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2.
8 Risk management
Risk, which is an integral part of banking business, emerges from day-to-day business transactions,
Expansion of banking business, competitive market trend, cutting-edge ICT use, global, immoral
banking CEO& Managing Director's Message practices are causing various challenges for banks.
Thus, new risks and the degree of risks are climbing up in investment and asset-liability
management activities. In this context, bank is strengthening its own risk management to mitigate
potential risks and has formed and re-arranging different risk related committee under the BB core
risk guidelines and maintaining more caution in overall operation. Currently, for overall risk
management, Risk Management Division, Risk Management Committee of the board, Executive
Risk Management Committee and necessary sub-committee have been formed. Foreign Trade
Monitoring Department and Foreign Trade Audit Department have been formed for foreign trade
risk management. These are tasked with identifying various risks of daily banking operations and
mitigating them by taking preventive measures and are submitting reports to the Board and
Bangladesh Bank regularly.
2.8.1 Credit Risk Management:
Credit risk is the risk of loss arising from the failure of a borrower, issuer, counterpart or customer
to meet its financial obligations to the Bank. The Bank's credit risk policies define different level
risk parameters under which credit risk is monitored and controlled.
Credit exposures are controlled by a system of limits/caps based on internal risk grading. This
system applies to all credit exposures, foreign exchange settlement exposures and exposures
arising from settling securities trades for customers.
The Bank's Credit Committee chaired by the Deputy Managing Director, Credit Division, regularly
reviews the creditworthiness of issuers, counter parties and customers to whom the Bank provides
credit. The committee makes recommendations to the approving authorities through the respective
department.
Credit risk is managed by ensuring that exposures are sometime fully collateralized with
appropriate higher margin. All such exposures are monitored on a regular basis and additional
margin is called as required.
Policy has already been formed and is being updated from time to time. Credit Risk Manuals and
several Instruction Circulars have been issued to implement CRM. Early Alert System, Credit
Recovery, NPL Management, Check list/Due date Diary have already been introduced and these
are continuous processes. CEO and MD issues letters from time to time with instruction to
implement CRM.
Bangladesh Bank has made risk grading mandatory for Banks & Financial institutions for loan
amount of BDT 1.00 crore and above.
Chapter Five
“SWOT Analysis”
For all of these, SWOT analysis is considered as an important tool for making changes in the
strategic management of an organization. Through direct observation and discussion with the
Janata officials. I am able to point out some major strength and weaknesses as well as some threats
and opportunities regarding the various issues of the Bank such as- Organizational identity, Service
level, Operational efficiency, Technology, Employee efficiency etc. Along with many other issues.
S=Strengths-Attributes helpful for achieving the objective
W=weaknesses-Attributes harmful for achieving the objective
O=opportunities-External conditions that are helpful for achieving the objective
T=Threats-External conditions that may harm the business's performance.
The SWOT Analysis of Janata Bank Ltd. is presented in a table below:
Strengths Weaknesses
• Name recognition within the community. • Lack of proper motivation, training and job
• Large customer base. rotation
• Bank has an interactive corporate culture. • Lack of experienced employees in junior
• It provides moderate range of loans. level management
• The interest rate is affordable. • Lack of own ATM services
• It provides some attractive features • Tendency to leave the bank in quest of
• The credit risk management is very flexible environment
efficient. • Lack of proficient manpower in some
• High morality of the employees and department
customers. • Limited advertising and publicity of bank’s
• Regulatory performance is strong and products and activities
positive. • Absence of strong marketing activities
• Fine environment in side of the branch. • Office environment is not good as private
• Attractive location. bank environment.
• High charges of L/C
Opportunities Threats
• More experienced & managerial know • Strong community bank competition non-
how. bank competition.
• Opportunity to expend geographically • Inefficiencies within the operation of the
within Bangladesh. bank.
• Customers are looking for good quality and • Other banks provide more facilities.
have the willingness to bank with Janata • Lack of clients.
Bank. • Political instability of the country.
• Lack of Flexibility to adopt to any change.
• Lack of appeal to younger, student,
affluent potential customers.
• Increased technological innovative and
technology costs in order to complete
effectively.
• Market pressure for lowering the profit
/interest rate.
The descriptions of the SWOT are given below:
Strengths:
• Name recognition within the community: Name of the bank that is Janata matters a lot.
Because they have already earn reputations.so their name matters so much.
• Large customer base: Janata Bank has a good profile in front of their consumers. Because
of their good services.
• Community investment/Increasing Presence in the Market: Janata Bank always tries
to maintain their existence in the Market. For this reason they always involves in the
Market.
• Management knowledge of Industry: The bank has enough knowledge about industry.
They maintain a systematic management way.
• Financial Condition: Janata Bank has strong capital and asset quality.
• Regulatory performance is strong and positive: Regulatory performance of Janata Bank
is strong and positive.
• Fine environment in side of the branch: Janata Bank always creates a firm environment
in the side of all branches of it.
• Co-operation and Co-ordination among the staff: All the employees of the Janata Bank
are very much co-operated. They have good understanding among themselves.
• Attractive Location: Janata Bank’s head office is in an attractive location. Because it is
established in Motijheel which is a commercial area.
• Old Bank so Greater Radiance to customer: Janata Bank is well known Bank. They
achieve a reputation from their customer. So it is very much old Bank has greater reliance.
Weakness:
• Lack of Knowledge: Lack of Knowledge of customer profile overall market share needs
to grow opportunities.
• Insufficient Focus on quality customer service and mortgage banking: Janata Bank is
not focused on quality customer service and mortgage banking.
• Growth in Commercial Business: Janata Bank’s growth is very high in Commercial
Business.
• Increase Market share through Growth of Loan Portfolio: Janata Bank increase
market share through growth of loan portfolio.
• Increased presence by means of Additional ATMs: Increased presence by means of
additional ATM s of it.
• Enhanced Business Development: Enhanced business development in all product areas
and promotions of those products.
• Strategic Marketing: Strategic marketing towards customers of large merging banks.
• Attracting Candidates: Attracting candidate’s acquisition for the next few years.
• Insurance products: This is a big issue that becomes a weakness of Janata Bank.
• Potential Marketing for Internet Banking: Janata Bank has no potential market for
internet banking.
Opportunities:
• More Experienced & Managerial know: It has the opportunities to be experienced

about managerial views.
• Opportunity to Expand Geographically within Bangladesh: It has the opportunity to
expand their business geographically within Bangladesh.
• Good Quality: Customers are looking for good quality and have the willingness to bank
with Janata Bank Ltd.
Threats:
• Competition: Strong community bank competition Non-bank competition.

• Inefficiencies: Inefficiencies within the operations of the bank.
• Political Instability: Political instability is the main weaknesses of it.
• Lack of Flexibility: Lack of flexibility to adapt to any change.
• Increase in Non-bank Competitors: The continuing increase in Non-bank competitors
offering similar services.
• Continued Deregulation: Continued deregulation and globalization of services.
• Technology costs: Increased technological innovation and technology costs in order
to compete effectively.
5.1 Ratio analysis
Ratio analysis is one of the major tools of analysis. A single variable cannot all the time provide
correct information. Though trend analysis plays a vital role in the field of analysis, there are
always some other factor, that are needed to be considered. More clearly, when one variable is
linked with other variable or the result is obtained in percentage or proportion of other variable, it
becomes more accurate. The ratio analysis of Janata Bank Ltd, are described in the below:
5.1.1 Liquidity Ratios:
Liquidity ratios are known as a class of financial metrics used to determine company's ability to
pay off its debt obligations. The higher value liquidity ratio is the higher safety margin for bank.
The liquidity ratio of Janata Bank are presented below
5.1.1.1 Current Ratio:
According to investopedia.com, the current ratio is actually a liquidity ratio that measures a bank's
ability to pay short-term obligations or those that mature in a year. It informs analysts and investors
whether the bank is maximizing its current assets on its balance sheet to satisfy its current debtors
and other accounts payable or not. The formula used to measure Janata Bank’s current ratio is:
Formula: Current Ratio = Current Assets / Current Liabilities
Year 2014 2015 2016 2017 2018
Current 1.31 1.02 1.04 1.04 0.91

Ratio
5.1.1.2 Quick Ratio:
The quick ratio is an indicator of a company’s short-term liquidity position and measures a
company’s ability to meet its short-term obligations with its most liquid assets.
Net Loans to Deposit (Total Borrowing) Ratio
Net loans to deposit ratio shows the percentage of loan disbursed from total deposit amount.
Formula: Net Loans Deposit (Total Borrowing) = Net Loans / Total Deposits
Year 2014 2015 2016 2017 2018
Quick Ratio 6.83% 6.49% 6.74% 6.67% 5.92%
5.1.1.3 Net Loans to Deposit (Total Borrowing) Ratio:
Net loans to deposit ratio shows the percentage of loan disbursed from total deposit amount.
Formula: Net Loans Deposit (Total Borrowing) = Net Loans / Total Deposits
Year 2014 2015 2016 2017 2018
Net Loan 0.62 0.61 0.63 0.71

Deposit
5.1.2 Asset Management Ratios:
Asset management ratios measure the success of business to manage its asset to generate income.
5.1.2.1 Loan Loss Reserve to Gross Loans (LRGL) Ratio:
Loan loss ratio to gross loans ratio shows the percentage of provision against gross loan.
Formula: LRGL Ratio = Loan Loss Reserve / Gross reserve
Year 2014 2015 2016 2017 2018
LRGL Ratio 0.12 0.12 0.15 0.16 0.14
5.1.2.2 Liquid Asset to Total Asset Ratio:
Liquid asset to total asset ratio shows that the percent of liquid asset in total asset.
Formula: Liquid Asset to Total Asset Ratio = Liquid Asset / Total Asset
Year 2014 2015 2016 2017 2018
Liquid Asset to 0.10 0.09 0.12 0.15 0.10

Total Asset
Ratio
5.1.2.3 Liquid Asset to Total Liabilities Ratio:
Liquid asset to total liabilities ratio states that the amount of liquid asset to meet up liabilities.
Formula: Liquid Asset to Total Liabilities Ratio = Liquid Asset / Total Liabilities
Year 2014 2015 2016 2017 2018
Liquid Asset to 0.11 0.11 0.14 0.18 0.19

Total Liability
Ratio
5.1.3 Debt Management Ratio:
Debt management ratio measures the total debt amount compared to its financing amount.
5.1.3.1 Deposit to Total Asset Ratio:
This ratio measures the amount of deposit (debt) in percent of total asset.
Formula: Deposit to Total Asset Ratio = Total Deposit / Total Asset
Year 2014 2015 2016 2017 2018
Deposit to Total 0.80 0.82 0.82 0.83 0.78

Asset Ratio
5.1.3.2 Deposit to Equity Ratio:
Deposit to Equity Ratio shows the amount of deposit (debt) in percentage of equity.
Formula: Deposit to Equity (DE) Ratio = Total Deposit / Total Equity
Year 2014 2015 2016 2017 2018
Deposit 23.15 13.74 11.35 12.57 12.38

Equity Ratio
5.1.3.3 Equity Multiplier:
Equity multiplier is a ratio that represents the amount of total asset with the times of equity.
Formula: Equity Multiplier (EM) = Total Asset / Total Equity
Year 2014 2015 2016 2017 2018
Equity 26.05 12.40 7.58 19.29 15.87

Multiplier
5.1.4 Profitability Ratio:
Profitability ratios access the ability of business to generate earning compared to expenses.
5.1.4.1 Return on Asset:
Return on Assets (ROA) is an index of profitability which evaluates the rate of return on resources
that a company owns. It measures the level of net income generated by the assets of a company.
The formula for the return of assets is:
Formula: Return On Assets = Net profit/ total asset
Year 2014 2015 2016 2017 2018
Return on 0.61% 0.70% 0.33% 0.33% 0.03%

Asset
5.1.4.2 Return on Equity (ROE):
Return on equity measures the percentage of net income in proportion to total equity.
Formula: Return on Equity (ROE) =Net profit/Total Equity
Year 2014 2015 2016 2017 2018
Return on 9.66% 9.70% 5.22% 5.23% 0.46%

Equity
5.1.4.3 Return on Deposit (ROD):
Return on deposit measures how much revenue is gained from deposit.
Formula: Return On Deposit=Net Profit/Total Deposit
Year 2014 2015 2016 2017 2018
Return on 0.007 0.008 0.004 0.004 0.0003

Deposit
4.1 Loan and Advance Management of banking sector:
Agreement, in which a borrower receives something of value now, with the agreement to repay
the credit, is a contractual lender at some date in the future.one of the basic functions of the bank
is to deposit extraction and credit extension. And managing credit operations is the crying need for
any bank. The objective of the credit management is to maximize the performing asset and the
minimization of the non-performing asset as well as ensuring the optimal point of loans and
advances and their efficient management.
The loan and credit department is one of the most important departments of any bank. The money
mobilized from ultimate surplus units are allocated through this department to the ultimate deficit
unit (borrower).Success of this department keeps a great influence on the overall profit of a bank,
Again, Failure of this department may lead the bank to huge losses or even to bankruptcy.
4.2 Loan and Advance

Lending being the most important function of commercial bank, every bank should have own
credit policy. The loans & Advance of any bank has been formulated of the plan of provides good
loan. This plan was formed on the basis of the following objectives:
• To deliver general banking services to the public and credit to variable borrowers at a
reasonable cost.
• To maximize the profit of the bank by making sound lending.
• To deliver credit to variable borrowing at a reasonable cost.
• To provide satisfactory return on investment.
• To assist the social and economic development of the country.
4.3 Function of loan and advance division:
Money lending is one of the main functions of commercial bank. In the lending process selection
of borrower is the most crucial and vital job for a banker. Before customer enjoys credit facilities
it is important that the applicant should qualify for five C’s. The five C’s are:
➢ Character=intention to pay back the loan.

➢ Capacity-borrowers competence in terms of utilizing the fund profitably and generate
income.
➢ Capital-Financial strength to lending cover the risk.
➢ Conditions-General business condition between two parties.
➢ Collateral-implies additional securities.
In addition, objectives of the loan and advance department are managing credit exposure of the
bank, maintaining credit risk, compliance of Central bank Ltd. recovering or collecting dues of
retail loans or advances. At present loan and advance division performs following activities:
➢ Dealing with Corporate and Retail Credit.

➢ Perform Collection and Monitoring Activities
➢ Support Recovery and Risk management
Besides this, the activities of this department include managing the financial books of the bank,
checking all entries of the book are according to standards, preparing daily reports for Bangladesh
Bank, revenue appropriation and calculations, setting the internal pricing rates etc.
4.4 Different types of loan and advance facilities
There are different types of credit facilities offered by banks from which some of are explaining
below:
4.4.1 Overdraft
The word overdraft means the act of overdrawing from the Bank account. An overdraft occurs
when money is withdrawn from a bank account and the available balance goes below zero. The
Overdraft loan has an expiry date after which renewal or enhancement is necessary for enjoying
facility. Overdraft facilities are generally granted businessmen for expansion their business against
securities of stock in trade, shares, debentures, government promissory notes, fixed deposit, life
insurance policies, gold and gold ornaments etc.
4.4.2 Cash credit:
A cash credit is an arrangement by which the customer is allowed to borrow money up to a certain
limit. This is a parliament arrangement and the customer need not draw the sanctioned amount at
once, but draw the amount as and when required. Thus, Cash Credit is an active and continuous
process in which deposits and withdrawals going on frequently. Interest is charged only for the
amount withdrawn. This is most favourite of borrowing by large commercial and industrial
concern. Cash credit in true sense is against pledge of goods. Cash credit is also allowed against
hypothecation of goods.
4.4.3Demand loan:
In opening letter of credit (L/C), the clients have to provide the full L/C amount in foreign
exchange to the bank. To purchase this foreign exchange, bank extends demands loan to the clients
at stipulated margin. No specific repayment date is fixed. However, as soon as the L/C documents
arrive, the bank requests the clients to adjust their loan and retire the L/C documents. Demand
loans mainly include "Payment Against Documents'', ''Loan against Imported Merchandise (LIM)''
and "Later of Trust Receipt".
4.4.4 Term loan
These are the advances made by the bank with a fixed repayment schedule terms loans mainly
include "Consumer credit scheme", "Lease finance", "Hire purchase" and "Staff loan". The term
loans are defined as follows:
Short term loan: Up to 12 months.

Medium term loan: More than 12 months & up to 36 months.
Long term loan: More than 36 months.
Classification on characteristics of financing.
4.4.5 Bill Discounting
Under this type of lending,Bank takes the bill drawn by borrower on his customer and pay him
immediately deducting some amount as commission/discount.The bank then presents the bill to
the borrower's customer on the due date of the bill and collects the total amount.If the bill is
delayed,the borrower or his customer pays Bank a pre determined interest depending upon the
terms of transaction.
4.4.6 Loan
In case of loan the banker advances a lump sum for a certain period at an agreed rate of interest.The
entire amount is paid on an occasion eight in cash or by crediting in his current account,which he
can draw at any time the interest is charged for the full amount sanctioned whether he withdraws
the money from his account or not.The loan may be repaid in instalments or at expiry of a certain
period.Loan may be demand loan or term loan.
4.4.7 Short term loan
Term loan extended for short period usually up to one year is term as STL.This type of loan may
or may not have specific repayment schedule.However STL with repayment schedule is
preferable.Suppose short term Agricultural Loan and Micro Credit is enlisted by Agricultural
credit division of Bangladesh Bank in,annual loan program.Short term microcredit's are the credits
not exceeding BDT 25000/-(taka twenty five thousand)only and repayable within twelve months.
4.4.8 Lease Finance
These types of finance are made to acquire the assets selected by the borrower (lessee)for hiring
of the same at a certain agreed terms and conditions with the bank (lesser).In this case bank retains
ownership of the assets and borrower possesses and uses the same on payment of rental as per
contract. In this case no down payment is required.
4.4.9 Letter Of Credit (LC)
A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be
received on time and for the correct amount. There are many kinds of letters of credit, including
one for travellers. Banks collect a fee for a letter of credit service, typically a percentage of the
size of the letter of credit.
4.4.10 Home Loan
Home Loan is a term loan facility to purchase your desired home/flat. BASIC Bank Ltd. Also
provide home loan under following situation
Who Can Apply?
-Salaried Individuals
-Professionals
-Business Persons
Age Limit: Loans are only available to Bangladeshi nationals:
-Minimum age of eligibility: 21 years
-Maximum age of eligibility: 65 years
Loan Size:
-Minimum: BDT 5, 00,000
-Maximum: BDT 75, 00,000

Tenure: Maximum 15 Years depending on the size and credibility.
Interest Rate: Depending on the size and tenure, BASIC Bank Home Loan interest rates vary
from 12% to 13.50%
Security: Registered Mortgage of the House/Apartment
Govt. Charges: As per Government Specification.
Other Terms & Conditions: Minimum Gross Family Income: BDT 40,000.00
4.4.11 Corporate Loan
Any loan exceeding 1, 00, 00,000 BDT and issued for business and trade purposes is defined as
corporate loan. Such loans mainly serve the purpose of initials for the establishment of industry or
large scale factory.
4.4.12 Bank Guarantee
Bank Guarantee is one sort of non funded facility. Bank Guarantee is an irrevocable obligation of
a bank to pay a pre-agreed amount of money to a third party on behalf of a customer of a bank. A
contract of guarantee is thus secondary contract, the principal contract being between the
beneficiary/creditor and the principal/principal debtor themselves to which guarantor is not apart.
If the promise or the liability in the principal contract is not fulfilled or discharged, only then the
liability of guarantor or surety arises.
4.4.13 Syndicate Loan
These are the loans usually involving huge amount of credit and such to reduce a particular
Bank’s stake. A number of banks/financial institutions participate in such credit, known as loan
Syndication. The bank primarily approached/arranging the credit is known as the lead or managing
bank.
4.4.14 Marriage Loan
Marriage loan enables people to organize and celebrate the marriage in style. Any self-employed
or service holder can be benefited under this loan scheme. The maximum loan limit sanctioned for
this purpose is TK. 300000.The eligible applicants monthly income must be between TK.10000-
TK 25000.Besides the age limit of the borrower must be between 25-65 year(at the time of
repayment).The interest rate is16%.The maximum loan periodic three years.
4.4.15 Travel Loan
When planning an overseas vacation or making a trip to chosen exotic location, financing may be
an issue. This loan is to facilitate for those who loves to travel. For travel purpose, any self-
employed or service holder can apply for this scheme. For running travel agency business the
purpose of this loan. The mode of repayment is the Sale proceeds of tickets. The interest rate
is15.50%.The maximum loan periodic one year.
4.4.16 Car Loan Scheme
There are minimum criteria to get the loan. If the applicant is a service holder then the applicant's
monthly income must be at least Tk. 20,000 and if the applicant is a business man then the income
must be at least Tk. 40,000. The age limit of the borrower must be between 25-60 years. The down
payment of the loan must be 10%.The interest rate is 16%.car loan only sanctioned for the car
manufactured in Japan. The car for which the loan will be sanctioned must not be older than 2004
model Japanese car. Bank generally does not invest for the car exceeding 20 laces. Exceptional
cause may be considered if the bank is satisfied about the repayment capacity of the client as well
as Client's social status. The loan is sanctioned for six years at a maximum.
4.4.17 Collateral Loan
To minimize risk on loan bank tend to take collateral for loan. For taking collateral bank has to
take some strategy about collateral. For example collateral asset has to be sellable, Asset has to be
solid in documentation, asset has to be existing in reality and asset value must be more than loan
amount.
4.4.18 Education Loan
For higher education parents of a student can apply for the loan. Here the applicant would be the
guardian having income and the beneficiary would be the children of that applicant. If the applicant
is a service holder then the applicant monthly income must be minimum TK12000.The rate of
interest rate is 16%.Maximum loan sanctioned for this purpose is 5 lac. Maximum loan period is
4 years.
4.4.19 Women Empowerment Loan
Another important concept in SME financing is to develop the women entrepreneurship. Under
the framework of SME, commercial banks are giving special emphasis in developing women
entrepreneurs and in line with the regulatory institutions, they provide credit facilities in they have
been disbursed BDT 7434.08 million as agriculture loan.
4.4.20 SME (Small & Medium Enterprise) Loan
This type of loan is disbursed for business purposes but the amount loaned does not exceed BDT
10,000,000. The amount loaned here serves the purpose of potential (partial) working capital for
small and medium business venture.
After the branch manager has ensured that the credit will be a profitable propositioning for the
bank, he should then turn his attention to the cash flow situation of the borrower. The bank’s credit
can be classified into three main categories, as follows:
• A very short-term advance will be liquidated by funds received in the very near future, such
as advances against foreign or local bills or bridge functioning where evidence of credit
sanction from another financial institution is available.
• Provision for current assets; this type facility is needed for trading or manufacturing
activities.
• Long term loans, generally over 5 years; example of such facilities as investment in plant
and machinery, a farm or a shop, generally, a long term is repaid out profits generated by
the business.
4.5 Operational Guidelines for Different Credit Facilities

Broadly, there are two types of loan such as- Retail Loan and Corporate Loan. For each different
types of loan, credit officer have follow different steps to accomplish credit activities
appropriately. Each and every step is given below for various purposes of loan
4.5.1 Retail Loan
Retail loan can be classified into different types which are as follows
❖ Secured Overdraft (FO-FDR, DPS)
In case of Fresh loan
➢ Receiving customer Application (RFCL)

➢ Receiving the Instrument (FDR, DPS) duly discharged by the client
➢ Verification of the Instrument, signature verification & lien marking from General
➢ Banking Division
➢ Preparation of Office Note
➢ Preparation of sanction advice & get it accepted by the client
➢ Obtain charge documents from the clients
➢ Mail limit request form to Credit Admin, Head Office for limit insertion
➢ Deduct charges
➢ Stamping the charge documents
➢ Entry of Security Documents in the SISO Register
➢ Safekeeping of Security Documents in the Safety Vault.
In case of Renewal
➢ Receiving customer Application

➢ Preparation of Sanction Advice & get it accepted by the client
In case of Enhancement

➢ Receiving new Instrument (FDR, DPS) duly discharged by the client
➢ Verification of the Instrument, signature verification & lien marking from GeneralBanking
Division
➢ Deduct charges
In case of Reduction

➢ Ensure outstanding has brought down (By cash or encashment of FDR)
➢ Mail limit request form to Credit Admin, Head Office for limit reduction
➢ Return of Original Instrument (if adjustment by cash)
➢ Entry the release of Instrument in the SISO Register (Take client’s signature on the register).
In case of closing the Account
➢ Receiving customer Application with cheque book (if issued)

➢ Ensure adjustment of outstanding liability (By cash or encashment of FDR
➢ Mail limit cancellation request form to Credit Admin, Head Office
➢ Close the account
➢ Return of Original Instrument (if adjustment by cash)
➢ Entry the release of Instrument in the SISO Register (Take client’s signature on the register).
And Follow-up
➢ Issue Letters to the clients for renewal before one month of the expiry date.
➢ Call the clients for renewal at least one week before the expiry date.
➢ Issue Letters to the clients for payment of Interest/EOL within one week of each quarter
end.
➢ Call the clients for payment of Interest/EOL on regular basis.
➢ Regular update of the spread in line with the change of FDR interest rate
➢ Regular follow up of the EOL SOD Accounts so that outstanding does not exceed the
security (encashment) value.
➢ Regular follow up of the Expired SOD Accounts so that it does not become classified.
❖ Personal Loan
Application & Disbursement
➢ Receiving customer Application in prescribed form along with required documents &
Application fee.
➢ Receiving CIB Undertaking for the Applicant & Guarantor along with fee
➢ Scrutinize the Application Form & attached documents carefully
➢ Forward the Application Form & CIB Undertaking to Head Office (if found in order and
you are satisfied)
➢ Follow-up the progress of the file in Retail Banking Division
➢ Preparation of Sanction Advice & get it accepted by the client after getting approval from
Head Office
➢ Obtain signature on the charge documents from the client
➢ Obtain 3 unfilled Cheques from the client
➢ Ensure deposit of charges by the client in the link account
➢ Disburse the Loan by transferring the amount to client’s Savings Account after completion
of documentation as per H.O. approval
Follow-up
➢ After disbursement, ensure regular payment of monthly instalment by the clients

➢ Prepare the overdue list in the first working day of every month
➢ Call all the defaulting borrowers for recovery of overdue instalments throughout month
➢ Call the Guarantors if the client is unreachable over phone or if the client breach
commitment of payment several times.
➢ Issue 1st reminder letter to client if 1 instalment due
➢ Issue 2nd reminder letter to client if 2 instalment due
➢ Issue 3rd reminder letter to client & guarantor if 3installment due and forward the shadow
file to Monitoring Unit, Head Office
➢ Visit client’s residence if above procedure does not work.
❖ Car Loan
Application fee.
you are satisfied)
Head Office
➢ Issue Purchase Order in favour of the Car Vendor with other related documents
➢ Obtain all required Car Documents (copy of Registration & Insurance cover note, Original
Delivery Challan, Bill, Money Receipt, and Insurance Policy) and cross match those with
the sanction & Quotation
➢ Physically verify the vehicle (Reg. No., Engine No. & Chassis No.)
➢ Ensure deposit of charges by the client in the link account
➢ Disburse the Loan vide Pay Order favouring Car Vendor after completion of documentation
as per H.O. approval
Follow-up

❖ Home Loan
Application fee.
➢ Visit the property to physically verify the possession & ownership and also obtain valuation
Report by the Surveyor
you are satisfied)
Head Office
➢ Obtain all land related documents from the client and get it verified by the lawyer (Vetting
the Documents)
➢ Execute Tripartite Agreement as per Lawyer’s draft.
Documentation
➢ Obtain Charge Documents, Cheques, Tripartite Documents & Land related Documents
before disbursement,
➢ Follow-up regularly whether registration formalities has been completed or not
➢ Obtain Title Deed, DCR, Mutation, Rent Receipt, DCC Holding Tax Receipt after
completion of registration of the Flat
➢ Obtain RAJUK‟s NOC for Mortgage if RAJUK‟s property
➢ Obtain Draft of Mortgage Deed from lawyer
➢ Complete Mortgage formalities in the concerned Sub-Registry office
➢ Obtain Certified Copy of Mortgage Deed
Follow-up

4.5.2 Corporate Loan
Again corporate loan can be classified under two types which are as follows
❖ Bank Guarantee
Case to Case
➢ Receiving customer Application (RFCL)

➢ Receiving the Instrument (FDR) duly discharged by the client (if margin given by FDR)
➢ Verification of the Instrument, signature verification & lien marking from General Banking
Division (if margin given by FDR)
➢ Preparation of Sanction Advice & get it accepted by the client Obtain charge documents
from the clients
➢ Draft the Bank Guarantee as per format & Print it.
➢ Pass issuance Entry in the system (taking required margin & deduct charges)
Limit Clients

➢ Draft the Bank Guarantee as per format & Print it.
➢ Pass issuance Entry in the system (taking required margin & deduct charges)
Amendments

➢ Draft the amendment letter & Print it.
➢ Pass amendment Entry in the system (deduct charges)
Reverse
➢ Receiving customer Application along with Original Bank Guarantee

➢ Pass reversal/closing Entry in the system (refund the margin)
Follow-up
➢ After Expiry of the BG immediately inform the client to return the BG or extend time
➢ If the client does not come forward within 1 week, issue 1st Reminder Letter to the
beneficiary of BG giving 15 days’ time
➢ If the beneficiary does not return the BG within 15 days, issue 2nd Reminder Letter the
beneficiary of BG giving 15 days’ time
➢ If the beneficiary does not return the BG within 15 days, issue 3rd & Final Reminder
Letter to the beneficiary of BG giving 15 days time
➢ If the beneficiary does not return the BG within 15 days, reverse the BG without the original
one.
❖ SME
In case of New Proposal
➢ Receiving customer Application (RFCL) along with required documents

➢ Receiving CIB Undertaking for the Applicant & owners along with fee
➢ Forward the CIB Undertaking to Head Office
➢ Scrutinize the attached documents carefully
➢ Visit client’s business places (office, factory, go down etc.) and proposed mortgage property
& prepares visit report
➢ Valuation of proposed mortgage property by enlisted surveyors
➢ Prepare & forward the Proposal to Head Office (if you are satisfied)
➢ Follow-up the progress of the file in SME Unit
Head Office
➢ Obtain land related documents from the client and forward to Lawyer for vetting
➢ If the docs are in order get the draft of Mortgage Deed & other security documents (as per
sanction) from the lawyer
➢ Complete the Mortgage formalities in the concerned Sub-Registry office File charge with
RJSC (if limited company)
➢ Obtain Notarized IGPA to sell Hypothecated Stock & Machinery (where applicable)
➢ Obtain undated Cheques from the clients as per sanction
➢ Obtain Insurance Policy from the clients as per sanction
➢ Obtain Undertaking in 150 Taka stamp paper as per sanction
➢ Collect certified copy of Mortgage Deed
➢ Insert Signboard on the mortgage property/factory and preserve a photograph of that in the
file
➢ Send all the Documents to lawyer for obtaining Letter of Satisfaction
➢ Send Compliance Certificate to Credit Admin, Head Office with copy of LS
➢ Mails limit request form to Credit Admin, Head Office for limit insertion/ disbursement.
In case of Renewal & Enhancement
➢ Receiving customer Application (RFCL) along with required documents (Stock Report,
Renewed Trade License)
➢ Receiving CIB Undertaking for the Applicant & owners along with fee
➢ Forward the CIB Undertaking to Head Office
➢ Scrutinize the attached documents carefully
➢ Visit client’s business places (office, factory, go down etc.) and proposed mortgage property
& prepares visit report
➢ Prepare & forward the Proposal to Head Office (along with security compliance Certificate
& LS)
➢ Follow-up the progress of the file in SME Unit
Head Office
➢ Obtain signature on the fresh set of charge documents from the client
➢ Obtain Insurance Policy (renewal) from the clients as per sanction
➢ Send Compliance Certificate to Credit Admin, Head Office
➢ Mails limit request form to Credit Admin, Head Office for limit insertion/ disbursement.
4.6 Overall Procedure for Sanctioning Loan
The following procedure need to be followed for giving advances to the customer. These are:
1. Party’s application
2. Filling form-A
3. Collecting CIB report from Bangladesh Bank
4. Processing loan proposal
5. Project appraisal
6. Head office approval I
7. Sanction letter
8. Documentation
9. Disbursement.
4.7.1 Party’s application
At first borrower had to submit an application to the respective branch for loan, where he/she has
to clearly specify the reason for loan. After receiving the application form the borrower Bank
officer verifies all the information carefully. He also checks the account maintains by the
borrower with the Bank. If the official becomes satisfied then he gives form-A (prescribed
application form of Bank) to the prospective borrower.
4.7.2 Filling Form–A
After satisfying with party‟s application the applicant need to fill Form-A. It is the prescribed
form provides by the respective branch that contains information of the borrower. It containsName
with its factory location, Official address and telephone number, details of past and
present business, its achievement and failures, type of loan needed etc.
4.7.3 Collecting CIB Report from Bangladesh Bank
After receiving the application for advance, BASIC Bank sends a letter to Bangladesh Bank for
obtaining a report from there. This report is called CIB (Credit Information Bureau) report.
Janata Bank generally seeks this report from the head office for all kinds of investment. The
purpose of this report is to being informed that whether the borrower has taken loan from any
other Bank; if „yes‟ then whether the party has any overdue amount or not.
4.7.4 Processing loan Proposal
After receiving CIB report from Bangladesh Bank, then respective branch prepare an Investment
proposal, which contains terms and conditions of Investment for approval of Head Office.
Documents those are necessary for sending Investment proposal are:
Necessary Documents
While advancing money, banks create a lot of documents, which are required to be signed by the
borrowers before the disbursement of the loan. Of them some are technically called charge
documents. Necessary steps and documents:
Loan application form duly signed by the customer.

Acceptance of the term and conditions of sanction advice.
Trade license.
In Case Of Partnership Firm, copy of registered partnership deed duly certified as true
copy or a partnership deed on non-judicial stamp of taka-150 denomination duly
notarized.
In Case Of Limited Company:
Copy of board resolution of the company for availing credit facilities and authorizing
managing director/chairman/director for execution of documents and operation of the
accounts.
Copy of memorandum and articles of association of the company including certificate
of incorporation duly certified by Registered Joint Stock Companies (RJSC) and
attested by the managing director and accompanied by an up-to-date list of directors

An undertaking not to change the management of the company and the memorandum
and article of the company without prior permission
Copy of last audited financial statement up to last 3 years.
Personal guarantee of the directors including the chairman and managing director.
An undertaking not to change the management of the company and the memorandum
and article of the company without prior permission
Certificate of registration of charges over the fixed and floating assets of the company
duly issued by RJSC.
Certificate of registration of amendment of charges over the fixed and floating assets
of the company duly issued by RJSC in case of repeat loan or change in terms and
conditions of sanction advice regarding loan amount and securities etc.
Demand promissory notes.

Letter of hypothecation of stocks and goods.
Letter of hypothecation of books debts and receivable.
Letter of hypothecation of plant and machinery.
Personal letter of guarantee.
Required Docks‟ for Retail (Individual) Loan
Photograph- 2 Copies
Passport/National ID/Driving License
Visiting card/company ID
Tin
Trade license (For Businessman)
LOI (For service holder)
Utility Bill (electricity/WASA/Gas)

Bank statement- last 6 months
Quotation (For Auto or HHD)
Partnership Deed (for partnership firm)
Company memorandum
Rental/Lease/Title Deed
Certificate of professional degree
Guarantor
Spouse- photo with signature, Attested by applicant
Eligible photo with signature, Attested by the applicant, Visiting card, TIN
Sanction letter with Related Bank Statement (If Enjoying Any Loan).
Required Docks‟ for SME

Total stock
Total sale for 1 year
Guarantor
Photograph
Visiting card
TIN
Trade license
4.7.5 Project Appraisal
It is the pre-investment analysis. Project appraisal in the Banking sector is important for the
Following reasons:
To achieve organizational goals
To recommend if the project is not designed properly
To justify the soundness of an investment

To ensure repayment of Bank finance.
Techniques of Project Appraisal
An appraisal is a systematic exercise to establish that the proposed project is a viable preposition.
Appraising officer checks the various information submitted by the promoter in first information
sheet, application for Investment and Investment proposal.
The Head Office (HO) mainly checks the technical, commercial and financial viability of the
project. For others, HO is dependent on branch‟s information. But when the investment size is
big, then the HO verifies the authenticity of information physically.
4.7.6 Head Office Approval
When Head office receive appraisal from the branch then, Head Office again appraises the
project. If it seems to be a viable one, the HO sends it to the Board of Directors for the approval
of the Investment. The Board of Directors (BOD) considers the proposal and takes decision
whether to approve the Investment or not. If the BOD approves the investment, the HO sends the
approval to the concerned branch.
The respective officer of Head Office appraises the project by preparing a summary named
“TopSheet” or “Executive Summary” and then he send it to the Head Office Credit Division for
theapproval of the Loan. The Head Office Credit Division considers the proposal and takes
decision
whether to approve the Investment or not. If the committee approves the investment; the HO
sends the approval to the concerned branch.
4.7.7 Sanction Letter
After getting the approval of the HO the branch issues sanction letter to the borrower. A sanction
letter contains:
Name of borrower,
Facility allowed,
Purpose,
Rate of interest,
Period of the Investment and mode of adjustment,
Security and Other terms and condition.
4.7.8 Documentation
If the borrower accepts the sanction letter, the Documentation starts. Documentation is a written
statement of fact evidencing certain transactions covering the legal aspects duly signed by the
authorized persons having the legal status. The most common documents used by the BASIC
Bank for sanctioning different kinds of Investment are:
Joint Promissory Note,
Letter of Arrangement,
Letter of Disbursement,
Letter of Installment,
Letter of Continuity,
Trust Receipt,
Counter Guarantee,
Stock Report,
Letter of Lien,
Status Report,
Letter of Hypothecation,
Letter of Guarantee
Documents Relating to Mortgage.
4.7.8 Disbursement
After sanction and completion of all formalities the respective officer disburses the loan. The
officer writes cheque and provides it to the borrower. For this borrower has to open an account
through which he/she can withdraw the money.
Strategies for Recovery: Recovery of loan can be made in the following three methods.
Persuasive Recovery
The first step in recovery procedure is private communication that creates a mental pressure on
borrower to repay the loan. In this situation bank can provide some advice to the borrower for
repaying the loan.
Voluntarily
In this method, some steps are followed for recovering loan. These are:
Building Task Force
Arranging Seminar
Loan Rescheduling Policy
Waiver of Interest Rate
Legal Recovery
4.8 Credit Administration
The administration function is critical in ensuring that proper documentation and approvals are
inplace prior to the disbursement of loan facilities. For this reason it is essential that the
functioncredit administration be strictly segregated from relationship management/ marketing in
order the possibility of controls being compromised of issues not being highlighted at the
appropriatelevel.
4.9 Credit Monitoring

To minimize credit losses, monitoring procedures and systems shall be in place that provides an
early indication of the deteriorating financial health of a borrower. At a minimum, systems shall
be in place to report the following exceptions to relevant executives in CRM and RM team: Past
due principal or interest payments, past due trade bills, account excesses, and breach of loan
covenants.
• Loan terms and conditions are monitored, financial statements are received on regular
basis, and any covenant braches or exceptions are referred to CRG and the RM team for
timely follow-up.
• Timely corrective action is taken to address finding of internal, external or regulator
inspection/audit.
• All borrower relationships/loan facilities are reviewed and approved through the
submission of a credit proposal at least annually.
4.10 Credit Risk Assessment
Risk assessment or analysis is all about understanding the risk associated with lending money.
Until and unless risks are not assessed and measured it will not be possible to control risks. The
primary factor determining the quality of the Bank‟s credit portfolio is the ability of each borrower
to honor, on timely basis, all credit commitments made to the Bank. This must be accurately
determined by the authorized Credit Officers/ Executives prior to approval. Therefore a thorough
credit risk assessment shall be conducted prior to the sanction of any credit facilities. While
assessing a credit proposal total emphasis shall be given on repayment potential of loans out of
funds generated from borrower‟s business (cash flow) instead of realization potential of
underlying securities. Credit risk assessment process in the Bank shall be governed by the
following principles:
4.10.1 Assessment Frequency
A comprehensive Credit Assessment (Due Diligence) shall be conducted before sanction of any
loan. Thereafter, it will be done annually for all types of credit facilities Demand Loan,
Continuous Loan and Term Loan.
4.10.2 Assessment Documentation

The result of the Credit Assessment shall have to be presented in the Credit Assessment Form
enclosed in. Initially, it will be originated by the Relationship Officer of the Branch and
reassessed in Corporate Banking Division. Credit Review Department of Credit Risk
Management Division will review the risk factors and facility structure to determine that all the
risks have been properly assessed and Risk mitigation measures have been taken and all bank‟s
policy requirements & regulatory requirements have been addressed. All evidences of credit
assessment have to be filed properly in the respective Credit File.
4.10.3 KYC Policy
Bank‟s KYC policy applicable for depositors shall also be applicable for borrowing customers.
The prescribed credit application form will disclose the information of the client. In addition,
before sanctioning any credit facility the concerned relationship officer must physically visit the
business premises of the customer, talk with important personalities of the locality, collect
information on the borrower from his/her existing banker, if any to know financial status,
capacity, competence, experience and summarize all these information in the Pre-sanction
Inspection Report. The report serves as preliminary information about the prospective borrower
before a detailed evaluation is undertaken.
4.10.4 Accountability
The Relationship Manager (presently Head of Branch) shall be the owner of the customer
relationship and be held responsible to ensure the accuracy of the entire credit
application/assessment form submitted for approval. He/she will be responsible for conducting
due diligence on the borrower, principals and guarantors.
4.10.5 Filling up Credit Assessment Form
Bank requires sufficient information to enable comprehensive assessment of the true risk profile
of the borrower. Hence, Credit Assessment Form must be filled in with accurate information in
full. No field in the assessment form should be erased or left vacant. If information is not
available, concerned field should be filled in with “Information Not Available” with proper
justification.
4.10.6 Credit Requirement
Credit requirement of the borrower must be assessed properly. The relationship officer will apply
prudence to find out actual credit requirement of the borrower and place his/her findings in the
Credit Assessment Form.
4.10.7 Repayment Source
Repayment source of the borrower is to be validated in the Credit Assessment Form by cash flow
and other financial analysis. For such analysis, at least three years financials are to be reviewed.
Loan amount and tenor must commensurate with the repayment capacity of the borrower.
4.10.8 Risk & Mitigating Factors
Risks inherent in a credit proposal shall have to be identified and appropriate mitigating factors
should be applied. Critical success factors should be analyzed. These are to be summarized in the
Credit Assessment Form.
4.10.9 Collateral
Collateral offered against a credit facility shall properly be valued and verified by the concerned
Relationship Officer and/or Relationship Manager and revalued and re-verified annually in the
subsequent period. In addition to the valuation of the Relationship Officer/Manager, the same
collateral must be valued and verified by an enlisted surveyor of the Bank if the total credit
facility to the concerned customer exceeds BDT 25.00 Lac (Taka Twenty Five Lac). Any
valuation of collateral must be supported by the photograph and site map, where applicable.
4.10.10 Insurance Coverage
Adequacy and extent of insurance coverage must be assessed in the Credit Assessment Form.
Customer‟s preference for not taking required insurance policy must be justified properly and it
must be mentioned as deviation. The policy must be obtained from approved insurer of the Bank.
4.10.11 Adherence to Policy
It should be clarified whether the customer has agreed to comply with bank‟s internal policy and
external regulatory requirements. Any deviation from the policy or other internal or external
requirements must be justified properly and mentioned as Deviation in the Credit Assessment
Form. Furthermore, the originating officer will affix a declaration in the Credit Assessment Form
that the proposal does not contradict with any rules and regulations of the Bank, Banking
Companies Act, any circulars of Bangladesh Bank etc.
4.10.12 Syndicated Loans

Proposal for syndicated loans shall be analyzed with respect to risk and return in the same
manner as directly sourced loans. In case of participation in a syndication deal, Bank will
independently assess the proposal and will not solely depend on the credit assessment of the
Lead Arranger.
4.10.13 Change in Pricing
Any changes in the pricing of an existing credit facility must be highlighted and to be justified in
the Credit Assessment Form
4.11 Credit Risk Grading (CRG) System
Credit risk grading is an important tool for credit risk management as it helps the Banks &
financial institutions to understand various dimensions of risk involved in different credit
Findings:
Every bank has its own loan and advance management procedure.The Janata Bank Ltd,possess a
standard loan and advance management approval procedure.As the objective of my report is to
make a comment on the loan and management approval process of Janata Bank Ltd,I tried my best
to collect data for the report and find out the reality. I have summed up my findings here and I
think this will help me to achieve my objective.
Janata Bank follows the overall loan assessment and risk grading process according to the rules of
Bangladesh Bank in a somewhat manner.
Some employees are very reserve in disclosing information.
Sometimes the officer of JBL, gives loan in favor of the client
(familiar/relative to the officer) without having adequate documents. In this case the
branch gives loan just relying on what client said to them.

In JBL, They do not have sufficient number of employees so that one employee has to
do more work than he/ she should.
Janata Bank Ltd. Charges high interest rate on loans which hinders customers to take
loan.
The number of officers in loan & advance department is insufficient to provide service to
huge number of customers of Corporate Branch Janata Bank Ltd.
Before sanctioning loan, sometimes CIB report is not obtained from Bangladesh Bank
timely.
The website of Janata Bank Ltd does not contain all required information about loans
and advances.
Most of the loan disbursement is centrally controlled from the Head Office, Which
sometime creates problem for the branch in choosing the right client.
Janata bank's both loan processing service charge and loan processing time is quite high compared
to their competitors.
The credit proposal evaluation process is lengthy .Therefore, sometimes valuable clients
are lost.
Recommendations for the Janata Bank
As an internee it is very difficult for me to give any recommendation with my little working
experience but I have tried my best to give best recommendations for the organization.
Following recommendations are prepared in the light of findings.
The bank should diversify its loans more to finance small entrepreneurs for better growth
of the country.
The bank can provide student loan, doctors loan etc., this may encourage the students to
come forward to do something for the economy. And also increase the amount of
personal loan and consumer loan.
Strong promotional activities should be increased to motivate its present potential loans
related clients. More loans can be granted for new entrepreneurs, new businessman and
new companies etc, which ultimately reduce “class banking”
The law and order should be easier for the bank to liquidate the collateral, so that the
borrower can be able to pay the debt easily.
Maximum number of the loan is provided in the long-term industrial loans. Bank‟s clients are
also limited. So, they can‟t serve the economy of the country that much. So, they should diversify
their loans more in agriculture, forestry, fishing and new industries etc.for better economic growth
of the country.
Installment period and installment time duration should be increased so that the borrower can
utilize their debt facility properly for profit maximization.
In case of some mortgage problem such as acquisition, proprietorship and problem of
asset, the bank should try to avoid this type of loan sanction.
The bank should try to increase its recovery amount since loan amount each year has
been increased. The bank should induce quality client and select best project for risk free rate of
interest.
The bank should update its loan and advances strategy in sustainable and appropriately
enough to survive in the market.
The bank should provide more loans of small scale in different sectors though it will
decrease the profit a little. But it will be very safe.
In a competitive financial market, the bank should innovate it‟s products & services need
to be focused more on customer‟s needs.
JBL should give the quick services to the customer by the help of modern technology.
Proper implementation of the investment plan and investment policy should be 're-planned each
year of the Janata Bank.
6.2Conclusion
As an internee of JBL, I have truly enjoyed my internship from the learning and experience
viewpoint. I am confident that this two months internship program at JBL will definitely help me
to realize my further career in the job market.
As there are lots of local and foreign banks in Bangladesh, the Janata Bank Limited is promising
commercial bank among them . In this competitive market, bank has to compete not only the
others commercials but also with the public ones.I have discussed about the different aspects of
Loan & Advance activities of Janata Bank. The JBL is a nationalized bank in Bangladesh. JBL
plays an important role in the banking sector as well as in our economy. It is committed to provide
high quality financial services to contribute to the growth of G.D.P of the country through
stimulating trade and commerce, accelerating the pace of industrialization, boosting up export and
creating employment opportunities. The success of a bank depends largely on the efficient loan &
advance management. A successful loan & advance management is not only needed for a bank‟s
own performance but also it is needed for the smooth development of an economy. It is playing a
vital role in financing import-exports and other areas of the country. The bank also provides
General banking service, which renders a significant treatment to that locality. Now JBL serves its
clients with one thousand and fifty branches.
During the internship program I have gathered lots of practical knowledge and experience and
finally agreed to this statement to be true. Working and getting involved in a reputed bank is
really pleasure to me. The internship program is obviously helpful for further thinking about my
career. I am thankful for every person who was involved in my internship program.

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2.

2.8.1 Credit Risk Management:

S=Strengths-Attributes helpful for achieving the objective

W=weaknesses-Attributes harmful for achieving the objective

O=opportunities-External conditions that are helpful for achieving the objective

T=Threats-External conditions that may harm the business's performance.

The SWOT Analysis of Janata Bank Ltd. is presented in a table below:

• More Experienced & Managerial know: It has the opportunities to be experienced

• Competition: Strong community bank competition Non-bank competition.

5.1.1 Liquidity Ratios:

The liquidity ratio of Janata Bank are presented below

5.1.1.1 Current Ratio:

Formula: Current Ratio = Current Assets / Current Liabilities

Year 2014 2015 2016 2017 2018

Current 1.31 1.02 1.04 1.04 0.91

Net Loans to Deposit (Total Borrowing) Ratio

Year 2014 2015 2016 2017 2018

Quick Ratio 6.83% 6.49% 6.74% 6.67% 5.92%

5.1.1.3 Net Loans to Deposit (Total Borrowing) Ratio:

Year 2014 2015 2016 2017 2018

Net Loan 0.62 0.61 0.63 0.71

5.1.2.1 Loan Loss Reserve to Gross Loans (LRGL) Ratio:

Formula: LRGL Ratio = Loan Loss Reserve / Gross reserve

Year 2014 2015 2016 2017 2018

LRGL Ratio 0.12 0.12 0.15 0.16 0.14

5.1.2.2 Liquid Asset to Total Asset Ratio:

Year 2014 2015 2016 2017 2018

Liquid Asset to 0.10 0.09 0.12 0.15 0.10

Year 2014 2015 2016 2017 2018

Liquid Asset to 0.11 0.11 0.14 0.18 0.19

5.1.3 Debt Management Ratio:

5.1.3.1 Deposit to Total Asset Ratio:

Formula: Deposit to Total Asset Ratio = Total Deposit / Total Asset

Year 2014 2015 2016 2017 2018

Deposit to Total 0.80 0.82 0.82 0.83 0.78

Formula: Deposit to Equity (DE) Ratio = Total Deposit / Total Equity

Year 2014 2015 2016 2017 2018

Deposit 23.15 13.74 11.35 12.57 12.38

5.1.3.3 Equity Multiplier:

Formula: Equity Multiplier (EM) = Total Asset / Total Equity

Year 2014 2015 2016 2017 2018

Equity 26.05 12.40 7.58 19.29 15.87

5.1.4.1 Return on Asset:

Formula: Return On Assets = Net profit/ total asset

Year 2014 2015 2016 2017 2018

Return on 0.61% 0.70% 0.33% 0.33% 0.03%

5.1.4.2 Return on Equity (ROE):

Formula: Return on Equity (ROE) =Net profit/Total Equity

Year 2014 2015 2016 2017 2018

Return on 9.66% 9.70% 5.22% 5.23% 0.46%

Return on deposit measures how much revenue is gained from deposit.

Formula: Return On Deposit=Net Profit/Total Deposit

Year 2014 2015 2016 2017 2018

Return on 0.007 0.008 0.004 0.004 0.0003

4.2 Loan and Advance

➢ Character=intention to pay back the loan.

➢ Dealing with Corporate and Retail Credit.

4.4.2 Cash credit:

Short term loan: Up to 12 months.

Classification on characteristics of financing.

4.4.5 Bill Discounting

4.4.7 Short term loan

4.4.9 Letter Of Credit (LC)