Credit Analysis-Including Learning Part

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INTERNSHIP REPORT
ON
Credit Analysis of Bangladesh Development Bank Ltd.

Page | 1

INTERNSHIP REPORT
ON
Credit Analysis of Bangladesh Development Bank Ltd.

SUPERVISED BY:
Md. Shofiqul Islam
Assistant Professore
Accounting & Information System
Jagannath University

PREPARED BY:
Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University

Date of Submission: February 26, 2012.
Page | 2

Letter of Transmittal
Date- February 26, 2012
To
Md. Shofiqul Islam

Assistant Professor
Accounting & Information System
Jagannath University

Sub:

Submission of Internship Report on “Credit Analysis of Bangladesh
Development Bank Ltd.”

Dear Sir,
It is my great pleasure to submit you my internship report on “Credit Analysis of
Bangladesh Development Bank Ltd.”. I have tried my best to complete this report
properly following the guidelines provided by you and concerned organization.
I have confidence that the internship program has increased both of my practical
experience and of theoretical knowledge largely. I will be obliged to answer any query
that may arise during the evaluation of this report. Therefore, I am eagerly requesting and
hope that you would be kind enough to accept my report and oblige thereby.

Sincerely Yours,
--------------------------

Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University

Page | 3

SUPERVISOR’S DECLARATION
This is to certify that the internship Report on “Credit Analysis of Bangladesh
Development Bank Ltd.” has submitted for the award of the degree of Masters of
Business Administration (MBA) major in ACCOUNTING & INFORMATION SYSTEM
(AIS) from Jagannath University, carried out by Nasrin Jahan of 2nd Batch bearing ID:
084624, under my supervision. To the best of my Knowledge and as per his declaration,
any part of this report has not submitted for any degree, diploma or certificate.

He is permitted to submit the Internship Report.

------------------Md. Shofiqul Islam

Assistant Professor
Accounting & Information System
Jagannath University

Page | 4

STUDENT’S DECLARATION
I, Nasrin Jahan, the student of Masters of Business Administration (MBA) 2nd Batch
bearing ID: 084624, major in Accounting & Information System (AIS) from Jagannath
University, would like to soberly declare here that an internship report on “Credit
Analysis of Bangladesh Development Bank Ltd.” has been authentically prepared by
me. While preparing this internship report, I did not breach any copyright act
intentionally. I am further declaring that, I did not submit this report anywhere for
awarding any degree, diploma or certificate.

--------------------------

Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University

Page | 5

Preface
Internship program is a sophisticated way for acquiring practical knowledge. The
main objectives of the MBA program are to create skilled professional for various
sectors. The department of accounting and information system is arranged this
program for MBA students.
This program is designed to meet the needs of each student who want to develop
their career as executives in the field of different business areas as well as teaching
and research positions in different institutions. But perfection dose not come only
form theoretical knowledge. To reinforce the theoretical knowledge acquired,
practical internship of three months in private business organizations, government
offices, public sectors, corporation, banks and non-bank financial institution is to
expose as in the organizational work situation.
After completion this program each student will submit a report on a particular topic on
the basis of their observation, experience and analysis. My selected topic is the “Analysis
of Credit Performance & Operational Aspects of Bangladesh Development of Bank
Limited.” My honorable supervisor & my favorite teacher Md. Shofiqul Islam also help
me to select this topic.
This report encompasses five chapters including a section of appendix. I have tried to
cover all aspects of BDBL to prepare an effective and useful report. I have enjoyed every
step in conducting the study. These Pragmatic knowledge and experience will help me in
my practical life. I expect that this report will be accepted as a true picture of Bangladesh
Development Bank Ltd. If any lacking prevails in my report, I have no objective to accept
it sincerely

ACKNOWLEDGEMENT
Page | 6

At first I would like to express my gratitude to almighty Allah for enabling me with the
strength and opportunity to complete the report within the schedule time
successfully.

I feel proud to express my gratitude from the core of my heart to Department of
Accounting and Information System for granting me the permission to take up practical
orientation in BDBL. I also feel proud to express my gratitude from the core of my heart
to my honorable teacher and supervisor of the internship program, Assistant Professor
Md. Shofiqul Islam
, And my honorable Chairman Professor Dr. Md. Ali Noor, Department of Accounting &
Information System, Jagannath University for his stimulating inspiration, proper
guidance, valuable criticism, sagacious advice’s and whole-hearted supervision to me in
preparing this report.
I am also grateful to my host supervisor of the internship program Md. Abdul Awal
Chowdhury, Deputy General Manager, Training department of Bangladesh Development
Bank Ltd. for his cordial help and co-operation during the internship program.
I am also grateful to all departmental heads and all other officials of various department
of BDBL for their co-operation, spontaneous help and cordial assistance in preparing of
the report.
Finally, I am grateful to Department of Accounting & information System, Jagannath
University, for giving me the opportunity to work outside for attaining practical
knowledge.
This report suffers from shortcomings but I have tried my level best to bring about all the
facts in comprehensive manner.
Thanks for all from core of my heart.

--------------------------

Nasrin Jahan
ID: 084624, Section: C
MBA, 2nd Batch
Accounting & Information System
Jagannath University

Page | 7

EXECUTIVE SUMMARY
In the backdrop of growing competition among commercial banks, Bangladesh
Development Bank Ltd. is one of the leading banks in the local market of our country.
Hence, this internship report is aimed at discussing the General Banking Activities &
Credit Practices on of Bangladesh Development Bank Ltd.
This report is broadly classified in six different parts. In part one introduction, Statement
of the research problem, Objective of the study, Methodology of the Study, Definitions of
terms used in the study, Literature review and Limitations of the study is discussed. Part
Two narrates the company profile including Background of BDBL, Corporate
Information, Organization Structure, Name of the Branches, Number of the employee,
their mission and vision, Services of the Bank, Principal Activities, SWOT Analysis,
Shares incorporated Bangladesh Development Bank Ltd. on September 29, 1999 under
the Companies Act 1994 as a Public Company Limited for carrying out all kinds of
banking activities. The Company issued Certificate for Commencement of Business on
the same day, granted license on October 05, 1999 by Bangladesh Bank under the
Banking Companies Act 1991, and started its banking operation on October 24, 1999.
Outside regular activities BDBL also takes part in different community services and
environmental management programs.
Part three forces on the Credit performance. It includes Sanction of term Credit, Sanctions
and Disbursement of Working Capital / Commercial Loan and Credit Recovered by the
bank.
In part four, Definition of loan performance and Sector wise loan performance analysis
BDBL describe briefly.
In part five, Practical Experiences Gathered through doing Internship in BDBL are
discussed.
After that, in part six, I discuss about the Findings & Analysis of the organization’s
performance. . Finally, I proposed some recommendation to improve the customer service
which will help the bank to survive in the competitive market.

Page | 8

TABLE OF CONTENTS
Particular
Title Page
Letter of Transmittal
Supervisor’s Declaration
Student’s Declaration
Preface
Acknowledgement
Executive Summary

Page no.
ii
iii
iv
V
vi
vii

viii

CHAPTER-ONE- INTRODUCTION
1.1 Statement of the research problem
02
1.2 Objective of the study
03
1.3 Methodology of the Study
04
1.4 Definitions of terms used in the study
04
1.5 Literature review
06
1.6 Limitations of the study
09
CHAPTER TWO- ORGANIZATIONAL OVERVIEW
2.1 Background of BDBL
10
2.2 Corporate Information
12
2.3. Organization Structure
13
2.4 Name of the Branches
15
2.5 Number of the employee
17
2.6 Vision of the BDBL
17
2.7 Mission of the BDBL
18
2.8 Services of the Bank
18
2.9 Principal Activities
20
2.10 SWOT Analysis
21
CHAPTER THREE- MAIN ACTIVITIES OF THE INTERNSHIP REPORT
3.1 Sanction of term Credit
24
3.2 Credit Application Received
24
3.3 Disbursement of Term Credit
3.4 Sanctions and Disbursement of Working Capital
3.5 Others investments
3.6 Projects implementation
3.7 Credit portfolio
3.8 Credit Recovered
3.9 Credit Sanction Form

24
25
25
25
26
27
28
Page | 9

CHAPTER FOUR- ANALYSIS OF LOAN PERFORMANCE
4.1 Definition of loan performance
30
4.2 Sector wise loan performance analysis BDBL
30
4.2.1 Food and allied products
30
4.2.2 Jute and allied fiber
31
4.2.3 Cotton and Woolen Products
32
4.2.4 Paper and Paper products
33
4.2.5 Forest and Wood Products
34
4.2.6 Transportation
35
4.2.7 Miscellaneous
35
4.2.8 Classified and unclassified loan at glance
37
4.3.1 Total Findings in brief
37
CHAPTER FIVE- PRACTICAL EXPERIENCES GATHERED THROUGH
DOING INTERNSHIP IN BDBL
5.1. Loan Operation Department
38
5.2. Project Implementation Department
39
39
5.3. Loan Recovery Department
5. 4. Law Department
39
5.5. Central Accounts Departments
40
40
5.6. Human Resource Management Department
CHAPTER SIX- FINDINGS & ANALYSIS
Given data for finding lack of credit range?
44
Problem in repayment period
45
Conclusion
47
Recommendation
47
Bibliography
49
APPENDIX-A1

Page | 10

Chapter - 1

INTRODUCTION
Present world is changing rapidly to face the challenge of competitive free market
economy. To keep pace with the trend banks need executive with modern knowledge.
Provide fresh graduate with modern theoretical and professional knowledge in banking
sector. Under this phase the students are sent to gather practical knowledge about
organizational environment and activities. The students also have to submit a report on
practical orientation in the respective organizations.
At first BDBL was started his activities in loan sector. But now organization increases
departmental activities. Now start commercial banking.
The low rate of economic growth, high rate of unemployment, illiteracy, growth rate of
population, low rate of credit recovery etc. are the impediment factor of economic
development of a country. Despite of this obstructed BDBL has shown a mediocre
performance.
Finally the bank try to establish profitable organization and contribute the social activities
by provide Banking service. It carefully listen to the market and business potentials, It is
assisting stakeholders to build a progressive, healthy, democratic and poverty free
Bangladesh.

Page | 11

1.1 Statement of the research problem
The internship program of MBA student of the faculty of business studies is a vital part of
MBA program. So we need proper application of our knowledge to get some benefit from
our theoretical knowledge to make it more effective.
We engage ourselves in such field to make proper use of our knowledge in our practical
life. Only when we come to know about the benefit of the theoretical knowledge, such an
application is made possible through internship. After compliance of the program period a
student must present the report on assigned topic to the supervisor and the department.
The program period is three month. During this period I worked with employees of the
organization. In consulting with my supervisor of the department and bank employee I
have selected a topic. My internship topic is “Credit management of Bangladesh
Development Bank Limited”
When start my work in credit sector create some Question. In the following given the
question list





What is the current position in credit sector?
What is the technological system?
What is the position of loan recovery?
What is credit performance of growing sector?

The purpose of BDBL is not only grant credit but also to develop the country economic.
So BDBL start general banking activities like another commercial bank. Not only
industrial development bank provide all social responsibilities.

1.2 Objective of the study:
In the following given the objective of the study. The objective of the study is to
find out the Loan Performance and general banking of BDBL








To know the loan and advance product of BDBL.
To know the Credit Grading Rating (CGR) System of BDBL.
To know the principles of lending.
To know the processing system of loan proposal
To justification Credit Information Bureau (CIB) Report.
Processing of loan sanction and disbursement.
Performing and Non-performing loan justification.

 To gather practical knowledge about the loan performance of a financial
institution.
 To develop knowledge about the reasons of making loan default by the
sponsors.
 To identify the lending risk of bank.
 To know the bank performance & efficiency in the field of Loan & advance
management.
 To identify the problems face by the bank in credit management.
 Suggest several guidelines to overcome these problems.
 To taking knowledge about general banking.
 To get an idea about the foreign banking system.
Page | 12

 To get a knowledge about bank performance in the social sector.
 To fulfill the requirement of the internship program under MBA program.

1.3 Methodology of the Study
For the prepare report collect more information from various sources. Such like Primary
source, Secondary source, Personal interview, Group interview
And another source.
In the following given the Primary source Data…
 Collect data from face to face communication in the loan department.
 Observe the loan holder behavior.
 Conversation with the Bank officers and staffs.
 To ready question for the clients collect primary data.
In the following given the Secondary source of data
 Annual report of the BDBL.
 Financial statement of the previous year of BDBL.
 Credit rating report of Bangladesh bank.
 Annual report of Bangladesh Bank.
 Banking journal and magazine.
 Daily news paper and financial journal.
 Previous internship report of the BDBL students.
 Web side of the Bangladesh bank
 Web side of the finance ministry.
 Web side of NBR.
 Web side of BDBL.

1.4 Definitions of terms used in the study
Given the details about terms and topics definition of the study in the bellow.
 Bangladesh Bank.
Bangladesh bank is our central Bank. It was established in 16 December 1971.All
banking sector are control by the Bangladesh bank. A part from the head office in Dhaka
it has nine more branches of which two Dhaka another are in divisional level .There are
more function of BB. Those functions are
 Issue of Banknotes
 Acting as banker to other bank
 Acting as banker to Govt.
 Credit control
 Money market control
Governor is the chief of Bangladesh Bank. First governor of the BB was
A.N.M.Hamidulla and current governor of the Bangladesh bank Dr. Atiur Rahman.
 Working Capital
Working Capital is current assets less current liabilities .When a company takes on new
projects the balance in the current assets accounts will often increase.

 Preparation of appraisal report:
The bank authority makes the report, which consists of three (3) types of analysis, is as
follows:
Page | 13

(a) Technical analysis
(b) Financial analysis.
(c) Economic analysis/market analysis

 Continuous Loan:
The loan Accounts in which transactions may be made within certain limit and have
an expiry date for full adjustment will be treated as Continuous Loans. Examples are: CC,
OD etc.

 NBR (National Board of Revenue)
The NBR is the central Authority for tax administration in Bangladesh.
Administratively it is under the internal resources Division (IRD) of the ministry of
Finance (MOF). MOF has 4 Division namely the Finance Division the Internal Resources
Division.

 Demand Loan:
The loans that become repayable on demand by the bank will be treated as
Demand Loans. If any contingent or any other liabilities are turned to forced loans (i.e.
without any prior approval as regular loan) those too will be treated as Demand Loans.
Such as: Forced LIM, PAD, FBP, and IBP etc.

 Fixed Term Loan:
The loans, which are repayable within a specific time period under a specific
repayment schedule, will be treated as Fixed Term Loans.
 Export cash credit :
Advance allowed as ash credit for processing goods for exports. The advance is
usually adjusted from export proceeds. The term PC (Packing Credit) is also used for
such advance.
 EBP :
Post export credit allowed against export bills. If the bills are drawn as per terms
of the L/C, the bank purchases the same and pay equivalent amount of the bill to the
credit of the client’s account. The advance is adjusted on realization of export proceeds
through foreign agent.
 Local Bill purchase:
Advance allowed against bills drawn under an inland L/C opened and accepted by
a local bank. Such local L/C is usually opened as back to back L/C against export L/C.
 Micro Credit:
BDBL Bank launched a Micro credit Scheme in 1994. Micro credit scheme provides
for the poor for generation of employment and income on a suitable basis particularly in
urban and suburban areas. The bank follows two systems of credit delivery.
 Litter of credit:
An undertaking by the bank to make payment to the seller subject to submission of
documents drawn in strict compliance with the stipulated terms giving title to goods to the
buyer/ bank.
Page | 14

 Credit Rating report:
Credit report should obtain for all sort of credit proposal. Single credit proposal
should not approve without having Clean CIB Report from Bangladesh Bank. In
compliance with the Bangladesh Bank, BDBL appointed credit Rating Information and
Service Limited to evaluate the Credit Rating of the bank.

1.5 Literature review
At the beginning of BDBL it name was Bangladesh Shilpa Bank it was the only
institution without whose support industrial project was impossible to build up. About the
entire industrial unit established up 1990 is the output of Shilpa Bank. It is the bank
whose main objective is to encourage and motivate the potential entrepreneur to setup the
new industry in the various part of the country. Bangladesh Shilpa bank offers loan with
the most attractive terms and condition for setting up industrial come forward and can
plays significant contribution in the development of the country.
Following signing of two vendor’s agreements with the Government in December 2009
BDBL established as a public limited company took over the undertakings and the
business of statutory bodies namely BSB and BSRS with all their assets.
When establish BSB their activities only limited by loan section. Then BSB and BSRS
made new bank Bangladesh Development Bank. Now BDBL increases are working area.
Now they are start general activities.
For my credit Analysis and my topics research follow previous some activities and found
out some statement .In the following given the main points of researcher view.
In the competitive environment of retail banking there is constant pressure to innovate
and develop new ways to improve Credit Management service. In the context of Credit
management service is “the long-term person-to-person relationship between a financial
institution, its distributors and its customer” (Wong & Perry, 1991). Credit management
service is considered as an important factor if a retail bank is to achieve a competitive
advantage (Kelley, 1990; Javalgi, 1992). The term “Credit management service” is used
today in the field of loan service management to describe a host of different but critically
interrelated activities. Some authors view loan service as all activities which bind a
corporation and its customers together to further a sales relationship (Hopkins & Bailey
1970; Christopher & Wills, 1974).
Lewis (1989) stated that in the financial services industry, the marketing key is now
face credit problem like the amount of consumer loans in a short-term basis.
Lehtinen and Lehtinen (1982) published some credit problem in the following show





Always keeps the goal of loan workouts firmly in mind: to maximize the bank’s
chances for the full recovery of its funds.
The rapid detection and reporting of any problems with a loan are essential: delay
often worsens a problem loan situation.
Keep the loan workout responsibility separate from the lending function to avoid
possible conflicts of interest for the loan offers.
Estimate what resources are available to collect the troubled loan.
Page | 15



Loan workout personnel should conduct a tax and litigation search to see if the
borrower has other unpaid obligations and many other processes.

According to the International Organization for Migration (IOM, 2004) there are
about three million Bangladeshi migrants working abroad sending remittances more or
less regularly to their families and friends at home. They are published some problem
about remittances, when this remittances deposited in bank and provide like loan.
Risk
.

Safety

Liquidity

National
Interest

Personal
Security

Assignment

Purpose

6 C’s

Primary And
Collateral

Lien

Profitability

Security

Pledge

Set off

Hypothecation

Guarantee

Diversification

Other
Factors

Mortgages

Insurance

There is always a requirement for banks to systematically and realistically identify their
problem assets and provide adequate reserves for possible losses. To accomplish this,
Bangladesh Bank issued guidelines in 1989 (vide BCD Circular No. 34, dated
16.11.89) regarding classification and provisioning procedure. Subsequently, a revised
policy was introduced in 1994 (vide circular No. 20, dated 27.12.94) to be implemented
by banks in five phases commencing 31st December 1994. The introduction of this
program was aimed at bringing loan loss provisioning and classification in line with
international standards by the end of 1998. Prior to 1989, there were no clear-cut policy
guidelines to enforce adequate provision by the banks. In the majority of cases, banks
simply did not identify problem assets, establish realistic provisions for potential losses or
suspend interest on non-performing assets. As a result, the balance sheet did not reflect
the bank's actual condition and the income statement overstated profits upon which
dividends and taxes were paid. However, during the mid-eighties a norm was fixed by the
Central Bank to raise the level of provisions by 0.5% of total loans each year till it
reached 4%. Obviously, it had no relation to loans classified. Interestingly, the banks on
the whole did not comply with this requirement. The situation ultimately led to
unreasonable developments regarding keeping of provisions by the bank CHOUDURY
ct al .1997 PP 43-4
Page | 16

Some of the researcher of Bangladesh bank and SEC .They are found out some credit
management problem area Those area are
● Economical sector
● Capital sector
● Labor sector
● Raw material sector
● Market
● Social condition
● Marginality
● Security
● Psychological sector
●Governmental sector
●Political sector
When BDBL was established only their activates area limited by loan sector. So all
researcher find out the loan term problem. Now a day BDBL starts their mission in
general banking. So I am a new researcher of the general banking in BDBL. Our team
works in the BDBL head office and branches and find out some problem in the general
banking. Those problems are
Lack of proper management and efficient management for credit system.
• Their operational system is manual so loan section face problem.
• Lack of modern technology
• Limited employee for general banking
• Transaction system is old method
• Lack of proper advertisement
• Lack of experience of foreign banking
• Limited branches
The financial analyst should have a clear idea as to what is intended to be achieved
through the financial report .The financial appraisal is directed to examine mainly the
following two aspects .Fund requirement to bring the project in to existence and the
probable sources from which the required funds will it goes into operation and likely
position of the concern with regard to its actual cash generation and its probable impact
upon the financial condition .The first aspect deals with the estimation of total of the
project and a suitable financial arrangement .The second aspect relates to the analysis of
production cost profit at different volume of production carried up to the year the project
attains its normal capacity operation.

1.6 Limitations of the study:
As a student prepare Banking report is so much difficult. Then I am trying to best
performance. But internship time is limited so learning scope is little. After completing
the institutional experience, practical performances in the formal stage become difficult.
So in performing this report my lack of proper knowledge greatly influenced in this
performance. Besides above, every study has some limitations. When I conduct my study
1 also had some problems. Those are as follows:






Lack of proper knowledge about banking sector.
Lack knowledge about modern technology. Such as Software ,core banking, and
another banking system
Co-operational problem.
Security problem.
Lack of available information and documents to support our study.
Page | 17







Unwillingness to give information
Limitation of time was one of the most important factors that shortened the
present study. Due to time constraints, many aspects could not by discuss in the
present study.
Lack of comprehension of the respondents was the major problem that created
many confusions regarding verification of conceptual questions
Up-to-date information was not available
Lack of problem to my site because now I am student so I have no details clear
idea about BDBL.

Page | 18

CHAPTER – 2

An Overview of the Organization
2.1 Background of DBBL
With decision of the Government, Bangladesh Development Bank Limited was
incorporate on 16 November 2009 as a Limited Company under the companies Act 1994
by merger of former Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rain
Sangstha (BSRS).Bangladesh Shilpa Bank was established in October 31, 1972 And
BSRS was established in October 31, 1972 according to President order No 129 and 128
of 1972.
In order to carry on business activities of BDBL Bangladesh Bank issued banking license
on 19.11.2009.
Tow vender agreements were singed between the government of the peoples Republic of
Bangladesh and the BDBL on 31 December 2009 to acquire and take over all of their
(BSB AND BSRS) assets benefits, rights, power, authority’s privileges, liabilities
.borrowings and obligations and carry on with the same business.
As a public limited company BDBL formally embarked its journey on January 03, 2010.It
extended financial assistance for set ting up industrial and provides all kinds of
commercial banking services to its customers through its branch network in Bangladesh

Page | 19

Corporate Information at Glance
(Information as per December 2010)
1.
2.
3.
4

Name
Legal Status
Date of incorporation
Banking Licensee obtained

5

Vendors’ Agreement Signed

6
7

Formal Inauguration
Registered Office

8
9
10
11
12
13
14
15

Authorized Capital
Paid up capital
Reserve
Total Assets
Total human Resource
Number of Zonal Office
Number of Branch Office
.Membership

16
17
18

Launching of retail banking
Corporate Tax Rate
Auditors

19
20
21
22
23

Legal Adviser & Consultant
Credit Rating Agency
Income Tax Advisor
Face Value per share
Web Site

Bangladesh Development Bank Limited.
Public Limited Company
November 16, 2009
November 19, 2009 issued by
Bangladesh Bank
December 31, 2009 between the
Government and Board of Directors of
BDBL nominated by the Government
January 03, 2010
BDBL Bhaban, 8, Rajuk Avenue,
Dhaka-1000
TK 1000 crore
TK 100.00 crore
TK. 2270 million
TK 16747 million
1025
4
21
Dhaka Stock Exchange & Chittagong
Stock Exchange Ltd
April 2010
42.50 %
MESSERS ACNABIN AND HUDA
VASI CHOWDHURY & CO
A. K. M. Nazrul Islam ,Bar-AT-Law
CRISL
K. M. HASAN & CO
TK.100.00
www.bdbl.com.bd

Note-All of the information are collect from HR Department and Economics Department
at 15 February 2012.

Page | 20

2.2 Corporate Information
Given the bellow whole list of the Board of Directors
S. No
1.
2.
3.
4.
5.
6.
7.
8
9.
10.
11.

Name
Prof.Shanti Narayan Ghosh
Mr. Dewan Nurul Islam
Mr. Niaz Rahim
Mr. Amalendu Mukherjee
Mr. Md.Khalil Rahman Siddiqui
Mr. M Ishaque Bhuiyan
Mrs. Selima Ahmad
Krishibid Moshiur Rahman (Humayun)
Md. Fayekuzzaman
Dr. Md.Zillur Rahman
Abdur Rahim Khan

Position
Chairman (acting)
Director
Director
Director
Director
Director
Director
Director
Director
Director
G.M. & Company
Secretary

Page | 21

2.3

Organization Structure
Management Hierarchy of BDBL
Chairman
Managing Director
Deputy Managing Director

General Manager
(Administration)

General Manager
(Operation)
DGM

AGM

Senior Principle Officer
Principle Officer
Senior officer (IT)

Officer
Officer(Cash)
Assistant officer Grade-1
Assistant officer Grade-2
Assistant officer grade-3
Supporting Staff
Supporting Sub Staff

Page | 22

Another Organization Structure

Page | 23

2.4 Name of the Branches
There are twenty one branches of BDBL. In the following given the branches list
and address

Branch Name
Principal Branch
Motijheel Branch,
Karwanbazar Branch,
Dhaka
Bogra Branch
Pabna Branch
Dinajpur Branch
Barisal Branch
Faridpur Branch
Mymensingh Branch
Comilla Branch
Noakhali Branch
Sylhet Branch
Rangpur Branch
Jhenidah Branch
Chitagong Branch
Rajshahi Branch
Khulna Branch
Narayanganj Branch
(Opening Soon)
Elephant Road Branch
(Opening Soon)
Khatungang Branch
(Opening Soon)
Ashuganj Branch (Palli
Branch, Opening Soon)

Address
8,Rajuk Avenue, Motijheel, Dhaka.
DhakaMotijheel, Dhaka.
12, karwanbazar, Dhaka.
Khan Plaza (2nd Floor), Chakjadu Road,
Badurtola, Bogra.
Bhai Bhai Super Market,
Abdul Hamid Road, Pabna.
(Current Charge)
Abedin Complex, Gonesh Tola, Dinajpur.
Dr. Sobhan Complex, 130, C, Sadar Road (2nd
Floor), Barisal.
Mojib Sarak Chamber Building, Nilltoli, Faridpur.
6, Samcharan Rai Road, Mymensingh.
Samobay Bank Bhaban, kandir par, commilla
460, Dakhin Bazar, Choumohoni, Noakhali
1375-kha Syed Complex 3rd Floor, Amborkhana,
Sylhet.
Asir Building, Station Road, Rangpur.
18, Moulana Bhasani Sarak, Jhinaidha.
Quecort' 106, Agrabad C/A, Chittagong.
108/6, kumerpara, Rajshahi
25/26,KDA Commercial Area, Uper Jessor Road,
Khulna.
10, S M Maleh Road( 1st and 2nd Floor), Tan
Bazar, Narayanganj.
99, Elephant Road, Dhaka.
6 Ramjoy Mohajan Lane, Asadgang, Khatungang,
Chittagong
Holding No-117, Station Road, AShuganj,
Brahmanbaria.

Page | 24

2.5 Number of the employee
Page | 25

We know that Present BDBL come from BSB and BSRS. When BSB operate their
banking activities only Loan section. And same activities were BSRS. So their employee
condition is limited size. But now they are start commercial activities. So need their more
employees. On the basis of HR Department of we know that their current employee
number is 1025. In the following given the details description of the BDBL employee list.

Name of the post
Managing Director
Deputy Managing Director
General Manager
Deputy General Manager
Assistant General Manager
Senior Principle officer
Principle Officer
Senior Officer
Senior Officer (I.T)
Officer
Officer (Cash)
Assistant officer Grade-1
Assistant Officer Grade-2
Assistant Officer Grade-2(c
Supporting Staff Grade-1
Supporting Staff Grade-2
Supporting Sub Staff
Total

Head
office

Zonal
office

Branch
office

Total

1
1
6
18
19
32
57
101
16
59
2
28
9
0
24
43
54
470

0
0
0
4
0
4
4
8
0
8
0
4
0
0
0
3
6
41

0
0
0
1
27
44
75
141
9
83
23
20
0
11
0
20
60
514

1
1
6
23
46
80
136
250
25
150
25
52
9
11
24
66
120
1025

2.6 Vision of the BDBL
To emerge as the country’s prime Financial Institution for supporting private sector
industrial and other projects of great significance to the country’s economic development.
Also be active participant in commercial banking by introducing new lines of product and
providing excellent services to the customers.

2.7 Mission of the BDBL
In the following given the list of mission of BDBL





To be competitive with other Banks and Financial Institutions in rendering
services ;
To contribute to the country’s socio-economic development by identifying new
and profitable areas for investment ;
To mobilize deposit for productive investment ;
To expand branch network in commercially and geographically important places ;
Page | 26








To employ quality human resources and enhance their capability through
motivation and right –type of training at home and abroad.
To delegate maximum authority ensuring proper accountability ;
To maintain continuous improvement and up-gradation in business policies and
procedures ;
To adopt and adapt to new technology ;
To maximize profit by strong, efficient and prudent financial performance ; and
To introduce new product lines according to market needs.

2.8 Services of the Bank
The bank is always committed to serve the clients with the best values and innovative
products and services to enrich its portfolio.
The Service list of Bangladesh Development Bank Limited is stated below:
1. DEVELOPMENT BANKING
• Industrial loan with emphasis on syndicate arrangement. Example-Power and
Energy, Telecommunication, Fiber Optic cable etc.
• Public private partnership (ppp) Project.
• Small & Medium Enterprise (SME)
• IT industry Development of Hardware and Software.
• Agro –based venture development on indigenous
• Green Banking
● Lease Financing
● Real Estate
2. COMMERCIAL AND FOREIGN EXCHANGE BUSINESS
(a) Deposit Service
●Savings Deposit Account-with cheque
●Savings Deposit Account-without
cheque
• Current Deposit Account
● Short Term Deposit Account
• Convertible Taka Account
● Non-Convertible Taka
Account
• Exporter's FC Deposit Account (FBPAR)
Current Deposit AccountBank
• Shor Term Deposit Account-Bank
● Fixed Deposit
● Other Special Saving Deposit
● 5 year term BDBL Sanchay Scheme (BDBLSS)
• 10 Year term Shikkha Sanchay Scheme (SSS)
• 10 Year term Chickisha Sanchay Scheme (CSS)
(b) Term Deposits
 Monthly Term deposits
 Term Deposit for 3 Months
 Term Deposit for 6 Months
 Term Deposit for 12 Months
 Term Deposit for above 12 Months
(c) Short term Loan
● Cash Credit (Hypothecation)
● Cash credit (Pledge)
• Secured Advances (General)
● Secured Advances (Financial
Obligation)
Page | 27

• Retail Banking


Consumer credit

● Personal Loan

● Trade/ Foreign Trade Financing
# Export Cash Credit
# Packing Credit
# Purchase of local & Foreign Documentary Bill
o Payment Against Development (PAD)
o Loan Against Imported Merchandise ( LIM)
o Loan Against Trust Receipt (LTR)

(d) Foreign Exchange
# Local L/C
# Import L/C
# Export L/C
# Foreign Remittance # Foreign Exchange Buy and Sale

# Bank to Bank L/C

(e) Other Banking Service
# Demand Draft Issue
# Selling of Prize Bond

# Payment Order Issue
# Selling of Saving Certificates etc

(3) Capital Market
# Share /Security
# Under writing of public Issues
# Brokerage Fund Service
# Mutual Fund Operation # Bankers to the Public
Issues

(4) Loans & Advances
* Loan against Trust
* Loan Against Accepted
* Agricultural Term Loan
* Other Term Loan
* Overdraft

* Consumer Credit Scheme
* Industrial Term Loan
* Lease Finance
* Small Shop Financing Scheme
* Secured Overdraft (SOD)

2.9 Principal Activities
The principle activities of the bank are banking and banking related activities. The
banking business includes obtain deposits through account opening, offer credit to
corporate organizations, as well as retail and small & medium enterprises, trade
financing, project financing, lease and hire purchase financing. The mode of banking
included conventional banking. It also performs merchant banking function under the
license by Securities and Exchange Commission, Dhaka, Bangladesh.
Another Principle activities of BDBL are
# Loan operation maintenance
# Economics and Research
# Documentation of data
# Procurement implementation # Loan
Recovery
# Compliance
# Law maintenance
#
Central Account Control # HR maintenance
# Provide MIS service # General
activities implementation

Page | 28

2.10 SWOT Analysis of BDBL
The SWOT Analysis identifies the strength, weakness, opportunities, and threats. This
analysis identifies these four elements to help to formulate strategy of a bank. SWOT
analysis also can use to understand the overall position of a financial organization.
SWOT analyses of BDBL Bank Ltd are as follows:
STRENGTHS: The following issues are key strength of BDBL Bank Ltd
 BDBL Bank is unique in its nature having both specialized and commercial
operation it is regarded as a Development Bank as well as commercial one.
 One of the fundamental objectives of BDBL Bank is to boost up small &
medium scale industries, which makes a special perception about the bank.
 Due to become a 100% government own bank it gets different facilities in home
and abroad.
 BDBL Bank Ltd has a veteran management team.
 Branches of BDBL Bank Ltd are located in important commercial areas.
 Online banking operation & any branch banking facility
 BDBL Bank follows supply leading finance.
 After merger BDBL recruit young and energetic person who are capable to
maximize use of bank resource.
 Govt. Support and Encouragement

Weakness:
 Decision making process is lengthy.
 Lack of competitive banking.
 Lack of promotional activities.
 Shortage of branches.
 Less diversified product and service line. The salary structure of BDBL is not
high enough related other commercial bank operating in Bangladesh.
 MIN/Internet/on-line service in BDBL is not upgraded, many of their works
through manually.

OPPORTUNITIES OF BDBL
 There are huge demand of micro-credit, small and medium scale finance.

Page | 29

 Bangladeshi economy is expanding rapidly, so the need of bank is growing up.
 There are opportunities of innovation in the Banking industry

THREATS OF BDBL
● More and less all the competitors in the baking industry are competent, so to
survive BDBL Bank need to do many more. In BDBL no. of defaults loan is 37%
which is real threats of bank business.
● Due to governmental institution many of banking decision bias by political
government.
● Too much interrupted by international assistance institution like World Bank, IMF,
WTO
Bangladeshi economy is getting more engaged with the global economy, so any
recessionary condition can hit the banking industry first.

Page | 30

CHAPTER- Three
Main activities of the internship report
This report prepare on the basis of Loan performance and General banking activities. In
following given the details loan performance and General Banking activities

Credit performance
3.1 Sanction of term Credit:
The bank has kept on sanctioning term loans during FY 2009-10 also. This is long term
local currency loan of taka 7285 million has been sanctioned to 55 projects and short term
loan of taka 1100 million to 215projects. Of the total sanctioned long term loan, taka
4928 is for 37 new projects and an additional loan of taka 2385 for 13 existing projects.
Table-1
Sanction of term loans
(million TK)
2009-2010
Nature of
the
project

2010-2011

Number Local Foreign Total Number of Local Foreign
of
Currency Currency
the project Currency currenc
projects
y

New projects
Existing
project
(BMRE)

46

1188
6

Additional
Loans
Rehabilitatio
n

8

Total

6581

Total

37

-

1183
6

6581

102

-

122

13

704

-

704

-

-

-

-

-

-

-

-

54

1296

-

1311

52

7285

-

7285

-

Source: Annual financial report 2010-11
3.2 Credit Application Received: In FY 2010-11 , the bank has received 46 new
proposals with loan amount of taka 181.12 core after proper scrutinizes. The bank
received 96 loan proposals with loan amount of taka 166.47 crore in FY 2009-10
3.3 Disbursement of Term Credit: In FY 2010-11 , the Bank has disbursed term loans
of taka 564 million in local currencies to 53 projects registering an increase in terms of
number of projects and amount of loan disbursement 23 and 10 percent respectively
over the previous financial year.

Page | 31

Table-2
Commitment and disbursement of term Credit
Commitment/
Disbursement

(Million TK)
2010-2011

2009-2010
Numbe Local
Foreign Total
r of
Currency currency
projects

Commitment

35

Disbursement

43

Number of Local
Foreign Total
projects
Currenc currency
y
714

485

-

485

53

534

-

Source: Annual financial statement 20010-11
3.4 Sanctions and Disbursement of Working Capital / Commercial Loan
During FY 2010-11, the bank sanctioned Working Capital loans of taka 105 million to 15
projects and disbursed TK.196million to 13 projects. The bank sanctioned TK.232 million
to 9 projects and disbursed TK.32 million to 7 projects in 2007-08.The financial year
under review has witnessed a fall in sanction but a rise in the disbursement of working
capital
3.5 Others investments:
During FY 2009-10 the bank has invested TK. 50.36 million to purchase shares from the
primary and secondary market which is higher by TK 15.55 million than those of the
previous financial year. During the same financial year, the Bank has earned an amount of
TK 27.16 million as capital gain, dividend and commission from share trading. In FY
2007-08, it was TK 10.53 million, showing a rise of 158 per cent 2009-10.
3.6 Projects implementation:
The bank intensively monitors and supervises implementation of its financed projects.
During FY 2009-10, 8 projects commenced trial run and commercial production and 30
projects are under different stages of implementation .Of these, 14 projects are under
construction, 4 have completed loan agreement and 12 projects are awaiting
documentation.

Stages of implementation of projects
Different stages of project implementation
2009-2010
Start of commercial operation

2010-2011

12

08

Under construction

25

14

Documentation completed

24

04

Awaiting documentation

11

12

Total:

60

16

Position of projects under implementation:

Source: Annual report 2010-11
Page | 32

534

3.7 Credit portfolio:
A t the year end of 2010 the total number of projects in the portfolio stood at 205 with
total loan outstanding of TK 725.63 crore. The total projects included 61 export oriented
85 import substitute and 59 service industries. In 2010, 38 projects with loan liabilities of
TK 118.30 core were liquidated. Among these 25 projects were from normal portfolio
while 13 projects were from the write off portfolio. During the reporting year 27 new
projects entered into the loan portfolio with loan liabilities of Tk.25.26 core in 2010. The
sector wise position of Banks loan portfolio was shown below in following table

Sector Wise Position Of Banks Loan Portfolio
For the year ended December, 2010
Sector
No of projects Total loan Outstanding (crore)
55
48.14
Food and Allied Products
3
26.61
Jute and Allied Products
60
535.63
Cotton, Woolen and synthetic textiles
Textiles
8
12.34
8
13.02
Paper, paper products and printing
Printing
2
31
3
8.04
Tannery and leather products
1
1.68
Non-Metallic mineral Products
1
2.51
Forest Wooden Products
8
0.19
Rubber and rubber products
1
11.37
Metal Products
8
4.47
Electrical Machinery and Goods
2
0.12
Machinery and Spare parts
2
0.90
Water Transport
15
41.17
Chemical and Pharmaceuticals
2
5.03
Petro Chemical Products
33
18.61
Service Industries
9
8.14
Miscellaneous
Total
221
768.97

3.8 Credit Recovered:
Recovery of loan is a crucial index to measure the success of a lending organization. Like
previous years, this year too. the Bank has strengthened its recovery drive realizing loans
and dues from its borrowers and notable success has achieved. Total recovers)' target of
loans during the FY 2010-11 is TK. 163.08 crore against which actual cash recovery is
TK. 170.52 showing about 106.54 per cent up to the target. During the reporting year,
outstanding loan of TK. 39.85 crore. Tk 23.56 crore classified loan and Tk 24.64 crore
from written off

Page | 33

RECOVERY OF LOANS DURING 2010 (in core)
Category of loans
Unclassified
Classified
Written-off
Total

Recovery Target
96.80
26.28
40.00
163.08

Amount Recovered
122.32
23.56
24.64
170.52

3.9 Credit Sanction Form:
For loan section must fill up following form with honestly and effective data.

Bangladesh Development Bank Ltd
Head office, Dhaka.

Loan operation Department
01. Project related information
01.1 Name of the Project & Address

:
: a. Office:
b. Factory:
:
:

01.2. Organization Structure
01.3. Product Mix
01.4. Trade License No. & Date
01.5. TIN & Date
01.6. Capital Structure of the company
a. Authorized Capital:…………
b. Paid up Capital:……….
c. Value of each Share:………..
01.7. Amount Application For
02. Management Aspect
02.1 Particulars of Directors/Shareholders/Owners/Partners:
SL.
Name of the sponsors Educational
% of share Position
No
with father& mothers qualification
name

03. Sponsors:
SL. No
Name, Age & Address
TIN
Presen Permanen
t
t

Relation

Declared
Net worth

Experience

04. Sponsors(s):
05. Sponsors(s) Liability:
06. Net worth in Tk…….. (Sl.No.4-SL. No. 5
07, CIB Report
08. Proposed Project Cost & Means of Finance:
(Tk. In “000”)
Page | 34

Sl No
(a)
(b)
(c)
(d)

Items
Land
Civil Construction
Machinery
Others
Total:

Sponsor(s) Equity

09. Details of Machinery:
Name of Machinery
Country Origin
10. Profitability:
Particular
Capacity Utilization
Net Sales revenue
Gross Profit
Net profit before
interest & Tex
Net Profit after tax

1st Year

Bank Loan

Total

Price

2nd Year 3rd Year

4th Year

:
:
:
:
:

11. Ratio:
Particular

1st Year

Gross profit to sales

:

Net operating profit to
sales
Net profit after tax to
sales

:
:

2nd Year 3rd Year

4th Year

11.1 Debt- Equity
11.2. Fixed Assets Coverage Ratio
11.3. Debt Service Coverage Ratio
11.4. Break Even Analysis
11.5. Financial Rate of return
12. Cash Credit Loan
12.1. Amount of cash credit loan to be required
12.2. Description of Collateral Security
13. Source of Equity
14. Remarks
Authorized Signature

Page | 35

Chapter-4
Analysis of Loan Performance
4.1 Definition of loan performance:
Financial soundness of all banks depends on the performance of its disbursed loan on
various sectors. Loan performance means how the loans were scheduled to act and how
they are actually acting. It is closely associated with timely and steady repayment of
interest and principal of a loan. A loan is said to be well performed when its repayment is
duly made. If a loan fails to be repaid duly for some consecutive period or installments, it
falls under the classification criteria.
4.2 Sector wise loan performance analysis BDBL:
4.2.1 Food and allied products:
Food and allied product sector is one of the improving sectors of BDBL. In the financial
year 2009-10, food and allied sector got 4% concentration of its total loan outstanding
amounting to a total of TK224 million.
Status of classified loan:
For the year 2009-10 food and allied sector classified TK38 million as bad loans,
representing 17%percent of the total outstanding whereas TK185 million is still
unclassified. Percentage of classified and unclassified loan is presented in the following
pie chart:
Graph:

Findings of the sector:
Though the percentage of classified loan is 17% but the total outstanding is still too high
in 2009-10, this sector got some improvements over the last couple of years. The
following chart shows the improvements

Page | 36

Graph:

Total bad loan of this sector in 2009-10 was TK 423 million but it was reduced to TK 172
million in 2008-09 and got a dramatic improvement in 2009-10 with a 78%fall to Tk.38
million. This sharp and continuous reduction in Bad loans indicates better loan
monitoring and administration in this sector.
From unclassified loans point of view, this sector also conveys some positive signal.
Unclassified loans with the reduction in bad loans, goes up from 66 million in 2007-08 to
185 million in 2009-10. In short, loans of this sector are performing better year to year
and demands constant concentration.
4.2.2 Jute and allied fiber:
Jute and allied fiber is that sector with which BDBL is going to close its operation.
Already bank has stopped sanction and disbursement in this sector only job of the bank is
to recover the amount of loan money which was given before. In 2009-10 this sector got
9%concentration and its loan outstanding amount is 535 million.
Status of classified loan:
For the financial year 2009-10this sector has classified TK 416 million as bad loan which
is 78% of total outstanding whereas TK 118 million is still unclassified. The view of the
classified and unclassified loan is given below:

Page | 37

Statusof Clasifiedloan in
2009-2010
22%
0

Unclassified
Substandard

78%

Bad & Loss

Findings of the sector:
This sector has 78% bad loan comparing with the total outstanding, though it is 78% and
seems too high hut if we analyze the previous year's data we will get some different idea
about this sector.
Graph:

500000
400000
300000

Unclassified

200000

Classified
Bad & Loss

100000
0
2009-2010

2010-2011

If we start talking about bad loan or classified section we see the difference year to year.
In 2008-09 the amount of bad loan was TK 530 million, in 2007-08 the amount was TK
424 million and in 2009-10the amount is TK 412 which is comparatively low than
previous years. But the decreasing speed is slow here.
If we see the diagrams here we see the amount of unclassified loan is increasing and its
growth rate is good enough. It was only TK 7 million in 2008-09 there was huge change,
it was TK 112 million which is 16 times more than previous year. And in 2009-10 TK
118 million is also good if we apply the growth of unclassified loan point of view.
4.2.3 Cotton and Woolen Products:
This is the prime sector among the sectors with those BDBL deals. Sanction,
disbursement and recovery all is good in this sector. This is the sector by which the
country earns most of its foreign income and it is playing a vital role since couple of
years. This sector is getting more concentration year to year 69% of outstanding in this
sector.
Status of classified loan:

Page | 38

In the year 2009-10the percentage of classified loan is TK818 million which is 19% of
total outstanding and 81% of total outstanding is unclassified which sounds good is of TK
3504 million.
Findings of the sector:
In 2009-10 the amount of bad loan was of TK 1588 million and in the year 2008-09 that
was of TK 948 million and in the year 2009-10it is of TK 818 million. So here

If we talk about substandard loan in the diagram, we see in 2008-09 it was of TK 110
million and in 2008-09 it was of TK .158 million and in 2009-10 no existence of this
class. So it indicates well because a class has dropped out.
In the consecutive years there is no significant change among the amount of unclassified
loan, which really proves better performance of this sector better planning, monitoring
and controlling of the bank.
4.2.4 Paper and Paper products:
Only 2%of total outstanding exist in this sector. This is the sector which is very important
for a country, if the sector falls then the country become dependent on import which may
not be good for a country.
Status of classified loan:
In this sector here the percentage of bad loan is 10% which is relatively low comparing
with other sectors and with total outstanding. The amount of bad loan is of TK 14 million
in 2009-10 where unclassified loan is 90% and it is of TK 125 million.
Page | 39

Findings of the sector:
In this sector the data gives us that kind of information which can be matter of hope. Here
he see, in 2007-08 bad loan was of TK 54 million, in 2005-06 the amount was TK 22
million and in 2009-10the amount is only 14 million. So the falling rate of bad loan is
60% and 37% in two consecutive years, a positive change in unclassified section.

Though in 2008-09 unclassified section showed negative signals and there was also a big
amount of doubtful loan but the bank has crossed the session and now is in good position.
In 2009-10 the unclassified loan is of TK125 million which is 76.8% more than the last
year, so it proves the great performance of the bank and demands such kind of
performance in all sectors.
4.2.5 Forest and Wood Products:
Though it is an important sector of the country but BDBL is not currently dealing with
this sector.
Status of classified loan:
There is no amount of outstanding loan in last two years and also classified and
unclassified loans.
Findings of the sector:
In 2008-09 there was only of TK 6 million bad loans in this sector. After that we see no
activities of this sector. BDBL need to consider the sector again not only for its
profitability but for the people who deals with this sector.

Page | 40

4.2.6 Transportation:
One of the most important sectors with which BDBL deals. This sector has a great utility
for communication purpose.
Status of classified loan:
19% of total outstanding is not bad when the amount of bad loan is falling year to year. In
2009-10the amount of classified loan was 13 million and the unclassified loan was almost
56 million.

Findings of the sector:
In 2008-09 the total outstanding amount was bad loan. the amount of bad loan was 15
million which was 26% of total outstanding and that year unclassified loan was 44
million, which was 78% of total outstanding and in 2009-10the difference between
classified and unclassified loan improved and turned into the proper way.

Page | 41

4.2.7 Miscellaneous:
When the outstanding amount of a section is 2% of total outstanding and the total amount
are classified then the sector is bad can be easily said.

Status of classified loan:
In the year 2009-10the total outstanding amount is 97 million and 96.5 million is bad
loan, so this is the section which is in danger.

Findings of this sector
In 2007-08, the amount of bad loan was 12 million; the amount of substandard loan was
69 million and the unclassified loan was 14 million which only 19% of total outstanding
was. In the year 2008-09, the classified loan was 76 and unclassified was 6 million only
and the final year the situation is 96 million bad loan and unclassified loan is only 7
million, and the ratio is 14:1. So BDBL need to take quick and effective initiative to bring
the sector from this kind of bad situation.

Page | 42

4.2.8 Classified and unclassified loan at glance:
BDBL deals with 18 sectors. 1 or 2 sectors are going to close by the bank because of loan
default, government policy, donor pressure etc, but the remaining sectors will run. So if
we look at the chart, we see 22% of outstanding amount is bad loan or we can say the
portion under classified section and the rest amount is unclassified.
4.3.1 Total Findings in brief:
In the year 2008-09, bad loan was 2975 million, doubtful loan was 46 million,
substandard loan was 193 million and unclassified loan was 4226 million, go by ratio the
situation was 1.3:1. substandard loan was 1.9 million and unclassified loan was 4122
million, the ratio was 2:1, and in the recent last year 2009-10 , the ratio is 2.63:1, so
considering the previous situations, comparing the performance of year to year, the bank
is performing good now and their loan performance is coming in control

Page | 43

Page | 44

CHAPTER-5
Practical Experiences Gathered through doing Internship in an
Organization.
1. Loan Operation Department
This Department is the first day of BDBL.A Senior Principle Officer is my guide officer
for day working.
As a development bank, BDBL primarily remains committed to committed to provided
industrial financing. Bank formulated a lending policy with a view to providing speedy &
efficient services to clients in a consistent manner.
Loan Section
# At first an Application form is supplied to the entrepreneur for tk 3000 only.
# After filling up Application form And ready Project Appraisal letter.
For achieving loan an investor must fulfill two steps
Step -1
1. Information form (Particulars) for issuing loan application form, an investor
must fulfill this from and then submitted it loan operation department. If all
required information fulfilled correctly by investor as required of department,
department judge this given information within their rules & regulation.
2. Loan application from if investor given information in particulars form are
correction then he/she collect loan application form paid of Tk.3000. Investors
then fulfills all required information needed in application form and submitted it
department along with a feasibility report of his/her proposed project.
Step – 2
In this step department judge application form information given by investor and make a
project appraisal fill (including technical aspect, market condition, financial ratio,
management information) and also judge different ratio related to project. Department
also ensure utility service availability that’s why they informed an enquiry committee
which committee judge all information given in application form (land position,
management position, utility service availability, CIB report etc). After judging all
information and if given information are correct for sectioning loan, loan operation
department then pass loan fill next department along with all documents and their
approved signature.
Loan section power of different persons is distinct in policy
For private ltd. Company
MD – 5 corers, DMD – 3corers, GM – 2.5 corers, 4 Zonal DGM – 1.5 corers, Branch
manager – 1 corer, Above 5 corers loan consider by board of directors
For proprietorship/partnership company
MD – 2.5 Corers, DMD – 1.5 corers, GM – 1.25 corers, DGM – 75 laces, AGM – 50
laces, Above 2.5 corers loan consider by board of directors.
SME
Bank also provided SME loan with a 12% interest rate for manufacturing company and
14% interest rate for service and trading company. Amount of SME loan 50 thousand to
50 laces which is approved by credit committee consists of 4 GM as consultant officer.
Page | 45

For SME loan investor need to provide application form along with TIN number and
treading certificate.

2. Project Implementation Department
In this department our guide teacher is Md.Khalid Hossain (D.G.M).
After all documental worked completed by documentation department, documentation
department then pass application form in favour of procurement & implementation
department for final approval. Procurement & implementation department then done all
necessary work, and sing an agreement paper. In an agreement paper normally following
thing are include:







Definition of the project

● Scope of the agreement

Reference

● Price

Modes and terms and payment

● Re-inspection

Operation and putting into force of the contract

● Liabilities

Submission of document
● Termination ● Arbitration
Procurement & implementation closely observed all work of the project in whole life and
section loan, implement project work.

3. Loan Recovery Department
This is the important department for loan section. Our guide teacher name is Md.Yaqub
Ali, Deputy General Manager. He is more cooperative person
Loan recovery is held responsible for recover amount of loan along with interest of loan.
Loan recovery remove hurdle related to recovery amount. This department always
maintains connection with investor for loan recover. Any investor if failed to paid any
amount of loan this department communicate them and inform them for collecting loan &
interest amount as per rules of loan recovery. Some time an incumbent situation recovery
department gives an opportunity to investor for paying his/her portions some time delay.
But if an investor modes of payment always delay then recovery department deals with
him/her according rules & regulation, if recovery department failed to recover their
amount under their rules & regulation they will pass it Law department to deals with
investor.

4. Law Department
Md. Anisur Rahman who is my guide teacher.
When department loan recovery department failed to collects their amount of loan in
normal procedure then law department negotiate the situation with clients with the help of
court or by law.
BDBL has 47 advocate panels for different who are experienced in different Act. To deals
with all the case of BDBL in court, lead by a barrister. To collect borrowed fund BDBL
normally applied following Act.

1.
3.

The Money Laundry Act.2003

Public Demand Recovery Act. 1987
1881

2.The Bankruptcy Act. 1997
4.Negotiable Instrument Act.

Page | 46

5. Central Accounts Departments
For proper functioning accounts department complete their work by 11 sections, each
section done separate jobs for complete accounts department works.
• Not due section
• Accurately list prepare list of balance sheet.
• Advice sending to borrower
• Quarterly , Monthly, Half yearly, Yearly by interest charge.
• Policy & General section – (make policy different kinds of policy.
• Accounts section – (financial statement)
• Salary section – (salary sheet, welfare fund)





Investment section – (loan, SME, bridge, debenture, school banking, deposit,
Green banking, equity loan, support)
Provident fund section

● Pension section

Bill section
● BBR (Bangladesh Bank Return section)
• Reconciliation section (inter branch transaction)
• Treasury & fund management – everyday transaction
Accounts department collects information/data time to time those department and makes
final statement of BDBL.

6. Human Resource Management Department
Ashraful Islam (Manager) ,BDBL
To assess & collect compatible personal who will be perfect for the bank
 To prepare & implement policy about human resources & related activities
 To take program & implement for developing human resources
 To control the administration of human resources of the bank
 To make appointment, promotion & appraising skill of officer & staff
 To make service rules, administration rules & others rules for proper
controlling of staff
Page | 47

 To communicate stakeholder or interested party for proper implementation of
labor law
 To section of staff loan for house building motorcycle and monitor thus loan
 To assess & grant retirement facilities at the time of retirement

CHAPTER-6
Finding of analysis
The 3 (three) month internship program has been going to be finished through writing a
report. During the time of internship I have tried with my best to acquire theoretical and
practical knowledge banking business and the investment Sector.
While working at Bangladesh Development Bank Limited, Head office and Principal
Branch I have attained a newer kind of experience with credit procedure and general
banking as well. After collecting and analysis data I have got some findings and
recommendations. These findings are completely my personal view of point, which is
given below:
● Bank’s gives loan depends on customer relationship with the bank; otherwise in
case of new client they take more time to understand client’s activities.
● There is some problem in maintaining the IT support to Banking activities.
● The total number of branches of BDBL Bank limited are fewer then their position
in the banking area. Though BDP support is a plus point of them but they have to pay a
huge amount for each transaction. So they need to increase the branches in all over the
country that they can able to earn more profit.
● Given data for finding lack of credit range?

Page | 48

Credit Range

Tally
///////
/////

Absolute
Frequency
7
5

Relative Frequency in Percentage
(%) form
18%
12%

Below 50,000
50,001-5,00,000
5,00,001-10,00,000

////////////////

16

40%

10,00,001100,00,000

////////////

12

30%

Findings: From the question no.8 highest 40% respondents have taken loan within range
Problems
Tally
Absolute
Relative Frequency in
Frequency Percentage (%) form
Lengthy loan sanctioning
process
High Mortgage Charges
Both lengthy loan
sanctioning process and high
mortgage Charges
No problem faced
Others

///////

7

18%

////
///////////////////////
/

4
24

10%
60%

/////

5
0

12%
0%

Findings: It is found that highest 60% respondents had faced problem of both lengthy
loan sanctioning process and high mortgage charges. Only 12% respondents did face any
problem during availing the credit. Normally it takes three weeks to eight weeks to
sanction a loan which very lengthy indeed. The loan sanctioning is a long procedure. So
many customers are unsatisfied. The bank mortgage charges are very high. It takes more
than ten thousand taka to one-lac taka mortgage charges and other cost for making deed
also includes insurance charges depend on the value of the property. The customers of
small loan might get demoralized
● Problem in repayment period.
Repayment Period

Tally

Absolute
Frequency

12 Month
24 Month
36 Month
48 Month
60 Month

////////////////
//////
/////
//////
//////

17
6
5
6
6

Relative Frequency
in Percentage (%)
form
42%
15%
13%
15%
15%

Finding: It is found that highest 42% respondent’s repayment period is one year; 15%
respondent’s repayment period is 24 month; 13% respondent’s repayment period is 36
month; 15% respondent’s repayment period is 48 month and the rest 15% respondent’s
repayment period is 60month.
● The bank provided most of the credit facilities in the large loans BDBLally for long
terms and also gave some personal loans too. It mainly focuses on these sectors because
Page | 49

of high profitability and security. But if one of the clients fails to repay the loan then the
bank will be in serious trouble.
● The bank’s overall recoveries in different sectors are very encouraging. But recovery
from the working capital & import sector and from transport loans, staff loans, and
secured overdrafts etc. sector is much higher than the large loan and other sectors
● Some common problem in our country basis on Banking sector. Those Sectors are
 To abuse Political power for loan sector.
 BDBL all of the management and employee are old model basis and manual basis.
 Lack of problem about GOVT policies.
 Loan recovery policies are not strong.
 Lack of Law for credit recovery and credit distribution
 More corruption

CHAPTER –SEVEN
Conclusion and Recommendation
Bank and financial institutions can be compared with the heart of an economy, if the
circulation of money is not normal the economic growth will be hurdled. Bangladesh is a
growing economy, it is growing in every aspect in every day, to help to continue this
growth credit flow, credit circulation, and credit recovery should be smoothen. In order to
increase more employment, set up new industrial unit, boost up export earning, increase
the inflow of FDI, Diversify export, and increase the productivity credit facility must be
extended. Proper credit management can give the strength a bank to increase the flow of
credit facility, so in coming days I hope bank and financial institutions of Bangladesh will
be more efficient in managing credit risk, and will be able to extend the credit facility to
different sectors.
If this report can improve the existing condition of sanctioning procedure, and is
implemented, my little initiatives will get a breathed satisfaction because I poured effort
which I could.

Recommendation
Page | 50

Recommendations of these report has been made on the basis of the research findings of
the credit facilities of BDBL.It is very difficult to recommend about this topic because of
research restrictions and unavailability of data. Despite these problems there is something
that the credit department of BDBL,Head Office should look at.

To create better client the bank should increase
the amount of consumer loans in a short-term basis.

Most of BDBL loans are in the large sector. If the
performance of that sector crash then the bank will fail to continue though the profit
is very high. So, the bank should provide more loans of small scale in different
sectors though it will decrease the profit a little. But it will be very safe.

In the bank there is a credit risk analysis division.
But their activities are rarely seen. This division has to work more and have to point
out which sectors are profitable and which sectors are risky.

In case of loan against mortgage, the client
should register the land to the bank in the terms that if the client fail to pay off the
loan than the bank can capture the land without notifying the court.

In case of mortgage loan, if anybody sues against
the land the person should put 50% of the land value to the court.

The person, who works in Special Asset
Management Department, should include in credit approval board.

Credit approval board should include Bangladesh
Bank person.

More training should be conducted for the
bankers to improve their analytical ability and professional standard and other tools
and techniques in selecting the borrowers and analyzing the loan proposals.

Authority should be delegated to the lower level
with adequate measures for the necessary control and follow-up for making the
lending decision and recovery

One proper standard procedure should be
developed for all types of clients and no interpersonal relationship should be
involved in approve a loan

Bank should fixed-up specific types of client
strategy according to the different character of client.

Interest income occupies the major part of the
total earnings of a bank and bank’s profitability mainly depends on interest earning
capacity, so bank should establish a research and development cell for the purpose
of lending analysis and recovery of loans.
o The bank should go for long-term investment.
o If possible the credit limit of C.C.S should be increased.
o The bank should take much lower security if possible.
o Reduce the all political power capacity.
o Reduce corruption
o Increase HR capacity in credit section.
o To prepare new credit policy.
o Loan recovery system is manual basis so prepare new process.
o Change old model technology system and introduce modern technology.

Chapter-Eight
Page | 51

Reference
1. http:// www. bdblcom.bd
2. Bangladesh Bank guidelines on loan classification.
3. Different Project Appraisal report of BDBL.
4 .Loan sanctioning letter of BDBL.
5. Bangladesh Development Bank Ltd. Ordinance 1972.
6. http://bdbl.com/company_profile.php
7. Human resource manual from BDBL
8. Several Booklets & Newspapers, Leaflets, Brochures, Synopsizes etc from
BDBL.
9. Ricky W. Griffin, “Management”, 9th Edition
10. David A. DeCenzo & Stephen P. Robbins (1999), “Personnel/Human Resource
Management”, Third edition, Prentice Hall: Londo.

Appendix
Appendix No -1

Page | 52

Page | 53

Appendix No -2

Page | 54

Appendix No -3
For the practical problem overcome and my report prepared create some question .When
create any question then my BDBL all officers solve my problem. Some time
communicate bank client for specific for data or question. In the following given the
important question for internship purpose

Question for customer.
Q.- Are you satisfy in BDBL technological support?
Q.- What is your Statement about change structure from BSB and BSRS?

Question for bank officer and Management
Q - What do you think about their training programs?
Q.- Are you satisfy in your changing process .
Q - How satisfied are you with the salary? .
Q - How do you feel about working in this environment?
Q.- What is the source of capital of BDBL.
Q.- What is the method of their accounting system?
Q - How do your colleagues feel about Management?
Q.- What is the source of worker?
Q.- What is the other income source of the bank?

Questionnaire for Customers
Dear Sir/Madam,
I need your valuable opinion for my internship research project that I am currently doing in
Bangladesh Development Bank Limited. It will be an immense help if you take the time to fill in this
questionnaire. This study will be used to improve the service quality of Bangladesh Development Bank
Limited and my academic purposes. I thank you in advance for your kind cooperation.
General

Information

Name: _____________________________________________ Age:
____________
Address:
_____________________________________________________________ Page | 55
Occupation:

Dear Sir/Madam, Please fill the following questions accordingly

Perception
Strongly

Statements

in
Strongly

the

Reliability

Dimension

Disagree

agree

1. When your bank promises to do something
by a certain time, it does so.

1

2

3

4

5

6

7

2. When you have a problem, your bank shows
a sincere interest in solving your problems.

1

2

3

4

5

6

7

1

2

3

4

5

6

7

1

2

3

4

5

6

7

1

2

3

4

5

6

7

3 Your bank performs the right service at first time.
4 Your bank provides its services at the time it
promises to do so.
5. Your bank keeps you informed about when services
will be performed.

STATEMENT IN THE RESPONSIVENESS DIMENSION
Strongly
Strongly
Disagree
6. The employees in your bank give you prompt service.
7. The employees in your bank always willing to help you.
8 The employees in your bank are never
too busy to respond to your request.
Statements
9.
10.
11.
12.

in

the

agree

1
1

2
2

3
3

4
4

5
5

6
6

7
7

1

2

3

4

5

6

7

Assurance

The behavior of the employees of the bank inspires
confidence in you.
You feel safe in your transactions with your bank.
The employees in your bank consistently courteous with you.
The employees in your bank have the knowledge to
answer your questions.

Dimension

1
1
1

2
2
2

3
3
3

4
4
4

5
5
5

6
6
6

7
7
7

1

2

3

4

5

6

7

Page | 56

Statements
13.

in

the

Your bank gives you individual attention.

Empathy

Dimension

1

2

3

4

5

6

7

14. Your bank has employees who give you individual attention.

1

2

3

4

5

6

7

15. Your bank has your best interests at heart.

1

2

3

4

5

6

7

16. The employees in your bank understand your specific needs.

1

2

3

4

5

6

7

Statements

in

the

Tangibles

Dimension

17. The bank has modern-looking and hi-tech equipments.

1

2

3

4

5

6

7

18. The bank’s physical facilities are visually appealing.

1

2

3

4

5

6

7

19. The employees of the bank appear neat.

1

2

3

4

5

6

7

20. Materials associated with the service (such as signs or
statements) are visually appealing at the bank.

1

2

3

4

5

6

7

21. Your bank has convenient business hours.

1

2

3

4

5

6

7

Page | 57

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