Professional Documents
Culture Documents
1.1 Prelude
Internship is an assigned work performed usually by the students of BBA at the end as partial fulfillment of the requirements for the degree of BBA in the Dept. of Business Administration of the University of Information Technology !ciences. The aim of internship is to apply one"s theoretical knowledge in practical fields. As a student of #arketing. $e are interested to complete our internship program at financial institutions. And for this purpose I was sent to %a&shahi 'rishi Unnayan Bank (%A'UB)* %egional +entral Branch* %a&shahi. The program is completely supervised by our respected teacher !hamima ,asrin* Department of Business Administration University of Information Technology !ciences* (UIT!). The program started from -.th /anuary 0.12 and continued up to 03th April 0.12. After &oining the branch* I was first introduced with Ayesha Parvin* A4# 5.D.%* %a&shahi 'rishi Unnayan Bank (%A'UB)* %egional +entral Branch. 6ater on* he introduces me with other officers of the branch who accept me cordially. They were very helpful in collecting information and helped me as much as possible. This was the first practical e7perience of mine* so that I have en&oyed it very much. The cordial help of manager and officers make it more en&oyable. !ince I have completed a course on Bank management* I have some theoretical knowledge about different activities of bank. And practical e7periences of bank activities enrich my knowledge through getting real view. The report is prepared from the knowledge which I have had from theoretical learning and practical e7perience which I have got from the internship program. Though I have got a conception about overall banking functions but in this report I have focused on loan management of %A'UB* %egional +entral Branch* %a&shahi.
need organi:ational data. The data was collected from the %a&shahi 'rishi Unnayan Bank during the internship period. To make the report more meaningful and presentable two sources of data and information have been used widely those are@ 1. Arimary sources of information 0. !econdary sources of information Above mentioned sources are described below9 1. Pri(ary s!ur es) Arimary data are measurements observed and recorded as part of an original study. Arimary sources are the sources from where information is collected from %a&shahi 'rishi Unnayan Bank. The ways through which I have collected information in my internship program are described below9 a. *uesti!nnaire (eth!d) Buestionnaire method is one of the most usual systems used in collecting data or information. Buestionnaire is two types such as open ended questionnaire and close ended questionnaire. I have prepared an open ended a questionnaire under the supervision of my respected supervisor about different functions and mainly loan management of %egional +entral Branch* %a&shahi of %A'UB. The manager and specially the second officer of the branch answer most of my questions. The questionnaire is given at the end of the report. b. Observati!n (eth!d) According to o7ford dictionary the observation means Cthe act of watching something carefully for a period of time specially to learn somethingD. I went to the %A'UB %egional +entral Branch* %a&shahi and observed the different activities of officers and the different problems and requirements of customers through which I have collected some information. But one true thing is that I could not ask question to the officer in all the time when I cannot understand* the reason is that in my branch the month of loan management is going on* so most of the officer stay busy in most of the time. . Intervie+ (eth!d) The interview is face to face interpersonal discussion in which one person asks pertinent question to a person
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called respondent about a selected topic or area. I have collected some information through asking the officers. 2. $e !ndary s!ur es) $hen an investigator uses the data which has already been collected by others* such sources or data are called secondary sources or data. I have collected some secondary information which is already published by the bank authority. I have collected secondary information from the following sources9 a. !tatement of affairs of the branch b. Documents supplied by branch . Different articles d. #aga:ines and papers e. Bank"s website ". %ules and regulations provided by agricultural credit department of Bangladesh bank. '. Annual report of the bank from 0..=8.> to 0..381.. h. !ome statistical graphs and charts of the bank. Analysis !" ,uesti!nnaire) There are different techniques of analy:ing questionnaire. I have asked different questionnaire about the functions of %A'UB* activities of %egional +entral Branch* %a&shahi and specially their credit policy* loan management initiatives taken to improve etc. I have analy:ed this information giving special emphasis on loan disbursement policy.
clear knowledge about different activities* so the effort to collect information through observation is go in vain. This is the first internship program and report preparation of my life* so for the limitation of my knowledge I cannot prepare it more effectively.
Chapter- T+!
AN O01R0I12 O3 RA4U5
2.1 Intr!du ti!n
%a&shahi 'rishi Unnayan Bank (%A'UB) is a state8 owned Bank in Bangladesh with regional approach. The bank emerged as a government"s plan of intensive care to agriculture of %a&shahi division providing livelihood to ;; million people of the area. The region is less developed compared to other parts* yet full of potentials in agriculture. %a&shahi division characteri:ed by its surplus food grain production is popularly called the Cgranary of the countryD. Besides catering to agricultural credit* %A'UB* as it is acronym renders deposit banking service through all the -<2 branches. The headquarters of the bank is stationed at %a&shahi city* some 0=. kilometer to the north of Dhaka.
agricultural production and agricultural loan the Aakistani 4ovt. established another bank namely CAakistan 'rishi BankD in 13;=.
In 13=1 Bangladesh has been emerged as an independent country through a historic war of nine months. After the liberation of Bangladesh the 4overnment renamed the Aakistan 'rishi Bank as Bangladesh 'rishi Bank (B'B) in 13=- according to the Aresidential order 0=. As Bangladesh is an agro8based country* the demand for the agricultural loan of 'rishi Bank is in increasing trend. To manage agricultural loan it becomes very difficult for Dhaka based head office of 'rishi Bank to serve the remote areas of the country. Eor this reason the government takes the decision to decentrali:e the 'rishi Bank in the divisional areas. The people of the northern areas of Bangladesh are lagging behind in all respects than the other parts of the country. %a&shahi 'rishi Unnayan Bank (%A'UB) was established by the president"s ordinance no ;> of 13>< with the aim of providing institutional agricultural credit for optimum utili:ation of agricultural potentials of %a&shahi division. Taking over the branches and offices along with assets and liabilities of the Bangladesh 'rishi Bank within in the %a&shahi division* the bank started functioning on 1; #arch 13>=.
As the largest development partner in the northwest region %a&shahi 'rishi Unnayan Bank (%A'UB) aims at overall development of farmers and all the sectors and sub8sectors of agriculture in this region. Besides* catering to agricultural credit the bank performs ancillary functions as financing agri8business and agro8based industries and poverty alleviation programs.
2.- &ana'e(ent
The board is vested with the responsibility of formulation of policy in line with attainment of growth in agriculture and economic development of the region through agricultural credit support. The board of directors is constituted by seven members* all appointed by the government. Besides* for emergency decisions there is an e7ecutive committee constituted of the chairman of the board and two other members9 the managing director and one of the directors elected by the board. The managing director is the chief e7ecutive of the bank.
audit offices for conducting regular audit in branches as well as in regional and :onal offices.
OR:ANI;ATIONA/ $TRUCTUR1
Board of Directors !ecretariat #anaging Director Aublic %elation !ecretariat of #.D.
Budget
Training institute
6AG
Dhaka Branch
%egional Gffice !ira&gan& %egional Gffice ,atore Honal Gffice Aabna %egional Gffice !ira&gan&
Branch 00
Branch 1-
Branch 1=
Branch 13
%egional Gffice Branch Branch Branch Branch Ahanchogor University 1< of Information 1= 1< Technology 1; %egional Gffice Dina&pur Honal Gffice Dina&pur
%egional Gffice 6almonirhat
Branch & Branch Sciences 1= 1> %egional Gffice ,ilfamary %egional Gffice 'urigram
6oans and Advances Department8I 6oans and Advances Department8II %esearch and Development Department. = Audit A !unts and Re !very Divisi!n9 6oan %ecovery Department8I 6oan %ecovery Department8II Audit and Inspection Department +entral Account Department81 +entral Account Department80 6aw Department ?ngineering* Arocurement #aintenance Department %egion wise branches of %A'UB are given through table at ne7t page. Table819 %egion wise total branches (Up to -. /une* 0.1-) !6. ,o. HoneF%egion ,o. of Branches .1. %a&shahi 02 .0. ,aogaon 0> .-. ,atore 0. .2. %a&shahi 1< .;. Bogra (,orth) 0. .<. Bogra (!outh) 12 .=. Aabna 02 .>. /aipurhat 1; .3. %angpur 0< 1.. 4aibandha 02 11. ,ilphamari 0. 10. 'urrigram 01 1-. 6almonirhat 1= 12. Dina&pur (,orth) 1= 1;. Dina&pur (!outh) 1> 1=. Thakurgoan 1> 1>. Aanchagarh 1> 13. Dhaka 1 0.. 6.A.G (%a&shahi ) 1
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01
!ira&gon&
d
1.#anaging Director (#D) 0.Deputy #anaging Director (D#D) -.4eneral #anager (4#) 2. Deputy 4eneral #anager(D4#) ;.Assistant 4eneral #anager(A4#) <.!enior Arincipal officer(!AG) =.Arincipal officer(AG) >.!enior officer(!G) 3.Gfficer Total Gfficer 1..Gther ?mployee Total .1 .1 .-< << 12= --< <0. 3.. 211? 010< %2#. .1 8 .0> ;> 1-> 0=1 033 =01-21 1>>3 #%1? 8 .1 8 > > 3 <; -01 1== -<> 0-= <2.
program designed on such sub&ects of professional interest as management of credit and accounts* +ommercial banking* audit and inspection etc.
unemployed youth in compliance with government policy. The bank has financed Tk. 0>3..- million as against of Tk. -2. million annual disbursement target in 11 poverty alleviation credit programs in the year 0..>8.3. Eollowing are the bank"s poverty alleviation credit program9 1. %A'UB self8help credit program(%!+A) 0. #arginal small farm system crop intensification pro&ect -. !wanirvar credit program 2. !hogorip (Eood grain godown credit program ;. U, +apital development fund credit program <. $omen entrepreneurship development program =. Ailot employment generation program >. !emi8intensive goat rearing program 3. #edicinal plantsForchard nursery 1.. +redit program for the disable persons 3!rei'n aided pr!je t) %A'UB takes some pro&ect with the help of foreign aid* those are mentioned below9 1. $(all 1nterprise Devel!p(ent Credit Pr!je t A$1CP=) !mall enterprise development credit pro&ect (!?+A) has been lunched under ,orwegian assistance to promote new small enterprises and streamline e7isting ones in ;1 upa:ilas of greater %a&shahi * Bogra* Aabna and 'urigram districts. 2. N!rth 2est Cr!p Diversi"i ati!n Pr!je t ANCDP=) The bank has undertaken a pro&ect named ,orth8$est crop diversification pro&ect under financial assistance of Asian development bank. The pro&ect is under implementation by the department of Agricultural ?7tension under ministry of Agriculture in <1 upa:ilas of 1< districts of %a&shahi division
6oan deposit ratio %atio of classified loan against total loan advances ArofitF(loss) after ta7 Amount of classified loan Arovision for classified loan Arovision for surplusFdeficit +ost of fund Interest earning assets ,onperforming assets %eturn on investment(%GI) %eturn on assets (%GA) Interest on investment Income per share Income price ratio
19..;= 19..-2 (<2*.>*<;*<1>) 3--*-;*>3*... 1><*0-*00*... >3*;=*3-*... >.-.J 0;=2*0<*.0*3>113.*>.*03*;<= 1=*2.*;2; 13=*2=*1>*12=
!ource9 www.rakub.org.bd
Interest on unclassified loan =<. Interest on fresh loan 11. %ecovery from classified loan By ad&usting deferred0.. income By rescheduling -. 15
00. -.
0-. 2.
0;. ;.
0-. 2.
10
Interest income on deposit 1-. Income from loan0<. provisioning Interest on staff loan 2. +ommercial income 1. #iscellaneous -. Total income 1;=.
!ource9 www.rakub.org.bd
2.1< RA4U5 at a :lan e 9 AUp t! #?th BuneC 2?1#= .1) .0) .-) .2) .;) ?stablishment Authori:ed +apital Aaid up +apital %eserve Area of %A'UB9 a. Area b. !pread c. District d. Upa:illa e. Union i) !A+A ii) ,on8 !A+A f. Total Aopulations g. Total ,o. of Eamily h. Agricultural Eamily .<) Total Branch i) #unicipal ii) Union .=) Total manpower
16
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
1; #arch* 13>=. Tk. =;..... (in million) Tk. ;=..... (in million) Tk. 0.>.2 (in million) %a&shahi Division -2*;1- !quare.'.#. 1< 10; 1.30 3.> 1>2 about -.;. cores ;1 lakhs. -0 lakhs. -<2 <2 -.. -21.
i) Gfficers ii) $orkforce .>) Honal F%egional office .3) %egional Audit office 1.) %egional officer 11) Honal officer 12) $ebsite
Chapter- Three
O01R0I12 O3 RA4U5C Re'i!nal Central 5ran hC Rajshahi
#.1 Intr!du ti!n) %a&shahi 'rishi Unnayan Bank* %egional +entral Branch* %a&shahi starts its operation in 00 Eebruary 13;=. This branch is recogni:ed as an ideal branch of %A'UB in %a&shahi district. #.2 /! ati!n) %a&shahi 'rishi Unnayan Bank* %egional +entral Branch* %a&shahi #.# 1(pl!yee !" RA4U5C Re'i!nal Central 5ran h) There are 10 people as employee in %egional +entral Branch. Their designation is given in below9 (ne7t page) 1(pl!yees and Desi'nati!n !" RA4U5C Re'i!nal Central 5ran h. $./. N!.
17
Desi'nati!n
1. 0. -. 2. ;. <. =. >. 3.
#anager (Arincipal Gfficer) !econd Gfficer /unior officer Data operator Aeon +ashier !upervisor !ecurity 4uard Total ?mployees
1 1 1 1 1 1 10
Different deposit related services provided by the bank are mentioned below9 A= Dep!sit $ervi e) 1) +urrent Deposit Account 0) !avings Deposit Account -) Term Deposit Account a) !hort Term Deposit Account (!TD)
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b) Deposit Aension !cheme (DA!) c) %A'UB Deposit Aension !cheme (%DA!) d) Ei7ed Deposit Account 5= C!((er ial $ervi e) 1) Demand Draft (DD) 0) #ail Transfer (#T) -) TelephoneF Telegraphic Transfer (TT) 2) Aayment Grder (AG) +) /!an $ervi e) 1) !hort Term 6oan 0) #edium Term 6oan -) 6ong Term 6oan The above services of %A'UB"s %egional +entral Branch are discussed in following pages respectively9 A. Dep!sit $ervi es) The following - types of accounts are available at %egional +entral Branch. 1. Current A !unt) Erom this type of account any amount of money is deposited and drawn at any time in the office hours. There is no interest on current account. Bank over draft is sanctioned based on it. This account is opened with minimum deposit of Tk.1.... 2. $avin's A !unt) !avings account opened for the individual customers e7cept companies* firm and +o8operative society. #oney is withdrawn two times a week and deposited at any time in the office hours. If an account holder draws money from account heFshe will not get interest for that month. To open an account bank requires Tk.0.. only. 2. Ter( dep!sits) a. $h!rt Ter( Dep!sit A !unt A$TDA=9 !hort Term Deposit Accounts are opened for company* business firms and government demonstrative body. This account is operated like current account. b. Dep!sit Pensi!n $ he(e ADP$=)
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It is one kind of deposit program circulated by government. In this savings scheme a person receives the opportunity to build up saving by contributing monthly installment to get an attractive fi7ed amount at the end of a specific period. The si:e of monthly installments is Tk. 1..* Tk. 0..* Tk. -..* Tk. 2..* Tk. ;..* or which is to be deposited within the first week of each month. In this case compound rate of interest is charged . RA4U5 Pensi!n $ he(e ARP$=) %A'UB has some savings schemes to motivate the people for savings. In this case %A! is regarded as the special product of this bank. The %A! is same as DA!. But terms of savings of %A! are ; years and 1. years. d. RA4U5 :ra(een Pensi!n $ he(e AR:P$=) It is for the grameen poor people to motivate them increase in savings. It is same as DA! %A!. e. 3i@ed Dep!sit A !unt A3D=) Ei7ed deposits are taken for the following terms9 Erom one month to below three months. Above three months to below si7 months. Above si7 months to below one year. Above one year to below three years. Above three years. Table819 The rate of interest in deposit accounts !6. ,o Types of Accounts Interest rate 1 +urrent Account ,o interest 0 !avings Account =J Ei7ed Account =J to >.;J 2 !hort Term Deposit(!TD) 2J ; %A'UB Aension !cheme(%A!) 10J < Deposit Aension !cheme(DA!) 1;J = %A'UB 4rameen Aension !cheme (%4A!) <J !ource9 #anager* %egional +entral Branch* %A'UB. 5= C!((er ial "un ti!ns !" RA4U5D$ Chapi Na+b'!nj The following types of commercial service are available in %A'UB"s %egional +entral Branch9
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1. De(and Dra"t ADD=) DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one branch Aayable to another branch on demand. DD is issued in against at Tk.0. commission up to Tk.1.... $hen the limit e7ceed commission amount increased in a certain rate. 2. &ail Trans"er A&T=) This branch transfer money another branch of this bank in another place in against of commission money of this security paper has to be transferred to an account of another branch. 5ere the bank commission is minimum Tk.-. and the postal charge is Tk.;.. #. Tele'raphi Trans"er ATT=) It is the quickest method of remitting fund from one place to another. In this procedure no instrument is sent to the paying branch. Gnly message is sent over telephone or tele7 and the paying branch makes payment after getting message. Due to lack of technology this branch cannot operate TT.
%. Pay(ent Order APO=) It is a written document. This AG can be encased on that branch from where it is issued. !everal supplier organi:ations use this AG and here no account is needed to open with bank. It is issued locally. Table809 +ommission charged on commercial service
!ource9 #anager* %egional +entral Branch* %A'UB. !ervice Demand Draft Telegraphic Transfer Aayment Grder Up to Tk.1... Up to Tk.1*..*... Gver Tk.1*..*... Up to Tk.;*..*...and over #ail Transfer +ancellation +harge of DD* #T* TT* AG Up to Tk.;.. Gver Tk.;.. +harge Tk. Tk.0.LKAT Tk.-.LKAT Tk.0.LKAT Tk.-.LKAT Tk.;.LKAT Tk.1..LKAT #inimum Tk.-.L Aostal cost(Tk.;.)LKAT Tk.0;LKAT Tk.;.LKAT
C= /!an servi es) Banks loan portfolio has been classified under the following heads9 1= $h!rt Ter( /!an A$T/)9 6oan period is 1 year. 2= &ediu( Ter( /!an A&T/)9 6oan period is above 1 year to ; years. #= /!n' Ter( /!an A/T/=) 6oan period is more than ; years.
pro&ect 2 ; < = > 3 1. 11 Aoultry Aoultry boiler farms* Aoultry hatchery* Aoultry feed and allied pro&ect.
#i7ed farming Dairy live stock and Eishery based horticulture crops9 Agriculture based poultry dairy and fishery pro&ect. Black Bengal Black Bengal goats* !heep +attle farming for goat quality meat production* and #eat processing production and #arketing. Dairy farming #ilk production* #ilk collection and processing. Agro based +ommercially profitable sweet water fish and industries !hrimp feed production* Ice plant* Ice8cream factory and so on. Agro8 ?ngineering work shop for Agro8equipment* equipment %epairing agro equipment and #arketing. production +old storage +old storage for potato preservation* !peciali:ed mini8cold storage for fruits* Kegetables and Eish preservation. ?7port Eish free:ing plant* Eish dehydration plant* processing 6eather processing and manufacturing 6eather products. Animal and Aoultry and Eish feed meal production* +attle* fish feed meal 4oat* and 6amb feed meal production. production
2 ; < = > 3 1. 11
?7port credit $orking capital +ommercial purpose Agro8based industries +ottage industries !?+A Aoverty alleviation 6ive stock Irrigation equipment and firm machinery
supervisor
Officer
Casher
Peon
Security guard
Table829 ?mployee summery of %egional +entral Branch* %A'UB !6 ,o 1 0 2 ; < = > Designation #anager( !enior Arincipal Gfficer) !econd Gfficer ( !enior Gfficer) Gfficer !upervisor Data ?ntry Gperator +ashier Aeon !ecurity 4uard Total Authori:ed ?7isting Kacant 1 0 0 1 0 1 1 0 10 !ource9 %egional +entral Branch* %A'UB. . 0 0 1 1 1 1 1 1. . . . . 1 . . 1 0
The main ob&ectives of maintaining the books of %A'UB* %egional +entral Branch* %A'UB are to achieve the following goals. 1. to record day8to8day transaction 0. To reflect the financial position periodically -. To supply necessary information for monitoring the bank activities In that purposes cash transaction and other transaction is recorded in the books of accounts under the double entry system. In this bank* generally two types of books are used. A. C!ntr!l 5!!7s) It represents the immediate accounting picture of the bank at any time and it includes8 1) +ash !croll Book 0) +lean +ash Book -) 4eneral 6edger Abstract 2) !upplementary ledger Book 5. $ubsidiary 5!!7s) !ubsidiary Books are used to e7plain the total particulars in 4eneral ledger and it includes8 1) !aving account ledger 0) Ei7ed deposit ledger -) Income ledger 2) ?7penses ledger ;) The general ledger of %A'UB*
Cash
C earing !oucher "ecord in "egister Posting in edger Supp ementary sheet preparation Summary preparation
Transfer
Cash cum day book preparation $enera edger posting #ffairs frond page Subsidiary edger posting #ffairs back page
Chapter- 3!ur
/OAN $ANCTIONIN:
%.1 De"initi!n !" l!an
A loan may be defined as money lent at interest or on profit. It is nothing but temporarily parting with one"s resources in order to augment the purchasing power of the receiver of such facility with a promise to return the same with interest or profit or otherwise as mutually agreed upon. It is a type of debt. 6ike all instruments* a loan entails the redistribution of financial assets over time* between the lender and the borrower. In banking arena* many types of financial facilities are e7tended to the clients with the e7pectation of getting the same returned along with interest. CThe provided Aurchasing AowerD can be termed as loan* credit or advances. These three terms have similarities as well as some differences. According to the Dictionary of Banking Einance loans can be defined as* Cthe 6oan of a sum of money by a lender to a borrower to be repaid with a certain amount of interestD. Timothy $ 'och defined loan as* Cformal agreement between a bank and a borrower to provide a fi7ed amount of credit for a specified periodD. $e can say* if a bank gives its resources temporarily under certain conditions and for a specific duration* it will be called loan.
(-) 3ully se ured l!an9 !ecured loan means any which is guaranteed by the borrower giving valuable property as security. If the loan is given by taking the security of the amount e7ceeding the amount of security is provided to cover the loan sanctioned or &ust equal to the amount of loan* it is called Cfully secured loan.D B= Classi"i ati!n based !n ter() According to the classification by term or periodicity* loans can be of three types9 (1) $h!rt-ter( l!ans9 This loan is sanctioned for less than one year. !hort8 term loans can be of two types9 (a) 6oans provided fir immediate use and payable on demand and (b) 6oans payable on short notice. (0) &ediu(-ter( l!an9 Usually* loans with the maturity of 1 to ; years are called mid8term loans. 5owever* commercial banks give mid8term loans of maturity of 18- years. (-) /!n'-ter( l!an9 6oans with the maturity of more than ; years are called long8term loans. C= Classi"i ati!n based !n user) 1. Individual l!an) a) C!nsu(er l!an9 Banks provide loans for durable goods and appliances and commodities like loans for Eree:e* TK* +omputer* +ar* Eurniture etc. b) 6!usin' /!an9 This includes loans to the fi7ed or low8income people for housing purposes. This loan is usually intermediate term andFor long term. c) 1du ati!n and !ther l!an) !ome of the bank also provide loan to the people of the society in order to meet their educational and other needs after being sure about the repayment.
2. Industry l!an) a) 2!r7in' apital l!an9 This type of loan is given to the business or industry to provide capital required for purchasing raw materials* paying wages and fuel e7penses etc. (b) 3i@ed apital l!an9 5uge amount of capital is required for procurement and replacement of machinery and equipments for the industrial organi:ations.
#. /!an "!r business pers!n) (a) 2!r7in' apital l!an9 Eor maintaining day to day operations* business persons need a great deal of working capital. By providing working capital loans* banks help to solve the working capital necessity of the business persons. (b) 1@p!rt-i(p!rt l!an9 Banks also help in e7port8import firms by issuing 6F+* bill of e7change* discounting* direct loan etc. %. /!an "!r "ar(er) (a) Cr!p l!an9 Eor buying seeds* cows and fertili:ers* farmers need money. They borrow the money from the bank in order to meet the e7penses required. (b) N!n- r!p l!an9 Earmers also need money for poultry* fisheries* agro8 business* agro8processing and other purposes. In this case* commercial banks provide small and medium loans to farmers. E 3ar(in' e,uip(ent l!an9 To purchase farming equipments* banks also provide loans to farmers. Earming equipments may include power tiller* tractors* machinery for irrigation etc.
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D= Other "!r(s) 1= Overdra"ts) The over drafts is a kind of loan always allowed on a current account operated upon by cheques. The customer may be sanctioned a certain limit upon which he can overdraw his current account within a stipulated period. Interest is calculated and charged only on the actual debit balance on daily product basis. 0= Cash redit) +ash credit is the favorite mode of borrowing by traders* industrialists* agriculturists etc. for meeting their working capital requirement because it is an elastic form of borrowing. This type of facility is always provided against pledge of goods* produces and merchandise which remain under the possession of bank with effective control but ownership remains with the borrower.
+ollecting information
?valuating proposal
?valuating by agent
Branch level evaluation !anctioning and documentation of loan Disbursing loan !upervision of the loan %ecovery of the loan
Decision
Branch level
Usual recovery
6egal recovery
%.. ð!d !" l!an san ti!nin' and appli ati!n "!r()
6oan application should be written in a specific form of the bank it must be submitted by the loan in the bank. Karious kinds of loan application forms are as follows9 Description Amount of loan ,o of Eorm no Arice Aer in Tk. necessary +opy Tk. +opy a) +rops loan Up to ;... 1 6.E.< 0. b) +rops loan ;..1 to 1.*... 1 6.E.< 2. c) +rops loan 1...1 to above 1 6.E.< <. d) Any loan beyond Up to 1.*... 1 6.E.1 >. special e) Any loan beyond Above 1.*... N 6.E.0 <. f) Aro&ect loan 8 0 6.E.2 >. g) $orking capital Up to 1.*..*... 0 6.E.> 0;. loan h) $orking capital Above 1.*..*... 0 6.E.> ;..
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loan At that time of submitting loan application the loan applicant should give fee at various rate. The various types of loan application fee is given below8 Up to <*... ,o need <*..1 to =*;.. 1;... =*;.. to 1*..*... 0... Tk. Aer thousand 1*..*... to above 0.. and 1 Tk. Aer thousand $!ur e) %A'UB* %a&shahi Branch* %a&shahi .
Chapter- 3ive
/OAN &ANA:1&1NT
-.1 Intr!du ti!n
The strong base of %A'UB* %egional +entral Branch* %a&shahi is totally dependent on sound investment because interest on loan is the main source of income. That is why qualitative loan management is much emphasi:ed here as well as it leads to increase in total income of the bank. The bank authority sanction loan in compliance with the rules and regulations determined by the highest decision making authority of the bank.
D= 3ishery) The Bank attaches importance to use scientific method and modern technology in fish cultivation. It e7tends adequate credit support for e7cavation and re8e7cavation of ponds* round the year cultivation of species* which have rapid growth* cultivation of sweet water prawn and other fishes. The Bank makes use of e7pertise of the concerned government agencies for bringing more pondsFwater bodies under cultivation and increasing productivity. 1= /ive st! 7) The bank e7tends credit facilities or systematic and commercial live stock farming* which includes dairy* beef* fattening poultry raising and setting up of hatcheries* which in turn is e7pected to increase production of milk* meat and eggs* the main sources of portion. As the marginal and small farmers" access to mechani:e farming is restrained by want of cash and collateral the bank has big 6oan window of draft animals for cultivation of land has big 6oan window of draft animals for cultivation of land transportation of agriculture produces and other farming activities. 3= Irri'ati!n e,uip(ent and "ir( (a hinery) Today technology based farming for high yielding and high volume of crops* mechani:ation of cultivation* irrigation and pest control is indispensable* to cope with the situation and pest control is indispensable. To cope with the situation %A'UB financing for power tillers* tractors* tube wells* power machineries are being treated as an important associated sector of 6oan. := A'r!- based industries) The operational &urisdiction of the bank is noted for its agricultural potentials. This is noted for its agricultural potentials. The bank pay due importance to setup agro industries for preservation* processing and marketing of agricultural products having backward linkage with basic sub sectors of crop* fishery* live stock and forestation* manufacturing and marketing of agricultural implements are also encouraged. Agro industries for import substitution are specially encouraged by offering moderate terms of financing. 6= P!verty alleviati!n)
University of Information Technology & Sciences 39
The poverty strikes ,orth $est Bangladesh is characteri:ed by comparatively lower rate of saving* inadequate capital accumulation and poor employment opportunities. The e7isting collateral based banking system is also of little use in respect of e7tending support to the millions of landless people. To address the problem the bank has been financing collateral free micro8credit for income and employment generation through its poverty alleviation credit program. %A'UB also gives some loan on cottage industry. $e know* the industry* which is built8up in a cottage or house* is a cottage industry. The role of cottage industries is very importance to improve the economics of Bangladesh. Usually* the main promoters of cottage industries in our country are small farmer* landless and poor people. They can build a cottage industry with own capital and some 6oan capital of %A'UB.
Gnly after such counter8signature in the borrower"s acknowledgment receipt* supplier"s bill can be processed for payment.
!ource9 %egional +entral Branch* %A'UB . O Achievement rate P 1.. C!((ent) Erom the above table it is evident that the loan management target is reduced in the year 0..381. from 0..>8.3. After that the target is increased in the year 0.1.811 and again decreased in the year 0.11810 and increased in the year 0.1081-. Gn the other hand total achievement is reduced in the year 0..381. from 0..>8.3. After that the achievement is increased in the year 0.1.811 and again decreased in the year 0.11810 and increased in the year 0.1081-. The highest rate is found in the financial year 0..>8.3(3;.1=J) and the lowest rate at 0.1.811(<0..3J). The last five years loan disbursement positions of %egional +entral Branch* %A'UB are shown below through bar char.
University of Information Technology & Sciences 41
A= /!an (ana'e(ent!" 2??<-2??> %A'UB* %egional +entral Branch pro&ected a 6oan target of Tk.-2021... for the financial year 0..>80..3. During the year loan disbursement was Tk.-0;3.... which was 3;.1=J of the target. During the year the following seven sectors were given preference in disbursing loan9 1. +rops 0. Eishery -. 6ive stock 2. Agro8based industries ;. +ontinuous F cash credit <. Aoverty alleviation The loan management for the financial year of 0..>80..3 is shown in ne7t table9 (Amount in lakh Taka) 0..>80..3 Items +rops Eishery 6ive stock Agro8based industries +ontinuous loan Aoverty alleviation Gthers
42
6oan disbursement target 1;3.-2 1;... 1.-. 1.;. -<..; 0.-0 10<.30
Total loan achievement 1;2.;< 1;... 1.2= -... 2<.>= 0.0; >0.;.
Total
3;.1=J
O Achievement rate P 1.. C!((ent) Erom the above table it is evident that the highest loan disbursement target was in crops sector (Tk1;3-2...).The highest disbursement is made in crops sector (Tk1;2;<...). The highest achievement rate is found in the Agro8based industries (13.J) and the lowest achievement rare is found at others (<;J). The loan management of %egional +entral Branch* %A'UB during the year 0..>80..3 is shown below through bar chart9
2?? /!an disburse(e nt tar'et T!tal l!an a hieve(ent A hie ve(ent rateAF=
1<?
1.?
1%?
12?
<?
.?
%?
2?
? Cr!ps 3ishery /ive st! 7 A'r!-base d industrie s C !ntinu!us l!an P!ve rty alleviati!n O thers
Eigure9 !ector wise loan management of 0..>80..3 5= /!an disburse(ent !" 2??>-2??1? %A'UB* %egional +entral Branch pro&ected a 6oan target of Tk.-1.=0... for the financial year 0..380.1.. During the year loan disbursement was Tk.0<>.3... which was ><.0>J of the target. During the year the following seven sectors were given preference in disbursing loan9 1. +rops 0. 6ive stock -. +ontinuous 2. Aoverty alleviation ;. Gthers The loan management for the financial year of 0..380.1. is shown in ne7t table9 (Amount in lakh Taka) 0..380.1. Items 6oan disbursement target 1<2.0< =... 1>.3> -<.2. >2..> -1..=0 Total loan achievement 1-1.21 <... 1>.<. -<.2. =;.<> 0<>..3 Achievement rate >.J >3J 3>J 1..J 3.J ><.0>J
!ource9 %egional +entral Branch* %A'UB O Achievement rate P 1.. C!((ent) Erom the above table it is evident that the highest loan disbursement target was in crops sector (Tk1<20<...).The highest achievement is made in crops sector (Tk1-121...). The highest achievement rate is found in the Aoverty alleviation sector (1..J) and the lowest achievement rare is found at crops sector (>.J). The loan management of %egional +entral Branch* %A'UB* %A'UB during the year 0..381. is shown below through bar chart9
1<?
1.?
1%?
12?
1??
<?
.?
%?
2?
Eigure9 !ector wise loan management of 0..380.1.. C= /!an disburse(ent !" 2?1?-2?11 %A'UB* %egional +entral Branch pro&ected a 6oan target of Tk.2>.23... for the financial year 0.1.80.11. During the year loan management was Tk.03>0.... which was <0..<J of the target. During the year the following seven sectors were given preference in disbursing loan9 1. +rops 0. Eishery -. 6ive stock 2. Irrigation equipment and farm machinery ;. +ontinuous <. Aoverty alleviation =. Gthers The loan management for the financial year of 0.1.811 is shown in ne7t table9 (Amount in lakh Taka) 0.1.80.11 Items 6oan Total loan Achievement disbursement achievement rate target +rops 0>0.30 1=;.>3 <0.1=J Eishery 2-.=. -.;. >.J 6ive stock 2..3 2..3 1..J Irrigation equipment and 1.-2 1.0= 3;J farm machinery +ontinuous loan 1;..; 12... 3-J
University of Information Technology & Sciences 46
;.32 10=.2;
-.>< 3;.;3
<;J =;J
O Achievement rate P 1.. C!((ent) Erom the above table it is evident that the highest loan management target was in crops sector (Tk0>030...).The highest achievement is made in crops sector (Tk1=;>3...). The highest achievement rate is found in the live stock sector (1..J) and the lowest achievement rare is found at crops sector (<0.1=J). The loan management of %egional +entral Branch* %A'UB during the year 0.1.811 is shown below through bar chart9
#??
/!an disburse (e nt tar'e t T!tal l!an a hie ve (e nt A hie ve (e nt rate AF=
2-?
2??
1-?
1??
-?
?
r! ps 7 al le vi at i! n 3i sh O th er s er y hi ne ry st! C l! !n ti n u! us P! v an
/i ve
"a r(
Ir ri 'a ti! n
47
e, ui p(
en ta
nd
er ty
D= /!an (ana'e(ent!" 2?11-2?12 %A'UB* %egional +entral Branch pro&ected a 6oan target of Tk.-121>... for the financial year 0.1180.10. During the year loan management was Tk.03.0.... which was 30.-<J of the target. During the year the following eight sectors were given preference in disbursing loan9 1. +rops 0. Eishery -. 6ive stock 2. Irrigation equipment and farm machinery ;. Agro8based industries <. +ontinuous =. Aoverty alleviation >. Gthers
The loan management for the financial year of 0.1180.10 is shown in ne7t table9 (Amount in lakh Taka) 0.1180.10 Items 6oan disbursement target +rops 1=>.>0 Eishery 0.;. 6ive stock 1..1. Irrigation equipment and 3.-. farm machinery Agro8based industries 0.0. +ontinuous loan 02.=1 Aoverty alleviation -..; Gthers Total >-.;. -12.1> Total loan achievement 1;>.11 0.;. 3.-0 3.0. 0... 0=.0; 0.;1 =3.-03..0. Achievement rate >>.20J 1..J 30.0.J 3>J 3.J 11..0;J >0..-J 3;J 30.-<J
!ource9 %egional +entral Branch* %A'UB O Achievement rate P 1.. C!((ent) Erom the above table it is evident that the highest loan management target was in crops sector (Tk1=>>0...). The highest achievement is made in crops sector (Tk1;>11...). The highest achievement rate is found in the +ontinuous loan sector (11..0;J) and the lowest achievement rare is found at +rop sector (>>.20J).
The loan management of %egional +entral Branch* %A'UB during the year 0.1180.10 is shown below through bar chart9
2?? 1<? 1.? 1%? 12? 1?? <? .? %? 2? ?
r! ps y 7 3i sh er es !n tin u! us l! an P! ve rt y al le vi at i! n st! in du st ri hi ne ry C th er O s ( a ( -b as ed A 'r ! C
/i ve nd "a r
Ir r
i' at i! n
e, ui p( en ta
1= /!an (ana'e(ent!" 2?12-2?1# %A'UB* %egional +entral Branch pro&ected a 6oan target of Tk.22.0>... for the financial year 0.1080.1-. During the year loan management was Tk.--=.;... which was >2.=-J of the target. During the year the following eight sectors were given preference in disbursing loan9 1. +rops 0. Eishery -. 6ive stock 2. Agro8based industries ;. +ontinuous <. !#? =. Aoverty alleviation >. Gthers
The loan management for the financial year of 0.1080.1- is shown in ne7t table9 (Amount in lakh Taka) 0.1080.1-(up to /une) Items 6oan Total loan disbursement achievement target 1<>..1 1;1.-> 0.;; 0.;; ;.;0 2.>0 <.0. ;... 1.3... >;.;; 10... >... ;... 1-0... 22..0> 2.-; 111.20 -=-..= Achievement rate 3..1.J 1..J 30.03J >..;<J ==.;.J <-.2.J ><.=.J >-.<<J >2.=-J
+rops Eishery 6ive stock Agro8based industries +ontinuous loan !#? Aoverty alleviation Gthers Total
!ource9 %egional +entral Branch* %A'UB O Achievement rate P 1.. C!((ent) Erom the above table it is evident that the highest loan management target was in crops sector (Tk1<>.1...).The highest achievement is made in crops sector (Tk1;1->...).The highest achievement rate is found in the Eishery sector (1..J) and the lowest achievement rare is found at !#? sector (<-.2.J).
The loan management of %egional +entral Branch* %A'UB during the year 0.1080.1- is shown below through bar chart9
1<? /!an disburse (e nt tar'e t T!tal l!an a hie ve (e nt A hie ve (e nt rate AF=
1.?
1%?
12?
1??
<?
.?
%?
2?
?
r! ps y 7 1 3i sh er $& !n tin u! us l! an al le vi at i! n in du st rie s C st! th er O s
/i ve
-b as ed
'r !
P! ve
rt y
Chapter- $i@
/!an Re !very
..1 Intr!du ti!n) $hen a bank or other financial institutions distribute a loan to other organi:ation or people* then after regaining from loan it is called loan recovery* %A'UB* %a&shahi Brach* Distributed loan to loan and recovers this money. %A'UB* %egional +entral Branch* classifies loan in two categories9 a. Unclassified loan* and b. +lassified loan. a. Un lassi"ied l!an) $hen half or more than half of the total loan is repaid within the due dates by the borrowers then that is called unclassified loan. The duration of time in which the loan will be treated as unclassified is less than 10 months from sanctioning loan. b. Classi"ied l!an) $hen more than half of the total loan or total is unpaid F due over the due date then that loan is called classified loan. +lassified loans can be sub standard* Doubtful and bad. The criteria of these classification of classified loans are as follows9 1. 3!r sh!rt ter( l!an) !hort term loan are classified by %A'UB* %egional +entral Branch in three categories8 i= Cr!p l!an and (i r! /!an and Advan e) Age of over 10 months (due)9 Irregular. Age of over 1-8-< months (due)9 !ubstandard Age of over -<8<. months (due)9 Doubtful. Age above <. months9 Bad.
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ii= Cash /!an and Advan e-and +!r7in' apital Erom < months but less than 3 months8 !ubstandard. Erom 3 mouths but less than 10 months8Doubtful. 10 mouths or above8 Bad. iii= De(and /!an Erom < months but less than 3 months8 !ubstandard. Erom 3 months but less than 10 months8 Doubtful. Above 10 months8Bad. 2. &ediu( l!an AUp t! - years=) Erom . month but less than < months8!ubstandard. Erom < months but less than 10 months8 Doubtful. Erom 10 months but less than 1> months 8 Bad. #. /!n' ter( l!an AAb!ve - years= Erom . month but less than 10 months8!ubstandard. Erom 10 months but less than 1> mounts8Doubtful. Erom 1> months but less than 02 months8Bad. ..2 Pr! edure !" l!an re !very) The main responsibility of bank manager and loan officer is to recovery the outstanding loan in %A'UB* %egional +entral Branch. Two8 recovery procedures are8
a) Usual procedure. b) 6egal procedure.
a= 1. 0.
Usual pr! edure) The usual loan recovery procedure is divided into several steps. They are as follows9 Issue of demand notice9 Demand notice is issue before on month being due of outstanding loan or installment. It is sent to the borrower. 6egal notice9 It the borrower does not repay their respective loans and interest after maturity being received the demeaned notice under registered with acknowledgement by post to the borrowers the bank should send lower notice to him. !pecial notice9 Beside the above to notice a special notice signature by D+* T,G is sent to the respective borrower to keep mental pressure on him for repaying the loan.
University of Information Technology & Sciences
-.
55
2. ;.
Eield recovery9 6oan officer recover the recovered loan through I.G. receipt by visiting the spot and source of the borrower. Aersonal +ommunication9 If the borrower fails to repay his loan installment* the loan officer communicates with the respected persons of that area to give mental pressure to the borrower so that he repays his respective loan. 6oan %ecovery +amp9 %A'UB* %egional +entral Branch made camp in various areas for the recovery of his loan* in this issue* the manager and other officer were present in the camp and communicated with borrowers. They gave them moral persuasion and tried to encourage them* so that they could repay their loan.
<.
b=
/e'al pr! edure) $hen legal action for recovering loan becomes failed a case in filed against the borrowers. The case is generally filed in the following ways9 i. ii. Unwilling to repay loan although he is financially solvent. ?very effort of loan recovery becomes failure.
..# Rules !" Re !very) %egional +entral Branch* %A'UB loan recovery from loan in installment system is as follows9 i) $eekly ii) Eortnightly iii) #onthly. ..% Causes !" de"aulter) The loan cannot loan payment in due time in various causes9 i) ,atural calamity destroy the crops* for this reason the loan unable to pay loan in due time. ii) %A'UB* %egional +entral Branch cant takes proper steps against the loan for influential man. iii) The loan cant use the loan in proper way. iv) The loan does not pay loan in more time.
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v) ..i=
Ne'ative attitudes !" the l! al elites t! repay l!an- In most of the cases* the influential persons due to their political and social power are not interested to repay the loan. Because of their political influence* loan officers cannot take any effective measure for loan recovery from them. !ometimes* loan received by them for a specific purpose is also diverted to other purposes. ii= Da(a'e !" r!ps due t! "l!!d- !ometimes* the farmers have some valid reasons for non8repayment of loan in spites of their willingness of repayment of loan. In the case of crop failure due to natural disaster like flood* drought* etc.* it becomes really difficult for the farmers to repay loan in time. iii= Unpr!du tive use !" l!an- The time involved in processing loan is such that the farmers usually receive loan at the end of the specific crop season even after harvesting of the crop. Eor that matter* 6oan and Advance does not help in increasing production rather it is actually spent for non8farm e7penses. iv= $h!rta'e !" l!an pers!nnel- The branch has shortage of manpower to evaluate loan and advance worthiness of the borrowers* identification of real borrowers* and supervision and recovery of loan. v= /a 7 !" le'al a ti!n by the ban7s a'ainst de"aulters- ,either the Bank #anager nor the supervisors have any authority and power to take effective measures or administrative action against defaulters. Eor that reason* the defaulters do not bother for requests of loan repayment by them. #oreover* legal action against defaulters has rarely been taken. vi= C!rrupti!n !" the ban7 e(pl!yees- In some cases* the bank officers take bribe from the defaulters and avoid responsibilities of reali:ation of loan from the borrowers. vii= Inability !" the "ar(ers t! repay l!an- Earmers need loan not only for agricultural production but also for consumption for their survival* particularly by marginal farmers. This sometimes compel them to divert agricultural loan to consumption and other unproductive purposes which ultimately lead to their low repayment capacity. viii= G5ena(iD l!an re eived parti ularly by U.P. hair(anH&e(ber!ometimes the rural influential* particularly Union Aarishad +hairman
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i@=
@=
@i=
...
and #embers receive QBenami" loan. It happens particularly due to shortage of loan personnel who have to disburse 6oan and Advance in a short notice and do not have enough time to identify genuine borrowers. A essibility t! alternative /!an and Advan e instituti!ns- There is a number of financial institutions* which are working independently. !o non8repayment of loan to one institution does not affect in receiving loan from another institution. 1valuati!n !" ban7er e""i ien y- The performance of bank personnel is &udged on the basis of amount deposited by him* not on the amount of loan recovered. Eurther* there is practically no incentive for him to increase recovery amount. Inade,uate trainin' "a ilities "!r /!an and Advan e !""i ers and their ,uali"i ati!ns- The persons involved in agricultural 6oan and Advance operations in rural bank branches have poor educational background with inadequate training. Banking training program has hardly anything regarding agricultural loan and advance operation* which affects loan recovery performance of the Banks. /!an Re !very s enari! Re'i!nal Central 5ran hC RA4U5)
a= /ast "!ur years /!an Re !very. AA(!unt in /a7h Ta7a= Re !very rate 3inan ial year Tar'et A hieve(ent 0..380.1. 0.1.80.11 0.1180.10 0.1080.1;3.;= 1.2.-= 1=;J 3..0> 1.>.=< 10..2<J 1.0.;. 1-2.>3 1-1.<.J 1-;... 1;..>> 110J !ource9 %a&shahi Brach of %A'UB I %ecovery rate P 1.. C!((ent) It is evident from the above table that 0..380.1. to 0.1080.16oan %ecovery Target and achievement are increased by amount gradually. But its Achievement performance is fluctuated. 5ighest Achievement in 0..380.1. financial year which is 1=;J and lowest in 0.1080.1- 6oan financial year which is 110J .
b= /!an Re !very "!r 0..380.1. 6oan %ecovery target was T' ;3.;=6akh and 6oan recovery achievement was T' 1.2.-= 6akh (1=; percent of target) #a&or items wise loan recovery position .18.=80..3 to -.8.<80.1. Items Achievement (Amount in Aercentage of Total University of Information Technology & Sciences 58
+rops +ontinuous loans Aoverty Alleviation Eishery 6ive stock Irrigation equipment and farm machinery ..<; ..<0 Agro8based industries 1..;> 1..1Gthers 1.2.-= 1.. Total !ource9 Re'i!nal Central 5ran hC RA4U5
C!((ent) Erom the above table it is shown that Aoverty alleviation loans is the highest achievement amount of T' 2;.<> lakh which is 2-.=<J of the total achievement and fishery is the lowest achievement which is ..0<J of the total achievement. Gthers recovery items is not considered here.
Pie dia'ra( Presentati!n !" l!an Re !very 2??>-2?1? "inan ial year A$e t!r +ise=
0.28 7.7
Live sto ! "rri#ation e$uip%ent an& 'ar% %a hinery A#ro()ase& in&ustries *thers
45.68
= /!an Re !very "!r 2?1?-2?11 6oan recovery target was T' 3..0> 6akh and Achievement was 1.>.=< 6akh (10..2< percent of the target) #a&or items wise position of 6oan %ecovery .18.=80.1. to -.8<.0.11 Achievement (Amount in Aercentage of Total Items 6akh T') achievement (J) +rops ->.20 -;.-0 +ontinuous loans -.<> -.-> Aoverty Alleviation -1.11 0>.<. Eishery 1.-< 1.0; 6ive stock 10.3= 11.30 Irrigation equipment and 0.2; 0.0; farm machinery Agro8based industries 0.-2 0.1; Gthers 1<.21;.1. Total 1.>.=< !ource9 Re'i!nal Central 5ran hC RA4U5 C!((ent) Erom the above table it is shown that +rop loans recovery is the highest achievement amount of T' ->.20 6akh which -;.;0J of total achievement and Eishery is the lowest achievement* which is 1.0;J of the total achievement. Gthers recovery items is not consider here Pie dia'ra( Presentati!n !" l!an Re !very 2?1?-2?11 "inan ial year A$e t!r +ise=
Crops 16.43 2.34 2.45 38.42 Continuous loans Poverty Alleviation Fishery 12.97 Live sto ! "rri#ation e$uip%ent an& 'ar% %a hinery A#ro()ase& in&ustries *thers
1.36
6oan recovery target was T' 1.0.;. 6akh and Achievement was 1-2.>3 6akh (1-1.<. percent of the target)
#a&or items wise position of 6oan %ecovery .18.=80.11 to -.8<.0.10 Achievement (Amount in Aercentage of Total Items 6akh T') achievement (J) 2;.32 -2 +rops 1=.01 1+ontinuous loans 1> 1Aoverty Alleviation ..2> ..-< Eishery 0;..1> 6ive stock 8 8 Irrigation equipment and
farm machinery 0.-0 1.0= Agro8based industries 0;.31 13.0. Gthers 1-2.>3 1.. Total !ource9 Regional Central Branch, RAKUB
C!((ent) Erom the above table it is shown that +rops loans recovery is the highest achievement amount of T' 2;.32 lakh* which is -2J of total the achievement* and Eishery is the lowest achievement which is ..-<J of the total achievement and there is no target and achievement in the irrigation equipment and firm machinery sector. Gther recovery items is not consider here.
Pie dia'ra( Presentati!n !" l!an Re !very 2?11-2?12 "inan ial year A$e t!r +ise=
Crops 25.91 45.94 2.32 0 25.03 Poverty Alleviation Fishery Live sto ! "rri#ation e$uip%ent an& 'ar% %a hinery A#ro()ase& in&ustries *thers Continuous loans
0.48 18 17.21
6oan recovery target was T' 1-; 6akh and Achievement was 1;..>> 6akh (110 percent of the target)
#a&or items wise position of 6oan %ecovery .18.=80..2 to -.8<.0..; Achievement (Amount in Aercentage of Total Items 6akh T') achievement (J) 21.-< 0=.21 +rops -;.-1 0-.2. +ontinuous loans 13.2> 1Aoverty Alleviation 8 8 Eishery -0.>< 01.=> 6ive stock -.-0.0. Irrigation equipment
and farm machinery 0.20 1.<. Agro8based industries 1<.10 1..<> Gthers 1;..>> Total !ource9 Regional Central Branch, RAKUB
C!((ent) Erom the above table it is shown that +rops loans recovery is the highest achievement amount of T' 21.-< 6akh* which 0=.21J of total achievement and Agro based industry is the lowest achievement* which is 1.<.J of the total achievement* and there is no target and achievement in the Eishery sector. Gthers recovery items are not consider here. Pie dia'ra( Presentati!n !" l!an re !ver 2?12-2?1# "inan ial year A$e t!r +ise=
Crops
2.42 3.33
16.12 41.36
Continuous loans Poverty Alleviation
Chapter- $even
3INDIN:$ AND R1CO&&1NDATION$
8.1 3indin's
%a&shahi 'rishi Unnayan Bank has been established for agricultural development as well as to serve the farmer of north8west region of the country. The bank reached record high loan disbursement and played a positive role in the financial development of the country. During my internship program at %A'UB* %egional +entral Branch closely observed all banking activities of this branch and my study is concentrated on loan management. %A'UB* %egional +entral Branch playing a vital role in agricultural development to the surrounding area of %egional +entral Branch. During the days of internship I have observed some drawbacks which are creating trouble in achieving its ob&ectives* those are mentioned below9 1. !hortage of efficient credit personnel. 0. Inadequate training facilities for credit personnel. -. The lengthy loan disbursement process creates drawback in getting loan in time. 2. 6ack of proper planning and efficient fund management. ;. 6oan is not paid through proper assessment. <. Insufficient fund of the bank creates problem in loan disbursement policy. =. 6ack of proper security against loan. >. !ector wise loan disbursement scenario is much fluctuated. 3. 6ack of proper supervision and monitoring. 1..The political and frequent government interference in the operation of agricultural credit policy is one of the main causes of poor recovery of agricultural loans. 11. In the institutional credit delivery system credit is provided for crop production but do not meet the credit requirement for
University of Information Technology & Sciences 64
other purposes for which the farmers have to go to the money lenders to borrow at e7orbitant rate of interest. 10. The farmers do not get a fair and reasonable price for their production. The term of trade between agricultural and manufactured goods always goes against the agriculturist* particularly the price of the agricultural commodities remain very low during harvest season. !o it"s difficult for farmers to repay loan from incremental income. 1-. The agricultural credit institutions disburse credit to the farmer mainly against the security of their land. But in the real sense of the term land cannot be used as appropriate security as it is not possible to reali:e the loans and interest from land which is not easily saleable. 12. #a&or share of the institutional credit is taken by the wealthy influential rural elites by e7ercising their social and political power and influences. 1;. !ometimes the dishonesty of officer leads to inappropriate 6oan. 1<.The notice is not issued to the borrower in &ust time* for that reason* recovery is hampered. 1=. All the transitions are recorded manually* so information is not organi:ed which creates problem in decision making. 1>. Eund diversion i.e. taking loan for one purpose and using it in another purpose.
8.2 Re !((endati!ns
Based on the findings of the study* the following recommendations are feasible9 1. The rural financing activity of %A'UB by increasing credit deployment needs to be increased. 0. Diversified sectors are to be identified and financed. -. $here the short term loans constituted most of the loan portfolio* the medium and long term loans should be provided more and more for true rural development. 2. !ince crop and draft animal sectors both constituted two8 thirds of the total loan portfolio* emphasis should be given to other sectors equally in financing. ;. In disbursing loan* the economic position of the borrower should be kept in view. <. Borrower should be provided with small si:ed loans for better results. =. ?ducated borrower should be preferred in loan sanctioning. >. In providing loan* land mortgaged security should be preferred for best results. 3. Timely and direct delivery of loan to the borrower must be ensured for better result. 1.. Adequate amount of loan to the borrower should be provided to minimi:e diversion although it does not necessarily effect good repayment. 11. !mall si:ed loans should be disbursed to the small landholders obviously in time and directly for best result. 10. !hort8term credit should be provided to the borrowers having small si:ed land holdings. 1-. !maller si:ed loans are not being provided adequately for which these should be considered accordingly. 12. #onitoring and supervision of agricultural loans means the mechanism or process through which %A'UB can ensure the disbursement of credit to the genuine borrowers. 1;. The bank branch must take responsibility for its loans. It needs to develop systematic and continuing relationship with its loan.
University of Information Technology & Sciences 66
Appendi@
R131R1NC1$
1. +howdhury* 6 %. A Te7t book on banker"s advances* (0nd ed.80..0)* Dhaka9 Eair corporation. 0. +howdhury* Gmar* (0..-) CBank"s non performing loans8 some lessions for bank 6oan.D Journal of institute of bankers, Bangladesh Kol8;.* ,o80 Dec80..-* Ap8 1>-813-. -. 'han* Dr. A %* Bank #anagement9 A fund emphasis* (1st ed.80..>)* Dhaka9 %uby Aublications. 2. 'han* Dr #a&ibur %ahman* (13>3) CAgricultural credit in Bangladesh9 some issues and considerations in policy planning.D Krishi Bank Paraikrama, Kol.83 1.* /une8 Dec.813>3* pp8=.8>2. ;. %a&shahi 'rishi Unnayan Bank* Annual report (0.1180.10) <. %a&shahi 'rishi Unnayan Bank* "egiona Centra %ranch* !tatement of affairs (0..>80.10s). =. %A'UB"s web site9 http9FF +++.ra7ub.!r'.bd
:/O$$ARJ K A55R10IATION
%A'UB UIT! ADE+ B'B 6A, %!+A ,+DA !TD DA! %DA! DD #T TT AG !TDA DA! %A! %4A! EDA #T DD TT AG !T6 #T6 6T6 !AG A!G %a&shahi 'rishi Unnayan Bank University of Information Technology !ciences Agricultural Development Einance corporation Bangladesh 'rishi Bank 6ocal Area ,etwork %A'UB !elf8help +redit Arogram ,orth $est +rop Diversification Aro&ect !hort Term Deposit Account Deposit Aension !cheme %A'UB Deposit Aension !cheme Demand Draft #ail Transfer TelephoneF Telegraphic Transfer Aayment Grder !hort Term Deposit Account Deposit Aension !cheme %A'UB Aension !cheme %A'UB 4rameen Aension !cheme Ei7ed Deposit Account #ail Transfer Demand Draft Telegraphic Transfer Aayment Grder !hort Term 6oan #edium Term 6oan 6ong Term 6oan #anage Aro&ect !upervision Gfficer
5I5/IO:RAP6J
1. 0. -. 2. ;. <. =. >. Annual report of %A'UB 8 0..>80..3 to 0.1080.1-. '.c. !hekhar* 8Banking theory and practice. 'GT5A%I8+% 8%esearch methodology. $ # 5 /AI# # 6 %A5#A,* 8 6oan #anagement8A #acro level Analysis. #anagerial ?ffectiveness9 A +ase !tudy of Bangladesh 'rishi Unnan Bank. 8EA5#IDA +5G$D5U%S 6oan ledger of %A'UB* %a&shahi Branch . www.wikipedia.com $eb !ite of %A'UB8 www.rakub.org.bd