Professional Documents
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General Banking Activities and Loan Disbursement and Recovery of RAKUB
General Banking Activities and Loan Disbursement and Recovery of RAKUB
INTRODUCTION OF INTERNSHIP
1.1.
Introduction:
1.2.
Importance of Internship:
An internship provides the student with a greater understanding of
There are two sources of data one is Primary source of data and
another is Secondary source of data. I have used both the sources for
collecting data.
ii)
iii)
iv)
My
diary
maintained
while
undergoing
the
practical
orientations.
v)
vi)
vii)
Documents.
CHAPTER TWO
RAJSHAHI KRISHI UNNAYAN BANK
2.1.
Introduction:
2.2.
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oriented now. But it becomes very difficult for some limited banks to
meet up the multiple demand of loan specially crop loan.
Since Bangladesh is an agro-based country; the demand for the
loan of Krishi Bank has been increased remarkably. It becomes very
difficult for a Dhaka based head office of Krishi Bank to manage agroloan in the remote areas of the country. For this reason, government felt
to decentralize the Krishi Bank in the divisional areas and Rajshahi
division was the first choice. The Northern areas of Bangladesh were not
developed in comparison with other areas of Bangladesh; it is one of the
main reasons of establishing RAKUB. Rajshahi Krishi Unnayan Bank
was established in 1986 with the ordinance number 58 of the president.
RAKUB started its operations from 15 March 1988.
industries,
self-employment,
solving
unemployment
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branches is 365. At his outset of bank, the credit balance was Tk 610
crores and now credit balance is Tk.2067.27 core. For the well being of
all industries farmers in the northwest region in Bangladesh, RAKUB is
continuing relentless efforts and taking more than one hundred and seven
loan programs.
2.3.
of Bangladesh. The area is noted for aromatic and fine rice production
which has got a growing demand in export market. Besides the area is
noted for fruits and vegetables. More than 50 percent of the country's
potato production comes from Rajshahi and Rangpur division. Besides
flood-free land the adaphic and agro-climatic condition is suitable for
commercial seed production for cereals, potatoes, pulses and a number of
vegetable crops.
The seed production processing and marketing business have got both
domestic demands as well as export potentials.
The area is particularly suitable for rearing black Bengal goats noted for
highly demandable goatskin and high quality mutton. Once it gets going
the mutton of black Bengal goats can harness the world market.
The region is also famous for production of high quality beef and milk
which have immense potential for value added processing. Rajshahi is
still an unexplored area for establishment of poultry hatchery and fish
grow-outs and fish processing.
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3. Authorized capital
: Tk 750 core.
4. Region of RAKUB
5. Area
6. Extent
7. No. Of District
: 16
8. Thana
: 128
9. Municipalities
: 57
10.Unions
: 1092
11.Total population
: 35 million
: 5.10 million
: 3.20 million
14.Training institute
:1
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2.5.
Objectives of RAKUB:
The main goals of RAKUB are as follows:
To provide Loan and Advance facilities for all kinds of
agricultural and agro- based economic activities keeping in
view the needs of small and marginal farmers.
To promote cottage and other allied industries in rural and urban
areas.
To assist farmers in adopting appropriate technologies under
the Bank's supervision.
To earn a normal profit for meeting the operational
expenses, building of reserve and expansion of activities to
cover wider geographical area.
To extend counseling and advisory services to the
borrowers/ entrepreneurs etc. in utilizing Loan and Advance
facilities of the Bank.
Provide credit facilities for agricultural development of poor
farmers.
To provide credit facilities for the socio economical
development of poor farmers.
To save money as deposit (Hajj Saving, Education Saving,
Rural Pension Saving and others) for future expenditure or
needs.
To provide credit facilities for creating self independence.
To provide credit facilities for creating small firm as
Livestock & Poultry, Fishery, Hatchery.
To encourage the small entrepreneurship via providing credit
facilities.
Department of Finance and Banking
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supply
Agricultural
inputs
and
service
to
the
entrepreneur.
To develop and create employment opportunities.
2.6.
Functions of RAKUB:
2.7.
Management:
2.8.
Organizational Structure:
The Head Office of the bank is stationed at Rajshahi. The branchnetwork comprises 365 branches including one in Dhaka. One General
Manager's office at Rangpur, eighteen zonal offices stationed in district
headquarters control branches under them. There are 18 independent
regional audit offices under direct control of the head office for
conducting regular audit in branches as well as in zonal offices.
Department of Finance and Banking
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2.9.1. b)
Operation Division:
Branches control Department.
Loans and Advances Department-I
Loans and Advances Department-II
Research and Development Department.
Budget and Expenditure Control Department.
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2.9.1. c)
2.9.3 Vigilance:
The functions of the Audit offices are to keep the branches regular.
The Audit offices accomplish auditing of the branches on half-yearly
basis Regional Audit offices are directly controlled by the audit and
Inspection Department of the head office and by no way influenced by
the local Regional on zonal offices.
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19
20
: Tk.750 core.
2) Paid up capital
: Tk.570 core.
3) Reserve capital
: Tk.20.85 core.
: Tk.2067.27 core.
5) Loan disbursement
6) Recovered loan
: Tk.1060.12 core.
: Tk.992.46 core.
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CHAPTER THREE
22
23
24
General
Manager
Senior Officer
Officer
Cashier
Peon
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CHAPTER FOUR
GENERAL BANKING FUNCTIONS OF RAKUB, GREATER
ROAD KAJIHATA BRANCH
3.1. Introduction:
RAKUB combines the role of a specialized bank for rural credit and that
of a commercial bank. Like commercial bank, it performs functions such
as acceptance of deposits, remittance of fund, granting of working capital
finance to agricultural processing and trading units. The overall object is
to generate employment and increase income of farmers and rural people
and faster agricultural development leading to economic development of
the country.
i.
i.
Loan services
ii.
Deposit services
iii.
Commercial services
Loan Services:
Department of Finance and Banking
27
Banks loan portfolio has been classified under the following major
heads.
a) Short term loan: It is payable within 5-6 months loan period to
1year. These loans are.
All kinds of crop loans.
Socio-economic development activities.
Working capital loan agriculture based industries.
b) Medium term loan: It is repayable above 1 year but below 5
years. These types of loans are:
Land development
Bullocks for cultivator
Dairy farm
Poultry
Raising herds
Small irrigation projects
Development of agriculture based
Industries according to the chart
c) Long term loan: All loans repayable above 5 years are called
long term loans. These type of loans are:
Farm and irrigation machineries
Tea garden development
Agro-based industries
Department of Finance and Banking
28
Forestry
Infrastructure development.
ii.
Deposit Services:
a) Current Account:
Current accounts are normally opened for business/organization. No
interest is given on this A/C. In RAKUB, initial deposit is Tk. 1000 to
open a current account. Here the A/C holders can deposit or withdraw
money as many time as they want during the office hours.
b) Saving Accounts:
Saving accounts are opened for the customer except companies or firm
and co-operative society. If the bank is satisfied by observing the
registration and constitution of co-operative society then it can open
savings A/C. RAKUB gives interest @ 5.00%-7.00%per annum.
Minimum initial deposit is Tk. 500 and this amount must maintain
always. The depositors can deposit money in their account as many times
as they want but in a week, they are allowed to withdraw only Tk. of
the balance in the A/C and the highest limit of withdrawal in a week is
Tk. 100000. If anybody wants to withdraw more than , i.e. 25% or Tk.
25000 in a week, the customer has to give a written notice 7 days ago to
bank.
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3.2.1 The following table shows the various deposits and their interest
rates at a glance:
Deposit categoriesInterest rateCurrent depositNilSaving deposit (City
Area)5.00%Saving deposit (Urban Area)7.00FDRfrom 1 months to below
3 months
from 3 months to below 6 months
from 6 months to below 1 year
from 1 year to below 2 years
from 2 years to below 3 years7.00%
7.50%
8.00%
8.25%
8.50%DPS13%STD4.00%
iii.
Commercial Services:
The bank gives the commercial services by DD, TT, MT and LC etc. For
these services they take a fixed interest. This is a source of income.
RAKUB gives their customers the facility to remit fund form one place to
another. The people who are not customers can also enjoy this facility.
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II.
III.
II.
III.
32
33
ii)
iii)
34
Cashier enters the amount of the check in the cash register and
pays the appropriate amount to the customer.
35
After receiving the cash and deposit slip, the officer makes an
entry to scroll register book. Then the deposit slip and cash are
placed before cashier.
The cashier counts this amount of money first and then makes an
entry to another register book. The book is generally called cash
book.
Then the cashier passes the cashbook and deposit slip to the
second officer.
After verifying the deposit slip, the second officer returns the
counter-folio of the deposit slip to the customer and keeps the
other position in his custody.
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TT
PO
Advice
Customer
services
Customers check
collection
Same Bank
Other Banks
Electricity Bills
Customers bills
collection
Water Bills
Telephone Bills
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v) Advice:
It is simply the making of adjustment between debit and credit.
Here no cash remittance has done. RAKUB can transact among its
various branches with the help of such advice.
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Cash
Transfer
Clearing
Voucher
Record in register
Posting in ledger
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CHAPTER FIVE
LOAN DISBURSEMENT
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P = property / security
Borrower apply for sanctioning loan by the prescribed form, which is
provided by the bank and bank rates predetermined fees, then borrower
submit application form along with fees. The rate of loan application
form fees of RAKUB is as follows:
Amount of LoanRate of Application FeeTK 1000 to TK 6000TK 15TK
6001 to TK 1000003%Above TK 100000TK 200 Plus TK 1 for per
thousand
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made
necessary
documents
such
as:
mortgage
paper,
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Loans are not sanctioned in proper head and real lone due to
political influence
ii.
iii.
iv.
v.
vi.
vii.
viii.
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CHAPTER SIX
LOAN RECOVERY OF RAKUB
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Substandard loan:
A substandard loan is one that is inadequately protected by the current
sound worth and paying capacity of the oblige or of the collateral
pledged. Loans classified as substandard have a well-defined weakness or
weaknesses that jeopardized the liquidation of the debt.
A loan will be classified as substandard after a period of 12 months from
the due date.
Doubtful loan:
A loan where full repayment is questionable and uncertain. Degree of
repayment of loans in question range from a complete loss to uncertain
loss unless corrective actions are taken. Doubtful loans are usually nonperforming loans on which interest is overdue and full collection of
principal is uncertain.
A loan will be classified as doubtful after a period of 36 months from the
due date.
Bad debt:
Loans classified as bad debt are considered uncollectible and shall be
listed at 100 percent potential loss.
A loan will be classified as bad debt after a period of 60 months from the
due date.
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Statement of loan:
The statement of loans plays a vital role to make a loan recovery; it is an
initial instrument for office and field. Name and address of borrowers are
in this statement. This statement is prepared for village and union. This
statement is prepared at the beginning of financial year. It mentions that it
is helpful for disbursement loan.
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CHAPTER SEVEN
RECOMMENDATION AND CONCLUSION
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6.4. Conclusion:
A bank is basically a service-oriented institution. It acts in financial
inter-mediation process. Banks collect deposits at low rate of interest and
lend the collected money at a higher rate of interest to cover it operational
expenses and then make profit. In this process, if loans are stuck-up, the
entire process gets jeopardized.
This branch has not yet produced better performance in recovering those
loans given to small borrowers because this branch started its journey
from 20th November, 2011 and will start recovery from July, 2012. The
branch should take care of this very important aspect of banking for its
smooth survival in the coming days.
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