Internship Report On Consumer Financing of IFIC Bank Ltd (Lalmatia Branch).

Consumer Financing of IFIC Bank Ltd (Lalmatia Branch)

Prepared for: Nipa Saha Senior Lecturer Department of Business Studies State University of Bangladesh

Prepared by: Nadia Sultana Cho dhur! I"# UG01-17-08-0 ! $rogram# BB" %% "ecem&er' %())

School of Business and Social Studies

22 th December, 2011

State University of Bangladesh 77, Satmasjid Road, Dhanmondi, Dhaka 1207

Nipa Saha
Senior !ect"rer De#artment of B"siness St"dies State University of Bangladesh Dear $adam, %t is my #leas"re to s"bmit the internshi# re#ort on the to#ic Consumer Financing of IFIC Bank Ltd (Lalmatia Branch) as re&"irement of the com#letion of my BB' co"rse( % have tried my best to analy)e all necessary information related to my to#ic and #resent as affectionately as #ossible( %t is not im#ossible that there *ill be minor mistakes in this re#ort( B"t still % ho#e that this re#ort *ill #rovide the a##ro#riate analysis on the to#ic of +,ons"mer -inancing of %-%, Bank !td .!almatia Branch/0( %f yo" sho"ld need any assistance in inter#reting this re#ort or im#lementing my recommendation #lease contact me at the $ob(01172303452( %n concl"sion, % *ant to e6#ress my thanks to yo", as *itho"t yo"r co o#eration it *o"ld be barely im#ossible for me to #re#are this re#ort related to my s"bject(

Sincerely yo"rs, Nadia Sultana Chowdhur !rogram" BB'

I#" U701 17 05 021

*ckno ledgements
't the beginning % am very m"ch gratef"l to almighty 'llah for giving me strength and o##ort"nity and so"nd mind to com#lete the internshi# re#ort( %t is common #ractice to thank all those #eo#le *ho contrib"ted to the task that one has to achieve and % see no reason to change this c"stom(8re#aring the %nternshi# Re#ort on Consumer Financing of IFIC Bank Ltd (Lalmatia Branch) is not an easiest assignment *here the information sho"ld be analy)ed #ro#erly and some data yet to be disclosed on the re#ort to o#erate s"ch research *ork( 9his descri#tive #a#er is the o"tcome of my #ractical *orking e6#erience in %-%, Bank !td( .!almatia Branch/( -or s"ccessf"l com#letion of this re#ort, % have been fort"nate to have the s"##ort, assistance and enco"ragement of a n"mber of individ"als( $any of them #layed a decisive role in hel#ing me making this re#ort, altho"gh % honestly acce#t f"ll res#onsibility for all the errors and omission( 9here are those #eo#le *ho contrib"ted in cond"cting my re#ort, those *ho have #rovided information and those *ho have read, revie*ed and #rovided moral s"##ort and enco"ragement( % like to thank s#ecially to honorable sir $ir %olam $owla, -irst :ice 8resident ; Relationshi# $anager of %-%, Bank !td( .!almatia Branch/, *ho gave me the o##ort"nity to cond"ct my internshi# #rogram at %-%, Bank !td( Secondl , % *o"ld like sho* my heartiest gratit"de to $d& $oinul Islam' 'ssistant :ice 8resident,!almatia Branch of %-%, Bank, *ho al*ays enco"raged me and hel#ed me thro"gh my internshi# #eriod *ith his val"able advice( $y gratef"lness to (asnu)a *hale+ue' -irst 7rade <fficer of %-%, Bank, !almatia Branch, *ho have g"ided me from the very beginning in !oan section and hel#ed me in gaining #ractical e6#eriences in banking( (hirdl , my s#ecial thanks go to Nur,-,-lahi Staff <fficer <f %-%, Bank !td( !almatia Branch, *ho hel#ed me *ith #roviding lots of information regarding my internshi# re#ort( 9hey are very s"##ortive in s"#ervising my *orks and % am so m"ch gratef"l to all the em#loyees of %-%, Bank, !almatia Branch for their *hole hearted co o#eration(

Finall , % am very m"ch thankf"l to my honorable teacher, Nipa Saha' Senior !ect"rer, De#artment of B"siness St"dies, State University of Bangladesh( =ho al*ays gave g"idelines and s"ggestion d"ring the #eriod of com#leting my internshi# re#ort(

+,ecuti-e Summar!
9he *ord >Bank? is said to have derived from the %talian *ord >banko? meaning a bench( %t is an instit"tion *hich transacts the b"siness of banking, namely, acce#tance of de#osits, for the #"r#ose of lending *ithdra*able on demand by che&"e or other a##roved means( Banks mobili)e money from the #"blic in the form of de#osits as *ell as borro* f"nds from the banking system *ith a vie* to #roviding credit in the economy( Besides these core activities, banks are #erforming other roles in the economy( @istory sho*s that a modern bank is offering a *ide array of financial services and the bank?s service men" is gro*ing ra#idly( 9his re#ort entitled, +Consumer Financing of IFIC Bank Ltd (Lalmatia Branch)is #re#ared on the basis of three months #ractical e6#erience at %nternational -inance %nvestment ; ,ommerce .%-%,/ Bank !imited( 9his internshi# #rogram hel#ed me a lot to learn abo"t the #ractical sit"ation of a financial instit"tion and to im#lement my theoretical kno*ledge in #ractical and realistic *ork atmos#here( %nternational -inance %nvestment and ,ommerce Bank !imited A%-%, BankA came in to e6istence in 1371 as a joint vent"re bet*een the 7overnment of Bangladesh and s#onsors in the #rivate sector *ith the objective of *orking as a finance com#any *ithin the co"ntry and setting "# joint vent"re banksBfinancial %nstit"tions abroad( %n 135C *hen the 7overnment allo*ed banks in the #rivate sector, %-%, *as converted into a f"ll fledged commercial bank *ith cor#orate slogan of, +.our Satisfaction First& 9he 7overnment of the 8eo#le?s Re#"blic of Bangladesh no* holds C2(74D of the share ca#ital of the Bank(%-%, Bank !td #rovide #rod"ct ; services like ,or#orate Banking, Retail Banking, S$E Banking, 'gric"lt"ral !oan etc(,ons"mer finance is the segment of the financial services that tends money to individ"al cons"mers for meeting their #ersonal, family and ho"sehold needs( ,ons"mer finance is one of the #arts of Retail Banking( <ther 8arts are De#osit 8rod"cts, ,ards, FRB, St"dent -ile, and S$S Banking( 9he target c"stomer of Retail Banking is individ"al #erson to accom#lish their #ersonal need s"ch as for b"ying

car, for getting married, for getting higher ed"cation in abroad, or for any #"r#ose %-%, Bank gives them these kinds of loan *ith a fi6ed interest rates( 9he %-%, Bank offers 1C different #rod"cts "nder ,ons"mer -inancing Famely Easy !oan .Sec"red 8ersonal !oan/, ,ons"mer D"rable !oan, 8ar"a .Ed"cation !oan/, 9hikana .@o"se B"ilding !aon/, 'ny 8"r#ose !oan, $arriage !oan, ,F7 ,onversion !oan, @ome RenovationB%nterior Decoration !oan, @oliday !oan, 8eshajeebi !oan. !oan for 8rofessional/, '"to !oan and -estival !oan( %n this st"dy, a *hole hearted effort *as a##lied to collect, organi)e, analy)e, and inter#ret the related data and finally to attain the o#tim"m o"tcome of the research( %n s#ite of these efforts, there e6ist some limitations that acted as a barrier to cond"ct the research( 9he main limitation of this re#ort is Bank?s #olicy of not disclosing some data and information for confidential reason, *hich co"ld be very m"ch "sef"l for the re#ort( Some #roblems % fo"nd like !ack of '9$, $ost of the em#loyees are not ada#ted in online BankingG $arketing 8olicy is not strong etc(9o recover these #roblems % #rovide some recommendations in this re#ort that *ill hel# the bank( 8erformance analysis of a de#artment of a bank is not so s"fficient to meas"re and e6#ress #erfectly *ithin this short time of my internshi# #eriod( B"t it is a great o##ort"nity for me to get "se to *ith the o#erational environment of commercial banking of %-%, Bank( % have tried by so"l to incor#orate the research re#ort *ith necessary relevant information in my re#ort(%-%, Bank sho"ld al*ays try to im#rove their service level in every term(

List of *cron!ms
IFIC, %nternational -inance %nvestment ; ,ommerce !!%, 8rod"ct 8rogram 7"idelines L/C !etter of ,redit LLC,!imited !iability ,om#any( Co& Ltd ,om#any !imited( NBBL Fe#al Bangladesh bank !imited N0B, Fon Resident Bangladeshi S$S Short $essage Service S$1, Small and $edi"m enter#rises %#! 7ross Domestic 8rod"ct LI$, !oan against %m#orted $erchandi)e CN%, ,om#ressed nat"ral gas IFICBL, %nternational -inance %nvestment ; ,ommerce Bank !imited C00, ,ash Reserve Ratio SL0,Stat"tory !i&"idity Ratio -L$, 'sset !iability $anagement -LC2, 'sset !iability $anagement ,ommittee 2I1, <man %nternational E6change 3&-&1&,United 'rob Emerat NB Bank Fe#al Bangladesh Bank !td( SB! State Bank of 8akistan $C0 $inim"m ,a#ital Re&"irement B$L Bank of $aldives !imited -($ '"tomated 9eller $achine 4,Cash,H"ick ,ash

CS0 cor#orate Social Res#onsibility C0$, ,redit Risk $anagement 0$ Relationshi# $anager F#0 -i6ed De#osit Recei#t !SS 8ension saving scheme S2# Sec"red <verdrafts -B Bank, %o)t 7overnment $NC $"ltinational ,om#any N%2, Fon governmental organi)ation $# $anaging Director 51#B =age Earner Develo#ment Bond $IS, $onthly %ncome Scheme #S1 6Dhaka Stock E6change CS1, ,hittagong Stock E6change #! Note Demand 8romissory Fote ICB %nvestment ,or#oration of Bangladesh CIB ,redit %nformation B"rea" (&I N 9a6 %dentification F"mber N2C, Fo <bjection ,ertificate 72C ,@ead of ,redit 72CB, @ead of ,or#orate Banking C0$,,redit Risk $anagement BB- Bachelor of B"siness 'dministration 8-( :al"e 'dded 9a6 CF ,ons"mer -inance L(0 loan 'gainst 9r"st Recei#t CC ,ash ,redit I#B! %nland Doc"mentary Bill 8"rchase 2# <ver Drafts S7BL Staff @o"se B"ilding !oan

.:%/

Table of contents
Chapter Topics
S!nopsis

Page No
.:%/ 1 2 2 2 2 2 2 C C C C C C 2 2

Introductor! $art
1(%ntrod"ction 1(1(<bjective of the St"dy 1(1(1(Broad <bjective 1(1(2(S#ecific <bjective 1(2($ethodology of the St"dy 1(2(1(Fat"re of Research 1(2(2(Data ,ollection a/ 8rimary So"rce b/Secondary so"rce c/ %nternal So"rce d/E6ternal So"rce 1(2(C(Data 'nalysis 1(C(Rationale of the St"dy 1(2( Sco#e of the St"dy 1(4( !imitation of the St"dy

Chapter.)

Organi/ation O-er-ie
2(@istorical Backgro"nd of %-%, Bank 4

Chapter.%

!td 2(1( $ilestones in the Develo#ment of 1 %-%, Bank 2(2( Branches of %-%, Bank 2(C( Bank @ierarchy of the $gt 2(2(<#erational Fet*ork <rganogram 2(4($ission ; :isions <f %-%, 2(1( 7oal of the Bank 2(7( <rgani)ation 8rinci#les 2(5(Strategic ; -inancial <bjectives 2(3( @"man Reso"rce Develo#ment 2(10(8rod"ct ; Services 2(10(1(,or#orate Banking 2(10(2(Retail Banking 7 5 3 10 10 10 11 11 12 12 12 1C

Chapter.%

2(10(C(S$E Banking 2(10(2('gric"lt"ral ,redit 2(10(4( !ease -inance 2(10(1( $oney 9ransfer 2(10(7(9reas"ry ; ,a#ital $arket 2(10(5(-oreign E6change Desk 2(10(3($oney market Desk 2(10(10(%nvestment Desk 2(10(11 'sset !iability $anagement 2(10(12( 9reas"ry 8rod"cts 2(10(1C(8rod"ct ; Services at a

1C 12 12 14 11 11 17 17 17 15 15 15 13 20

glance 2(11(Ioint :ent"res 'broad 21 2(11(1(<man %nternational E6change 21 !!,, <man 2(11(2( Fe#al Bangladesh Bank 21

!td,Fe#al 2(11(C( F%B Bank !td,8akistan 21 22 2(11(2(Bank of $aldives 22 2(11(4(Fe#al Bangladesh -inance ; 22 !easing !td 2(12(9echnology 2(1C(Board of Director 2(12(,SR 22 2C 2C 22 22

1opic *nal!sis
C(,ons"mer -inancing 24 C(1(!oans ; 'dvances 24 C(2(8rocess -lo* ,hart of ,ons"mer 27 -inancing C(C(1(%-%, Easy !oan C(C(2(,ons"mer D"rable !oan C(C(C( 8ar"a !oan C(C(2(9hikana !oan C(C(4('ny 8"r#ose !oan C(C(1 %-%, $arriage !oan C(C(7(%-%, ,F7 ,onversion !oan C(C(5(%-%, @ome Renovation !oan C(C(3(%-%, @oliday !oan C(C(10(%-%, 8eshajibi !oan C(C(11( %-%, '"to !oan C(C(12( %-%, $edical !oan C(2(1(887 of Easy !oan 25 C0 C2 C2 C1 C7 C3 21 2C 24 27 23 41 23 C1 CC C4 C7 C3 21 22 22 21 25 40 42

Chapter.0

Chapter.0

C(2(2(887 of ,D! C(2(C(887 of 8ar"a !oan C(2(2(887 of 9hikana !oan C(2(4(887 of -le6i !oan C(2(1(887 of 8eshajibi !oan C(2(7(887 of a"to !oan C(4(!oan '##roval 8rocess C(1($onitoring C(7(%dentification ; 'llocation of 'ssets C(5(,ollection Ste#s

4C 44 47 10 11 1C 14 11 17 17

44 47 43 11 1C 12 11

45 1hree 4onths In IFIC Bank Ltd (Lalmatia Chapter.2 Branch)

2(1(Descri#tion ; Fat"re of the Iob 15 2(2(%-%, Res#onsibilities of Iob 13 70 2(C(1(!oan Disb"rsed in the month of 70 <ctober 2(C(2( !oan Disb"rsed in the month of 71 Fovember 2(C(C( !oan Disb"rsed in the month of 71 December 2(C(2(9otal !oan Disb"rsed *ithin 71 three month 2(2(,ritial <bservation 72

Findings' Conclusion6 Recommendation

4(1(-indings 4(1(1(S=<9 'nalysis 4(1(1(1 Strength 4(1(1(2(=eakness 4(1(1(C(<##ort"nity 4(1(1(2(9hreat 4(1(2(<ther 8roblems 4(2(,oncl"sion 4(C(Recommendation 7C 7C 7C 7C 72 72 72 74 71

Chapter.3

72 74 71 77

List of #a$le
1(-ig 2 2(-ig 7 C(-ig 5 2( -ig 22 4(-ig 24 1(-ig 21 7(-ig 27

#opic %ame

&age %um$er

$ilestones in the develo#ment of 1 %-%, Bank Board of Directors !oans ; 'dvances ,ollection Ste#s !oan Disb"rsed in the month of 2C 22 24 17 70

<ctober !oan Disb"rsed in the month of 71 Fovember !oan Disb"rsed in the month of 71 December

List of 'hart(&ie #opic %ame 'hart

1(-ig 2 2( -ig 4 C(-ig 1 2( -ig 3 4( -ig 10 1( -ig 11 7( -ig 12 5( -ig 1C 3( -ig 12 10( -ig 14 11(-ig 11 12( -ig 17 1C( -ig 15 12( -ig 13 14( -ig 20 <rganogram 8rod"ct ; Services at a glance !oans ; 'dvance ,redit 8ortfolio -lo* ,hart of !oan 8rocessing ,om#arison %nterest rate of

&age %um$er

Bank @ierarchy of the $gt 5 <#erational Fet*ork 3 20 21 21 27 C1

,D! *ith other Bank ,om#arison of 8ar"a !oan CC ,om#arison <f 9hikana !oan C4 ,om#arison of 'ny 8"r#ose C7 !oan ,om#arison of $arriage !oan C3 ,om#arison of ,F7 20 ,onversion loan ,om#arison of @ome 22 22 21

Renovation !oan ,om#arison of @oliday !oan ,om#arison of 8eshajibi !oan

11( -ig 21 17( -ig 22 15(-ig 2C

,om#arison of '"to !oan ,om#arison of $edical !oan !oan '##roval 8rocess

25 40 14