ACKNOWLEDGEMENT

This is an attempt to make an analysis of various

deposit and loan scheme of the Premier bank as
part of the internship program. However to
make this I am indebted to many persons for
their ideas and assistance.
First of all, I would like to express my
indebtedness to my course coordinator s.
Imrana !esmin, lecturer, arketing "epartment,
"#, for helping me and giving assistance in
preparing this report.
I would like to thank to r. .$. !ousuf %han,
anaging "irector, Premier &ank, to allow me
for the program in this well'reputed
organi(ation. I)m very grateful to the anager of
&anani &ranch of the Premier &ank, and every
o*icial of that branch for their continuous
cooperation, sharing their time, supplying
necessary documents, and giving suggestions
and supervisions.
EXECUTIVE SUMMARY
Like other Commercial Bank the Premier Bank also invest their money to earn
profit. But they are differs in the manner of operation. The Premier Bank is a
customer-oriented bank and their motto is Service First. The philosophy of
The Primer Bank is to be the most carin! and customer friendly provider of
financial services" creatin! opportunities for more people in more places. The
Primer Bank is committed to ensure stability and sound !ro#th #hile enhancin!
the value of shareholders investments. $s bank of ne# millennium Primer Bank
a!!ressively adopt technolo!y at all levels of operations to improve efficiency
and reduce cost per transaction. To ensure a hi!h level of transparency and
ethical standards in all business transaction it trains and e%uip fresh recruits for
buildin! a stron! foundation and appoints skilled manpo#er to cope #ith the
!ro#in! business need. &t provides con!enial atmosphere" #hich #ill attract
competent #ork force. $s a business firm the main tar!et of the Primer Bank is
to earn profit but the Premier Bank not only !ives emphasis on profit. &t is also
socially responsible and strives to uplift the %uality of life by makin! effective
contribution to national development. The Premier Bank is !radually comin! up
as a ma'or bank in Ban!ladesh and makin! si!nificant contribution to national
economy. The last three-year business performance of the Premier Bank is
remarkable. The result #as lar!ely due to confidence and loyalty of the
customer. The Premier Bank is no# more encoura!ed and strivin! for
e(cellence #ith the !uidance of the valued shareholder and directors. The
Premier $ccomplishments continue to accumulate #hile they remain focused
on providin! best bankin! service to their customers. To improve efficiency and
effectiveness of the bakin! service" they are buildin! up infrastructure to
introduce )nline Bankin! facility" Credit Card system as soon as possible. The
Premier Bank is also #orkin! actively to set up ne# branches in different prime
location to ensure their presence closer to their customers.
PREFACE
INTRODUCTION:
*arly bankin! system served mainly as depositors for funds" #hile the more
modern system have considered the supplyin! of credit their main purpose. $
Bank not only accepts money or deposits" but it also lends money and creates
its o#n credit" Cro#ther has defined a bank as a dealer in debts- his o#n and
of other people. Sa#yers states" +e can define a bank as an institution #hose
debts ,bank deposits- are #idely accepted in settlement of other peoples debts
to each other
The class of financial institutions called commercial banks has one important
characteristic that distin!uishes it from all other kinds of financial institutions.
This important distinction is that it alone can hold deposits to be dra#n upon by
check" &t has the po#er to create and destroy money" #ithin limits" throu!h the
use of loans and demand deposits. Commercial banks lend money by creatin!
demand deposits and retire loans by cancelin! demand deposits.
The functions of modern commercial banks are numerous and overlap #ith
those of such other financial institutions. They are most sharply differentiated
from other financial institutions by the character of their principal liabilities. )nly
commercial banks hold demand deposits" #hich constitute the most important
component of money supply" thus banks are uni%ue amon! non-!overnmental
institutions as administrators of demand deposits and as money issuers. They
influence not only si.e of the money stocks but also the allocation of funds and
thus the direction and use of resources #ithin the system as a #hole. The
banks are in fact the heart of the modern currency system
OBJECTIVES OF THE STUDY:
There are some ob'ectives for makin! this study" those are as follo#s/
0. To !et a practical orientation and increase one1s e(posures.
2. To !et clear ideas about the bankin! activities.
3. To familiari.e oneself #ith a practical situation.
4. To !et an orientation bet#een theory and practice.
5. To analy.e the different deposit and loan scheme of The Premier
Bank Limited as a #hole.
SOURCE OF DATA
Sources of information for #ritin! this report are/
a. 6ifferent Procedure 7anual" published by The Primer Bank.
b. Personal e(perience !ained by visitin! different desks.
c. Study of old files.
d. Personal investi!ation #ith bankers.
e. 6ifferent circulars sent by 8ead )ffice of The Premier Bank and
Ban!ladesh Bank.
f. $nnual 9eport.
STRUCTURE OF THIS REPORT
&n the very be!innin! of this report a brief description of The Premier Bank
has been furnished and then in the subse%uent chapters" elaboration of the
t#o departments of branch" say :eneral bankin! and Credit has been !iven.
$t last fe# pa!es of the main repot" some problems in bankin! #hich are
observed #hile doin! #ork in the branch are detected alon! #ith some
recommendations to overcome these problems.
SCOPE OF THE STUDY
The Primer Bank Limited is one of the leadin! banks in Ban!ladesh but the
scope of the study is limited to the Banani Branch only. The report covers the
or!ani.ational structure" back!round" functions and the performance of the
bank.
LIMITATIONS OF THE STUDY
)nly three months are not enou!h to study deeply all types of deposit and
advance.
OVERVIEW OF THE PRIMER BAN LIMITED:
Bank! in "#r $"#n%r&:
The banks play an important role in the economy of the country. $fter
liberation e(pects the forei!n banks all banks #ere nationali.ed. These banks
#ere mer!ed and !rouped into si( commercial banks. )f the total si(
commercial banks ;ttara and Pubali #ere transferred to private sector from
0<=5. >o# there are four nationali.ed commercial banks namely $!rani"
?anata" 9upali" and Sonali Bank. There are five speciali.ed banks in our
country. &n addition to this" 42 private commercial banks are e(istin! in our
country at present.
THE PREMIER BAN
The Primer Bank Limited has created a ne# #ay of its o#n bankin! arena of
Ban!ladesh in terms of service to customer and value addition to its
stakeholders. &n has incorporated in Ban!ladesh as a bankin! company on
0@
th
?une 0<<< under the Company $ct 0<<4. Ban!ladesh Bank issued
bankin! license on 0A
th
?une 0<<< under the bankin! company1s $ct 0<<0.
The 8ead office of The Primer Bank is located at 42" Bemal $taturk 9oad"
Banani. Still no# it has opened 03 branches in different areas of the country.
OBJECTIVE OF THE BAN:
To encoura!e and motivate ne# entrepreneur to establish industries
and business in line #ith development of the national economy.
To boost up investment in private sector by financin! independently or
under syndication arran!ement.
To financin! forei!n trade of the country both in e(port and import.
To enhance savin!s tendency of the people by offerin! attractive and
lucrative ne# savin!s scheme.
To develop the standard of livin! of the limited income !roup by
offerin! consumer credit scheme.
To boost up mobili.ation of savin!s both from urban and rural areas.
To develop the model of participatory bankin!.
To develop competitive" most modern scientific and social #elfare
oriented bankin! institution on the country.
To finance the industry" trade and commerce throu!h conventional #ay
as #ell as by offerin! various customers friendly credit products.
MISSION OF THE BAN:
To be the most carin! and customer friendly provider of financial
services" creatin! opportunities for more people in more places.
To ensure stability and sound !ro#th #hile enhancin! the value of
shareholders investment.
To a!!ressively adopt technolo!y at all levels of operation to improve
efficiency and reduce cost per transaction.
To ensure a hi!h level of transparency and ethical standards in all
business transacted by the bank.
To provide con!enial atmosphere #hich #ill attract competent #ork
force .
To be socially responsible and strive to uplift the %uality of the life by
makin! effective contribution to national development.
ACTIVITIES:
The Premier Bank en!a!es in #ide ran!e of activities from small scale
lendin! to lar!e industrial pro'ect financin!. &t involves e(port and import
financin! as #ell as many other services" &ts ran!e of activities at a !lance
are as follo#s/
L"an! an'
a'(an$e!
Tra'e
)inan$e
De*"!i% O%+er !er(i$e!
Pro'ect loan
+orkin!
capital loan
Cash credit
)verdraft
Packin! credit
C trust receipt
8ouse
buildin!
finance
&mport finance
:uarantee
*(port
&mport
Current account
Savin!s account
Short term deposits
Fi(ed deposit
Bearer certificate of
deposit
>on resident forei!n
currency deposit
account
9esident forei!n
currency account
Special savin! scheme
Safe custody
,locker-
Travelers Che%ue
6emand draft
Pay order
Tele!raphic
transfer
Sellin! and buyin!
forei!n currency
Standin!
instruction
Lease financin!
AUTHORI,ED AND PAID UP CAPITAL:
$uthori.ed capital of the bank is taka 0@@@.@@ million and paid up capital of
the bank 222.@@ million as per 6ecember 30
st
2@@0.
CAPITAL ADE-UACY RATIO:
Capital ade%uacy ratio of the bank stood at 02.4AD on risk-#ei!hted asset on
6ecember 30
st
2@@0" #hich is #ell above the stipulated =D re%uired for the
bank operation in Ban!ladesh.
DEPOSITS:
6eposits of the bank have sho#n a remarkable increase by 0<D" #hich
reached taka 22@E.3< million at the end of the year 2@@0" compared to taka
0=5@.03 million in the precedin! year. The bank has introduced several
'e*"!i% !$+eme! to encoura!e and mobili.e savin!s. $s-
7onthly income scheme.
7onthly savin!s scheme
*ducation Savin!s scheme
Students credit pro!ram for hi!her education
Consumer credit scheme
9ural credit scheme- poverty alleviation
Fi(ed deposit scheme
LOAN AND ADVANCES:
Bank continued to e(tent credit facilitates to industries" trade" and commerceF
productive and priority sectors and to small and medium enterprises. 6urin!
the year 2@@0" credit e(panded by taka <E=.A4 million to taka 2@5A.<E million
#hereas it #as taka 0@=<.22 million in 2@@@. The banks credit %uality remains
vary sound.
$t the end of 2@@0 accumulated provision for loan losses amounted to 22.A@
million. &mportant feature of the loan and advances is that it has no inside
lendin! to its directed. There ere no instances of actual #ritten off.
CUSTOMER SERVICES:
The Premier Bank ensures better customer services. Premier bank has the
follo#in! arran!ement of remittance #ithin and outside the country/
,a- Pay order
,b- 6emand draft
,c- Tele!raphic transfer
INVESTMENT:
&nvestment of the company for 2@@0 #as 2A@.03 million #here in 0<<< it #as
only E@ million.
Year In(e!%men% .in mi//i"n0
0<<< E@
2@@@ 04@.05
2@@0 2A@.03
BRANCH NETWOR:
The bank covers by its activities all the important tradin! and commercial
centers of the City of 6haka" Chitta!on! and Brahmanbaria. $s on 7ay 2@@3"
it had 03 branches #ithin Ban!ladesh. &t is !oin! to open branches at
*lephant 9oad" 9a'shahi" Bo!ra" Savar" Barisal" and Sylhet and in other
places in a short time. $lmost all the important branches are e%uipped #ith
computer in addition to the modern facilities and lo!istics and professionally
competent manpo#er.
DHAKA
Gulshan
Diskusha
Imamgonj
Kawranbazar
Motijheel
Banani
Uttara
KHULNA
CHITTAGONG
Agrabad
Khatungonj
ASHUGONJ
MEGHNAGHAT
PROFILE:
Pr")i/e
")
Premier Bank Limi%e'
PBL
PBL is a private
commercial
bank
*stablished in
0<<<
C"re Va/#e
0- &t emphasi.es mainly on the
customer1s satisfaction
2- &t creates employment
opportunities
3- &t creates employment
opportunities
4- &t invest on the profitable
sector to ma(imi.e return and
!ive a healthy return to the
deposit
5- &t !ive client prompt services
C"re *r"'#$%
a- 6eposit
b- Loan
c- )ther
customer
services
O*era%i"na/ area!
a- 03 branches all over the
countries
b- = branches in 6haka.
c- t#o branch in
Chitta!on!
d- )ne branch in $shu!on'
e- )ne branch in Bhulna
f- )ne branch in
7e!hna!hat
Premier Bank1!
M"%%"
Service first
O(era//
*er)"rman$e
Authorize capital &
Paid capital/ 0@@@ C
222. Deposit:
22@E.3< Advances:
2@5A.<3 Investment:
2A@.03 Operating
profit/ 024.04 ,taka in
million-
C"m*e%i%"r!
6haka Bank Ltd.
>ational Bank Ltd.
Primer Bank Ltd.
South *ast Bank Ltd.
*astern Bank Ltd.
>C Bank Ltd.
6utch Ban!la Bank
&F&C Bank Ltd.
*(im Bank Ltd.
7ercantile Bank Ltd.
YEARLY PERFORMANCE OF THE BAN:
Taka in 7illion
Par%i$#/ar! 2333 4555 4552 4554
$uthori.ed Capital 0@@@.@@ 0@@@.@@ 0@@@.@@ 0@@@.@@
Paid up Capital 222.@@ 222.@@ 222.@@ 23<.AE@
9eserve Fund @.@@ 2.=E 25.3@ 2E.52
6eposits 0424.24 0=5E.03 2@5A.<E 523E.A@
$dvances 00.20 0@=<.22 A433 42=@.A2
&nvestments E@.@@ 04@.05 2A@.03 E=@.<
Forei!n Trade Business 54.2A 034=.2@ E05=.43 -
Forei!n 9emittance - 04.E2 5A.50 -
&ncome 2@.E= 224.3E 425.40 EE3.=42
*(penditure 30.43 0<<.0= 0<0.2A -
)peratin! Profit -0@.A5 25.0= 024.04 -
Fi(ed $ssets EA0 4E.A< 4=.5< 0E@.A0<
>umber of Branches 2 E A 02
>umber of *mployees =E 02A 0E4 225
G $nnual 9eport of The Premier Bank.
DIFFERENT DEPOSIT OF PREMIER BAN
CURRENT DEPOSIT ACCOUNT
6enera/ C+ara$%eri!%i$!:
a. C6 accounts are unproductive in nature as banks loanable fund
is concerned. Sufficient fund has to be kept in li%uid form" as
current deposits are demand liability.
b. Thus hu!e portion of this fund become non-performin!. For this
reason banks do not pay any interest to C6 $ccountholders.
c. There is no restriction on the number and the amount of
#ithdra#als from a current account.
d. Service char!es are recovered form the depositors since the
bank make payments and collect the bills" drafts" che%ues" for
any number of times" daily.
e. Businessmen and companies are the main customers of this
product.
f. The Banks !rant the loans and advances throu!h current
accounts.
!. &n practice of Premier Bank" a minimum balance of Tk. 2@@@
has to be maintained.
SAVIN6S DEPOSIT ACCOUNT
6enera/ C+ara$%eri!%i$!:
$s per BB instruction ==D of SB deposits are treated as time liability and
02D of it as demand liability.
a. &nterest is paid on this account. Primer Bank offers a reasonable
rate of =.5D of interest for SB $HC.
b. :enerally" banks re%uire a A-day prior notice if the total amount of
one or more #ithdra#als on any date e(ceeds 25D of the balance
of the account unless is !iven" but in Premier Bank there is no
restriction about dra#in! money form savin!s account. $ny time
holders may dra# money of any amount #ithout prior notice.
c. :enerally householders" individuals and other small-scale savers
are the clients of this account.
d. 7inimum Balance of Tk. 2@@@ is to be maintained.
e. &nterest #ill be counted on the avera!e balance of month.
f. >o service char!e as it is an interest bearin! account.
FDR SECTION:
This branch maintains a separate section for maintainin! fi(ed 6eposit. F69
is an important factor for the bank and volume of F69 determines the
investment base of the Bank. Basically this is the mobili.ation unit of the
Bank. This section deal #ith the customers of short-term deposit ,ST6-" term
deposit ,T6- $HC" bearer certificate of deposit ,BC6-.
SHORT TERM DEPOSIT ACCOUNT .STD0
6enera/ C+ara$%eri!%i$!:
a. Customers deposit money for a shorter period of time.
b. ST6 account can be treated as semi-term deposit .
c. ST6 should be kept for at least seven days to !et interest.
d. The interest offered for ST6 is less than that of savin!s deposit
e. &n practice. Premier Bank offers E.5D rate interest for ST6
account.
f. Iolume of ST6 $HC is !enerally hi!h. &n premier Bank" various
bi! companies" or!ani.ations keep money in ST6 accounts.
!. Fre%uent #ithdra#al is discoura!ed and re%uires prior notice.
TERM DEPOSITS
6enera/ C+ara$%eri!%i$!:
a. Popularly" it is kno#n as Fi(ed 6eposit 9eceipt ,F69-" Term
deposits are made #ith the bank for a fi(ed period of time.
b. The banks need not to maintain cash reserves a!ainst these
deposits and therefore" the bank offers hi!h rate of interest on
such deposits.
&n Premier Bank" fi(ed deposit account is opened in t#o forms- 7idterm
,7T6-" #hich is less than one year" and the other is Tem 6eposit" #hich is
more than one year. Types of F69 maintained by this branch alon! #ith their
respective interest rate.
Period 0 C 2
7onths
3
7onths
E
7onths
02
7onths
24
7onths
3E
7onths
Proposed rate
per annum
=.A5D <.25D <.5@D 0@.@@D 0@.5@D 00.@@D
BEARER CERTIFICATE OF DEPOSIT .BCD0 ACCOUNT
6enera/ C+ara$%eri!%i$!:
a. The bearer certificate of deposit is a document of title similar to
time deposit receipt issued by the bank.
b. But in case of BC6 account" no name and address are mentioned.
The customer opens this type of account as a bearer. +hoever
presents it to the bank has the ri!ht to !et the money.
c. There is prescribed interest rate on such funds.
Ban!ladesh Bank has order to close all these accounts and not to open any
further accounts.
The Premier has already introduced 4 ,four- yieldin! deposit scheme" #hich
have been hi!hly acclaimed by the depositors. These are.
0. 7onthly Savin! Scheme ,7SS-
2. 7onthly &ncome Scheme ,7&S-
3. *ducation savin! Scheme ,*SS-
4. Special 6eposit Scheme ,S6S-
MONTHLY INCOME SCHEME:
;nder 7onthly &ncome Scheme any individual can keep the deposit in taka
5@"@@@ or in multiples thereof. There is no upper limit.
YOUR DEPOSIT:
Tk. 5@"@@@ Tk. 0"@@"@@@ Tk. 2"@@"@@@ Tk. 5"@@"@@@
BENEFIT EACH MONTH
FOR 7 YEARS:
Tk. 45@ Tk. <@@ Tk. 0"=@@ Tk. 4"5@@
FOR 8 YEARS:
Tk. 5@@ Tk. 0"@@@ Tk. 2"@@@ Tk. 5"@@@
Benefits ne!otiable for deposit of Tk. 0@"@@"@@@ or above. Payment of benefit
#ill start after 3@ days of deposit. &n case of e(treme emer!ency if any
individual make premature enactment" interest #ill be paid at savin!s rates.
6epositors can also avail loan up to =5D of the deposit. >omination is also
acceptable. >o photo!raph or introduction is re%uired for openin! this
account. Ban!ladeshis livin! abroad may also open this account for providin!
fi(ed amount of income to their dependentH families in Ban!ladesh.
EDUCATION SAVIN6 SCHEME:
These days providin! a !ood education for children are really costly. To
ensure bearin! such costly education e(penses of children every body need
to start savin!s early. The scheme provides opportunity for meetin!
educational e(penses of children at school" colle!e or university.
Beep deposit of Tk. 25"@@@ or any multiple thereof for 5 years. There is no
upper limit. Children can maintain their educational cost on monthly basis for
subse%uent five years or lump sum at maturity.
Term 6eposit 7onthly benefit
For 5 years
or lump sum
payment
5 Jears Tk. 25"@@@ Tk. <=@ Tk. 44"@@@
5 Jears Tk. 5@"@@@ Tkl. 0"<E@ Tk. =="@@@
Loan can allo#ed up to =5D of deposits. &n case of e(treme emer!ency if
any one make premature enactment" interest #ill be paid at savin! rate. The
student in the merit list #ill be a#arded special stipendH !ift.
SPECIAL DEPOSIT SCHEME:
7inimum deposit of this is 0@"@@@ or its multiples. Term of this deposit is 5 or
0@ years. $n order instrument mentionin! the amount payable after maturity
shall be issued favorin! the depositors. The instrument shall not be enchased
before maturity. 8o#ever" if re%uired" the instrument may be discounted at
the counter of issuin! Bank at 05D interest for the remainin! period of
maturity provided further that under no circumstances" the depositor shall !et
less than the deposit at the initial period. $ny other bank" or!ani.ation" forms
or person may also discount the instrument #ith intimation to the issuin!
Bank. &n that case" the discountin! bank" or!ani.ation" firm or person may
hold the instrument till maturity or present at the counter of issuin! Bank for
immediate payment at the discountin! rate.
The amount payable at maturity a!ainst deposit of Tk. 0.@@ lac is sho#n
belo#/
Term! Ini%ia/ De*"!i% Pa&a9/e a% Ma%#ri%&
5 Jears Tk. 0"@@"@@@ Tk. 0"E5"@@@.@@
A Jears Tk. 0"@@"@@@ Tk. 2"@@"@@@.@@
0@ Jears Tk. 0"@@"@@@ Tk. 3"@@"@@@.@@
The depositors may select nominees. &n case of death of the depositor" the
amount at discounted rate #ill be payable to the nominee or the nominees or
in the absence of nomination" to the le!al heirs of the depositors. Loan facility
may be allo#ed up to =@D of deposit a!ainst lienH pled!e on such instrument
at Banks prescribed rates and rules. &n case of lost instrument" duplicate
instrument shall be issued as per rules of instrument in F69. The depositor
shall fill up to prescribed form desi!ned for this purpose. The Bank reserves
the ri!ht to make chan!esH alteration amendmentH additionH modification etc
to the account and to its related char!es fees etc at any timesH sta!es #ithout
assi!nin! any reason #hatsoever.
SECTOR WISE DEPOSIT OF YEAR 4552
De*"!i% Taka :
Current 6eposit 05<"0=0"3=3 24.2@D
Short Term 6eposit 054"@3@"E3A 23.00D
Staff Security 6eposit 2@@"@@@ @.@3D
6eposit Forei!n Currency 0"5A="E4A @.23D
7onthly Savin! Scheme 34"A5A"<EE 5.24D
7onthly &ncome Scheme 3A"A@@"@@@ 5.E=D
*ducation Savin! Scheme 2"AE@"<@3 @.40D
Special 6eposit Scheme 2"<AA"=@E 4@.44D
Sundry 6eposit 2E<"44A"A<E 4@.EED
T"%a/ ;;4<;78<27= 255:
S"#r$e/ $nnual 9eport 2@@0
SECTOR WISE DEPOSIT OF YEAR 4554
De*"!i% Taka :
Current 6eposit 30E"05@"0A@.30 E.@3D
Savin! 6eposit E5@"4=5"5A0.A@ 02.42D
Short Term 6eposit 204"355"4@@.E@ 4.@<D
Fi(ed 6eposit 2"<3<"50@"@A<.4= 5E.03D
Bearer Certificate of 6eposit E4"22E"054.@@ 0.22D
Staff Security 6eposit 3E@"@@@.@@ @.@@E=D
6eposit in Forei!n Currency 4"E=3"444.2A @.@@=<D
7onthly Savin! Scheme =3"A4="054.A0 0.5<D
Special 6eposit Scheme 0A"2=5"05<.=0 @.33D
7onthly &ncome Scheme 3E="05@"@@@.@@ A.@3D
*ducation Savin! Scheme 5"5@"0@@.0A @.0@D
Sundry 6eposit Scheme 5A2"2AE"553.3< 0@.<2D
S"#r$e/ Consolidated Statement of affairs on 30-02-2@@2 ,before-.
CREDIT
Thi s i s the survi val uni t of t he bank because unt i l and unl ess t he
success of thi s sect i on the survi val i s a %uest i on t o every bank. &f
t hi s sect i on i s not properl y #orki n! t he bank i t sel f may become
bankrupt . Thi s i s i mport ant because t hi s i s the earni n! uni t of t he
bank. Banks are accept i n! deposi t s f rom t he deposi t ors i n
condi t i on of provi di n! i nt erest t o t hem as #el l as saf e keepi n!
t hei r money. >o# t he %uest i on may !radual l y ari se ho# the bank
#i l l provi de i nt erest to the cl i ent s and t he si mpl e ans#er i s K
advance. +hy t he bank provi des advances t o t he borro#ers-
a. To earn i nt erest f rom t he borro#ers and !i ve the deposi t ors
i nt erest back.
b. To accel erat e economi c devel opment by provi di n! di fferent
i ndust ri al as #el l as a!ri cul t ural advances
c. To creat e empl oyment by provi di n! i ndust ri al l oans
d. To pay t he empl oyees as #el l as meet i n! the i nt erest of
deposi t ors and sharehol ders.
Credi t i s a cont i nuous process. 9ecovery of one credi t !i ves ri se
t o anot her credi t . & n t hi s process of revol vi n! of f unds" bank
earns i ncome i n t he f orm of i nt erest . $ bank can i nvest i t s f und i n
many #ays. Bank makes l oans and advances t o t raders"
busi nessmen" and i ndust ri al i sts. 7oreover nat ure of credi t may
di ffer i n t erms of securi t y re%ui rement " di sbursement provi si on"
t erms and condi t i ons etc.
+e of t en use l oans and advances as an al t ernat i ve t o one
anot her. But academi cal l y t hi s concept i s i ncorrect . $cademi cal l y
advances i s t he combi nat i on such i t ems #here l oans i s a part
onl y. For t hi s credi t sect i on of t he banks i s kno#n as advance
sect i on. $cademi cal l y $dvance i s t he combi ned f orm of the
f ol l o#i n! i t ems
$dvances
Cash Credit
+orkin! Capital
Loans )verdraft
Bills Purchased
$nd 6iscounted
Vari"#! %&*e! ") a'(an$e! an' in(e!%men%:
$ commercial bank !enerally !ives short-term fund to various sector of the
country like industrial loan" a!ricultural loan" consumer credit and so on.
Short-term loan is !enerally payable on demand or at short notice. &n practice
ho#ever banks allo# midterm and also some lon!-term loan. BankLs credit
creates deposit in the country .&t means that the borro#er of the credit spends
that money in makin! payment to his other creditors" Those people deposit
that money partly or #holly to their accounts on their respective banks.
Loan on the basis of security
On the basis of the securit bank credit is of two t!es"
#lean or unsecured credit
$ecured credit
C!ean cre"it %hese are the ad&ances of the bank' (()hich are disbursed
based on the !ersonal securit of the borrower* $uch ad&ances are not
made to the ordinar customer of the bank' these t!es of credit are
gi&en to the &alued customer who ha&e a good credit standing*
Secure" cre"it In case of the secured ad&ances the bank has recourse
to the securit in addition to the !ersonal securit of the borrower* It
means that the borrower is also liable for an shortfall that ma arise
after the sale !roceeds of the securit* %he notable feature is that a
secured loan is co&ered b the assets owned b the borrower or b a third
!art the market &alue of which is not in an !oint of time is less than the
amount of loan* %he securit ma be !ledged' mortgaged' h!othecated'
guaranteed or lien* +,am!le of some good securities are land' building'
machiner' stock in trade' documents of the title to goods' -D.' share'
debenture' bills recei&able etc*
C!assification on the basis of the nature of the !oan
O&erdrafts
#ash credit
Demand loan
O#er"raft O&erdraft are those drawings which are allowed b the
bank in e,cess of the balance of the current account u! to a s!ecified
amount for a definite !eriod of time* %he ad&ances ma be clear or
secured %he customer can freel o!erate on his account But this t!e of
ad&ances is irregular in nature* In !ractice a bank ma also sometimes
allow o&erdrawing in current account without an !rior arrangement in
order to honor a che/ue of a &alued customer who has drawn it for a little
higher amount than balance* %his t!e of ad&ance is known as tem!orar
ad&ances'
Cash cre"it #ash credit accounts are basicall current account
and are o!ened under !rior arrangement for allowing credit facilities*
%he basic distinction between cash credit and the o&erdraft is that in
case of o&erdraft an account is o!ened with an intention of credit
balance and in case of cash credit there is an account for drawing an
ad&ance' cash credit facilities are allowed through these accounts are
known as cash credit ad&ances' another ad&ances allowed through
current accounts are known as o&erdraft* %he !rimar securities
against which ad&ances are gi&en are generall marketable securities'
stock in trade of the borrower etc' In case of such ad&ances the
borrowers gi&e !ledge or 0!othecation of the securities and take
deli&er wholl or !artl according to his business re/uirement* In a
word cash credit are ad&ances' which are made based on the !ledged'
or h!othecation of the borrowers securit*
Cash cre"it $hy%o& %his t!e of cash credit is made to the indi&idual
firm' retailer' wholesaler as well as the industr* Generall this t!e of
credit is gi&en to the firm to meet the working ca!ital re/uirement of
the firm against the h!othecation of the goods the traded as the
!rimar securit* It is allowed under the categor1
2i3 4#ommercial 5ending4 when the borrower is other than an industr)
and 2ii3 working ca!ital4 when the client is an industr*
Cash cre"it $%!e"'e& In this t!e of credit cash credit are allowed to
indi&idual firm' retailer' wholesaler' and also to the industr to meet
their working ca!ital re/uirement against the !ledged of the goods as
the !rimar securit*
De(an" Loan A demand loan is an ad&ance for a fi,ed amount*
%he disbursement of demand loan in each case is made at a lum! sum*
An subse/uent de!osit of fund is considered the reduction of loan
amount* %he borrower is not !ermitted to an further borrowing with
same securit* If additional drawing is re/uired beond the original
loan amount a fresh loan is need to be granted and the outstanding of
the original loan is adjusted*
E)%ort financin' +,!ort financing is that kind financing to the &arious
!arties of the bank which is re/uired to facilitate e,!ort* %he major
earnings of our e,!ort comes from the read1made garments sector till
now* $o the e,!ort financing of our bank is mainl concentrated to the
garments industries of our countr* +,!ort financing is mainl of two
t!es*
6* 7re shi!ment financing
8* 7ost shi!ment financing
*re shi%(ent financin'1 this is the credit facilit e,tended to the
e,!orter !rior to the actual shi!ment of goods for e,!ort1 $uch credit
includes
i' 9orking ca!ital solel for +,!ort
ii 7rocuring and !rocessing for raw materials
III' 7acking and trans!orting of goods for e,!ort
i&* 7ament of insurance !remium
& Ins!ection fee
&i' -reight charge etc
Pre shipment credit facilities are essentially a short form credit" #hich is to be
li%uidated by purchasin! of e(port bill coverin! the particular shipment. :enerally the
Pre shipment credit takes the follo#in! forms-
7acking credit
Back to back credit
.ed clause letter of credit
*ac+in' cre"it
Packin! credit" is usually a short-term advance !ranted by the bank to an e(porter for
assistin! him to buy" process" pack and ship the !oods. Such a credit facility is
allo#ed usually by #ay of cash credit #ith or #ithout any security. 6ependin! on the
arran!ement made by the customer the loan may be disbursed #ithout creatin! any
char!e on the !oods. &n that event the borro#er submits the e(port bill to the bank
and the bank ad'usts the advance by ne!otiation of their documents. $lternatively the
!oods purchased or produced from time to time may be pled!ed or hypothecated to
the bank to cover the advance
,ac+ to bac+ cre"it" It is a secondar credit o!ened b the ad&ising
bank in fa&or of a domestic su!!lier on behalf of the beneficiar of the
original foreign 5:#* %he beneficiar of a documentar credit for fulfilling
his obligation under the credit o!en a counter credit in fa&or of another
!art to shi! the goods of his !urchaser or im!orter* %his is known as back
to back letter of credit
-e" c!ause !etter of cre"it under this L/C the issuing bank instructs the
negotiating bank to make ad&ance to the beneficiar u! to an aggregate
amount in order to enable him to !urchase and !rocess merchandise* %he
ad&ance with interest is to be realized on !urchase of the e,!ort bill to be
tendered b the e,!orter* In this case all risk goes to the issuing bank
since the issuing bank undertake the !ament of such ad&ance with
interest* In the e&ent of non deli&er of shi!!ing documents b the
beneficiar in time the issuing bank will reco&er the amount of ad&ance
!lus interest with other charge from the a!!licant who assume all risk
*ost shi%(ent financin' 7ost shi!ment financing is a financial
accommodation e,tended to an e,!orter against e,!ort document after
actual shi!ment of the goods* ;ormall the !eriod of recei&ing !ament
&aries from < to = months* But an e,!orter is a manufacturer or a regular
su!!lier and has to make immediate !ament to the su!!lier of raw
materials' local seller of goods or to !rocure goods for further shi!ment*
$o an e,!orter alwas feels necessit of !ost shi!ment bank)s finance to
o&ercome his re&ol&ing need of working ca!ital in the !rocess of e,!ort
trade*
*urchase of e)%ort bi!! $.D,*&
It is also termed as the foreign document bill for !urchase or -DB7* %his is
the most widel used method of bank finance in the e,!ort trade It is the
!urchase of e,!ort bill at the !ost shi!ment stage* In e,!ort' customer
who draws an e,!ort bill waits for its !ament b the drawee and face
immediate crisis of fund to maintain the usual flow of trade acti&it* 0ere
the bank e,tend financial accommodation to the concerned e,!orter b
allow him to enjo a -B7 2foreign bill !urchased3 limit with !rior a!!ro&al
of the head office* %he bank allows the e,!orter taka e/ui&alent of foreign
bill amount after deducting its discount and commission as !ar e,isting
rule* 9hile !urchasing an e,!ort bill the bank a!!lies ruling OD buing
rate of e,change*
Ne>"%ia%i"n ") '"$#men%!: >e!otiation of documents under the letter of
credit is the usual method of financin! e(porter at the post shipment sta!e. &n
this system after the shipment of !oods" the e(porter present the relative
document to the ne!otiatin! bank for ne!otiation .The documents that are
obtained should be verified strictly #ith the terms and condition before
ne!otiation.
P"!% im*"r% )inan$in>:
L"'>men% ") im*"r%! 9i// ") e?$+an>e: The liabilities of openin! banker
under the import letter of credit are dischar!ed #hen payments are made to
the e(porter b- ne!otiation of the bills by the advisin! i.e. the ne!otiatin!
banker. These payments in forei!n currency convert to advances to the
importerLs accounts in e%uivalent local currency as soon as the bills are
received and accounted for throu!h the bill of e(chan!e account. The total
outstandin! in the bill of e(chan!e account appear as advances on the
customer account until the importers retire the bill or the bank clear the
!oods. The openin! bank as holder for the value holds the bills.
Loan a'ainst i(%orte" (erchan"ise 9here the im!orter fails to retire
the documents e&en after the arri&al of the consignment' the banker clear
the goods and takes the deli&er of the same b !aing customs dut and
sales ta, etc* %he bill amount along with other e,!enditure incurred b
the bank is accounted for in his books as loan against im!orted
merchandise 25IM3 b transfer credit of the bill amount to the bill of
e,change account* %hese outstanding are actuall not direct ad&ances to
the customer account* In case of 5IM the !ossession of the good is under
the control of the bank* %he customer graduall !as the bank for the
re!ament of 5IM
Lo"'(ent of in!an" !etter of cre"it" %he bills drawn b the beneficiar
under an inland letter of credit are negotiated b the ad&ising branch and
!aments are made against on behalf of the o!ening branch through inter
branch general account* Immediatel on recei!t of the bill' the o!ening
branch reimburses the negotiating branches b debit to DD. account in
case of demand bill and BB. account in case of issuance bill4* %he amount
of the bill then a!!ears in the books of the o!ening branch as ad&ance on
account of the bill recei&ed for realization and the documents are held b
it as holder for &alue until retired b the o!ener*
L"an a>ain!% %r#!% re$ei*% .LTR0: $dvances allo#ed for retirement of
shippin! documents and release of !oods imported throu!h LHC falls under
this head. The !oods are handed over to the importer under trust #ith the
arran!ement that sale proceeds should be deposited to li%uidate the
advances #ithin a !iven period.
C/a!!i)i$a%i"n "n %+e 9a!i! ") !e$%"r ") $re'i%:
AGRICUITURE CREDIT
#redit facilities to the agricultural sector falls under this categor* It is
subdi&ided into two major heads4
a) Loans to primary' producers:
%his sector of agricultural financing refers to the credit facilities allowed to
!roduction units engaged in farming' fishing' forestr or li&estock but does
not include traders of agricultural !roducts*
b) Loans to input dealers/distributors:
It refers to the financing allowed to in!ut dealers and 2or3 distributors in
the agricultural sectors* Until the Bank mobilizes enough funds and
e,tends its outreach to rural areas' there would not be much sco!e for
disbursement of loans to !rimar !roducts*
TE-M LOAN .O- LA-GE / MEDIUM SCALE INDUST-0
This cate!ory of advances accommodate the medium and lon! term financin! for
capital machinery and e%uipment of ne# industries and of the e(istin! units #ho are
en!a!ed in manufacturin! !oods and services.
Term financin! to tea-!ardens is also be included in this cate!ory dependin!
on the nature and si.e of investment re%uires.
TE-M LOANS .O- SMALL / COTTAGE INDUST-IES
%hese are the medium and long1term loans allowed to small > cottage
manufacturing industries* $mall industr is !resentl defined as those
establishments whose total in&estment in fi,ed ca!ital such as land'
building' machiner and e/ui!ment 2 e,cluding ta,es and duties3 does not
e,ceed <? million taka 2cottage industries also fall within this definition3*
Bangladesh Bank sometimes !ro&ides interest subsid at &aring rates to
the banks on loans e,tended under this categor'
1O-KING CA*ITAL
5oans allowed to the manufacturing units to meet their working ca!ital
re/uirements' irres!ecti&e of their size' big' medium or small' fall under
the categor* %hese are usuall continuing credits and as such fall under
the categor* %hese usuall take the character of continuing credits*
E2*O-T C-EDIT
Credit facilities allo#ed to finance e(ports a!ainst letter of Credit Hand H or
confirmed e(port orders fall under this cate!ory. &t is accommodated under
the heads M*(port Cash Credit ,*CC-" Packin! Credit ,PC-" Forei!n
6ocumentary Bills Purchased ,F6BP-" Local *(port Bills Purchased etc.
COMME-CIAL LENDING
$hort1term loans and continuing credits allowed for commercial !ur!oses
other than e,!orts fall under this categor *It includes im!ort financing'
financing for internal trade' ser&ice establishment' etc* ;o medium and
long term loans are accommodated here* %his categor of ad&ances are
allowed in the form of 2I3 5oan against im!orted merchandise 25IM3' 2ii3
5oans against trust recei!t 25%.3' 2iii3 7ament against im!ort documents
27AD3' 2i&3 $ecured O&erdrafts 2$OD3' 2&3 #ash #redit 2##3' 2&i3 5oan
2Gen*3' etc for commercial !ur!oses*
UNDE- S*ECIAL C-EDIT SCHEME
a3 #onsumers credit scheme
b3 .ural credit scheme for !o&ert alle&iation
c3 Monthl income scheme
d3 Monthl sa&ing scheme
e3 +ducation sa&ing scheme
f3 $tudents Micro credit !rogram for higher education
g3 Other such schemes as and when introduced b the Bank *
OTHE- C-EDITS
$ny loan that does not fall under any of the above cate!ories is considered under the
cate!oryL MothersM. &t includes loan to ,&- transport e%uipment" ,ii- construction #orks
includin! housin! ,commercialHresidential-" ,iii- #ork order finance" ,iv- personal
loans" etc.
A"#ance" to #arious %ersons
$nyone capable of openin! of an account can borro# from the bank. There are
certain types of borro#ers in re!ard to #hom the bank must take care in complyin!
#ith the le!al and other formalities to safe!uard his interest.
Min"r: :enerally a minor is not entitled to !et any credit facilities from the
bank accordin! to the la#. This is because of the fact that a minor is not
le!ally capable of enterin! into a valid contract. But the scenario #ill be
different #hen the advances are made to the minorLs 'oint or partnership firm
account because in this case the credit #ill be recoverable from the person
other than the minor.
Joint account Generall !ersons o!erate under a joint account do not
entitled to get the o&erdrawing* As such a re/uest for ad&ance is made b
all the !art and debt created thereb will be joint liabilit* In the e&ent of
death of one account holder the bank can take recourse to the sur&i&or or
to the legal re!resentati&e of the deceased !artner*
*ro%rietorshi% fir( An ad&ance ma be allowed to the firm name
against the charge document e,ecuted b the !ro!rietor* It is not !ro!er
to allow an ad&ance in the name of the firm through the !ro!rietor)s
!ersonal account but it is the !ro!rietor who is solel res!onsible for the
ad&ances granted to the !ro!rietorshi! firm*
*artnershi% fir( 9hile allowing the credit facilit to the !artnershi!
firm the bank should ha&e a co! of registered !artnershi! deed on his
record to note if there is an s!ecial !ro&ision regarding bank account and
borrowing of the firm* +&er !artner is se!aratel and jointl liable for the
debts of the firm to full e,tent of his means* %he bank will make scrutin
that the re/uest for the ad&ance and the mandate for the o!eration and
e,ecution of the documents signed b all the !artners* It)s a registered
mortgage of firm)s !ro!ert and is offered to secure an ad&ance* %his
should be !ro&ided for in the joint mandate' as a !artner has no im!lied
authorit to gi&e a registered mortgage of the firm@s !ro!ert*
Limi%e' $"m*an&: &n most of the cases the ma'or borro#er of the bank are
the limited companies. $s like the other case" securities should be offered in
case of sanctionin! credit to the limited company account. +hen the %uestion
of !rantin! any credit facility to a limited company arises" the bank #ill
e(amine the relative resolution of the director to find #hether the loan facility
#ill !ive personal benefit to the directors. &n practice" in most of the cases the
memorandum and articles of association contained provisions for the
borro#in! po#er of the directors. &n addition to the securities offered by the
company and irrespective of #hether they are sufficient or not for !ivin! the
advance" they should insist on the personal !uarantee of the directors #hich
#ould not only further secure the advance but also sho# the directors o#n
confidence in the company and impel them to take steps for repayment of the
loan.
Non3tra"in' concern ;o credit should be gi&en to the non1trading
concern unless there is a resolution of the managing committee in this
res!ect* Borrowing b such an organization should be !ro!erl secured*
-or these organizations unless incor!orated under the com!an act' ha&e
no legal entit and can not be sued b their names and also the indi&idual
members who administer the fund are not !ersonall liable*
Co3o%erati#e society %he borrowings of the coo!erati&e societ from
other than its members are restricted to a ma,imum amount datelined
annuall at a general meeting of the societ subject to the a!!ro&al of the
registrar of coo!erati&e societ* 9hile granting ad&ance to the coo!erati&e
societ' the bank should ensure this re/uirement* ;ormall ad&ances to
the coo!erati&e societ are !ro!erl secured and where no securit is
a&ailable at least !ersonal guarantee of the office bearer should be
obtained*
Cor%oration an" *ub!ic bo"y generall the borrowing !ower of the
cor!oration or the !ublic bod is laid down on the relati&e act* %he bank
before allowing an ad&ance should ascertain b the reference to the said
act*
E)ecutor4 a"(inistrator4 an" trustee where the bank is re/uired to
allow an ad&ance through the e,ecutorshi!s or administratorshi! account
the same should be allowed onl against s!ecific securit or at least
against third !art) guarantee*
Li5ui"ator4 recei#er %he 5i/uidator or recei&er can raise loan for the
!ur!ose of discharging their res!ecti&e duties against the securit of the
!ro!ert of the concern com!an or the insol&ent* Before allowing such
ad&ance the bank &erif the detail terms and condition of their
a!!ointment regarding the bank account and borrowings*
N"n re!i'en%: the bank is !enerally not permitted to !rant loan and
advances ,secured or unsecured- to the non-resident account holder #ithout
prior approval of Ban!ladesh Bank.
Consu(er cre"it sche(e
#onsumer credit scheme offer the customer to bu their needed item
without !aing the full cost of the item* Bank used to bu the !roduct in
fa&or of the customer* #ustomer needs to re!a the loan with a fi,ed
installment for a certain !eriod of time* %he installment consists of
!rinci!al !ament as well as interest* $ince Bangladesh is one of the
!oorest countr in the world the majorit of our !o!ulation is forced to
li&e a substandard life* %he middle class famil can)t afford to bu their
essential utilit !roduct with their fi,ed monthl income* In this
connection banks in our countr has introduced the scheme of consumer
credit to e,tend credit facilit to limited and fi,ed income grou! to
im!ro&e their standard of li&ing* 5ike our countr consumer credit is &er
!o!ular in most of the de&elo!ed and de&elo!ing countr* #onsumer credit
is designed to finance the fi,ed income !eo!le to bu essential commodit
to be re!aid on installment basis at different rate for different !roduct*
#onsumer credit scheme is based on the trust and the consumers abilit
and willingness to re!a*
Ma6or ob6ecti#es
%o e,tend credit facilit to the limited income grou!*
%o de&elo! standard of li&ing of middle and u!!er middle class*
%o !artici!ate in the socio economic de&elo!ment of the countr*
%o e,tend credit to a wide range of customers
Subsi"iary ob6ecti#e
%o !ro&ide in&estment facilit to the de!ositor of the bank*
%o !o!ularize bank)s !roduct among the mass !eo!le*
%o increase the relationshi! network of the bank*
%o increase the number of beneficiar through small t!e of credit*
%o establish a !artici!ator economic sstem*
E!i'ibi!ity of the c!ient
Different banks ha&e set u! different criteria to get the loan* Among them
the commons are"
63 Age 8? to AB ears
83 $er&ice holder in go&ernment' semi go&ernment organization'
autonomous bodies' cor!orations' multinational cor!orations' local
renowned com!anies' teachers of educational institution' officers of
armed forces' members of !rofessional bodies etc* %he a!!licant
must ha&e a credible re!utation* In 7remier Bank' monthl
dis!osable income should not be less than A'???61 or three times of
the monthl installment for ser&ice holders*
<3 %he rules for the businessmen to get credit from 7remier Bank are
that monthl dis!osable income should not be less than taka
6?'???:1 or three times of the monthl installment*
C3 #redit not a&ailable for !ro!rietorshi! firm' 5imited com!anies'
%rusts' #lubs' Association' Other institution' and minors
E!i'ib!e ite(s un"er the consu(er cre"it sche(e
Do(estic a%%!iances
Air conditioner' refrigerator' dee! freezer1 washing machine' air cooler'
mobile !hone' cooking range' microwa&e' furniture* $ewing machine* and
other domestic a!!liances*
7ehic!es
#ar' microbus' small jee!s' motorccle etc*
Office E5ui%(ent
7ersonal com!uter' !hotoco!ier' I*7*$*' U7*$' small non1commercial
generator' and other office e/ui!ment*
Entertain(ent ite(s
%ele&ision' D#D' D#.' music sstem' sound sstem' &ideo camera etc*
Intan'ib!es
7edical e(pense" holiday" marria!e etc.
Others
0ome re!airs' redecoration' and reno&ation*
Security8co!!atera!
Generall it de!ends on the bank)s assessment of risk in making the
credit* Banks !refer financial instrument like -D.' $a&ings certificate'
9age +arners De&elo!ment Bond' h!othecation of asset' shares of1
!ublic limited com!an* 7remier Bank uses the h!othecation of asset as
securit for financing consumer durable and &ehicles* 0!othecation of the
!urchased item shall be the !rimar securit against the loan* But unlike
the consumer durableE loan for medical e,!enses' holida' marriage'
home re!air etc* will &irtuall be on clean basis* In case of loan against
&ehicles joint registration of the &ehicle shall be made*
Guarantee
.e!ament commitment is re/uired to be guaranteed b the em!loer or
high official* Incase of 7remier Bank at least two !ersonal guarantees shall
be furnished b the borrower who are acce!table b the bank*
Docu(entation
As !er bank regulation credit contract re/uire the following documents"
63 %he client should a!!l the loan under consumer credit in the
Bank)s !rescribed form* %aka 8? to be realized for each a!!lication
form
83 7rice /uotation of the items to be !urchased
<3 #ost estimation for the intangibles
C3 Attested !hotogra!h
A3 Guarantors information in the !rescribed form
=3 $alar certificate of the client
B3 5etter of assurance
E5uity %artici%ation
*%uity in the form of mar!in shall be at least 05D of the value of the item
e(cept for vehicle. For vehicle it should be at least 3@D. The client before the
disbursement of the loan shall deposit the amount of e%uity.
Interest rate
Interest rate is 6CF !er annum*
Char'es"
%here are three t!es of charges
GH 6F of risk fund on the loan amount
GH 8F of ser&ice charges on the loan amount
GH $tam!ing charge of taka =A?:1
-e%ay(ent arran'e(ent
9: #onsumer will re!a the loan 8C:<=:CI monthl installment' In
case of loan o&er taka I' ??'??? the <= or CI installments will be
allowed'
;: %he borrower will ha&e to submit the !ost1dated account !aee
che/ues 2one for each installment3 in fa&or of the Bank before the
disbursement of the loan*
<: %he installment will be !aable within the first week of e&er month
starting from the following month of disbursement of the loan*
=: 7enalt for dela !ament will be charged J taka A? if the loan
installment is not !aid within 6A das from the Ith da of each
month and J taka BA for further dela of each 6A das*
Char'e "ocu(ents
7rior to disbursement of the loan' the following documents must be
com!leted and ke!t in the safe custod of the bank"
a* Demand !romissor note
b* 5etter of #ontinuit
c* 5etter of agreement
d* 5etter of Disbursement
e* 5etter of .e&i&al
f* 5etter of 0!othecation
g* 5etter of %rust .ecei!t 2consumer credit3
h* 7ersonal Guarantee of the Guarantors
i* Mone recei!t and the deli&er chalan for the item !urchased
Disburse(ent *roce"ure
6* $igning the re/uisite charge document*
8* .ecei&ing 8C' <= or CI !ost dated che/ues*
<* Issuance of !ament order to the su!!lier*
C* +nsuring the !ro!er deli&er of goods*
5. 9eceivin! the photocopy of blue book" insurance certificate" and other
papers.