Loan Recovery Performance of the Uttara Bank Limited

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“Loan Recovery Performance of the Uttara Bank Limited”

1.1 Introduction

The internship program is an opportunity for the students and it bears a great significant for us. It familiarizes the students with the practical business operations. The students of internship program get the chance to understand the real business world closely and familiarize themselves with internal and external expects of business. It gives them an opportunity to develop the analytical skill and scholastic aptitude.

All over the world the dimension of banking has been changing rapidly due to Deregulation, Technological innovation and Globalization. Commercial banks in Bangladesh have to keep pace with the change in global business. Now banks have to compete in market place both with the local institutions as well as with the foreign institutions.

To survive and thrive in such a competitive banking world, two important requirements are development of appropriate financial infrastructure by the central bank and development of “professionalism” in the sense of developing an appropriate manpower structure and its expertise and experience. To introduce skilled banker, only theoretical knowledge in the field of banking studies is not sufficient. An academic course of the study has a great value when it has practical application in real life situation. So, I need proper application of my knowledge to gate some benefit from my theoretical knowledge make it more tactful. When I engage myself in such fields to make proper use of my theoretical knowledge in my practical life situation. Such theoretical knowledge is obtained from a course of study at only the half way of the subject matter.

1.2 Objective of the Study

There are several types of objectives involve here for this study. The objectives of studies are

• ? To analyze the bank’s overall performance.
• ?To know about the loan strategy of Uttara Bank Ltd.
• ? To know about the services provided by the bank .
• ? To acquire the knowledge of practical operations and the function of the
• Bank.
• ? To gain an overall idea and know about the financial position of the bank.
• ? To find out the exiting problems of the bank (Branch).
• ? To recommend solutions to the existing problem.
• ? To show the trend of the key financial indicate faced by the bank branch.

1.3 Methodology

For the purpose of my study both the primary and the secondary information will be used for analyses.

Primary Sources

1. Personal observation.
2. Desk work in different section.
3. Discussion with the bank’s officers.
4. Discussion with my bank’s advisor/ supervisor.

Secondary Sources

1. Annual report of the bank.

2. Publication’s of Bangladesh Bank.

3. Different types of book related with banking.

4. Newspaper.

5. Website information.

Data Analysis:

For the purpose of my study, it requires analyzing the data on the bank. For these purposed the following techniques have been used.

1. SWOT Analysis.
2. Common size statement Analysis.
3. Ratio Analysis.
4. Statistical Method (Mean, Variability Measures & Standard Deviation) and
5. Trend Analys

1.4 Limitation of the study

To prepare this report, I have faced some limitations, which are mentioned in the follows:

Time Limitation

The main and the first constraints is time that hinder to cover all aspect of the study. In three month it’s not possible to cover learning about any bank properly and also going to write a report on this. So limitation of time is the main problem.

Lack of Data

If any one can wise than he can gather primary data to the banks employees. But this data is not proper for writing a report. Secondary data is also very rears. It is just only the annual report and the web site. But in the web site the information is updated and is properly given.

Limitation of Scope

While collecting data, the authority did not disclose much information due to the confidentially of the Bank

2.1 Historical background of UBL

Uttara Bank Ltd. has been a nationalized bank in the name of Uttara Bank under the Bangladesh Bank (Nationalization) order 1972, formally known as Eastern Banking Corporation Limited.

• » Uttara Bank ltd. started functioning from 28.01.1965
• » Consequent upon the amendment of Bangladesh Bank (Nationalization) order 1972
• » Uttara Bank ltd. converted into Uttara Bank ltd. as a public limited company in the year
• 1983 and obtained business commencement certificate on 21.08.1983.
• » Uttara Bank ltd. floated its shares in the year 1984.
• » Uttara Bank ltd. has 207 branches all over Bangladesh
• » The bank is listed in the Dhaka Stock Exchange Ltd. and also in Chittagong Dhaka
• Stock Exchange Ltd.
• » It publicly quoted company for trading of its shears.
• » The registered office of the Bank is located in 90, Motijheel Commercial Area, Dhaka-1000.

· Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. 207 branches at home and 600 affiliates worldwide create efficient networking and reach capability. Uttara is a bank that serves both clients and country.

· UBL is one of the largest private banks in Bangladesh.

• It operates through 207 fully computerized branches ensuring best possible and fastest services to its valued clients.

2.2 UBL Networks

The Head Office is located at Bank’s own 18-storied building at Motijheel, the commercial center of the capital, Dhaka.

Corporate Offices ( Corporate Branch & Local Office )	2
Regional Office	13
Worldwide Affiliates	600
Total Branches ( Including Corporate Branch & Local Office )	207
Authorized Dealer Branches	38
Treasury & Dealing Room	1
Training Institute	1
Man Power	3562

2.3 Board of Director

· Chairman- Mr. Azharul Islam

· Vice Chairman- Mr. Md. Asaduzzaman

· Director- Badrunnessa (Sharmin) Islam, Md. Mahfuzus Subhan, Mr. Abul Barq Alvi, Mr.

Faruque Alamgir, Col. Engr. M. S. Kamal(Retd.), Prof. Mirza Mazharul Islam, Prof. Sharif Md. Shahjahan, Mr. Syed A. N. M. Wahed, Mr. Shah Habibul Haque, Mr. Sk. Amanullah

· Managing Director- Shamsuddin Ahmed

· Secretary- Md. Fazlur Rahman

2.4 Executive Committee

Like other bank Uttara bank ltd. has also the Executive Committee. In their Executive Committee there have Chairman, Vice- Chairman, Directors, MD, and Secretary. Its shows below-

Chairman- Mr. Azharul Islam

· Vice Chairman- Mr. Md. Asaduzzaman

· Director- Mr. Md. Mahfuzus Subhan, Shah Habibul Haque, Col. Engineer M.S Kamal (Retd)

· Managing Director- Shamsuddin Ahmed

· Secretary- Md. Fazlur Rahman

List of the senior Executive

Managing Director- Shamsuddin Ahmed

Additional Managing Director- Md. Abdus Sattar

Deputy Managing Director-Md. Abdul Halim, Shaikh Abdul Aziz

Assistant Managing Director- Md. Abdul Matin

Consultant (Credit)- Shaikh Aminuddin Ahmed

General Manager- Md. Abdur Rashid, Abu Ahmed, Muinuddin Al Hussain, Niresh Chandran Das,Md. Nazmul Haque, Md. Fazlur Rahman, A.K.M. Idris Ali Faquir, Kazi Md. Monzur Hossain, Md. Abdul Hamid,

Narayan Chandra Basak, Sribash Chandra Sarker, Md.Selim Nazrul Hoque Chowdhury.

Performance of Uttara Bank Ltd.

Uttara Bank Ltd. closed the year 2009 recording significant growth in every sector despite various types of economic crises.

Head wise position of Bank’s invested Fund at the end of the Year 2009 is given below

Head of Investment	(Taka in million)
Treasury Bills and Bonds Approved Debenture (in purchase price) Prize Bond	22,182.9 151.0 10.2
Ordinary Shares: 1. Eastern Bank Ltd. 104.0 2. Karmasangsthan Bank 10.0 3. ICB (Approved) 31.8 4. CDBL 01.0 5. Other Companies 4.3	96.4
Total:	22,502.5

2.5 Human Resources and Training

The total manpower of the bank in different grades as on 31.12.2009 was under:

1.Executives (Assistant General Manager & Above) 2. Officers 3.Assistant Officers 4. Others	132 1,991 420 748	4.01% 60.50% 12.76% 22.73%
Total:	3,291	100.00%

2.6 Branch Position

Financial Position of the Branch (June-09)

From when I started here as an internship I expired that this branch is always over crowed with a lot of customers. This has promoted me to find out the financial position of the branch. Here I was able to extract the following data regarding the branch.

Particulars	Taka
Total Deposit	116,663,162
Total Advance	54,344,613
Profit/ Loss	5,708,143
Current account G/L Balance (30.06.08)	90
Cash Credit account G/L Balance (29.06.08)	19,042,085

3.1 Loan

In case of loan the banker advances a lump sum for a certain period at an agreed rate of interest. The entire amount is paid on an occasion either in cash or by credit in his current account, which he can draw at any time. The interest is charged for the full amount sanctioned whether he withdraws the money from his account or not. The loan may be repaid in installments or at expiry of a certain period. Loan may be demand loan or a term loan.

3.2 Loan Policy of UBL

One of the most important ways, a bank can make sure that its loan meet organizational and regularity standards and they profitable is to establish a loan policy.

Such a policy gives loan management a specific guideline in making individual loans decisions and in shaping the bank’s overall loan portfolio.

3.3 Loan Principles

· All Loan extension must comply with the requirements of Bank’s Memorandum and Article of Association, Banking Company’s Act, Bangladesh Bank’s instructions, other rules and regulation as amended from time to time.

· The bank shall provide suitable credit services for the markets in which it operates.

· It should focus on the development and enhancement of customer relationship.

· It should go those customers who can make best use of them.

· The conduct and administration of the loan portfolio should contribute with in defined risk limitation for achievement of profitable growth and superior return on bank capital.

· Interest rate of various lending categories will depend on the level of risk and types of security offered.

3.4 Loan Classification:

Loan classification is a process by which the risk or loss potential associated with the loan accounts of a bank on a particular date is identified and quantified to measure accurately the level of reserves to be maintained by the bank to provide for the probable toss on account those risky loan.

Loan may be classified with reference to elements of time, nature of financing and provision base.

3.5 Classification on The Basis of Time:

· Continuous loans

These are the advances having no fixed repayment schedule but have a date at which it is renewable on satisfactory performance of the clients. Continuous loan mainly includes “Cash credit both hypothecation and pledge” and “Overdraft”.

· Demand loan

Demand loan is used as one of the import finances. In opening letter of credit (L/C), the clients have to provide the full L/C amount in foreign exchange to the bank. To purchase this foreign exchange, bank extends demand loan to the clients at stipulated margin. No specific repayment date is fixed. However, as soon as the L/C documents arrive, the bank requests the clients to adjust their loan and to retire the L/C documents. Demand loans mainly include “Loan against imported merchandise (LIM)” and “Later of Trust Receipt”.

· Term loans

These are the advances made by the bank with a fixed repayment schedule. Terms loans mainly include “Consumer credit scheme”, “Lease finance”,” Hire purchase”, and “Staff loan”. The term loans are defined as follows:

• Short?term loan: Up to 12 months.

• Medium term loan: More than 12 months & up to 36 months

• Long?term loan: More than 36 months.

3.6 Classification on The Basis of Characteristics of Financing

Categories of loans offered by the bank UBL:

» Agriculture

» Large and medium scale industries

» Export

» Other commercial lending (Jute and fertilizer)

» Small and cottage industries

» Personal loan

» Consumer loan

» Others

Some other loans are:

a) Housing loans b) Residential c) Commercials d) Transport e) Cold storage f) Brick field g) Gold loans h) Against work order i) Against work (FDR) loan against sanchaypatar j) Loan against WEBD, ICB, unit certificate k)Loans against life insurance policy l) Other special program.

3.7 Sector wise position of loans and Advance as on 31.12.2009 (Taka in million)

	Public/ Nationalized	Private	Total
1. Agriculture : a)Crops b)Fisheries c)others	– – –	92.4 30.2 191.7	92.4 30.2 191.7
2. Industrial leading(Term): a) Large & Medium b) Small & Cottage	– –	5167.3 11.3	5167.3 11.3
3. Industrial leading (Working Capital): a) Large & Medium b) Small & Cottage	– –	545.6 25.7	545.6 25.7
4. Commercial Lending: a)Export b)Import c)Internal Trade	– – 10.5	858.4 3628.8 14439.3	858.4 3628.8 14439.3
5. Special Programmed: a)Consumer Credit Scheme(Uttaran) b) Personal loan Scheme c) Small Business loan Scheme d) Uttaran House Repairing and Renovation Scheme	– – – –	87.4 02.6 246.3 4263.6	87.4 02.6 246.3 4263.6
6. Housing: a)General Housing Building loan b)Staff Housing Building loan	– –	32.7 402.6	32.7 402.6
7. Leasing Financing	–	391.6	391.6
8. Others	–	5861.3	5861.3
9. Bills disconnected and purchased a) In Bangladesh b) Outside of Bangladesh	– –	3027.0 135.1	3027.0 135.1
Total: Loan & Advance	10.5	39440.9	39451.9

Sector wise Loans and Advances 2009

Agri(1%)	Hous(1%	Ind. Leading(15%)	Lease Fin(1%)	Coml Lead(48%)	Others(15%)	SpecialProg(11%)	Bills Dis& Purc(8%)
1%	1%	15%	1%	48%	15%	11%	8%

Sector wise Loans and Advances 2008

Agri(1%)	Hou(3%)	Ind. Lea(21%)	Lease Fin(1%)	Coml Lead(42%)	Others(11%)	Spe lProg10%)	Bills Disc & Purc(11%)
1%	3%	21%	1%	42%	11%	10%	11%

Sector wise Loans and Advances 2007

Agri(1%	Hous(2%)	Ind. Lead(35%	Lease Fin(2%)	Com Lead20%)	Others(13%)	Spe Progr(9%)	Bills Dis & Purc(8%)
1%	2%	35%	2%	20%	13%	9%	8%

Sector wise Loans and Advances 2006

Agri(1%	Hous(1%)	Ind. Lead(30%	Lease Fin2%)	Com Lead(22%)	Others(13%)	Spe Prog(9%)	Bills Dis & Purc(8%)
1%	1%	30%	2%	22%	13%	9%	8%

Sector wise Loans and Advances 2005

Agr(1%)	Hou(1%)	Ind. Lead(35%	Lease Fin(2%)	Com Lead25%)	Others(19%)	Spe Progr(13%)	Bills Dis& Pur(8%)
1%	1%	35%	2%	25%	19%	13%	8%

The loans and advances of the Bank grew impressively during the year 2009 with a growth of 6.22% Total loans and advances of Bank stood at Tk 39,451.4 million during the year as compared to Tk 37141.3 million of the previous year. Average loan per branch stood at tk 187.0 million. Separation of responsibility among risk management, leading decision and monitoring function is now being implemented more smoothly by the bank with a view to improving the quality and soundness of loan portfolio. The bank has rendered diversified and well structured advance portfolio due to emphasis on maintaining the quality of assets. Bank has participated in the syndicate business financing in the year 2009.

3.8 Personal Loan:

Personal Loan Scheme for Salaried Officers

? Emergency expenses for own marriage of a service- holder or his dependents.

? Emergency expenses of urgent surgical operation/ medical treatment.

Special Features

· Any permanent salaried employee aged between 20 to 55 years is eligible to get loan.

· No collateral security is required.

· Maximum Amount of loan Tk. 1, 00,000.

· Maximum period of loan upto 3 years.

Five year data of personal loan:

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
2.6m	2.4m	2.1m	1.9m	1.7m

Required Document

· Document related to applicants job to prove himself

· Two copies passport size photographs.

· Photograph of nominee (if any) dully attested by the account holder.

3.9 Uttaran Consumer-Credit Scheme:

Objectives

The objectives of this loan are to provide essential household durable to the fixed income group (Service Holders) and other eligible borrowers under the scheme. The abbreviated name of the scheme will be “Consumer”. In CCS, the work involves giving the clients loans on various schemes, such as car loan, household items, office equipment and entertainment products.

UBL started uttaran consumers credit scheme from 1996. UBL offers opportunity of financial assistance for-

· Motor cycle/car-New or re-conditioned.

· Refrigerator/deep freeze.

· Television /VCR/VCP/VCD.

· Radio/Two in one.

· Air condition/Waters cooler/Water pump.

· Washing Machine.

· House hold furniture.

· Cellular Telephone.

· Fax.

· Photocopier.

Five year Data of consumer Loan

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
87.4m	86.2m	80.4m	79.3m	78m

Five year Data of House Repairing Loan

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
4,263.00m	3,822.20m	3,694m	3,424m	3,131.50m

The Total amount of loans along with the duration in which these loans taken, need to be repaid is given below:

Type of Product	Loan Amount (Tk) Lac	Tenure
1. Vehicle	6.00	3 years
2. Household items	1.00	2 years
3. Office Equipments	2.00	2 years
4. Entertainment items	1.00	2 years
5. Others	Special Considerations	Special Considerations

3.10 Small business loan (SBL): For the genuine & hand working small enterprise who run their business with their own capital but for lack o0f capital cannot expend their business uttara bank limited has a loan scheme named “Uttara small business loan (USBL)”

Five year Data of Small Business Loan

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
1,025.00m	976.00m	920m	910m	899.00m

3.11 Medium enterprise Loan:

The Common balance sheet shows that the outstanding balance in this sector stands at TK. 7,764.5 million at the end of the year 2009 as against taka 6,975.1million of the previous year 2008.in 2007 it stood Tk.6,522.3 million, in 2006 it stood taka 6,320.5 million & 2005 it stood tk.6,310 million.

Five year Data of Medium Enterprise Loan:

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
7,764.50m	6,975.10m	6,522.30m	6,320.50m	6,310m

3.12 Women enterprise loan scheme “ Nari Swanirbor Rin Prakalpo “

Economic development is closely related to the empowerment of women . In Bangladesh the number of women – companies\ farms continue to grow. For smooth credit flow for SE Women enterprise Uttara Bank Limited is dedicated in helping the genuine Women entrepreneur having sincerity, honest & strong Deliberation to improve the banking habit of self employed women entrepreneurs to run any legitimate business smoothly with the help of bank finance by ofdfering a special business loan product named “ Nari Swanirbor Rin Prakalpo “

3.13 Agricultural Loan:

The Common balance sheet shows that the outstanding balance in this sector stands at TK. 314.3 million at the end of the year 2009 as against taka89.0 million of the previous year 2008.in 2007 it stood Tk.107 million, in 2006 it stood taka 75 million & 2005 it stood tk.60 million.

Five year Data of Agricultural Loan

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
314.3m	89m	107m	75m	60m

3.14 Proverty Alleviation Loan:

The Common balance sheet shows that the outstanding balance in this sector stands at TK. 3.5 million at the end of the year 2009 as against taka 2.1million of the previous year 2008.in 2007 it stood Tk.3.1 million, in 2006 it stood taka 1.9 million & 2005 it stood tk.2.00 million.

Five year Data of Agricultural Loan:

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
3.5m	2.1m	3.1m	1.9m	2m

3.15 Provision For Loan & Advance:

The Common balance sheet shows that the outstanding balance in this sector stands at TK. 91.01 million at the end of the year 2009 as against taka 81.01million of the previous year 2008.in 2007 it stood Tk.75.02 million, in 2006 it stood taka 70.21 million & 2005 it stood tk.73.12 million.

Five year Data of Provision For Loan & Advance

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
91.01m	81.01m	75.02m	70.21m	73.12m

3.16 Interest Income: The Common balance sheet shows that the outstanding balance in Interest income stands at TK. 4,492.4 million at the end of the year 2009 as against taka 4,084.3 million of the previous year 2008.in 2007 it stood Tk.3,550.2 million, in 2006 it stood taka 3,990.4 million & 2005 it stood tk.3,550.2 million.

Five year Data of Interest Income

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
4,492.40M	4,084.30M	3,550.20M	2,990.30M	2,100.40M

3.17 Interest Expenses: The Common balance sheet shows that the outstanding balance in Interest Expenses stands at TK. 2,790.4 million at the end of the year 2009 as against taka 2,200.5 million of the previous year 2008.in 2007 it stood Tk.2,000.2 million, in 2006 it stood taka 1,790.4 million & 2005 it stood tk.1,250.2 million.

Five year Data of Interest Expenses

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
2,790.40m	2,200.50m	2,000.30m	1,590.40m	1,220.40m

3.18 Net Interest Income: The Common balance sheet shows that the outstanding balance in Net Interest income stands at TK. 2,790.4 million at the end of the year 2009 as against taka 2,200.5 million of the previous year 2008.in 2007 it stood Tk.2,000.2 million, in 2006 it stood taka 1,790.4 million & 2005 it stood tk.1,250.2 million.

Five year Data of Net Interest Income

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
1,702.00	1,883.80	1,622.30	1,590.30	1,003.50

3.19 Syndicate Loan: The Common balance sheet shows that the outstanding balance in this sector stands at TK. 240.18 million at the end of the year 2009 as against taka 238.31 million of the previous year 2008.in 2007 it stood Tk238.12 million, in 2006 it stood taka 222.06 million & 2005 it stood tk.220.38 million

Five year Data of Syndicate Loan

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
240.18m	208.31m	198.12m	172.06m	120.38m

3.20 Bad Loan: The Common balance sheet shows that the outstanding balance in this sector stands at TK. 2,842.0 million at the end of the year 2009 as against taka 2,633.8 million of the previous year 2008.in 2007 it stood Tk1,980.0 million, in 2006 it stood taka 2,703.2 million & 2005 it stood tk.2,583.5 million

Five year Data of Bad Loan

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
2,842.00m	2,633.80m	1,980.00m	2,703.20m	2,583.50m

3.21 Credit Rating of the Bank

As per the BRPD Instruction circular No. 06 dated July 5, 2006 the Bank has done its credit rating by credit Rating Information and Service Limited (CRSL) based on 31.12.06 and the following rating was awarded.

Credit Rating Report (Entry Rating) on Uttara Bank

Particular	Long Term	Short Term
Current Rating	BBB+(Moderate Safety)	ST-3(Good grade)
Date of Rating	18.06.07	18.06.07
Validity of Rating	01(one) year	06 (six) month

3.22 Credit Evaluation Principles

In order to get the optimum returns from the deployed funds in different kinds of lending, more emphasis shall be given on refund of loans and advances out of fund generated by the borrower from their business activities instead of realization of money by disposing of the securities held against the advance which is very much uncertain and time consuming . Some principles or standards of lending are maintained loans in order to keep the risk to a minimum level and for successful banking business. The main principles of lending are:

Liquidity

Liquidity means the availability of bank funds on short notice. The liquidity of an advance means it repayment on demand on due date or after a short notice. Therefore, the banks must have to maintain sufficient liquidity to repay its depositors and trade off between the liquidity and profitability is must.

Safety

Safety means the assurance of repayment of distributed loans. Bank is in business to make money but safety should never be sacrificed for profitability, to ensure the safety of loan. The borrower should be chosen carefully. He should be a person of good character & capacity as well as bank must have to maintain eligible number of security from borrower,

Profitability

Banking is a business aims at earning a good profit. The difference between the interest received on advances and the interest paid on deposit constitute a major portion

of the bank income, besides, foreign exchange business is also highly remunerative. The bank will not enter into a transaction unless a fair return assured.

Security

The security offered for an advance is an insurance to fall bank upon incases of need. Security serves as a safety value for an unexpected emergency. Since risk factors are involved, security coverage has to be taken before a lending.

National interest

Banking industry has significant roll to play in the economic development of a country. The bank would lend if the purpose of the advances can contribute more to the overall economic development of the country.

Loan Administration

The functions of Loan Administration start after the sanction of a credit. UBL Loan Administration covers mainly maintenance of credit files and charge documents. Broadly Loan Administration of UBL engulfs the work of documentation and monitoring. Loan Administration of UBL follows some principles to deal with documentation, supervision, follow-up and monitoring.

Security against Advances:

The different types of securities that may be offered to a banker are as follows:

(a) Immovable property

(b) Movable property

• Pratiraksha Sanchaya Patra, Bangladesh Sanchaya Patra, ICB unit certificate, wage earner development bond.
• Pledge of goods
• Hypothecation of goods, produce and machinery
• Fixed assets of manufacturing unit.
• Shipping documents.

Five year Data of Deposit & Advance

Dec-09	Dec-08	Dec-07	Dec-06	Dec-05
59,387.30	50817	48312.2	52316.6	48512.9

The client’s management capability, equity strength, nature of scheduled work and feasibility study should be judiciously made to arrive at logical decision. If there is a provision for running bills for the work, appropriate amount to be deducted from each bill to ensure complete adjustment of the liability within the payment period of the final bill.

3.23 Credit Monitoring and Review

It is the last step in credit policy and procedure framework of UBL. Credit monitoring and review is very important, because it ensures proper utilities and repayment of bank fund. Credit monitoring and review feature of UBL is concerned was assessing the quality of different type of loan. Periodic review and follow up should, inter-aria aims at ensuring:

• That conduct (Turnover, regularity of repayment etc) of the borrowing account is during the period under review has been satisfactory or as expected.
• The account is not having excess over limit
• The terms and condition of the sanctioned letter are strictly followed.
• The value of the collateral security is adequate.
• There is not any unfavorable situation in market, economy and political conditions, which may endanger the reliability of the borrower account.
• The analysis of the borrower’s business performance and comparison of the projected and actual to find any deviations.
• Apparent profitability from the loans

4.1 Findings Of the study

In the middle of twenty first century here we are facing a heavy competition with each other. Here everyone is competing with each and every single point. So today’s business institution are moving forward to remember this concept. If any one has a week point than the rival party will take the opportunity and make a problem for the week intuition.

After complete my internship in The Uttara Bank, I realized that there are many problems and this may be a cause of huge loss or create a barrier for the future prospect. So the bank should taken care it very seriously.

The Problems for The Uttara Bank’s are:

(A) Security Problem

Now a days Uttara bank ltd. is one of the top performer bank in our country. But the security system is very weak. Because they have no security camera in the bank and of course the branch also which is very weak sector of Uttara bank limited

(B) Employment Problem

In current situation it would be the major problem of Uttara bank limited. The situation of too many heads but few heads must be eliminated for the future of the bank. In order to enhance the productivity of the work force at Uttara bank limited, the management must have to consider the appropriate amount of work force required and must assess the productivity of each employee. The employees who do not have many things to be done should be relocated or provision should be given to them for voluntarily retirement.

(C) Enhancement of Remuneration

The most important lacking of UBL that have to be improving immediately is Enhancement of remuneration. The current remuneration of Uttara bank limited in very poor, unimpressive and not capable to attract quality personnel to fill up its position. It have to be said that the foreign banks pay double that of Uttara bank limited and other private banks also pay a higher scale of remuneration than Uttara bank limited. It is the time the management should consider revising the remuneration package in order to attract the high quality human resource and of course to retain them in Uttara bank limited.

In course of my brief Bank’s career in UBL I found that a good number of employees are not working hour. This work force should be brought under utilization. The skill and experience of this section of employers should be utilized properly in the development of the Bank.

(D) Absence of Online Banking:

Today’s world is modern world, so here every one wants that they will do banking from their own house. The Uttara Bank does not have this kind of facilities. So if they implement online banking than they will gain huge popularity.

(E) Limited Number Of Branches:

The Uttara Bank has limited branches allover the Bangladesh. So if they want to do a vast business then they have to increase the number of branches.

(F) Limited ATM Booths of the Bank:

Uttara Bank has only five ATM Booths overall the Bangladesh. It is not enough, if any bank need to higher position in this competitive market.

4.2 SWOT Analysis for Uttara bank Limited

Strength

Weakness

1.Uttara Bank is one of the largest and oldest private-sector commercial bank in Bangladesh, 2. They have over two hundred (207) branch for customer service. 3. The bank has more than 600 foreign correspondents world wide. 4. They have over 3000 employees’ for ensure best possible and fastest services to its valued clients. 5. Uttara is a bank that serves both clients and country. 6. They have an 18-storied building at Motijheel of there own.

1. There banking system is not fully automation system. 2. There security (Security Camera) system has to improve. 3. There MIS is not so strong. 4. The absence of certain strengths may be viewed as a weakness. 5. They working system is know also manual system.

Opportunities	Threats
1. The external environmental analysis may reveal certain new opportunities for profit and growth. 2. They have a great opportunity of leading banking institution and to play a pivotal role in the development of the country though they have 207 branch’s.	Compete with the huge number of competitors in the market. Changes in the external environmental also may present threats to the firm. Going with new strategy would be risky.

5.1 Recommendation

Before drawing the end I would like to offer the following suggestions for bringing improvements of UBL.

· Ingeneral banking department they follow traditional system. The entire general

banking system is not fully computerized so an implementation of fully automated system is required.

· They are not using data base networking in information technology (IT) department. So they have to transfer data from branch to branch and branch to head office by using transferable disk. Such as –floppy which are risky?

· The Accounts opening procedure is not easier to the customers, so every branch have to need a separate desk for account opening.

6.1 Conclusion

Banking sector is the chief financial intermediaries in a country. It’s also true for Bangladesh. Uttara bank limited is a very challenging institution. In the age of globalization and free trade, the process and the system of running a bank is changing. UBL (Uttara Bank Ltd.) is continuously managing itself with this changing environment. The company strategies are clean and concise. The return is pretty good. If the company performs this way, we can expect that in near future Uttara bank limited may become one of the top performer in banking sector of our country. They are also able to contribute to our economy in better way. The working environment of the bank is impressive. It was also found that the bank (Branch) is doing better in most of the sectors and their performance is better than average. However during the year 2008 their investment is not sufficient. The investment during 2008 went down in comparison to that of the previous years. Finally it can be said that the bank is doing very good in the competitive market and if it can continue to perform this way it can become a leading banking institution which can play a pivotal role in the development of the country.