To acquire the depth knowledge on credit functions. To learn the modes of financing. To learn the repayment of loan.

To analyze the performance of the bank. To compare the credit policy of BASIC Bank with other banks. To analyze the strengths, weakness etc. of the credit policy of BASIC Bank.

Primary Sources Direct observation. Special outlook. Questioning the concerned persons. Discussion with the other Bankers.

Secondary Sources Annual report of BASIC Bank Limited Desk report of the related department Other manual information Different reference books of the library Some of my course elements as related to this report.

Established
Activity Status Legal Status Authorized Capital Paid-up Capital Branches No. of Employees

1989
Incorporated January 21, 1989 Public Limited Company Tk. 2000.00 (Million) 2010 Tk. 1964.65 (Million) 2010 31 964

Tk. in crore

Credit management of a bank is the entire procedure of credit activities how a bank provide loans and advances to their customers, different types of credit facilities and their management system, security keeping against credit facilities, how recover those type of facilities, credit risk measurement and credit granting policy etc.

Aggregate loans and advances of the Bank shall not exceed 100% of the loan-able fund of the Bank. The loan-able fund shall include 70% of deposit, 90% of borrowing and 100% of the capital and reserve of the bank. 50% of the loan-able fund shall have to be deployed in financing small and medium industries in the form of term loan and working capital. Aggregate funded exposure for trade finance will be restricted to 25% of the Banks total loans and advances. Loans to a particular industrial or commercial sub-sector shall not exceed 20% of the total loans and advances of the Bank at any one point of time.

Collateral Securities

Margin

Loan documents

 Informal interview of the client with the credit officer. If the project seems feasible then informal interview with the branch manager. Step 1
Client is provided some papers which are required to be submitted to the credit officer and then a brief summary is prepared. Step 2

Another interview of the client with the credit division of the HEAD OFFICE supported by the brief summary. Step 3
Preparing CLP.

Step 4

Head office prepares sanctioning letter if it seems acceptable by judging the submitted papers. Step 5 Branch credit office then again prepares another sanctioning letter by including additional covenants. Step 6

An appraisal practice in BASIC Bank Ltd. concentrates on the

following five major aspects:

Technical Feasibility

Market Feasibility

Financial Viability

Economic Feasibility

Organizat ional Feasibility

Term loan:
Client is provided with a loan repayment schedule where installment amount is defined. In case of term loan, client is considered a grace period after which the repayment starts. Installments come in a monthly basis. Loan account is created and fund is disbursed at once or sometime in some steps.

Working capital:
For a 90 days loan, clients are required to pay over the time through his/her C.C. account. For continuous loan there is a time limit for the operation of the account. Client is required to pay interest for the excess over limit at the end of three month.

Supervision Follow up

Keep watch over the ledgers and the accounts. Ensure that inputs / materials are purchased /produced as per procedures. Keep watch over the inflow and outflow of fund. Collect periodical reports and information about the borrower. Ensure that security /collaterals have been obtained as per terms of sanction

and valuation has been done correctly.

Ensure that security has been properly insured. Keep regular contact with the borrower. Keep watch over the repayment trend.

1. Industrial, Commercial and micro credit scheme. 2. Geographical location wise loans and advances.

3. Sector wise distribution of loans & advances.

4. Loan to small scale industries.

5. Disbursement of loans and advances according to deposit mobilization.

6. Performing loan & non performing loans. 7. Recovery of loans & advances.

Tk in million

Aggregate Loans and advances are 98% of the total Deposit. Approximately 57% of the loans and advances have been given to small and cottage industries. Head Office of the bank are monitoring all kind of loans and advances. Branch managers are fully liable for the selection of the borrower. Continuous monitoring of the working capital facilities are ensured by the inspection of the stocks. Standard Documentation Process. House building loan facility and other commercial loan facility has been demoralized by the branch authority. Credit evaluation techniques are not enough to judge the credibility of the borrower. Credit analysis techniques for LIM facilities are not good enough. Small range of loan portfolio are restricting further improvement. Lack of up-to-date credit manual.

Customer Services should be enhanced. Loan appraisal technique should be modernized. Documentation process should be improved. Efficiency in storing data. Marketing for selling the services should be encouraged. Detail manual should be prepared for accurate credit operation. Adequate training is required for credit officer. LIM facility should be withdrawn by the Bank Management. Adequate measure should be taken for small industrial loan. Some discretionary power should be given to the branch management.

The BASIC Bank Limited has been trying to operate its business successfully in Bangladesh since beginning. Basic Bank has already developed goodwill among its client by offering its excellent services through General banking, Credit division and Foreign Exchange divisions. But the success of Basic Bank can be attributed largely to its credit operation system & policy. BASIC Bank is exception in the sense that in spite of being a 100% state owned bank, it is highly profitable compare to other state owned commercial banks.