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%20Bank%20LImited%20Final.pdf?sequence=1.
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DaffodilInternationalUniversity

AnAnalysisofLoans&AdvancesofRupaliBankLimited
(DhanmondiBranch),Dhaka
PreparedBy:
RumaRaniRay
Id:09111838
DepartmentofBusinessAdministration
DaffodilInternationalUniversity

INTERNSHIPREPORT
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DaffodilInternationalUniversity
SupervisedBy:
MasudIbnRahman
AssociateProfessor
DepartmentofBusinessAdministration
FacultyofBusiness&Economics
DaffodilInternationalUniversity
SubmittedBy:
RumaRaniRay
ID:09111838
DepartmentofBusinessAdministration
FacultyofBusiness&Economics
DaffodilInternationalUniversity
HostOrganization
RupaliBankLimited
H:40/2,R:14/ASatmosjidRoad,
DhanmondiR/A,Dhanmondi,Dhaka1209
AnAnalysisofLoans&AdvancesofRupaliBankLimited
(DhanmondiBranch),Dhaka

DaffodilInternationalUniversity
August31,2014
MasudIbnRahman
AssociateProfessor
DepartmentofBusinessAdministration
FacultyofBusiness&Economics
DaffodilInternationalUniversity
Subject:SubmissionofInternshipReport.
DearSir,
ItakepleasureinsubmittingthereportonAnanalysisofLoans&Advancesof
RupaliBank
Limited,(DhanmondiBranch):astudyonDhanmondiBranch,asarequirementof
BBA
program,DepartmentofBusinessAdministrationforyourconsideration.Ihave
completedthe
reportinduetimeandmetalltheproposedobjectives.Apartfromtheacademic
knowledge
gained,thisinternshipprogramandpreparationofreporthasgivenmetheopportunityto
understandtheauditprocedureandauditorsindependence.
Ihavetriedmybesttomakethisreportcomprehensiveandinformativeone.Ihopeyou
will
appreciatemyendeavorandfindthereportuptoyourexpectation.
Ithastobementionedfurtherthatwithoutyouradviceandcooperationitwouldnotbe
possible
formetocompletethisreport.Ishallbegratifiedtoansweranysortofqueriesyouthink
necessaryregardingthereport.
Yourssincerely,
_______________
RumaRaniRay
IDNo:09111838
DepartmentofBusinessAdministration
DaffodilInternationalUniversity

LETTEROFTRANSMITTAL
I

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DaffodilInternationalUniversity

RumaRaniRay,ID:01911838,majorinFinance,DepartmentofBusiness
Administration,
DaffodilInternationalUniversityhascompletedinternshipreportundermysupervision.
Hehas
donethisreportonAnanalysisofLoans&AdvancesofRupalibankLimited,
(Dhanmondi
Branch)asapartofrequirementforobtainingthedegreeofBachelorofBusiness
Administration.
Ihavegonethroughthereportandfounditawellwrittenreport.Hehascompletedthe
reportby
himself.Iwishhimeverysuccessinlife.
__________________
MasudIbnRahman
AssociateProfessor
DepartmentofBusinessAdministration
FacultyofBusiness&Economics
DaffodilInternationalUniversity

APPROVALCERTIFICATE
II

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DaffodilInternationalUniversity
Intheearlyofyear2014,therewasopportunitytobeemployedbyRupaliBankLtd,
(DhanmondiBranch)asanIntern.Undertheirsupervision,itwasagreatopportunityto
undertake90daysinternshiptoexpandthehorizonsandthewayofthinking.Themajor
jobin
theaforesaidbankwasbasedwithintheloandepartmentandprimarilyinvolvedpractical
understandingunderthesupervisionofmanager.Duringtheinternshipperiodtheygave
opportunitytoengageindifferenttypesofbankingservicetoenrichmydomainof
practical
bankingknowledge.

Preface
III

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DaffodilInternationalUniversity
BythenameofGodthereporthasbeencompleted.However,thespecialthankstomy
honorable
supervisorMr.MasudIbnRahman,AssociateProfessor,DepartmentofBusiness

Administration,andDaffodilInternationalUniversity.Thesupervisionandsupportthat
hegave
trulyhelptheprogressionandsmoothnessoftheinternshipprogram.Thecooperationis
much
indeedappreciated.
MygratefulthanksalsogotoMr.AbdurRahim(GM),RupaliBank,DhanmondiBranch,
who
hascreatedtheopportunitytogetthepracticalknowledge.Besides,thisinternship
program
makesmerealizedthevalueofworkingtogetherasateamandasanewexperiencein
working
environment,whichchallengesuseveryminute.Moreover,greatappreciationgoestothe
other
studentsandstaffsofRupaliBank,DhanmondiBranchthosehelpedmealotduringthe
internship.

ACKNOWLWDGEMENT
IV

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DaffodilInternationalUniversity
ThisreportispreparedasrequirementofBBAprogram.Thisreportfocusesthreemonths
workingexperiencesin,RupaliBankLimited,(DhanmondiBranch),Dhaka.Thisreport
will
giveaclearideaaboutLoans&AdvancesofRupaliBankLimited.
Themainobjectofthereportistoknowabouttheloan&advancesandtheprocedure
followed
bythebankforsanctioningloan.ThisBanktriestoprovidehigherqualityservicesin
caseof
sanctioningtheloansandadvances.Theinformationofthereporthascollectedfrom
secondary
sourceslikebooks,publishedreportsandwebsiteoftheRupaliBankLimited.Itinclude
source
ofexisting/publisheddata,suchasOperationalmanual,officialwebsite,Banking
journals,
Researchpapersandfinancialstatement.
Afteranalyzingdata,itwasfoundthatcustomershavechosenRupaliBankLimitedfor
its
goodwillasstateownedbank.Buttheloansanctioningprocedureistimeconsuming.
Thatswhy

bankislosingitsvaluablecustomersinloanandadvancedepartment.Therefore,Rupali
Bank
Limitedshouldgivemoreefforttomakewellestablishmarketinthecontextof
Bangladeshand
bemoreflexibletodisburseloan&advance.

ExecutiveSummary
V

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CHAPTERS
PARTICULARS
PAGENO.
LetterofTransmittal
I
ApprovalCertificate
II
Preface
III
Acknowledgement
IV
Executivesummary
V

Chapter1
Introduction

1.1Introduction
1
1.2Backgroundofthestudy
12
1.3ScopeoftheStudy
2
1.4ObjectivesoftheStudy
2
1.5MethodologyoftheStudy
24
1.7LimitationoftheStudy
4

Chapter2
ProfileoftheOrganization
2.1Background
5
2.2CorporateProfile
67
2.3Vision&Mission
7
2.4CoreValues
7
2.5StrategicObjectives
8
2.6EthicalPrinciples
89
2.7BankingFacilitiesofRupaliBankLimited
9
2.7.1GeneralBankingServices
910
2.8OtherBankingServices
1013

Chapter3
Loans&AdvancesDepartment
3.1CreditPrinciples
1415
TableofContent

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CHAPTERS
PARTICULARS
PAGENO.
3.2TypesofLoanandAdvances
1518
3.3LoanSanctioningprocessfortheClient
18
3.4BasisofLoansandadvances
1819

3.5ForeignExchange
2022
3.6Remittance
2224
3.7StepsinvolvedinCreditProcessing
2431

Chapter4
Analysis
3234

Chapter5
Findings
35

Chapter6
Recommendations
36

Chapter7
Conclusion
37

Chapter8
References
38
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Chapter1

Introduction
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1.1Introduction

RupaliBankLtd.wasconstitutedwiththemergerof3(three)erstwhilecommercial
banksi.e.
MuslimCommercialBankLtd.,AustralasiaBankLtd.andStandardBankLtd.operated
inthe

thenPakistanonMarch26,1972undertheBangladeshBanks(Nationalization)Order
1972
(P.O.No.26of1972),withalltheirassets,benefits,rights,powers,authorities,
privileges,
liabilities,borrowingsandobligations.RupaliBankworkedasanationalizedcommercial
bank
tillDecember13,1986.RupaliBankLtd.emergedasthelargestPublicLimitedBanking
CompanyofthecountryonDecember14,1986.
RupaliBankLtd.emergedasthelargestPublicLimitedBankingCompanyofthecountry
on
December14,1986.Thebankwasdenationalizedin1986,andreorganizedasalimited
company,withtheGovernmentofBangladeshholding51%shares.However,afterthe
year
2000,theGovernmentdivestedofitsshares,andtheprivatizationofthebankwas
complete.
RupaliBankLimitedisgovernedbyaBoardofDirectorsconsistingof10(Ten)members
headed
byaChairman.TheBankisheadedbytheChiefExecutiveOfficer&Managing
Director,whois
awellknownBankerandareputedprofessional.Theheadofficeofthebankalongwith
its
corporatestructureislocatedat34,DilkushaCommercialArea,Dhaka1000,
Bangladesh,the
maincommercialcenterofthecapital.RupaliBankLimitedextendsallthemajor
personal
bankingfacilitiesandservicestoitscustomerswithitsskilledmanpowerandlargest
networkof
around517branchescoveringalltheurbanandremoteruralareasofBangladesh.Itis
linkedto
itsforeigncorrespondentsallovertheworld.
1.2BackgroundoftheStudy
Theinternshipprogramismandatoryrequirementforthestudentswhoaregraduating
fromthe
FacultyofBusiness&EconomicsundertheprogramBachelorofBusiness
Administrationof
DaffodilInternationalUniversity.

1.INTRODUCTION
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DaffodilInternationalUniversity
Internshipprogramhasthreemonthsprogramforworkinginanorganizationforwhich
therewas
anopportunitytoengageinRupaliBankLimitedwherelearnedalotregardingloansand
AdvancesprovidedbytheBank.
Consequently,itwillhelptorelatethetheoreticalknowledgeofbanktopractical
exposure.Thus
theknowledgeandcontinuedworkingexperiencegatheredfromthebankhelpedmeto
work
selectedtopicLoans&AdvancesofRupaliBankLimited:AstudyonDhanmondi
Branch.
1.3ScopeoftheStudy
Aftercompleting122creditsinDaffodilInternationalUniversitytherewerean
opportunityto
getappointmentinoneofthelargestandrenownedRupaliBanklimitedwhichexplored
avast
scopeforthestudy.Scopesforthestudydepictedasfollows:
a)LoanandadvanceprocedurefollowedbytheRupaliBankLtd.
b)BackgroundandprospectiveofRupaliBankLtd.
1.4ObjectivesoftheStudy
GeneralObjective:
ThemainobjectiveofthestudyistoanalyzetheLoansandAdvancesofRupaliBank
Limited,DhanmondiBranch.
Secondary/SpecificObjectives:
TodiscusscreditservicesofferedbyRupaliBankLimited.
TodescribeloansanctioningprocessofRupaliBankLimited.
ToanalyzeloanoperationssystemoftheRupaliBankLimited.
ToidentifytheproblemsrelatedtoloansandadvancesoperationsofRupaliBank
Limited.
Tomakesomerecommendationstosolvetheproblems.
1.5MethodologyoftheStudy
Methodologyisthewaytosystematicallysolvetheresearchproblem.Thisjobhadbeen
completedbyfollowingsystematicandsequentialsteps.Firstly,theresearchproblem
was
formulated.Secondly,anextensivesurveyhadbeentakenplacetogatherrelevantand
required
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DaffodilInternationalUniversity

literature.Thirdly,aresearchdesignhadbeendetermined.Inthefourthstageassampling
techniquehadbeenchosenwhichiscallednonprobabilityjudgmentsampling.Sixthly,
boththe
primaryandsecondarydatawerecollected.Atthefinalstage,collecteddatawere
analyzedand
arrangedasperthestudydemands.
ThestudyhasbeeninitiatedtoexploretheinsightofthecriticalissuesofLoans&
Advances.So
thestudyisanexploratoryresearch.Tocompletethestudybothprimaryandsecondary
datahas
beenused.
Primarydata
Theprimarydatahasbeencollectedfromoriginalsourcesbyaninvestigation.The
primarydata
arethosewhicharecollectedafreshandforthefirsttimeandareoriginalincharacter.
Thedata
wascollectedfollowinganinterviewschedulefortheemployeesofthebank.
PrimaryDataSources
i)Datacollectionthroughworkingwithemployeesofthebankatthetimeoffield
operations.
ii)Workexperiencegatheredthroughworkingduringinternshipperiod.
iii)Discussionwithemployees,managers
v)Observationduringothersworks.
Tocollectprimarydatamostpopularandconvenientquestionnairemethodwasused.
Twosetof
questionnairehasbeendesignedonthebasisofmultiplechoicequestionsandafew
questiongot
thedichotomousformat.
TargetPopulation
Thetargetpopulationofthisreportisthemanagersandloandepartmentstaffsofthe
bank.
SamplingTechnique
Togatherprimaryinformationfromasamplesizehasbeendeterminedfromapopulation
by
selectingasamplingtechniquenamedjudgmentsamplingtechniquewhichisnon
probability
sampling.
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SampleSize:Thesamplesizeofthestudyasfollows
1Manager.
2loanDepartmentstaffs.
20customers
SecondaryData
Ontheotherhand,thesecondarydataarethosewhichhavealreadybeencollectedby
someone
elsewhichhavebeencollectedthroughthestatisticalprocess.Secondarysourcesofdata
consist
ofallpublishedandreportedmaterialsincludingbooks,journals,articlesetc.
SecondaryDatasourcesare
(i)
CollectionofsecondaryfromAnnualreport
(ii)
Secondarydataalsohavebeencollectedfromthedifferentpublicationsofthe
Bank.
(iii)OtherinformationwasobtainedfromvariouscorrespondingfilesoftheBank.
(iv)Internetwasoneoftheimportantsourcesforsecondarydatacollection.
1.6LimitationsoftheStudy
Thestudyisconductedwithanobjectivetomakeathoroughstudyofloans&advances
proceduresthathavebeenavailedmanyfacilitiesandfacedsomeobstaclesduringmy
study.
Theseobstaclesmaybetermedaslimitationofthestudy.Theselimitationsareas
follows:
Limitationoftimeduringinternshipperiod.
Theinformationacquiredforthestudywasnotadequate.
Thesamplesizewastooshortconsideringthesizeofthepopulation.
Thesurveymadeforthestudycouldntreflectthefactbecausethestateofmindofthe
respondentsandthequestionanswermaynotbeequitable.
Confidentialdocumentsorobjectstothefirmwerenotavailabletoaccess.
Astheinternshipisthefirstpracticalexperience,itisnotpossibletoknoweverything
aboutthebank.
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Chapter2

Profileoftheorganization
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2.1Background

RupaliBankLtd.wasconstitutedwiththemergerof3(three)erstwhilecommercial
banksi.e.
MuslimCommercialBankLtd.,AustralasiaBankLtd.andStandardBankLtd.operated
inthe
thenPakistanonMarch26,1972undertheBangladeshBanks(Nationalization)Order
1972
(P.O.No.26of1972),withalltheirassets,benefits,rights,powers,authorities,
privileges,
liabilities,borrowingsandobligations.RupaliBankworkedasanationalizedcommercial
bank
tillDecember13,1986.RupaliBankLtd.emergedasthelargestPublicLimitedBanking
CompanyofthecountryonDecember14,1986.
PresentCapitalStructure
AuthorizedCapital
:
Tk.7000million(US$88.66million)
PaidupCapital
:
Tk.1650million(US$20.9million)
BreakupofpaidupCapital
Governmentshareholding
:
90.19%
Privateshareholding
:
09.81%
PresentShareStructure
TotalNumberofshare(Eachlot:
16,50,00,00010)
ShareDemotedbyshareholders:
124358890(ason24.02.2013)
NumberofBranches

RupaliBankoperatesthrough517branches.Itislinkedtoitsforeigncorrespondentsall
overtheworld.
NumberofEmployees
Thetotalnumberofemployeesis4293.
ChiefExecutive
TheBankisheadedbytheManagingDirector(Chiefexecutive)whoisareputed
professionalBanker.

2.ProfileoftheOrganization
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2.2CorporateProfile
Nameofthecompany
:RupaliBankLimited
Chairman
:AhmedAlKabir,PhD.
ManagingDirector
:M.FaridUddin
CompanySecretary
:Md.ShahjahanKhandaker
LegalStatus
:PublicLimitedCompany
Genesis
:RupaliBankLimitedhasbeenincorporatedon14
December1986undertheCompaniesAct1913aftertaking
overandacquiringasagoingconcerntheundertakingand
businessesofRupaliBankwithallofitsassets,liabilities,
benefits,rights,powers,authorities,privileges,borrowingsand
obligations.RupaliBank,whichinitiallyemergedasa
NationalizedCommercialBank(NCB)undertheBangladesh
Banks(Nationalization)Order,1972(PresidentsOrderNo.26
of1972),hasnowbecomeastateownedcommercialbank
(SCB)throughavendorsagreementdated15November2007.
DateofIncorporation
:14December1986
RegisteredOffice
:34,DilkushaCommercialArea,Dhaka1000,Bangladesh
AuthorizedCapital

:Tk.700Crore
PaidupCapital
:Tk.165Crore
Reserves
&
Retained
Earnings
:Tk.1374Crore
Credit
Rating
by
CRAB(2009)
:LongtermA3
ShorttermST3
NationalSupportAAA
ListingwithDSE
:19081987
ListingwithCSE
:10101995
CommencementofTrading
withDSE&CSE
:23121986
VATRegistration
:9011039307
TINCertificate
:1772000021/LTU/Dhaka
Auditors
:AHMAD&AKHTAR,CharteredAccountants,
BCICBhaban,(3
rd

Floor)
3031,DilkushaC/A,
Dhaka1000,Bangladesh.
LegalAdvisor
:S.MAtikurRahman,BaristeratLaw,
SuiteD(1stFloor),105/A,KakrailRoad,
Dhaka,Bangladesh.
TaxConsultant
:K.M\HASAN&CO.CharteredAccountants,
Hometown

Apartment
(8th
&
9th
Floor),
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87,NewEskartonRoad,Dhaka1000,Bangladesh.
NumberofEmployees
:4503
NumberofBranches
:511
NumberofSubsidiary
Companies
:01(RupaliInvestmentLimited)
PhonePABX
:+8802955162425,
Fax
:+88029564148,+88029552671
SWIFTBIC
RUPBBDDH
Website
www.rupalibank.org
Email
info@rupalibank.org

2.3Vision&Mission
Vision

OurVisionistoexpandourloyalcustomerbasebybeingknownasthefinancial
partner
ofchoiceconstantlyexceedscustomerexpectations.
OurMission

Developlongtermrelationshipsthathelpourcustomersachievefinancialsuccess.
Offerrewardingopportunitiesandcultivatestaffcommitments.
Upholdethicalvaluesandmeetitscustomersfinancialneedinthefastestandmost
appropriatewayandcontinueinnovateworksinordertoachievehumanresourcewith
superiorqualities,technologicalinfrastructureandservicepackages.

2.4CoreValues

Socialresponsibilitywecareforandcontributetoourcommunities.
Performancewemeasureandresultsrewardachievements.
Integrityweupholdtrustworthinessandbusinessethics.
Respectwecherisheveryindividual.
Innovationweencouragecreativity.
Teamworkweworktogethertosucceed.
ThefirstlettersoftheinitialwordsformSPIRITandcarryequalimportance.
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2.5StrategicObjectives

Developacustomerorientedserviceculturewithspecialemphasisoncustomercare
and
convenience.
Increasemarketsharebyfollowingadisciplinedgrowthstrategy.

Achieveasignificantshareofdepositandcreditsfromtheexistingandnichemarkets.
Leverageitstechnologyplatformandpenscalablesystemstoachieve.
Costeffectiveoperations,efficientMIS,improveddeliverycapabilityandhighservice
standards.
Developinnovativeproductsandservicesthatattracttargetedcustomersandmarket
segments.
Maintainahighqualityassetsportfoliotoachievestrongandsustainablereturnsandto
continuouslybuildshareholdersvalue.
Explorenewavenuesforgrowthandprofitability,particularlybydiversifyingloan
portfoliothroughstructuredfinanceandexpansionofretailandSMEfinancing.
Strengthenthebanksbrandrecognition.

2.6EthicalPrinciples
CustomerFocusandFairness:AtRBL,Theirprimefocusistoachieveperfectionin
their
customerservice.Customersaretheirfirstpriorityanddrivingforce.Theywishtogain
customer
confidenceandbetheirtrustedpartner.Theybelieveinfairtreatmenttoallcustomers,
depositors,borrowers,andclientswithoutanydiscrimination.

Quality:Qualityserviceexperienceisaparamounttotheircustomersandtheyare
strongly
committedinfulfillingthisideal.Theyhaveacultureoftimelycomplianceofregulatory
requirements.
HonestyandIntegrity:Theyensurethehighestlevelofintegritytotheircustomers,
creatingan
ongoingrelationshipoftrustandconfidence.Theytreattheircustomerswithhonesty,
fairness
andrespect.
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DaffodilInternationalUniversity
Beliefinourpeople:Theyrecognizethatemployeesaretheirmostvaluableassetand
their
competitivestrength.Theyrespecttheworthanddignityofindividualemployeeswho
devote
theircareersfortheprogressofthebank.Theytrustinequaltreatmenttoallshareholders
irrespectiveoftheirindividualsizeofshareholdings.
Teamwork:Theyareafirmbelieverinteamworkandfeelthatloyalandmotivated
teamcan
produceextraordinaryresults.Theyaredrivenbyaperformanceculturewhere
recognitionand
rewardsarebasedonindividualmeritanddemonstratedtrackrecord.
GoodCorporateGovernance:EffectiveCorporategovernanceproceduresareessential
to
achieveandmaintainpublictrustandconfidenceinanycompany,moresoinabanking
company.AtRBL,Theyarecommittedtofollowingbestpracticesresultingingood
corporate
governance.
CorporateSocialResponsibility:Asaresponsiblecorporatecitizen,theyconsiderit
important
toactinaresponsiblemannertowardstheenvironmentandsociety.Theircommitment
has
alwaysbeentobehaveethicallyandcontributetowardstheimprovementofqualityoflife
ofour
people,thecommunityandgreatlythesociety,ofwhichtheyareanintegralpart.

2.7BankingFacilitiesofRupaliBankLimited
2.7.1GeneralBankingServices

RupaliBankLimitedextendsalltheBankingfacilitiesandservicestocustomers.The
bankhasa
verywidenetworkofactivitiesandservicesbothinurbanandruralareasthroughits492
branchesalloverthecountry.
Depositschemes

Savingsdeposit
Currentdeposit
ShortNoticedeposit
TimeDeposit
DPS
RupaliDepositPensionScheme
FestivalDeposit
Calldeposit
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InterestRates

2.8OtherBankingServices

RupaliBankLtd.providespromptandexcellentotherBankingServiceslikeissuing
DemandDraft

PayOrder
TelegraphicTransfer
MailTransfer
CallDeposit
TransferofFundonstandinginstructionarrangement
ComputerizedBankingService
Tomodernizebankingoperationandensurepromptservices,majorbranchesofthebank
have
alreadybeencomputerized.Otherimportantbranchesareintheprocessof
computerization.
OneStopService
Inordertoprovidespeedyservicestothecustomers,RupaliBankLtd.hasalready
introduced
OneStopServiceinthefollowingBranches:

1.LocalOffice,Dhaka.
2.IbrahimmansionCorporateBranch,Dhaka.
3.MotijheelCorporateBranch,Dhaka.
4.T.C.B.BhabanBranch,Dhaka.
5.GulshanBranch,Dhaka.
6.MohammadpurLadiesBranch,Dhaka
SLNo.
TypesofDeposit
InterestRateperannum
1.
SavingsDeposit
4.50%
2.
ShortNoticeDeposit
3.50%
3.
TimeDeposits
a)3months&abovebutlessthan6months
b)6months&abovebutlessthan1year
c)1year&abovebutlessthan2years
d)2years&abovebutlessthan3years
7.50%
7.75%
8.00%
8.50%
4.
DepositFromforeignRemittance
6.00%
5.
RupaliBankDepositPensionScheme2
6.50%
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DaffodilInternationalUniversity
7.RupaliSadanBranch,Dhaka.
8.FarmgateBranch,Dhaka.
9.NewMarketBranch,Dhaka.
10.DhanmondiBranch,Dhaka.
CreditFacility

GeneralCreditLineandProgramme
RupaliBankLtd.extendscreditfacilitytoalmosteverysectorofthecountry's
economic
activities.
MainfocusofRupaliBankCreditprogrammeisonfinancingtradeandcommerce,
businessandindustryhavingproductivepurpose.
Creditfacilitiesarealsoofferedtointernationaltradeandbusiness,exportandimport.

CreditProgrammeoftheBankalsocoversdevelopmentofruraleconomicactivities
like
agricultureandlivestock,dairyandpoultry,fishingandhatcheryetc.
Loanisprovidedtothrustsectorsdeclaredbythegovernmentatconcessionalterms.

LendingprogrammesareoperatedasperguidelineofBangladeshBank(thecentral
bank
ofthecountry)throughaneffectivelendingpolicyandprocedureoftheBank.
LendingpolicyoftheBankensuresquickprocessing,sanctioninganddisbursementof
loaninallviablesectors
RuralCreditProgramme
Bangladeshismainlyalandofagriculture.Avastmajorityofourpeoplelivesinthe
ruralareas
andtheirmainsourceofincomeareagricultureandagrobusiness.Toproduce
agricultural
output,promoteagrobusiness,facilitateagrobasedservices,createandsustain
employment
opportunities,RupaliBankLtd.isdisbursingagriculturalloan/ruralcreditthroughits401
branchesalloverthecountry.
SectorsofFinancing:RupaliBankLtd.extendscredittothefollowingruralsectors
1.Fishery
2.Livestock
3.ShrimpCulture
4.PovertyAlleviationProgramme
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DaffodilInternationalUniversity
5.Microcredit
6.Agriculturalproductprocessingandmarketing.
GreenBanking
Theworldisconcernedandworriedaboutclimatechange,Globalwarming,environment

pollutionandtheirbadimpacts.Therapidchangeinclimatehavedirectimpactson
biodiversity,
agriculture,forestry,land,water,air,humanhealthandsoon.Urgentstepsareneededto
save
theplanetagainstclimatechange.Bangladeshisthemostclimatechangevulnerable
country.
Climatechangehascompelledustothinkaboutprotectionofenvironmentand
conservationof
energy.Theyalsothinkaboutrenewableenergyfortheirexistence.Banksholdaunique
and
vitalpositioninthearenaofeconomy.Bankerscancontributemuchtodevelopthe
country's
economicsystem.Whenabankdoessomethinggooditsreputationgoesupandwhenit
does
somethingbadoraccusedtodoso,itsreputationgoesdown.Greenbankingisatoolto
acquire
reputation.
Greenbankingisasimplewordbutitsmagnitudeissignificantlywidecoveringsocial
environmentandeconomicalaspects.Greenbankingisadevicethatconsiderssocialand
ecologicalfactorstoprotectenvironmentandconservenaturalresources.Theythink
protecting
environmentmeansprotectingourselves.Greenbankersthinktoprotectenvironmentand
conservepowerandenergyinordertoensureasaferworldforthenextgeneration.Green
bankersareconcernedaboutsustainabledevelopment.Greenbankingisourspecial
agendato
takecareofenvironmentoftheearth.Greenbankingisaproactiveandeffectivestep
witha
visionforfuturesustainability.Asahumanbeing,theyaretomaintainethicalstandard.
They
dontcompromisewithunethicaltasks.Doingharmtoenvironmentmeansdoingharmto
usas
wellasournextgenerations.Theyshouldusetheirresourceswithresponsibilityavoiding
harm
tomankind.
InvestmentPortfolio
RupaliBankLtd.presentlyroaminginthefollowingareasofinvestment:
BangladeshGovernmentSecurities/Bonds.

TreasuryBills.
GrameenBankBonds.
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DaffodilInternationalUniversity
Debenturesofgovernmentandsemigovernmentorganizations&PublicLimited
Companies.
Sharesoflistedcompanies.
IndustrialBanking
Inordertosupportthedevelopmentofindustrialsectorofthecountrythroughactive
participationofprivateanddirectforeigninvestment,RupalibankLtd.hastaken
appropriate
programmesasperIndustrialPolicyoftheGovernment.TheloanportfoliooftheBank
includes
sizeableinvestmentoffundtowardsdevelopmentofthrustindustrialsectorslikeTextile,
Jute,
Leather,Leathergoods,FrozenandsemicookedShrimps,Footwear,KnitGarmentsand
other
smallandmediumenterprises.
RupaliBankLtd.isparticipatinginjointventurefinanceandconsortiumfinancefor
settingup
largescaleprojects.TheBanklaysspecialemphasisonagrobasedandITrelated
industries.
UtilityServices
RupaliBankLtd.offerssomespecialservicestocustomersinadditiontoitsnormal
banking
operation.Collectionofvariousutilitybillsisoneofthem.Underthisservice,theBank
benefitedCustomerbycollectingtheirvariousutilitybillslikeTelephonebill,Water&
Seweragebill,Electricitybilletcfreeofcharges.
CollectionofBills
1.TelephonebillofBangladeshTelephone&TelegraphBoard(BTTB).
2.Water&SeweragebillofWaterandSewerageAuthority(WASA).
3.ElectricitybillofPowerDevelopmentBoard(PDB),RuralElectrificationBoard
(REB)
etc.
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Chapter3

LoansandAdvancesDepartment
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4.
ThewordcreditcomesfromlatinwordcredomeansIBelieve.Itisalenderstrustin
a
people/firm/companysabilityandintentiontorepay.Inotherwords,creditistheability
to
commandgoodsandservicesofanotherinreturnforpromisetopaysuchgoodsor
servicesat
somespecifiedtimeinthefuture.Forabank,itisthemainsourceofprofitandonthe
other
hand,thewronguseofcreditwouldbringdisasternotonlyforthebankbutalsoforthe
economy
asawhole.
Theobjectiveofthecreditmanagementistomaximizetheperformingassetandthe
minimizationofthenonperformingassetaswellasensuringtheoptimalpointofloan
and
advanceandtheirefficientmanagement.Creditmanagementisadynamicfieldwherea
certain
standardoflongrangeplanningisneededtoallocatethefundinthediversefieldandto
minimizetheriskandtomaximizethereturnontheinvestedfund.Continuous
supervision,
monitoringandfollowuparehighlyrequiredforensuringthetimelyrepaymentand
minimizing
thedefault.Actuallythecreditportfolioisnotonlyconstitutedthebankassetsstructure
butalso
avitalfactorofthebankssuccess.Theoverallsuccessincreditmanagementdependson
the
bankscreditpolicy,portfolioofcredit,monitoringandproperfollowupoftheloansand
advances.

3.1CreditPrinciples

Inthefeature,creditprinciplesincludeguidelinesofprovidingcreditbyBranchmanager
(AGM)
orcreditofficer(Loansincharge).IntheRupalibanklocalbranchoffices,thefollowing
proceduresarefollowedwhilesanctioningloansandadvancestotheclient.
Creditadvancementshallfocusonthedevelopmentandadvancementofcustomer
relationship.

AllcreditextensionmustcomplywiththerequirementsofBankingCompanysAct,
BangladeshBanksinstructions,otherrulesandregulationasamendedfromtimetotime.

3.LoansandAdvancesDepartment
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Loansandadvanceshallnormallybefinancedfromcustomersdepositandnotoutof
temporaryfundsorborrowingfromotherbanks.
Thebankshallprovidesuitablecreditservicesforthemarketsinwhichitoperates.

Itshouldbetothosecustomerswhocanmakethebestuseofthem.
Theconductandadministrationoftheloanportfolioshouldcontributewithindefined
risk
limitationforachievementofportfoliogrowthandsuperiorreturnofbankcapital.
Interestratesofvariouslendingcategorieswilldependonthelevelofriskandtypesof
securityoffered.

3.2TypesofLoanandAdvances
GeneralProducts

IndustrialProjectLoan
CashCredit(Hypothecation)
CashCredit(Pledge)
Overdraft(OD)
BankGuarantee
StudentLoan
LoanunderEquityEntrepreneurshipFund(EEF)
GreenprojectLoan
RenewableEnergyProjectloan
SmallandMediumEnterpriseLoan(SME)

SHOHOJ
PESHAJIBI
BABOSHAYEE
MAJHARI
Underthe4SMEproducts,loantoSolarInstallation,BiogasandAgrobasedproject
andTrainedEfficientprofessionalsareprovidedasthespecializedarea.

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WomanEntrepreneurFinancingProgramme

ClusterFinancing
SmallEnterpriseFinancing
Manufacturing

FixedAssetsFinancing
WorkingCapitalFinancing
TradingandServices

FixedAssetsFinancing
WorkingCapitalFinancing
ForeignExchangeBusiness
AllsortsofForeignExchangeTransactionsaremadeinRupaliBankLimitedunder
Guidelines
forForeignExchangeTransactions(GFET2009)byBangladeshbanksuchas
ForeignCurrencyAccounts

ForeignCurrencyAccount
ResidentForeignCurrencyDepositAccount
NonResidentForeignCurrencyDepositAccount
PrivateNonResidentTakaAccount
NonResidentBlockedTakaAccount
NonResidentInvestorsTakaAccount(NITA)
ConvertibleandnonconvertibleTakaAccount
ExportersRetentionQuota(ERQ)Account

ImportFinance
RupaliBankLimitedsupportsitscustomersbyprovidingfacilitiesthroughouttheimport
process
toensuresmoothrunningoftheirbusiness.Thefacilitiesare:
LettersofCredit
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LoanagainstImportedMerchandise(LIM)
LoanagainstTrustReceipt(LTR)
ExportFinance
RupaliBankLimitedoffersextracovertoitscustomersforwholeexportprocesstospeed
up
receiptofproceeds.Thefacilitiesare:
PreshipmentCredit

CashCreditAgainstHypothecationofRawMaterials/ExportableGoods
CashCreditAgainstPledgeofRawMaterials/ExportableGoods
PackingCredit(PC)
BacktoBackL/C
BacktoBackL/CunderExportDevelopmentFund(EDF)
PostshipmentCredit

NegotiationofExportDocuments
CollectionofExportDocuments
ForeignBillsPurchase(FBP)
InlandBillsPurchase(IBP)
ModernBankingservices

Onlinetransactionfacility(ABB)
SWIFT
ATMservice
WesternUnion
ThebanksLoans&AdvancesismainlytwotypesofLoans
1.Funded(DemandorConsumerloan)
2.NonFunded(L/C,BankGuaranteeetc.)
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OthertypesofloansarealsoavailableinthisbranchofRupaliBank.
CashCredit

OverDraft
TermLoan
DemandLoan

LoanagainstDPS.
Loanagainstothersecurity
I.BankGuarantee
II.Floorloan
III.PC(PackingCredit)
IV.Exportdevelopmentfund(EDF)
V.LetterofCredit
VI.LATR(loanagainsttrustreceived)
VII.HouseBuilding

3.2LoanSanctioningprocessfortheClient

ApplicationforbyClientinroughformatthanbuiltinformat.
Received
Verification(Normalthanphysical)
ForheavyLoan,BranchhastosubmitCIBandProposaltoHeadOfficeand
Bangladesh
Bankforpermission
Approvedloanapplication/Rejecttheproposal

Collectsecurity
Givenewaccountandpermissiontowithdrawtheloanmoney.
3.3BasisofLoansandadvances
I.Lien
II.Mortgage
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1.LIEN
LienispermittedagainsttheFollowing
DPS=DepositPensionScheme

FDR=FixedDepositReceipt
PSE=ProtirakhaSanchoyPatra
Lien(VALUE)mustbehigherthanthevalueofLoans.80%ofLiendocuments
(VALUE)is
permittedfortheLoans&Advances.ThepositionofLienDocumentsmustbeunderthe
handofBank.Here,InterestRateofLoans:14%
2.Mortgage

Land
Building
Shop
MortgagevaluemustbehigherthanthevalueofLoans.50%ofMortgageDocuments
(value)is
permittedfortheLoans&Advances.ThepositionofMortgageDocumentsneednotto
beunder
thehandofBankonlylegalpapersarenecessarytobeunderthehandofBank.Here,
Interest
RateofLoans:13%.
TogetLoans&AdvancefortheindividualclientagainstDPS(DepositPension
Scheme),FDR
(FixedDepositReceipt),MBDR(MonthlyBenefitDepositReceipt),DBDR(Double
Benefit
DepositReceipt),PSP(ProtirakhaSanchoyPatra)etcinfavor3
rd

partythepapersfollowingsare
needed

LetterofAgreement

LetterofAuthority

DemandPromissoryNote

BalanceConfirmationSlip

LetterofLienandauthorityforadvancesofthirdpartysagainstFixedDeposits/Call
Deposits/SpecialDepositsorMarginDeposits

LetterofContinuity

MemorandumofDepositofSecurities
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3.5ForeignExchange
Inanyinternationaltradethebuyersandsellersareofdifferentcountries.Noneofthem
know
eachothernorabouttheirbusinessintegrityandcreditworthiness.Variousregulations

prevailingintheirrespectivecountriesaboutforeigntradearealsounknowntothem.
Thus,the
buyerwantstobeassuredofgoodsandthesellertobeassuredofpayment.Insucha
situation
commercialBanksassurethesethingssimultaneouslybyopeningLetterofCredit
guaranteeing
paymenttosellerandgoodstobuyers.ByopeningLetterofCreditonbehalfofabuyer
andin
favorofaseller,Commercialbanksundertaketomadepaymenttoasellersubjectto
submission
ofdocumentsdrawninstrictcompliancewiththetermsoftheLetterofCreditgivingtitle
to
goodstothebuyer.
InternationaltradeconstitutesthemainstreamofbusinessactivitiesofRupaliBank
Limited.We
offerafullrangeoffinanceandservicesnamely,issue,adviceandconformationof
documentary
credit;offeringandarrangingforwardexchangerate,preshipmentandpostshipment
finance,
negotiationandpurchaseofexportbills,discountingbillofexchange,collectionofbills,
inward
andoutwardremittanceetc.
Maintaskofthedepartment
1.ImportBusiness
2.ExportBusiness
3.ForeignCorrespondents
FunctionsofForeignExchange

LetterofCredit(L/C)isopenedhere.
ForeignPayOrder
PreparestatementandreportforHeadOfficeandBangladeshBank.
Exchangeforeigncurrency
PaymentandcollectionofL/CmoneyinfavorofClient.
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LetterofCredit
Documentaryletterofcreditisanarrangementwherebyabankactingattherequestand
in

accordancewiththeinstructionsofacustomeristomakepaymenttoortotheorderofa
beneficiaryoristopayacceptornegotiatebillsexchangedrawnbythebeneficiary
against
stipulateddocumentsandcompliancewithstipulatedtermsandconditions.
TheformoftheLetterOfCreditvariesfromBanktoBank.AllthepartiestoaLetterof
Credit
musthavethesameunderstandingaboutthetermsandconditionsusedinthecredit.The
internationalChamberofCommercehasformulatedtheUniformCustomsandPractice
for
DocumentaryCreditstoavoidthescopeforambiguitiesanddifferencesininterpretation
of
termsofthecredit.
TypesofL/C:TherearetwotypeofL/C,whichis
1.MasterL/C
2.BacktoBackL/C
MasterL/Cistwotypes
1.ImportL/Ctoimportanygoods,theclienthastoopenaforeignorlocalimportL/C.
BankchargessomecommissionforopeningL/C.
2.ExportL/CBankreceivesomeforeignL/Cforexportinggoodsinfavorofclient.
Bank
collectmoneyfortheclient.
BacktoBackL/CTocoveramasterL/C(Export),sometimeBacktoBackL/Cis
needed.Two
types
1.LocalCollectgoodsfrominland
2.ForeignCollectgoodsfromforeigncountry.
DocumentsrequiredforopeningL/C:
Ifanyimporterwanttoimportsomethingwhicharelegal,andhehasallimporter
documents
(IRN,TIN,VATandCURRENA/C),thenhegotothebanktoopenL/Ctoimport,if
Bank
wanttoopenL/C,thentheimportermustfollowtheconditions:
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RequestlettertoopenL/C

Performainvoiceorindent(acceptedbytheimporter)
LCAF(letterofcreditauthorizationform)

IMP(import)form
Insurancecovernote.
Requestletter
ImporterwritesarequestlettertothebanktoopenaL/C
Performainvoice
Thebeneficiarygavethisdocument,andtheimporteracceptedthat,inthisdocument
havethe
rateofthegoods,totalamount,andquantityofthegoodswhichquantitywasimport,the
quantitywasfixedinthisinvoicebecausebeforegiventhisdocumenttotheimporter
theyare
negotiatebetweenthem.
LCAF
MeansLetterofCreditauthorizationform,inthisFormimportermustsignedandinthis
form
importerIRCnumbermusthave.
IMPform
Thisformwasusebecauseeveryendofmonthbanksubmitssomestatementtothe
Bangladesh
Bank,andthestatementwasgiveninthisform.Thisformimportermustsign.
Insurancecovernote
BeforeopeningL/Cimportermustsubmittheinsurancecovernotewithcashmoney
receiptto
thebank,withoutinsurancecovernote,bankcannotopenanyL/C.

3.5Remittance

Sendingmoneyfromoneplacetootherplacesforthecustomersinanotherimportant
serviceof
banksandthisserviceisanimportantpartofcountriespaymentsystem.Forthisservice,
people
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speciallybusinessmentransferfundsfromoneplacetoanotherveryquickly.Thereare
various
typesofremittingmoney,suchas:
PayOrder(PO)
Thepayorderisusedformakingaremittancetothelocalcreditor.PayOrdergivesthe
payeethe

righttoclaimpaymentfromtheissuingbank.Itcanbeencashedfromissuingbankonly.
Unlike
cherub,thereisnopossibilityofdishonoringpayorderbecausebeforeissuingpayorder
bank
takesoutthemoneyofthepayorderinadvance.PayOrdercannotbeendorsedor
crossedandso
itisnotnegotiableinstrument.
DemandDraft(DD)
DemandDraftisanorderofissuingbankonanotherbranchofthesamebanktopay
specified
sumofmoneytothepayeeondemandthatisthenamedpersonororderofthedemand.It
is
generallyissuedwhencustomerwantstoremitmoneyinanyplace,whichisoutsideof
the
clearinghouseareaofissuingbranch.Payeecanbepurchaserhimselforanother
mentionedin
theDD.Itisanegotiableinstrumentanditcanbecrossedornot.
TelegraphicorTelephonicTransfer(TT)
Thismethodtransfersmoneytooneplacetoanotherplacebytelegraphicmessage.The
sender
branchwillrequestanotherbranchtopayrequiredmoneytotherequiredpayeeon
demand.
Generallyforsuchkindoftransferpayeeshouldhaveaccountwiththepayingbank.
Otherwiseit
isverydifficultforthepayingbanktorecognizetheexactpayee.
Whensendingmoneyisurgentthenthebankusestelephoneforremittance.Thisservice
isonly
providedforvaluedcustomers,whoisveryreliableandwithwhichbankshavelong
standing
relationship.
MailTransferAdvice(MTA)
Wheretheremitterdesiresthebankertoremitthefundstothepayeeinsteadof
purchasinga
drafthimselfthebankerdoesitthroughamailtransferadvice.Thepayeemusthavean
account
withthepayingofficeastheamountremittedinsuchamannerismeantforcredittothe
payees
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accountandnotforcashpayment.Itistheleastusedtechniquefortransferringfund.
Where
thereisnotelexmachineortelephonelinethenthismethodisused.

3.6StepsinvolvedinCreditProcessing

Thecreditprocessstartswithbuildinguprelationshipwithcustomerthroughaccount
opening.
Thepreliminaryscreeningofcreditproposalandcollectionofinformationfromdifferent
sources
takeplaces.Feasibilitystudyandappraisalofloanproposalistheimportantpartofthe
lending
process.Thestageofcreditapprovalaredonebothatthebranchesandheadofficehigher
authoritylevel.Sanctionofcreditisdonebythesanctioningofficerwhohasauthorityto
sanctioncredit.AfterfulfillingtheconditionsthecreditisdisbursedCreditsupervision
and
followupstartattheendofthecreditdisbursement.Necessarystepsshouldbetakento
minimizetheriskandincreasethereturnofthebank.
Step1:ApplicationofLoanProposal
Aloanprocedureformallystarswithaloanapplicationfromclientwhomusthavean
account
withthebank.Atfirst,itstartsfromthebranch.Onceacustomerdecidestorequesta
loan,an
interviewwithaloanofficerusually
Followsrightaway,givingthecustomertheopportunitytoexplainhisorhercredit
needs.After
gettinganapplicationforaloan,ARupaliBankofficialstudiesthepastrecordofthe
client.
Generally,thestudyincludes
Accountbalancesandthepasttransactions.

Creditreportfromotherbanks
Informationoftheindustrybystudyingmarketfeasibility.
Financialstatements(Balancesheet,CashflowstatementandIncomestatement)
ReportfromcreditinformationbureauofBangladeshbankifthecreditisproposed.
Interviewingtheclients
Interviewisparticularlyimportantbecauseitprovidesanopportunityforthebanksloan
officer
toassessthecustomerscharacterandsincerityofpurpose.Theofficertriestofindout
the
followingprocess

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Borrowersidentity,familybackground,characterandcapacity.

Reputationoftheborrowerinbusinesscycle.
Educationalqualificationandexperienceinbusiness.
Allsourcesofincome,amountandlengthontime.
Currentloanmortgageinformation.
Otherstockssuchasstocks,bondsetc.
Liabilities
Purposeofloan
Step2:Preliminaryscreeningofcreditproposal
Borrowerselection
Borrowerselectionisthemostimportantpartoflendingprocess.Generally,anyonewho
isan
employeeoftheRupaliBankLtdcanbringcreditcustomerforthebankorpresent
customercan
getcreditfromthebank.Whileselectingborrowertheloanofficersareinterestedtotake
utmost
caresothatadverseselectionisnotmade.
BorrowerAnalysis
Thequestionthatmustberaisedthatcustomerhastheabilitytorepayornot.This
usually
involvesdetailedstudyof6aspectsoftheloanapplicationCharacter,capacity,capital,
collateral,conditionsandcontrol.Allmustbesatisfactoryforaloanapplicationfrom
lenders
pointofview.
Screeningofthecreditproposal
Bankofficialsofcreditdepartmentscreeningcreditproposalattheinitialstage.
Applicants
formallyappliesforcreditfacilitytothebank,thefollowingdocumentsarecollectedto
screeningthecreditproposal.
Profileofthebusiness

Copyoftradelicense,TINcertificate,Memorandumofassociation,Articlesof
Association.
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Certificateofincorporation,ResolutionofBoardofDirectors.

Deed,Valuationcertificate,financialdocuments,NECF.
Bankstatementsforthelast12monthsfrompreviousbanks.
Step3:Feasibilitystudy&appraisalofloanproposal
Bankofficialsofthecreditdepartmentwillinspecttheproposalforwhichtheloanis
applied.
Anyloanproposalneedstobeevaluatedonthebasisoffinancialinformationprovided
bythe
loanapplicant.Ifthecreditissatisfiedwithhiscreditworthinessthensecondissuemust
be
faced.
Anelementofriskisalwayspresentineveryadvance.Securityistakenagainstloanand
advancetoreducetheriskofrecoveryofloan.Importanceofchargingsecurityis
Protectionofinterest

Ensuringtherecoveryofcredit.
Provisionagainstunexpectedchange
Commitmentoftheborrower.
CreditAnalysis
Tominimizetheriskfinancialinformationoftheborroweriscalculatedwiththe
scientific
methodnamespreadanalysis.Financialspreadsheetanalysisconsistsofbalancesheet,
cash
flowstatement,incomestatementprovedveryeffectiveinjudgingthefinancialhealthof
the
borrower.Sometimescreditanalysisfailstoprovebetweentheselectionoftheborrower
andthe
finalapprovaloftheloanduetolackofvalidinformationprovidedbytheborrower.In
suchcase
financialspreadsheetanalysisgeneratesfaultyresults.Therefore,itissuggestedthatthe
quantitativecreditanalysisshouldsupplementedwithsubjectivejudgment.
CollectionofBorrowersInformation
CIB(CreditInformationBureauofBangladesh)report
RupaliBankcreditadministrationdepartmentcollectsinformationontheborrowers
liabilitiesto

differentbanksfromtheCIBofBangladeshbank.Theinformationissoughtbyfillingup
the
specificCIBinquiryform.TheimportanceofCIBreporttotheloanprovideris
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Toensurewhethertheborrowershaveasoundeconomicsituation.

Toensurethatborrowerisnotaloandefaulter.
Toensuretherepaymentconditionoftheborrowers.
SearchandInspectionreport
Sourcesofotherinformationare
Physicalinformation

Customerfinancialstatements
Experienceofotherlenderswiththiscustomer
CustomerAnnualreport
LocalNewspapers
LocalChamberofcommerce
FinancialStrengthAnalysis
Analyzingthefinancialpositionisoneofthemainfactorstobeidentifiedbefore
financingany
business.Intheapplicationform,theclienthastomentionthetotalinvestmentamount
forthe
business.Thenetworthoftheclientmustbefoundbythecreditofficer.
Paidupcapital

Investmentinbusiness
Cashflow
Totalassetsandtotaldebts
Liabilitypositionanalysis
Whileapplyingfortheloanclientmustprovideinformationaboutthecreditfacility
providedby
theRupaliBankandotherbanks.Thecreditofficercollectsinformationabout
ExistingfacilitytakenbytheRupaliBankandotherbanks.

Existingfacilitiesforthesisterconcernifapplicable.
Debttoassetratio

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RiskAnalysis
Theriskinvolvedwiththeprojectorbusinesswilldeterminethereturnfromthe
business.For
assessingtheriskbankfollowssomefactorssuchasIndustryrisk,Marketrisk,and
Securityrisk.
Typesofsecurity
Typesofsecuritiesofferedbybankvaryfromplacetoplaceandbusinesstobusiness.In
metropolitancities,itmaybegovt.bonds,sharesorbillsreceivableetc.Whereasin
industrial
areas,Rawmaterialsandfinishedgoodsareofferedassecurities.Agriculturalproduction
isthe
principalsecuritiesintheagriculturalcenters.RupaliBankmainlyreceives3types
securities.
Collateralsecurities
Thetangiblesecuritiespledgedbytheborrowertothebankandadditionallyheldbythe
bankto
securealoanarecalledcollateralsecurities.Incaseofadvanceagainstpledge,bankmay
insist
onimmovablepropertiesascollateral.Goodcollateralsecuritieshavesome
characteristics.
Tangible

Transferable
Easilymarketable
PriceStability
Durability(Notperishable)
Guarantee
Attimes,whenthepersonalsecurityoftheborrowerisnotconsideredsufficientorwhen
therisk
involvedisaborderlinecaseandtheborrowerisnotinapositiontooffersufficient
collateral
againstloan,thebankmayaskguaranteefromthethirdpartywhosefinancialabilityand
credit
standingisacceptabletothebank.Aguaranteeisanundertakinggiventothebankbya
third

partycalledtheguarantorwhoisreadytogiveguaranteeonbehalfoftheborrowertothe
bank.

Securities
Collateral
Guarantee
Margin
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Margin
Thedifferencebetweenthemarketvalueandassetvalueofthegoods,merchandise,and
productionpledged/hypothecationtosecurealoan/advancesandtheamountoftheloan/
is
knownasmargin.Themargintoberetainedforeachtypeofloan/advanceswillbein
accordancewithinstructionsissuedfromtimetotimebyBangladeshBank/Headoffice
ofthe
RupaliBank.
Incasewhereminimummarginisspecified,thepercentagemaybeincreasedaccording
to
marketconditions/durability/inspectionfacilityandstorecapacityofthegoods.
Modesofchargingsecurities
Pledgeisabailmentofthegoodsassecurityforpaymentofadebtorperformanceofa
promise.
Apledgemaybeinrespectofgoodsincludingstocksandshareaswellasdocumentsof
titleto
goodssuchasrailwayreceipts,billoflading,dockwarrantsetc.dulyendorsedinfavorof
the
bank.
Hypothecation
Incaseofhypothecation,thepossessionandtheownershipofthegoodsbothrestthe
borrower.
Theborrowertothebankercreatesanequitablechangetothesecurity.Theborrower
doesthis
byexecutingadocumentknownasAgreementofHypothecationinfavorofthelending
bank.
Lien
Liesaretherightofthebankertoretaingoodsoftheborroweruntiltheloanisrepaid.
The

bankslienisgenerallien.Abankercanretainallsecuritiesinhispossessiontillall
claims
againsttheconcernpersonaresatisfied.
Mortgage
Accordingtosection(58)oftheTransferPropertyAct,1882,Mortgageisthetransferof
an
interestinspecificimmovablepropertyforthepurposeofsecuringthepaymentofmoney
advanceortobeadvancedbythewayofloan,Existingorfuturedebt,ortheperformance
ofan
engagementwhichmaygiverisetoapecuniaryliabilityInthiscasethemortgagordoes
not
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transfertheownershipofthespecificimmovablepropertytothemortgages,onlytransfer
some
ofhisrightsasanowner.Thebankerexercisestheequitablemortgages.
Step4:Feasibilitystudy&appraisalofloanproposal
Ifthecreditcommitteeissatisfiedwiththeloanapplication,anditsfinancialinformation
then
bankwillapprovalthecreditforthecustomer.Adocumentisawrittenstatementoffacts
of
prooforevidencearisingoutofparticulartransaction.Theexactionofdocumentsin
properform
istherequirementsofthelawknowasdocumentation.Documentsarenecessaryforthe
acknowledgementofthedebtbytheborrowerandchargingofsecuritiestothebankby
him.
Properandcorrectdocumentationisessentialnotonlyforthesafetyofadvancesbutalso
necessaryfoetakinglegalactionagainstthedebtorsiscaseofnonrepaymentofdues.
Dependingonthetypesofloansandadvancesdifferentdocumentsarerequired.
DocumentationofLoan

DemandofPromissory(D.P)Note
Letterofpartnership(incaseofpartnershipconcern)orresolutionoftheboardof
Directors(incaseoflimitedconcern).
Letterofagreement

LetterofDisbursement
Letterofpledge(incaseifpledgeofgoods)

LetterofHypothecation(incaseofHypothecationofgoods)
Trustreceipt(incaseofLTRfacility)
LetteroflienandOwnership(incaseofadvanceagainstshare)
LetterofLienforrackingcredits
Legaldocumentsformortgageoftheproperty
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Step5:DisbursementofLoanandAdvances
Aftercompletelypreparingtheloandocuments,theloanofficerisreadytodistributethe
loan
totheborrowersloanaccount.Afterdisbursement,theloanneedstobeorganizingand
maintainingtoensurewhetherthetermsandconditionsoftheloanfulfilledbythebank
or
clientornot.
Step6:SupervisionandFollowup
Creditsupervisionandfollowupimpliesthatthecheckingofthepatternoftheuseofthe
disbursedfundtoensurewhetheritisusedfortherightpurposeornot.Itincludesa
reporting
systemandcommunicationarrangementbetweentheborrowerandthelendinginstitution
andwithindepartment,appraisal,recoveries,followupetc.Rupalibankofficerchecks
on
thefollowingpoints.
Theborrowersbehavioroftheturnover.

Theinformationregardingtheprofitability,liquidity,cashfollowsituationandtrend
insalesinmaintainingvariousratios.
Thereviewandclassificationofcreditfacilitiesstartsatcreditdepartmentofthe
branchwiththebranchmanagerandfinallytheheadofficeofcreditdivision.
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Chapter4
ISSUESTHATIMPAIRSAUDITORSINDEPENDENCE

Analysis
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BusinessProgress

Despitetheincessantworldeconomicrecessionandthecountryslargescaleinstability
inthe
previousespeciallyinthesecondhalf,theRupaliBankLtd.Hasachievedexpected
business
successin2013.
Loans&Advances
Thebanksloansandadvancesintheyears2009,2010,2011,2012,2013areTk5234.42
crore,
Tk6604.90crore,Tk7652.49crore,Tk9064,16crore,Tk10742.63crorerespectively.
The
growthrateis26.18%in2010,15.86%in2011,18.45%in2012and18.53%in2013.
Deposit
Inthelastfiveyears,itwaspossibletoachieveastabledepositbaseinthebank.Its
depositin
theyears2009,2010,2011,2012,2013areTk7380.34crore,Tk9112.38crore,Tk
10723.40
crore,13659.88croreandTk17795.64crorerespectively.Thegrowthrateis23.47%,in
2010,
17.68%in2011,27.38%in2012,and30.28%in2013.
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
20092010201120122013

Deposit
Loans&Advances

4.Analysis
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Therefore,thegrowthrateofloans&advanceswaslowerthandepositsintheyear2013
comparativetopreviousyears.Butstarteditsjourneyin2009withonlyTk5234crore
loanand
advance,thebanksloan&advancebecamedouble(Tk10743crore)in2013.

DivisionwiseLoans&Advance
PalliLoan&SMELoan
68%
14%
1%3%
12%
2%

DivisionwiseLoans&Advance
Dhaka
Chittagong
Sylet
Barishal
Khulna
Rajshahi
0
10
20
30
40
50
60
2013
2012
2011
SME
IndustrialProject

(Incrore)
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TypesofLoan
2013
2012
2011
SMELoan(incrore)
Tk8.15
Tk10.05
Tk6.76

IndustrialProject
Loan(incrore)
Tk51.26
Tk56.97
Tk45.97

ClassifiedLoan
TypesofLoan
2013
2012
2011
2010
Import(incrore)
Tk251.51
Tk161.82
Tk181.09
Tk150.40
Export(incrore)
Tk181.08
Tk155.10
Tk131.80
Tk84.16

Import

Intheyears,2010,2011,2012and2013,theamountofthebanksimportbusinesswas
TkTk
150.40crore,Tk181.09crore,Tk161.82croreandTk251.51crore.Despitetheexemption
in
2012,banksimporttradehasbeenincreasingnotablysince2010.

Export

Thebanksexporttradein2010,2011,2012and2013wasworthTk84.16crore,Tk
131.80
crore,Tk155crore,Tk181.08crorerespectively.
0
50
100
150
200
250
300
2013
2012
2011

1010

Import
Export

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Chapter5
ISSUESTHATIMPAIRSAUDITORSINDEPENDENCE

Findings
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Fromtheaforesaidstudyanumberoffindingscanbedisclosed.Inthischaptermajor
findings
arebeingstatedandintheimmediatenextchapterallthepossiblesolutionsofnegative
findings
willberecommended.
Loandisbursementproceduretakeslongertimethanotherbanksthatmaycauselosing
clients.
Limitedauthorityofbranchmanagerincaseofsanctioningloans.

Loansandadvancesarenotwidelydisbursed.
Duetothirdpartyintervention,loansarerarelyrecovered.
Paperbasedworksarestillexistedinbranchthattakeslongertimesincaseof
processingloanapplication.
Decreaseinloandisbursementmaylowertheincomeofthebank.

5.FINDINGS
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Chapter6
ISSUESTHATIMPAIRSAUDITORSINDEPENDENCE

RECOMMENDATIONS

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Inordertogetcompetitiveadvantageandtodeliverqualityservice,topmanagement
shouldtry
tomodifytheservices.
Thecreditproposalevaluationprocessandtimeshouldbeshortened.

RupaliBankLtd.shouldincreaseitsloanproductstocompeteinthemarket.
RupaliBankshouldalwaysmonitortheperformanceofitscompetitorsinthefieldof
loanandadvance.
ForcustomersconvenienceinRupaliBankLtd.shouldprovidemorecreditofficerto
investigatetheclientfinancialposition.
RupaliBankLtd.shouldcontinuouslystrivetomonitortheloansanctioning
proceduretoimprovethecurrentposition.
RupaliBankLtd.shouldincreaseitsfinanceondiversifiedprojectstoachievemore
clients.
RupaliBankLtd.mustdevelopelectronicbankingsystemtomoderatetheservice.

Timeconsumedatservicelevelshouldbeminimizedatoptimumlevel.
6.RECOMMENDATIONS
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Chapter7
ISSUESTHATIMPAIRSAUDITORSINDEPENDENCE

Conclusion
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DaffodilInternationalUniversity
AsabankRupaliBankLimitedhastodoalotofthingsforthebettermentofthecountry.
The
Bankisstronglypositionedinthemarketandwithitscorestrengthsitcanmatch
shareholders
expectationsandthusraisetheirwealthinfuturethroughethicalbankingandbest
pricing.Thus,

ithastotakeinitiativesothatitcanfulfillthedesireofthegovt.aswellaspeople.Itwill
enhancemorepublicservicesandbuildupworkingteamstoprovidethebestservicesto
its
valuablecustomers.Itmustberuninorganizedwayanddisciplinemustbeensuredinall
sphere
ofitsperformance.Efficientexportteam,importteamandremittanceteammustbe
formedand
performdutiesproperly.Moretraining,computerization,datacollection,marketanalysis
and
swiftnessinservicingareessentiallyrequired.
Todothesetherecommendedsuggestionscanbeused.Althoughitistheoretical
suggestions,it
isnotvalueless.Ithasgreatimpactonthebankingbusinessandothersectorsofthe
economy.
Forthis,govt.helpisessentialanditisexpectedthatgovt.willbroadenitshandfor
implementingtherecommendationsforthewelfareofthepeopleofBangladesh.

7.Conclusion
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Chapter8
ISSUESTHATIMPAIRSAUDITORSINDEPENDENCE

References
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Websites

http://www.rupalibank.org
CircularspublishedbyBangladeshBank.
AuditedAnnualreportofRupaliBankLimited

Books&Journals

Theory&PracticeofBanking,BangladeshInstitituteofBankManagement(BIBM)
Documentationforloansandadvances,Kashem,M.A
PerformanceofRupaliBankincreditmanagement,AhmedA,InstituteofBusiness
Administration(IBA),DhakaUniversity,1989.

PerformanceEvaluationandCompetitiveAnalysisofStateOwnedCommercialBanks
inBangladesh,ShahJohirRayhan,S.M.SohelAhmed,RiponKumarMondal

8.References
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