General Banking and Credit Management Activities of UCBL

1
General Banking and Credit Management Activities

of
United Commercial Bank Limited
Submitted by
WWW.ASSIGM!"#$I".C$M
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Part-II
Chapter One
Introductory Part
Part-II
Chapter One
Introductory Part
1
%.&. Introduction'
A bank is usually defined as a financial institution which deals in money. Today however, the
functions of a bank have increased so much that it is considered a very vital agent of
development in country like ours. Because of their positive involvement in trade, industry,
business finance and a host of their allied services, banks today firm a very important part of an
economy.
A bank like private commercial Bank helps to develop economy as follows:
Fig 1: evelopment of Bangladesh
The nationali!ed banks, countries margin operational banking units, could not demonstrates and
achieve optimistic results in terms of overall economic growth. The gloomy picture of
nationali!ed banks is mainly due to"
#ack of $uality of services.
%inimum of commitment toward institutions.
%anagement inefficiency.
Finance
Payment
Services
Resources
Mobilization
Resource
allocation
Speciatio
n
Economics
of Scale
Real
investment
Real savings
Economic
Growth
1
&'cessive intervention of collective bargaining agent ()BA*
#ack of security.
ocumentation of loans and advances debarring legal action in case of default.
+low rate of recovery of loan.
#ack of supervision and monitoring of loans and advances.
irective loans.
,olitical instability.
Transitional inconsistency while formulating policy issues on banking.
ue to inefficient and continuous loosing concern of public sector, the main ob-ect of
privati!ation policy was"
To reduce deficit of the .ovt. to meet continuous loss of public enterprises.
To improve operative efficiency of enterprises.
To introduce competitiveness in all spheres of economic activities e'cept
few areas where .ovt. control of economic activities was unavoidable.
/n the country, it was increasingly felt that a number of ,)Bs might have improved their position
putting nationali!ed banks into competition. The launching of ,)Bs has finally created a
significant impact in $uality of services in banking. Banking being a service industry, it is not
easy to $uantify to performance of this sector like manufacturing. The performance of banking
sector in terms of generating of profit, e'pansion of bank branches, mobili!ation of deposits,
deployment of advances, involvement in foreign trade and generating of employment.
%.%. Background of t(e study'
0nited )ommercial Bank is the largest local commercial bank operating in Bangladesh. They have a huge
customer base that is ever growing. 0nited )ommercial Bank is mainly providing two types of service.
1* )orporate Financial +ervices
1* )onsumer Financial +ervices.
1
)onsumer financial services include account opening, card services, loan facilities, and so on. .eneral
Banking is one of the parts of customer financial service. .eneral banking consists of account opening for
various types of deposit and saving scheme, card issue, che$uebook issue, receiving foreign remittance,
and such which will be discussed on the following chapters.
%.). $rigin of t(e Study'
The report entitled 2.eneral Banking 3 )redit %anagement Activities of 0nited )ommercial
Bank #imited: A +tudy on 0ttarkhan branch4 has been prepared as a partial fulfillment of BBA
program authori!ed by the supervisor or epartment of Business Administration, Faculty of
Business 3 &conomics, affodil /nternational 0niversity. The key purpose of this report is to
identify and analy!e the .eneral Banking 3 )redit %anagement system of 0nited )ommercial
Bank #td. This report will help me for learning about the .eneral Banking 3 )redit
%anagement +ystem of 0nited )ommercial Bank ltd. This study will also help the authority of
0nited )ommercial Bank to find out the ma-or operation of its .eneral Banking 3 )redit
%anagement system and also to get an idea about how they should offer better services
compared to other banks. 0nited )ommercial Bank will also be able to know how far )ustomers
are satisfied with their services.
After completing my Bachelor of Business Administration (BBA* as a student of /0, / wanted
to complete my /nternship program from a reputed Bank which would be helpful for my future
professional career. / got the opportunity to perform my internship in the 0)B#. / was sent to
.ulshan )orporate Branch. /t was three months practical orientation program. This report is
originated as the re$uirement of 0)B#.
%.*. $b+ective of t(e Study'
The ob-ective of this study is to have a clear concept and some practical e'perience about the
overall banking +ystems of the 0nited )ommercial Bank #imited and analy!e the ratio of this
1
organi!ation and identify the financial condition of this organi!ation. /n addition, the study seeks
to achieve the following ob-ectives:
a. To find out the .eneral banking activities of 0)B#.
b. To e'amine the )redit management activities of 0)B#.
c. To evaluate the financial analysis of 0nited )ommercial Bank #td.
d. To suggest some possible measures for the improvement of 0)B#.
%.,. Met(odological As-ects'
/n order to make the report more meaningful and presentable, two sources of data and
information have been used widely.
The .#rimary Sources/ are as follows:
Face"to"face conversation with the respective officers and staffs of the Branch.
/nformal conversation with the clients.
,ractical work e'posures from the different desks of the departments of the
Branch covered.
5elevant file study as provided by the officers concerned.
The .Secondary Sources/ of data and information are:
Annual 5eport of 0)B#.
6arious books, articles, compilations etc. regarding general banking functions,
foreign e'change operations and credit policies.
ifferent 7,rocedure %anual8, published by 0)B#.
ifferent circular sent by 9ead :ffice of 0)B# and Bangladesh Bank.
0ata Collection -rocedure'
Annual 5eports of the 0)B#.
,eriodicals ,ublished by Bangladesh Bank.
1
ifferent books, articles etc. regarding Foreign &'change :perations
0ata #rocessing'
/n order to process the data %+ &'cel has been used to analy!e the data and to prepare the
graphical presentation.
%.1. Sco-e of t(e Study'
Banking sector of Bangladesh is a prospective, profitable and prestigious sector. These Banking
sectors receive increase emphasis from the government over the past few years and achieved a
beautiful growth rate annually over the past five years. )urrently most of the market share of
banking sector is owned by the local owners and some are by the multinational owner. There are
several reasons for the dominance of local owners in the Banking sector of Bangladesh, which
will be discussed in the following sections. ;ith these advantages it is not surprising that
national Banking sector like /BB#, BB#, are making huge amount of money every year. Thus,
undoubtedly there lies a considerable scope in understanding and analy!ing this potential sector
and identifying the right choice for 0nited )ommercial Bank #imited.
This strategic analysis will enable:
0nderstanding the Banking sector micro and macro"environmental factors in
Bangladesh.
0nderstanding the functional, business, corporate, and global level strategy of
0)B#.
eveloping a picture of how the future Banking sector will look like.
Analy!ing how strategic planning, implementation and e'ecution are done in
0)B#.
Finally, suggesting in what areas 0)B# can adopt changes to make it the market
champion
1
%.2. Limitation of t(e Study'
To prepare the internship / encountered some limitations. The limitations are given below"
#imitation of time was a ma-or constraint in making a complete study, due to time
limitation. The duration was only twelve weeks. /t was too limited to cover all the
banking area. %any aspects could not be discussed in the present study.
)onfidentiality of data was another important barrier that was faced during the
process of this study.
#ack of comprehension of the respondents was the ma-or problem that created a
lot of confusion regarding verification of conceptual $uestion.
As being an intern, it also created some problems as / was unable to ac$uire hands"on"e'perience
in all the departments, due to the bank8s policy of maintaining secrecy and also because / did not
get the opportunity in all the departments.
1

Chapter Two
Organization
al Profle
Chapter Two
Organization
al Profle
1
).%. 3istory'
/n Bangladesh, first commercial banks started business back in 1<=>. 0nited )ommercial Bank
#td. (0)B* is one of the first five private commercial banks started operation in Bangladesh.
0nited )ommercial bank #imited was established under the rules 3 regulations of Bangladesh
bank 3 the Bank companies8 Act 1<<1, on the 1?
th
@une 1<=> with the leadership of #ate %r.
+hah-ahan Aabir, founder chairman who had a long dream of floating a commercial bank which
would contribute to the social"economic development of our country. 9e had a long e'perience
as a good banker. A group of highly $ualified and successful entrepreneurs -oined their hands
with the founder chairman to materiali!e his dream. /ndeed, all of them proved themselves in
their respective business as most successful star with their endeavor, intelligence, hard working
and talent entrepreneurship. Among them, %r. %.A. 9ashem became the honorable chairman
after the demise of the honorable founder chairman. The Bank obtained permission to commerce
business with effect from 1? @une 1<=> and started banking operations on 1< @une 1<=> with an
authori!ed capital of Tk 1BB million ordinary shares of TA 1BB each. The paid up capital was Tk
>C.C million but now 11<.= corers. #ater, both authori!ed and paid up capital were increased
several times and on >1 ecember 1BB, they stood at Tk 1,BBB million and Tk 1>B.1? million
respectively. :f the total paid up capital, Tk 1B1.C? million was paid by its >D sponsorsE >,BF=
members of general public shareholder paid Tk 11F.CF million and the remaining Tk 1F.B?
million were subscribed by the government of the ,eople8s 5epublic of Bangladesh. 5eserve
fund if the bank comprised statutory reserves and general reserves if Tk >>F.D= million in 1<<<
as against Tk =C.== million in 1<<B. The bank is listed with haka and )itation +tock &'change.
The management of the bank is vested in a 11"member board of director with the managing
director as the chief e'ecutive. The bank carries out almost all types of commercial banking
activities.11?
th
branches covering all ma-or cities of Bangladesh.
1
The )ompany started its banking operation and entitled to carry out the following types of
banking business
a. All types of commercial banking activities including %oney %arket operations.
b. /nvestment in %erchant Banking activities.
c. /nvestment in )ompany activities.
d. Financiers, ,romoters, )apitalists etc.
e. Financial /ntermediary +ervices.
f. Any related Financial +ervices.
The )ompany (Bank* operates through its 9ead :ffice at haka and 11?
th
branches. The
)ompanyGBank carries out international business through a .lobal Hetwork of Foreign
)orrespondent Banks. "(e 4egistered $ffice of t(e Bank is' ,lot: );+ (A*"1, 5oad: >F
.ulshan Avenue, haka, Bangladesh. ,ABI: J=="B1"==C1CBB. &"%ail: infoKucbl.com. ;eb
site: http:GGwww.ucbl.comG.
+.;./.F.T: 0)B#B9
).). 5ision6 mission 7 core values'
5ision'
To be the bank of first choice through ma'imi!ing value for their )lients, shareholders, /nvestors
and &mployees and contributing to the national economy with social commitment. To be the best
performing community bank in the 0nited +tates by continuing to e'pand our franchise in areas
of high growth opportunities. To further differentiate ourselves by providing seamless service to
customers doing business across the ,acific 5im by establishing offices in strategic locations in
Asia
1
Mission'
;e aspire to be the most admired financial institution in the country, recogni!ed as a dynamic,
innovative and client focused company that offers an array of products and services in the search
for e'cellence and to create an impressive economic value. ;e will provide a sustainable, high
level of financial performance, while continuously enhancing shareholder value. ;e will build
long"term customer relationships by offering a full range of financial products and services while
adhering to the highest ethical standards and providing $uality personali!ed service. :ur
customers choose us because we deliver the best. ;e value and reward both individual initiative
and teamwork. ;e foster an environment in which our employees are proud and eager to work.
;e actively participate in social and economic programs for the betterment of the communities
we serve.
Core values'
1. ;e put our customers first
1. ;e emphasi!e on professional ethics
>. ;e maintain $uality at all levels
F. ;e believe in being a responsible corporate citi!en
C. ;e say what we believe in
?. ;e foster participative management
).*. $b+ectives of UCBL'
Bangladesh is now integral part of global market. As such there is an urgent re$uirement for
Bangladesh to place the traditional banking pretties in harness with the global trades, of a free
market economy by following international banking customs, practices and standards. Today
clients of a bank in Bangladesh are e'posed as well as international markets. They have to stay
update with their practice and standards to meet the demands of achieving harmony in the high
standards of a free economy.
1
0nited )ommercial Bank #imited fully appreciates the importance and implication of the rapidly
emerging competition in banking and finance sector of Bangladesh. /t intends financing its
customer suited to his or her place in the market. /n this regards 0)B# emphasi!es in its
employment the software aspects of human resource capability. /t also emphasi!es competence
among its banking professional to cater to vary customer re$uirements to the modern time.
The ob-ective of 0)B# is not only earn profit but also to keep the social commitment
and to ensure its co operation to the person of all level, to the businessman,
industrialist specially who are engaged in establishing large scale industry by
consortium and the agro based e'port oriented medium and small scale industries by
self inspiration.
0)B# is always ready to maintain highest $uality of services by upgrading banking
technology prudence in management and by applying high standard of business ethic
through its established commitment and heritage.
0)B# is committed to ensure its contribution to national economy by increasing its
profitability through professional and disciplined growth strategy for its customer and
by creating corporate culture.
Business ob+ectives'
Build up a low cost fund base.
%ake sound loan and investment.
%eet capital ade$uacy recruitment at all the time.
&nsure 1BBL recovery of all advances.
&nsure a satisfied work force.
Focus on free based income.
Adopt an appropriate management technology.
/nstall a scientific %/+ to monitor banks activities.
1
).,. Cor-orate Information'
Auditors:
+yful +hamsul Alam 3 )o.
)hartered Accountants
Hame of the Bank : 0nited )ommercial Bank #imited
#egal +tatus : ,ublic #imited )ompany
Founded : @une 1?, 1<=>
+logan : 0nited we Achieve
Authori!ed )apital : =BBB.BB %illion
,aid up )apital : D1DC.BB %illion
Humber of Branches : 11? (:ne 9undred Twenty +i'*
)hairman : %r. %.A. +abur (Acting*
)ompany +ecretary : %r.%ir!a %ahmud 5afi$ur 5ahman (A%*
%anaging irector : %r. %uhammed Ali
Trading of shares in +& : Hovember >B, 1<=?
Trading of shares in )+& : Hovember 1C, 1<<C
Ta' )onsultants : %r. %d. %osharrof 9ossain, Advocate
#egal )onsultant : T./.H. Hurun Habi )howdhury
5ating Agency : )redit 5ating /nformation 3 +ervices #td. ()5/+#*
4egistered $ffice'
United Commercial Bank Limited6 3ead $ffice
Bulus Center6 ,lot " );+" (A*"1, 5oad Ho M >F
.ulshan Avenue, haka"1111, Bangladesh.
,hone : J=="B1"==C1CBB.
Fa' : J=="B1"==C1CBB"?BBB, J=="B1"==C1CBF
&"%ail : infoKucbl.com.
;eb site : http:GGwww.ucbl.comG, +.;./.F.T: 0)B#B9
1
).1. Commitments of UCBL'
In carrying ourselves at 8ork'
iscipline
9onesty 3 /ntegrity
+incerity
)reativity
In serving t(e bank'
#oyalty
Total commitment and dedication
&'cellence through teamwork
In serving customer'
)ustomer " first
Nuality " focus
)redibility 3 secrecy
).2. Credit 4ating'
)5/+# has rated the bank based on ecember >1, 1B11 with 7AA"O(pronounced as double a
minus* in the long term and +T"1 for the short term. The date of rating was April B<, 1B11.
Pear #ong Term 5ating +hort Term 5ating
1B11 AA" +T"1
1B1B AJ +T"1
0)B# has been rated as AA" which means Ade$uate +afety for timely repayment of financial
obligations. This level of rating indicates a corporate entity with an ade$uate credit profile. 5isk
factors are more variable and greater in periods of economic stress than those rated in the higher
categories.
The +hort Term rating +T"1 indicates high certainty of timely payment. #i$uidity factors are
strong and supported by good fundamental production factors. 5isk factors are very small.
1

).9. #roduct 7 Services'
Lone #roducts
Trade Finance
/ndustrial Finance
/mport Finance
&'port Finance
#one +yndication
;orking )apital Finance
,acking )redit
Transport #oan
#ease Finance
9ire ,urchase #oan
9ouse Building #oan
9ome #one
)onsumer )redit #oan
Auto #oan
octors #oan
%arriage #oan
&ducation #oan
9ospitali!ation #oan
Travel #oan
)H. )onvention #oan
9ome %ortgage #oan
9ouse 9old urable #oan
)redit )ard
0e-osit #roduct
)urrent eposit
+avings eposit
+pecial Hotice eposit
Fi'ed eposit
Foreign )urrency eposit
AG)
0)B %ulti %illionaire
0)B %oney %a'imi!er
0)B &arning ,lus
0)B ,+ ,lus
0)B Poungsters +aving
0)B Poungsters ,+
0)B +avings ,lus

$t(er Service
;estern 0nion %oney
Transfer
+%& Banking +ervice
:nline +ervice
/nward 3 :utward
5emittance
Travelers )he$ues
0nderstanding and Bridge
Financing
#ocker +ervice
:ffshore Banking

1
).:. Board of 0irectors'
C(airman
Mr. M.A. Sabur ;Acting<
5ice C(airman
S(o8kat A=i= 4ussell
0irector 7 C(airman6 !C
Mr. M.A. Sabur
0irector 7 C(airman6 AC
Mr. Md. >a(angir Alam ?(an
0irectors
Mr. M.A. 3as(em ;0irector<
3a+ee @unus A(med ;0irector<
3a+ee M.A. ?amal ;0irector<
Mrs. ur a(ar Aaman ;director<
Mr. Saifu==aman C(o8d(ury ;0irector<
Mr. S(abbir A(med
Mr. S(arif Aa(ir ;0irector<
Mr. Md. "anvir ?(an ;0irector<
Mr. Anisu==aman C(o8d(ury ;0irector<
Mr. Asifu==aman C(o8d(ury ;director<
Mrs. Sultana 4e=ia Begum
Mr. A(med Arif Billa(
Managing 0irector
Mr. Mu(ammed Ali
Com-any Secretary
Mr. Mir=a Mo(mud 4afiBur 4a(man
1
).%&. 3ierarc(y of t(e Management of UCBL'

Senior Vice President
Vice President
First Assistant Vice
President
Executive Vice President
Assistant Vice President
Managing Director
Senior Executive Ofcer
Executive Ofcer
Senior Ofcer
Ofcer
Junior Ofcer
Sub-Sta
De!ut" Managing Director
1
).%%. #erformances of UCBL'
The business of banking consists of borrowing and lending. As in other businesses, operation
must based on capital, but employ comparatively little of their own capital in relation to the total
volume of their transactions. The purpose of capital and reserve accounts is primarily to provide
an ultimate cover against losses on loans and investment.
0)B# was incorporated as a public #imited company on the 1
nd
@une 1<<< under )ompany Act
1<<F. The Bank started commercial banking operations effective from >
rd
August 1<<<. uring
this short span of time the Bank has been successful to position itself as a progressive and
dynamic financial institution in the country. The Bank widely acclaimed by the business
community, from small businessGentrepreneurs to large traders and industrial conglomerates,
including the top rated corporate borrowers from forward"looking business outlook and
innovative financing solutions.
/n year 1BB< 0)B# made commendable in all business arenas like eposit, )redit, Fund
%anagement, /nvestment and Foreign &'change related business.
Pear"wise performance analysis of 0)B# in different business arenas is shown below:

"able' &C ;Amount in Crore<
Particu#ars
Financia# $ear
%&&' %&&( %&&) %&*& %&**
Authorize
!apital 1""" 1""" 1""" #"""
#"""
Pai$%p !apital &'' &'' 11'( &'1" )&)*
1
Reserve Fun 1*'+ 1##' &#1# ,(*1
-eposits (&&'+ *((#* )))," 11,")1 1,'(#*
Avances ,)**+ ((((+ +1+'& ',*+" 11**"+
.nvestments **1# )&"1 ',(+ 1*"(# 1',#,
Gross .ncome +"*& )#*" '*(" 1,(#) 1'('#
Gross
E/peniture (",( *("" +(1* #)**
1,*&*
0et Pro1t2Pre$
ta/3 1++# 1(+,
1*(&
,+,&
*1),
.mport +",&' +"""' *##*) #+++) '"'&"
E/port &)&," ,+*"" ,#*1' *")1& )+'+&
0o4 of Foreign
!orresponent &,* &*) &)( &'+ ,,,
0o4 of Employees &"#& &&'& &*"# &),# &'#&
0o4 of 5ranches #( #( '# 1") 11*
0umber of
Shareholers )('' 1",,) 1",,) )&)',
Source6 Annual Report From &"")$&"11
1
).%). "y-ical Structure of a Branc('
SEVP+,ranc-
Manager
&!eration Manager
Account
O!ening
Section+Front
.as-
Section
.redit
Sectio
n
Account
s
Section
Foreign
Exc-ange
Section
Ofcer+Secti
on inc-arge
Ofcer+Secti
on inc-arge
Ofcer+Secti
on inc-arge
Ofcer+Secti
on inc-arge
Ofcer+Secti
on inc-arge
Junior
Ofcer
Assista
nt
Ofcer
Junior
Ofcer
Assista
nt
Ofcer
Junior
Ofcer
Assista
nt
Ofcer
Junior
Ofcer
Assista
nt
Ofcer
Junior
Ofcer
Assista
nt
Ofcer
Su!er Visor
Securit"
/uard
/un Man Messeng
ers
.#eaner
1
).%*. Cor-orate Social 4es-onsibility ;CS4<'
Though business is a process of generating g revenue through economic transactionE At 0)B we
believe it is not a phenomenon out of the society. Aligned with revenue generation, there are
some moral obligations for our Bank to contribute towards society. These moral obligations
combined together in the form of charity or development is corporate social responsibilities.
)ertainly the Bank has moral debt for social commitment to integrate social, &nvironmental and
economic concerns into its values and day to day operations activities.
0nited commercial Bank limited. :ne of the largest private banks of the country is highly
concerned about the assimilation of social cause in its core process. As a part of our commitment
to create real value in a changing world, we are determined to hold ourselves accountable for the
social, &nvironmental and economic impacts of our operations. And we are committed to
developing policies.
Business practices and social services which drive change in our industry we use the power of
our brand the energy and passion of our people and the scale of our business to create meaningful
changes in society.
!ducation'
0nited commercial Bank has long been practicing )+5 /n education sector through scholarship
for poor and brilliant students, &ducation promotion scheme education for underprivileged
children, onation to education institution etc.
A donation was given to the :ne degree initiative to facilitate learning sessions for poor children
in April 1B11. +ince children from poor and unfortunate families lack opportunities in having
education and proper recreation in our country its urgent to take proper and ade$uate initiatives
for the development of this less fortunate group. 0)B and one degree initiative -ointly made an
attempt to conduct a learning session consisting of a series of intra and inter school $ui!
competition as well several recreational events in 11diffrent schools.
Financial assistance was provided to department of applied chemistry and comical engineering,
university of haka for enhancing their modern educational facilities during @anuary 1B11.
0)B always encourages the participation of students in e'tracurricular activities. Therefore a
donation was made to st. @oseph higher secondary school for arranging their annual science fair
1BB1. :n February 1B11 a donation was also made to shikkhar manunnayane shammilito
pracheshta a -oint endeavor of the ma-or schools and colleges of greater haka for arranging a
1
fair as a part of their ongoing education programmer named education and cultural fair 1B11 on
February BD 1B11
3ealt('
0)B have always been directly or indirectly involved in pro-ects for improvement in health
sector of Bangladesh. As a continuous effort, 0)B made a donation of BT 1CBBBBB to
B/5&% ental epartment to install a complete dental unit and dimplant surgical kit.
B/5&% dental department serve people since 1<=D on that note with a social responsibly
aspect this financial support was provided with an ob-ective of better treatment of mass people.
A donation of taka 1Clac was also given to )hittagong samitee for establishment of a hospital in
)hittagong on ecember 1B11.A donation was also made for sandman a voluntary institute of
maniacal student of faridpur medical college unit for supporting their voluntary activates in
@anuary 1B11
Financial assistance was also provided on Hovember B1 1B11 to %r. %ohammad %ahboob
9osssain Ahan. Assistant professor department of Bio"Technology 3 .enetic &ngineering
kushtia /slamic university, As he was suffering from acute lymphoblastic leukemia.
!nvironment'
As a conscious corporate citi!en 0)B is not only promoting environment friendly pro-ects but
also advising its clients to make their pro-ects compliant as regards to environmental issues.
)onse$uently the corporate where 0)B financed be it large or small are becoming fully aware of
environmental impacts and complying with the banks re$uirements besides 0)B also provided
financial support for a number of causes last year.
A donation was also provided for to the department of soil water and environment haka
university during @une 1F"1?"1B11 with an ob-ective to enhance their environmental research
work.
0isaster Management'
As a socially responsible corporate body 0)B always comes forward whenever the country is
stricken with a natural disaster or a tragic accident a fatal accident occurred on @uly 11 1B11 in
mirsarai )hittagong F1 school students died and 1D more were severely in-ured in a tragic road
accident at mirsarai )hittagong most of them were 1> to 1? year old and students of Abu Torab
high school. The tragic death of these young students shocked the whole country. ;hile the
country is still trying to recover from this massive shock, ifferent banks, business groups,
1
professional organi!ation, educational institutions donated to help the affected families from the
accident.
A donation was also made to AI/ATA limited for fund generation for the tsunami affected
people on @une 1>, 1B11.
Art 7 Culture'
:ver the year 0)B has been contributing for the development of art and culture sector in
Bangladesh which includes donation to different cultural institution financial assistance to young
and budding talents. ,romoting agar and culture in grass root level etc. year 1B11 was no
e'ception accordingly a donation was made for Bangladesh shish academy )hittagong to
construct the main entrance gate boundary wall and a room ad-acent almost 1=BB students are
getting trained on different ground
:f arts and aesthetics in this academy to promote the future artists 0)B came forward with
financial support to this academy as a part of banks social responsibility.
A donation was given to4 c(attagram samity/ haka for organi!ing me!ban and )hittagong
festival 1B11 held during ecember 1"> 1B11 at sultana kamal stadium dhanmondi haka
me!ban is the most popular local festival in )hittagong and in year 1B11 they celebrated their
1BByears -ourney since inception.
S-orts'
0) B is currently highlighting on youth development and sports 0)B takes initiatives mostly to
grass level so that the talents and skills may come from rural and district level.
Beside cricket has been supporting some other sports too. For e'ample a donation of taka thirty
five lack was made to late shikh -amal dhanmondi club football team in February 1B11 financial
assistance was provided to organi!e :lympic day 1B11 arranged by Bangladeshi :lympic
association the day was observed in all of the seven division of the country on @une 1>, 1B11
from all over the country >BBBB participants took part on this 2:lympic ay4
Again, a donation was also given to organi!e bi-oy dibosh hockey tournament 1B11 hold during
1B"1B
th
ecember, 1B11at moulana bhashani hockey stadium, haka.
1

Chapter
Three
General
Banking
Activities
Chapter
Three
General
Banking
Activities
1
*. General Banking'
.eneral banking is one of the main departments of any bank A Bank starts its banking work
through .eneral Banking. .eneral Banking helps to do other activities of the Bank smoothly.
.eneral Banking ivision consists of the following fields of activities:
)ustomer service.
Account opening to closing.
5emittance.
1. ,ayment :rder /ssue
1. emand raft /ssueG)ollection
>. T.T. /ssueG)ollection
F. &ndorsements
C. /B)G:B) )ollection.
#ocker service.
Account department.
1. )ase
1. Transfer
>. )learing
*.%. Customer service of UCBL'
,rofessional merit and )ompetency, Fle'ibility, etermination and edication are the core
resources that 0)B# consider to be of paramount importance for building a client oriented
modern banking. )ustomer satisfaction is 0)B# foremost professional undertaking. Therefore, a
satisfied client is 0)B# precious product and they consider them 0)B# ambassador in the
market.
*.). Account o-ening to closing'
"y-es of Account'
Savings 0e-osit
1
0nited )ommercial Bank #imited offers customers a hassle free and low charges savings
account through the branches all over Bangladesh.
Benefits ;Condition A--ly<
/nterest rate of F.CBL on minimum monthly balance.
%inimum balance Tk.CBB.
%aintenance charge half"yearly Tk. >FC.
Ho hidden costs.
+tanding /nstruction Arrangement are available for operating account.
Account $-ening
1 copies of recent photograph of account holder.
HomineeQs ,hotograph.
6alid photocopy of 6oter / )ard.
Current 0e-osit
0nited )ommercial Bank #imited offers customers current deposit facility for day"to"day
business transaction without any restriction.
Benefits ;Condition A--ly<
%inimum balance Tk.1BBB.
%inimum maintenance charges half yearly Tk.CFC.
Ho hidden costs.
+tanding /nstruction Arrangement are available for operating account.
&asy access to our other facilities.
Account $-ening
T/H certificate.
+eal of company.
DiEed 0e-osits'
Fi'ed deposit is one, which is repayable after the e'piry of a predetermined period fi'ed by him.
The period varies from 1 month to 11 months. These deposits are not repayable on demand but
they are withdrawing able sub-ect to a period of notice. 9ence, it is a popularly known as QTime
1
epositQ or QTime #iabilitiesR. Hormally the money on a fi'ed deposit is not repayable before the
e'piry of a fi'ed period. /n case of Fi'ed eposit Account the Bank needs to maintain a cash
reserve. +o 0)B# offers a high interest rate in Fi'ed eposit accounts that is 11.CBL.
0#S of UCBL'
0nited )ommercial Bank #imited offers customers to different type of deposit pension scream
(,+*.
Account $-ening
0#S Scream of UCBL'
%onthly eposited C year 1B year
Tk.CBB Tk.FB,C<C Tk.1,11,1>?
Tk.1,BBB Tk.=1,1=< Tk.1,11,C1B
Tk.1,BBB Tk.1,?1,>D= Tk.>,>?,FB=
Tk.>,BBB Tk.1,F>,C?D Tk.F,FC,B1B
Tk.C,BBB Tk.F,BC,<F< Tk.11,11,CC>
Tk.1B,BBB Tk.=,11,=<F Tk.11,1C,1BC
Tk.1C,BBB Tk.11,1D,=F1 Tk.>>,>D,?C=
Tk.1C,BBB Tk.1B,1<,D>C Tk.CC,?1,D?1
$ne Million
Pear %onthly eposited Total amount
C 11,>BB 1B,BB,BBB(1 %illion*
? <,?BB 1B,BB,BBB(1 %illion*
D D,=BB 1B,BB,BBB(1 %illion*
= ?,FBB 1B,BB,BBB(1 %illion*
< C,>BB 1B,BB,BBB(1 %illion*
1B F,CBB 1B,BB,BBB(1 %illion*
Dive Million
D >=,DBB CB,BB,BBB(C %illion*
= >1,=BB CB,BB,BBB(C %illion*
< 1?,CBB CB,BB,BBB(C %illion*
1B 11,>CB CB,BB,BBB(C %illion*
11 1<,BBB CB,BB,BBB(C %illion*
11 1?,1CB CB,BB,BBB(C %illion*
1
"en Million
1B FC,1CB 1,BB,BB,BBB(1B %illion*
11 >=,CBB 1,BB,BB,BBB(1B %illion*
11 >1,<BB 1,BB,BB,BBB(1B %illion*
1> 1=,>BB 1,BB,BB,BBB(1B %illion*
1F 1F,FCB 1,BB,BB,BBB(1B %illion*
1C 11,1BB 1,BB,BB,BBB(1B %illion*
UCBL Consumer Banking #roducts are'
1. 0)B ,+ ,lan +cheme
1. %onthly Benefit ,lan
>. +ave &veryday ,lan
F. )hildren &ducation ,lan
C. )onsumer )redit +cheme
?. Best invest ,lan
D. 0ni$ue +avings ,lan
+ome of 0)B# )onsumer ,roducts
l. UCB 0#S #lan Sc(eme'
%onthly /nstallment C PearsS 1B PearsS
The maturity value is an indicative figure. Ta'G&'cise uty will be deducted as per govt. rules.
=BL #oan Advantage on deposited amount. Thereafter in multiples of Tk. CBBB up to a limit of
Tk. 1BB,BBB.
). UCB Mont(ly Benefit #lan'
eposit Amount /ncome Amount for >"year planS /ncome Amount for C"year planS
S The maturity value is an indicative figure. Ta'G&'cise uty will be deducted as per govt. rules.
<BL #oan Advantage on deposited amount.
*. Save !veryday #lan'
+aving money for the future is a common practice in any society. +avings help you to build a
better tomorrow. 5egular saving makes a man become disciplined, self confident and successful.
1
0)B# offers you R+ave &verydayR ,lan. The primary advantage of this plan is that you are
absolutely free to choose your own time for depositing money into this account. Pou can deposit
daily, weekly or monthly. The choice is yours, but the transactions will have to be within the
BankQs transaction hour.
This is a C year plan and you will be re$uired to open the account with an initial deposit of Tk.
1CBBGT only. ;e offer you very attractive interest rate which is accrued in this account on a daily
basis.
,. UCB !ducation #lan'
%onthly /nstallment F PearsS D PearsS < PearsS
=BL #oan Advantage on deposited amount.
1. Consumer Credit Sc(eme'
/n order to make a significant contribution in the living standards of the people of medium and
low income category, 0)B# has introduced a scheme called R)onsumer )redit +chemeR. ;ith a
view to materiali!e the dreams of those who are unable to make one time investment from their
own savings, one can now afford to buy necessary household e$uipments and thus improve the
standard of living.
All sorts of household durables e.g. Television, 5efrigerators, )omputers, Air )onditioners,
6ideo )ameras, ;ashingG rying %achines and Furniture8s are allowed under this scheme. :ne
can buy %otorcycle too under this programmed.
The collateral security is minimum and the interest rates are one of the lowest in the market.
,lease contact the nearest branch for details.
2. Best invest'
Best invest offers you efficient high return investment plan. This plan helps you to build up a
si!eable income in easy and affordable installments. This plan allows you to own C times the
1
initial invested amount. Best invest offers two separate and convenient term deposit periods for F
years and ? years respectively.
Best invest is available in units worth Tk.CB, BBB each. Pou will invest Tk. 1B, BBBB as down
payment for purchasing 1 (one* unit and the Bank will provide loan for Tk.FB, BBBB. The
customer also has the option to buy units in multiples of Tk. CB, BBB" but ma'imum up to Tk. 1,
BB, BB, BBB" (one crore*. This is a uni$ue high return plan catering to all income groups. +o do
not miss the opportunity.
Customi=ed #roducts are'
1. 0)B ouble +aver ,lan: eposit Amount %aturity 6alue after = PearsS
1. 0)B Triple +aver ,lan: eposit Amount %aturity 6alue after 11 PearsS
>. 0)B %illionaire ,lan: %onthly /nstallment Pear %aturity 6alueS
C. UCB UniBue Savings #lan'
0ni$ue +avings ,lan is an any day, any amount savings plan. The beauty of this plan is that a
customer can deposit any day, any time and any amount.
0ni$ue +avings ,lan offers you to deposit any amount of your choice but not less than Tk. CBBD"
for >GFGC years. This is a high income plan with withdrawal facilities. The withdrawal facility
will help you at the time of any emergency. Pou can withdraw CBL of the deposited balance for
once a month. At maturity you will get a handsome amount.
Interest #osting to ClientFs account'
1
Bangladesh .overnment has circulated that, 1BL deduction from the BankQs /nternal
AccountQs. 1BL ta' deduction from the clientQs interest. :therwise another circulation is that,
from the :B) collection every bank cut off their :B) commission as income account, here
Bangladesh Bank said that 1CL money cut off from the :B) collection as 6at on :thers.
C(eBue Book Issues'
o Types of )he$ue BookQs:
o +avings Account " 1B #eaves
o )urrent eposit Account " 1C #eaves
o )urrent eposit Account " CB #eaves
C(eBue Issuing is "8o "y-es'
1. irect re$uisition slips
1. )he$ue BookQs re$uisition slip
)ustomers +ervice :fficer receives these types of slip from the clientQs and gives the che$ue
books under processing. ,rocessing means )he$ue BookQs collect from the 6:#T and the put
account number in the )he$ue bookE write down the serial number of the che$ue book in the
re$uisition slip and che$ue book register, then 6erified client signature. After all this things the
,rincipal :fficer sign in the che$ue leaves and sent the che$ue book to another ,rincipal officer
for sign, after his sign the client
5eceive the che$ue book. These things the ,rincipal :fficer for sign, after his sign the client
receive the che$ue book. Then ,rincipal :fficer posting that che$ue books leaves number in the
computer data processing system.
A cover file containing the re$uisition slip is effectively preserved as vouchers. /f any defect is
noticed by the ledger keeper, he makes a remark to that effect on the re$uisition slip and forward
it to the cancellation officer to decide whether a new checkbook to be issued to the customer or
not
Account Closing'
For two reasons, one can be closed. :ne is by banker and other is by the customer.
1
By banker' /f any customer doesnQt maintain any transaction within si' years and the AG)
balance becomes lower than the minimum balance, banker has the right to close an AG).
By customer: /f the customer wants to close his AG), he writes an application to the manager
urging him to close his AG).
0ifferent -rocedures are follo8ed in cas( of different ty-es of AGC to close'
Fi'ed deposit AG) is closed after the termination of the period. Brick by Brick AG) is very easily
closing if one of the clients didnQt pay hisGher monthly installment at the bank three months one
after one, in this way three months. Another accountQs will be closed on the parties advice, if they
want to close any one of the account clients must have to submit an AG) closing letter through
des pass. Then the +r. ,rincipal :fficer checks it out and closes the AG).
Closing -rocess for current 7 savings AGC'
After receiving customerQs application the officer verifies the balance of the AG). 9e then
calculates interest and other charges accumulated on the AG). /f it bears a credit balance, the
officer writes advice voucher. 9e gives necessary accounting entries post to accounts section.
The balance is returned to the customer. And lastly the AG) is closed. But in practice, normally
the customers donQt close AG) willingly. At times, customers donQt maintain any transaction for
long time. /s this situation at first, the AG) becomes dormant and ultimately it is closed by the
bank.
*.*. 4emittance'
5emittance of funds is ancillary services of 0)B#. /t aids to remit fund from one place to
another place on behalf of its customers as well as non" customers of Bank. 0)B has its
branches in the ma-or cities of the country and therefore, it serves as one of the best mediums for
remittance of funds from one place to another.
The main instruments used by 0)B#, +avar Branch for remittance of funds.
1
,ayment :rder /ssueG)ollection
emand raft /ssueG)ollection
T.T. /ssueG)ollection
&ndorsements
Travelers )he$ue /ssuance
/B)G:B) )ollection.
#ayment $rder IssueGCollection'
The pay order is an instrument issued by bank, instructing itself a certain amount of money
mentioned in the instrument taking amount of money and commission when it is presented in
bank. :nly the branch of the bank that has issued it will make the payment of pay order.
Issuing of #ay $rder'
The procedures for issuing a ,ay :rder are as follows:
eposit money by the customer along with application form.
.ive necessary entry in the bills payable (,ay :rder* register where payeeQs name, date,
,: no, etc is mentioned.
,repared the instrument.
After scrutini!ing and approval of the instrument by the authority, it is delivered to
customer. +ignature of customer is taken on the counterpart.
0emand 0raft IssueGCollectionH
The person intending to remit the money through a emand raft (* has to deposit the money
to be remitted with the commission which the banker charges for its services. The amount of
commission depends on the amount to be remitted. :n issue of the , the remitter does not
remain a party to the instrument: i* rawer branch ii* rawee branch iii* ,ayee. This is treated as
the current liability of the bank as the banker on the presentation of the instrument should pay the
money. The banker event on receiving instructions from the remitter cannot stop the payment of
the instrument. +top payment can be done in the following cases:
Loss of draft before endorsement' /n this case, Rraft reported to be lost, payeeQs endorsement
re$uires verificationR is marked.
1
Loss of draft after endorsement' /n this case, the branch first satisfies itself about the claimant
and the endorsement in his favor.
Issuing of 0u-licate 00'
/f the customer wants to issue a duplicate , than customer is asked to do the following
formalities:
%ake a general diary (.* in the nearest ,oliced +tation. Furnishing an /ndemnity Bond in
Tk.CBGT stamp
The banker immediately marks Rstop paymentR in the register after receiving the application
from the customer and a duplicate is issued.
IBCG$BC'
By :B), we mean that those che$ues drawn on other banks which are not within the same
clearing house. :fficer gives :B) seal on this type of che$ues and later sends a letter to the
manager of the branch of the some Bank located in the branch on which che$ue has been drawn.
After collection of that bill branch advises the concerned branch in which che$ues has been
presented to credit the customer account through /nter Branch )redit Advice (/B)A*.
/n absence of the branch of the same bank, officer sends letter to manager of the bank on which
the che$ues is drawn. That bank will send pay order in the name of the branch. This is the
procedure of :B) mechanism.
Actually :B) comes from the outside bankQs branch, or inter branches. +uppose A.5AH/ Bank,
@atrabari Branch sent a )he$ue, which no: B11C>?, Tk. C, BB,BBB to 0nited )ommercial Bank
#imited against A.5AH/ Bank %oti-heel )orp. Branch. +o this che$ue could be an :B). How
what 0nited )ommercial Bank #imited has to doU 0)B# tries to collect this che$ue through
Bangladesh Bank )learing 9ouse, and credited clients account.
$BC Collection #rocess'
)reate a 6oucher against :B): +G AG) :B) Tk. C, BB,BBB
1BL cut off as )ommission on :B) Tk. CBB
1
1CL cut off as 6at on :thers Tk. DC
Tk. 1BG" )ut off as ,ostage 5ecovery Tk. 1B
Total Tk. C<CG"
/n this condition 0)B# got the che$ue amount of Tk. C,BB,BBB, but after cut off the commission,
vat and postage recovery 0)B# will be credited the amount Tk. (C,BB,BBB "C<C*T Tk. F,<<,FBC
in party account.
Banglades( Bank Circulation about $BC'
Bangladesh Bank has circulated some things about :B). These are given below: /f the che$ue
amount will be under Tk. 1, BB,BBB then bankQs :B) commission will be charged at .1CL./f the
che$ue amount will be above Tk. 1, BB,BBB to Tk. C, BB,BBB then BankQs :B) commission will
be charged at .1BL./f the che$ue amount will be above Tk. C, BB,BBB then BankQs :B)
commission will be charged at .CL. Against the :B) the .overnment Ta' will be reali!ed on
1CL on )ommission. Amount ,ostage 5ecovery will be reali!ed Tk. 1B for each :B).
*.,. Locker Service'
0)B# 0ttarkhan Branch is providing facility of locker service for the purpose of safeguarding
the valuable property of customers. The person or organi!ation that has any account in bank
branch can en-oy this service. They keep their valuable assets in bankerQs custody. )ustomers
have right to look after with a key of their individual locker provided by bank. 0)B# maintains
the following types of lockers:
#arge locker.
%edium locker.
+mall locker.
For en-oying this service, clients have to give charge yearly Tk.1CBBG", Tk.1BBBG" and Tk.1CBBG"
for large, medium and small locker respectively.
*.1. Accounts 0e-artment'
1
Accounts epartment is play most vital role in Banking. Accounts epartment is a department
with which each and every department is related. /t records the profit 3 loss AG) and statement
of assets and liabilities by applying R.olden 5ulesR of book"keeping. The functions of it are
theoretical 3 computeri!ed based. 0)B# 0ttarkhan Branch records its accounts daily, weekly,
and monthly every record. 0)B# 0ttarkhan Branch Accounts epartment in )harge: %r.
Aeshob lal sarker, :fficer )ash (having 1> years of e'perience in banking sector*. Another
officerQs are: %r. %d. 5ashedul /slam, (+enior :fficer*, %r. %d. Hurul /slam Talukder (+.&.:*.
This entire e'ecutiveQs helps me a lot in my internship program at 0)B#. They didnQt guide me
as an /nterneeE they guide me as a training officer of 0)B# to gather practical knowledge about
Banking. They tried their best to inform me everything about accounts department. / hope / knew
everything that gave me as a new comer in banking sector.
Basically Accounts epartment is not alone. Accounts department is a mi' of as follows:
CAS3
+hakhawat 9ossain Akand (:)*, %ehedi 9ossain (A):* and %d. Anwar 9ossain (A):* are
the cash in charge. Both of the two senior e'ecutives helps me lot to get practical knowledge and
prepare this report.
The cash section of any branch plays very significant role in Accounts epartment. Because, it
deals with most li$uid assets the 0)B# 0ttarkhan Branch has an e$uipped cash section. This
section receives cash from depositors and pay cash against che$ue, draft, ,:, and pay in slip
over the counter. &very Bank must have a cash counter where customer withdrawn and deposit
there money. ;hen the valued clientQs deposit their money at the cash counter they must have to
full fill the deposit slip hisGher own, then they sing as the depositor optionQs then they deposit
their money through cash officer at the cash counter.
S!5!4AL "@#!S $D 0!#$SI" SLI#'
1
There are several types of deposit slip as follows: )urrent eposit AG) +lip, +avingQs eposit
AG) +lip, Festival eposit AG) +lip, 0)B ,+ ,#0+ eposit AG) +lip, ,ay order +lip, emand
raft +lip.
After paying this kindQs of slip, the valued client waits for the deposit slip book out side of the
cash counter. The cash officer deposit the money in there account through computer software,
while the depositors account credited, then the cash officer put a seal in the deposit slip and
return it to the client.
4!C!I5IG CAS3'
Any people who want to deposit money will fill up the deposit slip and give the form along with
the money to the cash officer over the counter. The cash officer counts the cash and compares
with the figure written in the deposit slip. Then he put his signature on the slip along with the
Qcash receivedQ seal and records in the cash receive register book against AG) number.
At the end of the procedure, the cash officer passes the deposit slip to the counter section for
posting purpose and delivers duplicate slip to the clients.
0ISBU4SIG CAS3'
The drawn who wants to receive money against che$ue cornes to the payment counter and
presents his che$ue to the officer. 9e verifies the following information:
ate of the che$ue
+ignature of the AG) holder
%aterial alteration
;hether the che$ue is crossed or not
;hether the che$ue is endorsed or not
;hether the amount in figure and in word correspondent or not
Then he checks the che$ue from computer for further verification. 9ere the following
information is checked.
;hether there is sufficient balance or not
;hether there is stop payment instruction or not
;hether there is any legal obstruction (.arnishee :rder* or not
1
After checking everything, if all are in order the cash officer gives amount to the holder and
records in the paid register.
The cash section of 0)B# deals with all types of negotiable instruments, cash and other
instruments and treated as a sensitive section of the bank. /t includes the vault which is used as
the store of cash instruments. The vault is insured up to Tk. =B lacs. /f the cash stock goes
beyond this limit, the e'cess cash is then transferred to ,rinciple Branch :ffice. ;hen the e'cess
cash is transferred to 0)B# ,rinciple Branch :ffice the cash officer issues /BA.
"4ASD!4
Transfer is not a critical sector in banking but it is very important. Transfers play a vital role in
banking sector. +o now we have to know what transfer is: basically transfer is a type of register
maintaining matter. /n this register officer write down every day transactions in ebit and )redit
side then the officer calculate both the side of the register if both side shown same amount, it
means that the total dayQs transaction is completely okay.
CL!A4IG
)learing is one of the magical parts of banking. / really en-oyed this part of the accounts
department and banking sector. /n 0nited )ommercial Bank #imited clearing in charges A.#.%.
Ahairul Bari (:fficer*, / did work with him.
1
W(at is clearing 3ouseI
/n Bangladesh Bank, there is a very large room, which contains fifty (CB* or more tables for each
bank that is called the clearing house.
ature of clearing (ouse'
1
st
)learing 9ouse
5eturn )learing 9ouse
Clearing 3ouse #rocess'
&very bank has an officer of clearinghouse who is work with Bangladesh Bank clearing house.
Actually most of ma-or client deposit their account in different kinds of bank che$ues. )learing
officer check all the che$ues and deposit slip very carefully and then he received the che$ue.
After the clearing officer posting all the che$ues in computer software which is recogni!ed
through Bangladesh bank computer department. Then clearing officer seal all the che$ues in
advance date after that the officer endorsement all the che$ues and sign all the che$ues.
All the )he$ues are posted in the computer by branch wise, then officer print the entire
document and staple all the che$ues by branch wise this is called schedule of clearing house. /t is
a very difficult -ob to staple all the che$ues, because some timeQs the che$ues are huge in
$uantity, it may be 1CB to FBB, this is very vital -ob because every che$ue must have to staple
very carefully, it means che$ue amount and the print sheet amount and che$ue branch must have
to be same. /f the che$ues staple in wrong direction, the che$ue may be return from another
bank, thatQs why 0)B# not to be able to credited party account.
Then the clearinghouse officer copying all the document in two floppy disk as per Bangladesh
Bank re$uirement. ;hen the clearing officers enter the clearinghouse, his first -ob is that the
floppy delivered to the Bangladesh Bank computer department.
All of the procedure the clearing in charge goes to the Bangladesh Bank clearing house before 1B
am in the morning. The clearing officer check all the bankQs che$ue and he put all the che$ues in
bank wise, like as this another bankQs delivered there che$ues in 0BB# desk. Then the officers of
1
0)B# have to calculate all the che$ues by using calculator machine, +taple pin remover, and
then he divided all the che$ues as 0)B# Branch wise.
"y-es of Clearing C(eBue'
0)B# +avar Branch performs the bill clearing function through Bangladesh Bank. 0)B# +avar
Branch acts as the agent of all 0)B# branches for the clearing house of the Bangladesh Bank.
There are two types of che$ue which are"
1. /nward clearing che$ue
1. :utward clearing che$ue.
4!C$GIA!0 BA?FS AS "3! M!MB!4 $D BAGLA0!S3 BA? CL!A4IG
3$US! WI"3 "3!I4 CL!A4IG3$US! C$0!'
1
*.2. Credit Card'
Through its )redit
)ard, 0nited
)ommercial Bank
#imited has not only
initiated a new
scheme but also
brought a new life
style concept in
Bangladesh. How the
SLo. ame of Bank Code
1 Agrani Bank 11
1 Al"Baraka Bank Bangladesh #imited F<
> A/"Arafah /slami Bank #imited CD
F Arab Bangladesh Bank #imited F1
C Bangladesh Bank 1B
? Bangladesh )ommerce Bank ?F
D Bangladesh Arishi Bank >1
= Bangladesh +hilpho Bank >1
< Bangladesh +hilpo 5in +angstha >F
1B Bank Asia #imited C1
11 Brae Bank #imited D1
11 )iti H.A Bank #imited 1?
1> )radit Agricole /ndosue! 1D
1F haka Bank #imited C?
1C utch Bangla Bank #imited C<
1? &astern Bank #imited C1
1D First +ecurity Bank #imited ?D
1= 9abib Bank #imited 1C
1< 9+B) #imited =>
1B /F/) Bank #imited FC
11 /slami Bank Bangladesh #imited F1
11 @amuna Bank #imited D1
1> @anata Bank 11
1F %arcentile Bank #imited ?B
1C %utual Trust Bank #imited ?C
1? Hational Bank #imited F>
1D Hational Bank of ,akistan 1=
1= Hational )redit and )ommerce Bank #imited C>
1< :ne Bank #imited ?1
>B ,rime Bank #imited CF
>1 ,ubali Bank #imited FD
>1 0nited )ommercial Bank #imited ?>
1
dangers and the worries of carrying cash money are memories of the past. )redit )ard comes in
both local and international forms, giving the client power to buy all over the ;orld. How en-oy
the conveniences and advantages of )redit )ard as you step into the new millennium.
*.C. UCBL A"M Service'
0nited )ommercial Bank #imited has introduced AT% service to its )ustomers. The card will
enable to save our valued customers from any kind of predicament in emergency situation and
time consuming formalities. 0)B# AT% )ard will give our distinguished )lients the
opportunity to withdraw cash at any time, even in holidays, 1F hours a day, and D days a week.
*.9. Western Union'
@oining with the worldQs largest money transfer service R;estern 0nionR, 0)B# has introduced
Bangladesh to the faster track of money remittance. How money transfer between Bangladesh
and any other part of the globe is safer and faster than ever before.
This simple transfer system, being on line eliminates the comple' process and makes it easy and
convenient for both the sender and the receiver. Through 0)B# " ;estern 0nion %oney
Transfer +ervice, your money will reach its destination within a few minutes.
;estern 0nion is a global leader in %oney transfer and message services. ;ith the help of
western 0nion a consumer or a Businessman can transfer money or make payments more
$uickly and more securely from one part to another part of the world. There are 1, 1D,BBB
;estern 0nion Agent #ocations over 1=C countries in the world. /t8s the largest network in the
world. ;estern 0nion markets transact more than one $uarter Billion money every year.
In Uttark(an Branc(6 8e take one of t(e follo8ing documents as a 5alid I0 before t(e
-ayment of 8estern Union.
,hotocopy of 1
st
three pages of 6alid ,assport. /n case of renewal, the photocopy of
renewal page will be added.
1
Hationality )ertificate with ,hotograph from )hairmanG)ommissionerG%,. The said
person will verify the signature photograph of the applicant.
Bank8s )ertificate with photograph AGc %aintaining with the Bank. The Authori!ed
:fficerGBranch in )harge will verify the signature 3 photograph of the applicant.
Any AGc 9older of our Branch. /n this case we will use the AGc Humber as /
6oter /.
Chapter Four
Credit Management
Activities of UCBL
Chapter Four
Credit Management
Activities of UCBL
1
,.%. Credit Management of UCBL'
The word credit comes from the #atin word 2)redo4 meaning 2/ believe4. /t is a lender8s trust in
a person8sG firm8sG or company8s ability or potential ability and intention to repay. /n other
words, credit is the ability to command goods or services of another in return for promise to pay
such goods or services at some specified time in the future. For a bank, it is the main source of
profit and on the other hand, the wrong use of credit would bring disaster not only for the bank
but also for the economy as a whole.
0nited )ommercial Bank #imited is a third generation bank, which is committed to provide high
$uality financial servicesGproducts to contribute to ., through stimulating trade 3 commerce,
accelerating the pace of industriali!ation and boosting up e'port by allowing credit facilities.
The failure of the commercial bank is mainly occurs due to bad loans, which occurs due to
inefficient management of the loan and advance portfolio. The ob-ective of the credit
management is to ma'imi!e the performing asset and the minimi!ation of the non"performing
asset as well as ensuring the optimal point of loan and advance and their efficient management.
)redit management is a dynamic field where a certain standard of long"range planning is needed
to allocate the fund in diverse field and to minimi!e the risk and ma'imi!ing the return on the
invested fund. )ontinuous supervision, monitoring and follow"up are highly re$uired for
ensuring the timely repayment and minimi!ing the default.
Therefore, while analy!ing the credit management of BB#, it is re$uired to analy!e its credit
policy, credit procedure and $uality of credit portfolio. These three aspects of credit management
are now discussed in the following section.
1
,.). Credit #olicy of UCBL'
:ne of the most important ways, a bank can make sure that its loan meet organi!ational and
regularity standards and they profitable is to establish a loan policy. +uch a policy gives loan
management a specific guideline in making individual loans decisions and in shaping the bank8s
overall loan portfolio.
Agriculture'
)redit facilities provided to the customers who transact agro business falls under this category. /t
is divided into two ma-or sub"sectors:
a* #oans to primary producers: This sub"sector of agricultural financing refers to the credit
facilities allowed to production units engaged in farming, fishing, forestry or livestock.
b* #oans to input dealersGdistributors: /t refers to the financing allowed to input dealers and (or*
distributors in the agricultural sectors.
#oan to Agriculture sector may include short, medium and long term loans as well as continuous
)redits. As a product, it may fall under Term #oanG Time #oanG9ire",urchaseG#ease
FinanceG)ash )reditG:verdraft etc.
"erm Loan to Large 7 Medium Scale Industry'
This category of advances accommodate the medium and long term financing for capital asset
formation of new /ndustries or for B%5& of the e'isting units who are engaged in
%anufacturing of goods and services.
Term loan to tea gardens may also be included in this category depending on the nature and si!e.
As the financing under this category have fi'ed repayment schedule it may fall under the heads
Term #oanGTime #oan G9ire",urchaseG#ease Financing etc.
"erm Loans to Small 7 Cottage Industries'
These are the medium and long term loans allowed to small 3 cottage manufacturing industries
[egu!atory definition of "ma!! #nterprise means an entity$ idea!!y not a pu%!ic !imited
company$ does not emp!oy more than &' persons (if it is manufacturing concern) and
*&persons (if it is a trading and service + trading concern ,ith tota! assets at cost e-c!uding
1
!and and %ui!ding from ./0&'$''' to ./0 &' !ac$ manufacturing concern ,ith tota! assets at
cost e-c!uding !and and %ui!ding from ./0&'$''' to ./0 10& crore020
%edium 3 #ong term loans to weaver are also included in this category. #ike the #arge
3%edium +cale /ndustry it is also allowed in the form of Term #oanGTime #oanG9ire
,urchaseG#ease Financing etc.
Working Ca-ital'
#oans allowed to the manufacturing units to meet their working capital re$uirements,
irrespective of their si!e " big, medium or small, fall under this category. These are usually
continuous credits and as such fall under the head R)ash )reditR or4 :verdraft4.
!E-ort Credit'
)redit facilities allowed to facilitate e'port of all items against #etter of )redit andGor confirmed
e'port orders fall under this category. /t is accommodated under the heads R&'port )ash )redit
(&))*R, ,acking )redit (,)*, Foreign ocumentary Bill ,urchased (FB,*, /nland
ocumentary Bill ,urchased (#B,* etc.
Commercial Lending'
+hort term #oans and continuous credits allowed for commercial purposes other than e'ports fall
under this category. /t includes import financing for local trade, service establishment etc. Ho
medium and long term loans are accommodated here. This category of advance is allowed in the
form of (/* #oan against /mported %erchandise (#l%*, (ii* #oan against Trust 5eceipt (#T5*,
(iii* ,ayment Against ocuments (,A*, (iv* :verdraft (:*, (v* )ash )redit etc. for
commercial purposes.
$t(ers'
Any loan that does not fall in any of the above categories is considered under the category
R:thersR. /t includes loan to (i* transport e$uipments, (ii* construction works including housing
(commercialGresidential*, (iii* work order finance, (iv* personal loans, etc.
,.*. "y-es of Credit'
)redit may be classified with reference to elements of time, nature of financing and provision
base. .enerally Hational Bank, &lephant 5oad Branch given these loans that are given below:
1
+ecured :verdraft (+:*
#oan against /mported %erchandise (#T%*
#oan against Trust 5eceipt (#T5*
,ayment against ocument (,A*
9ouse Building #oan
9ouse Building #oan (staff*
Term #oan.
#oan (general*
Bank .uarantee V
&'port )ash )redit
)ash )redit (,ledge*
)ash )redit (9ypo*
Foreign ocumentary Bill ,urchase (FB,*
#ocal ocumentary Bill ,urchase (#B,*
J Secured $verdraft ;S$0<'
/t is a continuous advance facility. By this agreement, the banker allows his customer to
overdraft his current account up to his credit limits sanctioned by the bank. The interest is
charged on the amount, which he withdraws, not on the sanctioned amount. 0)B Bank sanctions
+: against different security.
S$0 ;general<'
Advance allowed to individualG firms against financial obligation (i.e. lien on F5W
5G,+,GB+,G insurance policy share etc.* This may or may not be a continuous )redit.
S$0 ;ot(ers<'
Advances allowed against assignment of work order or e'ecution of contractual works falls
under this head. This advance is generally allowed for a definite period and specific purpose i.e.
it is not a continuous credit. /t falls under the category RothersR
S$0 ;!E-ort<'
1
Advance allowed for purchasing foreign currency for payment against #G)s (Back to Back*
where the e'ports do not materiali!e before the import payment. This is also an advance for
temporary period, which is known as e'port finance and under the category Rcommercial
lendingR.
LIM ;Loan against Im-orted Merc(andise<'
Advances allowed for retirement of shipping documents and release of goods imported through
#G) taking effective control over the goods by pledge in go downs under Banks lock 3 key fall
under this type of advance. This is also a temporary advance connected with import, which is
known as post"import financing, falls under the category Rcommercial lendingR.
L"4 ;Loan against trust recei-t<'
Advance allowed for retirement of shipping documents, release of goods imported through #G)
falls under trust with the arrangement that sale proceed should be deposited to li$uidate within a
given period" This is also a temporary advance connected with import, which is known as post"
import financing, falls under the category Rcommercial lendingR.
#A0 ;-ayment against document *:
,ayment made by the Bank against lodgment of shipping documents of goods imported through
#G) falls under this head. /t is an interim advance connected with import and is generally
li$uidated against payments usually made by the party for retirement of the documents for
release of imported goods from the customerQs authority. /t falls under the category Rcommercial
BankR.
3ouse building Loan ;General<'
#oans allowed to individualG enterprise construction of house (residential or commercial* fall
under this of advance. The amount is repayable by monthly installment within a specified period,
advances are known as #oan (9B#".&H*.
3ouse building loans ;staff<'
1
#oans allowed to the Bank employees for purchaseGconstruction of house shall be known as +taff
#oan (9BF)"+TAF,*.
"erm Loan'
0)B Bank considers the loans, which are sanctioned for more than one year as term loan. 0nder
this facility, an enterprise is financed from the starting to its finishing, i.e. from installation to its
production.
Loan ;general<'
+hort term and long term loans allowed to individualG firms G industries for a specific purpose but
a definite period and generally repayable by the installments fall under this head. These types of
lending are mainly allowed to accommodate financing under the categories.
a* #arge and %edium +cale /ndustries"
b* +mall and )ottage /ndustries, 6ery often term financing for agriculture and others are also
included here.
Bank guarantee'
The bank is very often re$uested by his customer to issue guarantees on their behalf to a third
party " committing to make an unconditional payment of certain amount of money to the third
party, if the customer (on whose behalf it gives guarantee* becomes liable, or creates any loss or
damage to the third party.
!E-ort cas( credit ;!CC<'
Financial accommodation allowed to customer for e'ports of goods falls under this head is
categori!ed as R&'port )redit R. The advances must be li$uidated out of e'port proceeds within
1=B days.
Cas( Credit ;3y-ot(ecation<'
1
The mortgage of movable property for securing loan is called hypothecation. 9ypothecation is a
legal transaction whereby goods are made available to the lending banker as security for a debt
without transferring either the property in the goods or either possession. The banker has only
e$uitable charge on stocks, which practically means nothing. +ince the goods always remain in
the physical possession of the borrower, there is much risk to the bank. +o, it is granted to parties
of undoubted means with the highest integrity.
,.,. Classification on "(e Basis of "ime'
Continuous loans'
These are the advances having no fi'ed repayment schedule but have a date at which it is
renewable on satisfactory performance of the clients. )ontinuous loan mainly includes R)ash
credit both hypothecation and pledgeR and R:verdraftR.
0emand loan'
emand loan is used as one of the import finances. /n opening letter of credit (#G)*, the clients
have to provide the full #G) amount in foreign e'change to the bank. To purchase this foreign
e'change, bank e'tends demand loan to the clients at stipulated margin. Ho specific repayment
date is fi'ed. 9owever, as soon as the #G) documents arrive, the bank re$uests the clients to
ad-ust their loan and to retire the #G) documents. emand loans mainly include R#oan against
imported merchandise (#/%*R and R#ater of Trust 5eceiptR.
"erm loans'
These are the advances made by the bank with a fi'ed repayment schedule. Terms loans mainly
include R)onsumer credit schemeR, R#ease financeR,R 9ire purchaseR, and R+taff loanR. The term
loans are defined as follows:
S(ortKterm loan' 0p to 11 months.
Medium term loan' %ore than 11 months 3 up to >? months.
1
LongKterm loan' %ore than >? months.
,.1. Classification on "(e Basis of C(aracteristics of Dinancing'
The making of loan and advance is always profitable to the bank. As the bank mobili!e savings
from the general people in the form of deposit the most important task of it is to disburse the said
deposit as loan or advance to the mass people for the development of commercial, industrial,
agricultural, who are in need of fund for investment. #ike other business firm, the main purpose
of the commercial banking is making profit. The profitability of the banks depends on the
efficient manner and avenues in which the resources are employed. The 0nited )ommercial
Bank #imited has made so far efficient use of the deposit and classified rates are almost !ero.
The 0)B# disburse loan in different form. /t varies in purpose wise. %ode wise and sector wise.
The varieties types of credit facilities provided by 0)B# are briefly described below with the
common terms and condition. The credit facilities of 0)B# may be broadly classified into five
categories. They are as follows:
#oans
)ash )redit
:verdraft
Bills purchased and discounted
)onsumer )redit
Loan'
/n case of loan the banker advances a lump sum for a certain period at an agreed rate of interest.
The entire amount is paid on an occasion either in cash or by credit in his current account, which
he can draw at any time. The interest is charged for the full amount sanctioned whether he
withdraws the money from his account or not. The loan may be repaid in installments or at
e'piry of a certain period. #oan may be demand loan or a term loan.
!ligibility: #oans normally allowed to those parties who have either fi'ed source of income or
who desire to pay it in lump sum.
1
Interest 4ate: 1CL"1DL per annum (Nuarterly paid*.
Cas( Credit'
/n )ash credit, banker specifies a limit called the cash credit limit, for each customer, up to
which the customer is allow to borrow against the security of tangible assets or guarantees The
distinction between the current account and a cash credit account is that the former is intended to
be an account with credit balance and the latter an account for drawing of advances. :peration of
cash credit is same as that of overdraft. The purpose of cash credit is to meet working capital
need of traders, farmers and industrialists.
)ash credit in true sense is against pledge of goods. )ash credit is also allowed against
hypothecation of goods. /n case of hypothecation the ownership and possession of the goods
remain with the borrower. By virtue of the hypothecation agreement bank can take possession of
the goods hypothecated, if the borrower defaults.
4ate of Interest: 1CL"1?L.
$verdraft'
:verdrafts are those drawings, which are allowed by the banker in e'cess of the balance in the
current account up to a specified amount for definite period as arranged for. These advances are
secured, immovable, like land 3 building and hypothecation of trade, if it is for working capital
finance. The overdraft may e'tend against finished product of any industry as against pledge of
the products. The loan holder can freely draw money from this account up to the limit and can
deposit money in the account off course, this loan has an e'piry date after which renewal or
enhancement is necessary for en-oying such facility. :verdraft facility is given to the
businessmen for increasing their business activity.
E#igibi#it"6 7verraft facilities are generally grante to businessmen for e/pansion
of their business8 against the securities of stoc9$in$trae8 shares8 ebenture8
Government promissory notes8 1/e eposit8 life policies etc
,.2. Guiding #rinci-le of Credit a--raisal of UCBL'
1
The main ob-ective of the relationship manager is to establish long"term relationships with
clients with the e'pectation for on going commercial business. This type of business is e'pected
to provide stability and growth in earnings in the short run as well as to continue in the long run,
and therefore, also, should be diversified to avoid over reliance on any particular client group G
industry segment.
To determine the worth of a client for such a relationship and thereby decide on development of
the relationship, the following conceptual e'ercises should be undertaken. There are no fi'ed and
set methods to perform credit"marketing -ob, and scope for application of individual -udgmentG
perception always plays over set rules in such work. For e'ample, drop in revenue of a
contractor may indicate the clients8 failure to get work, or it may be due to adaptation of policy to
do higher margin, $uality -obs.
,.C. Credit 4atification Aut(ority of UCBL'
)redit decisions are heart of all credit works. The person who is held responsible for appraising
a loan proposal is called the relationship manager. The customer re$uest for credit limit and the
relationship manager must decide whether to accept or refuse proposal. %aking this decision is
the most important credit activityE all other activities of the credit epartment are supportive to
this decision. To ensure the proper and orderly conduct of the business of the bank, the Board of
irectors authori!ed the %anaging irector and other top"level e'ecutive, that is, % and &6,
to sanction the credit. /t is mentionable that principal branch operates the credit division under
the supervision of 6,. The relationship manager of principal branch furnishes the credit proposal
with the re$uired information and sends it to the final authority, i.e. &6,, % 3 %, of head
office for final approval.
,.9. Credit !valuation #rinci-les'
/n order to get the optimum returns from the deployed funds in different kinds of lending, more
emphasis shall be given on refund of loans and advances out of fund generated by the borrower
from their business activities instead of reali!ation of money by disposing of the securities held
against the advance which is very much uncertain and time consuming . +ome principles or
1
standards of lending are maintained loans in order to keep the risk to a minimum level and for
successful banking business. The main principles of lending are:
+afety
+ecurity
#i$uidity
Ade$uate yield
iversity
Safety'
+afety should get the prior importance in the time of sanctioning the loan. At the time of maturity
the borrower may not will or may unable to pay the loan amount. Therefore, in the time of
sanctioning the loan ade$uate securities should be taken from the borrowers to recover the loan.
Banker should not sacrifice safety for profitability.
0)B Bank #td" e'ercises the lending function only when it is safe and that the risk factor is
ade$uately mitigated and covered. +afety depends upon:
The security offered by the borrowerE and
The repaying capacity and willingness of the debtor to repay the loan with interest.
LiBuidity'
Banker should consider the li$uidity of the loan in time of sanctioning it. #i$uidity is necessary
to meet the consumer need.
Security'
Banker should be careful in the selection of security to maintain the safety of the loan. Banker
should properly evaluate the proper value of the security. /f the estimated value is less than or
e$ual to loan amount, the loan should be given against such securities. The more the cash near
item the good the security, in the time of valuing the security, the Banker should be more
conservative.
1
AdeBuate @ield'
As a commercial origination, Banker should consider the profitability. +o banker should consider
the interest rate when go for lending. Always Banker should fi' such an interest rate for its
lending which should be higher than its savings deposits interest rate. To ensure this profitability
Banker should consider the prospect of the pro-ect
0iversify'
Banker should minimi!e the portfolio risk by putting its fund in the different fields. /f Bank put
its entire loan able fund in one sector it will increase the risk. Banker should distribute its loan
able fund in different sectors. +o if it faces any problem in any sector it can be covered by the
profit of another sector.
,.:. #rocess of Credit Management'
The function of commercial bank is to accept deposit from the common people and to invest
deposited money in different sectors for overall development of the economy of the country. +o
the banks have to be very much careful in credit appraisal. The person who is held responsible
for appraising a loan proposal in 0nited )ommercial Bank #imited is called the relationship
manager. The customer re$uest for credit limit and the relationship manager must decide whether
to accept or refuse proposal. %aking this decision is the most important credit activityE all other
activities of the credit department are supportive to this decision. To ensure the proper and
orderly conduct of the business of the bank, the Board of irectors authori!ed the %anaging
irector and other top"level e'ecutive, that is, % and &6, to sanction the credit. /t is
mentionable that principal branch operates the credit division under the supervision of 6,. The
relationship manager of principal branch furnishes the credit proposal with the re$uired
information and sends it to the final authority, i.e. &6,, % 3 %, of head office for final
approval.
,.%&. Ste-s Involved In Credit #rocessing'
There are several steps involved in credit processing in BB#. The steps are as follows:
1
A--lication for loan
Applicant applies for the loan in the prescribed form of bank. The purpose of this forms is to
eliminate the unwanted borrowers at the first sight and select those who have the potential to
utili!e the credit and pay it back in due time.
Getting Credit information
Then the bank collects credit information about the borrower from the following sources:
1. ,ersonal /nvestigation
1. )onfidential report from other bankG 9ead officeGBranchG)hamber of commerce
>. )/B report from central bank
Scrutini=ing and Investigation
Bank then starts e'amination that whether the loan applied for is complying with its lending
policy. /f comply, than it e'amines the documents submitted and the credit worthiness. )redit
worthiness analysis, i.e. analysis of financial conditions of the loan applicant is very important.
Then bank goes for #ending 5isk Analysis (#5A* and spreadsheet analysis, which are recently
introduced by Bangladesh Bank. According to Bangladesh Bank rule, #5A and +A is must for
the loan e'ceeding one core. /f these two analyses reflect favorable condition and documents
submitted appears to be satisfactory then, bank goes for further action.
"(e CLs of Good 7 Bad Loan
The relationship managers of HB# try to -udge the possible client based on some criteria. These
criteria are called the )8s of good and bad loans. These )8s are described below:
C(aracter'
The outcome of analy!ing the character is to have overall idea about the integrity, e'perience,
and business sense of the borrower. Two variables, /nteractionGinterview and %arket 5esearch
are used to analy!e the character of the borrower.
0nteraction+interview1 t-e indicators are1
Prompt an consistent information supply8 information given has not been
foun false
1
!.5 also reveals business character4
:illingness to give owns sta9e;e<uity = collateral to cover4
>a/ payer4
Mar2et 3esearc-1
.nformation on business is veri1e4
-ealing with supplier an or customer as supplier is also a 9in of lener? the
payment character can also be veri1e4
Ca-ital'
For identifying the capital invested in the business can be disclosed using the following
indicators.
Financial Statements
Receivable8 Payable8 statements to practically assess the business
positions4 0et worth through 1nancial statements or from eclaration of
Assets = @iabilities4
Ca-acity ;Com-etence<'
)apability of the borrower in running the business is highly emphasi!ed in the time of selecting a
good borrower. As the management of the business is the sole authority to run the business that
is use the fund efficiently, effectively and profitably. The indicators help to identify the capacity
of the borrower.
Entrepreneurship s9ills i4e4 ris9 ta9ing attitue shown by e<uity
mobilization4
Management competencies both mar9eting an proucts etail8 ability to
ta9e ecision4
Resilience or shoc9 absorption6 !onnection8 5ac9 up 2if 1rst time falls
secon lines come to help43
1
.o##atera#
Ma9e sure that there is a secon way out of a creit8 but o not allow that to rive
the creit ecision4
.as- Fo##ow
)ash flow is the vital factor that is used to identify whether the borrower will have enough cash
to repay the loan or advance. )ash keeps the li$uidity to ensure repayment. The relationship
managers try to identify the annual cash flow from the submitted statements.
.onditions
%nerstaning the business an economic conitions can an will change after the
loan is mae4
.are#essness
Remember that ocumentation8 follow$up an consistent monitoring is essential to
high <uality loan portfolios4
1
.ontingencies
Ma9e sure that you unerstan the ris9s? particularly the ownsie possibilities an
that you structure an price the loan consistently with that unerstaning4
,.%%. 0ocuments for Credit'
For e'ecution of different types of loans the bank usually uses two types of documents. :ne is
application form and other is charge document. A detail of these documents are given below:
a< A--lication Dorm'
Hational bank ltd uses two types of application form for different types of loans. For )) (9*, ))
(,*, #oan (.*, 0)B#, ,ro-ect G Term loan, B. etc, the application form contains:
1. Hame of the Applicant GFirmG )ompany.
1. Applicant8s Address.
>. Hature of the AG)
F. TelephoneG Fa' number.
C. ,articulars of proprietor.
?. Hature of BusinessG /ndustry.
D. Trade #icense Ho. and 6alidity
=. ate of &stablishmentG )ommencementG /ncorporation of Business.
<. Hature and Amount of #imit
1B. ,urpose.
11. ,eriod
11. %ode of 5epayment.
1>. etails of +ecurity :ffered.
1F. ,articular of .uarantor.
1C. Full particulars of #iabilities (if any* of the Borrower and their AlliedG sister concerns
with 0)B#, other Banks and Financial /nstitutions etc.
1?. :ther 5elevant ,articularG /nformation.
1D. eclaration
1=. )ertificate of the organi!ation
1<. ,hotograph (two copies*
1
b< C(arge 0ocument'
Before disbursing the loan, the following documents must be completed by borrower. :n these
documents, the stamp needed for legislative reasons, which is paid by the borrower.
%. #etter of .uarantee
). #etter of 9ypothecation
*. emand ,romissory Hote
,. #etter of isbursement
1. #etter of Agreement
2. #etter of Authority
C. #etter of installment
,.%). Dees of Loans and Advances'
#re Sanction C(arge'
> copy )/B in$uiry from tk.CB each
+urvey 5eport )harge: Tk.1BBB and above (based on collaterals value and
Humber*
#egal opinion charge about the security offered to mortgage.
#ost Sanction C(arge'
+tamp charge: Tk.1CB to Tk.CCB
%ortgage Fee: From Tk.CBBB to above (Based on collateral assets8 value *
/nsurance of hypothecated goods (/f goods are pawned as security* : /nsurance
)harge on the hypothecated goods8 value.
+ervice )harge: 1L o the total loan amount.
+ecurity )harge (For +mall Business #oan, 9ouse 5enovation and 5epairing
#oan, ,ersonal #oan*: 1L on total loan value.
5isk )harge (For +mall Business #oan, 9ouse 5enovation and 5epairing #oan,
1
,ersonal #oan*: 1L on total loan value.
,.%*. Security against Advances'
The different types of securities that may be offered to a banker are as follows:
(a* /mmovable property
(b* %ovable property
,ratiraksha +anchaya ,atra, Bangladesh +anchaya ,atra, /)B unit certificate, wage
earner development bond.
,ledge of goods
9ypothecation of goods, produce and machinery
Fi'ed assets of manufacturing unit.
+hipping documents.
,.%,. Modes of C(arging Security'
A wide range of securities is offered to banks as cover for loan, in case of borrower inability to
repay, the banker can full upon the securities. /n order to make the securities available to banker,
in case of default of customer, a charge should be created on the security. )reating charge means
making it available as a cover for advance. The following modes of charging securities are
applied in the Hational Bank.
#ledge'
,ledge is the bailment of the goods as security for payment of a debt or performance of a
promise. A pledge may be in respect of goods including stocks and share as well as documents of
title to goods such as railway receipt, bills of lading, dock warrants etc. duly endorsed in bank8s
favor.
3y-ot(ecation'
/n case of hypothecation the possession and the ownership of the goods both rest the borrower.
The borrower to the banker creates an e$uitable charge on the security. The borrower does this
by e'ecuting a document known as Agreement of 9ypothecation in favor of the lending bank.
Lien'
1
#ien is the right of the banker to retain the goods of the borrower until the /nvestment is repaid.
The bankers8 lien is general lien. A banker can retain all securities in his possession till all claims
against the concern person are satisfied.
Mortgage'
According to section (C=* of the Transfer of ,roperty Act,1==1 mortgage is the 78transfer of an
profit in specific immovable property for the purpose of securing the payment of money
advanced or to be advanced by way of /nvestment, e'isting or future debt or the performance of
an engagement which may give rise to a pecuniary liability4. /n 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. The banker e'ercises the e$uitable mortgage.
,.%1. Lending 4isk Analysis ;L4A<'
The Financial +ector 5eform ,ro-ect (F+5,* has designed the #5A package, which provides a
systematic procedure for analy!ing and $uantifying the potential credit risk. Bangladesh Bank
has directed all commercial bank to use #5A techni$ue for evaluating credit proposal amounting
to Tk. 1B million and above. The ob-ective of #5A is to assess the credit risk in $uantifiable
manner and then find out ways 3 means to cover the risk. 9owever, some commercial banks
employ #5A techni$ue as a credit appraisal tool for evaluating credit proposals amounting to Tk.
C million and above. Broadly #5A package divides the credit risk into two categories, namely
""""" Business risk and +ecurity risk. A detail interpretation of these risks and the procedure for
evaluating the credit as follows:
Business risk
/t refers to the risk that the business falls to generate sufficient cash flow to repay the loan.
Business risk is subdivided into two categories.
Industry risk
5iskE that the company falls for e'ternal reason. /t is subdivide into supplies and sales risk.
Su--lies risk
/t indicates that the business suffers from e'ternal disruption to the supply of imputes.
)omponents of supplies risk are as raw material, #abor, power, machinery, e$uipment, factory
1
premises etc. +upply risk is assessed by a cost breakdown of the imputes and then assessing the
risk of disruption of supplies of each item.
Sales risk
This refers to the risk that the business suffers from e'ternal disruption of sales. +ales may be
disrupted by changes to market si!e, increasing in competition, and change in the regulation or
due to the loss of single large customer. +ales risk is determined by analy!ing production or
marketing system, industry situation, .overnment policy, and competitor profile and companies
strategies.
Com-any risk
This refers to the risk that the company fails for internal reasons. )ompany risk is subdivided
into company position risk and %anagement risks.
Com-any -osition risk
;ithin an industry each and every company holds a position. This position is very competitive.
ue to the weakness in the companyQs position in the industry, a company is the risk for failure.
That means company position risk is the risk of failure due to weakness in the companies8
position in the industry. /t is subdivided into performance risk and resilience risk.
#erformance risk
This risk refers to the risk that the company8s position is so weak that it will be unable to repay
the loan even under Favor able e'ternal condition. ,erformance risk assessed by +;:T
(+trength, ;eakness, :pportunity and Threat* analysis, Trend analysis, and )ash flow forecast
analysis and credit report analysis (i.e. )/B repot from Bangladesh Bank*.
4esilience risk
5esilience means to recover early in-ury, this refers to risk that the company falls due to
resilience to une'pected e'ternal conditions. The resilience of a company depends on its
leverage, li$uidity and strength of connection of its owner or directors. The resilience risk is
determined by analy!ing different financial ratio, fle'ibility of production process, shareholders
willingness to support the company if need arise
1
Management risk
The management risk refers to the risk that the company fails due to management not e'ploiting
effectively the companies8 position. %anagement risk is subdivided into management
competence risk and integrity risk.
Management com-etence risk
This refers to the risk that falls because the management is incompetent. The competence of
management depends upon their ability to manage the companyQs business efficiently and
effectively. The assessment of management competence depends on management ability and
management teamwork. %anagement ability is determined by analy!ing the ability of owner or
board of the members first and then key personnel for finance and operation.
Security risk
This sort of risk is associated with the reali!ed value of the security, which may not cover the
e'posure of loan. &'posure means principal plus outstanding interest. The security risk is
subdivided into two ma-or heads i.e. security control risk and security cover risk.
Management integrity risk
This refers to the risk that the company fails to repay the loan amount due to lack of management
integrity. %anagement integrity is a combination of honesty and dependability. %anagement
integrity risk is determined by assessing management honesty, which re$uires evaluating the
reliability of information supplied and then management dependability.
Before completing the #5A form, the relationship manager collects data especially industry
specific from published sources and company specific data that not usually published by
personally visiting the company. After collecting the necessary data heG she prepare financial
spreadsheet. This spreadsheet provides a $uick method of assessing business trend 3 efficiency
and helps to assess the borrower ability to pay the loan obligation.
,.%2. Credit A--raising 7 #resentation of Credit #ro-osal for Dinal A--roval'
;hen relationship manager is satisfied with applicantQs credit worthiness, financial capability,
management ability and feasibility of the pro-ect through credit appraisal on the basis above
1
guiding principle, the applicant may hope for credit from the bank. Then relationship manger
sent this credit proposal ()redit %emorandum* to higher authority (&6,, % 3 %* for final
approval.
Credit Issue #rocedure Dlo8c(art'

Application received from
customer
+ales G branch scrutini!es
the application
Applicati
on
Meets
basic
PPG
criteria ?
Sales oAcer;Manager
recommens the loan an sens
Application is
receive at creit an
assesse
!reit
ApproveB
Ces
ocument
s
/n orderU
Ces
Ces 0o
Chapter Five
Financia! Ana!ysis
of UCBL
Chapter Five
Financia! Ana!ysis
of UCBL
1
1. Dinancial Analysis of UCBL'
Financial analysis is divided into three parts. That8s are haven below M
1. 6erticalG)ommon +i!e Analysis
1. 9ori!ontalGTrend Analysis
,4 5atio Analysis
1.%. 5erticalGCommon Si=e Analysis'
6erticalG)ommon si!e statements came from the problems in comparing the financial statements
of firms that differ in si!e. /n the balance sheet, for e'ample, the assets as well as the liabilities
and e$uity are each e'pressed as a 1BBL and each item in these categories is e'pressed as a
percentage of the respective totals. /n the common si!e income statement, turnover is e'pressed
as 1BBL and every item in the income statement is e'pressed as a percentage of turnover (sales*.
9ere bank has no sales so that / have considered the operating as 1BBL.
Balance S(eet
As on 0ecember *%6 )&%% 7 )&%&
Common si=e
Balance s(eet
#articulars )&%% ;B0"< )&%& ;B0"< )&%% ;M< )&%& ;M<
#ro-erty and assets
Cas( '
)ash in hand
Balance with Bangladesh
Bank 3 Agent Bank
1,D?1,DBD,1?=
11,1D1,CBF,<11
1,?1C,DCB,??D
=,F1>,D1F,C?<
1.BF
?.?D
1.1F
?.F=
%*6&*,6)%)6%:& %&6&):6,C16)*2 C.C) C.C)
Balance 8it( ot(er banks
7 financial Institutions '
/n Bangladesh
:utside Bangladesh
>,1B=,F>C,D=<
C>1,CD1,>>>
1,1D=,11=,>1?
CF?,F1?,CF?
1.<B
B.>1
B.<=
B.F1
*6C,&6&&96%)) %69),61*,692) ).)% %.,&
1
Money at call and sort
notice
16&C&6&&&6&&& %6%)&6&&&6&&& *.&& &.92
Investments '
.overnment
:thers
1?,>B>,11?,1>1
>,B=B,>B1,BD<
11,FB=,11F,1<1
1,?FB,11=,111
<.?C
1.=1
<.CC
1.B>
%:6*9*6,%96*%& %16&,96)*)61&, %%.,C %%.19
Loan and advance '
#oans, cash credit,
overdrafts etc.
Bills purchase and
discounts
111,DF1,F?B,DB<
1,D?F,=??,11>
<1,1=?,C<1,=B1
1,>DF,1B<,<F>
??.DC
1.?F
DB.11
1.=>
%%161&26*)26:*) :*612&6C&%6C,, 29.*: C).&,
DiEed assets including
-remises6 furniture 7
fiEture
$t(er assets
>,1==,B=D,1DD
=,=?<,D1F,>1?
1,<??,>F<,B=D
?,>1D,D><,>?D
1.<C
C.1C
1.C1
F.=D
"otal #ro-erty and assets %2969:%6CCC6%1C %):69CC6&*)69&& %&& %&&
Liabilities and Ca-ital
Borro8ing from ot(er
Banks6 Dinancial
Institutions 7 agents
0e-osits and ot(er
accounts '
)urrent deposit 3 other
accounts
Bills payable
+avings Bank deposits
Fi'ed deposits
KKKKKKKKKKKKKKKK
1?,>C>,FFF,D<1
1,1D>,B=?,>FC
1F,=11,1<1,?F<
1B?,BFD,B1>,11D
"""""""""""""""
1?,>>D,1BC,1D?
1,CF1,=1=,1FD
1F,B>B,11F,?1F
=B,1?B,?1F,CC=
""""""""""""
<.?=
1.>C
=.DD
?1.D<
"""""""""""""
11.C=
1.<?
1B.=B
?1.D1
%*:6,9,6C,16:&* %%*6&C&6C9)61&1 9).1: 9C.&2
$t(er Liabilities 1>,FFB,?1=,>11 =,<==,<D<,DFC D.<? ?.<1
"otal Liabilities %1)6:)16*2,6)%, %))6&1:6C2)6)1& :&.11 :*.:9
Ca-italGs(are(olders
eBuity '
,aid up capital
+hare premium
D,1DF,==>,DCB
1,FCF,<D?,DCB
1,<B<,<C>,CBB
"""""""""""""""
F.>1
B.=?
1.1F
"""""""""
1
+tatutory reserve
.eneral reserve
:ther 5eserve
5etained earnings
>,C<F,1DD,<>?
1?,CDD,<?1
1,?>=,>D?,DD1
1,<DD,>1<,DDC
1,CC<,?<C,B1D
<1,CDD,<?1
D<<,<?<,?B>
1,FC?,BDF,F?<
1.1>
B.B1
B.<D
1.1D
1.<D
B.BD
B.?1
1.11
"otal stock(olderLs
eBuity
%16:226,%)6:,* C69%C6)C&611& :.,1 2.&%
"otal liabilities and
stock(olderLs eBuity
%2969:%6CCC6%1C %):69CC6&*)69&& %&& %&&
et Asset 5alue ;A5< 1C,<??,F11,<F> D,=1D,1DB,F?<
From the vertical analysis above, we can compare the percentage mark"up of asset items and
how they have been financed. The strategies may include increaseGdecrease the holding of certain
assets. The analyst may as well observe the trend of the increase in the assets and liabilities over
several years. /t can be observed that there is an increase in the holding of the current assets of
the company. The management can seek the reasons of why the holding of these assets is
continuously increasing. Though both the assets and liabilities are increasing but proportionately
liabilities were a little higher than the assets, which may make some ratio lower. The above
analysis also shows that total liabilities has increase but stock holderQs e$uity has decreased,
which indicates that 0)B# is more debt financed than the e$uity.
#rofit and Loss Account
Dor t(e year ended 0ecember *%6 )&%% 7 )&%&
Common si=e
#rofit and Loss
Account
,articulars 1B11 (BT* 1B1B (BT* 1B11 (L* 1B1B (L*
/nterest /ncome
#ess /nterest ,aid on eposits 3
Borrowing etc.
1C,>C1,?>1,B<=
1B,1B>,11F,D?1
<,F?=,>?1,F1F
C,?>1,<FD,F>?
1?C.1DL
1B<.DDL
11B.CCL
D1.D1L
et Interest Income 16%,96,%C6**C *69*16,%*6:99 11.*:M ,9.9*M
/ncome from investments
)ommission, e'change 3 brokerage
:ther operating income
1,D><,<11,==C
1,?FD,DB?,B>B
DC=,>>D,B>F
1,<DB,?D1,F1F
1,>C<,CCB,>>>
?==,1F?,>=1
1=.D1L
1D.D>L
=.1?L
1C.B<L
1D.>1L
=.D?L
"otal o-eration income :6):,6*C)6)92 C691*699)6%)2 %&&M %&&M
Less ' $-eration eE-enditure
+alary 3 allowances 1,D=F,CCF,>CB 1,D<C,CDC,?>D 1<.1BL 11.=?L
1
)hip &'ecutive8s salary and fees
irector8s fees
5ent, ta', insurance, electricity
#egal e'penses
,ostage, stamps, telegram 3
telephone
Audit fee
,rinting, stationary, advertising
epreciation on 3 repairs to banks
property
:ther e'penditure
1B,<1?,>BB
C,CDB,C=F
FCB,BD1,>CF
D,>==,D><
?F,C<?,1<D
C1F,?BB
1<<,<=<,B>B
1>?,DD<,111
C?1,B?D,>1>
1B,B>>,BBB
F,?BB,1?1
>D>,F=<,??D
11,B<C,F1C
CF,B>>,1>F
C1C,BBB
1C<,B=C,D1F
1?<,B1C,C>=
CF>,>B1,1F1
B.11L
B.B?L
F.=FL
B.B=L
B.?<L
B.BBCL
1.1CL
1.CCL
?.B>L
B.1>L
B.B?L
F.DCL
B.1FL
B.?<L
B.BB?L
1.B1L
1.1CL
?.<1L
"otal o-erating eE-enditure *6*)%6,1C629: *6%)&6C1161%C *1.C*M *:.C*M
#rofit Before -rovision 16:C)6:%,61:C ,6C**6%)262&: 2,.)2M 2&.)2M
#ess : ,rovision against loans 3
advances
,rovision for diminution in value of
investment
:ther provision
D==,>B=,11C
""""""""""""""
11,?<1,DDC
=>1,BC1,DCF
D1,=>1,BBB
1<?,?FC,11C
=.F=L
""""""""
B.1>L
1B.C<L
B.<1L
1.CBL
#rofit before "aE 16%C)6:%,61:C *62*)61:26C*& 11.21M ,2.)1M
#ess : ,rovision for ta' current
eferred
1,11D,1B<,?11
""""""""""""""
1,1==,BFD,C<B
1?1,11C,BCD
1>,<?L
""""""""
1?.FBL
1.B?L
et #rofit after taE )6:,169&,6:C1 )6%9)6,*,6&9* *%.2:M )C.C9M
A--ro-riations
5etained surplus
+tatutory 5eserve
1,<11,111,BC?
1,B>F,C=1,<1<
1,FC?,BDF,F?<
D1?,>C<,?1F
1B.C?L
11.1>L
1=.CFL
<.1CL
!arning -er s(are;!#S< ,.)& *.,:
A second method of common si!e analysis is a means of comparing figures within a single , 3
#. A common si!e profit and loss statement, for e'ample, compares all components of the , 3 #
to total operating income. /n other words, Total operating income is defined as 21BBL and all
other figures on the statement are e'pressed as a percentage of that. /n this way, we not only get
an automatic indication of appro'imate profit margin, we also can see the importance of all of
your costs and e'penses relative to operating income. 6ertical analysis can also be done on these
common si!e percentages in order to identify trends in the relative si!es of categories like costs,
1
e'penses, or margins. The above analysis shows that 0)B# has higher net interest income than
1B1B to 1B11. But after ta' net profit has decreased because they paid more provision against
loan and advances. :n the other hand they paid lower ta' in 1B1B. /n the year 1B11 0)B# has
comparatively higher e'penditure, but marginally lower percentage, which was not good signal
for the bank.
1.). 3ori=ontalG"rend Analysis'
/t is conducted by setting consecutive balance sheet, income statement or statement of cash flow
side"by"side and reviewing changes in individual categories on a year"to"year or multiyear basis.
The most important item revealed by comparative financial statement analysis is trend. X
#ercentage c(angeN ;recent yearK-revious year<G-revious year
UCBL -erformance for )&%% com-ared to )&%& 7 )&%& com-ared to )&&:.
I"!MS )&%%
;Million<
C(ange
;M<
)&%&
;Million<
C(ange
;M<
)&&:
;Million<
,aid up )apital D,1DF.== 1CB.BB 1,<B<.<C 1F>.DC 1,1<>.=>
+hareholder8s e$uity 1C,<??.F1 1BF.1C D,=1D.1D >D.B1 C,DBC.FD
Total )apital 1?,=DD.BC =C.DC <,B=C.=1 CB.CC ?,B>C
Total Assets 1?=,=<1.D= >B.BF 11<,=DD.B> F>.CF <B,F=>.D=
Total eposits 1><,F=F.DC 1>.>? 11>,BDB.D= FC.F? DD,D>B.FB
Total #oans and Advances 11C,CB?.>> 1>.F? <>,C?B.DB C1.?? ?1,?<1.11
Total /nvestments 1<,>=>.F1 1=.=1 1C,BF=.1> ?1 <,>F?.><
Total )ontingent liabilities FB,1CC.>D (1.>>* FB,D<D.DF =F.?1 11,B<=.1<
:perating /ncome <,1<F.>D 1=.>F D,=C>.== C1.1D C,1<1.BC
:perating &'penditure >,>11.F? ?.F> >,11B.D? CB.<< 1,B??.=<
,rofit before provision and ta' C,1D1.<1 F1.FB >,?>1.?B 1>C.?B 1,CF1.=?
1
Het profit after provision and
ta'
1,<FC.=B >F.<= 1,1=1.F> 1>>.<F <>1.<B
&arning Assets 1FB,1D>.1C 1=.1= 1B<,1D>.?B F?.1> DF,DD=.1F
Hon"interest &arning Assets 1=,D1=.C> ><.>< 1B,?B>.F> >1.1= 1C,DBC.?F
A comparison of statements over several years reveals direction, speed and e'tent of a trend(s*.
The hori!ontal financial statements analysis is done by restating amount of each item or group of
items as a percentage. +uch percentages are calculated by selecting a base year and assign a
weight of 1BB to the amount of each item in the base year statement. Thereafter, the amounts of
similar items or groups of items in prior or subse$uent financial statements are e'pressed as a
percentage of the base year amount. The resulting figures are called inde' numbers or trend
ratios. The above analysis shows that 0)B# performance trend is $uite better in 1B11, but
somewhere it was not good. Their import was too higher, which is not good. Their capital was
higher in 1B11 but stockholders e$uity has decreased. As compared 1B1B though their asset and
deposit was higher but they had very low investment as well as 0)B# was highly debt financed.
1.). 4atio Analysis'
5atio analysis is a study of the relationships between financial variables. /t is very important in
fundamental analysis which investigates the financial health of any financial institution. This
ratio analysis gives frank financial information in this current business world. By giving a glance
anyone will be able to know what the position that institution is now. Therefore managers,
shareholders, creditors etc. all take interest in ratio analysis. For e'ample using li$uidity ratios
managers can use the information if the institutionQs li$uidity is struggling and they may have to
take out short term finance. For this reason to evaluate the performance of 0)B# the ratio
analysis has been selected. 9ere in this report contains the most common ratios and analy!e to
1
evaluate the performance of 0)B# over the year 1BB=, 1BB< and 1B1B. The following types of
ratios fre$uently are used:
1. #i$uidity ratios
1. #everage ratios
>. ,rofitability ratios
F. ividend policy ratios
%. LiBuidity ratio'
#i$uidity ratios are the first ones to come in the picture. These ratios actually show the
relationship of a firmQs cash and other current assets to its current liabilities. Two ratios are
discussed under #i$uidity ratios. They are:
CU44!" 4A"I$'
This ratio is calculated by dividing the total current assets of an institution by its total current
liabilities. /t shows how any institution like 0)B# meets its current liabilities through its current
assets.
)urrent 5atio T )urrent Assets G )urrent #iabilities
Pear 1B1B 1BB< 1BB=
)urrent 5atio >.?< 1.C= >.?1
Table: )urrent 5atio

1
Digure' Current 4atio
According to result the current ratio of 0)B# was >.?< in 1B1B, 1.C= in 1BB< and >.?1 in 1BB=.
/n 1B1B the current ratio was >.?< which mean 0)B# had >.?< taka of currents assets against 1
taka of short term debt or liability. /t means 0)B# had the ability to pay off its current liabilities
with its current assets. /n 1BB< the current ratio was 1.C= which was a little than 1B1B which
means in 1BB< 0)B# invested less in short term assets. :n the other hand in 1BB= the current
ratio was >.?1 which mean 0)B# investment in current assets was lower than 1B1B but higher
than 1BB<. /n fact the higher the current ratio is better for the institution because this higher ratio
helps to prevent getting default.
Ouick ratio'
This ratio indicates the firmQs li$uidity position as well. /t actually refers to the e'tent to which
current liabilities are covered by those assets e'cept inventories.
Ouick 4atioN ;Current AssetsKInventories<GCurrent Liabilities
Pear 1B1B 1BB< 1BB=
Nuick 5atio >.11 1.11 >.BC
Table: Nuick 5atio
1
Digure' Ouick 4atio
This ratio portray the idea that 0)B# has so far an almost constant li$uidity position which is
good at some point, but at the same token it can be said that they have not been able to improve
them"selves. +tanding at this point, we can make an assumption that may be their profit margin
was not so high that they can make some investments paying off the liabilities that could result in
an increase in assets and decrease in liabilities to make the li$uidity position far better.
). Leverage ratio'
#everage ratios are used to calculate the financial leverage of an institution. /t helps to get an
idea of the institutionQs methods of financing or to measure its ability to meet financial
obligations. There are several types of ratios which main factors are debt, e$uity, assets and
interest e'penses.
L$GK"!4M 0!B" "$ !OUI"@ 4A"I$
#ong term debt to e$uity ratio is one of the financial leverage ratios which are used in banking
sectors to know the link between the long term debt and e$uity. The ratio is calculated by taking
the institutionQs long"term debt and dividing it by the total value of its e$uity.
#ong"term ebt to &$uity 5atio T #ong"term ebt G Total &$uity
Pear 1B1B 1BB< 1BB=
#ong"term ebt to
&$uity 5atio
11.F1 <.1> <.<>
Table: #ong"term ebt to &$uity 5atio
1

Digure' LongKterm 0ebt to !Buity 4atio
This ratio measures 0)B#8s long"term sources of fund. 9ere from this figures it is noticed that
most of the 0)B#8s long term sources of fund come through the long term liability like fi'ed
deposits and multiple saving schemes. /n 1B1B this leverage ratio was 11.F1 which mean 0)B#
long term funds come from depositors8 deposits rather than the stockholders 7e$uity. :n the other
hand in 1BB< and 1BB= the #ong"term ebt to &$uity 5atio was respectively <.1> and <.<> which
was less than 1B1B.
"$"AL 0!B" "$ !OUI"@ 4A"I$
/t is one of the banking financial leverage which is calculated by dividing its total liabilities by
stockholdersQ e$uity. /t mainly indicates the proportion of e$uity and debt that a bank is using to
finance its assets.
Total ebt to &$uity 5atio T Total ebt G Total &$uity
Pear 1B1B 1BB< 1BB=
Total ebt to &$uity
5atio
1C.?1 1F.=? 1>.D=
Table: Total ebt to &$uity 5atio
1

Digure' "otal 0ebt to !Buity 4atio
Alike all bank 0)B#8s most of the fund collected from deposits. /n year 1B1B, 1BB< and 1BB=
the ratio was 1C.?1, 1F.=? and 1>.D= conse$uently. The result shows that in 1B1B, 1BB< and 1BB=
0)B# financed most of its assets through the debt which means through deposits. As a result the
bank is doing well by increasing its deposits over years like 1B1B and 1BB<. This higher outcome
over years not only increases the risk but also increases the profit.
"$"AL 0!B" "$ "$"AL ASS!" 4A"I$
Total debt to total asset ratio measures a bank8s financial risk. /t determines how much of the
bank8s assets have been financed by the debt. /t is calculated by total debt dividing by the
institutionQs total assets.
Total ebt to Total Asset 5atio T Total ebt G Total Asset
Pear 1B1B 1BB< 1BB=
Total ebt to Total
Asset 5atio
<>.<=L <>.?<L <>.1>L
Table: Total ebt to Total Asset 5atio
1

Digure' "otal 0ebt to "otal Asset 4atio
Almost all of the 0)B#8s assets are financed by its debt. /t works by taking the deposits from the
general and invest it in different sectors. From the year 1BB= to 1B1B the ratios were <>.<=L,
<>.?<L and <>.1>L which are almost same. The higher ratio may increase more risk because if
0)B# defaults in any investment than the depositors will also default.
"$"AL !OUI"@ "$ "$"AL ASS!" 4A"I$
Total e$uity to total asset ratio is one of the leverage ratios which is used by the organi!ation like
banking sectors. /t determines how much of the bank8s assets have been financed by the e$uity.
Total &$uity to Total Asset 5atio T Total &$uity G Total Asset
Pear 1B1B 1BB< 1BB=
Total &$uity to Total
Asset 5atio
?.B1L ?.>1L ?.DDL
Table: Total &$uity to
Total Asset 5atio
1
Digure' "otal !Buity to "otal Asset 4atio
0)B#8s almost all the fund collected from the depositors so the shareholder8s contribution on
this organi!ation is too low. The outcome of this ratio over the years was downward. /n year
1B1B, 1BB< and 1BB= the ratios were ?.B1L, ?.>1L and ?.DDL. The reason behind this
downward slope was that the bank8s deposits are increasing over years and shareholders are less
e'posed to the risk than the depositors or debtors are.
*. #rofitability ratio'
,rofitability 5atios measure the overall earnings performance of an institution and its efficiency
in utili!ing assets, liabilities and e$uity.
!" #4$DI" MA4GI
Het ,rofit %argin is a ratio of profitability which is calculated by dividing the net profit after
ta'ation by revenues or net interest income. /t measures how much 0)B#8s is actually earning
from its every taka of revenue.
Het ,rofit %argin T Het ,rofit after Ta'ation G Het interest /ncome
Pear 1B1B 1BB< 1BB=
Het ,rofit %argin C?.==L >C.?CL >=.BDL
Table: Het ,rofit %argin
1
Digure' et #rofit Margin
The greater the outcome the better the 0)B#8s performance is. /n 1B1B the result was C?.==L
that means in 1BB taka of net interest income 0)B#8s net profit was C?.== taka. :n the other
hand in 1BB< and 1BB= the net profit was taka >C.?C and >=.BD against 1BB taka of net interest.
Between the years in 1B1B the bank had a handsome profit margin in percentages and oppositely
in 1BB= 0)B# net profit margin was better than the year 1BB<.
4!"U4 $ !OUI"@
5eturn on e$uity measures a bank8s profitability which calculates how much net profit that bank
may generates with the money that shareholders have invested as e$uity.
5eturn on &$uity T Het ,rofit after Ta'ation G &$uity
Pear 1B1B 1BB< 1BB=
5eturn on &$uity 1D.<1L 1?.>CL 1D.FFL
Table: 5eturn on &$uity
1
Digure %,' 4eturn on !Buity
5:& is very popular ratio toward the shareholders of any bank. After doing the analysis from
0)B#8s financial statements its shows those in years 1B1B, 1BB<, and 1BB= the return from 1BB
taka invested by the shareholders was respectively 1D.<1, 1?.>C and 1D.FF. The higher the
percentage is the better for the bank as well as for shareholders.
4!"U4 $ ASS!"S
5:A is a profitability ratio which shows how profitable a bank is related to its total assets. 5:A
gives an idea that how efficient the management of a bank is to generate profits using its assets.
5eturn on Assets T Het ,rofit after Ta'ation G Total Assets
Pear 1B1B 1BB< 1BB=
5eturn on Assets 1.?=L 1.B>L 1.1=L
Table: 5eturn on Assets
1
Digure' 4eturn on Assets
5:A is the most used profitability ratio. As 0)B# was a part of banking industry and its most of
the assets come from the debt which was the reasons for its low net profit as well as poor 5:A.
As a result the 0)B# had low 5:A in the year of 1B1B, 1BB< and 1BB= which were 1.?=L,
1.B>L and 1.1=L respectively. /n the year 1B1B the net profit of the bank had increased as a
better growth rate rather than its assets growth.
Gross #rofit Margin'
.ross ,rofit %argin measures the profit of the company after deducting the cost of goods sold
from the total profit.
Gross #rofit MarginN Gross -rofit G Sales
Pear 1B1B 1BB< 1BB=
.ross ,rofit %argin F1.?< 1<.CF >1.11
Table: .ross ,rofit %argin
1

Digure' Gross #rofit Margin
From the above analysis we can see that, 0)B# has a higher .ross ,rofit %argin which
indicates that they earning more that will be paid to its shareholders.
,. 0ividend #olicy ratio'
/t describes how a firm pays their divided as they earn. :n the other hand it also shows that a
firm may earn and provide the dividend to its shareholders.
0ividend -ayout ratio'
/t is e$uals the percentage of earnings paid out as individuals.
0ividend -ayout N 0ividendGet income
Pear 1B1B 1BB< 1BB=
ividend payout C.F1L >.C>L >.?1L
Table: ividend payout
1
Digure' 0ividend #ayout
.enerally, growth firms have low dividend payout ratios as they retain most of their income to
finance future e'pansion. 9ere 0)B# has a high pay out rations, which indicates it is a well"
established bank.
Chapter "i-
"O3. Ana!ysis of
UCBL
Chapter "i-
"O3. Ana!ysis of
UCBL
1
2. SW$" Analysis of United Commercial Bank at a Glance'
+;:T analysis is a strategic planning method used to evaluate the strengths, weaknesses,
opportunities, and Threats involved in a business venture. /n banking sectors it is important to
identify the internal and e'ternal factors that are favorable and unfavorable to achieve its
ob-ectives. From the +;:T analysis we can figure out ongoing scenario of the bank. +o to have
a better view of the present banking practice of 0)B#, the +:;T analysis of 0)B# is given
below"
2.%. Strengt(s'
/t is an internal factor. /t deals with the organi!ations own strength. 0)B#8s strengths are
1. 0sage of faster pc bank software which is ,) BAHA 1BBB
1. &fficient administration
>. )orporation with each other
F. Fewer default loans.
C. %embership with +;/FT
?. .ood banker"customer relationship
D. &nergetic as well as smart work force
=. ;ell"furnished and air"conditioned bank
<. Hot engage in unfair business practice
2.). Weaknesses'
;eakness is also an internal factor of +;:T analysis. 0)B#8s weaknesses are
1. &'isting manual vouchers
1. #imited consumer credit scheme
1
>. &nhance of new private banks
F. #ack of training facility
C. #ack of promotional activities
?. :fficers in the -unior level are not highly $ualified
2.*. $--ortunities'
:pportunities are e'ternal factors which indicate the industry8s advantages available for the
companies.
1. 9uge business area
1. /ntroducing different debit and credit card
>. /ndustry8s positive growth
F. /ntroducing any branch banking through online
C. Fle'ible credit schemes
?. 5eliably to local public
2.,. "(reats'
Threats are e'ternal factors of +;:T analysis. The threats for 0)B# are
1. ifferent classic services of foreign banks
1. Better developed card division of other private banks
>. 0ses of modern technologies by the rival banks
F. ,olitical unrest and government restricted banking strategies
C. The number of rivalry is too high into the banking industry.
1
:.%. Ma+or Dindings'
Chapter "even
Ma4or Findings$
ecommendation
and Conc!usion
Chapter "even
Ma4or Findings$
ecommendation
and Conc!usion
1
As a pioneer of welfare banking, 0nited )ommercial Bank #imited has contributed a lot to the
national economy as well as to social welfare through financial structure under /slamic
banking. uring the internship period in 0nited )ommercial Bank #imited (0)B#* / have
found various things, which are as follows:
0)B# has a good set of customer service environment. /t has provided very potential and
dynamic customer service to its customer.
0)B# has a good set of institutional owners, which gives a better board of directors
than many other banking companies.
0)B# has successfully developed a professional -ob environment where each officer has
substantial level of authority and responsibility.
The organi!ation is divided in to departments, and then in to units and subunits and thus
the total flow of work has become very systematic.
The bank uses R,) Bank 1BBB4 software for its banking operations as a computeri!ed
bank.
The marketing strategy and customer care department is not up to the mark.
This Bank canQt intestinal economic sectors, which are prohibited by the law of /slam.
This bank has limited activity to capitali!e the huge potentials of the credit card market. /t
will verse that tomorrows payment will be considered of only plastic money ()redit
)ard*. A large part of business transaction will be done by credit card /// near future. +o
the branch should give special attention on credit card.
The bank has taken a C"year plan from 1BBD"1B11 to make a fle'ible and comfortable
service to its clients.
/t has diversified product line.
The growth of the bank has so far been very steady and high.
/t lacks of AT% and )redit card facilities.
0)B# Bank #imited also hasn8t proper monitoring system.
This bank started on"line service newly. As a resulted customers are not getting the full
service by the on"line service. +ometimes they have to face problem with on"line
account.
1
The number of human resources in the )omputer section is really insufficient to give
services to huge number of customers.
/ have the practical e'perience in 0)B# for only two months. 0nited )ommercial Bank #td
introduces a new dimension of business among the local bank in the financial market of
Bangladesh in 5etail ,roduct %anagement. But in the comple' business environment and
diversified business world these products cannot meet the customer needs. Today, customer
classes are vibrant and it is difficult to keep the customers without an appropriately designed and
also is not properly market driven. eveloping a market driven product management system is
essential for any company if the company would like to win the competitive condition and would
like to survive in futuristic competitive market setting. /n this regard, following specific
recommendations are forwarded for the development of product management of 0nited
)ommercial Bank #td.
0nited )ommercial Bank limited is a leading ,rivate commercial bank in Bangladesh with
superior customer bases that are loyal, faithful, worthy towards the bank. The service provided
by the young energetic officials of the 0nited )ommercial Bank #imited is very satisfactory. As
a commercial bank 0)B# has to follow the rules of Bangladesh bank despite the fact that these
rules sometime restrict the foreign business to some e'tent. uring my internship in this branch /
have found its /nvestment department to be very efficientH therefore this department plays a
ma-or role in the overall profitability of the branch and to the Bank as a whole.
The BankQs drive towards market leadership as well as $uality in choosing business will continue
in the coming years although competition is intensified with the opening of more financial
institutions. The Bank is optimistic that the volume of business will increase in future through
pragmatic and market friendly policies. The Bank shall continue to e'plore new Branches for
Banking. ;e shall endeavor to adopt customer"oriented policies and introduce new techni$ues
that will help to earn profit and increase greater confidence of the e'istingG prospective
customers. /f 0nited )ommercial Bank #td, 0ttarkhan Branch adopts professionalism within the
1
framework of commercial, they will be able to earn handsome and higher return to the depositors
and shareholders. 0ltimately, public will get more confidence on this type of Banking.

:.). 4ecommendations'
Taking into consideration of the e'periences from working in the 0ttarkhan branch, the
following recommendations can be referred:
Though the performance of general customer services is very good, it has some problem
of efficiency.
:fficials whom are involved in )ustomer +ervices should be trained properly. Because
some time they cannot give proper suggestions to the customer $ueries.
Their -obs should be mentioned more fre$uently.
They should be made somewhat free from doing business.
#ink between )ustomer +ervice :fficer8s and )ustomer +ervice %anager should be
easier.
To provide better 3smarter services, 0)B# should also improve their call center service.
The bank should introduce more product and service based on market demand.
Humber of AT% booth needed to be increased.
AT% should take good care. Because it has been seen that most of the time they remain
out of order or out of cash.
5elationship between Bank and customer should be increased.
)harges and fees may be reduced for more customer satisfaction.
There should be a code of conduct for the 0)B# officials, which should followed.
1
0ttarkhan Branch should have computeri!ed token system.
The website of 0)B# should upgrade regularly.
There sitting or waiting arrangement should be increased with co!y furniture.
+ome officers behaviors are very infuriate, they should change this type of attitude.
Being a clear transparent the bank can provide the best support to customer as earn profit.
:.*. Conclusion'
0nited )ommercial Bank #imited has formulate 2Business ,olicy and ,erspective ,lan4 to attain
the financial strength, sustainable growth and operational efficiency. To protect the interest of the
stakeholders, bank has formulated the perspective plan for consolidation of the growth and
profitability. uring the period of perspective plan, bank has the main ob-ective to attain the
highest operational e'cellence and consolidation to turn the bank into a dynamic Bank in the
country.
uring the period from 1BBD to 1B11, new 3 potential avenues of business in all areas of
operation to be e'plored and e'panded through the network of e'isting1BB branches and more
new branches to be opened gradually during the plan period sub-ect to permission of Bangladesh
Bank. The bank ensures optimum utili!ation of bank8s invested fundG deposit to be mobili!ed in
future in an organi!ed way to ma'imi!e banks profit consolidating the financial strength of the
bank and to achieve the overall ob-ective, mission 3 vision of the bank as a whole.
/t is great pleasure for me to have practical e'posure in 0nited )ommercial Bank #imited,
0ttarkhan Branch. Because without practical e'posure it could not be possible for me to compare
the theory with practice, and it is well established that theory without practice is blind. / have
completed my internship in 0ttarkhan Branch of 0nited )ommercial Bank #imited. uring the
practical orientation, / have observed the function of overall banking activities like cash
1
department, clearing section, customer client division 3 various laws that comply with the sound
business operations of 0nited )ommercial Bank of Bangladesh. The Bank which is fully
customer oriented. /ts performance specially based on prompt and swift services is busier than
other department of 0nited )ommercial Bank #imited of 0ttarkhan Branch. The more and more
are coming in the branch through this department resulting deposit of the branch is increasing
day to day.
:n the other hand, for the concept of commercial banking system most valuable, and affluent,
wise client are step forwarding to the corridor of the 0nited )ommercial Bank #imited. As a
result, the Accountholder 3 liability of the bank is growing time to time, which will help to
makes proper investment. That is why the number of account is opening more than previous
year, which signifies the positive sign for our developing economy. /n a word, the performance
of 0nited )ommercial Bank #imited, 0ttarkhan branch is growing rapidly and the volume of
remittance is increasing effectively.
At last it can be said that, 0nited )ommercial Bank #imited will be turned into a dynamic
commercial Bank in the country and will e'pand its Banking Business all over the country to
provide the banking services to the groups including the deserving &conomic groups of the
society who have no easy access to the banking channel. This will help for alleviation of the
poverty, income generation, creation of employment opportunity, up"gradation of the standard of
living of the lower economic groups, which will also contribute to the emancipation of national
economy of the country. The bank follows the Bank )ompanies Act 1<<1, the )ompanies Act
1<<F, the Hegotiable /nstrument Act 1==1, the Foreign &'change 5egulation Act 1<D> and many
more to make the banking business in Bangladesh lawfully.


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