CHAPTER 1

Introduction
Introduction of Report:

Internship program is the pre-requisite for the graduation in BBA. Now a day,
education is not just limited to books and classrooms. In today s world, education is
the took to understand the real world and apply knowledge for the betterment of the
society as economy. From education, the theoretical knowledge is obtained from
course of study, which is only the half way of the subject matter. Practical knowledge
has no alternative. The perfect coordination between theory and practice is of
paramount importance in the context of the modern business world in order to resolve
the dichotomy between these to areas. Therefore an opportunity is offered by dept. of
Accounting, University of HSTU, for its potential business graduates to get 45 days
practical experience, which is known as “Internship Program”. For the competition of
this internship program, the author of the study was placed in a bank namely, “Sonali
Bank limited” for a period of 45 days (19th april ,2017 to 11th june,2017 ).

Background of the report:

Economy history shows that development has started everywhere with the banking
system and its contribution towards financial development of country is highest in the
initial stage. As mandatory requirement of Bachelor of Business Administration
(BBA) program, I was assigned to do my internship in Sonali Bank Limited corporate
branch, Dinajpur, for a period 45 days. From practical knowledge, I will be able to
know real world situations and start a career with some practical experience. This
report “Credit risk grading(CRG) system of sonali bank,

Corporate Branch, Dinajpur” has been prepared to fulfill the partial requirement of
BBA program as a mean of internship program. While preparing the report, I had a
great opportunity to have an depth knowledge of the banking activities of sonali bank
limited.

Significance of the Report:

Education will be the most effective when theory and practice blends. Theoretical
knowledge gets its perfection which practical application. In addition, the internship is
designed to bridge the gap between the theoretical knowledge and real application.
We all know that there is no alternative of practical knowledge, which is more
beneficial than theoretical aspects. The prime reason of this study is to become
familiar with the practical business world and to attain practical knowledge about the
overall banking and corporate world, which is so much essential for each student to
meet the extreme growing challenge in job market.

Sonali bank limited is a state-owned leading commercial bank in Bangladesh. It is

largest bank of the country.

Objective of the Report:

The purpose of this report relates with the internship. The internship objective is to
gather practical knowledge and experience the corporate working environment. To
this regard this report is contemplating the knowledge and experience accumulated
from internship program.

The objectives behind the construction of this report are:

 To know the practical implication of credit risk grading system.

 To differentiate between practical and theoretical leaning.
 To have depth knowledge of credit management procedure of Sonali Bank
Limited.
 To justify how a bank effective employ procedures.
 To judge creditworthiness of prospective and existing borrower.

Methodology of the Report:

 As the topic of the report was credit risk grading system, so it is needed to
collect information regarding the credit control procedure.
 Data was collected from both primary and secondary sources.
 The details of these sources are highlighted below:

Primary sources:

 Customer database and historical data of delinquent customers.

 Interviews with the approval officers.
 Facing some practical situation related with the day to day banking activities.
Secondary sources:

 Internal sources.
 SBL’s Annual Report.
 External sources.
 Different book and periodicals related to the banking sector.
 Newspaper.
 Website information.

Limitation of the study:

 As SBL is state owned bank, it follows strict rules while providing

information. Again it is also not a listed company in the bourses, so collection
of annual report and necessary paper were difficult.
 The credit policies and manuals of SBL are of confidential nature and thus it is
difficult to collect the necessary literature and documents within this short
time.
 The bank officials though helpful in every respect do not have much time to
explain the internal procedures.
 Many operations relating to the credit extension run simultaneously by
different credit officials and it is difficult to capture the sequence of any
particular credit proposal.
 A structured filing procedure is often neglected which also poses difficulty in
understanding the sequential procedure.
 Borrowers do not often have the time to cooperate in the information gathering
process.