Loan and Advance

Loan and Advances of SEBL
CHAPTER -1
INTRODUCTION OF THE RRPORT
• ORIGIN OF THE STUDY

• BACKGROUND
• OBJECTIVE OF THE STUDY
• SCOPE OF THE STUDY
• SOURCES OF INFORMATION
• METHODOLOGY
• LIMITATION
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1.1 ORIGIN OF THE STUDY
The Applied Research Work program exercise a significant importance as it is

undertaken after completion of a vast theoretical course, Organized by the Department of
Business Administration, the students study thoroughly about the institutions. At the end
of the program, the students are required to place the accomplishment and findings of the
work through the writing of report covering the topic assigned to them. During the
program each student is supervised and guided by a teacher of the department. It enables
the students to develop their analytical skills and scholastic aptitudes.
I have conducted a study on “Sanctioning and Recovery System of Loan and Advances”
of Southeast Bank Limited’. My supervisor Mr. Md. ShahanShah Molla, Lecturer
Department of Business Administration, Leading University, Sylhet, also approved the
topic and authorized me to prepare this report as part of the fulfillment of internship
requirement.
1.2 BACKGROUND
Loan comprises the most important asset as well as the primary source of earning for the
financial institutions. On the other hand this loan is also the major source of risk for the
bank management. A prudent bank management should always try to make an
appropriate balance between its return and risk involved with the loan portfolio. An
unregulated banking financial institution might be fraught with unmanageable risk for the
purpose of managing its potential return. In such situation, the banking financial
institution might find itself in serious financial distress instead of improving its financial
health. Consequently, not only the depositors but also the general shareholders will be
deprived of their money from the bank. The determination of loan quality will also affect
the intermediation efficiency of the institutions and thus the economic growth process of
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the country. This establishes the fact that bank should provide increasing emphasis on
various analytical tools and techniques for screening proposal and loan decision taking.
1.3 OBJECTIVE OF THE STUDY

The basic objective of this paper is to acquaint with how a banking financial list evaluate
individual potential borrower- based on which sanction different credit limit to different
customer and charges different interest to different borrower that is what factors
determinates decisions.
The specific objective are
1. To know more about the credit sanctioning policy of SEBL.
2. To have an adequate knowledge about which factors mostly affects the loan
sanctioning decisions, what amount of loan should be sanctioned to a particular
loan applicant depending on his credit worthiness.
3. To furnish the possibilities that the commercial bancs can extend their expertise
consultation service to control risk exposures of a loan.
4. To identify and suggest scopes of improvement in loan and advance portfolio of

SEBL
.1.4 SCOPE OF THE STUDY
The study would focus on the following areas of Southeast Bank Limited.
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 Credit evaluation system of Southeast Bank Limited.

 Procedure for different loan facilities.
 Credit portfolio management of Southeast Bank Limited.
 Organization structures and responsibilities of management.
 Each of the above areas would be critically analyzed in order to determine the
efficiency of SEBL’s Credit appraisal and Management system.
1.5 SOURCES OF INFORMATION
Information collected to furnish this report is both from primary and secondary in nature.
This study is mainly based on the information extracted from various published annual
reports, books, documents, study reports and articles. Interviews and discussion with the
senior executives of the Bank gave some insights into the problems and issues of the
study. The methods of collecting data followed throughout the study may be detailed as
under:
 SEBL credit policy and guidelines
 Practical Banking experience of the bank’s officers.
 Discussion with the officers / executives of the Bank.
 Annual Reports
 Journals of existing literature
 Publications of Bangladesh Bank
 Different websites.
1.6 METHODOLOGY
The following methodology will be followed for the study:
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Both primary and secondary data sources will be used to generate this report. Primary
data sources are scheduled survey, and informal discussion with professionals. The
secondary data sources are annual reports, manuals, and brochures of Southeast Bank
limited and different publications of Bangladesh Bank.
To identify the implementation, supervision, monitoring and repayment practice,
interview with the employee and extensive study of the existing file was done.
1.7 LIMITATION OF THE REPORT
1. This paper has focused on the most sensitive part of the organization i.e. loan
and advance. So the bank authority hesitated to disclose important information
to maintain business secrecy.
2. Only three month time is not enough to complete such a study in a lucid
manner.
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CHAPTER -2
ORGANIGATIONAL OVERVIEW OF SOUTHEAST BANK
• STATUS OF THE BANK

• VISION OF THE BANK
• MISSION OF THE BANK
• CORE VALUES OF THE BANK
• CLIENT COMITMENT OF THE BANK
• NATURE OF BUSINESS
• DEPOSIT SCHEME
• LOAN SCHEME
• INTERNATIONAL BUSINESS
• OTHER PRODUT/SERVICES
• CORE OBJECTIVE
• MANAGEMENT STRUCTURE OF SEBL
• SPECIAL FEATURE OF THE BANK
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• SOUTHEAST BANK AT A GLANCE
2.0 STATUS OF THE BANK
Southeast Bank Limited, a second generation private Bank, emerged in 1995 amid
liberalization of global economics. Currently its Authorized Capital TK.3,500 million and
its Capital and Reserve reached TK. 2678.87 million as of June 30, 2006. The Bank has
a diverse arrangement of carefully adapted products and services to satisfy client needs.
The Southeast Bank Limited is pledge-bound to convert the bank into a global modern
banking institution dynamic in actions, progressive in ideas, honest in dealings, correct in
judgment, futuristic in attitude, fair in approach, polite in behavior and devoted to high
quality services to clients. Its aims are for boosting modern management, advanced
technology, good profitability, solid growth and excellent image of the bank. Today,
Southeast Bank Limited in a responsive organization which promotes innovations,
encourages improvements, values sense of urgency and develops people who accept
challenges and turned them in to opportunities.
"A Bank with Vision" has been precisely an essence of the legend of success in the Asian
countries. Southeast Bank Limited is a scheduled commercial bank in the private sector,
which is focused on the established and emerging markets of Bangladesh. Southeast
Bank Limited has 46 branches throughout Bangladesh and its aim is to be the leading
bank in the country's principal markets. The bank by concentrating on the activities in its
area of specialization has achieved good market reputation with efficient client service.
The Bank is committed to providing continuous training to its staff to keep them up to
date with modern practices in their respective fields of work. The Bank also tries to fulfill
its share in community responsibilities. By such measures the Bank intends to grow and
increase shareholders' earning per share. Southeast Bank Limited has been licensed by
the Government of Bangladesh as a Scheduled commercial bank in the private sector in
pursuance of the policy of liberalization of banking and financial services and facilities in
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Bangladesh. In view of the above, the Bank within a period of 10 years of its operation
achieved a remarkable success and met up capital adequacy requirement of Bangladesh
Bank.
2.1 VISION OF THE BANK
‘To stand out as a pioneer banking institution in Bangladesh and contribute significantly
to the national economy.’
2.2 MISSION OF THE BANK
• High quality financial services with the help of latest technology.

• Fast & accurate customer service.
• Balanced growth strategy.
• High standard business ethics.
• Steady return on shareholders' equity.
• Innovative banking at a competitive price.

• Deep commitment to the society and the growth of national economy.
• Attract and retain quality human resource.
2.3. CORE VALUES OF THE BANK
• Integrity
• Respect
• Fairness
• Harmony
• Team spirit
• Courtesy
• Commitment
• Service Excellence
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2.4 CLIENT COMITMENT OF THE BANK
• Dispatch of work with high degree of professionalism and use of most suitable
banking technology.
• Founding life-long relationship based on mutual trust and respect.
• Response to customer needs with quickness and accuracy.
• Sharing their values and beliefs.
• Mutual growth.
• First-rated solutions of the banking problems and issues.
• Competitive pricing of products and services.
• Safety and security of their money in trust with Bank.
2.5 NATURE OF BUSINESS
As a commercial bank, Southeast Bank does all traditional banking business including
the wide range of savings and credit scheme products, retail banking and ancillary
services with the support of modern technology and professional excellence. The bank
has launched a number of financial products and services since its inception. The types of
deposits, loans & advances and international business are as under:
2.6. DEPOSIT SCHEME
Besides Fixed Deposits, Savings Bank Deposits and Current Account Deposits, the Bank
has introduced the following customer friendly deposit schemes:
a) Pension Savings Scheme (PSS)
b) Education Savings Scheme (ESS)
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c) Monthly Savings Scheme (MSS)

d) Savers Benefit Deposit Scheme (SBDS)
e) Fixed Deposits ( 1, 2, 3, 6 & 12 months and 2, 3 years)
f) Double Benefit Scheme (DBS)
2.7. LOAN SCHEME
The loan portfolio of the Bank is well diversified and covers funding to a wide spectrum
of business and industries including readymade garments, textile, edible oil, ship
scrapping, steel & engineering, chemical, pharmaceuticals, cement, construction, health-
care, real-estate and loans under consumer’s credit schemes allowed to the middle-class
people of the country for acquiring various household items.
a) Agricultural Scheme
b) Commercial Lending
c) Working Capital
d) House Building Loan
e) Consumer Credit Scheme
f) Finance to NBFIs
g) SME Finance
h) Large/Medium Scale Industry
i) Loan against Export & Import
2.8. INTERNATIONAL BUSINESS
The international business of the bank includes the following:

- Import Business
- Export Business
- Foreign Remittances
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2.9. OTHER PRODUT/SERVICES
The other product / services offered by the bank are as under:

- ATM Operation
- Real Time On-line any Branch Banking Service
- Dual Currency Visa Credit Card
- Islamic Banking Services
- Merchant Banking Services
2.10 CORE OBJECTIVE
The bank's overall objective is to have a higher profitability than that of the weighted
average of other banks. As such the main focus of the Bank is on highly profitable
business with convincing growth potential. Vision for the future is the characteristic that
differentiates Southeast Bank from other competitors.
2.11 MANAGEMENT STRUCTURE OF SEBL
Southeast Bank is blessed with a well-designed management structure with clearly

defined responsibilities, delegation of authority and proper accountability. Resultantly,
there is transparency in decision-making and management activities. The bank has
appropriate organizational structure manned with qualified professionals for proper
planning, executing, controlling and monitoring functions.
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Managing Director
Deputy Managing Director
Senior Executive Vice President
Executive Vice President
Senior Vice President
Vice President
First Vice President
ENTRY LEVEL Senior Asstt. Vice President ENTRY LEVEL
Asstt. Vice President
Senior Principal Officer
Management Trainee Principal Officer
Management Trainee Executive Officer
Senior Officer Probationary
Officer
Officer
Junior Officer
Trainee Asstt. Officer Assistant Officer
Computer Trainee Computer Operator
Cashier Trainee Cashier

Chart-1: Hierarchy of Southeast Bank Ltd.
2.12 SPECIAL FEATURE OF THE BANK
g) Southeast Bank Limited is engaged in conventional commercial banking.

h) It is the pioneer to introducing and launching different customer friendly
deposit scheme to tap saving of the people for channeling the same to the
productive sector of the economy.
i) The bank is committed to continuous research and development so as to
keep phase with modern banking.
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j) The operation of the bank is computerized to ensure prompt and efficient

service to the customers.
k) The bank has introduced camera surveillance system to strengthen the
security service inside the bank premises.
l) The bank introduced customer relation management to asses the need of
the customers and resolves any problem on the spot.
Now I would like to show a feature as the improvement of last five years as bellow:
At a Glance improvement of five years
TABLE 1:SOUTHEAST BANK AT A GLANCE
2009 2005
2008 2007 2006
Taka in
Particulars Taka in Taka in Taka in Taka in
Million
Million Million Million Million
Authorized Capital 10000.00 3500.00 3500.00 2500.00 2500.00

Paid-up Capital 3422.64 2852.20 22810.76 21120.74 1056.37
Reserve Fund 6504.52 4804.81 4186.60 2828.18 1180.47
Equity Fund (Capital and
9927.16 7657.01 6468.36 4940.92 2236.84
Reserve)
Deposit 96669.05 68714.67 55474.05 46056.18 38258.15
Advance 77497.57 60281.26 48164060 41147.28 32551.09
Investment 21350.23 12299.61 8462.86 6265.55 5113.14
Import Business 69582.92 58019.77 38470.34 35125.12 29079.30
Export Business 46724.47 42178.60 28771.36 25874.61 13511.10
Guarantee Business 11916.74 15078.99 9008.32 8656.80 7975.00
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Total Income 13704.45 10250.13 8670.47 6766.11 4689.55

Total Expenditure 9087.79 7237.55 5754.27 4706.45 3216.11
Operating Profit 4614.66 3012.58 2916.20 2062.66 1473.44
Net Profit after-Tax and
1870.19 887.24 1222.97 909.88 374.20
Provision
Fixed Assets 4338.85 2685.56 1708.11 1300.39 790.62
43294.81
Total Assets 112676.92 81181.53 64370 53706.12
Earning per Share (Taka) 54.64 31.11 40.88 59.71 35.42

Dividend Cash (%) 15% 15% 20%
Bonus Shares 35%(20:7) 20%(5:1) 25%(4:1) 8% (12.5:1) 20%(5:1)
Return on Equity (ROE) 16.51% 12.06% 19.90% 17.98% 17.64%

Return on Assets (ROA) 1.66% 1.09% 1.90 % 1.66% 0.86%
Non performing Loans as % of
3.73% 4.12% 3.77% 3.97% 4.37%
Total Loans
Capital Adequacy Ratio 11.72% 11.12% 13.00% 11.50% 6.90%
Number of Correspondent
146 145 140 138 130
Banks
Number of Foreign
589 587 598 536 507
Correspondents
Number Of Shareholders 22152 12536 9636 8855 5750
Number of Employees 1254 1080 964 845 759
Number of Branches 56 46 38 31 31
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At the time of incorporation in 1995, the Authorized Capital of the Bank was Tk.500.00
Million. At the end of 2009, the Authorized Capital and of the Bank stood at Tk.10,
000.00 million. The Authorized Capital since inception of SEBL have been increased by
1,900% respectively to maintain sound capital adequacy of the Bank and to make the
Bank financially stronger. The growth of Authorized Capital and Shareholders equity of
the Bank is shown below:
Authorized Capital
2009
2008
Year
2007
2006
2005
0 5000 10000
Amount
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Fig 1: Authorized Capital
Shareholders Equity
10000
9000
8000
7000
6000
Amount
5000
4000
3000
2000
1000
0
2005 2006 2007 2008 2009
Year
Fig 2: Shareholders Equity
The Bank mobilized total deposits of Tk.96669.05 million as of December, 2009 as

compared to Tk.68714.67 million in 2008.Competitive interest rates, attractive deposit
products, deposit mobilization efforts of the employees and confidence reposed by the
customers in the Bank are the factors that contributed to the notable growth in deposits.
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Deposit (2005-2009) At a Glance
70000
60000
50000
Taka In 40000
Million 30000
20000
10000
0
2005 2006 2007 2008 2009
Year
Fig 3: Total Deposit

At the end of the year 2009, the number of outstanding shares of our Bank stood at
3, 42, 26,373 shares. We had 30, 00,000 shares at the time of listing with Dhaka Stock
Exchange and Chittagong Exchange in 2000. We have issued 3, 12, 26,373 shares in the
Form of Bonus Shares and Rights Shares after listing with stock exchanges, showing
1040.88% increase in number of Bank’s outstanding shares. As we have been making
Substantial profits for five consecutive years, the harmony between increased numbers of
Issued Shares and Earning per Share is being maintained. The Bank’s positive Earning
per Share for the last five years is shown below:
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Earning Per Share
70
60 59.71
Amount
54.64
50
42.88
40
35.42
30 31.11
20
10
0
2005 2006 2007 2008 2009

Year
Fig 4: Earning Per Share
At the end of the year 2009, the number of outstanding shares of SEBL Bank stood at
34226373 shares. SEBL had 3000000 shares at the time of listing with Dhaka Stock
Exchange and Chittagong Exchange in 2000. It have issued 31226373 shares in the form
of Bonus Shares and Rights Shares after listing with stock exchanges, showing1040.88%
increase in number of Bank’s outstanding shares. As it has been making Substantial
profits for five consecutive years, the harmony between increased numbers of Issued
Shares and Earning per Share is being maintained. The Bank’s positive Earning per Share
for the last five years is shown at above& cash dividend and bonus share are shown
below.
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Bonus Share
40.00%
35.00%
35.00%
30.00%
25.00%
25.00%
20.00%
%
20.00%
20.00%
15.00%
10.00%
8.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Year
Fig 4: Bonus Share
Cash Dividend
25.00%
20.00%
20.00%
15.00% 15.00%
15.00%
%
10.00%
5.00%
0.00% 0.00%
0.00%
2005 2006 2007 2008 2009
Year
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Fig 5: Cash Dividend
During the year 2009, Return on Equity (ROE) of the Bank was 16.51 percent as against
12.06 percent of the previous year. The percentages of Return of Equity for the last five
years are given below:
Return on Equity
25.00%
17.64
% 19.90%
20.00%
16.51%
15.00% 17.98%
%
12.06%
10.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Year
Fig 6: ROE
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CHAPTER -3
LITERATURE VIEW OF LOAN AND ADVANCES OF SEBL
• LOAN
• TYPES OF LOANS
• LOAN CLASSIFICATION ---AN OVERVIEW
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3.0 LOAN
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of
financial assets over time, between the lender and the borrower. Or loan is an
arrangement in which a lender gives money or property to a borrower, and the borrower
agrees to return the property or repay the money, usually along with interest, at some
future point(s) in time. Usually, there is a predetermined time for repaying a loan, and
generally the lender has to bear the risk that the borrower may not repay a loan (though
modern capital markets have developed many ways of managing this risk).
According to oxford dictionary of business “a specified sum of money but by bank to

a customer, usually for a specified rate of interest is called bank loan or bank advance”1
“Banker’s credit means the credit granted by a banker to his customer’s”
Prof. Henchmen” when a bank makes an advance to a customer whether by overdraft or

loan account is called banker’s credit”
From above definition we can say that credit or advance is main function of a commercial
bank, which means banker grant credit to his customer for his profit. Bank lends money
in different forms.
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In a loan, the borrower initially receives or borrows an amount of money, called the
principal, from the lender, and is obligated to pay back or repay an equal amount of
money to the lender at a later time. Typically, the money is paid back in regular
installments, or partial repayments; in an annuity, each installment is the same amount.
The loan is generally provided at a cost, referred to as interest on the debt, which
provides an incentive for the lender to engage in the loan. In a legal loan, each of these
obligations and restrictions is enforced by contract, which can also place the borrower
under additional restrictions known as loan covenants. Although this article focuses on
monetary loans, in practice any material object might be lent.
Acting as a provider of loans is one of the principal tasks for financial institutions. For
other institutions, issuing of debt contracts such as bonds is a typical source of funding.
3.2 TYPES OF LOANS
3.2.1 Secured
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property)
as collateral for the loan.
A mortgage loan is a very common type of debt instrument, used by many individuals to
purchase housing. In this arrangement, the money is used to purchase the property. The
financial institution, however, is given security a lien on the title to the house until the
mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the
legal right to repossess the house and sell it, to recover sums owing to it.
In some instances, a loan taken out to purchase a new or used car may be secured by the
car; in much the same way as a mortgage is secured by housing. The duration of the loan
period is considerably shorter often corresponding to the useful life of the car. There are
two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the
loan directly to a consumer. An indirect auto loan is where a car dealership acts as an
intermediary between the bank or financial institution and the consumer.
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3.2.2 Unsecured
Unsecured loans are monetary loans that are not secured against the borrower's assets.
These may be available from financial institutions under many different guises or
marketing packages:
• credit card debt

• personal loans
• bank overdrafts
• credit facilities or lines of credit
• corporate bonds
The interest rates applicable to these different forms may vary depending on the lender
and the borrower. These may or may not be regulated by law..
3.2.3 Demand
Demand loans are short term loans that are atypical in that they do not have fixed dates
for repayment and carry a floating interest rate which varies according to the prime rate.
They can be "called" for repayment by the lending institution at any time. Demand loans
may be unsecured or secured.]
3.3 LOAN CLASSIFICATION ---AN OVERVIEW
Loan classification attempts to categorize the debt information in a systematic manner.

Loan classification is defined in terms of degree of risk associated with loans.
Classification of loans include only such assets of the balance sheet of a bank which did
not yield interest income and have remained past due for some quarters. The vastness of
the loan classification status of Bangladesh can be measured from the figures of total
classified loans in the country. Loans are generally categorized in Bangladesh as either
unclassified or classified. Loans are classified as substandard, doubtful and bad/loss as
per classification guidelines by the Bangladesh Bank.
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Objectives of Loan Classification:
 To find out Net Worth or Adjusted Capital of a bank.

 To help for assessing financial soundness of a bank.
 To calculate the required provision and the amount of interest suspense.
 To put the bank on sound footing in order to develop sound banking
practice in Bangladesh.
Importance of Loan Classification:
 Strengthen credit discipline

 Improve loan recovery positions
 Make planning for future course of loan.
Table 3:Type of loans to be reported in CLS.
Sl Type of loans
Definition
No.
1. Continuous These are those advances which do not have any set
schedule for drawing or disbursement but usually have a
terminal date of full adjustment or repayment, as for
example OD, CC.
2. Demand The loans which become payable after serving demand
notice by the bank concerned are termed as Demand
Loan. For Example- Forced LIM. PAD, FBP, IBBP
ETC.
3 Term These are loans, which is payable on specific repayment
schedule and specific period is to treated as term loan.
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For example- Project Finance, Industrial Finance etc.

4 Short Term Short term agriculture loan include the short-term credit
Agricultural / mentioned in the circular issued by Annual Agricultural
Micro Credit Department (ACD) of Bangladesh Bank under
annual credit program. Loan disbursed in agri-sector
repayable within 12 months will also be treated under
this head. Short term small loan means loan up to Tk.1
lac and micro credit repayable within 12 months.
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CHAPTER-4
LOAN AND ADVANCES AT SOUTHEAST BANK LTD
• OVERVIEW
• TYPES OF LOAN IN SEBL
• RATE OF INTERAST ON LOAN
• DOCUMANTATION OF LOAN
• PROCESS OF DISBURSMENT
• APPROVAL AUTHORITY
• PROCEDURE OF RECOVERY
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4.0 OVERVIEW
Bank credit means bank loans and advances. A bank keeps a certain proportion of its
deposits as minimum reserve for meeting the demand of the depositors and lends out the
remaining excess reserve to earn income. The bank loan is not paid directly to the
borrower but is only credited in his account. Every bank loan creates an equivalent
deposit in the bank. Thus, credit creation means multiple expansions of bank deposits.
The whole structure of banking is based on credit. Credit means getting the purchasing
power (i.e., money) now by a promise to pay at some time in future. The making of loans
and advances has always been prominent and most profitable function of a bank.
Sanctioning advances to clients and others out of the funds at its disposal is one of the
principal services of a modern bank. Commercial Banks deal with the money from the
depositors repayable on demand. So, they cannot afford to lock up their fund for long
periods. They usually grant short term advances which are utilized to meet the working
capital requirements of the borrower. Only a small portion of a bank’s demand and time
liabilities is advanced on long term basis where the banker usually insists on a regular
repayment by the borrower in installments. While lending fund a banker, therefore,
follows a very cautious policy and conducts his business on the basis of well-known
principles of sound lending in order to minimize the risk.
Loans and advances are the most profitable and the least liquid assets of the bank. Banks
provide loans and advances to the businessmen either through overdraft or by discounting
of bills of exchange. The difference between loans and advances is that the advances are
for short period and loans are for relatively longer period. Loans and advances earn high
rate of interest, carry greater risk and are generally non-shiftable. Thus, while and
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advances are mostly preferred by the banks because of their high yields, they are not
popular from the consideration of liquidity and safety of the bank.
4.1. TYPES OF LOAN IN SEBL
There are different types of loans are offered by the Southeast Bank Limited these are
given below –
1. Term Loans
a. Consumer Credit Scheme
b. House Building Loan
c. Staff Loan
2. Over Draft
3. Time loan
4. Industrial loan
(1) Term Loans:
The term loan is determined on the basis of conception period of a project and generation
of income by use of the loan. Such loans are provided for agricultural activities, farm,
machinery, dairy, and poultry; transport facilities, extension of tea gardens and
development of horticulture, fishing etc. Mainly loan has a time period of 3-5 years.
a. Consumer Credit Scheme (CCS): This is a special credit scheme provided by

Southeast Bank Ltd. to the service holders to buy car, furniture, computer, air-
conditioner, TV, DVD etc. the interest rate is 13% the customer must have an account
is the bank. The customer needs two guarantors. The customer needs a verification
certificate form his employer. Mostly this loan has a time period of 2 years to 3 years.
b. House building Loan: It is a long term Loan. This Loan is sanctioned for house
building purpose & interest rate is 16%. The following documents are required for this
type of loan -
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o Valuation certificate of the Bank

o Estimated cost for construction of house by the engineer
o A copy of permission from DIT
c. Staff Loan: This type of loan is only given to the employees or staffs of bank. This
type of loan gives some facilities to the staffs of the bank. The interest rate of the loan is
8.00%. The maturity period is 180 months to 15 years.
(2) Over Draft:

Advance in the form of overdrafts is allowed on a current account. The customers may
be sanctioned a certain limit within which he can withdraw his loan amount for several
times within a stipulated period. Here interest will be charged on the withdrawal loan
amount, overdraft facility is normally given to the party for the expansion of business
and this facility is given for maximum one year.
(3) Time loan:

It is a short term loan. It is sanctioned for less than a year. Normally this type of loan is
sanctioned for 3, 6 or 9 months.
(4) Industrial Loan:

The bank provides industrial loan to it clients. It is sanctioned for 5 years or above. In
order to get loan form the bank, the clients are obliged to fulfill certain requirements
provided by the bank.
4.1.1 BANK GUARANTEE:
Bank gives guarantee to his valued client on the basis of work order by tender. The client
should be deposited his margin amount which is refundable. For the bank guarantee client
needs to bear Stamp, Commission, and Vat etc charges. When client will like to close his
bank guarantee the bank maintain some procedure.
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Cancellation of Bank Grantee B/G: The amount deposited for margin on B/G bank
created liability account.
Margin A/C: DR.
Part A/C: CR.
Than
Liability A/C: DR.
Asset A/C: CR.
4.1.2 LOAN SYNDICATION
A Syndication of loan is a loan given to a party by some banks. There is a leading bank
and others are participants. Southeast Bank Limited is involved in this process with many
parties. Recent two loan syndication of Southeast Bank Limited is given below:
[1] Meer Cement- Loan amount Tk.15.00 crores

Lead arranger:
 Southeast Bank Limited
Participants:
 Arab Bangladesh Bank Limited
 Exim Bank Limited
[2] H.P Chemicals- Loan amount Tk.33.00 crores
Lead arranger:
 Prime Bank Limited
Co-arranger:
 Southeast Bank Limited
Participants:
 Exim Bank Limited
 Jamuna Bank Limited
Chowhatta Branch 31
4.2 RATE OF INTERAST ON LOAN

The Bank from time to time circulate the interest rates/pricing of loans, charges ,
commissions etc. to its Branches with the approval of the competent authority and as per
guidance of Bangladesh Bank. As on date the Bank fixes a mid rate for lending based on
the Average Cost of fund.
Table-4: Interest Rates of Loan
LENDING
LENDING CATEGORIES
RATE
1. AGRICULTURE.
• Loan to primary producers 9.00%
• Loan to Agricultural input Traders and Fertilizer 10.00%
Dealer/ /distributors
2. LARGE AND MEDIUM SCALE INDUSTRIES (TERM
16.00%
LOAN)
3. SMALL & COTTAGE INDUSTRIES (TERM LOAN) 16.00%
4. WORKING CAPITAL (Industrial)
o Jute 13.50%
o Other than jute 13.50%
5. EXPORT
o Jute Goods Export 11.00% Fixed
o Other Export 11.00% Fixed
6. COMMERCIAL, LENDING
• Jute Trading 14.50%
• Commercial Lending(Others) 14.50%
7. HOUSE BUILDING FINANCE
• Real Estate Developers 16 .00%
Chowhatta Branch 32
• Individual/Housing Finance Comp. 16.00 %

8. CONSUMER CREDIT SCHEME 16.00%
2.50% per month
9. CREDIT CARD
(Fixed)
10. FINANCE TO NBFIs 13.50%
11. OTHER LOANS
• SME 16 .00%
• Others 16 .00%
4.3 DOCUMANTATION OF LOAN
Documentation is obtaining such agreement where all the terms and condition and
securities are written and signed by the borrower. It specifies rights and liabilities of both
the banker and the borrower. In documentation each type of advances requires a different
set of documents. It also differs with the nature of securities. The documents should be
stamped according to the stamp Act. There are no hard and fast rules of documentation
and it varies from bank to bank. Generally, the documents are taken in the case of a
secured advance by SEBL:
i. Demand promissory note: Here the borrower promises to pay the loan as and
when demand by bank to repay the loan.
ii. Letter of arrangement.
iii. Letter of continuity.
iv. Letter of hypothecation of goods and capital machinery.
v. Stock report: This report is used for OD and CC. In this report, information
about the quality and quantity of goods hypothecated is furnished.
vi. Memorandum of deposit of title deed of property duly signed by the owners of
the property with resolution of Board of Directors of the company owning the
landed.
vii. Personal guarantee of the owners of the property.
Chowhatta Branch 33
viii. Guarantee of all the directors of the company.

ix. Resolution of the board of directors to borrow fund to execute documents and
completes other formalities
x. Form no. XVII/XIX for filling charges with the register of joint stock
companies under relevant section.
xi. Letter of Revival.
xii. Letter of lien for advance against FDR
4.4 PROCESS OF DISBURSMENT
4.4.1Pre-disbursement Compliance:
When the credit proposal are approved the credit officer must have to be ensured that the
disbursement of the credit facilities must comply with the directions written in the credit
policy and circular made by time to time along with checking all the following terms and
conditions.
 The officer of Loan Administration must collect the acceptance of the customer’s
of the terms and conditions on the duplicate copy of the sanctioned advice.
 They will thoroughly examine and ensure that the subject credit facility does not
contradict to any law, rules and regulation of the country, Bangladesh Bank and
deed of the Mortgage and power of the Attorney to be drafted and executed under
the Supervision of the Bank’s Legal Advisor.
 Lawyers certificate to the effect that all the legal formalities (Equitable/
Registered Mortgaged) has been properly created on the land and building in
favor of the bank and bank has acquired the effective title of the property.
 Registered power of attorney has been collected from the borrower (contractor)
assigning the work order favoring the bank and the power of attorney has been
registered with the work order given agency and they have agreed that they will
issue all the cheques favoring bank.
 The legal documents of the vehicle have been obtained.
Chowhatta Branch 34
 Collection of the satisfaction certificate in respect of all the documents both legal
and banking from the lawyer.
 After being satisfied all the above terms and conditions the credit in-charge will
disburse the loan amount to the client.
4.4.2 Mode of Disbursement:
After sanctioning of loan under the Scheme, Branch will disburse the loan amounts only
when all security documentation is in place, CIB report is obtained, as appropriate, and
clean, the loan amount will be disbursed and credited (against Quotation(s) to be
produced/submitted by the customers) directly to the respective account of the customers
to be maintained with the Branch and payment thereof (sanctioned amount plus client’s
equity) as per quotation(s) shall be made directly to suppliers/ shopkeepers through Pay
order or Demand Draft. Disbursement will be made in all cases after having
acknowledgement of receipt of the goods.
However for minor purposes disbursement may be made by clients’ choice at the
discretion of banking authority.
4.4.3 Mode of Repayment:
Maximum 60 (sixty) Equal Monthly Installments depending on loan amount and items.
Residue if any shall be paid along with last installment.
4.4.3.1 Early Repayment
The borrower may repay the loan in full before the end of the loan term. In such cases,
outstanding principal & accumulated interest as on the date of payment has to be paid.
In case of early payment Tk.1000/- will be charged. No partial payment allowed.
4.4.3.2Security /collateral & Documentation:
1) Duly filled in Loan Application Form Terms and conditions signed
2) Demand Promissory Note
Chowhatta Branch 35
3) Letter of Continuation
4) Irrevocable Letter of Authority for undated cheque
5) Letter of Introduction from the employer or referee (where applicable)
6) Personal guarantee of two guarantors acceptable to the bank and qualified to

borrow under the scheme.
7) Undated cheques for 1.5 times to the loan amount.
8) Post dated cheques as per repayment schedule.
9) Tin Certificates (if any)
10) Personal Net-worth statement
11) Salary Certificate / Pay slip / Bank Statement of 3-12 months
12) Proof of Professional Certificate (when required)
13) Quotations of Items to be purchased
14) Copy of recent Utility bill paid in the name of borrower (for address
verification)/ Copy of Passport/Copy of Valid Trade license
15) Letter of Hypothecation
16) Letter of Lien
17) Trust Receipt
18) Cash and/ or collaterals, immovable property, assignment of interest may he

accepted if offered by the client.
19) Other (if any)
• For Car Other Security/ Collateral
a) Hypothecation over the car (lien mark- Hire Purchase raised in the BRTA and
blue-book of the car).
b) First party comprehensive insurance of the car (Policy must be renewed every
year and copy of the policy must be submitted to the bank)
• For Cur Other Legal Documents
Chowhatta Branch 36
a) Letter of Set-Off
b) Irrevocable Letter of Authority to repossess the vehicle
c) Ownership transfer form signed by customer
d) Letter of Offer with full terms and conditions stated therein and duly accepted.
4.4.3.3 Other Terms & Condition
Prepayment
Prepayment penalty will be charged on the outstanding amount and when decided by the
bank.
Loan Renewal
Successive loans depend on track record of previous loan; usually repayment behavior of
the borrower is the main considerations for renewal and enhancement of the loan amount.
Recovery System
If the borrower fails to adjust the loan within validity period or to repay his monthly
installment then the responsible loan-monitoring officer of the concerned branch will
arrange for adjustment of the overdue installments from the borrower’s savings account if
there adequate balance. The Officer shall regularly follow up for recovery and necessary
measure for recovery.
Collection Steps
The goal of the collection process is to obtain payments promptly while minimizing
collection expense and write-off costs as well as maintaining the customer’s goodwill by
a high standard of service. Collection also protects the assets of the bank. This call be
achieved by identifying early signals of delinquency and thus minimizing losses.
To identify and manage arrears, the following aging classification is adopted:
Chowhatta Branch 37
Past Due
Collection Action
(DPD)
1-14 Letter, Follow up & Persuasion over phone
15-29 1st Reminder letter
30-44 2nd reminder letter + Single visit
• 3rd reminder letter
• Group visit by team member
45-59 • Follow up over phone
• Letters to Guarantor, Employer, Reference all above effort follows
• Warning on legal action by next 15 days
Call up loan
Final Reminder & Serve legal notice
60-89
Legal proceedings begin
Repossession starts
Telephone calls/Legal proceedings continue
90 and Collection effort continues by officer & agent
above
Letter to different banks/Association
4.5. APPROVAL AUTHORITY
The Bank’s existing policy is to centralize the delegated power to be vested to

Committees. This policy is adopted with the view to minimize the risk by screening the
proposal at the approval stage. The sharing of knowledge and experience for taking
decisions enables the management to avoid the unnecessary risk. The following
guidelines are to be applied in the approval/sanctioning of Loans.
• The credit approval authority must be delegated in writing from the MD and
Board (as appropriate) and records of all delegation to be retained in CRM.
• Before approving any facility the authority must be ensured that the borrowers
CIB report as obtained is updated and clean.
Chowhatta Branch 38
• Delegated approval authorities should be reviewed annually by MD/CEO/Board.

• The credit approval function should be separated from the marketing/relationship
management (RM) function.
• Approvals must be evidenced in writing, or by electronic signature. Approval
records must be kept on file with the Credit Applications.
• All credit risks must be authorized by Committee within the authority limit
delegated to them by the MD/CEO/Board. The “pooling” or combining of
authority limits should not be permitted.
• Credit approval should be centralized within the CRM function. Regional credit
centers may be established; however, all large loans must be approved by the
Head of Credit and Risk Management or Managing Director/CEO/Board or
delegated Head Office Credit Executives.
• The aggregate exposure to any borrower or borrowing group must be used to
determine the approval authority required.
• Any credit proposal that does not comply with Lending Guidelines, regardless of
amount, should be referred to Head Office for Approval.
• MD/Head Office Credit Committee / Head of Credit Risk Management must
approve and monitor any cross-border exposure risk.
• Any breaches of lending authority should be reported to MD/CEO, Head of
Internal Control, and Head of CRM.
• It is essential that executives/members of the Committee charged with approving
loans have relevant training and experience to carry out their responsibilities
effectively
4.5.1Credit Approval Process
Southeast Bank conducts its banking operation under branch banking system. For
administrative control and smoothening its day-to-day operation and extension of
Chowhatta Branch 39
appropriate and quick services, quick credit delivery, all branches have been placed under
centralized Credit Operation Department of Head Office. For mitigating the credit risk
due to lack assessment or refrain sanction of any credit facility without fulfilling the total
requirement for sanctioning a credit by the Head of Branch, Southeast Bank Limited has
introduced centralized system of sanctioning any type of credit except credit facility
backed by cash collateral.
Credit proposals are generally originated at branch. However proposals may also be
received at Head Office for syndication and also from big clients, Financial Institutions.
At the branch level the officers and executives of credit department must possess full
knowledge of the policy & procedures of credit operations. The credit officers and
executives after obtaining credit applications through Branch Manager along with all
required papers and documents ensures sufficiency and consistency of the papers and
documents. They originate credit proposals, prepare detailed credit memorandum after
undertaking a thorough credit check and conducting credit risk assessment of the client in
light of credit policy Guidelines of the Bank. The fully documented Credit Memorandum
(CM) is placed to the Branch Credit Committee by the In-charge credit. Credit committee
after thoroughly & critically examining the proposal recommend it to the Branch
Manager who approve credit under his delegated authority. When the proposal falls
beyond the power of the Head of Branch, it is sent to Head Office, Credit Division.
Divisional Head, Credit gets credit and risk assessed by Credit officials. The proposal
being found acceptable is placed to Head Office credit committee if the proposal falls
under the delegated authority of the Management. When the proposal is under the
approval authority of the Executive Committee, the proposal, having been assessed by the
credit Officers/Executives is placed to the EC, through Divisional Head, Credit, DMD
(credit) and the Managing Director, where the approval are accorded. If a proposal does
not meet the basic lending criteria as per Credit guidelines and banking norms, it is
declined and Credit Division inform the decision to the branch accordingly. Head office
Credit Division keeps credit files under proper control number and its use is restricted to
the authorized officials only
Chowhatta Branch 40
Flow chart for approval Process of Loans & Overdrafts
Credit Application processed by credit officers and recommended

by Credit In charge/ Head of Branch of the branch.
Fig: Flowchart for approval process of loans and advances

Branch Credit Committee
ne
ecli Head of Branch (HOB)
n/D
ctio
San
Head Office, Credit Division
Head Office Credit Committee
Managing Director
Executive Committee/Board of Director
4.5.2Mandatory Checking
 Proposed Credit facilities are compliant of the existing banking regulations.

 CRG has been done.
 Other analysis and assessment has been done properly.
Chowhatta Branch 41
 Competent authority as per Bank's policy approves facilities in writing.

 Credit approvals are given on a one-obligor basis.
 Limit is approved as per authority delegated in the rule book.
 Standard facilities are described using standard language.
 Large loans are approved within the ceiling advised by Bangladesh Bank.
 Fresh approvals, renewal, rescheduling, compromise agreement for large loan
accounts are placed for approval by the Board as per Bangladesh Bank
Guidelines.
 Proposal incorporates that facilities are subject to banking regulation, which
shall be mentioned in the sanction letter also.
 Approval authorities check that pricing of the facilities are within the Bank's
declared band.
4.5.3Appeal Process
Any declined credit will be represented to the next higher authority for re-assessment/
approval.
4.5.4 Segregation of Duties

The following lending functions should be segregated:
1. Credit Approval/Risk Management.

2. Relationship Management/Marketing.
3. Credit Administration.
The purpose of the segregation is to improve the knowledge levels and expertise in each
department, to impose controls over the disbursement of authorized loan facilities and
obtain an objective and independent judgment of credit proposals.
4.5.5 Preferred organizational structure & responsibilities
Chowhatta Branch 42
The appropriate organizational structure must be in place to support the adoption of the
policies detailed in Section 1 of these guidelines. The key feature is the segregation of the
Marketing/Relationship Management function from Approval / Risk Management /
Administration functions. Credit approval should be centralized within the CRM
function. Regional credit centers may be established, however, all applications must be
approved by the Head of Credit and Risk Management or Managing Director /CEO
/Board or delegated Head Office credit executive.
4.5.5.1 Preferred Organizational Structure

The following chart represents the preferred management structure:
Head of Branch
Credit Department Credit Administration
Fig 7: Organizational Structure Branch
CEO/Managing
Director
Deputy Managing
Director
Credit Administration
Credit Division
Deapartment
Chowhatta Branch 43
Law & Recovery
Unit
Fig 8: Organizational Structure (Head Office)
4.5.2.2 Key Responsibilities
The key responsibilities of the above functions are as follows.
Credit Risk Management (CRM)
• Oversight of the bank’s credit policies, procedures and controls relating to all
credit risks arising from corporate/commercial/institutional banking, personal
banking, & treasury operations.
• Oversight of the bank’s asset quality.
• Directly manage all Substandard, Doubtful & Bad and Loss accounts to
maximize recovery and ensure that appropriate and timely loan loss provisions
have been made.
• To approve (or decline), within delegated authority, Credit Applications
recommended by RM. Where aggregate borrower exposure is in excess of
approval limits, to provide recommendation to MD/CEO for approval.
• To provide advice/assistance regarding all credit matters to line management/
RMs.
• To ensure that lending executives have adequate experience and/or training in
order to carry out job duties effectively.
Chowhatta Branch 44
Credit Administration:
• To ensure that all security documentation complies with the terms of approval
and is enforceable.
• To monitor insurance coverage to ensure appropriate coverage is in place over
assets pledged as collateral, and is properly assigned to the bank.
• To control loan disbursements only after all terms and conditions of approval
have been met, and all security documentation is in place.
• To maintain control over all security documentation
• To monitor borrower’s compliance with covenants and agreed terms and
conditions, and general monitoring of account conduct/performance.
Relationship Management/Marketing (RM)
• To act as the primary bank contact with borrowers.

• To maintain thorough knowledge of borrower’s business and industry through
regular contact, factory/warehouse inspections, etc. RMs should proactively
monitor the financial performance and account conduct of borrowers.
• To be responsible for the timely and accurate submission of Credit Applications
for new proposals and annual reviews, taking into account the credit assessment
requirements outlined in Section 4. 1.2.1 of these guidelines.
• To highlight any deterioration in borrower’s financial standing and amend the
borrower’s Risk Grade in a timely manner. Changes in Risk Grades should be
advised to and approved by CRM.
• To seek assistance/advice at the earliest from CRM regarding the structuring of
facilities, potential deterioration in accounts or for any credit related issues.
Internal Audit/Control
Chowhatta Branch 45
• Conducts independent inspections annually to ensure compliance with Lending

Guidelines, operating procedures, bank policies and Bangladesh Bank directives.
Reports directly to MD/CEO or Audit committee of the Board.
4.6 PROCEDURE OF RECOVERY:

In whatever form bank advances are, granted, they are repay-able on demand or at the
expiry of some fixed period. Sills of exchange discounted are repayable on demand,
although the bank seldom exercises the right except in circumstances mentioned below.
Loans are repayable on the expiry of the periods for which they are granted. In case the
loan is repayable in installments and default occurs in the payment of any installment, the
entire loan usually becomes immediately recoverable at the option of the bank.
4.6.1 Recalling of advances

Banks conduct a regular scrutiny of all advances and ensure that timely action is taken in
each case either for the continuance of the facility on the existing terms, or with such
modifications as may be considered necessary, or for the recovery of the amount if it is
decided not to continue the facility. Advances are usually recalled under the following
circumstances:
1. Death of the borrower or the guarantor.
2. Insolvency of the borrower or the guarantor, or liquidation of the borrowing
company.
3. Dissolution of the partnership.
4. Failure to renew the documents sufficiently before the expiry of the period of
limitation. The bank cannot afford to wait till the last day when the period of
limitation expires.
5. Want of satisfactory turnover, or deterioration of the security.
6. Failure to adhere to the terms and conditions of the sanction in spite of the bank’s
repeated requests.
Chowhatta Branch 46
7. Deterioration of the financial position of the party. If it comes to the notice of the
bank that the party has committed a fraud or has heavily speculated, it will be an
adverse factor and the bank may consider recalling the advance.
8. Failure to maintain adequate margin in spite of reminders to the borrower.
9. Change in the bank’s policy regarding certain types of advances. The bank may at
any time decide advances against certain commodities because of their over
production or the fear of an expected slump.
There may also be other reasons for withdrawing the facility e.g. the law and order
situation at a certain place is such that it may be risky to continue the advance there.
In the cases stated above, the bank endeavors to revokes the advance by making a formal
demand, and thereafter, if necessary, by putting pressure on the borrower or his legal
representatives, as the case may be, with a threat of legal action. If there is a guarantor, he
is also called upon to adjust the account or have it adjusted by the principal. The party
may come round and make a proposal for repayment—may be by installments—and
request for time to implement it. He may agree to offer additional security or a
respectable guarantor of means. The banker should carefully scrutinize the proposal and
if he considers that the debt could be recovered without resorting to litigation, he may
agree. Much will, however, depend on the honesty of purpose of the borrower and his
financial position at that time. If he is already heading towards insolvency, any
indulgence shown to him may further complicate matters for the bank. If the threat of
litigation does not have the desired effect, the bank may consider filing a Suit. It must,
however, be known that legal proceedings entail a good deal of delay and expense and
the results in the long run may not generally be satisfactory.
4.6.2 Notice
In case, the borrower does not adjust the account as desired, the only course left open to
the bank would be to send a registered, acknowledgement due, notice to him and to the
guarantor, if any, preferably through a lawyer. This should normally be done after
obtaining the approval of the authorities concerned, unless the case is urgent and there is
Chowhatta Branch 47
no time to seek their instructions. If the advance is on a pledge basis, the notice should
state that in case the advance is not fully and finally adjusted within, say, a fortnight, the
pledged goods would be sold by private sale or public auction at the discretion of the
bank and the net sale proceeds would be applied in repayment of the advance with
interest. The notice should also state that the borrower as well as the guarantor, if any,
would be liable for any balance that might remain due, after the security has been sold. If
it is an unsecured advance, the borrower and the guarantor, if any, should be threatened
with a suit after the period mentioned in the notice has expired.
The Post Office receipt/s for sending the registered letter/s and the acknowledgement/s by
the addressee should be carefully preserved, as it/these may have to be tendered in the
court as documentary evidence.
In case the borrower or guarantor refuses to accept the registered notice, the Post Office
would return it to the bank in due course with the remark ‘Refused’. This is sufficient
service in law. It would not be necessary, as such, to tender the evidence of the postman
in whose hand the word “refused” was written. The cover with the remarks of the post
office should be kept intact with the other relative documents.
The bank should carefully scrutinize the documents before serving legal notice or filing a
suit. Any discrepancies in the documents, if noticed, should be tactfully got corrected by
the borrower. After the notice has been served, it would be difficult to secure the
cooperation of the party. The documents must be kept safely in proper custody,
preferably under dual control.
4.6.3 Goods under pledge

If the account is by way of pledge and the pledgor makes default in payment of the debt,
the bank as a pledgee has two alternatives. It may bring a suit 4 in the sale of the pledged
goods is the debtor himself, whose business is to deal in them. Care should, however, be
taken that the borrower does not enter into collusive transactions for his, own benefit.
Chowhatta Branch 48
4.6.4 Stocks under hypothecation

If the charge is by way of hypothecation, the bank, under the relative documents, has a
right to take possession of the security and thereafter treat it as a pledge. The bank may
take over possession of goods and start selling them after giving reasonable notice to the
borrower. There may, however, be practical difficulties in obtaining possession of the
hypothecated goods from an un-cooperative borrower, when the bank requires the
possession thereof.
4.6.5 Mortgages
In both types of mortgage- simple and equitable- a suit will have to be filed against the
mortgagor to enforce recovery and sell the mortgaged property. A preliminary decree is
passed by the court against the mortgagor in the first instance giving him time to redeem
mortgaged property. If the mortgagor (judgment debtor) fails to pay dues to the
mortgagee (decree-holder) within the stipulated time, a final decree is passed against him
ordering the sale of the mortgaged property through the court.
4.6.6 Life policies

If the debtor fails to redeem his indebtedness and the bank holds as security a life policy
or life policies which have been assigned by the debtor, the bank will have to consider the
action it should take in the circumstances; whether to pay the future premiums to the
debit of the borrower’s account and maintain the policies in force until they mature, or to
surrender them.
When an endowment assurance does have a long period to run to maturity, the amount
expected on maturity may exceed the cost of maintaining the policy, in which case, if the
debt is not fully covered and repayment from some other source is not likely it will
obviously be worthwhile to continue payment of the premiums both from the point of
view of the gain to be realized eventually and the death-risk cover. If the bank decides
Chowhatta Branch 49
that it would not be advantageous to maintain the policy, it may surrender the policy and
obtain from the insurance company payment of the surrender value.
4.6.7 Unsecured advances

It is possible that the security, if any, may not be sufficient to liquidate the entire
advance. In certain cases no security may be available. Attempts should, in such cases, be
made to secure the advance. If that is not possible and the party does not repay the
amount after the period specified in the notice, a suit may have to be filed, after carefully
assessing the chance of recovery of the debt.
4.6.8 Compounding with the borrower

The borrower may sometimes offer a proposal to the bank to compound the debt, in taka
full and final settlement of the debt. In this case, it will have to be considered whether it
would be in the interest of the bank to arrive at a compromise with the borrower or to
proceed legally against him and get a decree for the amount due from him. The position
of the party and the guarantor, if any, and the chances of recovery through Court process
will have to be carefully assessed before compounding the debt. It should, however, be
noted that if there is a guarantor, the settlement cannot be arrived at without his consent
unless there is an express clause to that effect in the agreement of guarantee.
4.6.9 Death
1. Borrower’s Death: After a borrower’s death (in the case of an individual soul
proprietor of a concern), no further withdrawals or debits in his advance account
should be permitted. If the borrower’s successors and heirs approach the bank for
the continuance of the facility, the case, will have to be examined from all angles.
In case the bank agrees to the request, the debit balance in the account of the
deceased may be transferred to a new account in the name of his heirs or
successors along with the securities held in the account. Legal opinion may have
to be taken before this is done. If the desired facility is refused or no application is
made by the heirs or successors in this behalf, the securities, if any, may have to
be sold and the guarantee, if there is one, invoked. For the balance, if any, a suit
Chowhatta Branch 50
may have to be filed and a decree obtained, if adjustment is not possible out of
court. It should be noted that the heirs of the deceased borrower are responsible to
pay the debt only to the extent of the assets of the deceased, which come to their
hands. They are not personally liable.
2. Death of partner: Unless there is an agreement to the contrary between the
partners, a partnership is dissolved by the death of any partner. If the firm’s
account is overdrawn and the banker desires to retain his clime against the estate
of the deceased, or if securities belonging to the deceased partner are held for the
firm’s account, the account should be stopped and a new one opened for the
future transactions. In case where a guarantee is held from a thud party, the
account should also be broken on the death of a partner, until fresh arrangements
are made with the firm and with the guarantor.
3. Death of joint customer: In such an eventuality, steps similar to those stated in
the previous paragraph will be necessary with suitable modification depending
upon the circumstances of the case.
4. Death of guarantor: Similar steps, as stated above, are necessary in this case too.
4.6.10 Insolvency
Insolvency of a borrower, whether he is an individual or a partner of a firm, or that of a
firm or one or more of the borrowers in a joint account, creates problems of its own and it
would be necessary to explain what is insolvency and the steps to be taken in such a
contingency.
Meanings of insolvency, insolvent: When a person is unable to pay his debts in full and
upon his adjudication as an insolvent, his property, in certain circumstances, is taken
possession of by the Official Receiver or the Official Assignee, under orders of the Court.
He realizes the debtor’s property and ratably distributes the proceeds among his creditors.
Such a proceeding is called ‘insolvency’, and the debtor is known as the ‘insolvent’.
Chowhatta Branch 51
The petition to declare a person or a firm insolvent is made by a creditor or the debtor
himself, to a court of competent jurisdiction, which appoints an officer, usually the
official Assignee or the Official Receiver, to take immediate possession of the assets of
the person or the firm concerned. He realizes the assets and makes a ratable distribution
of the proceeds (called dividend) amongst the insolvent’s creditors. Any person or firm
capable of entering into a contract can be adjudged an insolvent if he/it is a debtor and
has committed an act of insolvency. No insolvency petition can be presented against any
corporation, association or company registered under any enactment for the time being in
force.’ They can be wound up in accordance with the procedure laid down by the relative
Act.
When an order of adjudication has been made, all persons claiming to be creditors of the
insolvent in respect of debts provable against him have to tender proof of their respective
debts by producing evidence of the amount and particulars thereof, and the Court
determines the persons who have proved themselves to be creditors of the insolvent in
respect of such debts, and the amount of such debts, respectively, and frames a schedule
of such persons and debts. If, in the opinion of the Court, the value of any debt is
incapable of being fairly estimated, the Court may make an order to that effect, and
thereupon the debt is no included in the schedule. The debt may be proved by delivering,
or sending by post in a registered letter, to the Court an affidavit verifying the debt. The
affidavit shall contain or refer to a statement of account showing the particulars of the
debt, and shall specify the vouchers (if any) by which the same can be substantiated. The
Court-may at any time call for the production of the vouchers.
In the case of third party security, the banker may for the time being ignore the security
and make a claim on the estate of the insolvent for the full amount of the debt. If the
dividend or dividends that the banker receives from the estate of the insolvent are not
sufficient to clear off the debt, the banker can thereafter fall back on the said security for
the balance due to him.
4.6.11 Discharge
Chowhatta Branch 52
A debtor may, at any time after the order of adjudication but within the period specified
by the Court, apply to Court for an order of discharge. The Court may grant or refuse an
absolute order of discharge, or suspend the operation of the order for a specified time or
grant an order of discharge subject to certain conditions. A person once adjudicated an
insolvent continues to remain an undercharged insolvent until he receives his discharge.
4.6.12 Stopping of account

On the insolvency of one of the borrowers in a joint account, or of a principal or a
guarantor in case of a guaranteed account, the account should be broken and any future
payments will reduce the liability of the insolvent to the bank.
It would always be advisable to take competent legal advice as

soon as it is known that a petition of insolvency is pending in court or the-borrower has
been adjudged as an insolvent.
4.6.13 Suit and decree

While recommending institution of legal proceedings in any case, branches are generally
required by Head Office to indicate the chances of recovery of the amount involved, the
estimated cost of the litigation (court fees, counsel’s fees and miscellaneous expenses)
and the approximate time that would be required for getting a decree. On the basis of the
information supplied, Head Office decides whether it would be worthwhile to take legal
action or to write off the amount.
If it is decided, ultimately to file a suit it has to be done against all parties, the principal or
his heirs, successors or assigns and the guarantor or his heirs, etc., if any, a the case may
be. After a decree is obtained, it has to be executed through court process by attachment
and sale of the judgment debtor’s property.
Chowhatta Branch 53
Chapter -5
ANALYSIS AND FINDINGS
Chowhatta Branch 54
• FINANCIAL PERFORMANCE OF SEBL

• DEPOSIT OF SEBL
• ANALYSIS OF GROWTH IN LOAN AND ADVANCES
• PROBLEMS OF SOUTHEAST BANK
5.0 FINANCIAL PERFORMANCE OF SEBL
Southeast Bank's policy was to expand the loan portfolio moderately in consideration of
economic and socio-political scenario of the country. The Bank's loans and advances
increased by 25.10% in 2008 to Tk.60281.26 million as against Tk. 48,164.60 million in
2007.The Bank emphasized on disbursement of agriculture credit for the farmers in
fulfillment of government's socio-economic policy. The Bank extended a considerable
amount of agri-credit directly or indirectly via NGOs through rural branches.
Chowhatta Branch 55
The credit portfolio of the Bank is now very well diversified having a balanced mix
covering a wide spectrum of business and industries including readymade garments,
textiles and spinning, telecommunication, pharmaceuticals, steel and engineering, ship
scraping, cement, edible oil, real estate, education and transport etc. The Bank also
expanded its financing to the Small Enterprises and Consumers under SME Credit
Scheme and Consumers Credit Scheme. Moreover, in order to help the poor segment of
people of the society, the Bank extended its financial assistance to NGOs for onward
financing to the poor people.
The Bank also got involved in extending facilities in the CNG dedicated buses and CNG
filling stations under Dhaka Clean Fuel Project against refinance program of Asian
Development Bank (ADB) through Rupantarita Prakritik Gas Co. Ltd. (RPGCL). The
Bank has separate units at Credit Division of Head Office working for handling
Garments Industry, Syndication Loans, Project Financing, Loans to Small Enterprises

and Consumers etc. to ensure due diligence and to expedite the decision making process.
Recently, the Bank also introduced House Building Finance Scheme under Refinance
Scheme of Bangladesh Bank.
The Bank has already given continued efforts to maintain high quality of assets. Besides
giving emphasis on the satisfactory business performance of the clients and collateral
support, we have geared up loan monitoring and follow up activities to arrest the loans
from becoming non-performing. The non-performing loans of the Bank increased to
4.12% as on December 31, 2008 from 3.77% of the year 2007.
5.1 DEPOSIT OF SEBL
The bank mobilized total deposits of TK. 68714.67 million as of December 2008 as
compared to TK. 55474.05 million in 2007. Competitive interest rate, attractive deposit
products, deposit mobilization efforts of the bank employees and confidence reposed by
Chowhatta Branch 56
the customers in the bank contributed to the notable growth in deposits. The deposit mix
of the bank as on December 31, 2008 was as follows:
Growth in deposit (Taka in Million)
80000
Deposit ( Taka in Million)
70000
60000
50000
40000
30000
20000
10000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
Fig 9: Growth in Deposit
5.1.1Guarantee Business
The bank issued guarantees amounting to Tk.15,078.99 million during the year 2008
compared to Tk. 9008.32 recorded in the previous year registering a growth of 67.39
percent. The guarantees were issued in favor of different Govt. authorities, Ministries,
autonomous bodies, corporations, private companies, individuals and
multinational companies, etc. on behalf of the valued clients of the bank.
Chowhatta Branch 57
Growth in Gurantee Business
20000
Amount (taka in
15000
million)
10000
5000
0
2004 2005 2006 2007 2008 2009
Amount in million 3391.2 4717.8 7975 8656.8 9008.3 15079
Year
Fig 10: Growth in Guarantee Business
5.1.2Corporate Finance
Corporate Finance is the broad term given to different facilities that large companies,
governments, or other big institutions need in order to meet their long term and short-
term financial requirement. Southeast bank’s business is focused to a considerable extent
on the corporate clients by maintaining the relationship and extending financial assistance
based on a deep understanding on the client’s business environments, financial needs and
internal strategies for growth.
5.1.3 SME Financing
The bank introduced SME financing scheme in 2004. Because of mounting, special
emphasis, the bank could extend facilities to 2848 small and medium enterprises
amounting to Tk.6, 595.21 million as on 31.12.2008 which was Tk,3,023.05 million to
1,513 customers in 2007 registering 118.16 percent growth.
5.1.4 Syndicated Finance
Southeast Bank Limited, the pioneer amongst the local private commercial banks, started
participation in the syndicated facility since 1996. the has an independent unit for
such finance which is enriched with qualified and experienced bank officers. Since then
the bank participated in 46 syndications of Tk.25,581.40 million of which
Chowhatta Branch 58
Southeast Bank's participation was Tk. 5,048.00 million. Out of total syndication of
Tk.25,581.40 million, the bank acted as arranger/agent of 13 syndications for Tk.4,500.00
million and the projects have been successfully running as profitable concerns.
Growth in investments
15000
Amount (taka in
10000
million)
5000
0
2004 2005 2006 2007 2008 2009
Year
Fig 11: Growth in Investment
5.2 ANALYSIS OF GROWTH IN LOAN AND ADVANCES

The total loans & advances of the bank increased from Tk.3402.21 million in 1999 to
Tk.60281.26 million in 2009. The growth rate in loans & advances over the previous year
and over the base year (1999) has been analyzed as under:
Table: 3 Analysis of Growth in Loans & Advances
Year Loans & Advances Growth rate over

the previous year
1999 3402.21 ---
2000 5051.88 48.49%
2001 7061.87 39.78%
2002 9178.03 29.96%
2003 13027.13 41.93%
2004 15548.11 19.35%
2005 22001.70 41.50%
2006 32551.09 47.95%
Chowhatta Branch 59
2007 41147.28 26.41%

2008 48164.60 17.05%
2009 60281.26 25.16%
The highest growth in loans and advances was in the year 2000 i.e. 48.49%. In the year
2009 growth rate in loans and advances was 25.16% over that of the year 2008. Loans &
advances of Southeast Bank over the previous year witnessed a positive growth rate. The
growth in loan and advances of Southeast Bank over the past ten years are showed below
in a diagram
Southeast Bank, on an average, provided loans & advances of Tk.23401.38 million per
year. Like deposit there has been rising trend in loans & advances during the period from
1999 to 2009. This indicates that the average rate of increase of total loans & advances
was Tk.23401.38 million per year. This indicates that bank could sustain positive trend of
business during the period 1999 - 2009.
Classified Loans (Last 5 Years):
Table: 4 Last 5 years classified loan of this branch

Figure in “000”
Year Total Amount
2005 33903
2006 33835
2007 24015
2008 26237
2009 29953
Chowhatta Branch 60
35000
30000
25000 2005
20000 2006
15000 2007
10000 2008
2009
5000
0
2005 2006 2007 2008 2009
Figure 12: Last 5 years classified loan of this branch
The amount of classified loan is increasing in the year 2006.From the graph, it has been
seen that classified loan was decreased from the period of 2007 to 2008.But in 2009 it
was increased. In 2008, the total amount of classified loan was 2 crore 62 lac and in 2009,
this amount has been increased which is 2 crore 99 lac.
Total Loan and Advances (5 Years):
Table: 5 Last 5 years loan and advance:

Figure in “000”
Year Total Amount
2005 797726
2006 845877
2007 678400
2008 617333
2009 960027
Chowhatta Branch 61
1000000
800000
2005
600000 2006
2007
400000
2008
200000 2009
0
2005 2006 2007 2008 2009
Figure 12: Last 5 years loan and advance:
Total loan and advances of this branch was not satisfactory before 2009. In 2008, the
total amount of loan and advances was only 61 crore 73 lac. After that the amount of loan
and advances was grow which was 96 crore.
Amount of Various kinds of Loan & advances:
Table- 6 Amount of Various kinds of Loan & advances( Last 5 years)

Figure in “000”
Year Time Term CCS Overdraft Advances Advances Staff
loan loan (BLC) (LTR) House
Building
Chowhatta Branch 62
2005 5,18,92 40,34,32 8,12,3 32,64,08 32,64,08 32,32 32,82

2006 4,12,21 41,11,85 26,97 37,97,31 69,41 10,27 30,72
2007 3,69,32 36,27,72 15,57 27,21,94 14,56 7,60 27,24
2008 6,00,08 32,27,99 32,14 22,49,24 34,27 5,80 23,77
2009 6,123,12 33,12,05 34,23 24,54,12 36,82 7,20 22,10
The most popular modes of disbursement of this branch are term loan and overdraft.
These two modes of disbursement contribute more than 85% of total disbursement for
each financial year. Though the time loan and CCS has the great influence on this
specified area. The highest disbursement on term-loan has been occurred in 2006. In that
period more than TK. 41.11 Crore has been financed to various economic sectors. Term
loan is mainly given for real estate business and other industrial areas. Overdraft is a mid
term loan which is mainly financed for the requirement of working capital. Again, in the
year 2006, the amount of disbursement on overdraft was highest when more than TK.
37.97 crore has been financed to the professionals. Consumer credit scheme is a type of
loan which is mainly given to the professionals or public/private employee. The amount
of CCS is decreasing in each year. Advances (BLC) and Advances (LTR) are two modes
of disbursement which is issued against the letter of credit. These are the short term loans
and the amounts of these two modes are negligible. Staff house building loan is a loan
which is issued only to the staffs of the branch at a lower interest rate for the purpose of
house building for the staff. The volume of this mode of finance is also very much
negligible.
Percentage of Classified Loans:
Table: 7 Percentages of Classified Loans:
Chowhatta Branch 63
Year Percentage of classified loan (%)

2005 4.25
2006 4.00
2007 3.54
2008 4.25
2009 3.12
In 2008 the percentage of classified loan was very high which was 4.25%. But in 2009,
the percentage of classified loan was decreased which was 3.12%.
Perchantage of Classified Loan
2005
2006
2007
2008
2009
Fig 13: Classified Loan of SEBL
Position of Loan and Advances of the branch:
Table: 8 Position of Loan and Advances of the branch
Chowhatta Branch 64
Year Loan(In 000) Classified Loan(In % of Non

000) performing Loan
2005 797726 33903 4.25

2006 845877 33835 4.00
2007 678400 24015 3.54
2008 617333 26237 4.25
2009 960027 29953 3.12
In the year 2008, non-performing loan was 4.25% and in one year period of time, it
reduced to 3.12%. It happened due to intensive disbursement of Fresh Loan in the year
2009 rather recovery of classified loan. In the year 2009 additional TK.34.26 crore loan
was disbursed. Apparently it seems that % of classified loan reduced in 2009. But
actually, from the year 2008 to 2009 classified loan was increased by TK37.16 lac. On
the other hand we see that in 2006 non-performing loan was 4% and 2007, it was 3.54%.
This improvement in 2007 was because of recovery of classified loan. In 2008, classified
loan was 2.6 crore and in 2007, classified loan was 2.4 crore which is less than in
2008.So in 2007, non-performing is also improved.
Loan Recovery (Last 5 years):
Table: 9 Loan Recovery (Last 5 years)
Figure in “000”
Year Amount
Chowhatta Branch 65
2005 23,60,33
2006 28,00,67
2007 58,47,53
2008 17,10,43
2009 50,33,13
The recovery of loan of this branch was not in a satisfactory level before the period 2007.
In 2005, the amount of total recovery loan was only TK.23.60 crore. After that the
amount of recovery was increasing in each financial year though the trend was very slow
before 2007. In the year 2007, the total recovery of this branch was more than TK. 58.47
crore. In 2008 the amount of total recovery has stood above TK17 crore.In 2009 the
amount of recovery is TK 50 crore.
Loan Recovery
700000
600000
500000
Amount
400000
300000
200000
100000
0
2005 2006 2007 2008 2009
Year
Fig 14: Loan Recovery

Disbursement and Recovery ratio:
Table-10 Disbursement and Recovery Ratio
Chowhatta Branch 66
Year Total Loan Recovery Ratio

2005 797726 23,60,33 29.59%
2006 845877 28,00,67 33.11%
2007 678400 58,47,53 86.19%
2008 617333 17,10,43 27.71%
2009 960027 50,33,13 52.43%
From the table, we see that the ratio for disbursement and recovery is in an increasing
trend. In 2005, the ratio was only 29.59%, but this ratio comes to 86.19%. in 2007. In
2008, the ratio for disbursement and recovery becomes to 27.71%.
[Ratio :( Recovery of Loan/Total Loan)*100]
1000000
800000
600000
Total Loan
400000 Recovery
200000
0
2005 2006 2007 2008 2009
Fig 15: Disbursement and Recovery
Area of Disbursement
Table: 11 Disbursement n different sectors of this branch

Figure in “000”
Chowhatta Branch 67
Year Business/ Real Consumer Working Export Import Miscellaneous

Industrial Estate Loan Capital
2005 2,27,05 34,23,3 1,27,19 25,26,93 21,57 41,67 33,54
5
2006 5,18,92 40,34,3 81,23 32,64,08 32,32 13,54 32,82
2
2007 4,12,21 41,11,8 26,97 37,97,31 69,41 10,27 30,72
5
2008 3,69,32 36,27,7 15,57 27,21,94 14,56 7,60 27,24
2
2009 6,07,91 35,77,1 33,00 21,44,01 40,65 7,60 25,79
1
business/
Disbursement n different sectors of industrial
this branch in 2009 real state
consumer
loan
working
capital
export
import
Miscellaneo
us
Fig 16: Disbursement

The SEBL, LDP is financing most of its disbursement on the real estate and working
Capital for the business sectors. In these two sectors this branch investing more than 85%
of its total loans and advances. In business/ industrial sectors, this branch is also investing
which has an influence on its total disbursements. Consumer loan is another important
segment where this branch is also keeping a significant role on the total economy. This
branch is also financing on export/import sectors though the amount insignificant
compare with the others sectors.
Chowhatta Branch 68
5.3 PROBLEMS OF SOUTHEAST BANK
Although Southeast Bank Limited (SEBL) has been profitable organization in

Bangladesh for the last ten years but it has also got some limitations. These limitations
exist in the operations, management and etc. of the Bank. Some identified problems are
as under:
• Credit card service is also provided but for getting this card client must be
deposited security more than as how much he/she want. But security should not
deposited for credit card holder it should be give to their valued client those who
are maintain high transaction
• The CC TV does not cover whole space into the bank it should be cover full
place.
• Comparatively Southeast Bank takes high service charge from their client for
current account Tk.690 and saving account Tk.690 yearly.
• Minimum balance required to maintain in account by the client is Tk.5000 for

both savings and current account.
Chowhatta Branch 69
• Southeast Bank Limited was started consumer loan but right now it stopped for
defaulter. It should be again start and give consumer loan to well known client.
• The management should implement “job rotation system” in the bank. This is
the system in which every officer is capable to work in every desk. This system
can build up Total Quality Management (TQM).
• Credit officers does not properly monitor the loan disbursements
• No guideline for merchant banking.
• While taking loan clients sometimes provides false securities, collaterals.
• The process of loan proceeds takes more than a month which some times makes
the borrower helpless to get the loan on due time.
• The head office should not centrally control all the decision; branch should have
some power to take decision.
• Bank should more focus on agricultural and industrial credit and discourage
consumer durable finance.
• Bank should make proper and exhaustive documentation before disbursement and
to ensure proper supervision, monitoring and follow up of each credit
• Southeast Bank is facing shortage of employee in their branches.
• There is a very few merchant location of ATM card booth. In facts the bank have
no its own ATM booth
Chowhatta Branch 70
CHAPTER 6
SWOT ANALYSIS
Chowhatta Branch 71
6.0 SWOT ANALYSIS OF SOUTHEAST BANK
SWOT analysis, is a strategic planning tool to evaluate he Strengths, Weaknesses,

Opportunities and Threats involved in a project or in a business venture. It involves
specifying the objective of the project or business venture and identifying the internal and
external factors that are favorable and unfavorable to achieve the objectives. The aim of
the SWOT analysis is to identify the key internal and external factors that are important
to achieve the objectives
6.1 Strengths
 Well-built investment arrangement

 Having a goodwill in the banking sector
 Client loyalty is exceptionally high.
 Improved working situation
 Training and development facilities
 Good interior decorations with central air-condition.
 Minimum waiting time
Chowhatta Branch 72
 Good personal relationship with customers.

 Southeast Bank has its well-trained employees.
 Southeast Bank is providing online banking facility to its customers. All the
branches are computerized.
 Good corporate image in the banking sector.
 It’s a good profit making branch of SEBL.
 Providing loan in corporate sector.
 Amount of bed debt lower.
6.2 Weaknesses
 Worker number is inadequate

 More up to date banking facilities such as account checking by mobile, Credit
card is unavailable.
 The workforces of the bank are not receiving appropriate validation regarding
different type of facilities.
 Centralized management makes decision-making process more difficult and time
overriding
 There is no 24 hours banking facilities.
 Binding in rules and regulation.
 Lack of communication between management.
6.3 Opportunities
Chowhatta Branch 73
 As Chowhatta branch of SEBL is situated most commercial area it has a chance to

attract the more businessmen.
 It has the chance to capture students segment of the market by giving them customized
service for both saving and credit scheme.
 The population of Bangladesh is continuously increasing at a rate of 7.3% per annum.
The country’s growing population is gradually and increasingly learning to adaptation of
consumer finance.
6.4 Threats
 Current law and order situation is not positive for the investment part.
 The percentage of credit defaulter is elevated
 Pessimistic representation to the govt. and to Bangladesh Bank.
 Some Banks offering more attractable rate on deposits than Southeast Bank.
 Some foreign Banks are introducing many new, expensive and technological
services for customers.
 Many foreign banks are occupying markets by various attractive advertising and
promotional activities but Southeast Bank is still behind them.
 Number of potential competitors both foreign and domestic private banks is
increasing day by day. At present HSBC, Prime Bank, Dutch-Bangla Bank,
EXIM Bank, BRAC Bank, Mercantile Bank, Social investment, Islamic Bank are
also coming up with very competitive force
Chowhatta Branch 74
CHAPTER -7
RECOMMENDATIONS
Chowhatta Branch 75
7.0 RECOMMENDATIONS
The following important activities need to be performed by the bank to become more
efficient and effective in near future
 SEBL should establish new/updated financial products to attract potential

depositors.
 Customer’s credit scheme should ameliorate by various modern banking systems.
 Current portfolio should be exaggerated. Not to give weight only in working

capital financing.
 They should create other type of deposit to attract more customers.
 The loan officer must determine that borrower for responsible attitude toward
using borrowed funds, is truthful in answering the bank’s question and will make
every effort to repay what is owed.
 The loan officer must be reviewed all types of loan on a periodic basis
Chowhatta Branch 76
CHAPTER: 8
CONCLUSION
Chowhatta Branch 77
8.0 CONCLUSION
In his modern world like all other sectors banking sector is also changing. Southeast bank
is operating its’ business facing various barriers like deregulation, telecommunication and
globalization successfully. Southeast bank limited has been trying to operate its business
successfully since 1995. The bank has already developed good image and goodwill
among its clients by offering excellent services to its customers. Through SEBL is facing
both external and internal problems, it can achieve dynamic leadership by taking
implementing marketing strategies. Within a few years of its operation, the bank has
captured a position in the banking sector and it is looking forward.
Chowhatta Branch 78
Reference:
1. A Text Book Foreign Exchange by L.R. Chowdhury.
2. A Journal of Banking Finance Volume XXVII Nos. 2 & 3, June & September 2003
3. Annual Report of the Southeast Bank, 2009
4. Credit Manual of the South East Bank Limited
5. Cooper, Donald R. and Schindler, Pamela S. (1999, 6th ed.), Business Research
Methods, Tata McGraw-Hill Publishing Company Limited, New Delhi, India.
6. Chowdhury, L. R. (2002, 2nd ed.), A Text Book on Banker’s Advances, Dhaka,

Bangladesh.
7. Circular:
BCD Circular of Bangladesh Bank no. 20 date 27.12.1994
BRCD Circular of Bangladesh Bank no. 16 date 06.12.1998
BRPD Circular of Bangladesh Bank no. 09 date 14.05.2001
8. Bank Management & Financial Services, sixth edition (McGraw-Hill International

Edition).
9. www.sebank.bd.com
10. Zikmund, William G (2003, 7th Ed.) Business Research Methods, South-Western,
Ohio, the USA.
Chowhatta Branch 79
• Recruit more employees.

• Southeast Bank may
Chowhatta Branch 80

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Loan and Advances of SEBL

INTRODUCTION OF THE RRPORT

• ORIGIN OF THE STUDY

1.1 ORIGIN OF THE STUDY

The Applied Research Work program exercise a significant importance as it is

1.3 OBJECTIVE OF THE STUDY

The specific objective are

1. To know more about the credit sanctioning policy of SEBL.

4. To identify and suggest scopes of improvement in loan and advance portfolio of

.1.4 SCOPE OF THE STUDY

 Credit evaluation system of Southeast Bank Limited.

1.5 SOURCES OF INFORMATION

The following methodology will be followed for the study:

1.7 LIMITATION OF THE REPORT

ORGANIGATIONAL OVERVIEW OF SOUTHEAST BANK

• STATUS OF THE BANK

• SOUTHEAST BANK AT A GLANCE

2.0 STATUS OF THE BANK

2.1 VISION OF THE BANK

2.2 MISSION OF THE BANK

• High quality financial services with the help of latest technology.

• Innovative banking at a competitive price.

2.3. CORE VALUES OF THE BANK

2.4 CLIENT COMITMENT OF THE BANK

2.5 NATURE OF BUSINESS

2.6. DEPOSIT SCHEME

c) Monthly Savings Scheme (MSS)

2.7. LOAN SCHEME

2.8. INTERNATIONAL BUSINESS

The international business of the bank includes the following:

2.9. OTHER PRODUT/SERVICES

The other product / services offered by the bank are as under:

2.10 CORE OBJECTIVE

2.11 MANAGEMENT STRUCTURE OF SEBL

Southeast Bank is blessed with a well-designed management structure with clearly

Cashier Trainee Cashier

2.12 SPECIAL FEATURE OF THE BANK

g) Southeast Bank Limited is engaged in conventional commercial banking.

j) The operation of the bank is computerized to ensure prompt and efficient

TABLE 1:SOUTHEAST BANK AT A GLANCE

Authorized Capital 10000.00 3500.00 3500.00 2500.00 2500.00

Total Income 13704.45 10250.13 8670.47 6766.11 4689.55

Earning per Share (Taka) 54.64 31.11 40.88 59.71 35.42

Bonus Shares 35%(20:7) 20%(5:1) 25%(4:1) 8% (12.5:1) 20%(5:1)

Return on Equity (ROE) 16.51% 12.06% 19.90% 17.98% 17.64%

Fig 1: Authorized Capital

Fig 2: Shareholders Equity

The Bank mobilized total deposits of Tk.96669.05 million as of December, 2009 as

Deposit (2005-2009) At a Glance

Fig 3: Total Deposit

Earning Per Share

2005 2006 2007 2008 2009

Fig 4: Earning Per Share

Fig 4: Bonus Share

Fig 5: Cash Dividend

LITERATURE VIEW OF LOAN AND ADVANCES OF SEBL

• LOAN CLASSIFICATION ---AN OVERVIEW

According to oxford dictionary of business “a specified sum of money but by bank to

“Banker’s credit means the credit granted by a banker to his customer’s”

Prof. Henchmen” when a bank makes an advance to a customer whether by overdraft or

3.2 TYPES OF LOANS

• credit card debt

3.3 LOAN CLASSIFICATION ---AN OVERVIEW