Bank imited emerged as a new commercial bank to rovide e#cientbanking service and to contribute socio=economic develoment of the country. Thebank commenced its oeration on une 5% 1DDD. The Bank rovides a broad range of(nancial services to its customers and cororate clients. The board of directorsconsists of eminent ersonalities from the realm of commerce and industries of thecountry. The renowned 80 industrialists established this Bank. Mercantile Bankimited is a rivate commercial bank with -ead F#ce at ;1% ilkusha C+% haka%Bangladesh% with a total of branches all over Bangladesh% including its three$M6 Hrishi branches. ,rom its incetion Mercantile Bank had introduced a widerange of banking services for the eole of all classes. *t has introduced the retailbanking% online banking and also the $M$ Banking to reach the banking services at
every door stes. The bank mobili)ed deosits of BT ?.80 billion and the loansand advances of BT 9?.80 billion at the end of 5015. To contribute in the caitalmarket of the country the bank has launched the oeration of mercantile bankbrokerage house ltd. The bank has achieved Ncerti(cate of meritO from the *C+B.MB has also been awarded as N$onar Manush $heba +wardO by the Refugeeand migratory movementIs research unit 3RMMRG4.
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).*.( ;ision of Mercantile Bank
"ould make (nest cororate citi)en
).*.) Mission of Mercantile Bank"ill become most caring% focused for e&uitable growth based on diversi(eddeloyment of resources and nevertheless would remain healthy and gainfullyro(table bank
).*.* +'ecties of Mercantile Bank
to increase shareholders' value
to achieve economic value addition
to be market leader in roduct innovation
to be one of the to three (nancial institutions in Bangladesh in terms of e#ciency
to be one of the to (ve (nancial institutions in Bangladesh in terms of marketshare in all signi(cant market segments we serve
Fbective of Mercantile bank is mainly the strategic obectives not the oeratingobectives
).*.- &ore ;alues of Mercantile Bank
1. Customer delight
Customer satisfaction ervades all our activities. "e areciate that CustomerIs satisfactiois critical for our success.
5. *nnovation
$urring innovation for reinforcement of our business. Frigination and materiali)ation ofchange management for attainment of erfection and we believe change is always constan
8. 6thical 7alues
"e continue to be resonsible% ethical% sincere and transarent in our thoughts and actions
9. Caring for -uman Resources
Reali)ation of latent otentialities of emloyees% resecting individual worth and dignity toensure smooth career rogression as well as welfare orientation in -uman Resourcesmanagement olicy and ractices.
. Commitment
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"e always kee high on the agenda our commitment towards valued deositors as theirtrustworthy custodian and to maintain the same sirit for all other stakeholders.
;. $ocially Resonsible
Constant endeavor to act and resond in a socially resonsible manner keeing in mindsociety and our country.To care for our environment.
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background. +lthough it is not ossible at this stage to undertake RL activitiessimilar to those of the banks in the develoed countries% mercantile bank hasestablished a core research and lanning division comrising skilled ersons fromthe very incetion of the bank
?uman Resources 1iision"
The emloyees are Mercantile Bank's most valuable resource. -aving cometentand rofessional emloyees is becoming increasingly imortant in today'scometitive world% and MB has a signi(cant cometitive advantage in this resectmany of its emloyees have worked here since the BCC* area and therefore havevast e!erience in their resective (elds. +lso the new emloyees are recruited withsound academic background and given roer training after recruitment to groomu for their resonsibilities. They lan to inculcate a high erformance culture wherethe emloyees will work with fun and ride.
raining and 1eelopment:
The main function of this division is to reare the emloyee of the bank ascometent and &uality workforce. The function of this division is s follows:
+rrange training and orientation rogram for the fresh trainee o#cers.
@rovide seci(c training rogram for the emloyee to make them morerofessional.
8udit and &ompliance 1iision"The main function of this division is to rovide legal assistance to the branches andto ensure strict adherence of rules and olicies by all concerned o#cials of the bankthrough routine and surrise insection and audit. The functions of this division areas follows:
*mlement rescheduling rocess of stuck=u loan to the branches forobtaining reayment schedule through strong ersuasion and serve (nalnotice etc. as the condition re&uired.
Monitor the individual cases with resect to their securities% value of
securities% and (nally review of ossibility of recovery of bank's stuck=uclassi(ed loan.
*nvestigate susicious or irregular matters being directed by highermanagement +lso conduct such in&uiry being re&uested by a/ected branch=in=charges.
Time to time follow=u of stuck=u advances of branches and kee thebranches under constant ressure.
*nsect all branches' oerations at least once in a year.
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Carry out surrise audit as felt necessary.
&redit 1iision"
The rimary obective of this division is to evaluate the credit worthiness and debtayment caability of resent loan customers and loan alicants. *t is also
resonsible for keeing track of the credit ortfolio by obtaining regular informationfrom the branches. *t sets rices for credits and ensures a/ecting it at the branches.This deartment also monitors the various loan accounts of the branches andreares various statements for Bangladesh Bank. The credit risk managementdeartment is assisted by the credit administration deartment% which is mainlyconcerned with the ost=aroval functions of the division. The asects that arecritically tracked and monitored by credit administration are:
Credit e!iry
@ast dues
6!cess over limit
ocument de(ciency
Reorting
Credit +dministration is involved in basically 5 broad functions:
1. Loan Monitoring:
The imortant asects of this art are:
,ollow aroval terms
@roer loan disbursement
Monitor interest ayments and rincial reayment Balance with general ledger
). 1ocumentation"
The imortant functions of this art are:
ook at sanction terms and ,ill u loan documentation checklist%
6nsure @roer loan documentation and Fbtain client sign o/
,iling with the Registered oint $tock Cororation 3 R$C4
Registered mortgage deed e!ecution
Marketing diision"
The main function of this division is to build relationshi with the otentialcustomers and strengthen the relationshi with the e!isting customer. The functionserformed by this division are as follows:
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To inform and e!lain the otential customer about the facilities rovided bythe bank.
To search for new area of business and collect information about the otentialsector.
To reare strategy for getting cometitive advantage.
To rovide information to other division about the resent market scenario. To kee close contact with the e!isting clients.
&entral accounts diision"
,inance and +ccounts division task is to:
Maintain daily li&uidity ositions% treasury bills% call money% debentures%lacement of funds etc. Monthly=accrued interest calculation of all interests bearing accounts% inter=
branch calculation for head o#ce% and amorti)ation of all (!ed and otherassets.
@rearation of statement of accounts and ro(t and loss account for thebank.
"eekly deosit and advance analysis and Cost of fund analysis.
Maintenance of accounts% rearation of annual reort of the bank%maintenance of rovident fund accounts% maintenance of income ande!enditure osting% maintenance of salaries and wages of the emloyees etc.
,ul(lling reorting re&uirements of Bangladesh Bank.
International 1iision:
*nternational division is resonsible for assisting the authori)ed branches to deal inforeign trades% that is% imort and e!ort businesses on account of the customers ofthe bank by giving aroval for transactions and controlling them at various stages.*t deals with all corresondents of foreign banks having arrangement with the bank.6very year new agents are added. The larger the number of corresondents and the
wider the coverage area% the richer will be the international connections of thebank.
The functions erformed by this division are as follows:
Corresondent banking relationshi
$uervision of foreign e!change transaction of other units
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Monitoring on comliance of Bangladesh Bank regulations
$uervise sale urchase of foreign currencies
Reconciliation of >ostro +ccounts 3*talian word for account of our money%held by us4
Information technolog# diision:
@reviously% Mercantile Bank had a very low level of automation. There was hardlyany @C in the whole Bank before 5001. But when the new management took over in5001% they gave huge emhasis on comuteri)ing the bank's oerations. +fter 5years% almost all the oerations in the bank are now automated. The bank is alsoshifting to a new *T latform% which aims at maintaining% oerating andstrengthening the technology base of the bank to enable error free roduction ofinformation that ensures ongoing e#ciency and ro(tability of oeration% + worldclass banking software called ,le! Cube has been installed which will centrali)eoerations and rovide online banking% internet banking% automated teller machine%
telehone banking% oint of sale disenser% credit card facility etc. last >ovember% 0introduced new software called @C Bank 5000.
+t resent% the *T deartment serves the following functions:
eveloment of software's for bank's oeration according to need%their maintenance and urchase of new software.
Maintenance of comuter hardware and ugrading the @Cs wheneverre&uired.
Training of the sta/ so that they can erform roerly in the automated
environment @rearing training materials.
Troubleshooting with the new software.
).- Prime Bank Ltd.
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Head Ofce : 8damee &ourt 8nne@ BuildingA), ((=A()7, Motiheel&8, 1hakaA(777
e! " https"333.prime'ank.com.'d
@rime Bank imited is fast growing rivate bank. This Bank is already at the to slot
in teams of &uality service to the customers% and at the value addition to the
shareholder. @rime Bank td has been oerating in this industry since 1DD and
belongs to the second generation of rivate banks to be incororated since the
indeendence of Bangladesh @rime Bank td. has already made signi(cant rogress
within a very short eriod of its e!istence. The bank has already occuied an
enviable osition among its cometitors after achieving success in all area of
business oeration. The bank o/ers all kind of Commercial cororate and @ersonal
banking service covering all segment of society within the framework of Banking
Comany +ct% rules and regulation laid down by our central bank. @rime Bank td. is
determined to e!lore the di/erent ways to accommodate with the needs of its
clients. Fne of these ways includes ,oreign 6!change Feration and transactions
which o/er customers a medium of doing business globally with minimum risk
associated.
Basic &orporate Information
!e'ruar# /, (==/"Memorandum and +rticles of +ssociation by the sonsors.
!e'ruar# (), (==/"*ncororation of the Bank and Certi(cate of Commencement
of Business.
!e'ruar# )7, (==/"icense issued by Bangladesh Bank.
Noem'er (/, (==="isted in Chittagong $tock 6!change imited 3C$64.
March (-, )777"ividend declared in the th +EM 3,irst after the *@F4.
March )2, )777"isted in haka $toke 6!change imited 3$64.
March )=, )777"Trading of $hared in $6 and C$6.
March )=, )77("Registered as Merchant Banker with $ecurities and 6!change
Commission 3$6C4.
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8pril (2, )77/",ormal launching of the Bank L Commencement of the business
from the Motiheel Branch.
June *7, )77/"+greement with Temenos for Core banking software T59.
8ugust )=, )77/"*nitial @ublic F/ering 3*@F4.
1ecem'er ((, )772"icense issued from Bangladesh Bank as @rimary ealer.
March )=, )774"Registered as deository articiant of CB.
June (/, )774"Trading of share started in emat form in $tock 6!changes
).-.( ;ision of Prime Bank
To be the best @rivate Commercial Bank in Bangladesh in terms of e#ciency% caital
ade&uacy% asset &uality% sound management L ro(tability having strong li&uidity.
).-.) Mission of Prime Bank
3a4 To build @rime Bank td. in to an e#cient% market driven% customer focused
institution with good cororate governance structure.
3b4 Continuous imrovement in business olicies% rocedure L e#ciency through
integration of technology at all levels.
).-.* +'ecties of Prime Bank
To have a strong customer focus L to build a relationshi based on integrity
suerior
services L mutual bene(t.
To work as a team to serve the best interest of the grou. To work for continuous business innovations L imrovements.
To value L resect eole L make decisions based on merits.
To rovide recognition L rewards on erformance.
To have sustained growth% imroved L wide sectrum of roducts L service.
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).-.- &ore ;alues &orporate Philosoph# of Prime Bank
!or +ur &ustomer "
To rovide the most courteous and e#cient service in every asect of itsbusiness. To be innovative in the develoment of new banking roductsand services.
!or our >mplo#ees
By romoting their well=being through attractive remuneration and fringebene(ts.
By romoting good sta/ morale through roer sta/ training and
develoment% and rovision of oortunities for career develoment.
!or our $hareholders
By forging ahead and consolidating its osition as a stable and rogressive(nancial institution.
By generating ro(ts and fair return on their investment.
!or our &ommunit#
By assuming our role as a socially resonsible cororate citi)en in atangible manner By adhering closely to national olicies and obectivesthereby contributing towards the rogress of the nation.
By uholding ethical values and best ractices.
Constantly seeking to imrove erformance by aligning our goals withstakeholders e!ectations because we value them.
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).-./ Basic Management 8ctiities and 1iisions of Prime Bank
-ighly skilled rofessionals having long e!erience in banking are managing @rime
Bank td. They constantly focus in understanding L anticiating customer needs L
oerate according to it to survive in the changing market condition. >ow we wouldlook in to each of the four basic management activities @lanning% Frgani)ing%
Controlling and eading that the bank ractices% in order to stay on to of its
cometitors.
P"#$$I$%:
The overall lanning aroach in @rime Bank is to=down. Management of @rime
Bank td. can be categori)ed in to two broader teams% one is the To Management
team and other one is the Mid evel Management team. The To=Management team
usually comrises of the Board of irectorIs where the BankIs Chairman heads the
meetings. ong terms goals are usually been discussed in these high ro(le
meetings% where the bank owners decides everything. ,or e!amle% what should be
the targeted ro(t for the ne!t (scal year. uring their regular meeting each month
the directors tries to review the feedback from decisions given earlier. Changes are
made if needed and new issues are also discussed. The Mid evel Management
team on the other hand deals with short term goals. They are here to see whether
the short terms goals are in line with the long=term targets. Moreover% they alsorovide solutions to everyday challenges that can come u all the time. Most of the
emloyees in the mid level are usually head of individual branches and is entitled to
with resonsibility to see the smooth oeration of the branch.
OR%#$I&I$%:
The term organi)ing for Bank indicates the way through which the day to day
activities of the bank are carried out for smooth oeration. @rime Banks follows two
aroaches for organi)ing its business% one the Branch Based +roach and the
other is the eartment Based +roach. *n the Branched Based +roach% each
individual branch is treated as the searate identity and is head by a branch
manager. The branch manager is liable to the to management for the erformance
of that articular branch. Before the starting of a facial year and from than onward%
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it is the duty of the branch manager to see that targets are being met. Eiven below
is an organ gram of an individual branch for better understanding.
!ig ).( " +rgani9ational hierarch# of an ideal Branch
The eartment Based +roach is similar to that of the branch based aroach%
where each deartment oerates as a searate unit but sometimes collaborates in
order oerates more e#ciently or to solve a common roblem. $uch dearts are
also treated as a searates entity but are much more seciali)ed in on articular
area of business unlike a branch% which has to be involve a multile tasks. 6!amles
of few other departmentsat @rime Bank td are as given below:
314 -uman resource eartment.
354 ,inancial and +dministration eartment.
384 Monitoring and *nsection eartment.
394 Marketing.
34 @ersonal and Relation eartment.
3;4 Merchant Banking.
3
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3104 Eeneral service ivision.
3114 Comuter and *nformation Technology ivision.
3154 Credit +dministration ivision.
3184 Cororate +/airs ivision.
3194 Card ivision.
)./ National Bank Ltd.
Head Ofce : (4 ,1ilkusha &ommercial 8rea, 1hakaA(777,
e! " http"333.n'l'd.com
>ational Bank imited has its roserous ast% glorious resent% rosective future
and under rocessing roects and activities. 6stablished as the (rst rivate sector
Bank fully owned by Bangladeshi entrereneurs% >B has been Aourishing as the
largest rivate sector Bank with the assage of time after facing many stress and
strain. The member of the board of directors is creative businessman and leadingindustrialist of the country. To kee ace with time and in harmony with national and
international economic activities and for rendering all modern services% >B% as a
(nancial institution automated all its branches with comuter network in
accordance with the cometitive commercial demand of time. Moreover%
considering its forth=coming future the infrastructure of the Bank has been
rearranging. The e!ectation of all class businessman% entrereneurs and general
ublic is much more to >B. Heeing the target in mind >B has taken rearation
to oen new branches within the year 5019. The e!ectation of all classbusinessman% entrereneurs and general ublic is much more to >B.
>ational Bank imited was born as the (rst hundred ercent Bangladeshi owned
Bank in the rivate sector. ,rom the very incetion it is the (rm determination of
>ational Bank imited to lay a vital role in the national economy. *t is determined
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to bring back the long forgotten taste of banking services and Aavors. *t wants to
serve each one romtly and with a sense of dedication and dignity.
The emergence of >ational Bank imited in the rivate sector is an imortant event
in the Banking arena of Bangladesh. "hen the nation was in the gri of severerecession% Eovt. took the farsighted decision to allow in the rivate sector to revive
the economy of the country. $everal dynamic entrereneurs came forward for
establishing a bank with a motto to revitali)e the economy of the country.
The then @resident of the @eole's Reublic of Bangladesh ustice +hsanuddin
Chowdhury inaugurated the bank formally on March 5?% 1D?8 but the (rst branch at
9?% ilkusha Commercial +rea% haka started commercial oeration on March 58%
1D?8. The 5nd Branch was oened on 11th May 1D?8 at Hhatungon% Chittagong.
+t resent% >B has been carrying on business through its 1B has been continuing its small credit rogram for disbursement of
collateral free agricultural loans among the oor farmers of Barindra area in Rashahi
district for imroving their livelihood.
>B focused on all key areas covering caital ade&uacy% maintaining good asset
&uality% sound management% satisfactory earning and li&uidity. +s a conse&uence% it
was ossible to a record growth of 1
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105%9B @ublic $chool L College at Moghba)ar where resent enrolment is
1190. Besides awarding scholarshi to the meritorious children of the emloyees%
the bank has also e!tended (nancial suort for their education. *t also rovided
(nancial assistance to the +siatic $ociety of Bangladesh at the time of their
ublication of Banglaedia and observance of 900 years of haka City.
The Transarency and accountability of a (nancial institution are reAected in its
+nnual Reort containing its Balance $heet and @ro(t L oss +ccount. *n recognition
of this% >B was awarded Crest in 1DDD and 5000% and Certi(cate of +reciation in
5001 by the *nstitute of Chartered +ccountants of Bangladesh.
The bank has a strong team of highly &uali(ed and e!erienced rofessionals%
together with an e#cient Board of irectors who lay a vital role in formulating and
imlementing olicies.
)./.( ;ision of National Bank
6nsuring highest standard of clientele services through best alication of latest
information technology% making due contribution to the national economy and
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establishing ourselves (rmly at home and abroad as a front ranking bank of the
country are our cherished vision.
)./.) Mission of National Bank
6/orts for e!ansion of our activities at home and abroad by adding new
dimensions to our banking services are being continued unabated. +longside% we
are also utting highest riority in ensuring transarency% account ability% imroved
clientele service as well as to our commitment to serve the society through which
we want to get closer and closer to the eole of all strata. "inning an everlasting
seat in the hearts of the eole as a caring comanion in ulifting the national
economic standard through continuous u=gradation and diversi(cation of our
clientele services in line with national and international re&uirements is the desiredgoal we want to reach.
)./.* +'ecties of National Bank
+longside u gradation and diversi(cation of banking service to rovide
ma!imum satisfaction to the resected clients% nourishing saving habit
among the general eole by o/ering them attractive savings oriented
roducts% thereby assisting economic develoment.
To build u a dee=rooted and harmonies banker=customer relationshi by
disensing romted imroved services to the clients.
To make best use of the hard=earned investment of our valued shareholders.
$imultaneously% lay our due art in develoing a vibrant caital market by
ensuring more e/ective articiation of the Bank in the share market.
To make best use of latest technologies for giving the clients a taste of
modern banking so as to encourage them to continue and feel roud of
banking with >B.
To resond to the need of the time by articiating in syndicated large loans
(nancing% thereby e!anding the area of investment of the Bank.
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To gain con(dence of all &uarters involved in the economic develoment of
the country through ursuance of a olicy of continuous adustment and
coordination of the BankIs e!ternal trade rogrammers with the dynamism
inherent in the international trade and ayments system.
'()(* Product Sc+eme
)./.-.( &urrent 1eposit"
>ational Bank imited o/ers customers current deosit facility for day=to=day
business transaction without any restriction.
Benets C&ondition 8ppl#D
Minimum balance Tk.5000.
Minimum maintenance charge yearly Tk. ?00.
>o hidden costs.
$tanding *nstruction +rrangement are available for oerating account.
6asy access to our other facilities.
o open an 8ccount
5 coies of recent hotograh of account holder.
T*> certi(cate.>ominee's @hotograh.
7alid hotocoy of 7oter * Card.
)./.-.) ?ome Loan"
>B o/ers home loan facility for urchasing Aats or construction of house .
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Benets C&ondition 8ppl#D
,inancing amount e!tends u to B o/ers consumer credit facility for retail customers.
!inancing items
6lectronics consumer roducts.
Comuter or Comuter accessories.
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)././.* rade !inance
>B rovides comrehensive banking services to all. tyes of commercial concerns
such as in the industrial sector for e!ort=imort urose as working caital%
acking credit% trade (nance% *ssuance of *mort Cs% +dvising and con(rming
6!ort Cs. = Bonds and Euarantees .
Benets C&ondition 8ppl#D
ow interest rate 18.00K=19.0K.
Minimum rocessing time.
ow service charges.
)././.- $aings 1eposit
>ational Bank imited o/ers customers a basal free and low charges savings
account through the branches all over Bangladesh.
BenetsC&ondition 8ppl#D
*nterest rate of ;.00K on average monthly balance.
Minimum balance Tk.1000.
Maintenance charge yearly Tk. 900.
>o hidden costs.
o +pen an 8ccount
5 coies of recent hotograh of account holder.
>ominee's @hotograh.
7alid hotocoy of 7oter * Card.
)./././ &urrent 1eposit
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>ational Bank imited o/ers customers current deosit facility for day=to=day
business transaction without any restriction.
Benets C&ondition 8ppl#D
Minimum balance Tk.5000.Minimum maintenance charge yearly Tk. ?00.
>o hidden costs.
$tanding *nstruction +rrangement are available for oerating account.
6asy access to our other facilities.
o open an 8ccount
5 coies of recent hotograh of account holder.
T*> certi(cate.
>ominee's @hotograh.
7alid hotocoy of 7oter * Card.
*.4.= R!& 1eposit"
>ational Bank imited gives oortunity to maintain foreign currency account
through it's +uthori)ed ealer Branches. Bangladesh nationals residing abroad or
,oreign nationals residing abroad or Bangladesh and foreign (rms oerating in
Bangladesh or abroad or ,oreign missions and their e!atriate emloyees.
Benets C&ondition 8ppl#D
>o initial deosit is re&uired to oen the account.
*nterest will be o/ered 1.
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o open an 8ccount
5 coies of recent hotograh of account holder.
>ominee's @hotograh.
@assort Coy.
* of residence in abroad.
)./././ N!& 1eposit
>ational Bank imited gives oortunity to maintain foreign currency account
through it's +uthori)ed ealer Branches. +ll non=resident Bangladeshi nationals and
ersons of Bangladesh origin including those having dual nationality and ordinarily
residing abroad may maintain interest bearing >,C +ccount.
Benets C&ondition 8ppl#D
>,C +ccount can be oened for Fne month% Three months% $i! months and Fne
ear through G$ ollar% @ound $tarling% aanese en and 6uro.
The initial minimum amount of S1000 or 00 @ound $tarling or e&uivalent other
designated currency.
)././.0 Monthl# $aings
>ational Bank imited o/ers monthly savings scheme for its retail customers.
Benets C&ondition 8ppl#D
Monthly amount can be 00 and multile of it.
@remature encashment is available for urgent need.
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oan facility can be available u to ?0K against >M$ account balance.
$tanding instruction facility can be available to auto transfer installment to >M$
account.
o open an 8ccount
1 coy of your recent hotograh.
>ominee's @hotograh.
)././.2 $hort erm 1eposit
>ational Bank imited o/ers interest on customer's short term savings and gives
facility to withdraw money any time.
Benets C&ondition 8ppl#D
Minimum balance Tk. 5000.
Minimum maintenance charge yearly Tk. ?00.
$tanding *nstruction +rrangement are available for oerating account
)././.4 !i@ed 1eposit
>ational Bank imited o/ers (!ed term savings that will scale u your savings
amount with the time.
Benets C&ondition 8ppl#D
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+ny amount can be deosited.
@remature encashment facility is available.
Fverdraft facility available against term receit.
o open an 8ccount
1 coy of recent hotograh of account holder.
>ominee's @hotograh.
)././.4 +erdraft
>B o/ers overdraft facility for cororate customers for day=to =day businessoerations .
Benets C&ondition 8ppl#D
ow charges in overdraft account maintenance.
,acility is available against deosit receit or mortgage roerty.
ow interest rate 18=1;K.
o open an 8ccount
*ntroductory current account .
Fthers necessary documents as er loan re&uirement
)././.= %estern Enion
oining with the world's largest money transfer service "estern Gnion% >B
has introduced Bangladesh to the faster track of money remittance. >ow
money transfer between Bangladesh and any other art of the globe is safer
and faster than ever before. This simle transfer system %being on line
eliminates the comle! rocess and makes it easy and convenient for both
the sender and the receiver. Through >B = "estern Gnion Money Transfer
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$ervice% your money will reach its destination within a few minutes.
)././.(7 &redit &ard"
Credit card is the newest concet in our country. *n our country Credit card was (rst
introduced by the >ational bank ltd. master card is a name of oular credit card
band and it
is worldwide acceted credit card. Credit card is safe% instant and universal money.
>ational bank ltd issued two tyes of credit card% which is as follows:=
Local credit card" A
ocal credit card is two tyes% such as Ngold cardO and Nsilver cardO.
Eold card limit is 9000 taka to 100000 taka
$ilver card limit is 10000 taka to 9000 taka
ReFuirement for local credit card"A
,R.$T account oan
Ta! identi(cation number
Two coy assort si)e hoto
International credit card"A
*t has also two tyes% such as gold card and silver card.
,or international urose gold card limit is 5000 us dollar to 9000 us dollar.
,or international urose silver card limit is 1000us dollar to 5000us dollar.
ReFuirement for international credit card"A
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Credit Risk Management ofCommercial Banks in Bangladesh
@ass ort hotocoy 3(rst (ve ages4
Two coy assort si)e hoto.
T*> number
,R% $T% $B account lien
Through its Credit Card. >ational Bank imited has not only initiated a new
scheme but also brought a new life style concet in Bangladesh. >ow the
dangers and the worries of carrying cash money are memories of the ast.
Credit Card.
)././.(( NBL 8M $erices"
+TM means automated teller machine. >B +TM card give oortunity to their
customer that they can withdraw their money at any time% any days even holidays.
By using +TM subscriber can give various utility bill such as telehone% gas%
electricity bills etc. actually +TM card is a debit card. >ational Bank imited has
introduced +TM service to its Customers. The card will enable to save our valued
customers from any kind of redicament in emergency situation and time
consuming formalities. >B +TM Card will give our distinguished Clients the
oortunity to withdraw cash at any time% even in holidays% 59 hours a day% and o need of any account of >B branch. +lication form
available at any >B branch and card center. >o annual fee for the (rst year.
Renewal fee tk 500.00 only. ocal card limit 1000at minimum or its multile.
*nternational card limit=G$S 00.00 at minimum. Re(ll through any >B branch.
rawing cash from >B +TMs free of charge L from +TMs under Q=Cash network=Tk
10.00 er transaction from other +TM=Tk 100.00. oading fee for international card
will be charged U1K of the loaded amount. Cash withdraw fee 3abroad4 5K of the
cash drawn amount or G$ S.5.00% whichever is higher. +cceted at all 7*$+ @F$
merchants. Cash withdrawal at all +TM booths bearing 7*$+ and Q=Cash logo.
3 6!cet -$BC Bangladesh4. Gtility bill ayment. *t is a reaid card. >o need of any
account of >B branch. +lication form available at any >B branch and card
center. >o annual fee for the (rst year. Renewal fee Tk 500.00 only. ocal card limit
1000at minimum or its multile. *nternational card limit=G$S 00.00 at minimum.
Re(ll through any >B branch.
)././.(* &urrent account C&1D"
Current account is that tyeIs account where deositor can withdraw his deosited
money at any time there is no restriction. Current account can be divided into
following such as:=
*ndividual current account
@rorietorshi current
@artnershi
imited Comanies
Trustees clubs association and di/erent tyes of institution etc.
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).0 $%+ anal#sis of the NBL
).0.( $trengths
>B rovides its customers e!cellent and consistent &uality in every
service. *t is of highest riority that customer is totally satis(ed.
>B draws its strength from the adatability and dynamism it ossesses. *t
has &uickly adated to world class standard in terms banking services. >B has also
adated state of the art technology to connect with world for better communication
to integrate facilities.
+ll the level of the management are solely directed to maintain a culture
for the betterment of the &uality of the service and develoment a cororate brand
image in the market through organi)ation wide team aroach and oen
communication system.
>B utili)es state of the art technology to ensure consistent &uality and oeThe roof of that can
be found in one of its branches% $cotia that is e&uied with Reuters and $"*,T. +ll
facilities will be introduced
in every branch vary shortly.
Fn of the key=contributing factors behind the sources of >B are its
emloyees who are highly trained and most cometent in their own (eld. >B
rovides their emloyees training both in= house and out side ob.
>B is free from deendence from the ever=disrutive owner suly of our
ublic sources. The re&uired ower is enervated by the comany through enervator
fed on diesel. "ater enervation at resent is also done by dee tube wells on siteand is abundant in &uality.
>B rovides its workforce an e!cellent lace to work in. total comle! has
been centrally conditioned. The interior decoration was done e!&uisitely with the
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choice of soothing colors and blend of artistic that is comarable to any
multinational bank.
>B rovides the western union money transfer service for these
customers are easily getting the foreign money.
>B also rovide ower card service facility. ,irst year Bank is not roviding
any service charge for the ower card.
).0.) %eaknesses"
>B has very limited human resources comared to its (nancial activities.
There are not many eole to erform most of the tasks. +s a result many of the
emloyees are burdened with e!tra workloads and works late hours without any
overtime facilities. This might cause high emloyee turnover that will rove to be
too costly to avoid.
,ew of the >BIs roducts o/ered to its clients like N@ersonal credit 3@C4O
are lying idle due to roer marketing initiative from the management. These
roducts call easily be made available in attractive way to increase its client base as
well as its deosit status.
).0.* +pportunities
Eovernment of Bangladesh has rendered its full suort to the banking
sector for a sound (nancial status of the country% as it is becoming one of the vital
sources of emloyment in the country now. $uch government concern will facilitate
and suort the long term vision for >B.
6mergence of e=banking will oen more scoe for >B to reach the clients
not only in Bangladesh but also in global arena. *t is also facilitate wide area
network in between the buyer and the oulation units of >B to smooth oeration
to meet the desired need with least deviation.
).0.- hreats
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*.( +erie3 of &redit Risk Management"*.( +erie3 of &redit Risk Management"
The word credit comes from the atin NcredoO means N* believeO. *t is a lenderIs
trust in a ersonIs(rmIscomanyIs ability or otential ability to command goods orservices of another in return for romise to ay such goods or services of another in
return for romise to ay such goods or services at some seci(ed time in the
future. The making of loans and advances has always been rominent ro(table
function of the banks. $anctioning credit to customers out of the funds at its
disosal is one of the rincial services of a modern Bank.
+s a (nancial intermediary the rimary obective of a bank is to collect deositsfrom the surlus units 3who have surlus fund4 and utili)e the same by lending the
de(cit units 3whose re&uires funds4. Bank is the roer medium of those arties to
utili)e the caital roerly. Bank guild the surlus arties where to invest. Bank
collect deosits from surlus arties in return bank give them some ercent of
bene(ts that are gained out of the di/erent loan or credit e!tended to the
borrowers. Bank takes residual ortion of bene(t from the credits.
+s Bank deals with the money collected from the deositors reayable on demand.
$o% it cannot a/ord to lock u it fund for long or uncertain eriods. Conse&uently%
Bank must safeguards its deosits through e/ective management of all ossible
risks associated with its credits.
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Fne of the most signi(cant risks of a bank is e!osed to is% what is generally termed
as ,Credit Risk-% which is the rimary risk in the banking system. $ince the largest
slice of income generated by a bank and a maor ercentage of assets is subect to
this risk% it is obvious that rudent management of this risk is fundamental to the
sustainability of a bank. Management of Credit Risks needs to be a robust rocess
that enables the Banks to roactively manage the credit ortfolio in order to
minimi)e losses and earns an accetable level of return for the $hareholders.
Risk is inherent in all asects of commercial oeration. -owever for Banks Credit
risk is the fundamental to the sustainability of a bank. Thus Credit Risk is an
essential factor that needs to be managed.
Credit Risk
Credit risk is the ossibility that a borrower will fail to meet its obligation in
accordance with agreed terms. Credit risk% therefore% arises from the BankIs
dealings with or lending to cororate% individual and other Banks or (nancial
institutions.
To revent e!cessive Aow of credit and roer use of it% banks re&uire taking on the
aroriate credit araisal rocedure to imose (nancial disciline on borrowers.
The rocedure that organi)e% control and motivate the borrowers will called credit
management.
$ome e(nitions related with Credit Risk are &uoted below:
NThe concet of high &uality loan cannot e!ist in the absence of obective
credit standards.O
- R( .aggart Mur/+y.
N+sset &uality is the most imortant fundamental dimension of bank analysis. +sset
&uality ultimately drives everything% including margins% caital ade&uacy%
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underlying ro(tability% investment sentiment and valuations.O J Roy Ramos% -ead
of Banking +nalysis% Eoldman $achs% -ong Hong.
*n Banks and ,inancial *nstitutions% Credit Risk is considered as an essential factor
that needs to be managed. Credit Risk is the ossibility that a borrower or counter
arty will fail to meet its obligations in accordance with the agreed terms. CreditRisk% therefore% arises from the BankIs dealings with or lending to cororate%
individuals and other Banks or ,inancial *nstitutions. Credit Risk Management needs
to be a robust rocess that enables Banks to roactively manage loan ortfolios in
order to minimi)e losses and earn an accetable level of return for shareholders.
Mercantile Bank td. is committed to rovide high &uality services to its constituents
through di/erent (nancial roducts and ro(table utili)ation of fund and contribute
to the growth of E@ of the country by (nancing trade and commerce% heling
industriali)ation% boosting e!ort% creating emloyment oortunities for the
educated youth and encouraging micro=credit leading to overty alleviation and
imroving the &uality of life of the eole and thereby contributing to the overallsocio=economic develoment of the country. "ith a view to achieving the aforesaid
obectives of the bank% Credit oeration is of aramount imortance as the greatest
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