credit risk management policy in national bank ltd

8/12/2019 Credit Risk Management Policy in National Bank Ltd

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Credit Risk Management policy

in

National Bank Limited

Submitted by

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C%apter & ' Introduction


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'.' (oundation o) t%e Report

BBA program of Mohammadpur Kendriya College Department of BusinessAdministration is organized and tailored to provide the students with the conceptual,

theoretical and practical tools of analyses !pecial stresses are given on theory and

practice them under an organization "herefore, as an internee # have completed my

practice session and prepared iris re$uired report %ased on investigations carried out %y

me in &ational Ban' (imited )B(* As an internee student # have tried my level %est to

cover the contemporary credit ris' management system of &ational Ban' (imited in this

report

'.* #b+ecti,es

Broad #b+ecti,e-"o analyze the Credit +is' Management policySpeci)ic #b+ecti,e-"o attain the %road o%ective the following specific o%ectives will

%e pursued-

"o identify the various types of credit dis%ursed %y &B(

"o analyze the credit portfolio of &B(

"o get idea a%out the process of credit management practices of &B(

"o e.amine the credit dis%ursement trend of &B(

"o analyze the credit recovery performance of &B(

"o analyze compliance with the Bangladesh %an'/s guidelines

"o analyze the financial performance of &B(

'. Scope o) t%e Report

"his report has two %road divisions 0ne is the organization part and the other is the

proect part "he organization part descri%es my host organization &B( "he proect part

deals with the specific assignment that # carried out on my host organization "his

specific assignment ort the proect is to find out the effectiveness of credit ris'

management policy of &B(

'./ Met%odology

Source in)ormation- of information Both primary and secondary sources of

information were used to complete this report



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'./.' "rimary Sources

3rimary data and information were collected %y interviewing relevant persons at &B("he interviewed personnel were

'./.* Secondary Sources

"he secondary sources are

Annual report of &ational Ban' (imited

3eriodicals pu%lished %y the Bangladesh %an'

Different pu%lication regarding %an'ing functions, foreign e.change operation

and credit policies

'.0 Limitation o) t%e Report

"his report will only consider credit ris's of &ational Ban' (imited #t will not cover

Asset and lia%ility4%alance sheet ris'

5oreign 6.change +is'

#nternal control And compliance ris'

Money laundering +is'

'.1 Interns%ip "eriod

#nternship period started on 7anuay 11, 2812 and it will %e continued to April 18, 2812

#n this period, # have to %e covered general %an'ing, investment, and foreign e.change

division at &ational Ban' (imited, (a'e Circus Branch


9

Md Asaduzzaman

3rinciple 0fficer

&ational Ban' ltd

(a'e Circus Branch

Contact 81:21:1:;1;

Md Anuyar

6.ecutive 0fficer

&ational Ban' ltd

(a'e Circus Branch


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*.' Corporate In)ormation

*.'.' 2istory and 2eritage

&ational Ban' (imited has its prosperous past, glorious present, prospective future and

under processing proects and activities 6sta%lished as the first private sector %an' fully

owned %y Bangladeshi entrepreneurs, &B( has %een flourishing as the largest private

sector Ban' with the passage of time after facing many stress and strain "he mem%ers of

the %oard of directors are creative %usinessmen and leading industrialists of the country

"o 'eep pace with time and in harmony with national and international economic

activities and for rendering all modern services, &B(, as a financial institution,

automated all its %ranches with computer networ's in accordance with the competitive

commercial demand of time Moreover, considering its forth-coming future, the

infrastructure of the Ban' has %een rearranging "he e.pectation of all class%usinessmen, entrepreneurs and general pu%lic is much more to &B( At present we have

19< %ranches under our %ranch networ' #n addition, our effective and diversified

approach to seize the mar'et opportunities is going on as continuous process to

accommodate new customers %y developing and e.panding rural, !M6 financing and

offshore %an'ing facilities =e have opened 18 %ranches and < !M64Agri %ranches

during 2818

"he emergence of &ational Ban' (imited in the private sector was an important event in

the Ban'ing arena of Bangladesh =hen the nation was in the grip of severe recession,

the government too' the farsighted decision to allow the private sector to revive the

economy of the country !everal dynamic entrepreneurs came forward for esta%lishing a%an' with a motto to revitalize the economy of the country

&ational Ban' (imited was %orn as the first hundred percent Bangladeshi owned Ban' in

the private sector 5rom the very inception, it was the firm determination of &ational

Ban' (imited to play a vital role in the national economy =e are determined to %ring

%ac' the long forgotten taste of %an'ing services and flavors =e want to serve each one

promptly and with a sense of dedication and dignity

"he then 3resident of the 3eople/s +epu%lic of Bangladesh 7ustice Ahsanuddin

Chowdhury inaugurated the %an' formally on March 2>, 1:> %ut the first %ranch at 9>,

Dil'usha Commercial Area, Dha'a started commercial operation on March 2, 1:>"he 2nd Branch was opened on 11th May 1:> at Khatungon, Chittagong

At present, &B( has %een carrying on %usiness through its 18 %ranches and 1< !M6 4

Agri Branches ?total 19< service locations* spread all over the country !ince the very

%eginning, the %an' has e.erted much emphasis on overseas operations and handled a

siza%le $uantum of home %ound foreign remittance #t has drawing arrangements with

91< correspondents in @< countries of the world, as well as with @ overseas 6.change

Companies located in 1 countries &B( was the first domestic %an' to esta%lish agency

arrangements with the world famous =estern nion in order to facilitate $uic' and safe

remittance of the valua%le foreign e.changes earned %y the e.patriate Bangladeshi


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nationals "his has meant that the e.patriates can remit their hard-earned money to the

country with much ease, confidence, safety and speed

&B( was also the first among domestic %an's to introduce international Master Card in

Bangladesh #n the meantime, &B( has also introduced the isa Card and 3ower Card

"he Ban' has in its use the latest information technology services of !=#5" and

+6"6+! &B( has %een continuing its small credit programmes for dis%ursement of

collateral free agricultural loans among the poor farmers of Barindra area in +ashahi

district for improving their livelihood

&B( focused on all 'ey areas covering capital ade$uacy, maintaining good asset $uality,

sound management, satisfactory earning and li$uidity As a conse$uence, it was possi%le

to a record growth of 1@ million %eing @

percent increase over the preceding year (oans and advances stood at "':2, 88


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"he %an' has a strong team of highly $ualified and e.perienced professionals, together

with an efficient Board of Directors who play a vital role in formulating and

implementing policies

*.'.* Mission

6fforts for e.pansion of our activities at home and a%road %y adding new dimensions to

our %an'ing services are %eing continued una%ated Alongside, we are also putting

highest priority in ensuring transparency, account a%ility, improved clientele service as

well as to our commitment to serve the society through which we want to get closer and

closer to the people of all strata =inning an everlasting seat in the hearts of the people

as a caring companion in uplifting the national economic standard through continuous up

gradation and diversification of our clientele services in line with national and

international re$uirements is the desired goal we want to reach

*.'. 3ision

6nsuring highest standard of clientele services through %est application of latest

information technology, ma'ing due contri%ution to the national economy and

esta%lishing ourselves firmly at home and a%road as a front ran'ing %an' of the country

are our cherished vision

*.'./ Commitments

In ser,ing Customers In Ser,ing t%e Bank In Carrying #ursel,es

at Work

Customer-first uality-focus

Credi%ility !ecrecy

(oyalty "otal

commitment dedication6.cellence through teamwor'

Discipline Eonesty

!incerity Caring Creativity


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*.'.0 #rgani4ational Structure

=e 'now organizational structure plays an important role on the profita%ility of any

organization &ational Ban' (imited is a centralized organization and it/s activatesdesigned on the %asis of traditional %an'ing %usiness process, !uch as Credit,

#nternational Division, #nvestment, Administration, and operation etc &B( has a formal

organizational structure that is highly specialized and centralized

0rganizational setup of the &ational Ban' (imited is consisting of three organizational

domains 5irstly, the central top management, which contains Board of Directors,

Managing Director, Additional Managing Director and Deputy Managing Director

Maor responsi%ilities of this are to ta'e central decision and transmit it to the second

step !econdly, Central e.ecutive level management, which contains 6.ecutive ice

3resident, !enior ice 3resident, ice 3resident and Assistant ice 3resident Maor

responsi%ility of this part to supervise and control division4 department "hirdly, %ranchoperation management, which contains %ranch manager and other mid4 lower level

management Maor responsi%ilities of this part are to the 18 %ranches and 1


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.*;../ Compliance re9uirement o) credit administration

Credit administration shall su%mit all re$uired Bangladesh Ban' circulars 4regulations 4 guidelines relating to credit centrally, ensure issuance of

corresponding circular and advise all relevant departments to ensure compliance

of the content of the circular

All rdparty service providers li'e values, lawyers, C3A/s etc shall %e approved

and their performance reviewed on annual %asis

.*;..0 Credit Monitoring

"o minimize credit losses, monitoring procedures and system should %e reinforced and

more system should %e developed in view of varied comple.ities involved in various

types of credit "he procedures and system must provide early indication of deterioratingfinancial health of a %orrower

At a minimum, report on the following to %e generated and su%mitted to management

and %ranch to %e instructed regularize the same

0verdue principal and interest ?Monthly*

0verdue trade %ills ?Monthly*

6.cess over limit4e.cess over facility approved ?Monthly*

Collateral shortfall

Breach of loan covenants4terms and conditions4documentations deficiencies

?fortnightly* &on-payment and late payment

&on-receipt of financial statement in time ?Annually*

0%ections of internal4e.ternal or regulator inspection4audit and advice corrective

measures timely

Details of early alert accounts and preparation of list of delin$uent account and

special mention account ?!MA*, ?Monthly*

#dentification of the account, which shall %e !MA status due to non-renewal

?Monthly*

(isting of the accounts, which shall %e !MA if not renewed with in month and

ta'ing necessary measures ?Monthly* 6nsuring renewal of limits 2 months ahead of e.piry dates

6ntering all credit facility amounts into M#! data%ase


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.*' !ypes o) Ad,ance Loan #,erdra)t Cas% Credit

"he main functions of a &B( are two, a to ta'e deposits and % to ma'e advanceMa'ing of advance is the most important function of a %an', as upon it/s depend the

profita%ility of the %an' Moreover, %an' ma'e advance out of deposit of the pu%lic

which are paya%le on demand A commercial %an' ma'es advance to different sectors for

different purpose #e financing of trade and commerce, imports and e.ports, industries,

agriculture, transport, and house %uilding etc advance %y commercial %an's are made in

different forms such as loans, overdrafts, cash credits

.*'.' Loan

=hen an advance is made hi a lump sum repaya%le either hi fi.ed monthly installments

or in lump sum and su%se$uent de%it is ordinarily allowed e.pected %y way in interestand incidental charges, etc it is called a loan

(oan is allowed for a single purpose where the entire amount may %e re$uired at a time

or in a num%er of installments within a period of short span

After dis%ursement of the entire loan amount, there will %e only repayment %y the

%orrower A loan once repaid in full or in part, cannot %e drawn again %y the %orrower

6ntire amount of loan is de%ited to the loan a4c in the name of the customer and is paid to

him through his !B4CD4A4c sometimes loan amount is dis%ursed in cash Commercial

%an's generally ma'e loans for the following purpose

&ow a dayNs commercial %an's especially the nationalized commercial %an's in

our country are to ma'e loans under different schemes #O, agriculture loans andloans under self employment scheme etc

Depending upon the purpose, loans may %e repaya%le within a few months or the

repayment period may e.tend up to a few years

Agricultural loans are generally repaya%le within a period of ?three* months to

1 ?one* year But repayment of transport loans and house %uilding loans may ta'e

longer period comprising a num%er of years

(oans are generally secured %y lien on fi.ed4term deposits, shares, de%entures,

protira'hsha sachoy patra, insurance policy, pledge of gold, mortgage or real

estate and hypothecation of crops, vehicles, machineries etc depending upon the

nature and purpose of the loan


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.*'.* #,erdra)t

"he overdrafts are always allowed on a current a4c operated upon %y che$ues "he

customer may %e allowed a certain limit up to which he can overdraw within a stipulatedperiod of time #n an over daft a4c withdrawals and deposits can %e made any num%er of

times within the limit and prescri%ed period #nterest is calculated and charged only on

the actual de%it %alances on a daily product %asis 0ver draft are of three 'inds

a "emporary 0ver Draft ?"0D*

% Clean 0ver Draft ?C0D*

c !ecured 0ver Draft ?!0D*

!#5-

"0D is allowed to honor an important che$ue of a valued client without any priorarrangement As this facility is allowed for a very short period, it is called "emporary

0verdraft

C#5-

!ometimes over draft are allowed with no other security e.cept the personal security of

the %orrowers "hese types of overdrafts are called Clean 0verdraft

S#5-

!ome overdrafts are allowed against securities they are called !ecured 0verdraft0verdrafts are generally to contractors and supplier for carrying on construction wor's

and supply orders and to %usinessmen for their %usiness

.*'. Cas% Credit

Cash credit is allowed to the %usinessmen, traders and industrialists etc for meeting their

wor'ing capital re$uirements, cash credit is always allowed against hypothecation or

pledge of goods Eence, cash credit is two types

a Cash credit ?Eypothecation*

% Cash credit ?3ledge*


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.*'..' Cas% Credit ?2ypot%ecation@

Cash credit allowed against hypothecation of goods is 'nown as cash credit ?EG30*limit #n case of hypothecation the %orrower retains the ownership and possession of

goods on which charge of the lending %an' is created Eolden says, hypothecation is a

legal transaction, where%y goods may %e made availa%le as security for de%it without

transferring either the property of the possession the lender "he documents, which

creates charge of the lending %an' on the hypothecated goods, is called letter of

hypothecation By singing this letter of hypothecation, the %orrower %inds him to give

possession of the hypothecated goods to the lending %an' when called upon to do so As

the hypothecated goods remain under the as such the %an'er should ta'en the following

precautions

"he %an'er should carefully verify the stoc's of hypothecated goods and their

mar'et price 3eriodical statement of stoc' duly signed %y the %orrower should %e o%tained

!toc' should duly insure against fire %urglary +!D with %an' clause

Ban'er should try to o%tain sufficient collateral security

"he %orrower should %e trustworthy and prudent customer

"he goods are readily salea%le and have good demand in the mar'et

"he price of the goods, offered as security, is to %e calculated as per following

principle purchase price or mar'et price whichever is lower

"he price of the goods is steady

.*'..* Cas% Credit ?"ledge@Cash credit allowed against pledge of goods is 'nown as cash credit ?pledge* limit #n

case of cash credit ?pledge* limit, the %orrower pledges his goods to the %an'ers as a

security against the credit facility, pledge has %een defined as Pa %ailment of goods as

security for payment of de%t or performance of a promiseP "he ownership of the pledge

goods remains with the pledge

&B(/s retain the effective control of the pledge goods 3ledged goods may %e stored in

godown of the %orrower %ut under loc' and 'ey of the %an' Ban'/s guards are posted

round the cloc' to protect the godown !ometimes, pledge goods are stored in %an's

godown Ban's ma'es delivery of the pledge goods to the party against payment


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5ollowing points should %e ta'en into consideration while allowing cash credit ?pledge*

limit

"he $uantity of the goods is ascertained

"he goods are readily sala%le and have a constant and effective demand in the

mar'et

"he $uantity of the goods is ensured, the goods are not perisha%le and will not

deteriorate and $uality as a result for long or short duration

Foods are stored in pucca godown to save them from deterioration and to guard

them against ris's of pilferage

"he %orrower has an a%solute title of the goods

"he prices of the goods should %e steady and are not su%ect to violent changes

"he valuation of the goods should %e made very carefully P3urchase price or

mar'et price whichever is lowerP is the general principle for assessing thevaluation of the goods

"he goods should %e stored in the presence of responsi%le %an' official

"he goods are insured against all ris's, such as fire, theft +!D etc and the

insurance policy %ears PBan' Mortgage ClauseP

"he stoc's report is o%tained duly singed %y the %orrower

!toc's must %e inspected regularly %y the %ranch in charge

!toc's cards indicating the $uantity of stoc's, their value and rate is placed in the

godown

"he loc's of the godown are sealed and 'eys are deposited in the %ranch

.** 5ra$ing "o$er

Both in case of hypothecation and pledge, the %an'er should find out the drawing power

Advance is allowed against hypothecation4pledge of goods after deduction of the margin

#f the margin for advance against stoc' of PCotton GarnP is 8H then %an' can advance

t' @84-against hypothecation4pledge of stoc' of cotton yarn of t' 188@- in this case t'

@8@- is the drawing power A %an'er should 'now the mar'et price of the goods to arrive

at a correct D3


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.* Comparati,e Study among Loan Cas% Credit and #,erdra)t

Rudiments Loan Cas% Credit #,erdra)tDis%ursement 0ne time

dis%ursement or

may %e part %y part

As and when

re$uired

As when re$uired

#nterest 0n dis%ursement

amount as per

schedule

0n drawn amount 0n drawn amount

+epayment At a time or %y

installment as per

schedule

Any amount any

time within

stipulated period

Any amount any time

within stipulated period

Chec'ing 5acility &o Ges Ges

"ransaction 0nce repaid cannot%e withdrawn

+evolving nature As per re$uirement4revolving

nature

Borrower Both new old

customer

&ormally

old customer

&ormally old customer

Account "hrough a separate

loan account

"hrough a separate

loan account

Allowed on a current

account4separate loan

account

!ecurity ?primary* 5+D, Fold, +eal

6state, ehicle,

5inanced Assets

3ledged goods,

Eypothecated

goods

5D+, Assigned wor'

order4supply order etc


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C%apter & / (inancial "er)ormance

,aluation o) NBL


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/.* Import 7 =port

#n harmony with earlier years/ trend, &ational Ban' (imited was intensely active in

international trade during the year 2818 "he Ban' put forth every possi%le attempt to

e.pand its e.ternal %usiness %y esta%lishing (C, underta'ing e.port %ill negotiations,

realization of e.port proceeds, foreign remittance etc

"he Ban' opened a total 29,@@< (Cs amounting to !D 1,:88 million for facilitating

import trade in 2818 "he main commodities were capital machinery, raw cotton, scrap

vessels, rice, wheat, edi%le oil, petroleum products, yarn, fa%rics, garment accessories

and other consumer items

"he Ban' has %een nurturing the e.port %usiness enthusiastically since its inception #n

2818 it handled 22,1< e.port documents valuing !D ;:1@: million with agrowth of

29 percent over the last year/s volume of !D


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/. 5eposit

"he deposit %ase of the %an' registered a growth of @ percent in the reporting year

over the last year and stood at "'182, 9@1> million 6.pansion of %ranch networ',

competitive interest rate and deposit products contri%uted to the growth "he customers

of the %an' were individuals, corporations, financial institutions, government and

autonomous %odies etc

/./ Net "ro)it a)ter !a=

6fficient Board and management, strong capital %ase, wide %ranch networ', support from

other sta'eholders helped &B( in revenue earnings and profit ma.imization During the

period &B( earned an operating profit of "' >,:98;8 million in 2818 which was "'

,:@


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/.1 Remittance

&ational Ban' (imited e.erted highest emphasis on overseas operation and handling a

sizea%le $uantum of home%ound foreign remittance since %eginning By this time, it has

earned a reputation as the leader in providing such remittances not only among the

customers %ut also among the regulators #n 1:>< the Ban' esta%lished e.change house

with e$uity ownership and management in 0man !u%se$uently many arrangementshave %een made with different e.change houses and also %y esta%lishing su%sidiaries

a%road for e.panding the Ban'/s overseas networ' in places with high concentration of

Bangladeshi e.patriates

&ational Ban' (imited in 1:: introduced =estern nion Money "ransfer, a glo%al

leader in money transfer services in Bangladesh remained lone agent till 2882 #t was a

%rea'through in getting prompt payment of foreign remittances %y the %eneficiaries

which encouraged remitters to use legal channel As a contri%utor of national economy,

&B( is relentlessly wor'ing to ease the flow of inward foreign remittance "he %an'

introduced different products and technology including 0nline Ban'ing, 65" and other

automated devices for uninterrupted speedy payments 5urthermore, &B( entered into adeal with A!A, a leading &F0 having ,888 outlets throughout the country and also

with !ocial #slamic Ban' (imited ?!#B(* to provide inward remittance products on

%ehalf of &B( #n 2818, foreign remittance %rought through &B( was !D @8>;@

million with an increase of !D ;2@8 million over the previous year showing a growth

of :@8H



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/.6 Current (inancial "osition o) NBL

/.6.' "ro)it 7 Loss account

Based on continued operation of &B( financial performance is very well Based on

unaudited 3rofit (oss account on 5rom 81 7anuary to 1 March 2811 &B( earned &et

3rofit after "a. t' ;,:;,19,2


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C%apter & 0 SW#! Analysis o) NBL



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!=0" analysis is the detailed study of an organization/s e.posure and potential in

perspective of its strength, wea'ness, opportunity and threat "his facilitates the

organization to ma'e their e.isting line of their performance and also foresee the futureto improve their performance in comparison to their competitors As though this tool, an

organization can also study its current position, it can also %e considered as an important

tool for ma'ing changes in the strategic management of the organization

0.' Strengt%s

&ational Ban' (imited has already esta%lished a favora%le reputation in the %an'ing

industry of the country #t is one of the leading private sector commercial %an's in

Bangladesh "he %an' has already shown a tremendous growth in the profit deposits

sector

&ational Ban' (imited has already achieved a high growth rate accompanied %y an

impressive profit growth rate in 2818 "he num%er of deposits and the loans and

advances are also increasing rapidly

&ational Ban' has the reputation of %eing the provider of good $uality services to its

potential customer

0.* Weakness

"he main important thing is that the %an' has no clear mission statement and strategic

plan "he %an's not have any long term strategies of whether it wants to focus on retail

%an'ing or %ecome a corporate %an' "he path of the future should %e determined now

with a strong feasi%le strategic plan

"he %an' failed to provide a strong $uality recruitment policy in the lower and some mid

level position As a result the services of the %an' seem to %e dues in the present days

"he poor service $uality has %ecome a maor pro%lem for the %an' "he $uality of the

service at &ational Ban' is not higher than the Dha'a Ban', 3rime Ban', or Dutch

Bangla Ban' etc so the %an' has to complete with the multinational %an' located here

!ome of the o% in &ational Ban' has no growth or advisement path !o lac' of

motivation e.ists in persons filling those positions "his is a wea'ness of &B( that it is

having a group of unsatisfied employees

#n terms of promotional sector, &B( has more emphasize on that "hey have to follow

aggressive mar'eting campaign

&B( remittance payment system is very poor, to pay a customer %an' consume huge

time ?in some cases it ta'es a day to pay*, %ecause their #" investment is poor



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0. #pportunity

#n order to reduce the %usiness ris', &B( has to e.pand their %usiness portfolio "hemanagement can consider options of starting merchant %an'ing or diversify into leasing

and insurance sector

&B( has a huge scope to increase their customer service $uality By investing more in #"

sector, recruit dynamic people who can ensure ma. customer %enefit

"he percentage of classified loan of &B( is a%out


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Chapter Q ; +ecommendation and

Conclusion



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1.' Recommendation

A %an'er cannot sleep well with %ad de%ts in his portfolio "he failure of commercial

%an's occurs mainly due to %ad loans, which occurs due to inefficient management of theloans and advances portfolio "herefore any %an's must %e e.tremely cautious a%out its

lending portfolio and credit policy !o far &ational Ban' (imited has %een a%le to

manage its credit portfolio s'illfully and 'ept the classified loan at a very lower rate

"han's go to the standard and stringent credit appraisal policy and practices of the %an'

But all things around us are changing at an accelerating rate "oday is not li'e yesterday

and tomorrow will %e different from today Fiven the fast changing, dynamic glo%al

economy and the increasing pressure of glo%alization, li%eralization, consolidation and

disintermediation, it is essential that &ational Ban' (imited has a ro%ust credit ris'

management policies and procedures that are sensitive to these changes "o improve the

ris' management culture further, &ational Ban' (imited should adopt some of the

industry %est practices that are not practiced currently "hese are

&B( should have a clear written lending guideline "he lending guideline should

include #ndustry and Business !egment 5ocus, "ypes of loan facilities, !ingle

Borrower and group limit, (ending caps, Discouraged Business "ypes, (oan

5acility 3arameters and Cross %oarder +is'

#t should adopt a credit grading system all facilities should %e assigned a ris'

grade And the %orrowers ris' grades should %e clearly stated on credit

application

Approval authority should %e delegated to individual e.ecutives rather than

6.ecutive Committee4 Board to ensure accounta%ility "his system will not only

ensure accounta%ility of individual e.ecutives %ut also e.pedite the approval

process

All lending functions should %e segregated in the following way

Credit Approval 4 +is' Management

+elationship Management 4 Mar'eting

Credit Administration

"hey should avoid nepotism and favoritism,

"hey should improve relationship with Bangladesh Ban'



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"he segregation of duties will improve the 'nowledge levels and e.pertise in each

department

"he organization structure should have to %e changed to put in place thesegregation of the Mar'eting4 +elationship Management function from

Approval 4 +is' Management 4 Administration function

"he responsi%ilities of the 'ey persons of the a%ove function must also %e clearly

specified

"here should %e a +ecovery nit to manage directly accounts with sustained

deterioration "o encourage +ecovery nit incentive program may also

introduced

1.* Conclusion

During the internship program at &B( almost all the des' has %een o%served more or

less, for gaining 'nowledge a%out practical %an'ing and to compare this practical'nowledge with theoretical 'nowledge "hough all departments and sections are covered

in the internship program, it is not possi%le to go to the depth or each activities of

division %ecause of time limitation !o, o%ective of this internship program have not

%een fulfilled with complete satisfaction Eowever, highest effort has %een given to

achieve the o%ectives of the internship program



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credit risk management policy in national bank ltd

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