INTERNSHIP REPORT ON

NON-PERFORMANCE LOAN (NPL) ANALYSIS OF

Submitted To:
Anwar Zahid
Lecturer A (Senior Lecturer)
Department of Finance
School of Business & Entrepreneurship
Independent University, Bangladesh

Submitted By:
Name: Fahim
Tanvir ID: 1930443

Date of Submission: 30th April 2023

 LETTER OF SUBMISSION

30th April 2022

To,
The Supervisor,
Anwar Zahid
Senior Lecturer, Independent University, Bangladesh.

Subject: Submission of internship report on National Credit & Commerce Bank Limited.

Dear Sir,

It is a great pleasure for me to present the internship report based on “National Credit & Commerce
Bank Limited." I have attempted my best to follow your rules in each part of arranging and setting
up my report. I have conducted my internship at National Credit & Commerce Bank Limited, at the
Shantinagar Branch in Shantinagar, under your close supervision. During the internship period, I
gained experience and knowledge that was helpful and that I believe will aid me in my professional
life. Though we are on the learning curve, this report has enabled me to gain insight into the core
facts of banking for an institution. Thank you for your support in completing the report; without your
help, things would be more difficult and challenging to finish this report. I hope you find this report
informative and useful, and I therefore request that you accept the report and oblige thereby.

Yours Sincerely,

FAHIM
TANVIR ID-
193044

I
 ACNOWLEGMENT
I am very thankful to everyone who made it possible for me to complete this internship report. For his
insightful comments and constant support throughout my internship and especially throughout the
drafting of my report, I am deeply thankful to my supervisor, Anwar Zahid Sir. For her constant
guidance, I have greatest appreciation. I'd also like to thank the people at National Credit & Commerce
Bank Limited for their help; they allowed me to access their resources and information to finish my
internship. From the branch manager, Mr. A.T.M. Habib (AVP and Branch Manager), to the rest of the
personnel at the bank, I would like to extend my sincerest gratitude, but especially to Mr. Mirza Raquibil
Alam (EO and Deputy Manager), who assisted me throughout my internship. The most information I
gained about their niche was from them. The bank staff was extremely helpful and kind.

II
 Executive Summary
The Bangladeshi government recognized the need for a commercial bank; therefore, they established
National Credit and Commerce Bank Ltd. (NCCBL) in 1994. To conduct banking operations, the
corporation is governed by the Bank Company Act of 1991 (as amended) and the Bangladesh Bank
Ordinance of 1972.

I have experience in virtually every division of this financial institution. The role of the General Banking
Department in the smooth functioning of the country is crucial. Account opening, payment, remittance,
clearing, cash, and computer services are all part of general banking. They allow the bank to connect
with its clients, collect payments, transfer money, and honor checks written on the branch's account.
These services are offered more quickly and competently by the general banking department.
(Assemblment Point, n.d.)

We all know that investments are the "heart" of a bank since they provide so much of the institution's
revenue. The growth and health of bank investment impact the nation's money supply and, in turn, the
amount of economic activity, making them crucial to the economy. Keeping in line with Bangladesh
Bank's lending policy, the bank widened access to its investment facilities across industries. The
investment department is crucial to the expansion and profitability of the bank. Secured Overdraft, Cash
Credit, Home Construction Loan, Trust Receipt (TR), Inland Bill Purchase (IBP), Overseas Bill
Purchase, etc. are only a few of the investment options available to its clientele. The bank's Investment
Section collects papers, including DP Notes, Letters of Lien, Registered Mortgages of Collateral
Security, and more, to guarantee the bank's money. (Assemblment Point, n.d.)

III
 Table of Contents
LETTER OF SUBMISSION.....................................................................................................................I
ACNOWLEGMENT................................................................................................................................II
Executive Summary.................................................................................................................................III
CHAPTER 01.............................................................................................................................................1
1.1 Company Profile................................................................................................................................2
1.1.1 Vision, Mission & Objectives.......................................................................................................2
1.1.2 Corporate Division/Department...................................................................................................3
1.1.3 Product & Services........................................................................................................................5
1.1.4 Operation Details:.........................................................................................................................7
1.1.5 Corporate Social Responsibility:................................................................................................12
CHAPTER 02...........................................................................................................................................13
2.1 The Internship Experience & Responsibilities of an Intern.......................................................14
2.2. Function of the Department.........................................................................................................15
CHAPTER 03...........................................................................................................................................18
3.1 Industry Analysis............................................................................................................................19
3.2 Finding Peer Group/ Main Competitor of NCC Bank...............................................................21
3.2.1 Non-Islamic Bank........................................................................................................................21
3.2.2 Ratio Analysis:.............................................................................................................................22
Non-Performing Loan......................................................................................................................22
Bad Debt Ratio..................................................................................................................................23
Non-performing Loans to Total Asset............................................................................................23
Coverage Ratio..................................................................................................................................25
Loan To Deposit................................................................................................................................25
Loan Loss Provision Ratio...............................................................................................................26
3.2.3 Islamic Bank................................................................................................................................27
3.2.4 Ratio Analysis:.............................................................................................................................28
Non-Performing Loan......................................................................................................................28
Bad Debt Ratio..................................................................................................................................29
Non-performing Loans to Total Asset............................................................................................29
Coverage Ratio..................................................................................................................................30
Loan To Deposit................................................................................................................................31
Loan Loss Provision Ratio...............................................................................................................32

CHAPTER 04...........................................................................................................................................33
4.1 Recommendations...........................................................................................................................34
 4.2............................................................................................................................................Conclusion
References.................................................................................................................................................36

List of Tables and Figures

Figure 1.....................................................................................................................................05
Figure 2.....................................................................................................................................09
Figure 3.....................................................................................................................................10
Figure 4.....................................................................................................................................11
Figure 5...................................................................................................................................13
Figure 6...................................................................................................................................17
Figure 7...................................................................................................................................18
Figure 8...................................................................................................................................21
Figure 9...................................................................................................................................22

Chart 01..................................................................................................................................22
Chart 02..................................................................................................................................23
Chart 03..................................................................................................................................24
Chart 04..................................................................................................................................25
Chart 05..................................................................................................................................26
Chart 06..................................................................................................................................23
Chart 07..................................................................................................................................23
Chart 08..................................................................................................................................28
Chart 09..................................................................................................................................29
Chart 10..................................................................................................................................30
Chart 11..................................................................................................................................31
Chart 12..................................................................................................................................32
CHAPTER 01

Page 1
 1.1 Company Profile

The history of National Credit and Commerce Bank Limited is distinct from that of any other bank. The
company's roots are in the country's financial industry, where it was founded as an investment firm in
1985. The corporation set out to play a catalytic role in the development of the country's industrial and
trade sector and capital market by raising funds from internal sources and investing them in productive
enterprises. The firm owes a great deal of its success in these areas to the fact that it is a member of the
browser. The firm served the country through its 16 branches until 1992, at which point it received
approval from the Central Bank to transform into a full-fledged private commercial Bank with paid-up
capital of Tk. 39.00 crore. From its founding, NCC Bank Ltd. has maintained its stellar reputation via its
dedication to providing each customer with attentive, individual service in a cutting-edge digital setting.
The Bank has pioneered innovative approaches to finance in the I&T&F sector. Customers, both
businesses and individuals, have been drawn to the Bank because of the variety of deposit and credit
options it offers. (NCC Bank, 2021)

1.1.1 Vision, Mission & Objectives

Vision
To combine credit and business for the benefit of our shareholders and the development of our country
as an innovative and socially responsible financial institution. (NCC Bank, 2021)

Mission
Providing first-rate banking services to our local neighborhoods relies heavily on the quality of the
relationship with the consumer. Creating long-term fixes by fusing together our innovative, cutting-edge
technology, extensive knowledge, and robust financial resources for our customers and partners
Fostering a warm and welcoming community allows customers and employees alike to thrive. (Ncc
Bank, n.d.)

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Objectives:

 To start relationship banking and improve the quality of services by making Strategic
Marketing Plans.
 To keep going, one of the best banks in Bangladesh when it comes to making money
and having good assets.
 To put in place systems that are fully automated by using information technology.
 To make sure that partners get a good return on their investments.

 To keep the amount of risk in an acceptable range, including any risks that don't show up
on the balance sheet.

 To keep the business growing in a way that fits the image that is wanted.

 To keep good management systems and clear procedures in place to make sure that all available
resources are used as well as possible.

 To work toward a good system of administration by making sure everyone follows ethical
rules and is open and accountable at all levels.
 To build and keep a good staff with the help of a good human resource management system.
 To keep the business growing in a healthy way and to keep the image that was wanted.

1.1.2 Corporate Division/Department

 Human Resource Management

 Banking Operation Division

 Credit Administration Division

 Card & ADC Division

 Finance & Accounts Division

 NRB Banking & Foreign

 Remittance Division

 ICC Division

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 Trade Finance Processing Center, Dhaka

 Board's Secretariat

 Marketing and Development Division

 Treasury Division

 Risk Management Division

 Credit-Risk Management Division

 Retail Banking Division

 Agricultural Loan Unit

 International Division
The Department Are:

General Banking Department

Foreign Exchange Department

Investment Department

Figure:01
General Banking Department
The general banking functions will be carried out by this division. Every other division has merged into this one.
It also has a major impact on the branch's ability to attract deposits. General banking is sometimes referred to as
the "mother" of banking.

However, NCCBL offers a variety of accounts, lockers, and savings plans under its general banking umbrella.

Page 4
Foreign Exchange Department
The Foreign exchange department deals with foreign currency and the dealing of it. The major jobs of this
department are listed below:
 Letter of Credit (for Export and Import)

 Dollar/Travelers Cheque (TC) Endorsement

 Foreign Remittance

 Foreign Currency Account

Investment Department
The investment policy of National Credit & Commerce Bank is distinguished by its adherence to the
ideals and principles of the profit-loss sharing system. The investment philosophy of NCCBL places a
higher priority on achieving social good and providing job opportunities than on maximizing financial
gain.

1.1.3 Product & Services

The Bank can produce money products and services in a variety of ways. Products like Monthly Savings
Schemes, Consumer Credit Schemes, Lease Finance, Women's Personal Loans, and the Shop Financing
Scheme served as inspiration for these offerings. Bank services are available around the clock, seven
days a week, using Debit Cards and NPSB ATM cards from National Credit & Commerce Bank Ltd.
NCCBL offers the following products and services to its clients. The Bank's services cover a broad
range. Some examples are as follows:

 Deposit Schemes

 Remittance and Collection

 Import and Export handling and Finance.

 Project Finance
Page 5
  Investment Banking

 Hire Purchase.

 Personal Loan for Woman

 24-hours Banking: NPSB ATM facility

 Corporate Banking

 Consumer Credit Scheme

 International Banking

Corporate Banking:
NCCBL's Banking Services are aimed at meeting the individual requirements of each client. The Bank
categorizes the demands of its commercial clientele and develops customized solutions. National Credit
& Commerce Bank Ltd. provides a comprehensive suite of advisory, financial, and operational services
to its commercial clientele. Among these are investment banking, treasury services, and transaction
banking.

CORRESPONDENT RELATIONSHIP (INTERNATIONAL):

Nearly 12 million (6.66% of total Bangladeshi Citizens) citizens of Bangladesh (Non-Resident
Bangladeshi-NRB) are staying abroad to earn foreign money directly to bolster our national economy,
making expat banking a rapidly expanding business worldwide. Our goal is to provide NRBs and
their domestic beneficiaries with individualized banking services and products. Our mission is to
serve the needs of Bangladeshi expatriates, who are often highly educated and competent workers
who have found themselves temporarily or permanently stationed in a foreign country.

Online Banking:
There is a lot of competition in the banking sector nowadays because of the importance placed on
offering a wide range of products and providing superior customer service. NCCBL understands that it
must adopt innovative technologies and respond to a dynamic business climate or risk falling behind the

Page 6
competition.

Page 7
They have an all-encompassing strategy to boost service and delivery to better satisfy customer
demands. New technologies like the "FLORA BANK ONLINE BANKING SOFTWARE" and the
switch code, servers, ATMs, data storage system, and other hardware needed to set up a fully working
data center in the computer departments indicate their dedication to modernization. Customers may save
money while receiving superior banking services thanks to NCCBL's completely automated online
market.

Personal Banking:
When it comes to personal banking needs, National Credit & Commerce Bank has a comprehensive
selection of services and products available. Transaction accounts, savings plans, and loan options are
just some of the services that National Credit & Commerce Bank Ltd. provides. To guarantee client
satisfaction, they take extraordinary measures. Having a positive experience at a branch might depend
on the quality of the employees there.

1.1.4 Operation Details:

Work-Related Activities - When I joined National Credit & Commerce Bank Ltd, I did different activities. There
are 5 major general banking operations, they are-
1. Account section
2. Cash section
3. Clearing and transferring section
4. Remittance section
5. Account opening section.

Account Opening Section:

A person instantly becomes a customer when they choose to open an account with a bank. A person or a
company can open an account to carry out safe financial activities. Customers open accounts to deposit
money into them. Without deposits, banks cannot operate. Customers must complete an official-looking
form to transact business with a bank.

Page 8
Account Opening Process:

Conversation With The Customer

Fill Up Account Opening Form

Collect Introducer Information

Collect And Attach All Necessary Documents

Verify Account Opening Form

Deposit Initial Amount In Newly Opened Account

Figure:02

Here, there is significant documentation of consumer information. It serves as the customer's identity
evidence, and the information can subsequently be verified by the appropriate authorities. While opening
an account, customers must provide the following forms of identification:
• Photocopy of national ID card/ driving license /passport.
• Need nominee’s signature and photos.
• Photos of account holders and nominees.
• TIN-certificate.

Accounts Title: Account title depends on person’s name or company’s name.

Type of Account: There are different types of accounts for customers, as like-

Page 9
 Type of
Account

Current Deposit
Account

Fixed Deposit Savings Students Salary Business

Account Account Account Account Account

Figure:03

Other Bank A/C(s) of the customer: Some customers have various accounts in other banks. They
must mention this in detail as it is the rule of this bank.
Introducer's Information: When a customer opens an account, he or she needs an introducer to open
a bank account. In the form, they need to mention the account number, account name and details of
the introducer.

Nominees Information: Account holder requires nominees to take depositary money in absence
of account holder. So, this requires the nominee’s name, address, occupation, religion, income,
national ID, 2 copy photos.

Source of Fund: What is the source of income to deposit the money is to be included in the form. It can
be from individual businesses or Service Company.

Declaration and Signature: Customers sign the form that works like guaranties or proof of real
customer of the account. They must give the same signature for all the transactions.

Checkbook issue: Customers must have a checkbook to complete transactions. Customers will fill out
the check requisition form to order a check book. Customers' names, account numbers, account names,
and the account holder's signature are required for check requisitions. The officer then requests a
checkbook from headquarters. Take the checkbook after that, then hand it to the consumers. The
checkbooks come in 10, 20, or 50 leaf options.

Page 10
Closing account: Account can be closed by two reasons, those are-

By Customer If consumers don't conduct any transactions within six months,

the banker may occasionally shut the account. because the
account's balance is getting lower and lower every day.

By Customer The banker must have closed the account before the account
deposit time expired if the customer wants to shut their own
account.

Figure:04
Cash Section:
The money in a bank is a vulnerable asset. Cashiers carefully carry out their jobs to protect the company.
The Safe Room or the vault is another name for the bank's safe. The first chief cashier and official
supervisor check the cash book, which is where the bank logs withdrawals and deposits.
Cash received: Cash may be deposited by deposit slip of CC/SB/FD/CD or creditors vouchers.
To deposit cash, the following some steps are followed:
• The cashier should check the deposit slip like- account title, account number, amount in words
and figures.
• Currency should be counted physically or by a counting machine by the cashier.

• The cashier gives her or his signature on the deposit slip and writes the amount with a red
pen. Affix cash received stamp with date.
• The cashier officer retains the original deposit slip and gives a duplicate slip to the client.

Payment Cash: Customers may make payments in person with cash, debit cards, demand drafts, credit
cards, money orders, and check deposit slips. In this instance, the bank checks certain processes,
including:
• Should verify the account holder's signature.

• Checks are delivered to the account department for storage.

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• Checks cannot be approved until the drawer confirms them.

Page 12
Clearing Section
General banking depends on the clearing division. Following posting, Account Payee Credited separates
the deposit slips, clears them with the new date, and seals them. Every branch of NCC Bank Ltd is
computerized and is controlled by a server located in the clearing house. There are two types of houses:
• Same day clearing house.

• 1st clearing house.

• There are 2 two types clearing, those are-

 outward

 inward

Account and remittances Section

• On the last day of each month, produce a statement of the bank's total assets and liabilities.

• Recording daily financial status

• Picked up clearing checks and sent them to the main branch.

• Write down how much stationary costs.

• Make a wage sheet and salary sheet.

• provide solvency certificates.

• Collect all the coupons and extras and put them in order.

Page 13
 1.1.5 Corporate Social Responsibility:
NCC Bank has earned a great reputation since its founding because of its commitment to social
responsibility and the initiatives it has taken to promote the healthy development of communities,
economies, and infrastructure. Thus far, we have distributed aid during times of crisis, provided medical
aid to individuals and institutions, provided stipends to deserving students who would otherwise be
unable to continue their study, etc. Throughout the epidemic, the Bank sent essential supplies to
hospitals and clinics around the world.

Education

Health and Well -Being

Environmental Management

Disaster Management

Figure:05

Page 14
CHAPTER 02

Page 15
 2.1 The Internship Experience & Responsibilities of an Intern:
I worked in two different departments at NCC Bank's Shantinagar Branch during my time as an intern.
This is how NCC Bank typically works to adapt interns to the organization, give them a flavor of all its
operations, and provide them the best opportunity to learn as much as possible from the bank. Below I'll
go over my duties as an intern in several departments.
Cash Department:
In the cash division, I was not assigned any duties. My role was to facilitate efficient operations within
the division and reduce the workload for the staff. Most of what I picked up concerned the bank itself,
such as the requirement that anyone withdrawing 50,000 taka or more prove their identity. I observed to
learn how to operate the photocopier and the cashier's duties. Due to the high demand in other sectors,
such as general banking, I was only here for a short while.
General Banking Department:

Although my role in general banking was quite apparent, the department was a hot, stifling mess.
Everything was vitally needed, but no one could seem to find anything, and nothing was ever where it
should have been. My responsibilities included completing a mountain of account paperwork. I am
pleased to report that I have successfully closed at least 150 accounts during my tenure at the general
banking department. In addition, I handled financial transactions. It was my job to organize the stack of
checkbooks that would be dropped off by the delivery man each morning and store the inventory list
somewhere secure. Later, when clients came to pick up their orders, I had to have them sign a list and
hand over their checkbooks. The genuine owner of a checkbook was sometimes unable to come to the
office to get it. Thus, I'd need to request to see the letter of authorization, have the in-charge double-
check the signature, have the proxy sign the list, attach the letter of authorization to the list, and only
then would I be able to hand over the check book. Debit cards and their related PINs were my
responsibility. These goods were delivered to the bank in a manner analogous to that of checkbooks,
although a list of debit cards was typically not included. As a result, I devised a register system in which
information was entered by hand prior to the issuance of cards and PINs. For security reasons, we keep
PINs in a different location from debit cards. While I worked at the bank, I shuttled checks between
Awlauddin Bhai, who handled the day- to-day business, and Nusrat Apu, who oversaw the accounting.
In addition to their regular operations, the bank had to handle some ad hoc responsibilities. In this
process, the checkbooks and debit cards were "destroyed," and the captured cards were returned to the

Page 16
corresponding financial institutions. Checkbooks

Page 17
and company debit cards were "destroyed" under my watch. NCC Bank will keep your checkbook and
debit card safe for up to six months after the original delivery date. If after 12 months the customer still
has not received their checkbook and debit card, then we shall trash them. The list of items to be
destroyed is sent out for disposal after every reasonable effort has been made to contact the client and
confirm delivery or absence thereof. The ATM might "steal" your card sometimes. This can happen if
the customer enters incorrect card information or if the ATM makes a mistake. In most cases, the
machine will just reject the card, and the shopper can try again later. In the extremely unlikely event that
the machine does not return the card, it is forwarded immediately to the associated financial institution.
If the card is not issued by NCC Bank, the issuing bank must be contacted, the situation explained, and
the card and letter forwarded. Lastly, I was sometimes trusted to handle inquiries from customers or
close deals on my own. I did well.

2.2. Function of the Department

I have worked for the General Banking departments in the NCC Bank Shantinagar branch.
General Banking department: The primary function of the general banking division is to assist
customers in opening new accounts and to offer guidance on how to maximize interest earnings. They
hand over the customer's checkbook and authorize them to cash any check in the book.
GENERAL BANKING ACTIVITIES:
The "heart" of any full-service bank is the general banking department, whose primary function is to
accept deposits. Banks not only save money, but also invest it in numerous economic sectors and make
sure money flows from poorer countries to wealthier ones. General banking is the primary emphasis of
the banking industry. The bulk of the effort ends here. Here is where the action of getting money takes
place. General banking operations can be broken down into five main categories. Which are –

• Account Opening section.

• Cash Section.

• Clearing and Transferring Section

• Remittance Section
• Accounts Section.

Page 18
 Account
Opening
Section

Accounts
Section Cash Section
General
Banking
Activities

Remittance Clearing and

Transferring
Section Section

Figure:06
Account Opening Section

The initial interaction between a client and a bank is the opening of an account. When a customer opens
an account with a bank, the bank and the customer enter into a contractual contract.
Cash Section
In the business world, money is the ruler. The branch's cashier position may be particularly fraught.
Vault instruments and other forms of currency storage are discussed in this section, among many others.
The money officer's first order of business is to withdraw the gap money balance from the safe. The safe
deposit box is still in one piece and safely stashed away. The total amount of gap funds is recorded in a
ledger. Any funds remaining in the money counter at the close of business are returned to the vault. The
closing balance main branch describes this process. What this section primarily accomplishes is –

• Cash Receipt

• Cash Payment

Clearing
The financial institutions that are a membership of the Bangladesh Bank are referred to as "banking
institutions" per Article 37(2) of the Bangladesh Bank Order from 1972. Checks are typically cleared
during a regularly scheduled meeting between officials from all participating banks. There is a clearing
division at every bank. Deposit slips are used to deposit checks, drafts, and other similar instruments that
consumers bring into the department. Checks are cleared by Bangladesh Bank's finance organization.
(FM Associates, Leading Law Firm in Bangladesh, 2023)
Page 19
Remittance Section

Sending money internationally is fraught with danger. To keep their customers out of hot water, banks
will wire funds on their behalf. To accomplish this, they have set up a system of branches. You can
transfer funds in five different ways. That's why-

Pay Order (PO)

Demand Draft (DD)

Real-time Gross Settlement
(RTGS)
National Payment Switch
Bangladesh (NPSB)
Bangladesh Electronic Funds
Transfer Network (BFTN)

Figure:07

Accounts Section:
The duty for this department rests with the branch's final banking department, despite the department's
independence and individuality. The accounting team maintains detailed records of all financial dealings
and documents. Each participating division delivers a voucher of the previous hour's transactions to the
current division at the start of the dealing's hour. The accounting team verifies that the supplementary
statement created on the computer matches all the numbers, quantities, and descriptions of the
transactions. This section notifies the other section of any transaction issues. The accounting division's
duties consist of the following:
• To record all dealings within the money book.

• To organize daily, weekly, monthly, half-yearly and yearly fund position.

• To organize every kind of statements associated with Bangladesh Bank, Head workplace
and National Board of Revenue (NBR)
• To organize monthly remuneration statement, provident fund statement and
body expenditure statement.
• To form charges for various kinds of duty.

Page 20
CHAPTER 03

Page 21
 3.1 Industry Analysis

The Recent Scenario of Banking Sector:

Due to loan default, significant non-performing loans, and other challenges, Bangladesh's banking
system has been struggling to survive in recent years. The Bangladesh Bank and the government have
implemented monetary and fiscal policies to stabilize the economy and keep growth rates high. To
entice financiers, Bangladesh Bank began offering borrowing and lending rates in the single digits last
year. Low investment prospects and a large cash infusion from the Bangladesh Bank have led to a
surplus of funds in the banking industry. The rise in remittances in 2016 can possibly be attributed to the
increased volatility in the international economy. (Ahmed, 2021)

Keeping the pricing consistent is important to provide local exporters with a competitive edge. To
maintain dollar stability and boost liquidity, the Bangladesh Bank repurchased $5 billion on the open
market. In November, when there was a surplus of cash, the call money rate dropped below 2%. The
total amount of loans in default in the banking industry was Tk 94,440.5 crore at the end of September
of the previous year. From January to September, profitability increased at 18 of the 27 banks surveyed.
(Ahmed, 2021)

The banking industry needs to take stock and start a turnaround in the next years in preparation for the
second wave of coronavirus in 2021. Still, the banks' low deposit rate is driving away customers. In
order to decrease unemployment, boost economic growth, and pay off massive debt, the Bangladesh
Bank must take decisive action. If financial institutions are serious about avoiding future loan defaults,
they must conduct thorough borrower background checks. The government has proposed a big budget
with a sizable deficit amount, which means that banks and other financial organisations who expect to
fall short on tax collection will have to look inward and borrow. There should be stricter criteria for
postponing and restructuring loans, as well as better corporate governance, updated state-owned
commercial banks, and more effective ways to speed up loan recovery. (Ahmed, 2021)

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The Size of the Industry:

Figure:08
The banking industry needs to take stock and start a turnaround in the next years in preparation for the
second wave of coronavirus in 2021. Still, the banks' low deposit rate is driving away customers. In
order to decrease unemployment, boost economic growth, and pay off massive debt, the Bangladesh
Bank must take decisive action. If financial institutions are serious about avoiding future loan defaults,
they must conduct thorough borrower background checks. The government has proposed a big budget
with a sizable deficit amount, which means that banks and other financial organizations who expect to
fall short on tax collection will have to look inward and borrow. There should be higher standards for
postponing and structuring loans, as well as better corporate governance, updated state-owned
commercial banks, and more effective ways to speed up loan recovery. (Ahamed, 2012)
There are different groups of banks that make up the sector. The sector can be split into the following
groups based on who owns it:
• Banks that are owned by the government (SOCBs).
• Development banks owned by the government (DFIs).
• Foreign Commercial Banks
• Private Commercial Banks (FCBs).

Page 23
 State-Owned
Commercial Banks(6)

Specialized Banks (3)

Conventional Private
Scheduled Banks (61) Commercial Banks (34)
Private Commercial
Banks (43)
Islami Shahriah Based
Commercial Banks (8)
Foreign Commercial
Banks (9)

Figure:09
NCC Bank Ltd. provides its services through 126 branches and 6 sub-branches, which might be a direct
means to reach out to more individuals. The bank established a multitude of indirect methods for saving
money and withdrawing cash, such as ATM locations and the internet. (NCC Bank, n.d.)

3.2 Finding Peer Group/ Main Competitor of NCC Bank

3.2.1 Non-Islamic Bank

A Non-Islamic bank is a type of bank that takes deposits from the public and lends money for both
investment and consumption with the goal of making a profit.

"Corporate banks" are banks that focus on working with corporations and other large or medium-sized
organisations as opposed to "retail banks" and "investment banks," respectively. When we talk about
"commercial banks," we're talking about both public and private banks. (Ullah, 2020)

NCC Bank Ltd. is one of the best banks among all the private banks. In the commercial banking sector,
it has some competitors in its segment. The competitors are:

 Bank Asia
 Mercantile Bank
 Mutual Trust Bank

There are other competitors for NCC Bank limited. NCC Bank must compete with other banks as well
to survive in the market.

Page 24
 3.2.2 Ratio Analysis:
Non-Performing Loan
When a borrower fails to make their regularly scheduled payments of principal and interest, the loan is
considered a nonperforming loan (NPL). When a borrower is 90 days past due on a commercial loan,
the loan is deemed nonperforming in the banking industry. (Nonperforming Loan (NPL) Definitions,
Types, Causes, Consequences, 2022)
Non-Performing Loan (NPL) Ratio = NPL/Total Loan

NON PERFORMING LOAN

NCC BANK BANK ASIA MERCANTILE BANK MUTUAL TRUST BANK
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 5.67% 5.71% 4.74% 4.90% 4.51%
BANK ASIA 4.38% 4.10% 4.61% 3.24% 5.14%
MERCANTILE BANK 3.79% 4.82% 4.86% 5.13% 4.54%
MUTUAL TRUST BANK 4.30% 5.74% 5.69% 5.20% 6.30%

Chart:01
The better off a business is, the smaller its NPL. The lowest ratio was recorded by Mercantile Bank in
2017, followed by Bank Asia and Mutual Trust Bank. NCC Bank has the highest NPL in both 2017 and
2018. The NPL of NCC Bank was the lowest of any bank in 2019. In 2020, NCC Bank's ratio was lower
than any of the other three banks, although only slightly so; in 2021, NCC Bank's NPL was lower than
any of the other four banks. When compared to the other three banks, NCC Bank has the third-best
Nonperforming Loan (NPL) Ratio based on a five-year moving average.

Page 25
 Bad Debt Ratio
The bad debt ratio is the percentage of net sales that must be written down as bad debt for a given
organization. Calculate as a percentage by dividing the bad debt by the total AR for the time.
(HighRadius, 2023)

Bad Debt Ratio = (Bad Debt / Total Loans) x 100%

Bad Debt Ratio

6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 4.46% 4.48% 5.11% 5.19% 5.27%
BANK ASIA 1.89% 1.81% 2.03% 1.68% 2.78%
MERCANTILE BANK 3.76% 5.09% 5.32% 4.56% 5.33%
MUTUAL TRUST BANK 4.58% 5.07% 5.18% 5.20% 4.87%

NCC BANK BANK ASIA MERCANTILE BANK MUTUAL TRUST BANK

Chart:02

In 2017, NCC Bank's bad loan percentage was higher than that of the other three banks combined. The
bank, on the other hand, had a negligible amount, at about 1.89 percent. Among the top four banks
during 2018-2021, NCC Bank ranked third in terms of percentage growth. The average NCC bank is in
the second poorest position in terms of bad debt ratio when compared to other banks. The ideal
conditions occur at Bank Asia.

Non-performing Loans to Total Asset

Nonperforming loan to total gross loans ratio is calculated by taking the value of nonperforming loans
(gross value of the loan as recorded on the balance sheet) and dividing it by the total value of the loan
portfolio (including nonperforming loans before deduction of loan loss provisions). (Glossary |
DataBank, 2023)

Non-performing Loans to Total Asset = (Non-performing Loans/Total Asset)

Page 26
 8.00% Non performing Loans To Total Asset
6.00%
4.00%
2.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 4.17% 4.17% 3.34% 3.43% 3.11%
BANK ASIA 2.97% 2.85% 2.95% 1.93% 3.06%
MERCANTILE BANK 3.79% 4.82% 4.86% 5.13% 4.54%
MUTUAL TRUST BANK 4.30% 5.74% 5.69% 5.20% 6.30%

NCC BANK BANK ASIA MERCANTILE BANK MUTUAL TRUST BANK

Chart:03

The non-performing loan to total asset ratios of four banks have changed over the last five years, with
NCC Bank having the lowest ratio in 2021. Bank Asia's ratio has stayed generally stable, with a major
reduction in 2020 and a little rise in 2021. Mercantile Bank's ratio increased in 2020 and declined in
2021, while Mutual Trust Bank had the highest ratio in 2018 and then declined. These ratios may
indicate the amount of risk involved with a bank's lending activity.

Page 27
 Coverage Ratio
In its simplest form, a company's coverage ratio is a measure of its ability to pay interest and dividends
on its debts and other liabilities. If the coverage ratio is strong, the company should have no trouble
paying its debt service or dividends. (Coverage Ratio, 2020)

Coverage Ratio = (Loan Loss Provisions / Non-Performing Loans) x 100%

Coverage Ratio
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 28.66% 23.09% 26.68% 7.02% 20.85%
BANK ASIA 37.17% 42.10% 54.29% 14.62% 32.22%
MERCANTILE BANK 24.77% 18.87% 22.65% 13.42% 10.96%
MUTUAL TRUST BANK 37.37% 25.99% 19.14% 12.18% 5.70%

NCC BANK BANK ASIA MERCANTILE BANK MUTUAL TRUST BANK

Chart:04

In 2017–2019, NCC Bank was ranked third among the other three banks. But in 2020, NCC Bank had
7.02%, which indicates a very bad situation to pay interest. This happened because of the COVID-19
pandemic. In 2021, Bank Asia had the highest percentage of coverage ratio, around 32.22%, but NCC
Bank had second place among all other banks. If we do the average, the best position is Bank Asia, and
the second position is NCC Bank.

Loan To Deposit
A bank's liquidity may be assessed by calculating the loan-to-deposit ratio, which compares the total
loans issued during a certain time to the total deposits received during the same time. A bank's loan-to-
deposit ratio may be determined by dividing its total loans by its total deposits over the same time.
(Skeet, 2023)

Page 28
 120.00% Loan To Deposit
100.00%
80.00%
60.00%
40.00%
20.00%
0.00% 2017 2018 2019 2020 2021
NCC BANK 93.62% 94.66% 93.22% 94.52% 97.29%
BANK ASIA 95.39% 98.17% 90.80% 81.62% 83.41%
MERCANTILE BANK 94.83% 98.81% 96.86% 94.96% 99.99%
MUTUAL TRNUCSCT 9B5A.N94K 9M6E.1R1C E BAN94K.94% TUAL9T6R.0U7S K 99.14%
BANK %ASIA %ANTIL %T BAN
MU

Chart:05

NCC Bank's ratio has been continuously high, rising from 93.62% in 2017 to 97.29% in 2021. Bank
Asia's Changes ratio was low in 2020 but rose to 83.41% in 2021. The ratio at Mercantile Bank was
high, ranging from 94.83% in 2017 to 99.99% in 2021. From 2017 to 2021, Mutual Trust Bank has a
relatively high ratio that fluctuated between 94.96% and 99.14%.

Loan Loss Provision Ratio

A financial institution's capacity to deal with potential losses is measured by what is known as the loan
loss provision coverage ratio. A larger ratio indicates that the bank has a greater ability to tolerate
losses in the future, both foreseen and unexpected. (Loan Loss Provisions and Bank Stock Returns,
2015)

Loan Loss Provision Ratio

2017 2018 2019 2020 2021

NCC BANK 1.63% 1.32% 1.26% 0.34% 0.94%
BANK ASIA 1.63% 1.73% 2.50% 0.47% 1.66%
MERCANTILE BANK 0.94% 0.91% 1.10% 0.69% 0.50%
MUTUAL TRUST BANK 1.61% 1.49% 1.09% 0.63% 0.36%
NCC BANK BANK ASIA MERCANTILE BANK MUTUAL TRUST BANK

Page 29
 Chart:06

Page 30
NCC Bank had the lowest loss loan provision ratio in 2020, followed by Mercantile Bank with 0.50%,
Mutual Trust Bank with 0.50%, and Bank Asia with 1.66%. It is difficult to determine which bank has
the best overall performance, but based on the loss loan provision ratio, NCC Bank appears to have the
best performance.

3.2.3 Islamic Bank

Islamic banking is a different version on banking system. It's one of a kind since it does away with
interest rates altogether. Islamic law and Islamic tradition provide the basis of the Islamic financial
system. It promotes respect for fairness, effectiveness, steadiness, and development. The system's risk is
split 50/50 between the business owner and the investor.
Depositors and investors alike split the profits from their money. If Islamic banks want to provide their
depositors a greater return on their money, they must continually look for productive and lucrative
ventures.
The first attempts at establishing an Islamic bank in rural Pakistan date back to the 1950s. Yet, the bank
in question has been inactive for some years. Islamic Bank Bangladesh Limited (IBBL) opened for
business on March 13, 1983, making it the country's first Islamic bank. (Ferdous, 2020)

In Islamic banking sector, it has some competitors too in its segment. The competitors are:

 EXIM Bank

 Jamuna Bank

 NRB Bank

Page 31
 3.2.4 Ratio Analysis:
Non-Performing Loan

Non Performing Loan Ratio

14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 5.67% 5.71% 4.74% 4.90% 4.51%
EXIM BANK 3.08% 3.70% 3.24% 3.01% 3.12%
JAMUNA BANK 4.02% 3.77% 3.70% 2.95% 2.97%
NRB BANK 6.16% 8.16% 8.29% 8.46% 11.48%
NCC BANK EXIM BANK JAMUNA BANK NRB BANK

Chart:07

The NPL should be kept as low as possible for the company's benefit. NCC Bank, Jamuna Bank, and
Exim Bank all had the lowest ratio in 017. The NPL of NRB Bank was the highest of any bank in 2017
and 2018. NCC Bank has the third lowest NPL in 2019. In the year 2020, NCC Bank had the third
lowest ratio after the other three banks, and Jamuna Bank had the lowest ratio was 2.95%, NCC Bank
had the third-lowest ratio of nonperforming loans among the banks. When compared to the other three
banks, NCC Bank has the third-best nonperforming loan (NPL) ratio based on a five-year moving
average.

Page 32
 Bad Debt Ratio

Bad Debt Ratio

7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 4.46% 4.48% 5.11% 5.19% 5.27%
EXIM BANK 1.52% 1.33% 1.30% 1.06% 1.88%
JAMUNA BANK 3.99% 4.82% 5.81% 6.40% 5.99%
NRB BANK 1.03% 0.80% 0.76% 0.56% 0.91%

NCC BANK EXIM BANK JAMUNA BANK NRB BANK

Chart:08

In 2017, NCC Bank's bad loan percentage was higher than that of the other three banks combined.
Among the top four banks during 2018-2021, NCC Bank ranked third in terms of percentage growth.
The average NCC bank is in the third poorest position in terms of bad debt ratio when compared to
other banks. The ideal conditions occur at NRB Bank.

Non-performing Loans to Total Asset

Non Performing Loans To Total Asset

10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 4.17% 4.17% 3.34% 3.43% 3.11%
EXIM BANK 2.27% 2.91% 2.66% 2.42% 2.24%
JAMUNA BANK 2.89% 2.77% 2.70% 1.98% 1.96%
NRB BANK 5.61% 7.50% 7.44% 7.56% 7.84%

NCC BANK EXIM BANK JAMUNA BANK NRB BANK

Chart:09

Page 33
Over the last several years, all four banks' non-performing loan to total asset ratios have decreased,
with NRB Bank having the highest ratio. Jamuna Bank is the top performer, with an average ratio of
2.46%, followed by Exim Bank at 2.34%, NCC Bank at 3.2%, and NRB Bank at 7.02%.

Coverage Ratio

Coverage Ratio
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 28.66% 23.09% 26.68% 29.55% 20.85%
EXIM BANK 21.86% 16.88% 12.61% 28.99% 13.27%
JAMUNA BANK 19.66% 16.92% 16.88% 16.05% 19.26%
NRB BANK 32.15% 21.56% 19.97% 18.55% 14.91%

NCC BANK EXIM BANK JAMUNA BANK NRB BANK

Chart:10

In 2017, NCC Bank was ranked second among the other three banks. But in 2018–2021, NCC Bank
reached the first position, which indicates a very good situation to pay interest. If we take the average,
the best position is NCC Bank.

Page 34
 Loan To Deposit

Loan To Deposit
NCC BANK EXIM BANK JAMUNA BANK NRB BANK

120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
2017 2018 2019 2020 2021
NCC BANK 93.62% 94.66% 93.22% 94.52% 97.29%
EXIM BANK 86.54% 97.17% 99.94% 98.99% 92.33%
JAMUNA BANK 84.89% 87.96% 87.54% 85.12% 82.44%
NRB BANK 99.19% 99.22% 97.97% 97.90% 91.77%

Chart:11
NCC Bank's loan-to-deposit ratio changed from 2017 to 2021, reaching a high in 2018 and 2021. Exim
Bank and Jamuna Bank had lower loan-to-deposit ratios, while NRB Bank's fell from 99.22% in 2018 to
91.77% in 2021. Jamuna Bank had the lowest average loan-to-deposit ratio (93.47%).

Page 35
 Loan Loss Provision Ratio

2.50%
Loan Loss Provision Ratio
2.00%
1.50%
1.00%
0.50%
0.00%
2017 2018 2019 2020 2021
NCC BANK 1.63% 1.32% 1.26% 0.34% 0.94%
EXIM BANK 0.67% 0.63% 0.41% 0.28% 0.41%
JAMUNA BANK 0.79% 0.64% 0.62% 0.47% 0.57%
NRB BANK 1.98% 1.76% 1.65% 0.45% 1.71%

NCC BANK EXIM BANK JAMUNA BANK NRB BANK

Chart:12
The loss loan provision ratio has improved over the past five years, with NCC Bank having the highest
ratio in 2017, followed by NRB Bank. Exim Bank and Jamuna Bank had lower ratios compared to NCC
Bank and NRB Bank in 2017. Exim Bank has the lowest average ratio 0.36% over the past five years,
followed by Jamuna Bank 0.62% and NCC Bank 1.15%, and NRB Bank 1.51%. Exim Bank appears to
be the best performer in terms of managing its loan portfolio's credit quality.

Page 36
CHAPTER 04

Page 37
 4.1 Recommendations
Incorporation of computers
Account opening forms are piling up, and there isn't enough room on the premises to keep them. At
some point soon, this will be too much. Computers and digital databases will not only make it easier and
faster to open accounts, but they will also free up a lot of space that can be put to better use. The same
goes for other files they use every day.
Training in the IT segment
When it comes to employee development and training, NCC Bank shines. As quickly as possible, it
must provide improved computer training for its staff. Employees need to be able to use not only the
current systems but also any new ones that may be developed in the country.
Better allocation of employee
I learned throughout my time at NCC Bank that the General Banking division was tasked with an
unreasonable amount of work. This was done to save the bank money, and the work was nevertheless
completed with fewer people. However, they ignore the number of unhappy employees. People regularly
ask for moves because they are uncomfortable in their current positions due to too much work and not
enough rest. The added expense of hiring more workers should be justified by their positive impact on
productivity.
Better distinction and distribution of work
Due to interdependencies between departments, assigning responsibilities can be difficult. This must be
made very clear, as a common reason for not doing one's work is that it is someone else's responsibility.
Increase professionalism.
NCC Bank must change to compete successfully. The staff members need to take their work
responsibilities more seriously. The bank is calling, and they must take care of it. In the absence of clear
guidelines, a responsible and accountable worker will complete the assignment anyhow. The bank will
benefit from systemic and later human resource improvements.
Invest in interpersonal and English communication skills.
There aren't many people around here who can communicate with clients in English, and no one here
speaks it very well. A bank that deals with international corporations cannot afford to have such an
opening in their security.

Page 38
 4.2 Conclusion

In 1985, National Credit and Commerce Bank Limited opened its doors as an investment business, but
by 1992, it had evolved into a fully private commercial bank, giving it a unique background among
financial institutions. The bank has earned a fantastic reputation because of its commitment to delivering
exceptional customer service and the development of novel methods for dealing with financial matters.
NCC Bank Ltd continues to perform well thanks to its flexible deposit and loan products, despite stiff
competition from other commercial and state financial institutions. The bank has had issues with
nonperforming loans in the past, but it has reduced that percentage via careful management of credit
quality.
In the Islamic banking system, the company owner and the investor share the risk equally, and interest
rates are forbidden. Although not as popular as conventional banking systems, Islamic banking provides
an alternative financial model that supports equity, efficiency, stability, and expansion.
NCC Bank, like other conventional and Islamic financial institutions in Bangladesh, faces stiff
competition. Comparatively, Islamic banks provide a unique method of funding based on Islamic law
and tradition, whereas NCC Bank continues to do well as a commercial bank with a focus on individual
customers and fresh ideas. Nonperforming loan management is a problem for both retail and investment
banks, but both have seen success because of their efforts to keep credit risk under control. NCC Bank
and Islamic banks will be crucial in influencing the future of banking as the financial sector continues to
develop in Bangladesh and beyond.

Page 39
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