Internship Report On Bank Risk Management

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Internship on Bank Risk Management.
Experiment Findings · November 2019

DOI: 10.13140/RG.2.2.16038.88642
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Tanvir Hasan Anik Md. Nurul Kabir Biplob
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Begum Rokeya University, Rangpur
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Credit Risk Management of Janata Bank Limited, Rangpur Shilpa Nagari Branch, Rangpur
CHAPTER - 1
INTRODUCTION
Department of Finance & Banking | Page 1

Begum Rokeya University, Rangpur.
1.1 Introduction
In recent days, people are becoming more aware about the management of their resources. As
the banks do business by lending their depositors' money, they are more responsible to
manage their credit portfolio smoothly. Bank's reputation is a critical factor for its success
and therefore Govt. banks must follow appropriate guidelines, policies and relevant manuals
regarding credit extension and recovery. The usage of banking service for any type of
financial activities is increasing day by day. People are taking loans not only to start
businesses but also it uses other purposes. It is now most important to know the internal
credit processes of the banks.
1.2 Background of the Report

A developed banking sector plays a vital role for financial stability of a country. In the BBA
program, the internship is a vital parts, which has to be done by most of the student. The
internship program provides an opportunity for the student to minimize the gap between
theoretical and practical knowledge and will help in practical life. After completing my BBA
as a student I wanted to complete my Internship program from a reputed Bank which would
be helpful for my future professional career. I got this great opportunity to perform my
internship program in the JANATA BANK LIMITED. I have completed internship program
based on theoretical and practical knowledge. I was sent to Shilpa Nagari Branch. It was
three months practical orientation program. I have worked in Regulatory Reporting
Department mainly but I had to work on others departments like ShanchayPatra department
and Loans and Advance as I was an Intern. As a Finance and Banking student I liked to
choose Credit Risk Management as the topic of my internship report.
1.3 Problem Statements

In today’s world, Credit officers skilled in evaluating the credit request of business firms rank
among the most experienced and highest paid people in the financial services field along with
investment bankers. Well, JB credit department try their best in maintenance of credit. My
research report basically focuses on business Credit management of JB by a practical
example.

1.4 Origin of the Report

It is said that without theory, practice is blind and without practice theory is meaningless. An
internship is designed to bridge the gap between the theoretical knowledge and real
application. The prime reason of this report is to learn about credit risk minimization process
of a Bank. This report has been prepared based on one selected listed Bank in Bangladesh,
named Janata Bank Limited. The report has-been prepared based on the information of this
bank which has been gathered during the internship period. The report titled “Credit Risk
Management of Janata Bank Limited”. No knowledge is fully complete unless it is fully
supported by events on ground. Whatever may be the quality of theoretical knowledge, it is
not complete without practical implication on ground. This realization is more pronounced in
the study of Business Administration where experience on ground plays a dominant role.
Internship program is essential for BBA students because it helps him/her acquit with real life
situation. Bank is a one of the important financial institutions, so I have selected Janata Bank
Limited, which is one of the leading Govt. commercial banks in Bangladesh. For this reason I
have prepared my internship report on Credit Risk Management of Janata Bank Limited.
Throughout the last few years Bangladesh has-been experiencing a rapid and significant
change in the banking sector. Not only in our country, all over the world the dimension of
banking has been changing rapidly due to the technological innovation, globalization and
deregulation. Janata Bank Ltd a state owned scheduled bank in Bangladesh. It has a vital
contribution towards lending and investment in economy because Janata Bank Ltd. has been
participating in all sectors (from industrial sector to microfinance).
1.5 Objectives of the Report

The main objective of the report is to identify and evaluate the credit risk management
system of Janata bank limited, which includes the following specific objectives:
i.To know the practices of credit structure of the Janata Bank Limited.
ii.To identify the recovery system performed by the bank.
iii.To asses and highlight the legal actions followed by the Branch in terms of credit recovery
.
1.6 Methodology of the Report
The report is descriptive and empirical in nature. To fulfill the objectives of this report the
total methodology has divided into two major parts. They are:

a) Data Collection Procedure: To conduct the completion of this report data we recollected
from both primary & secondary sources.
i. Primary Source:
a. Personal observation
b. Desk work in different section, of the bank.
c. Conversation with bank’s employees.
ii. Secondary Source:
-Annual report of Janata Bank Limited
-Variety of books, articles & journal related to banking.
-Information from the internet.
b) Data Processing & Analysis:

The collected information have then processed & complied with the aid of MS Word& other
computer software like Minitab,SPSS etc.. Necessary tables have been prepared on the basis
of collected data. Detail explanations and analysis have also been incorporated in the report.
There have been used 3 independent variables and 1 dependent variablesfor empirical
analysis. These are-
Risk Weighted Asset (RWA) (m), X1
Total Expenses (m), X2
Investment (m), X3
Net Profit after Tax (m), Y
The general form of the multiple regression equation with three independent variables is:
Y=a+b1X1+b2X2+b3X3
Where,
Y is dependent variable that is net profit after tax,
a is the Y-intercept,
b1is the coefficient of X1,
b2 is the coefficient of X2,

X1 is the total Risk Weighted Asset(RWA)
X2 is the total expenses,
X3 is the total Investment
Results from MINITAB:
Regression Analysis: Net Profit versus,total Risk Weighted Asset (RWA), Total
Expenses,total Investment. Coefficients
1.7 Scope of the Report

Janata bank is the second largest commercial bank in Bangladesh. It has 916 branches and
four overseas branches. It is liked with 1203 foreign correspondents all over the world. I was
assigned to learn practical knowledge from Janata bank Ltd. Here I tried to learn about how
to manage credit risk management, tools of credit risk management, loan recovery system,
facing problems in loan recovery system, performance of the bank in loan recovery system
etc. All things comes under the theory of credit risk management and finally I would
conclude with the critical evaluation of credit risk management under the guidelines of bank
companies act1991 and a discussion on major findings and recommendations.
1.8 Limitations of the Report

To prepare a report on the topic like this in a short duration is not easy task. In preparing this
report some problems and limitations have encountered which are as follows:
i. The main constraint of the study was insufficiency of information, which was
required for the study. But the employees do not provide due to security other
corporate obligations.
ii. Lack of opportunity to access to internal data.
iii. Due to time limitation, many of the aspects could not be discussed in the present
report.
iv. Since the bank personnel were very busy, they could not give enough time.
v. Based on secondary data in most cases for preparing this report.
vi. As the data, in most cases, are not in organized way, the bank failed to provide all
information.
vii. Legal action related information was not available.

1.9 Flow Chart of the Study
PLANNING
DESIGNING THE LAYOUT
THE APPROACH
The literature Review
Theoretical consideration
METHODOLOGY
PRIMARY SOURCES
a) Face to face
SECONDARY SOURCES
a) Annual report
conversation with Bankers
b) Working papers
c) Office files
d) Selected Books
COLLECTING INFORMATION
ANALYZING
PREPARING THE REPORT
SUBMISSION OF THE REPORT
Scope of the Report

Janata bank is the second largest commercial bank in Bangladesh. It has 916 branches and
four overseas branches. It is liked with 1203 foreign correspondents all over the world. I was

CHAPTER-2
LITERATURE REVIEW

Loans that constitute a large proportion of the assets in most banks' portfolios are
relatively illiquid and exhibit the highest CR (Koch and MacDonald, 2000). The theory
of asymmetric information argues that it may be impossible to distinguish good
borrowers from bad borrowers (Auronen, 2003), which may result in adverse selection
and moral hazards problems. Adverse selection and moral hazards have led to substantial
accumulation of non‐performing accounts in banks (Bester, 1994; Bofondi and Gobbi,
2003). The very existence of banks is often interpreted in terms of its superior ability to
overcome three basic problems of information asymmetry, namely ex ante, interim and
ex post (Uyemura and Deventer, 1993). The management of CR in banking industry
follows the process of risk identification, measurement, assessment, monitoring and
control. It involves identification of potential risk factors, estimate their consequences,
monitor activities exposed to the identified risk factors and put in place control measures
to prevent or reduce the undesirable effects. This process is applied within the strategic
and operational framework of the bank.
Several risk‐adjusted performance measures have been proposed (Heffernan,

1996; Kealhofer, 2003). The measures, however, focus on risk‐return trade‐off, i.e.
measuring the risk inherent in each activity or product and charge it accordingly for the
capital required to support it. This does not solve the issue of recovering loanable
amount. Effective system that ensures repayment of loans by borrowers is critical in
dealing with asymmetric information problems and in reducing the level of loan losses,
thus the long‐term success of any banking organization (Basel, 1999; IAIS, 2003).
Effective CRM involves establishing an appropriate CR environment; operating under a
sound credit granting process; maintaining an appropriate credit administration that
involves monitoring process as well as adequate controls over CR (Basel,
1999; Greuning and Bratanovic, 2003; IAIS, 2003). It requires top management to ensure
that there are proper and clear guidelines in managing CR, i.e. all guidelines are properly
communicated throughout the organization; and that everybody involved in CRM
understand them.

Considerations that form the basis for sound CRM system include: policy and strategies
(guidelines) that clearly outline the scope and allocation of a bank credit facilities and
the manner in which a credit portfolio is managed, i.e. how loans are originated,
appraised, supervised and collected (Basel, 1999; Greuning and Bratanovic, 2003)has
been recommended by, among others, Derban et al. (2005). The recommendation has
been widely put to use in the banking sector in the form of credit assessment. According
to the asymmetric information theory, a collection of reliable information from
prospective borrowers becomes critical in accomplishing effective screening.
The assessment of borrowers can be performed through the use of qualitative as well as
quantitative techniques. One major challenge of using qualitative models is their
subjective nature (Bryant, 1999; Chijoriga, 1997). However, borrowers attributes
assessed through qualitative models can be assigned numbers with the sum of the values
compared to a threshold. This technique is termed as “credit scoring” (Heffernan,
1996; Uyemura and Deventer, 1993). The technique cannot only minimize processing
costs but also reduce subjective judgments and possible biases (Kraft, 2000;Bluhm et al.,
2003; Derban et al., 2005). The rating systems if meaningful should signal changes in
expected level of loan loss (Santomero, 1997). Chijoriga (1997)concluded that
quantitative models make it possible to, among others, numerically establish which
factors are important in explaining default risk, evaluate the relative degree of
importance of the factors, improve the pricing of default risk, be more able to screen out
bad loan applicants and be in a better position to calculate any reserve needed to meet
expected future loan losses.
Clear established process for approving new credits and extending the existing credits
has been observed to be very important while managing CR (Heffernan, 1996). Further,
monitoring of borrowers is very important as current and potential exposures change
with both the passage of time and the movements in the underlying variables
(Donaldson, 1994; Mwisho, 2001), and also very important in dealing with moral hazard
problem (Derban et al., 2005). Monitoring involves, among others, frequent contact with
borrowers, creating an environment that the bank can be seen as a solver of problems and

trusted adviser; develop the culture of being supportive to borrowers whenever they are
recognized to be in difficulties and are striving to deal with the situation; monitoring the
flow of borrower's business through the bank's account; regular review of the borrower's
reports as well as an on‐site visit; updating borrowers credit files and periodically
reviewing the borrowers rating assigned at the time the credit was granted (Donaldson,
1994; Treacy and Carey, 1998; Tummala and Burchett, 1999; Mwisho, 2001).
Tools like covenants, collateral, credit rationing, loan securitization and loan syndication
have been used by banks in developing the world in controlling credit losses (Benveniste
and Berger, 1987; Greenbaum and Thakor, 1987; Berger and Udell, 1992; Hugh, 2001).
It has also been observed that high‐quality CRM staffs are critical to ensure that the
depth of knowledge and judgment needed is always available, thus successfully
managing the CR in the CBs (Koford and Tschoegl, 1997;Wyman, 1999). Donaldson
(1999) and Jeremy and Stein (1999) observed that computers are useful in credit
analysis, monitoring and control, as they make it easy to keep track on trend of credits
within the portfolio. Marphatia and Tiwari (2004) argued that risk management is
primarily about people – how they think and how they interact with one another.
Technology is just a tool; in the wrong hands it is useless. This stresses further the
critical importance of qualified staff in managing CR. presents a summary of the CRM
system as explained in the literature.

CHAPTER-THREE
JANATA BANK LTD. OVERVIEW

3.1 History of the Bank

JANATA bank confined is the second one largest kingdom owned business financial
institution in Bangladesh. Right away after the liberation of Bangladesh in 1971, the
erstwhile United bank constrained and Union bank restrained constrained had been renamed
as JANATA bank. The hooked up of JANATA bank became happened underneath the
Bangladesh bank order 1972. It was integrated as a public confined organization on 21, may
also 2007 vide certificate of incorporation No-C66933 (4425)07 in the early generation of
privatization. The financial institution has taken over the business of JANATA bank at a buy
attention of Tk. 2594.90 million as a going problem via a vendor settlement signed among the
Ministry of Finance of the Peoples’ Republic of Bangladesh and the Board of directors on
behalf of JANATA financial institution restrained on 15 November 2007. The operation of
JANATA financial institution confined restricted works via 910 branches and along with four
remote places branches at United Arab Emirates and a subsidiary enterprise named JANATA
alternate enterprise in Italy. it is related 1204 overseas correspondents everywhere in the
international.
3.2 Vision, Values, Mission & Objective of JBL
3.2.1 Vision
Become the effective largest commercial bank in Bangladesh to support socio- economic
development of the country and to be a leading bank in south Asia.
3.2.2 Values
Professionalism Diversity
Growth Accountability
Values
Integrity
Dignity

3.2.3 Mission
JANATA bank constrained restricted will be an effective enterprise financial institution

through maintaining a robust growth approach by retaining, handing over high first-rate
financial products, imparting remarkable customer support via an skilled management group
and make sure true corporate governance in every step of banking community.
3.2.4 Objective
The bank plays a vital role in socio-economic development of Bangladesh

A) Agro credit.
B) Micro credit
C) SME Credit
D) Project loan (Industrial credit)
E) General Loan
• Maximize income through client pride and contributing in national

economic system.
• Doing forex and trade to uphold the countrywide interest and stability of
trade in choose of Bangladesh.
• Blocking off all types of unlawful monitory sports with emphasis on cash
laundering as per govt. commands and Bangladesh financial institution
Circul
• Brining new technology based high high-quality customer support and

merchandise through IT such as ATM. ONE prevent provider, on line
BANKING credit score AND DEBIT CARD, computerized CLEARING
house FACILITY.
Giving nice merchant financial institution carrier to the client and maintaining wholesome
portfolio

3.3 Core operations
Janata bank restricted, the second biggest commercial bank in Bangladesh, has a licensed
capital of Tk. 30000 Million, paid up capital of Tk. 19140 Million in 2016. The financial
institution has a total asset of Tk. 779601.54 Million as on 31st December 2016. Without
delay after the emergence of Bangladesh in 1971, the erstwhile United bank limited and
Union financial institution restrained were nationalized and renamed as Janata financial
institution limited. Janata financial institution confined operates thru 910 (up to 2016)
branches along with four remote places branches at United Arab Emirates. It's far linked with
1233 overseas correspondents everywhere in the world. The bank personnel 13188 thousand
(As on 31.03.2017) humans.
The undertaking of the financial institution is to actively take part in the socio- economic
improvement of the country through running a commercially sound banking employer,
offering credit to possible debtors, correctly added and cost-effective, concurrently protecting
depositors finances and offering a nice go back on fairness to the owners.
The Board of directors consists of 15 (fifteen) participants headed by means of a MD. The
directors are representatives from both public and personal sectors.
The bank is headed via the handling Director (chief government), who's a reputed banker.
The corporate head workplace is placed at Dhaka with 35 (thirty five) Devision.
3.4 Future Outlook
The global financial meltdown caused a spillover effect in the economy around the world.
The efficacy of policy tools and their applications in managing systematic crises were
challenged. These almost inevitably compelled the policy makers and financial sectors
supervisors to revisit their policy choices.

JBL is well positioned to meet the challenges of 2017 and will continue to strive to innovate
and capture opportunity for growth and value creation.
Against the backdrop for achieving the short and the long terms goals JBL will concentrate
the focus on the following:
• JBL is well meet the challenges of 2017 and will strive to achieve the opportunity for
growth.
• Continued to launch new deposit, loan products and innovative services.
• Kept on expansion of branch network in rural and urban area.
• The bank will give more emphases on green banking, corporate social responsibility,
financial inclusion etc.
• Continued the employees’ database and borrowers’ database.
• Shifting of branches and renovation will be continued at commercial important

location.

3.4.1 Recent performance of JBL
Major Achievement in 2013 to 2017
Recently The Bank has been recognized internationally and domestically for Its good
performance.
Name of Awards Presented by Year
Tax card sonmanona-2016 Internal Resources division, MoF, GoB. 2016
ICMAB Best Corporate The Institute of Cost and Management 2015

Award-“2015” Accountants of Bangladesh.
School Banking Award Hon’able Governor of BB 2015
National Award forCorporate The Institute of Chartered Accountants of 2014

Bangladesh(ICAB)
‘ICMAB Best Corporate The Institute of Cost and Management 2014

Award – 2014’ Accountants of Bangladesh.
‘ICMAB Best Corporate The Institute of Cost and Management 2015

Award – 2015’ Accountants of Bangladesh.
National Award for Best The Institute of Chartered Accountants of 2014
Presented Annual Report Bangladesh(ICAB)
SAARC Anniversary Merit South Asian Federation of Accounts(SAFA) 2014

Award for Corporate
Governance Disclosure
Bangladesh Domestic Asian Banking and Finance 2015
technology and Operations
Bank of the year
Bangladesh Domestic Trade Asian Banking and Finance 2013
and Finance Bank of the year
Performance Excellence CITI Bank N.A 2013
Award 2013
Foreign Remittance Award Ministry of Expatriates’ Welfare and 2014
Overseas employment’ Bangladesh
Foreign Remittance Award Ministry of Expatriates’ Welfare and 2012
Overseas employment’ Bangladesh
International Award "World's Best Bank Award-2009 in 2009
Bangladesh
World’s Best Bank Award New York Based “Global Finance” 2009
Highest Remittance Collecting Financial Daily ‘The Industry’ 2008
Bank Award

It may be noted here that Janata Bank Limited has been working hard in improving the
customer services in recent times by introducing a number of IT-based reform measures
3.5 Management Hierarchy of the Bank
3.5.1 Board of Directors

The Board of directors is composed of 13 individuals headed with the aid of a chairman and
the administrators made out of representatives from both public and private sectors and
shareholders. The bank is headed via the dealing with Director (chief executive) who is a
reputed professional Banker.
3.5.2 Organizational Structure of Janata bank limited
Chairman
Managing Director
Deputy Managing Director
General Manager
Assistant General Manager
Manager
Senior Executive Officer
Executive Officer
Figure-3.1 Organizational Structure of Janata bank limited

3.6 Comparative Financial Highlights of JBL
(BDT in million unless stated otherwise)
Increase/
Particulars 2016 2015 (Decrease) Change%
Income Statement
Total revenue 54,528.08 55,678.82 (1,150.74) (2.07%)
Total expenses 44,489.80 44,958.32 (468.52) (1.04%)
Operating profit 10,038.28 10,720.50 (682.22) (6.36%)
Profit before tax 3,650.16 6,560.05 (2,909.89) (44.36%)
Profit after tax 2,605.48 4,807.88 (2,202.40) (45.81%)
Earnings per share 13.61 25.12 (11.51) (45.81%)
Net interest margin (NIM) 566.60 (3,327.53) 3,894.13 117.03%
Assets & Liabilities
Total assets 778,603.91 690,667.66 87,936.25 12.73%
Total loans and advances 403,037.42 349,861.30 53,176.12 15.20%
Property, plant and equipment 10,573.26 10,033.61 539.65 5.38%
Total deposit 641,819.15 568,911.14 72,908.01 12.82%
Shareholders’ equity 49,889.66 49,547.44 342.22 0.69%
Capital
Paid up capital 19,140.00 19,140.00 - -
Capital maintained 43,189.82 37,128.33 6,061.49 16.33%
Risk weighted assets (RWA) 404,088.92 365,625.15 38,463.77 10.52%
Capital required 40,408.89 36,562.52 3,846.38 10.52%
Capital to risk weighted asset ratio (CRAR) 10.69% 10.16% 0.53% -
Share Information
Earnings per share (EPS) 13.61 25.12 (11.51) (45.81%)
Net assets value per share (NAVPS) 260.66 258.87 1.79 0.69%

Net operating cash flow per share 103.13 145.87 (42.74) (29.30%)
(NOCFPS)
Number of Share 191.40 191.40 - -
Regulatory Ratio
Cash reserve requirement (CRR) 6.74% 6.49% 0.24% -
Statutory liquidity ratio (SLR) 35.95% 39.38% (3.43%) --
Capital to risk weighted asset ratio (CRAR) 10.69% 10.16% 0.53% -
Credit deposit ratio 62.80% 61.50% 1.30% -
Asset Quality
Earning assets 605,444.04 548,634.47 56,809.57 10.35%
Amount of classified loans and advances 59,359.80 43,181.70 16,178.10 37.47%
% of classified loans and advances 14.73% 12.34% 2.39% 19.33%
Required provision for loans and advances 23,565.50 20,361.50 3,204.00 15.74%
Provision maintained for loans and 23,817.06 20,445.27 3,371.79 16.49%

advances
Classified other assets 2,790.45 2,682.01 108.44 4.04%
Classified investment 222.05 187.22 34.83 18.60%
Total Classified Asset 62,372.30 46,050.93 16,321.37 35.44%
Source: Annual Report 2016

Table 3.1: Comparative Financial Highlights of JBL
Graphical Presentation of financial highlights of JBL.
Operating Profit (BDT in Million)

20,000 14,534 12
12,137 10,683 10,720 10,038
13
10,000
14
0 15
12 13 14 15 16
16

Net Profit After Tax(BDT in Million)

20,000 15,280
12
9,551
13
10,000 3,813 4,808
2,605
14
0 15
12 13 14 15 16
16
Net Interest Income(BDT in Million)

10,000 6,740 12
3,328 13
5,000 1,977 2,250
576 14
0 15
12 13 14 15 16
16
Earning Per share (BDT in Million)

200 139 12
86
13
100
20 25 14 14
0 15
12 13 14 15 16
16
Total Asset (BDT in Million)
1,000,000 778,604 12
628,415 690,668
511,129 586,083
13
500,000
14
0 15
12 13 14 15 16 16

Shareholders' Fund(BDT in Million)

49,547
50,000 37,116 39,547 40,190
12
17,477 13
14
0 15
12 13 14 15 16
16
Regulatory Capital (BDT in Million)

43,190
50,000 34,301 36,468 37,128 12
13
11,780
14
0 15
12 13 14 15 16
16
Capital to Risk Weighted Asset Ratio(CRAR) (%)

20 12
10 10 10 11
13
10 4
14
0 15
12 13 14 15 16
16
Net asset (BDT in Million) 49,890

49,547
50,000 37,116 39,456
12
17,477 13
14
0 15
12 13 14 15 16
16
Source: Annual Report 2016

Graph 3.1: Graphical Presentation of financial highlights of JBL

Deposits:
Janata Bank authorized total deposit of BDT 486124589.53 crore as of December 31, 2013 as
compared to BDT 385170551.66 crore in 2012. It’s indicated janata bank reserve has
increased FY2013 than reserve of FY2012.
Table Deposit and Deposit Mix:
Year Deposits
2013 297494287.63
2014 330880443.55
2015 385170551.07
2016 486124583.33
600000000
486124583.3
500000000
400000000 385170551.1
330880443.6
297494287.6
300000000
200000000
100000000
0
2013 2014 2015 2016
Graph 2.1: Deposits of Four Years (TK. In Crore)

Investment:
Investment of Janata bankis increasing year by year. So we can see customers are interested
to Janata Bank ltd for getting higher return.
Year Investment
2013 77719798.39
2014 97490860.22
2015 77303763.44
2016 122185295.7
140000000
122185295.7
120000000
97490860.22
100000000
77719798.39 77303763.44
80000000
60000000
40000000
20000000
0
2013 2014 2015 2016
Graph 2.2: Investments of Four years Tk. In Crore

3.7 Corporate Social Responsibilities (CSR)
Businesses should make a positive contribution to economic, environmental and social

progress with a view to achieving sustainable development and that businesses have a
responsibility to avoid and address the adverse impacts of their operations. Corporate Social
Responsibility (CSR) is the integration of business operations and values whereby the
interests of all stakeholders including customers, employees, investors, the community, and
the environment are reflected in the company’s policies and actions. The focus of Janata
bank’s CSR strategy is to help drive value for the Bank, its customers, shareholders,
employees, communities and society by creating business value and promoting positive social
change. The strategy is integrated into the core business objectives and competencies of the
organization, and embedded in day-to-day business culture and operations. JBL take
initiatives within some obligations by Bangladesh Bank and the Government. This is why,
JBL adheres to the following obligations.
A. Legal obligations
• For mainstreaming CSR in banks and financial institutions in Bangladesh, Bangladesh Bank
issued DOS Circular No. 1, dated: 1 June 2008 directing to voluntary engagements in
promoting equitable, sustainable development.
• The Government has prescribed 22 areas of CSR in schedule-Kha in Bangladesh Gazette

published on 1 July 2010.
• Aligning with the two, JBL has formulated its own CSR policy and been practicing CSR
accordingly
B. Moral obligations
• Ensure human welfare by integrating people, planet and profit.
• Stretch helping hands to the handicapped people in order that they could no longer be the
burden of the society.
• Bring out the marginal and poor people from the vicious circle of the money-lenders and
NGOs.

• Contribute to the development of educational infra-structure for building an educated

nation.
C. Social obligations
• The term “social”, in CSR is often taken to refer to the content of the responsibility.
• It identifies a field which, in the board sense, indicates duties to society as a whole,
sometimes excluding economic responsibilities and environmental responsibilities.
JBL has characterized its CSR activities and contributed the significant amount of the yearly
allocated budget in the following sectors:
1. Education & Research

2. Health & Treatment
3. Poverty reduction & rehabilitation
4. Combat against natural calamity
5. A try to bring the marginal farmers and the poor out of the grip of loan
6. Preservation of history-tradition, culture and sports
7. Preservation of environment
8. Expansion
9. Invention
10. Others.
CSR Budget and Contribution

400
350
350
310
291.5
300
250
250
200 Budget
138.42 Contribution
150
111.37
100 100
100
50 22.4
9.13
0
2012 2013 2014 2015 2016
Figure3.2: CSR activities of Janata Bank Limited of 2016
3.8 Information of Branches
Number of Branches
List of Branches (Grade/Category wise)
SL Category of Office/ Branches Number
01. Special Corporate 02
02. Corporate -1 Branches 28
03. Corporate -2 Branches 77
04. Grade - 1 Branches 209
08. Overseas Branches 04

Total 910
Table 3.2 Number of Branches

2.4: District wise JBL Branches in Bangladesh
JBL Branches as per Location
SL Category of Office/ Branches Number

01. Urban Branches 419
02. Rural Branches 487

03. Overseas Branches 04
Total 910
Table 3.3: List of Branches (Grade/Category wise)

Newly Open Branches in 2016
SL Name of Branches Location Opening

Date
01. Chuknagar Khilna 30-05-2016
02. West Mukterpur Munshigonj 30-11-2016
3.9 Function of JANATA Bank Limited as a Commercial bank
Collecting deposit ,
Lending loan , Honouring
General cheque Creation of medium
function of exchange, Discounting
bills, Money transfer etc.
Creation of savings and

Development formation of capital, helps
function export and import business,
Investment in development
sector, HR development etc.
Function of
Janata Bank
Receive and payment as the
representative of clients,
Representative selling of share and
function securities,
Transaction of foreign
Service currencies, information
function sharing, Consulting and
others service functions.
Figure 3.3: Function of Janata Bank Limited
3.9.1 Other Services of Janata Bank Limited.

Beside everyday banking operation, Janata bank confined offers specialised services to
unique walks of customers/corporations for the duration of the below the network of utility
offerings, customers of different executive. Companies, corporate bodies, neighborhood
bodies, academic establishments, college students, and many others are becoming vital
blessings from the financial institution continuously.

The utility services of Janata Bank Limited’s are:

 Bills Collection
 Payment Made on Behalf of Government
 Services Areas
3.9.1.1 Bills Collection

Accumulating the gasoline bills of Titas, Bakhrabad and Jalalabad gasoline Transmission
and Distribution groups. Regular collection of energy bills of Dhaka energy supply Authority,
Dhaka electricity organization, Bangladesh energy improvement Board and Rural
Electrification Board. Often collects the phone payments of Telegraph and smart phone
Board. Collects Water/Sewerage bills of Water and Sewerage Authority. Municipal
protecting tax of city company/ Municipalities is gathered by means of JBL.
3.9.1.2 Payment Made on Behalf of Government
• Payment of non- Govt. teacher’s salaries

• Providing girl Students scholarship/stipend & Primary Student Stipend
• Provides army pension
• Payment of widows, divorcees and destitute women allowances
• Old-age Allowances
• Food procurement Billslp
3.10: Empirical Analysis of Financial Performance of JBL
JBL's Significant Achievements:
JBL is one of the leading state owned commercial bank in the country in terms of
profitability, asset quality, capital adequacy, product diversification and service portfolio etc.
Inspite of persisting numerous challenges in overall banking sector, the bank has been
performed successfully. The major achievements in key areas during 2016 are given below:

• Operating profit achieved BDT 10,038.29 million and after tax profit BDT 2,605.48
million;
• Deposit raised to BDT 641,819.15 million which was BDT 568,911.14 in previous
year;
• Loans & Advances raised to BDT 403,037.41 million which was BDT 349,861.30 in
previous year and the growth is 15.20 percent;
• Capital to Risk Weighted Asset Ratio (CRAR) raised to 10.69 percent against
10.6256 percent prescribed by Bangladesh Bank under BASEL-III framework;
• Realized BDT 6,401.50 million in cash from classified loans and BDT 1,111.00
million from written-off loans.
• During 2016, the bank deposited approximately BDT 9,056.37 million as corporate
tax and collected tax.
Operating Profit and net profit
In 2016, operating profit stood at BDT 10,038.29 million. Operating Profit did not come up
to the expected level due to increase of operating expenses and a huge amount of interest
could not be considered as income. The operating profit was marginally higher in the
previous year, i.e., BDT 10,720.50 million.
Operating and Net profit
12000
2,605
10720
10038
10000
8000
10,038
6000 4808 Operating Profit
4000 Net profit

2605
2000
0
2015 2016
Graph 3.2: Compare between Operating and Net profit of JBL.

Interest Income
During the year, the interest income of the bank increased by BDT 1,242.73 million or 4.05
percent to BDT 31,897.90 million from BDT 30,655.17 million of the previous year.
Interest Expenses
In 2016, the bank paid the total interest amounting to BDT 31,331.30 million which is 7.80
percent lower than that of the preceding year.
Net Interest Margin (NIM)

During the year, the net interest margin (NIM) of the bank increased by BDT 3,894.10
million to BDT566.60 million from BDT (3,327.50) million of theprevious year.
Net Interest Margin (NIM) (BDT in million)
3328
3500
3000
2500
2000
1500
1000 567
500
0
2015 2016
Graph 3.3: Compare between Net Interest Margin of JBL.
Investment income
The investment income of the bank came to BDT 16,597.90 million from 18,260.44 million
of 2015, which is 9.10 percent lower than that of preceding year. This negative position was
mainly due to lower investments portfolio.
Non Interest Income
The non-interest income consists of the commission, fees, exchange and other operating
income of the bank. Total non-interest income of the bank experienced a negative growth of

10.81 percent i.e. from 6,763.21 million of 2015 to BDT 6,032.29 million in 2016.
Commission and exchange income decreased by BDT 780.72 million (15.66) percent during
the year 2016 mainly due to lower volume of import and export business as well as lower
remittance inflow during 2016.
Deposits
Overall deposits of the bank increased by 12.82 percent and stood at BDT 641,819.15 million
at the end of 2016. The savings deposits increased to BDT 1,37,840.78 million from BDT
114,590.51 million of the preceding year showing a growth of 20.29 percent. The low cost
deposit includes savings deposit, current deposit and short term deposit. This helps to bring
the ratio of high cost and low cost deposit to 54:46 which is considered as standard level.
This growth is facilitated by extended branch network and expected service provided to
customers as well as special initiatives carried out for mobilization of cost free and low cost
deposits during the year.
Deposit Mix in 2016
21.19% Current and other accounts;

136,013million
21.48% Saving deposits; 137,841million

13.81% Short notice deposits (SND); 88,662 million
43.52% Fixed deposit receipt (FDR); 279,344

million
Loans & Advances

Loans & Advances increased by BDT 53,176.11 million during the year 2016 and stood BDT
403,037.41 million which was BDT 349,861.30 million in 2015 showing a sustainable
growth of 15.20 percent over the previous year. Concentration of loans and advances was
well managed and details of concentration are given at notes to the financial statements.

450000 403037
400000 349461
350000 305340 319773
285748
300000
250000
200000
150000
100000
50000
0
2012 2013 2014 2015 2016
Graph 3.4: Compare between Loans & Advances of JBL

Recovery of Classified Loan
The target for total cash recovery against classified loans was BDT 12,000 million for 2016.
The bank was able to recovered BDT 6,401.50 million to December 2016 which is 53.35
percent of the recovery target.
Recovery of Write off Loan
Bank also cash recovered BDT 1,111.00 million from write off loans. Because, JBL
management was very much concern and proactive about recovery of write off loans from the
beginning of the reporting year. So, keeping eye on the recovery of the broad spectrum of
default loans, bank designed various action plans and took all out efforts to ease classified
loans and increased cash recovery as well.
Business Review
Industrial Financing
Bangladesh is progressing through the industrialization process in various sectors, leaving

behind the identity of under developed country to developing country. In order to achieve
sustainable growth, JBL is working hard and has given due focuses on entertaining large

corporate house with skilled and dedicated team under Corporate Customer Department
CCD-1 & CCD-2.
In 2016, JBL has disbursed BDT 1,266.30 million in different industrial sector. The table
shows the Industrial loan mix is given below:
Industrial Financing (BDT in Million)
Sectors Loan Outstanding Total Loan Disbursement
Food & Beverage 513.50 -
RMG & Textile 24,541.90 875.00
Paper & Printing 2,367.10 -
Pharmaceuticals 4,799.00 -
Others 24,940.30 391.30
Total Disbursement 57,161,80 1,266.30
Import Financing
During the year, import trade stood at BDT 126,650 million against 147,182 million at the
end of 2015. The summary of import financing for the year 2016 and 2015 are given below:
BDT in million
Particulars 2016 2015 Change (%)
Import 126,650 147,182 (13.95)
Export Financing
The major share of countries earnings comes from export of Readymade Garments.
Considering the growth of export in line with JBL's priority to serve the customers with better
service, a department named Foreign Trade Department is working with a specialized team to
support the emerging Readymade Garments and Textiles sector. Now JBL has a sizable
portfolio in export financing. Our all Authorized Dealers (AD) are well equipped to serve

country's export oriented industries. In the year 2016, export business of JBL stood at BDT
154,454 million against BDT 145,374 million of 2015. The summary of export for the years
2016 and 2015 are given below:
BDT in million
Particulars 2016 2015 Change (%)
Export 154,454 145,374 6.25
SME Financing
SMEs play a vital role in any economy in terms of employment, income generation,
alleviation of poverty and development of local markets and supply chain. Its also develop
local products services for local needs using local resources. Keeping this in the mind, JBL
has formulated a comprehensive policy for SME financing under the guidelines of
Bangladesh Bank and made significant progress in financing this sector with a view to
developing a balanced and dynamic industrial sector having a strong base of SMEs
throughout the country. JBL puts its continuous efforts by participating in various road
shows, workshop, forums and fairs to build awareness among the customers as well as
building capacity of the SME officials. To ensure vibrant native economy by financing in the
SME sector, JBL is working relentlessly and has disbursed BDT 95,108.41 million in favor
of various SME entrepreneurs in 2016.
Foreign Remittance
JBL has set up an independent department named as Foreign Remittance Department (FRD)
that exclusively handle payment and distribution of all foreign remittances to the branches.
FRD has assigned a dedicated and hard-working team that relentlessly provide prompt
service to ensure payment on due time. On-line foreign remittance system has been
established at FRD. Foreign Remittance Payments for account credit and instant cash have
been made through this on-line EFT system within the same day or within shortest possible
of time. Janata bank has Taka Drawing Arrangements (TDA) with 79 Exchange
companies/banks in different countries i.e. UAE, USA, Saudi Arabia, Malaysia, Kuwait,
Bahrain, Oman, Singapore, UK, Qatar, Greece, Spain, South Korea and Mauritius. 910
domestic branches of JBL are making cash payment of web-based remittance through

renowned exchange Co. like RIA, Western Union, Money Gram, Xpress Money, Trans-fast,
IME, Prabhu, Merchantrade, EzRemit, Placid, NBL Quick Pay, Cash Express, City Pay, NEC
Money Transfer, Speed Cash and U-Remit instantly.
In 2016, the bank achieved total inward foreign remittance of BDT 90,081.80 million that
represents 8.45 percent share of total national remittance in Bangladesh.
16 JBL SHILPA NAGARI

Janata Bank is the second the largest commercial bank in Bangladesh. It starts its journey in
1971 after the independent of Bangladesh by combining the erstwhile United Bank Limited
and Union Bank limited under the Banks Nationalization order (Presidents Order No.26) of
1972. On 15 November , 2007 Janata Bank got registered and restructured as a public Ltd.
Company with the name of Janata Bank Limited. Now JBL has 910 branches all over the
country, Shilpa Nagari Branch is one of them. Shilpa Nagari Branch starts its journey on 15
September 1998. It situated at Rafi complex (1st Floor), Shilpa Nagari,Rangpur.
3.17 Corporate Profile of Shilpa Nagari Branch

Name of the Branch ShilpaNagari Branch
Branch Code 0534
Location Janata Bank Limited
Rafi complex (1st Floor),
Shilpa Nagari, Rangpur
Established 15 September 1998
deposits BDT 65,81,24,323.03

Investment BDT 16,56,32,598.56
No. of man power 16
No of Depositor 579
No. of Borrower 9040
Web/Email
Phone number 0521-63605

3.18 Organizational Structure of Shilpa Nagari Branch
Branch Manager
Assistant Manager
Executive Officer (EO)
Assistant Executive Officer (AEO)
Assistant Executive Officer –Teller
Supporting Staff
Figure: Organizational Structure of Shilpa Nagari Branch

3.19 Credit Facilities Provided by Shilpa Nagari Branch

As on 21 November, 2016 Shilpa Nagari Branch’s number of clients who have received
Credit facilities are given bellow:
Types of Loans and Advances Number of Borrower
Cash Credit 60
Agriculture Loan 393
Staff Motorcycle loan 14
Staff Computer Loan 18

Staff House Building Loan 26
Secured Overdraft (SOD) 68
Table: Number of Borrower of Shilpa Nagari Branch.
3.20 Deposit collected by Shilpa Nagari Branch

As on 21 November, 2016 the number of depositor of JBL, Shilpa Nagari Branch is as
follows:
Types of Deposit Number of Deposit
Current Deposit 656
Fixed deposit 179
Double Benefit Scheme 44
Monthly Benefit Scheme 20
Monthly AmanathProkolpo 250
School Banking Saving Account 54
JBDS 127
JBSPS 4
JBLRSS 4
JBMSS 18
JBSDS 60
Saving Bank Account 7580
Special Notice Deposit 43
Table:Number of Depositor of Shilpa Nagari Branch

3.21 Deposit collected by Shilpa Nagari Branch

As on 21 November, 2016 the number of depositor of JBL, Shilpa Nagari Branch is as
follows:
Types of Deposit Deposit Amount (tk)
Current Deposit 13,54,23,247.85
Fixed deposit 5,52,31,705
Double Benefit Scheme 1,66,66,989
Monthly Benefit Scheme 45,00,000
Monthly AmanathProkolpo 1,94,16,222
School Banking Saving Account 1,43,105
JBDS 1.20,20,877
JBSPS 38,963
JBLRSS 26,66,662
JBMSS 10,53,726
JBSDS 90,80,149
Saving Bank Account 32,17,37,775.79
Special Notice Deposit 7,80,65,711.14
Table: Deposit position of Shilpa Nagari Branch
3.22 Number of Employee of Shilpa Nagari Branch

Profile Number of Employee
Manager 1
Assistant Manager 1
Executive Officer 2
Assistant Executive Officer 4
Assistant Executive Officer-Teller 6
Supporting Staff 2
Total 16

3.23 Loan and Advance Offered by Shilpa Nagari Branch
• Cash Credit (CC

• Agriculture Loan
• Staff Motorcycle loan
• Staff Computer Loan
• Staff House Building Loan
• Secured Overdraft (SOD

CHAPTER-FOUR
CONCEPT OF CREDIT RISK MANAGEMENT AND

GUIDELINES PROVIDED BY BANGLADESH BANK

4.1 Credit Risk

Credit risk is a risk due to uncertainty in counterparty’s ability to meet its obligation. There
are many types of counterparty’s obligations ranging from individuals to sovereign
governments. Risk is inherent in all aspects of commercial operation. However for banks and
financial institution, credit risk is an essential factor that needs to be managed. Credit risk is
the possibility that a borrower counter party will fail to meet its obligations in accordance
with agreed terms. Credit risk, therefore, arises from the banks dealing with or lending to
corporate, individuals and other banks or financial institutions.
Factors Related with Credit
• Risk
• Time
• Interest rate
• Security or Collateral
• Operating Expense
• Legal Considerations
• Inflation
• Finance Charge
4.2Credit Risk Management

The goal of credit risk management is to maximize a bank’s risk adjusted rate of return by
maintaining credit risk exposure within acceptable parameters. Bank need to manage the
credit risk exposure inherent in the entire portfolio as well as the risk in individual credit or
transactions. Bank should consider the relationship between credit risk and other risk. The
effective management of credit risk is a critical component of a comprehensive approach to
risk management and essential to the long term success of any banking organization.
Assessing Credit risk an institution must consider three issues:
Default Probability
Credit Exposure
Recovery Rate

4.3 Objectives of Credit Risk Management
There are some objectives behind a written credit risk management of Janata Bankthat are as
follows:
• To provide a guideline for giving loan.

• Quick response to the customer need.
• Shorten the procedure of giving loan.
• Reduce the volume of work from top level management.
• Handing over of authority of work from top level of management.
• To check and balance the operational activities.
4.4 Types of Credit Risk Management
Credit risk can be classified in the following way:
Credit default risk- The risk of loss arising from a debtor being unlikely to pay its loan
obligations in full or the debtor is more than 90 days past due on any material credit
obligation. Default risk may impact all credit-sensitive transactions, including loans,
securities and derivatives.
Concentration risk - The risk associated with any single exposure or group of exposures with
the potential to produce large enough losses to threaten a bank's core operations. It may arise
in the form of single name concentration or industry concentration.
Country risk - The risk of loss arising from sovereign state freezing foreign currency
payments (transfer/conversion risk) or when it defaults on its obligations (sovereign risk).
4.5 Principle of credit Risk management

The management of credit risk is essential to a sound credit management process, the basic
principles a bank has to follow in its credit risk management are:
Background, Character and ability of the borrowers

Purpose of the facility
Term of facility

Safety and Security

Profitability
Source of repayment
Diversity of loan portfolio
4.6 Under credit risk management the following tasks are also done
Collect all relevant data from different models and information systems for analyzing
risk.
Assess the quality, completeness and correctness of all relevant data needed to analyze
risks.
Highlight risky portfolios and deficiencies of the bank on timely manner with
recommendations and suggestions.
Analyze data through preparation of paper named risk management paper.
Identify, evaluate, control and monitor major risks in line with the standard set in the
policy guideline to avoid necessary loss and ensure the banks in pricing
all risk correctly .
Review market conditions and take precautionary measures towards facing abnormal
market situation.
Ensure through independent oversight that different risks are identified, evaluated,
monitored and reported within the established risk management frame work.
4.7 Tools used in Credit Risk Management

The quality of the credit portfolio of banks depends to large extent on the quality of its
borrower.
To judge the quality of a borrower the bank s takes into consideration the following:
a) Character: It refers to the willingness of the customers to pay.

b) Capacity: The customer’s ability to meet credit obligations.
c) Capital: The customer’s financial reserves
d) Collateral: Adequate net worth to support for the loan
e) Conditions(economic)Recent trends in borrower line of credit
f) Compliance( law & regulations)

4.8 Definition of Credit Risk Grading (CRG)
The Credit Risk Grading (CRG) is a collective definition based on the pre- specified scale
and reflects the underlying credit-risk for a given exposure.
A Credit Risk Grading deploys a number/ alphabet/ symbol as a primary summary indicator
of risks associated with a credit exposure.
Credit Risk Grading is the basic module for developing a Credit Risk Management system.
4.9 Use of Credit Risk Grading
Janata Bank Ltd. applies the following credit risk grading matrix as provided by Bangladesh
Bank guidelines.
Risk Rating Grade Definition

Superior-Low 1 Facilities are fully secured by cash deposits,
Risk government bonds or a counter guarantee from a top tier
international bank. All security documentation should
be in place.
Good- 2 The repayment capacity of the borrower is strong. The
Satisfactory borrower should have excellent liquidity and low
Risk leverage. The company should demonstrate consistently
strong earnings and cash flow and have anJBL
enmeshed track record. All security documentation
should be in place. Aggregate Score of 95 or greater
based on the Risk Grade Scorecard.
Acceptable – 3 Adequate financial condition though may not be able to
Fair Risk sustain any major or continued setbacks. These
borrowers are not as strong as Grade 2 borrowers,
but should still demonstrate consistent earnings, cash
flow and have a good track record. A borrower should
not be graded better than 3 if realistic audited financial
statements are not received. These assets would
normally be secured by acceptable collateral (1st charge
over stocks / debtors / equipment / property). Borrowers
should have adequate liquidity, cash flow and earnings.

An Aggregate Score of 75-94 based on the Risk Grade

Scorecard.
Marginal- 4 Grade 4 assets warrant greater attention due to
Watch list conditions affecting the borrower, the industry or the
economic environment.
These borrowers have an above average risk due to
strained
liquidity, higher than normal leverage, thin cash flow
and/or
inconsistent earnings. Facilities should be downgraded
to 4 if the borrower incurs a loss, loan payments
routinely fall past due, account conduct is poor, or other
untoward factors are present.
An Aggregate Score of 65-74 based on the Risk Grade
Scorecard.
Special 5 Grade 5 assets have potential weaknesses that
Mention deserve
management’s close attention. Facilities should be
downgraded to 5 if sustained deterioration in
financial condition is noted (consecutive losses,
negative net worth, excessive leverage), if loan
payments remain past due for 30-60 days, or if a
significant petition or claim is lodged against the
borrower. Full repayment of facilities is still expected
and interest can still be taken into profits. An Aggregate
Score of 55-64 based on the Risk Grade Scorecard.
Substandard 6 Financial condition is weak and capacity or inclination
to repay is in doubt. Loans should be downgraded to 6
if loan payments remain past due for 60-90 days, if the
customer intends to create a lender group for debt
restructuring purposes, the operation has ceased trading
or any indication suggesting the winding up or closure
of the borrower is discovered. An Aggregate Score of

45-54 based on the Risk Grade Scorecard.

Doubtful and 7 Full repayment of principal and interest is unlikely and
Bad the possibility of loss is extremely high. However, due
(non- to specifically identifiable pending factors, such as
performing) litigation, liquidation procedures or capital injection,
the asset is not yet classified as Loss. Assets should be
downgraded to 7 if loan payments remain past due in
excess of 90 days, and interest income should be taken
into suspense (nonaccrual). Loan loss provisions must
be raised against the estimated unrealizable amount of
all facilities.
The adequacy of provisions must be reviewed at least
quarterly on all non-performing loans, and the bank
should pursue legal options to enforce security to obtain
repayment or negotiate an appropriate loan
rescheduling. In all cases, the requirements of
Bangladesh Bank in CIB reporting, loan rescheduling
and provisioning must be followed. An Aggregate
Score of 35-44 based on the Risk Grade Scorecard
Loss 8 Assets graded 8 are long outstanding with no
(non- progress in
performing) obtaining repayment (in excess of 180 days past due) or
in the late stages of wind up/liquidation. The prospect
of recovery is poor and legal options have been
pursued. The proceeds expected from the liquidation or
realization of security may be awaited.
The continuance of the loan as a bankable asset is not
warranted, and the anticipated loss should have been
provided for.
Bangladesh Bank guidelines for timely write off of bad
loans
must be adhered to. An Aggregate Score of 35 or less
based on the Risk Grade Scorecard

Source: (Focus Group on Credit Risk Management, (2005), Credit Risk Management:
Industry Best Practices, Managing Core Risks of Financial Institutions, Bangladesh Bank)
If any facility is to be downgraded, the RM prepares The Early Alert Report and it is duly
forwarded to the higher authority for approval. After approval, the report is forwarded to
Credit Administration, who is responsible to ensure the correct facility/borrower Risk Grades
are updated on the system.
4.10 Credit Risk Management Process

The Credit Risk Management Division is vital for the efficient functioning of JBL. It
critically scrutinizes the credit proposals from risk weighted point of view before sanctioning
approvals ensuring a high quality credit portfolio. The goal of credit riskmanagement is to
maximize a bank's risk-adjusted rate of return by maintaining creditrisk exposure within
acceptable parameters. Banks need to manage the credit riskinherent in the entire portfolio as
well as the risk in individual credits or transactions.
The credit risk management process of Janata Bank Ltd. covers the following tasks:
a) Credit Processing/Appraisal
b) Credit Approval/Sanction
c) Credit Documentation
d) Credit Administration
e)Disbursement
f) Monitoring and Control of Individual Credits
g) Monitoring the Overall Credit Portfolio (stress testing)
h) Credit Classification
i) Disbursement of Loan
j) Classified Loans
k) Recovery of Loan
a. Credit Processing/Appraisal
Credit processing is the stage where all required information on credit is gathered
andapplications are screened. Credit application forms should be sufficiently detailed
topermit gathering of all information needed for credit assessment at the outset. In

thisconnection, financial institutions should have a checklist to ensure that all

requiredinformation is, in fact, collected. Financial institutions should set out pre-
qualificationscreening criteria, which would act as a guide for their officers to determine the
typesof credit that are acceptable. For instance, the criteria may include rejectingapplications
from blacklisted customers. These criteria would help institutions avoidprocessing and
screening applications that would be later rejected. The next stage tocredit screening is credit
appraisal where the financial institution assesses thecustomer’s ability to meet his obligations.
Institutions should establish well designedcredit appraisal criteria to ensure that facilities are
granted only to creditworthycustomers who can make repayments from reasonably
determinable sources of cashflow on a timely basis.
As a general rule, the appraisal criteria will focus on:
-amount and purpose of facilities and sources of repayment;
-integrity and reputation of the applicant as well as his legal capacity toassume the credit
obligation;
-risk profile of the borrower and the sensitivity of the applicable industrysector to economic
fluctuations;
-physical inspection of the borrower’s business premises as well as thefacility that is the
subject of the proposed financing;
-current and forecast operating environment of the borrower;management capacity of
corporate customers.
b. Credit Approval/Sanction
A financial institution must have in place writtenprocess and the approval authorities of
individuals or committees as well as the basisof those decisions. Approval authorities should
be sanctioned by the board ofdirectors. Approval authorities will cover new credit appcredits,
and changes in terms and conditions of previously approved credits,particularly credit
restructuring, all of which should be fully documented andrecorded. Prudent credit practice
requires that persons empowered withapproval authority should not also have the customer
relationship responsibility.Depending on the size of the financial institution, it should develop
a corps of creditrisk specialists who have high level expertise and experience and
demonstratejudgment in assessing, approving and managing credit risk. An accountability
regimeshould beestablished for the decisiontrail of decisions taken, with proper identification
of individuals/committees involveAll this must be properly documented.

c. Credit Documentation
Documentation is an essential part of the credit process and is required for each phaseSof the
credit cycle, including credit application, credit analysis, credit approval, creditmonitoring,
and collateral valuation, and impairment recognition, foreclosure ofimpaired loan and
realization of security. The format of credit files must bestandardized and files neatly
maintained with an appropriate system of cross-indexingto facilitate review and follow
up.The Bangladesh Bank will pay particular attention to the quality of files and thesystems in
place for their maintenance. Documentation establishes the relationshipbetween the financial
institution and the borrower and forms the basis for any legal action in a court of law.
Institutions must ensure that contractual agreements with their borrowers are vetted by their
legal advisers. For security reasons, financial institutions should consider keeping only the
copies of critical documents (i.e., those of legal value, facility letters, and signed loan
agreements) in credit files while retaining the originals in more secure custody. Credit files
should also be stored in fire-proof cabinets and should not be removed from the
institution’spremises. Financial institutions should maintain a checklist that can show that all
their policies and procedures ranging from receiving the credit application to the
disbursement of funds have been complied with. The checklist should also include the
identity of individual(s) and/or committee(s) involved in the decision-making process.
d. Credit Administration
The Credit Administration function is critical in ensuring that proper documentation and
approvals are in place prior to the disbursement of loan facilities. For this reason, it is
essential that the functions of Credit Administration be strictly segregated from Relationship
Management/Marketing in order to avoid the possibility of control being compromised or
issues not being highlighted at the appropriate level. A financial institution’s credit
administration function should, as a minimum, ensure that
:
-Credit Administration procedures should be in place to ensure the following. credit files are
neatly organized, cross-indexed, and their removal from the premises is not permitted;
-the borrower has registered the required insurance policy in favor of the bank and is
regularly paying the premiums;
-credit facilities are disbursed only after all the contractual terms and conditions have been
met and all the required documents have beenreceived;
-collateral value is regularly monitored;

-the borrower is making timely repayments on interest, principal and any agreed to fees and
commissions;
-the established policies and procedures as well as relevant laws and regulations are complied
with; and
-On-site inspection visits of the borrower’s business are regularly conducted and assessments
documented.
e. Disbursement
Once the credit is approved, the customer should be advised of the terms and conditions of
the credit by wa5y of a letter of offer. The duplicate of this letter should be duly signed and
returned to the institution by the customer. The facility disbursement process should start
only upon receipt of this letter and should involve,inter alia, the completion of formalities
regarding documentation, the registration of collateral, insurance cover in the institution’s
favor and the vetting of documents by algal expert. Under no circumstances shall funds be
released prior to compliance withpre-disbursement conditions and approval by the relevant
authorities in the financial institution.
f. Monitoring and Control of Individual Credits

To safeguard financial institutions against potential losses, problem facilities need to be
identified early. A proper credit monitoring system will provide the basis for taking prompt
corrective actions when warning signs point to deterioration in the financial health of the
borrower. Examples of such warning signs include unauthorized drawings, arrears in capital
and interest and deterioration in the borrower’s operating environment. Financial institutions
must have a system in place to formally review the status of the credit and the financial health
of the borrower at least once a year. More frequent reviews (e.g at least quarterly) should be
carried out of large credits, problem credits or when the operating environment of the
customer is undergoing significantchanges. In broad terms, the monitoring activity of the
institution will ensure that:
-funds advanced are used only for the purpose stated in the customer’s credit application;
-financial condition of a borrower is regularly tracked and management advised in a timely
fashion;
-collateral coverage is regularly assessed and related to the borrower’s financial health;
-The institution’s internal risk ratings reflect the current condition of the customer.

g. Monitoring the Overall Credit Portfolio (stress testing)

An important element of sound credit risk management is analyzing what could potentially
go wrong with individual credits and the overall credit portfolio if conditions/environment in
which borrowers operate change significantly. The results of this analysis should then be
factored into the assessment of the adequacy of provisioning and capital of the institution.
Such stress analysis can reveal previously undetected areas of potential credit risk exposure
that could arise in times of crisis. Possible scenarios that financial institutions should consider
in carrying out stress testing include:
-Significant economic or industry sector downturns;
-Adverse market-risk events; and
-Unfavorable liquidity conditions.
Financial institutions should have industry profiles in respect of all industries where they
have significant exposures. Such profiles must be reviewed /updated every year. Each stress
test should be followed by a contingency plan as regards recommended corrective actions.
Senior management must regularly review the results of stress tests and contingency plans.
The results must serve as an important input into a review of credit risk management
framework and setting limits and provisioning levels.
h. Credit Classification
It is required for the board of directors of a financial institution to “establish credit risk
management policy, and credit impairment recognition and measurement policy, the
associated internal controls, documentation processes and information systems;”Credit
classification process grades individual credits in terms of the expected degree of
recoverability. Financial institutions must have in place the processes and controls to
implement the board approved policies, which will, in turn, be in accord with the proposed
guideline. They should have appropriate criteria for credit provisioning and write off.
International Accounting Standard 39 requires that financial institutions shall, in addition to
individual credit provisioning, assess credit impairment and ensuing provisioning on a credit
portfolio basis. Financial institutions must, therefore, establish appropriate systems and
processes to identify credits with similar characteristics in order to assess the degree of their
recoverability on a portfolio basis. Financial institutions should establish appropriate systems
and controls to ensure that collateral continues to be legally valid and enforceable and its net
realizable value improperly determined. This is particularly important for any delinquent
credits, before netting off the collateral’s value against the outstanding amount of the credit

for determining provision. As to any guarantees given in support of credits, financial

institutions must establish procedures for verifying periodically the net worth of the
guarantor.
i. Classified Loans
Banks are financial service firm, producing and selling professional management of the
public’s funds as well as performing many other roles in the economy. But now-days
commercial banks are not performing their activities smoothly for a large burden of default
loan. Every year Janata Bank distributes thousand core taka among individuals, organizations
etc. but a large sum of these distributed fund cannot be recovered in due time. The Bank has
to classify this loan.
-Signs for Classification
First and foremost requirement for any and all credit managers is to identify problem credit in
its earlier stages by recognizing the signs of deterioration. Such signs include but not limited
to the following:
-Non-payment of interest or principal or both on due dates or past dues beyond reasonable
period or recurring past dues.
-In case of Overdraft no movement in the account beyond a reasonable period.
-Deterioration in financial condition of the client, as gathered from client’s latest financial
statement.
-A shortfall in collateral coverage, particularly if the collateral was a key factoring the
decision-making.
-Death or withdraw of key-owners or management personnel.
-Company filing for bankruptcy or voluntary dissolution.
-Adverse market report about the company itself or its principal owners.
-Loan Classification Guidelines from Bangladesh Bank
Classification of overdue loans and advances opened a new era in the credit management of
commercial banks in Bangladesh. Before 1989 no specific guidelines were followed by the
commercial banks for this purpose. In 1989, Bangladesh Bank issued BCD circular
No.34/1989 stating specific rules and conditions of loan classification. After that each
schedule banks except BKB, RAKUB, and BSB would-be responsible for its own loan
classification according to the guidelines ispresented in the following table:

Loan Classification Systems
Length of overdue Status of classification Rate of

provision
All loans except Annual provision

Agricultural loans
Less than 1 year Unclassified 1%
Loans overdue for 1 year but less Substandard 10%
than 3
Years
Loans overdue for 3 years but less Doubtful 50%
than 5
years
Loans overdue for 5 years or more Bad/loss 100%
For agricultural loan: Classified, substandard, 5%

Loans not overdue for 5 years or Doubtful
more
Loans overdue for 5 years or more Bad/ loss 100%
Table – 7 Loan Classification Systems

*Source: BCD Circular no. 34/1989
According to this circular loans and advances were classified on a loan by loan basis rather
sample classification. This process was continued till 1994. Bangladesh Bank further issued a
circular in1995 (BCD circular#20/1994). The title of the circular was “Revised rules of
classification and provisioning of loans and advances,” which came into implementation from
January 1, 1995

Sector wise Loans and Advances are shown below:
Year 2013 2014 2015

Jute Industries 12367204.30 17075000 6220295.71
Jute Trade 224059.14 319354.84 214381.72

Tannery (Industry & 7144892.47 6347446.24 5510752.69
Trade)
Textile (Industry & 7611021.51 10016155.91 10487231.18
Trade)
Transport 41935.48 42741.94 43279.57
Steel & Engineering 2980779.57 3664650.54 3580107.53
Tea 117876.34 118951.61 119220.43

Sugar Mills 3981182.81 5094220.43 5016397.85
House Building 2032392.47 1558467.74 2004166.67
Rural Credit 17278091.41 19594354.84 21978763.44

Bricks 1617338.71 1918682.81 2019489.25
Cold Storages 89650.54 383064.52 643145.16
Food (Industry 2207930.11 2547983.87 2802419.35
&Trade)
Export Credit 25648790.32 37992607.53 51338172.04
Import Credit 43958064.52 70913978.49 81496908.60
Industrial Credit 30069986.56 53836021.51 55848118.31

Others 66703534.92 71508951.66 97183951.65
Total 223600806.45 303403225.81 346506720.43s

The Recovery procedure of Janata Bank is the ultimate combination of time, effort of money.
It follows several procedural steps to recover the lending amount, which isjoint effort of
Bank, society and legal institutions. There are several programs taken by the bank to recover
the disbursed loans. They are discussed hereafter.
j. Programs for Loan Recovery

When Janata Bank sanctions loans and advances to its customers, they clearly state the
repayment pattern in the loan agreement. But some credit holders do not pay their credit in
due period. The nationalized and private sector commercial banks have to face this sort of
problems. This situation is especially severe in Janata Bank. To overcome the problem of
overdue loan, the bank needs to take some particular loan recovery programs. They are:
1.Establishing credit supervision and monitoring cell in the bank

2.Re-structuring the loan sanctioning and distributing policy of the bank
3.Sanctioning loans and advances against sufficient securities as best as possible
4.Giving more powers to the branch manager in credit management decision-making process
5.Offering a package of incentives to the sound borrowers
6.Giving more emphasis on short term loans and advances
7.Imposing restrictions on loans and advances for sick industries
8.Taking legal actions quickly against unsound borrowers as best as possible within the
period specified by the law of limitations.
-Steps for Loan Recovery Against Defaulters

The following steps are taken by Janata Bank Ltd against the defaulters for recovery of loan:
Emending the party to repay the loan after validity dates:

First of all, the Credit Administration division reminds the borrower about the remaining days
to repay the loan mentioning the validity dates from time to time.
i. Send final notice: If the borrower fails to repay the loan within the sanctioned period for
repayment then he or she is given an additional period for the repayment of the loan attaching
a final notice for the repayment as well.

ii. Send legal notice: When the borrower fails to repay the loan even after the additional
period and the final notice, the credit administration of JBL sends algal notice to the borrower
mentioning that if he or she is not capable to repay the loan within a specific time then the
bank will file a suit in the court against him or her.
iii. Eventually sue a case against the party: Finally, the bank, not getting any repayment
from the borrower, suits a case against the defaulter according to the respective law. Then the
decision of the court will be final for the recovery process and both the party and bank will
have to abide by the law. These are the general procedures for recovery of loan followed by
Janata Bank Ltd.
Amendment of section 13 of Act N.14 of 1991: In section 13 of the said Act- the words
"previous financial year", wherever they are mentioned, the words "accounting year" the
following explanation shall be added, namely: - "For the purpose of this section, demand
liabilities and temporary liabilities shall not include the paid-up capital, the consolidated
fund, the liabilities shown in the profit and loss account and loans received from the
Bangladesh Bank and interbank liabilities."
INDUSTRY BEST PRACTICES AS SUGGESTD BY BANGLADESH BANK
4.11 Policy Guidelines

This section details fundamental credit risk management policies that are recommended for
adoption by all banks in Bangladesh. The guidelines contained herein outline general
principles that are designed to govern the implementation of more detailed lending
procedures and risk grading systems within individual banks.
Lending Guidelines:
All banks should have established Credit Policies (“Lending Guidelines”) that clearly outline
the senior management’s view of business development priorities and the terms and
conditions that should be adhered to in order for loans to be approved. The Lending
Guidelines should be updated at least annually to reflect changes in the economic outlook and
the evolution of the bank’s loan portfolio, and be distributed to all lending/marketing officers.
The Lending Guidelines should be approved by the Managing Director/CEO & Board of
Directors of the bank based on the endorsement of the bank’s Head of Credit Risk

Management and the Head of Corporate/Commercial Banking. (Section 2.1 of these

guidelines refers) Any departure or deviation from the Lending Guidelines should be
explicitly identified in credit applications and a justification for approval provided. Approval
of loans that do not comply with Lending Guidelines should be restricted to the bank’s Head
of Credit or Managing Director/CEO & Board of Directors. The Lending Guidelines should
provide the key foundations for account officers/relationship managers (RM) to formulate
their recommendations for approval, and should include the following:
Industry and Business Segment Focus:

The Lending Guidelines should clearly identify the business/industry sectors that should
constitute the majority of the bank’s loan portfolio. For each sector, a clear indication of the
bank’s appetite for growth should be indicated (as an example, Textiles: Grow, Cement:
Maintain, Construction: Shrink). This will provide necessary direction to the bank’s
marketing staff.
Types of Loan Facilities:

The type of loans that are permitted should be clearly indicated, such as Working Capital,
Trade Finance, Term Loan, etc.
Cross Border Risk:

Risk associated with cross border lending. Borrowers of a particular country may be unable
or unwilling to fulfill principle and/or interest obligations. Distinguished from ordinary credit
risk because the difficulty arises from a political event, such as suspension of external
payments
o Synonymous with political & sovereign risk
o Third world debt crisis. For example, export documents negotiated for
countries like Nigeria.
4.12 Credit Assessment & Risk Grading
• Credit Assessment
A thorough credit and risk assessment should be conducted prior to the granting of
loans, and at least annually thereafter for all facilities. The results of this assessment

should be presented in a Credit Application that originates from the relationship

manager/account officer (“RM”), and is approved by Credit Risk Management
(CRM). The RM should be the owner of the customer relationship, and must be held
responsible to ensure the accuracy of the entire credit application submitted for
approval. RMs must be familiar with the bank’s Lending Guidelines and should
conduct due diligence on new borrowers, principals, and guarantors. It is essential that
RMs know their customers and conduct due diligence on new borrowers, principals,
and guarantors to ensure such parties are in fact who they represent themselves to be.
All banks should have established Know Your Customer (KYC) and Money
Laundering guidelines which should be adhered to at all times. Credit Applications
should summaries the results of the RMs risk assessment and include, as a minimum,
the following details:
o Amount and type of loan(s) proposed.
o Purpose of loans.
o Loan Structure (Tenor, Covenants, Repayment Schedule, Interest)
o Security Arrangements.
In addition, the following risk areas should be addressed:
• Borrower Analysis:
The majority shareholders, management team and group or affiliate companies should
be assessed. Any issues regarding lack of management depth, complicated ownership
structures or intergroup transactions should be addressed, and risks mitigated Industry
analysis.
• Supplier/Buyer Analysis. Any customer or supplier concentration should be

addressed, as these could have a significant impact on the future viability of the
borrower.
• Historical Financial Analysis. An analysis of a minimum of 3 years historical

financial statements of the borrower should be presented. Where reliance is placed on
a corporate guarantor, guarantor financial statements should also be analyses. The
analysis should address the quality and sustainability of earnings, cash flow and the

strength of the borrower’s balance sheet. Specifically, cash flow, leverage and
profitability must be analyzed.
• Projected Financial Performance: Where term facilities are being proposed,

projection of the borrower’s future financial performance should be provided,
indicating an analysis of the sufficiency of cash flow to service debt repayments.
Loans should not be granted if projected cash flow is insufficient to repay debts.
• Account Conduct: For existing borrowers, the historic performance in meeting

repayment obligations (trade payments, cheques, interest and principal payments, etc)
should be assessed.
• Adherence to Lending Guidelines: Credit Applications should clearly state whether

or not the proposed application is in compliance with the bank’s Lending Guidelines.
The Bank’s Head of Credit or Managing Director/CEO should approve Credit
Applications that do not adhere to the bank’s Lending Guidelines.
.
• Loan Structure: The amounts and tenors of financing proposed should be justified
based on the projected repayment ability and loan purpose. Excessive tenor or amount
relative to business needs increases the risk of fund diversion and may adversely
impact the borrower’s repayment ability.
• Security: A current valuation of collateral should be obtained and the quality and
priority of security being proposed should be assessed. Loans should not be granted
based solely on security. Adequacy and the extent of the insurance coverage should be
assessed.
• Name Lending: Credit proposals should not be unduly influenced by an over reliance
on the sponsoring principal’s reputation, reported independent means, or their
perceived willingness to inject funds into various business enterprises in case of need.
These situations should be discouraged and treated with great caution. Rather, credit
proposals and the granting of loans should be based on sound fundamentals,
supported by a thorough financial and risk analysis. Appendix iv contains a template
for credit application.
• Risk grading

All Banks should adopt a credit risk grading system. The system should define the
risk profile of borrower’s to ensure that account management, structure and pricing
are commensurate with the risk involved. Risk grading is a key measurement of a
bank’s asset quality, and as such, it is essential that grading is a robust process. All
facilities should be assigned a risk grade. Where deterioration in risk is noted, the
Risk Grade assigned to a borrower and its facilities should be immediately changed.
Borrower Risk Grades should be clearly stated on Credit Applications. The following
Risk Grade Matrix is provided as an example. The more conservative risk grade
(higher) should be applied if there is a difference between the personal judgment and
the Risk Grade Scorecard results. It is recognized that the banks may have more or
less Risk Grades; however, monitoring standards and account management must be
appropriate given the assigned Risk Grade:
4.13 Approval Authority, Segregation of Duties & Internal Audit
Approval Authority
The authority to sanction/approve loans must be clearly delegated to senior credit executives
by the Managing Director/CEO & Board based on the executive’s knowledge and experience.
Approval authority should be delegated to individual executives and not to committees to
ensure accountability in the approval process. The following guidelines should apply in the
approval/sanctioning of loans:
• Credit approval authority must be delegated in writing from the MD/CEO & Board
(as appropriate), acknowledged by recipients, and records of all delegation retained in
CRM.
• Delegated approval authorities must be reviewed annually by MD/CEO/Board.
• The credit approval function should be separate from the marketing/relationship

management (RM) function.
• The role of Credit Committee may be restricted to only review of proposals i.e.
Recommendations or review of bank’s loan portfolios.

• Approvals must be evidenced in writing, or by electronic signature. Approval records

must be kept on file with the Credit Applications.
• All credit risks must be authorized by executives within the authority limit delegated
to them by the MD/CEO. The “pooling” or combining of authority limits should not
be permitted.
• Credit approval dshould

within be
the centralize
CRM function. Regional credit
centers may be established, however, all large loans must be approved by the Head .
• Credit and Risk Management or Managing Director/CEO/Board or delegated Head

Office credit executive.
• The aggregate exposure to any borrower or borrowing group must be used to

determine the approval authority required.
• Any credit proposal that does not comply with Lending Guidelines, regardless of
amount, should be referred to Head Office for Approval.
• MD/Head of Credit Risk Management must approve and monitor any cross border
exposure risk.
• Any breaches of lending authority should be reported to MD/CEO, Head of Internal

Control, and Head of CRM.
Segregation of Duties
Banks should aim to segregate the following lending functions:

o Credit Approval/Risk Management
o Relationship Management/Marketing
o Credit Administration

The purpose of the segregation is to improve the knowledge levels and expertise in each
department, to impose controls over the disbursement of authorized loan facilities and obtain
an objective and independent judgment of credit proposals.
Internal Audit
Banks should have a segregated internal audit/control department charged with conducting
audits of all departments. Audits should be carried out annually, and should ensure
compliance with regulatory guidelines, internal procedures, and Lending Guidelines and
Bangladesh Bank requirements.
4.14 Preferred organizational structure & responsibilities

The appropriate organizational structure must be in place to support the adoption of the
policies detailed in Section 1 of these guidelines. The key feature is the segregation of the
Marketing/Relationship Management function from Approval / Risk Management
/Administration functions. Credit approval should be centralized within the CRM function.
Regional credit centers may be established, however, all applications must be approved by
the Head of Credit and Risk Management or Managing Director /CEO Board or delegated
Head Office credit executive.
Key Responsibilities
The key responsibilities of the above functions are as follows:
Credit Risk Management (CRM)
o Oversight of the bank’s credit policies, procedures and controls relating to all credit
risks arising from corporate/commercial institutional banking, personal banking, &
treasury operations.
o Oversight of the bank’s asset quality.
o Directly manage all Substandard, Doubtful & Bad and Loss accounts to maximize
recovery and ensure that appropriate and timely loan loss provisions have been made.

o To approve (or decline), within delegated authority, Credit Applications

recommended by RM. Where aggregate borrower exposure is in excess of approval
limits, to provide recommendation to MD/CEO for approval.
o To provide advice/assistance regarding all credit matters to line management/ RMs.
o To ensure that lending executives have adequate experience and/or training in order to
carry out job duties effectively.
o Credit Administration:
o To ensure that all security documentation complies with the terms of approval and is
enforceable.
o To monitor insurance coverage to ensure appropriate coverage is in place over assets
pledged as collateral, and is properly assigned to the bank.
o To  control loan d
been met, and all security documentation is in place.
o To maintain control over all security documentation.
o To monitor borrower’s compliance with covenants and agreed terms and conditions,
and general monitoring of account conduct/performance.
Relationship Management/Marketing (RM)
o To act as the primary bank contact with borrowers.

o To maintain tho
regular contact, factory/warehouse inspections, etc. RMs should proactively monitor
the financial performance and account conduct of borrowers.
o To be responsible for the timely and accurate submission o
new proposals and annual reviews, taking into account the credit assessment
o To highlight any deterioration in borrower’s financial standing and amend the
borrower’s Risk Grade in a timely manner. Changes in Risk Grades should be advised
to and approved by CRM.
o To seek assistance/advice at the earliest from CRM regarding the structuring of
facilities, potential deterioration in accounts or for any credit related issues. Internal
Audit/Control

o Conducts independent inspections annually to ensure compliance with Lending

Guidelines, operating procedures, bank policies and Bangladesh Bank directives.
Reports directly to MD/CEO or Audit committee of the Board.
4.15 Procedural guidelines

This section outlines of the main procedures that are needed to ensure compliance with the
policies contained in Section 1.0 of these guidelines.
4.16Approval Process
The approval process must reinforce the segregation of Relationship Management/ Marketing
from the approving authority. The responsibility for preparing the Credit Application should
rest with the RM within the corporate/commercial banking department. Credit Applications
should be recommended for approval by the RM team and forwarded to the approval team
within CRM and approved by individual executives. Banks may wish to establish various
thresholds, above which, the recommendation of the
Head of Corporate/Commercial Banking is required prior to onward recommendation to
CRM for approval. In addition, banks may wish to establish regional credit centres within the
approval team to handle routine approvals. Executives in head office CRM should approve all
large loans. The recommending or approving executives should take responsibility for and be
held accountable for their recommendations or approval. Delegation of approval limits should
be such that all proposals where the facilities are up to 15% of the bank’s capital should be
approved at the CRM level, facilities up to 25% of capital should be approved by CEO/MD,
with proposals in excess of 25% of capital to be approved by the EC/Board only after
recommendation of CRM, Corporate Banking and MD/CEO.
Credit Administration
The Credit Administration function is critical in ensuring that proper documentation and
approvals are in place prior to the disbursement of loan facilities. For this reason, it is
essential that the functions of Credit Administration be strictly segregated from Relationship
Management/Marketing in order to avoid the possibility of controls being compromised or
issues not being highlighted at the appropriate level. Credit Administration procedures should
be in place to ensure the following:

Disbursement:
Security documents are prepared in accordance with approval ter
enforceable. Standard loan facility documentation that has been reviewed by legal counsel
should be used in all cases. Exceptions should be referred to legal counsel for advice based
on authorization from an appropriate executive in CRM. Disbursements under loan facilities
are only be made when all security documentation is in place. CIB report should
reflect/include the name of all the lenders with facility, limit & outstanding. All formalities
regarding large loans & loans to Directors should be guided by Bangladesh Bank circulars &
related section of Banking Companies Act. All Credit Approval terms have been met.
Custodial Duties:
Loan disbursements and the preparation and storage of security documents should be
centralized in the regional credit centers. Appropriate insurance coverage is maintained (and
renewed on a timely basis) on assets pledged as collateral. Security documentation is held
under strict control, preferably in locked fireproof storage.
Compliance Requirements:
All required Bangladesh Bank returns are submitted in the correct format in a timely manner.
Bangladesh Bank circulars/regulations are maintained centrally, and advised to all relevant
departments to ensure compliance. All third party
service providers (value’s, lawyers,
insurers, CPAs etc.) are approved and performance reviewed on an annual basis. Banks are
referred to Bangladesh Bank circular outlining approved external audit firms that are
acceptable.
4.17 Incentive Program

Banks may wish to introduce incentive programs to encourage Recovery Unit (RU) Account
Managers to bring down the Non-Performing Loans (NPLs).
The table below shows an indicative incentive plan for RU account managers:

Recovery as a % of Recommended Incentive as % of net recovery

Principal plus interest amount
If CG 7-8 if written off

76% to 100% 1.00% 2.00%
51% t0 75% 0.50% 1.00%
20% to 50% 0.25% 0.50%

CHAPTER - 5
ANALYSES & FINDINGS

5.1(a)Financial strength Analysis of JBL

We want to measure the financial strength of the relationship between the independent
variables and the dependent variable. There were five years financial data of JBL. We want to
draw the multiple regression model of Net Profit versus Risk Weighted Asset (RWA),
Expenses and Investment. The following data were:
(BDT in Million)
Variables 2016 2015 2014 2013 2012

Net Profit after Tax 2605.48 4807.88 3818.15 9551.39 (15280.34)
Risk Weighted Asset 404088.92 365625.15 354202.50 333923.30 318980.32
(RWA)
Expenses 44489.80 44958.32 45709.66 42944.75 34981.83
Investment 233274.87 219150.10 196713.53 193269.66 108342.04
Table: Five year’s Financial Data of JBL.
Particulars:
Risk Weighted Asset (RWA) (m), X1
Total Expenses (m), X2
Investment (m), X3
Net Profit after Tax (m), Y
The general form of the multiple regression equation with three independent variables is:
Y=a+b1X1+b2X2+b3X3
Where,
Y is dependent variable that is net profit after tax,
a is the Y-intercept,
b2 is the coefficient of X2,

X1 is the total Risk Weighted Asset(RWA)
X2 is the total expenses,
X3 is the total Investment
Results from MINITAB:
Regression Analysis: Net Profit versus,total Risk Weighted Asset (RWA), Total
Expenses,total Investment. Coefficients
Regression Analysis: Net Profit After Tax versus Risk ... ses, Investment
Analysis of Variancejo
Source DF Adj SS Adj MS F-Value P-Value
Regression 3 351830765 117276922 10.39 0.223
Risk Weighted Asset(RWA) 1 67457584 67457584 5.98 0.247
Total Expenses 1 30555 30555 0.00 0.967
Investment 1 49386370 49386370 4.38 0.284
Error 1 11286792 11286792
Total 4 363117557
Model Summary
S R-sq R-sq(adj) R-sq(pred)
3359.58 96.89% 87.57% 0.00%

Coefficients
Term Coef SE Coef T-Value P-Value VIF
Constant 39916 54981 0.73 0.600
Risk Weighted Asset(RWA) -0.275 0.113 -2.44 0.247 4.78
Total Expenses -0.07 1.27 -0.05 0.967 11.00
Investment 0.325 0.155 2.09 0.284 20.17
Regression Equation
Net Profit After Tax = 39916 - 0.275 Risk Weighted Asset(RWA) - 0.07 Total Expenses
+ 0.325 Investment
Fits and Diagnostics for Unusual Observations
Net Profit
Obs After Tax Fit Resid Std Resid
1 -15280 -14952 -329 -1.00 X

X Unusual X
Regression Equation
Net Profit after Tax (m) = 39916 - 0.275 Risk Weighted Asset (RWA) - 0.07 Total Expenses
+ 0.325 Investment
The Regression equation is:
Y= 39916-0.275X1-0.07X2+0.325X3
that is, Net Profit after Tax = 39916-0.275×Risk Weighted Asset (RWA)
-0.07 × Total Expenses + 0.325 × Investment
The intercept value is 39916 if the value of all independentvariable is zero then net profit is
39919.

The value of b1 is -0.275 indicates that holding otherfactors remaining constant, if the risk
weighted Asset increases by 1 unitof measurement, the net profit would go down by 0.275
unitof measurement.
The value of b2 is -0.07 indicates that holding otherfactors remaining constant, if the
expenses increases by 1unit of measurement, the net profit would go down by0.07 unit of
measurement.
The value of b3 is0.325 indicates that holding otherfactors remaining constant, if the
investment increases by 1 unit ofmeasurement, the net profit would go up by0.325 unit
ofmeasurement.
Credit RiskManagement Performance of Janata Bank Ltd (Trend and Ratio Analysis)
5.1(b)Trend Analysis of Total loan and Advances
Table-1: Total loan and Advances
Year Amount (BDT in million)
2012 257801
2013 305339
2014 285757
2015 319773
2016 349861
Source:Annual report of JBL 2012-2016

Total Loan and Advances

Total Loan and Advances 349861
319773
305339 285757
257801
2012 2013 2014 2015 2016
Figure: 5.1 Trend of Total loan and Advances
Interpretation: The above graphical presentation indicate that the amount f total loan and
advances of JBL in the year of 2012-2016 was respectively BDT
257801,305339,285757,319737,349861 TK (million).Over the five from 2012-2016 almost
all the years the amount of loan and advances has been increased without 2014. So it can be
said that there is an increasing trend over the last five years in the total loan facility provided
by the JBL.
5.2 Total required provision for Total loans and advances:
Table-2 Total required provision for Total loans and advances
Year Required provision(Amount in

BDT in million)
10,612.53
2012
34,012.05
2013
21,961.78
2014
23,909.15
2015
20,361.50
2016
Source: Annual report of JBL 2012-2016

5.2 Trend of required provision for Total loans and advances
40,000.00
34,012.05
35,000.00
30,000.00
23,909.15
25,000.00 21,961.78
20,361.50
20,000.00 Required provision(Amount in
BDT in million)
15,000.00
10,612.53
10,000.00
5,000.00
0.00
2012 2013 2014 2015 2016
Figure: 5.2 Total required provision for Total loans and advances
Interpretation: From the above graph we can see that the provision against total loan and
advances is unstable. It means that credit risk is not stable which also indicate less emphasis
on loan and advances. The higher provision was in the year is 2013 the amount of it was
34,012.05 million.
5.3 Trend of Classified Loans and recovery
Table-3: Classified loan and Recovery
year Classified loan(Amount in Recovery(Amount in

BDT in million) BDT in million)
15040 7234
2012
53201 35735
2013
31766 23400
2014
37375 28400
2015
43181 34150
2016

60000
53201
50000
43184
40000 35735 37375
31766 34150
30000
Classified Loans
23400
20000 15040 18700 Recovery
10000 7234
0
2012
2013
2014
2015
2016
Figure5.3: Trend of Classified Loans and recovery
Interpretation: From the graph we can see that the classified loan of JBL has been increased
and the recovery of loan is also increased except 2013. It indicates that the CRM of JBL is
stable. The higher classified loan and recovery was 2013.
5.4 Provision against Classified Loans & Advances
Provision against Classified Loans

35000 31771.65
30000
25000 19015.33 21434.72

17670.8
20000
Provision against Classified
Loans
15000
8175.17
10000
5000
0
2012 2013 2014 2015 2016
Figure-5.4 Trend of Classified Loans and recovery

Interpretation: From the above graph we can see there are unstable trend in the provision
against the classified loan of JBL in the last five years. That means in the last five years they
emphasis less on classified loans and advances. We see that in the year 2013 the amount of
provision was 31771million and the next year the amount was 19015.and the provision was
higher in 2013.
5.4.1 Trend of % of Doubtful:
Table-4: Trend of % of Doubtful
Year classified loan and Doubtful(BDT in % of Doubtful

Advance (BDT in million)
million)
53201 8081 15.19
2013
31766 4296 13.52

2014
37375 4212 11.27

2015
43181 3708 8.59

2016
Source: Annual report of 2012-2016
15.19
% of Doubtful
16 13.52
14 11.27
12
8.59
10
8
% of Doubtful
6
4
2
0
2013 2014 2015 2016
Figure5.4.1Trend of % of Doubtful

Interpretation: As we know that doubtful amount of classified loans advances is highly

questionable and improbable to collect or recover the higher percentage of it represents the
bad image and higher risk of liquidity and bankruptcy. In this Graph, it Shows that the
amount of doubtful amounts are decreasing. In the year of 2013, doubtful amount is the
highest and that is 15.19%. It gradually reduces and represents 113.52%, 11.27 % and 8.59%
for the year respectly. The trends of doubtful amount in this graph focus the good
performances of credit risk management which ensure the highest profitability and reduce the
risk of liquidity.
5.4.2 Trend of % of Loss:
Table-5: Trend of % of Loss
Year classified loan and Loss(BDT in % of Loss

Advance (BDT in million)
million)
53201 32162 60.45
2013
31766 20394 64.20

2014
37375 27980 74.86

2015
43181 28725 66.52

2016

% of Loss
74.86
64.2 66.52
80 60.45
60
40 % of Loss
20
0
2013 2014 2015 2016
Figure 5.4.2 Trend of % of Loss
Interpretation: The figure shows the both tendency of occurring loss. First three years, the
percentage of loss of classified loans and advances increased from 60.455 to 74.86%. It
indicates that the management of credit was higher risky and that loss of classified Loans and
Advances reduced the asset of the Janata Bank Ltd. And it affected the profitability of JBL.
But in the year of 2016, The authority emphasized on the credit risk management which
reduced the risk and loss . As a result of the percentage of loss decreased (66.52%) compared
the highest loss of (74.86%) in the year of 2015 through it was also higher than the year of
2013(60.45%) and 2014 (64.2%). After all we can hope it graduality does well as loss is
deckling.
5.4.3 Percentage of credit risk under risk weighted asset (RWA)
Year Credit %of Market %of Operational %of Total Risk

Risk credit risk Risk market Risk operational Weighted
to risk to risk to asset
Weighted Weighted Weighted
asset asset asset
2015 283437 80% 37055 10% 33710 10% 354202

2016 308650 84% 22906 6% 34068 10% 365625

Percentage of all risk under risk weighted asset

(RWA) in 2015
10%
10%
Credit Risk
80% Market Risk

Operational Risk
Figure 5.4.3 Percentage of all risk under risk weighted asset (RWA) in 2015
Percentage of all risk under risk weighted asset in

2016(RWA)
6% 10%
Credit Risk
84% Market Risk

Operational Risk
Figure 5.4.3 Percentage of all risk under risk weighted asset (RWA) in 2016
Interpretation:From theabove picture, credit risk is the highest position of 80% along
with the two risk market risk 10% and operational risk is 10% which are only 20%. The
highest percentageof credit risk indicates that success in banking is extremely dependent on
the proper management of credit risk.And in 2015 CR is 84% which is a sign of alarming
report. The more efficient the management the less risk is associated with the credit risk
policy & practices. The bodyof knowledge must be concerned about how to lessen the CR for
the benefit of the bank.

5.5 Ratio Analysis
Here, I will analyze the CRM performance of Janata Bank using some ratios of Standard
and NPLs loans because I think ratio is the best tools for analyzing any types of
performance of a financial institutions.
5.5.1Standard Loan to Total Loans Ratio
Table 5 Standard Loan of Janata Bank (2012-2016).
Year Amount of Standard Total Loans and Ratio of Standard

Loan (BDT in Advance ( BDT in Loans to total loans
million) million) and advance (Taka)
2012 230938 257801 89.58%
2013 276173 305339 90.45%
2014 165674 285757 57.57%
2015 292134 319773 91.36%
2016 320235 349861 91.53%
Data source: Annual Report of JBL Bank (2012-2016)

Standard Loan to Total Loans Ratio

91.36% 91.53%
89.58% 90.45%
100.00%
80.00%
57.57%
60.00%
Standard Loan to Total Loans
Ratio
40.00%
20.00%
0.00%
2012 2013 2014 2015 2016
Figure: 5.5.1 Standard Loan to Total Loans Ratio.
Interpretation:
The above figure shows that the stander loan to total ratio is increasing on average through in
2014 it was decreasing than previous year. It also shows 91.53% in2016. It indicates that total
loan is nearest to standard. It can be interpreted that credit risk is manage well.
From the above figure of ratio of Standard Loan to Total Loans and Advances of Janata
Bank Bank Ltd., we can see that in year 2013 the ratio declined .Otherwise in other four years
the ratio increases than the previous year.

5.5.2 Non-Performing Loan to Total Loans Ratio
Table 5-PL Loan of Janata Bank (2012-2016).
Year Amount of NPL Total Loans and Ratio of NPL to

(Taka) Advance (Taka) total loans and
advance (Taka)
2012 43,181 257801 16.11 %
2013 37,375 305339 12.24% %
2014 31,766 285757 11.12%
2015 53,201 319773 16.63 %
2016 15,040 349861 4.30 %
Data source: Annual Report of Janata Bank 2011-2015
Non-Performing Loan to Total Loans Ratio

18.00% 16.11% 16.63%
16.00%
14.00% 12.24%
12.00% 11.12%
10.00%
Non-Performing Loan to Total
8.00%
Loans Ratio
6.00% 4.30%
4.00%
2.00%
0.00%
2012 2013 2014 2015 2016
Figure 5.5.2 NPL to Total Loans Ratio.
Interpretation:
From the above figure, it can easily be understand that from 2012 to 2016 the NPL to
total loans ratio was in instable rate. However, in 2015 this ratio increases marginally higher
than the previous years. The main reason of this increase is the recent credit scam of Janata
bank limited.

5.5.3 Operating profit to Total Loan and Advances:
Year Operating Profit Total Loan and Ratio of Operating

Advances profit to Total Loan
and Advances
2012 15722 257801 6%
2013 14534 305339 4.755
2014 12127 285757 4.24%
2015 10683 319773 3.34%
2016 10720 439861 2.43%
Ratio of Operating profit to Total Loan and

Advances
6%
6% 4.75%
4.24%
5%
4% 3.34%
2.43%
Ratio of Operating profit to
3%
Total Loan and Advances
2%
1%
0%
2012 2013 2014 2015 2016
Figure 5.5.3 Operating profit to Total Loan and Advances
Interpretation: From the above figure we can see that the ratio of Operating profit to Total
Loan and Advances has been decreased respectively. It indicates that credit risk also
increases.

5.5.5 Sector wise Credit risk Management:
Janata Bank Limited Shilpa Nagari Branch mainly provides loan & Advance on four sectors.
These are;
1. General Advance
2. Staff Loan
3. Micro Credit
4. SME
Table.6: Sector wise credit management from year 2011-2015(Amount in thousands)
Year
2012 2013 2014 2015 2016
Amount % Amoun % Amount % Amount % Amount %

t
Sector
Gener 8862 59 9909 56.29 8943 46.62 9732 38.54 9215 31.41
al
Advan
ced
Staff 6157 41 7713 43.77 9808 51.13 14840 58.77 17335 59.08
loan
Micro - - 431 2.25 679 2.69 1460 4.98

credit
SME - - - - 1330 4.53
Source: Shilpa Nagari Branch, Rangpur (Statement of affairs)
Interpretation: Table shows the yearly sector wise credit investment in loan and advance.
Janata bank Ltd. invest on Government bond & Treasary bond is 19%(16% on bond and 3%
need to put cash reserve) of total Deposit.
Graphical presentation of sector wise credit management is;

Percentage
44.12 G.AD
Staff
51.57
M.C
SME
Interpretation:
The above pie chart shows that Janata Bank CorporateBranch’s maximum portion of loan in
Staff loan(52.49%) then in general advance(43.84%), loan & advance in micro credit portion
is(2.42%), in SME(1.25%). Upto year 2010 this only provide staff loan & general loan in
2011 it started micro credit loan and loan in 2013 it started to provides SME loan
5.6 SWOT Analysis of Janata Bank Shilpa Nagari Branch, Rangpur:
SWOT Analysis
1. Strengths of Janata Bank Ltd. 3. Opportunities of Janata Bank Ltd.

-Top Management consisting efficient -Product line proliferation for introducing
management group. more branches
-Company Reputation with positive image in -Introducing special corporate scheme
the banking industry. -Developing new products and services
-Many Branches to satisfy customer needs. .
-Various Products and Services for clients.
2. Weaknesses of Janata Bank Ltd. 4. Threats of Janata Bank Ltd.

-Heavily depended on head office for -The default risks of all terms of loan have to
decision making. be minimizing in order to sustain in the
-Absence of upgraded website. financial market. Because default risk leads
-Low remuneration package. the organization towards to bankrupt.
-Low promotional campaign. -The low compensation package of the
-Not fully computerized. employees from mid-level to lower level

position threats the employee motivation.

- Some commercial/ foreign as well as
private banks.
-Customer awareness of pricing and services.
5.7 Summary of Findings

1.The bank follows the overall credit assessment and risk grading process according to the
rules of Bangladesh Bank in a somewhat manner.
2.With a view to implementing government policies, JBL has been maintaining its position in
extending credit to government bodies, sector corporations and private enterprises.
3But in practice credit officers do not fill up the proposal form properly. Most of the cases,
they use assumption rather than exact figure. This practice might end up with bad or
classified one.
4.JBL distribute loans without sufficient security in some cases. This is violationb of the
Bangladesh bank order.
5.Sometime the document verification is done after loan sanctioning the loan.
6.There is shortage of manpower and lack of proper training for the employees nin credit
section.
7.The credit proposal evaluation process is lengthy .Therefore, sometimesb valuable clients
are lost.
8.The website of JBL does not contain all required information about loan and aadvance.

9. In many cases bank face the problem of recovery because the credit officer fails to value
collateral property. Proper valuation means collateral will exactly cover the risk of bad loan.
Officials must do it with due care.
10. JBL is not efficient in processing and executing legal actions againstb defaulters for their
non-payment of loans and advances.

CHAPTER-SIX
RECOMMENDATIONS AND CONCLUSION

6.1 Recommendations
To improve the risk management culture further, Janata Bank Limited should adopt some of
the industry’s best practices that are not practiced currently. These are:
1.Continuous monitoring of the customer should be conducted so that loan cannot be
classified.
2.The bank should emphasis more on loan diversification like loans on different promising
sectors and newly invented thrust sectors in the economy.
3.Political intervention should be avoided while approving and sanctioning loan.
4.All the loan documentations have to done honestly. The bank should concentrate more on
proper documentation of all types of loans to make the department trustworthy & healthy.
5.The documents supporting the security against the loan have to be verified properly by the
bank before sanctioning the loan.
6.Every day the business environment is changing and so the risk. So the bank should be
developed as a dynamic organization to adapt with the changing circumstances.
7.An Early Alert Account system should be introduced to have adequate monitoring,
supervision or close attention by management
8.The website of JBL should have maintained required information about loan and advances.
9.There should be a Recovery Unit to manage directly the accounts with sustained
deterioration. To encourage Recovery Unit, incentive program may also be introduced.

6.2 Conclusion
It goes without saying that credit policy cannot be isolated from the broader monitory policy
of the country. Like any other segment of the economic policy, credit is very important for
any financial institution as it generates profit and gear up economic activities of the country.
In other words, credit is business and it is input in the production process of the country.
Since credit has an inherent risk, therefore proper utilization of the loans are essential to meet
the requirements of the borrower. Thelon applied for by the borrower must not be employed
for unproductive purpose. In this regard, the Janata Bank Limited must closely follow the
progress of the loan and the way the borrower is utilizing the funds. In this way the Janata
Bank Limited will deter any fake activities on the part of the borrower Credit evaluation
system of JanataBank Limited is very lengthy process. It has been revised time to time in
response to the respective circular of Bangladesh Bank. The overall credit activity of Janata
Bank Limited is composed of corporate credit division and credit administration. The credit
management system of Janata Bank Limited is more or less effective as recovery position of
classified loan is high and classified loan has been decreasing graduallyduring the year. They
always trying to improve their credit policy for minimizing lossand maximizing profit and
various measures are undertaken to develop the creditmanagement system.

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APPENDIX
JBL Janata Bank Limited
CEO Chief Executive Officer

MD Managing Director
CSR Corporate Social Responsibility
A/C Account
DMCBL The Dhaka Mercantile Co-operative Bank limited
NPAT Net Profit after tax
ROI Return on Investment
ROA Return on Asset
EPS Earning per share
HO Head Office
PO Pay Order
DD Demand Draft
TT Telegraphic Transfer
MT Mail Transfer
CIBTA Computer Inter Branch Transaction Account
IBDA Inter Bank Credit Advice
TIN TAX Identification Number
IBC Inward Bills for Collection
OBC Outward Bills for Collection
CAD Cash Against documents
GD General Diary
IDT Inter Data Transfer
ESS Education Savings Scheme
F.D.D Foreign Demand Draft
F.T.T Foreign Telegraphic Transfer
SRC Speedy Remittance Cell

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Internship on Bank Risk Management.

Experiment Findings · November 2019

Tanvir Hasan Anik Md. Nurul Kabir Biplob

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Department of Finance & Banking | Page 1

1.2 Background of the Report

1.3 Problem Statements

Department of Finance & Banking | Page 2

1.4 Origin of the Report

1.5 Objectives of the Report

Department of Finance & Banking | Page 3

b) Data Processing & Analysis:

Risk Weighted Asset (RWA) (m), X1

Total Expenses (m), X2

Net Profit after Tax (m), Y

Y is dependent variable that is net profit after tax,

b1is the coefficient of X1,

b2 is the coefficient of X2,

Department of Finance & Banking | Page 4

b3is the coefficient of X3,

X1 is the total Risk Weighted Asset(RWA)

X2 is the total expenses,

X3 is the total Investment

Results from MINITAB:

1.7 Scope of the Report

1.8 Limitations of the Report

Department of Finance & Banking | Page 5

1.9 Flow Chart of the Study

DESIGNING THE LAYOUT

PREPARING THE REPORT

SUBMISSION OF THE REPORT

Scope of the Report

Department of Finance & Banking | Page 6

Department of Finance & Banking | Page 7

Several risk‐adjusted performance measures have been proposed (Heffernan,

Department of Finance & Banking | Page 8

Department of Finance & Banking | Page 9

Department of Finance & Banking | Page 10

JANATA BANK LTD. OVERVIEW

Department of Finance & Banking | Page 11

3.1 History of the Bank

3.2 Vision, Values, Mission & Objective of JBL

Department of Finance & Banking | Page 12

JANATA bank constrained restricted will be an effective enterprise financial institution

The bank plays a vital role in socio-economic development of Bangladesh

• Maximize income through client pride and contributing in national

• Brining new technology based high high-quality customer support and

Department of Finance & Banking | Page 13

3.3 Core operations

3.4 Future Outlook

Department of Finance & Banking | Page 14

• Continued to launch new deposit, loan products and innovative services.

• Kept on expansion of branch network in rural and urban area.

• Continued the employees’ database and borrowers’ database.

• Shifting of branches and renovation will be continued at commercial important

Department of Finance & Banking | Page 15

3.4.1 Recent performance of JBL

Major Achievement in 2013 to 2017

Name of Awards Presented by Year

Tax card sonmanona-2016 Internal Resources division, MoF, GoB. 2016

ICMAB Best Corporate The Institute of Cost and Management 2015