National University, Bangladesh

Project Report
On
“Credit Risk Management Of Bangladesh Commerce
Bank LTD”

Submitted to:
Controller Of The Examinations
National University, Bangladesh

Submitted by:
Jannatul Ferdous
Class Roll: 855
Reg. No.: 17501001976
Session: 2017-2018
BBA (Final Year)
Department of Business Administration
Dhaka Commerce College, Dhaka

Supervised By
Farzana Haque Boby
Lecturer
Department of Business Administration
Dhaka Commerce College, Dhaka

Date of submission 15th October, 2023

 Letter of Transmittal
Date: 15th October, 2023

Controller of the Examinations

National University
Gazipur-1704, Bangladesh

Subject: Submission of Project Report.

Dear Sir,
I have prepared my Project Report on “Credit Risk Management of Bangladesh
Commerce Bank LTD” under your kind supervision as a requirement of completing the
degree of BBA program. I have tried my best prepare the report in consistence with the
optimal standard under you valuable direction.

I have made every effort to reveal greater insight in this report. I hope that this will meet
the standard of your judgment.

Thanking you for your kind supervision.

Sincerely Yours

Jannatul Ferdous
NU Reg. No. : 17501001976
college ID No: BBA-855
Major: Accounting & Information System (AIS)
Session: 2017-2018
Dhaka Commerce college, Dhaka
 Student’s Declaration

I do hereby declare that this Project Report entitled “Credit Risk Management of
Bangladesh Commerce Bank LTD” Submitted by me to Dhaka Commerce College,
Dhaka under National University, Bangladesh, for the degree of Business Administration.
This project work was carried out under the supervision of Farzana Hoque Boby,
Lecturer, Department of Business Administration, Dhaka Commerce College, Dhaka.

I also declare that this paper is my original worked and prepared for academic purpose
which is a part of BBA. The work as a whole or in part thereof has not been submitted in
any form for any other degree at anywhere.

----------------------------------------
Jannatul Ferdous
NU Reg. ID : 17501001976
College ID No :BBA-855
Major : Accounting Information System (AIS)
Session : 2017-2018
Dhaka Commerce College, Dhaka
 Acknowledgement

At first I wish to express my eternal gratitude to the Almighty for the blessings,
protection, help and wisdom in all aspects of my life.

I wish to express immense indebtedness and deepest sense of gratitude to my respected

supervison Farzana Hoque Boby, Lecturer, Department of Business Administration,
Dhaka Commerce College, Dhaka, for her valuable advice, guidance, encouragements
and helpful suggestions throughout the period of study.

I wish to thank to all the respected teachers of the Department of Business

Administration, Dhaka Commerce College, Dhaka, for their cordial co-operation.

I would also like to thank to my friends for their continuous support and inspiration.

Above all, I am really grateful to the authority of for providing me important information
and invaluable co-operation from time to time in completing the Project Report.

Finally, I am really grateful to my family members who give me all kinds of support and
enthusiasm to complete my BBA.

----------------------------------------
Jannatul Ferdous
NU Reg. ID : 17501001976
College ID No :BBA-855
Major : Accounting Information System (AIS)
Session : 2017-2018
Dhaka Commerce College, Dhaka
 Supervisor’s Declaration

The Project Report on “Credit Risk Management Of Bangladesh Commerce Bank

LTD” has been submitted to the Department of Business Administration of Dhaka

Commerce College, Dhaka, under National University, for the degree of BBA of

Business Administration. I hereby declare that I have cheeked this Project Report and in

my opinion this is satisfactory in terms of scope and quality for the students of this

course.

--------------------------
Farzana Hoque Boby
Lecturer
Department of Business Administration
Dhaka Commerce College, Dhaka
 Executive Summary

The Project report is prepared as requirement of BBA program of Dhaka Commerce

College. This report is on “Credit Risk Management of Bangladesh Commerce Bank
LTD”. This report is intended to assist the reader in detailed understanding the
credit risk management process. It also attempts to capture the procedures practiced in
Bangladesh Commerce Bank Ltd. (BCBL) in relation to credit handling. The purpose of
this report is to have an idea about the credit process and risk management procedure
of Bangladesh Commerce Bank and then to assess its effectiveness in connection with.

At the starting of the report Introduction, Objectives, Sources of data collection

(Methodology), Scope & Limitations of the report are discussed. The main objective of
this report is to fulfill the partial requirement of BBA program. And secondary objectives
are to know and gather knowledge about the Credit Risk Management system of BCBL.
The scope of the report is to give students opportunity to personally observe the complexity
and find out the various ways to solve different problem applying the theoretical knowledge
developed during course of the study. There are also some limitations of the report such as
lack of Information, lack of time etc.

Secondly, in the organizational part I have provided detailed information about the
organization with its company profile, Corporate Vision and Mission, product & service
and resources of BCBL. The bank has various products and services for its customers. It
has a huge number of clients for different types of products and services. The core values,
core strength, strategies are also discussed in brief too.

Thirdly I’ve discussed about the overall credit risk management process of BCBL
which starts with the branch and done fully under head office’s credit department. It
covers the credit appraisal, Credit sanction for the borrowers. Various credit
documentation procedures followed by the bank. The report also covers credit
administration activities of credit risk administration unit. The report describes
disbursement of the loans and advances in prerequisite ways. It describes the
monitoring and control of individuals’ credits. It explains how the bank manages the
credits and to minimize financial losses. This report describes the classification of loans.
The recovery process implies that a borrower will be treated legally in case of failure in
repayment of loans.

Finally I tried to give some suggestion to the base of my knowledge and experience which
I have achieved during Project at BCBL Mirpur Branch, for further growth in credit and
convenience in credit risk management and expansion of this Branch. The whole system
has been described elaborately keeping in mind the most important segment.
 Table of Content
Sl No. Particular Page
Letter of Transmittal I
Student’s Declaration Ii
Acknowledgement Iii
Supervisor’s Declaration Iv
Executive Summary v-vi
Chapter-1 Introduction 1
1.1 Origin of the Report 2
1.2 Objectives of the Report 3
1.3 Methodology of the Report 3
1.4 Scope of the Report 4
1.5 Limitations of the Report 4
Chapter-2 Overview of Bangladesh Commerce Bank Limited 5
2.1 Historical Background 6
2.2 Branches of BCBL 6-7
2.3 Vision 8
2.4 Mission 8
2.5 Strategic Priorities 8
2.6 Offerings 9
2.6.1 Cash Credit Hypothecation 9
2.6.2 Overdraft 9
2.6.3 Bill Purchase / Discounting 9
2.6.4 Term Loan 9
2.6.5 House Building Loan 9
2.7 Products/Services of BCBL 10
2.8 Corporate Profile of BCBL 11
2.9 Board of Director 12
2.10 Analysis 12-19
Chapter-3 Credit Risk Management of BCBL 20
3.1 Overview of Credit Risk Management 21
3.2 Types of Credit risk of BCBL 21-23
3.3 Objectives of Credit Risk Management 23
 3.4 Instruments and Tools used in Credit Risk Management 23
3.5 Major Functions of CRM 24
3.5.1 Duties and Responsibilities of CRM 25-26
3.6 Credit Principles of BCBL 27
3.7 Deviation from the Credit Policy 27
3.8 Credit Risk Management of BCBL 27
3.9 Types of Credit Activities of BCBL 27-29
3.10 Credit Risk Assessment 30
3.11 Qualitative Approach 30
3.12 Credit Risk Grading 31
3.12.1 Functions of Credit Risk Grading 31
3.12.2 Use of Credit Risk Grading 31-32
3.13 Credit Risk Grading Definition 33-34
3.14 Credit Facilities Parameter 34
3.14.1 Maximum Size 34
3.14.2 Maximum Tenor 35
3.14.3 Securities 35
3.15 Early Alert System 36-37
3.16 Process of Credit Risk Management 37
3.16.1 Credit Processing/Appraisal 37-40
3.17 Credit Department of BCBL 40-41
3.18 Disbursement 41-42
3.18.1 Creit Recovery 42
3.19 Function of Recovery Unit 42-43
Chapter-4 Findings, Recommendations 44
4.1 Findings 45
4.2 Recommendations 46
Chapter-5 Conclusion 47
5 Conclusion 48
Appended Bibliography 48
Part