Report On CREDIT MANAGEMENT OF DHAKA BANK LIMITED

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Report On CREDIT MANAGEMENT OF DHAKA BANK LIMITED

EXCELLENCE IN BANKING

Executive Summary

The report is originated in result of internship programme which have done as a requirement of BBA program .This report is completed based on my three months internship in Dhaka Bank Limited. This is an orientation report that contains the real life day to day working experience of different tasks in Credit Department of Dhaka Bank Limited, Moghbazar Branch.

The objective of this study is to analyze the credit policy, client’s perception towards the performance of DBL, financial performance regarding credit etc. Dhaka Bank mainly deals with large corporate customers seeking large loan facilities. But for banks, loans are the largest and most obvious source of risk. Experience in recent years has shown that absence of proper management of such risk has resulted in significant losses or even crippling losses for a number of banking institutions. Effective credit risk management is therefore vital to ensure that a banking institution’s credit activities are conducted in a prudent manner and the risk of potential bank failures reduced. So, appropriate policies, procedures and systems should be implemented at each financial institution for identifying, measuring, monitoring and controlling credit risk effectively.

The first section of this report consists of an introductory part of this report, which has been developed for the proper execution of the entire report. In the second part, a brief description about the host organization of my internship, Dhaka Bank Limited, has been given. In the third part of this report consist of the working experience of the internship at Dhaka Bank Limited. The remaining part consist the analysis, findings, recommendations and conclusion.

After completion of analysis, it is found that DBL credit policy is quite lengthy & service Charge is quite high. . In year 201 the non performing loan is 3.45% which is more than other banks. Banks credit deposit ratio is increasing from previous year. That means bank can invest properly and utilize more funds to maximize their profit. Disbursement of loan and advances are increasing year by year. On the basis of findings it can be recommended for betterment that their loan sanctioning procedure should be less time consuming and monitoring should be striker.

Finally it can say that Dhaka Bank should strictly follow the principles of sound lending and they should make strong their credit monitoring department. Among the most important of these are honesty, reliability, thoroughness and willingness to always be open to new ideas and new ways of Meeting customer needs.

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

It has become essential for every person to have some idea on the bank and banking procedure. As our educational system predominantly text based, inclusion of practical orientation program is an exception to the norm. From practical knowledge, we will be able to know real life situations and start a career with some practical experience. Bachelor of Business Administration (BBA) is a professional course. The course is designed with an excellent combination of practical and theoretical aspects. After completing BBA, certain times are preserved for internship.

As a student of BBA, internship is an academic requirement. For internship every student is required to work in a selected institution to enhance ones practical knowledge and experiences. For the requirement of the course was assigned to Dhaka Bank Limited (DBL), Moghbazar Branch for my internship. In this situation was assigned to prepare report on “Credit Management of Dhaka Bank Limited.’’

Basically, this report is highlighted on Credit management of the bank, Structure, Analysis, Present status, Performance of DBL, Own Experience, Recommendation and Conclusion.

1.2 RATIONALE OF THE REPORT:

This report has been prepared as a requirement of the internship program. very glad for getting the opportunity to accomplish practical training in the Dhaka Bank Limited at the Moghbazar branch in Credit Division, 70, Outer Circular Road, Dhaka. My internship commenced from October 1, 2012 to December 31, 2012.

The Submitting report on “Credit Management of Dhaka Bank Limited”. For any Commercial Bank Corporate Customers is one of the main source of income and huge risk is also involved in it. So selecting the Corporate Customer is very important for any organization. Being an BBA student, major in Finance, this is my responsibility to examine the situation, how the Commercial Bank perform in selecting the Corporate Customers, where different types of risks are associated with it and how the Bank mitigate those risks. The report will definitely increase the knowledge of other students to know the banking industry of Bangladesh.

1.3. Objectives of the Report

· To analyze the “Credit Management of Dhaka Bank Ltd.’’

· To know the lending procedure of Dhaka Bank Limited.

· To analyze the work process and monitoring system of credit department.

· To appraise the actual recovery position of DBL.

· To review the state of default and reasons of default.

· To know the steps Dhaka Bank take against the client make default in payment of the debt.

· To point out some recommendation for improving the bank’s service.

· To illustrate the strength, weakness, opportunity and threat of DBL.

· To fulfill the requirement of the internship program under BBA program.

1.4 Scope of the Report

As was assigned to the Dhaka Bank Ltd, Moghbazar Branch, there is enough scope of the study. The report covers the topic “Credit Management of Dhaka Bank Ltd.” To conduct a study on Credit Management of Dhaka Bank, I have gathered valuable information from DBL, Moghbazar Branch and have also got some information from website of Dhaka Bank.

Despite this topic there are many sectors for working and analysis, like:

· An overview of Dhaka Bank Limited

· Financial performance of DBL

· Credit management scenario of DBL

· Comparison with other Banks.

· Procedure for different credit facilities.

· Portfolio (of Loan or advances) management of Dhaka Bank Limited.

· Organization structures and responsibilities of management.

· Each of the above areas would be critically analyzed in order to determine the efficiency of DBL’s Credit appraisal and Management system.

1.5 Methodology

Methods followed to perform a job or conducting activities to complete a task is called methodology. In conducting this study the following methodology was adopted in collecting data & information, preparation of reports etc. The methodology of report is given below:

1.5.1. Research Type

This is a Descriptive Research, which briefly reveals the overall activities of the Dhaka Bank Limited and also critically analyzes the “Credit Management” of this bank.

1.5.2. Sources of Data

To prepare this report all the necessary information collected from both primary and secondary sources of data.

· Primary sources

· Secondary sources

1.5.2.1. Primary sources of data

In the preparation of this report, data was collected from different primary sources. The techniques were used to collect data are:

· Observation

· Informal Discussion

1.5.2.2. Secondary sources of data

Secondary sources of data are of two kinds:

· Internal: Annual Reports of Dhaka Bank Ltd, Other published documents of the bank, Dhaka banks Website.

· External: Books, Articles, Journals, Newspaper, Web browsing.

1.5.2.3 Data Analysis

Both the qualitative analysis (SWOT analysis, Questionnaire analysis) and quantitative analysis (Financial data analysis, Ratio analysis, Customer Satisfaction Level Analysis, Five Year Financial Data Analysis) have been used to collect and analyze the gathered data. Besides this different types of software are used for reporting the gathered information from the analysis, such as- Microsoft Word, Microsoft Excel, Microsoft PowerPoint.

1.6 Limitations of the study

Though I have given utmost effort to prepare this paper but there are some limitations of the study. Such are as follows-

· The main constrain of the study was insufficiency of information, which was required for the study. There are various information the bank employee can’t provide due to security and other corporate obligations.

· Due to time limitation many of the aspects could not be discussed in the present report. Learning all the functions within just 90 days is really tough.

· Since the bank personnel were very busy, they could not provide enough time to me. Lack of opportunity to visit more than one branch.

· The functions and activities of Dhaka Bank are too vast, so they change their strategy day by day. As a result I can’t collect update information & strategy.

Chapter Two: Background of the

Organization

2.1 An overview of the organization

Dhaka Bank Limited is one of the leading private sector commercial banks in Bangladesh Offering full range of Personal, Corporate, International Trade, Foreign Exchange, Lease Finance and Capital Market Services. DBL had been widely acclaimed by the business community from small business to large traders and industrial conglomerates, including the top rated corporate borrower for forward looking business outlook and innovative financing solutions. The Bank offers the full range of banking and investment services for personal and corporate customers, backed by the latest technology and a team of highly motivated officers and staff. The Bank has launched Online Banking services (i-Banking), joined a countrywide shared ATM network and has introduced a co-branded credit card. A process is also underway to provide e-business facility to the bank’s clientele through Online and Home banking solutions.

Dhaka Bank is making loan and advances in different areas. The bank continues to explore and diversify its loan distribution with the objective of efficient use of resources and take utmost precaution to safeguard it. The main source of profit of Dhaka Bank comes from different types of loan and credit facilities. So the management of DBL should put a lot of effort in credit risk management.

2.2 History

The Dhaka Bank was incorporated as a public limited company on April 06, 1995 under the Companies Act 1994. The Bank started its commercial operation on July 05, 1995 with an authorized capital of Tk. 1,000 million and paid up capital of Tk. 100 million, Aiming at offering commercial banking service to the customers’ door around the country, Dhaka Bank Limited established 69 branches up-to this year. This organization achieved customers’ confidence immediately after its establishment in domestic and international markets. The Company Philosophy – “Excellence in Banking” has been preciously the essence of the legend of bank’s success. The Bank within a period of 17 years of its operation achieved a remarkable success and met up capital adequacy requirement of Bangladesh bank.

2.3 Mission and Vision of DBL

Mission

“To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking.”

Vision

“At Dhaka Bank, we draw our inspiration from the distant stars. Our team is committed to assure a standard that makes every banking transaction a pleasurable experience. Our endeavor is to offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments.”

“Our people, products and processes are aligned to meet the demand of our discerning customers. Our goal is to achieve a distinction like the luminaries in the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision – Excellence in Banking.”

2.4 Values of DBL

· Customer Focus.

· Integrity and Honesty

· Quality

· Teamwork.

· Respect for the Individual

· Responsible Citizenship

· Transparency and Accountability

· Environmentally Conscious

· High Morale

2.5 Goal

DBL people, products and processes are aligned to meet the demand of its discerning customers. Its goal is to achieve a distinction like the luminaries in the sky. Its prime objective is to deliver a quality that demonstrates a true reflection of its vision – Excellence in Banking.

2.6 Strategic Objectives

· To conduct transparent and high quality business operation within the legal and social framework.

· To provide customers continually efficient, innovative and high quality products with excellent delivery system.

· To generate profit with qualitative business as a sustainable ever-growing organization and enhance fair returns to shareholders.

· We are committed to our community as a corporate citizen and contributing towards the progress of the nation as our corporate social responsibility.

· Our employees are our backbone. We promote their well being through attractive compensation package, promoting staff morale through training, development and career planning.

· We strive for fulfillment of our responsibility to the government through paying entire range of taxes and duties and abiding the other rules.

· We are cautious about environment & climatic change and dutiful to make our homeland a green and clean soul.

2.7 Company Profile

Name of the company Dhaka Bank Limited

Legal form A public limited company incorporated in Bangladesh on April 06,

1995 under the Companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.

Date of Commencement July 05, 1995

Registered Office Biman Bhaban (1^st Floor) 100 Motijheel C/A,

Dhaka-1000 Bangladesh

Telephone +8802 9554514

Telefax +8802 9556584, 9571013, 9565011

SWIFT Code DHBLBDDH

E-mail info@dhakabank.com.bd

Web Page www.dhakabankltd.com

Auditors Hoda Vasi Chowdhury & Co.

Chartered Accountants

Tax Consultant Howladar, Yunus & Co.

Chartered Accountants

Managing Director Khondker Fazle Rashid

Company Secretary Arham Masudul Huq

Number of Branches 69

2.8 Ownership structure of Dhaka Bank Ltd

Owner’s Level:

Executives Level:

Office Level:

Chart-2.1: Ownership Structure of DBL

Source: Dhaka Bank website (www.dhakabankltd.com)

2.9 Management structure of Dhaka Bank

Chart -2.2: Management Structure of DBL

Source: Annual Report 2011(Dhaka Bank Ltd)

2.10 Risk management of DBL

Dhaka Bank’s risk management approach is emphasized not only for regulatory purpose but also to improve operational and financial performance of the Bank. The objective of the risk management is that the Bank takes well calculated business risks while safeguarding the Bank’s assets, its profitability from various risks.

Chart -2.3: Risk Management of DBL

Source: Annual Report 2011(Dhaka Bank Ltd)

2.11 Product/Service Offerings

The product/service offers by Dhaka Bank is shown below in a chart:

Chart -2.4: Product/Service Offering

Source: Dhaka Bank website (www.dhakabankltd.com)

2.12 Balance sheet

2.13 Profit and loss account

2.14 Cash flow statement

Chapter Three: General Activities of the Organization

3.1 General banking

Dhaka Bank Limited has a wide range of products and services in its assortment. These value based products are very much contemporary and standardized. All the products are very well thought-out and addressed to the very basic financial needs of the individuals and organizations. Its Retail Banking is under General Banking Department are described briefly next:

Retail Banking

DBL is a leading bank in the countries consumer banking arena. Emphasis on customer service, product innovation, asset quality and brand building are the cornerstones of the Retail Banking strategy. The major products and services of Retail Banking include:

Liability Products

Savings Bundled Product

Deposit Pension Scheme

Special Deposit Scheme

Deposit Double Scheme

Gift Cheque

Asset Products

Home Loan

Personal Loan

Vacation Loan

Car Loan

Any Purpose Loan

Services

Internet Banking

SMS Banking

Locker

ATM Card & VISA Credit Card

3.2 Documents for opening account

Required Documents for opening Different type of General Banking Account are given below:

· Photograph- 2 Copies

· Passport/National ID/Driving License

· Visiting card/company ID

· Tin

· Trade license (For Businessman)

· LOI (For service holder)

· Utility Bill (electricity/WASA/Gas)

· Partnership Deed (for partnership firm)

· Spouse- photo with signature, Attested by applicant

· Eligible photo with signature, Attested by the applicant, Visiting card, TI

3.3 Interest Rate paid to Deposit Accounts

Table-3.1: Interest Rate of Deposit Accounts

Source: Dhaka Bank website (www.dhakabankltd.com)

3.4 Remittance of DBL

DBL is continuously pursuing for improvement of its Remittance operation for smooth mobilization of fund from the NRB’s. For this, DBL is increasing its distribution channel. It has already started payment of remittance through two renowned NGO of Bangladesh-PAGE and PADAKHEP MANOBIK UNNOYON KENDRO, which added 250 distribution centers. It is also a member of EL-DORADO which is a 9-bank Elite Network for remittance distribution facility. It has already introduced Mobile remittance disbursement partnering with Banglalink.

3.5 Remittance Related Services of DBL

Local Remittance:

· PO/DD/TT/MT

· Collection of PO/DD/MT

· Purchase/Discount of cheques-Inland Bill

Local Collection:

· Under Clearing House

· Collection of Cheques/Clean Bills/Documents.

Foreign Remittance:

· Encashment of any foreign TT.

· Purchase of foreign Drafts.

· Encashment of any Foreign Currency Drafts.

· Issuance of Foreign Currency Draft.

· Cancellation of Foreign Currency Draft.

· Student File Opening.

· Collection of Clean Bill.

3.6 Loans and Advances

The Bank implemented the system of credit risk assessment and lending procedures by stricter separation of responsibilities between risk assessment, lending decisions and monitoring functions to improve the quality and soundness of loan portfolio. The Bank recorded a 19% growth in advances with a total loans and advances portfolio of Tk. 75,983million at the end of December 2011 compared to Tk. 63,591million at the end of December 2010.

Graph 3.1: Advances over the last five year

As of 31 December 2011, 1066.98 million compared to Tk. 1481.39 million of 2010. DBL ratio of nonperforming loans improved to 3.45% in 2011 from 4.57% in 2010.

Graph 3.2: Loan Portfolio

Chapter Four: Credit Management of Dhaka Bank Ltd

4.1 Credit Management of DBL

Credit is a contractual Agreement, in which a borrower receives something of value now, with the agreement to repay the lender at some date in the future. One of the basic functions of the bank is to deposit extraction and credit extension. And managing credit operations is the crying need for any bank. The objective of the credit management is to maximize the performing asset and the minimization of the non-performing asset as well as ensuring the optimal point of loans and advances and their efficient management.

The loan and credit department is one of the most important departments of any bank. The money mobilized from ultimate surplus units are allocated through this department to the ultimate deficit unit (borrower). Success of this department keeps a great influence on the overall profit of a bank. Again, Failure of this department may lead the bank to huge losses or even to bankruptcy. Like any other bank Dhaka bank’s credit division also tries to do their job perfectly.

4.2 Credit Policy of DBL

Lending being the most important function of commercial bank, every bank should have own Credit policy. The credit policy of Dhaka Bank Limited has been formulated of the plan of “ALL NEW LOANS TO BE GOODS LOANS”; the plan was formed on the basis of the following objectives:

· To maximize the profit of the bank by making sound lending.

· To deliver credit to viable borrowing at a reasonable cost.

· To provide satisfactory return on investment.

· To assist the social and economic development of the country.

· To deliver general banking services to the public and credit to viable borrowers at a reasonable cost.

But in DBL most of the lending officers are not familiar with their written credit policy or lending guidelines. They have got only some oral instruction from the senior management or in charge of credit. If all the lending officers of DBL thoroughly know and understand their credit policy it will be very helpful for them to do their job more efficiently.

4.3 Functions of Credit Division

Money lending is one of the main functions of a commercial bank. In the lending process, selection of borrower is the most crucial and vital job for a banker. Before a customer enjoys credit facilities it is important that the applicant should qualify for five Cs. The five Cs are:

· Character – Intention to pay back the loan.

· Capacity – Borrower’s competence in terms of utilizing the fund profitably and generate income.

· Capital –Financial strength to Lending cover the risk.

· Conditions – General business condition between two parties.

· Collateral – Implies additional securities.

In addition, objectives of the credit department are managing credit exposure of the bank, maintaining credit risk, compliance of Central Bank Ltd, recovering or Collecting dues of retail loans or advances. At present credit division performs following activities:

· Dealing with Corporate & Retail Credit

· Perform Collection and Monitoring Activity

· Support Recovery & Risk Management

Besides this, the activities of this department include managing the financial books of the bank, checking all entries of the book are according to standards, preparing daily reports for Bangladesh Bank, revenue appropriation and calculations, setting the internal pricing rates etc.

4.4 Different Types of Credit Facilities

There are different types o credit facilities offered by DBL from which some of are explaining

Below:

Overdraft

The word overdraft means the act of overdrawing from the Bank account. In other words, the account holder withdraws more money from the Current Account than has been deposited in it. The loan holder can freely draw money from this account up to the limit and can deposit money in the account. The Overdraft loan has an expiry date after which renewal or enhancement is necessary for enjoying such facility. Any deposit in the overdraft account is treated as repayment of loan. Interest is charged as balance outstanding on quarterly basis. Overdraft facilities are generally granted to businessmen.

Bill Discounting

Under this type of lending, Bank takes the bill drawn by borrower on his (borrower’s) customer and pays him immediately deducting some amount as discount/commission. The Bank then presents the Bill to the borrower’s customer on the due date of the Bill and collects the total amount. If the bill is delayed, the borrower or his customer pays the Bank a pre-determined interest depending upon the terms of transaction.

Term Loan

This type Banks lend money in this mode when the repayment is sought to be made in fixed, pre-determined installments. These are the loans sanctioned for repayment in period more than one year. This type of loan is normally given to the borrowers for acquiring long term assets.

Short Term loan

Term loan extended for short period usually up to One year is term as STL. This type of loan may or may not have specific repayment schedule. However STL with repayment schedule is preferable. Suppose, Short Term Agricultural Loan and Micro Credit are enlisted by Agricultural Credit division of Bangladesh Bank in its ‘annual loan program’. Loans disbursed in agricultural sector for a period not more than 12 months are also included in this category. Short term micro credits are the credits not exceeding BDT 25,000/- (taka twenty five thousand) only and repayable within twelve months.

Lease Finance

These types of finance are made to acquire the assets selected by the borrower (lessee) for hiring of the same at a certain agreed terms and conditions with the bank (lessor). In this case bank retains ownership of the assets and borrower possesses and uses the same on payment of rental as per contract. In this case no down payment is required and usually purchase option is not permitted.

Letter of Credit (L/C)

This is a pre-import finance which is made in the form of commitment on behalf of the client to pay an agreed sum of money to the beneficiary of the L/C upon fulfillment of terms and conditions of the credit. Thus at this stage bank does not directly assume any liability, as such the same is termed as contingent liability.

§ RETAIL: Retail loans are given for personal usage rather than for business purposes. It includes auto loan, personal loan, home loan and vacation loan.

Personal Loan

The objectives of this loan are to provide essential household durable to the fixed income group (Service Holders) and other eligible borrowers. Car loan, loan for house renovation, vacation loan, marriage loan and loan for household equipment well as entertainment products are governed by personal loan program. Depending on the size and purpose of the loan, the number of installments varies from 12 to 60 months. In DBL the minimum amount one can borrow under this facility is BDT 25,000 and the maximum amount is BDT 10, 00,000. Personal loan is given under personal guarantee of the borrower and another third parson known to the borrower. There is also a processing fee of 2% taken at the time of disbursement of the loan.

Who can apply: – Salaried Individuals

– Professionals

Age Limit: -Minimum Age of the Applicant: 21 Years

-Maximum Age of the Applicant: 57 Years

Loan Size: -Minimum loan amount : BDT 25,000.00

-Maximum loan amount : BDT 5, 00000.00

Interest Rate: 21.5 % per annum

Other Terms & Conditions: Minimum Gross Family Income: BDT 15,000.00

Car loan

Car loan provide for purchasing customer desired car.DBL provide car loan under Following condition.

Who can apply: – Salaried Individuals

– Professionals

Age Limit: -Minimum Age of the Applicant: 21 Years

-Maximum Age of the Applicant: 57 Years

Loan Size: -Minimum : BDT 3, 00,000.00

-Maximum : BDT 20, 00,000.00

Interest Rate: 19.5 % per annum

Other Terms & Conditions: – Minimum Gross Family Income: BDT 50,000.00

-Loan Facility for Brand New or Re-Conditioned Vehicle, not older than 6 Years.

-Vehicle should be for personal use only.

Home Loan

Home Loan is a term loan facility to purchase your desired home/flat. DBL also provide home loan under following situation

Who Can Apply: -Salaried Individuals

-Professionals

-Business Persons

Age Limit: Loans are only available to Bangladeshi nationals:

-Minimum age of eligibility : 21 years

-Maximum age of eligibility : 65 years

Loan Size: -Minimum : BDT 5, 00,000

-Maximum : BDT 75, 00,000

Tenure: Maximum 15 Years depending on the size and credibility.

Interest Rate: Depending on the size and tenure, Dhaka Bank Home Loan interest rates is 17.5% per annum

Security: Registered Mortgage of the House/Apartment

Govt. Charges: As per Government Specification.

Other Terms & Conditions:-Minimum Gross Family Income: BDT 40,000.00

CORPORATE

Any loan exceeding 1, 00, 00,000 BDT and issued for business and trade purposes is defined as corporate loan. Such loans mainly serve the purpose of initials for the establishment of industry or large scale factory.

Bank Guarantee

Bank Guarantee is one sort of non funded facility. Bank Guarantee is an irrevocable obligation of a bank to pay a pre-agreed amount of money to a third party on behalf of a customer of a bank. A contract of guarantee is thus secondary contract, the principal contract being between the beneficiary / creditor and the principal / principal debtor themselves to which guarantor is not a part. If the promise or the liability in the principal contract is not fulfilled or discharged, only then the liability of guarantor or surety arises.

Syndicated Loan

These are the loans usually involving huge amount of credit and such to reduce a particular bank’s stake. A number of banks / financial institutions participate in such credit, known as loan syndication. The bank primarily approached / arranging the credit is known as the lead or managing bank.

SME (Small & Medium Enterprise) Loans

This type of loan is disbursed for business purposes but the amount loaned does not exceed 1, 00, 00,000 BDT. The amount loaned here serves the purpose of potential (partial) working capital for small and medium business ventures.

4.5 Credit Rating Report

Dhaka Bank Limited was rated by Credit Rating Agency of Bangladesh Limited (CRAB) on the basis of Audited Financial Statements as on December 31, 2011. The summary of Rating is represented below:

Table-4.1: Credit Rating Report

Commercial banks rated AA3 in the long term are adjudged to be to be strong banks, characterized by good financials, healthy and sustainable franchises and a first rate operating environment. Commercial banks rated ST-2 in the short term are considered to have strong capacity for timely repayment.

4.6 Operational Guideline Different for Credit Facilities

Broadly, there are two types of loan such as-

§ RETAIL LOAN AND

§ CORPORATE LOAN

For each different types of loan, credit officer have follow different steps to accomplish credit activities appropriately. Each and every step is given below for various purposes of loan.

§ RETAIL LOAN: Retail loan can be classified into different types which are as follows-

1. Secured Overdraft (FO-FDR, DPS)

In case of Fresh loan:

a) Receiving customer Application (RFCL)

b) Receiving the Instrument (FDR, DPS) duly discharged by the client

c) Verification of the Instrument, signature verification & lien marking from General Banking Division

d) Preparation of Office Note

e) Preparation of Sanction Advice & get it accepted by the client

f) Obtain charge documents from the clients

g) Mail limit request form to Credit Admin, Head Office for limit insertion

h) Deduct charges

i) Stamping the charge documents

j) Entry of Security Documents in the SISO Register

k) Safekeeping of Security Documents in the Safety Vault.

In case of Renewal:

a) Receiving customer Application

b) Preparation of Office Note

c) Preparation of Sanction Advice & get it accepted by the client

d) Obtain charge documents from the clients

e) Mail limit request form to Credit Admin, Head Office for limit insertion

f) Entry of Security Documents in the SISO Register

g) Safekeeping of Security Documents in the Safety Vault.

In case of Enhancement:

a) Receiving customer Application

b) Receiving new Instrument (FDR, DPS) duly discharged by the client

c) Verification of the Instrument, signature verification & lien marking from General Banking Division

d) Preparation of Office Note

e) Preparation of Sanction Advice & get it accepted by the client

f) Obtain charge documents from the clients

g) Mail limit request form to Credit Admin, Head Office for limit insertion

h) Deduct charges

i) Stamping the charge documents

j) Entry of Security Documents in the SISO Register

k) Safekeeping of Security Documents in the Safety Vault.

In case of Reduction:

a) Receiving customer Application

b) Ensure outstanding has brought down (By cash or encashment of FDR)

c) Preparation of Office Note

d) Preparation of Sanction Advice & get it accepted by the client

e) Mail limit request form to Credit Admin, Head Office for limit reduction

f) Return of Original Instrument (if adjustment by cash)

g) Entry the release of Instrument in the SISO Register (Take client’s signature on the register)

In case of closing the Account:

a) Receiving customer Application with cheque book (if issued)

b) Ensure adjustment of outstanding liability (By cash or encashment of FDR)

c) Mail limit cancellation request form to Credit Admin, Head Office

d) Close the account

e) Return of Original Instrument (if adjustment by cash)

f) Entry the release of Instrument in the SISO Register (Take client’s signature on the register)

And Follow-up:

a) Issue Letters to the clients for renewal before one month of the expiry date.

b) Call the clients for renewal at least on week before the expiry date.

c) Issue Letters to the clients for payment of Interest/EOL within one week of each quarter end.

d) Call the clients for payment of Interest/EOL on regular basis.

e) Regular update of the spread in line with the change of FDR interest rate

f) Regular follow up of the EOL SOD Accounts so that outstanding does not exceed the security (encashment) value.

g) Regular follow up of the Expired SOD Accounts so that it does not become classified.

2. Personal Loan

Application & Disbursement:

a) Receiving customer Application in prescribed form along with required documents & Application fee.

b) Receiving CIB Undertaking for the Applicant & Guarantor along with fee

c) Scrutinize the Application Form & attached documents carefully

d) Forward the Application Form & CIB Undertaking to Head Office (if found in order and you are satisfied)

e) Follow-up the progress of the file in Retail Banking Division

f) Preparation of Sanction Advice & get it accepted by the client after getting approval from Head Office

g) Obtain signature on the charge documents from the client

h) Obtain 3 unfilled Cheques from the client

i) Ensure deposit of charges by the client in the link account

j) Disburse the Loan by transferring the amount to client’s Savings Account after completion of documentation as per H.O. approval

k) Stamping the charge documents

l) Entry of Security Documents in the SISO Register

m) Safekeeping of Security Documents in the Safety Vault.

Follow-up:

a) After disbursement, ensure regular payment of monthly installment by the clients

b) Prepare the overdue list in the first working day of every month

c) Call all the defaulting borrowers for recovery of overdue installments throughout month

d) Call the Guarantors if the client is unreachable over phone or if the client breach commitment of payment several times.

e) Issue 1st reminder letter to client if 1 installment due

f) Issue 2nd reminder letter to client if 2 installment due

g) Issue 3rd reminder letter to client & guarantor if 3installment due and forward the shadow file to Monitoring Unit, Head Office

h) Visit client’s residence if above procedure does not work,

3. Car Loan

Application & Disbursement:

a) Receiving customer Application in prescribed form along with required documents & Application fee.

b) Receiving CIB Undertaking for the Applicant & Guarantor along with fee

c) Scrutinize the Application Form & attached documents carefully

d) Forward the Application Form & CIB Undertaking to Head Office (if found in order and you are satisfied)

e) Follow-up the progress of the file in Retail Banking Division

f) Preparation of Sanction Advice & get it accepted by the client after getting approval from Head Office

g) Obtain signature on the charge documents from the client

h) Obtain 3 unfilled Cheques from the client

i) Issue Purchase Order in favor of the Car Vendor with other related documents

j) Obtain all required Car Documents (copy of Registration & Insurance cover note, Original Delivery Challan, Bill, Money Receipt, and Insurance Policy) and cross match those with the sanction & Quotation

k) Physically verify the vehicle (Reg. No., Engine No. & Chasis No.)

l) Ensure deposit of charges by the client in the link account

m) Disburse the Loan vide Pay Order favoring Car Vendor after completion of documentation as per H.O. approval

n) Stamping the charge documents

o) Entry of Security Documents in the SISO Register

p) Safekeeping of Security Documents in the Safety Vault.

Follow-up: Same as Personal Loan

4. Home Loan

Application & Disbursement:

a) Receiving customer Application in prescribed form along with required documents & Application fee.

b) Receiving CIB Undertaking for the Applicant & Guarantor along with fee

c) Scrutinize the Application Form & attached documents carefully

d) Visit the property to physically verify the possession & ownership and also obtain valuation Report by the Surveyor

e) Forward the Application Form & CIB Undertaking to Head Office (if found in order and you are satisfied)

f) Follow-up the progress of the file in Retail Banking Division

g) Preparation of Sanction Advice & get it accepted by the client after getting approval from Head Office

h) Obtain all land related documents from the client and get it verified by the lawyer (Vetting the Documents)

i) Obtain signature on the charge documents