Credit Risk Management internship report

An Internship Report
On
Credit Risk Management of Southeast Bank Limited,
Pragati sarani Branch.
Supervised By:
Sk. Habibur Rahaman
Assistant Professor
Department of Business Administration
Manarat International University
Present By:
Md.Abdullah Al Mamun
ID: 1440 BBA 03194
Batch: 40th
-M
Date of Submission:

On
Pragati sarani Branch

On
Pragati sarani Branch
Supervised By:
Sk. Habibur Rahaman
Assistant Professor
Present By:
Md.Abdullah Al Mamun
ID: 1440 BBA 03194
Batch: 40th
-M
Date of Submission:

LETTER OF TRANSMITTAL
Sk. Habibur Rahaman
Assistant Professor
Subject: Submission of Internship project
Dear Sir;
Assalamu Aliakum
My name Abdullah Al Mamun Sani and I am a student of you reputed university. I am a
student of the Department of Business Administration and my major is in finance &
banking. Recently I had completed my Internship program. My supervisor had assigned
me to submit an internship project on “Credit Risk Management of Southeast Bank
Pragati sarani Branch”. I am very much happy to inform you that I have completed the
report. During the preparation of this project, I had experience and learnt a great deal
about the practical procedures and transaction that are involved in bank.
I believe this real and truehearted analysis will help you to have positive angle of vision
upon me. I will be glad to furnish you with further explanations or clarifications that you
may feel necessary in this regard. I shall be obliged if you kindly approve this effort.
Sincerely yours,
………………………………
Md. Abdullah al Mamun Sani
ID: 1440 BBA 03194
Manarat international university

STUDENT’S DECLARATION
I, hereby declare that the Internship report submitted in fulfillment of the requirement for
the Degree of Bachelor of Business Administration (B.B.A) 12th
Semester under Manarat
international university embodies the result of my (Abdullah Al Mamun
Sani,1440BBA03194) own internship report pursued under the supervision of Sk.
Habibur Rahaman, Assistant professor, Department of Business Administration.
I further declare that work reported in this term paper is original and no part or whole of
the term paper has been submitted to, in any form, any other university or institution for
any degree or any other purpose.
……………………………
Md. Abdullah al Mamun Sani
ID: 1440 BBA 03194
Manarat international university

SUPERVISOR’S CERTIFICATE
This is to certify that Md. Abdullah Al Mamun Sani, ID: 1440BBA03194, Department of
BBA, Manarat International University has completed his Term paper titled “Credit Risk
Management of Southeast Bank. (Progoti sarani branch)” This Term paper was free from
plagiarism as per my knowledge.
To the best of my knowledge, this work or any of its part has not been previously
submitted to any other University or Institution for any Degree or Diploma.
Sk. Habibur Rahaman
Assistant Professor

CERTIFICATE OF THE INTERNSHIP COMMITTEE
It is our pleasure to certify that, Md. Abdullah Al Mamun Sani, ID No: 1440BBA03194,
is a student of the Bachelor of Business Administration (BBA), Manarat International
University, has been completed the internship report as MIU prescribed format. The
report has been accepted and may be presented to the Internship Defense Committee for
Evaluation.
We wish her every success in life.
On the behalf of Internship Committee
(MMA/ AM / MA /MZI/ IA)
Assistant professor

ACKNOWLEDGEMENT
Firstly, I would like to express my deep gratitude to the almighty Allah for fruitfully
preparing this internship report.
I am also very much grateful to my supervisor Sk. Habibur Rahaman for his tips
containing specific guideline regarding the preparation of the term paper successfully.
I am grateful to all concerned person who provide valuable guidance, suggestion and
advices in collecting information, analyzing and preparing the term paper. I am
particularly indebted to them whose efforts and cordial cooperation made the term paper
possible.
Finally, I would like to thank all the bank staffs for providing the information and
additional elements and I would like to give special thanks to my friends who helped me
to finalize the term paper.

EXECUTIVE SUMMARY
Credit risk is one of the most vital risks for any commercial bank. Credit risk arises from
nonperformance by a borrower. Either it may arise from an inability or an unwillingness
to perform in the pre commitment contracted manner. The real risk from credit is the
deviation of portfolio performance from its expected value. The credit risk of a bank is
also effect the book value of a bank. The more credit of a particular is in risk, the more
probability of a bank to be insolvent. Therefore, the status of depositor in the bank is at
risk and probability of incurring loss from their deposited value. In other way, the risk of
a commercial bank is calculated through long term and short-term rating by the credit
rating agencies.
SEBL which how’s the organizational chapter, the establishment, mission, vision,
objective, the next chapter shows that the internship experience than text main part of the
report Credit risk management of SEBL
The last chapter shows finding of the study, Recommendations, Conclusion and
reference.

Table of Content
Part Topic Page no.
Letter of Transmittal I.
Student’s Declaration II.
Supervisor’s Certificate III.
Certificate of the Internship Committee IV.
Organization Certificate V.
Acknowledgement VI.
Executive Summary VII.
Introduction
Part Topic Page no.
Chapter One
Background of the Report
Objective of the Report
Scope of the Report
Methodology
Limitations of the Report
Overview of SEBL
Part Topic Page no.
Chapter Two
History
Vision & Mission
Core Values of SEBL
Core Strengths of SEBL
Strategies of SEBL
Products & Services of SEBL
Number of Employee
Top Management of SEBL
Branch Management of the SEBL
Chapter-3
Internship Experience
Page no.
3.1 Audit
3.1.1 General ledger Transactions
3.1.2 Customer Ledger Transactions
3.1.3 Cash Transactions
3.2 Account Opening
3.3 FDR opening
Chapter-4
Analysis & Findings of the Study
4.1 Definition of Credit
4.2 Objectives Of Credit Risk Management

4.3 My Area of Concentration
4.3.1 Time Loan
4.3.2 Term loan
4.3.3 Over Draft
4.4 Credit management procedure of SEBL
4.5 Documents to be required to avail the loan
4.6 Credit / Loan sanction procedure of SEBL
4.7 Flow Chart of approval process
4.8 Eligibility for obtaining credit
4.8.1 Account opening section
4.8.2 FDR Opening
4.8.3 Types of Clearing
4.8.4 Remittance & its Operations
4.8.5 Causes of Loan Default in Southeast Bank Ltd
4.8.6 Legal Action Against Loan Defaulters Southeast Bank
Limited
4.7 Studies On Credit Distribution
4.7.1 Total Loans & Advances
4.7.2 Collection of Loan & Advance
4.97.3 Number of Cardholder
4.7.4 Credit to deposit Ratio Analysis
4.7.5 Classified Loan
4.7.6 Net Profit
4.7.7 Growth of Profit
4.8 SWOT Analysis
4.9 Credit Rating Report Southeast Bank Limited
4.7.10 Findings of the Study
CHAPTER FIVE
RECOMMENDATIONS & CONCLUSION
5.5.21 Recommendations
Conclusion
Bibliography

1.1Background of the Report
This report is made to fulfill the partial requirement of the BBA program. As I have been
working in Southeast Bank Limited, progoti sarani Branch in Dhaka as Intern for three
months, practical knowledge has been gathered on the Credit risk management
department and the report is aimed to work on overall Credit risk management of
Southeast Bank Ltd.
Practical work situation is different from what is learnt theoretically. Though the business
processes are based on theory, the application has to be different to meet the requirement
of a situation. The Credit risk management of the Southeast Bank Limited progoti sarani
branch, Dhaka, thus, has been observed practically and presented in this report.
1.2Objectives of the Study
1.2.1 General objectives of the Study:
The main objective of the study is to analyze the credit risk management of
Southeast Bank Ltd. Progoti Sarani Branch.
1.2.2 Specific objectives of the Study:
 To investigate about operations of credit risk management of southeast Bank
Limited.
 To find out the problems encountered when a loan is being default by
Southeast Bank Limited and the ways to overcome the problems.
 To find out the causes how and why a loan defaults.
1.3 Scope of the Report
Southeast Bank Limited (SEBL) is one of the leading banks in Bangladesh. The scope of
the Study is limited to the Branch level only. The report focuses upon the organizational
structure and the financial services offered by SEBL and the performance of the bank.
This report covers Credit risk management of SEBL, which deals with deposit, cash and
remittance. This has been prepared through extensive discussion with bank employees
and with the customer. While preparing this report, I had a great opportunity to have an in
depth knowledge of all the banking activities practices by the “Southeast Bank Ltd”. It
also helps me to acquire perspective of a leading private banking in Bangladesh.

1.4 Methodology
Primary data:
Collecting data directly from the practical field is called primary sources of data. The
method that will be used to collect the primary data is as follows:
 Interview: Face to face, conversation with the respective officers and staffs of the
branch helped me to collect information.
 Practical work experience: Working in different desk of the branch helped me to
collect some information that makes the report informative.
 Group discussion: Group discussion with other internee of the branch and my
classmates is another way to make me informative.
External sources:
 Different books and periodicals related to banking sector Bangladesh bank report.
 Website.
 Newspapers.
1.5 Limitations of the Report:
Nothing beyond limitation, I also had some limitation to prepare this Internship report
effectively. Following listed factors are the major limitations that affected most:
 Time constraint;
 Limited access to data;
 All the employees of the bank are very busy. So they do not have much time
to share information;
 All customers are not proactive or knowledgeable to share information;
 Due to the limitations of time and to protect the organizational confidentiality,
many aspects of the report are not in depth;
 Lack of published relevant documents;
 Lack of website information to reach on any nice ending;

Chapter- 2
Profile of the organization

2.2 History:
Southeast Bank Ltd is a fast growing private bank. It focuses on providing high quality
customer service at a very competitive price. Bank’s efforts are directed at diversification
of product and service. Offering customers, a wide variety of choices and options have
remained cornerstone of their business strategy. Southeast Bank Limited (SBL), “A Bank
with Vision”, emerged in the Commercial Banking Industry of Bangladesh in 1995. It
was incorporated on March 12, 1995 as a public limited organization according to the
Companies Act 1994. The commencement of its banking operations occurred on May 25,
1995 by the Principal Branch located at one, Dilkusha Commercial Area, Dhaka. The
inception of SEBL is the outcome of a successful group of prominent and non-resident
Bangladeshi investors whose vision was to contribute to the country’s economy through
commercial banking. Southeast Bank Limited began its services with the inaugural
Chairman Mr. Mohammad Abul Kashem, Vice Chairman Mr. Ragib Ali and the former
President and Managing Director Mr. Shah Mohammad Nurul Alam. In 1995, the Bank
used to provide services to its clients through only five branches situated in different
strategic locations and has increased its total number of branches to 19 by 2002. The
number of employees in 2003 stood over 600. Bangladesh Institute of Bank Management
(BIBM) and other training institutes are providing regular training and orientation courses
to update the skills and knowledge of the officers and staffs of the Bank. Although the
Bank is considered as the 2nd
generation bank and has been in operation for only 8 years,
it has begun fierce competition with its other contemporary banks. Southeast Bank
Limited was licensed as a scheduled bank. It is engaged in pure commercial banking and
providing services to all types of customers ranging from small entrepreneurs to the large
business organizations. It is working for the economic welfare by transferring funds from
the surplus economic unit to the deficit economic unit.
2.2 Vision & Mission
Vision
 To stand out as a pioneer banking institution in Bangladesh
 Contribute significantly to the national economy.

Mission
 High quality services with state of the art technology.
 Fast customer service.
 Sustainable growth strategy.
 High Ethical standards in business.
 Steady return on shareholder’s equity.
 Innovative banking at a competitive price.
 Attraction and retention of quality human resource.
 Commitment to Corporate Social Responsibility.
2.3 Core Values of SEBL
 Integrity Respect
 Harmony
 Team Spirit
 Courtesy
 Commitment
 Service Excellence
 Insight and Spirit
 Enthusiasm for Work
 Business Ethics
2.4 Core Strengths of SEBL
 Professionally strong Board Directors
 Strong capital base.
 Transparent and quick decision-making.
 Efficient team of performers.
 Satisfied customers.
 Skilled Risk management.
 Strong asset base.

2.5Strategies of SEBL
 Maintaining a high quality assets portfolio to achieve strong and sustainable
returns and to continuously build shareholders
 Maintaining adequate capital in line with risk appetite of the Bank. Strengthening
trust and partnerships with customers by focusing on the Bank’s core values of
quality customer service, professionalism, teamwork and integrity.
 Hiring professionals with strong background and knowledge.
 Strengthening technologies that reduce operational risks and promote the
implementation of best practices in the industry.
 Developing innovative products and services that attract our targeted customers
and market segments.
2.6 Products & Services of SEBL
These are some products and services of Southeast Bank Limited under conventional
banking system:
Deposit products:
 Saving Account
 Current Account
 Special Notice Account
 Fixed Deposit Receipt
 Double benefit scheme
 Milliner Deposit Scheme
 Monthly Income Scheme
 Pension Scheme
Loans and advance products:
 Working Capital finance
 Overdraft
 Project Finance
 Syndicated loan
 Packing Credit
 Loan against Export Bill

 Loan Against Trust receipt
Islamic Banking products:
 Mudaraba saving account
 Al-Wadiah Current Account
 Mudaraba Special Notice Deposit(MSND) Account
 Mudaraba Term Deposit receipt
 Mudaraba Double Benefit Scheme(MDBS) Account
 Mudaraba Hajj Sanchay Prokalpa
 Mudaraba Millionaire Deposit Schema
Services:
 SME Banking
 Dual currency VISA credit Card
 Southeast VISA Platinum Card
 Southeast My Remit Card
 SEBL ATM / Debit Card
 Virtual Card
 Remittance Business
 Western Union
 SWIFT Services
 Locker Services
 ATM Services
 Bill Payment Services
 E-Statement Services
 Internet Banking Services
2.7 Number of Employee
The bank has 2616 employees in banking and 587 employees in nonbanking. The Bank
has plans to join more employees in current fiscal year to expand.

Year 2010 2011 2012 2013 2014 2015 2016 2017
No of Employee Banking 1373 1526 1655 1704 1810 1926 2025 2616
Non-Banking 240 322 355 414 488 526 566 587
2.8 Top Management of SEBL
SL Name Designation
01. Mr.Alamgir kabir, FCA Chairman
02. Mrs. Duluna Ahemed Vice Chairman
03. Mrs. SiratMonira Director
04. Mr. M.A. Kashem Director
05. Mr. Azim Uddin Ahmed Director
06. Mrs. Jusna Ara Kashem Director
07. Mr. Md. Akibur Rahman Director
08. Mrs. Rehana Rahman Director
09. Mr.A.H.M. Moazzem Hossain Independent Director
10. Dr.Quazimesbahahuddin Ahmed Independent Director
11. Mr. M. Kamal Hossain Managing Director
12. Mr. Zakir Ahmed Khan Advisor
2.9 Branch Management of the SEBL
SL No Hierarchy of the Bank
1. Deputy Managing Director
2. Senior executive vice president
3. Executive vice president
4. Senior vice president
5. Executive Vice President
6. Vice President
7. First Vice President
8. Senior Vice President
9. Asst.Vice President
10. Senior principal officer
11. principal officer
12 Executive officer

13 Senior Officer
14 Officer
15 Junior officer
16 Trainee junior officer
17 Trainee cash officer
Chapter-3
Internship Experience

Internship Experience:
Credit is the front-side banking service department. It provides those customers who
come regularly. In some Credit risk management, there is no relation between banker and
customers who will take only one service from bank. On the other hand, there are some
customers with whom banks are doing its business frequently.
I worked mainly in the Credit department and then other department for last 3 months
under senior officer Mohammad Lokman Hossain, who are looking after the credit
section. Here, first I learnt about audit where I checked regular transaction of the branch.
3.1 Audit:
In Audit Section, we are working on 3 types of transactions. They are:
1. General ledger Transactions,
2. Customer Ledger Transactions,
3. Cash Transactions.
3.1.1 General ledger Transactions: In general ledger transaction area, I worked on the
regular trisections which are done inside the branch and for the branch. There are four
parts having Debit and Credit.
Under Code 901, I collected and organized the transactions occurred under Bank’s
Assets. Under Code 902, I collected and organized the transactions occurred under
Bank’s Income sector.
Under Code 903, I collected and organized the transactions occurred under Bank’s
Liabilities. Under Code 904, I collected and organized the transactions occurred under
Bank’s Expenditure sector.
3.1.2. Customer Ledger Transactions: In Customer ledger transaction area, I worked on
the regular trisections, which are happened between customer and bank/branch. There are

different code number for different accounts and schemes having Debit and Credit. For
example,
Code 111 for – Current accounts
Code 121 for – Savings accounts for clients and customers
Code 122 for - Savings accounts for Staffs
Code 241 for –FDR for 3 months
Code 243 for- FDR for 6 months
Code 244 for- FDR for 1 year

3.1.3. Cash Transactions: In cash transaction, I checked the cash transaction happened
between bank and customer. We can also say that, here cash payment and collection is
checked.
3.2 Account Opening:
I want to front desk to work Mr Hasan. Her responsibility is mainly to open different
saving account of the clients. Beside she answer all the basic inquiries of the client. The
whole week I stayed her on the front desk and learn details about it.
To open a saving account client must have bring following things-
 NID and photo copy
 An introducer and his or her information
 Two passport size picture
 Nomine (NID) photo copy and general information with passport size picture
3.3 FDR opening:
Work on the front desk was fund and I had the chance to meet and talk with many clients.
After that on the week, I joined the FDR desk. Mr. Nursad Khan is responsible employed
of that desk. From day one of that week, I sat with him and learned details about how to
open frothed following formalities must be completed by the customer.
 Application on the prescribed form.
 Furnishing photographs both a/c holder and nominee
 Introduction by an account holder.
 Putting Specimen signatures in the signatures card

Chapter-4
Analysis & Findings of the Study

4.1 Definition of Credit
The word credit comes from the Latin word “Credo” meaning “I believe”. It is a lender’s
trust in a people /firms or company’s ability or potential ability and intention to repay. In
other words, credit is the ability to command goods or services of another in return for
promise to pay such goods or services at some specified time in the future. For a bank, it
is the main source of profit and on the other hand, the wrong use of credit would bring
disaster not only for the bank but also for the economy a whole. The objective of the
credit management is to maximize the performing asset and the minimization of the non-
performing asset as well as ensuring the optimal point of loan and advance and their
efficient management. Credit management is a dynamic field where a certain standard of
long-range planning is needed to allocate the fund in diverse field and to minimize the
risk and maximize the return on the invested fund.
4.2 Objectives Of Credit Risk Management
There are some objectives behind a written credit risk management of Southeast Bank
that are as follows:
 To provide a guideline for giving loan.
 Quick response to the customer need.
 Shorten the procedure of giving loan.
 Reduce the volume of work from top-level management.
 Handing over of authority of work from top level of management.
 To check and balance the operational activities.
4.3 My Area of Concentration
In my report, I decided to concentrate on the credit risk management of Southeast Bank
Ltd. So that, I want to say what credit system is. Credit system is the loan system inside
the branch/ bank from the money bank gets from deposits, FDR and schemes. There are 3
types of loan. They are:
1. Time loan
2. Term Loan
3. Over Draft (OD)

4.3.1. Time Loan
Time loan is given for specific period of time, highest for 1 year
4.3.2. Term loan
In case of Term Loan, security is obtained as a line of defense to fall back upon. It is
meant to be an insurance against emergency. But taking security, bank acquires a claim
upon the assets of the borrower if repayment is not made as planned. But what should be
the significant securities of loans depends in the guidelines prescribed by the Bangladesh
Bank through BCD circular no. 17/1977 and also the negotiation of the respective branch
to its borrowers. The most significant categories of security lodged are as Asset pledge
for credit approval: A no. of asset can be pledged for sanctioning loan. SEBL accept the
following asset for sanctioning loan
 Collateral of land & building
 Share certificate
 Local bank & financial institution guarantee
 Fixed deposit receipt
 Export documents
 FDR of other bank
 Govt. bond
 Personal guarantee
 Others securities
There are 3 types of term loan
1. Personal Loan
2. Car loan
3. Home Loan

Product Loan Limit Interest Rate Maximum
Tenure
Age Limit
1.Southeast
Personal
Loan
Minimum Tk.
50000/- to Tk. 5
lac (No
collateral is
required) Above
Tk. 5.0 lac (with
cash collateral)
19% ( 2% less
for SEBL
employee)
60 months ( For
SEBL Employee
72 months)
21-55 years;
retirement age or
65 years
whichever is
earlier covers
tenor.
2.Southeast
Car loan
Minimum Tk. 3
lac to Tk. 20 lac
with
hypothecation of
car purchased
under the
scheme.
19% ( 2% less
for SEBL
employee)
60 months ( For
SEBL Employee
72 months)
21-55 years;
retirement age or
65 years
whichever is
earlier covers
tenor.
3.Southeast
Home
Loan
Minimum Tk.
2.0 Lac to Tk. 75
Lac
17% ( 2% less
for SEBL
employee)
21-55 years;
retirement age or
65 years
whichever is
earlier covers
tenor.
4.3.3. Over Draft:
Over Draft is also a kind of loan. Over Draft is mainly two types. They are:
 Cash Back: This type is given to the individual against that customer’s FDR or
Schemes for highest 1 year. In every three months, interest is charged. Interest is
based on scheme/FDR rate. 3% extra interest is added over the interest rate is
decided on the FDR /scheme.
 A customer can get highest 90% of his/her FDR’s amount.
 A customer can get highest 80% of his/her deposited amount of money for that
scheme, because if the scheme is pre-mature on the time, when he breaks the
 scheme, then customer can only get what he deposited, when he takes the loan.
4.4 Credit management procedure of SEBL
The Bank has an exhaustive credit policy, which is periodically reviewed and updated
under which all the functions of credit operations and management are carried out. The
credit policy broadly includes and provides the Bank with the guidelines on the following
aspects of credit
 The Application Process

 Analysis of credit risk
 Loan structure and terms
 Documentation / Communication
 Managing risk after loan approval
 Monitoring on-going credit risk
 Loan review function
 Loan modification
 Loan restructuring
 Problem loan identification and mitigation techniques
 Loan account closing
In addition to the above, to cater to the needs of the financing requirement in specific
sectors, separate schemes like (i) Consumer Credit Scheme (ii) SME Credit Scheme (iii)
Agricultural Loan Scheme (iv) Scheme for financing in Leather Sector etc. have been
devised as per policy and guideline of Bangladesh Bank from time to time.
4.5 Documents to be required to avail the loan
 Three copies of Passport size photographs.
 Last 3 months’ bank’s statement
 Last pay certificate from the employer/profit/Income Statement of last 3 months
for self-employed persons.
 Proof of ID/Citizenship certificate from the competent authority e.g: Net worth
statement, Quotation Certificate
 Proof of employment of minimum 2/4 years’ regular service as applicable in the
category
 Copy of Employment Letter.
 Salary Certificate from the Employer/ authorization from the employer
 Personal Guarantee acceptable to the Bank (possessing equivalent status/Financial
capacity)
 Spouse guarantee
4.6 Credit / Loan sanction procedure of SEBL:
Step 1: After the arrival of the client, the bank tries to understand what type of loan is
needed. The bank observes his account maintaining, other transactions like L/C etc.
Step 2: Then the client has to fill up the CREDIT REQUEST FORM (CRF).

Step 3: Then the bank evaluates client’s property (Present market value and Distress
value).
Step 4: Then the bank prepares the credit proposal. Credit proposal includes the
following information:
 Clients name, background & business position
 Guarantors name & business position (if any)
 Net asset
 Account turnover
 Import turnover etc.
Branch sends credit proposal, credit request form & one set of valuation form for
approval of the Head Office
Step 5: C.I.B. report (Credit Investigation Bureau: Bank seeks information about the
client from Bangladesh Bank through the Head Office. Branch provides CIB report to
head Office with the proposal.
CIB Form 1- Company profile
CIB Form 2- Owners profile
CIB Form3- Others company profile
Step 6: After few days’ branch gets approval from the Head Office.
Step 7: Then they collect all original copies of property documents from client and send
those to the legal advisors.
Step 8: SEBL gets the following documents from the legal advisors.
 Deed of Mortgage [Type the contents on 12 stamps cost 100 Taka each]
 General power of attorney to sell the mortgage property [Type on Tk.150 stamp]
Step 9: Registered the documents in the registry office. The bank preserves the client sign
on the backside of the registry receipt.
Step 10: Then SEBL pragati sarani branch fills up loan account input form.
Step 11: SEBL disburse loan to the client.
Step 12: Review the loan regularly.

4.7 Flow Chart of approval process
BRANCH MARKETING
TEAM (EXECUTIVES & OFFICERS)
HEAD OF BRANCH
(APPROVAL/ DECLINE)
HEAD OF CRMScrutiny /
recommendation & returned to Head of
Corporate
DMD
APPROVAL/ DECLINE AS PER DELEGATION
BEYOND AUTHORITY
RECOMMENDED TO
HEAD OF CORPORATE/ COMMERCIAL
BANKING (MARKETING)
FORWARDED TO
MD
APPROVAL/ DECLINE)(
EXECUTIVE COMMITTEE OF
DIRECTORS
APPROVAL/ DECLINE)(
BEYOND AUTHORITY
RECOMMENDED TO
BEYOND AUTHORITY
RECOMMENDED TO
BOARD OF DIRECTORS
(APPROVAL/ DECLINE)
BEYOND AUTHORITY
RECOMMENDED TO
HOCRC
Recommendation / observation
Approval / declined by delegated
Executives (approval Dept. of CRM)
Beyond Authority
Head of Corporate Banking Division
Placed to

4.8 Eligibility for obtaining credit
For the credit, different Banks have different criteria. Some bank offers this credit to each
level of income group with every profession where others have some limited area for
disbursement of this credit. Usually the credit is given to following employees.
 Permanent employees of Government Bodies.
 Permanent employees of Semi-Government Bodies and Autonomous bodies.
 Permanent employees of Banks, Insurance Companies and other financial
institutions.
 Permanent employees of Universities, Colleges and Schools.
 Employees of Armed forces, BDR, Police and Ansa
After that, I worked in the account opening section and here my supervisor was MR.
Hassan (Officer), who gave me an introduction on the account opening process. She also
told me account opening is under SEBL General banking which is divided into 7 sections.
These seven sections are.
1) Account opening section.
2) FDR.
3) Clearing section.
4) Remittance section.
5) Cash section.
6) Accounts Section.
7) Foreign exchange. /Remittance
Now I would like to elaborate my activity which was done by me.
4.8.1 Account opening section: In account opening section, MR. Hassan first
introduced me with the Application Form for Current/ Savings Account. For current
or saving account, I have to tell the client to fulfill the procedure by giving
necessary documents. Before that, I have to ask the customer that if he/she wants

to continue the account. As, he/she must accept the conditions to keep open the
account like,
1. First, minimum Balance to be maintained in current account Tk
10,000.00 and for Savings Account Tk. 500/-.
2. Recent photographs of the Account openers duly attested by the
Introducer must be produced.
3. When cheque deposited are payable by other banks or outstation they
are available after clearing or collection only, Service charge will be
charged @ Tk.100 /- in Current account and Tk.50 /- in Savings account
yearly or as charged by the Bank from time to time as and when required
Interest rate for Savings Account (SB) at 5 % (Half years
compounding).
These documents are the main contents of the application form for opening
Savings or Current account in SEBL:
For individual:
1) Name of the Applicant(s)
2) Father’s/ husband’s Name
3) Present Address
4) Permanent Address
5) Number, Date of issue, Date of Expiry & Place of Issue of Passport (if
any)
6) Date of Birth
7) Photocopy of Voter ID Card (Both the Party and Nominee)
8) Occupation
9) Nominee (s)
10) Special Instruction of Operation of the Account (if any)
11) Initial Deposit
12) Specimen Signature (s) of the Applicant (s)
13) Introducer’s Information (Name, Account Number, Specimen
Signature)

14) Two copies of photographs of the Account Holder (s) duly attested by the
Introducer 15) One copies of photograph of the Nominee duly attested by
the Account Holder
In case of Join Account, bank needs these two contents too:
a) Operation instruction of the account.
b) Signature
Then, in Partnership Account
a) Partner’s Signature.
b) Partner’s Name.
Again, In case of Minor’s Account,
1. Putting the word “MINOR” after the title of the account.
2. Recording special instruction of operation of the account.
3. The account opening form is to be filled in and signed by either of the
parents or the legal guardian appointed by the Court of Law & not by the
Minor.
After fulfilling the above formalities, I submit those forms to the bank; then bank
generally opens an account against the account user & provides the customer a
pay-in-slip book. Then Bank Sends Letter of thanks to Account Holder(s) and
Introducer to be sent under registered post to verify the address of the account
holder.
Risk areas in Account opening are
1. Account holder’s identification: If account holders provide fake national
identification number (NID) or fake passport. It might be risk for bank.
2. Source of income: Legal income source must. If account holder’s source
of income illegal, then money laundering must.
Work Responsibilities:

When clients came to know about any kind of account opening like SB, CD, SND
and schemes then I gave them a form and help them to fill the form with proper
information. I also gave cheque book to client and took their sign to the register
copy and the in charge officer verified their sign in computer is the sign is right
then I let them go.
After that I worked under another supervisor, MR. Nursad (officer) in charge of
FDR. She gave me a general idea about FDR.
4.8.2 FDR Opening:
Before opening of a FDR account, the following formalities must be completed by
the customer:
 Application on the prescribed form
 Furnishing photographs both a/c holder and nominee
 Introduction by an account holder
 Putting specimen signatures in the signature card
 Nominee
After fulfilling the above formalities, I submit those forms to the bank; then bank
generally opens an FDR account against the account user (if the customers have
any other a/c in the same bank like SB or schemes then bank provide the same
user id but different a/c holding number. Like, someone open 3 months FDR then
his or her FDR a/c holder number starts with 243...& same user id) & provides the
customer a cheque slip.
The contents of the application form for FDR are same as account opening.
Risk areas in Account opening: Like,
1. Account holder’s identification: If account holders provide fake
national identification number (NID) or fake passport. It might be risk
for bank.
2. Source of income: Legal income source must. If account holder’s
source of income illegal, then money laundering must.
Here are actually the same risk areas like a/c opening.
When clients came to know about any kind of FDR account opening like
1, 2, 3, 6 or 12 months then I gave them a form and help them to fill the

form with proper information. After that, I helped my supervisor to make
ready the newly filled form to give Manager for his approval.
I worked also in clearing section and here my supervisor was Shajada
Sultana in charge of clearing. Here my supervisor gave me an outline
about clearing section and its activities.
Clearing section is an important section of general banking. This is the
section through which branch has to clear it’s inter branch & inter branch
transaction. Customers do pay & receive the collecting branch.For
example, a client from SEBL received a cheque of another bank, which is
located in the clearing range deposit the cheque in his account at SEBL.
Now SEBL will credit his account & collected it. Though the amount is
credited in the customer’s account but he will not get the money until the
cheque is honored.
4.8.3 Types of Clearing
 Inward clearing cheque
 Outward clearing cheque
Inward clearing cheque:
When a particular branch receives a cheque for them & sent by other member
bank for collections are treated as inward clearing cheque.
For example, if any cheque drawn on SEBL pragati sarani then the cheque from
Mercantile Bank Ltd, Kawran Bazaar Branch is called inward cheque of SEBL
pragati sarani Branch.
Outward clearing cheque:
Outward cheques are drawn on other bank branches which are presented on the
concerned branch for collection through clearing house of Bangladesh Bank.
For example, the cheque drawn on Mercantile Bank Ltd, Kawran Bazaar Branch
has been presented on SEBL pragati sarani Branch. This cheque is called the
outward cheque of SEBL pragati sarani Branch Office. Hence it is said that the
cheque which is the inward cheque of one bank is the outward cheque of another
bank.
Whenever a cheque is brought to the collection the concerned Officer does two
functions

 Giving the special crossing.
 Endorsed by the collecting bank.
In this case I conducted to check that the concerned officer did the function
properly or not.
Risk areas in Clearing is fake/false cheque, for this reason it is very important to
verify the genuineness of clearing cheque after collecting the cheque.
After giving the special crossing I wrote down the cheque number and other
details in the cheque clearing book and count the total value in two different
sections.
There are two types of cheque:
1. High value cheque: five lakh taka and above
2. Regular value cheque: Below five lakh taka.
4.8.4 Remittance & its Operations:
Remittance of funds is ancillary services of Southeast Bank Ltd. It aids to remit
fund from one place to another place on behalf of its customers as well as non-
customers of Bank. SEBL has its branches in the major cities of the country and
therefore, it serves as one of the best mediums for remittance of funds from one
place to another.
With international correspondent relationship in combination with Operation
Center and branch network covering almost all provinces and cities, is fully able
to process remittance orders quickly, precisely and safely with simple procedure
and the most attractive fee.
4.8.5 Causes of Loan Default in Southeast Bank Ltd
Wrong Appraisals
Southeast Bank Ltd are very keen in giving out funds to entrepreneurs and they usually
set very strict appraisal procedures that should be followed at all times. These may
include checking out the business plan, analyzing financial details, considering collateral,
reviewing business or personal credit history and looking at cash flow projections among
others.

In some cases, the loan officers may overlook such requirements due to close relations
with the business owners or negligence among other reasons. This then results to wrong
appraisals and some of the businesses may end up failing to settle the expected
repayments.
Increased Competition
Apart from banking institutions, it is now possible to get business financing from other
sources like credit unions and even private lenders. This has created increased
competition forcing commercial banks to come up with ways of retaining and attracting
customers. In trying to do so, some loan officers tend to lower their lending standards and
they may end up advancing credit to high risk businesses.
Lack of Supervision
After giving out the approved amount, it is up to the credit officers to follow-up and
ensure that the funds are used for the intended purpose. This may involve visiting the
business’s premises, carrying out a physical inspection and even carrying out financial
analysis. Lack of proper supervision can make it difficult to ascertain how the loan is
spent and it can also be hard to notice early signs of failure.
With close supervision, it is very easy to tell if a business is struggling and even make
adjustments to the loan terms. This also makes it possible for the credit officer to confirm
that the initial lending decision is still valid based on the existing market conditions. The
current value of the pledged collateral can also be considered where applicable.
Poor Business Skills
There are skills that are mandatory to run a business efficiently and lacking some of them
can easily contribute to defaulting. These include financial management, marketing and
sales, proper communication, project planning and implementation, time management and
problem solving. By having the mentioned skills, it should be easy to maintain proper
records, increase sales and even re-invest to grow the business.
Follow Up & Recovery
Authorized representatives of the lenders follow the following set of rules for the
collection process:

 Only the authorized people from the organization can follow up and has to
provide the identity at first. The authority letter has to be shown by the Bank
representative in the security’s repossession or the collection of dues.
 The Bank respect the privacy of the borrower. While contacting the borrower on
phone or in personal for the recovery of the balance due, the bank does not intrude
the privacy of the borrower.
 The Bank ensure that the communication either verbal or written will be in a
simple business language and the interaction is done with civic manners.
 The timings are specified to 10.00 AM to 4.00Pm hours to contact the borrower
unless the special circumstances require the lender to contact the customer at a
different time.
 Borrower’s request to call at a different time is honored. If the he customer wishes
he can be contacted at a different place of his choice other than his/ her residence
or the business place.
 The efforts made for recoveries are always documented along with the gist of
interactions with the borrower.
 The assistance is given to resolve the disputes in a mutually acceptable and
orderly manner.
 Any inappropriate or other calamitous occasions are avoided for making calls / the
collection of dues.
4.8.6 Legal Action Against Loan Defaulters Southeast Bank Limited
Right to Sample notice
A default does not strip you of your rights or make you a criminal. Banks have to follow
process and give you time to repay dues before repossessing your assets to realize the
arrears.
Typically, banks initiate such proceedings under the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interests Act. If the borrower’s account is
classified as a non-performing asset (NPA), where repayment is overdue by 90 days, the
lender has to first issue a 60-day notice to the defaulter.
“If the borrower fails to repay within the notice period, the bank can go ahead with sale of
assets. However, in order to sell, the bank has to serve another 30-day public notice
mentioning details of the sale,” says banking and management consultant.

Right to ensure fair value
The lender starts the process of auctioning your property to recover dues if you fail to
clear what you owe or respond during the 60-day notice period. However, before doing
so, they will have to issue another notice specifying the fair value of the secured asset as
assessed by the banks’ values, along with other details like reserve price, date and time of
auction.
“The borrower can object if the property is undervalued. He can justify his objection by
conveying any better offer that he may have so that the bank can make a decision,” says
Kulkarni. In other words, you can look for prospective buyers on your own and introduce
them to the lender if you think that the property can yield a better price.
Realize balance proceeds
Do not write off your asset mentally the moment it is repossessed. Keep track of the
auction process—it’s easier to do so now as most lenders conduct e-auctions. Lenders are
required to refund any balance after recovering the dues, which is a real possibility given
that property prices can shoot up beyond the owed amount. “After recovering the dues
and all expenses of conducting the auction, the bank has to refund the amount to the
borrower as the money belongs to him legitimately,”
Right to be heard
During the notice period, you can make your representation to the authorized officer and
put forth your objections to the repossession notice. “The officer has to reply within seven
days, giving valid reasons if he rejects the representation and objections raised by the
borrower,”
Legal Notice
However, for any loan, the bank has to inform the borrower of his/her dues with a legal
notice before it can begin any proceedings against a defaulter. A minimum period of
seven days is to be given by a bank before it can begin recovery proceedings against a
defaulted loan.
4.7 Studies On Credit Distribution

4.7.1 Total Loans & Advances
Interpretation: The bank is showing increasing trend in the amount of loans & advances.
Average loans & advances are high for Southeast Bank Ltd. but the std. deviation is high.
So we can say that though it is increasing but not stable.
4.7.2 Collection of Loan & Advance
Year Amount(In millions)
2013 246
2014 131
2015 152
2016 505
2017 953
Table: Collection of Loan and Advances of SRBL Pragoti sarani Branch
during the period from 2013 to 2017
Interpretation: Above table and graph shows that the collection of loan and advance of
SEBL Pragoti sarani Branch are fluctuate year by year from 2013 to 2017. In 2013 the
collection of loans loan was 246 million. But it was decreased to 131 million in 2014.
4.7.3 Number of Cardholder

4.7.4 Credit to deposit Ratio Analysis
Credit deposit ratio measures the portion of deposit used for credit. The more the ratio the
more the bank is capable to uses its deposit as credit.
Credit to deposit ratio= Total Credit/ Total Deposit
Year Total Credit Total Deposit Total Credit/ Total Deposit
2013 410 455 90.10%
2014 329 436 75.45%
2015 382 507 75.34%
2016 722 853 84.64%
2017 1191 1256 94.82%
Table: Loan and Deposit Ratio SEBL Pragoti sarani Branch during the period from 2013
to 2017

Interpretation: From the figure it can be said that the collection of deposit in fluctuate
year by year that form into loan & advances increasing year by year subsequently. Firstly,
there high loans and deposit ratio but next two years falls their loans & deposit ratio. If
we noticed that from year 2016 to 2017 credit deposit ratio has increased significantly
which is positive sign that the bank is successfully utilizing its deposit collected from the
people by the lowest interest rate into in the form of loan and advances which is main
source of Bank’s income.
4.7.5 Classified Loan
2013 0.93
2014 2.59
2015 2.65
2016 2.93
2017 3.21
Table: Classified Loan of SEBL Pragoti Sarani Branch during the period from 2013 to
2014

Interpretation: Above table and graph shows that the classified loan and advance of
SEBL Pragoti sarani Branch are increasing year by year from 2013 to 2017.
4.7.6 Net Profit
2013 13.39
2014 28.38
2015 25.89
2016 33.71
2017 83.61
Table: Net Profit of SEBL Pragoti sarani Branch during the period from 2013 to 2017

Interpretation: Above table and graph shows that the Net Profit of SEBL Pragoti sarani
Branch is fluctuate year by year from 2013 to 2017. Net Profit was highest in 2016 and
the figure was 83.61 million takas. However, in 2013 it was lowest and the figure was
13.39 million takas.
4.7.7 Growth of Profit
Year Growth of Profit
2013 40.48%
2014 112%
2015 91.22%
2016 30.39%
2017 148%
0
20
40
60
80
100
2013 2014 2015 2016 2017
Net Profit
Net Profit
28.38
13.39
25.89
33.71
83.61

Interpretation: From the graph shows that the Growth of Net Profit of SEBL Pragoti
sarani Branch is fluctuate year by year from 2013 to 2017. In 2013 growth of net profit
was 40.48% and in 2014 it in increased at 112%. But in 2015 SEBL Pragoti sarani Branch
couldn’t perform well as its growth of net profit was decreased at 8.80% compared to year
2014 at 112%. In 2016 to 2017 the growth of net profit is gradually increased but
maximum profit growth in 2017 at 148%.
4.8 SWOT Analysis
STRENGTHS WEAKNESSES
• Southeast Bank Limited (SEBL) is newly
established Commercial Bank in the
Banking Sector but it builds strong
reputation in short time.
• The Financial Condition of SEBL is very
strong. It’s Loan and Deposit Quality is
better than most other Private
Commercial Banks in Bangladesh.
• SEBL has strong network throughout the
country and provide quality services to
every level of Customers
• SEBL’s Correspondents Relationship
with more than 200 International and
Local Banks created Global Accessibility
and Relationship with People.
• Installation and use of highly
sophisticated, automated System (For
example, BANK ULTIMUS) enables
Southeast Bank Limited (SEBL) to have
on time communication with all Branches
reduces excessive paper-works waste of
time for Valued Customer Transaction
• ATM Cards, Credit Cards and Phone
Banking of SEBL give the Customers 24-
hours Banking Facilities from his/her
Accounts
• The Shortage of Manpower in
every Division. During the
Working Hours of the Bank, the
Employees have to be fatigued
and cannot provide proper
attention that type of Services,
which create dissatisfaction of the
Customers.
• Higher Service Charge in some
areas of Banking Operations
discourages the Customers for
opening and maintaining
Accounts with SEBL.
• In the Deposit side, SEBL is
facing some problems from its
Competitors. Because the
Competitors are giving a Higher
Interest Rate in Deposits without
any reason, Because of this a lot
of Depositors are leaving the
Bank.
• There is a very little practice for
increasing Motivation in the
Employees by the Management of
Southeast Bank Limited (SEBL),
which discourages them to provide
the best Service to the Customers
OPPORTUNITIES THREATS

• The greatest Opportunity for
Southeast Bank Limited (SEBL)
lies in the increase of standard of
living of a certain mass of the
Population as well as their
acceptance of the Nation of
Consumer Financing and Short
Term Lending.
• The Credit Facility offered by
Southeast Bank Limited (SEBL)
attracted Security and Status
conscious Businessmen and as well
as Service holders with Higher
Income Group.
• The emergence of several Private
and Foreign Banks within the past
few years offering similar Service
with less or free charge for the
facilities can be a major Threat of
Southeast Bank Limited.
• The Central Bank exercise strict
control over all Banking Activities
in Local Banks like Southeast Bank
Limited. Sometimes the restrictions
impose barrier in the Normal
Operations and Policies of the
Bank.
• Revival Banks easily copy the
Product offering of Southeast Bank
Limited. Therefore, the Bank is in
continuous of Product Innovation to
gain Temporary Advantage over its
Competitors.
4.9 Credit Rating Report Southeast Bank Limited
Credit Rating Information and Services Limited (CRISL) reaffirmed the long term rating
of Southeast Bank Limited at AA (Pronounced as Double A) and reaffirmed the short
term rating at ST-2 based on audited financials up to 31" December, 2016 and unaudited
financials up to 31" March, 2017 and other relevant qualitative as well as quantitative
information up to the date of rating.

SURVEILLANCE RATING EXPLANATION
RATING 2016 RATING 2017
Long term
AA
Double A
(High Quality and High
Safety)
Long term
AA
Double A
(High Quality and High
Safety)
The Bank rated AA (High
Safety) in credit rating is
adjudged to be of high
quality offers higher safety
and has high credit quality.
This level of rating
indicates a corporate entity
with a sound credit profile
and without significant
problems. Risk are modest
and may very slightly from
time to time because of
economic condition
Short term
ST_2
High Grade
Short term
ST_2
High Grade
The Bank rated ST_2
(High Grade) in the short
term in credit rating is
considered to have high
certainty of timely
payment. Liquidity factors
are strong and supported
by good fundamental
protection factor. Risk
factor are very small.
Outlook Stable
Date of Rating June 23,2017
Validity Up to June 22, 2018
4.10 Findings of the Study
While working at Southeast Bank Limited, Pragoti sarani Branch. I have attained to the
kind of experience. After the collecting and analyzing of data I have got some findings.
Those findings are completely from my personal point of view.
1. The Loans & Advances of Southeast Bank Limited, Pragoti sarani Branch was
fluctuating year by year, but it was decreased to 329 million in 2014. The highest
amount was tk. 1191 million and the lowest amount tk. 329 million in the year 2017
and 2014 respectively.
2. The collection of loan and advance of Southeast Bank Limited, Pragoti sarani Branch
are fluctuating year by year from 2013 to 2017. In 2013 the collection of loans loan
was 246 million. But it was decreased to 131 million in 2014.

3. The collection of deposit was fluctuating year by year that form into loan & advances
increasing year by year subsequently. Firstly, there high loans and deposit ratio but
next two years falls their loans & deposit ratio. If we noticed that from year 2016 to
2017 credit deposit ratio has increased.
4. The Classified loan and advance of Southeast Bank Limited, Pragoti sarani Branch
are increasing year by year from 2013 to 2017.
5. The Net Profit of Southeast Bank Limited, Pragoti sarani Branch is fluctuating year
by year from 2013 to 2017. Net Profit was highest in 2017 and the amount was 83.61
million takas. However, in 2013 it was lowest and the amount was 13.39 million
takas.
6. The Growth of Net Profit of Mutual Trust Bank, Alankar Mour Branch is fluctuating
year by year from 2012 to 2016. In 2012 growth of net profit was 40.48% and in 2013
it in increased at 112%. But in 2014 Mutual Trust Bank, Alankar Mour Branch
couldn’t perform well as its growth of net profit was decreased at 8.80% compared to
year 2013 at 112%. In 2015 to 2016 the growth of net profit is gradually increased but
maximum profit growth in 2016 at 148%.
7. A systematic loan approval process is maintained.

CHAPTER FIVE
RECOMMENDATIONS & CONCLUSION

5.1. Recommendations:
Recommendations of these report has been made on the basis of the research findings of
the credit risk management of Southeast Bank Limited, Pragoti sarani Branch. It is very
difficult to recommend about this topic because of research restrictions and unavailability
of data. Despite these problems there is something that the credit department of Southeast
Bank Limited should look at
 Bank should prepare the CRG score sheet based on audited balance sheet. Because
it shows appropriate position of the firm. So it reduces the credit risk.
 Effective decision should take by the trust for the more deposit because the more
deposit, the more loan, the more profit & the more investment.
 Effective and efficient initiative is necessary to recover the default loans.
 The loan documentation and verification should be done fairly and properly.
 They should diversify their Loan products.
 The credit department, strict supervision is necessary to avoid loan defaulters. The
bank officials should do regular visit to the projects.
 SEBL should take initiative for agriculture sectors
 SEBL should attract customer to provide loan at minimum rate compare to other
bank.
 SEBL should improve the recovery rate of Loan & Advances.
 The bank should take proper step to maintain & increase its credit to deposit ratio.
It should increase in order to generate more profit.
5.2. Conclusion
As I was an intern in the Southeast Bank Limited, Pragati Sarani Branch, Dhaka for three
months, I had the opportunity to work in almost all the desks of Credit Division of the
Branch which helped me a lot to make the report writing easier. Also, it helps me a lot to
understand and face the real life problems regarding credit management and other
banking activities, which is not possible to face and understand only with the help of
academic knowledge. I am very grateful to every single person of my University,
Southeast Bank Ltd and people around me who help me to complete my internship and
open up a new world in front of me.

Bibliography:
Annual report of southeast bank limited 2013-2017
https://www.southeastbank.com.bd/annual_reports.php
Web Sites: Official Website of Bangladesh Bank:
https://www.bb.org.bd/
Official Website of Southeast Bank Ltd:
https://www.southeastbank.com.bd/index.php

Credit Risk Management internship report

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