An internship report of credit management in Janata bank Ltd.

“Credit Management on Janata Bank Ltd.”
1
An
Internship Report
On
Credit Management in Janata Bank Limited:
A Case Study on Sukanta Biponi Branch, Kushtia
Submitted to the Department of Accounting & Information Systems, Faculty of
Business Administration, Islamic University, Kushtia in Partial Fulfillment of the
Degree of BBA in Accounting &Information Systems.
SUBMITTED TO:
Prof. Dr. Md. Abu Sina
Dept. of Accounting &
Information Systems
Islamic University, Kushtia.
SUBMITTED BY:
Md. Ashikur Rahman
BBA
Roll No: 1504036
Reg. No: 279
Session: 2015-2016
Dept. of Accounting & Information Systems
Islamic University, Kushtia
Date of Submission: 07/03/2020

2
LETTER OF SUBMISSION
07 March, 2020
Dept of Accounting & Information Systems
Islamic University, Kushtia
Subject: Submission of Internship Report.
Sir,
I have the pleasure to submit the internship report on the “Credit Management of Janata
Bank Limited (JBL)” as a partial requirement of BBA program.
To prepare this report, I have tried to devote my best effort and conducted extensive
analytical work to find out the study relevant materials. It gives me the opportunity to
acquaint myself with Bangladesh Capital Market. I believe that the experience I have
acquired from this study will be an invaluable asset in my career. During the process of
preparation, due to various constraints there may be some mistakes. I would be grateful if
you consider those from excusable point.
Finally, I hope that, you will enjoy going through this report as I have felt great pleasure to
prepare it. I shall be pleased to answer any sort of query that you may have regarding this
report.
Sincerely yours,
Md. Ashikur Rahman
BBA
Roll No: 1504036
Reg. No: 279
Session: 2015-2016
Department of Accounting & Information Systems

3
Dedicated
To
My
Respectable Parents

4
PREFACE
The discussing report is the terminal formalities of the Internship for the degree of BBA
program of Department of Accounting & Information Systems of Islamic University,
Kushtia, which is compact professional progress rather than specialized. This report has
prepared as per academic requirement of after the successfully completion of Internship
organized at Janata Bank Limited, Sukanta Biponi Branch, Kushtia with the view to
familiarized the students with the practical implementations of the knowledge provides the
theoretical aspects of practical life.
It is my Pleasure to submit my internee report on “Credit Management of Janata Bank
Limited (JBL)”. I have tried to gather as much information as possible and together all the
information is pertaining the report to enrich it. I believe that it was a fascinating experience
to work Janata Bank Limited, Sukanta Biponi Branch, Kushtia and it has enriched both my
knowledge and experience.
This report is not free from limitations. There might have problems regarding lacks and
limitations in some aspects.

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ACKNOWLEDGEMENTS
To accomplish any task successfully, the help of others is a must. Without the help of the
number of persons the success remains silent. I am very much fortunate to get the sincere
guidance and supervision from a number of people.
Firstly, I want to pay my gratitude to almighty God for the preparation of the report
successfully. Then, I would like to thank my supervising teacher Prof. Dr. Md. Abu Sina for
providing me an overall concept on the process of preparation of the internship paper.
In preparing the report, I sincerely express my heart-felt gratitude for the co-operation of the
employees of JBL, Sukanta Biponi Branch, Kushtia.
They have enriched me with necessary ideas & concepts which help me to conduct and
complete this report. I would also like to thank the entire departmental heads and staffs who
helped me in various ways. The members of the management team of JBL, Sukanta Biponi
Branch, Kushtia were very cooperative and helpful to me from top to bottom level. They
helped me by supplying various data, guidelines and direction.
My friends and senior sisters also assist me by providing the ideas, documents and possible
guidelines for completing this report in full fledge. So it is worthwhile to show my gratitude
to them for their unconditional assistance.

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CERTIFICATE OF SUPERVISOR
It is certified that Md. Ashikur Rahman, BBA program, bearing Roll No: 1504036 has
completed the internship report titled “Credit Management of Janata Bank Limited (JBL)”
under my supervision. As far I know, He is honest, modest, and loyal student and he tried
his best effort in the process of completing this report required for attaining his BBA Degree
from the Department of Accounting & Information Systems, Islamic University, Kushtia.
I, hereby, satisfied & wish his all the success.
Thanking you,

7
DECLARATION
I declare that the report entitled “Credit Management of Janata Bank Limited”, submitted as
requirements of BBA of Islamic University, Kushtia, was prepared by me. I was tried my
best to collect necessary information that made the report unique and original. I may assure
you that the report was uniquely prepared by me.
…………………………
Md. Ashikur Rahman
BBA
Roll No: 1504036
Reg. No: 279
Session: 2015-2016

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EXECUTIVE SUMMARY
Commercial banks lend money to different categories of borrowers for various purposes with
a view to generating revenue. Accordingly, while processing and appraising a loan proposal,
banks essentially analyze the information relating to borrowers, assess the purposes of
loan and determine the viability of the loan proposal. If the proposal is sound and safe for
lending, loan is sanctioned and disbursed. The report discusses about the management
practices of different credit facilities, approval process, monitoring and performances of the
bank under study. This report is categorized in seven different chapters.
Firstly, the introductory of the study. Secondly, Review of the Literature & Research
Methodology. Thirdly, Profile of the organization. Fourth portion of this report is Concept of
Credit Management. Fifth the Performance of Janata Bank Limited, Sukanta Biponi Branch,
Kushtia. Next discussion is the analysis and findings about different variables of Credit
facilities. At the end, the report makes some valuable recommendations and conclusions.
Janata Bank Limited is the second largest Government owned Bank. The bank is established
in 1971. It operates credit facilities for business purpose as well as welfare of the economy
Bank finance at the rural level at a very low interest rate. It has also Special loan procedures
for the rural farmers. This helps for the development of the rural economy of the country. As a
government owned bank, Janata Bank Ltd. faces different problems for credit facilities. But
still it has more transparent Credit program than other government banks.
LOAN DISBURSEMENT, OUTSTANDING, CLASSIFIED AND RECOVERY
SCENARIO
It is the duty of the recovery department of the Bank to recover the landed fund within the
stipulated time and if the borrower fails to repay the money within the said period Bank will
declare him as a defaulter and recover the fund by selling the securities given by the
borrower or by freezing his account or make a suit against him.

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The total outstanding Loans and advances of Janata Bank Limited from 2014 to 2018 are
given below:
Source: Annual Reports of JBL. Ranging 2014-2018
Graphical representation:
Comment:
In the above figure we see that the total Loan & advances of Janata Bank from 2014 to 2018
is increasing trend that indicates better performance in providing Loan & advances. In the
total Loan & advances of Janata 25% to 30% Loan is Industrial sector Loan. Industrial
sector of Janata Bank consists of Jute industries, Tannery Industries, Textile Industries, Agro
Industries and Industrial credit etc.
SECTOR WISE LOAN DISBURSEMENT OF JBL.
Following the guidelines of Bangladesh Bank, credit facilities have been extended to
productive and priority sectors. Total Loans and Advances of the Bank stood at
TK.346506720.43 crore as of 31 December 2016 as compared to TK.303403225.81 crore in
2015,registering a growth rate of 12.44%.In credit facilities, the Bank has given due
importance to sect oral needs and requirements of both public and private sector.
Particulars 2014 2015 2016 2017 2018
Amounts 225,732.21 257,801.03 305,339.58 285,747.65 319,773.25

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Sector wise Loans and Advances are shown below:
Amount in crore
Year 2014 2015 2016 2017 2018
Transport 41935.48 423535.50 42741.94 46241.94 43279.57
Steel & Engineering 2980779.5 2810779.5 3664650.54 3664650.54 3580107.53
Sugar Mills 3981182.81 3925182.81 5094220.43 5614220.43 5016397.85
House Building 1558467.74 1658567.74 2032392.47 5432392.47 2004166.6
Rural Credit 17278091.41 18275091.41 19594354.84 21594354.84 21978763.44
Food (Industry &
Trade)
2207930.11 2307630.11 2547983.87 2147983.87 2802419.35
Industrial Credit 30069986.56 31629986.56 53836021.51 53836021.51 55848118.31
Source: Official Records

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LOANS AND ADVANCE OF LAST FIVE YEARS
Total loans and advances performed by JBL Bank ltd. are quite satisfactory and are
maintaining an increasing trend over the years. The below graph shows, in 2013, the amount
increased significantly than the previous years.
Loans and Advances of Janata Bank Limited
Year Disbursed Loans Recovery Overdue
2014 154456677.42 134416677.00 20040000.42
2015 194459677.42 184453677.10 10006000.32
2016 223600806.45 218600406.59 5000399.86
2017 303403225.81 301402225.45 2001000.36
2018 346506720.43 316502720.00 30004000.43
Comment:
Above table shows that disbursed of loans and advances in 2014-2018 are 154456677.42,
194459677.42, 223600806.45, 303403225.81, 346506720.43 respectively. Recovery of
loans and advances in 2014-2018 are 134416677.00, 184453677.10, 218600406.59,
3014022258.45, 316502720.00 respectively and overdue in 2014-2018 are 20040000.42,
10006000.32, 5000399.86, 2001000.36, 30004000.43 respectively. It is found that
disbursement and recovery of loans and advances is increased day by day and overdue of
loans and advances is also increased.

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Figures in Million
20182017201620152014
72,733.54
63,230.14
0
30000
40000
50000
60000
70000
80000
50,387.68
79,948.22
83,091.4
4
Loans & Advances (2014-2018)

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Table of Contents
S.L No Page No
Letter of Submission i
Dedicated ii
Preface iii
Acknowledgements iv
Certificate of Supervisor v
Declaration vi
Executive Summary vii
Chapter: 1 Introduction
1.1 Introduction 2
1.2 Objectives of The Study 2
1.3 Scope of The Study 2
1.4 Rationale of The Study 2
1.5 Limitations of The Study 3
1.6 Chaptarization 3
Chapter: 2 Review of The Literature &
Research Methodology
2.1 Review of The Literature 5
2.2 Methodology of The Study 7
Chapter: 3 Profile of The Organization
3.1 Overview of The Bank 9
3.2 International Award 11
3.3 Managing Body of Janata Bank Limited. 14
3.4 Corporate Profile of JBL. 15
3.5 Management Organogram of JBL. 17
3.6 Objective of The Bank 18
3.7 Values of The Bank 18
3.8 Mission of The Bank 19

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3.9 Corporate Mission 19
3.10 Corporate Vision 19
3.11 Branches of Janata Bank Ltd. 20
3.12 Information About Administration of JBL 21
3.13 Core Values 23
3.14 Products & Services of JBL. 23
3.15 Special Product 29
3.16 Deposit And Deposit Mix 33
3.17 Investment 34
3.18 Net Profit 34
Chapter: 4 Concept of Credit Management
4.1 Concept of Credit Management 36
4.2 Loans And Advances 37
4.3 Function Related With Credit 38
4.4 Types of Loan 38
4.5 Loan Products 39
4.6 Current Interest Rate 41
4.7 Credit Schemes 47
4.8 Interest Rate 51
4.9 Approaches To The Bank 52
4.10 Bank Guarantee 52
4.11 Calculation of Interest On Advances 54
4.12 Limitation of Loan Section 54
4.13 Analysis of Loan Disbursement, Outstanding, Classified
And Recovery Scenario
55
4.14 Principles of Sound Lending 59
4.15 Diversification of Risks 60
4.16 Loan Classification 60
4.17 Loan Provisioning 61
4.18 General Procedure For Investment 62
4.19 Importance of Loan Classification 69

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4.20 Loan Monitoring 69
4.21 Steps Against Defaulter 69
4.22 Recovery of Loan 70
Chapter 5 Performance of JBL. (Sukanto
Biponi Branch)
5.1 Measuring Liquidity 72
5.2 Sector Wise Loan Disbursement of JBL.(Sukanta Biponi
Branch
73
5.3 Loans And Advance of Last 5 Years 74
Chapter6 Analyses & Findings
6.1 SWOT Analysis of Janata Bank Ltd. 77
6.2 Credit Analysis 80
6.3 Perception Analysis 81
6.4 Financial Statement of Janata Bank Limited. 89
Chapter 7 Recommendations& Conclusion
7.1 Recommendations 94
7.2 Conclusion 96
References 97
Appendix 99

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Chapter: 1
Introduction

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1.1 INTRODUCTION
Here I have presented the origins, orientation topic, purpose, scope, limitations,
methodology of the study, and objective of the study, the data collection method and
background ofthe study while creating this report.
1.2 OBJECTIVES OF THE STUDY
The objectives of the study are as follows:-
 To study the loans disbursement & recovery system of Janata Bank Ltd.
 To identify problems related to various loans & advance products of JBL.
 To explain how the bank sanction loan to clients.
 To illustrate the loan recovery system of Janata Bank.
 To make some recommendations on the basis of the problems
1.3 SCOPE OF THE STUDY
This report has been prepared through extensive discussion with bank employees and with
the clients. While preparing this report, I had a great opportunity to have an in depth
knowledge of all the loans & advance by the Janata Bank limited. It also helped me to
acquire a fast hand perspective of a leading bank in Bangladesh.
1.4 RATIONALE OF THE STUDY
Bangladesh is one of the developing country in the world. The economy of the country has
a lot left to be desired and there are lots of scopes for massive improvement. In an

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economy like this, Credit Performance can play a vital role to improve the overall
economic condition of the country. The banks by playing the role of an intermediary can
mobilize the excess fund of surplus sectors to provide necessary finance, to those sectors,
which are needed to promote for the sound development of the economy.
This report is an effort to reflect a clear idea about the strategies, activities, and
performance of Bangladesh regarding Credit Performance Business.
1.5 LIMITATIONS OF THE STUDY
To prepare a report on the achieved practical experience in a short duration is not an easy
task. In preparing this report, some problems & limitations have encountered, which are as
follows:
 Large scale analysis was not possible due to constraints & restrictions posted by the
banking authority.
 This report is limited only to the Loans & Advance Department, it does not cover
the general banking part of Janata Bank Ltd.
 In many cases, up to date information was not published.
 In some cases, access to relevant papers & documents were strictly prohibited.
 In some other cases, access was denied to procedural matters conducted directly by
the top management in the operations of loans & advance department.
1.6 CHAPTARIZATION
Introduction, Review of the Literature & Research Methodology, Profile Of The
Organization, Concept Of Credit Management, Performance Of Jbl (Sukanto Biponi
Branch, Analysis & Findings, Recommendations & Conclusion.

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Chapter: 2
Review of the Literature &

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2.1 Review of the Literature
It is the review of existing literature in the field of liquidity management. Nowadays
huge numbers of researchers are centralizing on working capital management of
business. Re-view of literature helps in capturing both conceptual and re-search based
studies of liquidity management1. Here both India and abroad based research and
conceptual studies are involved. Many studies relating to management of various
elements of working capital have been analyzed. Number of studies is accessible on
the topic; it is the summary of critical points of a particular topic consisting of
essential findings as well as theoretical and methodological contributions. A qual-ified
literature review is characterized by displaying proper ar-ranged ideas. The following
displays the studies and obser-vations on liquidity management. Here both India and
abroad based research and conceptual studies are examined.
Abramovitz and Modigliani (1957):They highlighted the relationship between capacity
utilization and inventory investment. Existing stock of inventories was expected to
adjust to the desired levels. Thus the variable, ex-isting stock of inventories, was essential to
be negatively relat-ed with the desired stock. The result was that there is positive relation
among the ratio of inventory to sales and inventory investment. High ratio of stocks
to sales in the past suggests requirement of high levels of inventories in the past
and promising high investment in inventories in the current period also.
R.S. Chadda (1964): Study had been made on inventory management practices of
Indian companies. The analysis suggested application of modern scientific inventory
control techniques like operations research. These modern scientific techniques furnish
oppor-tunities for the companies, Companies can minimize their investment in
inventory but there is continuous flow of pro-duction. He argued that industrially
advanced countries, like, USA, were engaged in developing highly sophisticated
math-ematical models and techniques for modernizing and redefin-ing the existing tools
of inventory investment.

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National Council of Applied Economic Research (NCAER 1966):Conducted a
study in 1966 regarding working capital man-agement of three industries namely
cement, fertilizer and sug-ar. This study mainly devoted to ratio analysis of
composition, utilization and financing of working capital for the period of 1959 to
1963. The study reveals that inventory constituted a major portion of working capital
i.e. 74.06 per cent in the sugar industry followed by cement industry (63.1%) and
fer-tilizer industry (59.58%). It was observed that inventory had not managed
properly. So far as the utilization of working capital was concerned, cement and
fertilizer industry had bet-ter implementation of working capital. The sugar industry had
huge accumulation of stocks so there was inefficient utiliza-tion of working capital
heavily.
Welter (1970):He stated that working capital originated because of the global delay
in making payment for purchase of raw materi-al and receiving amount for the sale
of finished product. He recognized that working capital can be reduced through most
fashionable information from computers and improved profes-sional ability of
management. Reduction in length of global delay can lead decreased working capital.
Global delay can be minimized through favorable redistribution of this global delay among
the different delay centers.
V. Appavadhanulu (1971):Identified lack of attention being given to working capital, less
amount is invested. He analyzed working capital management by examining the impact of
method of production on work-ing capital investment. Various production techniques
require different amount of working capital, mainly because different techniques have
specific length of production period, the rate of output flow per unit of time and time pattern
of value ad-dition.
Warren and Shelton (1971) :Applied financial simulationto assume future financial
state-ments of a firm based on a set of simultaneous equations. Fi-nancial simulation
approach makes it possible to make a link between uncertainty of future and
interrelationships among current assets, current liabilities and other balance sheet ac-

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2.2 Methodology of the study
Primary sources of data
The data collection has been accomplished directly from the different sectors of
Janata Bank head office. This is called primary source of data.
Secondary sources of data
The secondary data is collected from annual report, distinguished conceptual matters,
websites and several published matter as articles in different versions of printings.
Secondary Sources are:
Annual Reports of different years of Janata Bank Limited. Bangladesh Bank web
site. Other published documents of Janata Bank Limited. Janata Bank web site.
2.2.1 Sample unite of the study
As, the, data which I collected from both sources, were segregated, for fulfilling the purpose
of this report.
2.2.2 Sample size of the study
As, I, have collected data, these were further processed, to fulfill the purpose of this study.
2.2.3 Data collection procedures
The collected data were segregated &then processed, after that those were inserted in tables
& charts & presented in the body of this report.
So, to prepare this report combinations of the following method of research in social science
have been followed:
 Interview method
 Observation method
 Desk study method

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Chapter: 3
Profile of the organization

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3.1 OVERVIEW OF THE BANK
JANATA Bank Limited welcomes to all to explore the world of progressive Banking in
Bangladesh. It is a state owned commercial bank and is catering the need of the mass
business people. Immediately after the independence of Bangladesh in 1971, the erstwhile
United Bank Limited and Union Bank Limited were nationalized and renamed as Janata
Bank. It was corpora zed on 15th November 2007. Janata Bank was born with a new
concept of purposeful banking sub serving the growing and diversified financial needs of
planned economic development of the country. The noble intention behind starting of this
Bank was to bring about a qualitative change in the sphere of banking and financial
management. Janata Bank is playing a significant role towards socio-economic development
of the country by financing Non-Banking Financial Institutions dealing with Home Loan,
Corporate Financing & Loan Syndication. Janata Bank is always vigilant to develop its
market potentialities way before others are thinking/planning today. Janata Bank is the first
among to start SWIFT operation to minimize transmission cost in lieu of the telex system
and simultaneously increase remittance business and foreign trade. It has automated 92
branches and developed 20-application software by its own staff, which has reduced huge
internal expenses and enriches operational efficiency as well. Janata Bank Limited operates
through 864 branches including 4 overseas branches at United Arab Emirates. It is linked
with 1202 foreign correspondents all over the world. The Bank employs 15705 employees.
The mission of the bank is to actively participate in the socio- economic development of the
nation by operating a commercially sound banking organization, providing credit to viable
borrowers, efficiently delivered and competitively priced, simultaneously protecting
depositor’s funds and providing a satisfactory return on equity to the owners. The Board of
Directors is composed of 13 (Thirteen) members headed by a Chairman. The Directors are
representatives from both public and private sectors. The Bank is headed by the Chief
Executive Officer & Managing Director, who is a reputed banker. The corporate head office
is located at Dhaka with 10 (ten) Divisions comprising of 37 (thirty seven) Departments.
International Award -"World's Best Bank Award-2009 in Bangladesh. Janata Bank Limited
was awarded Best Bank-Bangladesh in the Global Finance, World's Best Bank Awards,
2009 by New York based Financial Magazine "Global Finance". "Global Finance" has
identified winning banks based on number of criteria including growth in Assets,

25
Profitability, Strategic relationships, Customer Service, Competitive pricing and innovative
products.
Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an
authorized capital of BDT. 20000.00 million (approx. US$ 250 million), paid up capital of
Tk. 19140.00 million, reserve of Tk.17976.20 million. The Bank has a total asset of Tk.
586082.98 million as on 31st December 2017. Immediately after the emergence of
Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were
merged and renamed as Janata Bank. On 15th November, 2007 the bank has been
corporatized and renamed as Janata Bank Limited.
 Janata Bank Ltd currently operates through 905 branches including 4 overseas
branches in United Arab Emirates. It is linked with 1239 foreign correspondents in
the world.
 The Bank employs more than 14(fourteen) thousand personnel’s.
 The mission of the bank is to actively participate in the socio- economic development
of the nation by operating a commercially sound banking organization, providing
credits to viable borrowers, efficiently delivered and competitively priced,
simultaneously protecting depositors funds and providing a satisfactory return on
equity to the owners.
 The Board of Directors is composed of 13 (thirteen) members headed by a Chairman.
The Directors are representatives from both public and private sectors.
 The Bank is headed by the Chief Executive Officer & Managing Director, who is a
reputed banker.
 The corporate head office of the Bank is located in the capital city Dhaka with 10
(ten) Divisions comprising of 44 Departments.

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3.2 INTERNATIONAL AWARD
Recently The Bank has been recognized nationally and internationally for its outstanding
performance.
Best Presented Annual Report Awards and SAARC Anniversary Awards
for Corporate Governance Disclosers 2017
The awarding ceremony was held on 4th December 2018 at hotel Mayfair, Bhubaneswar,
India. Dr. Prodip Kumar Panigrahi, minister of State, Higher Education, Science and
Technology Ministry of Udisha, India, handing over South Asian Federation of Accountants
(SAFA) award to Md. Mosaddake-Ul-Alam, company secretary of Janata Bank Ltd.
14th ICAB National Award for Best Presented Annual Reports 2017
The Institute of Chartered Accountants of Bangladesh (ICAB) awarded Janata Bank Limited
with the ICAB National Awards for best presented annual reports in 2016 and in the
category of public-sector bank Janata Bank Limited secured first position. In the category of
corporate governance disclosure, Janata Bank Limited was awarded second position by the
same institution. Finance Minister AMA Muhith handed over the 14th ICAB National
Award to the CEO & Managing Director of Janata Bank Limited, Md. Abdus Salam at a
ceremony arranged by ICAB at Sonargaon Hotel in the capital, Dhaka.
ICMAB Best Corporate Award
The Institute of Cost and Management Accountants, Bangladesh (ICMAB) recognized the
achievements of Janata Bank Limited with the following awards:
ICMAB Best Corporate Award 2018

27
Janata Bank Limited achieves '2014 Performance Excellence Award' by
Citi Bank N. A.
Citi Bank N.A recently recognized Janata Bank Limited with '2014 Performance Excellence
Award'.
The awarding ceremony was held on 11 September, 2014 at the Head Office premise of the
Bank. S M Aminur Rahman, CEO and Managing Director, Janata Bank Ltd. received the
award from Khd. Rashed Maqsood, Managing Director and Citi Country Officer,
Bangladesh. DMDs of the Bank Md. Golam Sarwar, A K M Ashraf Uddin Khan and Omar
Farooque and GMs of the Bank Abdus Salam Azad and Md. Monjerul Islam and High
officials of Citi Bank, N. A. were also present at the awarding event. Janata Bank Limited
achived this award for solidifying leadership in the payment space.
Janata Bank Limited wins 'The Asian Banking & Finance Wholesale
Banking Awards 2014 & Retail Banking Awards 2014'
It is a matter of great pleasure for us that Janata Bank Limited has once again been awarded
by Asian Banking and Finance (ABF) Magazine, a conceren of Carlton Media Group
(CMG), Singapore. Evaluating Janata Bank Limited's last year's performance in different
fields the magazine has judged JBL winner of three awards in two following categories:
A. Asian Banking & Finance Wholesale Banking Awards 2014
1. Bangladesh Domestic Project Finance Bank of the Year
2. Bangladesh Domestic Trade Finance Bank of the Year
B. Asian Banking & Finance Retail Banking Awards 2018
3. Domestic Retail Bank of the Year Bangladesh

28
Janata Bank Limited wins ‘The Asian Banking & Finance Awards 2016’
It is a matter of great pleasure for us that Janata Bank Limited has once again been awarded
by the Asian Banking and Finance Magazine (ABF), a leading financial magazine in Asia .
For several years the magazine has been recognizing the best performers in bank business of
different countries in Asia with these esteemed awards. Evaluating Janata Bank Limited's
last year's performance in different fields the magazine has judged JBL winner of two
awards in three following categories:
A. The Asian Banking & Finance Wholesale Banking Awards 2016
1. Bangladesh Domestic Project Finance Bank of the Year
2. Bangladesh Domestic Trade Finance Bank of the Year
B. The Asian Banking & Finance Retail Banking Awards 2016
3. Domestic Retail Bank of the Year Bangladesh
The awarding ceremony was held on 23 August, 2016 in Singapore . Md. Afzalul Bashar,
General Manager and Md. Mosaddake-Ul-Alam, Company Secretary received the awards on
the podium as representatives of Janata Bank Ltd.
International Award-The Bank of the year-2011in Bangladesh
Janata Bank Limited has been awarded ‘The Bank of the Year-2011 in Bangladesh’ by the
London based Financial Magazine The Banker of the Financial Times Group. This is for the
sixth time the bank has been awarded ‘The Bank of the Year’ award. Janata Bank Limited
achieved remarkable progress in the year 2010.
International Award -"World's Best Bank Award-2009 in Bangladesh
Janata Bank Limited was awarded Best Bank-Bangladesh in the Global Finance, World's
Best Bank Awards, 2009 by New York based Financial Magazine "Global Finance".
"Global Finance" has selected winning banks based on number of criteria including growth
in Assets, Profitability, Strategic relationships, Customer Service, Competitive pricing and
innovative product.

29
3.3 MANAGING BODY OF JANATA BANK
Chairman Shaikh Md. Wahid-uz-Zaman
CEO& Managing Director Mr. Md. Abdus Salam
Chief Risk Officer Mr. Omar Farooque (DMD)
Head of Internal Control and
Compliance
Mrs. Mahtab Zabin (GM)
Chief Financial Officer (CFO) Mr. Md. Nurul Alam FCA, FCMA (GM)
Company Secretary Mr. Md. Mosaddake-Ul-Alam (GM)
Source: Annual report of Janata bank 2018

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3.4 FUNCTION OF JBL.
3.4 CORPORATE PROFILE OF JBL.
Chairman Shaikh Md. Wahid-uz-Zaman
CEO & MD Mr. Md. Abdus Salam
Legal Status Public limited company
Date of Incorporation 21 may, 2007
Registered address Janata Bhaban,110 Matijheel Commercial Area, Dhaka-
1000, Bangladesh
Authorized Capital 30,000.00 (million)
Paid up Capital 19,140.00(million)
Earnings per share(EPS) Tk. 100 per share
Domestic Network Number of Branch : 900
Number of Divisional Office : 11

31
Source: Annual report of Janata bank 2017
Number of Area Office : 47
Number of AD Branch : 56
Overseas Network Number of Branch : 04
Number of Employees 14413
Phone 9560000, 9566020, 9556245-49, 9565041-45
E-mail md@Janatabank-bd.com
Website www. Janatabank-bd.com

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3.5 MANAGEMENT ORGANOGRAM OF JBL.

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3.6 OBJECTIVE OF THE BANK
 To earn customer satisfaction through diversified banking activities and introduction
of innovative banking.
 To improve the customer services in recent times by introducing a number of IT-
based reform measures.
 To remain one of the best banks in Bangladesh in terms of profitability and Assets
Quality.
 To ensure an adequate rate of return on investment.
 To maintain adequate liquidity to meet maturing obligations and commitments.
 To maintain a healthy growth of business with desired image.
 To maintain adequate control systems and transparency in procedures.
 To ensure optimum utilization of all available resources.
3.7 VALUES OF THE BANK
 To have a strong customer focus arid build relationship based on integrity, superior
service and mutual benefit.
 To work as a team to serve the best interests of the group.
 To work for business innovation and improvements.
 To value and respect the people and make decision based on the merit.
 To provide recognition and reward on performance.
 To be responsible, trustworthy and law-abiding in every sphere.
 To become the base bank in respect of service, profitability and strength.Provide
greatest return to the shareholders by achieving sound profitable growth

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3.8 MISSION OF THE BANK
 To mobilize resources from within to the development and growth of the country.
 To play a catalyst role in the formation of capital market.
 Anticipating business solutions required by all our customers everywhere and
innovatively supplying them beyond expectation.
 Setting industry benchmarks of world class standard in delivering customer value
through our comprehensive product range, customer service and all our activities.
 Maintaining the highest ethical standards and a community responsibility worthy of a
leading corporate citizen
 Continuously improving productivity ,profitability& thereby enhancing sha
 Shareholder value.

3.9 CORPORATE MISSION
Janata Bank Ltd creates new opportunities for its clients. It gives customized services &
maintains harmonies banker client relationship.
3.10 CORPORATE VISION
To become the bank of choice in serving the nation as a progressive & socially responsible
financial institution by bringing credit & commerce together for profit & sustainable growth.
And to be a leading Bank in South Asia.

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3.11 BRANCHES OF JANATA BANK LTD

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3.12 INFORATION ABOUT ADMINISTRATION OF JBL.
Office Automation:
Technology, computer, internet these thins brings a new generation of banking
service to the customer. Eight to ten years ago customers cannot think about that they can
withdraw or deposit money from their account at least within one hour. But now it takes
only at best five minutes for withdraw their money. This is the simple example what
technology brings to banking sector. In before bankers has to maintain huge ledger book for
their daily or any sorts of banking record. But now they can do it by on click and by strike of
few buttons. They have web page (www.Janatabank-bd.com). Customer can get detail
information from the web page. JB Ltd also has credit card and ATM machine now a days.
Audit Inspection Recovery Distribution:
Head Office Audit and Inspection Division comprising
sufficiently experienced and skilled manpower carried out internal audit and inspection
work on regular basis. In 2002, all the branches of the Bank were audited at least once.
Surprise inspections were also undertaken in many branches. Bangladesh Bank audit
teams also conducted comprehensive and foreign exchange related inspections on the
affairs of many branches during the year under report.
Human Resource Division:
In the Janata Bank, this department deals with the employees as the core resources of the
organization. This department mainly emphasize on the recruitment, selection of the
employees. They are also motivating the employee to work efficiently and effectively.
Information Technology Division:
It is very significant to adapt with the ongoing information technology revolution to provide
faster services to the clients. The Information Technology Division supervises the overall
computerization of the banking operations, networking and support the day to day
operations.

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Training Division:
The main objective of this division is to make the employees efficient. Usually this division
offers training to their employee time to time. This is helpful to the employee to do their job
efficiently and effectively.
Marketing Department:
The Marketing department mainly works for to promote the different types of services of
information to the people. To improve the marketing network through out the country. To
implements the marketing strategies and the concept of Trade marketing.
Credit Department:
The credit department mainly deals with different types of loan and advances. This
department analysis the proposal, approvable, monitoring the credit, disbursement, credit
recovery position and credit policy that is given by all branches.
International Banking Department:
The foreign exchange department mainly deals with export, import and foreign currency of
different branches of the Bank.
Public Relation & Protocol Department:
This department deals with people & coveys people’s views to the management.
Dead Stock & Stationery:
This department prints all security documents of Bank & looks after of this security
items.

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3.13 CORE VALUES
For Customers: To become most caring bank by providing the most courteous &
efficient service in every area of our business.
For Employees:By providing the well-being of the members of the staff.
For Shareholders: By ensuring fair return on their investment through generating stable
profit.
For Community: By assuming our role as a socially responsible corporate entity in a
tangible through close adherence to national policies & objectives.
3.14 PRODUCTS & SERVICES OF JBL.
Mainly four types of products are by Janata Bank.
 Deposits
 Loans and advantages
 Special product
 Green Banking
 Deposits:
 Current Deposit:
Janata Bank Limited offers customers current deposit facility for day-to-day
business transaction without any restriction. This deposit account pays no interest
but a customer can withdraw money from this account when he wants by presenting
his account cheque over counter during any working day. This type of account may

39
be opened in the name of individual or firms. This account suits best for business
man or business firm.
 Saving Deposits:
Savings Bank Account can be opened in any branch of Janata Bank
depositing any amount of taka by any Bangladeshi citizen in the name of an
individual or a group of individuals which can be operated singly or jointly.
Account holder can deposit or withdraw any amount during any working
day with prior notice or without notice.
 Special Notice Deposit:
Janata Bank Limited offers interest on customer's special notice deposit (SND)
account and gives facility to withdraw money at any time.
 Term Deposit:
A depositor can open Fixed Deposit Account for different terms with any branch of
Janata Bank easily. Any individual or a group of individuals can go to any branch,
fill a prescribed form, depositing cash or easily cashable instrument of FDR amount
and a Fixed Deposit Receipt will be issued by the Bank on behalf of the applicant.
 Schemes:
Under this scheme Janata Bank offers various deposit schemes following monthly
savings plan suitable for all classes of people and continue depositing to complete
the respective tenor.
 Loans and Advances:
The main focus of Janata Bank Limited Credit Line/Program is financing business,
trade and industrial activities through an effective delivery system.

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 SME Banking:
The role of Small and Medium Enterprises (SMEs) is indispensable for overall
economic development of a country. SMEs are recognized as engine of economic
growth and employment generation for sustainable industrialization in both
developed and developing countries of the world particularly like Bangladesh. Since
this sector is labor intensive with short gestation period, it is capable of increasing
national income as well as rapid employment generation ; achieving Millennium
Development Goals (MDGs) especially eradication of extreme poverty and hunger,
gender equality and women empowerment. Janata Bank Limited, as development
associate of the government, gives more importance in SME financing for economic
development, creating employment opportunities and increasing GDP.
 Export Financing:
In our export product line we have a number of products and we are
looking ahead to include more products in this line. Our major export products are-
 ECC (HYPO & PLEDGE)
 PACKING CREDIT
 Other Export Finance
 LTR(FC)
 ECC for export Oriented Project
 BMRE for export Oriented Project
 Loan General
 Cash Credit
 Demand Loan

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 Advance against Cash Subsidy
 PAD(EDF)
 PAD (GMT)
 Import Financing:
The import products are:
 PAD (Cash)
 LIM
 LTR
 Demand Loan
 Working Capital Loan:
 Credit Program for Agro-based Industry/Project
 Working capital for husking mill
 Credit program for Preservation of Potatoes in Cold storage
 Other Working Capital
 Rural and Micro Credit Loan:
A vast majority of the Bangladeshis live in the rural areas and their main
source of income is agriculture and agro-business. Janata Bank Limited has opened
branches in rural areas to cater to the banking needs of rural people. Apart from
accepting deposits from the rich and moderately well-off villagers, Janata Bank
Limited encourages the poor people to make small savings through different
mechanisms. So far lending in rural areas is concerned; Janata Bank Limited has
been financing agricultural production and poverty alleviation programs since 1977.

42
It also lends to the poor landless so that they can make a living. The average loan
size is about Taka 20,000.00 (around US$ 285).
 Specialist Loan Program:
The Micro Enterprise & Special Program Division is responsible for
implementing of…
 Micro Credit Programs related with the poverty reduction,
 Special credit programs related with employment generation and
 Financing of agro-based industries.
Bank has different micro-credit programs of its own & in collaboration with other
agencies. For successful implementation of these credit programs especially poverty
reduction credit programs it requires close supervision and monitoring. Considering
Bank's manpower/field staff it is not always possible to ensure intensive supervision
at the grass root level. To make the micro credit programs time & cost effective bank
has initiated linkage program using intermediaries/collaborating agencies (GOs &
NGOs).
 Agriculture loan Program:
 All kinds of Crops Loan & Cultivation Loan
 Loan for Shripm culture development
 Loan for Irrigation and agricultural equipment
 Loan for Salt production plant
 Poverty Alleviation:
The Micro Enterprise & Special Program Division (MESPD) is responsible
for implementing of

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 Micro Credit Programs related with the poverty reduction,
 Special credit programs related with employment generation and
 Financing of agro-based industries.
 Thrust Sector:
To augment the growth in industrial sector and broaden the base of
investment, Janata Bank (JB) has already taken some positive initiatives. The Bank
has invested a sizeable amount of fund in the development of Cement manufacturing,
Composite textile, spinning mills, Paper/Board mills, Knit Garments industries and
other small and medium enterprises. Janata Bank is marching ahead by adopting
consortium lending strategy. Under this lending scheme, two or more banks are
invited to finance big projects with JB acting as the lead Bank. Besides supporting
the export oriented Ready Made Garment enterprises, it also lays special emphasis
on agro-processing and IT related industries while promoting the thrust sectors.
 Joint Venture:
In line with the government investment policies, Janata Bank undertakes joint
venture financing and foreign investment in Bangladesh. The country offers
attractive facilities and incentives to foreign investors. The main facilities and The
Policy framework for fore incentives is appended below:
foreign investment in Bangladesh is based on Foreign Private Investment
(Promotion and Protection) Act, 1980 which provides for;
 Non - discriminatory treatment between foreign and local investment.
 protection of foreign investment from expropriation by the state
 ensured repatriation of proceeds from sale of shares and profit

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 Consumer credit Program:
Janata Bank has introduced a strong product line under its consumer financing
profile. In light of ‘Prudential Regulations for Consumer Financing’ of Bangladesh Bank
all the consumer financing products have been included in our product list.
 Credit Card
 Debit Card
 Auto Loan
 General House Building Loan
 Staff House Building Loan
 Service Holders Loan
 Doctors Loan
 Cyber Cafe Loan
 Household Commodity Loan
 Building Renovation Loan
3.15 SPECIAL PRODUCT
A product for non-resident Bangladeshis
 Special NRB product:
 NRB Gift Cheque
 NRB Escrow A/C

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 Continuous Benefit Account
 Advance Benefit Account
 Foreign Currency Account
 NRB Home Loan Scheme
 Credits:
 Advance Benefit Account
 Special deposit product:
 Q-Cash Deposit
 NRB Gift Cheque
 Ghore Ghore Sanchay
 Gift Cheque Scheme
 NRB Escrow A/C
 Continuous Benefit Account
 Foreign Currency Account
 Personalized Services:
Janata Bank Limited with its widely speeded branch network and skilled
personnel provides prompt and personalized services like issuing…..
 Demand Draft
 Telegraphic Transfer
 Mail Transfer

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 Pay Order
 Security Deposit Receipt
 Transfer of fund by special arrangement
 Normal transfer
 Electronic transfer through Ready Cash Card
 Locker Service
 Online Banking:
Times have changed and technological boom has given the businesses
superlative edges over the manual and traditional functionalities of business operations.
So the bank business in Bangladesh has overwhelmingly changed with the introduction
of on-line banking in bank business. Janata Bank Limited has also stepped into the world
of on-line banking and is rapidly progressing in implementation of on-line banking
through Core Banking System (CBS). Up to January, 2015 total 174 branches out of 904
branches have been brought under CBS and as planned all the branches will be brought
under this system by 2016.
 ATM Service:
To offer modern banking services, Janata Bank Limited is providing its
customer with ATM facilities. At present, this ATM service is being provided under
the largest network Comprised of 28 banks of which 26 are member banks and 2 are
network-sharing banks. Card-holders of our bank have access to more than 2800 ATMs,
of which 6 are of the Bank's own and the others are of network-sharing and member
banks’. Apart, Card-holders have the opportunity to use approximately 3,600 Point of
Sales. Schemes have also been taken to increase the number of ATMs of the Bank.

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 Utility Services:
As per decision of the Government 46 branches of our bank (40 branches in
Dhaka city,one branch in Narayanganj city and five branches in Chittagong city) are
involved in receiving all utility bills in a same station from January'2004. Janata Bank
collects various types of utility bills like-
 Gas bill
 Electricity Bill
 Telephone Bill
 Sewerage Bill Collection
 Municipality Holding Tax Collection.
 Inland Remittance:
Janata Bank Limited with its wide ranging branch network and skilled
personnel provides prompt and personalized services like issuing:
 Demand Draft
 Telegraphic Transfer
 Mail Transfer
 Pay Order
 Security Deposit Receipt
 Government Service:
National e-Government Procurement (e-GP) portal of the Government of
the People’s Republic of Bangladesh is developed, owned and being operated by the
Central Procurement Technical Unit (CPTU), IME Division of Ministry of Planning.

48
The e-GP system provides an on-line platform to carry out the procurement activities by
the Public Agencies – Procuring Agencies (PAs) and Procuring Entities (PEs).
3.16 DEPOSITE AND DEPOSITE MIX
 Deposit (in millions)
Source: Annual report 2018

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3.17 INVESTENT
Investment of Janata banks increasing year by year. So we can see customers are interested
to Janata Bank ltd for getting higher return.
 Investment (in corer)
3.18 NET PROFIT
 Net profit in corer

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Chapter: 4
Concept of Credit Management

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4.1 CONCEPT OF CREDIT MANAGEMENT
Credit management includes all activities related with bank credit i.e., volume, mixes, level,
movements and the like.
Credit management is usually regarded as assuring that customers pay on time, credit costs
are kept low, and poor debts are managed in such a manner that payment is received without
damaging the relationship with those customers. An approved credit management policy can
offer assurances to a financing bank, which may facilitate financing.
Credit management is the process of granting credit, setting the terms it's granted on,
recovering this credit when it's due, and ensuring compliance with company credit policy,
among other credit related functions. The goal within a bank or company in controlling
credit is to improve revenues and profit by facilitating sales and reducing financial risks
Credit:
The word credit is derived from the Latin word “credo” which means “I believe” and is
usually defined as the ability to buy with a promise to pay. It consists of actual transfer and
delivery of goods and services in exchange for a promise to pay in future. It is simply the
opposite of debt. Diversification of banking service has accelerated the use of credit in the
expansion of business operation. It is a fundamental precept of banking everywhere that
advances are made to customers in reliance on his promise to pay rather than the security
held by the banker.

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4.2 LOANS AND ADVANCES
In common parlance the loan “document” means any written record which serves as an
evidence in respect of a transaction and be described as anything obtained for recording a
transaction. Documentation may be described as the process or technique of obtaining the
relevant documents. A banker must obtain proper documents executed from the borrower to
protect himself against willful defaults. Moreover, when money is lent against security of
some assets, the documents must be got executed in order to give to the banker a legal and
binding charge against those assets. Documents contain the precise terms of granting loans
and advance and they serve as important evidence in law counts if the circumstance so
require. It is, therefore, absolutely necessary for a banker to obtain proper documents from
the borrower while granting a loan or advance to him. In banking system, loan interest is
calculated in daily basis.
Janata bank is one of the leading largest commercial banks in our country. It has been
playing a vital role in our economy flourishing industrial sector by providing financial
support. Following the guidelines of Bangladesh Bank, credit facilities have been extended
to productive and priority sectors. In consideration of the importance of rural sector on
overall economy of the country Janata Bank has been involved in Rural Financing through
the vast branch network spread all over the country. The main objectives of the rural credit
policy and programs of the bank have been designed to cover all segments of rural
population whether skilled or unskilled such as farmers, landless, laborers, women,
unemployment educated and vocational trained youths, weavers, and other rural dwellers
and artisan. A good number of micro credit programs have been launched for poverty
reduction sponsored by the bank on its own and in collaboration with local and foreign
agencies. Emphasize has been given on entrepreneurship development and Gender Equality
in the credit programs. Besides, the bank has also given emphasis on agro-based industries.
Most of the rural and micro credit programs are collateral free. Interest has been fixed up at
10%. To provide co-operation and necessary counseling to the rural entrepreneurs, bank has
opened “Micro Enterprise Wing” at Head Office, Regional Office and branch level.

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4.3 FUNCTION RELATED WITH CREDIT
 Risk
 Time
 Interest rate
 Security or Collateral
 Operating Expense
 Legal Considerations
 Inflation
 Finance Charge
4.4 TYPES OF LOAN
Fig: Four types of Loans

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4.5 LOAN PRODUCTS
 Continuous Loan:
 Secured Over Draft Against Financial Obligation [SOD(FO)]
 Secured Over Draft Against Work Order [SOD(G)]
 Cash Credit (Hypothecation)
 Cash Credit (Pledge)
 Export Cash Credit (ECC)
 Demand Loan:
 Loan general
 Demand loan against ship breaking
 Payment against documents (pad)
 Loan against import merchandise (LIM)
 Loan against trust receipt (LTR)
 Forced loan
 Packing credit
 Secured over draft against cash incentives
 Foreign documentary bills purchased (FDBP)
 Local documentary bills purchased (LDBP)
 Festival business loan

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 Term Loan:
 Project loan
 Transport loan
 House building loan
 Small business loan
 Consumer finance loan
 Lease finance
 Personal loan
 Table of Loan classification:
LOAN TYPE
UNCLASSIFIED
(MONTH)
SUBSTANDARD
(MONTH)
DOUBTFUL
(MONTH)
BAD
(MONTH)
Continues
Loan Demand
Loan
Expiry up to 5
month
6 to 8 month 9 to 11 month 12 month +
Term Loan Up
to 5 years
0 to 5 month 6 to 11 month 12 to 17 month 18 month +
Term Loan
more then 5
years
0 to 11 month 12 to 17 month 18 to 23 month 24 month +
Micro Credit 0 to 11 month 12 to 13 month 36 to 59 moth 60 month+

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Source: Documents from Head Office Web.
4.6 CURRENT INTEREST RATE
Types of deposite Rate of interest offered (%)
Savings Urban 05.75
Rural 06.00
Freedom Fighter 06.00
Short Term Deposit 03.50
Term Deposits: Rate of interest offered (%)
3 months & above but < 6 months 07.5
6 months & above but < 1 year 7.5
1 year & above but < 2 year 07.75
2 year & above but < 3 year 08.00
Janata Bank Limited Sanchaya
(Savings)
Pension Scheme: (5 years)
09.00
DPS 8.5

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 SOD (FO)
Advance is granted to a client against financial obligations. The security of advance is
granted to the person to whom the instrument belongs. The discharged instrument is
surrendered to the bank along with a letter signed by holder/holders. The bank’s lien is
prominently noted on the face of the instrument under the signature of an authorized
bank official. Interest rate is 13% to 15%.
 SOD (G)
Granted against the work order of government departments, corporation’s autonomous
bodies and reported multinational private organization. Disbursement is made after
completion of documentation formalities, besides usual charge, documents like a
notarized irrevocable power of attorney to collect the bills from the concerned authority
and a letter from the concerned authority confirming direct payment to the bank is also
obtained. The work is strictly monitored to review the progress at each interval. Interest
rate is 13% to 15%
 Cash Credit (Hypothecation)
The mortgage of movable property for securing loan is called hypothecation.
Hypothecation is a legal transaction whereby goods are made available to the lending
banker as security for a debt without transferring either the property in the goods or
either possessing. The banker has only equitable charge on stocks, which practically
means nothing. Since the goods always remain in the physical possession of the
borrower, there is much risk to the bank. So, it is granted to parties of undoubted means
with highest integrity. Interest rate is 13%
 Cash Credit (Pledge)
Transfer of possession in the judicial sense of essential in the valid pledge. In case of
pledge, the bank acquire the possession of the goods or a right to hold goods until the
repayment for credit with a special right to sell after due notice to the borrower in the
event of non-repayment. Interest rate is 13%.

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 Consumer Credit Scheme
This scheme is aimed to attract consumers from the middle and upper middle class
population with limited income. The borrower should have saving or current deposit
account with the bank. Minimum 25% of the purchase cost of the product is to be
deposited be the borrower with the bank is equity before the disbursement of the loan.
The rest 75% is to be kept as cash collateral (FDR, Shanchay Patra etc.) with the bank.
Loan amount is disbursed through a/c payee pay order/demand draft directly to the seller
after submission of the indent, deposit of client equity and completion of documentation
formalities.
 Loan (general)
JBL considers the loans, which are sanctioned for more than one year as loan (g). Under
this facility, an enterprise of financed from the stating to its finishing, i.e. from
installment to its production. JBL offers this facility only to big industries.
 Working Credit
Loans allowed to the manufacturing unit to meet their working capital requirement,
irrespective of their size big, medium or large fall under the category.
 Staff Loan
Bank official from senior officer and above is eligible for this loan. The maximum
amount disbursed is Tk. 50,000/- for a period of 2 years.
 House Building Loan
This loan is provided against 100% cash collateral, besides; the land & building are
also mortgaged with the bank. Interest rate is 17% p.a.
 Small Loan Scheme
JBL introduced three new small loan scheme are:

59
 House Renovation Loan
 Personal Loan
 Small Business Loan
 House Repairing/Renovation Loan Scheme
This loan is offered for renovation and modernization of the house/building/flat which
are acquired by inheritably or purchasing and other ways to make the properties liable
and durable. Interest rate is 14%
 Personal Loan for Salaried Person
This loan is provided to fixed salaried persons in various organizations to meet any
emergency cash needs at various events- treatment/operations of critical disease,
matrimonial, maternity expenditure etc. Interest rate is 10% p.a. and maximum credit
ceiling is Tk1, 00,000/-
 Small Business Loan Scheme
This loan is offered to the small and promising entrepreneurs to meet their capital
requirement and enable them to operate and expand the business purposely.
Maximum credit ceiling is Tk 5.00 lac with interest rate is 10% p.a.
 Loan against Imported Merchandise (LIM)
Advances allowed for retirement of shipping documents and release of goods imported
through L/C taking effective control over the goods by pledge fall under this type of
advance, when the importer failed to pay the amount payable to the exporter against
import L/C, than JBL gives loan against imported merchandise to the importer. The
importer will bear all the expenses i.e. the go down charge, insurance fees, etc. and the
ownership of the goods is retaining to the bank.
Interest rate is 16%

60
 Loan against Trust Receipt (LTR)
Investment allowed for retirement of shipping documents and release of goods imported
through L/C fall under this heard. The goods are handed over to the importer under trust
with the arrangement that sale proceeds should be deposited to liquidate the investments
within a given period. This is also a temporary investment connected with import and
knows as post-import finance and falls under the category "Commercial Lending".
 Payment Again Documents (PAD)
This facility originates payment of Import bills on lodgment of CLEAN shipping
documents received from FOREIGN correspondent against Letter of Credit opened on
behalf of the customers. This is an obligation which the bank shall extend strictly on the
merit of shipping document and which must conform to the terms & conditions of LC.
 Loan documentary Bill Purchase (LDBP)
Payment made against documents representing sell of goods to local export oriented
industries, which are deemed as exports, and which are deemed as exports, and which
are dominated in local currency/foreign currency falls under this head. The bill of
exchange is held as the primary security. The client submits the stance bill and the bank
discounts it. This temporarily liability is adjustable from the proceeds off the bill.
 Loan against Other Securities (LAOS)
Loan against other securities is a 100% secured advance, which requires no sanction
from the Head Officer. It is sanctioned by marketing lien of FDR, ICB Unit Certificate.
Interest rate is16%

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 Inland Bill Purchase (IBP)
Payment made through purchase of inland bills/cheques to meet urgent requirement
of the customer falls under this type of investment facility. This temporary
investment is adjustable from the proceeds of bills/cheques purchased for collection.
It falls under the category "Commercial Landing"
 Foreign Bill Purchase (FBP)
Payment made to customer through Purchase of Foreign Currency Cheques/Drafts
fall under this head. This temporary investment is adjustable from the proceeds of
the cheque/draft. Foreign Exchange Department deals with Letter of credit (L/C)
operation and foreign remittance. L/C operation divided into import operation,
export operation and inland trade. Janata Bank offers two types of credit facilities to
its customers. Such as:
 Funded Credit and
 Non Funded Credit
 Funded Credit
The credit facility in which the fund of the Bank is directly invested is known as
funded credit. Such as cash credit, secured overdraft etc.
 Non Funded Credit
The credit facilities in Bank’s funds are not directly invested are known as non
funded credit such as –Letter Of Credit (L/C), Guarantee etc.

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4.7 CREDIT SCHEMES
Micro Credit Programs
1. Small Farmers & Landless Laborers Development Project (SFDP)
Target Group : Small Farmers & Landless
Objectives: To increase production and to create employment amongst rural poor by
providing credit.
Security: No collateral is required.
Interest: 10%
Repayment: loan repayable by installment.
2. Swanirvar Credit Scheme:
This type of credit facility is given to the poor and landless rural people. The objective of
this scheme is to create employment opportunity amongst poor. The interest is 10%. It is
repayable by 52 weekly installments.
3. Co-operative Credit for rural poor:
This credit is given to the members of Co-operative Association to create employment to the
rural poor co-operators. The Association gives guarantee. Interest rate is 10%.
4. Diversified Credit Programs:
All segments of rural and urban poor people are eligible getting this loan. The main
objectives of this scheme are to create self-employment among the asset less and landless
poor with view to reduction of poverty. Up to75000/-, no collateral is required. It is
repayable by weekly/monthly installment.

63
5. Grain Storage Credit:
It is given to the marginal producers so that they could get fair price of their products.
Hypothecation of cereal crops is stored in go down as security of the loan. It is repaid by 6
months.
Entrepreneurship Development Program
1. Women Entrepreneurship Development Credit Program:
Women Entrepreneurs Development Scheme has been introduced to encourage women in
doing business. Under this scheme, the bank finances the small and cottage industry projects
sponsored by women. Interest rate is 10%. It is repayable in monthly installment within 3
years that star from the 4th month after obtaining loans
2. Cyber Café loan:
This type of loan is given to the trained youth in computer technology in order to create
employment opportunity for the unemployed trained youth and expansion of information
business in the country. Up to tk. 300000, no collateral is required. It is given through
personal guarantee at 10%.
3. Doctor’s Loan:
Doctor Credit scheme is designed to facilitate financing to fresh medical graduates and
established physicians to acquire medical equipments and set up clinics and hospitals and to
create employment opportunity of Doctor’s possessing certificate. Interest rate is 10%.
4. Small business development loan scheme:
This scheme has been evolved especially for small shopkeepers who need credit facility for
their business. This credit facility is given to the small business by third party guarantee that
is acceptable to the bank at 11% interest rate. It is to be repaid in 5 years in 60 monthly
installments in case of term loan or 1 year in working capital.

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Other special credit programs
1 .Credit for Employees:
This type of credit is given to the employees of the bank to meet up the emergency needs at
12% interest rate. Advance cheques of monthly salary are considered as security that is
repaid within 2 years in 24 installments.
2. Consumer Credit Scheme:
Consumer Credit Scheme is related to relatively new field of collateral free finance of the
Bank. People with limited income can avail of this credit facility to buy household goods
including computer and other consumer durables. Interest rate is 12% that is repaid between
1 and 2 years.
3. Personal Loan Scheme:
Personal Loan Scheme has been introduced to extend credit facilities to cater to the credit
needs of low and medium income group for any purpose. Government and semi-government
officials, employees of autonomous bodies, banks and other financial organizations,
multinational companies, reputed private organizations and teachers of recognized public
and private schools, colleges and universities are eligible for the loan facilities.
4. Financing in IT Sectors:
Today, we are living in the age of information that is Internet. To accelerate the growth of
information and expanding IT business in our country and to attract young energetic in IT
professions JANATA BANK has launched a new credit scheme titled “Financing Computer
Software Development & Data Export.” The maximum loan amount is take. 10 million, with
debt to equity ratio being 80:20. The rate of interest is 10%. But anybody with export
market exposure can get the benefit at 9% interest rate. The main feature of this scheme is to
set up industrial based IT projects for development of software for data export. No collateral
is required. if anyone wants to show interest to provide collateral security, they will be given
priority.

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5. Car Loan Scheme:
Car Loan Scheme has been introduced to enable middle-income people to purchase
Cars/SUVs/Jeeps. Governments and semi-government officials, employees of autonomous
bodies, banks and other financial organizations, multinational companies, reputed private
organizations, teachers of recognized public and private universities and businessmen are
eligible for the loan facilities.
6. Gharoa Prokalpa:
Performance of ongoing micro-credit programs has encouraged Janata Bank authority to
undertake a new product. ‘Gharoa Prokalpa’ which is a package of facilities employment
and retain them in the rural areas. It was launched on 25th July 2000.
7. Financing of Industries:
Janata Bank Limited entrusted with the responsibility of developing industries within the
frame work of Industrial policy of the Government of Bangladesh and credit norms of
Bangladesh Bank as well as by the Investment Board. If the project is managerially,
marketing Pont of view, technically, commercially and financially viable, then Janata
Bank Limited finances the project. Sponsors/companies having prior experience in the
related field are given priority.
8. Loan Limit:
Janata Bank Limited may be financed up to Tk. 129.60 million in single project a year. But
if any project required above the limit, the project may be financed under
consortium/syndication arrangement with other financial institutions.
9. Rate of Interest:
Rate of interest of project loan ranges from 11%-13%. Working capital rate of interest is
12% to 13.50% and with that in export oriented industries ranges from 7% to
14%(changeable).

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10. Debt Equity Ratio: Normally debt equity ratio is 50:50. But higher equity ratio
sharing is given preference. Above all, Bankers/Customers relation is also considered in
fixing debt equity ratio.
11. Repayment Mode and Period:
5 years to 10 years with 6-24 months grace period inclusive of construction period. Project
loan is repayable by half yearly installment. Working capital loan and export credit are
sanctioned for 1 (one) year and they are renewable every year.
12. Security:
The project land, building, machineries and others i.e. project assets are considered as
primary security against term/project loan. But if the project is to be set up on rented
premises, collateral securities is obtained obtained minimum 1.3 times of project loan.
Sanctioning Authority: Janata Bank Limited, Head Office, Dhaka.
4.8 INTEREST RATE
The interest rates of various types of loans are as follows:
Types Of Loans &
Advances
Interest
Rate
Collateral
Required
Loan limit
C.C(PLEDGE) 15% Not Compulsory 100000-200000
C.C(HYPOTHECETION) DO Do Do
OVER DRAFT (O.D) DO Bank Deposit 50000-100000
REAL ESTATE (Resident) 12% Documents of
Assets
No limit

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REALESTATE(Commercial) 15.5% Do Do
PALLI RIN 10% Personal Guarantee <50000
SERVICE LOANS 12% Check of monthly <50000
CONSUMER CREDIT 15% Personal Guarantee <100000
DOCTOR’S LOANS 10% Do <50000
SYBER CAFÉ LOAN 10% Do <50000
PRATIBONDI LOAN 10% Do <50000
GENERAL LOAN 11% <40000
4.9 APPROACHES TO THE BANK
When a borrower approaches to JBL for a loan, he or she is required to fulfill the following
criteria: He or she has to be a client of the bank. He or she needs to apply properly
describing the purpose of the loan amount needed & his/her capacity of repayment.
4.10 BANK GUARANTEE
Suppose one party get a project or construction work then employer may want guarantee.
This guarantee is required because whether party can give financial support to finish the
whole work or not. Bank will give such guarantee against their client it is also called
contingent liability. There are three type of bank guarantee:
 Bid Bond
 Performance
 Advance payment

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Bid bond: This type of BG is issued only for tender.
Performance guarantee:
Depending on the reliability of the client’s transaction bank will sanction guarantee.
Advance payment guarantee (APG):
It may be happened that one party doesn’t complete their work within the fixed time. And
this client already issued a BC from bank. In this circumstances party may request advance
payment from their employer. If bank sanction APG against that party employer may give
advance payment to them. This type of loan is sanctioned only few reliable parties.
Requirements of the clients: Client must have SB/CD a/c in that bank.
Interest and other charges:
No interest is charged for BC. Bank charge commission @ 0.5% over the total amount.
Quarter and VAT (commission @15%) and stamp cost.
Security:
After getting approval of the BC a margin amount will be transfer from parties CD/SB a/c as
security. At the time of issuing BC a liability will be created to the party a/c. The liability
amount is equal to the amount they are showing as BG.Counter guarantee: Bank will take a
counter guarantee document from the party as a security. By this way bank will receive
guarantee form the party.
Discretionary power: BC will be sanctioned from the Head Office.
Returning procedure:
After finishing the work party will return the BC to the bank. Bank will reverse the liability
and return margin to party a/c.

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4.11 CALCULATION OF INTEREST ON ADVANCES
Interest on sub-standard and doubtful loan accounts should be credited to “Interest Suspense
Account” instead of crediting the same to the interest income account.
Calculation of interest on Bad/loss loan accounts should be deferred instead of calculating
the same on those accounts.
If there is any recovery on the above accounts that recovery/ portion of recovery will be
treated as interest recovery, not principal recovery. After adjustment of interest due,
principal portion of respective loan account will be adjusted later on. Cost of application
form and processing fee will be credited to bank’s income A/c “Service and other charges”.
Base for Provision =Outstanding of CL—Interest Suspense—Eligible Securities
 List of eligible securities:
 All financial Obligation (FDR, DPS, SPS, All other deposit, SP, WEDB)-100%
 Gold and Gold Ornaments –100% of Market value
 Guarantee/Counter Guarantee BB/Govt. –100%
 Goods with pledge/LIM –50% of Market value
 Land and Building up to 50% of Market value
4.12 LIMITATION OF LOAN SECTION
There are some limitations in the advance section of this bank. Among them the major
limitations are-
 Lack of good party.
 Party characteristics are not good all time
 Party all time not keep their word

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 Some time pressure from top level though the party condition is not good.
 Here there is lack of enough loan scheme that are effective now a days.
 Many old payment of loan is due, that creates pressure now.
 Lack of information about old loan, that creates problems to continue the case of
default loan.
 Lack of proper docomentation about loan.
 Loan Interest rate is very competitive.
 Lack of Technological advantage
 Lack of promotional activities about loan product.
4.13 ANALYSIS OF LOAN DISBURSEMENT, OUTSTANDING, CLASSIFIED AND
RECOVERY SCENARIO
It is the duty of the recovery department of the Bank to recover the landed fund within the
stipulated time and if the borrower fails to repay the money within the said period Bank will
declare him as a defaulter and recover the fund by selling the securities given by the
borrower or by freezing his account or make a suit against him.
The total outstanding Loans and advances of Janata Bank Limited from 2014 to 2018 are
given below:
Source: Annuals Report of JBL Ranging 2014-2018
Graphical representation:
Particulars 2014 2015 2016 2017 2018
Amounts 225,732.21 257,801.03 305,339.58 285,747.65 319,773.25

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Comment:
In the above figure we see that the total Loan & advances of Janata Bank from 2014 to 2018
is increasing trend that indicates better performance in providing Loan & advances. In the
total Loan & advances of Janata 25% to 30% Loan is Industrial sector Loan. Industrial
sector of Janata Bank consists of Jute industries, Tannery Industries, Textile Industries, Agro
Industries and Industrial credit etc.
 Sector wise Loans and Advance TK in million
Name of Sector 2018 2017
Rural, ME&SP.
Financing
18781.30 16955.67
Export Credit 50400 48850.40
Import Credit 46227.90 50694.60
Industrial Credit 76438.20 57530.60
Food & Allied 8930.50 6879.90
Steel & Engineering 8412.10 7980.80
Textile Ind. & trade 19778.20 18805.80

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Jute Sector 5696.70 7565.80
Tannery 5579.10 5430.90
Transport 340.10 213.93
Other 79189.10 64838.80
Total 319773.20 285747.65
Source: Annual Report of the Janata Bank Limited 2018
 Graphical Presentation:

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 Summary of Loans and Advances with risk status
The summary of loans and advances with the risk status is given below:
Types ofLoans
and Advances
Position as of
2018 2017
Variance
(%)
Total Loans
&
Advances
319,773.25 285,747.65 11.91
Less: Total
provision for
Loans &
Advances
3,089.21 22,291.78 86.14
Net Loans
and Advances
316,684.04 263,455.87
Classified Loans
Sub-Standard 5,183.25 7,076.52 26.75
Doubtful 4,212.10 4,296.11 1.96
Bad/Loss 27,980.32 20,394.23 37.20
Total
Classified
Loans &
Advances
37,375.67 31,766.86
Classified Loans as % of total Loan
Sub-Standard 1.6% 2.48% 0.86

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Doubtful 1.32% 1.50% 0.19
Bad/Loss 8.75% 7.14% 1.61
Total 11.69% 11.12% 0.57%
4.14 PRINCIPLES OF SOUND LENDING
 Safety
Janata Bank exercises the lending function only when it is safe and the risk
factor is adequately mitigated and covered. Safety depends upon:
 The security offered by the borrower.
 The repaying capacity and willingness of the borrower is to repay the advance.
 Liquidity
The liability of a Bank is repayable of demand or at a short notice. So the Bank
has to maintain its liquidity at a sufficient level. Investment on building, plant, machinery,
land etc. cannot be recovered quickly, so it is less liquid.
 Profitability
Profit is needed to pay interest to depositors, depreciation, and maintenance, declare
dividend to share holders, provide or reserve against bad and doubtful debts etc. so like all
other Banks Janata Bank also disburse advances to earn profit.
 Security
To ensure safety of advances, Banks takes different types of securities like MTDR,
Sanchaypatra, land, work order etc. Banker should ensure that the securities are adequate,
marketable and free from encumbrances.

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4.15 DIVERSIFICATION OF RISKS
It is very risky for a bank to invest all its assets into a particular sector or a single borrower
or to one particular region. If somehow the business of that sector or area or borrower
collapses, the bank may fall in a critical situation. So it is better to invest in different
sectors/borrowers and spread over the country. That’s why Janata Bank invests its fund in
various sectors.
4.16 LOAN CLASSIFICATION
Loan classification attempts to categorize the debt information in a systematic manner. Loan
classification is defined in terms of degree of risk associated with loans. Classification of
loans mean and include only such assets of the balance sheet of a bank which do not yield
interest income and which have remained past due for some quarters. Loans are generally
categorized in two types
 Loan
 Classified Loan
 Unclassified Loan
 Classified loan:
If any continuous credit is not adjusted/ renewed within expiry date, the loan will be
treated as classified/ irregular loan from the next day of the expiry date. Loans are classified
which are judge to have a reduced chance of repayment. Classified loan can be three types:
 Classified loan
 Substandard
 Doubtful
 Bad/ loss

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 Substandard: If the loan unadjusted for six months or more but less than nine
months, the loan will be treated as “substandard”.
 Doubtful: For nine months and above but less than twelve months the loan will be treated
as “doubtful”.
 Bad: If the period is twelve months or more, the loan will be classified as “bad”. The above
time frame is applicable in respect of demand loan also.
 Unclassified loan:
 Unclassified loan are those which are repay regularly. Objectives of loan
classification:
 Find out net worth/ adjust capital of a bank
 Help for assessing financial soundness of a bank.
 Calculate the required provision and the amount of interest suspense
 Put the bank on sound footing in order to develop sound banking practice in
Bangladesh.
4.17 LOAN PROVISIONING
A certain amount of money is kept for the purpose of provisioning. This percentage is set
following Bangladesh Bank rules.
LOAN TYPE UC SS DF BL
Continues
Loan
1% 20% 50% 100%
Demand Loan 1% 20% 50% 100%

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Term Loan Up
to 5 years
1% 20% 50% 100%
Term Loan
more than 5
years
1% 20% 50% 100%
Term Loan
more than 5
years
1% 20% 50% 100%
Micro Credit 5% 5% 5% 100%
Source: Documents from Head Office website
4.18 GENERAL PROCEDURE FOR INVESTMENT
The following procedure is applicable for giving advance to the customer. These are:
 Duly fill-up first information sheet
 Application for Investment
 Collecting CIB report from Bangladesh Bank
 Making Investment proposal
 Project appraisal
 Head office approval
 Sanction letter
 Documentation
 Charges on Securities
 Recovery

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 First Information Sheet
First information sheet is the prescribed form provides by the respective branch that contains
South East Bank information of the borrower. It contains following particulars: –
 Name of the concern with its factory location,
 Officer address and Telephone number,
 Name of the main sponsors with their educational qualification,
 Business experience of the sponsors,
 Details of past and present business, it achievement and failures,
 Name of all the concerns wherein the sponsors have involvement,
 Income tax registration number with the amount of tax paid for the last three
years,
 Details of unencumbered assets personally owned by the sponsors,
 Details of liabilities with other Banks and financial institutions including
securities held there against,
 Estimated cost of the project & means of finance.
 Application for Investment
After receiving the first information sheet from the borrower Bank official verifies all the
information carefully. He also checks the account maintains by the borrower with the Bank.
If the official becomes satisfied then he gives application or Investment form to the
prospective borrower.
 Collecting CIB Report from Bangladesh Bank
After receiving the application for advance, South East Bank sends a letter to Bangladesh
Bank for obtaining a report from there. This report is called CIB (Credit Information
Bureau) report. South East Bank generally seeks this report from the head office for all
kinds of Investment. The purpose of this report is to being informed that whether the
borrower has taken loan from any other Bank; if ‘yes’ then whether the party has any
overdue amount or not.

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 Making Investment Proposal
After receiving CIB report, concern branch prepare an Investment proposal, which contains
terms, and conditions of Investment for approval of Head Office or Head of the concerned
branch. Following documents are necessary for sending the Investment proposal:
 Loan application
 Declaration of the borrower
 Photograph of the borrower duly attested
 Bio data of the borrower
 Limit sanction
 Credit report
 Legal opinion
 Memorandum of article
 Trade license
 Copy of title deeds
 Tax clearance certificate
If the officer thinks that the project is feasible then he will prepare a proposal. SEBL
prepares the proposal in a specific form called Investment proposal. It contains following
relevant information:
 Borrower,
 Date of establishment, constitution,
 Main sponsor/director with background,
 Capital structure, address,
 Account opening date, introduced by type of business, particulars of previous
sanctions,
 Security (existing and proposed),
 Movement of accounts,
 Components on the conduct of the account,
 Details of deposit, liabilities of allied concerns, liabilities with other Banks,

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 CIB report,
 Rated capacity of the project (item wise),
 Production/purchase during the period,
 Sales during the period,
 Earning received for the period,
 Project Appraisal:
It is the pre-investment analysis done by the officer before approval of the project.
Project appraisal in the Banking sector is needed for the following reasons:
 To justify the soundness of an investment,
 To ensure repayment of Bank finance,
 To achieve organizational goals,
 To recommend if the project is not designed properly.
Techniques of Project Appraisal:
An appraisal is a systematic exercise to establish that the proposed project is a viable
preposition. Appraising officer checks the various details submitted by the promoter in first
information sheet, application for Investment and Investment proposal.
South East Bank Ltd. considers the following aspects in appraising a proposal.
 Technical viability
 Commercial viability
 Financial viability
 Economic viability
The Head Office (HO) mainly checks the technical, commercial and financial viability of
the project. For others HO is dependent on branch’s information. But when the investment
size is big, then the HO verifies the authenticity of information physically.

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 Head Office Approval:
Upon receipt of the Investment proposal from the branch, the Head Office aging appraises
the project. If it seems to be a viable one, the HO sends it to the Board of Directors for the
approval of the Investment. The Board of Directors (BOD) considers the proposal and takes
decision whether to approve the Investment or not. If the BOD approves the Investment, the
HO sends the approval to the concerned branch.
The respective officer of Head Office appraises the project by preparing a summary named
“Top Sheet” or “Executive Summary”. Then he sends it to the Head Office Credit Division
for the approval of the Loan. The Head Office Credit Division considers the proposal and
takes decision whether to approve the Investment or not. If the committee approves the
Investment, the HO sends the approval to the concerned branch with some conditions. These
are like:
 Drawing will not exceed the amount of bill receivables.
 All other terms and conditions, as per policy and practice of the Bank for such
advance to safeguard the Banker’s interest shall also be applicable for this sanction
also.
 Bank may change/alter/cancel any clause (s) of the sanction without assigning any
reason whatsoever and that shall be binding upon the client unconditionally.
 Branch shall not exceed the sanctioned limit.
 Sanction Letter
After getting the approval of the HO the branch issues sanction letter to the borrower. A
sanction letter contains the following particulars amongst other details:
 Name of borrower
 Facility allowed
 Purpose
 Rate of interest
 Period of the Investment and mode of adjustment

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 Security
 Others terms and condition
 Documentation
If the borrower accepts the sanction letter, the Documentation starts. Documentation is a
written statement of fact evidencing certain transactions covering the legal aspects duly
signed by the authorized persons having the legal status. Following are the most common
documents used by the SEBL for sanctioning different kinds of Investment:
 Joint Promissory Note
 Letter of Arrangement
 Letter of Disbursement
 Letter of Installment
 Letter of Continuity
 Trust Receipt
 Counter Guarantee
 Stock Report
 Letter of Lien
 Status Report
 Letter of Hypothecation
 Letter of Guarantee
 Documents Relating to Mortgage
 Charges on Securities
There are 6 types of moods of charging on securities:
Pledge: Pledge is the bailment of goods as security for payment of a debt or performance of
a promise. A pledge may be in respect of goods including stocks and share as well as
documents of title to goods such as railway receipts, bills of landing, dock warrants etc. duly
endorsed in Bank’s favor.

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Hypothecation: In case of hypothecation the possession and the ownership of the goods
both rest the borrower. The borrower to the Banker creates an equitable charge on the
security. The borrower does this by executing a document known as Agreement of
Hypothecation in favor of the lending Bank.
Mortgage: According to section (58) of the Transfer of Property Act, 1882 mortgage is the
transfer of an interest in specific immovable property for the purpose of securing the
payment of money advanced or to be advanced by way of loan, existing or future debt or the
performance of an engagement which may give rise to a pecuniary liability. In this case the
mortgagor dose not transfer the ownership of the specific immovable property to the
mortgagee only transfers some of his rights as an owner.
Lien: Lien is the right of the Banker to retain goods of the borrower until the loan is repaid.
The Banker’s lien is general lien. A Banker can retain all securities in his possession till all
claims against the concern person are satisfied.
Assignment
Assignment means transfer of any existing or future right, property or debt by one person to
another person. The person who assigns the property is called assignor and the person whom
it is transferred is called assignee. .
Usually assignments are made of actionable claims such as book debts, insurance claims etc.
In banking business, a borrower may assign to the Banker (1) the book debts (2) money due
from government’s debt (3) insurance policy.
Set-off
Set-off means the total or partial merging of a claim of one person against another in a
counter claim by the latter against the former. Set-off arises when a debtor or his creditor
wishes to arrive at the net figure owing between them when separate accounts or debt are
involved.

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4.19 IMPORTANCE OF LOAN CLASSIFICAION
 Strengthen credit discipline
 Improve loan recovery position
 Make planning for future course of loan
4.20 LOAN MONITORING
Investment monitoring implies that the checking of the pattern of use of the disbursed fund
to ensure whether it is used for the right purpose or not. It includes a reporting system and
communication arrangement between the borrower and the lending institution and within
department, appraisal, disbursement, recoveries, follow-up etc.
 The borrower’s behavior of turnover.
 The information regarding the profitability, liquidity, cash flow situation and trend in
sales in maintaining various rations
 Regular checking the balance of SB/CD/STD accounts of the borrower.
 Periodical visit with the customers to maintain relationship and supervision of supplied
articles
 Legal action to be taken after failings all possible efforts to recover the bank’s due.
 Issuance of legal notice to the defaulter customers and guarantors prior to classification
of the loans.
4.21 STEPS AGAINST DEFAULDER
 Reminder the party to repay the loan after validity dates
 Send final notice
 Send legal notice

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 Eventually sue a case against the party.
4.22 RECOVERY OF LOAN
When Janata Bank sanctions loans and advances to its customers, they clearly state
the repayment pattern in the loan agreement. But some credit holders do not pay their credit
in due period. The nationalized and private sector commercial banks have to face this
sort of problems. This situation is especially severe in Janata Bank. To overcome the
problem of overdue loan, the bank needs to take some particular loan recovery
programs. They are:
 Establishing credit supervision and monitoring cell in the bank
 Re-structuring the loan sanctioning and distributing policy of the bank
 Sanctioning loans and advances against sufficient securities as best as possible
 Giving more powers to the branch manager in credit management decision
 making process
 Offering a package of incentives to the sound borrowers
 Giving more emphasis on short term loans and advances
 Imposing restrictions on loans and advances for sick industries
 Taking legal actions quickly against unsound borrowers as best as possible
 within the period specified by the law of limitations.
Steps for Loan Recovery Against Defaulters
The following steps are taken by Janata Bank Ltd against the defaulters for recovery of loan:
Reminding the party to repay the loan after validity dates: First of all, the Credit
Administration division reminds the borrower about the remaining days to repay the loan
mentioning the validity dates from time to time.
i. Send final notice: If the borrower fails to repay the loan within the sanctioned period for
repayment then he or she is given an additional period for the repayment of the loan
attaching a final notice for the repayment as well.
ii. Send legal notice: When the borrower fails to repay the loan even after the
additional period and the final notice, the credit administration of JBL sends a legal notice to
the borrower mentioning that if he or she is not capable to repay the loan within a specific
time then the bank will file a suit in the court against him or her.
iii. Eventually sue a case against the party: Finally, the bank, not getting any
repayment from the borrower, suits a case against the defaulter according to the
respective law. Then the decision of the court will be final for the recovery process and both
the party and bank will have to abide by the law.
These are the general procedures for recovery of loan followed by Janata Bank Lt

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Chapter 5
Performance of JBL
(Sukanta Biponi Branch)

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5.1 MEASURING LIQUIDITY
Particulars 2018 2017 2016 2015 2014
1.Loan to Total
Deposit
ratio:
Total Loan
Advance
Total Deposit
346506767.99
486124589.53
=0.71
303403506.09
385170551.66
=0.79
223601459.17
330903157.17
=0.68
194459923.91
297494288.62
=0.65
164415923.69
267491588.59
=0.59
2.Loan to
Liabilities ratio
: Total Loan&
Advance
Total Liabilities
346506767.99
551393083.75
=0.63
303403506.09
436617743.43
=0.69
223601459.17
376078512.04
=0.59
194459923.91
346901786.76
=0.56
194459923.91
346901786.76
=0.56
Asset to
Liabilities ratio:
Total Asset
Total Liabilities
591921195.07
551393083.75
=1.07
464024096.98
436617743.43
=1.06
396238451.84
376078512.04
=1.05
359082388.34
346901786.76
=1.035
359082388.34
346901786.76
=1.035
Comments:
A higher Liquidity ratio indicates a less Risk & Less Profitability of a Bank. The Bank has
the Loan: Deposit ratio in 2014 is 0.79, But in 2018 the proportion of loan amount gradually
decrease in respect to Deposit collection. In year 2018, Janata Bank grand taka 0.71 of loan
in respect of deposit taka 1.07, which show a grater utilization of Deposit money.
Furthermore Bank’s Loan to Liabilities ratio is also decreases from 2017 to 2018, which

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indicate lower default risk. Finally Janata Bank’s Asset level also increase in respect with
total Asset in last year.
5.2 SECTOR WISE LOAN DISBURSEMENT OF JBL.(SUKANTA
BIPONI BRANCH)
Following the guidelines of Bangladesh Bank, credit facilities have been extended to
productive and priority sectors. Total Loans and Advances of the Bank stood at
TK.346506720.43 crore as of 31 December 2016 as compared to TK.303403225.81 crore in
2015,registering a growth rate of 12.44%.In credit facilities, the Bank has given due
importance to sect oral needs and requirements of both public and private sector.
Sector wise Loans and Advances are shown below:
Amount in crore
Year 2014 2015 2016 2017 2018
Transport 41935.48 423535.50 42741.94 46241.94 43279.57
Steel & Engineering 2980779.5 2810779.5 3664650.54 3664650.54 3580107.53
Sugar Mills 3981182.81 3925182.81 5094220.43 5614220.43 5016397.85
House Building 1558467.74 1658567.74 2032392.47 5432392.47 2004166.6
Rural Credit 17278091.41 18275091.41 19594354.84 21594354.84 21978763.44
Food (Industry &
Trade)
2207930.11 2307630.11 2547983.87 2147983.87 2802419.35
Industrial Credit 30069986.56 31629986.56 53836021.51 53836021.51 55848118.31

An internship report of credit management in Janata bank Ltd.

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