Internship Report on Credit Management Of BDBL
Internship Report on Credit Management Of BDBL.
Internship Report on Credit Management Of BDBL ( Bangladesh Development Bank Limited). This Internship Report has been prepared on the basis of credit management activities and the analysis of credit recovery performance of the BDBL.
1.1. Statement of the research problem –
Banking sector in Bangladesh has been flourished during last few decades. It outcomes due to the adoption of privatization policy. Until, Government sector owned, controlled and operated financial sector of Bangladesh with the aim of distributing funds to priority sectors. Loan recovery was not emphasized because the loans ultimately collectible. The quality of financial inter-mediation, judged by loan recovery rates, was dismal. But it is a matter that the financial system was not efficient and failed to attain its objective.
Then government decides to reform the financial sector and commercial banks now a day have proved themselves as the life blood of modern economy in Bangladesh. No businesses trade, exports, imports. Production, all other economic activities can not run without the aid of banking.
This report is entitled “Loan Operation and Recovery Portfolio of Bangladesh Development Bank Limited”. Showing the picture of loan sanction and recovered performance is my main emphasis on this report. A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. A research must find the problem and formulate it so that it becomes susceptible to research.
Like a medical doctor, a researcher must examine all the symptoms concerning a problem before he can diagnose correctly.
Usually we say that a research problems dose exist if the following conditions we met with.
• There must be an individual or a group or an organization.
• There must be at least two courses of action is defined by one or more values of the controlled variables.
• There must be at least two possible outcomes, the course of action of which one should be preferable to the other.
• The course of action available must provide some chance of obtaining the objective, but they cannot provide the some chance. Otherwise the choice would not matter. In simple words, we can say that the choices must have unequal efficiency for the desired outcomes.
Internship Report on Credit Management Of BDBL
1.2. Significance of the study –
In professional life, we need practical knowledge to cope with the difficulties in business environment. In order to materialize the theoretical knowledge in the practical field. It can help to cope with the changing condition of today’s complex business world. It is possible to acquire comprehensive knowledge about the complex problem. It can help to compete with other competitive institution. For this the qualities of the product and service can be developed. The internship is done in the practical field. So the knowledge about the relationship between the different divisions or sectors can be acquired.
Through the internship the information about the concern can be compare with other and the problem can be identified and solved. Through the internship direct discussion are possible with high officials and general employees. It helps to acquire knowledge about the functions of an organization.
1.3. Objectives of the study –
The objective of the study is to gather practice of all knowledge regarding banking sector and its operations. Theory classes provide us theories regarding business segment and practical orientation gives us the chance of view those systems and their operations. The prime objectives of the study are to evaluate Loan Operation of Bangladesh Development Bank Limited.
More precisely I can assume those objectives:-
• To examine the loan disbursement policy of Bangladesh Development Bank Limited.
• To findout the problems of recovery of loan.
• To scrutinized the genuine reasons of being bad of disbursed loan of the bank.
• To suggest some remedial measures to overcome the problem of overall loan management of the bank.
1.4. Literature Review –
Bangladesh Development Bank Limited (BDBL) is a state-owned commercial bank in Bangladesh. A fully state-owned enterprise, the bank has been discharging its nation-building responsibilities by undertaking government entrusted different socio-economic schemes as well as money market activities of its own volition, covering all spheres of the economy.
At the beginning of BDBL it name was Bangladesh Shipla Bank (BSB), it was only institution without whose support industrial project was impossible to build up. With the decision of the Government, Bangladesh Development Bank Ltd. (BDBL) was incorporated on 16 November, 2009 as a Limited Company under the Companies Act. 1994 by merger of former Bangladesh Shiplap Bank (BSB) and Bangladesh Shiplap Ran Sanest (BSRS) are two Development Financial Institutions (Dais) in the public sector.
Bangladesh Shipla Bank (BSB) was established in October 31, 1972 for accelerating the industrial pace of the country through providing loans and equity to the industrial projects as per Bangladesh Shop Bank Order, 1972 (President’s Order No. 129 of 1972). With the same objective, Bangladesh Shiplap Ran Sanest (BSRS) was also established in October 31, 1972 as per Bangladesh Shiplap Ran Sanest Order, 1972 (President’s Order NO. 128 of 1972. In order to carry on business activities of BDBL, Bangladesh Bank issued banking license on 19-11-2009.
Two Vendor Agreements were signed between the Governments of the People’s Republic of Bangladesh and the BDBL on 31 December, 2009 to acquire and take over all of their (BSB & BSRS) assets, benefits, rights, powers, authorities, privileges, liabilities, borrowings and obligations and to carry on with the same business. As a public limited company, BDBL formally embarked its journey on January 03, 2010.
It extends financial assistance for setting up industries and provides all kinds of commercial banking services to its customers through its branch network in Bangladesh.
The BDBL also inherited membership of Dhaka Stock Exchange Limited (DSE) and Citation Stock Exchange Limited (CSE). In order to contribute to the capital market, it acts as stock dealer and operates two brokerage houses, one at Motijheel and the other at Koran Bazaar which are providing services to investors- n small and medium. The BDBL is also managing a close -end Mutual Fund with paid up capital of TYK. 5.00 Crore.
1.5. Methodology of the study –
Correct and smooth completion of report requires adherence to some rules and methodology. In order to make the report, the decision has been taken to collect various primary and secondary data. Data have been collected through interviewing the responsible officers. They also gave me annual report, annual budget granted through government of Bangladesh Development Bank Limited (BDBL) and other documents. Different forms of statistical configurations such as table percentage rates and ratios have been used to make the study meaningful and realistic.
After collecting data from the interview and materials provided by them were carefully scrutinized first. Then the data was organized as required. In order to make the study effective and efficient, following types of data and information have been used widely.
1.5.1. Data Sources –
Essential data sources both primary and secondary are identified which will be needed to complete and work out the study. To meet up the need of data primary data are used and study also requires interviewing the official and staffs were necessary. The report also required secondary data. Information collected to furnish this report is both from primary and secondary sources.
I) The primary sources –
• Face-to-face conversation (Questioners) with the respective officers and staffs of the Branch.
• Practical work exposures from the different desks of the departments of the Branch covered.
II) The Secondary sources –
• Annual Report of Bangladesh Development Bank Limited
• Annual budget of the Bangladesh Development Bank Limited.
• Publications of Bangladesh Bank (BB).
• Relevant books, newspapers, journals, etc.
• Information kept by branch manager, operations manager in their own files.
• Various document and published articles related to loan of Bangladesh Development Bank Limited library.
• Previous internship report of Bangladesh Development Bank Limited of students.
• Financial statement of the Bangladesh Development Bank Limited of the departments and respective officers
and staff of the Bangladesh Development Bank Limited.
• Official records and Various documents of the Bank
• Extensive literature search on the basis of these documents of publications
• Newspapers journals, articles etc
• Web site of Bangladesh Development Bank Limited.
• Web site of Bangladesh Bank
1.5.2. Data Collection Procedure –
I have used the following data collection methods to prepare this report –
Interview method: One method of collecting data is interview. Interview can be face to face or by telephone. I collected data and information from the top level executive, manager, and responsible officer of Bangladesh Development Bank Limited by face to face communication. But there have some limitations in interview method that’s why i used another method for preparing this report which is Questionnaire method.
Questionnaire method: A questionnaire is an efficient data collection mechanism. At first, I selected what is required and how to measure the variables of interest. Therefore I prepared a questionnaire and send to top level executive, officers, managers of Bangladesh Development Bank Limited by mailing address and finally collect information.
1.5.3. Techniques of Analysis –
After collecting the data, it is necessary to analyze or process the data to get meaningful information. Under this study the collected data have been processed through tabulation and then analyzed.
In order to analyze the collected data scrutinized, applied some techniques.
I. Processing of data
II. Analyzing of data
Analyzing of data:
I have used the following tools to analyze the data –
- Tabular representation.
- Graphic representation through bar diagram
- Pie graph
- Chart etc.
1.5.4. Scope and Limitations of the Study –
After completing the institutional experience, practical performances in the formal stage become difficult. So in preparing this report my lack of proper knowledge greatly influenced in this preparation.
Scope of the study includes –
• Procedure and technique followed by the credit department and central recovery department.
• Loan portfolio
• Trend analysis of sanctioned and recovery loan.
• Findings and recommendation.
Beside this, every study has some limitations. I find out these limitations of the study which as follows
• Lack of sufficient knowledge.
• Lack of available information and documents to support our study.
• Up-to-date information was not available.
• Prolonged process and long time involved in the evaluation of project.
• Improper combination among various departments.
• Confidentiality of the bureaucrats.
• Unwillingness to give information.
• Only few days’ internship’s experience is not enough time to find out the pros and cons of such a vast project.
• Sometime unacceptable feasibility reports are submitted by sponsors who do not contain enough and dependable information.
• The personnel of the organization did not want to disclose the classified information to the outsiders.
Internship Report on Credit Management Of BDBL
Chapter – 02
Organizational Overview of BDBL
2.1. Background of Bangladesh Development Bank Limited (BDBL)
Bangladesh Development Bank Limited (BDBL) is fully state owned Bank of Bangladesh which came to effective at 3rd January 2010. Bangladesh Shilpa Bank (BSB) and Bangladesh shilpa Rin Songstha (BSRS) were merge into Bangladesh Development Bank ltd (BDBL) at 16th November 2009 and come to effective at 3rd January 2010. In addition commercial Banking, BDBL provides financial and technical assistance to broaden the private as well as public sector industrial base of the country.
It prioritizes, especially, export oriented/export linkage industrial units, efficient import substitution, joint ventures, commercialization of local technology and promotion of agro-based industry.
Bangladesh Shilpa Bank (BSB) and Bangladesh shilpa Rin Songstha (BSRS), with almost similar functions, were established on 31st December, 1972 under the presidential order no. 129to provide loans and facilities to industrial institutions, help failed to meet expectations. In 1992, the government moved to privatize BSRS, which remained unaccomplished due to some complexities, the company’s board sat on December 8 to fix a vendor agreement schedule with the government, the BDBL organ gram, employee pay structure and select office space for the banks headquarter. As per merger plans, the accounts of the two organization’s consolidated by December 2009. The paid up capital of the merged company will amount to 400 cores.
Before merged the paid up capital of BSB was tk. 200 core was tk.70 core for BSRS. Making adjustment to the reserve to the reserve funds of the two companies will raise the capital. In the meaning, BSRS raised its funds to taka. 200 core. As per BDBL operational plans, the bank will operate across the country by setting up branches at district levels.
2.2. Vision Statement of the BDBL:-
“ To emerge as the country’s prime Financial Institution for supporting private sector industrial and other projects of great significance to the country’s economic development. Also be active participant in commercial banking by introducing new lines of product and providing excellent services to the customers. ”
2.3. Mission Statement of the BDBL:-
In the following given the list of the mission of BDBL
- To mobilize deposit for productive investment ;
- To expand branch network in commercially and geographically important places ;
- To employ quality human resources and enhance their capability through motivation and right –type of training at home and abroad.
- To delegate maximum authority ensuring proper accountability ;
- To maintain continuous improvement and up-gradation in business policies and procedures ;
- To adopt and adapt to new technology ;
- To maximize profit by strong, efficient and prudent financial performance ; and
- To introduce new product lines according to market needs.
- To be competitive with other Banks and Financial Institutions in rendering services ;
- To contribute to the country’s socio-economic development by identifying new and profitable areas for investment
2.4. Values of the BDBL:-
Customer focus: Provide smart, efficient, transparent and courteous services.
Social Responsibility: Practice corporate social responsibility.
2.5. Strategic Priorities of the BDBL:-
- Select and invest industrial projects where locational advantages like local availability of raw materials, good infrastructural facilities (road communication, transport facilities, etc.) and utilities (power, gas, water, etc.) shall be available.
- Limit project loan to Tk. 15 crore maximum and Tk.2 crore minimum (for large projects). Arrange and participate in syndicated loan for projects above Tk. 15 crore.
- Identify prospective and potential entrepreneurs and investors/ clients and motivate, guide and help them select profitable industrial venture for investment.
- Regularly publish financial disclosures.
- Undertake from time to time SWOT (Strength, Weakness, Opportunity and Threats) analysis for reviewing bank’s market position.
2.6. Services/Products Of The BDBL:-
The Bank is always committed to serve the clients with the best values and innovative products and services to enrich its portfolio looking at the client’s demands and desires.
The list of services/products of the Bangladesh Development Bank Limited is stated below:
0l. Development Banking –
- Industrial Loan with emphasis on syndicated arrangement (Power &
- Telecommunication, Fibre Optic Cable, etc.)
- Public-Private Partnership (PPP) project (Port Development, Transport &
Communication like Road, Water & Air Ways etc.)
- Small & Medium Enterprise (SME like IT industries i.e. development of
Hardware & Software).
- Agro -based ventures depending on indigenous raw materials (like Jute
Twin/Yarn and other Industries).
- Green Banking (Environment & Eco-Friendly industries like automatic brick kiln, renewable energy, effluent treatment plant, etc.)
- Lease Financing.
- Real Estate business (including housing loan).
Commercial & Foreign Exchange Business –
(a) Deposit Services:
|V Current Deposit Account
v Savings Deposit Account-with cheque
v Convertible Taka Account
v Short Term Deposit Account-Bank
v Exporter’s Fc Deposit Account
v Non-Convertible Taka Account
|v Fixed Deposit
v Deposit Pensions Scheme
v Other special Savings Deposit
v 5-Year Term BDBL Sanchay Scheme (BDBLSS)
v 10-Year Term Sheikh Sanchez Scheme (SSS)
v 10-Year Term Chickasha Sanchez Scheme (CSS)
(b) Term Deposit:
|Monthly Term Deposit||Term Deposit for 3 Months|
|Term Deposit for 6 Months||Term Deposit for 12 Months|
|Term Deposit for above 12 Months|
(c) Short Terms Loans:
|Cash Credit (Hypothecation)||Secured Advances (General)|
|Cash Credit (Pledge)||Secured Advances (Financial Obligation)|
|Consumer’s Credit||Personal Loan|
Trade/Foreign Trade Financing
|Export Cash Credit||Payment Against Documents (PAD)|
|Packing Credit||Loan Against Imported Merchandise (LIM)|
|Purchase of Local & Foreign Documentary Bills||Loan Against Trust Receipt (LTR)|
(d) Foreign Exchange:
|Local L/C||Import L/C|
|Export L/C||Back to Back L/C|
|Foreign Remittance||Foreign Exchange Buy & Sale|
(e) Other Banking Service:
|Demand Draft Issue||Selling of Prize Bond|
|Payment order issue||Selling of savings certificates, etc.|
- Capital Market Operation –
|Share /Securities Trading||Brokerage House Services|
|Underwriting of Public Issues||Banker’s to the Public Issues|
|Mutual Fund operation|
4. Loan & Advances –
|Loan against trust||Consumer credit Scheme|
|Loan against accepted||Industrial term loan|
|Agricultural term loan||Lease finance|
2.7. Principal Activities Of BDBL –
The principal activities of the bank during the financial year were the provision of financial services including lending, deposit taking, payments services, investment portfolio management and advice, unit trust and superannuation fund management, insurance services, leasing, general finance, foreign exchange and money market services. It also performs the merchant banking function under the license by Securities and Exchange Commission, Dhaka, Bangladesh.
Other principal activities of BDBL
|Loan Operation||Economics and Research|
|Documentation of data||Procurement implementation|
|Central account control||HR maintains|
|Provide MIS service||General activities implementation|
Internship Report on Credit Management Of BDBL
2.8.SWOT Analysis of Bangladesh Development Bank Limited (BDBL):-
Here (on another post), we discussed in detail of –
Internship Report on Credit Management Of BDBL