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We are the students of the University of Rajshahi, Department of Finance and Banking. According to the rules of Rajshahi University (in BBA) we were sent in some organizations to acquire some practical knowledge that is called internship. As a student of Finance and Banking we are to complete our internship program mainly on Financial organization; Banking sector are given preference here. This time for internship we were divided in some groups, eight students in a group were sent in Rajshahi Krishi Unnayan Bank, Greater Road Kajihata branch to complete our internship. We were given 90 days to complete our internship program which was not enough to get overall practical knowledge on banking sector. But as a student of Finance and Banking we tried hard to get on over all idea on banking sector from RAKUB. We are very much grateful to our honorable teacher, Zubair Ahmed, Assistant General Manager of Greater Road Kajihata Branch of RAKUB, other officials and workers who helped us in many ways during the whole period of our internship program.
Department of Finance and Banking
What does Internship mean:
Practical training is necessary to achieve complete knowledge about something. Learning of the in and outs of the practical experience engaging on the basis of activities is called internship. In another word, practical training or internship means to acquire knowledge and information investigating organization. Internship is an assigned work performed usually at the end of the BBA course curriculum. The goal of internship is to apply one’s theoretical knowledge in practical fields. Thus internship is a pragmatic program of achieving practical experience by engaging oneself in different organizations. From the above discussion, it can be concluded that internship is the way to acquire practical experience through working in the practical field. 1.3. Importance of Internship: An internship provides the student with a greater understanding of career demands and qualifications. It allows the students to understanding the connection between what is studied and how it is applied in the world of work. Practical work increases our real knowledge. At the end of our theoretical study, we are working for practical training. Thus it enhances the student knowledge. Internship program is the way of implementing the theoretical knowledge practically. However, the importance of internship is stated as follows: Practice makes a man perfect-truthfulness of such can be achieved practical training. Internship program helps to increase the quality and effectiveness of the trainer.
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It mentally prepares for their professions. It acts as guideline during the service period. Perfect conception about business / accounting procedure in various industries and business concern may easily be earned. To innovate new techniques of management. To enact different policies for the over all development of the institutions. To make the skill labor. It facilitates thinking about problem of apply my theoretical knowledge in the field of action. By internship program students can under and limitations, shortages and tractability of their knowledge and thereby can take necessary action for removing these limitation and shortages. Last of all we can say that, one should importance of an internship program.
1.4. Objectives of the study: The objective of internship is to earn practical experience about definite subject. It helps to achieve practical knowledge and experience. The main objective of internship training is to discover answer to
questions through the application of considerable procedures. Main objectives are given below: To know the functions or service to customers. To understand administrative structure of RAKUB.
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To know in what types of project financing by RAKUB. To understand loan sanctioning procedure along with general banking system of RAKUB. To identified problems faced by both the bank and the clients in loan management. To Put some suggestions on the basis of the findings of internship program to improve the existing situation. To implement the knowledge of practical training in the post service life.
1.5. Scope of the Study: It has been mentioned earlier, the main focus of the study is “Performance of Loan Disbursement and Recovery” of Rajshahi Krishi Unnayan Bank (RAKUB),with special reference to Greater Road Kajihata Branch, Rajshahi . The report gives an overview of Rajshahi Krishi Unnayan Bank. There is an one elaborate chapter on RAKUB’s loan Recovery performance . This study will also present some problems and recommendation to solve those problems of Rajshahi Krishi Unnayan Bank.
1.6. Methods of Data Collection: Methodology is a systematic procedure, which is used to solve a problem easily in a practical area. It covers collection, measuring, analyzing and interpreting of data to lead decision i.e. methodology includes why a study we have been undertaken.
Department of Finance and Banking
There are two sources of data one is Primary source of data and another is Secondary source of data. I have used both the sources for collecting data.
1.6.1. Primary data collection Method Primary data was collected from Rajshahi Krishi Unnayan Bank. To prepare a report, I have collected data and information by following way: 1.6.1. a) Questionnaire method To collect information for my practical training at first, I made a questionnaire with the help of my honorable supervisor. After preparing the questionnaire I collected the information and data from the officers, personnel and other concerned people of my targeted bank.
1.6.1. b) Interview Method I have collected the information and data through interview. I have taken interview of the officers, executives and supervisors and they all responded all of questions friendly.
1.6.1. c) Observation Method I was present physically in every department of Rajshahi Krishi Unnayan Bank, Greater Road Kajihata Branch for the purpose my internship training period and observe all the functions. From this observation and with the help of my practical knowledge, I have collected some information and data about the bank.
Department of Finance and Banking
leaflets. iv) My diary maintained while undergoing the practical orientations.7.2. compilations etc. foreign exchange operation and credit policies. v) vi) vii) Some published and unpublished research report. special savings scheme. entitles. the concerned data & information are not always be presented to others. ix) Documents. Secondary Data Collection Method The only source of secondary data was official record of bank. As secrecy of rules and regulation in accounting is must for every institution. Department of Finance and Banking 6 . 1. But it can not achieve easily. regarding general banking functions. There are some problems in this activity. magazines and papers. Others sources of secondary data are as follows: i) ii) iii) Annual reports of RAKUB Periodical Published by RAKUB Various books.1. Books.6. Limitation of the Study: There is no doubt that practical training is essential to acquire a complete knowledge in related fields. which are as: Observation of activities is a difficult task. viii) Public records and statistics. Business and technical journals .
As secrecy of accounting is a must for an institution. So I had to conduct with all functions within short time. Another problem is lack of necessary elements and aspects practically becomes difficult. The concerned data and information are not always mutually presented to evaluate the institution. It needs sufficient financial support. It was very short time to complete this internship program properly. Time of data collection was not sufficient. For this reason. The total time period of the orientation was a weeklong working days. The given time is not enough for this program becomes. this program needs at least three months Department of Finance and Banking 7 . but we can not get this support.
Besides catering to agricultural credit. Department of Finance and Banking 8 .CHAPTER TWO RAJSHAHI KRISHI UNNAYAN BANK 2. 1987. The north-west region comprises of 16 districts of entire Rajshahi and Rangpur administrative division with on area of 34. The region is the driest and poorest area with a high population density and low rate urbanization (13%) while property is consented in the country side with 59% of the rural population suffering from various degrees of deprivation. financing agri-business and agrobased industries and poverty alleviation programs the bank performs commercial banking functions.513 Sq. RAKUB took over the operations under (Bangladesh Krishi Unnayan Bank) BKB within the administrative division of Rajshahi along with its assets and liabilities.As the largest development partner in the northwest region Rajshahi Krishi Unnayan Bank aims at overall development of the farmers and all the sectors and sub-sectors of agriculture in this region. Introduction: The name of the institution is Rajshahi Krishi Unnayan Bank (RAKUB). RAKUB is playing a vital role both in agricultural and development as well as eradication of poverty.1. a state owned financial institution established under the president order no. Especially RAKUB is the largest source of agricultural credit in Rajshahi Division. km. Rajshahi Krishi Unnayan Bank (RAKUB). RAKUB was established in 1987. and estimated population of about 28 million. To overcome the problems and improve the condition of the poor. 58 of 1986 the bank started functioning on March 15.
In this circumstances Shar-e-Bangla. 2. In 1952 Pakistan government established “Agricultural Development Finance Corporation” (ADFC) to disburse loan in agriculture sector. Rajshahi Krishi Unnayan Bank was established. In adequate access to credit among other resources is crucial barrier to the farmer’s of the improve upon their productivity. This area contributes more than 30% to the food grain production of Bangladesh. moneylender etc. many farmers who were engaged with the exploitation by the moneylenders and landlords. Pakistan Period: In 1947 the Indian sub-continent was freed from the British colonial rule and in the Indian sub-continent originated by the two independent states namely India and Pakistan.184.108.40.206. Historical Background of RAKUB: Rajshahi Division is considered to be a vital area in respect to country agriculture productivity.2. As a result. Department of Finance and Banking 9 .K. As a result.2. A. breathed with peace. British Period: In the British regime. Bangladesh was indicated as East Pakistan as a part of Pakistan. Fazlul Haque established “Rin Salishi Board” for the sack of farmers. 2. all the belongings of the farmers were sold in the bid and they had to stay with much difficulty. the people of bangle was included in the “Dadon” business of indigenous landlord. For this reason. What is needed is unlimited and sustainable flow of credit to improve them against low productivity.
for that reason they lend from their relatives and friends. This institution provides state facilities to the farmers in many ways. For that reason the consciousness of people is increased. in 1973. established a financial institution named “Pakistan Krishi Bank”. The president’s ordinance number – 27. 2. institutional loan demand of farmers increased. But now bank offer various types of loan to the farmers and they are somewhat bank Department of Finance and Banking 10 . In the earlier time people were not familiar with bank loan or institutional loan. After independence of Bangladesh “Pakistan Krishi Unnayan Bank” was renamed as “Bangladesh Krishi Unnayan Bank”. and other necessary institutions are made.2. Bangladesh period: The evolution of Bangladesh made through the “Great Liberation War” on 16 December in 1971. various organizations are working independently and freely. Bangladesh Rice Research Institution. Pakistan Krishi Bank started its operations from 1958. rice of new quality and introduction of other high yielding crops and the increasing demand d of its. After the evolution of Bangladesh and with the time being. Rural Electrification Board.3.Pakistan government realized the importance of agro-loan and agricultural production. The creation of Water Development Board. Control of flood. “Pakistan Krishi Unnayan Bank” renamed Bangladesh Krishi Unnayan Bank. This two state owned financial institution merged in 1962 and established a new financial institution named “Pakistan Agriculture Development Bank” (ADBP).
Since Bangladesh is an agro-based country.4 Present Condition: Institutional agricultural credit plays a crucial role in the modernization of agriculture. For this reason. government felt to decentralize the Krishi Bank in the divisional areas and Rajshahi division was the first choice. providing money from expansion of socio-economic activities and provide consultancy are the main objective of establishing RAKUB. Development of agro-based industries. Credit facilities also help the process of commercialization of subsistence agriculture. solving unemployment problems. In the very beginning of RAKUB. self-employment. this responsibility has been increased tremendously.oriented now. Adequate flow of credit can remove the financial constraints of the farmers and provide the incentive to adopt new technologies that would otherwise be more slowly accepted. It becomes very difficult for a Dhaka based head office of Krishi Bank to manage agroloan in the remote areas of the country.2. Rajshahi Krishi Unnayan Bank was established in 1986 with the ordinance number 58 of the president. But it becomes very difficult for some limited banks to meet up the multiple demand of loan specially crop loan. The Northern areas of Bangladesh were not developed in comparison with other areas of Bangladesh. Now the number of Department of Finance and Banking 11 . 2. RAKUB realized this situation and performed their job tremendously. the number of branches wasTk. 253 core. After the construction of Jamuna Multipurpose Bridge. it is one of the main reasons of establishing RAKUB. the demand for the loan of Krishi Bank has been increased remarkably. RAKUB started its operations from 15 March 1988.
The region is also famous for production of high quality beef and milk which have immense potential for value added processing. Besides flood-free land the adaphic and agro-climatic condition is suitable for commercial seed production for cereals. Department of Finance and Banking 12 .2067. The area is noted for aromatic and fine rice production which has got a growing demand in export market. RAKUB is continuing relentless efforts and taking more than one hundred and seven loan programs. Rajshahi is still an unexplored area for establishment of poultry hatchery and fish grow-outs and fish processing. The seed production processing and marketing business have got both domestic demands as well as export potentials. 2. potatoes.branches is 365. The area is particularly suitable for rearing black Bengal goats noted for highly demandable goatskin and high quality mutton.3. More than 50 percent of the country's potato production comes from Rajshahi and Rangpur division.27 core. pulses and a number of vegetable crops. At his outset of bank. the credit balance was Tk 610 crores and now credit balance is Tk. Economical Impotance of Rajshahi and Rangpur division: Rajshahi and Rangpur division is popularly termed as the granary of Bangladesh. Besides the area is noted for fruits and vegetables. Once it gets going the mutton of black Bengal goats can harness the world market. For the well being of all industries farmers in the northwest region in Bangladesh.
Dinajpur and Saidpur. It has been created with greater Rangur and Dinajpur regions. Rangpur division is the northernmost division of Bangladesh.Rangpur Division was proclaimed as Bangladesh's seventh division on January 25th. Dhaka. 2010. prior to which it was part of the Rajshahi Division. The major cities in the division includes Rangpur. Rajshahi and Rangpur division is characterized by cheap labour force and excellent rail and road communication infrastructure. The city of Saidpur has the only airport in the division. Department of Finance and Banking 13 . Two airports in the area take only 30-40 minutes to communicate with the capital city.
Authorized capital 4. 5.4. No. RAJSHAHI KRISHI UNNAYAN BANK AT A GLANCE: 1.Unions 11. Area 6. Municipalities 10. : All regions in the Rajshahi and Rangpur division.Training institute : Rajshahi and Rangpur Division. Region of RAKUB : 15th March 1987. Grater Road. : Kazihata. Of District 8. Establishment Date 2. : 16 : 128 : 57 : 1092 : 35 million : 5.2.Total population 12.20 million :1 Department of Finance and Banking 14 .Total number of families 13. : Tk 750 core. : 34. Location of Head office 3.513 Square kilometer.Number of farm families 14. Extent 7. Rajshahi. Thana 9.10 million : 3.
To earn a normal profit for meeting the operational expenses. Department of Finance and Banking 15 . To provide credit facilities for creating small firm as Livestock & Poultry.5. To assist farmers in adopting appropriate technologies under the Bank's supervision. To extend counseling and advisory services to the borrowers/ entrepreneurs etc. To save money as deposit (Hajj Saving. Fishery. Education Saving. To provide credit facilities for the socio economical development of poor farmers. Provide credit facilities for agricultural development of poor farmers. Hatchery.based economic activities keeping in view the needs of small and marginal farmers. in utilizing Loan and Advance facilities of the Bank. To encourage the small entrepreneurship via providing credit facilities. To provide credit facilities for creating self independence. Rural Pension Saving and others) for future expenditure or needs. building of reserve and expansion of activities to cover wider geographical area. Objectives of RAKUB: The main goals of RAKUB are as follows: To provide Loan and Advance facilities for all kinds of agricultural and agro. To promote cottage and other allied industries in rural and urban areas.2.
Besides. Organizational Structure: The Head Office of the bank is stationed at Rajshahi. 2. agro-business and agro-based industries and poverty alleviation programs the bank performs ancillary banking functions.7. There are 18 independent regional audit offices under direct control of the head office for conducting regular audit in branches as well as in zonal offices. RAKUB aims at overall development of farmers and all the sectors and sub-sectors of agriculture in this region.8. The government appoints all the directors of the board. eighteen zonal offices stationed in district headquarters control branches under them. The Managing Director is the chief executive of the Bank.6. Functions of RAKUB: As the largest development partner in the Northwest region. To increase income and remove poverty of the people of Bangladesh. Also an executive committee constituted by the Chairman and two other directors including the Managing Director is there for taking emergency decisions. 2. The branchnetwork comprises 365 branches including one in Dhaka. Department of Finance and Banking 16 . One General Manager's office at Rangpur. 2. To supply Agricultural inputs and service to the entrepreneur. Management: A seven-member Board of Directors is entrusted with the responsibility of policy formulation for promotion of growth in agriculture leading to economic development of the country through agricultural Loan and Advance support. To develop and create employment opportunities. catering to agricultural Loan and Advance financing.
Department of Finance and Banking 17 .1.1 Head Office: The head office of RAKUB is located at 280 km far from capital city Dhaka. Total workforce of 3364 as on 30-04-2011 was composed of 1497 officers and 1867 other staffs. Budget and Expenditure Control Department. 2.1. All operation is control by head office. b) Operation Division: Branches control Department. Each headed by a General Manager: Administration and Accounts Division.9. a) Administration and Accounts Department: Personnel Department Common Services Department Central Accounts Department-I Central Accounts Department-II 2.The bank has a training institute located at Rajshahi. The Managing Director is assisted by the three following functional divisions. Loans and Advances Department-I Loans and Advances Department-II Research and Development Department.9. The three divisions further divided into 12 departments are as follows: 2. Operation Division. Regional offices stationed in district headquarters control branches under them.9. North-west divisional city Rajshahi.
9. 2.2 Supervision and control: The zonal offices are headed by Deputy General Managers while Regional offices by Assistant General Managers. 2.4 Training Institute: The only training Institute at Rajshahi Imparts training to the junior and mid-level officers and other staff according to the annual training program designed on such subjects of professional interest as management of Loan and Advance and accounts.1.3 Vigilance: The functions of the Audit offices are to keep the branches regular. Commercial banking.2.9.9. 2. The Audit offices accomplish auditing of the branches on half-yearly basis Regional Audit offices are directly controlled by the audit and Inspection Department of the head office and by no way influenced by the local Regional on zonal offices. c) Audit and Recovery Division: Loan Recovery Department-I Loan Recovery Department-II Audit and Inspection Department A Deputy General Manager is the head of the each division. audit and inspection etc Department of Finance and Banking 18 .9.
2. (Rajshahi) Total 23 29 20 16 18 17 24 22 15 26 24 20 20 17 17 18 19 18 1 1 365 Department of Finance and Banking 19 .5 Branch Network: Table-1 Region wise total branches (Up to May.9.P.2011) Rajshahi Naogaon Natore Chapai Nawabgonj Bogra (North) Bogra (South) Pabna Sirajganj Jaipurhat Rangpur Gaibandha Nilphamari Kurrigram Lalmonirhat Dinajpur (North) Dinajpur (South) Thakurgoan Panchagarh Dhaka L.O.
Department of Finance and Banking 20 .Principal officer(PO) 8.Officer Total Officer 10.Senior officer(SO) 9.Senior Principal officer(SPO) 7. Employee summary (up to April-2012): Designation 1.10.Managing Directors (MD) 2. Deputy General Manager(DGM) 5.Deputy Managing Directors (DMD) 3.Assistant general Manager(AGM) 6.Source: Personnel Department of RAKUB.Other Employee Total Authorized 01 01 03 36 66 147 336 620 900 2110 2126 4236 Exist 01 01 03 21 55 125 225 360 706 1497 1867 3364 Source: Personnel Department of RAKUB. 2.General Manager (GM) 4.
1060. : Tk.Details are as follows(up to 30 June-2010)1) Authorized capita 2) Paid up capital 3) Reserve capital 4) Deposit from customers 5) Loan disbursement 6) Recovered loan : Tk. : Tk.27 core. Capital and it sources: RAKUB is a governmental banking institute.2.12 core. So the main sources of Capital are government fund.11.750 core.992. : Tk.46 core.570 core.85 core. Department of Finance and Banking 21 .20.2067. : Tk. : Tk.
side by side the bank performs commercial banking functions in its area of interest.1. Establishment of Greater Road Kajihata Branch: Greater Road Kajihata Branch. The Greater Road Kajihata Branch of RAKUB. 2. RAKUB started its operation in 20th November 2011.2. Greater Road Kajihata Branch has been playing a vital role for the development of the agriculture in north-west region. Before this branch Local Principal Office maintained its operation at this location which got license in 1995. finances agribusiness and agro-based industries and poverty alleviation programs.The main role of Greater Road Kajihata Branch of RAKUB is to develop the agro-based industries. The bank not only caters the need of agricultural credit. Greater Road Kajihata Branch: Rajshahi Krishi Unnayan Bank (RAKUB). Although Greater Road Kajihata Branch of RAKUB is specialized of agriculture loan but the general commercial activities of this bank is very much wide. self- Department of Finance and Banking 22 . Role of RAKUB. Local Principal Office has transferred its operation Nawdapara at present. Rajshahi performs all traditional banking functions including deposit mobilization and lending.CHAPTER THREE INTRODUCTION TO RAKUB GREATER ROAD KAJIHATA BRANCH 2.
Greater Road Kajihata Branch: Banking business is primarily concerned with the activities of deposit collection and loan disbursement.employment.3. The main activities of Greater Road Kajihata Branch of RAKUB are as follows: i). Loan disbursement and recovery Department of Finance and Banking 23 . RAKUB is not different from these activities. 2. Activities of RAKUB. Deposit collection and mobilization and ii). solving the unemployment problem and supply of money for the expansion of socio-economic activities.
4. loan appraisal to project. recommendation of each credit. supervision. Department of Finance and Banking 24 . 1 Assistant General Manager 2 Senior Principal Officer 1 Loan disbursement. No. Employees of Greater Road Kajihata Branch: There are 11 employees at Greater Road Kajihata Branch and their designations are as follows: Table: No. legal action. RAKUB. Sl. 3 4 Senior Officer Officer 4 2 RSCP Different statement. 5 Cashier 1 Cash transaction Designation No.2. industrial loan. deed preparation and official activities. of Employees of Greater Road Kajihata Branch. of employees 1 Overall management Responsibilities 6 Data Entry Operator 1 Entrance of Data 7 Peon 1 Miscellaneous Source: Greater Road Kajihata Branch.
RAKUB: Assistant Manager General Senior Principal Officer Senior Officer Officer Cashier Data Entry Operator Peon Department of Finance and Banking 25 .2.5. Organizational Structure of Greater Road Kajihata Branch.
Greater Road Kajihata Branch at a glance (As on 30 April. 2012) Number of employees: 11 Contant number of the branch: 0721-810482 Department of Finance and Banking 26 . 2011 Location: Rajshahi City Corporation Number of Wards: 10 Target of Deposit: 5 crore tk (Upto 30 th June.2. 2012) Establishment: 20th November.6 RAKUB. 2012) Achievement of Loan Disbursement: 59 lakhs 25 thousand tk (upto 30 April. 2012) Target of Loan Disbursement: 4 crore tk (Upto 30th June. 2012) Achievement of Deposit: 2 crore 61 lakhs 89 thousand tk (upto 30 April. 2012) Loan recovery: Not yet started (It will started from July.
Types of Services: As a largest development partner in the northwest region. The bank performs commercial banking functions. The bank performs to their customer mainly the following services: i. The overall object is to generate employment and increase income of farmers and rural people and faster agricultural development leading to economic development of the country. remittance of fund.1.2. GREATER ROAD KAJIHATA BRANCH 3. ii. Loan services Deposit services Commercial services i. iii. it performs functions such as acceptance of deposits. granting of working capital finance to agricultural processing and trading units. Like commercial bank. financing agri-business and agro-base industries and poverty alleviation program. Introduction: RAKUB combines the role of a specialized bank for rural credit and that of a commercial bank.CHAPTER FOUR GENERAL BANKING FUNCTIONS OF RAKUB. 3. Loan Services: Department of Finance and Banking 27 . Rajshahi Krishi Unnayan Bank aims at overall development of the farmers and all the sectors and sub-sectors of agriculture credit.
These loans are. Working capital loan agriculture based industries. These type of loans are: Farm and irrigation machineries Tea garden development Agro-based industries Department of Finance and Banking 28 . b) Medium term loan: It is repayable above 1 year but below 5 years.Bank’s loan portfolio has been classified under the following major heads. Socio-economic development activities. a) Short term loan: It is payable within 5-6 months loan period to 1year. All kinds of crop loans. These types of loans are: Land development Bullocks for cultivator Dairy farm Poultry Raising herds Small irrigation projects Development of agriculture based Industries according to the chart c) Long term loan: All loans repayable above 5 years are called long term loans.
b) Saving Accounts: Saving accounts are opened for the customer except companies or firm and co-operative society. Department of Finance and Banking 29 . ii. the customer has to give a written notice 7 days ago to bank. 1000 to open a current account. 25000 in a week. initial deposit is Tk. No interest is given on this A/C. Deposit Services: The different Classes of customers can open different kinds of deposit accounts. RAKUB gives interest @ 5.e. 500 and this amount must maintain always. a) Current Account: Current accounts are normally opened for business/organization. ¼ of the balance in the A/C and the highest limit of withdrawal in a week is Tk. 100000.00%-7. i. In RAKUB. they are allowed to withdraw only Tk. Forestry Infrastructure development. All the various deposit accounts have different feathers and phenomenon. If anybody wants to withdraw more than ¼. If the bank is satisfied by observing the registration and constitution of co-operative society then it can open savings A/C. Minimum initial deposit is Tk.00%per annum. Here the A/C holders can deposit or withdraw money as many time as they want during the office hours. 25% or Tk. The depositors can deposit money in their account as many times as they want but in a week.
d) Deposit Pension Scheme (DPS): In this Savings Scheme a person is given an opportunity to build up savings by contributing monthly installment for getting an attractive fine amount at the end of the specified term. If 7 days ago a written notice is placed to the bank in every withdrawal. 200. g) RAKUB Triple Money Skim (RTMS): Here in 11 years the money will be tripled. which is to be deposited within 1st week in each month. firm.c) STD (Short Term Deposit) A/C: STD A/C is opened for company. Tk. then the bank gives interest 4% per annum. In this case compound rate of interest is charged. Here in 6. In this case RDMS is regarded as the special product of this bank. The size of monthly installments is Tk. Minimum amount of deposit is 50000 tk.5 years the money will be doubled. e) RAKUB Double Money Skim (RDMS): RDMS is a special product of this bank. Tk. Tk. 500. 100. Department of Finance and Banking 30 . STD A/C is operated like current A/C. and Government administrative body like TNO. RAKUB has some savings schemes to motivate the people for saving. f) RAKUB Daily Profit Account (RDP): Here minimum amount should be 20000 taka. 400 and Tk. 300. Minimum amount of deposit is 25000 tk.
For these services they take a fixed interest. This is a source of income. The people who are not customers can also enjoy this facility. TT. RAKUB gives their customers the facility to remit fund form one place to another.00% 8.3. MT and LC etc.1 The following table shows the various deposits and their interest rates at a glance: Deposit categories Current deposit Saving deposit (City Area) Saving deposit (Urban Area) FDR from 1 months to below 3 months from 3 months to below 6 months from 6 months to below 1 year from 1 year to below 2 years from 2 years to below 3 years DPS STD 7.50% 8.00% 7. Commercial Services: The bank gives the commercial services by DD.00 iii.25% 8.00% 7. Department of Finance and Banking 31 .50% 13% 4.2.00% Interest rate Nil 5.
3. Opening an Account: To its customers RAKUB gives opportunity to open an account like other banks.1. The person whose mind is unsound. III. The person who is still bankrupt. Taking initial deposit in cash. III. Deaf and dumb account etc. But there are some special types of account holder like joint account. 3. The following things are considered to open an account: I. II. The person who is totally mad.3. Department of Finance and Banking 32 . Special types of account: Basically a person whose age is 18 years or more can be competent to open an account with the bank. blind person account. Observing whether the application form is properly filled in. Getting a preserving specimen signature of a customer. Who cannot open an account? The following parties can never open an account with the bank: I. These accounts are opened by following various conditions. minor account illiterate person account. II.3.
Account opening procedure: To open an account.3. an individual has to carry out the following formalities: Obtain an application form Submit the completed form to the concerned officer Face a brief interview Sign the specimen signature card Deposit of money and Get counter-folio of the payment slip Once these formalities are carried out in appropriate manner. Department of Finance and Banking 33 .2.3. the applicant is issued a checkbook and considered as a valid account holder of the bank.
the company has to give a description about the type of the account and the operation of the account. 3. Account opening form and the special instruction must be signed by all the joint account holders to signify their consent. the account holder has to place written application. the bank will deduct service charges at an amount of Tk. the applicant must furnish the following information: i) Name of the parties who will be operated the account and signed checks. ii) At the event of death of either or any of the account holders. 200 and Tk.3.3. how the balance will be paid and to whom the securities (if any) will be delivered. Specimen signature of the people who are authorized to open and operate the account and the source of their authority. iii) If the client is a private or public limited company.3. In case of joint accounts. After getting application. Department of Finance and Banking 34 . 300 against savings and current deposit respectively as closing fee from the balance and the rest of the money is given to the customers.3.4. Account closing procedure: In order to close an account. The documentary requirements are almost the same as individual accounts.
General function of cash department: Cash payments: For convenience. The LO now verifies the ledger of the customer. If the customer’s account position is okay. he passes the check to the second officer (SO). Cashier enters the amount of the check in the cash register and pays the appropriate amount to the customer. At the end of banking hour. the cash payment (cheque honoring) procedure is illustrated by a flowchart as under: COUNTER Customer places the check to the ledger officer (LO). enters its particulars in a register and issues the customer a token. Department of Finance and Banking 35 . Once the check is cancelled that is okay for payment it is brought to the cashier by a peon.3. a trail balance is prepared from the registers and all the registers are compared with one another. The SO compares the customer’s signature given on the check with that on the signature card kept in his custody.4. The LO receives the check. If the signature is okay then he makes an entry of the check in another register and cancels it by signing across the check.
Cash Receipt: Customer’s deposits are received in this section of bank.1. The book is generally called cash book. Then the cashier passes the cashbook and deposit slip to the second officer. trial balance is prepared from that cash receipt register. At the end of banking hour.3. Then the amount received is credited to the customer’s A/C in the ledger book. Then the deposit slip and cash are placed before cashier. the second officer returns the counter-folio of the deposit slip to the customer and keeps the other position in his custody. the officer makes an entry to scroll register book.4. After verifying the deposit slip. Department of Finance and Banking 36 . After receiving the cash and deposit slip. The formalities that are followed to receive a customer’s deposit (cash) in the cash receipt section are stated in the following flow chart:- COUNTER Customer places this cash and deposit slip before the respective officer at the counter. The cashier counts this amount of money first and then makes an entry to another register book.
The Greater Road Kajihata Branch of RAKUB offers the following customer services: DD MT Money transfer TT PO Advice Customer services Customers check collection Same Bank Other Banks Electricity Bills Customers’ bills collection Water Bills Telephone Bills Department of Finance and Banking 37 .3. Customer services: RAKUB earns a huge amount of money by selling several customer services.5.
30. The commission for TT is 10% for any amount of TK. In order to cash MT. Test number is placed on DD. The descriptions of these instruments are as under: i) DD (Demand Draft): DD is the most popular instrument of remitting fund. iii) TT (Telegraphic Transfer): Telegraphic transfer is the quickest method of remitting fund from one place to another. Department of Finance and Banking 38 . 30. If the number of issuer bank and reimburse bank becomes the same only then the specified amount of money on DD is paid to the customer. ii) MT (Mail Transfer): MT is another mode of remitting fund and it is same to DD but here the customer is not provided any papers but a receipt.5. no instrument is sent to the paying branch. By this procedure. It is an order to pay money drawn by one branch of a bank upon another branch of the same bank for a particular sum of money which is payable to order on demand. The commission for DD is 10% for any amount of TK. 30. message is sent-only over telephone or telex and the paying branch supplies payments after having message.1. The commission for MT is 10% for any amount of TK. and the minimum commission is TK. and the minimum commission is TK.3. and the minimum commission is TK. The bank sends the MT papers under its own responsibility to the respective branch. the payee must maintain an account with the bank.
Several supplier organizations use this PO.100000 to below TK. The PO can be enhanced on that branch from where it is issued. TK.100000.20 for TK.50 for above TK.1000.500000. TK. Here no cash remittance has done.500000. v) Advice: It is simply the making of adjustment between debit and credit. the contractors and suppliers use this instrument. TK. Department of Finance and Banking 39 .iv) PO (Payment Order): Payment order is a written document. It is issued locally. RAKUB can transact among its various branches with the help of such advice. Generally. The commission for PO is TK.30 for TK. Here no account is needed to open with the bank.100 for above TK.
Accounting system of RAKUB. Greater Road Kajihata Branch: Transaction Cash Clearing Transfer Voucher Record in register Posting in ledger Supplementary sheet preparation Summary preparation Cash com day book preparation General ledger posting Affairs front page Subsidiary ledger posting Affairs back page Department of Finance and Banking 40 .3.6.
horticulture & nursery etc.CHAPTER FIVE LOAN DISBURSEMENT According to ordinance of RAKUB 1986. it was established in the administrative area of Rajshahi division. It operates banking activities to increase agricultural production. to develop overall economic condition. There are nine main loan areas of RAKUB. and to improve socio-economic activities.1. cultivation of sweet water prawn and Department of Finance and Banking 41 . It extends adequate credit support for excavation and re-excavation of ponds. High yielding and high value crops and seeds production is particularly encouraged. b) Fishery: The Bank attaches importance to use scientific method and modern technology in fish cultivation. round the year cultivation of species. Loan Areas: RAKUB provide loan both agro-based and non-farming sector. out of nine loan areas it gives preference on the following loan areas. which have rapid growth. to develop agro-based industries. to develop small and cottage industries. Crop sub-sector alone occupies 60% of the lending budget of the Bank. 4. The Bank finances for production of all the summer and winter crops. a) Crop Production.
other fishes. transportation of agricultural produces and other farming activities. meet and eggs. mechanization of cultivation. processing and marketing of agricultural produces having backward linkage with basic sub-sectors of crop. and fertilizer and pesticide application devices. tube wells. c) Livestock & Poultry: The Bank extends credit facilities for systematic and commercial livestock farming which includes dairy. The Bank pays due importance to setting up agro-industries for preservation. The Bank makes use of expertise of the concerned government agencies for bringing more ponds/water bodies under cultivation and increasing productivity. power-pumps. As the marginal and small farmers’ access to mechanized farming is restrained by want of cash and collateral. poultry. raising and setting up of hatcheries which in turn is expected to increase production of milk. tractors. e) Agro-industry & Agri-business: The operational jurisdiction of the Bank is noted for its agricultural potentials. beef-fattening. d) Irrigation Equipment & Farm Machinery: In today's technology-based farming of high yielding and high-value crops. livestock Department of Finance and Banking 42 . irrigation and pest-control is indispensable. To cope with the situation financing power tillers. the main source of protein. fishery. the bank has a big lending window of draft animals for cultivation of land.
the Bank has been financing collateral-free micro-credit for income and employment generation through its poverty alleviation credit programs. Agro-industries for import sub situation are specially encouraged by offering moderate terms of financing. RAKUB also provides some loan to their customer: These are as: Consumers' Credit (District & Upazila Branches) Service-holders' Credit (District & Upazila Branches) Small Traders' Credit(All Branches) Department of Finance and Banking 43 . inadequate capital accumulation and slim employment opportunities. f) Poverty alleviation: The poverty-stricken area of north-west Bangladesh is characterized by comparatively lower rate of savings.2. The existing collateral-based banking system is also of little use in respect of extending support to the millions of landless people. To address the problem. Manufacturing and marketing of agricultural implements are also encouraged. 4.and forestation.
4. 4. When Bank select borrower closely consider the following four “P” P = Person P = Purpose P = Profitability Department of Finance and Banking 44 . Selection of Borrower: Selection of borrower is the important factor in loan disbursement. medium and long term. The following subject matter should be considered in loan disbursement.3.4. the registrar of co-operative society must be registered it. Term Wise loan disbursement: Bank disburse loan in various term wise. In case of co-operation society. such as small. Short Term: Short-term loan is repayable from 5-6 months to 1 year Medium Term: Medium term loan is repayable within 5 years. Citizen of Bangladesh Adult Ability to utilize loan Not defaulter The registrar of Joint Stock Company must register limited company. Long term: Long-term loan is repayable above 5 years. Not bankrupt or not unsound minded.
00%-14.00% Poverty alleviation 6.00% Cash Credit 13.5. P = property / security Borrower apply for sanctioning loan by the prescribed form.00% Fisheries 12. 4.00% Source: RAKUB website 4.00% Livestock 11.00% Agro Industry 12. Loan officer investigate the information of loan application to go to the spot and evaluate loan application consciously.00% Firm Machinery 12. RAKUB. then borrower submit application form along with fees. Interest Rates: Sectors Interest Rate Crops 10. Department of Finance and Banking 45 .00%-15. After submitting necessary papers. Loan Case Investigation: Loan applicant must submit necessary papers along with loan application. The rate of loan application form fees of RAKUB is as follows: Amount of Loan TK 1000 to TK 6000 TK 6001 to TK 100000 Above TK 100000 Rate of Application Fee TK 15 3% TK 200 Plus TK 1 for per thousand Source: Loans and Advances Department-I. which is provided by the bank and bank rates predetermined fees.6.50%-13. responsible officer take some step against loan application.00%-13.
loan officer made necessary documents such as: mortgage paper. If loan officer satisfied to the loan proposal he / she may sanction loan. such as: cash. Forecasting: There are three types of forecasting form of RAKUB. sources of equipment in case of equipment loan. SP note etc. or installment. suitable use of loan etc. and the availability of equipment. According to condition of loan sanction. purchase receipt. Loan disbursement: On the basis of forecasting statement the responsible officer investigate the actual need of loan. cash payment and receiving statement with the forecasting report. Bank disburse loan in various ways. Loan officer write a report about project appraisal. apart from this loan officer attached income and expenditure statement. making necessary papers correctly is essential.Loan case evaluation officer scrutinize the necessary papers and documents of security and he /she will go to the local land office. In case of installment loan bank investigate the past installment and experience of the borrower. Before sanction of loan. hypothecations papers. Loan forecasting or loan evaluation is very important. loan officer considered the amount of loan.7. In the time of forecasting. 4.8. pledged agreement. project viability in case of project loan. 4. Department of Finance and Banking 46 .
vi. Loons are not disbursed properly as a result of the dishonesty of the officers.4.75 27. 2011 to March 31. v. Inflexibility of the government policies in disbursing loan.42 Source: Greater Road Kajihata Branch.9.10.86 January. Wants of sound guarantor.00 23.64 4. iii. 2012 Month December. Lack of proper mortgage against loan. iv. Lack of real loaner.) 68.2012 March.38 114. viii. Deficiency of adequate human resource. From LPO branch two loans had transferred.2011 Deposit Collection (TK in lakh. Loans are not sanctioned in proper head and real lone due to political influence ii. vii.2012 58. Department of Finance and Banking 47 .65 20. RAKUB 4. Problems of Loan disbursement: Greater Road Kajihata Branch of RAKUB faced the following problems in disbursing crop loan – i.2012 February. Insufficient fund of the bank. Cash Credit purpose 3.44 Loan Disbursement (TK in lakh.) No loan had sanctioned previously. Table-1: Loan disbursement of Greater Road Kajihata Branch of RAKUB from November 20.
Unclassified loan: When half or more than half of the total loan is repaid within the due dates by the borrower thus that is called unclassified loan.2.1.The duration of time in which the loan will be treated as unclassified is less than 12 months from sanctioning loan.1. Unclassified loan 2. Classified loan is not being repaid on time and has been designated a troubled asset. Greater Road Kajihata Branch of RAKUB loans disburse to the loanee regained this money. 5.1. Classified loan 5. it is called recovery. then this currency regained from loaner. Greater Road Kajihata Branch of RAKUB loan recovered under two bases: 1. Classified loans are three types- Department of Finance and Banking 48 . Classified loan: When more than half of the total loan or total is unpaid/due over the due date then that loan is called classified loan.CHAPTER SIX LOAN RECOVERY OF RAKUB When bank or other financial institution currency disburses to another organization or people.
Department of Finance and Banking 49 . A loan will be classified as bad debt after a period of 60 months from the due date. A loan will be classified as doubtful after a period of 36 months from the due date. A loan will be classified as substandard after a period of 12 months from the due date. Doubtful loan: A loan where full repayment is questionable and uncertain. Substandard loan: A substandard loan is one that is inadequately protected by the current sound worth and paying capacity of the oblige or of the collateral pledged. Bad debt: Loans classified as bad debt are considered uncollectible and shall be listed at 100 percent potential loss. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardized the liquidation of the debt. Doubtful loans are usually nonperforming loans on which interest is overdue and full collection of principal is uncertain. Degree of repayment of loans in question range from a complete loss to uncertain loss unless corrective actions are taken.
This statement is prepared at the beginning of financial year. Name and address of borrowers are in this statement. it is an initial instrument for office and field. Loan Recovery procedure: The important tasks of branch manager Greater Road Kajihata Branch is to recover the outstanding loans. Thus recoverable all loan are to be timely. The loss recovery procedure is divided into several steps. schedule to loan are to be adjusted. a) Schedule to pay of crops loan are fixed according to Bangladesh bank and rules. when production are start commercially.2. There as follows: Loan recovery: Greater Road Kajihata Branch makes a schedule to recover the outstanding loan. It mentions that it is helpful for disbursement loan. loan to be paid in due time. Statement of loan: The statement of loans plays a vital role to make a loan recovery. There are several schedules to pay of difference types of loans. c) For project loan. The branch manager gets sounds planning and makes policy to recover the loan. This statement is prepared for village and union.5. d) For working capital loan. b) Different schedule to pay loan for various objectives. The main responsibility of branch manager and field supervisor to recover the outstanding loans in Greater Road Kajihata Branch. Department of Finance and Banking 50 .
Causes of Defaulter: The loanee cannot pay due time in various causes: Natural calamity destroy the crops. Loan Recovery camp. Various types of notice: There are various types of notice to recovery of loan. which are serially set to the borrower. These are Demand notice.4. Special Notice. Co-operation of UP chairman and Case filing. for this reason the loanee unable to pay loan in due time. Greater Road Kajihata Branch cannot take proper steps against the loanee for influential man. 5. Field recovery. The loanee do not pay loan in more time willingly. The loanee cannot use the loan in proper way. Legal Notice. installment system are as: Weekly Fortnightly Monthly 5. Rules of Recovery: Greater Road Kajihata Branch Loan recovery from loanee is installment system.3. Department of Finance and Banking 51 .
If any sector continuously goes for losses. then branch issue legal notice. branch issue special notice. As it is a new branch which is started it’s journey from 20th November. Again lone failure to pay loan. 2011 the loan recovery is not started yet. In this way Greater Road Kajihata Branch recovers loan by court. Problems of loan Recovery: Loanee cannot utilize loan properly. 5.5. Weakness of taking step against loanee by bank. Weakness of supervisor for supervising loan.4. branch does not shut down the sector. Many people of Bangladesh live in village and they are ignorant to use the loan. as a result they fail to repay loan.1Greater Road Kajihata Branch takes some step against Defaulter: When a lone default to pay loan the Greater Road Kajihata Branch takes some step against loanee: First they issued Demand notice to loanee. Political pressure is a common phenomenon in recovery of loan Department of Finance and Banking 52 . Loan disbursement is running on and loan recovery will be started after June.5. If the loanee not pay loan. 2012. Greater Road Kajihata Branch again refinances that sector and encourages to the loanee. After all loanee default to pay loan then branch case filling against loanee.
I observed the following unavoidable problems. 4. Department of Finance and Banking 53 . 1. But being physically presented at the bank during 15-day internship and having discussed the different staffs about farming loan management. Shortage of efficient credit personnel. Political pressure: Due to pressure of local political leader the bank cannot determine proper borrowers for distribution loan. it would be seemed that the bank has no problems and running well recent years. Limitation of the study: Rajshahi Krishi Unnayan bank plays an important role in developing the agricultural sector as well as poverty alleviation and socio-economic development of the Rajshahi and Rangpur Division. But I have tried my best to prepare this report properly and effectively. Problems Identification: In common eyes. it is not possible for me to collect the all data about this Bank. The activities of this bank are widely dispersed. 3.They create always-unnecessary influence in determining borrowers.CHAPTER SEVEN RECOMMENDATION AND CONCLUSION 6. but I have time constraint which was prevention to acquire complete and sufficient knowledge about the role of Rajshahi Krishi Unnayan bank. Fund diversion. 6. Due to the shortage of time.2. 2. Lack of legal action by the banks against defaulters.1.
Lack of proper supervision. before disbursement of loan. for this reason some time the recovery of loan is disturbed. I can say strongly that project’s viability depends on only its sound analysis.Lack of proper planning and inefficient-fund management. Lack of sound guarantor. 8. As a result loan recovery will be impossible. These aged problems could not be solved overnight. If analysis of a project is accurate. Department of Finance and Banking 54 .The notice are not issued just time.5. borrowers will not be able to use that loan in particular sector. A bank can’t make profit due to various problems mentioned before.Sometime the loan-less recovery show their unwillingness to pay the loan in order to have various advantages form the government. a bank should run in the profitable basis. I have mentioned some recommendations here to be followed in order to get relief from acute problems.3. 15. 10. I have tried to observe various aspects of loan disbursement and recovery system with different analysis of this bank. 6. Insufficient fund of the bank. 12. Lack of real loanee. 11. 7. Recommendation: In this study.Loan is not paid through proper assessment. 9. Recommendations are given below: As the student of Finance and Banking. 14. it will provide profits. the bank should be sure that the conducted analysis is accurate. So. Lack of proper mortgage against loan. Inadequate training facilities for credit officers and their qualifications.If loan disbursement is not in accurate time. For survival. 6. 13. However.
Loan classification and provision should be revised on the basis of national economic condition. Department of Finance and Banking 55 . In Bangladesh. Its prime ground is lack of supervision. the bank could keep a “written loan policy”. To avoid such political pressure. if they are well supervised. RAKUB have to recruit efficient personnel Last but not least. political influence a bank’s decision about giving loan. the bank should be computerized to ease the accounting process and increase customer services. Most of the loanees are illiterate. The bank should be more needful in recovery of classified and unclassified loan. the bank should strictly follow the various programs adopted by RAKUB. As a specialized bank. Here. supervision is a vital factor. Most of the loans become default loan just after disbursement. In the age of modern technology. it is mentionable that supervision means personal contact with the loanee. Training makes a man perfect. The staff could be given training about their respective business at regular basis. So. they must show their responsibility of repaying the loan. Deposit mobilizations have to be increased.
6. 2011 and will start recovery from July. the entire process gets jeopardized.4. This branch has not yet produced better performance in recovering those loans given to small borrowers because this branch started it’s journey from 20th November. if loans are stuck-up. It acts in financial inter-mediation process. The branch should take care of this very important aspect of banking for its smooth survival in the coming days. Department of Finance and Banking 56 . 2012. Banks collect deposits at low rate of interest and lend the collected money at a higher rate of interest to cover it operational expenses and then make profit. In this process. Conclusion: A bank is basically a service-oriented institution.
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