BANGABANDHU SHEIKH MUJIBUR RAHMAN SCIENCE &

TECHNOLOGY UNIVERSITY,
GOPALGANJ-8100

Internship Report
On
Loan giving procedure & Credit Management of Agrani Bank
Limited: A Study on Gopalganj Branch

Course Title: Internship

Course Code: AIS 488

Submitted By Submitted To

Name: Sabrin Aktar Name: Ashik-Uz-Zaman

Student ID: 17AIS014 Assistant Professor
Year: 4th Department of Accounting & Information Systems
Semester: 2nd
Department of Accounting & Information Systems

BSMRSTU, Gopalganj BSMRSTU, Gopalganj

Date of submission: 01 February 2023

Page | I
Page | II
 Letter of Submission
Date: 01 February 2023
Ashik-Uz-Zaman
Assistant Professor
Department of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj-8100

Subject: Submission of Internship Report on Loan giving procedure & Credit Management
of Agrani Bank Limited: A Study on Gopalganj Branch.
Dear Sir,
With great pleasure, I am submitting my internship report on Loan giving procedure & Credit
Management of Agrani Bank Limited: A Study on Gopalganj Branch.The internship program
“from 12-09-2022 to 11-12-2022” has been an excellent experience for me as it provided me with
vast exposure to the professional environment.
I have followed your guidelines and have included ideas that you shared during our discussions.
I thank you very much for letting me have the opportunity to work on my internship report and
really hope to meet your expectations and standards. In case of any further clarification or
elaboration regarding this report I would welcome the opportunity to consult with you to explore
how my findings could best meet your needs.

Yours sincerely,

……………………..
(Sabrin Aktar)
Student ID: 17AIS014
4th Year, 2nd Semester
Session: 2017-18
Department of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj-8100

Page | III
 Student’s Declaration
I am Sabrin Aktar, Student ID: 17AIS014 is announcing that the presented internship report on
Loan giving procedure & Credit Management of Agrani Bank Limited: A Study on
Gopalganj Branch is prepared by me and it fulfills the requirement of the Bachalor of Business
Administration Program of Bangabandhu Sheikh Mujibur Rahman Science and Technology
University, Gopalganj-8100.
I further affirm that the information reported in this internship report is original and any other
students or other degree holders have not submitted whole or any part of this report for any
purpose.

……………………..
(Sabrin Aktar)
Student ID: 17AIS014
4th Year, 2nd Semester
Session: 2017-18
Department of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj-8100

Page | IV
 Certification of Supervisor
This is to certify that the internship report on loan giving procedure & Credit Management of
Agrani Bank Ltd. placed to the evaluation board it is done by Sabrin Aktar in partial fulfillment of
the requirement for the degree of the Bachelor of Business Administration. The report has been
carried out under my guidance and is a record of the bona fide work carried out successfully.

.........................................
Ashik-Uz-Zaman
Assistant Professor
Department of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science & Technology University Gopalganj-8100

Page | V
 Acknowledgement
Education is not confined only the text book knowledge. We have to use it in practical life. I have
made the report for this purpose. All the activities of this report I have also done with practical
knowledge. I have taken help directly or indirectly from different people for the preparation of this
report. I am extremely thankful to my Supervisor Ashik-Uz-Zaman, Assistant Professor,
Department of Accounting and Information Systems, Bangabandhu Sheikh Mujibur Rahman
Science and Technology University for his kind guidance, support and encouragement. It could
not be possible to prepare this report without the help of Ashik-Uz-Zaman Sir. I am thankful to all
the member of “Agrani Bank Ltd.” for providing their valuable time and guidance to prepare this
report within 90 days. I am also thankful to almighty Allah for successfully preparing this report.
I also thank all of my friends, senior brothers and sisters who have more or less contributed to the
preparation of this report. I shall be always indebted to them.
The study has indeed helped me to explore my knowledge in “Loan giving procedure and credit
management of Agrani Bank Limited” and I am sure it will be helpful in future.

Page | VI
 Dedication
First of all, I dedicated this report to the Almighty Allah who always gives me strength, knowledge,
and wisdom in everything I do.
This study is whole heartedly dedicated to our beloved parents, who have been our source of
inspiration and gave us strength when we thought of giving up, who continuously provide their
moral, spiritual, emotional and financial support.
This report is also dedicated my sibling, friends, mentors, seniors who shared their word of advice
and encouragement to finish this study.

Page | VII
 Executive Summary
Agrani Bank Ltd. is one of the scheduled private commercial bank in Bangladesh which is
established under the banking companies Act 1991. The main motto of this bank is to make profit.
One of the most important functions of Agrani Bank Ltd. is collecting deposit and giving loans.
Agrani Bank Ltd, like others Commercial Banks, are collecting deposit from clients and giving
loans to clients for making Bank’s revenue. The employees of Agrani Bank Ltd. are very sincere
about their work. They maintain a protocol to establish a good relationship with existing clients
and they are also eager to search new clients. Agrani Bank Ltd. collected a big amount of deposit
from clients in every month.
I have discussed about loans/ credit management system of Agrani Bank Ltd. in this report. The
report has four parts, firstly introducing part, secondly a brief history of Agrani Bank Ltd., thirdly
loans/ credit management and lastly findings and recommendations with analysis and references.
The objective of Credit management of Agrani Bank Limited is to minimize the risk and maximize
banks risk adjusted rate of return by assuming and maintaining credit exposure within the
acceptable parameters. The Credit Management department is responsible for upholding the
integrity of the Bank’s profile.
Credit Management Department of Agrani Bank Limited conducted their functions by six wings.
Wholesale Credit, Retail Underwriting and SME underwriting- these three wings of Credit Risk
Management assess and approve the loan for the respective customers. Central Collection Unit
collects the credit. Special Asset Management wings help the bank to recover Bank’s bad portfolio.
The Bank has a team for credit approval. Different tools and techniques are being used to evaluate
a credit proposal. Retail Credit, Cards Credit, Authorization and Fraud Control, Central
Verification Unit (CVU) are related with retail underwriting. Although Agrani Bank Limited is
successfully operating credit management, the Bank should improve in some areas which will take
help the Bank to become the leader of banking sector.

Page | VIII
 Table of Content
Serial No Particulars Page No
Letter of Submission III
Student’s Declaration IV
Certification of Supervisor V
Acknowledgement VI
Dedication VII
Executive Summary VIII
Table of Content IX & X
Chapter One Introduction 1-4
1.1 Introduction 2
1.2 Background of the report 2
1.3 significance of the report 2
1.4 scope of the report 2
1.5 Objectives of the report 2&3
1.6 Methodology of the report 3
1.7 Limitations of the report 4
Chapter Two Overview of Agrani Bank 5-10
2.1 Historical background of Agrani Bank Limited 6
2.2 Mission of Agrani Bank Limited 6
2.3 Vision of Agrani Bank Limited 6
2.4 Motto of Agrani Bank Limited 6
2.5 Values of Agrani Bank Limited 6
2.6 Objectives of Agrani Bank Limited 6
2.7 Functions of Agrani Bank Limited 7
2.8 Strategy of Agrani Bank Limited 7
2.9 Departments of Agrani Bank Limited 7
2.10 Management Structure of Agrani Bank Limited 8
2.11 Products & Services of Agrani Bank Limited 8, 9 & 10
Chapter Three Theorical Aspects 11-19
3.1 Definition of loan 12
3.2 Definition of Advance 12
3.3 Loans/Advances Products 12 & 13
3.4 Loan Department 13 & 14
3.5 Types of Loans and Advances 14, 15 & 16
3.6 Types of Security 17 & 18
3.7 Decision 19
Chapter Four Loan Giving Procedure 20-30
4.1 General Procedure of Sanctioning Loan 21-26
4.2 Cause of Loan Proposal Rejection 26 & 27
4.3 Initiative of the Bank for Non-performing Loan 28
4.4 Principles of the Lending 28-30
4.5 Limitations of Loan Section of ABL 30
Page | IX
 4.6 Principles of Sound Lending 30
Chapter Five Credit Management of ABL 31- 39
5.1 Credit Management and it’s Objectives 32
5.2 Credit Policy of ABL 32
5.3 Credit Principles of Agrani Bank 33
5.4 Credit Risk Management 33 & 34
5.5 Principles of ABL’s Credit Risk Management 34
5.6 Credit Risk Management Framework 34
5.7 Credit Monitoring 34
5.8 Credit Approval 35
5.9 Credit Recovery 35
5.10 Quality of Security in case of Loan 36
5.11 Securitization Procedure of Loan 36, 37 & 38
5.12 Responsibility Securitization Procedure 39
Chapter Six SWOT Analysis of Agrani Bank Ltd. 40-42
6.0 SWOT Analysis of Agrani Bank Ltd. 41
6.1 Strength 41
6.2 Weakness 41
6.3 Opportunity 41
6.4 Threats 42
Chapter Seven Findings, Conclusion & Policy Implications 43-46
7.1 Finding 44
7.2 Conclusion 45
7.3 Policy Implication 46
Reference 47

Page | X
Chapter One
Introduction

Page | 1
1.1 Introduction
The report basically deals with " Loan giving procedure & Credit Management of Agrani Bank
Limited ".The credit management policy of Agrani Bank Limited is prepared in line with the
guidelines of Bangladesh Bank in Credit Risk Management and for the guideline of the officers
or executives in handling affairs relating to credit in a disciplined way.Credit department plays a
very important role in bank as they evaluate the risk and take decision about giving loan to the
customers.
In this report l have tried to study the literatures statements about credit management and also the
credit operation Of Agrani Bank Limited.
1.2 Background of the report
This internship report is originated as a partial fulfillment of the BBA Program of Bangabandhu
Sheikh Mujibur Rahman Science & Technology University.This report is a mandatory
requirement of BBA completion. I have worked in various Department of Agrani Bank Limited,
Gopalgonj Branch.
In this report, I will try to make an overall analysis on all activities of Agrani Bank Limited
specially focuses on Loan giving procedure & Credit management.
1.3 Significance of the report
This internship report is an important partial requirement of four year BBA graduation program.
This is because knowledge & learning become perfect when it is associated with theory & practice.
By this internship program students can establish contacts & networking. Contacts may help to
get a job in practical life.That is, student can train & prepare themselves for the job market. A poor
country like Bangladesh has an overwhelming number of unemployed educated graduates.
As they have no internship experience they have not been able to gain normal professional
experience of establish networking system, which is important in getting a job. Therefore, it is
obvious that the significance of internship is clearly justified as the crucial requirement of four
years BBA graduation.
1.4 Scope of the report
The study would focus on the following areas of Agrani Bank Limited.
• An overview of Agrani Bank Limited
• Credit approval procedure of Agrani Bank Limited
• Credit performance of Agrani Bank Limited.

Page | 2
1.5 Objectives of the report
1.5.1 Broad objective
The broad objective of this report is to analyze the loan giving procedure & credit management
of Agrani Bank Limited.
1.5.2 Specific Objective
• To evaluate the credit approval process of Agrani Bank Limited.
• To assess geographical location wise credit disbursement of Agrani Bank Ltd.
• To derive few finding & to suggest some recommendations accordingly.
1.6 Methodology of the report
The study requires a systematic the topic to preparation of the final report. The data sources of this
study were to be identified and collected, in a systematic manner & key points were to be found
out.The overall process of methodology is given in the following:
1.6.1 Research design
This report will focuses on the credit operation of Agrani Bank Limited. To prepare this report all
the necessary information are collected from both primary & secondary sources of data.
1.6.2 Sources of data
The study is mainly based on secondary data.Both primary & secondary data sources will be used
to generate this report.
Primary sources of data
• Observation while working in different desks.
• Face to face conversation with the officer
Secondary sources of data:
• The annual report of Agrani Bank Limited
• Credit Mannual of Agrani Bank Limited
• Banking related text books, relevant books, research papers,newspapers, journals &
Manuals
• Desk report of related department
• Web browing

Page | 3
1.7 Limitation of the report
The Report is likely to have following limitations:
• Due to shortage of time, the accuracy of information may not have been completely
perfect.
• Confidentiality of data was another important barrier that was faced during the conduct of
this study. Every organization has their own secrecy that is not revealed to others.While
collecting Data on Agrani Bank Limited, personal did not disclose enough information for
the sake of confindentiality of the organization.
• Unpublished data have not considered for the study.
• The depth of the analysis has been limited to the extent of information collected from
different sources.
• Data & information used in this study are mostly from secondary sources.
• Last of all this study has been conducted within a limited time.
So, observing & analyzing the broad performance of the bank is not an easy task by the short
duration of time.

Page | 4
 Chapter Two
Overview of Agrani Bank Ltd.

Page | 5
2.1 Historical Background of Agrani Bank Limited
Agrani Bank is a nationalized commercial bank established on 26 March 1972 under the
Bangladesh (Nationalization) order 1972 by taking over two abandoned Pakistani banks Habib
Bank and Commerce Bank. Agrani Bank has 867 branches among the country, they have lots of
clients also they provide govt.loan for the country's welfare. 51% share are govt. and 49% are
others. It is the most popular & powerful ban in Bangladesh. In 2000 provides 74.97 billion for
loans and advance. They invest many reputed industries all over the country.
2.2 Mission of Agrani Bank Limited
To operate ethically and faithfully within the stringent framework set by our regulators and to
assimilate ideas and lessons from best practices to improve their business policies and procedures
to the benefit of their customer and employees.
2.3 Vision of Agrani Bank Limited
To become the best leading state owned commercial bank of Bangladesh operating at
international level of efficiency, quale,sound management, customer service and strong liquidity.
2.4 Motto of Agrani Bank Limited
To adopt and adapt modem approaches to stand supreme in the banking arena with global
presence.
2.5 Values of Agrani Bank Limited
We value integrity, transparency, accountability, dignity, diversity, growth and professionalism
to provide high level of service to all our customers and stakeholders inside and outside the countr
2.6 Objectives of Agrani Bank Limited
• Winning at least 7.00 percent share of deposits & 6.00 percent share of loans and advances
of. Bangladeshi market.
• Gaining competitive advantages by lowering overall cost compared to that of competitors.
• overtaking competitors by providing quality customer service.
• Achieving technological leadership among the peer group.
• Strengthening the bank' s brand recognition.
• Contributing towards the economic well-being of the country by focusing particularly on
remittance, SME & agricultural sectors.
• Strengthening research capability for innovative products.

Page | 6
2.7 Functions of Agrani Bank Limited
• To maintain all types of deposit A/Cs
• To make investment
• To conduct credit / loan facilities
• To conduct foreign exchange business
• To conduct other Banking services
• Agricultural & Rural credit
• Green Banking
• Export Development Fund
• Financial Women Entrepreneurs
• Loan Classification & Provisioning
• SWIFT operation
• Information Technology
• Internet Banking Service
• Perform Social Welfare activities
2.8 Strategy of Agrani Bank Limited
• To manage & operate the bank in the most efficient manner to enhance financial
performance and to control cost of fund
• To strive for customer satisfaction through quality control & delivery of timely services.
• To identity customers credit and other banking needs & monitor the performance in
meeting those requirement.
• To promote organizational effectiveness by openly communicating company plans,
policies, practices & procedures to all employees in a timely fashion.
• To cultive a working environment that fosters positive motivation for improved
performance.
• To increase direct contract with customers in order to cultivate a closer relationship
between the bank & its customers.
2.9 Departments of Agrani Bank Limited
• Human Resource Division
• Personal Banking Division
• Treasury Division
• Operations Division
• Operations Division
• Computer & Information Technology Division
• Credit Division
• Financial & Accounts Division
• Financial Institution Division
• Audit & Risk Management Division

Page | 7
2.10 Management structure of Agrani Bank Limited

2.11 Products & Services of Agrani Bank Limited

1.Deposit
(a) Taka Account
• Current Deposit ( CD)
• Saving Deposit ( SD)
• Fixed Deposit ( FDR)
• Special Notice Time Deposit ( SNTD)
• Non- Resident Special Taka Account (NRTA)
• Non- Resident Investors Taka Account (NRITA)
• Agrani Bank Pension Scheme ( APS)

Page | 8
 • Agrani Bank Bishesh Shanchay Scheme ( ABS)
• Agrani Double Benefit Scheme (ADBS)
• Monthly Deposit Scheme ( MDS)
• Monthly Income Scheme ( MIS)
• Student Saving A/ C ( School Banking)
• Small Life Insurance policy Holders A/C
• Farmers A/ C
• Freedom Fighter A/C
• Other Beneficiaries A/C under Social Securities
( b) Foreign Currency Account
• Foreign Currency ( FC) A/C
• Non - Resident Foreign Currency Deposit ( NFCD) A/ C
• Resident Foreign Currency Deposit
• Exporters Retention Quota ( ERQ) A/C
2. Loan & Advance
( a) Continuous Loan
• Cash credit ( Hypo)
• Cash credit ( Pledgo)
• Secured Overdraft ( SOD)
(b) Term Loan:
• Inland Bil Purchase (IBP)
• Export Cash Credit
• Industrial Credit ( IC)
• Housing Loan ( General &Commercial)
• Consumer Credit
• Loan for Overseas Employment
• Weaver's Credit
( c) Rural & Agro Credit
• Crop loan
• Fishery loan
• Animal Husbandry loan
• Agri Machinery loan
• Rural Transport loan
• Swanirvar loan
• Poverty Alleviation loan

Page | 9
(d) Small & Medium Enterprise Loan
• Service sector loan
• Trading sector loan
• Manufacturing sector loan
(e) Import Finance
• Loan Against Imported Merchandise ( LIM)
• Loan Against Trust Receipt ( LTR)
• Payment Against Document ( PAD)
(f) Export Finance
• Export Cash Credit
• Packing Credit ( PC)
• Local/ Foreign Bills Purchases
• Loan Against Export Development Fund
• Advance Against Cash Incentive

Page | 10
Chapter Three
Theorical Aspects

Page | 11
3.1 Definition of Loan
The term „loan‟ refers to the amount borrowed by one person from another. The amount is in the
nature of loan and refers to the sum paid to the borrower. Thus, from the view point of borrower,
it is „borrowing‟ and from the view point of bank, it is „lending‟. Loan may be regarded as „credit‟
granted where the money is disbursed and its recovery is made on a later date. It is a debt for the
borrower. While granting loans, credit is given for a definite purpose and for a predetermined
period. Interest is charged on the loan at agreed rate and intervals of payment.
3.2 Definition of Advance
Advance is a „credit facility‟ granted by the bank. Banks grant advances largely for short-term
purposes, such as purchase of goods traded in and meeting other short-term trading liabilities.
There is a sense of debt in loan, whereas an advance is a facility being availed of by the borrower.
However, like loans, advances are also to be repaid. Thus a credit facility- repayable in installments
over a period is termed as loan while a credit facility repayable within one year may be known as
advances. However, in the present lesson these two terms are used interchangeably.
3.3 Loan/Advance Products
a) Continuous Loan
➢ Cash Credit (Hypo)
➢ Cash Credit (Pledge)
➢ Secured Overdraft (SOD)
b) Term Loan
➢ Inland Bill Purchase (IBP)
➢ Export Cash Credit
➢ Industrial Credit (IC)
➢ Housing Loan (General & Commercial)
➢ Consumer Credit
➢ Loan for Overseas Employment
➢ Weavers‟ Credit
c) Rural & Agro Credit
➢ Crop Loan
➢ Fishery Loan
➢ Animal Husbandry Loan
➢ Agri Machinery Loan
➢ Rural Transport Loan
➢ Swanirvar Loan
➢ Poverty Alleviation Loan

Page | 12
d) Small and Medium Enterprise Loan
➢ Service Sector Loan
➢ Trading Sector Loan
➢ Manufacturing Sector Loan
e) Import Finance
➢ Loan Against Imported Merchandise (LIM)
➢ Loan Against Trust Receipt (LTR)
➢ Payment Against Document (PAD)
f) Export Finance
➢ Export Cash Credit
➢ Packing Credit (PC)
➢ Local / Foreign Bills Purchased (FBP)
➢ Loan Against Export Development Fund (EDF)
➢ Advance Against Cash Incentive (Subsidy, Assistance)
3.4 Loan Department
The bank’s credits and advances assortment also shows a magnificent enlargement.
➢ Generally two kinds of credit Agrani Bank are giving.

• Funded
• Non-funded
In the Branch of the Agrani Bank many kinds of funded credit and advances available.
➢ Listing of necessary credentials required to be relevant for a loan:

• Bank assurance Floor Credit.

• Packing Credit
• Sell overseas growth fund
• Letter of Credit
• Imbursement next to credentials
• LATR (loan against trust received

➢ Major duty of this section-

• Trade in Business
• Sell overseas Business
• Overseas Correspondents

Page | 13
 ➢ Task of Foreign Exchange-
• Letter of Credit is opened here.
• Overseas Pay Order
• Make declaration and information For Head Office and Bangladesh Bank.
• Swap overseas currency
• Imbursement and compilation of L/C money in money in good turn of customer.
3.5 Types Of Loans & Advances
Depending on various nature of financing, all the landing activities have been brought under the
following major heads:
Continuous loan
These are the loans and advances having no fixed repayment schedule, but have an expiry date at
which it is renewable on satisfactory performance.
Secured Overdraft (Financial Obligation)
Advance is granted to a client against financial obligations. The security of advance is granted to
the person to whom the instrument belongs. The discharged instrument is surrendered to the bank
along with a letter signed by holder/holders. The bank’s lien is prominently noted on the face of
the instrument under the signature of an authorized bank official.
Secured Overdraft (General)
Granted against the work order of government departments, corporation’s autonomous bodies and
reported multinational private organization. To arrive at logical decision, the client’s managerial
capability, equity strength, nature of scheduled work is to be judged. Disbursement is made after
completion of documentation formalities, besides usual charge, documents like a notarized
irrevocable power of attorney to collect the bills from the concerned authority and a letter from the
concerned authority confirming direct payment to the bank is also obtained. The work is strictly
monitored to review the progress at each interval.
Business Focus
The bank shall provide the suitable investment services and products for the following sectors,
which must meet the other requisites as set by the bank from time to time.
Sectors
1. Consumer Loan
2. Agriculture Loan
3. Textile & Garments Loan
4. Housing & Real Estate
5. Electronics & electrical commodities

Page | 14
Inland Bill Purchase (IBP)
Payment made through purchase of inland bills/cheques to meet urgent requirement of the
customer falls under this type of investment facility. This temporary investment is adjustable from
the proceeds of bills/cheques purchased for collection. It falls under he category “Commercial
Landing”
Foreign Bill Purchase (FBP)
Payment made to customer through Purchase of Foreign Currency Cheques/Drafts fall under this
head. This temporary investment is adjustable from the proceeds of the cheque/draft.
Staff Loan
Bank official from officer and above are eligible for this loan. There is different kind of loan under
this loan section. They are shown below
• Staff housing loan.
• Staff computer loan.
• Staff auto loan.
Loan under SME
a) Consumer Credit Scheme
This scheme is aimed to attract consumers from the middle and upper middle class
population with limited income. The borrower should have saving or current deposit
account with the bank. Minimum 25% of the purchase cost of the product is to be deposited
be the borrower with the bank is equity before the disbursement of the loan. The rest 75%
is to be kept as cash collateral (FDR, Shanchay Patra etc.) with the bank. The purchased
items are hypothecated with the bank. The disbursement of the loan is effected by debiting
loan (general) account to the opened in the same of the borrower. Loan amount is disbursed
through a/c payee pay order/demand draft directly to the seller after submission of the
indent, deposit of client equity and completion of documentation formalities. The bank
obtains postdated a/c payee cheques drawn in favor of the bank for the monthly
installments covering the lending period from the borrower and the loan amount is adjusted
on the due date of installments.

b) Working capital loan

Loans allowed to the manufacturing unit to meet their working capital requirement,
irrespective of their size big, medium or large fall under the category.
c) House Repairing/Renovation Loan Scheme:
This loan is offered for renovation and modernization of the house/building/flat which are
acquired by inheritably or purchasing and other ways to make the properties liable and
durable.

Page | 15
d) Small Business Loan Scheme
This loan is offered to the small and promising entrepreneurs to meet their capital
requirement and enable them to operate and expand the business purposely.

e) Personal Loan for Salaried Person

This loan is provided to fixed salaried persons in various organizations to meet any
emergency cash needs at various events- treatment/operations of critical disease,
matrimonial, maternity expenditure etc. Maximum credit ceiling is Tk1, 00,000/-

Recent Interest Rate of Loan and Advances

Types of loan and advance Interest Rate

Staff Housing Loan 4%

Staff Auto Loan 4%

Staff Computer Loan 4%

Staff Car Loan 0%

General House Loan 13%

Loan Against APS 11%

Loan Against DPS 17%

ABS loan 11%

O/D 14%

CC(Hypo) For business with security 9%

Auto Loan 9%
Small Loan 9%
Demand 9%

Agricultural Loan 9%

Page | 16
3.6 Types of Security
Personal Security: Security by which a borrower is personally made liable to repay the
loans/advances. Demand Promissory Note, personal Guarantee, Bills of exchange, etc.
Tangible Security: Tangible assets like stock of goods, bonds, deposit receipts, bill of landing,
bills receivables, warehouse receipt, real estate, shares, assignable, insurance policies, etc. are
taken as security.
Primary Security: The security which is deposited by the borrower himself against lending is
called primary security. Primary security is the main cover for the advance made by banks. Primary
security is associated with the purpose for which the lending allowed. “Stock in trade, industrial
plants, land & building, bills receivables, deposit receipt, etc which are deposited by the borrower
shall be treated as primary security.
Collateral Security: Additional, subsidiary or secondary in addition to primary security is called
collateral security.
Direct Collateral Security: Collateral security obtained from the borrower himself to secure his
own account is known as direct collateral security.
Indirect Collateral Security: Collateral security given by a third party / persons to secure a
customer’s loan account is called indirect collateral security.
Cash Credit (Hypothecation)
The mortgage of movable property for securing loan is called hypothecation. Hypothecation is a
legal transaction whereby goods are made available to the lending banker as security for a debt
without transferring either the property in the goods or either possessing. The banker has only
equitable charge on stocks, which practically means nothing. Since the goods always remain in the
physical possession of the borrower, there is much risk to the bank. So, it is granted to parties of
undoubted means with highest integrity.
Cash Credit (Pledge)
Transfer of possession in the judicial sense of essential in the valid pledge. In case of pledge, the
bank acquire the possession of the goods or a right to hold goods until the repayment for credit
with a special right to sell after due notice to the borrower in the event of non-repayment.
Export Cash Credit (ECC)
Term Loan
These are the loans made by the Bank with fixed repayment schedules. The term of Investment
are defined as follows:
Short Term: Up to 12 months
Medium Term: More than 12 and up to 36 months
Long Term: More than 36 months

Page | 17
House Building Loan
This loan is provided against 100% cash collateral, besides; the land & building are also mortgaged
with the bank.
Loan against other securities:
Loan against other securities is a 100% secured advance, which requires no sanction from the Head
Officer. It is sanctioned by marketing lien of FDR, ICB Unit Certificate.
Their Purchase
Their Purchase is a type of installment investment under which the Purchaser agrees to taka the
goods on hire at a stated rental, which is inclusive of the repayment of principal as well as profit
for adjustment of the investment within a specified period.
Demand loan
Loan (general)
ABL considers the loans, which are sanctioned for more than one year as loan (g). Under this
facility, an enterprise of financed from the stating to its finishing, from installment to its
production. ABL offers this facility only to big industries.
Loan against Imported Merchandise (LIM)
Advances allowed for retirement of shipping documents and release of goods imported through
L/C taking effective control over the goods by pledge fall under this type of advance, when the
importer failed to pay the amount payable to the exporter against import L/C, than ABL gives loan
against imported merchandise to the importer. The importer will bear all the expenses i.e.the
godown charge, insurance fees, etc. and the ownership of the goods is retaining to the bank.This
is also a temporary advance connected with import, which is known as post import finance.
Loan against Trust Receipt (LTR)
Investment allowed for retirement of shipping documents and release of goods imported through
L/C fall under this heard. The goods are handed over to the importer under trust with the
arrangement that sale proceeds should be deposited to liquidate the investments within a given
period. These are also a temporary investment connected with import and know as post-import
finance and falls under the category “Commercial Lending”.
Loan Documentary Bill Purchase
Payment made against documents representing sell of goods to local export oriented industries,
which are deemed as exports, and which are dominated in local currency/foreign currency falls
under this head. The bill of exchange is held as the primary security. The client submits the usance
bill and the bank discounts it. This temporarily liability is adjustable from the proceeds off the bill.

Page | 18
3.7 Decision:
Branch Level
It is to be headed by the Branch Manager, other members to be selected by the manager in
consultation with head office.
Zonal Office Level
Zonal office credit in accordance with authority established and delegated by the Board of
Directors.
• Reviewing, analyzing and approving extension of credit in accordance with authority
established and delegated by the Board of Directors.
• Evaluate the quality of tending staff in the bank and take appropriate steps to improve
upon.
• Recommending credit proposal to the executive Committee/Board of Directors which are
beyond the delegated authority.
• Ensuring, that all elements of credit application i.e. Forms. Analysis of statements and
other papers have been obtained and are in order.

Page | 19
 Chapter Four
Loan Giving Procedures

Page | 20
4.1 GENERAL PROCEDURE OF SANCTIONING LOAN
The following procedures are applicable for giving advance to the customer.These are:
• Party's application
• Collecting CIB report from Bangladesh Bank
• Complete balance sheet for 3 (three) year
• Compeenic income statement for 3 ( three) year
• Techniques of project Appraisal
• Application for decleration from applicant
• Proposal for filling by bank
• Head Office approval as sanction advice
• Branch approval as application
• Documentation
• Disbursement
A. Party's application
At first borrower had too submit an application to the respective branch for loan, where he/she has
to clearly specify the reason for loan. After receiving the application from the borrower Bank
Officer verifies all the information carefully. He also checks the account maintains by the borrower
with the bank. If the official becomes satisfied then he gives from (Prescribed application form of
Bank) to the prospective borrower.
B. Collecting CIB Report from Bangladesh Bank
After receiving the application for advance, United Commercial sends a letter to Bangladesh Bank
for obtaining a report from there.This report is called CIB ( Credit Information Bureau) report.
United Commercial generally seeks this report from the head office for all kind of investment.
The purpose of this report is to inform that whether the borrower has taken loan from any other
Bank; if ' yes' then whether the party has any overdue amount or not.
C. Party 's Financial Statement
After receiving CIB report from Bangladesh Bank, then respective branch collect from company's
financial statement minimum 3 year, this document help the future loan back possibility and this
base Investment for approval of Head Office. Documents those are necessary for sending
Investment proposal are
Necessary Documents
While advancing money, banks create a lot of document, which are required to be signed by the
borrowers before the disbursement of the loan of them some are technically called charge
documents. Amount the documents frequently used some are:
(a) Loan application form duly signed by the customer.
(b) Acceptance of the term and conditions of sanction advice.

Page | 21
(c) Trade license.
( d) Letter of guarantee of third party.
(e) Net- worth statement.
( f) If is individual borrower:
• Letter of Guarantee of the spouse of the borrower
• Personal net- worth statement of the borrower
( g) In case of partnership Firm
• Trade license ( Up to date)
• Partnership Deed( registered)
• Letter of Guarantee of the partners
• Personal net- worth statement ( PNS) of partner
• Letter of partnership
• Partnership Account Agreement
( h) In case of Limited Company
• Cope of memorandum and articles of association of the company including certificate of
incorporation duly certified by Registered Joint Stock Companies (RJSC) and arrested by
the managing director annd accompanied by an up to date list of directors.
• List / personal profit of director
• Certificate of Incorporation
• From 12 certified by RJSC
• Board resolution in respect of availing loans & execution of document with Bank.
• Letter of guarantee of the director
• Personal net- worth statement of director
• Deed of mortgage & hypothecation for creation of charge on fixed & fluting assets
(existing & future) with RJSC
• Modification of charge creation certificate from RJSC
• Undertaking starting that the borrower shall not makes any amendment or alteration in
memorandum & article of association without prior approval of bank.
• Approval of the bank for any inclusion of director in & from the company.
• Certificate of commencement ( In case of Public Limited Company)
• Joint Venture agreement ( In case if Joint Venture Company)
• BOI permission ( In case if Joint Venture Company)
• Required Doc's for Retail( Individual)
• Photograph - 2 Copies
• Passport / National ID/ Driving License
• Visiting Card / Company ID
• Tin

Page | 22
 • Trade license ( For Businessmen)
• Utility Bill ( Electricity / WASA/ Gas)
• Bank Statement - last 6 months partnership Deed ( For partnership firm)
• Company memorandum ( FPF)
• Rental / Lease / Title Deed
• Certificate of Professional degree
• Guarantor: Spouse - photo with signature, Attested by applicant
• Eligible photo with signature, Attested by the applicant, visiting card, Tin
• Sanction letter with Related Bank Statement ( If Enjoying Any Loan
Required Doc ' s for SME
• Total stock
• Total sale for 1 year
• Total creditors
• Total debtors
• Guarantor
• Net worth
• Photograph
• Visiting Card
• TIN
• Trade license
Required Doc's for Term loan
• Term loan agreement
• Letter of installment
• Letter off undertaking
• Amortization. schedule
Required Doc's for Home loan
• power of attorney for developing the property
• Letter of installment
• Letter of undertaking
• Amortization schedule
• Letter allotment of flat or floor
• Tripartite agreement among purchase, developer and bank ( if under construction)
• Under taking of the borrower to the effect that he will mortgage the flat/ floor space the
bank at the moment the same is registered in his name by the seller.
• Agreement between lend owner & developer
• Copy of approved plan of construction from concerned authority

Page | 23
D. Collect Credit risk grading Sheet ( CRGS)
The branch collect credit risk grading sheet because this measure the credit risk.The company or
person which category of risk against ( high,medium or low).This help of thee bank.
E. Techniques of project Appraisal
• An aappraisal is a ssystematic exercise to establish that the proposed project is a viable
preposition. Appraising officers checks the various information submitted by the promoter
in first information sheet application for Investment and Investment proposal. United
Commercial considers the following aspects in appraising a proposal.

1. Technical viability
2. Commercial viability
3. Financial viability
The Head Office ( HO) mainly check,the technical, Commercial and. financial viability of the
project. For others HO is dependent on branches information. But when the investment size is big,
then the HO. veeifies the authenticity of information physically.
F. Application & declaration from applicant
The application collects from applicant then the bank declaration from then loan amount. This
procedure applicant all of recoupment fill the bank than bank head - office send all information
for the sanction loan.
G. Proposal from filling the bank
The bank officer readies the proposal form. This. form applicant why collect this loan and this use
and return facility all information gather this proposal. This proposal applicant all information
known then this granted the head office and necessary observation complete for applicant.
H. Head Office approval as sanction advice
When Head Office receive appraisal from the branch then Head Office again appraises the
project.If it seems to be a viable one, the HO sends it to the Board of Directors for the approval
of the Investment. The Board Offer Directors ( BOD) considers the proposal and takes decision
whether to approve Investment or not. If the BOD approves the Investment, the HO sends the
approval to the concerned branch.
The respective Officer of Head Office appraises the project by preparing a summary named " Top
Sheet" or "Executive Summary " and then he sends it to the Head Office Credit Division for the
approval of the Loan.The Head Office Credit Division considers the proposal and takes decision
whether to approve the Investment or not.If the committee approves the Investment, the Ho sends
the approval to the concerned branch.
The all kind of formalities maintain so head office necessary legal analysis like as:
• If project loan then see the project this project legal all information collects

Page | 24
 • If the personal loan so all personal information collects
• The observation of Loan account
• This all confirm so head office approval as sanction advice from the branch than branch
sanction the loan.
I. Branch approval as sanction advice augend loan application
After geeting the approval of the HO the branch issues sanction letter to the borrower. A sanction
letter contains :
• Name of borrower
• Facility allowed
• Limit
• Purpose
• Rate of interest
• Period of the Investment and mode of adjustment
• Security and other terms & condition
J. Documentation
Documentation is obtaining such agreement where all the terms and condition and securities are
written and signed by the borrower. Generally the documents are taken in the case of a secured
advance by ABL:
• Demand promissory note: Here the borrower promises to pay the loan as and when
demand by bank to repay the loan.
• Letter of arrangement
• Letter of continuity
• Letter of hypothecation of goods and capital machinery
• Stock report : This report is used for OD and CC. In this report, information about the
quality and quantity of goods hypothecated is furnished.
• 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 ownning the landed
• Personal guarantee of the owners of the property
• Guarantee of all the directors of the company
• Resolution of the board of directors to borrow fund to execute documents and completes
other formialities
• Form no.XVII / XIX for filling charges with the register of Joint Stock Companies under
relevant section.
K. Disbursement
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 made by time to time
along with checking all the following terms and conditions.

Page | 25
 • 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 & regulation of the country, Bangladesh Bank.
• 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 & 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 ABL 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
ABL.
• The legal documents of the vehicle have been obtained.
• Collection of the satisfaction Certificate in respect of all the documents both legal and
banking from the lawyer.
• Entry has been made in the safe- out register and the documents are preserved.
4.2 Cause of Loan Proposal Rejection
1. Income and Debt
Maintaing a good credit score is excellent ; however lenders also consider your yearly income
and your current debt when applying for a loan.This allows them to determine if you can pay back
the amount you ask from them. If your yearly income is low and the lenders think that you'll bee
unable to repay the amount you are requesting then there are chances that your loan application
will get rejected. To decrease the chances for this, you should payoff your debts if you have any.
2. CIBIL Score
Your CIBIL Score is one of the most important factors lenders and banks consider before giving
you a loan.Your credit score is base on how well you manage your credit. If you have maintained
a good credit utilization ratio and you have a history of timely payments then it's likely that you' ll
have a good credit score that'll make you quality for loans. However people who fail to do this
have a lower credit score, lending to the rejection of their loan.
3. Negative event or error on a credit report
people can build up their credit score within 18 or 24 months even after major events like
bankruptcy or foreclosure.If your history has something like this, it will easily score off the lenders
lending to a rejection of your loan.
4. Incorrect or Incomplete Loan Application
The information you give on your loan applications plays a massive role in the approval of your
loan because banks use these documents to check your credibility. Often, loan applications get
rejected when people forget to attach the required documents or don't fill out the mandatory

Page | 26
details. Hence it is necessary to carefully fill out the loan application and provide all the needed
documents.
5. Mismatching of Signature
Getting a perfect signature is a problem for many people, and as per the rules, it should remain the
same everywhere. Now, getting a loan isn't that easy, and when you do the wrong signature on the
loan application, it ends up getting rejected. Therefore, you must try to make the perfect signature
that matches your other documents when you don't want any rejections in your loan application.
6.Utilization of Fund
This is lesser known fact, but the people who usually apply for personal loans use the funds for
marriage, vacation, home renovation, or buying new gadget. However, if you are applying for a
personal loan so you can use the funds to set up the business, it will contradict the income security.
Always remember that banks give you a loan based on your current salary, not the growth of your
business.
7. Credit Report Errors
The most common errors in your credit report can be incorrect reporting of some
payments,mistakes in your personal details a closed account still shown as active, PAN Details
and more.Such errors in your credit report can also lead to the rejection of your loan application.
Therefore, if you see any errors in your credit report your should raise a request to get it fixed.
8. Forget to Taka the NOC from the previous Lender
NOC stands for No Objection Certificate and getting it is a must when you have closed a loan.If
you are applying for a new loan applications can get rejected if your credit report doesn't mention
NOC.
9. Inaccurate Details
A Loan application can also get rejected when you have provided inaccurate details to the
lender.Every detail you provide is carefully verified notice there is something wrong, they ' ll end
up rejecting your loan application.
10. Residential Stability
Usually, the documents you provide for KYC take care of your Residential Stability by giving
banks the proof that you have a permanent address that confirms your stay in the city. If you live
on rent, banks may ask you for some additional details and if the banks can't verify your residential
stability, your loan application will get rejection.
11. Bank's Defaulter List of Location
This might sound weird to a lot of people, but if you are living in a location or an area that falls
under the bank's negative zone or comes under the defaulter list, there are high chances that the
bank will end up rejecting your loan even when you have a good credit score.

Page | 27
4.3 Initiative of the Bank for Non- Performing Loan
High levels of non - Performing loans ( NPLs) have been a major challenge for the financial
sectors of several EBRD countries of operation. NPLs depress credit activity growth and
ultimately job creation, perpetuating the private - sector debt problem.
In order to tackle the issue, the second phase of the vienna Initiative ( "Vienna Initiative 2.0")
launched a dedicated workstream with the overall objective of establishing institutions and
processes for resolution of NPLs and the parallel process of financial restructuring in enterprises.
The NPL Initiative is a broad IFI NPL project on building greater transparency for country reforms
and restructuring environments, sharing best knowledge on practices, and building capacity
through dedicated technical assistance and training. The work if ocused on Hungary ( Where the
EBRD leads), croutia and serbia ( with strong EBRD contribution), Albania and Montenegro, but
most Central, Eastern and South- East Europe ( CESEE) countries benefited from the Initiative.
The present NPL workstream aims at three overlapping objectives :
• Enhancing the transparency of restructuring frameworks :
Through a specialized web site and in- country workshops, we aim to make the national contexts
more accessible for international investors and the local financial community.
• Capacity building :
Technical assistance is coordinated between the principal international organisations and EU
bodies. Traning in modern restructuring principles builds a better understanding among private
market participants.
• Knowledge Sharing :
Monitoring and disseminating NPLs data, regulatory reform updates, market transactions
and improvements in servicing capacities through the NPL Monitor ( Semi annual publication).
Further, there is a wealth off additional resources or the " knowledge hub" website offering
notes on best practice, relevant industry reports and key insights from the academic literature.
4.4 Principles of the Lending
The Project plan is analysis and taken decision around the project. The advance and loan
department is vital for the analyzing. Then primary approval of the advance/debt program the last
approval is passed from the branch manager. If the advance/loan amount over a secure figure,
managers transferred the advance/loan about project to the supreme authority for final pass a loan.
The experts in principal office find out particular plan ratios promoted and perspective about the
capability of project. Bank calculate a debt proposal by as long as, few fixed variables.
❖ Repayment
❖ Safety
❖ Security

Page | 28
Most significant measure of assess advance/loan appeal is certainty of appeal. Security is
consistent by the safety offered for the loaner and paying quantity of loaner. The approach of the
debtor is also very vital attention. Liquidity refers the arrival of cash in the plan and its report.
Profit is the circulation of blood in any financial organization. Before sanctioning any documents
other papers every person or every organization ensure their profit and also ensure to minimize of
their risk. Bank or other financial take some security against loan or debt. When they are satisfied
for the all documents and property legality then authority take further action. Bank cannot approval
advance/loan by only depending on collateral.
The authority is must feasible one, who provides advance or loan. During approval/ sanctioning
any advance/loan Bank has to be fascinated about change of risk. Total amount money must not
be expended amongst a tinny number of peoples. Moreover any plan must be rooted for national
interest prosperity.
Lending Risk Analysis (LRA)
LRA is a very necessary and important analysis for taking decision whether the debt appeal is
potential /negative. Many kinds of statistical, mathematical, scientific& managerial tools and
appliance are needs to work under this analysis. National Bank limited maintains ethical form for
Lending Risk Analysis, which related to m/s excel analyze much data/ information. It’s impossible
to describe the whole LRA in Internship Report.
Documentation
For the sanctioning any loan or advance required these frequent data or information below these
docs are:-
• Appeal Promised Note : There the bum committed to allowance the debt so when Appeal
by the national bank to compensate the debt.
• Adjustment t: Here written bulk of the advance or debt allowed to the lender Is stated.
• Constancy: To take endless advantages so given regular securities.
• Claim: written archive of service & goods charge thus keep in bag of need.
• Basic Report: this internship report is worn for SOD & CC. Announcement data/
information about the aspect &amount of equipment mortgaged have equipped.
• Assure of the administrator for the company.
• Decision of the panel of directors: It may use to debt the capital to execute Docs & entire
other docs.
• Disclaimer: By this sign, the lender depart his all allegation on the Equity/ deposit.
• Acceptance: acceptance indicating signature of the approval offered by the lender.
• Agreement letter: written docs of the furnishings pledge and thus this doc’s legality of
assets the goods.
• Disbursement Letter : that is the archive through which amount of approval Loan
determined.
• Partnership Letter: In baggage of joint organization, the joint accomplishment is to be
served.

Page | 29
 • Letter of payment: Bulk of payment that’s to be repaid at convinced comma.
• Tax paying affidavit.
• Any docs. If characterize, so necessary in the approval consultation approval by the
Principal/ Head Office.
4.5 Limitation of Loan Section of Agrani Bank Limited
There are some limitations in the advance section of this bank. Among them the major limitations
are-
• Lack of good party.
• Party characteristics are not good all time.
• Parties all time not keep their words.
• Sometime pressure from top level through the party condition is not good.
• Here there is lack of enough loan schemes that are effective now days.
• Many old payment of loan is due.
• Lack of proper documentation about loan.
• Loan interest rate is very competitive.
• Lack of technological advantage.
4.6 Principles of Sound Lending
A. Safety
Agrani Bank exercises the lending function only when it is safe and the risk factor is adequately
mitigated and covered. Safety depends upon:
• The security offered by the borrower.
• The repaying capacity and willingness of the borrower is to repay the advance.
B. Liquidity
The liability of a Bank is repayable of demand or at a short notice. So the Bank has to maintain its
liquidity at a sufficient level. Investment on building, plant, machinery, land etc. cannot be
recovered quickly, so it is less liquid.
C. Profitability
Profit is needed to pay interest to depositors, depreciation, and maintenance, declare dividend to
shareholders, provide or reserve against bad and doubtful debts etc. so like all other Banks Agrani
Bank also disburse advances to earn profit.
D. Security
To ensure safety of advances, Banks takes different types of securities like MTDR, Sanchaypatra,
land, work order etc. Banker should ensure that the securities are adequate, marketable and free
from encumbrances.

Page | 30
 Chapter Five
Credit Management of Agrani Bank Ltd.

Page | 31
5.1 Credit Management & its Objectives
Credit management
Credit management is the process of controlling & collecting payments from customers. This is
the function within a bank or control credit policies that will improve revenues and reduce financial
risks. A credit manager is a person employed by an organization to manage the credit department
and make decisions concerning credit limits, accepted levels of risk and terms of payment to their
customers. In companies the role of credit manager is variable in its scope.
Objectives of Credit management
The objective of the credit management is:
• To maximize the performing asset and the minimization of the non - performing asset as
well as ensuring the optimal point of loan and advance and their efficient management.
• To allocate the fund in divers field and to minimize the risk and maximizing the return on
the invested fund. Continuous Supervision, monitoring and follow -up are highly required
for ensuring the timely repayment and minimizing the default.
The overall success in credit management depends on the banks credit policy, portfolio of credit,
monitoring, Supervision and follow -up of the loan and advance. Therefore, while analyzing the
credit management of Agrani Bank Limited, it is required to analyze its credit policy, credit
procedure, how they are managing credit and quality of credit portfolio. To implement procedures
which ensure the collection of debt, meeting of service targets and the prevention of escalation in
arrear debt. To facilitate financial assistance and basic services for the community 's poor customer
care, credit control, Debt collection and Indigent policy and provide incentives for prompt payment
as well as ensuing limited risk levels by means of effective management tools.
5.2 Credit Policy of Agrani Bank Limited
ln line with the Bangladesh Bank declared concretionary monetary policy that prevailed in the year
2012, Agrani Bank Limited 's. Credit Policy was o expand credit within prudent limit and to
discourage credit in unproductive sectors. Simultaneously, Agrani Bank Limited has maintained
a deliberate pro growth directional bias in its credit policy to ensure adequate credit flows to farm
and nonfarm productive sector of micro small & medium enterprises.
The credit policy of Agrani bank Limited has been devised in accordance with Bangladesh Bank's
guidelines to ensure that effective credit risk management practices are followed, which will
contribute towards the achievement of the overall business objectives of the bank while ensuring
compliance with the regulatory fremework set out by the regulators.
Agrani Bank Limited 's annual credit plan determines overall limits based on various client
segments and products economic sectors, geographical locations, currency and maturity with a
view to avoid undue concentration in any client segment, economic sector or geographical
location.

Page | 32
5.3 Credit Principles of Agrani Bank Limited
In the feature, Credit principles include the general guidelines of providing credit by branch
manager or credit officer. In Agrani Bank Limited they follow the following guideline while giving
loan and advance to the client.
• Credit advancement shall focus on the development of customer relationship.
• All credit extension must comply with the requirement of Bank's Memorandum and Article
of Association, Banking company 's Act, Bangladesh Bank's Instructions, other rules and
regulation as amended from time to time.
• Loans and advances shall normally be financed from customer's deposit and not out of
temporary funds or borrowing from other banks.
• The bank shall provide suitable credit services for the markets.
• It should be provide to those customers who can make best use of them.
• The conduct and administration of the loan portfolio should contribute within defined risk
limitation for achievement of profitable growth and superior return on bank capital.
• Interest rate of various lending catagories will depend on the level of risk and types of
security offered.
5.4 Credit Risk Management
Credit risk management encompasses identification, measurement, marching mitigations,
monitoring and control of the credit risk exposures to ensure that:
• The individuals who take or manage risks clearly understand it.
• The organization's Risk exposure is within the limits established by Board of Directors
with respect to sector, group and country's prevailing situation.
• Risk taking Decisions are in line with the business strategy and objectives set by Board of
Directors.
• The expected pay offs compensate the risks taken.
• Risk taking decisions are explicit and clear.
• Sufficient capital as a buffer is available to take risk.
Importance of Credit Risk Management for Banking
Banks and other financial institutions are often. faced with risks that are mostly of financial nature.
These institutions must balance risks as well as returns. For a bank to have a large consumer
base,it must offer loan products that are reasonable enough. Banks are constantly faced with risks.
There are certain risks in the process of granting loans certain clients. There can be more risks
involved if the loan is extended unworthy debtors. Certain risks may also come when bank offer
securities and other forms of investments. The risks of losses that result in thr default of payments
of the debtors are a kind of risks that must be expected. Because of the exposure of banks to many
risks,it is only reasonable for bank to keep substantial amount of capital to protect its solvency and
to maintain its economic stability. The second Basel Accords provides with the allocation in
connection with the level of risks the bank is exposed to, The greater the bank exposed is risks, the

Page | 33
greater the amount of capital must be when it comes to its reserves, so as to maintain its solvency
and stability.
5.5 Principles of ABL 's Credit Risk Management
While developing ABL' s credit risk management police following principles have been taken into
consideration:
1. The board has responsibility for approving and periodically reviewing the credit risk strategy
and significant credit risk appetite and the level of profitability the bank expects to achieve for
incurring various credit risk.
2. Senior management has responsibility for implementing the credit risk strategy approved by the
board and for developing policies and procedures for identifying, measuring, monitoring and
controlling credit risk.
3. Bank has in place a system for monitoring the condition of individual credits, including
determining the adequacy of provision and reserves.
4.Bank will ddevelop and utilize internal risk rating systems in managing credit risk. The rating
system will be in line with the regulatory instructions and consistent with the nature, size and
complexity of the banks activities.
5. Bank wiil take into consideration potential future changes in economic conditions when
assessing individual credits and their credit portfolios and will assess their credit risk exposures
under stressful conditions.
5.6 Credit Risk Management Framework
The Credit Risk Management Framework of Agrani Bank is developed based on the following
internationally acceptable practices The Framework is categorized into following main
components:
a. Board oversir
b. Senie management's oversight
c. organizational structure
d. Systems and procedures for identification, acceptant,measurement of risks
e. Monitoring and control of risks

Page | 34
5.7 Credit Monitoring
The Credit Administration Division will oversee the credit & investment activities of the Bank
with a broader portfolio - base outlook (regional dispersal industry & customer - type segmentation
product performance portfolio classification etc).
• The loan Administration unit og the division will establish and maintain a comprehensive
data base on all credit exposures and monitor consolidated movements as these are reported
through copies of transaction sheets and summaries. It will conduct portfolio analysts for
the purpose of evaluating portfolio performance & detecting any deterioration in the risk
exposures summary reports and recommendations wii be submitted to the credit committee
for appropriate action or policy decisions.
• The Credit review unit of the division is responsible for reviewing the credit process to
ensure that approved policies and procedures are being effectively being
implemented throughout the Bank.
5.8 Credit Approval
A financial institution must have in place written process and the approval authorities of
individuals or committees as well as the basis of those decisions. Approval authorities should be
sanctioned by the board of directors. Approval authorities will cover new credit and changes in
terms and conditions of previously approved credits, particularly credit restructuring, all of which
should be fully documented and recorded. Prudent credit practice requires that persons empowered
with approval authority should not also have the customer relationship responsibility.
Depending on the size of the financial institution, it should develop a corps of credit risk specialists
who have high level expertise and experience and demonstrate judgment in assessing, approving
and managing credit risk. An accountability regime should be established for the decision trail of
decisions taken, with proper identification of individuals/committees involve All this must be
properly documented.
5.9 Credit Recovery
It is the duty of the Bank to recover the lender fund within the stipulated time and if the borrow
fails to repay the money within the pointed period Bank declare him / her as a defaulter & recover
the fund by selling the securities given by the borrower or by freezing his / her account or make a
suit against him/ her.Recovery procedure is a lengthy one that requires efforts of the bank, society
and legal institutions. It also takes time and money. Like other banks, Agrani Bank Limited follows
four steps to recover the steps are described in detail below :
1. Reminder to the client is given through a formal communication channel. A letter is written
and properly signed on the bank's papers. This letter is issued several times to remind the
honorable loaner to repay his/ her outstanding portion.
2. If the loan amount is not yet repaid after sending a series of letters, theb social pressure is
created on the client by persons referred while opening account in the bank.
3. Legal notice is prepared & sent by Agrani Bank Limited when above two steps fails to
recover the amount. It is a threat to the borrower.

Page | 35
 4. The last and final step of the recovery procedure is the help from the court. Agrani Bank
Limited sincerely tries to avoid this kind of situation for its honorable clients but can't help
doing for its own sustainability.
5.10 Quality of security in case of loan
Investments/loans and advances are advanced to a borrower firstly based on the soundness of the
business in which the money is being put and the capability of the borrower to execute or
implement the investment plan /project and his willingness to meet his obligations. These should
be the primary source of security; however lending institutions need a fall back plan in the event
that the borrower fails to execute the plan. This is why security comes into play. The bank will
liquidate the security when the borrower defaults. The following are the attributes of a good
security:
1. Easy to Value: The market value of the security should be easy to determine in the market. The
value of house provided as security should be easily determined; further the value of the security
should be stable over the period and not fluctuate.
2. Easy to Realize: The security should also be marketable or easily to sale. The lending institution
should be able to dispose of the security without incurring additional cost. The security should also
be easy to liquidate, concert to cash in little time without loss of value.
3. Easy to Take: A good security should enable the lending institution to acquire an interest or
charge over it without delay and additional costs. There should be no legal encumbrances, disputes
on the security. The title deed or ownership of the security should be in favor of the borrower and
there should be no outstanding dispute over it. Other components of easy to take should be ease to
own legal or take physically.
5.11 Securitization procedure of loan
Securitization is the process of transformation of non-tradable assets into tradable securities. It is
a structured finance process that distributes risk by aggregating debt instruments in a pool and
issues new securities backed by the pool.
When a bank or financial institution is in need of additional capital to finance a new facility, to
raise the fund, instead of selling the assets, the financial institution decides to sell the portion of
the loan to a Trustee named as Special Purpose Vehicle (SPV) and collect the fund up front and
remove the loan asset from the balance sheet of the institution. SPV holds the asset as collateral in
balance sheet and issues bonds to the investors. It uses the proceeds from those bond sales to pay
the originator for the assets.

Page | 36
Stages involved in Securitization process:

Identification Process Stage:

In the first stage, the financial institution or the banker, is called the originator. The Originator will
pool his lending like mortgages, or account receivables into a homogeneous type based on interest
rate, maturity period, etc. Thus, the first stage is called Identification process stage.
Transfer stage:
The originator will transfer all his assets to another institution which helps in the process of
securitization. The assets are converted into securities by Special purpose vehicle (S.P.V) or Trust.
The Trustees may be retired high court judges who may have knowledge of valuation of assets and
finance. There are also merchant bankers who act as SPV and as agents for issue. The reputation
of merchant bankers will help in the issue of debt instruments by which the debt instruments will
be oversubscribed.
Issue stage in Securitization:
The SPV splits various assets into different types of securities according to their maturity date and
interest rate.
The SPV issues securities to investors which are as follows:
❖ Pass through certificates
❖ Pay through certificates
❖ Interest only certificates
❖ Principal only certificates
Page | 37
Pass through certificates: In the case of Pass through certificates, payments are received from
assets such as housing loan from out of which payment for certificate of deposits are met as and
when they are due.
Pay Through certificates: In this case, multiple maturity structure certificates depending upon
maturing pattern of various assets will be issued, so that as and when the assets mature the
respective certificates will be paid.
Interest only certificates: The interest for these certificates will be paid as per the earnings from
the assets securitised.
Principal only certificates: Only the principal amount will be paid on the certificates from the
realization of assets.
Redemption stage in Securitization: Payments received from various assets are used for
redeeming various credit instruments issued. This is done by the originator himself. In some cases,
a separate servicing agent may be appointed who will undertake collection work for which
adequate commission will be paid. The job of the servicing agent will be to discharge the assets
through the collection of principal and interest and settle the debt instruments.
For example, the housing loan may be collected with principal and interest and fi.om its collection,
debt instruments such as certificate of deposits will be met.
A pass through certificate which we have mentioned already may be a with recourse or without
recourse certificate. In the case of with recourse certificate, if payment is defaulted, the originator
will be held liable by the SPV. Hence, SPV plays a major role in settling the claims of the investors.
Credit rating stage in Securitization:
The pass through certificate issued by SPV has to be credit rated as they are debt instruments which
are issued to the public. The financial institutions issuing these debt instruments will have to
undergo credit rating which is statutorily mandated in certain countries. The debt instruments are
also traded in the secondary market especially for interest swap.
The following are the various assets which can be used for Securitization by financial institutions.
• Housing loan granted to individuals or institutions
• Hypothecation of vehicle loan
• Leasing finance, especially financial lease
• Supply bills belonging to government departments
• Outstanding on credit cards
• Long-term loans granted to reputed parties.

Page | 38
5.12 Responsibility of securitization procedure
The roles and responsibilities of various components involved in the securitization structure are
explained below:
• Borrower – An Individual or organization which obtains loan from financial institution /
bank and pays the monthly payments.
• Mortgage Broker - Acts as a facilitator between a borrower and the lender. The mortgage
broker receives fee income upon the loan's closing.
• Issuer - A bankruptcy-remote Special Purpose Entity (SPE) formed to facilitate a
securitization and to issue securities to investors.
• Lender - An entity that underwrites and funds loans that are eventually sold to the SPE for
inclusion in the securitization. Lenders are compensated by cash for the purchase of the
loan and by fees. In some cases, the lender might contract with mortgage brokers. Lenders
can be banks or non-banks.
• Servicer - The entity responsible for collecting loan payments from borrowers and for
remitting these payments to the issuer for distribution to the investors. The servicer is
typically compensated with fees based on the volume of loans serviced. The servicer is
generally obligated to maximize the payments from the borrowers to the issuer, and is
responsible for handling delinquent loans and foreclosures.
• Trustee - A third party appointed to represent the investors' interests in a securitization.
The trustee ensures that the securitization operates as set forth in the securitization
documents, which may include determinations about the servicer's compliance with
established servicing criteria.
• Securitization Documents - The documents create the securitization and specify how it
operates. One of the securitization documents is the Pooling and Servicing Agreement
(PSA), which is a contract that defines how loans are combined in a securitization, the
administration and servicing of the loans, representations and warranties, and permissible
loss mitigation strategies that the servicer can perform in event of loan default.
• Underwriter - Administers the issuance of the securities to investors.
• Credit Enhancement Provider - Securitization transactions may include credit enhancement
(designed to decrease the credit risk of the structure) provided by an independent third
party in the form of letters of credit or guarantees.

Page | 39
 Chapter Six
SWOT Analysis of Agrani Bank

Page | 40
6.0 SWOT Analysis of Agrani Bank Limited.
SWOT Analysis is the detailed strategy of an organization‟s exposure and potential in perspective
of its strength, weakness, opportunity and threat. This analysis used the organization to make their
existing line of performance also foresee the future to improve their performance in comparison
to their competitors.
By SWOT Analysis, an organization can also observe their current position. It can also be
considered as an important tool for making changes in the strategic management of the
organization.
SWOT is an acronym for the internal strength and weakness of a firm and the environmental
Opportunity and Threat facing that firm. So if we consider Agrani Bank as a business firm and
analyze its strength, weakness, opportunity and threat the scenario will be as follows:
6.1 Strength:
• Energetic as well as smart team work
• Good Management
• Lending rate is relatively competitive
• Cooperation with each other
• Good banker-customer relationship
• Strong Financial Position
• Huge business area
• Service charges are comparatively reasonable.
• Strong corporate identity
• Young enthusiastic workforce
• Empowered Work force
6.2 Weakness:
• Lack of proper motivation, training and job rotation
• Lack of experienced employees in junior level management
• Lack of own ATM services
• Tendency to leave the bank in quest of flexible environment
• Lack of proficient manpower in some department
• Limited advertising and publicity of bank‟s products and activities
• Absence of strong marketing activities
• Office environment is not good as private bank environment
• High charges of L/C
6.3 Opportunity:
• Growth of sales volume
• Change in political environment
• Launching own ATM card services
• Expansion of banking services into other different services
• Expansion branches of online

Page | 41
6.4 Threats:
• Upcoming Banks/Branches
• Different services of FCB‟S (Phone Banking/Home Ban king)
• Similar products are offered by other banks
• Default Loans
• Financial Crisis
• Existing card services of Standard Chartered Bank or other private Bank
• Daily basis interest on deposit offered by HSBC
• Government has been controlling industrial credit
• Recession of global economy Intensification of competition in the industry

Page | 42
 Chapter Seven
Findings, Conclusion & Policy Implications

Page | 43
7.1 Finding
While working at Agrani Bank ltd, Gopalgonj Branch, I have attained to a newer kind of
experience. After the collection of data, I have got some findings. These findings are completely
from my personal point of view. Those are given below:
1. There was a humongous growth in deposit & investment along with profit in 2018
2. They change high interest rate in home loan including reluctance in providing home loan.
3. They maintain a balance between loan and advances throughout the gear.
4. The amount of loans & advances is increasing but the growth of credit is decreasing over the
years of Agrani Bank Limited.
5. Agrani Bank Limited distribute a larger portion of credit in urban than rural areas.
6. Agrani Bank Limited provides the highest portion of loan in wholesale / retail trading and
personal section and lower portion of the loan in Transport storages & communication & ship
breakings. The trend of giving loans and advances by Agrani Bank Limited in power sector is
increasing over the years.
7. The portion of classified loan & advances in percentage of total loans & advances is too high.
8. Interest rate is an important factor to the entire potential borrower and the bank. It is the most
important source of income for bank.
9. ABL provides customer services to its client comparing to other financial institutions of
Bangladesh. It has been seen from customer opinion.
10. Interest rate on some loan products ( e.g car loan, home loan, personal loan) is too high than
other established banks in Bangladesh.
11. ABL does not provide loan to the person who actually needed. Sometime employees consider
their personal relationship with the person who wants to borrow money and give loan without
considering the factor of worthiness of borrower.
12. Factors that ABL takes into consideration are not sufficient factors. For this reason overdue of
loan is a regular occurance.
13. Absence of an appropriate and clear cut legal framework for enforcing quick recovery.

Page | 44
7.2 Conclusions
There are a number of Private Commercial Banks, Nationalized Commercial Banks and foreign
Banks operating their activities in Bangladesh. The Agrani Bank ltd. is one of them. For the future
planning and the successful operation for achieving its prime goal in this current competitive
environment this report can be a helpful guideline.
From the practical point of view I can declare boldly that I really had enjoyed my internship at
Agrani Bank Ltd. from the first day. Moreover, Internship program that is mandatory for my BBA
program, although it is obviously helpful for my further thinking about my career.
Banks always contribute towards the economic development of a country. Compared with other
Banks Agrani Bank Ltd. is contributing more by investing most of its funds in fruitful projects
leading to increase in production of the country.
Agrani Bank Ltd. is playing its leading role in socio-economic development of the country has
been rendering its Banking services with the needs of the nation to cope with the demands of
people in the country. By doing many other works for state & society, Agrani Bank Ltd. has
emerged as the pioneer of playing key role in the country.

Page | 45
7.3 Policy Implications
1. Agrani bank needs to reduce the rate of house loan. They also need to develop house loan
information system.
2. Agrani bank should develop house loan information system.
3. There is decreasing trend of credit growth over the years. Agrani Bank Limited should
concentrate more on credit disbursement.
4. Agrani Bank Limited does not provide enough loans in ship breaking and transport &
communication credit sector. To generate growth, Agrani Bank Limited should promote agro-
finacing in large scale with higher flexibility and concentration.
5. More concentration in transport & communication sector may bring era of success in
coming years.
6. Agrani Bank Limited should focus more on rural areas to provide loans & advances.
7. Agrani Bank Limited should give more concentration to recover the classified loan by
continuous communication with the client & should properly check the document of the applied
client before the disbursement of the fund.
8. The bad & loss loan increase over the years. So, bank should take necessary actions for reducing
the percentage of bad & loss loan such as carefully selecting the borrower & credit sectors which
may help to reduce the percentage of bad & loss loan.
9. The bank has to update its technological structure for better and faster customer services.
10. Bottlenecks on barriers should be removed by taking advanced steps in mode of disbursement,
charge documents & approval process.
11. Business power for sanctioning loans & advance can be increased at branch level.
12. ABL should decrease interest rate of some popular loan products.
13. In case of approving the loans, securities against the borrowing should be equal to thr market
value of the amount.
14. Loan facility parameter should be expanded so that all the people can get loan according to
their needs.
15. It should consider some other factor for determining credit worthiness before sanctioning any
loan for more security & aviod default of customers.
16. Credit manager should develop their process to provide loan & recovery of loans for
avoiding loans & overdue. They can impose a penalty for those who miss installment of
repayment.
17. The branch may introduce more attractive loan schemes or products.

Page | 46
Reference
Annual Report-2015, Annual Report- 2016, Annual Report- 2017
Grading of Credit Manual
www.ablbd.com
wikipedia.org/wiki/Bank
Foundations of financial management by Stanley
B. Block & Geoffrey A. Hart.
ABL’s retail banking service prospectus.
Articles published on Credit Department information.
Credit Measurement: New approaches to Value at Risk and other Paradigms by
Anthony Saunders.
www.bis.org/publ/bcbs54.htm
Credit Policy and management guide of abl.

Page | 47