Follow the red colored instructions.

Imterneship Report On:

Evaluation of Asset Liability management Of National Bank Limited

Term Paper On: It is not term paper

National Bank Limited

(This Internship Report Is Submitted For the Partial Fulfillment of the Degree of Master of Bank Management

Prepared By Name: Kazi Md.Zillur Rahaman Student Id: 397 Registration no: 333 Batch: 19th rogram: MBM Supervised By Ru!am "ho#dhur$ %ssistant ro&essor 'ecturer (ni)ersit$ o& Science * +echnolog$ "hittagong

!"e#uti$e summar% Introdu#tion or Ba#kground ,&&ecti)e credit ris- management is there&ore )ital to ensure that a .an-ing institution/s credit acti)ities are conducted in a !rudent manner and the ris- o& !otential .an- &ailures reduced. So0 a!!ro!riate !olicies0 !rocedures and s$stems should .e im!lemented at each &inancial institution &or identi&$ing0 measuring0 monitoring and controlling credit rise&&ecti)el$. 1B' 23o# come $our NB' .ecome 1B'4445 &ollo#s a centralized a!!roach in e6tending its credit. Relationshi! Managers 2RM5 .rings in ne# customers and !re!ares credit !ro!osals &or them. +he !ro!osal !ac-age is then sent to the "redit RisManagement 2"RM5 de!artment anal$zes the ris- mitigating &actors and sends the !ro!osal #ith recommendation to the credit a!!ro)ing authorit$. "redit a!!ro)ing authorit$ a!!ro)es the !ro!osal or denies it and sends the same to "RM again. NB' has a #ritten credit !olic$ manual. It &ull$ com!lies #ith Bangladesh Ban- 7uidelines. NB' does not e6tend credit to a .usiness0 i& it does not understand the .usiness. +he !rocess o& credit assessment is also guided .$ the central .an- directi)es. % thorough credit and risassessment is conducted !rior to the granting o& loans0 and at least annuall$ therea&ter &or all &acilities. +he loan structure is matched #ith the cash con)ersion c$cle o& the .usiness and a!!ro!riate securit$ is ta-en as collateral. In short0 credits are not e6tended rel$ing on 8ust the .orro#er/s or s!onsoring units re!utation in 1ha-a Ban- 'imited. 21on/t co!$ other/s re!ort !lease5 +hough all these ste!s are ta-en &or managing credit ris-0 it is not enough. 1ue to the s$stem0 &ailure can occur. %s Ban- deals #ith the de!ositors mone$0 it must ha)e some sa&et$ !recaution #hen gi)ing loan. +o !re)ent such &ailure international accords li-e Basel I0 Basel II are &ormulated. Bangladesh Ban- instructed all the Ban-s o& Bangladesh to ado!t Basel II &rom 9::7. +hough it has not .een made &ull$ acti)ated $et and the sim!ler a!!roach to measuring ca!ital #as ta-en .$ the Bangladesh Ban-0 still it/s a .ig challenge &or all the Ban-s. Regulator$ authorities are there&ore ma-ing e&&orts to design a!!ro!riate strategies that #ould ena.le the .an-ing sector &or smooth transition to Basel II. ;+he Ne# %ccord; com!rises o& three !illars. illar I sets out the minimum ca!ital re<uirements. illar II de&ines the !rocess o& su!er)isor$ re)ie# o& a &inancial institution;s ris- management &rame#or-. illar III determines mar-et disci!line through im!ro)ed disclosure. It is argued here that im!lementation o& illar I is a more critical than the other t#o. It re<uires minimum .an- ca!ital against three -inds o& ris-: credit ris-0 o!erational ris- and mar-et ris-. Since e6isting regulation re<uires .an-s to maintain ca!ital against credit ris- onl$0 it is !lausi.le to e6!ect that additional ca!ital re<uirement &or t#o other ris-s #ill cause all .an-s to raise ca!ital a!!recia.l$. RBI 29::=5 also argues that .an-s #ould need to raise additional ca!ital to su!!ort e6!ansion o& their .alance sheets. %s a regulator0 Bangladesh Ban- is re<uired to design !olicies that #ill &acilitate smooth transition to Basel II. "alculations o& ca!ital re<uirement suggest that Basic Ban- 'imited has ade<uate "a!ital %de<uac$ Ratio as it is o)er >? in the last <uarter. But0 as !er Bangladesh Ban7uideline0 &rom @ul$ 9:1: the ratio must .e maintained o)er 9?0 so BB' has to raise ca!ital <uic-l$ to .e com!liant #ith the regulation. %s0 !er the standardized a!!roach o& credit ris-0 e)er$ unrated client #ill .e ris- #eighted .$ 1A:? o& their loan amount0 so it #ill .e tougher &or BB' as most o& the clients are unrated. So0 this is a )er$ .ig challenge the Ban- are tr$ing to ta-e in the ne6t <uarter o& the $ear. Basel II has mani&old im!lications0 li-e it #ill !re)ent the small and unrated .orro#ers to ta-e loan as Bandon/t #ant to .e charged0 higher lending cost etc. In summar$0 it can .e said that0 u!to

no# BB' is com!liant #ith the ca!ital re<uirements0 .ut in the ne6t <uarter the ca!ital re<uirements #ill not .e enough. It has to increase ca!ital .$ raising &und &rom !u.lic0 issuing su.ordinated .onds or issuing right share.
Objective of the study: The objective of the internship program is to familiarize students with the real business situation, to compare them with the business theories & at last stage make a report on assign task. Credit Risk Management The study has been undertaken with the following objectives:

To complete the partial fulfillment of the requirement of ! "egree # To know the general banking activities of $ational !ank %td # To apprise the principal activities and evaluate performance of the $ational !ank %td To analysis the pros and cons of the conventional ideas about credit operation of a
!ank. To have better orientation on credit management activities specially credit policy and practices, credit appraisal, credit&processing steps, credit management, financing in various sector and recovery, loan classification method and practices of $ational !ank %imited '$!%(. To compare the e)isting credit policy of $ational bank limited with that of best

*ractices guideline given by !angladesh !ank, the central bank of !angladesh. To identify and suggest scopes of improvement in credit management of $!%. To get an overall idea about the performance of $ational !ank %td. To fulfill the requirement of the internship program under ! program 1. !co"e of the Re"ort: This internship is a part of !usiness +dministration degree that provides an on the job e)perience to students. , was placed at $ational !ank %imited as an internee for three months duration. This internship program was my very first on&the&job e)posure and provides me with learning e)perience and knowledge in several areas. "uring the first few week of my internship period, , was able to get accustomed to the working environment of $ational !ank %imited, co)bazar !ranch. +s the internship continued, , not only learned about the activities and operation of correspondent !ank, but , also gathered some -nowledge about the basic business activities of banking in first one& month of my internship period.

Methodology of the study: The following methodology will be followed for the study: !oth primary and secondary data sources will be used to generate this report. *rimary data sources are scheduled survey, informal discussion with professionals and observation while working in different desks. The secondary data sources are annual reports, manuals, and brochures of $ational !ank limited and different publications of !angladesh !ank.

To identify the implementation, supervision, monitoring and repayment practice& interview with the employee and e)tensive study of the e)isting file was and practical case observation was done.

1.# !ource of data: To perform the study data sources are to be identified and collected, the data are to classified, analyzed, interpreted and presented in a systematic.

i$ %rimary !ources& # .ace to face conversation with the official staff. # *ractical desk work #/imple "epth interview technique was used by asking number open&ended questions
to collect the information. # 0elevant file study as provide by the concerned officer.

ii$ !econdary !ources: # +nnual 0eport ' 1223, 1224 and 1225( $ational !ank %imited 'you have provide
latest data 1225 is too old( # 6redit 0isk anual '1223(, $ational !ank.

1.' (imitation of the study: The present study was not out of limitations. !ut it was a great opportunity for me to know the banking activities of !angladesh specially $ational !ank %imited. The study carried on has the following limitations: The main constraint of the study is inadequate access to information, which has
hampered the scope of the analysis required for the study. /ome problems create confusions regarding verification of data. The time is insufficient to know all activities. ,t was very difficult to collect the information from various personnel for their job constraint. +s some of the fields of banking are still not covered by our courses, there was difficulty in understanding some activities. !ecause of the limitation of information, some assumption was made. /o there may be some personal mistake in the report.

)Check you fon ty"e* si+e and "aragra"h scale. ,t should be the same throughout the re"ort$

Cha"ter - ./
Background of banking
/.1 0efinition of bank: The 7ews in 7erusalem introduced a kind of banking in the form of money lending before the birth of 6hrist. The word 8!ank9 was probably derived from the word 8bench9 as during ancient time 7ews used to do money &lending business sitting on long benches. .irst modern banking was introduced in :445 in /tockholm as 8/avings *is !ank9 which opened up a new era of banking activities throughout the ;uropean popularly known as -abuliwallas. They were known as 8-abuliwallas + bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. ,t is an institution for receiving, keeping, and lending money. !anks have influenced economies and politics for centuries. =istorically, the primary purpose of a bank was to provide loans to trading companies. !anks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. .or centuries, the banking industry only dealt with businesses, not consumers. !anking services have e)panded to include services directed at individuals, and risk in these much smaller transactions are pooled. The name bank derives from the ,talian word banco >desk?bench@, used during the 0enaissance by .lorentines bankers, who used to make their transactions above a desk covered by a green tablecloth. A1B =owever, there are traces of banking activity even in ancient times.,n fact, the word traces its origins back to the +ncient 0oman ;mpire, where moneylenders would set up their stalls in the middle of enclosed courtyards calledmacella on a long bench called a bancu, from which the words banco and bank are derived. +s a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in 0omeCthat of the ,mperial int.A<B ainland. ,n the /outh +sian region, early banking system was introduced by the +fghan traders uslim businessmen from -abul, +fghanistan came to ,ndia and started money lending business in e)change of interest sometime in :<:1 +.".

),t is just co"y and "asted job. 1hy don2t you write by yourself and "ut reference$

/.1.1 (aw of banking:

!anking law is based on a contractual analysis of the relationship between the bank and the customer. The definition of bank is given above, and the definition of customer is any person for whom the bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: :. The bank account balance is the financial position between the bank and the customer, when the account is in credit, the bank owes the balance to the customer, when the account is overdrawn, the customer owes the balance to the bank. 1. The bank engages to pay the customer9s cheques up to the amount standing to the credit of the customer9s account, plus any agreed overdraft limit. <. The bank may not pay from the customer9s account without a mandate from the customer, e.g. a cheque drawn by the customer. D. The bank engages to promptly collect the cheques deposited to the customer9s account as the customer9s agent, and to credit the proceeds to the customer9s account. 3. right to combine the customer9s accounts, since each account is just an aspect of the same credit relationship. 4. The bank has a lien on cheques deposited to the customer9s account, to the e)tent that the customer is indebted to the bank. E. The bank must not disclose the details of the transactions going through the customer9s account unless the customer consents, there is a public duty to disclose, the bank9s interests require it, or under compulsion of law.

/./ 3istorical background of the banking institution in 4angladesh: !anks have influenced economies and politics for centuries. =istorically, the primary purpose of a bank was to provide loans to trading companies. !anks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. .or centuries, the banking industry only dealt with businesses, not consumers. !anking services have e)panded to include services directed at individuals, and risks from in the these much smaller transactions are used pooled.The during the name bank derives ,talian word banco >desk?bench@,

0enaissance by .lorentines bankers, who used to make their transactions above a desk covered by a green tablecloth. A1B =owever, there are traces of banking activity even in ancient times. 1.< !eginning !anking operation in !angladesh:

+fter independence of !angladesh the government of !angladesh was formally to change the administration of the territory now constitute !angladesh. The government promulgated a law called !angladesh bank order :FE: 'acting president order no 1 of :FE:(. !y this order the state bank of *akistan was declared to be deemed as !angladesh bank and officers, branches and assets of said state bank was declared to be deemed as officers, branches of !angladesh bank. Gn the date there e)isted :D scheduled banks with about <2D1 branches all over the world. Gn the :4th "ecember :FE: there e)isted the following :1 banks in !angladesh namely:

;)isting !ank

$ew !ank /onali !ank

:. 1. <. D. D. 4. 4.

$ational bank. !ank of !ahawalpur %td *remir !ank %td. =abib !ank %td 6ommerce !ank %td Hnited !ank %td. Hnion !ank %td.

+grani !ank

7anata !ank

5. uslim 6ommercial !ank %td. 5. /tandard !ank %td. 5. +ustralasia !ank %td ::. ;astern ercantile !ank %td.

0upali !ank

*ubali !ank Httara !ank

:1. ;astern !anking 6orporation %td.

1here did you get it5 6ou have sim"ly co"ied it from internet. %lease write in your own language and follow referencing and citation "ro"erly

Cha"ter - .7 4ackground of 8ational 4ank (td.

National Bank Limited %imited has its prosperous past, glorious present, prospective future and
under processing projects and activities. ;stablished as the first private sector bank fully owned by !angladeshi entrepreneurs, $!% has been flourishing as the largest private sector !ank with the passage of time after facing many stress and strain. The members of the board of directors are creative businessmen and leading industrialists of the country. To keep pace with time and in harmony with national and international economic activities and for rendering all modern services, $!%, as a financial institution, automated all its branches with computer networks in accordance with the competitive commercial demand of time. oreover, considering its forth&coming future, the infrastructure of the !ank has been rearranging. The e)pectation of all class businessmen, entrepreneurs and general public is much more to $!%. +t present we have :D3 branches under our branch network. ,n addition, our effective and diversified approach to seize the market opportunities is going on as continuous process to accommodate new customers by developing and e)panding rural, / ; financing and offshore banking facilities. Ie have opened :2 branches and 3 / ;?+gri branches during 12:2. The emergence of National

Bank Limited in the private sector was an important event in the

!anking arena of !angladesh. Ihen the nation was in the grip of severe recession, the government took the farsighted decision to allow the private sector to revive the economy of the country. /everal dynamic entrepreneurs came forward for establishing a bank with a motto to revitalize the economy of the country.

National Bank Limited was born as the first hundred percent !angladeshi owned !ank in the private sector. .rom the very inception, it was the firm determination of National Bank Limited to
play a vital role in the national economy. Ie are determined to bring back the long forgotten taste of banking services and flavors. Ie want to serve each one promptly and with a sense of dedication and dignity. The then *resident of the *eopleJs 0epublic of !angladesh 7ustice +hsanuddin 6howdhury inaugurated the bank formally on arch 15, :F5< but the first branch at D5, "ilkusha 6ommercial +rea, "haka started commercial operation on arch 1<, :F5<. The 1nd !ranch was opened on ::th ay :F5< at -hatungonj, 6hittagong. +t present, $!% has been carrying on business through its :<2 branches and :3 / ; ? +gri !ranches 'total :D3 service locations( spread all over the country. /ince the very beginning, the bank has e)erted much emphasis on overseas operations and handled a sizable quantum of home bound foreign remittance. ,t has drawing arrangements with D:3 correspondents in E3 countries of the world, as well as with <E overseas ;)change 6ompanies located in :< countries. $!% was the first domestic bank to establish agency arrangements with the world famous Iestern Hnion in order to facilitate quick and safe remittance of the valuable foreign e)changes earned by the e)patriate !angladeshi nationals. This has meant that the e)patriates can remit their hard&earned money to the country with much ease, confidence, safety and speed. $!% was also the first among domestic banks to introduce international aster 6ard in !angladesh. ,n the meantime, $!% has also introduced the Kisa 6ard and *ower 6ard. The !ank has in its use the latest information technology services of /I,.T and 0;HT;0/. $!% has been continuing its small credit programmes for disbursement of collateral free agricultural loans among the poor farmers of !arindra area in 0ajshahi district for improving their livelihood. $!% focused on all key areas covering capital adequacy, maintaining good asset quality, sound management, satisfactory earning and liquidity. +s a consequence, it was possible to a record growth of :E3.3: percent with Tk. 5,52F.D2 million pre ta) profit in the year under review over the preceding year. The net profit after ta) and provision stood at Tk. 4,542.<D million which was Tk. 1,2E2.DE million in the previous year registering a 1<:.<D percent rise. The total deposits increased to Tk. :21,DE:.5< million being <<.<E percent increase over the preceding year. %oans and advances stood at Tk.F1,22<.34 million in the year under report which was Tk. 43,:1F.15F million representing D:.14 percent rise over the preceding year. .oreign trade stood at Tk. :DD,133.22

million in 12:2 compared to Tk. ::3,F<F.22 million, increased by 1D.D1 percent compared to that of the previous year. "uring 12:2, the bank handled inward remittance of Tk. DF,:D3.<2 million, :2.E< percent higher than that of the previous year. 0eturn on ;quity '0G;( registered a EE.5D percent rise over the preceding year. $ational !ank, has now acquired strength and e)pertise to support the banking needs of the foreign investors. $!% stepped into a new arena of business and opened its Gff /hore !anking Hnit at ohakhali to serve the wage earners and the foreign investors better than before. /ince its inception, the bank was aware of complying with 6orporate /ocial 0esponsibility. ,n this direction, we have remained associated with the development of education, healthcare and have sponsored sporting and cultural activities. "uring times of natural disasters like floods, cyclones, landslides, we have e)tended our hand to mitigate the sufferings of victims. ,t established the $ational !ank .oundation in :F5F to remain involved with social welfare activities. The foundation runs the $!% *ublic /chool & 6ollege at oghbazar where present enrolment is ::D2. !esides awarding scholarship to the meritorious children of the employees, the bank has also e)tended financial support for their education. ,t also provided financial assistance to the +siatic /ociety of !angladesh at the time of their publication of !anglapedia and observance of D22 years of "haka 6ity. The Transparency and accountability of a financial institution are reflected in its +nnual 0eport containing its !alance /heet and *rofit & %oss +ccount. ,n recognition of this, $!% was awarded 6rest in :FFF and 1222, and 6ertificate of +ppreciation in 122: by the ,nstitute of 6hartered +ccountants of !angladesh. The bank has a strong team of highly qualified and e)perienced professionals, together with an efficient !oard of "irectors who play a vital role in formulating and implementing policies.

Mission
,&&orts &or e6!ansion o& our acti)ities at home and a.road .$ adding ne# dimensions to our .an-ing ser)ices are .eing continued una.ated. %longside0 #e are also !utting highest !riorit$ in ensuring trans!arenc$0 account a.lilit$0 im!ro)ed clientele ser)ice as #ell as to our commitment to ser)e the societ$ through #hich #e #ant to get closer and closer to the !eo!le o& all strata. Binning an e)erlasting seat in the hearts o& the !eo!le as a caring com!anion in u!li&ting the national economic standard through continuous u!gradation and di)ersi&ication o& our clientele ser)ices in line #ith national and international re<uirements is the desired goal #e #ant to reach.

Vision
;nsuring highest standard of clientele services through best application of latest information technology, making due contribution to the national economy and establishing ourselves firmly at home and abroad as a front ranking bank of the country are our cherished vision.

Ob ectives of NBL
C&&ering <uic- and im!ro)ed clientele ser)ices through a!!lication o& modern in&ormation technolog$. la$ing and im!ortant role in the national !rogress .$ including im!ro)ed .an-er customer relationshi!. ,nsuring highest !ossi.le di)idend to the res!ected shareholders .$ ma-ing .est use o& their e<uit$. ursuing the !olic$ o& nurturing .alanced gro#th o& the .an- in all sectors. "onsolidating our !osition in the com!etiti)e mar-et .$ introducing inno)ati)e .an-ing !roducts. ,nsuring highest !ro&essional e6cellence &or our #or-&orce through enhancement o& their #or- e&&icienc$0 disci!line and technological -no#ledge.

,6!anding the .an-/s area o& in)estment .$ ta-ing !art in s$ndicated large loan &inancing. Increase &inances to small and medium ,nter!rise 2SM,5 sector including agriculture and agro .ased industries. +hus ma-ing due contri.ution to the national econom$. (!holding the image o& the .an- at home and a.road .$ !ursuing d$namic and time .ene&iting acti)ities. ,nsuring maintenance o& ca!ital ade<uac$0 com&orta.le li<uidit$0 asset <ualit$ and highest !ro&it through success&ul im!lementation o& the Management "ore Ris- !rogram.

!OTO
+he .an- #ill .e a con&luence o& the &ollo#ing three interests: C& the .an: ro&it ma6imization and sustained 7ro#th.

C& the customers : Ma6imum .ene&it and satis&action. C& the societ$ : Ma6imization o& Bel&are.

"ore values
NB'/s core )alues consist o& =-e$ elements. +hese )alues .ind our !eo!le together #ith an em!hasis that our !eo!le are essential to e)er$thing .eing done in the .an-. Integrity NB' !rotects and sa&eguard all customer in&ormation. NB' treats e)er$one in an e<uita.le and consistent manner. NB' creates an en)ironment0 #hich earns and maintains customer trust.

Open communication NB' .uilds customers relationshi! .ased on integrit$ and res!ect. NB' o&&ers a &ull line o& !roducts and e6cellent ser)ices. NB' is committed to the !ros!erit$ o& the customers and shareholders. Performance driven In NB'0 customers and em!lo$ees are 8udged in terms o& their !er&ormance.

"ontinuous sel& im!ro)ement "ontinuous learning0 sel& challenge and stri)e ma-e #a$s &or sel& im!ro)ement o& #or-&orce at NB'.

#uality NB' o&&ers hassle &ree .etter ser)ice timel$. NB' .uild u! <ualit$ asset in !ort&olio.

Team$ork Interaction0 o!en communication0 and maintaining a !ositi)e attitude re&lect NB'/s commitment to a su!!orti)e en)ironment .ased on team#or-.

%orkforce
National Ban- 'imited 2NB'5 recognizes that a !roducti)e and moti)ated Bor- &orce is a !rere<uisite to leadershi! #ith its "ustomers0 its Shareholders and in the Mar-et it ser)es. NB' treats e)er$ ,m!lo$ee #ith dignit$ and res!ect in a su!!orti)e en)ironment o& trust and o!enness #here !eo!le o& di&&erent .ac-ground can reach their &ull !otential. +he Ban-/s 3uman Resources !olic$ em!hasize on !ro)iding 8o. Satis&action0 7ro#th C!!ortunities0 and due recognition o& su!erior !er&ormance. % good #or-ing en)ironment re&lects and !romotes a high le)el o& lo$alt$ and commitment &rom the em!lo$ees. Realizing these National Ban- 'imited 21B'5 has !laced the utmost im!ortance on continuous de)elo!ment o& its 3uman Resources0 identit$ the strength and #ea-ness o& the em!lo$ee to assess the indi)idual training needs0 the$ are sent &or training &or sel&Dde)elo!ment. +o orient0 enhance the Ban-ing -no#ledge o& the em!lo$ees National Ban- training Institute 21BI+5 organizes .oth inD house and e6ternal training.

!anagement system
7reat em!hasis on the use o& im!ro)ed +echnolog$. It has gone to Cnline C!eration S$stem since 9::3. %nd the ne# .an-ing so&t#are E',F"(B, is ne#l$ installed. %s a result the Ban- #ill a.le to gi)e the ser)ices o& international standards.

"orrespondent relations&ip
+he .an- esta.lished corres!ondent relationshi! #ith a num.er o& Eoreign Ban-s0 namel$ %merican ,6!ress Ban-0 Ban- C& +o-$o0 Standard "hartered Ban-0 3ong Kong Shanghai Ban-ing "or!oration0 "I+I Ban- N%DNe# Gor- and %B Ban- limited. +he Ban- is maintaining Eoreign e6change %ccounts In Ne# Gor-. +o-$o. "alcutta0 and 'ondon. +he Ban- has set u! 'etter C& "redit on .ehal& o& its )alued customers using its "orres!ondents as ad)ising and reim.ursing Ban-s. +he Ban- maintains a need .ased "orres!ondent Relationshi! !olic$0 #hich is graduall$ e6!anding. +he num.er o& Eoreign "orres!ondents is no# 3A:.

Board of 'irectors
Zainul 3a<ue Shi-der Moazzam Sossain ar)een ha<ue shi-der %lha8 -halilur rahman ro&. Mah.u. %hmed MR @a-aria +aher Ron ha<ue shi-der Rich ha<ue shi-der 2't."ol. 9Rtd5 Md. %zizul %shra&0 !sc Ma.roor 3ossain %KM enamul ha<ue "a!t. %.u Sa$eed Monir Salim Rahman M1. Neaz %hamed "hairmen 1irector 1irector 1irector 1irector 1irector 1irector 1irector 1irector 1irector 1irector 1irector 1irector Managing 1irector * ",C

'epartments of National Bank Limited

I& the 8o.s are not organized considering their interrelationshi! and are not allocated in a !articular de!artment it #ould .e )er$ di&&icult to control the s$stem e&&ecti)el$. I& the an$ de!artments are not &itted &or the articular Bor-s there #ould .e 3a!hazard Situation and the !er&ormance o& a articular 1e!artment #ould not .e measured. National Ban- 'imited 2NB'5 has does this #or- )er$ #ell. 1i&&erent 1e!artments o& National Ban- 'imited 2NB'5 are as &ollo#s: 3uman Resources 1i)ision ersonal Ban-ing 1i)ision C!erations di)ision "om!uter and in&ormation technolog$ 1i)ision "redit 1i)ision

Einance and accounts di)ision Einancial institution 1i)ision %udit and Ris- Management 1i)ision

E(isting Branc&es
Cn 93 march 19>3 NB' #as &irst stared at 1il-usha Branch. %t the age o& 19 $ears it has esta.lished a total o& 7A .ranches o)er the countr$ and made a smooth net#or- inside the countr$ as #ell as throughout the #orld. +he num.er o& .ranches as territor$D #ise is mentioned in the &ollo#ing ta.le: Name of t&e Area 1ha-a "hittagong Ra8shahi Khulna S$lhet Total Number of Branc&es A= HA 91 93 9A )*+

Personal banking service: 'eposit Account:

"urrent %ccount 2"15 Short term de!osit %I" 2S+15D rate o& interest A.A?D=? Sa)ing %I" 2S15D rate o& interest =? Ei6ed de!osit Recei!t 2E1R5

,o$ to open an Account

Eirst interact #ith the client and understand hisIher interest to o!en an %I"0 address0 !ro&ession0 social status0 and also his re&eree. Must ha)e logical e6!lanation to o!en the %I" "urrent !hotogra!h.

Asked for some papers:

+a6 identi&ication notes 2+IN5 hotoco!$ o& !ass!ort +rade license Introduce mar- on the &orm0 &rom an$ em!lo$ee o& NB' ,m!lo$ment certi&icate.

If oint A-":
1eclarationD #ho #ill #ithdra# mone$4 Notice &rom clientD i& client #ant to #ithdra# more then J o& their de!osits or more than A:thousand0 notice must gi)e .e&ore 1 #ee- o& #ithdra#al I& it is a com!an$/s %I" then M% is must a&ter &ul&illment o& all re<uirements a client is !ermitted to o!en an account.

'ifferent types of "urrent Accounts:

Indi)idual ro!rietorshi! artnershi! "om!an$ "lu.0 societ$ etc.

%&o can open an .'/:

%n$ legal0 mentall$ &it !erson can o!en E1R. In time o& o!ening on !hoto and introducer is needed. E1R is made &or an$ amount.

'uration of interest rate:

.i(ed deposit /ecite is made for different maturity containing interest rate:

'uration
0 mont&s 7 mont&s )9 mont&s

Interest /ate
123 belo$ tk4 )+ Lac56 ))2 3above tk4 )+ Lac5 14823 belo$ tk4 )+ Lac56 ))482 3 above tk4 )+ Lac5 )+23belo$ tk4 )+ Lac56 ))482 3 above tk4)+ Lac5

/ules of .'/:
Normall$ a&ter maturit$ and &ollo#ing necessar$ rules holder o& E1R can #ithdra# total mone$ #ith interest rate. But i& the holder #ant to #ithdra# his mone$ .e&ore maturit$ then he does not get an$ interest0 .ut #ithdra# de!osited mone$. In case o& !remature E1R no !enalt$0 no IR in 3 or = months E1R. But in case o& 19 or 9H months .an- cut u! = months. %&ter that i& an$ sla. then according to this he gets IR. (!on interest rate 1:? income ta6 must cut u!. +here are some rules incase o& e6cise dut$ 2 $earl$ charged5

NBL mont&ly saving sc&eme 3N!:5:

It is an attracta.le sa)ings !ro8ect &or limited income grou!0 national Ban- 'imited got <uic- ta-e monthl$ &or AD> $ears. +he return is as &ollo#s:

In taka
!ont&ly installment
A:: 1::: 9::: 3::: H::: A::: 1::::

/eturn after 0 /eturn after 8 /eturn after ; years 14++2 years 14982 years 148+2
9:0=97 H109AA >90A1: 109307=A 1.=A0:9: 90:=097H H.190AH9 370>9= 7A0791 10A10A>3 9097037H 30:301== 307>09A7 70:>0H>A 7:0>H9 10H10=97 90>3039H H09A0:91 A0==07>> 70A7091H 1H01=097:

NBL deposit sc&eme 3N':5:

+he scheme #ill .e titled as N1S. +he !eriod o& de!osit #ill .e 3 $ears. "redit &acilities u! to >:? are allo#ed against lien on .alance o& N1S %I"0 at 1A? rate o& interest o& <uarterl$ rest.

N': amount 3 in taka 5

A:::: 1::::: 9::::: 3::::: H::::: A:::::

!ont&ly benefit payable 3in taka5

HA: 9:: 1>:: 97:: 3=:: HA::

)++++++ 9++++++ 8++++++

1+++ );+++ <8+++

T&e activities of cas& department:

+his cash de!artments deals #ith cash0 maintain the registers o& incoming and outgoing o& cash &lo#s. "ash de!artments has to !ro!erl$ maintain cash management !olic$. Bithin this !olic$0 cash de!artment !er&orms acti)it$ through some ste!s and &ollo#s some !olic$0 es!eciall$ insurance !olic$. +$!es o& insurance !olicies maintain in this de!artment &or getting insurance co)erage: "ash in sa&e insurance: u! to ta-a A:::::: co)erage "ash on counter insurance: u! to ta-a 1:::::: co)erage "ash in transit insurance: u! to ta-a 1::::::: co)erage

:%I.T services

NB' is one o& the &irst &e# Bangladesh .an-s to o.tain mem.ershi! o& s#i&t 2Societ$ &or #orld interD.an- telecommunication5. SBIE+ is a mem.ers o#ned coo!erati)e #hich a &irst and accurate communication net#or- &or &inancial transaction such as 'etter o& credit0 &und trans&er etc. .$ .eing a mem.er o& SBIE+0 the .an- has o!ened u! !ossi.ilities &or uninterru!ted connecti)it$ #ith o)er A7:: user institution in 1A: countries all o)er the #orld.

Bills and "learing department

+he .ills and clearing de!artments !er&orms their duties &or collection !ur!ose. +his !ur!ose ha!!ens through t#o #a$s:

T&roug& clearing &ouse:

,)er$ mem.er .an- o& the clearing house !re!ares a .an- #ish list o& che<ues and dra&t recei)ed &rom iits customers and dra#n on di&&erent .an-s. Re!resentati)e o& each .an- )isits the "learing 3ouse #ith the che<ues and their list in the morning and deli)ers the che<ues and dra&t to the re!resentati)e o& the res!ecti)e .an-s. Similarl$0 heIshe also recei)es the che<ues dra#n on hisIher .an- &rom the re!resentati)es o& the other .an-s. +he re!resentati)es returns to their res!ecti)e .an-s to meet again in the a&ternoon to return the dishonored instruments0 i& an$0 to the re!resentati)es o& the res!ecti)e .an-s. +he re!resentati)es o& the each .an- com!utes the &inal .alance !a$a.le or recei)a.le .$ his .an- or other .an- &rom other .an-s a&ter ta-ing into account the )arious amount o& recei!ts and !a$ment. +he &inal statement is e&&ected .$ the su!er)isor o& the "learing 3ouse .$ de.iting or crediting0 as the case ma$ .e0 the accounts o& the res!ecti)e .an-s as maintained #ith the clearing house.

/egisters:
.or collection purpose maintains some register suc& as=
'ocal Bill Eor "ollection 2'B"5 Cut#ard Bills &or collection 2CB"5 In#ard .ills &or collection 2IB"5

Branc& Banking:
"on)enience is the -e$ &eature o& the !ersonal Ban-ing rogram o& National Ban'imited 2NB'5. +he aim o& NB' is to !ro)ide o& e)er$ customer eas$ e6cess to hisIher account &rom an$ .ranch and ultimatel$ &rom an$ #here. Recognizing the need o& the customers0 NB' has recentl$ net#or-ed all o& the Branches in National0 Nara$angan80

"hittagong and s$lhet to !ermits its )alued cutomers to car$ out transaction &rom an$ .ranch. "ash #ithdra#al or de!osit or an$ t$!e o& !ersonal .an-ing. +ransaction can .e !er&ormed using the an$ Branch Ban-ing Ser)ice. %ll transactions under an$ Branch Ban-ing are a.solutel$ &ree o& charge.

T&e follo$ing services are available under any branc& Banking:

"as& $it&dra$al from one>s Account from any Branc& of t&e bank4 "as& and c&eck deposit into one>s Account from any branc& of t&e bank4

National bank "redit card:

NB' !ro)ide .oth credit card and de.it card .asicall$ this de!artment deals #ith credit cards0 and no# da$s onl$ the KMaster "ard/. But NB' recentl$ is starting the o!eration o& LIS% !o#er "ard as a 1e.it "ard. Master card is using as an alternati)e o& cash. In the real #orld cash carr$ing is not sa&e al#a$s that/s #h$ credit card is )er$ !o!ular the modern #orld and also in Bangladesh. eo!le can dra# cash &rom the %+M #ith out an$ in)ol)ement o& human0 .$ credit card one can .u$ an$thing &rom the sho!. NB' has t#o t$!e o& Master cards: Sil)er and gold0 .oth has local and international range. Interest rate is 9? &or .oth local and international.

Application and proposal preparing to open a card:

%!!lication recei)e &rom a !art$ Leri&$ the securities2E1R0 Sa)ing "erti&icate0 "1 or S1 %I" Eor e6!orter line #ill .e his E." %I" and !a$ment o& card #ill .e through (S1. Send the certi&icate to the to! management. I& a!!ro)ed .$ the management the card #ill !unched and deli)er a&ter 1 da$ to the client.

'ebit card 3?isa po$er card5:

NB' !o#er card issued to a card holder to a)ail o& ser)ices and to !urchase or to dra# cash .$ !ro!erl$ !resenting the same at the noti&ied mem.er ,sta.lishmentI Ban-I %+M. +hree t$!es o& !o#er card is a)aila.leD 'ocal card International card 1uel card.

Prominent feature of t&e NBL po$er "ard:

NB' !o#er card can .e used &or !urchased at merchants #here LIS% "ards are acce!ted trough electronic !oint o& sales terminals4

NB' !o#er card can .e used &or #ithdra#ing cash &rom automated teller machines 2%+M5. ersonal identi&ication num.er 2 IN5 necessar$ &or #ithdra#al o& cash #ill .e !ro)ided .$ the .anEor local card there is no insurance &ee &or the 1st $ear and 9nd $ear onl$ ta-a 9:: #ill .e charged. +o get a NB' o#er "ard "ustomer has to su.mit onl$ t#o co!$ o& hisIher recent !hotogra!h and the +IN 2+a6 Identi&ication Num.er5.

:ecured Overdraft /esc&eduling Term Loan: D bet$een ma(imum )82 of overdue installment or )+2 of
st

outstanding6 $&ic& is lo$er pain in cas& t&en ) resc&eduling considered4 Bet$een ma(imum 0+2 of overdue installment or 9+2 of outstanding6 $&ic& is lo$er pain in cas& t&en 9nd resc&eduling considered4

= bet$een ma(imum 8+2 of overdue installment or 0+2 of outstanding 6 $&ic& is lo$er pain in cas& t&en 0 resc&eduling considered4
rd

/esc&eduling of in case of demand and continuous loan>s resc&eduling rate of do$n demand and payment vary in order to loan amount4

"ontinuous loan:
Overdue loan amount One corer taka One @five corer taka .ive corer and above rate of do$n payment )82 )+2 82

Loans and Advanced:

'oans and ad)ance is a ma8or earning source o& a .an-. NB' is also )er$ care&ul to !ro)ide loan0 normall$ NB' sanction loan to indi)iduals0 smallImedium or large industries. %ctuall$ loans gi)e o& the .an-/s de!osit0 against )alua.le securit$.

NBL follo$ing some general rules- principle to provide loan to its client4

"as& credit 3""5 section:

%&at is "":

+he .an- should !ro)ide suita.le credit ser)ices and !roducts &or the mar-ets in #hich it o!erates. 'oans and ad)ances shall normall$ the &inanced &rom customers de!osits and not out o& the share0 tem!orar$ &unds or .orro#ings &rom other Ban-s. "redit #ill .e allo#ed in manners #hich #ill in no #a$ com!romise the .an-/s standards o& e6cellence and to customers #ho #ill com!lement such standards. %ll credit e6tension must com!l$ #ith the re<uirement o& .an-ing com!anies. %ct 1991 and Bangladesh .an-/s instructions amended &rom time to time. +he aggregate o& all cash &acilities shall not e6ceed >:? o& customer de!osits. It is &urther go)erned .$ the statutor$ and li<uidit$ reser)e re<uirement o& Bangladesh Ban-.

Types of "": Papers reBuire to give t&e "":

Actually cas& credit is one kind of credit facilities to t&e customers4 "" is fully continuous loan4 Aenerally t&is loan issued for providing $orking capital of a business T$o types of cas& credit are used: ,ypot&ecation 3,ypo5 pledge Party application Application in Bank>s prescribed form :tock report Trade license Audited balance s&eet for last 0 years Income ta( clearance certificate ?AT

&n Introdu#tion to 'i(uidit% &nd &sset)liabilit% Management LiBuidity !anagement 'i<uidit$ re&ers to the a.ilit$ o& an institution to meet demands &or &unds. 'i<uidit$ management means ensuring that the institution maintains su&&icient cash and li<uid assets 215 to satis&$ client demand &or loans and sa)ings #ithdra#als0 and 295 to !a$ the institution/s e6!enses. 'i<uidit$ management in)ol)es a dail$ anal$sis and detailed estimation o& the size and timing o& cash in&lo#s and out&lo#s o)er the coming da$s and #ee-s to minimize the ris- that sa)ers #ill .e una.le to access their de!osits in the moments the$ demand them. In order to manage li<uidit$0 an institution must ha)e a management in&ormation s$stem in !lace Mmanual or com!uterizedMthat is su&&icient to generate the in&ormation needed to ma-e realistic gro#th and li<uidit$ !ro8ections. +he in&ormation needed includes: N +he actual de!osit lia.ilities o& the MEI as o& a certain date according to client name0 maturit$0 amount0 and t$!e o& account. N % histor$ o& de!osit and loan in&lo#s and out&lo#s. N % histor$ o& o)erall dail$ cash demands to determine the amount o& cash that needs to .e -e!t onDsite and in demand de!osit t$!e accounts. % li<uidit$ shortage0 no matter ho# small0 can cause great damage to a sa)ings institution. It ta-es a long time to .uild client relationshi!s0 a li<uidit$ crisis can destro$ those relationshi!s instantl$. In order to a)oid a li<uidit$ crisis0 management needs to ha)e a #ellDde&ined !olic$ and esta.lished !rocedures &or measuring0 monitoring0 and managing li<uidit$. 'i(uidit% Management Poli#% % sa)ings institution should ha)e a &ormal li<uidit$ !olic$ that #as de)elo!ed and #ritten .$ the o&&icials #ith the assistance o& management. +he !olic$ should .e re)ie#ed and re)ised as needed0 no less than annuall$. +he !olic$ should .e &le6i.le0 so that managers ma$ react <uic-l$ to an$ un&oreseen e)ents. % li<uidit$ !olic$ should s!eci&icall$ state: N Bho is res!onsi.le &or li<uidit$ management. N Bhat is the general methodolog$ o& li<uidit$ management.3o# #ill li<uidit$ .e monitored or0 in other #ords0 #hat li<uidit$ management tools #ill .e used. Bhat are the time &rames to .e used in cash &lo# anal$sis0 the le)el o& detail0 and the inter)als at #hich the cash &lo# tools used are to .e u!dated. N +he le)el o& ris- that the institution is !re!ared to ta-e in minimizing cash to enhance !ro&ita.ilit$. S!eci&icall$0 the !olic$ should esta.lish minimums and ma6imums &or total cash assets and &or the amount to .e -e!t onDsite.

N 3o# o&ten decisions a.out li<uidit$ should .e re)ie#ed0 including: assum!tions used to de)elo! the cash &lo# .udget0 the minimum cash re<uirement as descri.ed in dail$ cash &orecasting0 and an$ o& the esta.lished ratio targets. N +he signator$ authorit$ limits o& the li<uidit$ manager should e6cess cash .e on de!osit at another institution. C&ten li<uidit$ decisions need to .e made ra!idl$ to a)oid a crisisO there&ore the li<uidit$ manager should ha)e some authorit$. +his authorit$ should ha)e limitsO &or e6am!le0another signature should .e re<uired &or unusuall$ large transactions. I& li<uid &unds are not in)ested in another &inancial institution or other t$!e o& in)estment0 then there should .e )er$ s!eci&ic !olicies on ho# e6cess &unds are to .e handled0 such as #ho has access to them and #here the$ are to .e -e!t. N Bhich assets are considered to .e li<uid. N ,sta.lished limits &or the ma6imum amount to .e in)ested in an$ one .an-0 to limit e6!osure to a .an- &ailure. N Bho ma$ access or esta.lish a line o& credit &or shortDterm li<uidit$ needs. N Bhat are acce!ta.le reasons or scenarios &or accessing the line o& credit. LiBuidity and Asset=liability !anagement %ssetDlia.ilit$ management 2%'M5 is the !rocess o& !lanning0 organizing0and controlling asset and lia.ilit$ )olumes0 maturities0 rates0 and $ields in order to minimize interest rate ris- and maintain an acce!ta.le !ro&ita.ilit$ le)el. Sim!l$ stated0 %'M is another &orm o& !lanning. It allo#s managers to .e !roacti)e and antici!ate change0 rather than reacti)e to unantici!ated change. %n MEI/s li<uidit$ is directl$ a&&ected .$ %'M decisions. Managers must al#a$s anal$ze the im!act that an$ %'M decision #ill ha)e on the li<uidit$ !osition o& the institution. 'i<uidit$ is a&&ected .$ %'M decisions in se)eral #a$s: N %n$ changes in the maturit$ structure o& the assets and lia.ilities can change the cash re<uirements and &lo#s. N Sa)ings or credit !romotions to .etter ser)e clients or change the %'M mi6 could ha)e a detrimental e&&ect on li<uidit$0 i& not monitored closel$. N "hanges in interest rates could im!act li<uidit$. I& sa)ings rates are lo#ered0 clients might #ithdra# their &unds and cause a li<uidit$ short&all. 3igher interest rates on loans could ma-e it di&&icult &or some clients to meet interest !a$ments0 causing a li<uidit$ shortage. Asset=liability !anagement %s an institution .egins to mo.ilize sa)ings the %'M challenges increase dramaticall$. Most sa)ings institutions o&&er se)eral t$!es o& sa)ings !roducts. ,ach !roduct t$!e has )ar$ing attri.utes and reacts di&&erentl$ to mar-et changesO the challenge o& %'M lies in the di&&ering characteristics o& each !roduct. +he o.8ecti)e o& %'M is to maintain a match in the terms o& rate sensiti)e assets 2those assets that #ill mo)e in search o& the most com!etiti)e interest rates5 #ith their &unding sources 2sa)ings0 de!osits0e<uit$0 and e6ternal credit5 in order to reduce interest rate ris- #hile ma6imizing !ro&ita.ilit$. Interest rate ris- is de&ined as the ris- that changes in the current mar-et interest rates #ill ad)ersel$ im!act the institution/s &inancial !er&ormance. Eor e6am!le0 due to changes in the

mar-et an MEI is &orced to ad8ust the interest rate on de!osits u!#ard to remain com!etiti)e0 .ut its earning assets are concentrated in longterm0 &i6edDrate loans0 and in)estments. Einancial !er&ormance #ill .e im!aired .ecause the institution cannot ad8ust its income earned on loans u!#ard as &ast as the cost o& &unds is increasing. Interest rate ris- to some degree is una)oida.le0 .ut it is managea.le.

44444444

Interest rate ris- ma$ increase in the &ollo#ing scenarios: N Bhen longerDterm &i6edDrate loans and in)estments are &unded #ith de!osits that are shortDterm and can .e re!riced <uic-l$ or that ha)e )aria.le interest rates #ith shortDterm ad8ustment !eriods. Eor e6am!le0 a oneD$ear &i6edDrate loan is &unded .$ certi&icates o& de!osit #ith threeDmonth maturities. N In an en)ironment o& high or un!redicta.le in&lation. I& clients de!osit their &unds in an institution #hen in&lation is high0 the$ still e6!ect to earn a real rate o& return. In order to !a$ a real rate o& return0 the institution must earn enough on its assets to !a$ a real rate o& return on its lia.ilities. +his scenario re<uires that managers constantl$ monitor interest rates and ma-e ad8ustments to assets and lia.ilities in a timel$ &ashion. +he e&&ect o& in&lation #ould .e e6acer.ated i& the rates on loans and in)estments #ere &i6ed and de!osits #ere shortDterm or #ith )aria.le interest rates.

/isk !anagement of National Bank Limited <4) 'efinitions of risk: Ris- is a conce!t that denotes a !otential negati)e im!act to some characteristic o& )alue that ma$ arise &rom a &uture e)ent0 or #e can sa$ that PRis-s are e)ents or conditions that ma$ occur0 and #hose occurrence0 i& it does ta-e !lace0 has a harm&ul or negati)e e&&ectQ. Ris- is a commercial strategic .oard game0 !roduced .$ ar-er Brothers 2no# a di)ision o& 3as.ro5. It #as in)ented .$ Erench mo)ie director %l.ert 'amorisse0 and originall$ released in 19A70 as 'a "on<uRte du Monde 2+he "on<uest o& the Borld50 in Erance. Ris- is an al.um .$ thrash metal .and Megadeth released in 1999. Ris- is also nota.le as the last original Megadeth release to &eature long time Megadeth guitarist Mart$ Eriedman. +his al.um is the &irst Megadeth recording #ith drummer @imm$ 1e7rasso. +he !ro.a.ilit$ o& harm&ul conse<uences0 or e6!ected losses 2deaths0 in8uries0 !ro!ert$0 li)elihoods0 economic acti)it$ disru!ted or en)ironment damaged5 resulting &rom interactions .et#een natural or humanDinduced hazards and )ulnera.le conditions

Ris- is a science &iction short stor$ .$ Isaac %simo)0 &irst !u.lished in the Ma$ 19AA issue o& %stounding Science Eiction0 and re!rinted in the collections +he Rest o& the Ro.ots 219=H5 and +he "om!lete Ro.ot 219>95.

<49 'efinition of "redit risk: Ris- is inherent in all commercial o!erations. Eor .an-s and &inancial institutions credit ris- is an essential &actor0 #hich needs to .e managed !ro!erl$. "redit ris)irtuall$ is the !ossi.ilit$ that a .orro#er #ill &ail to re!a$ de.t in accordance #ith the terms o& sanction. "redit ris- there&ore arises &rom the .an-s lending o!erations. In the !resent da$s state o& deregulation and glo.alization .an-s range o& acti)ities ha)e increased0 so also are the .an-. ,6!ansion o& .an- lending o!erations co)ering ne# !roducts ha)e &ocused the .an- to con&ront ne#er ris- areas and there&ore to #or- out !ro!er ris- addressing de)ices. "redit ris-s are so e6hausti)e that a single de)ice can not encom!ass all the ris-. %s National .an- is !ro)iding credit &acilit$ out o& its total a)aila.le &unds0 it has to manage these credits )er$ e&&icientl$. %n e&&icient credit management s$stem com!rises man$ things and this co)er the !reDsanction acti)ities to !ostDsanction acti)ities. "redit management is im!ortant as it hel!s the .an-s and &inancial institutions to understand )arious dimensions o& ris- in)ol)ed in di&&erent credit transactions. %t the !reDsanction stage0 credit management hel!s the sanctioning authorit$ to decide #hether to lend or not to lend0 #hat should .e the loan !rice0 #hat should .e the e6tent o& e6!osure0 #hat should .e the a!!ro!riate credit &acilit$0 #hat are the )arious &acilities0 #hat are the )arious ris- mitigation tools to !ut a ca! on the ris- le)el. %t the !ostDsanctioning stage0 the .an- can decide a.out the de!th o& the re)ie# o& rene#al0 &re<uenc$ o& re)ie#0 !eriodicit$ o& the grading0 and other !recautions to .e ta-en. <40 "redit risk and Banglades& bank: +he Einancial Sector Re&orm ro8ect 2ESR 5 has designed the 'R% !ac-age0 #hich !ro)ides a s$stematic !rocedure &or anal$zing and <uanti&$ing the !otential credit ris-.

Bangladesh Ban- has directed all commercial .an- to use 'R% techni<ue &or e)aluating credit !ro!osal amounting to +-. 1: million and a.o)e. +he o.8ecti)e o& 'R% is to assess +he credit ris- in <uanti&ia.le manner and then &inds out #a$s * means to co)er the ris-. 3o#e)er0 some commercial .an-s em!lo$ 'R% techni<ue as a credit a!!raisal tool &or e)aluating credit !ro!osals amounting to +-. A million and a.o)e. Broadl$ 'R% !ac-age di)ides the credit risinto t#o categories0 namel$ Business ris- * Securit$ ris-. % detail inter!retation o& these ris-s and the !rocedure &or e)aluating the credit as &ollo#s

<404) Business risk: It re&ers to the ris- that the .usiness &alls to generate su&&icient cash &lo# to re!a$ the loan. Business ris- is su.di)ided into t#o categories. <4049 Industry risk4 +he ris- that the com!an$ &ails to re!a$ &or the e6ternal reason. It is su.di)ide into su!!lies ris- and sales ris-. <4040 :upplies risk: It indicates that the .usiness su&&ers &rom e6ternal disru!tion to the su!!l$ o& im!utes. "om!onents o& su!!lies ris- are as ra# material0 'a.or0 !o#er0 machiner$0 e<ui!ment0 &actor$ !remises etc. "redit /isk !anagement <404< :ales risk: +his re&ers to the ris- that the .usiness su&&ers &rom e6ternal disru!tion o& sales. Sales ma$ .e disru!ted .$ changes to mar-et size0 increasing in com!etition0 change in the regulation or due to the loss o& single large customer. Sales ris- is determined .$ anal$zing !roduction or mar-eting s$stem0 industr$ situation0 7o)ernment !olic$0 and com!etitor !ro&ile and com!anies strategies. <4048 "ompany risk: +his re&ers to the ris- that the com!an$ &ails &or internal reasons. "om!an$ ris- is su.di)ided into com!an$ !osition ris- and Management ris-s. <4047 "ompany position risk: Bithin an industr$ each and e)er$ com!an$ holds a !osition. +his !osition is )er$ com!etiti)e. 1ue to the #ea-ness in the com!an$/s !osition in the industr$0 a com!an$ is the ris- &or &ailure. +hat means0 com!an$ !osition ris- is the ris- o& &ailure due to #ea-ness in the com!anies !osition in the industr$. It is su.di)ided into !er&ormance ris- and resilience ris-. <404* Performance risk:

+his ris- re&ers to the ris- that the com!an$/s !osition is so #ea- that it #ill .e una.le to re!a$ the loan e)en under Ea)or a.le e6ternal condition. er&ormance ris- assessed .$ SBC+ 2Strength0 Bea-ness0 C!!ortunit$ and +hreat5 anal$sis0 +rend anal$sis0 "ash &lo# &orecast anal$sis and credit re!ort anal$sis 2i.e. "IB re!ot &rom Bangladesh Ban-5.

"redit /isk !anagement <404; /esilience risk: Resilience means to reco)er earl$ in8ur$0 this re&ers to ris- that the com!an$ &alls due to resilience to une6!ected e6ternal conditions. +he resilience o& a com!an$ de!ends on its le)erage0 li<uidit$ and strength o& connection o& its o#ner or directors. +he resilience ris- is determined .$ anal$zing di&&erent &inancial ratio0 &le6i.ilit$ o& !roduction !rocess0 shareholders #illingness to su!!ort the com!an$ i& need arise and !olitical and !ri)ate a&&iliation o& o#ners and -e$ !ersonnel. <4041 !anagement risk: +he management ris- re&ers to the ris- that the com!an$ &ails due to management not e6!loiting e&&ecti)el$ the com!an$/s !osition. Management ris- is su.di)ided into management com!etence ris- and integrit$ ris-. <404)+ !anagement competence risk: +his re&ers to the ris- that &alls .ecause the management is incom!etent. +he com!etence o& management de!ends u!on their a.ilit$ to manage the com!an$/s .usiness e&&icientl$ and e&&ecti)el$. +he assessment o& management com!etence de!ends on management a.ilit$ and management team #or-. Management a.ilit$ is determined .$ anal$zing the a.ilit$ o& o#ner or .oard o& the mem.ers &irst and then -e$ !ersonnel &or &inance and o!eration. Management.. <404)) !anagement integrity risk: +his re&ers to the ris- that the com!an$ &ails to re!a$ the loan amount due to lac- o& management integrit$. Management integrit$ is a com.ination o& honest$ and de!enda.ilit$. <404)9 :ecurity risk: +his sort o& ris- is associated #ith the realized )alue o& the securit$0 #hich ma$ not co)er the e6!osure o& loan. ,6!osure means !rinci!al !lus outstanding interest. +he

securit$ ris- is su.di)ided into t#o ma8or heads i.e. securit$ control ris- and securit$ co)er ris-. <404)0 :ecurity control risk: +his ris- re&ers to the ris- that the .an- &alls to realize the securit$ .ecause o& .an-/s control o)er the securit$ o&&ered .$ the .orro#er i.e. incom!lete documents. +he riso& &ailure to realize the securit$ de!ends on the di&&icult$ in o.taining &a)ora.le 8udgment and ta-ing !ossession o& securit$. Eor anal$zing the securit$ control ris- the credit o&&ice is re<uired to )eri&$ documentation to ensure securit$ !rotection0 documentation com!leteness0 documentation integrit$ and !ro!er insurance !olic$. 3eIshe also conducts site )isit to )eri&$ securit$ e6istence. %ssessment o& securit$ control ris- re<uires anal$zing the !ossi.ilit$ o& o.taining &a)ora.le 8udgment and anal$zing the case #ith #hich the .an- could ta-e the !ossession and li<uidate the securities. <404)< :ecurity covers risk: +his re&ers to the ris- that the realized )alue o& securit$ is less than e6!osure. Securit$ co)er ris- de!ends on s!eed o& realization and li<uidation )alue. Eor anal$zing securit$ co)er ris-0 the o&&icial re<uires assessing the !o#er o& the customer to !rolong the legal !rocess and to anal$ze the mar-et demand &or the securit$ Eor assessment o& securit$ control ris-0 the o&&icials times the time that #ould re<uire to li<uidate the securit$ and assess the ris- and estimates the securit$ )alue at li<uidation and assess the rise <4< Process of "redit risk: "redit Management olic$ &or an$ commercial .an- must ha)e .een !re!ared in accordance #ith the olic$ 7uidelines o& Bangladesh Ban-/s Eocus 7rou! on "redit and Ris- Management #ith some changes to meet !articular .an-/s internal needs. "redit management must .e organized in such a !rocess that the .an- can minimize its losses &or !a$ment o& e6!ected di)idend to the shareholders. +he !ur!ose o& this !rocess is to !ro)ide directional guidelines that #ill im!ro)e the ris- management culture0 esta.lish minimum standards &or segregation o& duties and res!onsi.ilities0 and assist in the ongoing im!ro)ement o& concerned .an-. +he guidelines &or credit management ma$ .e organized into the &ollo#ing sections: Policy guidelines a4 'ending guidelines b4 "redit assessment and ris- grading c4 %!!ro)al authorit$ d4 Segregation o& duties e4 Internal control and com!liance Program Auidelines a4 %!!ro)al !rocess

b4 "redit administration c4 "redit monitoring d4 "redit reco)ers

Policy guidelines

a4 Lending guidelines: +he lending guidelines include the &ollo#ing: Industr$ and Business Segment Eocus +$!es o& loan &acilities Single .orro#ersI grou! limitsI s$ndication 'ending ca!s 1iscouraged .usiness t$!es As a minimum6 t&e follo$ings are discouraged: Militar$ e<ui!mentI #ea!ons &inance 3ighl$ le)eraged transactions Einance o& s!eculati)e in)estments 'ogging0 mineral e6tractionI mining0 or other acti)it$ that is ethicall$ or

environmentally sensitive 'ending to com!anies listed on "IB .lac- list or -no#n "ounter !arties in countries su.8ect to (N sanctions 'ending to holding com!anies. b4 "redit Assessment and /isk Arading: % thorough credit and ris- assessment should .e conducted !rior to the granting o& loans0 and at least annuall$ therea&ter &or all &acilities. "redit %!!lications should summaries the results o& the ris- assessment and include0 as a minimum0 the &ollo#ing details:

,n)ironment or social ris- in!uts %mount and t$!e o& loan 2s5 !ro!osed ur!ose o& loans 'oan structure 2 tenor0 co)enants0 re!a$ment schedule0 interest5

Securit$ arrangement %n$ other ris- or issue Ris- triggers and action !lanDcondition !rudent0 etc. Ris- is graded as !er 'ending Ris- %nal$sis 2'R%50 Bangladesh Ban-/s 7uidelines o&

classi&ication o& loans and ad)ances. )4 c4 Approval Aut&ority: %!!ro)al authorit$ ma$ .e as the &ollo#ing: "redit a!!ro)al authorit$ has .een delegated to Branch Manager0 "redit "ommittee .$ the M1I Board 1elegated a!!ro)al authorities shall .e re)ie#ed annuall$ .$ M1I Board.

!'- Board: %!!ro)als must .e e)idenced in #riting. %!!ro)al records must .e -e!t on &ile #ith credit a!!lication +he aggregate e6!osure to an$ .orro#er or .orro#ing grou! must .e used to determine the a!!ro)al authorit$ re<uired. d4 :egregation of 'uties:

Ban-s should aim at segregating the &ollo#ing lending &unction: "redit a!!ro)alI ris- management Relationshi! managementI mar-eting S "redit administration "redit /isk !anagement e* Internal "ontrol and "ompliance: Ban-s must ha)e a segregated internal auditI control de!artment charged #ith conducting audits o& all .ranches. "redit /isk !anagement Program Auidelines

a4 Approval process: +he &ollo#ing diagram illustrates an e6am!le o& the a!!ro)al

!rocess: b4 "redit administration: +he credit administration &unction is critical in ensuring that !ro!er documentation and a!!ro)als are in !lace !rior to the dis.ursement o& loan &acilities. c4 "redit monitoring: +o minimized credit losses0 monitoring !rocedures and s$stems should .e in !lace that !ro)ides an earl$ indication o& the deteriorating &inancial health o& .orro#er. d4 "redit recovery: +he reco)er$ unit o& .ranch should directl$ manage accounts #ith sustained deterioration 2a ris- rating o& su.Dstandard or #orse5. +he !rimar$ &unctions o& reco)er$ unit are: "redit /isk !anagement C C 1etermine account action !lanI reco)er$ strateg$ ursue all o!tions to ma6imize reco)er$0 including !lacing customers into

recei)ershi! or li<uidation as a!!ro!riate. C ,nsure ade<uate and timel$ loan loss !ro)isions are made .ased on actual and e6!ected losses. <48 Types of credit risk: +erm &inancing &or ne# !ro8ect had BMR, o& e6isting !ro8ects 2large0 medium0 SM,5. Bor-ing ca!ital &or industries0 trading ser)ices and others 2large0 medium0 SM,5. +rade &inance &or im!ort and e6!ort 'ease &inance Small loan &or traders0 micro enter!rise and other !roducti)e small )enture. "onsumer &inance Eee .usiness <47 Importance of credit risk:

+he im!ortance o& credit ris- management &or .an-ing is tremendous. Ban-s and other &inancial institutions are o&ten &aced #ith ris-s that are mostl$ o& &inancial nature. +hese institutions must .alance ris-s as #ell as returns. Eor a .an- to ha)e a large consumer .ase0 it must o&&er loan !roducts that are reasona.le enough. 3o#e)er0 i& the interest rates in loan !roducts are too lo#0 the .an- #ill su&&er &rom losses. In terms o& e<uit$0 a .an- must ha)e su.stantial amount o& ca!ital on its reser)e0 .ut not too much that it misses the In)estment re)enue and not too little that it lead itsel& to &inancial insta.ilit$ and to the ris- o& regulator$ nonDcom!liance. "redit ris- management0 in &inance terms0 re&ers to the !rocess o& ris- assessment that comes in an in)estment. Ris- o&ten comes in in)esting and in the allocation o& ca!ital. +he ris-s must .e assessed so as to deri)e a sound in)estment decision. 'i-e#ise0 the assessment o& ris- is also crucial in coming u! #ith the !osition to .alance ris-s and returns. Ban-s are constantl$ &aced #ith ris-s. +here are certain ris-s in the !rocess o& granting loans to certain clients. +here can .e more ris-s in)ol)ed i& the loan is e6tended to un#orth$ de.tors. "ertain ris-s ma$ also come #hen .an-s o&&er securities and other &orms o& in)estments. +he ris- o& losses that result in the de&ault o& !a$ment o& the de.tors is a -ind o& risthat must .e e6!ected. Because o& the e6!osure o& .an-s to man$ ris-s0 it is onl$ reasona.le &or a .an- to -ee! su.stantial amount o& ca!ital to !rotect its sol)enc$ and to maintain its economic sta.ilit$. +he second Basel %ccords !ro)ides statements o& its rules regarding the regulation o& the .an-/s ca!ital allocation in connection #ith the le)el o& ris-s the .an- is e6!osed to. +he greater the .an- is e6!osed to ris-s0 the greater the amount o& ca!ital must .e #hen it comes to its reser)es0 so as to maintain its sol)enc$ and sta.ilit$. ris- management must !la$ its role then to hel! .an-s .e in com!liance #ith Basel II %ccord and other regulator$ .odies. +o manage and assess the ris-s &aced .$ .an-s0 it is im!ortant to ma-e certain estimates0 conduct monitoring0 and !er&orm re)ie#s o& the !er&ormance o& the .an-. 3o#e)er0 .ecause .an-s are into lending and in)esting !ractices0 it is rele)ant to ma-e re)ie#s on loans and to scrutinize and anal$ze !ort&olios. 'oan re)ie#s and !ort&olio anal$sis are crucial then in determining the credit and in)estment ris-s +he com!le6it$ and emergence o& )arious securities and deri)ati)es is a &actor .an-s must .e acti)e in managing the ris-s. +he credit ris- management s$stem used .$ man$ .an-s toda$ has com!le6it$O ho#e)er0 it can hel! in the assessment o& ris-s .$ anal$zing the credits and determining the !ro.a.ilit$ o& de&aults and ris-s o& losses.

"redit ris- management &or .an-ing is a )er$ use&ul s$stem0 es!eciall$ i& the ris-s are in line #ith the sur)i)al o& .an-s in the .usiness #orld. <4* "redit risk planning: +here are some o.8ecti)es .ehind a #ritten credit !olic$ o& National Ban- that are as &ollo#s: ) +o !ro)ide a guideline &or gi)ing loan. ) rom!t res!onse to the customer need. ) Shorten the !rocedure o& gi)ing loan. ) Reduce the )olume o& #or- &rom to! le)el management. ) 1elegation o& authorit$ o& #or- &rom to! le)el o& management. ) +o chec- and .alance the o!erational acti)ities <4; Tools of credit risk: Eor credit management0 a &irm ma$ use tools a)aila.le to them. Such tools include "redit Ris- 7rading 2"R75 and Einancial S!read Sheet 2ESS5. "redit ris- grading is an im!ortant &or credit ris- management as it hel!s the .an-s and &inancial institutions to understand )arious dimensions o& ris- in)ol)ed in di&&erent credit transactions. +he aggregation o& such grading across the .orro#ers0 acti)ities and the lines o& .usiness can !ro)ide .etter assessment o& the <ualit$ o& credit !ort&olio o& a .an- or .ranch. +he 'ending Ris- %nal$sis 2'R%5 manual introduced in 1993 .$ the Bangladesh Ban- has .een in !ractice &or mandator$ use .$ the .an-s and &inancial institutions &or loan size o& B1+ 1.:: crore and a.o)e. 3o#e)er0 the 'R% manual su&&ers &rom a lot o& su.8ecti)it$0 sometimes creating con&usion to the lending .an-ers in terms o& selection o& credit !ro!osals on the .asis o& ris- e6!osure. Mean#hile in 9::3 end0 Bangladesh Ban- !ro)ided guidelines &or credit ris- management o& .an-s #herein it recommended0 interalia0 the introduction o& Ris- 7rade Score "ard &or ris- assessment o& credit !ro!osals. Bangladesh Ban- e6!ects all commercial .an-s to ha)e a #ell de&ined credit rismanagement s$stem #hich deli)ers accurate and timel$ grading. In !ractice0 a .an-/s credit ris- grading s$stem should re&lect the com!le6it$ o& its lending acti)ities and the o)erall le)el o& ris- in)ol)ed. <41 Essential "omponents of a :ound "redit Policy +here can .e some )ariations .ased on the needs o& a !articular organization0 .ut at least the &ollo#ing areas should .e co)ered in an$ com!rehensi)e statement o& credit !olic$ and National Ban-/s !olic$ also co)ers these areas: )4 94 Legal consideration: +he .an-/s legal lending limit and other constraints 'elegation of aut&ority: ,ach indi)idual authorized to e6tend credit should should .e set &orth to a)oid inad)ertent )iolation o& .an-ing regulations.

-no# !recisel$ ho# much and under #hat conditions he or she ma$ commit the .an-/s &unds. +hese authorities should .e a!!ro)ed0 at least annuall$0 .$ #ritten resolution 04 o& the .oard o& directors and -e!t current at all times. Types of credit e(tension: Cne o& the most su.stances !arts o& a loan is a

delineation o& #hich t$!es o& loans are acce!ta.le and #hich t$!e are not "redit /isk !anagement <4 Pricing: In an$ !ro&it moti)ated endea)or0 the !rice to .e charged &or the goods or ser)ices rendered is o& !aramount #ithout it0 indi)iduals ha)e &e# guidelines &or <uoting retag or &ees0 and the )ariations resulting &rom human nature #ill .e a source o& customer dissatis&action. 84 !arket Area: ,ach .an- should esta.lish its !ro!er mar-et area0 .ased u!on0 among other things0 the size and so!histication o& its organization its ca!ital stand!oint0 de&ining one/s mar-et area is !ro.a.l$ more im!ortant in the lending &unction than in an$ other as!ect o& .an-ing. 74 Loan :tandard: +his is a de&inition o& the t$!es o& credit to .e e6!ended0 <4)+ .ocus on Industry and Business :egment Industr$ segment &ocuses on +e6tile0 harmaceuticals0 %groD.ased0 Eood and allied0 +elecommunication0 o#er generation and distri.ution0 3ealth care0 ,ntertainment Ser)ices0 "hemicals0 +rans!ort0 In&rastructure de)elo!ment0 'in-age industr$0 In&ormation technolog$0 "eramics0 Cthers as decided &rom tome to time. %nd .usiness segment &ocuses on 1istri.ution0 Bric- &ield0 Rice millI &lour millI oil mill0 Bororder0 Garn trading0 "loth merchant0 Industrial s!ares0 3ard#are0 ,lectronic and electrical goods0 "onstruction materials0 Eish trading0 7rocer$0 BholesaleI retail0 Cthers as dedicated &rom time to time "redit /isk !anagement <4)) Lending Auidelines %s the .an- has a rate o& nonD!er&orming loans. Ban-s ris- ta-ing a!!lied should .e contained and our &ocus should .e to maintain a credit !ort&olio -ee!ing in mind o& .an-/s ca!ital ade<uac$ and reco)er$ strength. +hus .an-/s strateg$ #ill .e in)igorating loan !rocessing ste!s including identi&$ing 0 measuring 0 containing ris-s as #ell as maintaining a .alance !ort&olio through minimizing loan concentration 0 encouraging loan di)ersi&ication 0 e6!anding !roduct range 0 streamlining securit$ 0 insurance etc. as .u&&er again une6!ected. +hapter , -. "redit Evaluation Process 84) Indebtedness6 /ural and Drban: #herein the <ualitati)e standards &or acce!ta.le loans are set &orth.

Inde.tedness means the amount .orro#ed .$ the !eo!le &rom )arious sources &or in)estment in the )arious &ields. Rural inde.tedness is the amount .orro#ed .$ the agriculturists &rom )arious sources. +his amount is to .e used &or the im!ro)ement in agriculture0 &or the !urchase o& im!ro)ed agricultural im!lements0 .etter seeds0 &ertilizers0 etc. But the amount0 thus .orro#ed0 is not generall$ used &or the !ur!ose &or #hich it is .orro#ed. +he &unds are utilized &or un!roducti)e !ur!oses such as orthodo60 customs hea)$ e6!enditure on ceremonial acti)ities0 #eddings0 &esti)als0 etc. B$ ur.an inde.tedness is meant the amount .orro#ed .$ the industrialists0 traders and other .usiness communit$. +heir .usiness needs are met to some e6tent .$ the commercial .an-s and go)ernment agencies0 .ut0 &or incurring nonD!roducti)e e6!enditure0 the$ ha)e to resort to .orro#ing &rom the mone$Dlenders. "ontrar$ to the inde.tedness0 the amount .orro#ed is generall$ utilized &or the use in the res!ecti)e esta.lishments. +he commercial .an-s in the district generall$ charge interest &rom 7 !er cent to 13 !er cent0 according to the amount ad)anced and securit$ o&&ered. +he .an-s ad)ance loans on the !ledge o& goods mo)a.le or immo)a.le. +he mo)a.le goods are -e!t in the custod$ o& the .an-s. +he a)erage lending rate in the "entral "oDo!erati)e Einancial Institutions ranges in .et#een = to > !er cent0 de!ending u!on the nature and !ur!ose o& loans. +he coDo!erati)e societies ad)ance loans at the rate o& interest ranging &rom 9 T to > T !ercent. 'oans ad)anced0 under the State %id to Industries %ct0 193A0 carr$ interest &rom 9 T to = T !ercent. +he inde.tedness mone$Dlenders charge interest )ar$ing &rom 19 to 9A !ercent. +he loans ad)anced .$ the unregistered mone$Dlenders carr$ much higher rate o& interest0 usuall$ ranging &rom =: to 1:: !ercent0 !er annum. +he indigenous .an-ers are either going out to the !icture or the$ are tr$ing to &all in line #ith the modern .an-ing institutions. +here is hardl$ an$ case #here usur$ is noticed these da$s. +he interest is sometimes calculated in -ind0 too0 in rural areas. It is done onl$ in case #here loan is ad)ance in -ind. Such interest )aries &rom 9A to A: !ercent on the loan ad)ance in -ind0 i.e.0 is one <uintal o& #heat is ad)anced as loan0 it #ill &etch one <uintal 9A -ilos or one <uintal &i&t$ -ilos to the creditors0 as the case ma$ .e. Such loans are ad)anced .$ landlords0 .ut this !ractice is .$ and .$ disa!!earing .ecause o& the coming u! o& coDo!erati)e institutions #hich e6tend &inancial assistance li.erall$ to the rural areas. 849 /ole of Private !oney=lenders and .inanciers Mone$Dlenders. D +hough the institution o& !ri)ate mone$Dlending has lost its im!ortance0 $et it has not .een com!letel$ eliminated. It is regarded as a necessar$

agenc$ #here the modern .an-ing has not de)elo!ed. +he illiterate and conser)ati)e !eo!le0 #ho ha)e not .een &ull$ ac<uainted #ith the modern .an-ing !ractices or ha)e not .rought themsel)es into the coDo!erati)e &old0 still go to the doors o& the !ri)ate mone$Dlenders. +he mone$Dlenders or the Banian still dominates the rural sector o& the district econom$. 3is su!remac$ in the &ield o& rural &inance is still unchallenged. +he .usiness o& the mone$Dlenders is generall$ a &amil$ concern. 3is #or-ing ca!ital is his o#n. 3e grants 3e &ollo#s indigenous methods o& -ee!ing he charges is out o& !ro!ortion to the rate o& interest charged .$ the other .an-ing institutions. In the !rimiti)e agriculture societ$0 the indigenous mone$Dlender constituted the main and onl$ source o& &inance to a large section o& !o!ulation. 3e ser)ed in man$ #a$s the agriculturist #ho re<uired mone$ &or the !urchase o& &ood and other necessaries o& li&e0 &or social and religious ceremonies and &or securing agriculture re<uisites such as seeds0 .ulloc- etc. In times o& drought and &amine0 agriculturists used to .orro# hea)il$ &rom the mone$Dlender against the securit$ o& agricultural lands return the de.ts at har)est time. +hese de.ts0 not regularl$ re!aid .$ the &armers0 !iled u! through generation and created in succeeding $ears the !ro.lem o& rural inde.tedness. In the a.sence o& an$ ade<uate !rotection to the de.tor in the &orm o& State regulation the mone$Dlender indulged in a num.er o& mal!ractices and caused hardshi!s to the de.tors. +he 7o)ernment had0 there&ore0 to inter)ene to !re)ent mone$Dlenders &rom indulging in mal!ractices. +he )arious %cts !assed .$ the 7o)ernment chec-ed the acti)ities o& the mone$Dlenders. +he rise and gro#th o& modern .an-ing institutions also a&&ected their .usiness ad)ersel$. +ill recentl$0 !ri)ate mone$Dlending #as regarded as a hereditar$ !ro&ession. +here #as a se!arate class #hich #as ha)ing mone$Dlending as its regular !ro&ession. +he children o& this class generall$ used to ado!t the same !ro&ession in turn. +he !assing o& the un8a. Regulation o& %ccounts %ct0 193:0 a&&ected the !ri)ate mone$D lending .usiness ad)ersel$. +hough the class o& !ro&essional mone$Dlending still e6ists0 $et it has either le&t mone$Dlending as a !ro&ession or has re&ined this !ro&ession in line #ith the modern !ractice o& m:ne$:lending. No# the mone$D lenders are re<uired to get themsel)es registered #ith 840 Aovernment and :emi=Aovernment "redit Agencies +ill recentl$0 the s$stem o& indigenous mone$Dlending as a source o& &inance0 .oth in rural and ur.an areas0 #as common. But the de)elo!ment o& 7o)ernmentISemi 7o)ernment credit agencies ga)e a death .lo# to it. +he 7o)ernmentISemi 7o)ernment agencies are: 2i5 +he un8a. Einancial "or!oration. It #as esta.lished in19A3 under the State Einancial "or!oration %ct0 19A10 #ith the o.8ect o& !ro)iding medium and longDterm loans to industrial concerns located in the

un8a. State to the e6tent o& Rs 9: la-hs in the case o& a !u.lic limited com!an$ or a registered coDo!erati)e societ$ and 1: la-hs in other case0 at a rate o& interest o& 3 !ercent a.o)e the .an- rate0 #ith a minimum o& 9 !ercent !er annum. +his amount is re!a$a.le in 1: $ears. +he loans are ad)anced on the securit$ o& land0 .uilding0 !lant and machiner$0 .$ #a$ o& &irst registered mortgage0 #ith a margin o& H: !ercent o& the net assessed )alue. In case o& 7o)ernment guarantee0 the margin is reduced to 9A !ercent. O 2ii5 +he Khadi and Lillage Industries "ommission. It caters to the &inancial needs o& the -hadi and )illage industries &or shortDterm loans. O 2iii5 @oint StocBan-s O and 2i)5 "oDo!erati)e .an-s. Einancial assistance is also rendered .$ the State 1e!artment o& Industries under the State %id to Industries %ct0 193A0 &or setting u! ne# industrial units and &or e6!ansionImodernization o& e6isting units. +he 7o)ernment also ad)ances loans to the agriculturists o& agricultural !ur!ose such as !urchase o& &ertilizers0 seeds0 cattle0 tractors0 agricultural im!lements0 etc 84< Eoint=:tock Banks +he .an-s registered under the Indian "om!anies %ct0 19130 come under this head. Crganized on modern lines o& 8ointDstoc- com!anies #ith limited lia.ilit$0 the 8ointDstoc- .an-s are usuall$ re&erred to as commercial .an-s. +he modern .an-ing institutions in the countr$ had a )er$ che<uered histor$. +he .eginning o& the 9:th centur$ #as a turning !oint in their de)elo!ment. +he S#adeshi mo)ement ga)e a great &illi! to the .an-ing industr$. % good num.er o& .an-s #ere started .$ enter!rising Indian .usinessmen and ca!italists. 3o#e)er0 there #ere se)eral .an-ing &ailures. +he &irst t#o decades o& the 9:th centur$ #ere characterized .$ !rogress o& .an-ing as #ell as .an- closures. +he BorldDBars I 2191HD1>5 and II 21939DHA5 .rought acceleration !rogress. 1uring the thirties also there #as a .an-ing crises. +he !assage o& the Ban-ing "om!anies %ct0 19H90 in the .an-ing legislation in India. +his %ct #as amended &rom time to time. In the 7urdas!ur 1istrict0 in the .eginning0 there #as at 7urdas!ur a .ranch o& the 1oa.a Ban- 'td.0 .ut it had a )er$ short li&e. +herea&ter0 a .ranch o& the eo!le/s Ban- o& Northern India 'td. #as o!ened. +hough &ro a sometime it had a good .usiness0 $et it also #ent into li<uidation. Batala had a .ranch o& Sahu-ara Ban- 'td. +he %mrit Ban- 'td. #ith its 3ead C&&ice at %mritsar0 o!ened a .ranch at 7urdas!ur in 1939 and another one at Batala. +he Batala .ranch #as closed a&ter a.out a $ear .ut another #as o!ened at 1inanagar. %t that time0 the %mrit Ban- #as the onl$ commercial .an- at 7urdas!ur. 'ater on0 the "entral Ban- o& India 'td. %nd the Im!erial Ban- o& India 2no# the State Ban- o& India5 also o!ened their .ranches there0 .ut these closed soon a&ter. %&ter the la!se o& some !eriod0 the Bharat Ban- 'td. and the un8a. National Ban- 'td. o!ened their .ranches at 7urdas!ur 2in 19HH50 848 Leading Auidelines of NBL:

+his section details &undamental credit ris- management !olicies that are recommended &or ado!tion .$ all .an-s in Bangladesh. +he guidelines contained herein outline general !rinci!les that are designed to go)ern the im!lementation o& more detailed lending !rocedures and ris- grading s$stems #ithin indi)idual .an-s 8484) Types of loan facilities: National Ban- has .een o&&ering #ide range o& credit &acilities as under: N%M, "ash credit23$!o * ledge5 SC1 2 7eneral5 SC1 2 ,6!ort 5 (R CS, Business ca!ital I Bor-ing ca!ital. %gainst E.CI Bor- CrderI su!!l$ order. a$ment o& acce!ted .ills at maturit$ .e&ore recei!t o& e6!ort !roceeds. 'oan 2 7en. 5 %c<uiring ca!ital assetsI !urchasing0 constriction &inishing0 e6!ansion0 re!air0 reno)ation o& houseI &latsI real estate .usiness etc. '"% 2 'oans against cash assistance 5 Einancing &or the !eriod o& nonD recei!t o& reim.ursement &rom Bangladesh .an-. '" 2 'ocal and &oreign5 Sight * on de&erred Eor im!ortI local !rocurement o& goodsI ser)ice. !a$ment .asis %1 Eor ma-ing !a$ment o& the 'I" o.ligation against recei!t o& document. '+R 'IM " Retirement o& shi!!ing document. Retirement o& shi!!ing document. Meeting &inancial re<uirement o& the e6!ort at !reD shi!ment stage against e6!ort 'I". '1B IE1B %s !ost shi!ment &inances against localI &oreign e6!ort .ills. B+B 'I" Ban- guarantee localI &oreign Im!ort o& ra#I !ac-ing materials against e6!ort 'I". Eor su.mission o& tenderI to o.tain and o&&er as securit$ against #or- order0 su!!l$ orderI &or gas electricit$ connection against deli)er$ o& goods against release o& goods #ithout or against !artial !a$ment .$ customer etc.

848494 :ingle borro$er- group limits- syndication: National .an- ltd !ursues I #ill continue to !ursue the !olic$ o& a)oiding too much loan concentration to a single .orro#er grou! in order to .$ !ass !ossi.le threat in e)ent o& such ad)ance turning stic-$. In a .id to -ee! credit ris- at the minimum le)el in res!ect o& larger .ut !ros!ecti)e ad)ance0 National .an- #ill !re&er s$ndicated &inancing a&ter !ro!er &easi.ilit$ stud$.

848404 Leading caps: National .an- ltd is )er$ much a#are o& o)er concentration o& credit in a !articular area0 #hich ma$ under some situation0 create disaster &or the .an-. Kee!ing this in consideration and also the o)er all .usiness0 trend0 !ros!ectsI !otentials0 !ro.lems0 ris- * mitigates0 !ricing o#ner/s sta-e in .usiness0 .usiness com!etition in)ol)ement sa&et$0 li<uidit$0 securit$ etc. Cur .an- #ill .e guided .$ the &ollo#ing leading ca!s generall$: Sector "a!s +rade and commerce SM, Industr$D #or-ing ca!ital ro8ect &inanceD loan term ? HA? 1:? 1:? 1:?

RetailI consumer 2 ""S 5 %gro credit Bor-I su!!l$ order 2 contractual &inance 5 Cthers +otal 8484<4) Nature of advanced: ,ach ad)anced to .e made #ill .e 8484< Loan facilities parameters:

1:? A? A? A? 1::?

National .an- ltd e6tends and #ill credit &or )arious genuine !ur!ose. Cne t$!es o& ad)ance re<uires to .e treated di&&erent &rom other t$!es. 1e!ending on the t$!es &inanced o#nershi! !attern0 .usiness mode0 cash &lo#0 securit$ and other related maters &acilit$ !arameters categorized under one o& the arranged t$!es and #ill .e go)erned under the terms and conditions related thereto. 8484<49 Purpose: Cur leading #ill .e guided .$ legitimate !ur!ose0 &inancing &or hoarding0 s!eculati)e !ur!ose and #hich #ill .e utilized &or degrading the character o& the !eo!le #ill a)oided. "redit #hich #ill contri.ute to !roduction0 trade0 commerce0 im!ort0 e6!ort0 de)elo!ment o& industr$0 de)elo!ment acti)ities.

8484<40 Limit- amount of facility- ma(imum siFe: Eacilit$ #ill .e considered .ased on assessment o& re<uirement * 8usti&ication su.8ect to the o)erall leading ca!s as !er Bangladesh .an- single !art$ e6!osure limit. 8484<4< !argin- EBuity: It #ill .e the general !olic$ o& the .an- to 8udiciousl$ ensure sta-e o& the .orro#er in an$ &inancing !lan. Margin #ill ho#e)er .e su.8ect to institution !olic$ in this regard and central .an- !olic$ #here a!!lica.le.

A.A.H.A Rate o& interestI "ommission: 1 9 3 H A = 7 > %ssessment o& the customer integrit$ and #illingness to re!a$ #ill &orm .asis o& leading. "ustomer ha)ing ca!acit$ and a.ilit$ to re!a$ shall onl$ .e lent. ossi.ilit$ o& de&ault #ill .e #or-ed out .e&ore lending. "redit #ill .e e6tended in the areas ris-s o& #hich can .e su&&icientl$ understood and managed. Inde!endent credit !artici!ation in the credit !rocess shall .e ensured. ,thical .eha)ior in all credit acti)ities shall .e ensured. Be !roacti)e in identi&$ing0 managing and communicating credit ris-. Be diligent in ensuring that credit e6!osures and acti)ities including !rocessing &unction com!l$ing #ith NB' re<uirements as #ell re<uirement o& regulator$ authorit$. 9 1: 11 19 13 1H Ris- is re#ard to .e o!timized. 1i)ersi&ied credit !ort&olio to .e .uilt and maintained. "redit #ill normall$ .e &inanced &rom customer/s de!osit. +he .an- #ill !ro)ide suita.le credit ser)ice and !roducts &or the mar-et in #hich it o!erate. "redit #ill .e allo#ed in a manner #hich #ill in no #a$ to com!romise. %ll credit e6tension must com!l$ #ith the re<uirement o& .an-ing com!an$/s act 1991 and amendment thereo& &rom time to time.

Rate o& interest #ill .e charged as !er declared rate o& the .an-.

ricing #ill .e

.asicall$ ris- .ased. 3igher !rice #ill .e considered &or ris-ier .orro#er .ecause o& higher ris- in)ol)ed. 2I.e. lo#er score o.tain .$ an o.ligor as !er "R7 score sheet is called a ris-$ client5. Similarl$ lo#er !rices #ill .e considered &or !rime clients on the .asis o& their lo# ris-. 2'o# ris- grade client means #here an o.ligor o.tained higher aggregate score as !er "R7 score sheet or 1::? cash co)ered or go)t. international to! .an- guarantee5. 8484<47 Insurance: Cur .an- ha)e insura.le interest on a !ro!ert$ an asset o.tain insurance !olic$ as !er norms against credit &acilities e6tended in order to !rotect our .an-s interest. Insurance com!an$. 8484<4* :ecurity: !olic$ shall ta-e timel$ .asis. Insurance should ta-e &rom a re!uted

Cur .an- mostl$ reliesI #ill continue to rel$ on securit$ .ased leading ta-ing into consideration the character o& the .orro#er nature o& .usiness cash &lo#0 en)ironmental0 economical0 .usiness and other in&luencing &actor. "ollateral securit$ o& acce!ta.le t$!e ha)ing ade<uate mar-et sale )alue is acce!ted. "ollateral !ro!ert$ is 8udiciousl$ )alued .e&ore acce!ting the same. +he !ro!ert$ is )alued .$ the .ranch o&&icial .$ a!!l$ing !rudence and considering !re)ailing rate in the location area o& the !ro!ert$. 847 "redit Principles of NBL: +o achie)e our goal &or ma6imizing the stoc-holders )alue and !rotect the interest o& the de!ositors as #ell as to im!ro)e the <ualit$ o& .an-s assets as &undamentall$ sound &inancial institution0 #e #ill a.ide .$ .ut #ill not .e limited to the &ollo#ing credit !rinci!les0 #hich should guide our .eha)ior in our leading decisions:

84* "redit Evaluation Process of NBL: National .an- #ill &ollo# the &ollo#ing e)aluation !rocess: S re)ailing credit !ractices in the mar-et. S "redit #orthiness0 .ac-ground and trac- records o& the .orro#er. S Einancial standing o& the .orro#er su!!orted .$ &inancial statement and other documentar$ e)idence. S 'egal 8urisdiction and im!lications o& a!!lica.le la#s. S ,&&ect o& an$ a!!lica.le regulations and la#s. S ur!ose o& the loanI&acilit$. S +enure o& the loanI&acilit$. S Lia.ilit$ o& the .usiness concern. S "ash &lo# anal$sis and also !ro8ection thereo&. S Uualit$ )alue and ade<uac$ o& securit$ i& a)aila.le. S Ris- ta-ing ca!acit$ o& the .orro#er. S ,ntre!reneurshi! and managerial ca!a.ilit$ o& the .orro#er. S Relia.ilit$ o& the source o& re!a$ment.

S Lolume o& ris- in relation to the ris- ta-ing ca!acit$ o& the .an- or com!an$ concern. S ro&ita.ilit$ o& the !ersonal to the .an- or com!an$ concerned. S "redit ris- grading. S Gield &rom the &acilit$. S Mar-et as!ect. S +otal glo.al e6!ansion o& the .orro#er. "IB status. /atio Analysis: Einancial ratios are constructed .$ &orming ratios o& accounting data contained in the .an-s re!orts o& income 2i.c .alance sheet5. Ratio anal$sis is a !art o& &inancial anal$sis. % ratio anal$sis is de&ined as the indicated <uotient o& t#o mathematical e6!ressionsQ and as the relationshi! .et#een t#o or more things.Q In &inancial anal$sis a ratio is use as a .enchmar- &or e)aluation the &inancial !osition and !er&ormance o& a .an-. % #ide )erit$ o& &inancial ratio can .e calculated to assess di&&erent characteristics o& &inancial !er&ormance. +o e)aluate a !articular &inancial ratio &or a .an-0 com!arison #ith !eer grou! .an- is o&ten used. %lso it is .ene&ited to trac- the ratio o)er time relati)e to other .an-s. ,)en #ithout com!arison #ith other .an-. Ratio trends o)er time ma$ !ro)ide )alua.le in&ormation a.out the .an- !er&ormance. +o measure the !er&ormance o& the .an- it is im!ortant to measure source o& the ratios to get a clear !icture a.out the .an- and its acti)ities. Some o& the im!ortant ratios are Return and asset ratio 2RC%50 Return on e<uit$ 2RC,50 !ro&it margin and asset utilization ratio.

"redit /isk !anagement 7494) Profit !argin /atio: +he !ro&it margin gi)es some ingredients to 8udge the a.ilit$ o& management to control e6!ense0 including ta6es gi)e a !articular le)el o& o!erating income. +he !ro&it margin ratios are as &ollo#s: ro&it Margin NB' SIB' IBB' 9::A 91.A9 11.:: 7.1A 9::= 9:.=3 1A.H9 9.9A 9::7 1H.>9 1H.H: 1H.HA

74949 /ate of return on asset 3/OA5: +he rate o& return on asset is &re<uentl$ used to e)aluate .an-s management. +he RC% measure the a.ilit$ o& management to utilize the real and &inancial resource o&

the .an-s to generate returns. It indicates net income !er ta-a o& total assets o#ned during the !eriod. +he RC% o& the .an-s are as &ollo#s: RC% NB' SIB' IBB' 9::A 9.99 1.9A 1.99 9::= 9.A: 9.1A 9.:A 9::7 H.99 3.7A 3.9A

74940 /ate of return on EBuity 3/OE5: +he rate o& return on e<uit$ is considered as a #ell 8udgment in anal$zing a .an-/s &inancial health. RC, sho#s #hat contri.ution the e<uit$ ca!ital has on net income. It measures the !ercentage return on each dollar o& stoc-holders e<uit$ is the aggregate return to stoc-holders .e&ore dis.ursing di)idends. +he higher return the .etter as .an-s can add more to retained earnings and !a$ more in cash di)idends #hen !ro&its are higher. +he RC, o& the .an-/s are RC, NB' SIB' IBB' 9::A 7.9: H.A1 >.1A 9::= >.=H A.19 >.=: 9::7 A.A= >.H= >.:H

740 Asset DtiliFation /atio: +he asset utilization ratio re!resents the a.ilit$ o& management to em!lo$ assets e&&ecti)el$ to generate re)enues. Ban- assets &all into one o& &our general categories. 'oans in)estment securities non interest cash and due &rom .an-s and other assets. +he assets utilization ratios are: %ssets (tilization NB' SIB' IBB' 74< /isk ratio Analysis: It is )er$ im!ortant &or .an- to measure its ris- associated #ith its o!eration. Bithout identi&$ing ris- no .an- can success in &uture rather it #ill &ace li<uidit$ o!erational 9::A 99.99 =.7A 1:.9 9::= H3.AA 1=.33 19.7H 9::7 3:.1A 7.9= 17.:>

and mar-et ris-. +here&ore it is )er$ im!ortant measure ris- and ta-es necessar$ ste!s against it. 74<4) EBuity !ultiplier 3E!5: ,<uit$ multi!lier measures &inancial le)erage and re!resents .oth !ro&it and rismeasure. ,M a&&ects .an-s !ro&its .ecause it has a multi!lier im!act on RC% to determine a .an-s RC,. It should .e o.)ious that a higher e<uit$ multi!lier can increase .oth RC, and the gro#th rate o& the .an- as long as RC% is !ositi)e. Cn the do#nside i& RC% is negati)e RC% #ill .e margined in a negati)e direction. ,<uit$ Multi!lier NB' SIB' IBB' 9::A 97.=1 1:.:: 1>.97 9::= 3H.1= 91.:: 1=.:: 9::7 93.3: 9>.:: 1>.=H

74<49 T&e investment ratio: +he in)estment ratio indicates that e6tent to #hich assets are de)elo!ed to loans as o!!osed to other assets0 including cash securities and !lant and e<ui!ment. +he greater the greater the .an-s a.ilit$ to generate income as interest that the .an- o#ns. In)estment Ratio NB' SIB' IBB' 748 LiBuidity /atio: 'i<uidit$ can .e de&ined as the e6tent to #hom the .an- has &unds a)aila.le to meet cash demands &or loans and de!osit #ithdra#als. +he &ailure o& .an- meet its o.ligations due to lac- o& su&&icient li<uidit$ 0 #ill result in a !oor credit#orthiness0 loss o& creditors con&idence or e)en in legal tangles resulting in the closure o& the .an-. % )er$ high degree o& li<uidit$ is also une6!ected idle cash earn nothing. +here&ore it is necessar$ to stri-e a !ro!er .alance .et#een high li<uidit$ and lac- o& li<uidit$. +he most common ratio are as &ollo#s: 7484) "as& /atio: "ash including )ault cash0 de!osit at other .an-s and cash items in the !rocess o& collection. %ll these earn no interest. %s such .an- management should attem!t to minimize its in)estment in these assets. Cn the other hand0 it is the most li<uid asset. Ban-s must maintain li<uid assets to meet u! an$ sudden need. 'o#er cash ratio 9::A >.9A H=.9A A9.9A 9::= A.=9 31.:> 9:.1A 9::7 1H.31 HA.A3 H:.=3

indicates higher ris- or it #ill lose its re!utation. +here&ore .an-s ha)e to maintain an o!timal cash ratios o& the .an- are 9::A to 9::7 "ash Ratio NB' SIB' IBB' 9::A H.A: 3H.1A 19 9::= H.9= 1>.37 9:.:H 9::7 H.17 1A.99 9:.11

Performance at a glance: ,ig&lig&ts on t&e overall activities of t&e Bank

Taka in !illion Particulars %uthorized "a!ital aid u! "a!ital Reser)e Eund ,<uit$ Eund 2"a!ital and Reser)e5 1e!osits 'oans * %d)ances ro)ision Re<uired ro)ision Ke!t In)estment Im!ort Business ,6!ort Business +otal Income +otal ,6!enditure C!erating ro&it Net ro&it a&ter +a6 and ro)isions Ei6ed %ssets +otal %ssets Eun=+; 90HA:.:: 10>79.79 307=:.A= A0=33.99 A30739.AH HH0>::.1> 10371.:: 10A99.97 707>:.H7 H>099=.=9 1>0HH7.A: H039>.A= 903=1.9: 90:3=.=A 10:=A.9H 10>9>.:A =A01=>.91 Eun=+* 90HA:.:: 109:>.91 90=HA.93 30>A3.HH HA0177.=7 390=9A.1H 101=9.=7 10393.:= 709A9.H7 970AH3.3H 1H0131.19 303H9.9= 909A9.=9 10:>9.A7 A>:.H7 10711.:3 A30A7=.19 2 ercentage5 "a!ital %de<uac$ Ratio 13.31? 19.9A?

? o& "lassi&ied 'oan * %d)ance %d)ance 1e!osit Ratio "ost o& Eund Return on %ssets 2RC%5

A.91? >3.37? =.H:? =.9A?

7.1:? 79.37? =.AH? H.:H?

2%mount in +a-a5

,arnings !er Share 2, S5 D%nnualized Boo- Lalue !er Share Mar-et Lalue !er Share rice ,arning Ratio 2+imes5

113.>H 3::.>1 9>A.A: >.==

1:9.H7 31>.9H >A1.A: >.31 2In num.er5

Num.er o& Eoreign "orres!ondents Num.er o& Shareholders Num.er o& ,m!lo$ees Num.er o& Branches

H:A 1H0991 90=39 1:1

39A 110=33 90977 99

"onclusion G /ecommendation for t&e NBL:

It is also )er$ di&&icult &or me to gi)e an$ recommendation #ith m$ little #or-ing e6!erience .ut I ha)e tried as m$ .est to gi)e .est recommendation a.o)e shortcomings 2its ma$ .e its not s#eet a.le &or NB'5 2don/t use I0 B,. (se indirect s!eech5 S NB' should gi)e more &reedom to their .ranches &or ta-ing decisions and their head o&&ice should ta-e decision more <uic-l$. S NB' should .uild se!arate loan reco)er$ di)ision i& it ha!!ed then their classi&ied loan amount #ill reduce and the$ can in)est more. S NB'0 Inter Ban- +ransaction is made .$ ad)ice .ut it is unsecured &or .anso NB' ha)e to .uild net #or-ing s$stem .et#een .ranches and head o&&ice. S NB' should go through the online .an-ing as earl$ as !ossi.le &or .etter ser)ice to the customer. S NB' should increase o#n in)estment in di&&erent sectors as li-e Islami Ban'td. i& the$ can increase their o#n in)estment then their cost o& ca!ital #ill reduce. S NB'0 3uman Resources 1e!artment should train their em!lo$ees #ith com!uter -no#ledge and their 3uman Resources 1e!artment should arrange training !rogram &re<uentl$.

S NB'0 management should ta-e decision more <uic-l$. S NB' should use grou! incenti)es so that em!lo$ee can share their e6!erience0 strength and can #or- smoothl$. S +heir statement should .e com!uterized #hich is cost e&&ecti)e and sa&e. S It has .een seen that NB' mar-eting acti)ates are not su&&icient .ut no# a da$/s !ro!er mar-eting is im!ortant &or creating good image in target customer mind. +he$ should increase !romotion cam!aign and the$ should !artici!ate in social acti)ities &or creating good image in target customer mind.

Gour re!ort is e6tremel$ sloppy-untidy4 lease &ollo# the &ollo#ing suggestion Kee! $our re!ort out o& co!ied materials. Brite those #ords in $our o#n language.

Gou need at least 19 re&erence and citation to get !ass Gou must need to !ro)ide recent $ear/s data not 9::7. %rrange $our re!ort !ro&essionall$ 2use same &ont t$!e and size0 8usti&ied !aragra!h etc5. Gour &indings are not com!l$ing #ith $our o.8ecti)es &ull$. Bhat !ro.lem did $ou &ind in the &ield o& credit ris- management o& NB'4 Not cleared.

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