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Introduction

1.1 Background of the Report Commercial Banks are one of the key contributors to the economy of Bangladesh. The process of economic development requires the banking sector to operate efficiently and allocate the capital resources to the proper development agencies. People and the government itself are very much dependent on the services provided by these banks in the financial market for the process of economic development to function properly. Commercial banks act as financial intermediaries by performing the function of mobilization the funds from one group and lending the same to another while making a reasonable amount of profit after meeting the cost of funding. Lending is said to be the primary function of a banker and through this function he earns income for the bank by charging interest on the extended credit facility (in the form of loans and advances) to the clients. There are various types of loans and advances through which the bank exercises the function of lending. Modern Banking system plays a vital role for a nation’s economic development. Over the last few years the Banking world has been undergoing a lot of change due to deregulation, technological innovations, globalization etc. These changes also made revolutionary changes of a country’s economy. Present world is changing rapidly to face the challenge of competitive free market economy. It is well recognized that there is an urgent need for better-qualified management and better-trained staff in the dynamic global financial market. Bangladesh is no excepting of this trend. Banking sector in Bangladesh is facing challenges from different angles though its prospect is bright in the future. Money and Banking is the center around which all-economic science clusters. So this report is carried on to find out the problems faced by Eastern Bank and recommend some measures to overcome these problems for economic development of Bangladesh. 1

About EBL: Eastern Bank Limited (EBL) is one of the modern, fully online and technologically superior private commercial Banks in Bangladesh. Eastern Bank markets a wide range of depository, loan & card products. These products include different types of Savings & Current Accounts, Personal Loans, Auto Loan, Debit Card, Pre-paid Cards, Internet Banking, Treasury, Syndication, Corporate Banking and SME Banking services through a network of branches & centers countrywide. Eastern Bank has its presence in major cities/towns of the country including Dhaka, Chittagong, Sylhet, Khulna and Rajshahi. Tracing its origin back to 1992, EBL is serving the individual and corporate clientele alike with remarkable success offering innovative banking services since then.

1.2 Objectives of the Report:
There had been some objectives set forward in doing this report so that it can be determined what task I have to perform in the bank. The objectives of the report are divided into two partsBroad Objective:

• To identify Consumer Loan classification, Provisioning Requirement & Recovery
Strategies of Eastern Bank Ltd. Specific Objective: • • • To understand the gap between banking theory and practice. To identify the consumer loan sanction process of EBL. To evaluate how information technology in modern business help bankers to manage their activities.

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1.3 Topic of the Report To write a report is necessary to select a topic. A well defined topic reflects what is going on to be discussed through out the report. The topic that has been assigned by supervisor is “Consumer Loan classification, Provisioning Requirement & Recovery Strategies of Eastern Bank Ltd”. The report has discussed how the bank operates their activities with their regular customers

1.4 Methodology of the Report:
Source: Information provided on this report is of two types. One is primary source and the next
one is secondary source. In fact, most of the information has collected from primary sources.

Primary Sources:
1. Interview with the EBL employees. 2. Day-to-day conversation and discussion with the credit analysts. 3. MIS officers.

Moreover, I have maintained a close contact with the direct sales team members of Eastern Bank Ltd. who regularly visit clients and consult with prospective customers.

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Secondary Sources:
1. Eastern Bank Limited Annual Reports 2007

2. Product Program Guide [PPG] 3. Credit Assessment Guideline
4. Loan files of the client.

5. Websites and so on.

Data Collection Method:
The process of financial data collection is not hassle free for any outsiders. As I worked there for three months, they have allowed me to collect data from MIS of CFC. Some times, they have provided data verbally and I took note of that.

1.5 Scope of the Study:
This report has prepared to gain a clear view of the consumer loan management process. It includes all my experience in CFC. I tried to show how EBL handles all the activities necessary to disburse loans to its clients. But there are some policy issues like which loan needs to be reviewed, what should be the interest rates, how many documents should be made compulsory for security reasons, who will be liable for the default loan, how responsibility will be delegated to officials and so on. These issues have not addressed in this report – as my goal was to reveal how work is done not how it should be done.

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1.6 Limitations of the Study:
Actually, the truth is that, the limitations of this report are well concrete. They have stated below –

Time:
It was one of the major limitations of this report. Nevertheless, according to PARKINSON’S Law: “Works tend to expand to fill the time available’’. The subject matter of this report was so vast that despite of the time given, I have not included all the aspects of consumer loan as I expected earlier. However, I tried my best to present this report before the submission deadline.

Inadequate Discussion:
As a newcomer to banking service, I have taken considerable time to understand this business. To make a solid report I felt the urgency of communication with high-level employees but there is no opportunity to make appointments with them. I think inadequate discussion is one of the limitations of the report.

Restricted Disclosure:
The report will be very information worthy if I get the opportunity to make a comparative analysis of consumer loan. Nevertheless, the fact is, most of the banks do not disclose consumer loan data in a separate heading in the annual report. Moreover, trend analysis of EBL consumer’s loan also lacks the historical data necessary to make a valid forecast. Most of the loans have launched in recent times.

Lack of knowledge and experience:
Honestly, I agree that making a comprehensive study on consumer’s loan requires a great deal of experience and current banking knowledge. As an M.B.A student, I do not possess that kind of knowledge and experience.

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office. we can add value to your profession. Now a day. education is to understand the real world and applying knowledge for the betterment of the society as well as business. which is only the half way of the subject matter. With a little financial help under EBL's Loan for Professionals Scheme. 2. 6 . and life style. Customers can choose 12. From the education.Literature Review 2. we get to use our online banking services as well.2 Loan for Professionals: EBL Loan for Professionals is meant for the development of our professional life. or 36 equated monthly installments (EMI) to repay the loan. 24. Their interest rates are competitive in the market. theoretical knowledge is obtained from a course of study. Their Consumer loan Scheme will allow to avail credit up to 75% of the price of the item they want to buy. education is not just limited to books and classrooms. Practical knowledge has no alternative. Its flexible nature allow customer to improve their home. The maximum repayment period for EBL Consumer Loan is 3 years. In today’s world.1 Consumer Loan: EBL Consumer Loan has aimed at solving our personal financial needs. The perfect coordination between theory and practice is of paramount importance in the context of the modern business world in order to resolve the dichotomy between these two areas. As a loan customer.

Lawyer.If anyone is a self-employed Doctor. the Eastern Bank Limited was formed as a public limited company incorporated in Bangladesh with primary objective to carry on all kinds of banking business in and outside Bangladesh. framed by the Bangladesh Bank and approved by the Government of Bangladesh.1 Organization Orientation 3. Architect. Computer Professional or a Chartered Account.1 Formation: In pursuance of the “Bank of Credit and Commerce International (Overseas) Limited in Bangladesh (Reconstruction) Scheme.1. they can buy or import equipment. assets. Eastern Bank Limited had also taken over the business. and liabilities of erstwhile Bank of Credit and Commerce International (Overseas) Limited branches in Bangladesh with effect from 16h August 1992. It offers full range of commercial banking products and services to the corporate. tools. Now EBL is a second-generation commercial bank with 25 online branches across major cities in Bangladesh a 612 full time employees on year end 2006. Engineer. customized products for use in your chamber. The purchase of the item is expected to directly contribute to the advancement of their professional/ business solution They need to be a Bangladeshi national between the ages of 25-60 working in the abovementioned field for at least five years. 1992”. Organizational Features: 3. mid-market and 7 .

Whereas non-performing loans as on year end.98 billion or 13. Besides. foreign owned EPZ companies etc.000 10.8 billions on year end 2006 against BDT 1.000 5.15 percent of total loans as against BDT 175.000 20.292.09 billion or 13. and takes deposits only in freely convertible foreign currency to and from resident son/institutions. commercial banks operating in Bangladesh disbursed an accumulated amount of BDT 1.retail segment.2 Banking Industry Scenario: Loan Deposit Growth & NPL: As per BB statistics.28. in the first half of FY 07.62 percent over same period of FY 06mainly due to increased borrowing by Govt in the 8 .51 billion year end 2005(growth 18. 30.55 per cent of total loans on year end 2005.000 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Tk Year Fig: 1 Loan Deposit 3. EBL has an Offshore Banking Unit (OBU) setup in 2004.000 15. Besides main operation. 2006 stood at BDT 200.1.26). overall domestic credit rises by 9.this better NPL scenario was mainly attributable to write off of around BDT 110 billion bad loans till the end of September 2006 among which state owned enterprises wrote more than half of bad debts off. which gives loans.000 25.

stood at BDT 1.923 Table: 1 9 .053.342.077.017.596 41.132.093.330.017. in response to the rise in policy rates.521.915 205.000 10.929152 N/A N/A 20.003.495 305.Back drop of shortfall in revenue collection.524 N/A 25.561 371.705 1.991 305.469 240.220 25.15 percent in first half Y 07 compared to same period FY 06.004 33.969.671.524 N/A 740.128.76182billion as n December 31.909 N/A 98. Deposit.753. the commercial banks ‘lending rates increased from 1.539 83.392.889.3percent to 12.424.4 percent and deposit rates from 5.819.797 2.371.566 N/A 371.288 20368. Private sector credit grew by 12.511 437.209.076.144 407. 2006 registering around 20 percent growth.987 5.067.9 percent to 7 percent from December 2005 to September 2006.291. Calculation of Provision for Loans and Advances as per CL December 2006: Nature Outstanding Interest Suspense Eligible Security Base for Provision Required Capital Standard SMA SS DF BL Staff Loan Total 24392.377 N/A N/A 14.913.998 154.362.338. on the other hand.315.692 1.570 24.533 727.053.

10 . both internal and external. • We will ensure to maximize shareholder's value.1.1. • We will constantly change our systems. • We will create an enabling environment and embrace a teambased culture where people will excel.3. It has adopted a new logo that looks very dynamic in its attractive colors that reflect all the changes that are taking place in EBL.3 Vision of EBL: “To become the bank of choice by transforming the way we do business and developing a truly unique financial institution that delivers superior growth and financial performance and be the most recognizable brand in the financial services in Bangladesh. 3. procedures. and training to maintain a cohesive and professional team in order to achieve service excellence.4 Mission of EBL: • We will deliver service excellence to all our customers.’ EBL dreams to become the bank of choice of the public including both the consumer and the corporate clients.

76% 33.533 16.44% 2.1 7% 2.256 354 1.46% 22.67% 2.255 731 631 18.288 3.82% 30.000 828 2.132 19.11% 71.17% 2.04% 13.241 1.66% 2.10% 22 484 2003 281.000 720 2.448 13.716 2004 1.642 1.61% 18.36% 22 495 2004 317.971 (Above figures are in million BDT) Table: 2 EBL at a Glance (2002 .50% 25 612 11 .349 892 851 23.2006) (Continued…) Particulars Book Value per share (Taka) Market value per share (Taka) Earning per share (Taka) Dividend per share (Taka) Return on Equity (Average) Return on Assets (Average) Classified loan as % of total Loans Capital Adequacy Ratio Cost-Income Ratio Net Interest Margin RWA to Total Asset Number of Branches 2002 295.07% 1.239 29.891 4.056 967 27.957 1.272 2.98 45 16.286 39.226 759 638 18.146 25.183 1.21 20 15.300 828 3.000 828 2.79% 14.733 15.44% 2.Particulars Authorized Capital Paid-up Capital Reserve Deposit & Other Accounts Loans & Advances Export Import Guarantee Business Operating Income Operating Expenses Operating Profit Net Profit Before Tax Total Assets (excluding contingent) 2002 1.38 792.692 555 2.33% 1.32% 27.17% 5.008 24.41% 18.134 35.222.986 1.26% 81.952 11.358 12.91% 3.985 1.27%28.191% 14.32% 7.49% 54.38 43 18.358 1.048 2005 3.87 382 43.68% 22 536 2006 400.93 1.303 24.661 10.414 947 2.47% 71.70% 22 522 2005 370.396 17.02% 35.901 1.560 11.445 2003 1.734 26.62% 3.400 2006 3.93% 3.94% 13.649 14.347 651 4.758 13.913 1.50 61.300 828 3.75 66.49 35 17.73 780 58.00 40 19.29 303 51.81% 61.973 8.

598.94 8 17.400.954.352.970.79 2005 828.290.705.508.76 5.007.549 6.642.901.90 8 98.496.68 23.26 32.507 27.180.649.928 15.19 18.757.123.853.137 8.471.590.10 6 3.00 192.53 12 .370.328.92 12.863.79 513.751.847 1.682.734.56 6 13.377.62 459.791 26.000 3.345.584.363 2.761.28.264.46 9 17.891.98 254.984 1.893 657.316.000.087 101.868 3.41 546.000 3.425 1.06 3.263.170.219.399.60522.17 311.000.197.077 61.236 960.Eastern Bank Limited HIGHLIGHTS ON THE OVERALL ACTIVITIES For The Year Ended 2006 Sl No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Particulars Paid up capital Total capital Surplus/shortage capital Total asset Total deposits Total loans and advances Total contingent liabilities Loans and deposits ratio % of classified loans against total loans & advances Profit after tax and provisions Classified loans for the year Provisions held against classified loans Surplus of provision Cost of fund Interest bearing assets Non-interest bearing assets Return on assets Income from investments Earning per share Revenue per share Price earning ratio Taka Taka Taka Taka Taka Taka Taka % % Taka Taka Taka Taka % Taka Taka % Taka Taka Taka Times Table: 3 2006 8.726 35.980.228 66.224 785.847 985.294 25.886 45.989.853 423.

3.5 Management Hierarchy: CHAIRMAN BOARD OF DIRECTORS MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER DEPUTY MANAGING DIRECTOR & CHIEF OPEARATING OFFICER SENIOR EXECUTIVE VICE PRESIDENT (SEVP) EXECUTIVE VICE PRESIDENT (EVP) SENIOR VICE PRESIDENT (SVP) VICE PRESIDENT (VP) SENIOR ASSISTANT VICE PRESIDENT (SAVP) FIRST ASSISTANT VICE PRESIDENT (FAVP) ASSISTANT VICE PRESIDENT (AVP) SENIOR PRINCIPAL OFFICER (SPO) PRINCIPAL OFFICER (PO) SENIOR OFFICER (SO) OFFICER ASSISTAT OFFIER (AO) TRINIG ASSISTANT OFFICER (TAO) 13 .1.

236.252.783.1.473 197.3.631 2005 Taka 138.380 (b) General provision against unclassified Loans & Advance: 2006 Opening balance Provision made during the year Taka 193.983.471.6 Provision for Loans and Advances (a) Specific provision against Loans & Advances 2006 Opening balance Fully provided debt written off ring the year Recovery of amount previously written off Specific provision for the year Provision held a the end of the year Taka 464.627 (70.188.839 (29.297 (62.570 55.756) _ 33.372.083.104 785.388.473 657.956 2005 Taka 493.589.151.853 14 .203.388.051) _ 25.879.678.380 (95.917) 464.594.385.060 Table: 4 193.903 Total (a)+(b) 391.083.424) 393.

Findings Consumer Loans of EASTERN BANK LIMITED Unsecured Loans: 1 JIBAN DHARA LOAN 2 UTSHAB LOAN 3 EXECUTIVE LOAN 4 CAR LOAN 5 DEBIT LINE Secured Loans: 6 FAST LOAN 7 FAST CASH 15 .

Advance rental payments .Businessperson .1 Description and features: EBL Jiban Dhara loan is an any purpose Lifestyle loan. This loan cannot be taken for solely business purposes like working capital and industrial machinery purchase. All EBL branches subject to CPV being in place Any credit worthy individuals like: .Purchase of professional equipment like X-ray machine. machines. LOAN 1 4. Architects. Engineers.Hospitalization or other emergency medical needs .Lawyer .Interior Decoration .Doctors. self-employed professionals. medical beds. However. To meet lifestyle needs of the creditworthy individuals and to capitalize JIBAN DHARA the vast market gap.Purchase of miscellaneous household appliances .Other legitimate purpose.Salaried executives .Marriages in the family . engineering/ mechanical tools . Chartered Accountant.House renovation .Trips abroad . Purpose might be considered as follows: . who have private practices can avail this loan to buy their office equipment.000/- 16 . 50. ultra-sonogram machine. Consultant and IT professionals .Journalists of reasonably lower rank . Colonel level Purpose Purposes not allowed Availability Target customers Non target customers Loan Amount - Minimum TK. Bank would finance against gross monthly income of the any credit worthy individual. Jiban Dhara Loan is suitable unsecured consumer loan product.EBL Jiban Dhara loan is any purpose unsecured and terminating loan facility (EMI based) for any legitimate purpose. and accessories or premise renovation.Defense official below Lt.

(minimum and maximum) for A category customers - Maximum TK. (Interest rates can be changed by Authority from time to time based on market situation . System will be auto debit installment from customer’s CASA account.a.Reputed Businessman acceptable to EBL Identification Document of guarantor: .Photograph or business card 17 . Eligibility of guarantor: . Early full and final settlement is flat 1% of the outstanding loan amount. whichever is lower. In addition.Professionals (Doctors.a. 10.1% of the loan amount.. 12 to 60 months (As per clients will. DBR must be supportive with income and EMI as per our income assessment policy. Penal interest of 3% p. 16% p.Customer can avail more than 1 loan from EBL if income and DBR supports [Separate new loan account will be created in the case of top-up. Chartered Accountants. and Engineers etc) or . 00.e. on dues amount. At least minimum 30% of the loan outstanding has to pay by customer while making advance/prepayments amount.A guarantor can provide personal guarantee once only for any EBL consumer loan. i.000/. Allowed after 6 month. Interest Rate Processing Fee Repayment Tenor Disbursement Repayment Advance /Partial pre payment Early payment fee Installment failure charge Stamp charge Top-ups - - Personal Guarantee All relevant stamp charges will be on borrower’s account and will be debited from the account at the time of disbursement .Any salaried executive deemed acceptable to EBL or . .TIN . affordability and our credit assessment criteria) Credit to the customer’s deposit account with us. Monthly Income = Gross monthly salary or Business income + 80% income of other proven sources like spouse salary. will not be an additional draw down over existing loan account] .1 Personal Guarantee will be required for EBL Jiban Dhara Loan. rent income and so on.or 12 times of gross monthly income.

Colonel level Minimum TK. Monthly Income = Gross monthly salary or Business income + 80% income of other proven sources like spouse salary.000/. machines. who have private practices can avail this loan to buy their office equipment.or 12 times of gross monthly income.Waiver of Guarantee for Priority Organizations’ Employees Good Boy/Good Girl Note - No personal guarantee would be required for the salaried executives of EBL priority organization list that will mainly comprise the MNCs.Hospitalization or other emergency medical needs . 50. Banks. rent income and so on. Architects. 00.House renovation . Engineers. DBR must be supportive with income and EMI as per our income assessment policy. Purpose might be considered as follows: .Trips abroad .Marriages in the family . ultra-sonogram machine. and accessories or premise renovation. engineering/ mechanical tools .Purchase of professional equipment like X-ray machine. However.Doctors. EBL Jiban Dhara loan is an any purpose Lifestyle loan.Purchase of miscellaneous household appliances .000/Maximum TK. Chartered Accountant.Interior Decoration .Other legitimate purpose. Purpose Purposes not allowed Availability Target customers Non target customers Loan Amount (minimum and maximum) for A category customers 18 . All EBL branches subject to CPV being in place Any credit worthy individuals like: .Salaried executives . and large local corporate House.Advance rental payments .Lawyer .Businessperson . self-employed professionals.Journalists of reasonably lower rank . This loan cannot be taken for solely business purposes like working capital and industrial machinery purchase. Good Boy/Good Girl Note will be required for all EBL Jiban Dhara Loan. Consultant and IT professionals . whichever is lower. 10. In addition.Defense official below Lt. medical beds.

Doctors. Christmas and other festivals.Purchase of miscellaneous household appliances like TV. To meet life style needs of the credit worthy individuals and to capitalize the vast market gap. Availability All EBL branches subject to CPV being in place Target customers Any credit worthy individuals like: .2 UTSHAB LOAN EBL Utshab loan is any purpose unsecured and terminating loan facility (EMI based) for credit worthy individuals to meet the expenses on the Eve of Holy Eid. this loan is a suitable unsecured consumer loan product.Purchase of audio-video equipment . Fridge or Home Theater .Purchase of furniture during Eid time Purposes not allowed This loan cannot be taken for solely business purposes like working capital and industrial machinery purchase.Businessperson Chartered Accountants. Consultant and IT professionals .Eid Shopping .Salaried executives .Travel in abroad .Purchase of personal computers . Bank would finance against gross monthly income of the any credit worthy individual. Architects. Engineers. 4. 19 . Purpose might be considered as follows: .2 Description and Features: Purpose EBL Utsheb Loan is any purpose Lifestyle loan that will support customer Eid related financial needs.

000/Maximum TK. A charge for early full and final settlement is flat 1% of the outstanding loan amount. on the dues amount. At least minimum 30% of the loan outstanding to be paid by customer while making advance/prepayments amount. Allowed after 6 month. Colonel level Loan Amount (minimum and maximum) Minimum TK. And DBR must be supportive with income and EMI as per our income assessment policy. Monthly Income = Gross monthly salary or Business income + 80% income of other proven sources like spouse salary. Fee: 1% of the partial payment amount. 50.a. - Interest Rate 15% p.a. 1.or 10 times of gross monthly income. System will be auto debit installment from customer’s CASA account.Non target customers - Lawyer Journalists of reasonably lower rank Defense official below Lt.24 or 36 months From the time of launch in First week of September 2005. Installment failure charge - Penal interest of 3% p.000/. Advance /Partial pre payment - Early payment fee Early full and final settlement is allowed. rent income and so on.50. 20 . Processing Fee Nil Repayment tenor Loan Availability Disbursement Repayment 12. whichever is lower. Credit to the customer’s deposit account with us.

e. 3 EXECUTIVELO AN Many Private Banks have introduced unsecured personal loan in the market with varying degree of success. It is an “All Purpose’’ loan aimed to meet the short. A satisfactory Good Boy/Good Girl Note will be required for all EBL Utshab Loan.Professionals (Doctors. 21 .term financial needs of an upper income groups of salaried executives. Considering the market trend for consumers Loans. Chartered Accountants. new loan account will be created in the case of top-up. EBL laun-ched this product in Aught.Stamp charge - All relevant stamp charges will be on borrower’s account and will be debited from the account at the time of disbursement Top-ups Customer can avail more than 1 loan from EBL if income and DBR supports [Separate. Eligibility of guarantor: . and Engineers etc) or .A guarantor can provide personal guarantee once only for any EBL consumer loan. i.TIN .Photograph or business card - Waiver of Guarantee for Priority Organizations’ Employees Good Boy/Good Girl Note - No personal guarantee would be required for the salaried executives of EBL “Priority Organization List’’ (POL) that will mainly comprise the MNCs. Banks and large local corporate House. will not be an additional draw down over existing loan account] Personal Guarantee 1 Personal Guarantee will be required for EBL Utshab Loan for general customers including businessmen and employees of the companies not included in the “EBL Priority Organization List’’ .Reputed Businessman acceptable to EBL Identification Document of guarantor: .. It was the first consumer loan among the four other loans.Any salaried executive deemed acceptable to EBL or . EBL has launched an unsecured personal loan products “EBL executive loan’’ targeting salari-ed executive only. 2004.

who maintain or will open a salary account with EBL and will arrange for irrevocable letter.000/Maximum Taka 3. 4. Interest rate Category A: 18% Category B: 19% Category B*: 20% 22 .or 3 times of Gross salary.There are three (3) categories: • Category A: Individuals. which ever is lower. • Category B: Individuals. • Category C: Individuals who will avail the loan by depositing postdated cheque for each EMI amount. 00. who will open a salary account with EBL arranging an irrevocable letter from employer to deposit only their salary with the Bank. Loan amount Minimum Taka 50.000/.3 Product Description and Features: Availability - EBL all branches.

) 23 .a.24.000/.00.000/0.36 months Disbursement Credit to the customers deposit account with EBL Repayment EMI via standing order will be raised in the salary account. Advance/Partial prepayment Early payment Fee Not allowed Early full and final settlement is allowed. Top-ups Not Allowed 4 CAR LOAN EBL Car loan is a terminating loan facility (EMI based) of the purpose of brand new and reconditioned but unregistered automobiles for personal use only.000/- Stamp charge - All relevant stamp charges will be on borrower’s account and will be debited from the account at the time of disbursement Tenor - 12. Please refer to section “Permissible Exceptions’’ at later part of this document. full and Installment failure charge Penal interest of 3% p. system will automatically debit the installment amount and credit it to the loan account. Purchase of second hand vehicles are not allowed unless exception approval obtained jointly from MD and DMD.75% above 1.00. (Unregistered means first time registration is yet have to done. so that moment his/her salary is credited to the account.Processing Fee - 1% up to 1. 1. Penalty for early final settlement is TK. on the dues amount.flat.

000/.or 15 times of gross monthly income.4. All EBL branches subject to CPV being in place . it does not include comprehensive insurance cost that is on purchaser’s account. Station Wagon. For 100% cash secured cases. 1.75% 12. it is 0.Minimum TK. whichever is lower.00% 14. (Maximum Loan allowable for purchase of very high value or premium vehicles was TK. Microbus for private use only: . however Bangladesh Bank fixed loan ceiling of TK 20 lac recently.00% of the loan amount for all cases other than 100% cash secured. maximum amount will be TK 20 lac from the publication of this circular. 24 .00% Loan Amount (minimum and maximum) - Interest Rate (Interest rates can be changed by ALCO from time to time based Processing Fee 1.50.5% of the loan amount.00% 13. 00. However. Jeep. 50. 00 crore. Cars older than 4 years will treat as an exception. So.) Loan cash Loan cash Loan cash Unsecured coverage 100% coverage 75% coverage 50% 11.000/Maximum TK.Brand new-any brand at purchaser’s choice Purpose - Reconditioned-Toyota brands preferred. 3. Availability Purchase value refers to car price as quoted by the Vendor and may include VAT and Registration cost.4 Description and Features: Purchase value new and reconditioned Car. 4Wheeler.

O favoring vendor by debiting CASA. on the dues amount.Loan vehicle Piece Ratio 100% cash covered: 100% of quotation price 75% cash covered: 100% of quotation price 50% cash covered: 100% of quotation price 0% cash covered: New 75% Recondition 70% (Price includes car value + VAT + Registration) Customer will bear comprehensive insurance cost.a. a current/savings account will be opened in customer’s name). Vendor will register the car on behalf of Eastern Bank Ltd. Early full and final settlement is allowed.e. Fee: 1% of the partial payment amount. R.CASA (in case of new customer. Vendor also collects the copy of the comprehensive insurance (Insurance company from EBL approved list) and submits both the documents along with the delivery Challan for the car to EBL. P. Allowed after 6 month. At least minimum 30% of the loan outstanding must be paid by the customer while making advance/pre-payments amount. -CFC will disburse Loan amount through CASA. Reconditioned Vehicles above 3 Brand New and years old reconditioned Vehicles 3 years Tenor 12-48 month 12-60 months Disbursement -On loan being sanctioned. A charge for early full and final settlement is flat 1% of the outstanding loan amount. Advance /Partial pre payment - Early payment fee Installment failure charge Stamp charge - Penal interest of 3% p. On email confirmation from CFC.M will organize to send the P.O will include only the loan amount portion of total quotation amount (i. . excluding borrower’s equality) Branch to ensure PO commission and VAT will deduct from customer CASA. branch will issue P.O to the vendor. Repayment System will auto debit installment from customer’s CSAC account. All relevant stamp charges will be on borrower’s account and will be debited from the account at the time of disbursement Customer can avail more than 1 loan from EBL if income and 25 .

this debit line to would not hinder sales prospect of credit card since initial credit . will not be an additional draw down over existing loan account] One [1] Personal Guarantee for salaried executive. new loan account will be created in the case of top-up. i. Customers prefer debit card for cash withdrawal & shopping purpose.) have to provide copy of their professional certificate. Engineer. Bank and NBFI officials (equivalent to AGM of NCBs. EBL is planning 26 launch credit card. Department Head of Local and Foreign Banks and NBFIs). Professional (Doctors.e.Top-ups Personal Guarantee One [1] Personal Guarantee for businesspersons and self employed. - DBR supports [Separate. Debit card is more of a transactional facility than credit card. 5 DEBIT LINE Debit card has substantial momentum across the world due to its customer-oriented features.A guarantor can provide personal guarantee once only for any EBL consumer loan. Risk profile of the debit card is much lower than that of credit card due to small ticket size and due to allowing only to executives of selective corporate client & professionals as per enclosed list. AVP/ Branch Manager. . Chartered Accountants etc. . However. Offering small overdraft facility in debit card has become a popular product worldwide.Eligibility of guarantor: Individuals with ranges equivalent Senior Assistant Secretary or higher would qualify as grantor.

and Architect.or 3 times Self-Employed of gross monthly Professionals like Doctors. provided  Maximum Tk. employees Purpose Target Customers A Category customer & Limit B Category Customer & Limit 27 . 1.  EBL Employees will also fall in A Category Employees of COL Minimum Tk.5 Description and Features: Debit Line is an unsecured and revolving credit facility for any legitimate purpose. provide in the later section.000/. whichever is lower.000/in the later section. Debit line is an any purpose unsecured OD facility to be drawn through charging debit Card. or 5 times of gross monthly  Self Employees of COL income. Employees of POL (Priority Minimum Tk.000/List). whichever is lower. 20.  Govt. income. provided in the later  Maximum Tk.4. Engineers. (Corporate Organization 20.000/Organization List). and Architect. Any credit worthy individuals like :  Salaried Executives of priority organization & Corporate Organization (List enclosed)  Self-employed Doctor. (Corporate Organization List). section 50. 00. Engineer.

minimum payment due. Limit loaded on January 25. Executives of POL & COL and Professionals who are holding the credit card of SCB/PrimeBank/Lanka Bangla C Category & Limit Minimum Tk. Colonel level  All branches subject to CPV in place  20%  15% p.  1% of the approved limit or Tk. 50. 2006 will expired on December 31. 1. 2006 will expired on December 31. 2006) (e. 20. Limit loaded on February 18. Applicant having credit cards of other Banks may also apply for A & B Category meeting the criteria. whichever is lower.  Monthly statement covering the limit.g. 2006 will expired on March 31. 2007)  No grace period for interest will be allowed.g.000/.g. Initial limit expiry date to be set on quarter end only (nearest quarter of a year).000/ Maximum Tk.  Processing free will be waived for EBL employees. Limit loaded on April 25. Monthly Statement Validity Grace Period 28 . utilization and available room and transaction history etc. Non target customers Availability Interest Rate Interest Rate for EBL Employees Interest Accrual Processing Fee Available cash Withdrawal limit  Businessmen  Lawyer  Individuals with political affinity  Journalists of reasonably lower level  Defense official below Lt.or 80% of exiting limit (highest limit of all cards) of the existing credit card of SCB/Prime Bank/ Lanka Bangla. would be provided to the customer due the card Division within the first week of every month. (e.000 whichever is higher.  Client would be able to withdraw full amount in cash through ATM as per ATM cash withdrawal policy. payment deadline.a  Interest would accrue on daily basis based on EOD balance and would be applied on monthly basis. The statement has to be generated by the system. 2006) (e.  Revolving limit for 12 months.

 Bank reserves the right to call up the line at its discretion or in the event of default.per month Length of Service/Practice Income for Salaried Executives Income for Self Employed Professionals 29 .  If applicants fail to make available monthly repayment for consecutively 3 months or more over the tenor of the facility.000 whichever is higher  Renewal fee for EBL employees will be waived.  No cheque book will be issued against EBL Debit Line account Facility call Up Renewal Fee Early payment Fee Personal Guarantee Loan KYC Stamp Charges Updated Cheque Cheque Book CIB Nationality Age  No CIB is required  Bangladeshi  22-66 years old  Salaried Executives: Minimum 1 year of permanent employment with present employer.  Professionals: Minimum 1 year of practice in the profession  Minimum BDT 15.000/.  Clients need to repay every month 5% of month-end total outstanding by the 15th of each month.000/.  Early full and final settlement is allowed. No early payment charge is required  No Personal Guarantee will be required for Debit Line  Good Boy/ Good Girl Note or KYC will be required for all Debit Line Applications  All relevant Stamp charges will be borne by the Borrower and will be debited from his/her account.000/.  3% on outstanding on expired account.per month (For Govt.  Renewal Fee would be 1% of outstanding or Tk 1. entire outstanding will be called back by collection department.per month  Minimum BDT 12. Employees)  Minimum BDT 20.  1 EBL UDC covering full limit.Repayment Penalty & Late Payment Fee  Client may reduce/repay outstanding through standing instruction option. sweep in option & through cheque/cash deposit. This will be the minimum payment due. at the time of disbursement.  Minimum Payment failure charge is Flat Tk 200/= to be charged and applied in the Debit Line account.

Fast Cash allows the customer to draw up to a predetermined amount of credit from their Current Account. Sanchaya Patra. EBL Fast Loan has convenient repayment period ranging from 12/24/36 EMI's.” s 30 .6 FAST LOAN 4.8 Guidelines For 100% Cash Covered Loans: 1. EBL Fast Loan is priced at competitive rates and loan is sanctioned within 24 hours of application 7 FAST CASH 4.6 Fast loan is a short-term loan facility from EBL. 50. ICB Unit certificates etc.7 EBL Fast Cash is a revolving credit facility.000. and we will ask for nothing more than what is “basic. But the general attitude will be lenient in this regard too. This loan is fully secured against cash security (EBL FDR. The minimum limit for EBL Fast Cash is Tk. Basic identification is all that is required.). Govt. Supporting identification documents will apply as part of KYC.00 4. Customers will only be charged interest for the amount they draw.

2. income needs not be substantiated. For a 100% secured terminating loan. which will be noted in the LAP. which will be effective from May 07. hence there may be some sort of relaxation n minor items. no bank account statements etc are needed. 4. Hence. payment is guaranteed anyway. Hence no UDC or PDC. A LAP has to be properly filled up in any cases only thing we will keep in mind: it‘s a 100 secured loan. UDC and PDC are for ensuring payment guarantee. 3. Client will just declare his income.9 Interest Rates on Deposits: The Asset Liability Committee (ALCO) of the Bank in its special meeting held on May 07. No supporting paper to prove income is needed. 2007 as decided to introduce new interest rates on deposit. CIB to be obtained. 4. No compromise on major items in the LAP though. No UDC and no PDC will be required since it is free to credit risk. CIB thing will be based on the policy of CIB. If CIB policy gives any leeway on this for 100% secured cases. Income: for cases like these. 2007. 31 . 5. we will take that leeway. If not.

branches had the authority to approve & 32 .100M to < 150M FDR-1 Month.5M FDR-1 Month.40% 9.00% 7.00% 8.100M to< 150M STD.30M to< 100M STD.00% 8.150M and above STD.25% 8.IPO Proceeds Rates Effective From May 07.Bank STD.Less than.5M to < 10M FDR-1 Month.00% 7.150M and above 8.00% 6. 2007 6.00% 8.10M to< 30M STD.00% 7.25% 8.25% 8.Collect STD.less than 10 M STD.00% 6.40% 8.25% 8.Types of Deposit (HPA/SB/STD) HPA less than 1M HPA more than 1M Saving up to 1M Saving above 1M STD.10M to < 50M FDR-1 Month.25% Table: 5 Loan Approval Process Consumer loan of EBL are processed and approved through its Consumer Finance Center.00% Types of Deposits (FDR) FDR-1 Month. Before the establishment of CFC.50M to < 100M FDR-1 Month.00% Market Rate 8.

that will be responsible for loan assessment. CFC has set up on March 15. It will consist of a team of people to identify. Motijheal.10 Consumer Finance Center: CFC is located on the second floor of Jiban Bima Bhaban.disburse loans though consultation with higher authority – Head of Consumer Banking. and collection. management of EBL decided to set up a central unit CFC. disbursement. measure and manage risk related business. approval. 4. 4.12 Management Structure: The management hierarchy of CFC is very simple as total much of employees are only 16. and Managing Director. 4. 2004 for evaluating credit worthiness in consumer lending. Deputy Managing Director.11 Structure of CFC: CFC handles all the retail loan applications coming from all the branches and Direct Sales Teams (DST) across the country. 33 . Dhaka. analysis. As the process faces some crucial pitfalls.

_ To provide information and to keep contact with higher authority– HOCNB. _ To assist analyst group to measure credit risk. DMD.Head of CFC Manager Credit Analysis Security & Disbursement Collection & Recovery Management Information System Fig: 2 Management Structure 4. MD and _To take measures to keep smooth operation.13 Responsibilities of the Department of CFC: Head of CFC: The head of CFC is primarily responsible to oversee the activities of CFC & to collaborate with the 25 branches across the country. Daily activities include – Consultation with prospective client where necessary. 34 .

sent to queries. Head of CFC where necessary.approved. (2) Utshab Loan. (1) Jiban Dhara Loan. MIS officer provide a database that contains all true relevant information of each and any lap irrespective of there status. then he consults with higher authority. place for decision. Security Checking & Disbursement: Officer lading support & officer disbursement both cheek all the relevant documents and give authorized signature where necessary. disbursed.Manager of CFC: Manager of CFC has the authority to approve or decline loan applications. pending on process. The branch managers may also benefit from this MIS as it updates every two or three hours. Management Information System (MIS): Within the CFC. The next part describes how CFC handles loan application and gives decision. (3) Executive Loan. (5) Debit Line and (6) Fast Cash (7) Fast Loan 35 . If an eligible Client is refused then the revenue of the banks decreases and if an unworthy client is included loan disbursement. They can also take help from higher authority. which means the actual loan sanction process of Consumer Finance Center. declined. If discrepancies or any fraudulent is found. Credit Analysis is one of the core activities that can make a difference in retail banking. If his authority does not permit. bank may face loan defaults. they consult with manager CFC and if everything is okay then disburse the loan.manager of CFC. two people keep track of all the laps that CFC receives or CFC returned. CFC has five (5) members dedicated to assess credit risk in consumer lending. (4) Car Loan. It serves an important purpose of inform all related members about retail loan.

CFC (MIS) status updated Send for storage in CFC Necessary stamps will be attached. Client receives money on the same day by electronic fund transfer. DMD. UDC.15 The Lap flow chart described in details: 36 .4. DP note CFC checks all documents & CIB/CPV if found ok then disburse. ask for necessary documents if needed. copy of sanction letter. HOCFC and where applicable by HOCNB. Fig: 3 LAP Work Flow 4. gives necessary input and hand over to analyst group for assessment. Lap with major discrepancy will be returned to branch and lap with minor discrepancy will be assessed and needs to rectified Approved laps will be review by Manager-CFC. return to client.14 LAP Work Flow for All Consumer Loans: Branch Level Lap filled & assessed by ARM/ RM and necessary Recommendations taken CFC Level CFC (MIS) receives the lap. and wait for CPV/CIB clearance Branch provides documentsSanction letter. MD Final review by supervisor CFC informs branch about approved laps.

visiting card. DST knocks prospective clients and collects information about them. After preliminary screening. There are 25 branches & more than 250 DST in EBL. photograph and sign verified by the applicant. Letter of introduction by the organization. Copy of valid Passport/Voter ID/Driving License/Others. Summary of Share Capital (Form X and XII) Partnership Deed of Partnership firm. The employee in change wills request her/him for the following documents – • • • • • • • • • • • • • • Applicant’s photograph and visiting card (if available). CIB report. Memorandum and Article of Association certified by Joint Stock company. One (1) personal guarantor. If the client is a ‘walking customer’ then the ARM & RM stars talking with him/her. If other income added than required supporting documents. they invite client to EBL Branch. Other loan’s sanction letter and last 6 months bank statement of that. copy of guarantor’s TIN. Bill copy of T&T/Mobile phone/ Contract copy of pre-paid phone. Last 6 months bank statement (Personal/Company).Loan Booking: EBL consumer loan has two sources– (Direct sales team) DST & Branch. If client expresses strong will to avail a JDL/UL. 37 . Copy of TIN certificate. Copy of Trade License.

Good boy/ Good girl Assessment curd – It is also called KYC. for loan purpose. This bank A/C details will help managers to access client’s income. Bank A/C Defaults. E. D. Loan behavior. Credit worthiness. 38 . client must open an EBL current A/C. Criminal record. Personal Information and contact details. client fills the pre formatted lap – A. Lifestyle. When this part of lap is filled properly. C. B. Employment details. here branch will provide a documentation cheek list– whatever the documents required by the bank. B. Education. (2)Branch fills the Loan KYCB. A. Appearance. The next part of lap will be filled by branch. Personal life. More over.When client submit the above documents (not every document is essential but it varies client to client) the ARM or RM performs the following tasks: (1) In presence of ARM/RM. Compliance. Facility Defaults. client will give signature with date on pre-formatted space and it must be verified by RM/SSM. Financial information – Monthly income & expenses. Debit Authority. Joint Applicant (spouse only) C. Her branch delineates clients Background. and Willingness to repay.

At this point. MIS (CFC) inputs some basic information about the client and assigned a Lap number. Status. Comments.date on which CPV received. his family status and so on.Approved/Declined/On process/ Pending/ Cancelled/ Disbursed.branch /DST. Loan KYC-serves a key role in evaluating loan proposal as CFC employees never met them physically.When performance or position of that client is in respective criteria can’t be assessed with full certainty but however estimated or known to be okay. recordation and waiver (if sought) with signature of the respective authority. the branch manager sends the lap to CFC. Credit officer. 39 . Status date. On receiving Lap. Disbursed date. Applied amount. Low Ratings – When position on performance is “Not known to Branch or doubt full. This number is used for further reference. CPV (out) – date no which CPV asked for. his behavior. High Rating – Excellent beyond any question or doubt’ Medium Rating. KYC help then visualize the client. Lap receive date. CPV (in). Approved amount. Excel sheet of MIS containsSerial no. Under the KYC table the officer in change produces – summary comments.These ratings are gives in each category. source. clients name.

Sample of MIS Excel Sheet: 40 .

41 .

month and so on. 7.0 lac Upto Tk.0 lac - 42 . credit officer.MIS update data on a continuous basis. 3. 3. Status report sort by branch.5 lac Upto Tk. Credit approval authority: Product Jibon Dhara Loan Utshab Loan Executisive Loan Car Loan Debit Loan Manager CFC Upto Tk. 20. 10.0 lac Upto Tk.0 lac Upto Tk. 1. 10.0 lac Upto Tk. so whenever any action taken or any loan status changed MIS inputs it. recommendation & approval. 5.0 lac Upto Tk.0 lac Upto Tk. Then analyst focuses on key area – assessing financial capacity of the borrower. Loan KYC helps analyst to judge the client’s social status and some other attributes.0 lac Upto Tk. 5.5 lac Upto Tk. Retail Credit Assessment: (Same for All Loans) 6 persons are employed for credit analysis at CFC.5 lac Approval Authority HO CFC HO CNB Upto Tk.0 lac DMD/MD Upto Tk.0 lac Upto Tk. MIS officer distributes the laps received each day to the credit analysts for credit assessment.0 lac Upto Tk.0 lac Upto Tk. approved amount.7 lac Table: 6 Upto Tk. . EBL. 1. 10. Two are specialized in car loan analysis and other analyst evaluates rest of the loans. 5. week. 15. Credit Analysis: Credit Analyst will read the lap carefully before embarking on finding credit worthiness that is income assessment. MIS is built in a way that with short notice – MIS can produce • • • Daily status report Approved loan amount report. 1.0 lac Upto Tk. date.

analyst will fill the lap’s approval sheet. Only the CFC validated income will be considered is computing debt benumb ratio and other important items. with assessment guideline.000-49. If the loan is approved then. On this sheet.999 30. 4.000-99.999 50. we will find the table that shows monthly income – claimed by applicant. To evaluate client’s capacity to pay the EMI analyst will find ant EMI as a percentage of average balance & Debt burden ratio on CFC validated income.00.000-29.000+ Table: 7 DBR 35% 40% 50% 55% If the DBR and percentage of average balance are consistence.16.999 1.Approval Sheet: The credit analysts will recommend to approve or decline the loan based on his/her judgment.1 CPV (contact point verification) Report: • • Consumer Lending CPV/ Policy and Process Guideline 43 .16 Verification Process: 4. and other income assessed by branches use CFC. Value based DBR will be considered as follows: Monthly Income (Taka) 10. analysts will wait for CPV and CIB inhere required.

as it validates the information that is being used for assessment. The third party agency ensures that adequate measures are in place to eliminate any conflict-of-interest situations. To outline procedures to parameterize verification process through third-party agencies 2. Objective: The objectives of this document are as below: 1. Guarantor's verification 6. Credit Report 4. though presumably a simple task. Car value verification Verification ensures that credit assessment was based on authenticated information. Bank Statement Authentication 3. At EBL. This document intends to parameterize process of verification and outline a standard Procedure. To reengineer existing process and improve turn around time (TAT). Introduction: Verification is an integral part of credit appraisal. Verification is within the purview of CFC but it is conducted by independent agency(s).1. 44 . Contact point verification (CPV) 2. verification' is segregated and defined as below: 1. To formulate procedures which will be used as yardsticks for performance evaluation? 3. 2. With increase of volume as well as number of customers. It is vital that credit decisions are based on accurate and correct information. Rent Verification 5. verification has become sizable both in numbers as well as from cost point of view.

There are few exceptions with regard to foreign banks.2 Contact point verification (CPV) Contact point verification (CPV) consists of the following items • • • • • Residence Address .16. which is at residence (if any) Office Telephone . It is difficult to identify the cash flow from bank statements alone. as their statements are difficult to forge.16. Verification provides a detail view of all these aspects. it allows us to know the present condition (leased or vacant) of the space. Most of the cases. Credit report may be asked for Cash Credit / overdraft facilities. 45 .workplace of applicant(s) i.fixed telephone at workplace along ext.Applicants own mobile phone. (if any) Mobile Telephone .e.16.3 Bank Statement Verification: Here bank statement verification indicates to other bank statements that are being used for income assessment. primary source of income Residence Telephone . rents are being paid in cash. Credit report provides a brief picture of the present condition of the facility that the applicant is enjoying.16.fixed telephone. Installment loans.where the applicant(s) resides Office Address . which is available with him/ her 4.5 Rent Verification: Rent verification is done to ensure the rents declared are accurate. 4. or other credit facilities which are relevant to assessment.4. In addition. In addition. it is easier to identify fabricated statements of foreign banks.4 Credit Report: Credit Report indicates to other bank opinions about present standing of the line of credit(s) the applicant is enjoying. other statements may be forwarded for verification to be more certain. 4. In addition to that.

The CIB Report shows the analyst about the loan status of the client. but not exceeding 48 hours.16. After CPV assessment. then CIB will provide details of that loan. 46 . credit report and / rent verification (where applicable) requests are forwarded to verification agency.Loan amount.8 CIB (Credit information bureau) Report: To be confirm about the loan status of the client. This is a confident ional report and Bank provides this only to authorize institution. The higher authority will review along with other recommendation by the analyst and then it will be approval respect authority.6 Procedure: CFC initiates verification process. then he/she recommends for approval. Higher authority has the power to cancel any loan approved without contacting analyst. a loan recommended by analyst. approve by manager CFC/HOCFC/HOCNB can be declined by Managing Director /Deputy Managing Director. 4. Banks nil.If the customer avails no loan status will be nil. bank statement authentication. Credit analyst job is to make recommendation.4. The submission turn around time will be 24 hours.7 Time of receipt of request and submission of report: Every working day except for Thursday verification agencies would collect all the days' requests on or after 1800 hrs.16. Corresponding charges for verification will be guided by agreements signed between the bank and the agency. If analyst fined the CIB okay. Current status (Classify or unclassified). Therefore.16. 4. Prior to collecting requests verification agency will submit their last day's reports. not to get the loan approval. Bank requisites Bangladesh Bank to issue a CIB Report. If client has any other loan. payment behavior and so on.

and CIB input.39 47 . Those loans that are approved office wait for the required document.596. Related documents include sanction letter signature by applicant and UDC.24. In some case.000 15% For Auto Loan JDL Executive EMI/Month 3. MIS update. In general. DP writes etc. stamping.53 For category A & B (Executive) Full cheek Amount 1. any approval loan is disbursed on trust related documents are in place. grantor’ description with signature.Disbursement Disbursement process includes making a find review of all the documents.1 EMI & UDC Value Calculation: Disburse office has a programmed excel sheet that calculates UDC value automatically if data is entered. they try to disburse the loan on the same day.60 93.466. Loan Amount Rate of Interest 1. The table looks like this. 5. clearance fund formation.00. 18 Loan Tenor (In 36 months) 3 EBL UDC each UDC for 3 EMI Final EBL UDC Table: 8 10.399. When documents arrive.795. All they branch mangoes are informed by daily MIS status and they are commutated by the Disbursement offices.

a new screen will come called customer Addition. System will get back to the first screen and then press OK. In the Teller ID go to the Application Header under the Application Processing under the Workflow Transactions. A new screen will appear and if there is no 48 . Click the Primary customer tab at the bottom. If loan applicant is a new customer to the Bank. Select the product code and the application number and press the Mark Entry Complete Tab at the bottom. Fill all the fields and press OK button at the bottom.2 Loans Disbursement – CFC: 1. 5. Press the Loan Details tab at the bottom and a new screen will arrive. 8. another screen will appear and press OK tab at the bottom. 4. 2. Put the cursor on the row one after one and press received tab at the middle when mandatory state is Y in case of N state you can press waive tab and then Press OK tab at bottom. Press the Applicant Tab at the bottom and press OK tab when a new screen appears. After pressing OK. fill all the fields and then press oval customer and then press OK tab at the bottom. System will arrive. Select the Mark Data entry at the top of the screen and a new screen will appear. 6. Then press close tab at the bottom. 3. You loan application number and write down this number. Press the New tab at the top and fill all the fields.5. Press the documents tab at the bottom and a screen will appear.

Fill the field and press OK. Change the NO to Yes and press OK a: the bottom. Through the teller ID go to the Account Document under the Other Transaction in the Loan Account Transaction and fill the fields and press the tab button. Then go out of the screen by pressing the close tab at the bottom. 16. 11. Then go to the Recommend screen under the Application Processing in the Workflow Transaction and press OK tab at the bottom. Go to the Loan Account opening under the Application Processing in the Workflow Transactions and pick the Application Number and the Product name from the list and press OK. 9.message under the Fatal error part simply press OK tab at the bottom. A matrix will come on the screen and if you find Mandatory status is `Y' and Status is `N'. Need LOCAL AUTHORIZATION. Go to tile Customer Acceptance screen under the Application Processing in the Workflow Transactions fill tile fields and press OK. Pick the Application number and product from the pick list and press the Sanction tab. 14. 12. Again through the Teller ID go to the Maintain Result screen under the Application Processing in tile Workflow Transactions. Tick the box under the print column and press the Print tab. 49 . Go to the Offer Letter Printing screen through the Teller ID under the Application processing in the Workflow transactions and press The Get Tab. In the Authorizer ID go t0 the Authorize Result screen under the Application Processing in the Workflow Transaction and press OK tab. System will generate the Loan cucumber. System will say "Record Modified'. Then the previous screen will come and press the Close tab. 10. 15. just click the N and a small dialogue box will appear. Then CLOSE. 13.

Need LOCAL AUTHORIZATION. System says: 'DISBURSEMENT DONE' PRESS OK -------. Finally do the Disbursement the way instruction is done.17.PRESS CLOSE 19. 50 . .Payment mode: Savings transfer .System will say: A/C belongs to a non-replicate customer 18.First repayment date . Go to the Pay Instruction screen under the Other Transaction of the Loan Account Transaction and select Add option and fill all the fields and press OK.Put loan A/C number . To disburse Loan from Loan Account to Savings Account go to : Loan Account Transaction →Transfer→ Disbursement by Transfer to savings. Authorize it by the authorizer ID. To the Set up Account Disbursement under the Other Transaction in the Loan Account Transaction and fill the fields.

60 DPD 61 . The complete loan data.1 Few General functions: • • • • Loans system to generate a repayment schedule on the approved loan terms and conditions. New requests to be filtered against the historical data and live data to check double financing. Monthly installments to be collected from the customer's account through direct debit instructions authorized by the customer.Collection & Recovery 6. unless rescheduled under very rare circumstances. and letters sent and visits via diary notes within 24 hours of each contact. Repayment schedule prepared at the time of sanction. • OCR to maintain a logbook for recording details of all contacts.30 DPD 31 .89 DPD 90 . record of accomplishment and history to be retained in the system for future reference. Table: 9 51 . discussions. will remain in force throughout the life of the loan.180 DPD Rating Delinquent 1 Delinquent 2 Delinquent 3 Substandard Actions in Brief Reminders to Borrower through mail and telephone Physical visit made to office and residence Employer and Guarantor where applicable informed Account classified and written off. 6.2 Delinquencies: Delinquent accounts as identified by system will be categorized into buckets based on their DPD (Day Past Due) status: Days Past Due (DPD) 1 .

• Customer will be allowed to make another commitment for repayment of the outstanding amount.Delinquent accounts as identified by systems to be categorized into buckets on the basis of their 'DPD (Day past due) Collection Stage 1: Front end (130 Days past Due) DPD 1-14 15-30 Activity /Effort A grace periods of 7 days will be given to the customer to deposit due installment. 7 Written requests for repayments to be sent out to the customer. • Outstanding accounts will be divided between the front-end collectors and their individual efforts will be monitored. • Reasons for delinquency will be noted and payment commitment (not exceeding 7 days) will be obtained. • Officer Collection & Recovery (OCR) will make phone calls to the customer requesting payments. • The sales staff IRM who booked the deal will be informed of the status and will be asked to contact the customer as well. 52 . • Manager CFC will review the delinquent account and will follow up on payment commitments.The collection stages and the actions taken in each stage have been described Below.

reinforce payment conditions and will request payment within next 7 days. Fourth phone call made to borrower and OCR explains the problems the customer might face if the account moves into delinquent status. 50-59 In case of no success by the Officer. the Manager CFC will step in. 40 -49 A third reminder letters is sent to the customer notifying that the account is delinquent and late payment. Collection Stage 2: Mid range (31 . Maximum usage of the OCRs to be made by conducting visits at the residential and office addresses.• OCR will call (2"d call) the customer.our position reminder only on payment commitment and date. • During this time the department will also start following up for the installment that is payable in the next month. • Third phone call is made at the residential and office addresses for collection. Fifth telephone call to borrower and contact with family/ reference/guarantor is initiated to exert pressure on the defaulter. OCR to be very polite. Manager CFC will contact the customer.60 Days Past Due) DPD 31-39 Activity /Effort • A second reminder letter is sent to the customer notifying that the account is delinquent and late payment charged. • Manager CFC assesses the need of field visit by the Officers. 53 .

180 Days past Due) DPD 60-89 Activity / Effort • the employer/ guarantor are sent letters informing them of the delinquency of the borrower.Within 7 days of the return of the last cheque OCR will lodge FIR with the nearest police station. 120-179 OCR will provide a weekly update of delinquency follow-up (phone calls every week. 54 . • Account is moved into 'non accrual' status after encasing securities if there are any (Any residual account balances.Collection Stage 3: Hard core (61 . The undated cheques for the entire loan amount is dated and placed for collection. guarantor.In case of Category C. Guarantee is called up and guarantor is requested to settle the entire outstanding within 3 days from receipt of the letter. Manager CFC will periodically update the Consumer Head regarding pending cases. and employer to ensure no new loans are given. securities for any other products) 90 -120 a maximum of three legal notices (at fortnightly intervals) will be served to the customer and the guarantor with copy to employer. Loan is called up and the customer is informed through Registered Letter with CC to employer / guarantor (as applicable). Record provisions for write off as per credit policy. 180 write off Maintain a logbook of customer. until contact is made to all three as applicable) will be provided to the Manager CFC.

MIS The MIS for Consumer Finance Center should have the capacity of maintaining huge amount of data and generate required reports. planning risk. and written-off cases to Collection Agency. substandard. we will look at the possibility of handling over delinquent. management. Format for the regret letters and collection letters have been attached as Appendix-III Consumer Finance.Other banks will be informed of the defaulter and Central Bank for inclusion in CIB database if possible. In future. setting goals for sales and marketing. identifying trends and determining corrective actions if needed. whenever necessary. 55 . Reports will help in tracking.

All the loan applications are sent to CFC for assessment with related documents. It must revise its job responsibility in order to move ahead. Receiving the applications. After confirmation.Conclusion During my internship at EBL. I got the opportunity to see how bankers attract customers. One disbursement officer (CHECKER) check document and communicates with respective brunches if additional paper work needs to be done.two (2) 100% secured loans that are approved and disbursed by branches. 56 . CFC begins evaluation processes and contacts sales team members or relationship manager. CFC takes initiative for loan disbursement. If preliminary screening allows the analyst to recommend for approval. approve & disburse loans and enucleate dues. Two disbursement Officer (MAKER) disburse twenty loans per day approximately . evaluate loan proposal. assess credit risk. CFC current activities are satisfactory but with increasing workload and complexity. the applications are sent to appropriate authority. At present. The findings are as follows- EBL handles all consumer loans through this consumer finance center except Fast Cash and Fast Loan. CFC receives on average thirty-loan application. It has six analysts to access credit risk.

“Flex cube’’. is not verified by the ARM/RM. Branch managers have the tendency to make prurient phone calls to disbursement officer for getting the loan-disbursed earlier. It is expected to hinder the loan growth as interest rate has inverse relation ship with demand for loans. 3. These problems need to be addressed and rectify as soon as possible. These creates adverse problem as officers in charge of loan disbursement fail to consent properly on their task. EBL must engage it self in vast marketing campaign of consumer loans and to penetrate in target groups. 2.Recommendation 1. If responsibilities are not delegated properly. brunches send documents with major faults. practice of this type much be discouraged. 57 . It also increases the chance of error in their work. It is not as fast as required. These are – DP notes are not filled with approved amount. Therefore. It will hamper the control process for head of consumer finance center. signature of the client and guarantor. loan KYC does not include those information that are required. In this condition. Due to rise of provision rate on consumer lending. and so on. visiting curds are not sent. In some faces. 4. The speedy software will help officer to disburse loan quickly. 5. CFC has to revise its member’s job responsibility. bank has raised lending rates. UDC contains wrong amount.the computer software EBL uses for its Banking transaction has problems in speed.

EBL consumer loan has a consistent upward trend since its inception. then it will impossible for them to perform the task of collection. For collection department. then it may help solve this problem. The new MIS should be developed in a way that can trace all the information of customers who have availed loans from EBL. Existing work force is not sufficient to take care of increasing number of Loan Application. EBL extensively use e-mail and phone in this respect. 8.6. If mittens and seminar can be arranged. There are only five members and if they have to find LAP physically. CFC needs employees with high caliber. Poor coordination between CFC and branches has to be overcome. a separate MIS is necessary. To deliver unique service and to respond to this surge. ################################## 58 . 7.

59 . 2007. For the year of 2005.C. Annual Report of Eastern Bank Ltd. J. 3. Fabozzi.N Varshnay & Shri H. Frank J. Banking Law and Practice. Sarkar. Jones. 6. Different journal published by EBL . P. Foundations of Financial Market & Institution (3rd edition) Frank. Miller & Van Hoose. Framco Modigliani 4. Michael G. 2.References 1.Modern money and Banking. 2006. Ferri. Bangladesh Banks Prudential Guideline On Consumer Lending-20045 5.