The document presents an internship report on evaluating the credit risk management of Premier Bank Limited's O.R. Nizam Road branch in Chittagong. It discusses the bank's credit risk grading system, analyzes the branch's credit targets, disbursements and recovery rates from 2009-2013, and provides recommendations to improve the bank's credit services and risk management practices. In conclusion, it finds that while the bank follows international credit risk management standards, it could further enhance its policies, monitoring, and use of technology.

1. Welcome
to the
Presentation
on
Internship Report

2. Dividend Policy: A Study on the perception of
Shareholders
Prepared by :
Jakiya Sultana
ID No.: R-152429
Program: RMBA
Semester: Spring 2016
Major in Finance and Banking
Department of Business Administration
Faculty of Business Studies

3.  Main Objective:
The main objective of this study is to evaluate the Credit
Risk Management of Premier Bank Limited, O.R.Nizam
Road Branch, Chittagong.
 Specific Objective:
 To give an overview of the sample branch.
 To discuss about the Credit Risk Management of the
bank.
 To highlight the Credit Risk Grading of the bank.
 To evaluate the Credit Risk Management performance of
the sample branch.

4.  Primary Data Sources:
 Observation.
 Work experience at different desk.
 Relevant file study provided by the officers concerned.
 Conducting interviews with both customers and authority of
the branch.
 Secondary Data Sources:
 Annual report of Premier Bank Limited.
 Procedure manual published by the bank.
 Credit Risk Grading Manual published by Bangladesh Bank.
 Brochures and leaflet of the banks.
 Newspapers, Journals, Articles & text book reference.

5. Credit
Continuous Loan
1) Cash Credit
2) Over Draft
3) Secured
Overdraft (SOD)
Demand Loan
1) Loan against
Imported
Merchandise(LIM)
2) Payment against
Document(PAD)
3) Loan against Trust
Receipt(LTR)
4) Foreign Bill
Purchased(FBP)
5) Inland Documents
Bill Purchased(IBP)
Term Loan
1) Consumer
Credit Scheme,
2) Lease Finance,
3) Staff Loan.
To be continued…

6. Credit
Funded
1) Loan Against Monthly Savings Scheme (MSS),
2) Loan Against Double Benefit Scheme (DBS),
3) Loan Against Deposit Pension Scheme (DPS),
4) Loan Against Fixed Deposit Receipt (FDR),
5) House Building Loan,
6) Car Loan,
7) Over Draft,
8) Loan Against Trust Receipt (LTR),
9) Lease finance,
10) Payment Against Document (PAD),
11) Cash Credit,
12) Agriculture Financing,
13) SME Cash Credit.
Non-Funded
1) Letter of Credit
(LC),
2) Back to Back
LC,
3) Accepted Bill of
Payment (ABP),
4) Bank Guarantee
(BG).

7. To be continued…
Performance of Credit Risk Management of
the sample branch:
Total Target in last 5 years (2009 to 2013)
(Figure in Crore Taka)
Year 2009 2010 2011 2012 2013
Amount 75 85 92 105 125
Growth
Rate
----- 13.33% 8.24% 14.13% 19.05%
75 85
92
105
125
0
20
40
60
80
100
120
140
2009 2010 2011 2012 2013

8. Year 2009 2010 2011 2012 2013
Amount 65 72 85 103 134
Growth
Rate
----- 10.77% 18.06% 21.18% 30.10%
65 72
85
103
134
0
20
40
60
80
100
120
140
160
2009 2010 2011 2012 2013
Total Disbursement in last 5 years (2009 to 2013)
(Figure in Crore Taka)
To be continued…

9. Total Recovery in last 5 years (2009 to 2013)
(Figure in Crore Taka)
Year 2009 2010 2011 2012 2013
Amount 58.7 68 78 94.76 127.3
Recovery
Rate
90.31% 94.44% 91.76% 92% 95%
58.7
68
78
94.76
127.3
0
20
40
60
80
100
120
140
2009 2010 2011 2012 2013
To be continued…

10. Total target, disbursement & recovery in 2009 to 2013
(Figure in Crore Taka)
Year 2009 2010 2011 2012 2013
Target 75 85 92 105 125
Disbursement 65 72 85 103 134
Recovery 58.7 68 78 94.76 127.3
Recovery Rate 90.31% 94.44% 91.76% 92% 95%
0
20
40
60
80
100
120
140
160
2009 2010 2011 2012 2013
Target
Disbtursement
Recovery
To be continued…

11. Credit Performance of Sample Branch in Credit Risk Grading:
Number Risk Grading Short Name Score
1 Superior SUP  100% cash covered
 Government guarantee
 International Bank guarantees
2 Good GD 85+
3 Acceptable ACCPT 75-84
4 Marginal/Watchlist MG/WL 65-74
5 Special Mention SM 55-64
6 Sub-standard SS 45-54
7 Doubtful DF 35-44
8 Bad & Loss BL <35

12.  The overall credit target of the sample branch is increasing
but slowly.
 In Total credit disbursement of the sample branch is in
increasing trend but moderately.
 The overall recovery rate of the sample branch is in good
position which shows the good credit management of the
branch.
 The performance of risk management is good as its
recovery rate is 90% on an average.
to be continued…

13.  The company is maintaining a good credit monitoring
system that restricts the borrowers to default the loan.
 The organization has a good number of credit facilities
with some specialized loan for their clients.
 Modern banking service like ATM service is not available
in the branch.
 The number of employee is not enough according to the
total customer it serves through the branch.

14.  The bank should be more innovative and diversified in its
services.
 It should develop their E-Banking system to gear up their
credit services.
 They should give more emphasis on the disbursement of
the loan.
 Detail Manual should be prepared for accurate credit
operation.
 Some discretionary power should be given to the branch
management regarding loan sanctioning.
 Strong Security Coverage should be obtained by the
borrower as security. So that the bank may save from
financial losses.
to be continued…

15.  Terms and condition of credit should be more flexible and
easy.
 Various facilities should be provided to regular borrowers
which will encourage borrowers to take loan.
 They need to put more attention toward the expansion of
branch network.
 They should launch ATM Booths service in this branch.
 They should recruit more employees to serve their
customers.

16. This report mainly focuses on the Credit Risk Management
of the Premier Bank Limited because credit section is the
main source of earning of bank. Credit Risk Management
policies and techniques used in Premier Bank at present no
doubt is comparable to international standards. The officials
follow the policy very strictly. They are choosy and
conservative in sanctioning loan. The proposal is
thoroughly scrutinized by the loan sanctioning authority.
The total function of the credit division is monitored
periodically.