Final OCP Report

Comparative Analysis on Retail Credit in Context of Prime Bank Limited
A COMPARATIVE ANALYSIS ON RETAIL CREDIT

IN CONTEXT OF PRIME BANK LIMITED, BANGLADESH.
(THIS OCP REPORT IS SUBMITTED FOR THE PARTIAL FULFILMENT OF THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION WITH MAJOR IN MARKETING)
Supervised By:
Assistant Professor
Department of Business Administration
Md Hafij Ullah
Prepared by: MD. SAIFUL MOWLA RIZVI BHUIYAN

Metric No#R101133 Program: Masters of Business Administration (MBA) Major: Marketing Trimester: Autumn-2010 Submission Date: January 5, 2011
_______________________
Signature of Supervisor
Department of Business Administration Faculty of Business Studies INTERNATIONAL ISLAMIC UNIVERSITY CHITTAGONG
1.0: INTRODUCTION
Banking system occupies an important place in a nations economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country. The banking sector channels resources through deposit mobilization and providing credit for different business ventures. At new millennium the definitions of banking has been changed. Now banks are performing more vital role in the society in than before. Due to globalization and technical innovation banking business has become very competitive. The share of deposits of nationalized commercial banks in total deposits which was 89% in 1980 gradually declined over the years to reach the level of 36% in 2009. Simultaneously, private commercial banks which were responsible for only 18% of deposits in 1985 this share increased gradually over the years to constitute about two third of the total deposits. When I was assigned to prepare an OCP Report on my own interest I have chosen this sector because of its crucial role in development of our economy. I became more involve through my OCP on Prime Bank Limited. I have found that although there are many studies involving individual banking activities there are few study about the comparative study among the banks. It is now time to start a review among the forth generations banks and their competitive position. In my report I intend to make a comparative study among the forth generation banks banking activities.
1.1 Origin of the Report

OCP report is the ending of perfect synchronization among academic and practical practice throughout the session. This report includes evaluation of the performance of PCB and its risk management. Education is not presently restricted to paperback. Learning is the instrument to recognize the actual globe and certain understanding for the betterment of the world as well as business. Consequently, an occasion is presented by International Islamic University Chittagong (IIUC) for its impending business alumnae to get three months realistic understanding and known as Internship Program or OCP Program. For the contest of this program, I was placed in a Bank namely, Prime Bank Limited (PBL).
1.2 Objectives of the Study

The main objective of this study is to explore the Comparative Analysis on retail credit in context of Prime Bank Limited Bangladesh. Specific objectives are To analyze the current retail credit product Portfolio To analyze the credit assessment, approval and disbursement procedure To find out the trend of credit disbursement in term of retail credit To find out the Comparison between PBLs Retail Credit Disbursement And Recovery% To know the current position of PBL in comparison with four other similar second generation private commercial banks based on retail credit.
1.3 Scope of the Study

The report intends to assess the position of Retail Credit finance and Retail Credit promotional facilities, its procedure, types, problems etc. This study covers the period since incorporation of the Bank. The report is prepared with a view to provide a brief but complete idea about' consumer Credit Scheme. The readers will also understand the Retail Credit procedures and performance of Prime Bank Limited. Problems and prospects of Retail Credit have been identified from the view of the bankers. Some finding and recommendation have been mentioned in the report.
1.4 Methodology
Basically secondary data was used in the research. Secondary data was collected from annual report and publication of the prime bank, Statistical book, literatures, books and international publications and websites. It is a descriptive research and it is also known as desk research. 1.4.1 Research Design The research design is descriptive research from the view point of function and nature of data. From the view point of research place, it is a desk as well as a field research and finally from the viewpoint of objective it is a Basic research.
Comparative Analysis on Retail Credit in Context of Prime Bank Limited 1.4.2 Data Collection The financial figures were collected from the Prime Bank Limited Laldighi Branch database as well as from the periodical financial statements of the Bank. Among secondary data sources the most remarkable is the annual report of the bank. 1.4.2.1 Primary data I have collected primary data by interviewing employees of prime Bank Ltd. Primary data were derived throughout the employees of the organization. Clarifications of issues came from different concerned officials of prime Bank Ltd. I have collected primary data in the following way Face to face dialogue with employees Informal conference and conversation. 1.4.2.2 Secondary data I have used diffident types of secondary data in my research. Sources of secondary data are as follows: Annual reports Prospectus Publications CIB reports The Bank's internal records. 1.4.3 Data Analysis The collected data have then processed analyzed and the findings thereof have laid the basis of procedure analysis, comparison on the basis of internal and external different criteria.
1.5 Limitations of the Study

I have obtained enthusiastic co-operation of the employees of Prime Bank Limited. Several limitations have taken in my project. Among them the following worth mentioning: Time constrains: The time frame for the preparation of the report was not sufficient. Inexperience: During the OCP session, in many part of my inquiry, my performance was stuck by some lacking in experience. Lack of information due to confidential reason: The survey on retail credit was conducted in commercial banks. But the response was not inspiring, on the pretext of confidentially. For having inadequate data, extensive statistical analysis e.g. hypothesis testing, inferences, time series analysis etc. was not possible.
2.1: A BRIEF PROFILE OF PRIME BANK

Prime Bank Limited, a scheduled bank, was incorporated under the Companies Act 1994, and started its operation on April 17, 1995 with the target of playing the vital role in the socioeconomic development of the country as well as earning profit. It was registered as a banking company under the Bank Company Act 1991 from the Bangladesh Bank on February 12, 1995. The bank started making profit from the year of its inception. The first Managing Director, Mr. Lutfar Rahman Sarkar, Ex-Governor, Bangladesh Bank, provided required leadership for a newly established bank. Prime Bank Limited is a second - generation private commercial bank has been working for stimulating trade and commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity, alleviating poverty, raising standard of living of the people etc and thereby contributing to the sustainable development of the country. At present, the bank has a network of 84 (Eighty Four) branches with around 1500 employees stationed in both rural and urban areas of the country. Since inception, the Bank has been making significant profit every year and positioning itself as second highest profit-making bank in the country for last five consecutive years. This has been possible due to significant growth of the bank. This has also been possible due to minimize the risks of the bank successfully. The bank serves its customers with the following motto A Bank with a difference.
2.2 Mission of Prime Bank Limited

To build Prime bank limited into an efficient, market driven, customer focused institution with good corporate governance structure. Continuous improvement in our business policies, procedure and efficiency through integration of technology at all levels.
2.3 Vision of Prime Bank Limited

To be the best Private Commercial Bank in Bangladesh in terms of efficiency, Capital adequacy, asset quality, sound management, customer service, profitability, technology application and having strong Liquidity.
2.4 Awards & Achievement of PBL

In last 15 years, PBL has become as a top tier bank of Bangladesh by providing superior service quality, portraying powerful brand image, building strong corporate governance and a culture committed to excellence. In recognition of PBLs performance, accountability, transparency and good governance, the bank was awarded four times in a row as best bank in Bangladesh for its published accounts and reports by ICAB (Institute of Chartered Accountants of Bangladesh).
Comparative Analysis on Retail Credit in Context of Prime Bank Limited PBL also honored by SAFA (South Asian Federation of Accountants) Bronze award in region for its published accounts in 2007. For the first time any Bangladeshi bank has achieved this feat.
2.5 Long term & Short term Rating of PBL

Credit Rating of Prime Bank Limited by CRISL: Table 2.1: Credit Rating Long Term Surveillance Rating 2008 Surveillance Rating 2008 Out Look Date of Declaration AA AA Stable June 16, 2009 Short Term ST-1 ST-1
2.6 Strategic Priority

To have sustained growth, broaden and improved range of products and services in all areas of banking activities with the aim to add increased value to shareholders investment and offer highest possible benefits to the customers.
2.7 Products and Services

The bank serves its huge clientele with a variety of services apart from the traditional ones. Its continual improvement and introduction of new products and services has given it an edge over the competitors. 2.7.1 Depository Services The bank provides the following depository services and collects a huge amount of its deposits. The services are:1. 2. 3. 4. 5. 6. 7. 8. Contributory Savings Scheme Monthly Benefit Deposit Scheme Special Deposit Scheme Education Saving Scheme Fixed Deposit Receipt Savings Deposit Account Short Term Deposit Account PBL- Insured Fixed Deposit Scheme 9. Prime Bank Money Scheme 10. Multi currency Account 11. Foreign Currency Deposit Account 12. Non Resident Taka amount 13. NFCD ( Non Resident Foreign Currency) Account 14. Non resident Investors Account
Comparative Analysis on Retail Credit in Context of Prime Bank Limited 2.7.2 Loan Services Loans and advances have primarily been divided into two major groups: Fixed term loan These are the loans made by the Bank with fixed repayment schedules. Fixed term loans are categorized into three based upon its tenure which is defined as follows: Short term : up to 12 months Medium term : More than 12 and up to 36 months Long term : More than 36 months Continuing Loans These are the loans having no fixed repayment schedule but have an expiry date at which it is renewable on satisfactory performance of the customer. Furthermore all categories of loans are accommodated under the 7 prime sectors which are as under: a. Agriculture b. Term Loan to Large & Medium Scale Industry c. Term Loans to Small and Medium Enterprise(SME) d. Working Capital e. Export Credit f. Commercial Lending g. Others 2.7.3 Other Services The bank firmly believes that technology based product and services will play significant role in the performance of the bank as people are getting more conscious about their service they receive from a bank. For delivering faster service the bank has introduced online banking service. The bank has introduced other products and services to serve the ever-changing market. These are: SWIFT services L/C Delivery Services Locker Services Merchant Banking Services ATM services
3.0 Review of the Literature on Retail Credit

Todays banking industry is experiencing renewed interest in retail credit as one of the strategic key tools of risk diversification. Retail credit lending is one kind of services that banks provide to individuals with a cluster of products through branches, internet and other channels (Clark et al., 2007). According to Gopinath (2005), retail credit is, however, quite broad in nature - it refers to the different retail credit products that commercial banks provide to individual customers. Retail credit is becoming an increasingly complex concept to define. The operation of providing retail credit is called retail lending or retail credit financing. While pure retail credit is generally conceived to be the provision of mass market lending services to private individuals, it has been expanded over the years to include in many cases services provided to small- and medium sized business people. Again, retail or consumer credit refers to the debts (credits) of consumers involved in procuring consumer goods for the consumption of themselves and their families (Westerfield, 1998).Stiroh (2004) has described retail lending as hotter than Vindaloo, considering the fact that, Vindaloo the Indian-English innovative curry available in the restaurants of London is very hot and spicy. It seems that, retail lending is perceived to be the in-thing in todays world of banking. He has also mentioned that today's retail lending sector is characterized by three basic characteristics: multiple products (home loan, car loan, vacation loan, travel loan etc), multiple channels of distribution (call centre, branch, internet and multiple customer groups (consumer, small and corporate business people for daily needs). 3.1 Market for Retail Lending According to the statistics and market research papers available, the retail lending market in Bangladesh has a size of BDT 160 billion whereas loan outstanding as of September 30, 2009 as per Scheduled Bank Statistics of Bangladesh Bank is around BDT 48 billion (Categorized under: Advances for professional services, Flat purchase, Consumer Goods, purchase through credit cards, educational expenses etc). This indicates that only 30% of the market has been realized by the financial institutions. So the remaining 70% of the market holds true potential for the loan giving institutions.
4.0 RETAIL CREDIT PRACTICE IN PRIME BANK LTD

The Prime Bank Limited started to provide retail credit informally from the year 1999 as a part of its core business. It was then one of the negligible parts of total credit and advance and was provided to few number of individuals under the name of Others sector. From 2005, PBL started to expand its retail credit activities far more than the previous years as a part of risk diversification strategy. Since then, retail credit has been targeted for significant further growth.
The Loans and Advances cover following core areas: Corporate Loan, House Loan, SME, Retail Credit and Credit Card.
4.1 Background of Retail Credit

Retail Banking is a fast moving sector by virtue of product and service differentiation, customer acquisition and retention, and the integration of wealth management and aggressive sales proposition. Today, banks make much of their profits from retail banking. Growth in profit from retail lending is much higher than those from the more volatile business of corporate and wholesale banking. Recently in Bangladesh, some private and foreign commercial banks are aggressively moving ahead into retail banking products and services. Success and growth of Retail banking depends on some pillars. Direct sales team is one of most inevitable pillars for the success of retail banking which ensures management of retail bank business more structured way. The direct sale team plays a major role in business growth of bank by generating sales lead and making countless relationship contact with the customers.
4.2 Market Share of Retail Loan / Retail Credit

Retail Loan as a percentage of overall loan shows an upward trend from year 2005 and it continues till date. FCBs were the pioneer in Retail Lending, PCBs are becoming aggressive and we see gradual increase of market share of PCBs in RL market Prime Bank is also gradually having a bigger bite in the RL market along with other PCBs
4.3 Retail Credit Scheme

Retail Credit Scheme is generally known as Consumer Credit Scheme (CCS). Consumer Credit is the combination of two words- Consumer and Credit. Consumer means one who
Comparative Analysis on Retail Credit in Context of Prime Bank Limited consumes or it also means one who uses article produced. Credit comes from the Latin word Credo meaning I believe. When one borrows money, the loan is based upon confidence in the future solvency of the person and in his repaying the loan as per agreement. Consumer Credit Scheme is a new concept in Bangladesh and it proves the consumers equity participation. First, Islami Bank Bangladesh Ltd. and then Prime Bank Ltd. introduced this scheme for developing the standard of living of fixed income group and middle class people. Under consumer Credit Scheme the credit is provided for household durables and utility products goods like Car, Pick-up, Motor Cycle, Personal Computer, Televisions, and Refrigerator water Cooler, Furniture and Fixture, Crockery and Cutlery, Sewing Machine, Air Conditioner etc. 4.3.1 Objectives of Consumer Credit Scheme Every scheme is covered through some objectives, which is prepared in line with the corporate goal, mission and vision. The objectives of introducing consumer credit scheme by banks are considered to be as followsTo bring our credit services to a wide range of customers. To provide financial assistance to the limited income group towards buying utility products. To help the professionals in raising their standard of living. To participate in the socioeconomic development of the country. To fulfill the dream whatever they want to buy, can afford. To sell our services to a wide range of customers and increase our Consumer Credit Scheme portfolio. To provide financial assistance to the limited income group for buying household durables and utility products. To provide investment facility to the depositors of the bank. To develop small capitalist or industrialist. To build up strong communication to a wider range of customer through provide loan. To enhance job opportunities through credit facilities.
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4.4 Promotional Activities

For promotional activities, PBL has recruited Around eighty number of Direct Sales Agents (DST) who reaches from door to door to aware people about PBL retail credit. Paper advertisement and TV advertisement is regularly published. PBL sometimes arranges retail loan fair.
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5.0 THE CONSUMER LOAN PRODUCT PORTFOLIO OF PRIME BANK LIMITED

The Consumer Loan Products are as follows: 1. Personal Loan (Secured) 2. Personal Loan (Unsecured)
5.1. Personal Loan (Secured)

Eligible: Any person having a CD/SB/STD Account. Margin: Best effort basis. Accrued interest to be serviced quarterly. Limit: As per delegation of power circulated from time to time. Security: Lien on FDR and any other savings instruments duly discharged with letter of authority to Ancash in case of default. Rate of Interest: In case of FDR: 2-3% above FDR interest rate. In case of other deposit- 14% p.a with quarterly interest. Period: Maximum 12(twelve) months (renewable as applicable)
5.2. Personal Loan (Unsecured)

Household Durable Loan Car Loan Doctors Loan Advance Against Salary Any Purpose Loan Education Loan Travel Loan Marriage Loan CNG Conversion Loan Hospitalization Loan
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5.2.1 Household Durable Loan

Under This head, Loans will be sanctioned against guarantee of third parties acceptable to the bank or pledge of FDR. Saving instrument of Banks and assignment of salary where applicable. The loan limit, down payment, risk fund, service charge and period of loans are given below: Table 5.1: Features of Household Durable Loan
Name of the Item Motor Cycle PC/ Laptop Photocopier/Fax Other Item/ Furniture Loan Limit Tk. Lac Tk. Lac Tk. Lac Tk. Lac Down Payment Risk Fund 1% 1% 1% 1% Service Charge 1% 1% 1% 1% Period of Loan 2 years 2 years 2 years 3-4 years Sanctioning Authority Retail Head Banking Office HO/Branch Credit Full Limit Full Limit Full Limit 3 Lac Full Limit
1 10% 1 10% 1 10% 5 10%
Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income: Security:
17% Monthly equal installment Pay order directly issued in the name of respective company of purchase. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 475 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 15,000 for salaried individuals Tk. 20,000 for businessman
Two Personal gaurantee Undated cheques
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5.2.2 Car Loan

For purchasing of non-commercial, new and reconditioned vehicles, this loan is given for personal use of the individual. Instead of down payment, the Customer shall have option to
avail loan against their FDR or any other savings instruments up to 90% of the loan amount. The loan limit, down payment, risk fund, service charge and period of loans are given below: Table 5.2: Features of Car Loan
Sanctioning Authority Name of the Item Loan Limit Down Payment Risk Fund Service Charge Ternor Retail Banking Head Office
HO/Branch Credit New Vehicle Tk 20 10% Lac Recondition Vehicle Bus/Truck for Tk 20 10% Lac Tk 20 10% Lac Nil 1% 5 Years Any Limits would be Nil 1% 5 Years Tk. 10 Lac Tk 20 Lac Nil 1% 5 Years Tk. 10 Lac Tk 20 Lac
Corporate bodies for own use only
approved by EC/ Board
Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income:
Security:
15% Monthly equal installment Pay order directly issued in the name of respective car company. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 475 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 20,000 for salaried individuals Tk. 40,000 for businessman
Two Personal guarantee Undated cheques Registration of the Vehicle in the name of the bank.
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5.2.3 Doctors Loan

Any Bangladeshi citizen who is a graduate in Medical science/ Dentist/ Eye/ Allopathic/ General Practitioners desiring to setup chamber, medical store with necessary medical equipments and to become self- employed have the opportunity to take this loan. The loan limit, down payment, risk fund, service charge and period of loans are given below: Table5.3: Features of Doctors Loan
Sanctioning Authority Loan Limit Down Payment Risk Fund Service Charge Period of Loan Retail Banking Head Office
HO/Branch Credit General Practitioner MBBS/BDS Specialized Doctor Tk. 10 10% Lac Nil 1% 5 Years Tk. 5 Lac Full Limit Tk. Lac 5 10% Nil 1% 4 Years Tk. 3 Lac Full Limit
Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge : Stamp Charge : Early Settlement : Criteria for application:
17% Monthly equal installment Clients savings account or sometimes cash disbursement. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 470 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Income Tk. 15,000 for salaried individuals Income Tk. 25,000 for businessman
Security: Two Personal gaurantee Undated cheques The ownership of Medical equipments to be purchased must be hypothecated to the bank under hire purchase mood.
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5.2.4 Advance against Salary

To meet the financial needs for any acceptable purpose, this loan can be given.
The loan limit, down payment, risk fund, service charge and period of loans are given below: Table 5.4: Features of Advance against Salary
Sanctioning Authority Load Limit Down Payment Risk Fund Service Charge Period of Loan Retail Banking Head Office
HO/Branch Credit Salaried Person Tk. Lac 3 Nil 0 1% 2 Years Tk. Lac 1.50 Full Limit
Note: Risk Fund is nil who has salary account with us. Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: 17% Monthly equal installment Clients savings account or sometimes cash disbursement. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 320 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan.
5.2.5 Any purpose Loan

The loan limit, down payment, risk fund, service charge and period of loans are given below: Table 5.5: Any Purpose Loan
Sanctioning Authority Load Limit Tk. 3 Lac Down Payment Nil Risk Fund 1% Service Charge 1% Period of Retail Banking Head Loan 3 Years HO/Branch Full Limit Credit Office
Note: Risk Fund is nil who has salary account with us. Interest Rate: Repayment method: 17% Monthly equal installment
Comparative Analysis on Retail Credit in Context of Prime Bank Limited Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income:
Clients savings account or sometimes cash disbursement. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 475 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 10,000 for salaried individuals Tk. 25,000 for businessman
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Security: Two Personal gaurantee Undated cheques Lien on Service benefit of the concerned employee from the employer
5.2.6 Education Loan

For educational purposes like study in abroad or within the country, this loan is given.
Table 5.6: Features Education Loan

Sanctioning Authority Name of the Item Load Limit Down Payment Risk Fund Service Charge Period of Loan Retail Banking Head Office
HO/Branch Credit Salaried Person/ Businessman Tk. Lac 3 10% 1% 1% 2 Years Tk. Lac 1.50 Full Limit
Note: Risk Fund is nil who has salary account with us. Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income: 17% Monthly equal installment Clients savings account or sometimes cash disbursement. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 475 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 10,000 for salaried individuals Tk. 20,000 for businessman
Security: Two Personal gaurantee Undated cheques
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5.2.7 Travel Loan

To meet the financial needs for travel purpose, this loan can be given. Features of this loan are following:
Table 5.7: Features of Travel Loan

Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income:
17% Monthly equal installment Clients savings account or sometimes cash disbursement. 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 320 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 12,000 for salaried individuals and Tk. 25,000 for
businessmen(For rented people) Tk. 10,000 for salaried individuals and Tk. 15,000 for businessmen( for those who are residing in his/her own or family residence) Tk. 10,000 for Govt., Semi-Govt and autonomous bodies employees.
Security: Two Personal gaurantee Undated cheques
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5.2.8 Marriage Loan

The loan limit, down payment, risk fund, service charge and period of loans are given below: Table 5.8: Features of Marriage Loan
Interest Rate: Repayment method: Disbursement mode: Other Charges: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income: Security:
17% Monthly equal installment Clients savings account or sometimes cash disbursement 1% on the loan amount or Tk. 1000 whichever is higher+15%VAT 2% of the installment overdue Tk. 320 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 15,000 for salaried individuals Tk. 20,000 for businessman
Two Personal gaurantee Undated cheques
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5.2.9 CNG Conversion Loan

The loan limit, down payment, risk fund (nil), service charge and period of loans are given below: Table 5.9: CNG Conversion Loan
Sanctioning Authority Name of the Load Item Limit Down Payment Risk Fund Service Charge Period of Loan Owner/ Valid Tk. user of vehicles Corporate Bodies Tk. 1 Lac 10% 60 10% 5% loan Tk. amount 1% 5% Loan Tk. Amount 1% 1.5 Full Limit 1.5 Retail Banking HO/Branch Full Limit Head Office Credit
the Thousand
1000 or years
1000 or years
Interest Rate: Repayment method: Disbursement mode: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income: Security:
17% Monthly equal installment In the form of pay-order 2% of the installment overdue Tk. 475 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 15,000 for salaried individuals Tk. 20,000 for businessman
One or Two Personal gaurantee Undated cheques
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5.2.10 Hospitalization Loan

Table 5.10: Hospitalization Loan
Name of the Loan Hospitalization Loan Loan Limit Tk. 5 Lac Branch Tk. 3 Lac Head Office Full Limit
Interest Rate: Repayment method: Disbursement mode: Penalty Charge: Stamp Charge: Early Settlement: Criteria for application: Monthly Income: Security:
15% Monthly equal installment Clients savings account .In case of salaried individuals,
sometimes cash disbursement may happen.
2% of the installment overdue Tk. 320 At any time with no penalty charge Any Bangladeshi citizen of 25-60 years at the time of maturity of loan. Tk. 10,000 for salaried individuals Tk. 20,000 for businessman
Personal guarantee from an individual having means, standing and social status acceptable to the bank and another from his/her family 24 (twenty four) post dated cheques Letter of Assurance from the Employer / Authority. For any retail loan application, Tk. 50 is taken as a fee.
5.3 Documents Required

To apply for any of the above retail loan of PBL, a client needs his/her photographs, copy of passport/ID card, last one years bank statement, copy of TIN, trade license(for businessmen), personal net worth statement etc. One of the special criteria of retail credit or consumer credit is that, it is an unsecured loan as there is no requirement for collateral except letter of guarantee. Besides these, following legal documents are needed to get any retail credit from PBL. Duly filled in loan application form with terms and condition signed Demand Promissory Note Letter of Set-Off Irrevocable Letter of Authority to repossess the vehicle(for car loan) Ownership transfer form signed by customer(for car loan) Letter of Introduction(for salaried person) and Letter of offer with full terms and conditions stated therein and duly accepted.
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6.0 CREDIT ASSESSMENT, APPROVAL AND DISBURSEMENT PROCEDURE 6.1 Credit Assessment
The prior condition for any credit disbursement is to critically assess and approve the credit proposal that is the client selection and assessment. In case of retail credit it should be done more crucially as retail lending is one of the types of unsecured individual lending without collateral. The primary factor determining the quality of the Banks credit portfolio is the ability of each borrower to honor, on timely basis, all credit commitments made to the Bank that is, repayment of loan installment on time. In PBL, more emphasis is given on repayment potential of loans out of funds generated from borrowers business (cash flow) instead of realization potential of underlying securities while assessing a retail credit proposal. Following are the steps that are maintained in PBL for assessing any retail credit proposal.
6.1.1 Application
The first stage of retail credit assessment and approval process is a client application that contains the following information: Telephone and address / contact details Employment/business details Income Details Income and Expenditure Statement Personal Net worth Statement Residence details Credit references and guarantors details Basically, branches receive the client application with other required papers necessary for different retail loans.
6.1.2 Contact Point Verification (CPV)

Verification is a key part of application process. Contact point verification is done for all applicants except for the High Net Worth individuals or the clients having good account
Comparative Analysis on Retail Credit in Context of Prime Bank Limited relationship with Bank. The objective of this process is to check the declared/undeclared information of the applicants. CPV includes: Applicants Residence, business/office address, phone, status varification Guarantors Information Verification Bank statement and other income documents verification. In most of the times, CPV is done by branch managers. CPV is done by third party agency also to enable the client selection of better accounts for accelerated processing and quick rejection of those having negative/inadequate information. Retail credit officers then verify data collected by third part.
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6.1.3 Guarantee
One of the fundamental perquisites for securing retail credit is to obtain guarantee acceptable to the bank by way of social status and perceived creditworthiness. Retail credit officers at branch level check the guarantors information very carefully. In case of guarantors, following are the rules that are maintained: Existing guarantor of any other loan of the bank will not be accepted as other guarantor for other loans. Any existing borrowers will not be taken into account as a guarantor for any other loan. Guarantee from the Chairman, Managing Director and Directors of Corporate facility clients and obtaining will be allowed after the prior approval of Head Office. All guarantors will be verified whether they have any relationship with banks earlier with either positive or negative status.
6.1.4 Checking against Banks Database

All approved applicants are checked against Banks database to identify whether the applicant is enjoying any other loan in other accounts part from the declared loans. Whether the client has any other loan with any other bank is also important to know for client selection. In this case, CIB (Credit Information Bureau) are sent in a specific form to Bangladesh Bank.
Comparative Analysis on Retail Credit in Context of Prime Bank Limited Within the time of the CIB returned back to the branch, the retail credit officers of the branch make a credit proposal for further assessment and approval. CIB reports are requested for any amount equivalent to Tk. 50,000 and above that. After returning the CIB information, the credit proposal along with documents is sent to Retail Credit Head Office (RHO).Up to this point at branch level, almost seven to ten days are required for processing.
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6.1.5 Assessment Method

Assessment of credit proposal and credit approval are done in Head office of retail The assessment method can be divided in two steps. The first step is known as Credit Scoring which is done to predict the creditworthiness of applications. A prior designed excel sheet is there to score in point values of some important aspects of clients such as occupation, residence status, income details etc. The total of these point values in 100 points represents the repayment probability of that particular client. The higher the value, the probability of getting approval for credit is higher. The second step is known as Judgmental Decision. Application meeting the minimum cutoff score and meeting other criteria is further reviewed for judgmental decision. After creditscoring method is completed, all the credit proposals are presented in the board meeting for approval. The judgmental approval involves the assessment of an applicants character, capacity and collateral.
6.2 Credit Approval Process

There is a credit approval authority to finally decide whether the retail loan should be sanctioned or not. The authority includes The Board of Directors The Executive Committee of the Board The Managing Director The Deputy Managing Director Retail Credit Committee After presenting the credit proposals, the authority critically analyze the aspects and after that, the authority finally decides about the retail credit sanction. The members of the authority have some individual delegation power of retail credit, which is limited by Tk. amount. Up to this point, three to four days are required for processing.
Comparative Analysis on Retail Credit in Context of Prime Bank Limited The Success of any credit largely depends on its efficient administration. A bank has to undertake different policy prescription to manage the credit in line of the set objectives. Banks always monitor the performance of the loan so that the rate of default is less. This chapter concentrates on the various aspects of consumer credit provided by Bank. Consumer credit scheme is small and medium term loan. This credit is sanctioned for one to five years period. For the small size and three years period of loan, every branch of the Bank has the authority to sanction the loan. But the branches have some loan limit to provide the scheme in different goods. The Bank maintains some policies and guidelines to sanction the credit. Every branch of the Bank has a credit committee in order to facilitate quick sanction of loan under the scheme. The credit committee is constituted of in each of the designated branches with the following Executive/Officer: Credit Committee Branch Manager 2nd Officer
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Credit In Charge
CCS In Charge At first, the sanctioning of loan, the customer will approach to Consumer Credit In-Charge for getting the loan Under Consumer Credit Scheme. If the Consumer Credit Scheme incharge thinks that he or she is eligible for the credit then they get the opportunity for application of loan. After that, the Consumer Credit Scheme in-charge presents the application to Credit Committee of the respective branch. If the committee approves that the customer is eligible for the loan then the customer will submit the necessary documents to that Committee. After submission of the documents the credit committee will examine the documents and consumer credit scheme in change will go for physical inspection, as to whether the information is wrong or right that he or she is written on the application form. If all the information is correct then the credit committee sanctions the loan under this scheme. But if the loan amount exceeds the loan then the credit committee sends the necessary documents and information to
Comparative Analysis on Retail Credit in Context of Prime Bank Limited the Consumer Credit Division, at the Head Office of the bank. Then the credit division decides that the will be sanctioned or not. The sanctioning mechanism is shown in the following diagram: Customer CCS in-charge Credit Committee Head Office (if branch credit limit exceeds)
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6.3 Credit Disbursement

After the credit proposal has been approved, the credit officers of Retail Head Office check whether all the security components are collected properly. If all requirements are there, documentation and arrangements are prepared for credit sanction. A sanction advice for every particular retail credit is sent to the branches for final disbursement. This branch level disbursement is called Decentralized Disbursement System Branches, after getting the sanction advice, make a signing event with agreed terms and conditions between bank and individual client. After that, credit is disbursed to the clients savings account. The total process requires fifteen, in special cases, twenty days from receiving clients application up to disbursement.
Without completion of any of these steps including credit assessment, approval and proper documentation, no retail credit will be disbursed .The total process started from application received at branch level up to credit disbursement can be shown in a diagram which is common for all Private Commercial Banks who offer retail credit. This diagram along with the whole process is approved by Bangladesh Bank in a guideline named Prudential Regulations for Consumer Financing, 2004.
26
Chart 6.1 Process Flow Chart of Retail Loan Processing of Prime Bank Limited
27
6.4 Follow Up, Monitoring and Supervision

The credit under the scheme is fully supervised and the success of the scheme will depend on the porter and persistent supervision, follow up persuasion and monitoring of the credits by the branches. CCS unit shall monitor and supervise the CCS loan portfolio of all the branches. Branches shall maintain proper records of the applicants received, loans sanctioned, disbursed and recovery made thereon. Branches shall send the statements of CCS loan and the overdue list to the CCS Unit within the first week of every month. The CCS unit shall properly utilize the MIS (Management Information System) available in the existing computer program for consumer Credit Scheme of the bank to closely monitor and supervise the scheme.
6.5 Steps Taken In Case Of Default Installment

Before disbursement of loan, the customer will deposit crossed cheque covering the total number of monthly installments in favor of the bank which will have to be presented for collection of the due dates. Installments will be paid then within 7th day of each month. If one installment is not paid then it has become overdue. Actions are taken on the basis of default installment. Steps taken are described below: If one month installment is due then concerned officer will call a phone to the client. In case of installment due for two months letter is given to the client and phone is also called; In case of three months phone and letter to client as well as visit is done; If installment is not given within four months then letter is given to the guarantor; If installment is not given within five months then legal notice is send to the client; In spite of all these steps if installment is not given then case is sued against the client. In case of installment due for six months the loan is treated as classified loan.
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7.0 PORTFOLIO OF RETAIL CREDIT DISBURSED 7.1 Retail Credit Portfolio

Table 7.1: Contribution to Total Credit of PBL
(Taka in Crore)
PARTICULARS Total Credit Total Retail Credit Contribution to Total Credit 2009 8866 662 7.46% 2008 7057 451 6.39% 2007 5381 274 5.09%
Total Credit
10000
9000 8000 7000 Taka in Crore 6000 5000 4000 3000 2000 1000 0 2007
Total Retail Credit
8866
7057 5381
274
2008
451
2009
662
Chart 7.1: Retail Credit Disbursement of PBL Findings From the annual reports of PBL, some facts and figures are found regarding retail credit. According to these annual reports, in 2007, the total amount of credit disbursed was Tk. 5381 Cr. in which consumer credit counted with a 5.09% of that amount. In 2008, the credit portfolio was maintained by PBL of Tk 7057 Cr. in which, consumer credit scheme (CCS) accounted for only 6.39% of total credit disbursed in different sectors.
Comparative Analysis on Retail Credit in Context of Prime Bank Limited In 2009, though 7.4% of total credit was invested in terms of retail credit, PBL continued its spotlight on retail credit. In view of the growth potentials, separate division was created at the beginning of the year 2009 for managing the retail business following credit portfolio was standing with PBL with different lending sectors.
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7.2 Growth Rate

Table 7.2: Growth Rate of PBL in last 3 years (Taka in Crore) Particulars 2009 662 2008 451 2007 274 2006 200
Total Retail Credit
Growth Rate
46.78%
64.59%
37%
Growth Rate
80% 60% 40% 20% 37% 64.59% 46.78%
0% 2007 2008 2009
Chart 7.2: Growth Rate of Retail Credit of PBL in last 3 years Findings In 2007 total disbursement was 274 crore which increased from 200crore, the growth rate was 37%. In 2008 total disbursement was 451 crore which increased from 274crore, the growth rate was 64.59%. In this year, a number of products were developed and existing products were re-launched with better pricing structure and repayment period. And the made their sales team very effective and provide huge investment on advertisement. In 2009 total disbursement was 662 crore which increased from 451 crore, the growth rate was 46.78%.
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7.3 Income Generation by Retail Credit

Table 7.3: Total Credit Disbursement of PBL in term of interest income (Taka in Crore) Particulars Interest Income from Total Credit Interest Income from Retail Credit Contribution in Retail Credit
Interest Income from Total Credit 1400 1200 Taka in Crore 83 52 25 909 1085
2009 1085 83 7.65%
2008 909 52 5.57%
2007 717 25 3.48%
Interest Income from Retail Credit
1000
800 600 400 200 0 2007
717
2008
2009
Chart 7.3: Credit Disbursement of PBL in last 3 years Findings: As per the above percentages of retail credit or Consumer Credit Scheme (CCS) in total credit portfolio, the main income that this sector generates it the interest income. In 2007, the total interest revenue generated by different credit sectors was Tk 717 Cr. in which, CCS alone was responsible for income of Tk. 25 Cr. 3.84% income is generated in 2007 Again, in 2008, the total interest revenue from different sector was Tk. 909 Cr. wherein, Tk. 52 Cr. was gained by CCS. 5.57% income is generated in 2008 though in 2008 disbursement growth was highest. In the year 2009, total interest revenue earned was Tk.1085 Cr. and Tk. 83 Cr. was from CCS. 7.65% income is generated in 2009. Growth rate was not more than previous year in 2009 but income generation rate was highest.
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8.0 COMPARISON RECOVERY%
BETWEEN
PBLS
CCS
DISBURSEMENT
AND
8.1 Year Wise Disbursement Amount and Recovery Percentage of CCS Loans of Prime Bank Limited: (Last 5 years)
Table 8.1: Retail Credit Disbursement of PBL Year 2005 2006 2007 2008 2009 Total Disbursement Amount 182 219 274 451 662 (Taka in Crore) Recovery % 93.02% 95.75% 96.55% 95.80% 97.30%
Disbursment Amount
700 600 451 274 662 500 400 300 200 100 0 182 219
Taka in Crore
2005
2006
2007
2008
2009
Chart 8.1: Retail Credit Disbursement of PBL in last Five years Findings: From the graph above we can see that the trend of the disbursement amount of CCS Loan is increasing year to year. This indicates the healthier position of the Bank in the commercial market. In 2008, the disbursement is increased much more than the previous year at a highest rate (64.59%) in last five years, because of the very effective sales team and huge advertisement campaign. And in 2009 the disbursement amount was increased in a highest amount.
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Recovery %
98.00% 97.00% 96.00% 95.00%
97.30% 96.55% 95.75% 95.80%
94.00%
93.02%
93.00% 92.00% 91.00% 90.00%
2005
2006
2007
2008
2009
Chart 8.2: Retail Credit Recovery of PBL in last 5 years Findings: From the above graph we can see that the trend of the recovery% of CCS Loan is increasing in 2005-2007. This at a first glance indicates the good position of the Bank in the commercial market. But in 2008 recovery% was fall. It is because in 2008, PBL changed their retail credit policy which attracts more customers. So in 2008 the growth of disbursement was increased vey much that is 64.59%. PBL disbursed huge loan but they could not recover well. 2008 PBL faced a problem in recovery percentage because they apply new procedure of loan disbursement. This affected in their recovery rate because of lack of attention in this sector. But in 2009 they overcome this problem nicely. In 2009 the disbursement amount of PBL was increasing at a good amount as well as they recovery % was also satisfactory.
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9.0 COMPARATIVE ANALYSIS WITH OTHER BANKS

For the comparative Analysis of Prime Bank Limited (PBL) with the other Commercial Bank I have chose four other Banks. They are: 1. Dhaka Bank (DBL) 2. BRAC Bank 3. Hong Kong and Shanghai Banking Corporation (HSBC) 4. Standard Chartered Bank Limited (SCB)
9.1 The Disbursement Amount and Recovery% of five Different Bank including Prime Bank Limited (PBL) at Year 2007:
Table 9.1: The Disbursement Amount and Recovery% in 2007 (Taka in Crore) Diff. Bank PBL DBL BRAC HSBC SCB Disbursement amount 274 Recovery % 210 370 355 300
96.55% 96.00% 98.75% 97.50% 97%
Disbursement Amount
400 350 300 Tk in Crore 250 200 150 100 50 0 PBL DBL BRAC HSBC SCB 274 210 370 355 300
Chart 9.1: Retail Credit Disbursement of Five Banks in 2007
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Recovery %
99.00% 98.50% 98.00% 97.50% 97.00% 96.50% 96.00% 95.50% 95.00% 94.50% 98.75% 97.50% 97% 96.55% 96.00%
PBL
DBL
BRAC
HSBC
SCB
Chart 9.2: Recovery % of five Banks in 2007 Findings The total disbursement amount of PBL & DBL is Low. Because they have started their CCS from after the others. At 2007, the highest amount of disbursement was done by HSBC and Medium amount of disbursement was done by BRAC and SCB. BRAC has introduced Consumer Credit Scheme in a new way. They promote their different scheme in news paper TV media etc. This reflects in their disbursement. Recovery % of BRAC, SCB and HSBC is good. But comparatively DBL and PBL was not good. So, in 2007 the performance of PBL was not satisfactory from the point of disbursement as well as recovery
Table 9.2: The Disbursement Amount and Recovery% 2008 (Taka in Crore)
PBL Disbursement amount 451 Recovery %
DBL 330
BRAC HSBC 490 440
SCB 410
96.10% 95.50% 99.5% 98.20% 97.5%
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Disbursement Amount
600 500 Tk in Crore 400 300 200 100 0 PBL DBL BRAC HSBC SCB 451 330 490 440 410
Chart 9.3: Retail Credit Disbursement of Five Banks in 2008
Recovery %
100.00% 99.00% 98.00% 97.00% 96.00% 95.00% 94.00% 93.00% PBL DBL BRAC HSBC SCB 96.10% 95.50% 99.50% 98.20% 97.50%
Chart 9.4: Recovery % of five Banks in 2008 Findings At 2008, the highest amount of disbursement was done by BRAC and lowest amount of disbursement was done by DBL. HSBC is not very far from BRAC. Recovery % of BRAC is the Best and SCB & HSBC is good. But comparatively DBL and PBL is not good. In 2008 PBLs disbursement was increased much more than previous year. And PBL come to a strong position than previous year. But they did not focused on recovery so the recovery was reduced in this year So, in 2008 the performance of PBL was satisfactory in term of disbursement
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Table 9.3: The Disbursement Amount and Recovery% in 2009 (Taka in Crore)
Diff. Bank
PBL
DBL 560
BRAC 620
HSBC SCB 600 610 97.5%
Disbursement amount 662 Recovery %
96.80% 95.50% 99.50% 98%
Disbursement Amount
680 660 640 Taka in Crore 620 600 580 560 540 560 620
662
660
610
520
500 PBL DBL BRAC HSBC SCB
Chart 9.5: Retail Credit Disbursement of Five Bank in 2009
37
Recovery %
100.00% 99.00% 98.00% 97.00% 96.00% 95.00% 94.00% 93.00%
99.50% 98% 96.55% 95.50% 97.50%
PBL
DBL
BRAC
HSBC
SCB
Chart 9.6: Retail Credit Recovery% of five Banks in 2009 Findings At 2009, the highest amount of disbursement was done by PBL and lowest amount of disbursement was done by DBL. BRAC is as usual in the highest position. HSBC is not very far from BRAC. SCB is almost as previous year. Its also the highest amount disbursed by PBL. In this year PBL gave attention in recovery sector thats why their recovery % was increased than the previous year Recovery % of BRAC is the Best and PBL, SCB and HSBC is good. But comparatively DBL is not good. So, in 2009 the performance of PBL was good.
9.4 Overall Findings on Comparative Analysis

Among the five Commercial Banks, BRAC is in the superior position, both in terms of disbursement amount and recovery % of the CCS Loan. BRAC is in a supiror position because they started retail credit earlier than the other banks. PBL and HSBC are almost running in the same speed, both in terms of disbursement amount and recovery % of the CCS Loan. Their position is very satisfactory in the Commercial Market. Though PBLs Recovery% is not satisfactory. Though DBL had just started their CCS from year 2003, their position is not very good in comparison to these other banks. The position of SCB is satisfactory for CCS Loan. Because the trend of both disbursement amount and recovery % is decreasing each year. So they should concentrate more in this sector. So, from the overall scenario we can understand that the position of Consumer Credit Scheme (CCS) of Prime Bank Limited is enhancing in comparison to the other Commercial Banks.
38
10.0 PROBLEMS AND PROSPECTS OF RETAIL CREDIT OPERATION 10.1 Problem

From the above description and comparative analysis with Four other banks, following problems are found in Prime Bank Retail Credit, which is given below: Less diversified target client segments PBL currently is allowing retail credit disbursement to a few individuals who are businessmen. Again, salaried individuals are getting preference in terms of retail credit. Though the numbers of fixed income earning people are increasing day by day, there is an existing large segment of business people of different types in Bangladesh who needs retail loan frequently rather than salaried individuals. Also, the self-professionals related to the legal activities and media are not there in the target clients segment. This narrow focus on target clients is reducing the market share of PBL in retail lending. Lengthy Assessment Procedure For the compliance of prudential guidelines of Bangladesh Bank, 2004, PBL asks for CIB report for an amount of TK. 50,000 and more. As it takes six to seven days for CIB to be returned back to the branches, almost 15-20 working days are needed by PBL to disburse retail credit. Now days, people are too busy to spend longer time for having a smaller amount of loan for their personal need. For this longer assessment process that is widening the time interval between a loan application reception and loan disbursement has resulted less number of clients and has also affected the interest income. Decentralized Disbursement System The retail credit disbursement process of Prime Bank is decentralized which is also a barrier for it to take steps for more expansion in retail credit. As the credits sanctioned are disbursed from branch level, most of the employees of credit department in branches are engaged with disbursement related activities in most of the times which hampers the branch activities to attend more clients.
39
10.2 Prospects
From the above study and competitive analysis on Prime Bank, the prospects that are found are following: Diversified Product Portfolio PBL currently has diversified product portfolio. From the above comparison, it can be easily observed that, the other immediate major competitors like HSBC and SCB have only three to four types of product and with these products, they are trying to capture middle-class, upper middle class and upper class peoples personal credit need. But Prime Bank has separate cells for separate client segments which is one of the important aspects of PBL. This is one of the crucial prospects for PBL to proceed with retail credit further. Lower interest rate and related cost It can be said confidently from the above comparison that, PBL has the lowest interest rate in terms of all retail credit products among its competitors which is an opportunity for it to attract new clients. Again, in terms of processing fee, stamp charge and early settlement cost, wherein its other competitors are taking higher amount and charges for early settlement, PBL charges the lowest amount and allows its client for early settlement at free of cost, which is convenient for clients. Lower credit amount and credit cycle In some retail products, PBL offers different lowest amount and time interval as a minimum which is also a convenience for the clients of a developing country like Bangladesh. In Bangladesh, most of the fixed income earning people have income range within Tk. 20,00035,000.For them to avail an amount of retail credit for more than Tk. 10,000-12,000 to fulfill personal needs is almost impossible. Lower tenor of credit lessens the burden from clients and inspires them to take more credit which is currently offered by PBL. Protection against defaulter As PBL asks for CIB for any amount of TK. 50,000 and above, it protects PBL of holding default clients and secures the income generated by retail credit.
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11.0 RECOMMENDATIONS
There are some charges for the loan disbursement like Risk fund that should be reduced & definitely refundable after the repayment of the installments. Rate of interest should be reduced. Instead of 2 peoples security 3 people security would more secured the loan recovery. There should be special incentives for those of the regular payer. Loan disbursement procedure should be within 2 day after the application of the CCS. Recovery of the loan by the monthly installment should be done through the automated adjusted installment software by the banks. Interest rate differential should be there to encourage a group of people. The equal monthly installment chart should be enrolled to the brochure according to the various loan amounts. Individually every branch should be provided a target for selling the CCS loan & the top most sellers would be rewarded by the monetary benefits that would encourage the employers. Workshop on CCS loan should be arranged for initiating new ideas between the concerned officer & Retail credit division to initiate new concepts & ideas to compete with other banks. At least 2 loans fair should be arranged to sell the large amount of loans & the special waiver should be offered at that time. Various festivals loan (Eid, Puja) should be provided for the different people. During the period of festival loans loan-processing fees should be nil & interest rate waiver should be offered to sell the large amount. Proper communication through the publicity should be there to encourage all kind of CCS facilities. Total marketing team should be prompt enough to initiate the large number of customers every month.
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12.0 CONCLUSION
Bank is a functional institution that relates to money matter. For a country, it keeps an important factor. As an intermediary between the supplier and demand, Prime Bank Ltd. plays a deep role. From the aforesaid topic & my point of origin to work in Prime Bank Limited, I can say that I really enjoyed my OCP period at Prime Bank Limited, Laldighi East Branchs General Banking Department, Retail Credit Department, Foreign Exchange Department form the very first day. I am confident that this OCP program at Prime Bank Limited, Laldighi East Branch, Chittagong will definitely help me to realize my further career in the job market. A COMPARATIVE ANALYSIS ON PRIME BANK RETAIL CREDIT is not so sufficient to measure and express perfectly within this short time of my OCP period. But it is a great opportunity for me to get use to with the operational environment of micro credit of Prime Bank Limited. I have tried my soul to incorporate the research report with necessary relevant information in my OCP report. Though there are some lacking in the operational activities of CCS loan facilities but overall performance of consumer credit scheme are formidable to fight with other private sector banks. To ensure promising future it should develop its wide areas to socio-economic development of the society. We pray and hope that Prime Bank Limited will provide various kinds of service and schemes to welfare of the society.
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13.0 REFERENCES
Bangladesh Bank (2004).Prudential Regulations for Consumer Financing. Clark, T., Dick, A., Hirtle, B., Stiroh, K., & Williams, R.(2007).The Role of retail in U.S Banking Industry.Journal of Econmic Policy Review, 1-18. Gopinath, S. (2005, May).Retail Banking-Opportunities and Challenges. Paper presented at the IBA-banking Frontier International Conference, Mumbai, India. Math, B. (2005, December).Future Growth Drivers-Retail versus Corporate. Papers presented at a seminar at MDI, India. Ministry of Finance. (2006).The Activities of Banks and Financial Institutions, 20052006. Publication No. 329 EX-1400, Dhaka, Bangladesh Government Press. Stiroh, J.(2004).Diversification in Banking. Journal of Money, Credit and Banking, 39(1), 49-81. Westerfield, R.B. (1998) Effect of Consumer Credit on the Business Cycle. Journals of the American Academy of Political and Social Science, 196, 99-110.

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Comparative Analysis on Retail Credit in Context of Prime Bank Limited

A COMPARATIVE ANALYSIS ON RETAIL CREDIT

Prepared by: MD. SAIFUL MOWLA RIZVI BHUIYAN

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

1.1 Origin of the Report

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

1.2 Objectives of the Study

1.3 Scope of the Study

1.5 Limitations of the Study

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

2.1: A BRIEF PROFILE OF PRIME BANK

2.2 Mission of Prime Bank Limited

2.3 Vision of Prime Bank Limited

2.4 Awards & Achievement of PBL

2.5 Long term & Short term Rating of PBL

2.6 Strategic Priority

2.7 Products and Services

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

3.0 Review of the Literature on Retail Credit

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

4.0 RETAIL CREDIT PRACTICE IN PRIME BANK LTD

4.1 Background of Retail Credit

4.2 Market Share of Retail Loan / Retail Credit

4.3 Retail Credit Scheme

4.4 Promotional Activities

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.0 THE CONSUMER LOAN PRODUCT PORTFOLIO OF PRIME BANK LIMITED

5.1. Personal Loan (Secured)

5.2. Personal Loan (Unsecured)

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.1 Household Durable Loan

1 10% 1 10% 1 10% 5 10%

Two Personal gaurantee Undated cheques

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.2 Car Loan

Corporate bodies for own use only

approved by EC/ Board

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.3 Doctors Loan

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.4 Advance against Salary

5.2.5 Any purpose Loan

5.2.6 Education Loan

Table 5.6: Features Education Loan

Security: Two Personal gaurantee Undated cheques

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.7 Travel Loan

Table 5.7: Features of Travel Loan

Security: Two Personal gaurantee Undated cheques

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.8 Marriage Loan

Two Personal gaurantee Undated cheques

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.9 CNG Conversion Loan

One or Two Personal gaurantee Undated cheques

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

5.2.10 Hospitalization Loan

5.3 Documents Required

Comparative Analysis on Retail Credit in Context of Prime Bank Limited

6.1.2 Contact Point Verification (CPV)

6.1.4 Checking against Banks Database

6.1.5 Assessment Method

6.2 Credit Approval Process