Internship Report on Loan & Advances

of Bank Asia Limited

Submitted To
Dr. Mostafa Kamal
(Professor)
Department of Real Estate
Faculty of Business & Entrepreneurship
Daffodil International University

Prepared By

Major in Finance
Bachelor of Business Administration
Department of Business Administration
Faculty of Business & Entrepreneurship
Daffodil International University

Submission Date :
 Letter of Transmittal

Professor Dr. Mostafa Kamal

Department of Real Estate
Faculty of Business & Entrepreneurship
Daffodil International University

Subject: Submission of Internship Report on Loan and Advance of Bank Asia

Limited.

Dear Sir,

I am pleased to submit my outreach statement on "Current Status of Loan and

Advance of Bank Asia Ltd. Savar Branch", which you have provided me as part of
my BBA program needs. I have tried my best to write all kinds of relevant
information, which can give an overall idea of this topic. I worked for 4 months
with Bank Asia Limited and saw their work. I have tried to gather as much
information about the ad as possible I hope this report meets the required
standards.

Therefore, I request and hope that my report will be of interest to you and
approved by the review panel

Sincerely,

Major in Finance
Bachelor of Business Administration
Department of Business Administration
Faculty of Business & Entrepreneurship
Daffodil International University
 Certificate of Approval

This is proof that Nafiz Intiaz ID No. 163-11-373 BBA (Finance) is a regular
student of the Department of Business Administration, Faculty of Business and
Economics, Daffodil International University. He has completed his tenure at First
Bank Asia Limited and has arranged these activities under my direct supervision.
Its role is Loan and Advance Research Bank Asia Limited'. I think the
announcement is necessary to meet some of the BBA's responsibilities.

Professor Dr. Mostafa Kamal

Department of Real Estate
Faculty of Business & Entrepreneurship
Daffodil International University
 Acknowledgement

The successful conclusion of a course requires the support of many staff and I am
fortunate to have the support, guidance, and supervision of every part of my
coaching career and friends. First of all I want to be thankful for the measure of
grace and deep love of the Almighty God. I would like to express my sincere
gratitude to my Head of Education named Professor Dr. Mostafa Kamal, Advisor,
Daffodil International University. For its support and guidance on the preparation
of this report, I would like to express my gratitude to the Director, Md Abdul Latif
and Branch Manager, M. Delowar Hossain Sidy, who supervised me during my
internship. I would also like to thank all the departments and friends who came to
work for the four months that were creating the education for me. Special thanks to
all the credit officers in the credit bureau who assisted me in preparing my work
curriculum. It is my blessing and my joy to work in such a wonderful branch.
Finally my sincere gratitude to my family, friends, and classmates who helped me
whenever I needed it.
 Executive Summery

This notice is subject to lending rates and advance in Bank Asia Limited, Savar
branch. Through this report the reader will be able to know the current status of the
loan and ahead of Bank Asia Limited, Savar branch. This report also describes the
different types of loans they offer to their clients and the different treatments that
lead to different types of loans. This article will give readers more information
about the different divisions Bank Asia Limited, Savar branch has and how they do
their job. The two branches of the branch are described in detail. First the report
will tell the reader about the banking institution of the branch, which is to give the
reader the importance of the general banking process and then the people. Use
business products that banks provide, for example, savings accounts, accounts,
pension plans, fixed deposits and more. Second, the reader will be familiar with the
credit lending process based on its product portfolio like its loans, home finances,
fixed assets, unsecured loans and other and last but not least the reader will be able
to understand the performance of all the organizations in the market even if the
financial analysis (return on fairness, part income, return on assets, etc.)
 Table of Contents
Chapter Topic Name Page
1 1. Introduction of The study
Introduction 2. Origin of The study
3. Objective of The study
4. Scope of The study
5. Methodology of The study
6. Limitation of The study
2 1. History of Bank Asia Ltd
Overview of The Bank 2.Vision of Bank Asia Ltd
3.Mission of Bank Asia Ltd
4. Objective of Bank Asia Ltd
5. Hierarchy of Bank Asia Ltd
6. Corporate Milestores
7. Structure of Bank Asia Ltd Savar
Branch
8. CSR and Donation
3 1. General Banking
Departments 2. Customer Service
3. Foreign Exchange Department
4. Credit Department
5. Credit Product
6. Categories of Loan and Advance
7. Default Loan Classification
4 1. Loan and Advance Statistics
Loan and Advance 2. Trades & Commerce
Statistics 3. Construction
4. Consumer Finance
5. Total Loan and Advance Statistics for
the Quarters
5 1. Ratio Analysis
Financial Statement 2. Debt to Total Asset
Analysis 3. Debt to Equity
4. Return on Assets (ROA)
5. Return on Equity (ROE)
6. Net Interest Margin
7. Earnings Per Share
8. SWOT Analysis
 6 1. Recommendation
Conclusion and 2. Conclusion
Recommendation
Reference
 Chapter One : Introduction

1. Introduction of The study

The main purpose of this report is to review the Loans and Research of Bank Asia
Ltd. The report also outlines loan approvals, their safety and audit procedures, and
identifies loan repayments across a range of projects over the past year and offers a
comparison of them. Finally identify some issues related to lending and
advancement and provide some recommendations for improving the Loan and
Priority services.

2. Origin of The study

The Bachelor of Business Administration (BBA) is a four-year, four-year course
designed with a strong mix of theoretical and practical aspects. In the final year of
the BBA course students will be required to work in an organization for the skills
required to complete a BBA degree. This period is called internship time.
Internships help students apply all theoretical knowledge to hands-on activities that
are accomplished during a four (4) year course. I assigned to Bank Asia Limited,
Savar Branch For my job. I joined Bank Asia limited, Savar Review on 02
February, 2020 to complete my work. It is a four (four) month course ending on 03
June, 2020. Students must prepare a working report under the supervision of a
teacher for the chosen course. The subject of my working statement is "Current
loan status and promotion of Bank Asia Ltd, Savar Branch". With the help of my
supervisor and the staff of the organization I have tried my best to create an ad that
will showcase the work experience I have throughout my career working hours.

3. Objective of The study

 To understand the whole process of the bank below
 High self-help
 Consumer-focused
 All promises of quality
 Contribution in the economy
  The resources of human resources
 Promise it to its customers at every level
 To know the last 5 (five) years financial experience of Bank Asia Limited
 To have a clear idea of different types of loans in Bank Asia Limited


4. Scope of The study

These reports are intended to provide insight into the simplified practices of Bank
Asia. Using all my experience I try to have all of the basics of the liquid process
control. I focus on what is a liquid asset, what is possible easily, what is
management practices simplified, The Bank of Bangladesh needs of management
simplification all bank waste. I am also trying to show how The Bank Asia Limited
touches everything Ease of operations, how to manage emergency funds and how
to spend them money in the profit. The purpose of the paper will be to focus on
how the Bank Asia. The Financial Institution has control over the efficiency and
completeness of the Financial Institution on liquidity management of commercial
banks. And finally I draw the conclusion for simple governance management of
Bank Asia Limited.

5. Methodology of The study

About preparing the report I have used two different sites. They are,

 Primary Source
 Interview with the police
 Self-perception
 Face to face rotation
 Observe when working on credit dept
 Consultation Interviews with staff and customers
 Secondary Source
 Website of Bank Asia Limited
 Annual report of the bank
 Internet
 Office information
 Select Book
 Working papers
6. Limitation of The study
Upon completion of the declaration I will face some restrictions. They are,

 Insufficient information provided on the website

 Office staff could not provide enough information due to lack of time
 Not all information will be collected due to confidentiality
 Completion of such a statement of the time available is not enough
 Chapter Two : Overview of The Bank

1. History of Bank Asia Ltd

Bank Asia Limited is a term bank-based private enterprise established in
accordance with the vision of the Bank Company Act, 1991 and established in
accordance with the Government Company Policy in accordance with the
Company Policy, 1994 for the September 28, 1999. The bank has been in business
operation since November 27, 1999 with the start-up of the Company Office of the
Office of Room Rang Bhaban. The public response has resulted in the Bank
continuing its plans of expanding its network. The opening of the principal office
has made great strides going forward and completing the opening of the Gulshan
and Chittagong branches has expanded the edge of Bank Asia to bring its services
to the greater benefit of the people. In a short time, the bank opened four more
branches in Dhaka and two branches in Sylhet and Kishorgonj. In February 2001,
Bank Asia took over the operations of the Bank of Nova Scotia, the first venture
capital bank in Bangladesh. Bank Asia then took over the Bangladeshi business of
the Muslim Commercial Bank of Pakistan in December 2001. These tough actions
could lead to some decision-making. committed and yet dedicated team of
professionals who today put their most effort into building a bank as one of the
leading leadership concerns in the industry.

2. Vision of Bank Asia Ltd

 The Bank of Asia's vision is to bring the poor and financially disadvantaged
in Bangladesh past by a new generation in the millennium, which is having
an impact on the dream country.
 Try to make money savings in the direct market
 To play an important role in human resource development and job creation
 To develop effective business management systems
3. Mission of Bank Asia Ltd
 To help bring good services to our customers and participate in the growth
and expansion of business in the country
 To establish high standards of fairness and bring total satisfaction to our
customers, partners and employees.
 To become one of the most demanding people in the country, provide the
latest technology developed by our highly skilled team.
 Providing the best prices based on green products and services.
 Embracing the necessary skills and technology
 Develop a culture of innovation and continuous improvement
 Ensuring the highest return / cost to shareholders.
 Estimating business capital and opening up a human side of the bank

4. Objective of Bank Asia Ltd

 Maintain good relationships with customers and customers
 High customer satisfaction
 Give priority to the least frequently asked questions of the consumer.
 Provide better service and better products to customers
 Works for all by setting up branches in every country
 More value to stakeholders through better operational value
 Establish high standards of courtesy and courtesy
The main objective of the report is to analysis the Loan and Advances of Uttara
Bank Ltd. Other discussion are to get an idea regarding various types of Loan
and Advances of Uttara Bank and identify the loan sanction procedure in different
sectors in last some years. Report also identify the credit approval, their
securities and monitoring process and identify the recovery rates of the loans in
different sectors in last some years and have a comparison among them. Finally
find out some problems regarding loan and advances and give some
recommendations for improving the Loan and Advances services.

Over view of the Study

General Objective:
The general objective of the study is to figure out the Loan and Advances of
Uttara Bank Ltd.

Specific objectives are:

 To have idea regarding various types of Loan and Advances of Uttara Bank
Limited.
 To identify the loan sanction procedure in different sectors in last some years.
 To identify the credit approval, their securities and monitoring process of Uttara
Bank Limited
 To know the loan and advances activities of Uttara Bank Ltd. at shyamoli branch.
 To identify the recovery rates of the loans in different sectors in last some years
and have a comparison among them.
 To identify the problems regarding loan and advances and give some
recommendations for improving the effectiveness and efficiency of Loan and
Advances services.

Methodology

Sources of Data

In order to make the study more meaningful and presentable two sources of data
have been used such as—–

The primary sources that include  

 Conversation with the respective officers and staffs of the branch.

 Practical work experience in the different desk of the department of the branch.

The Secondary sources are enlisting bellow-

 Annual Report of Uttara Bank Ltd.

 Website of the Uttara Bank Ltd.
 Several books and periodicals related to the banking sector.
 Bangladesh Bank Report
 Different circular sent by the head Office of Uttara Bank Ltd.

Scope of the Study

The scope of the study includes the organizational structure, background and
objective, functional, departmental and business performance of UBL as a whole
and the main part covers loan and advance of UBL.
 

Introduction

Uttara bank is one of the largest and oldest private sector commercial bank in
Bangladesh. It has 211 branches at home and 600 affiliates worldwide create
efficient networking and reach capability.UBL adapts new technology both in
terms of equipment  and banking practice ensures efficient service to its clients.

Uttara bank was incorporated as a public limited company on 29 th June in

1983.Total equity(capital and reserve)  of the bank as on 31st December stood as
taka on 802,243,079.The Authorized capital of this bank is taka 200,000,000/-
(Taka twenty crores) only divided into taka 2,000,000/- (Taka twenty lack)
ordinary shares of taka 100/-(one hundred) . As per Bangladesh Bank BCD
Circular No. 34, dated November 16, 1989, provision for classified loans and
advances are to be made for Tk. 343.56 crore out of which Tk. 214.52 crore has
been provided for in the Accounts up to December 31, 2000. Bangladesh Bank
vide there letter, dated 26.05.1998 has allowed time to make full provision within
the year 2001.

Uttara bank performs all traditional commercial banking functions. These bank
has correspond relationships with 600 foreign banks/bank offices and exchange
houses in 72 countries.UBL formed taking overall the assets and Liabilities of the
‘Eastern Banking Corporation Ltd.’ of Former East Pakistan. It was the only
Bengali owned private bank in East Pakistan. UBL worked as a nationalized
Bank over a decade. It was denationalized in Sept. 15, 1983 as per Ordinance
No. XLVII of 1983. Since 1983 it is known as Uttara Bank Limited.

UBL is one of the largest private banks in Bangladesh bank. There total number
of employees nearly 3,562.The board of Directors consists of 13 members. .It
operates 211 fully computerized branches ensuring best possible and fastest
services to its value clients. The bank is headed by the managing director who is
the chief executive officer. The head office is located at Motijheel  in capital city
of Dhaka. The Bank is listed in the Dhaka Stock Exchange Ltd. and Chittagong
Stock Exchange Ltd. as a publicly quoted company for trading of its shares. With
the objective of attracting the Bangladeshi wage earners abroad and the non-
resident foreigners to invest in Bangladesh, the bank offered them the
opportunity to open non-resident foreign currency deposit accounts and foreign
currency current deposit accounts with it. By sides the bank consists of major
divisions named 1) Corporate banking, 2) Retail banking, 3) Treasury, 4) Small &
Medium Enterprise (SME). At present the bank operating its business by 211
branches.
Vision of Uttara bank ltd:

To be the best private commercial bank in Bangladesh in terms of efficiency,

assets competence, asset quality, sound management and profitability having
strong liquidity. Uttara Bank will be a unique organization in Bangladesh. It will be
a knowledge-based organization where the Uttara Bank professionals will learn
continuously from their customers and colleagues worldwide to add value. They
will work as a team, stretch themselves, innovate and break barriers to serve
customers and create customer loyalty through a value chain of responsive and
professional service delivery.

Uttara Bank Ltd. will serve its customers with respect and will work very hard to
inspire a strong customer service culture throughout the bank. It will treat its
employees with dignity and will build a company of highly qualified professionals
who have integrity and believe in the Bank’s vision and who are committed to its
success.

Mission of Uttara bank ltd:

The bank has some mission to achieve the organizational goals. Some of them
are as follows:-

 Uttara Bank Limited provides high quality financial services to strengthen the
well-being and success of individual, industries and business communities.
 The Bank has remained dynamic in its continued efforts to improve & increase
core competence & service efficiency by constantly upgrading product quality,
service standards, protocol and their effective participation making use of state of
the art technology.
 UBL intends to play more important role in the economic development of
Bangladesh and its financial relations with the rest of the world by interlinking
both modernistic and international operations.
 Its aim to ensure their competitive advantages by upgrading banking technology
and information system
 The bank looks forward with excitement and a commitment to bring greater
benefits to customers.
 The bank intends to meet the needs of their clients and enhance their profitability
by creating corporate market.

Goal of UBL:
  Short Term Goal: Increase financial services day by day. Earn satisfactory profit
by giving services to the customer.
 Long term Goal: Maximize the wealth of shareholders and want to be a leading
bank in the banking sector of Bangladesh.

Objectives of Uttara bank:

The objective of uttara bank limited is very specific. Now we can discuss about
the objective of uttara bank limited-

 Building a strong relationship with customers and focus what they want based on
integrity, superior service.
 To strive for profit and sound growth.
 To creating an honest, open and enabling environment.
 To value and respect of people and make decisions based on merit.
 To work as a team to serve the best interest of our owners.
 To responsible, trustworthy and law-abiding in all that we do.
 To mobilize the savings and channeling it out as loan and advances as the
company approve.
 To finance the international trade both import and export.
 To develop the standard of living of the limited income group by providing
consumer credit.
 To establish, maintain, carry on, transact and undertake all kinds of investment
and financial business including underwriting, managing and distributing the
issue of stocks, debentures and other securities.
 To base reward and recognition on performance.
 To value the feet that they are the members of uttara bank family committed to
the creation of employment opportunities across Bangladesh.
 To finance the industry, trade and commerce in both the conventional way and
by offering customer friendly credit service.
 To encourage new entrepreneurs for investment and thus to develop the
countries industry sector and contribute to the economic development.

Product and services:

UBL has different kind of product and services. Its 211 branches carry out all its
Banking activities very significantly. Now we can describe about Uttara Banks
product and services-
Products-

Personal banking products-

 Personal loan.
 Vacation loan.
 Car loan.
 Any purpose loan.
 Small business loan.
 Different deposit scheme;
 Monthly saving scheme(MSS)
 Monthly benefit scheme(MBS)
 Double growth deposit scheme.
 Uttaran consumer –credit scheme.
 Money gram.

Services-

As financial services UBL provides some services to its clients. These ares-

 Corporate Banking
 Personal Banking
 SME services
 Capital market services.
 Telephone and internet banking services.

Loan and Advances:

Loan and advances granted by Uttara bank are highly beneficial for firms,
individuals, companies and industrial concerns. 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. Advance is a credit facility granted by the bank. Bank
granted advances for short term purposes. Loan and advances granted by banks
help in meeting short term and long term financial needs of business enterprises.
Loan and Advances comprise the most important asset as well as the primary
sources of earning of the bank .On the other hand .loan is also the major sources
of risk for the bank management A prudent bank management should always try
to make an appropriate balance between return and risk involved with the loan
portfolio and unregulated bank might be with unregulated risk for maximizing its
potential return .In such a situation, bank might find itself in a serious financial
distress instead of improving its financial health .Consequently not only the
depositors but also the general shareholders will be deprived of getting back their
money from the bank.

Loans and advances mean lending made by the bank to weak clients for earning
interest. Main objective of the loans and advances is to earn profit for the bank.
On an average of 75%to 80% of the banks earning come from interest received
against the loans and advances of a bank.

The role played by banks in business world by way of loans and advances are as
follows-

 Bank does not interfere with the use, management and control of borrowed
money but takes care to ensure that the money lent is used only in business
purpose.
 Loan and advances are utilized for making payment of current liabilities, wages
and salaries of the employees and also the tax liability of business.
 Loan and Advances from banks are found to be economical for traders and
businessman because banks charge a reasonable rate of interest on such loans
and advances.
 Loan and advances can be arranged from banks in keeping with the flexibility in
business operation.
 Loan and advances by Banks generally carry element of secrecy with it. Banks
are duty-bound to maintain secrecy of their transactions with the customers.

Types of Loan and advances of Uttara bank ltd:

Uttara bank has different type of loans. As per banking company act 1991 every
company has to maintain a specified minimum (presently 16%) of the total of its
demand and time liabilities in the form of cash and approved securities with
Bangladesh Bank. .This percentage or ratio is termed statutory liquid ratio. The
Bank continued to consolidate and diversify its portfolio in 2010 to have a
diversified client base and portfolio distribution across the sectors to reduce client
specific concentration and industry specific concentration and to reduce overall
portfolio risk. In 2010 Uttara Bank Ltd registered a steady growth in the credit
portfolio posting a growth of 23.37 percent. Total loans and advances of the bank
stood at taka 48,672.7 million during the year 2010 as compared to TK 39,451.4
million of the previous year .Average loan per Branch stood at TK 230.7
million .Sector wise allocations of advances revealed a well- diversified portfolio
of the bank with balanced exposure in different sectors. His percentage or ratio is
termed statutory liquid ratio. Commercial banks allow different forms of
advances.

Uttara bank limited,shyamoli branch is situated in shyamoli, Dhaka which is very

importent place in Dhaka city.It is a very big and important branch of UBL. These
branches give different type of loans to its borrower. These are;

 CC Hypo (Cash credit hypo)

 CC Pledge (Cash credit Pledge)
 Consumer Credit Scheme(CCS)
 Overdraft (Second overdraft)
 UHRL (Uttaran Houseing Repairing Loan)
 SBL (Small Business Loan )
 Agricultural Loan
 PLS (Personal Loan)
 Women Entrepreneurship

Cash credit (Hypothecation):

Cash Credit allowed against hypothecation of good is known as Cash Credit

(HYPO) limit. In case of hypothecation, the borrower retains the ownership and
possession of goods on which charge of the lending bank is created.

Under this arrangement a credit is sanctioned against hypothecation of the raw

materials or finished goods. The letter of hypothecation creates a charge against
the goods in favor of the Bank but neither the ownership nor its possession is
passed on to it; only a right or interest in the goods is created in favor of the Bank
and the borrower binds himself to give possession of the goods to the bank when
called upon to do so. When the possession is handed over, the charge is
converted into pledge. This type of facility is generally given to the reputed
borrowers of undoubted integrity.

Charge of Uttara bank limited is 15%. The bank should take the following
precaution.

 The banker should carefully verify the stocks of hypothecated goods and their
market price.
 Stocks should be duly insured against fired burglary.
 Bank should try obtaining sufficient collateral security.
 Periodical statement of stock duly signed by the borrower should be obtained.
   The goods are readily saleable and have good demand in the market.
 The borrower should be trustworthy and prudent customer.
 The price of the goods, offered as security, is to be calculated as per purchase
price or market price whichever is lower.
 The price of goods is steady etc.
2. Cash credit (Pledge):

Cash credit allowed against pledge of good is known as Cash Credit (Pledge).In
case of Cash credit (Pledge), the borrower pledge his goods to the bank as
security against the Credit facility. Banks retain the effective control of the
pledged goods. Pledge goods may be stored in a go down of the borrower but
under lock and key of the bank. Banks guards are posted to protect the go down
sometimes; pledges goods are in Banks go down.

For CC loan every individual have to show some papers of their property. These
are –

 Original title deed

 Bia deed(minimum 25 years ownership)
 Mutation porcha
 Land revenue receipt and holding tax receipt.
 Maath jorip porcha.
 RAJUK Approval Plan.
 Picture of the property.
 Owners photograph (4 copies).
 Valuation certificate.
 NEC(Non Encumbered Certificate)
 Location Map.

If a person wants to take CC loan for his shop he has to submit some papers.
These ares-

 Applicants photograph.
 Up-to-date trade license.
 Contract deed of rental shop.
 Stocks of goods position.
 Balance sheet of 3 years.
 Account statement.
 TIN Certificate.
 National ID Card.
 3. Small Business Loan (SBL):

In case of SBL the borrower will get loan from the bank against his business.
Here the bank will charge against the amount of loan. Maximum limit of the loan
is TK 5 lac. Uttara bank Ltd Charges 15% interest against the amount.

Bank will obtain following documentation from the borrower.

 Photographs of borrower.
 Commissioner Certificate/ ID card/ Passport/ Photocopy as the identity of the
borrower.
 Photographs of the mortgage property.
 Documentation of property (Dalil,Parcha,Khajna rasit)etc.
 Valuation of the property.
 Audit report of the property.
 Six months bank statement.
 Report of CIB.
4. Consumer credit schemes (CCS):

The Bank distributed loan of Tk.6.4 million and 886.7 million during the year 2010
under two special project namely “Uttara Consumer Loan Scheme “and Uttaran
House Repairing and Renovation Scheme  “respectively . The outstanding
balance of the same stood at Tk. 84.1 million and Tk 4,315.5 million respectively
at the end of the year 2010.It may be mentioned here that the recovery rate in
these schemes is satisfactory

Prudential Regulations for Consumer Financing Regarding financing the

purchase of used vehicles Bangladesh Bank, Banking Regulation & policy
Department, Head office, Dhaka issued a BRPD Circular letter No. 15 dated
20/12/2010 in relation with financing on Auto vehicles loan which is respected
below, for meticulous compliance, Banking Regulation & policy Department
Bangladesh Bank, Head Office, Dhaka-1000.

Prudential Regulation for consumer Financing please refers to Regulation 21 of

Guideline for Regulation for Auto (Loan) Circular vides BRPD Circular No.33
dated November 2010.

Special features:

 No collateral security is required.

 Quick sanction.
 Simple rate of interest.
  Maximum loan amount Tk 3,00,000/-
 5% Incentive on total interest charged.
5. Personal Loan:

The banks desirous of financing the purchase of used vehicles shall prepare
uniform guidelines for determining value of the used vehicles, however, the bank
shall only finance the vehicles imported as described in the existing import policy
order, to cater the urgent financial need of the service holders having limited
income bank introduced loan scheme. The outstanding balance of the same
stood at Tk2.0 million at the end of the year 2010.

Special features:

 Any permanent salaried employee aged between 20 to 55 years is eligible to

loan.
 No collateral security is required.
 Maximum amount of loan Tk 100000/-
 Maximum period of loan upto 3 years.
6. Uttaran housing Repairing Loan:

In case of UHRL the borrower will get loan from the bank by giving mortgage of
his property. Here the bank will charge against the amount of Loan. Maximum
limit of the loan is TK.25 lac. Uttara bank Ltd charges 15% interest against the
amount.

Bank will obtain following documentation from the borrower:

 Photographs of Borrower.
 Commissioner Certificate/ ID card/ Passport photocopy as the identity of the
borrower.
 Photographs of the mortgage property.
 Documentation of property (Dalil, Parcha, Khajna, Rasid etc.)
 Valuation of property
 Audit report of the property
 Six months bank statements.
 Report of CIB.

Purpose:

 To help genuine House/ Building/ Flat owners to undertake repairing, renovation

works for better living or increasing rental income.
  To help the owners of House/ Building/ Flat to get loans at a minimum time &
without any hurdles.
 To contribute towards development of socio-economic condition of the society.
 To improve the standard of service holders and self employed persons or Retired
Government Officers, excluding Businessmen, developer.

Interest and other charges:

Interest:   15.00% per annum with yearly rest subject to change that may be
made by the Bank from time to time.

 Processing Fees: @TK 1000.00 (Taka One Thousand) only per lac to be realized
before processing of loan.
 Processing fee to be refunded deducting TK.500.00 (Taka Five Hundred) only as
service
 Charge per proposal in case of it is rejected
 Cost of Application form & Prospectus: TK 200.00 (Taka Two Hundred) only.

If loan installments are regularly & timely paid without any default, the borrower
will be allowed incentive at the rate of 5% of the total interest charged which will
be refunded on full adjustment of the account.

Repayment period

 The loan is to be repaid by equal by monthly installments including interest

maximum within 8 (Eight) years for loan above TK 5.00 lac (Taka Five Lac) only.
 Repayment will start after 3 (Three) months of availing 1 st installment of the loan.
 Loan installments will have to be paid within 10 th bay of every month. If any
installment is not paid within 10 th day of the month, the borrower will be treated
as defaulter and penal interest @ 2% per month will be charged on the defaulted
amount

Security:

 Registered Mortgage of the property where against loan is to be availed by

deposit of original Title Deed with chain of documents.
 Registered Irrecoverable General Power of Attorney empowering the Bank to sell
the mortgaged property as and when required.
 An undertaking by the borrower in banks prescribed form to pay monthly
installments regularly in time.
 Post dated cheque for all installments to be deposited in advance.
 Personal Guarantee of Spouse or any other person acceptable to the bank is to
be obtained.
The following papers have to submit while applying for loan-

 Application in prescribed form duly filled in all the columns and signed by the
applicant.
 Personal Net Worth statement of the client.
 Lawyer’s opinion on the documents of the properties.

Benefit of the scheme:

The genuine House/ Building/ Flat owners of small and fixed income group or
retired persons may avail of the opportunity to repair, renovate their own house
according to their need and repayment capacity.

Eligibility of the client:

 Any owner of House/ Building/ Flat aged between 30 to 55 years will be eligible
to get loan under this scheme who are financially capable to repay the loan
having income or additional income from own source and added rental income to
be guaranteed after utilization of the proposed loan. In case of age bar of
applicants the proposals may be considered for sanction if the guarantor is found
good or other source of income of the applicant covers the installment of the
loan.
 The House/ Building/ Flat to be repaired and / or renovated by the loanee should
not be older than 20 years.
 The monthly income will be certified by the employer of the concerned loanee in
case he is a service holder.
 The employees or their dependent of Uttara Bank Ltd. Are not eligible to get loan
under this scheme.
 The applicant must have a saving Account with the branch of the Bank from
where he / she want to avail of the loan.
 Bank reserves the right to accept or reject any application without assigning any
reason whatsoever.
7. Inland Bill Purchase(IBP):

Uttara Bank Limited started granting of credit facility against Inland Bill Purchase
by issuing the Instruction Circular No.243 dt. 17-01-99. subsequently certain
amendments have also been made there to provide Credit Division.

All concerned are hereby instructed to observe the following procedure for
granting of credit facility against Inland Bill Purchase (IBP):
  Only those bills will be purchased which arise out of genuine business
transactions of manufacturing units/concerned.
 The concerned branch allowing IBP facility must see that the bill has been drawn
by the party himself and he is not the purchaser of goods/services or endorser of
the bill.
 The applicant requesting for IBP facility will have to submit all the shipping
documents as required in the ILC opened by buyer’s bank.
 On receipt of acceptance and maturity date for payment of the bill from ILC
opening bank, our concerned branch will invariably verify, by physical contact
with concerned ILC issuing bank, the genuineness of the said acceptance letter
by relationship Manager/ second Officer/ Dealing officer (not bellow Principal
Officer) with authorized signature to be counter signed by the branch incumbent.
 The branches must not purchase Bill against ILC opened by any of our Bank
branches. In case of any need for purchasing against ILC of our bank, prior
permission from Head Office is to be obtained.
 The loans under IBP will be allowed by the concerned Branch Manager as per
his above discretionary power. The loans falling beyond his discretionary power
will be allowed only on sanction from the concerned Zonal Head or Head Office
as the case may by.
 In case the liability against any IBP is not adjusted even within 30 days after due
date of payment, the matter shall be referred to Head Office, International
Division giving full particulars of bills/LCs for taking up the issue by them for
settlement.

The following charges and interest are to be realized:

1. Handing Charge: 0.25% of bill value with minimum TK.25.00 and maximum
TK.2000.00
2. Rate of interest: 13.00% per annum with quarterly rest subject to change that
may be made by the bank from time to time.

The following papers and change documents are to be obtained/ executed by the
party before allowing IBP.

1. Loan application ( as per format in annexure ‘A’)

2. Single/ Double Party DP note (AS applicable)
3. DP Note delivery Letter (where guarantor exists)
4. Letter of continuity
5. Revival Letter Form-I
6. Revival Letter Form-II (where guarantor exists)

All concerned must comply the instructions of this circular meticulously while
granting credit facility against IBP.
 8. Loan Against Trust Receipt(LTR):

On the arrival of goods and lodgment of import documents, importer may request
the bank for clearance of goods from the port (custom) and keep the same to
bank go down. Proper sanction from the competent authority is to be obtained
before clearance of consignment. For giving these types of loan, officer makes
loan proposal and sends it to H/O for approval. After getting approval from H/O,
bank grants loan in the form of LTR.

 Advance against a Trust Receipt obtained from the Customers are allowed to
only first class tested parties when the documents covering an import shipment
or other goods pledged to the Bank as security are given without payment.
However, for such advances prior permission/sanction from Head Office must be
obtained.
 The customer holds the goods or their sale-proceeds in trust for the Bank, till
such time, the loan allowed against the Trust Receipts is fully paid off.

The Trust Receipt is a document that creates the Banker’s lien on the goods and
practically amounts to hypothecation of the proceeds of sale in discharge of the
lien.

9. Overdraft:

Overdraft is a loan. A person must need to have cash deposit if a person wants
to take this loan. If a person has a FDR or MDS deposit in UBL he can get the
loan. For MDS owner needs to pay 15% loan interest. For FDR owner needs to
pay loan interest up to 2% than his FDR interest rate. Overdraft loan can be
given to government employee. In that case they need to show land security and
the payable interest rate is 16%. 25% advance loan can be given by the bank on
work order value.

10. Agricultural Loan:

At present the bank is disbursing Agriculture Loan to the farmers directly through
its all branches with simple terms and conditions. The persons interested in
agriculture works , including men and women, landless, marginal farmers and
shared croppers are eligible for receiving Agriculture Loan from the bank .The
Agriculture credit sectors of banks are crops, irrigation, equipments, agriculture
machineries ,livestock, fisheries  (including  Shrimp) and poverty alleviation etc.
This loan is basically given by UBL because of poverty reduction. The limit of this
loan is 1 lac without showing any kind of property. But by showing property the
loan is unlimited.

11. Women Entrepreneurship Loan:

Woman can take this loan by starting a business. The limit of these loans is up to
15,00,000 and the interest rate is 10%.A women can get this loan up to 5,00,000
without showing any kind of property.

Different interest rate of UBL (Shyamoli branch):

Sl.No Loans Interest rate %

01 Cash Credit (CC) 16%

02 Personal Loan 16%

03 Small Business Loan 16%

04 Over Draft:Loan against DPS,MDS. 15%

05 Loan against FDR(our bank) 2%plus concerned

FDR rate.

06 Loan against DBDS 15%

O7 Loan against share/securities 15%

08 Loan against wage Earners  Development Bond 15%

09 Loan against work order 16.5%

10 Uttaran House Repairing Loan 17%

11 Import(PAD.LTR,&LIM)For importing essential items (rice, wheat, 16%

Edible oil, dal, Chola, Onion, Dates, and Suger etc,)

12 Lease Financing 16%

13 For importing all other items. 16%

14 Consumer (Household Durables) 13%

 15 IBP(Inland Bill Purchase) 16%

16 Nari Swanirbhor Rin Prokalpa 10%

Loan Sanction Activities

The respective unit office sanctions loan to the clients if it is between 2 & 5 lacs
and then send the sanction letter including all necessary charge documents to
the asset operation division for disbursement the loan. If the amount is higher
than 5 lacs then the respective unit office sends the proposal to SME head office
for sanction. The head of SME sanctions the loan and sends the sanction letter
including all documents to the AOD for disbursement and inform the respective
unit office regarding sanction of the loan.

Select potential enterprise: For loan, in this step the CRO conduct a survey and
identify potential enterprise. Then they communicate with entrepreneurs and
discuss the loan program.

Loan Presentation: The function of CRO is to prepare loan presentation based on

the information collected and provided by the entrepreneur about their business,
land property (Where mortgage is necessary).

Collect confidential information: Another important function of a CRO is to collect

confidential information about the client from various sources. The sources of
information are suppliers regarding the client’s payment, customers regarding the
delivery of goods of services according to order, various banks where the client
has account which shows the banks transactions nature of the client.

Open client’s accounts in the respective bank: When the CRO decided to provide
loan to the client then he/she help the client to open a bank account where Uttara
bank has a STD.A/c. Uttara bank will disburse the loan through this account. On
the other hand the client will repay by this account. Although there is some
exception occur by the special permission of the authority to repay by a different
bank account.
Fill up CIB form: CRO gives a CIB form to the client and the client fill and sign in
it. In some cases if the client is illiterate then the CRO fill the form on behalf of
the client. Then CRO send the filled and signed form to the SME, head office.

Sending CIB to Bangladesh Bank: The SME, head office collects all information
and sends the CIB form to Bangladesh Bank for clearance. Bangladesh Bank
return this CIB form within 10-12 days with reference no.

CIB report from Bangladesh Bank: In the CIB report Bangladesh Bank uses any
of the following reference no:

 NIL: if the client has no loan facility in any bank or any financial institution then
BB (Bangladesh Bank) use ‘NIL’ in the report
 UC (Unclassified): if the client has any loan facility in any bank or financial
institution and if the installment due 0 to 5.99 then BB use UC in the report
 SS (Substandard): if the client has any loan facility in any bank or financial
institution and if the installment due 6 to 11.99 then BB use SS in the report
 DF (Doubtful): if the client has any loan facility in any bank or financial institution
and if the installment due 12 to 17.99 then BB use DF in the report
 BL (Bad lose): if the client has any loan facility in any bank or financial institution
and if the installments due for more than 18 or above months then BB use BL in
the report. This report indicates that the client is defaulter and the bank should
not provide loan the client.

Analysis

Year to year Loan sanction Position of Cash Credit (Hypothecation) in

Shyamoli Branch.

(Amount in Lac Taka)

Types of Loan 2006 2007 2008 2009 2010

Cash Credit (Hypothecation) 1531 533 480 382 420

% of Total Loan sanction 23.13% 2.68% 2.21% 1.46% 1.41%

Table: Cash credit (Hypothecation)

In this figure shows the upward trends and downward trends for UBL, Shyamoli
Branch loan sanction, from 2006 to 2010 under cash credit (hypothecation) types
of loan. Loan sanction in 2006 was TK 1531 lac and increased growth was
23.13%, in 2007 was Tk533 lac and increased growth was 2.68%, the highest
loans  in this types of loan and in 2006 was TK 1531 lac and increased growth
was 23.13%.

Year to Year loan sanction position of Cash credit (pledge) in Shyamoli

Branch

(Amount in Lac Taka)

Type 2006 2007 2008 2009 2010

Cashcredit (pledge) 27 51 50 4 47

% of total loan sanction 0.40% 0.10% 2.21% 0.01% 0.15%

 Table 06: Cash credit (pledge)

Cash credit (Pledge)

In this figure shows the upward trends and downward trends for UBL, Shyamoli
Branch loan sanction, from 2007 to 2010 under cash credit (Pledge) types of
loan. Loan sanctions in 2006 were TK 27 lac and increased growth was 0.40%.
The highest loan sanctions in this type of loan and in 2008was Tk 50 lac but
increased growth was 2.21%, and in 2010 was TK 47 lac and increased growth
was 0.15%.

Year to Year loan sanction position of Consumer Credit schemes (CCS) in

Shyamoli Branch

(Amount in Lac Taka)

Type 2007 2008 2009 2010

Consumer Credit schemes 41 66 69 47

 (CCS)

% 0f total sanctions 0.20% 0.22% 0.26% 0.15%

Table 07: consumer credit schems

In this figure shows the upward trends and downward trends for UBL, Shyamoli
Branch loan sanction, from 2007 to 2010 under consumer credit scheme types of
loan. Loan sanctions in 2007 were TK 41 lac and increased growth was 0.20%.
The highest sanction in these types of loan and in 2008 was Tk 66 lac and
increased growth was 0.26%, and in 2010 was TK 47 lac and increased growth
was 0.15%.

Year to Year loan sanction position of Small Business Loan (SBL) in

Shyamoli Branch

(Amount in Lac Taka)

Year 2006 2007 2008 2009 June2010

SBL 3994 10456 15445 14919 13795

% of Total sanctions 60.35% 52.76% 68.43% 57.16% 46.39%

In this figure shows the upward trends and downward trends for UBL, Shyamoli
Branch, and sanction from 2006 to 2010 under SBL types of loan. Sanctions in
2006 were TK 3994 lac and increased growth was 60.35%. The highest sanction
in the SBL in 2008 was Tk 15445 lac and increased growth was 68.43%, and in
2010 was TK 13795 lac and increased growth was 46.39%.

Year to Year loan sanction position of LTR in Shyamoli Branch

(Amount in Lac Taka)

Type 2006 2007 2008 2009 2010

LTR 455 1377 1522 1670 2240

% of Total sanction 6.87% 6.94% 6.74% 6.39% 7.53%

 

In this figure shows the upward trends and downward trends for UBL, Shyamoli
Branch, and sanction from 2006 to 2010 under LTR types of loan. Sanctions in
2006 were TK 455 lac and increased growth was 6.87%. The highest sanction in
the LTR in 2010 was Tk 2240 lac and increased growth was 7.53%.

Procedure of Preparing Proposal for Loan:

The following procedure is followed by Shyamoli branch while preparing proposal

for loan.

First, borrower has to apply to UBL for their loan by filling up of a specific
application form given by the bank in respect of their own status
(individual/proprietorship/public/private ltd.etc.).A very efficient team of employee
is working under the supervision of sales manages to help the borrower in this
regard.

In case of individual loan, an applicant has to submit at least 6 month latest

financial statement of their own bank account along with his photocopy of
passport or ID card or any other documentation, as his personal identification. If
the loan is for house repairing then the borrower has to submit various
documents of existing house as an evidence of house owner. Thereafter, he has
to submit price quotation accepted and signed by the borrower, a salary
certificate given by the organization (if borrower is a service holder) and with all
other necessary documents.

But in the case of business person, some excess documents are required.
Borrower has to submit at least 12 months latest financial statement of their own
bank account. They are also required to submit the names of all board of
directors of the organization.

The following papers will have to be submitted while applying for loan:

 Application in prescribed form duly filled in all the columns and signed by the
applicant.
  Two passport size photographs of the applicant duly attested by manager/
relationship manager of the branch. A photograph of the house/ building/ flat is to
be sent with the proposal.
 Estimate of the proposed expenditure to be incurred for the repairing and or
renovation of the house/ building/ flat to be submitted of the application.
 Personal Net Worth statement of the client.
 Banks Statement for minimum last 6 (six) months of the account of the client.
 Contact Point Verification Report by banks authorized officer.
 Lawyer’s opinion on the documents of the properties.

Others

 The repairing and/ or renovation work must be done within the premises as per
estimate submitted by the party with the application.
 Since there is no provision for insurance cover against the loan, the borrower will
furnish an under taking to the effect that he/she will repay the banks loan even if
there is any loss of property due to natural calamity.
 The borrower will allow the bank official to inspect the side at any time.
 The borrower will immediately inform the bank if he /she or his /her grantor
changes residential address or professional.
 The borrower will not sell, gift or transfer the possession/owner ship of the
house/building /flat before full adjustment of the loan without prior permission
from the bank.
 Existing rent of the house /building /flat and other source of income of the
applicant are to be mentioned in loan application form.

After that, the applicants for loan has to fill up a CIB (Credit Information Bureau)
form and must be verified by Bangladesh Bank whether the applicant has any
irregularities in repayment of loan or any other credit records.

After that the employee of Shyamoli branch cheeks all documents provided by
the borrower .the following documents is checked:

 Application and passport size photograph: The employees of Shyamoli

branch cheeks application and 2 or 3 copies of recent passport size photographs.
 Price quotation: A quotation accepted by the applicant should also be submitted
to Uttara Bank Limited. And this quotation must be real, because this is also be
verified, it is genuine or not.
 Passport /voter ID / office ID/ other ID: Passport, voter ID, office ID, or any
other Kinds of ID are also required as and evidence of the applicants ID and
should be submitted by the prescribed application form.
  Salary Certificate: If the applicant is a service holder, then a real salary
certificate, signed by his superior is also needed.
 Photocopy of latest trade license: if the applicant is a business person and the
business is a proprietorship business, then a photocopy of latest trade license of
his organization is also required,
 Photocopy of registered/Notarized partnership deed: if the business is a
partnership business, then the applicant has to submit a photocopy of registered
or notarized partnership deed to Uttara Bank Ltd. these deeds of the applicant
business are also be verified carefully.
 Tax documents: sometimes personal relevant income tax documents are also
needed and should be submitted to Uttara Bank td.
 Bank statement: bank statement of the applicant’s account is very much
important. The applicant has to submit latest 6 months transactions.
 Checking duplicity and regular liabilities with Uttars Bank Ltd. in this part of
verification duplicity and regular liabilities of an applicant UBL are also be
checked.
 Checking proper filling up of the application: filling up of the application is
also an important requirement.

After that, Shyamoli Branch sent a very efficient team for the verification. If the
team is satisfied by all aspects, then they report to the branch manager. If the
branch manager agrees, then he gives order for preparing proposal for loan.

After getting the permission from manager the employee’s team prepares loan
statement of shyamoli branch. By adding all the documents, submit it to head
office and zonal office.

CIB Obtaining Process

CIB is a regulatory requirement for Loan Documentation. Credit Information

Bureau (CIB) of Bangladesh bank has a central database for all the lenders of
Bangladesh. It contains the total credit history of a client and act as the most
dependable source to analyze the credit worthiness of a prospective client.
Obtaining the CIB clearance is a precondition of fund disbursement and all type
of Retail, SME and corporate loan require CIB report before disbursement. For
some retail unsecured assets, UBL obtains post-factor CIB clearance. However,
in most cases AOD obtains the CIB for a client before disbursement of fund.

To obtain a CIB report, AOD fills up the following Bangladesh bank prescribed
forms for each loan application:
  Inquiry Form: CIB –A1: For each individual/ institution
 Inquiry Form: CIB –A2: Owner information if borrower is institution
 Inquiry Form: CIB –A3: Group/ related business information of borrower
 CIB Undertaking form “KA”: For each individual/proprietor/director/partner

These forms are filled up by the business units and sent to the CIB segment of
AOD. CIB segment maintains a central database for all the CIB inquiry forms.
Each form is registered under a Head Office serial number and a Branch/ Unit
office serial number. Therefore AOD prepares a forwarding letter with reference
to 20 such inquiry forms, and sent them to Credit Information Bureau of BB once
in a day. Usually the CIB reports are received within 7-10 working days.

After receiving the reports from BB, AOD prepares a summary of the report and
put that as reference in the loan file along with the photocopy of the CIB inquiry
forms, undertaking and copy of the original CIB report. For any mistakes made in
the forms, writing wrong spelling, incomplete name of individuals or institutions,
CIB report may show error as mismatch exists there. Those CIB inquiry forms
require to be sent again correcting the facts. CIB reports are usually updated
quarterly and half-yearly. Therefore most updated CIB reports are required to be
obtained and CIB report is also require for the same client for repeat loan. All
forms need to be supported by the Applicant’s Undertaking and all the forms are
signed by designated officers of the business organization.

Appraisal process of Loan/Application:

A potential customer to interested to avail Lease Finance from our bank will apply
in standard application Form design by the bank along with a brief write-up on
the proposal/equipment expected returns/benefits for the use of such equipment
or automobile as the case may be. A competitive quotation of the lease item
issued in favor of Uttara Bank Ltd. shall have to be submitted.

After examination of the various aspects of the project, if the branch manager
/relationship manager fully satisfied about the financial standing, credit
worthiness, management set–up , professional integrity , technical feasibility ,
repayment capacity etc, of the provost lessee and business viability of the project
,the proposal may be forward to head office through the zonal office with
necessary comments ,view and recommendation for approval.

Sanction letter
All letters addressed to the borrowers sanctioning credit facilities should be
prepared in duplicate and signed by two authorized officers of the Bank. Among
the two authorized Officer one must be a Manager of the Credit Team. If the
terms and conditions of loan sanction letter are acceptable to him the borrower
should return the duplicate copy duly signed.

Client’s information & Loan details is matched with the Credit approval then loan
is sanctioned & a Loan Sanction Number is auto generated.

Approval process

Loan Applications in the prescribed format shall be received at Credit Approval

unit recommended by sales team along with annexure that covers
comprehensive LPF information detailed in the Prudential Guideline advised by
Bangladesh Bank.

The sales team is responsible for loan sales and should be the owner of the
customer relationship, and must be held responsible to ensure the accuracy of
the loan application submitted for approval. They should be familiar with the
bank’s Credit Policy and PPG and should conduct due diligence on new
borrowers, purpose of the loans and guarantors. During recommending for a
client it is expected that the respective Officer has adhered to Know Your
Customer (KYC) and Money Laundering guidelines.

Credit Approval Sheet should have, as a minimum, the following details:

 Amount and type of loan(s) proposed.

 Purpose of loan(s)
 Loan Structure (Tenor, Covenants, Repayment Schedule, Interest)
 Security (if any)

Approvals must be evidenced in writing, or by electronic signature. Approval

records must be kept on file with the Credit Applications. Loans and advances on
becoming inoperative / stuck up should not be renewed and / or re-scheduled
without getting prior approval from the Credit Committee.

In case of loan take over from any bank/financial institution, then any
correspondence should be made with the bank/financial institution directly, such
as security takeover.
 

Registered Mortgage

In case of the loan files where registered mortgage is a requirement, AOD

checks the following land documentation:

 Original Title deed for the entire mortgaged property.

 Bia Deeds/ Duplicate of Bia Deeds to support the Title Deed.
 Mutation of the Mortgaged Property by the concerned AC Land
 Original Khatians
 Revisional Survey (R.S) – most important one
 Bangladesh Survey (B.S) –if done and issued
 State Acquisition (S.A) & Catetal Survey (C.S) – If there
 Up todate duplicate Carbon Receipt for the property after mutation.
 Non Encumbrance Certificate issued by the Sub-Registrar’s Office for the past 12
years.
 Up todate Rental Receipt for the property.
 Mortgage deed between Uttara Bank Limited and the enterprise.
 Notarized Memorandum of Deposit of Title Deeds.
 Legal Opinion
 Power of Attorney in favour of Uttara Bank Ltd.
 If the business is situated in land owned by Parents/ Siblings/ Spouse –
 Mortgage given by third party (For Registered Mortgage)
 MDTD sign by all land owners (For Equitable Mortgage)
 PG or NOC (Non objection certificate by third party)
 Ward commissioner’s (warission) certificate in case of clients’ parent’s death

If any documentation deficiency is found, the concerned CRO, ZO is informed for

resolving the deficiency. After checking the required fees submission for Loan
Documentation, the application is sent for Insurance Premium Checking.

Insurance Premium Checking Risk issues while checking Loan

Documentation:

 No Fluid or overwriting should be there

 Missing of seal and sign (Check all Pages)
 Missing of Signature verification by CRO
  Lack of witness CRO and Guarantor
 Missing of any clause of charge documents
 Missing Guarantors sign in Guarantee page
 Mismatch in Client’s Name, Business Name, Addresses and business type
 Incomplete documentation for registered mortgaged property
 Validity of licenses and deeds
 Bank’s name, client’s name, seal, signature and number of undated cheques

Besides, some particular licenses are required for categorized enterprises, like:

 Drug license (Medicine Business)

 BSTI (Food Business)
 Diesel / LP gas / Petrol (Fire license from Directorate of explosives)
 Saw Mill (Permission from District Forest Department)

Problem with Advances of Shyamoli branch:

 In case of advance in different project, the interest rate is too high.

 Maximum parties have no financial strength.
 In terms of law and order situation sometime it is very difficult for the bank to
liquidate the collateral when the party is unable to pay the debt.
 Most of the parties are creating some sort of pressure to get the loan.
 There are some mortgage problem such as, acquisition and proprietorship,
problem of asset.

Example of loan and advances:

There are different type’s loans in Uttara Bank Ltd at shyamoli branch; some
examples are given below—-

For CC loan:

Ripon karmakar, is a businessman. His loan amount is 7 00,000 lacks. For taking
the loan first he has to open an account. In 2 to 3 months he has to transact up to
tk 50,000 thousand to 2,00,000 lacks. The time period of the loan is 3 years.
After 3 years this will be closed. And within this 3 year he has to pay 16% interest
to the bank. For taking these loans he has to submit some papers-
  Papers of land.
 Voter ID card/
 National ID card.
 Photograph
 Trade license.

After showing that papers he got the loan.

For SBL loan:

There is another example of a person named Karim Rahman he has a small

shop in shyamoli. He has an account in UBL. His applicable loan amount was
50000 thousand. The time period of the loan is 3 years. The interest rate is 16%
of these loans. His shops condition was not so well. For that reasons he wanted
to take SBL (Small business loan) loan for his shop. Bank told him to show-

 Any kind of properties or fixed deposit.

 Land or building papers.
 Commissioner certificate.
 Audit report of the property.
 Valuation of the property.
 Six months bank statement.
 Accounts check(But His transaction amount was so little)
 Personal guarantee etc.

But Karim Rahman was unable to show that kind of papers. So He did not get the
loan.

For Personal loan:

There is a person named Sohel Rahman is a service holder worked in a NGO.

His basic salary is 20,000 thousand. His agricultural income is 10,000.He get
other facilities from his office. He also gives income tax. He has an account in
UBL. He applied for loan tk.5, 00,000. Basically this loans limit is 10 lacks. The
interest rate is 16% of this loan. And no need to show any collateral. So Sohel
can get the loan easily.

For women Entrepreneurship:

Mrs.Shaila khanom is a housewife. She has account in UBL. She wants to open
a boutique shop. For opening this shop she has not enough money. Without
property the limit of this loan is 5lac.but if women have enough property she can
get the loan up to 15 lacks. Mrs. Shaila applied for loan of tk.10 lac. The interest
rate of this loan is 10%. For taking this loan she has to submit some papers.
These are-

 Papers of building.
 Fixed Deposit statement.
 Statement of provident fund.
 Commissioner certificate.
 National ID/
 Voter ID card.
 Cheque of her account.etc.

After showing these kinds of papers Mrs.Shaila got the loan.

Loan sanction and recovery scenario in UBL for last five years

(In million taka)

Years 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Term Loan Sanctioned  1009   1311      1006    918   436

Term Loan Disbursed  144    485      534    384   616

Working Capital Loan  14   232      105    3    10

Sanction

Working Capital Loan  21    32       196    33    22

Disbursed

Loan Recovered  1391   1159     1065    981   908

Rephrased\Rescheduled  259   790      280    423  264

Loan Written off 11867   12626    12478    12531  12258

Table: Loan Sanction and Recovery (for last five Financial Years)

From the above table it has been observed that the loan disbursement of UBL
has a successive record. But the point being observed here is that the loan
recovery process follows a chronological fall from the FY 2005-06 to the FY
2009-10. This is because the loan disbursed among the projects are collected or
recovered on an installment basis. However, the loan amount each year has
been increased. Therefore there must have an increase in recovery amount. But
the amount of written-off loans has been increased. This indicates a controversial
cause and effect between theoretical and practical situation.

Percentage of loan recovery of UBL

Years 2005-06 2006-07 2007-08 2008-09 2009-10

Total loan outstanding 8187 6966 5688.4 5178 5481

 Loan Recovered 1391 1159 1065 981 908

Percentage of Loan 16.99 16.64 18.72 18.95 16.57

Recovery (%)

Change in Recovery (%) – (0.35) 2.08 0.22 (2.38)

Table: Percentage of loan recovery of UBL

 Percentage of loan recovery=(Loan recovery/Total loan outstanding)*100

 Change in recovery rate=(% of loan recovery of base FY-% of loan recovery of
preceding FY)

(E.g. in the case of change in recovery rate for FY2005-06, base FY=2005-06
and preceding FY=2004-05)

From table- 11(figures showed in parenthesis is a negative change) it is seen

that loan recovery rate in the FY 2008-09(18.95%) is highest. But total loan
outstanding in FY2008-09 is the lowest one. And now from table-10 again it can
be compared that during FY2008-09 the rescheduled loan and written off loan is
highest in compared to other FYs of UBL. In the FY 2008-09 total loan increased
by 303 million taka but loan recovery rate decreased by 2.38%. This situation
exhibits a hidden problem in UBL loan sanction and recovery process.

FINDINGS

 The loan and advance department takes a long time to process a loan because
the process of sanctioning loan is done manually. Since loan and advances
department is not fully automated there is a high risk of losing documents of
disbursed loans.
 In case of advances in different sectors the rate of interest is too high. Because
the rate of interest in Small Business Loan is 16%, Loan Against Work Order
16.5% and Uttaran House Repairing Loan is 17%, which all the rate of interest
are higher than that of other some banks.
 Small entrepreneurs are discouraged because UBL usually do not want to
finance small entrepreneurs whose financial standing is not clean to them.
 The Bank has a tendency to give loan only businessman. In 2010 the sector wise
loan sanction shows that 55.11% in industrial sector and 28.5% in commercial
sector.

 UBL does not grant loans for new entrepreneurs, new businessman and new
companies etc, which ultimately create “class banking”
 In terms of law and order sometimes it is very difficult for the bank to liquidate the
collateral, which makes the borrowers unable to pay the debt.
 The bank does not provide more loan in the small and cottage industry and the
agricultural, Fishing, and Forestry also.
 Installment period and installment time duration is relatively low. Because the
installment time duration is monthly or 6 th periods in a year for this reason
borrower can not utilize their debt facility properly for profit maximization.
 There are some mortgage problem such as acquisition, proprietorship and
problem of asset.
 The loan and advances strategy of the UBL is not appropriate enough to survive
in the market.
 Maximum amount of the loans are provided in the long-term industrial loan
sector.
 Not enough innovative products.
 Online banking facilities, ATM services and mobile Banking facility are not
available.
 Absence of ethical banking or green banking.
  Uttara bank limited does not update its Websites regularly, as a result the clients
are unable to gather information.

Conclusion

Loan and advances granted by Uttara Bank Ltd are highly beneficial for firms,
individuals, companies and industrial concerns. 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. Advance is a credit facility granted by the bank. Bank
granted advances for short term purposes. Loan and advances granted by banks
help in meeting short term and long term financial needs of business enterprises.
Loan and Advances comprise the most important asset as well as the primary
sources of earning of the bank . A prudent bank management should always try
to make an appropriate balance between return and risk involved with the loan
portfolio and unregulated bank might be with unregulated risk for maximizing its
potential return .In such a situation, bank might find itself in a serious financial
distress instead of improving its financial health .Consequently not only the
depositors but also the general shareholders will be deprived of getting back their
money from the bank. Credit Division of Uttara Bank has a very qualified and
dedicated group of officers and staffs who are always trying to provide the best
service to the clients. They always monitor the credit in different sectors and their
position. Before providing the loan they analyze whether the loan will be
profitable and whether the client is good enough to repay the loan within the
given period of time. Credit department diversified their loans in different sectors
classified by them. Among the sectors the bank doesn’t provide more loans in the
agricultural side. The reason showed that this sector is very risky and depends
on natural climate and still didn’t expand their service in the rural side. The bank
also does not provide more loan in the small & cottage industry. The reason is
that the return from this sector is not very good and also the sector is very
uncertain. The bank provides most of the credit facility in term loan mainly in
long-term loans. Return from short-term loan is very good and also proves to be
very safe to finance.

Recommendations

 The procedure of loan sanctioning should be automated to make sanctioning of

loan less time consuming and reducing the risk of losing documents of disbursed
loans.
 To create better client the bank should decrease the rate of interest on different
sector, especially in Uttaran House Rpairing Loan and Small Business Loan.
 The bank should diversify its loans more to finance small entrepreneurs for better
growth of the country.
 The bank can provide student loan, doctors loan etc, this may encourage the
students to come forward to do something for the economy. And also increase
the amount of personal loan and consumer loan.
 Strong promotional activities should be increased to motivate its present potential
loans related clients. More loans can be granted for new entrepreneurs, new
businessman and new companies etc, which ultimately reduce “class banking”
 The law and order should be easier for the bank to liquidate the collateral, so that
the borrower can be able to pay the debt easily.
 Maximum number of the loan is provided in the long-term industrial loans. Bank’s
clients are also limited. So, they can’t serve the economy of the country that
much. So, they should diversify their loans more in agriculture, forestry, fishing
and new industries etc. for better economic growth of the country.
 Installment period and installment time duration should be increased so that the
borrower can utilize their debt facility properly for profit maximization.
 In case of some mortgage problem such as acquisition, proprietorship and
problem of asset, the bank should try to avoid this type of loan sanction.
 The bank should try to increase it’s recovery amount since loan amount each
year has been increased. The bank should induce quality client and select best
project for risk free rate of interest.
 The bank should update it’s loan and advances strategy in sustainable and
appropriately enough to survive in the market.
 The bank should provide more loans of small scale in different sectors though it
will decrease the profit a little. But it will be very safe.
 In a competitive financial market, the bank should innovate it’s products &
services need to be focused more on customers needs.
 UBL has 211 branches all over the country. It is very hard to provide full range
services with those branches. The bank needs to pay more attention toward the
expansion of the branch network. The bank should develop quality service in
respect of speedy disposal both at branch head office regarding loan and
advances operations. A consistent relationship with customers should be
improved & maintained.
 For surviving in the market, online banking facilities, ATM services and mobile
Banking facilities should be provided.
 The bank should formulate the ethical banking or green banking both internally
and externally.