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1 Definition of Internship
Internship is a process to achieve practical knowledge about some theoretical lesson. Its most important aspect is to acquire knowledge about the real position. As a practical subject, Management needs some practical knowledge. Marketing of Business studies includes an internship programs for its Bachelor of Business Administration (BBA) programs. According to Polin Efro (1977). ³Social Research is such a scientific effort which tries to discover new information through some rational and organized system, which tries to examine the reliability of former information, and which tries to make to new theories, systems and conceptions to understand and Explain a human attitude´. Practical work is achieved to fulfill our knowledge. In practical work, we can realize some problems and possible determinants of their solution.

2.2 Objectives of Internship
Primary objectives of internship are to provide some practical knowledge, which will increase the practical experience with theoretical knowledge managerial efficiency. It helps to achieve real knowledge, perfect investigation, above discussion of known and unknown matter, techniques and experience. However, we can mention the objectives program of internship in the following ways: To show the guideline for searching various necessary information to solve the organizational problems. To add new information with established ways. To identify problems and recommends to solve them. To realize what kinds off organization can contribute to the economic development of a country. To determine entire actual situation of the organization. Another important objective of practical training is to implement the knowledge of practical training in the practical life. To prepare pragmatic report about entire management of organization. To make comprehensive solutions of problems to increase the diversification and modification of marketing. To show about the profitability, liquidity and solvency. To investigate the techniques those are used in decision-making. To show about the conditions of the Bank and its goodwill to the public. To identify managerial problems and eradicate those.

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2.3 Importance of Internship
Goods and services are produced for the purpose of using in daily life. Similarly, Theoretical knowledge is acquired for the purpose of applying in the practical life. The propensity of application of theoretical knowledge in practical life successfully internship program is absolutely necessary because theoretical knowledge will be fruitful if it can be applied in the practical life. When we can implement the theoretical knowledge practically, we can say the knowledge is successful; otherwise the achieved knowledge is valueless. Internship program is the way of implementing the theoretical knowledge practically. However, the importance of internship may be described in the following ways: As internship program is the practical implementation of the theoretical knowledge, it helps to increase the quality and effectiveness of the trainer. We can only know the problems of an organization in directly through theoretical knowledge, but we can know the nature of the problems, problems of the various departments, methods of solving the problems through the practical training. So it is very important to identify the problems and eradicate the problems. The trend of all activities is an organization becomes growing through practical training. To Innovate new technique of management. To realize the present condition of the institution. To make policy for development of the organization. It mentally prepares for their professions. Internship program acts as a bridge between theoretical knowledge and managerial practice. Internship acts as a guideline during the service period. By internship program students can understand limitations, shortages and practicability of their knowledge and thereby can take necessary action for removing these limitation and shortages.

2.4 Statement of the Problem
NCC Bank is playing a remarkable role for the economic and social development of Bangladesh. NCC Bank at Rajshahi Branch is also playing such type of role. The activities of this bank are widely diversified. But I have got only 60 working days for my internship program. These sixty working days programs are not sufficient to acquire complete knowledge about overall activities of the bank. So, it may have some sort of problems in deed besides there may have a big problem in collecting

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primary and secondary data. It is not abnormal that I may have problem of knowledge. Moreover, it might be said that data have reliable and valid as much as possible. So, I tried my best to prepare my report according to the information available to me.

2.5 Rationale of the Study
The present study is a pioneering attempt in the field of overall activities of NCC Bank Ltd. It is true that, financial performance is really important for realizing original financial position of a bank. In general uses the term fund frequently is used to include (i) cash (ii) liquid assets (iii) current assets (iv) working capital (v) total resources. Again, According to other fund constitutes the prime importance in starting and operating any business enterprise is the raising and management of funds financial decisions are those which concern the flow of funds from various sources and use of such funds. Efficient management of finance ensures best use of resources to earn profit. Bank finance management is the key to short to intermediate term decision-making in today¶s dynamic and volatile banking environment. This study is taken to enlighten the basic inherent problems of the bank which need a in- depth analysis for the survival of the bank in the situation of its chronics financial problems, such as lack of expected loan recovery, huge outstanding loan, large amount of classified loan and excess overdue loan etc. For continued the present condition of this branch it is now essential to verity its efficiency or lack. As student of BBA (in Marketing) I have considered all these matter and planned this study.

2.6 Objectives of the Study
Anything can¶t run without any objectives. There are so many objectives of each function. It is not exception of my study. I have selected the topics ³Loan Disbursement & Recovery System of NCC Bank limited´. This study has many objectives. The main objectives of this study are as follows: To know about the functions of NCC Bank Ltd. To analysis the loan disbursement system of NCC Bank Ltd. To analysis the loan recovery position. To analysis the outstanding loan and overdue loan. To analysis deposit structure. To analysis the target and recovery of classified and unclassified loan of the three years. To analysis the financial management efficiency.

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To find out the existing problems to loss and find out the causes of loss. To analysis the sector wise loan disbursement of the last three year. To measure the overall financial performance of NCC Bank Ltd. To give suggestions for improving its financial performance.

2.7 Limitations of the Study
This is the first research of my life. That is why, my knowledge in this field is not enough? In spite of this, I have tried hard to collect data from various sources. I think I could not collect all the information as my requirement. The main constraint of the study was insufficiency of information that was highly required for the study. Since the bank officials are very busy with their activities, as a result it was thought to have proper knowledge as was required for the study. The duration was not enough to study the all aspects of banking.

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3.1 Introduction
Data collection through census or survey can be used for many purposes. The present study is concerned with the analysis of overall banking system of NCC Bank Ltd. The approach adopted is basically analytical and interpretation in nature considering the objectives of the study and review of literature. It is also decided to employ quantitative descriptive method of analysis and investigations of the empirical data related to the analysis of financial performance problem of NCC Bank Ltd.

3.2 Sources and Nature of Data
In order to performance this internship report, I can use various methods to collect and present data. Mainly I used two types of data for this purpose1. Primary data 2. Secondary data 1. Primary Data Generally the following methods are used in collection of primary data: a. Direct interviewing. b. Personal Communication. c. Questionnaire method a. Direct Interviewing Before starting the task of practical training I prepare a questionnaire to collect data. I collect data from the managers and officers of the NCC Bank Limited at Rajshahi Branch, b. Personal Communication I gathered data through personal distribution from the officers and lower level employees. c. Questionnaire Method At first I made a questionnaire as the direction of my supervisor about the NCC Bank Limited. Thus, I collected other concern questions from information sector and arranged then in that questionnaire. 2. Secondary Data I have collected secondary data from the various sources such: a. Annual report of NCC Bank limited b. Monthly performance report c. Personnel development of NCC Bank Ltd at Rajshahi branch

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a ted person has to follow and apply some techniques. The purpose of putting each question was explained to them. This method relates to the collection of information directly from the respondents.3 Data Collection and Limitation For the purpose of data collection. I tried to entry each data in the worksheet. At first. 3. To analyze the collec data. These are: a) Editing: After the collection of data day by day. the collected data are analyzed. Microsoft Excel and Microsoft word are also used for completing the research. I make edition in order to have a complete. 3. Various types of official documents etc. b) Coding: The recorded data were coded in sheets according to a comprehensive code plan. the most convenient program for data analysis for social science. I carefully checked each schedule of questionnaire.d. I have used some important techniques for analyzing the collected data so that I can get faithful result from my study. accurate and homogenous data. consistent. in this method. Accordingly. the respondents (bankers) were directly contacted and the desired information was collected using a pre-designed questionnaire. Data processing procedure consist three parts.5. personal interview approach has been used. So. Some of the bankers have hesitated to give answer of some questions belonging to questionnaire. I tried my best to minimize possible bias due to coding of open question. Entire computerization of data has performed by a computer package named SPSS for windows version 11. all the qualitative variables were transferred by suitable numeric values. The data were edited rigorously to make correction of any existing inconsistencies in data and to minimize non-sampling error of the study. c) Computerization: Edited and coded data were next processed in a computer.4 Data Processing Data Processing is a key factor for conduction a research and to write a report. 3.5 Techniques of Data Analysis Under this study. To analyze the data. The techniques that I have applied in data analyses are as follows: Table Charts Graph 6 . Central accounts department of NCC Bank limited e.

The Bank has set up a new standard in financing in the Industrial.00 crore to serve the nation from a broader platform.39. Its membership with the browse helped the company to a great extent in this regard. namely Deposit. Since its inception NCC Bank Ltd.. Trade and Foreign exchange business. The company operated up to 1992 with 16 branches and thereafter with the permission of the Central Bank converted in to a fully fledged private commercial Bank in 1993 with paid up capital of Tk. Inward Foreign Remittance. The aim of the company was to mobilize resources from within and invest them in such way so as to develop country's Industrial and Trade Sector and playing a catalyst role in the formation of capital market as well. At present the bank is operating with 74 Branches with online facility across the country.2 Activities of NCCBL The world economy is going through various crises arising from insurgent activities at various parts of the globe. etc. During last few years. Advance. 7 . The organization started its journey in the financial sector of the country as an investment company named National Credit Limited back in 1985. Prudent handling of Asset-Liability is of utmost importance for keeping up profitability at a satisfactory level of any financial institution. bears a unique history of its own. Also it has put efforts to bring discipline in administering Bank¶s Asset through various measures. Taka has been devalued. popularly known as NCC Bank Ltd.1 Profile of the Bank National Credit and Commerce Bank Ltd. 4.4. the outcome of these efforts was very positive and encouraging indeed. Profit. tried to negotiate for a compromise among the various concerned parties. Its various deposit & credit products have also attracted the clients-both corporate and individuals who feel comfort in doing business with the Bank. The business community as a whole. As a whole. which contributed in continuing its steady growth in respect of all major indicators. During the year NCCBL has concentrated its focus to a number of income increasing sectors such as SME Financing. The turbulence also affected Bangladesh Economy adversely as well. etc. The bank earned a modestly satisfactory result during the year 2008. has acquired commendable reputation by providing sincere personalized service to its customers in a technology based environment. apprehending imminent doom. The political unrest caused devastation to the industrial and service sectors.

if proved feasible. In order to motivate and inspire the Bangladeshis residing abroad to send their hard earned money through legal Banking channel. NCCBL has taken a number of steps like making remittance arrangements with different money exchange companies all over the world. an NGO working for empowering the womenfolk of the country is a partner. Of late financing in SMEs has been proven to be very beneficial for banking sector.with the timely measures taken by the Management under guidance of the Board. which brought result beyond expectation. NCCBL plans to continue this project even after expiry of the RPCF. The bank also introduced a foreign remittance payment card in the brand name of ³MBridge Card´. Under this project the Bank is using not less than 250 outlets of TMSS to deliver remittance to the beneficiaries where it has no Branch. the Bank will pay attention to manage liability also so as to build up a strong deposit base to satisfy investment need of the market. etc. This process will continue in upcoming years also. it was possible to sustain steady growth through maintaining asset quality. 8 . very recently NCCBL started full-fledged real time On Line Banking System with implementation of Flora Banking UBS Software and introduced Debit Card in the brand name of ³MPower Card´. It is a matter of pride that the Bank has been awarded various trophies from exchange companies like MoneyGram for its initiatives in motivating people in this part of the world to avail of the opportunity of sending money through these enterprises. a jointly funded project by DFID in partnership with Bangladesh Bank under the grant facility called Remittances and Payments Challenge Fund (RPCF) where Thangamara Mohila Sobuj Shangha (TMSS). Also to cater the needs of the customers. participating in fairs and meetings with remitters and exchange companies. The bank started FRPP. Recovery Department and also a Task Force for continuous monitoring of difficult loans and advances of the Bank and to propose ways of recovery of Bank¶s dues. Further. The Bank has separate Credit Administration Department. Bank¶s Information Technology Division is always engaged in designing need based software and other programmers to ease the situation for the employees so as to enable them to work more dedicatedly to satisfy the customers. Over the last few years remittance business contributed remarkably in increasing fee based income of the Bank. The Bank has put due emphasis on grooming up its workforce in a technology based working atmosphere for some time.

4. 9 .4 MISSION NCC Bank shall be at the forefront of national economic development by: i) Anticipating business solution required by all NCC Bank¶s customers everywhere and innovatively supplying them beyond the expectation. of bank¶s customers and of national development. 4. Banks are optimistic that investing in this sector would not entail huge volume of default loan like conventional or cooperate financing. customer service and all the activities. ii) Setting industry benchmark of world class standard in delivering customer value through the comprehensive product range. iv) Maintaining the highest ethical standards and a community responsibility worthy of a leading corporate citizen.Banks have paid special focus to this sector to expand scopes of extending credit facilities to enhance sustainable profit. develop and retain employees of exceptional ability who help celebrate the success of bank¶s business. Moreover. In accomplishing this mission. 4. Each of the directors is the member of the Board. iii) Building an exciting team based working environment that will attract. The bank accomplishes this by offering to their customers the financial services which are expected by their customers while providing a return to their owners. the committee selected by the shareholders represents individual body that then looks after the periodic issue with the management and tries to solve the problems. v) Continuously improving productivity and profitability and thereby enhancing share holder value.5 BOARD OF DIRECTOR At present the Board of directors consists of 25 members including the Chairman and Vice Chairman of the Bank. They proudly say ³NCCBL is profit making and problem free´. Most of the members are reputed industrialist and businesspersons of our country. since it is believed that small and medium entrepreneurs are very hard working and sincere in paying back Bank¶s money. The members are obliged to maintain the annual general meeting and declare the dividend pay-out schedule on due time. Out of 25 members 21 of them are the sponsors of the shareholders. The Chairman heads the Board. the bank has now been free from all the natures of a problem bank though full filling all the conditions set by the central bank.3 VISION The vision of the bank is to become the bank of choice in the communities they serve. SME has been found to be a very potential avenue of financing.

Mahmud Mr. Abdul Awal Masuda Begum Amjadul Ferdous Chowdhury Mahbubul Alam Tara Ainul Kabir Mostafizur Rahman Alhaj Md. Humayun Kabir Din M. Harunur Rashid Mohammed Nurul Amin S.M. Shahjahan Mr. Wazhiullah Bhuiyan Mr.M. Abu Mohsin Principal M. Md. Rana Md. which is responsible for the welfare of the Banks directors. Audit Committee of the Board Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director 10 . A. Executive Committee of the Board Chairman. Name Yakub Ali Md.Abdus Salam Mr. Some members of the Board have formed the Executive Committee. K.S. Mohamad Ali Mr. Abul Bashar Director Khairul Alam Chaklader Md. Nurun Newaz Md. Fakrul Anwar Md. The particulars of the Board are presented as under.Z.The Board has appointed the management. Md. Which organizes a meeting in every week to deal with the minor issues such as promotion of cadre change of a confirmed employee. Conversely at least one meeting of the Board is held in every month to deal with major issues such as modification of the existing policy or major policy reforms. Tofazzal Hossain Mr. Main Uddin Monem Nurul Islam Mr. Moinuddin Designation Chairman Vice Chairman Managing Director & CEO Chairman.

11 . Assistant Vice President (SAVP) Assistant Vice President (AVP) Senior Principal Officer (SPO) Principal Officer (PO) Senior officer (SO) Officer Grade.I Officer Grade.II Management Trainee officer (MTO) Junior officer (JO) Assistant Officer (AO) ORGANOGRAM OF NCC BANK LTD. Executive Vice President (SEVP) Executive Vice President (EVP) Senior Vice President (SVP) Vice President (VP) Sr.Managing Director (MD) Additional Managing Director (DMD) Sr.

4. Through a worldwide network of 260 correspondent Banks. 1757.4. NCCBL has also positioned itself as an established correspondent Bank. 2863. With a highly professional team experienced and competent professionals we are able to provide a wide range of services to companies engaged in international trade. 2284.10 PRODUCT OF NCCBL Deposit product: Current A/C Savings Bank Deposit A/C Short Term Deposit A/C Term Deposit A/C Premium Term Deposit A/C Instant Earnings Term Deposit A/C Special Savings Scheme Special Fixed Deposit Scheme NFCD RFCD Loans and Advance Products: Working Capital Financing Commercial and Trade Financing Long Term (Capital) Financing House Building Financing 12 . Our ambit of correspondents includes top ranking international banks with a global reach. through issuance of 47% bonus share.62 million to Tk.7 AUTHORIZED CASPITAL The authorized Capital of the bank remained unchanged at TK.6 TRADE FINANCE & CORRESPONDENT BANK Successful companies today are fully aware that they need to be able to rely on the services of a bank that can handle international trade with a good hand. 4.9 RESERVE FUND The reserve fund increased to Tk.62 million in 2008 registering a growth of 30.94% 4. NCC Bank has been an accomplished ³Trade Finance´ bank. 5000 Million in the last four years (2006-2009) 4.64 million in 2009 from Tk. Ever since its conversion into a full-fledge bank in 1993.90 million during the year. NCCBL is present in all key areas of the globe. 3749.8 PAID UP CAPI TAL The bank raised its paid up capital from Tk.

15 Deposit of the bank at the end of the year 2008 was Tk 53900. 13 .90 2004 16069. Treasury Service.Retail and Consumer Financing SME Financing Agricultural Financing Import and Export Financing Remittance Products: Special Interest rate on Savings and Term Deposits Wage Earners Welfare Deposit Pension Scheme Loans for Real Estate (Land purchase construction/renovation) Advance against Regular Remittance Service of NCC Bank: Brokerage House. Deposit Structure Year Take (In millions) 2002 16.23 2005 21478.15 million. Remittance Service and House 4.22 2006 28147. which is more than deposit of 2008.34 2007 34901. It had happened for increase competition in banking sector where the customers are going to the other banks.12 DEPOSIT The total deposit of the bank is Tk.77 2008 46904. International and Dual) 4. 2009.062.11 CARD ATM Card Credit Card (Local. From 2000 to 2002 the bank had a rising position but in 2003 it has decrease.15million as on December 31. 53900. The Bank has introduced several welfare oriented deposit schemes to encourage and mobiles savings that have gained popularity among the public.35 2003 15.153.66 2009 53900.

13 24678.85 15. The Credit portfolio of the Bank is well di ersified and broad based covering various sectors of the economy in addition to traditional financing of domestic and international trade.13 ADVANCE The Bank followed its own credit policy within the guidelines of Bangladesh Bank. During the year Bank has introduced some new collateral free credit products under small loans unit and feasible loan scheme for the first time in banking history.69 50387.850.211.72 12.60000 50000 40000 30000 20000 10000 Amount 0 2002 2003 2004 2005 2006 2007 2008 2009 B t aft 2004 bank¶s deposit are Increases tremendousl This is happen because increasing confidence of customer to NCCB inspires people to make more and more deposited to NCCB 4. Year 2002 2003 2004 2005 2006 2007 2008 2009 Advance Table (2002.15 20533.2008) Taka (In milli ns) 13. The Bank also extended financial assistance to small scale industries and industrial loans to a number of projects for employment generation so as to fulfill the socio economic objectives of the Government.68 14 . The Bank extended credit facilities under consumer.36 32687.75 46322.147. hire purchase and lease financing schemes as well as loan syndication arrangement with other Banks and Financial Institutions.

which is more than 8.49 million in 2008 recording an appreciable growth of 32. The credit position is shown in the following graph. 50387.77 % of the preceding year. Credit investments of bank are increases as increases in the deposit amount. The Bank also bought membership of Chittagong stock exchange.75 percent which was possible due to prudent lending and efficient management of funds. the Board of Directors has been pleased to recommend 47% bonus share and 1R:2 right issues for its valued shareholders for the year 2009. 2363. 60000 50000 40000 30000 20000 Amount 10000 0 2002 2003 2004 2005 2006 2007 2008 2009 4.50 million.70 million as against Tk. OPRATIONA RE U T The operational Profit of the bank during 2009 was Tk. The Bank followed cautious but prudent policy during the year in a ¡   ¡ ¡   15 . NCC BANK AT PRE ENT In the 2009 the Bank could increase its profit and consolidate its position in all areas of operations.Credit of the bank at the end of the year 2009 was TK. NETWORK OF BRANCHE The bank has planned to expand its business network to reach large section of the potential clients living in remote areas. The net profit thus stood at Tk. 2010.14 CAPITAL MARKET OPERATION The Bank continued to participate in the day to day transactions of Dhaka Stock Exchange as a member of DSE and expect to earn substantial income through capital market operation in future.68million. 3137. 1719. DIVIDEND In the line of proposed appropriation of profit. The total number f branches were 74th as on 22th November. The Bank has already established a separate Brokerage House with a view to facilitating the investors to operate the capital market in a hassle free atmosphere.

15 million.64 -to million registering 30. The profit figure at the end of the year stood at Tk 53900.00 Crore. food shops. The term being used by many to call the present say banks. It is now being called a modern bank that undertakes all its operations at an international standard.39. 1800 1600 1400 1200 1000 800 600 400 200 0 profit Paid up capital Reserve fund 2008 2009 Like clothes.62 million.33% over the previous year¶s profit figure of Tk 46332.69 million of 2009 and reserve fund went up Tk 3749. an increase of 16. the current price level of its share and turn in trading is evidence of its high rating among investors. NCC Bank is not a debt shop.unpredictable economical and political situation.94% growth over last year¶s position of Tk 2863. 16 . The bank has been able to attain a commendable CAMEL rating and its performance has been outstanding in terms of profitability for the year ended 2002. shops. bakeshops. Listed in both the Dhaka and Chittagong Bourses since 1993 with an IPO that raised the paid up capital of the bank to Tk.

The CEO and Managing Director are assisted by a Senior Management Group consisting of Deputy Managing Director and Head of Divisions who supervise operation of various Divisions centrally and co-ordinates operation of branches. Besides. 5.2 District Wise Branch Distribution The branches of the Bank cover all the important trading and commercial centres in Bangladesh.nccbankbd.1 Management of NCC Bank The twelve members of the Board of Directors are responsible for the strategic planning and overall policy guidelines of the Bank. A Management Committee headed by the CEO and Managing Director manages key issues. there is an Executive Committee of the Board to dispose of urgent business proposals. This facilitates rapid decisions. 5.com 17 . The CEO and Managing Director. Deputy Managing Director and Head of Divisions are responsible for achieving business goals and overseeing the day-to-day operation. there is an Audit Committee in the Board to oversee compliance of major regulatory and operational issues. NCC Bank Ltd. it has 65 branches within Bangladesh.3 Head Office of NCC Bank Ltd. There is an Asset Liability Committee comprising member of the Senior Executives headed by CEO and Managing Director to look into all operational functions and Risk Management of the Bank.5. Address 7-8 Motijheel Dhaka. logistics and professionally competent manpower. Further. As date. Head Office NCC Bank Ltd. Telephone ---------------------------------------Telex ----------------------------------------------Fax Swift ---------------------------------Website www. is in the process of opening six more branches at important locations in the country. All the branches are equipped with computers in addition to modern facilities.

71 107.08 103.39 1186.58 4239.1 Historical Background In Rajshahi zone.56 2687.39 1115. The NCC Bank Ltd.41 0. at the present time. Rajshahi Branch was established in 25 October.87 1608.27 25412.24% 5. second officer principal.85 20596.54 2163.49 21280.33 20450.29 28575.87 1372. senior officer. officer.80 20774.5.25% 5.90 2406.85% 2004 Taka 500.90 19407.88 2666.75 622. Description 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Authorized capital Paid up capital Tier-I capital Tier-11 capital Total capital Total Deposit Total Loans & Advances Investment Total Asset Import Business Export Business Remittance Guarantee Business Total Income Total Expenditure Operating profit Credit Deposit Ratio Return on Asset Return on Equity 2005 Taka 500 492 1232 442 1674 21387 22331 3570 29800 13235 15325 2440 544 2873 2021 852 104. 2005 in Shaheb Bazar & it was transfer Shaheb Bazar to Alupotti more July/2009. 6. principal officer.39 1050.66% 0.2 Organizational Structure Organization structures of NCC Bank Ltd.02 1986.63 1986.50 19131.25 102.63% 2002 Taka 500.27 27101.83 24810.90 3344. cashier.63 321. number of officers and staff at this branch one 15 which include. it has only one branch.4 At a Glance of NCC Bank Ltd.93 421.00 2206..88 28885.89 19799.29% 0.90 4297.29% 6.87 1536. at Rajshahi Branch are as follows: Manager & Senior Vice President Senior Officer Officer G-1 18 .00 406.77 700. and others.20 21718.92% 2003 Taka 500. in Bangladesh Sl.27% 7.43 2543.92 304.00 406.83 1921. manager.44% 0.20 27557.25 2098.79 550. at Rajshahi Branch 6.02 421.30 3344.12 29513.00 406.35% An Over View of NCC Bank Ltd.

6.Officer Junior Officer Asstt. Branch.4 Objectives of NCC Bank Ltd. 19 . To maximize profit and wealth for the shareholder. are as follows: To earn profit and To give service. at Rajshahi Branch The main objectives of NCC Bank Ltd. Senior Vice President & Manager of NCC Bank Ltd. Officer 6.3 Name of the Chief of the Organization Aminur Rahman. at Rajshahi.

L an Disbursement & Recovery System Of NCC Bank Limited All banking activities can be divided into four categories: General Banking Advance Banking Foreign E change Ancillary Services Banking Activities of NCCBL Advance Banking Foreign Exchange General Banking Ancillary Service Accounts Maintaining Import Cash Section Export Bills Collection Remittance Clean Cash 20 .

have focus on the following areas: i.Introduction Banking is a business. The word credit derived from Latin word ³CREDO´ means I believe. Agriculture & Agro-based Ventures vii. political and other related aspects from time to time and as per guideline of central bank. One of the most important ways a bank or other lending institution can make sure its loans meets regulatory standards and are profitable is to establish a written loan policy. NCC Bank Limited have formulated their own credit policy indicating the areas of lending complied by Bangladesh Bank guidelines. Housing Loan Scheme viii. Such a policy gives loan officers and managements specific guidelines in making individual loan decisions and in shaping the overall loan portfolio (Rose et. Trade and Commerce ii. Lease Financing iv. The main features of credit policy of NCC Bank Ltd. Real Estate & Civil Construction 21 . Each and every bank has got their own credit policy which generally formulated on the basis of prevailing countries socio-economic conditions. If we analyze this theme it stands for trust & relationship between banker and customers. Industry iii. 1995). Small & Medium Enterprise (SME) Financing vi.al. This confidence enjoyed by banks and enables the bank to mobilize funds from various sources. This is run on the confidence and trust of people. Consumer Financing v.

distributors.4. retailers and small manufacturers scattered across the country. to keep its contribution to the growth of national GDP. whole sellers. Track record of operational performance of the industries. Financing for establishment of new industries or reinvestment to existing industries is a specialized function of the bank. In case of financing in this sector bank would prefer syndication with other banks to keep a balanced portfolio.2 Industry The domain of industry financing of NCC Bank Ltd. ii. & Financing of small cottage industries. 4. NCCBL¶s policy would be a selective approach to term loan financing to small scale industries and export oriented or import substitute industries which enjoy high degree of national economic priority. Therefore. cash flow prospects. iii.1.3 Lease financing NCC Bank Ltd. bank shall ensure that mere increase in the volume of business portfolio and relevant income generated from it is not the prime consideration as it involves payment in costly foreign exchange in case of foreign trade. accelerate the total economic development by infusing the fund in productive sector in more efficient and effective way. medium and small import business houses trading in similar item and finally. credit worthiness of the entrepreneur. Working capital financing to newly set up industries will also be considered on careful examination of validity. While allowing facilities under the segment of trade & commerce.1 Trade & commerce This broad category encompasses large business houses dealing with imported consumer items. 4. shop keepers.1. Transports (both road & marine). and reasonable security coverage shall form the basis of lending policies. The core of NCCBL¶s lending activities shall be the working capital financing to large and medium scale industries as well as small scale industries. diversity its portfolio and satisfy the customers need would go for leases finance for: i. 22 . Setting up of small and cottage industries/projects. Financing of existing projects. trading in non-essential items shall be discouraged for the greater interest of the country.1. basically comprises of: y y y Capital financing in the form of term loan Working capital financing. and entrepreneurial competence.

Fax machine & cellular phone viii. Education Loan Scheme iv.50-50.50-150.00 1-25 1-25 50.5 Small & medium enterprises financing According to ACSPD circular no. of employe e 1-50 1-50 Service Concern 0.8 dated 26/05/08 of Bangladesh Bank Small & Medium Enterprise are defined taking into account that the basic criteria for both type of business concern will not be public limited company (Table 4. Air conditioner vii.1.00 Trading Concern Manufacturing Concern 0.4.50-50. Household appliance v.4 Consumer financing In order to help the fixed income group in fulfilling their demand to upgrade the standard of living NCCBL has launched some consumer credit scheme such as: i. Other equipments 4.00 1-50 150. Table 4. employee Medium enterprise of Fixed assets No. in lac) Type of business \criteria Small Enterprise Fixed assets1 No.1.00-1000. Festival Personal Loan Scheme iii. 1 Value of fixed assets are calculated excluding value of land and building.1 Eligible criteria of small & medium enterprises (Tk. Personal Loan Scheme ii.00-2000.00 0.1). Motor cycle/car ix.00 50.8 of the year 2008. 23 .00-1000. Furniture & fixture vi.00 1-150 Adapted from: Bangladesh Bank ACSPD circular no.

A large section of our business community consists of small and medium business owners who are conducting there business with own resources without availing much support from financial institutions. ii. The main products of the bank are as follows: i) Continuous Loan a) Secured Overdraft against Financial Obligation [SOD (FO)] b) Secured Overdraft against Work Order/Real Estate etc. v. [SOD (G)] c) Cash Credit (Hypothecation) [CC (H)] d) Export Cash Credit (ECC) ii) Demand Loan a) Loan General b) Demand Loan against Ship Breaking c) Payment against Documents (PAD) d) Loan against Imported Merchandise (LIM) e) Loan against Trust Receipt (LTR) f) Forced Loan g) Packing Credit (PC) h) Foreign Documentary Bill Purchased (FDBP) i) Local Documentary Bill Purchased (LDBP/IDBP) j) Festival Business Loan iii) Term Loan a) Project Loan b) Transport Loan 24 . Small Business Loan Festival Small Business Loan Earnest Money Financing Scheme Financing of Service Concern Financing of Trading Concern Financing of Manufacturing Concern 4. has developed a wide variety of loan products to meet customers changing demand. vi. Banks major concentration shall be under this sector under the following categories: i. iv. iii.2 Lending Products of NCCBL NCC Bank Ltd.

However. the loan interest rate must also be low enough to accommodate the business customer in such a way that he or she can successfully repay the loan and not be driven away to other lenders or into the open market for credit. Pricing of loan depends on the cost of rising loanable funds and the operating costs of running the lending institutions. 25 .c) House Building Loan d) Small Business Loan e) Consumer Finance Scheme f) Lease Finance g) Personal Loan iv) Special Fee Earning Product a) Letter of Credit (L/C) b) Bank Guarantee (B/G) c) Foreign Bank Guarantee (F. As consequences of regulatory compliance and global economic crises NCC Bank has re-fixed its interest rates at a lower rate from the second quarter of the year 2009 in the following manner (Table 4.B/G) d) Credit Card 4. The lender wants to charge a high enough interest rate to ensure that each loan will be profitable and compensate the lending institution fully for the risk involved.2).3 Lending Rates of NCCBL One of the most difficult tasks in lending is deciding how to price a loan.

50 large scale industries) Working capital (medium 14.00 04 16.00 & residential) 13.50 13.A.50 13.Table 4.00 06 Commercial Loan a) Pledge b) Hypothecation c) PAD d) LIM e) LTR f) IBP g) FBP h) LDBP i) FDBP & Bills Discounted 14.50 Capital (Small scale industry) Export Financing a) Packing Credit (PC) b) Export (ECC) Cash Credit 7.00 07 Housing Loan (Commercial 15.00 03 13.00 Term Loan (medium & 14.2 Lending rates of NCCBL (Percent per year) Serial Category of Loan Rate May¶09 (% P.A.00 05 7.) before Existing Rate (% P.00 26 .00 13.50 & large scale industries) Term Loan & Working 14.) 01 02 Agriculture 12.

00 Source: Adapted from Head Office Instructional Circular of NCCBL (May¶ 2009). ii.4 Principle of Sound Lending It is imperative precept of banking everywhere that advances are made to customer in reliance on his promise to repay.00 16.00 order c) Trans port Loan d) Lease finance 16.00 2.00 09 10 11 Credit Card NBFI Others a) SOD (FO) 2.00 03% above FDR 03% above FDR rate rate 16.00 17.00/month 14. 4. and National interest 27 .00 b) SOD (G) work/supply 16. Safety Liquidity Profitability Purpose Security Dispersal/ Spread.00 16. rather than the security held by the banker. So it is necessary for any bank to develop sound and safe lending policies and practicing principles of sound lending. Security is required by the banker as a protection against unexpected default in repayment by the customer. iv. v. vi.00/month 14.08 Consumer Financing a) Small Business Loan b) Festival Small Business Loan c) House Repairing Loan d) Personal loan e) Consumer Scheme Finance 17.00 16. iii. Principles of sound lending are: i. vii.

4.4. Bankers also discourage advances for a hoarding of stocks. to see that major portion of the assets owned by it are not only liquid but also aim at earning a good profit. repayment of old debts etc. the repayment in the normal course will become uncertain.3 Profitability Commercial bank has to distribute its resources in a manner hat they meet the twin requirements of liquidity and profitability. They would prefer an advance to come back from the normal source. 4..4. because the very existence of a bank depends on the safety of its outstanding. 4. 4. 4. The repayment capacity of a borrower depends on the borrowers a) capacity to pay and b) willingness to pay.4. which should never be sacrificed to the profit earnings capacity of its advances.2 Liquidity Liquidity is the availability of bank funds on short notice. The purpose should be productive so that the money not only remains safe but also provides a definite source of repayment. A banker has.4. If the funds borrower is employed for unproductive purposes like marriage ceremony. otherwise. To maintain a banking concern in sound condition. So far as his advances are concerned.1 Safety Safety first should be guiding principle of a banker. the liquidity position of the bank is endangered. therefore.4. pleasure trip. or speculative activities. Security serves 28 . The security offered for an advance is insurance or a cushion to fall back upon in case of need. it is also necessary that it must come back on demand or in accordance with agreed terms of repayment.4 Purpose A banker would not through away money for any purpose of which the borrower wants. It is not enough that the money will come back.5 Security It is the practice of banks not to lend money without any security. A banker would not normally like to recover the advance from the safe of the security. The working funds of a bank are collected mainly by means of deposits from the public and interest has to be paid on these deposits. The borrower must be in a position to repay within a reasonable time after a demand for repayment is made. The banker should study the purpose for which the loan is required and the resources from which the borrower is expected to repay. This has led people to believe that a bank never advance any loan unless it is fully secured. it is very essential that the safety of its advances to customers should be its first principle.

7 National interest Banking industry has significant role to play in the economic development of a country. The advance must not be in one particular direction or to one particular industry. industries as well as areas. Security may be of i) Primary security and ii) Collateral security. because any adversity faced by that particular industry will have serious repercussions on the bank. There should be spread of advances against different securities.4. The banker would lend if the purpose of the advance is for overall national development plans necessitating flow of credit to propriety sector in the larger national interest. 4. 4. by a diversification of the advance a banker will be able to spread his risks and considerably improve the safety of advance.6 Dispersal/Spread The advances should be as much broad-based as possible and must be in keeping with the deposit structure. Again advance must not be granted in one area alone. Thus.as a safety value for an unexpected emergency.4. 29 .

Bank invariably collect credit report from Credit Information Bureau (CIB) of Bangladesh Bank to justify the declaration made by the applicant borrower regarding their credit exposure. disbursement.2 Stages of Lending Most loans to individuals are arise from a direct request from customer who approaches a member of the lender¶s staff and asks to fill out a loan application.LENDING PROCESS 5. A well thought out lending process is a significant safe guard of depositor¶s money as well as business of the bank (Rose. Bank also uses internal sources. focuses mainly on the following aspects: a) Managerial aspects i) Managerial ability ii) Honesty and integrity.e. iii) Managerial succession.2.at. monitoring. financial institutions. Bank obtain undertaking from the borrower about their present credit exposure (if any) lies with other banks.1 Pre-sanction stage Virtually the very supervision of loans starts during pre-sanction stage at the time a borrower approaches to a banker and applies for loan. 30 . i. Feasibility study. follow-up and supervision process of credit of NCC Bank Limited. This chapter aims at discussing the scrutiny. Lending process involves the following three stages: such as i) ii) iii) Pre-sanction Post-sanction/pre-disbursement Post disbursement 5. reputation. Credit Report. repayment capacity. approval. track record.. ii) Cross-check of the pricing as stipulated in the indent/pro-forma invoice. account performance. 2005). Unlike other bank NCC Bank has got a prescribed loan application form for applying for a loan. b) Technical aspects i) Whether the technology is outdated or modern to handle by the firm. In case of feasibility study NCC Bank Ltd. and intention to pay banks money to evaluate the prospective borrower. et. In the first stage credit investigation is very important as it involves selection of right and qualitative borrower. iii) Check the productivity of the proposed plant and machinery matching with the firm¶s goal.

The documents by which such rights are to be established on offered security is called Charge Document. Proper and correct documentation serves the following three basic purposes: a) Borrower¶s unqualified assent of availing credit facility. Documentation. c) In case of default of the borrower to repay. Such formation constructive rights of lender on borrower and offered security are the charge. Charge means to impose a duty. Before starting documentation bank officer who takes documents must consider the following preconditions: a) Nature of advance and purpose. And documents are the physical embodiment of the existence of loans and advances.c) Financial aspects i) Company¶s operating performance and future earnings prospects. v) Credit Risk Analysis. Documents means any matter expressed of described on any substance by means of letters figures or marks or by more than one of those means intended to be used for or which may be used for the purpose of recording that matter. Charge Documents. f) If stamped. or obligation on or to hold financially liable. d) Charge requiring registration or not. 31 . e) Charge documents to be stamped or not. ii) Current financial condition and factors likely to affect in the near future. 5. c) Nature of security and mode of charging. b) Bank¶s legal right is created to the securities deposited/offered as of the loan.2 Post-sanction/ Pre-disbursement stage Proper documentation and securitization is very important at this stage for safety of credit facility to be extended and enabling the bank to liquidate the loan liability in the event of borrower¶s default. h) Capacity of executants and signing capacity. right to demand payment from a person. iii) Demand-supply gap keeping in view the other similar existing industries and the industries which are in the offing. iv) Net worth of the sponsor directors/entrepreneurs/proprietors. Documentation is the execution of documents in right form and in lawful manner. amount and type of stamp. i) Banks supplied printed documents and their contents. the documents can be placed before court for a decree to realize the dues.2. responsibility. b) Nature of borrower. Documentation forms a permanent record of the rights responsibilities and obligations of the executants that the borrower and guarantors towards the lender (Bank). g) Special conditions of documents as per sanction advice.

Therefore. e) Stamping of documents as per Stamp Act-1999. Conditions of a Valid Document. regulations of Bangladesh Bank and the law of the nation. b) Legal opinion. of Deposit Pension Scheme (DPS) etc.S. a) Documents which are not acceptable in the court of law following cause are mainly behind the invalidation of bank document.S. Valid documents must satisfy the following criteria to become acceptable to the bank. Securitization. i) Ambiguous schedule of the offered security. In case of Collateral Security. Documents must be made in conformity with the conventional rules. Documentation involves.Steps of Documentation. a) Preparation of deed... security. etc. b) Alteration and interlineations in documents if it is done after execution. 32 . e) The parties executing the documents are not competent. Registered mortgage should be created as per Bank¶s Panel Lawyers opinion taking all the chain documents. proper and accurate documentation is utmost necessary to ensure banks interest. d) Witnessing. R. g) Want of attestation or witnessing.. l) Instruments executed in blank (amount. j) Forgery. f) Improper stamping/under stamping. d) If the party is blind or illiterate and if the documents are read falsely. Flaw less documentation ensure proper title and rights to the security offered to the bank by the borrower. c) Executants and execution.. S. c) The mis-statement misleads delivers a deed. k) Deed executed as a result of undue influence or forcefully. if necessary. standing in the name of the borrower himself and those standing in the name of 3rd party should be liened duly discharged. tempering deleting of documents. not with merchandize. other Term Deposit Receipt. Such as: a) Original deed b) Bia deed c) C. liability) with a bad intension. There is a saying that bank deal with documents. Parcha d) Non-encumbrance certificate e) Up-to-date rent receipt.A. Direct securities like Fixed Deposit Receipt (FDR). f) Registration as per Registration Act-1920. h) Failure to register with competent authority within specific time. and g) Safe keeping/ preservation of documents.

is of prime importance. h) Whether balance confirmation is being obtained from the borrow at regular interval. e) Whether personal contact with the borrower kept on at regular intervals.2. i) Whether befitting step is being taken so that the loan does not turn time ± barred. c) Whether fund disbursed has been used for the purpose the loan has been sanctioned for. If a borrower limited company is winded up. to get scarce deposit and maintain confidence of the people. It is of no doubt that effective and subjective supervision and control pave the ground wide for realization of loan. in whatever form it may be disbursed. stock. If market price of pledged goods falls down 33 .Creation of charge with RJSC. 5. f) Whether keen watch is exercised on irregularity of any form on the loan account. As such. it is moral responsibility and prime duty of manager to realize loan. Because bank lends out of deposit of people. If a borrower is declared insolvent. b) Whether balance in the loan account remains within limit. d) Whether stock reports are obtained and stocks are being inspected at a regular interval. charge (on the assets acquired/ to be acquired) must be created with the Registrar of Joint Stock Company (RJSC) with in 21 days from the date of documentation and the certificate thereof must be maintained with the charge documents. In case of accommodation against hypothecation of moveable property (machinery.) of limited company.3 Realization Realization of loan. If borrower is a partnership firm and the firm is dissolved. 5. A manager gifted with the quality of subtlety and diligence should remain alert on following points: a) b) c) d) e) If any borrower dies. g) Whether the aspects revealing financial and management position of the borrower are under close watch and supervision.3 Post disbursement stage At the post disbursement stage the following points must be examined by the branch in-charge and credit officer in order to keep the lending portfolio sound: a) Whether transaction in the loan account is being done satisfactory. etc.

69 74. EITD.98 3.00 lac at the end of the year 2009. Term deposit (FDR.00 3134. MDP. Total deposit consists of 15 percent cost free deposits and 85 percent cost bearing deposits.00 4.00 636.2 Deposit Mix of the Branch Deposit of the branch stood at Tk.41 15.00 4.1). 34 .) Percentage 1 Cost Free Deposit Current Deposit Sundry Deposit Accrued Innt.48 5.48 0.00 59. SDS) consists the largest portion of the deposit mix of the branch and Short Term Deposit consists the smallest share of total deposit of the deposit mix of the branch (Table 7.PORTFOLIO OF NCCBL RAJSHAHI BRANCH 7.1 Distribution of deposits by category Type of Deposit (Fig. in lac) Amount (Tk.00 138.67 5.00 251.00 29.00 2 Cost Bearing Deposit Savings Deposit Short Term Deposit Term Deposit Special Savings Schemes Sub-total Total deposit (1+2) 188. Rajshahi Br. respective Table 7.4197.00 210.00 4197.00 3561.29 1.00 85.00 100 Source: Daily Statement of Affairs as on 31 December 2009 of NCCBL. Payable Bills Payable Sub-total 188.

94 1553.141.41% 37.36 % 35 .41 2366. (Chart 7. the year 2005 was the establishment year of the Branch and the Branch was operated only from October to December in that year. Rajshahi Branch was the lowest.1 Distrib tion of deposit by cost. Deposit trend shows that the growth of deposit was increasing over the years of operation. Tk.71% 101.94 lac only. In the year 2009 total deposit stands for Tk4197. in lac) ¢ Growth 99.06 2493. Trend of Deposit of the Branch Total deposit of NCCBL.2 Growth of deposit over the years Year 2005 2006 2007 2008 2009 Source: Survey (2010).06 lac with the growth rate of 77.39 percent over the last year¶s deposit.73 4197. However.Cost Free Deposit 15% Cost Bearing Deposit 85% Chart 7.25% 77.06 (Fig. (Table 7.2). Table 7.2). in the year 2005. Deposit 141.

85 0. Where as Consumer Finance Scheme consists the smallest share of the loans and advances of the branch (Table 7.04 0.00 lac. of A/C 39 93 90 1 1 3 Amount (Tk. respectively.526.2458. respectively.3).73 5000 k i n lac 4000 3000 2000 1553.00 lac and SOD was Tk1123.6000 y = 892.73 2009 Yea Chart 7.41 2366.00 21. lending assets of the Branch reached at Tk.97 percent and 45.00 lac.) Percentage 1179.06 1000 0 141.94 2005 2006 2007 2008 Depo it 2493.00 69.00 7.69 2. Is was found that Cash Credit (Hypo) and Secured Over Draft consists the largest portion of the lending assets.00 1123.00 47. Table 7. Cash Credit (Hypo) was Tk.1179. 7.00 1.2 Growth of deposit over time. Those were 47.81 0.39x .3 Loans and Advances At the end of financial year 2009.97 45.3 Distribution of loans and advances by category (Fig.69 percent of the total loans and advances of he Branch.06 .28 36 £ ©  Depo it end o depo it ove time £ £ © ¤ ¥ §¦ ¨ 4197. in lac) Products Cash Credit (Hypo) Secured Over Draft (SOD) Small Business Loan Scheme Loan Against House Building Consumer Finance Scheme Lease Finance Scheme No.

33 0.3 Trend of Lending Portfolio Lending assets of the Branch was increasing over the year of its operation (Chart 7.24 percent growth of the portfolio over the last year¶s portfolio (Table 7.4 Growth of credit portfolio over time (Fig.79 2458.00 0.0.77 100% Source: Adapted from Daily Statement of Affairs and Module Wise Customer Lager Balance as on 31 December 2009 of NCCBL.3).67 104.00 Growth (%) 48.33 46.61 0.49 0.House Renovation Loan Scheme Personal Loan Scheme NCCBL Car Loan Scheme Festival Small Business Loan Scheme Short Term Loan (STL) Total Loan 5 28 2 3 1 266 12.00 4. From the year 2005 on credit portfolio of the branch was increasing every year.00 15.2458. Advance (Tk. After the bank was opened in the last quarter of the year 2005 it sanctioned Tk.13 889.99 434.00 2458. Table 7.00 8.00 lac.60 lac to the borrowers.00 295. in lac) Year 2005 2006 2007 2008 2009 Source: Survey (2010).24 37 . And in the year ended 2009 total loans and advances was Tk.96 176. which shows 179.00 19. 7.) 6.16 0. Rajshahi Br.4).

21 63. in lac) 2000 1500 1000 500 295.13 889.05 390.5 Growth of profit over time Year 2005 2006 2007 2008 2009 Profit (Tk. The Branch started making profit from the year 2006.)) y = 549.47 506. Table 7.25 (Fig. where as profit was lowest at the end of the year 2006. 63. The reasonbehind the loss was huge set up cost and non availability of adequate time to make investment to generate income.78x 832. It was found from table 7.5 Operating Profit Total operating profit of the Branch was negative in the year 2005.14 1.3 Growth of loans and advances over time. 7.56 2500 Loans & Advances (Tk.Advance (Tk. Trend of growth of profit of the branch was increasing upward over the years of operation (Chart 7.15 31.79 2458 2009 Year Chart 7. as the Branch was inaugurated in October 2005. 38   .4).) 3000 Linear (Advance (Tk.66 Source: Survey (2010).01 102.5 that the Branch made highest profit of Tk.05 5.99 0 500 6 2005 2006 2007 2008 434.25 lac in the year 2009 with a growth rate of 102.66 percent over the last year¶s profit figure.) -7. in lac) Growth (%) 1.

Therefore.25 31.6 that Bad and Loss (BL) consists the largest share of classified loans and advances.) Linear (Profit (Tk. Table 7.99 lac out of total loans and advances of Tk.67 0.4 rowth of profit over time 7.578 63.73 39 .32.6 Non-performing assets at the year ended 2009 (Fig.094 . in lac) Classification Unclassified SMA SS DF Amount (Tk.14 2006 2007 2008 y 17. in lac) 60 50 40 30 20 10 0 -10 -20 5.15 1.Profit (Tk. 97 percent of the lending was fallen in the category of unclassified or standard assets of the branch (Chart 7. In the lending portfolio Tk.05 2005 -7.2458. Where as Special Mention Account (SMA) consists the smallest portion of classified loans and advances of the Branch.) 2388.00 lac was classified adversely under different loan products.05 Percentage 97.5).01 4.)) 80 70 rofit (Tk. It was found in the table 7.58 18.15 0.21 2009 ear Chart 7.43 16.6 Non-performing Assets of the Branch The ratio of classified loan amount was 03 percent of total loans and advances in the year ended 2009.69.18 0.

Rajshahi Branch¶s credit portfolio. Classified 3 Qualitative Evaluation of Lending Assets National Credit and Commerce Bank Limited has got a vide variety of lending products. PLS.8 that at the end of the year 2009 the branch¶s CC (H) outstanding stands for Tk.93 69. HBL. SOD. Rajshahi Branch as on 31 December 2009.BL Total Classified Loan Total Loan and Advance 30. The present section aims at evaluating quality of individual products in terms of classification status of those products under prudential guidelines of loan classification.26 100.00 Source: Adapted from all loan customer wise balance statement. respectively. CFS. SBLS.28 percent was market as SS. and 1. Car Loan. among which 98. LFS.33 percent was standard and generating income for the branch and 0. Among which some products are in operation in its Rajshahi Branch. HRRLS and STL. Classification of lending assets of the Branch 40   Unclassified 97 ..00 1. 7.28 lac only.1179. NCC Bank Ltd. 0.14 percent was marked as BL.99 2458. FSBLS.  Chart 7.7.26 percent was marked as DF.1 Cash Credit (Hypo) Cash Credit (Hypo) is the most prominent product of NCCBL. It was found from table 7. There are namely CC (H).

.3 Small Business Loan Scheme (SBLS) Small Business Loan Scheme (SBLS) is another loan product of NCCBL Rajshahi Branch¶s credit portfolio.27 100. Amount (Tk. Amount (Tk.027 percent was marked as BL.07 1122. Rajshahi 7. NCC Bank Ltd. Rajshahi 7.00 3.10 that at the end of the year 2009 the branch¶s SBLS outstanding stands for Tk.14 100.68.18 percent is standard and generating income for the branch and 5.) 1119.53 0.53 lac only. among which . It was found from table 7.00 0.00 0.7.1119.79 Percent of total 99.2 Secured Over Draft (SOD) Secured Over Draft (SOD) is another prominent product of NCCBL Rajshahi Branch¶s credit portfolio.72 0.00 0.31 3. NCC Bank Ltd.Table 7.9 that at the end of the year 2009 the branch¶s SOD outstanding stands for Tk.73 0.00 0. Table 7.00 0.00 Source: Adapted from all loan customer wise balance statement.33 0. among which 36.00 0.7.03 13.26 1. The loan is being disbursed to the small business houses without taking and collateral security.00 3.28 0.28 Percent of total 98.41 1179.00 Source: Adapted from all loan customer wise balance statement.72 lac only.7 Classification of Cash Credit (Hypo) (Amount in lac) CL Status UC SMA SS DF BL Total Branch as on 31 December 2009. It was found from table 7..) 1159.8 Classification of Secured Over Draft (SOD) (Amount in lac) CL Status UC SMA SS DF BL Total Branch as on 31 December 2009.61 41 .

There were five loan accounts under this product (Table 7. 7. which was unclassified and generating income for the branch (Table 7.7.53 Percent of total 36. The present study revealed that at the end of the year 2009. under only one loan account. It was found from table 7. which was unclassified and generating income for the branch. 7. under three loan accounts.) 24.85 12.00 lac only.4 House Building Loan Scheme (HBL) House Building loan Scheme is a convenient product of NCCBL Rajshahi Branch. 42 . private hospital.12. under only one loan account.3 that at the end of the year 2009 the branch¶s LFS outstanding stands for Tk.18 5. It was found from table 7.5 Consumer Finance Scheme (CFS) CFS is a product of NCCBL Rajshahi Branch to help fixed income group house hold durables.80 3.7 House Repairing and Renovation Loan Scheme (HRRLS) HRRLS is another income generating lending product of NCCBL Rajshahi Branch¶s portfolio.61 18. clinic.77 15. Rajshahi 7. NCC Bank Ltd.3).00 lac only.9 Classification of Small Business Loan Scheme (Amount in lac) CL Status UC SMA SS DF BL Total Branch as on 31 December 2009.Table 7. During the study it was found that at the end of the year 2009 the branch¶s HBL outstanding stands for Tk.1. which was unclassified and generating income for the branch.6 Lease Finance Scheme (LFS) LFS is another sound lending product of NCCBL Rajshahi Branch to finance in to capital machinery to set up industry. Amount (Tk. 7. This product of the lending portfolio was still unclassified and earning income for the Branch.7.00 Source: Adapted from all loan customer wise balance statement. HRRLS outstanding was Tk.64 21.09 68.64 100.7.92 17.00 lac only.7.02 12.21. etc.3).00 lac only. It is a low cost credit facility to whom wants to make residential or commercial houses..7.3 that at the end of the year 2009 the branch¶s CFS outstanding stands for Tk.

under two loan accounts.30 100.67 13.51 0. 7.71 lac only. Kinds of business with have extensive seasonal demand variation is entitled to get this facility.7.3.Eid. Doctor.3).9 NCCBL Car Loan Scheme LFS is another sound lending product of NCCBL Rajshahi Branch ¶s credit portfolio. which was unclassified and generating income for the branch (Table 7.34 0.10 Classification of Personal Loan Scheme (Amount in lac) CL Status UC SMA SS DF BL Total Branch as on 31 December 2009.00 0.12 3. service holders in private organizations and other professionals are entitled to avail the facility.58 0. 43 .00 3.49 0. 13. While 15.00 lac only. Fixed income earning people such as Teacher.00 Source: Adapted from all loan customer wise balance statement.when they require huge amount of cash money to maintain stock of goods in their shop. respectively. It was found from table 7.11 that at the end of the year 2009 the branch¶s PLS outstanding stands for Tk.8 Personal Loan Scheme (PLS) PLS is another product which was designed to help fixed income group in case of their sudden requirement of money.7.30 percent was marked as BL.10 Festival Small Business Loan Scheme (FSBLS) FSBLS is the product which was designed to help small business group in the time of any festival . Table 7.71 Percent of tatal 67. It was found that at the end of the year 2009 the branch¶s LFS outstanding stands for Tk.15.) 2.34 percent was market as SS.69 15.67 percent was marked as SMA. among which 67. NCC Bank Ltd. Amount (Tk. Puja .69 percent was standard and generating income for the branch. and 3.7.7. Rajshahi 7..

19. 7. which was unclassified and generating income for the branch. NCC Bank Ltd.00 lac only. Rajshahi Branch as on 31 December 2009.00 0.) 6. under only one loan account.18 0.00 2. The following ratios are used for calculating KPI for evaluating Bank¶s performance: Cost of Deposit: Interest Paid on Deposit Average Deposit Operating Cost (Note: Operating Cost = Total Cost ± Average Deposit Cost of Operation: Interest Cost) Cost of Fund: Interest Paid on Deposit Operating Cost Average Deposit Interest arned on Advance Average Advance Yield on advance: Spread: Cost of Deposit Yield on Advance Credit Deposit Ratio: Total redit Total Deposit   44 .00 0.00 26.00 0.24 8.40 0.11 Short Term Loan (STL) STL is a newly developed lending product of NCC Bank Ltd.00 0.00 Source: Adapted from all loan customer wise balance statement. The loan is being allowed for 12 months to 24 months period. It was developed in the last quarter of the year 2009 in order to strengthen bank¶s lending base.Table 7.. Table 7.60 100.11 Classification of FSBLS (Amount in lac) CL Status UC SMA SS DF BL Total Amount (Tk.3 postulated that at the end of the year 2009 the branch¶s STL outstanding stands for Tk.42 Percent of total 73.7.

Loans & Advances 45            ! .32% 3.Cost Income Ratio: Total perating ost Total perating Income Non  Interest Income Non  Interest Expense Operating Inco e Nu ber of E ployees Operating Expense Nu ber of E ployees Burden Coverage Ratio: Per Employee Income: Per Employee Expense: Profit per Employee: Per E ployee Inco e  Per E ployee Expense Non Performing Loan Ratio: Non Perfor min g Loan Outs tan ding Loan Return on Assets: Operating Pr ofit otal Assets  Contra Ite Table 7.69% 11.47% Taka (in lac) / % 2.Deposit a) i) Cost bearing deposit ii) Cost free Deposit Total Deposit b) % of Cost bearing Deposit c) % of Cost free deposit d) Cost of Deposit e) Cost of operation(Total cost-Interest cost) Total Cost of fund (d+e) 3583 457 4040 88.12 Performance Indicator of the Branch for the year ended 2009 Indicators 1.15% 13.31% 10.

10% 46 .61 2.42% 249 46 30 325 14. Expense a) Net Interest Expense b) Salary & Allowances c) Others d) Total Expense e) % Empolyees Expense to Total Expense 2066 0.95 14.a) Total Loans & Advances b) Classified portfolio c) % of Classified Loan to total Loan & Advances d) yield of advances 3.15% 7.22 7. Credit Deposit Ratio 4. Cost Income Ratio (Operating Income) 35 155. Opwerating Profit/(Loss)-(5d-6d) 8.Income a) Net Interest Income b) Exchange gain c) Commission & fees Income d) Total Income e) Ratio of Non-Interest Income to Total Income f) Interest income Kept in suspense A/C 6. Spread {2(d)-1(d)} 5.84 34:66 4.52 311 49 360 27.

Online facility 47 . Quality manpower who wants to serve customer well. v. ii.Burden Coverage Ratio 10.9 SWOT Analysis for the Branch SWOT analysis was done to identify the factors affecting profitability of our branch business. Branch situated in a prime location of the city. 7. vi. Per Employee Salary & Allowances Expenses ix. Per Employee Expense viii. iv.9. Per Emplyee Deposit Per Employee Deposit Per EmployeeClassified Loan Per Employee interest Income Per Employee Non Interest Income Per Employee Income 61:39 0. y y y y Congenial working environment of the branch. Profit/(Loss) per Employee Executives & Officers Support Staff Total: Source: survey (2009). Return on Assets (ROA) 11. Efficiency Ratio i. Strength. iii.0079 311 159 5 19 3 23 20 3 2 13 3 16 vii.

48 . Alert Banking. Intense competition among competing banks to grab business. Risky SME financing due to borrowers easy access to NGO loan. In adequate training facility to improve managerial skills No any branch clearing facility Inadequate manpower in cash. Customer preference to deposit to FDR which increase cost of fund. and advances department. y y y y y Imbalanced rank and profile of staffs in the branch. Increase small savings. At least an ATM booth is required adjacent to branch. Phone Banking. Lease finance to professionals-doctor. Small segment of large-scale business concern in the city. general banking. y y y y y y Latest technology adoption.by competitors. finance to small and cottage industry.ATM. CIB report is not available to trace out NGO¶s loan made to borrower. Opportunity. Manager is a Sr. which may lead to over finance and reduce borrowers credit worthiness. which may lead to unsecured financing. Vice President and Deputy Manager is only Senior Officer. Threat.Weakness. y y y Trade finance business.

Under the banner of this foundation. ii. the bank has continued its social works. The bank is always aware of its social responsibility and consciously put its efforts to discharge this responsibility. For effective discharge of CSR.39. The bank has started FRPP. iv. to study the credit policy of NCC Bank Limited. a jointly funded project by DFID in partnership with Bangladesh Bank under the grant facility called Remittances and Payments Challenge Fund (RPCF) where Thangamara Mohila Sobuj Shangha (TMSS). The company operated upto 1992 with 16 branches and thereafter with the permission of the Central Bank converted into a full fledged private commercial Bank in 1993 with paid up capital of Tk. The organization started its journey in the financial sector of the country as an investment company back in 1985. . At present the bank is operating with 65 Branches with online facility across the country. an NGO working for empowering the womenfolk of the country is a partner. and to evaluate efficiency and effectiveness of credit operations of Rajshahi Branch of NCC Bank Limited. The present study of conducted to attain a broad objective of analyzing credit policy of NCC Bank Ltd. 49 . Mission of the bank is to mobilize financial resources from within and abroad to contribute to Agricultures. Industry & Socio-economic development of the country and to pay a catalytic role in the-formation-of-capital-market. to analyze key performance indicators of the Branch. The study further attempt to attain the following objectives in order to reach its broad objective. to study the credit risk grading system of NCC Bank Limited.SUMMARY CONCLUSION AND RECOMENDATION SUMMARY National Credit and Commerce Bank Ltd. i. Under this project the Bank is using not less than 250 outlets of TMSS to deliver remittance to the beneficiaries where it has no Branch. iii. And vision of the bank is to become the Bank of choice in serving the Nation as a progressive and Socially Responsible financial institution by bringing credit & commerce together for profit and sustainable growth. bears a unique history of its own. NCC Bank Foundation was established a few years back. to analyze credit portfolio of NCCBL Rajshahi Branch.00 crore to serve the nation from a broader platform.

2005). The present study was conducted based on secondary date generated mostly by the automated banking software-Flora Bank UBS. Now the banks interest rates ranges from 13 percent to 17 percent per year. Each and every bank has got its own credit policy which generally formulated on the basis of prevailing countries socio-economic conditions. Housing Loan Scheme and viii. NCC Bank Limited have formulated own credit policy indicating the areas of lending complied by Bangladesh Bank guideline. Lending process involves three stages: such as i. Published document is the annual report of the bank. Consumer Financing v. Daily Statement of Affairs. to analyze Branch¶s strengths & weakness. As consequences of regulatory compliance and global economic crises NCC Bank re-fixed its interest rates at a lower rate in the second quarter of the year 2009. Real Estate & Civil Construction Pricing of loan depends on the cost of rising loanable funds and the operating costs of running the lending institutions. Most loans to individuals are arise from a direct request from customer who approaches a member of the lender¶s staff and asks to fill out a loan application.v. et. quarterly statements. while unpublished sources of secondary data are different monthly statements. The main features of credit policy of NCC Bank Ltd. While post-disbursement stage involves monitoring 50 . and annual closing statements of the branch under study. Pre-disbursement stage involves securitization of the loans with adequate primary and collateral security. political and other related aspects from time to time and as per guideline of central bank. Small & Medium Enterprise (SME) Financing vi. Expenditure Statement. Industry iii.of the bank.at. Pre-sanction Post-sanction/pre-disbursement and Post disbursement Pre-sanctions stage involves justification of the prospective borrower¶s credit worthiness. A well thought out lending process is a significant safe guard of depositor¶s money as well as business of the bank (Rose. have focus on the following areas: i. The researcher himself collected the data from different published and unpublished material of NCCBL financial documents. to suggest some policy recommendations. Lease Financing iv. Agriculture & Agro-based Ventures vii. ii. and vi. deposit and loan ledgers. iii. Income Statement. Trade and Commerce ii.

It is also relevant for portfolio level analysis.and realization of the lending money.24 percent growth of the portfolio over the last year¶s loans and advances.2458.99 lac out of total loans and advances of Tk. Where as Consumer Finance Scheme consisted the smallest share of the loans and advances portfolio of the branch. Which were 47. Deposit of the branch stood at Tk.00 lac.00 lac. Rajshahi Branch commenced its journey on 25th October 2005. Cash Credit (Hypo) was Tk. Since inception the branch was trying to serve for the greater interest of all its stakeholders and of the society.00 lac was classified adversely under different category of loans and advances accounts.39 percent over the last year¶s deposit. v. Credit risk for counter party arises from an aggregation of the following: i. Total deposit consists of 15 percent cost free deposits and 85 percent cost bearing deposits. There are one executive. ii. Vice President & Manager. iii. And the growth rate of deposit was 77. The Credit Risk Grading matrix allows application of uniform standards to credits to ensure a common standardized approach to assess the quality of individual obligor. the branch or the Bank as a whole. and eleven officers employed in the branch.69 percent of the total loans and advances of the branch. line of business.25 lac in the year 2009 with a growth rate of 102. It was found that Cash Credit (Hypo) and Secured Over Draft consisted the largest portion of the lending assets. credit portfolio of a unit.00 lac at the end of the year 2009.2458.4197.1179. The ratio of classified loan amount was 03 percent of total loans 51 . Financial Risk Business/Industry Risk Management Risk Security Risk Relationship Risk Each of the above mentioned key risk areas require be evaluating and aggregating to arrive at an overall risk grading measure. where as profit was lowest at the end of the year 2006. Sr. Risk grading would also be relevant for surveillance and monitoring.00 lac. which shows 179. respectively.00 lac and SOD was Tk1123. respectively. Trend of growth of profit of the branch was increasing upward over the years of operation. The Branch made highest profit of Tk. 63. iv. internal MIS and assessing the aggregate risk profile of a Bank. lending assets of the Branch reached at Tk. respectively.97 percent and 45. And in the year ended 2009 total loans and advances was Tk. NCC Bank Ltd. Is was found in the study that Tk. In the year ended 2009.66 percent over the last year.2458.69.

The policy makers should. The officials are trying hard to provide their best for 52 .64 percent was marked as BL.18 percent was standard and generating income for the branch and 5. That is huge gap between Manager and Deputy Manager and different section in charge should be eliminated. 18. Every bank has the same target to earn profit. To earn profit bank needs to accept several policies so that it can provide more satisfaction to its customers than the competitors. In case of qualitative evaluation of individual lending products it was found that CC (H) and SOD were the highest performing products of the Branch.and advances in the year ended 2009. This is the only sector. (d) Some service charge free deposit accounts should be developed. among which 36. savings accounts for farmers and so on.61 percent was marked as SMA. But the bank still has scope to improve its operating efficiency to generate more income. As a result.64 percent was market as SS. RECOMMENDATION On the basis of the finding of the study it was evident that NCCBL Rajshahi Branch was operating profitably and generating employment opportunity to the people of Bangladesh. For this perspective bank strengthen its marketing activities. all banks are not tantamount. CONCLUSION There are many banks in Bangladesh. some policy recommendations may be advanced which are likely to be useful for policy formulation: (a) A balance in the hierocracy of employees of the branch should be maintained. where the technologies cope very fast. student¶s savings account. (c) ATM network and any branch clearing facility should be introduced. respectively. and (e) Loan sanctioning process should be more quickly. retired peoples savings account. (b) More employment training and development program should be taken by controlling authority to ensure employee competence in order to cope with the changing financial markets. It was found in the study that at the end of the year 2009 the branch¶s SBLS outstanding stands for Tk. take necessary measures according to the findings of the study. It was observed that most of the SBLS loan accounts are non-performing in the branch. Therefore. And SBLS was the worst performing product of the branch in terms of income generation and classification status. However the discipline of the banking sector is now outstanding.68. 97 percent of the lending was fallen in the category of unclassified or standard category of assets of the branch.53 lac only. 21. and accordingly Bangladesh Bank as the watchdog of the money market grading the banks. therefore.92 percent was marked as DF. Such as salary account for corporate houses. and 17.

Rajshahi branch. It contributes towards formation of national capital. The NCC bank has successfully made a positive contribution to the economy of Bangladesh with in very short period. It can be easily said that NCC Bank is a progressive Commercial Bank in private sector it creates new opportunities for its clients as well as give customerized services and maintains harmonious banker-client relationship. the more income from the credit operation the more will be profit of the bank . 53 . deposit has spread over So. I believe that my realization will be in harmony with most of the banking thinkers. From the practical implementation of the customer dealing the whole period of any practical orientation in NCC Bank Limited. NCCBL is offering special deposit schemes with higher benefit. it is necessary to hold some permanent customer by offering special deposit schemes otherwise in future amount of deposit may come down To strengthen the future prospect of branch.the betterment of the bank and also for the society. growth of savings & investment in trade. Foreign trade operation and general banking both section of the bank played a significant role in the overall business where the potential customers are always there. commerce & industrial sectors. Success in banking business largely depends on effective and efficient loan services. I have reached fain and concrete contusion in a very confident way. If they follow recommendation and take necessary action accordingly I think the bank will develop quickly and will come in top position in banking sector. it is emergence to collect more deposit. which is a crying need for long-term position in the financial market Because of the existence of many banks in the financial market.

com  www.George Foster  Newspaper: Financial Express  Bangladesh Bank Publications  Annual Report of NCC Bank Ltd.nccbank-bd.roc. -Van Horne  µFinancial Statement analysis ¶.Jeff Madura  µForeign Exchange and Financing of Foreign Asraf Ali rade ¶.Syed  Financial management and Policy -10th ed.2nd Edition .bd  www..seribd.gov.bangladesh-bank. 2008  www.com  www.7th ed.REFERENCE  µ nternational Financial Management ¶.com  www.com 54 .google.

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