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BRAC Bank Limited is a scheduled commercial bank in Bangladesh. This is one of the leading private
commercial banks which is established under the banking companies Act 1991, the bank began its
operation on 4th July,2001 with a primary objective of offering all types of commercial banking services
mostly emphasizing on promoting small and medium entrepreneurs all over the country. At present
BRAC Bank Limited has 151 branches, over 300 ATM Booths, 405 SME Unit Offices, 1,800 remittance
delivery points and 8,306 human resources. This report is the fulfillment of the requirement for the
evaluation process of the internship program. The main purpose of the report is to have an overall idea
about function and process of credit risk management, analyzing tools and techniques used to evaluate
credit proposal, analyzing steps taken to recover Bank’s bad portfolio of BRAC Bank Limited. Lending is
one of the main functions of a bank. The objective of Credit Risk management of BRAC Bank Limited is to
minimize the risk and maximize banks risk adjusted rate of return by assuming and maintaining credit
exposure within the acceptable parameters. The Credit Risk Management department is responsible for
upholding the integrity of the Bank’s risk/return profile. Credit Risk Management Department of BRAC
Bank Limited conducted their functions by six wings. Wholesale Credit, Retail Underwriting and SME
underwriting- these three wings of Credit Risk Management assess and approve the loan for the
respective customers. Central Collection Unit collects the credit. Special Asset Management wings help
the bank to recover Bank’s bad portfolio. For credit approval, the Bank has a team who approve the
credit. Different tools and techniques are being used to evaluate a credit proposal. Retail Credit, Cards
Credit, Authorization and Fraud Control, Central Verification Unit (CVU) are related with retail
underwriting. Credit Collection Unit of BRAC Bank Limited collects credit based on the level of
delinquencies of credit. Special Asset Management wings help the Bank to recover bad portfolio by
taking different types of steps. Although BRAC Bank Limited is successfully operating credit risk
management, the Bank should improve in some areas which will take help the Bank to become the
leader of banking sector.

Credit (from Latin credit, "(he/she/it) believes") is the trust which allows one party to provide money or
resources to another party wherein the second party does not reimburse the first party immediately
(thereby generating a debt), but promises either to repay or return those resources (or other materials
of equal value) at a later date.[1] In other words, credit is a method of making reciprocity formal, legally
enforceable, and extensible to a large group of unrelated people.

The resources provided may be financial (e.g. granting a loan), or they may consist of goods or services
(e.g. consumer credit). Credit encompasses any form of deferred payment.[2] Credit is extended by a
creditor, also known as a lender, to a debtor, also known as a borrower.

Introduction
Banks being the financial houses which primarily are established to accept deposits and to lead loans to
the public. Profitability of the bank depends mainly on the Net Interest Income(NII) generated.(I.e) If a
bank accepts deposits from customers for which an interest of 6 % is paid every quarter, but lends a loan
for an interest of (say) 13% which might fixed or a floating rate( it depends and varies for different asset
products). The Net difference which is excluding the cost, earned is the Spread which is also called Net
Interest Income.

The quality of loans lent depends on the efficiency of the banks in sourcing, screening, processing and
sanctioning of credit.

What does Retail Credit Operations really mean?

Retail Credit Operations means the sequential process which involves screening, evaluation of risk(s),
and ensuring that the bank lends to a worthy( credit worthy) client from the asset products applications
sourced.

The Process of Retail Credit Operations in Banks

Initially, the asset product( Personal loan/Mortgage/Business loan/Credit Card) applications are
sourced by the Sourcing team.

Sourcing team consists of :

a. Retail Branch Team

b. Direct Sales Team.

c. Tele-Sales Team.

Computerization of data and pre-screening of application is done by the pre-screening team, if any
rejections like missing documents or signature mismatch/unsigned forms are rejected to sourcing team
to attach the additional documents required.

Then the application moves to the Credit evaluation team, which evaluates the application as per the
Credit and product policy.

A CPV( Contact Point Verification) is done to ensure correct phone number, address, employment
details, existence of business, etc.A positive CPV check is essential to credit evaluation.
 Any suspicions in documents is observed, it is referred to the Fraud Management Unit and after FMU
clearance it is processed further.

Rejections observed during credit evaluation are clarified with Sourcing team and necessary
documents are attached for further evaluation.

If the Credit evaluation team while processing the application finds any recommendations attached by
GM/VP/Country head-sales for policy deviations or all the policy criteria are met but any system
deviations(errors in calculation of eligibility by the computer after policy revision) is observed then the
application is escalated/recommended to Credit Risk Evaluators to process it from their end.

When the policy criteria are not met( say customer has a poor credit score, cheque bounces in the
recent past, or may not be eligible for the particular product) then the application is declined.

Application is processed and moved to the disbursement team for disbursal, if all policy criteria are
met.

To keep growing and upkeep its competitiveness on the market, a company needs to invest into its
business, state-of-the-art equipment and innovative technologies. Years of cooperation with Ukrainian
and foreign companies allow UkrSibbank to perfectly understand financial needs of its clients and offer
individual solutions for your company.

THE CREDIT OPERATIONS OF BANKS

4.1. CREDIT CONDITIONS

• The essence of Bank credit, its forms, types, functions and principles of lending.

• Credit capacity of banks, its formation and distribution.

• Credit policy of the Bank.

• Organization of Bank credit activities.

• Stages of the lending process.

• Ensuring loans, the characteristics of each type of collateral.

• Assessment of borrower's creditworthiness as one of the methods of credit risk management.

• Formation of Bank of provision for possible losses from credit operations.

A list of recommended sources and literature

1. Banking: Theory and practice: Proc. manual. / S. M. Pedic, V. I. Ignatenko; ed. by S. M. Podca. - K.:
FADA LTD, 2006.

2. Banking operations: the Textbook / A. M. Moroz, N. I. Savluk, M. F. Pugovkina etc.; Under the
editorship of Dr. Econ. Sciences, Professor A. M. Frost. - 2nd ed. Rev. and extra - K.: KNEU, 2002. - 476 S.

3. Vasylenko, O. V. Banking operations: Studies. manual. - 5th ed. ].- K.: Knowledge, 2006. -311 S.

4. Commercial code of Ukraine. - K.: Parliamentary publishing house, 2004. -192 C.

5. Money and credit: Textbook / M. I. Savluk, A. M. Moroz, N. F. Pugovkina, etc.; For zag. edited by M. I.
Savluk. - K.: KNEU, 2001. - 602 p.

6. The law of Ukraine "On banks and banking activity" dated 07.12.2000 G.

7. The law of Ukraine "On bankruptcy" from 14.05.92 G.

8. The law of Ukraine "On pledge" from 02.10.92 G.

9. Instruction on the procedure of regulating banks activities in Ukraine Approved by the resolution No.
368 of the Board of the national Bank of Ukraine dated 28.08.2001, changes and additions.

10. Operations of commercial banks / R. Kozovska, V. Rychakovskaya, Tabachuk, Y. Hrudzevych, M.

Voznyuk. - 3rd ed. - K.: Alerta; Lviv: the Institute of the NBU, 2003. -500 S.

11. Regulations on the procedure of formation and use of reserve for reimbursement of possible losses
on credit operations of banks Approved by resolution No. 279 of the Board of the national Bank of
Ukraine dated 06.07.2000, changes.

12. Prokopenko I. F., Ganin V. I., Solyar V. V., Maslov S. I. basics of banking: Textbook. allowance. - K.:
Center educational literature, 2005. -410 S.

13. Dictionary of banking terms. Banking terminology dictionary / AG Zagorodniy, A. Sluszka, G. Voznyuk,
T., Smovzhenko. - K.: Publishing house "Aconite", 2000. - 596 p.

14. The civil code of Ukraine: Official edition. - K.: Atika, 2004. -416 p.

Glossary

Credit – the main form of credit in which the Bank provides the customer with temporary use of own or
borrowed capital on return with payment of percent.

Lending – the process of providing the business entity, natural person Bank loan.

The essence of Bank credit, its forms, types, functions and principles of lending

Credit is the economic relations between corporations, individuals and government about the
redistribution of value based on return and, as a rule, the payment of interest.
In the credit relationship involves two parties: the borrower and the lender.

These parties are called as subjects of credit relations, and the money or wealth, costs or projects for
which is a credit agreement, are subject to credit. Subjects of credit relations can simultaneously speak
and lenders, and borrowers.

There are the following main forms of credit:

• product that occurs between sellers and buyers, when buyers receive goods or services with deferred
payment (trade credit);

• cash-most common in banking practice;

• warranty (liabilities of the Bank to guarantee the payment to the customer in the case that he will not
be able to pay their bills – acceptance, Aval-s ' loans).

Loans can be classified according to various criteria, for example depending on the subjects of credit
relations and banking, national or international; depending on groups of borrowers to the population,
economic entities, interbank loan; purpose - consumer" investment the like; the areas of focus is aimed
in the sphere of circulation (credit to current operations), aimed in the sphere of production (loan in
investment activities); to ensure, via the terms of use, maturity, risk and the like.

Currently, there are four functions of the loan.

With the help of a loan is a redistribution of value on the basis of repayment, therefore, the loan
performs the redistributive function.

Another function of credit is the creation of a non-cash credit of funds for the operation of monetary
circulation, this function is in the form of equity.

Credit can also possess the control function. Enlisting in the credit relationship, the borrower and the
lender must exercise control over their activities.

Consider the function of credit capitalization, in this case, savings transformirovalsya in loan capital,
income.

All the features of a loan are closely linked.

Principles of lending are the basic assumptions that underpin both the theory and practice of credit
process.

Principles of lending are the following:

• urgency – the loan shall be repaid within the period specified by the credit agreement;

• repayment arises from the fact of the loan, this loan in contrast to fiscal relations;

• payment – payment of interest, an objective satellite of the loan, because the loan is a commercial
transaction;

• security – the purpose of this principle is to protect the interests of the Bank, to reduce the risk of the
operation;

• target use – investing in the sphere of circulation, production and the like.
The role of credit lies in effective organization of cash circulation, production expansion, agriculture
development, solving social problems.

bout Our Client

Our client was awarded the "Best Private Bank in Asia" by Wealth Briefing Asia. They have a global
presence and is part of a large Financial Group.

Job Description

Review credit documents and liaise with internal and external stakeholders to ensure proper and
efficient delivery of credit administration duties

Conduct periodical review on credit administration policy and procedures that will contribute to
process improvements

Ensure that the recording, deposit and withdrawal of the security documentations are properly
controlled

Generate, review and maintain loan disbursement reports for presentation to credit risk and provide
monthly reports

Ensure all lending documentation is complete as per the Bank Policy and Procedures with respect to
amount of finance, terms and conditions, borrower's borrowing mandate, authorised signatory etc.

Continually ensure that there is a robust process for the safe custody and control of all security
documents

Ensure compliance with the internal policy, credit approval terms and conditions regulatory ratio /
policies etc.
 Be responsible for collateral valuation, collateral monitoring and collateral reconciliation with original
documents and approval from relevant authorities is held for deferral / waiver of incomplete documents

Ensuring post disbursement compliance with approved terms and conditions, assignment of rights,
review expiry of credits, progress payment insurance, post fact mortgage etc.

Review daily system credit monitoring and management reports and ensure corrective action taken in
line with credit policy.

Monitor all irregularities, past dues and documentation deficiencies amongst other duties