Final Report

Chapter-One INTRODUCTION
1.1 Prelude
Internship is an assigned work performed usually by the students of BBA at the end as partial fulfillment of the requirements for the degree of BBA in the Dept. of Business Administration of the University of Information Technology !ciences. The aim of internship is to apply one"s theoretical knowledge in practical fields. As a student of #inance. $e are interested to complete our internship program at financial institutions. And for this purpose I was sent to %a&shahi 'rishi Unnayan Bank (%A'UB)* +ocal ,rinciple -ffice* %a&shahi. The program is completely supervised by our respected teacher .d. !a&edur %ahman* Department of Business Administration UIT!* %a&shahi /ampus. The program started from 0nd 1anuary 0234 and continued up to 3st April 0234. After &oining the branch* I was first introduced with Sudhangshu Kumer Halder* .anager* %a&shahi 'rishi Unnayan Bank (%A'UB)* +ocal ,rinciple -ffice. +ater on* he introduces me with other officers of the branch who accept me cordially. They were very helpful in collecting information and helped me as much as possible. This was the first practical e5perience of mine* so that I have en&oyed it very much. The cordial help of manager and officers make it more en&oyable. !ince I have completed a course on Bank management* I have some theoretical knowledge about different activities of bank. And practical e5periences of bank activities enrich my knowledge through getting real view. The report is prepared from the knowledge which I have had from theoretical learning and practical e5perience which I have got from the internship program. Though I have got a conception about overall banking functions but in this report I have focused on loan management of %A'UB* +ocal ,rinciple -ffice* %a&shahi.
University of Information Technology & Sciences 1
1.2 Ob e!t"#e $% the stud&

The main ob&ective of the study is to e5amine the loan management of %A'UB* +ocal ,rinciple -ffice* %a&shahi for the period of 0226732 to 0230738 to achieve the ob&ective9 the study seeks to reali:e the following9 3. To assess the activities of %A'UB* how it contributes in agricultural development of %a&shahi. 0. To assess the loan management system during the period 0226732 to 0230738. 8. To assess the loan disbursement condition of +ocal ,rinciple -ffice for the period 0226732 to 0230738. 4. To determine various sources of loan able fund. ;. To know the security evaluation system before providing loan to the customer. <. To e5amine the loan monitoring system of the bank. =. To know the different services provided by the bank to its customers. >. To know how they deal with problem loan. 6. To know the criteria of classifying loan. 32. To know the competitive position of the bank in the area with different financial institutions providing agricultural credit.
1.' S!$pe $% the stud&

?valuation of loan management is one of the most important parts for evaluating any commercial or speciali:ed bank. +oan management mainly comprises of loan disbursement policy* at the same time it deals with classification of loan and balancing liquidity and profitability position of the bank. The study is emphasi:ed on whether the bank providing loan considering all required aspect and recovering loan in timely manner and what initiative they are taking in respect of problem loan. That is how profitably the bank is operating with keeping loan management at optimum level.
1.( )eth$d$l$g& $% the stud&

.ethodology can be termed as underlying principles and rules of organi:ation or the philosophical systems that work at the back drop of any study. To fulfill an internship program and prepare a complete report we need organi:ational data. The data was collected from the %a&shahi 'rishi
Unnayan Bank during the internship period. To make the report more meaningful and presentable two sources of data and information have been used widely those are@ 3. ,rimary sources of information 0. !econdary sources of information Above mentioned sources are described below9 1. Pr"mar& s$ur!es* ,rimary data are measurements observed and recorded as part of an original study. ,rimary sources are the sources from where information is collected from %a&shahi 'rishi Unnayan Bank. The ways through which I have collected information in my internship program are described below9 a. +uest"$nna"re meth$d* Auestionnaire method is one of the most usual systems used in collecting data or information. Auestionnaire is two types such as open ended questionnaire and close ended questionnaire. I have prepared an open ended a questionnaire under the supervision of my respected supervisor about different functions and mainly loan management of +ocal ,rinciple -ffice* %a&shahi of %A'UB. The manager and specially the second officer of the branch answer most of my questions. The questionnaire is given at the end of the report. b. Obser#at"$n meth$d* According to o5ford dictionary the observation means Bthe act of watching something carefully for a period of time specially to learn somethingC. I went to the %A'UB +ocal ,rinciple -ffice* %a&shahi and observed the different activities of officers and the different problems and requirements of customers through which I have collected some information. But one true thing is that I could not ask question to the officer in all the time when I cannot understand* the reason is that in my branch the month of loan management is going on* so most of the officer stay busy in most of the time. !. Inter#"e, meth$d* The interview is face to face interpersonal discussion in which one person asks pertinent question to a person
called respondent about a selected topic or area. I have collected some information through asking the officers. 2. Se!$ndar& s$ur!es* $hen an investigator uses the data which has already been collected by others* such sources or data are called secondary sources or data. I have collected some secondary information which is already published by the bank authority. I have collected secondary information from the following sources9 a. !tatement of affairs of the branch b. Documents supplied by branch !. Different articles d. .aga:ines and papers e. Bank"s website %. %ules and regulations provided by agricultural credit department of Bangladesh bank. g. Annual report of the bank from 022=72> to 0226732. h. !ome statistical graphs and charts of the bank. -nal&s"s $% .uest"$nna"re* There are different techniques of analy:ing questionnaire. I have asked different questionnaire about the functions of %A'UB* activities of +ocal ,rinciple -ffice* %a&shahi and specially their credit policy* loan management initiatives taken to improve etc. I have analy:ed this information giving special emphasis on loan disbursement policy.
1./ The s"gn"%"!an!e $% the stud&

Dow7a7days the banks are playing a vital role in the economic development of any country. The %A'UB is a speciali:ed bank which is established with a view to developing the agricultural condition of the northern region of our country. The success of any bank depends upon how properly they are utili:ing their funds. %A'UB is +oan money to the people related to agriculture and contributing a lot in agricultural development of our country. The bank should provide loan after e5amining some important aspects and should recover cent percents of its loan. I have chosen the topic loan management for the reason to analy:e what problems are related behind the scene.
1.0 1"m"tat"$ns $% data !$lle!t"$n

Dothing is out of limitation. !o my report also has some limitations. #or these reasons* I cannot prepare it properly. The common culture of Bangladesh is that some government officers are not interested to do more than their assigned work. The ma&or problem I have faced at the time of data collection because the manager and officers are busy and do not get enough time to discuss frankly. The ma&or limitations are given below9 3. I have been sent to %A'UB* +ocal ,rinciple -ffice* %a&shahi for only three months which is not sufficient to understand different activities of the bank. 0. In my branch the month of disbursement is going on* so the officers are always remain busy. 8. The reports is basically prepared on published income statement* Balance sheet* information about loan and advances but for preparing report more details information are required. 4. !ince we are student so we have no in depth knowledge about preparing report. ;. The bank"s accounting period is from 1uly to 1une* so now the officers are busy in making arrangements for preparing financial statement. <. !ome officers are too much conservative* they are not interested to discuss about any matter. =. In some cases* officers are not interested to disclose information because of secrecy. >. To prepare report minimum four to five years information is required* but the branch has no computer* all records are kept manually. !o the officers are not interested to provide information other than recent year. 6. To complete internship program a lot of money is required but we do not get necessary money. 32. Information collection through observation method is possible when one"s have complete knowledge about the work* but I have no clear knowledge about different activities* so the effort to collect information through observation is go in vain.
This is the first internship program and report preparation of my life* so for the limitation of my knowledge I cannot prepare it more effectively.
Chapter- T,$
-N O23R2I34 O5 R-KU6
2.1 Intr$du!t"$n
%a&shahi 'rishi Unnayan Bank (%A'UB) is a state7 owned Bank in Bangladesh with regional approach. The bank emerged as a government"s plan of intensive care to agriculture of %a&shahi division providing livelihood to ;; million people of the area. The region is less developed compared to other parts* yet full of potentials in agriculture. %a&shahi division characteri:ed by its surplus food grain production is popularly called the Bgranary of the countryC. Besides catering to agricultural credit* %A'UB* as it is acronym renders deposit banking service through all the 8<4 branches. The headquarters of the bank is stationed at %a&shahi city* some 0=2 kilometer to the north of Dhaka.
2.2 H"st$r"!al ba!7gr$und $% R-KU6

Bangladesh is agriculture based country from the very beginning. .ost of the people are depended on agriculture. #rom British period till today* farmers of this country are dominated by different quarters of the society. In village level farmers take loan from different money lenders at high interest which is totally unreasonable. To save the farmers from village money lenders* British Eovt. took step under special program in order to disburse the agricultural loan to the farmers in 362;. +ater on* in 3680 India7British Eovt. took a step for the socio7 economic development of the small and marginal farmers* which was implemented through providing agricultural loan to them. In 36;0 the Eovernment of ,akistan established a financial institution named BAgricultural Development #inance /orporationC (AD#/) in order to disburse loan in agricultural sector. #eeling the importance of agricultural production and agricultural loan the ,akistani Eovt. established another bank namely B,akistan 'rishi BankC in 36;=.
In 36=3 Bangladesh has been emerged as an independent country through a historic war of nine months. After the liberation of Bangladesh the Eovernment renamed the ,akistan 'rishi Bank as Bangladesh 'rishi Bank (B'B) in 36=8 according to the ,residential order 0=. As Bangladesh is an agro7based country* the demand for the agricultural loan of 'rishi Bank is in increasing trend. To manage agricultural loan it becomes very difficult for Dhaka based head office of 'rishi Bank to serve the remote areas of the country. #or this reason the government takes the decision to decentrali:e the 'rishi Bank in the divisional areas. The people of the northern areas of Bangladesh are lagging behind in all respects than the other parts of the country. %a&shahi 'rishi Unnayan Bank (%A'UB) was established by the president"s ordinance no ;> of 36>< with the aim of providing institutional agricultural credit for optimum utili:ation of agricultural potentials of %a&shahi division. Taking over the branches and offices along with assets and liabilities of the Bangladesh 'rishi Bank within in the %a&shahi division* the bank started functioning on 3; .arch 36>=.
2.' Ob e!t"#e $% R-KU6

The main ob&ects of %A'UB are as follows9 a) To provide credit facilities for all kinds of agricultural and agro7 based economic activities keeping in view the needs of small and marginal farmers. b) To earn a normal profit for meeting the operational e5penses* building of reserve and e5pansion of activities to cover wider geographical area. c) To e5tend counseling and advisory services to the borrowersF entrepreneurs etc. in utili:ing credit facilities of the bank.
2.( 5un!t"$ns $% R-KU6

As the largest development partner in the northwest region %a&shahi 'rishi Unnayan Bank (%A'UB) aims at overall development of farmers and all the sectors and sub7sectors of agriculture in this region. Besides* catering to agricultural credit the bank performs ancillary functions
as financing agri7business and agro7based industries and poverty alleviation programs.
2./ )anagement
The board is vested with the responsibility of formulation of policy in line with attainment of growth in agriculture and economic development of the region through agricultural credit support. The board of directors is constituted by seven members* all appointed by the government. Besides* for emergency decisions there is an e5ecutive committee constituted of the chairman of the board and two other members9 the managing director and one of the directors elected by the board. The managing director is the chief e5ecutive of the bank.
2.0 Cap"tal and "ts s$ur!es

%A'UB is a governmental banking institute. !o the main sources of capital are government fund* as on 82 1une 0238 the details about capital are as follows7 3) Authori:ed capital 9 Tk. =;22 million 0) ,aid up capital 9 Tk. ;=22 million 8) %eserve capital 9 Tk. 02>.46 million
2.8 Organ"9at"$nal stru!ture

The Gead -ffice of the bank is stationed at %a&shahi. The branch7network comprises 8<4 branches including one in Dhaka. It has also eighteen :onal and regional offices. The bank has a training institute located at %a&shahi. Total workforce of 8432 as on 8372870238 was composed of 3;03 officers and 3>>6 other staffs. %egional offices stationed in district headquarters control branches under them. There are independent regional audit offices for conducting regular audit in branches as well as in regional and :onal offices.
OR:-NI;-TION-1 STRUCTUR3
Board of Directors !ecretariat .anaging Director ,ublic %elation !ecretariat of ..D.
Eeneral .anager Adm. AF/.
Eeneral .anager -perating
Eeneral .anager Audit %ecovery
Eeneral !ervice Dept.
%esource evelopment Dept
+oan %ecovery Dept73.
/entral Account Dept73
Budget
/ost /ontrol Dept.
+oan %ecovery Dep70.
/entral Account Dept70
Branch control Dept.
+oan %ecovery Dept70

%egional Audit office7 3>
,ersonnel .anagement Dept.
+oan Advance Dept70
Training institute
+oan Advance Dept73
+,-
Dhaka Branch
Honal -ffice %a&shahi
%egional -ffice Daugoan
%egional -ffice Dawabgong
%egional -ffice Datore
Honal -ffice ,abna
%egional -ffice !ira&gan& %egional -ffice Datore Honal -ffice ,abna %egional -ffice !ira&gan&
%egional -ffice %angpur

%egional -ffice Thakurgoan
Branch 3> Branch 03 Branch 38
Branch 00
Branch 38
Branch 3=
Branch 36
Branch 36 Branch 34 Branch 3; Branch 30
%egional -ffice Branch Branch Branch Branch ,hanchogor University 3< of Information 3= 3< Technology 3; %egional -ffice Dina&pur Honal -ffice Dina&pur
%egional -ffice +almonirhat
Branch & Branch Sciences 3= 3> %egional -ffice Dilfamary %egional -ffice 'urigram
Branch 3= %egional -ffice Eaibanda
2.< Organ"9at"$nal set up

The affairs of business of the bank are managed through three functional tiers9 The Gead -ffices The HonalF %egional offices The Branches Head $%%"!e* The head office of %A'UB is stationed at 0>2 km far from capital city Dhaka* at Dorth7west divisional city %a&shahi . All operation is controlled by head office. The managing Director is assisted by the three following functional divisions. ?ach headed by a Eeneral .anager9 Administration and Accounts Division. -peration Division. Audit and %ecovery Division The three divisions further divided into 3= departments are as follows9 a= -dm"n"strat"$n D"#"s"$n* ,ersonnel Department /ommon !ervices Department /omputer Department Budget and e5penditure control Department Training Institute Guman resource Department b= Operat"$n D"#"s"$n* Branches control Department. +oans and Advances Department7I +oans and Advances Department7II %esearch and Development Department. != -ud"t -!!$unts and Re!$#er& D"#"s"$n9
+oan %ecovery Department7I +oan %ecovery Department7II Audit and Inspection Department /entral Account Department73 /entral Account Department70 +aw Department %egion wise branches of %A'UB are given through table at
2.> 6ran!h net,$r7

ne5t page. Table739 %egion wise total branches (Up to 82 1une* 0238) !+. Do. HoneF%egion Do. of Branches 23. %a&shahi 04 20. Daogaon 0> 28. Datore 02 24. %a&shahi 3< 2;. Bogra (Dorth) 02 2<. Bogra (!outh) 34 2=. ,abna 04 2>. 1aipurhat 3; 26. %angpur 0< 32. Eaibandha 04 33. Dilphamari 02 30. 'urrigram 03 38. +almonirhat 3= 34. Dina&pur (Dorth) 3= 3;. Dina&pur (!outh) 3> 3=. Thakurgoan 3> 3>. ,anchagarh 3> 36. Dhaka 3 02. +.,.- (%a&shahi ) 3 03 !ira&gon& 00 Total 8<4 Source9 ,ersonnel department of %A'UB
2.1? 3mpl$&ee summer&

Table709 ?mployee summary of %A'UB (Up to 1une 82* 0238) Des"gnat"$n -uth$r"9e 3@"st"ng 2a!ant
d
3..anaging Director (.D) 0.Deputy .anaging Director (D.D) 8.Eeneral .anager (E.) 4. Deputy Eeneral .anager(DE.) ;.Assistant Eeneral .anager(AE.) <.!enior ,rincipal officer(!,-) =.,rincipal officer(,-) >.!enior officer(!-) 6.-fficer Total -fficer 32.-ther ?mployee Total 23 23 28 8< << 34= 88< <02 622 211? 030< (2'0 23 7 28 0> ;> 38> 0=3 066 =08 1/21 3>>6 '(1? 7 23 7 > > 6 <; 803 3== /<> 08= <20
!ource9 ,ersonnel department of %A'UB
2.11 Tra"n"ng "nst"tute

The only training Institute at %a&shahi Imparts training to the &unior and mid7level officers and other staff according to the annual training program designed on such sub&ects of professional interest as management of credit and accounts* /ommercial banking* audit and inspection etc.
2.12 ?%%"!e aut$mat"$n

A +ocal Area Detwork (+AD) connects all computers in departments at head office. Internet connections in the head office as well as field offices have facilitated e5change of information through e7mail. The
bank has its own website www.rakub.org.bd to represent it to the cyber world. /omputeri:ed branch banking has been introduced on e5perimental basis in two branches of the bank. Decessary steps have been taken to set up a complete computer department at head office. The bank has been giving much importance to training courses for enhancing computer skill of officers and other staff.
2.1' -ud"t and "nspe!t"$n

Internal audit and inspection plays an important role in establishing transparency and accountability of the bankIs accounting system. Besides there are commercial audit* Bangladesh Bank inspection and e5ternal audit for detecting and checking repetition of irregularities frauds and forgeries* if any* in different levels. The government appointed .Fs Hoha Haman 'abir %ashid /ompany* /hartered Accountants and .Fs 'han $ahab !hafiq %ahman /ompany* /hartered Accountants for conducting audit for the financial year 02327 0233. The audit report submitted by them on 3872370230 was sent to the ministry of finance on 3672070230 after approval of the Board of Directors.
2.1( Spe!"al !red"t pr$grams

%A'UB has taken some special programs which are mentioned below9 3. 0. 8. 4. ;. /onsumers" credit scheme /redit for small holding tea plantation ,otato seeds production Intensive mai:e cultivation pro&ect The production of import substitute agri7crops
2.1/ P$#ert& alle#"at"$n !red"t pr$grams

The bank has been disbursing micro7credit for poverty alleviation in the 3< northwestern districts since inception. Besides* the bank finances short term collateral free credit under select individual or group based programs for income generating activities among poor and unemployed youth in compliance with government policy. The bank has financed Tk. 0>6.28 million as against of Tk. 842 million annual disbursement target in 33 poverty alleviation credit programs in the year 022>726. #ollowing are the bank"s poverty alleviation credit program9 3. %A'UB self7help credit program(%!/,) 0. .arginal small farm system crop intensification pro&ect 8. !wanirvar credit program
4. !hogorip (#ood grain godown credit program ;. UD /apital development fund credit program <. $omen entrepreneurship development program =. ,ilot employment generation program >. !emi7intensive goat rearing program 6. .edicinal plantsForchard nursery 32. /redit program for the disable persons 5$re"gn a"ded pr$ e!t* %A'UB takes some pro&ect with the help of foreign aid* those are mentioned below9 1. Small 3nterpr"se De#el$pment Cred"t Pr$ e!t AS3CP=* !mall enterprise development credit pro&ect (!?/,) has been lunched under Dorwegian assistance to promote new small enterprises and streamline e5isting ones in ;3 upa:ilas of greater %a&shahi * Bogra* ,abna and 'urigram districts. 2. N$rth 4est Cr$p D"#ers"%"!at"$n Pr$ e!t ANCDP=* The bank has undertaken a pro&ect named Dorth7$est crop diversification pro&ect under financial assistance of Asian development bank. The pro&ect is under implementation by the department of Agricultural ?5tension under ministry of Agriculture in <3 upa:ilas of 3< districts of %a&shahi division
2.10 H"ghl"ghts $% $#erall a!t"#"t"es $% R-KU6

Table789 Gighlights of overall activities as on 82th 1une 0238
!+. Do 3 0 8 4 ; < = > 6 32 33 30 38 34 14 ,articulars ,aid up capital ( -n 8372870238) Total capital !urplus capital(Deficit) Total assets Total deposit Total loan and advances Total contingent liability +oan deposit ratio %atio of classified loan against total loan advances ,rofitF(loss) after ta5 Amount of classified loan ,rovision for classified loan ,rovision for surplusFdeficit /ost of fund University of Information Technology & Sciences Taka ;=2*22*22*222 (43*64*=>*2;<) 0<2*84*<>*02< 8=<;*2<*80*;;2 3;8>*6=*;;*06> 0=33*02*>2*4=0 =2*<;*<4*>>< 392.;= 392.84 (<4*2>*<;*<3>) 688*8;*>6*222 3><*08*00*222 >6*;=*68*222 >.82J
3; 3< 3= 3> 36 02 03
Interest earning assets Donperforming assets %eturn on investment(%-I) %eturn on assets (%-A) Interest on investment Income per share Income price ratio
0;=4*0<*20*6>8 3362*>2*06*;<= 3=*42*;4; 36=*4=*3>*34=
!ource9 www.rakub.org.bd
2.18 R-KU6 Perspe!t"#e plan

This is the ninth year of the %A'UB perspective plan. BankIs operational activities tracked the directives of the perspective plan throughout the year. -n the backdrop of negative impact upon overall income and profit earning of the bank due to reduced interest rates of deposit and advance the bank took precautionary measures of counter balancing the shortfall by enhancing disbursement of new loans and rescheduling of classified loans and raising income from commercial banking activities. In addition* measures were taken to curtail e5penditure on controllable items. The bank plans to undertake a midterm evaluation on the %A'UB perspective plan as per demand of the changed scenario.
Table-(* 3st"mated "n!$me under perspe!t"#e plan AIn m"ll"$n Ta7a= !ources of income 0226732 0232733 >42 302 0233730 602 382 0230738 Average Amount J 3222 >42 4> 342 302 =
Interest on unclassified loan =<2 Interest on fresh loan 332 %ecovery from classified loan By ad&usting deferred022 income By rescheduling 82 Interest income on deposit 382 Income from loan0<2 provisioning Interest on staff loan 42 /ommercial income 32 .iscellaneous 82 Total income 3;=2 15
002 82 342 062 42 32 82 3=02
082 42 342 832 ;2 32 ;2 3>>2
0;2 ;2 3;2 882 ;2 02 ;2 0242
082 42 342 0>2 42 32 82 3=82
38 0 > 3< 8 3 0 322
University of Information Technology & Sciences
!ource9 www.rakub.org.bd
2.1< R-KU6 at a :lan!e 9 AUp t$ '?th BuneC 2?1'= 23) 20) 28) 24) 2;) ?stablishment Authori:ed /apital ,aid up /apital %eserve Area of %A'UB9 a. Area b. !pread c. District d. Upa:illa e. Union i) !A/, ii) Don7 !A/, f. Total ,opulations g. Total Do. of #amily h. Agricultural #amily 2<) Total Branch i) .unicipal ii) Union 2=) Total manpower i) -fficers ii) $orkforce 2>) Honal F%egional office 26) %egional Audit office 32) %egional officer 33) Honal officer 34) $ebsite
16
9 9 9 9
3; .arch* 36>=. Tk. =;22.22 (in million) Tk. ;=22.22 (in million) Tk. 02>.4 (in million)
9 %a&shahi Division 9 84*;38 !quare.'... 9 3< 9 30; 9 3260 9 62> 9 3>4 9 about 8.;2 cores 9 ;3 lakhs. 9 80 lakhs. 9 8<4 9 <4 9 822 9 8432 9 3;03 9 3>>6 9 3> 9 3> 9 38 9 ; 9 ,,,.ra7ub.$rg.bd
Chapter- Three
O23R2I34 O5 R-KU6C 1$!al Pr"n!"ple O%%"!eC 1$!al Pr"n!"ple O%%"!e
'.1 Intr$du!t"$n* %a&shahi 'rishi Unnayan Bank* +ocal ,rinciple -ffice* %a&shahi starts its operation in 00 #ebruary 36;=. This branch is recogni:ed as an ideal branch of %A'UB in %a&shahi district. '.2 1$!at"$n* %a&shahi 'rishi Unnayan Bank* +ocal ,rinciple -ffice* %a&shahi '.' 3mpl$&ee $% R-KU6C 1$!al Pr"n!"ple O%%"!e* There are 30 people as employee in +ocal ,rinciple -ffice. Their designation is given in below9 (ne5t page) 3mpl$&ees and Des"gnat"$n $% R-KU6C 1$!al Pr"n!"ple O%%"!e. S.1. N$. 3. 0. 8. 4. !econd -fficer 1unior officer Data operator
Des"gnat"$n .anager (,rincipal -fficer)
N$. $% Pers$nnel 3 3 3 8
;. <. =. >. 6.
,eon /ashier !upervisor !ecurity Euard Total ?mployees
3 3 8 3 30
'.( 5un!t"$ns $% 1$!al Pr"n!"ple O%%"!eC Ra shah"

+ike other banks +ocal ,rinciple -ffice does the following activities9 I. %eceive deposit from customers II. ,ayment to customers according to payment order given through check by customers. III. Disbursements of loan policy of the given loan. IK. Eiving advice to the client of the bank K. Transfer money from one place to another place.
'./ Ser#"!es g"#en t$ !ust$mers b& 1$!al Pr"n!"ple O%%"!eC Ra shah".

Different deposit related services provided by the bank are mentioned below9 -= Dep$s"t Ser#"!e* 3) /urrent Deposit Account 0) !avings Deposit Account 8) Term Deposit Account a) !hort Term Deposit Account (!TD) b) Deposit ,ension !cheme (D,!) c) %A'UB Deposit ,ension !cheme (%D,!) d) #i5ed Deposit Account 6= C$mmer!"al Ser#"!e* 3) Demand Draft (DD) 0) .ail Transfer (.T) 8) TelephoneF Telegraphic Transfer (TT)
4) ,ayment -rder (,-) /) 1$an Ser#"!e* 3) !hort Term +oan 0) .edium Term +oan 8) +ong Term +oan The above services of %A'UB"s +ocal ,rinciple -ffice are discussed in following pages respectively9 -. Dep$s"t Ser#"!es* The following 8 types of accounts are available at +ocal ,rinciple -ffice. 1. Current -!!$unt* #rom this type of account any amount of money is deposited and drawn at any time in the office hours. There is no interest on current account. Bank over draft is sanctioned based on it. This account is opened with minimum deposit of Tk.3222. 2. Sa#"ngs -!!$unt* !avings account opened for the individual customers e5cept companies* firm and /o7operative society. .oney is withdrawn two times a week and deposited at any time in the office hours. If an account holder draws money from account heFshe will not get interest for that month. To open an account bank requires Tk.022 only. 2. Term dep$s"ts* a. Sh$rt Term Dep$s"t -!!$unt ASTD-=9 !hort Term Deposit Accounts are opened for company* business firms and government demonstrative body. This account is operated like current account. b. Dep$s"t Pens"$n S!heme ADPS=* It is one kind of deposit program circulated by government. In this savings scheme a person receives the opportunity to build up saving by contributing monthly installment to get an attractive fi5ed amount at the end of a specific period. The si:e of monthly installments is Tk. 322* Tk. 022* Tk. 822* Tk. 422* Tk. ;22* or which is to be deposited within the first week of each month. In this case compound rate of interest is charged
!. R-KU6 Pens"$n S!heme ARPS=* %A'UB has some savings schemes to motivate the people for savings. In this case %,! is regarded as the special product of this bank. The %,! is same as D,!. But terms of savings of %,! are ; years and 32 years. d. R-KU6 :rameen Pens"$n S!heme AR:PS=* It is for the grameen poor people to motivate them increase in savings. It is same as D,! %,!. e. 5"@ed Dep$s"t -!!$unt A5D=* #i5ed deposits are taken for the following terms9 #rom one month to below three months Above three months to below si5 months Above si5 months to below one year Above one year to below three years Above three years Table739 The rate of interest in deposit accounts !+. Do Types of Accounts Interest rate 3 /urrent Account Do interest 0 !avings Account =J 8 #i5ed Account =J to >.;J 4 !hort Term Deposit(!TD) 4J ; %A'UB ,ension !cheme(%,!) 30J < Deposit ,ension !cheme(D,!) 3;J = %A'UB Erameen ,ension !cheme (%E,!) <J !ource9 .anager* +ocal ,rinciple -ffice* %A'UB. 6= C$mmer!"al %un!t"$ns $% R-KU6DS 1$!al Pr"!"ple O%%"!e The following types of commercial service are available in %A'UB"s +ocal ,rinciple -ffice9 1. Demand Dra%t ADD=* DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one branch ,ayable to another branch on demand. DD is issued in against at Tk.02 commission up to Tk.3222. $hen the limit e5ceed commission amount increased in a certain rate. 2. )a"l Trans%er A)T=*
This branch transfer money another branch of this bank in another place in against of commission money of this security paper has to be transferred to an account of another branch. Gere the bank commission is minimum Tk.82 and the postal charge is Tk.;2. '. Telegraph"! Trans%er ATT=* It is the quickest method of remitting fund from one place to another. In this procedure no instrument is sent to the paying branch. -nly message is sent over telephone or tele5 and the paying branch makes payment after getting message. Due to lack of technology this branch cannot operate TT. (. Pa&ment Order APO=* It is a written document. This ,- can be encased on that branch from where it is issued. !everal supplier organi:ations use this ,- and here no account is needed to open with bank. It is issued locally. Table709 /ommission charged on commercial service !ource9 .anager* +ocal ,rinciple -ffice* %A'UB. !ervice Demand Draft Telegraphic Transfer ,ayment -rder Up to Tk.3222 Up to Tk.3*22*222 -ver Tk.3*22*222 Up to Tk.;*22*222and over .ail Transfer /ancellation /harge of DD* .T* TT* ,Up to Tk.;22 -ver Tk.;22 /harge Tk. Tk.02LKAT Tk.82LKAT Tk.02LKAT Tk.82LKAT Tk.;2LKAT Tk.322LKAT .inimum Tk.82L ,ostal cost(Tk.;2)LKAT Tk.0;LKAT Tk.;2LKAT
C= 1$an ser#"!es* Banks loan portfolio has been classified under the following heads9 1= Sh$rt Term 1$an AST1)9 +oan period is 3 year. 2= )ed"um Term 1$an A)T1)9 +oan period is above 3 year to ; years. '= 1$ng Term 1$an A1T1=* +oan period is more than ; years.
'.0 Se!t$rs "n ,h"!h R-KU6 e@tend !red"t

%a&shahi 'rishi Unnayan Bank* +ocal ,rinciple -ffice* %a&shahi e5tends credit in sectors and sub sectors* which are as follows9 (ne5t page) !+ Do. 3 0 8 4 ; < = Dame of the Description of pro&ect item ,ro&ect Tea industries !eeding production* Tea garden development* Tea marketing. %ubber plantation pro&ect ,oultry %ubber garden development* %ubber production and marketing. ,oultry boiler farms* ,oultry hatchery* ,oultry feed and allied pro&ect.
.i5ed farming Dairy live stock and #ishery based horticulture crops9 Agriculture based poultry dairy and fishery pro&ect. Black Bengal Black Bengal goats* !heep /attle farming for goat quality meat production* and .eat processing production and .arketing. Dairy farming .ilk production* .ilk collection and processing. Agro based /ommercially profitable sweet water fish and industries !hrimp feed production* Ice plant* Ice7cream factory and so on.
22
> 6 32 33
Agro7 equipment production /old storage
?ngineering work shop for Agro7equipment* %epairing agro equipment and .arketing.
/old storage for potato preservation* !peciali:ed mini7cold storage for fruits* Kegetables and #ish preservation. ?5port #ish free:ing plant* #ish dehydration plant* processing +eather processing and manufacturing +eather products. Animal and ,oultry and #ish feed meal production* /attle* fish feed meal Eoat* and +amb feed meal production. production
'.8 Interest rate $n l$an

Bank determines the interest rate differently for different sector. /onsidering interest rate on deposit* administrative cost* bank rate* interest rate at others bank and financial institutions* competitive money market etc* the banks use its rate of interest on loan. Table789 %ate of interest in different sectors.
!+ Do 3 0 8 4 ; < = > 6 32 33 Geads of loan /rops loan #isheries ?5port credit $orking capital /ommercial purpose Agro7based industries /ottage industries !?/, ,overty alleviation +ive stock Irrigation equipment and firm machinery %ate of interest 32J 32J 6J 33J738J 38J 30J 32J 30J 32J730J 32J 32J
!ource9 +ocal ,rinciple -ffice* %A'UB.
8.> -rgani:ational structure of +ocal ,rinciple -ffice* %a&shahi

The organi:ational structure of +ocal ,rinciple -ffice is shown below through diagram9
Manager (SPO)
supervisor
Officer
Data Entry Operator
Casher University of Information Technology & Sciences 24
Peon
Security guard
'.> 3mpl$&ee summer&

Table749 ?mployee summery of +ocal ,rinciple -ffice* %A'UB !+ Do 3 0 8 4 ; < = > 25 Designation .anager( !enior ,rincipal -fficer) !econd -fficer ( !enior -fficer) -fficer !upervisor Data ?ntry -perator /ashier ,eon !ecurity Euard Total Authori:ed ?5isting Kacant 3 0 0 3 0 3 3 0 2 0 0 3 3 3 3 3 32 2 2 2 2 3 2 2 3 0
30
!ource9 +ocal ,rinciple -ffice* %A'UB.
'.1? 6$$7s ma"nta"ned b& 1$!al Pr"n!"ple O%%"!eC R-KU6

The main ob&ectives of maintaining the books of %A'UB* +ocal ,rinciple -ffice* %A'UB are to achieve the following goals. 3. to record day7to7day transaction 0. To reflect the financial position periodically 8. To supply necessary information for monitoring the bank activities In that purposes cash transaction and other transaction is recorded in the books of accounts under the double entry system. In this bank* generally two types of books are used. -. C$ntr$l 6$$7s* It represents the immediate accounting picture of the bank at any time and it includes7 3) /ash !croll Book 0) /lean /ash Book 8) Eeneral +edger Abstract 4) !upplementary ledger Book 6. Subs"d"ar& 6$$7s* !ubsidiary Books are used to e5plain the total particulars in Eeneral ledger and it includes7 3) !aving account ledger 0) #i5ed deposit ledger 8) Income ledger 4) ?5penses ledger
;) The general ledger of %A'UB*
'.11 -!!$unt"ng pr$!edure $% 1$!al Pr"n!"ple O%%"!eC R-KU6

The procedure followed in +ocal ,rinciple -ffice is presented Cash Transfer C earing through diagram9
!oucher "ecord in "egister Posting in edger Supp ementary sheet preparation Summary preparation
Transaction
Cash cum day book preparation $enera edger posting #ffairs frond page 27 University of Information Technology & Sciences Subsidiary edger posting #ffairs back page
Chapter- 5$ur
1O-N S-NCTIONIN:
(.1 De%"n"t"$n $% l$an
A loan may be defined as money lent at interest or on profit. It is nothing but temporarily parting with one"s resources in order to augment the purchasing power of the receiver of such facility with a promise to return the same with interest or profit or otherwise as mutually agreed upon. It is a type of debt. +ike all instruments* a loan entails the redistribution of financial assets over time* between the lender and the borrower. In banking arena* many types of financial facilities are e5tended to the clients with the e5pectation of getting the same returned along with interest. BThe provided ,urchasing ,owerC can be termed as loan* credit or advances. These three terms have similarities as well as some differences. According to the Dictionary of Banking #inance loans can be defined as* Bthe +oan of a sum of money by a lender to a borrower to be repaid with a certain amount of interestC. Timothy $ 'och defined loan as* Bformal agreement between a bank and a borrower to provide a fi5ed amount of credit for a specified periodC. $e can say* if a bank gives its resources temporarily under certain conditions and for a specific duration* it will be called loan.
(.2 Class"%"!at"$n $% l$an

-= Class"%"!at"$n based $n se!ur"t&* (3) Unse!ured l$ans9 Banks provides loan without any type of collateral to the reliable persons or institutions as clients having profound goodwill* e5cellent track records or sometimes to the very poor clients. (0) Partl& se!ured l$an9 If the amount of loan is not fully secured* rather partial amount of collateral is provided to cover the loan sanctioned* it is called partially secured loan.
(8) 5ull& se!ured l$an9 !ecured loan means any which is guaranteed by the borrower giving valuable property as security. If the loan is given by taking the security of the amount e5ceeding the amount of security is provided to cover the loan sanctioned or &ust equal to the amount of loan* it is called Bfully secured loan.C B= Class"%"!at"$n based $n term* According to the classification by term or periodicity* loans can be of three types9 (3) Sh$rt-term l$ans9 This loan is sanctioned for less than one year. !hort7 term loans can be of two types9 (a) +oans provided fir immediate use and payable on demand and (b) +oans payable on short notice. (0) )ed"um-term l$an9 Usually* loans with the maturity of 3 to ; years are called mid7term loans. Gowever* commercial banks give mid7term loans of maturity of 378 years. (8) 1$ng-term l$an9 +oans with the maturity of more than ; years are called long7term loans. C= Class"%"!at"$n based $n user* 1. Ind"#"dual l$an*
a) C$nsumer l$an9 Banks provide loans for durable goods and appliances and commodities like loans for #ree:e* TK* /omputer* /ar* #urniture etc. b) H$us"ng 1$an9 This includes loans to the fi5ed or low7income people for housing purposes. This loan is usually intermediate term andFor long term. c) 3du!at"$n and $ther l$an* !ome of the bank also provide loan to the people of the society in order to meet their educational and other needs after being sure about the repayment.
2. Industr& l$an* a) 4$r7"ng !ap"tal l$an9 This type of loan is given to the business or industry to provide capital required for purchasing raw materials* paying wages and fuel e5penses etc. (b) 5"@ed !ap"tal l$an9 Guge amount of capital is required for procurement and replacement of machinery and equipments for the industrial organi:ations.
'. 1$an %$r bus"ness pers$n* (a) 4$r7"ng !ap"tal l$an9 #or maintaining day to day operations* business persons need a great deal of working capital. By providing working capital loans* banks help to solve the working capital necessity of the business persons. (b) 3@p$rt-"mp$rt l$an9 Banks also help in e5port7import firms by issuing +F/* bill of e5change* discounting* direct loan etc. (. 1$an %$r %armer*
(a) Cr$p l$an9 #or buying seeds* cows and fertili:ers* farmers need money. They borrow the money from the bank in order to meet the e5penses required. (b) N$n-!r$p l$an9 #armers also need money for poultry* fisheries* agro7 business* agro7processing and other purposes. In this case* commercial banks provide small and medium loans to farmers. E 5arm"ng e.u"pment l$an9 To purchase farming equipments* banks also provide loans to farmers. #arming equipments may include power tiller* tractors* machinery for irrigation etc.
D= Other %$rms* 3= O#erdra%ts* The over drafts is a kind of loan always allowed on a current account operated upon by cheques. The customer may be sanctioned a certain limit upon which he can overdraw his current account within a stipulated period. Interest is calculated and charged only on the actual debit balance on daily product basis. 0= Cash !red"t* /ash credit is the favorite mode of borrowing by traders* industrialists* agriculturists etc. for meeting their working capital requirement because it is an elastic form of borrowing. This type of facility is always provided against pledge of goods* produces and merchandise which remain under the possession of bank with effective control but ownership remains with the borrower.
(.' 1$an handl"ng d"agram

The steps which are followed in handling loan disbursement and loan recovery are presented through diagram to the ne5t page9
Eetting +oan ,roposal from the client
/ollecting information
?valuating proposal
?valuating by agent
Branch level evaluation !anctioning and documentation of loan Disbursing loan !upervision of the loan %ecovery of the loan
Decision
Gead office level
Branch level
Usual recovery
+egal recovery
S$ur!e* +ocal ,rinciple -ffice* %A'UB
(.( 1$an san!t"$n pr$!edure

Based on information available in the appraisal report* credit report* legitimate credit needs of the farmerFclient* the loan proposal should be carefully analy:ed by the sanctioning authority. Before sanctioning loan*
it is essential to make pragmatic analysis of status of applicant* credit worthiness* liabilities* pro&ect viability from technical* financial* economic* marketing and management point of view. As soon as the security is finali:ed and the sanctioning authority is satisfied* then the authority should proceed for sanction of loan.
(./ 5eature $% b$rr$,er

Borrower selection is an important factor in disbursement of loan. The mentioned factors are required to be considered in selecting a borrower9 3. Borrower must be Bangladeshi. 0. Borrower must be matured. 8. Borrower must have the ability to use loan in productive way and the ability to repay the loan and should have sound transaction record. 4. Borrower must not be loan defaulter. ;. Borrower must be registered with 1oint !tock /ompany* if it is limited company.
(.0 )eth$d $% l$an san!t"$n"ng and appl"!at"$n %$rm*

+oan application should be written in a specific form of the bank it must be submitted by the loan in the bank. Karious kinds of loan application forms are as follows9 Description Amount of loan Do of #orm no ,rice ,er in Tk. necessary /opy Tk. /opy a) /rops loan Up to ;222 3 +.#.< 02 b) /rops loan ;223 to 32*222 3 +.#.< 42 c) /rops loan 32223 to above 3 +.#.< <2 d) Any loan beyond Up to 32*222 3 +.#.3 >2 special e) Any loan beyond Above 32*222 N +.#.0 <2 f) ,ro&ect loan 7 0 +.#.4 >2 g) $orking capital Up to 32*22*222 0 +.#.> 0;2 loan h) $orking capital Above 32*22*222 0 +.#.> ;22 loan At that time of submitting loan application the loan applicant should give fee at various rate. The various types of loan application fee is given below7 Up to <*222 Do need
<*223 to =*;22 3;.22 =*;22 to 3*22*222 0.22 Tk. ,er thousand 3*22*222 to above 022 and 3 Tk. ,er thousand S$ur!e* %A'UB* %a&shahi Branch* %a&shahi .
(.8 D$!umentat"$n $% l$an

/redit activity is a risky function for a bank. #or a successful credit activity a bank should collect necessary documents from the borrowers. $ith these documents a bank can take legal action against the borrower in case of default. Both borrower and lender must sign every document. Thus the proper documentation gives the bank a right to save its interest. The following documents are commonly used for approving a loan or other types of businesses with the same nature9 3. -riginal loan agreement. 0. #illed up the loan application form. 8. #inancial statements of the borrower. 4. /redit analysis report. ;. ,roofs of certificates and documents of the collateral. <. The name and signature of the authori:ed personFattorney of the borrower. =. A copy of the resolution of the board of directors of the borrowing company. >. The copy of partnership deed and the statement of the assets in case of partnership business. 6. The surety from the authori:ed person of the company. 32.#inancial statements of the person or the company providing surety in favor of the potential borrower. 33.The copies of the written communication and e5changes of information between the bank and the borrower. 30..ortgage and trust agreement. 38./ertificate of earnest money given on assets. 34./opy of national identity card.
(.< Se!ur"t& aga"nst l$an

!ecurity is obtained as a line of last defense to fall back upon. It is meant to be an insurance against emergency. By taking security* bank
acquires a claim upon the assets of the borrower if repayment is not made as planned. !ecurities taken against a loan are stated below9 3. ,ersonal surety 0. Immovable property 8. ,ledge 4. .arketable securities ;. Document of title of goods <. /ertificate of fi5ed deposits =. Insurance policies >. -thers like gold and valuable documents.
(.> 3l"g"b"l"t& $% appl"!ant

To be eligible for loans from the bank* applicants meet the following basic requirement9 a) Be a citi:en of Bangladesh b) An adult c) !hould have repayment capacity and good reputation about financial dealings d) Dot defaulter of bank loan e) In case of corporate body equipped with manpower to carry out the scheme efficiently for which loan is required. f) Dot insolvent person g) Dot lunatic.
Chapter- 5"#e
1O-N )-N-:3)3NT
/.1 Intr$du!t"$n
The strong base of %A'UB* +ocal ,rinciple -ffice* %a&shahi is totally dependent on sound investment because interest on loan is the main source of income. That is why qualitative loan management is much emphasi:ed here as well as it leads to increase in total income of the bank. The bank authority sanction loan in compliance with the rules and regulations determined by the highest decision making authority of the bank.
/.2 D"sbursement $% l$an p$l"!&

Before releasing the sanctioned loan* all terms and conditions as laid down in the sanction letter are to be fully complied with. To that effect* the following basic requirements need to consider9 a) Terms and conditions that affect loan* whether all are complied with need to e5amine. b) !pecific documents as specified in the sanction letter must be completed. c) Kerification of encumbrances of security properties. 3. Don7encumbrances certificate. 0. ?5ecution of halapnama. d) /reation of charge on the collateral security9 In case of limited company* the charges on the company assets should be limited e) $ithin 03 days from the date of creation of charge* by registered post to the register* 1oint !tock /ompany. f) Insurance for9 3. !ecurity properties* as applicable. 0. Assets creates or to be created out of a loan fund or with two equity. 8. !tock of goods pledged with the bank as collateral shall be taken with appropriate risk cover. g) Any other stipulations as per sanction letter.
/.' 2ar"$us l$an pr$gram $% R-KU6

Agriculture and agriculturists are the facts of activities of %A'UB. The economic condition of the farmers is very dependent on the
performance of agriculture. /onsidering these facts* %A'UB has given to priority to all the subsection and associated sectors of agriculture for achievement of desired business goal. Gowever* a brief description of +oan programs of %A'UB is given below9 -= Cash !red"t* A cash credit is an arrangement by which a banker allows his customer to borrow money up to a certain limit. This is a permanent arrangement and need not to draw the full amount sanctioned at once but draw the amount as when that is required. Thus* cash credit is an active and running account to which deposit and withdrawal may be e5ercised frequently. Interest is charged only for the amount withdrawn. /ash credit arrangement is usually made against security of commodity hypothecated or pledged with the bank. !ometimes the bank provides the cash credit facility against personal security too. Dormally* cash credit is allowed for one year. 6= O#er dra%t* -verdraft is an arrangement between a banker and his customer by which the letter is allowed to withdraw over and above his credit balance in the current account up to an agreed limit. This is only a temporary accommodation usually granted against securities. The borrower is permitted to draw and repay any number of times. The total amount overdrawn does not e5ceed the agreed limit. The interest is charged only for the amount over drawn and not the whole amount sanctioned. -verdraft facilities are generally granted to business against securities of stock in trade* debenture etc. Eenerally* overdraft is three types9 3) Temporary overdraft 0) /lean overdraft 8) !ecured overdraft C= Cr$p l$an* The bank finance all the summer crop* winter crops and nursery etc. Gigh yielding and high value crops and seeds production is particularly encouraged. /rop sub sector alone occupies about <2J of the +oan budget the bank.
D= 5"sher&* The Bank attaches importance to use scientific method and modern technology in fish cultivation. It e5tends adequate credit support for
e5cavation and re7e5cavation of ponds* round the year cultivation of species* which have rapid growth* cultivation of sweet water prawn and other fishes. The Bank makes use of e5pertise of the concerned government agencies for bringing more pondsFwater bodies under cultivation and increasing productivity. 3= 1"#e st$!7* The bank e5tends credit facilities or systematic and commercial live stock farming* which includes dairy* beef* fattening poultry raising and setting up of hatcheries* which in turn is e5pected to increase production of milk* meat and eggs* the main sources of portion. As the marginal and small farmers" access to mechani:e farming is restrained by want of cash and collateral the bank has big +oan window of draft animals for cultivation of land has big +oan window of draft animals for cultivation of land transportation of agriculture produces and other farming activities. 5= Irr"gat"$n e.u"pment and %"rm ma!h"ner&* Today technology based farming for high yielding and high volume of crops* mechani:ation of cultivation* irrigation and pest control is indispensable* to cope with the situation and pest control is indispensable. To cope with the situation %A'UB financing for power tillers* tractors* tube wells* power machineries are being treated as an important associated sector of +oan. := -gr$- based "ndustr"es* The operational &urisdiction of the bank is noted for its agricultural potentials. This is noted for its agricultural potentials. The bank pay due importance to setup agro industries for preservation* processing and marketing of agricultural products having backward linkage with basic sub sectors of crop* fishery* live stock and forestation* manufacturing and marketing of agricultural implements are also encouraged. Agro industries for import substitution are specially encouraged by offering moderate terms of financing. H= P$#ert& alle#"at"$n* The poverty strikes Dorth $est Bangladesh is characteri:ed by comparatively lower rate of saving* inadequate capital accumulation and poor employment opportunities. The e5isting collateral based banking system is also of little use in respect of e5tending support to the millions of landless people. To address the problem the bank has been financing collateral free micro7credit for income and employment generation through its poverty alleviation credit program.
%A'UB also gives some loan on cottage industry. $e know* the industry* which is built7up in a cottage or house* is a cottage industry. The role of cottage industries is very importance to improve the economics of Bangladesh. Usually* the main promoters of cottage industries in our country are small farmer* landless and poor people. They can build a cottage industry with own capital and some +oan capital of %A'UB.
/.( 1$an super#"s"$n and m$n"t$r"ng

Under its charter* the bank is required* as far as possible* to ensure that a loan is spent on the purpose for which it is made and if this requirement is not complied with by the borrower* the bank may require taking necessary measures9 3. ,rimary responsibility of the manager is to supervise and monitor the cash loanFworking capital loan pro&ect and term loan stage by stage* ensure pro&ect constriction work* acquiring kind items and pro&ect goods as per approved arrangement specified in the sanction letter. 0. Bank finance pro&ect should be inspected by the regional manager and manager periodically* to assess physical conditions of the pro&ects facilities and the level of the pro&ect"s capacity utili:ation. 8. /ash loans can be misused for unproductive process. Therefore special attention must be given on borrowers past antecedents. In case of releasing cash loans and when the borrower drawing a substantial amount at that time the authority must supervise with special attention. 4. The manager should employ a pro&ect supervision officer (,!-) after documentation and releasing the first loan installment with the assignment of overall pro&ect supervision the duties. The ,!- should inspect the pro&ect site and observe the pro&ect development work and inform the progress to the manager through progress report periodically. ;. After inspection* the managerFauthori:ed officer should countersign the borrower"s acknowledgement receipt under his signature and seal. -nly after such counter7signature in the borrower"s acknowledgment receipt* supplier"s bill can be processed for payment.
;.; +oan disbursement scenario of +ocal ,rinciple -ffice* %A'UB

The last five years loan management of %a&shahi Branch* %A'UB are shown below through table9 (ne5t page) #inancial year 022>726 0226732 0232733 0233730 0230738 +oan disbursement target 840.43 832.=0 4>2.46 834.3> 442.0> (Amount in lakh Taka) Total loan Achievement achievement %ate 80;.62 0<>.26 06>.02 062.02 8=8.2= 6;.3=J ><.0>J <0.2<J 60.8<J >4.=8J
!ource9 +ocal ,rinciple -ffice* %A'UB . O Achievement rate P 322 C$mment* #rom the above table it is evident that the loan management target is reduced in the year 0226732 from 022>726. After that the target is increased in the year 0232733 and again decreased in the year 0233730 and increased in the year 0230738. -n the other hand total achievement is reduced in the year 0226732 from 022>726. After that the achievement is increased in the year 0232733 and again decreased in the year 0233730 and increased in the year 0230738. The highest rate is found in the financial year 022>726(6;.3=J) and the lowest rate at 0232733(<0.26J). The last five years loan disbursement positions of +ocal ,rinciple -ffice* %A'UB are shown below through bar char.
-= 1$an management$% 2??<-2??>

%A'UB* +ocal ,rinciple -ffice pro&ected a +oan target of Tk.84043222 for the financial year 022>70226. During the year loan disbursement was Tk.80;62222 which was 6;.3=J of the target. During the year the following seven sectors were given preference in disbursing loan9 3. /rops 0. #ishery 8. +ive stock 4. Agro7based industries ;. /ontinuous F cash credit <. ,overty alleviation The loan management for the financial year of 022>70226 is shown in ne5t table9 (Amount in lakh Taka) 022>70226 Items /rops #ishery +ive stock Agro7based industries /ontinuous loan ,overty alleviation -thers Total +oan disbursement target 3;6.84 3;.22 3.82 3.;2 8<.2; 0.80 30<.60 Total loan achievement 3;4.;< 3;.22 3.4= 8.22 4<.>= 0.0; >0.;2 Achievement rate 6=J 322J 338J 362J 382J 6=J <;J 6;.3=J
840.43 80;.62 !ource9 +ocal ,rinciple -ffice* %A'UB O Achievement rate P 322
42
C$mment* #rom the above table it is evident that the highest loan disbursement target was in crops sector (Tk3;684222).The highest disbursement is made in crops sector (Tk3;4;<222). The highest achievement rate is found in the Agro7based industries (362J) and the lowest achievement rare is found at others (<;J). The loan management of +ocal ,rinciple -ffice* %A'UB during the year 022>70226 is shown below through bar chart9
2?? 1$an d"sburse me nt targe t T$tal l$an a!h"e #ement -!h"e#e ment rateAF=
1<?
10?
1(?
12?
#igure9 !ector wise loan disbursement of 022<7022=.

1??
<?
0?
(?
2?
? Cr$ps 5"sher& 1"#e st$!7 -gr$-based "ndustr"es C$nt"nu$us l$an P$#ert& alle#"at"$n O thers
#igure9 !ector wise loan management of 022>70226

6= 1$an d"sbursement $% 2??>-2??1? %A'UB* +ocal ,rinciple -ffice pro&ected a +oan target of Tk.832=0222 for the financial year 022670232. During the year loan disbursement was Tk.0<>26222 which was ><.0>J of the target. During the year the following seven sectors were given preference in disbursing loan9 3. /rops 0. +ive stock 8. /ontinuous 4. ,overty alleviation ;. -thers The loan managementfor the financial year of 022670232 is shown in ne5t table9 (Amount in lakh Taka) 022670232 Items +oan disbursement target 3<4.0< =.22 3>.6> 8<.42 Total loan achievement 383.43 <.22 3>.<2 8<.42 Achievement rate >2J >6J 6>J 322J
/rops +ive stock /ontinuous loan ,overty alleviation -thers Total
>4.2> =;.<> 62J 832.=0 0<>.26 ><.0>J !ource9 +ocal ,rinciple -ffice* %A'UB O Achievement rate P 322
C$mment* #rom the above table it is evident that the highest loan disbursement target was in crops sector (Tk3<40<222).The highest achievement is made in crops sector (Tk38343222). The highest achievement rate is found in the ,overty alleviation sector (322J) and the lowest achievement rare is found at crops sector (>2J). The loan management of +ocal ,rinciple -ffice* %A'UB* %A'UB during the year 0226732 is shown below through bar chart9
1<?
10?
1$an d"sburse ment targe t T$tal l$an a!h"e #eme nt -!h"e#ement rateAF=
1(?
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? Cr$ps 1"#e st$!7 C$nt"nu$us l$an P$#ert& alle#"at"$n O the rs
#igure9 !ector wise loan management of 022670232. C= 1$an d"sbursement $% 2?1?-2?11

%A'UB* +ocal ,rinciple -ffice pro&ected a +oan target of Tk.4>246222 for the financial year 023270233. During the year loan management was Tk.06>02222 which was <0.2<J of the target. During the year the following seven sectors were given preference in disbursing loan9 3. /rops 0. #ishery 8. +ive stock 4. Irrigation equipment and farm machinery ;. /ontinuous <. ,overty alleviation =. -thers The loan management for the financial year of 0232733 is shown in ne5t table9 (Amount in lakh Taka) 023270233 Items +oan Total loan Achievement disbursement achievement rate target /rops 0>0.60 3=;.>6 <0.3=J #ishery 48.=2 8.;2 >2J +ive stock 4.26 4.26 322J Irrigation equipment and 3.84 3.0= 6;J farm machinery /ontinuous loan 3;.2; 34.22 68J ,overty alleviation ;.64 8.>< <;J -thers 30=.4; 6;.;6 =;J Total 4>2.46 46>.02 <0.2<J !ource9 +ocal ,rinciple -ffice* %A'UB
O Achievement rate P 322 C$mment* #rom the above table it is evident that the highest loan management target was in crops sector (Tk0>060222).The highest achievement is made in crops sector (Tk3=;>6222). The highest achievement rate is found in the live stock sector (322J) and the lowest achievement rare is found at crops sector (<0.3=J). The loan management of +ocal ,rinciple -ffice* %A'UB during the year 0232733 is shown below through bar chart9
'??
1$an d"sburse me nt targe t T$tal l$an a!h"e #e me nt -!h"e #e me nt rate AF=
2/?
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r$ ps 7 er & m a! h" ne r& al le #" at "$ n l$ an st$ ! 5" sh O th C er s
$n t" n u$ us
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D= 1$an management$% 2?11-2?12

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%A'UB* +ocal ,rinciple -ffice pro&ected a +oan target of Tk.8343>222 for the financial year 023370230. During the year loan management was Tk.06202222 which was 60.8<J of the target. During the year the following eight sectors were given preference in disbursing loan9 3. /rops 0. #ishery 8. +ive stock 4. Irrigation equipment and farm machinery ;. Agro7based industries <. /ontinuous =. ,overty alleviation >. -thers
The loan management for the financial year of 023370230 is shown in ne5t table9
(Amount in lakh Taka) 023370230 Items +oan disbursement target /rops 3=>.>0 #ishery 0.;2 +ive stock 32.32 Irrigation equipment and 6.82 farm machinery Agro7based industries 0.02 /ontinuous loan 04.=3 ,overty alleviation 8.2; -thers Total >8.;2 834.3> Total loan achievement 3;>.33 0.;2 6.80 6.02 0.22 0=.0; 0.;3 =6.88 062.02 Achievement rate >>.40J 322J 60.02J 6>J 62J 332.0;J >0.28J 6;J 60.8<J
!ource9 +ocal ,rinciple -ffice* %A'UB O Achievement rate P 322 C$mment* #rom the above table it is evident that the highest loan management target was in crops sector (Tk3=>>0222). The highest achievement is made in crops sector (Tk3;>33222). The highest achievement rate is found in the /ontinuous loan sector (332.0;J) and the lowest achievement rare is found at /rop sector (>>.40J).
The loan management of +ocal ,rinciple -ffice* %A'UB during the year 023370230 is shown below through bar chart9
2?? 1<? 10? 1(? 12? 1?? <? 0? (? 2? ?

r$ ps & 7 5" sh er es $n t"n u$ us l$ an P$ #e rt & al le #" at "$ n st$ ! m a! h" ne r& "n du st r" C th er O s -b as ed gr $ C
1$an d"sburse me nt targe t T$tal l$an a!h"e #e me nt -!h"e #e me nt rate AF=
1" #e nd %a r
#igure9 !ector wise loan management of 023370230.
3= 1$an management$% 2?12-2?1'

Ir r
"g at "$ n
e. u" pm en ta
%A'UB* +ocal ,rinciple -ffice pro&ected a +oan target of Tk.4420>222 for the financial year 023070238. During the year loan management was Tk.88=2;222 which was >4.=8J of the target. During the year the following eight sectors were given preference in disbursing loan9 3. /rops 0. #ishery 8. +ive stock 4. Agro7based industries ;. /ontinuous <. !.? =. ,overty alleviation >. -thers
The loan management for the financial year of 023070238 is shown in ne5t table9
(Amount in lakh Taka) 023070238(up to 1une) Items +oan Total loan disbursement achievement target 3<>.23 3;3.8> 0.;; 0.;; ;.;0 4.>0 <.02 ;.22 326.22 >;.;; 30.22 >.22 ;.22 380.22 442.0> 4.8; 333.40 8=8.2= Achievement rate 62.32J 322J 60.06J >2.;<J ==.;2J <8.42J ><.=2J >8.<<J >4.=8J
/rops #ishery +ive stock Agro7based industries /ontinuous loan !.? ,overty alleviation -thers Total
!ource9 +ocal ,rinciple -ffice* %A'UB O Achievement rate P 322 C$mment* #rom the above table it is evident that the highest loan management target was in crops sector (Tk3<>23222).The highest achievement is made in crops sector (Tk3;38>222).The highest achievement rate is found in the #ishery sector (322J) and the lowest achievement rare is found at !.? sector (<8.42J).
The loan management of +ocal ,rinciple -ffice* %A'UB during the year 023070238 is shown below through bar chart9
1<? 1$an d"sburse me nt targe t T$tal l$an a!h"e #e me nt -!h"e #e me nt rate AF=
10?
1(?
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1" #e
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#igure9 !ector wise loan management of 023070238.
gr $
Chapter- S"@
P$ #e
rt &
1$an Re!$#er&
0.1 Intr$du!t"$n* $hen a bank or other financial institutions distribute a loan to other organi:ation or people* then after regaining from loan it is called loan recovery* %A'UB* %a&shahi Brach* Distributed loan to loan and recovers this money. %A'UB* +ocal ,rinciple -ffice* classifies loan in two categories9 a. Unclassified loan* and b. /lassified loan. a. Un!lass"%"ed l$an* $hen half or more than half of the total loan is repaid within the due dates by the borrowers then that is called unclassified loan. The duration of time in which the loan will be treated as unclassified is less than 30 months from sanctioning loan. b. Class"%"ed l$an* $hen more than half of the total loan or total is unpaid F due over the due date then that loan is called classified loan. /lassified loans can be sub standard* Doubtful and bad. The criteria of these classification of classified loans are as follows9 1. 5$r sh$rt term l$an* !hort term loan are classified by %A'UB* +ocal ,rinciple -ffice in three categories7 "= Cr$p l$an and m"!r$ 1$an and -d#an!e* Age of over 30 months (due)9 Irregular. Age of over 3878< months (due)9 !ubstandard Age of over 8<7<2 months (due)9 Doubtful. Age above <2 months9 Bad. ""= Cash 1$an and -d#an!e-and ,$r7"ng !ap"tal #rom < months but less than 6 months7 !ubstandard. #rom 6 mouths but less than 30 months7Doubtful. 30 mouths or above7 Bad. """= Demand 1$an #rom < months but less than 6 months7 !ubstandard. #rom 6 months but less than 30 months7 Doubtful. Above 30 months7Bad.
2. )ed"um l$an AUp t$ / &ears=* #rom 2 month but less than < months7!ubstandard. #rom < months but less than 30 months7 Doubtful. #rom 30 months but less than 3> months 7 Bad. '. 1$ng term l$an A-b$#e / &ears= #rom 2 month but less than 30 months7!ubstandard. #rom 30 months but less than 3> mounts7Doubtful. #rom 3> months but less than 04 months7Bad. 0.2 Pr$!edure $% l$an re!$#er&* The main responsibility of bank manager and loan officer is to recovery the outstanding loan in %A'UB* +ocal ,rinciple -ffice. Two7 recovery procedures are7
a) Usual procedure. b) +egal procedure.
a= 3. 0.
Usual pr$!edure* The usual loan recovery procedure is divided into several steps. They are as follows9 Issue of demand notice9 Demand notice is issue before on month being due of outstanding loan or installment. It is sent to the borrower. +egal notice9 It the borrower does not repay their respective loans and interest after maturity being received the demeaned notice under registered with acknowledgement by post to the borrowers the bank should send lower notice to him. !pecial notice9 Beside the above to notice a special notice signature by D/* TD- is sent to the respective borrower to keep mental pressure on him for repaying the loan. #ield recovery9 +oan officer recover the recovered loan through I.-. receipt by visiting the spot and source of the borrower. ,ersonal /ommunication9 If the borrower fails to repay his loan installment* the loan officer communicates with the respected persons of that area to give mental pressure to the borrower so that he repays his respective loan.
8.
4. ;.
<.
+oan %ecovery /amp9 %A'UB* +ocal ,rinciple -ffice made camp in various areas for the recovery of his loan* in this issue* the manager and other officer were present in the camp and communicated with borrowers. They gave them moral persuasion and tried to encourage them* so that they could repay their loan.
b=
1egal pr$!edure* $hen legal action for recovering loan becomes failed a case in filed against the borrowers. The case is generally filed in the following ways9 i. ii. Unwilling to repay loan although he is financially solvent. ?very effort of loan recovery becomes failure.
0.' Rules $% Re!$#er&* +ocal ,rinciple -ffice* %A'UB loan recovery from loan in installment system are as follows9 i) $eekly ii) #ortnightly iii) .onthly. 0.( Causes $% de%aulter* The loan cannot loan payment in due time in various causes9 i) Datural calamity destroy the crops* for this reason the loan unable to pay loan in due time. ii) %A'UB* +ocal ,rinciple -ffice cant takes proper steps against the loan for influential man. iii) The loan cant use the loan in proper way. iv) The loan does not pay loan in more time. v) +ack of loan supervision. 0./ "= Causes $% l$, re!$#er&* Negat"#e att"tudes $% the l$!al el"tes t$ repa& l$an- In most of the cases* the influential persons due to their political and social power are not interested to repay the loan. Because of their political
influence* loan officers cannot take any effective measure for loan recovery from them. !ometimes* loan received by them for a specific purpose is also diverted to other purposes. ""= Damage $% !r$ps due t$ %l$$d- !ometimes* the farmers have some valid reasons for non7repayment of loan in spites of their willingness of repayment of loan. In the case of crop failure due to natural disaster like flood* drought* etc.* it becomes really difficult for the farmers to repay loan in time. """= Unpr$du!t"#e use $% l$an- The time involved in processing loan is such that the farmers usually receive loan at the end of the specific crop season even after harvesting of the crop. #or that matter* +oan and Advance does not help in increasing production rather it is actually spent for non7farm e5penses. "#= Sh$rtage $% l$an pers$nnel- The branch has shortage of manpower to evaluate loan and advance worthiness of the borrowers* identification of real borrowers* and supervision and recovery of loan. #= 1a!7 $% legal a!t"$n b& the ban7s aga"nst de%aulters- Deither the Bank .anager nor the supervisors have any authority and power to take effective measures or administrative action against defaulters. #or that reason* the defaulters do not bother for requests of loan repayment by them. .oreover* legal action against defaulters has rarely been taken. #"= C$rrupt"$n $% the ban7 empl$&ees- In some cases* the bank officers take bribe from the defaulters and avoid responsibilities of reali:ation of loan from the borrowers. #""= Inab"l"t& $% the %armers t$ repa& l$an- #armers need loan not only for agricultural production but also for consumption for their survival* particularly by marginal farmers. This sometimes compel them to divert agricultural loan to consumption and other unproductive purposes which ultimately lead to their low repayment capacity. #"""= G6enam"D l$an re!e"#ed part"!ularl& b& U.P. !ha"rmanH)ember!ometimes the rural influential* particularly Union ,arishad /hairman and .embers receive QBenami" loan. It happens particularly due to shortage of loan personnel who have to disburse +oan and Advance in a short notice and do not have enough time to identify genuine borrowers. "@= -!!ess"b"l"t& t$ alternat"#e 1$an and -d#an!e "nst"tut"$ns- There is a number of financial institutions* which are working
@=
@"=
0.0
independently. !o non7repayment of loan to one institution does not affect in receiving loan from another institution. 3#aluat"$n $% ban7er e%%"!"en!&- The performance of bank personnel is &udged on the basis of amount deposited by him* not on the amount of loan recovered. #urther* there is practically no incentive for him to increase recovery amount. Inade.uate tra"n"ng %a!"l"t"es %$r 1$an and -d#an!e $%%"!ers and the"r .ual"%"!at"$ns- The persons involved in agricultural +oan and Advance operations in rural bank branches have poor educational background with inadequate training. Banking training program has hardly anything regarding agricultural loan and advance operation* which affects loan recovery performance of the Banks. 1$an Re!$#er& s!enar"$ 1$!al Pr"n!"ple O%%"!eC R-KU6*
a= 1ast %$ur &ears 1$an Re!$#er&. A-m$unt "n 1a7h Ta7a= Re!$#er& rate 5"nan!"al &ear Target -!h"e#ement 022670232 023270233 023370230 023070238 ;6.;= 324.8= 3=;J 62.0> 32>.=< 302.4<J 320.;2 384.>6 383.<2J 38;.22 3;2.>> 330J !ource9 %a&shahi Brach of %A'UB I %ecovery rate P 322 C$mment* It is evident from the above table that 022670232 to 023070238 +oan %ecovery Target and achievement are increased by amount gradually. But its Achievement performance is fluctuated. Gighest Achievement in 022670232 financial year which is 3=;J and lowest in 023070238 +oan financial year which is 330J .
b= 1$an Re!$#er& %$r 022670232 +oan %ecovery target was T' ;6.;=+akh and +oan recovery achievement was T' 324.8= +akh (3=; percent of target) .a&or items wise loan recovery position 2372=70226 to 8272<70232 Achievement (Amount in ,ercentage of Total Items +akh T') achievement (J) 0>.;0 0=.80 /rops =.= =.8> /ontinuous loans 4;.<> 48.=< ,overty Alleviation 2.0> 2.0< #ishery 3;.;6 34.68 +ive stock University of Information Technology & Sciences 58
2.8= Irrigation equipment and farm machinery 2.<; Agro7based industries 32.;> -thers 324.8= Total !ource9 1$!al Pr"n!"ple O%%"!eC R-KU6
2.8; 2.<0 32.38 322
C$mment* #rom the above table it is shown that ,overty alleviation loans is the highest achievement amount of T' 4;.<> lakh which is 48.=<J of the total achievement and fishery is the lowest achievement which is 2.0<J of the total achievement. -thers recovery items is not considered here.
P"e d"agram Presentat"$n $% l$an Re!$#er& 2??>-2?1? %"nan!"al &ear ASe!t$r ,"se=
10.58 0.65 0.37 15.59 28.52
Crops Continuous loans Poverty Alleviation Fishery
0.28 7.7
Live sto ! "rri#ation e$uip%ent an& 'ar% %a hinery A#ro()ase& in&ustries *thers
45.68
!= 1$an Re!$#er& %$r 2?1?-2?11 +oan recovery target was T' 62.0> +akh and Achievement was 32>.=< +akh (302.4< percent of the target) University of Information Technology & Sciences 59
.a&or items wise position of +oan %ecovery 2372=70232 to 827<.0233 Achievement (Amount in ,ercentage of Total Items +akh T') achievement (J) /rops 8>.40 8;.80 /ontinuous loans 8.<> 8.8> ,overty Alleviation 83.33 0>.<2 #ishery 3.8< 3.0; +ive stock 30.6= 33.60 Irrigation equipment and 0.4; 0.0; farm machinery Agro7based industries 0.84 0.3; -thers 3<.48 3;.32 Total 32>.=< !ource9 1$!al Pr"n!"ple O%%"!eC R-KU6 C$mment* #rom the above table it is shown that /rop loans recovery is the highest achievement amount of T' 8>.40 +akh which 8;.;0J of total achievement and #ishery is the lowest achievement* which is 3.0;J of the total achievement. -thers recovery items is not consider here P"e d"agram Presentat"$n $% l$an Re!$#er& 2?1?-2?11 %"nan!"al &ear ASe!t$r ,"se=
Crops 16.43 2.34 2.45 38.42 Continuous loans Poverty Alleviation Fishery 12.97 Live sto ! "rri#ation e$uip%ent an& 'ar% %a hinery 3.68 31.11 A#ro()ase& in&ustries *thers
1.36
d= 1$an Re!$#er& %$r 2?11-2?12
+oan recovery target was T' 320.;2 +akh and Achievement was 384.>6 +akh (383.<2 percent of the target)
.a&or items wise position of +oan %ecovery 2372=70233 to 827<.0230 Achievement (Amount in ,ercentage of Total Items +akh T') achievement (J) 4;.64 84 /rops 3=.03 38 /ontinuous loans 3> 38 ,overty Alleviation 2.4> 2.8< #ishery 0;.28 3> +ive stock 7 7 Irrigation equipment and
farm machinery 0.80 Agro7based industries 0;.63 -thers 384.>6 Total !ource9 Local Principle Office, RAKUB
3.0= 36.02 322
C$mment* #rom the above table it is shown that /rops loans recovery is the highest achievement amount of T' 4;.64 lakh* which is 84J of total the achievement* and #ishery is the lowest achievement which is 2.8<J of the total achievement and there is no target and achievement in the irrigation equipment and firm machinery sector. -ther recovery items is not consider here. P"e d"agram Presentat"$n $% l$an Re!$#er& 2?11-2?12 %"nan!"al &ear ASe!t$r ,"se=
25.91 45.94 2.32 0 25.03 0.48 18
Crops Continuous loans Poverty Alleviation Fishery Live sto ! 17.21 "rri#ation e$uip%ent an& 'ar% %a hinery A#ro()ase& in&ustries
e= 1$an Re!$#er& %$r 2?12-2?1'
+oan recovery target was T' 38; +akh and Achievement was 3;2.>> +akh (330 percent of the target)
.a&or items wise position of +oan %ecovery 2372=70224 to 827<.022; Achievement (Amount in ,ercentage of Total Items +akh T') achievement (J) 43.8< 0=.43 /rops 8;.83 08.42 /ontinuous loans 36.4> 38 ,overty Alleviation 7 7 #ishery 80.>< 03.=> +ive stock 8.88 0.02 Irrigation equipment
and farm machinery 0.40 Agro7based industries 3<.30 -thers 3;2.>> Total !ource9 Local Principle Office, RAKUB
3.<2 32.<>
C$mment* #rom the above table it is shown that /rops loans recovery is the highest achievement amount of T' 43.8< +akh* which 0=.43J of total achievement and Agro based industry is the lowest achievement* which is 3.<2J of the total achievement* and there is no target and achievement in the #ishery sector. -thers recovery items are not consider here. P"e d"agram Presentat"$n $% l$an re!$#er 2?12-2?1' %"nan!"al &ear ASe!t$r ,"se=
Crops
2.42 3.33
16.12 41.36
Continuous loans Poverty Alleviation
32.86 0 19.48 35.31
Fishery Live sto ! "rri#ation e$uip%ent an& 'ar% %a hinery
Chapter- Se#en
5INDIN:S -ND R3CO))3ND-TIONS
8.1 5"nd"ngs
%a&shahi 'rishi Unnayan Bank has been established for agricultural development as well as to serve the farmer of north7west region of the country. The bank reached record high loan disbursement and played a positive role in the financial development of the country. During my internship program at %A'UB* +ocal ,rinciple -ffice closely observed all banking activities of this branch and my study is concentrated on loan management. %A'UB* +ocal ,rinciple -ffice playing a vital role in agricultural development to the surrounding area of +ocal ,rinciple -ffice. During the days of internship I have observed some drawbacks which are creating trouble in achieving its ob&ectives* those are mentioned below9 3. !hortage of efficient credit personnel. 0. Inadequate training facilities for credit personnel. 8. The lengthy loan disbursement process creates drawback in getting loan in time. 4. +ack of proper planning and efficient fund management. ;. +oan is not paid through proper assessment. <. Insufficient fund of the bank creates problem in loan disbursement policy. =. +ack of proper security against loan. >. !ector wise loan disbursement scenario is much fluctuated. 6. +ack of proper supervision and monitoring. 32.The political and frequent government interference in the operation of agricultural credit policy is one of the main causes of poor recovery of agricultural loans. 33. In the institutional credit delivery system credit is provided for crop production but do not meet the credit requirement for other purposes for which the farmers have to go to the money lenders to borrow at e5orbitant rate of interest.
30. The farmers do not get a fair and reasonable price for their production. The term of trade between agricultural and manufactured goods always goes against the agriculturist* particularly the price of the agricultural commodities remain very low during harvest season. !o it"s difficult for farmers to repay loan from incremental income. 38. The agricultural credit institutions disburse credit to the farmer mainly against the security of their land. But in the real sense of the term land cannot be used as appropriate security as it is not possible to reali:e the loans and interest from land which is not easily saleable. 34. .a&or share of the institutional credit is taken by the wealthy influential rural elites by e5ercising their social and political power and influences. 3;. !ometimes the dishonesty of officer leads to inappropriate +oan. 3<.The notice is not issued to the borrower in &ust time* for that reason* recovery is hampered. 3=. All the transitions are recorded manually* so information is not organi:ed which creates problem in decision making. 3>. #und diversion i.e. taking loan for one purpose and using it in another purpose.
8.2 Re!$mmendat"$ns
Based on the findings of the study* the following recommendations are feasible9 3. The rural financing activity of %A'UB by increasing credit deployment needs to be increased. 0. Diversified sectors are to be identified and financed. 8. $here the short term loans constituted most of the loan portfolio* the medium and long term loans should be provided more and more for true rural development. 4. !ince crop and draft animal sectors both constituted two7 thirds of the total loan portfolio* emphasis should be given to other sectors equally in financing. ;. In disbursing loan* the economic position of the borrower should be kept in view. <. Borrower should be provided with small si:ed loans for better results. =. ?ducated borrower should be preferred in loan sanctioning. >. In providing loan* land mortgaged security should be preferred for best results. 6. Timely and direct delivery of loan to the borrower must be ensured for better result. 32. Adequate amount of loan to the borrower should be provided to minimi:e diversion although it does not necessarily effect good repayment. 33. !mall si:ed loans should be disbursed to the small landholders obviously in time and directly for best result. 30. !hort7term credit should be provided to the borrowers having small si:ed land holdings. 38. !maller si:ed loans are not being provided adequately for which these should be considered accordingly. 34. .onitoring and supervision of agricultural loans means the mechanism or process through which %A'UB can ensure the disbursement of credit to the genuine borrowers. 3;. The bank branch must take responsibility for its loans. It needs to develop systematic and continuing relationship with its loan.
8.' C$n!lus"$n
%a&shahi 'rishi Unnayan Bank should look forward. They have to change and reform in keeping with the current and emerging requirement. They will do well to take lesson from the best practices of micro credit operation* and customi:e these for their credit operation in line with international best practices. They should make good loans and e5plore new avenues for investment. !mall loans have vast potential in this regard. +essons from micro credit institutions strongly indicate that %A'UB need to reform their +oan strategy* increase small loan portfolio* utili:e the potential of credit officers* establish accountability for enforce compliance. This branch has yet produces any better performance in disbarment those loans given to borrowers. The ma&or cause behind this low recovery is poor implementation of credit policy of the bank. %A'UB as well as the +ocal ,rinciple -ffice should take effective measures as recommended in disbursing loans which will lead to earn profit and help in smooth survival in the coming day.
Re%eren!es
3. /howdhury* + %. A Te5t book on banker"s advances* Dhaka9 #air corporation. 0. /howdhury* -mar* (0228) BBank"s non performing loans7 some lessions for bank +oan.C Journal of institute of bankers, Bangladesh Kol7;2* Do70 Dec70228* ,p7 3>87368. 8. 'han* Dr. A %* Bank .anagement9 A fund emphasis* Dhaka9 %uby ,ublications. 4. 'han* Dr .a&ibur %ahman* (36>6) BAgricultural credit in Bangladesh9 some issues and considerations in policy planning.C Krishi Bank Paraikrama, Kol.76 32* 1une7 Dec.736>6* pp7=27>4. ;. %a&shahi 'rishi Unnayan Bank* Annual report (023070238) <. %a&shahi 'rishi Unnayan Bank* %oca Princip e Office* !tatement of affairs (022>70230s). =. %A'UB"s web site9 http9FF ,,,.ra7ub.$rg.bd
+uest"$nna"re
+uest"$ns ab$ut the ban7

3. $hat are the historical backgrounds of %A'UBR 0. $hat is the vision of the bankR 8. $hat is the mission of the bankR 4. $hat are the main ob&ectives of the bankR ;. Gow many branches are under %A'UBR <. $hat the amount is of authori:ed* paid up and reserve capital of %A'UBR =. $hat is the main function of the bankR >. Gow many employees are involved with %A'UBR 6. $hat is the accounting period of the bankR
+uest"$ns ab$ut the bran!h and "ts %un!t"$ns

32.$hen has the branch been establishedR 33.$hat is the organi:ational structure of this branchR 30.Gow many employees are of your branchR 38.Gow many unions and villages are under your branchR 34.$hat are the different rates of interest of different accountR 3;.$hat is the minimum deposit of different accountsR
+uest"$ns ab$ut l$an d"sbursement p$l"!&

3<.$hat are the main purposes to provide loanR 3=.$hat are the different rates of interestR 3>.$hat are the different terms and conditions of loanR 36.$hat documents do you &udge in sanctioning loanR 02.$hat types of securities are accepted by the bankR 03.$hat type of person can be grantorR 00.$hat are the ma&or heads of loan disbursement policyR 08.$hat are the programs under poverty alleviationR 04.Gow do you evaluate feasibility before sanctioning loanR 0;.Is loan disbursement higher or lower than target* whyR 0<.Gow do you fi5 up installmentR
:1OSS-RJ K -66R32I-TION
%A'UB !IT! AD#/ B'B +AD %!/, D/D, !TD D,! %D,! DD .T TT ,!TDA D,! %,! %E,! #DA .T DD TT ,!T+ .T+ +T+ !,,!%a&shahi 'rishi Unnayan Bank University of Information Technology !ciences
Agricultural Development #inance corporation Bangladesh 'rishi Bank +ocal Area Detwork %A'UB !elf7help /redit ,rogram Dorth $est /rop Diversification ,ro&ect !hort Term Deposit Account Deposit ,ension !cheme %A'UB Deposit ,ension !cheme Demand Draft .ail Transfer TelephoneF Telegraphic Transfer ,ayment -rder !hort Term Deposit Account Deposit ,ension !cheme %A'UB ,ension !cheme %A'UB Erameen ,ension !cheme #i5ed Deposit Account .ail Transfer Demand Draft Telegraphic Transfer ,ayment -rder !hort Term +oan .edium Term +oan +ong Term +oan .anage ,ro&ect !upervision -fficer

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Chapter-One INTRODUCTION

University of Information Technology & Sciences 1

1.2 Ob e!t"#e $% the stud&

1.' S!$pe $% the stud&

1.( )eth$d$l$g& $% the stud&

1./ The s"gn"%"!an!e $% the stud&

University of Information Technology & Sciences 4

1.0 1"m"tat"$ns $% data !$lle!t"$n

2.2 H"st$r"!al ba!7gr$und $% R-KU6

2.' Ob e!t"#e $% R-KU6

2.( 5un!t"$ns $% R-KU6

as financing agri7business and agro7based industries and poverty alleviation programs.

2.0 Cap"tal and "ts s$ur!es

2.8 Organ"9at"$nal stru!ture

University of Information Technology & Sciences 8

Eeneral .anager Adm. AF/.

Eeneral .anager -perating

Eeneral .anager Audit %ecovery

Eeneral !ervice Dept.

%esource evelopment Dept

+oan %ecovery Dept73.

/entral Account Dept73

/ost /ontrol Dept.

+oan %ecovery Dep70.

/entral Account Dept70

Branch control Dept.

+oan %ecovery Dept70

,ersonnel .anagement Dept.

+oan Advance Dept70

+oan Advance Dept73

Honal -ffice %a&shahi

%egional -ffice Daugoan

%egional -ffice Dawabgong

%egional -ffice Datore

Honal -ffice ,abna

%egional -ffice %angpur

Branch 3> Branch 03 Branch 38

Branch 36 Branch 34 Branch 3; Branch 30

Branch 3= %egional -ffice Eaibanda

2.< Organ"9at"$nal set up

2.> 6ran!h net,$r7

University of Information Technology & Sciences 11

2.1? 3mpl$&ee summer&

!ource9 ,ersonnel department of %A'UB

2.11 Tra"n"ng "nst"tute

2.12 ?%%"!e aut$mat"$n

2.1' -ud"t and "nspe!t"$n

2.1( Spe!"al !red"t pr$grams

2.1/ P$#ert& alle#"at"$n !red"t pr$grams

2.10 H"ghl"ghts $% $#erall a!t"#"t"es $% R-KU6

0;=4*0<*20*6>8 3362*>2*06*;<= 3=*42*;4; 36=*4=*3>*34=

2.18 R-KU6 Perspe!t"#e plan

002 82 342 062 42 32 82 3=02

082 42 342 832 ;2 32 ;2 3>>2

0;2 ;2 3;2 882 ;2 02 ;2 0242

082 42 342 0>2 42 32 82 3=82

38 0 > 3< 8 3 0 322

University of Information Technology & Sciences

University of Information Technology & Sciences

Des"gnat"$n .anager (,rincipal -fficer)

,eon /ashier !upervisor !ecurity Euard Total ?mployees

'.( 5un!t"$ns $% 1$!al Pr"n!"ple O%%"!eC Ra shah"

'./ Ser#"!es g"#en t$ !ust$mers b& 1$!al Pr"n!"ple O%%"!eC Ra shah".

0;=40<206>8 3362>206;<= 3=42;4; 36=4=3>*34=