This document summarizes a study on debt recovery techniques, problems, and prospects at BASIC Bank LTD's Shantinagar branch. The study investigated causes of non-performing loans through a survey. It found that major causes included economic downturns reducing business profits and consumer buying. It recommended that banks carefully assess borrowers' repayment abilities, monitor loan use closely, and address insider lending to minimize bad loans.
Slade Waterhouse is Australia's leading debt collection firm dealing in Brisbane, Sydney, Melbourne, Adelaide, Perth and all Major cities in Australia.
www.sladewaterhouse.com.au
12 steps to achieve excellence in debt collection and recoveryEXUS
The challenges Collection & Recovery departments face nowadays have forced them to become more inventive and efficient.
The 12 steps to achieve excellence in C&R embed business knowledge that EXUS has accumulated all these years through the cooperation with field experts.
Go through this presentation and evaluate how these “best practices” employed by top financial institutions in the world can be adopted by your organisation.
The debt collection industry has changed significantly over the past ten years. The impact of technology on debt collection practices, industry consolidation
Watch full video on YouTube -
https://youtu.be/f3VgVOgAUoE
Credit management is the process of granting credit , setting the term its granted on, recovering this credit when its due and ensuring compliance with company credit policy.
The difference in the rate of interest that a bank charges on the amount lent and the rate it pays to the depositors is technically called spread or interest rate spread.
This spread bank has to use to meet all its overheads and interest on deposit but also provide for NPA.
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Slade Waterhouse is Australia's leading debt collection firm dealing in Brisbane, Sydney, Melbourne, Adelaide, Perth and all Major cities in Australia.
www.sladewaterhouse.com.au
12 steps to achieve excellence in debt collection and recoveryEXUS
The challenges Collection & Recovery departments face nowadays have forced them to become more inventive and efficient.
The 12 steps to achieve excellence in C&R embed business knowledge that EXUS has accumulated all these years through the cooperation with field experts.
Go through this presentation and evaluate how these “best practices” employed by top financial institutions in the world can be adopted by your organisation.
The debt collection industry has changed significantly over the past ten years. The impact of technology on debt collection practices, industry consolidation
Watch full video on YouTube -
https://youtu.be/f3VgVOgAUoE
Credit management is the process of granting credit , setting the term its granted on, recovering this credit when its due and ensuring compliance with company credit policy.
The difference in the rate of interest that a bank charges on the amount lent and the rate it pays to the depositors is technically called spread or interest rate spread.
This spread bank has to use to meet all its overheads and interest on deposit but also provide for NPA.
Thank You For Watching
Subscribe to DevTech Finance
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
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Credit Control Lunch and Learn session for new start ups. Improve payment performance with active credit management. Some fundamentals on credit management.
This presentation provides complete study ofcredit risk management,how it was performed in yester years ,how it is taken care nowadays and what is the road ahead in future
Watch out full video on Youtube. Click on the link below-
https://youtu.be/48r3LhGRX_A
Credit monitoring is the continuous process of reviewing and following loan accounts, asset quality and credit reports to judge the accuracy and standard of loan asset.
Whenever loan is granted to customer, banker is required to ensure that it remains a standard asset and does not turn out to be non-performing asset.
Pre-disbursement Care
Sanction letter shall be issued detailing various terms and conditions on which the loan has been approved.
Acknowledgement letter should be obtained from borrower stating that he/she has well understood and noted the terms of sanction.
Security documents along with acknowledgement letter should be kept aside properly.
Credit report should be reviewed periodically to ensure that there are no adversity causing risk to loan recovery.
Documentation should be done in proper format with all signatures as a part of due diligence.
End use verification to ensure legality of purpose.
Post-disbursement Care
Post-disbursement monitoring involves both onsite monitoring (visiting the unit) and offsite monitoring (scrutiny of records)
OFFSITE MONITORING INVOLVES :-
Study of Quarterly Information System, Monthly Select Operational Data, Cash Budget and Financial Statements
Stock Statement Verification
Scrutiny of the register and bills
Annual report containing director’s report, management discussion analysis, auditor’s report and financial statements
Comparison of actual financials with projected one on the basis of which loan was sanctioned
ONSITE MONITORING INVOLVES :-
Physical verification of stock
Check whether all machinery are working in good condition
Checking of Register Books ( Sales register, Purchase register, Production register, Stock register)
Invoices and utility bills
No. of skilled and unskilled workers in the unit
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I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
Credit Control Lunch and Learn session for new start ups. Improve payment performance with active credit management. Some fundamentals on credit management.
This presentation provides complete study ofcredit risk management,how it was performed in yester years ,how it is taken care nowadays and what is the road ahead in future
Watch out full video on Youtube. Click on the link below-
https://youtu.be/48r3LhGRX_A
Credit monitoring is the continuous process of reviewing and following loan accounts, asset quality and credit reports to judge the accuracy and standard of loan asset.
Whenever loan is granted to customer, banker is required to ensure that it remains a standard asset and does not turn out to be non-performing asset.
Pre-disbursement Care
Sanction letter shall be issued detailing various terms and conditions on which the loan has been approved.
Acknowledgement letter should be obtained from borrower stating that he/she has well understood and noted the terms of sanction.
Security documents along with acknowledgement letter should be kept aside properly.
Credit report should be reviewed periodically to ensure that there are no adversity causing risk to loan recovery.
Documentation should be done in proper format with all signatures as a part of due diligence.
End use verification to ensure legality of purpose.
Post-disbursement Care
Post-disbursement monitoring involves both onsite monitoring (visiting the unit) and offsite monitoring (scrutiny of records)
OFFSITE MONITORING INVOLVES :-
Study of Quarterly Information System, Monthly Select Operational Data, Cash Budget and Financial Statements
Stock Statement Verification
Scrutiny of the register and bills
Annual report containing director’s report, management discussion analysis, auditor’s report and financial statements
Comparison of actual financials with projected one on the basis of which loan was sanctioned
ONSITE MONITORING INVOLVES :-
Physical verification of stock
Check whether all machinery are working in good condition
Checking of Register Books ( Sales register, Purchase register, Production register, Stock register)
Invoices and utility bills
No. of skilled and unskilled workers in the unit
Thank you for Watching
Subscribe to DevTech Finance
Solutions for small business owners to receive guidance and business assistance from NGOs and microfinance institutions. Based on social internship done with an NGO in Ahmedabad in 2017
One of the major concerns is the quality of bank lending. Maintaining rigorous credit standards is a significant challenge particularly in an environment for new competition and clients. There is a need for evaluating the borrower behavior rather than the cash flow analysis. The banking sector is facing a big burden with the increase in NPA’s. Therefore it is imperative that the banks conduct a strict credit appraisal. The term credit appraisal basically refers to the judging the credit worthiness of a borrower.
The main purpose of the report is to understand the different techniques applied while conducting a credit appraisal. For the purpose of credit appraisal Jai Prakash Power Venture Ltd a power generation and distribution company will be appraised based on various parameters like company background, background of the promoters, business of the company, financial statement analysis of the company the company valuation and other such factors.
The study is to analyze the credit management-A Study on Prime Bank Ltd.Ariful Saimon
INTERNSHIP REPORT
ON
The study is to analyze the credit management
A Study on Prime Bank Ltd
PREPARED FOR
Mr.Rajib Datta
Assistant Professor
Department Of Finance
Faculty of Business Administration
Premier University
Chittagong
PREPARED BY
Md Ariful Islam Saimon Chowdhury
ID. No: 150-22080-2147
Section: A
Major: Finance
Batch: 22nd
MBA Program
Premier University
Date of Submission: 11/05/2017
The primary objective of the project is to understand the process of Project Appraisal for Term Loan & assessment for Working Capital Requirements. This includes evaluation of Financial Statements, Purpose for which facility is availed, Technical & Financial feasibility of project, Credit History, Managerial Competence and Past Experience in case of Term Loan.
This paper was presented at the Future of SMEs Banking Conference organised by Business a.m on 27th November, 2019 in Lagos. For SMEs to be able to play the role of engine of growth, Banks and other financial services provider need to be creative in managing funding and credit risks.
"Credit Performance of a Branch for Export Import Bank Bangladesh Limited,’Md. Sabbir Ali
From the research it has been found that evaluating credit worthiness is the very first step of minimizing credit risk. Exim bank always evaluates worthiness of customers before granting their loans or advances. Employees of the bank believe that the existing way of evaluating credit worthiness has no flaws.
Exim bank takes different kind of security measures before and after granting credit. For example, exim bank looks at the CIB report and Transaction Profile to find out the credit history and credit defaults of the customer. Security measures like frequent monitoring and early alert process for loan payment can reduce the risk of credit default.
From the research it has been found that documentation has positive correlation with credit Risk management Processand hence documentation can minimize credit risk. Proper documentation of loan and advance provides legal support against the loan.
Collateral is one of the most important parts of credit risk management. Collateral provides safeguard against non-performing loans and advances. For that reason banks always trends to keep good quality collateral. This research has found that there is a positive correlation between collateral and minimizing credit risk.
Efficiency also has an effect on credit risk management. Bank’s ability to understand risk and schedule disbursement and collection increases efficiency and minimizes credit risk.
An Analysis of Factors Influencing Customer Creditworthiness in the Banking S...Dr. Amarjeet Singh
This research is based on Bahraini bankers’ perception on the factors influencing customer creditworthiness in the banking sector of Kingdom of Bahrain. We consider that the research was done in the Kingdom of Bahrain which has a growing banking industry. To enhance the whole procedure of the creditworthiness, it is vital for an employer to understand the most important factors influencing customer creditworthiness. The purpose of the study was to investigate the factors influencing customers creditworthiness in the banking industry. The creditworthiness can be assessed through qualitative factors, quantitative factors and risk factors. The research was conducted through a survey, using the questionnaire as the research instrument. The respondents of the study are employees of banks across the Kingdom dealing with creditworthiness. The statistical tools used in the study are Multiple Regression Analyses and weighted mean. The researcher has found that there is significant relationship between all three factors and creditworthiness, and they don’t equally influence the creditworthiness. The research provides recommendations to banks in assessing the creditworthiness. The researcher recommended that employees must use the most effective methods such as credit scoring to conduct the analysis of creditworthiness in order to make effective decisions. Moreover, the researcher recommended that analysts should take into considerations the most effective factors in the analysis process and they must not neglect other.
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2. Debt Recovery Techniques Issues,
Problems & Prospects of
BASIC Bank LTD (Shantinagar Branch)
Supervised by
Md. Abdullah Al Mahmud
Senior Lecturer
Presented By:
Humayra Sahrin Trina
ID# 1129BBA01681
Major: Finance & Banking
Manarat International University
3. EXECUTIVE SUMMARY
Bank customers expect their bankers to provide them with loan and
advances to make up the short fall in their required find. The ability of
the bank to maintain profitability depends largely on the extent to
which the credit policy and debt recovery techniques are maintained.
The purpose of this research was to investigate the causes of non-
performing loans in BASIC Bank LTD (Shantinagar Br.). The research
questions used to guide the research included:
What are the causes of non- performing loans in BASIC Bank LTD
(Shantinagar Br.)?
What specific steps have bank managers taken to deal with the
problem of nonperforming loans’?
What is the level of success of the actions taken?
This is an explanatory research that adopted the survey research
design. Data was collected with the help of a questionnaire sent to 10
bank officers & 5 bank clients. Secondary sources information include
the use of existing literary coupled with use of some journals and other
unpublished manuals were seen to be useful for this work.
Chapter one highlights one the statement of the researches problem,
definition of some important terms used for the study, scope, limitation.
Chapter two dealt with relate iterative.
In the later part it focuses on conceptual and theorelocal bed rock
upon which bank recovery techniques is built .
4. Executive Summary (Continue…)
After theoretical discussion next chapter dealt on data collection which
includes questionnaire analysis, personal interview, analysis as well as
testing hypothesis based on response to the questionnaire & also the
findings.
Last chapter is conclusion and recommendation of the researcher.
Recommendations of this study are that loan officials must grant loans
basing their appraisal on loan analysis principles, using their
discernment as well as experience to verify debtor credibility i.e., debt
repayment ability, capital management and collateral suitability. More
importantly, loan officials should strictly monitor and control how the
loan is used in order to be able to promptly handle arising problems.
The study found that the actions had proved useful in minimizing bad
loans in the bank surveyed as reported by the credit managers. In
addition, banks should continue to invest in the training of loans officials
since most of the respondents confirmed that it was a new trend.
The findings of this study will help the management in BASIC Bank LTD
(Shantinagar Br.) to improve their management of non-performing
loans.
5. Objectives of the Study
General Objective:
The major objective of this study is to determine
the major causes of bad and doubtful debts of
BASIC Bank.
Specific objectives:
i . To investigate the causes of bad and doubtful
debts in BASIC Bank LTD.
ii. To examine the effects of bad and doubtful
debts in banks profitability, investors, the public
and the economy
6. Scope of the
Study
Different kinds of credit
facilities extended by BASIC
Bank Limited
General procedures for
getting those credit facilities
What kinds of standard
documents are required for
getting those credit facilities?
How different kinds of projects
are appraised and financed at
BASIC Bank Limited
Present scenario of recovery
rate and classified loan of
BASIC Bank Limited.
Limitations:
Sufficient records,
publications were not
available as per my
requirement.
Time constraint.
Lack of opportunity to work in
all the departments for a
longer time.
Up to date data are not
available.
Lack of opportunity to visit
more than one branch.
Lack of opportunity to survey
on wide number of clients.
7. METHODOLOGY
Data Source
Primary Data:
Structured
questionnaires,
Open-ended and
closed ended
questions.
Secondary Data
Reports,
Journals,
Credit procedure
manuals,
Offer letters,
Financial statements of
BASIC Bank Ltd.
Data Collection
Instruments
• Questionnaire
• Face to face conversation
• Observing
Data Analysis
• Mean
• Hypothesis
• Bar Chart
• Pie chart
• Frequency Table
• Independent sample t test
8. BASIC Bank at a glance
Particulars Detail
Name BASIC Bank Limited
Date of Incorporation August 2,1988
Date of Inauguration of Operation January 21,1989
Head Office Sena Kalyan Bhaban
195 Motijheel C/A
Dhaka-1000
Name of Chairman Mr. Alauddin A. Majid
Name of Managing Director Mr. Khandakar Md. Iqbal
Number of Branches 45
Paid up Capital 2946.98 million
Reserve & Surplus 3092.20 million
Ownership Government of Bangladesh
Service Provided Deposit Scheme, Credit Facility, Foreign
Exchange Services
9. ANALYSIS
Demographic Data
(Staffs)
Name
Gender
Age
Educational Status
Number of years in Credit
Department
The bank’s interest rate
Time duration to access credit
Types of loan(secured &
Unsecured)
Distance of mortgage
Percentage of loan of the value of
the property
Use the other means to recover
the loan
Demographic Data
(Clients)
• Name
• Gender
• Age
• Educational Status
• Bank often monitors the
loan
• Customers prefer to repay
their loan
• Reports are generated to
monitor the loan
performance
• Credit customer often
services their loan regularly
10. FACTORS OF BAD DEBT (STAFF)
Lack of well trained lending personnel
Positive relationship between high interest rate and bad debt
0
1
2
3
4
5
6
7
8
9
10
Lax
Procedures
used for credit
risk
Lack of
aggressive
credit collection
methods
The speedy
consideration
in granting
process
Insider Lending
& Owner
Concentration
Factors of Bad Debt
SA
Ag
N
DA
SDA
11. FACTORS OF BAD DEBT (CLIENT)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
New
businesses
experience
Simultaneous
operation of
too many
kinds of
business
Inappropriate
use of the loan
Debtors
conceal some
of the true
data
The provision
of poorly
valued
collateral
Factors of Bad Debt
Strongly Agree Agree Neutral Disagree Strongly Disagree
12. Level of Success
Bank Staff
Reduction of Interest
Projects for
management of
problem loans, or
intensive care units and
detailing scope, skill,
resources and
efficiency.
The contents of loan
files, the use of its
information to mentor
the quality of loan is
clear
Clients
Increased use of
information sharing
Effort to develop a
teamwork relationship
with your unit
Specific lending
procedures and
techniques
Overall performance of
the credit department
Standard loan process
form the client’s initial
enquiry efforts to the
final lending decision
13. Hypothesis t-test
Lax Procedures used for credit
risk assessment
Lack of aggressive credit
collection methods
Speedy consideration in
granting process
Insider Lending & Owner
Concentration
Lack of well trained lending
personnel
positive relationship between
high interest rate and
Reduction of Interest
Projects for management of
problem loans
Use of its information to
mentor the quality of loan is
clear.
New business experience
Simultaneous operation of
too many kinds of business
Inappropriate use of the
loan
Debtors conceal some of
the true data
Provision of poorly valued
collateral
Develop a teamwork
relationship with your unit
Standard loan process
Specific lending procedures
and techniques
Overall performance of the
credit department
Increased use of information
sharing
14. FINDINGS
The national economic downturn which leading to
depression for business in general; reduced buying
ability of consumers;
Insider lending and owner concentration;
New business experience
Simultaneous operation of too many kinds of
business
Inadequate procedures for credit risk assessment
and credit management;
Misuse of the loan;
Legal delays.
15. RECOMMENDATION
To manipulate its strengths like low-cost leadership,
skilled human resource, low rate of classified loan and
unique products by minimizing and addressing its
weaknesses like traditional products and services and
weak IT infrastructure.
Loan officials must carefully grant loans by basing their
consideration on loan analysis principles, using their
discernment as well as experience to verify debtor
credibility;.
More importantly, loan officials should strictly and
regularly monitor how the loan is used in order to be able
to promptly handle arising problems.
This will ensure that loan losses are kept at a minimum
via a programmed which permits constant supervision on
the projects being financed, easy identification of
delinquent loans and instituting effective corrective
measures.