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INTRODUCTION PART
1
1.1 TITLE OF THE REPORT:
The title of the report is “Loan Disbursement and Recovery system of NCC Bank Limited - A
study on Shyamoli Branch”.
During this period I learned how the host organization works with the help of the internal
supervisor. On the basis of working experience in this period I have prepared this report and I have
tried my level best to relate the theoretical knowledge with the practical work situation. And
during my internship, I had to prepare a report under the supervision of Md. Masum Iqbal,
Assistant Professor and Head of the Department, Bachelor of Business Administration (BBA),
Daffodil International University.
This report is a part of my academic program. The BBA program having 120 credits in total
contains six (6) credit hours on the internship program. The period of internship program has set
for three months. I believe this study will be beside me in future, especially if I have got involve
myself in banks or other financial institutions. This program helped me a lot to understand the
working environment and behavior.
2
1.4 OBJECTIVES OF THE STUDY:
The study has been carried out with the following objectives:
Since, working at NCC Bank Ltd. Shyamoli Branch, get the opportunity to gain knowledge of
Loan Disbursement and Recovery system. My decisions and analyses are done based on the
practices applied at this branch. The report covers with the status of functional and operational area
of loan disbursement and recovery. The report provides a clear view of:
NCC Bank Ltd, its loan products, classifications, pricing, lending operations and
disbursement pattern.
Recovery status, recovery pattern based on type of loan and tenure of client.
• Type of the study: Exploratory research has been used for the study.
3
• Sources of Data: The data used to furnish this report have been collected from the primary
sources and secondary sources. Among primary and secondary sources most of the data have been
collected from the secondary sources.
• Primary Sources:
Officers of the bank
Clients of the Bank
• Secondary Sources:
Company Confidential files.
Banker’s Foundation Training Course Book-2009.
Annual Reports of NCC Bank Ltd.-2009.
Office circular and other published papers, documents and reports.
Published specifications of different products in websites.
• Sample size: Sample size was 30 as data was collected where 10 from the officers and other 20
from the customers of NCCBL, Shyamoli Branch.
• Sampling method: Non probability sampling method was used as I collected data from the 30
respondents from NCCBL, Shyamoli Branch.
4
A quantitative research was carried out to identify the “Customers Perceptions towards Service
Quality of NCCBL: Specially Focused on Loan Services”. This research is based on primary data
which was collected from the clients and officers of NCC Bank Limited.
• Sampling Method: Convenience sampling method has been performed for selecting
samples.
• Target population
All officers and clients of Shyamoli Branch, NCC Bank Ltd.
• Sample size: There are 30 respondents.
Total 30
5
1.7 LIMITATIONS OF THE STUDY:
Loan and Advance department of NCC Bank Ltd. Is highly confidential for the
employee.
Sufficient records, publications or website regarding customer services were not
available for Loan and Advance department of NCCBL.
The information of Loan and Advance department of NCCBL not found in a
structured way.
There were some restrictions to have access to the information confidential by
concern authority.
6
Chapter- 02
ORGANIZATION PART
7
2.1. BANKING HISTORY:
The English word “Bank” is originated from Italian word “banco”. The Latin “bancus” and French
word banque which means a bench. They are of the opinion that the medieval European bankers
(i.e. money changers and money lenders) transacted their banking activities on the benches in
market place. This money changing and money lending business is known as ‘’Banking business’’.
Banks have to compete with local financial institution as well as foreign financial institution in the
market place, banks has to develop appropriate financial structure and should periodically review
and compare their performance with its competitor to build a sound banking institution.
Banks are financial intermediary institutions. The core is to mobilize the financial surplus of saver
in the form of deposits & allocate these savings to the credit worthy borrowers of different sector
of economy in the form of loans & advances. The advance of the intermediary functions between
the savers & investors would certainly in the lower level of savings & investment & thus lower the
economic growth. That development of the financial intermediaries & instrument (both in case of
deposit & advance) will lead to the development of the economy of a country.
Economy of Bangladesh is in the group of word’s most underdeveloped economics. One of the
reasons may be its underdeveloped banking system. Modern banking system has been plays a vital
role for a nations economic development. Over the last few years the banking world has been
8
undergoing a lot of change due to deregulation, technological innovations, globalization etc. These
changes also made revolutionary changes of a country’s economy. It is well recognized that there
is an urgent need for better qualified management & better-trained staff in the dynamic global
financial market. Bangladesh is no excepting in that trend. Banking sector in Bangladesh is facing
challenges from different angles though its prospect is bright in the future. Money & Banking is
the center around which all-economic science clusters. So this report is carried on to find out the
problems faced by NCC Bank & recommend some measures to overcome these problems for
economic development of Bangladesh.
NCC Bank is one of the fast growing commercial bank with having well reputation & goodwill for
its commitment & service it provides towards the consumers & the nation. With day by day
function the bank also provides some services & facilities which are most equal to an international
banking system. It helps the banks to get closer towards the consumers. ATM, Credit card,
worldwide correspondence etc are the most recent products of this bank which has world wide
demand as well as into the country’s.
For my internship I choose this bank because of its potentiality & fast growing attitudes which
make it popular & well acceptable to all within a short period of time.
9
The Bank has set up a new standard in financing in the Industrial, Trade and Foreign exchange
business. Its various deposit & credit products have also attracted the clients-both corporate and
individuals who feel comfort in doing business with the Bank. In recent years the bank has given
much importance on financing small businesses through SME loan to reach its credit offering to
wide range of customer.
No. of Branches 92
To mobilize financial resources from within and abroad to contribute to Agricultures, Industry &
Socio-economic development of the country and to play a catalytic role in the formation of capital
market.
10
NCC Bank is one of the most disciplined Banks with a distinctive corporate culture. In this bank, it
believes in shared meaning, shared understanding and shared sense making. The people of bank
can see and understand events, activities, objects and situation in a distinctive way. They mould
their manners and etiquette, character individually to suit the purpose of the Bank and the needs of
the customers who are of paramount importance to them. The people in the Bank see themselves as
a tight knit team/family that believes in working together for growth. The corporate culture they
belong has not been imposed; it has rather been achieved through their corporate culture.
Particulars Taka
Sponsor 700,000,000
11
Figure: Percentage of Shareholdings of NCCBL.
The bank has a strong capital base. Its authorized capital is TK. 2500.00 million while its paid up
capital is Tk. 1352.01 million. The share price of the bank is par value Tk.100.00. to meet the
overall requirement the bank borrow from Bangladesh Bank and other banks and financial
institutions. So far the bank has been able to meet its capital adequacy requirement successfully.
12
2.10. PERFORMANCE OF NCCBL AT A GLANCE:
Reserve fund and other Reserve 884.90 1,215.58 1,995.36 2,863.63 4,371.62
13
Fixed Assets 308.14 353.71 522.00 775.31 849.10
Number of Branches 41 48 53 57 65
Volume of Non-performing
981.54 1,212.26 1,353.31 1,902.58 1,420.57
Loans
14
The bank now continues its operation with 92 branches across the country, mainly in Dhaka,
Chittagong, Noakhali, Comilla, Sylhet, Jessore, Rajshahi and Khulna. The district wise pictorial
presentation of the branches appears as follows:
= Branches Location
15
There are 25 members of Board of Directors manages National Credit and Commerce Bank
Limited. For efficient operation of the bank the Board of directors forms an Executive Committee
of 19 members. Besides, a management Committee looks after the affairs of the bank. The Bank
maintains transparency in its entire works. All decisions of the management come through
discussions in appropriate forum and required follow-ups are also made to see their effectiveness.
Here are the management team given in a chart and he hierarchy of the NCCBL is given in next
page-
Chairman
Vice Chairman
Directors
16
Chairman
Vice Chairman
Board of Directors
Managing Director
Vice President
Principal Officer
Senior Officer
Officer Gr-1
Junior Officer
Assistant Officer
Fig: The Hierarchy of NCCBL
17
2.13. ORGANIZATIONAL HIERARCHY OF SHYAMOLI BRANCH:
There are 25 employees in NCC Bank, Shyamoli Branch. The organizational structure of NCCBL,
Shyamoli Branch is given below:
Principal Officer)
Senior Officer
Officer Grade-1
Junior Officer
Assistant Officer
18
2.10. PRESENT PROGRAMS OF THE ORGANIZATION:
The present programs run by NCCBL, Shyamoli Branch are shown below in a chart:
NCCBL:
Shyamoli
Branch
Account
Cash Clearing Remittance
Opening
Section Section Section
Section
Local Foreign
Remittance Remittance
19
Chapter- 03
LEARNING PART
20
3.1. LOANS and ADVANCES:
In the general sense, the loan means “document”- any written record which serves as an evidence
in respect of a transaction and be described as anything obtained for recording a transaction.
Documentation may be described as the process or technique of obtaining the relevant documents.
A banker must obtain proper documents executed from the borrower to protect himself against
willful defaults. Moreover, when money is lent against security of some assets, the documents
must be got executed in order to give to the banker a legal and binding charge against those assets.
NCCBL has its own policy formulated in the light of directives and guidelines issued by
Bangladesh Bank from time to time. The main focus of this policy is to maximize profit through
feasible investment ensuring sustainable growth. The bank always tries to extend credit facility to
unconventional sectors along with conventional ones. Various Agri-Projects, IPFF membership,
etc. helped largely to achieve fruitful results. During 2009, the Bank disbursed Tk.50987.68
million. Advance Deposits ratio was 0.93:1 in 2009.
60000
50388
50000 46333
40000
32688
30000
24678
20533
20000
10000
0
2005
1 2006
2 2007
3 2008
4 2009
5
21
3.2. LOAN PRODUCTS:
1. Continuous Loan:
a. Secured Over Draft Against Financial Obligation [SOD(FO)]
2. Demand Loan:
a. Loan general
f. Forced loan
g. Packing credit
3. Term Loan
22
a. Project loan
b. Transport loan
f. Lease finance
g. Personal loan
Credit analysis is the analysis of financial statement of business/customers for the purpose of
lending. Credit analysis are conducted to determine whether the customer is creditworthy and
whether the customer has sufficient cash flow and back up assets to repay the loan. The main
purpose of credit analysis is to ascertain whether the loan can be serviced by the customer and
whether the bank is well protected to realize the loan in the event of default by the borrower to
repay the loan.
The quality of credit analysis in our country is very poor. Many of the credit officers even do not
know how to analyze credit proposal or what is its importance in credit making process.
23
Whether the customer or his business has the ability to generate enough cash to repay the
loan.
Whether sufficient security has been offered, so that in the event of default bank’s fund can
be recovered.
Whether bank claims on the security can be established without risk or with low risk.
Fixing of amount of loan, loan terms and conditions, documentations, etc. meet the needs
of the borrower and to protect the interest of the bank.
• Customer must have a well defined purpose for requesting the loan.
• The purpose of the loan must be consistent with the bank’s existing credit policy.
• The purpose of the loan also should be consistent with the government policy and
regulation.
NCCBL outline industries or lending activities that are discouraged. NCCBL has segregated
sectors to be discouraged based on the following:
24
• Three source to repay loan:
i. Cash flow generated form sales or income,
ii. The sale or liquidation of assets or
iii. Funds raised by issuing debt or equity securities.
Bank prefers cash flow as the principal source of loan payment because assets sale
can weaken borrowing customers and make the bank’s position as creditor less
secured.
• Cash flow= Net profit ( revenue less expenses) + Non cash expenses
( depreciation)
Cash flow= Net profit + Non-cash expenses + addition to account payable- addition
to inventories and accounts receivable.
• History of earning and sales: Whether there is history of steady growth in earning or
sales and whether there is high probability that such growth will continue.
2. Condition:
• Analyze recent trends in the borrower’s business and industry and whether
changing economic condition might affect business or loan.
3. Control:
• Whether there are chances of change in government policy or law which adversely
affect borrower’s business.
25
Guarantees from owner’s or from a third party.
Collateral Security: Collateral Security serves two purposes for a lender. First, if the borrower
cannot pay, the collateral gives the lender the authority to seize or sell those properties to cover the
amount of loan default. Secondly, Collateral Security gives the lender a psychological advantage
over the borrower. Borrower on this situation feel more obligated and works hard to repay the loan
to avoid losing valuable assets.
26
Continuous
Loan
Term
Loan
27
Advance is granted to a client against financial obligations that is deposited in the bank. A client
can get up to 80% loan of the total deposited value. Loan repayment period is maximum 1 year. If
client can not repay the loan in this stated period then it is again renewed for 1 year more.
Interest rate is 14% to 16%. Only renowned clients get this loan.
28
Interest rate is 16%.
Continuous Loan
2500
2000
1500 1144.71
953.14
1000 1014.98
884.1
500 647.89
0
2005
1 2006
2 2007
3 2008
4 2009
5
29
aspects for sanctioning loan to clients which includes- purchase of flat, purchase of building & self
construction.
Lease finance
This type of financing are usually provided for machinery, transport etc. Now a day this Lease
Financing is one of the popular financing projects. Loan period is 3 to 5 year. Maximum loan
facility is tk. 15 lac.
Rate of interest is 15%. For lease financing, registered mortgage of land & building as
collateral is required.
Term loan for the last 5 years shown on chart below
Term Loan
9000
8000
7000 8101.6
6000
5562.38
5000
4000 4212.98
3000
2330.22
2000
1000
454.56
0
2005
1 2006
2 2007
3 2008
4 2009
5
Loan (general)
30
The loan which is sanctioned for more than one year is considered as loan (general). Under this
facility, an enterprise can get loan from setting up of the business to final production of goods or
services. NCCBL offers this facility only to big industries.
31
of exchange is held as the primary security. The client submits the bill and the bank discounts it.
This temporarily liability is adjustable from the proceeds off the bill.
Demand Loan
12000
10054.29
10000
8000
7489.25
6280.52
6000 6577.85
4000 5394.66
2000
32
Consumer Credit Scheme
This scheme is aimed to attract consumers from the middle and upper middle class population with
limited income. The borrower should have saving or current deposit account with the bank.
Minimum 25% of the purchase cost of the product is to be deposited by the borrower with the bank
i.e. equity before disbursement of the loan. The rest 75% is to be kept as cash collateral (FDR,
Shanchay Patra etc.) with the bank. The purchased items are hypothecated with the bank. Loan
amount is disbursed through pay order/demand draft directly to the seller after submission of the
indent, deposit of client equity and completion of documentation formalities. The bank obtains
post dated a/c payee cheque drawn in favor of the bank for the monthly installments covering the
lending period from the borrower and the loan amount is adjusted on the due date of installments.
Personal Loan
33
This loan is provided to salaried persons in various organizations to meet any emergency cash
needs. The loan facility starts from Tk 20000 and maximum credit ceiling is Tk 1 lac. Loan
repayment period is maximum 3 years.
SME Loan
2500
2000
1500
1000
From the above chart it is shown that, bank has invests a greater amount in demand loan. Second
highest loan is given to term loan category. Sanction of SME loan has fallen in comparison of
financial year 2005. Because bank now focus on term loan and demand loan as these sector earns a
higher interest rate than SME loan. Also, default risk is low in these two categories.
34
3.9.GENERAL PROCEDURES of SANCTIONING LOAN:
Approval Process
The approval process reinforces the segregation of Relationship Management/Marketing (RM)
from the approving authority. The responsibility of preparing the credit application is rest on the
Relationship Management. Credit Applications are recommended for approval by the RM team
and forwarded to CRM for their review and assessment. The credit subsequently approved by
proper approval committee.
NCCBL has established various thresholds, above which, the recommendation of the Head of
business unit is required prior to onward recommendation to CRM and subsequent appropriate
authority for approval.
The procedure for all the business units is as shown in the next page:
Credit Application
Recommended By RM
(ZCRO/HCRO)
Credit Committee
Executive Committee/Board
35
• Application forwarded to Zonal Office or Head Office for review by the ZCRO or HCRO.
• Advise the review to recommending branches.
• ZCRO/HCRO supports & forwarded to Head of Business Units (HOBU) within their
delegated authority and to Head of Credit Risk (HOCR) for onward recommendation.
• HOCR advises the review to ZCRO.
• HOCR & HOBU supports & forwarded to Credit Committee.
• Credit Committee advises the decision as per delegated authority to HOCR & HOBU.
• Credit Committee forwards the proposal to EC/Board for their approval within their
respective authority.
• EC/Board advises the decision to HOCR & HOBU.
The approval process may vary in NCCBL depending on the types of products and exposure. For
example, lending to Corporate and SME’s is mostly unstructured due to diverse nature of risk
exposure. On the other hand, consumer lending is mostly structured by standardizing the product
and risk aspects of individuals. As such applications for consumer lending may be done within the
head of consumer unit subject to delegation of authority to do so.
Lending Process
The main function of commercial bank is to take deposit and invest this fund. But in the process of
lending it has to safeguard the depositor’s money as well as business of the bank. Therefore proper
management supervision and follow-up is very important in the lending and recovery process.
NCCBL follows a three step process firmly to supervise and follow-up the lending and recovery
process.
36
Pre-sanction Stage
The very supervision of loans starts during pre-sanction stage. At this stage credit investigation is
very important as it involves selection of right and qualitative borrower. To select the borrower
NCCBL personnel at first interview the person to judge their capability to manage the finance or to
run the project effectively. The following steps are conducted to make sure that the loans are
authorized to the right persons.
Information collection
1. Management Aspect:
a. Managerial ability
b. Honesty and integrity
2. Technical Aspect:
a. Whether the technology is outdated or modern to handle by the firm
37
b. Cross-check of the pricing as stipulated in the pro-forma invoice.
c. Productivity of the proposed plant and machinery matching with the firm’s goal.
3. Financial Aspect:
a. Operating performance and future earnings prospects.
b. Current financial condition.
c. Demand- supply gap keeping in view the other similar industries.
d. Net worth
e. Lending risk analysis.
Post-sanction/Pre-disbursement
Proper documentation and securitization is very important at this stage for safety of the credit
facility to be extended and enabling NCCBL to liquidate the loan liability in the event of the
borrower’s default.
Proper documentation serves three basic purposes to NCCBL:
1. Borrower’s unqualified assets of availing credit facility.
2. Bank’s legal right created to securities offered as loan.
3. In case of default, the documents can be placed before court for a decree to realize the
dues.
Direct and indirect securitization is also done in this stage.
38
• Personal contact with the borrower at a regular basis.
• Keen watch in irregularity of any form on the loan account.
• Closely watch and supervise the financial and management position of the borrower.
• Taking steps so that the loan does not turn time-barred.
Finally respective officer disburses the loan after sanction and completion of all formalities. The
officer writes cheque and provides it to the borrower. For this borrower has to open an account
thorough which he/she can withdraw the money.
1) Persuasive
2) Voluntarily
3) Legally
1) Persuasive recovery:
If the borrower didn’t paid the due amount of loan in time then the first step of bank is private
communication with him. It creates a mental pressure on borrower to repay the loan amount. In
this case bank can provide some advice to the borrower for repaying the loan.
2) Voluntarily recovery:
39
In this method, some steps are followed for recovering loan. This are-
When all steps fails to keep an account regular and the borrower does not pay the installments and
interests then bank take necessary legal steps against the borrower for realization of its dues. In this
case “Artha Rin Adalat Ain-2003” plays an important role for collecting the loan.
Recovery procedure of NCC Bank is the ultimate combination of time, effort of money. It follows
four procedural steps to recover the lending amount, which is joint effort of Bank, society and
legal institutions, which are shown below:
40
3.11. PRINCIPLES of SOUND LENDING:
A. Safety
NCC Bank exercises the lending function only when it is safe and the risk factor is adequately
mitigated and covered. Safety depends upon:
B. Liquidity
The liability of a Bank is repayable of demand or at a short notice. So the Bank has to maintain its
liquidity at a sufficient level. Investment on building, plant, machinery, land etc. cannot be
recovered quickly, so it is less liquid.
C. Profitability
Profit is needed to pay interest to depositors, depreciation, and maintenance, declare dividend to
share holders, provide or reserve against bad and doubtful debts etc. so like all other Banks NCC
Bank also disburse advances to earn profit.
D. Security
To ensure safety of advances, Banks takes different types of securities like MTDR, Sanchaypatra,
land, work order etc. Banker should ensure that the securities are adequate, marketable and free
from encumbrances.
41
3.13. DISCOURAGED SECTORS of INVESTMENT:
42
Issuance of appreciation or greeting letter to the regular customers.
Periodical visit with the customers to maintain relationship and supervision of supplied
articles.
Legal action to be taken after failings all possible efforts to recover the bank’s due.
3.15.1. Implications
The very implication of non-performing loans are not only depriving of interest but also stoppage
of creating new loans for blockage of the fund and erosion of banks profitability, liquidity and
solvency, which might sometimes lead towards collapse of a bank. So, it is become essential for
policy makers of a bank to study the loan default scenario on a routine basis for estimating
classified loan, making appropriate provisioning, adopting effective recovery strategy and thus
ensuring soundness and efficiency of the bank.
In order to get rid of default loans, Bangladesh Bank introduced a circular (BCD circular no. 34)
on 1989 for classification & provision of loan thereof. The circular states the banks themselves will
43
carry out the classifications of their loans at least once in a year on the basis of the position
existing on December 31 in accordance with the guidelines given in the circular. In 1994,
Bangladesh Bank revised policy on classification and provisioning on quarterly basis.
The rules for classification and to maintain provisions as per overdue criteria are shown in the
table shown in next page:
44
repayment is uncertain but
there is little hope of
recovery)
Chapter- 04
45
Where Credit and Commerce Integrates
In the questionnaire there are 12 statements. These statements are based on SERVQUAL Model
where the questionnaires divided in to five dimensions- Reliability, Responsiveness, Assurance,
Empathy, Tangibles. I designed 5 points Likert scale for answering. These questionnaires based on
the 5 point Likert scale. There are five answering options and I put marks for each option and the
marks are:
Strongly agree =5
Agree = 4
Disagree = 2
Strongly Disagree = 1
• Reliability Dimension:
46
Descriptive Statistics
4.6667
4.8
4.6 4.3667
4.2
4.4
Mean
4.2
4
3.8
Keeps Maintains Reliable for
promises error free documents
records submitted
Statements
In reliability dimension there are three statements, where I calculate mean value of those
statements through SPSS software.
47
• On the basis of the first statement it is found that NCCBL keeps promises to the customer.
Since the mean value is 4.3667.
• From the second statement, it is found that NCCBL maintains customers’ error free
records. Hence, the mean value is 4.20.
• On the basis of third statement, it is found that the documents and papers submitted by the
customers to NCCBL are very much reliable. Since the mean value is 4.6667.
• Responsiveness Dimension:
Descriptive Statistics
48
Responsiveness Dimension Mean
4.6
5 4.1
3.533
4.5
4
3.5
3
Mean 2.5
2
1.5
1
0.5
0
Willing to Informed Satis faction
help custom ers with the
customers about loan
services products
Statements
49
• Assurance Dimension:
Descriptive Statistics
8. Ability of
30 3.00 5.00 4.6333 .61495
Relationship Officer
Assuarance Dimension
4.733
4.74
4.72
4.7
4.68
Mean 4.66 4.633
4.64
4.62
4.6
4.58
Safe Transactions Ability of
Relationship
Officer
Statements
• From the seventh statement of the questionnaire, it is found that the customers are feeling
very much safe in transactions with NCCBL. Hence, the mean value is 4.733.
50
• On the basis of eight no. statement of the questionnaire, it is understood that the
relationship officer of NCCBL has the ability to answer the questions regarding loan to the
customer. Since, the mean value is 4.633.
• Empathy Dimension:
Descriptive Statistics
51
Empathy Dimension
4.4
5
3.2
4
3
Mean
2
1
0
Satisfied with Gives individual
loan interest attention
Statements
• From the nine no. of statement of the questionnaire, it is assumed that the customers of
NCCBL are not very satisfied with the present loan interest rate. Since, the mean value is
3.2.
• On the basis of ten no. statement of the questionnaire, it is found that maximum customers
feel individual attention from employees of NCCBL. Hence, the mean value is 4.40.
• Tangibles Dimension:
Descriptive Statistics
Std.
Statements N Minimum Maximum Mean
Deviation
52
Tangible Dimension
4.233
4.5 3.466
4
3.5
3
Mean 2.5
2
1.5
1
0.5
0
Feel any loan Modern looking
charges and equipments
fees
Statements
The last dimension of the questionnaire is tangible dimension. There are two statements-
• From the eleven no. of statement of the questionnaire, it is understood that the customers
feel low charges and fees face from NCCBL regarding loan. While, the mean value is 3.46.
• On the basis of last statement of the questionnaire, it is found that the NCCBL has some
modern looking equipments but it needs more to give better service to the customers.
Since, the mean value is 4.233.
53
4.2. FINDINGS:
During my internship period I had worked mainly in Loan and Advances Section as well as in
General Banking Section in NCCBL, Shyamoli Branch. Throughout this three months the major
findings of the study are:
• The risk is concentrated in loan products as the total loan outstanding is highly dominated
by a few products.
• Small range of loan products offered by NCCBL, Shyamoli Branch is another problem in
diversifying its loan risk.
• In most of the cases loan disbursement is centrally controlled from the Head Office,
sometimes which creates problem in choosing the right client for the bank.
54
• Before sanctioning loan some times CIB report is not obtained from Bangladesh Bank.
• Foreign Exchange related loan or LC loans are not transacted in this branch.
• The credit proposal evaluation process is lengthy. Therefore sometimes valuable clients are
lost.
• Monitoring of loan is not sufficient
• Branches of NCC Bank are not sufficient to compared with other private banks.
• Innovation of new financial products is a rare case in NCC Bank rather they hardly upgrade
their offerings on the basis on some changes in interest rate and maturity.
• The website does not contain information about loan and other sections.
Chapter- 05
RECOMMENDATIONS &
CONCLUSION
55
NCC BANK LTD.
Where Credit and Commerce Integrates
5.1. RECOMMENDATIONS:
On the basis of the findings the following recommendations are made for the NCCBL, Shyamoli
Branch:
• At first NCCBL should find out the way to reduce its bad loan amount further as improve
its loan quality.
• NCCBL should increase their loan products to compete in the market.
• The loan policy and loan sanction procedure should be made flexible and easy.
• NCCBL can give attention to the foreign exchange and remittance services to maximize
profit.
56
• NCC Bank could give more attention to advertisement and promotion of products, which is
helpful to collect more deposits and increase investments scope. Bank could use various
media for advertisement like TV, News Paper, Internet and Billboard.
• Strict supervision must be adopted in case of high-risk borrowers. Time to time visit to the
projects should be done by the bank officers.
• NCCBL should introduce more ATM booth instead of manual banking system. It will save
huge amount of establishment and other cost.
• The website of the bank should be more informative that customers get the all information
about the different activities and facilities of the bank.
5.2. CONCLUSION:
Banks always contribute towards the economic development of a country. Compared with other
Banks NCC Bank is also playing leading role in socio-economic development of the country. The
bank is currently doing average. By analyzing it’s performance it is observed that a potential
growth might be accelerated through effective implications of some policy. Being an old
generation bank it has an advantage compared to newly established bank in the form of wide range
of activities. However policy implication needs to be as fast as possible to grab the early mover
advantage.
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The bank through years has been able to spread operation in mass banking rather than
concentrating in niches. It can hedge poor performance of one sector by some other sector for its
wide range of offering. Capital market operation has become a great potential for the bank to
increase its profitability. NCC bank brokerage house is concentrating to establish new work
stations in order to facilitate investor of remote places.
The bank has been able to create a multi component loan portfolio. However non performing loan
are a real challenge to the sound credit management. Default is increasing for lack of monitoring.
The bank is trying to increase its loan quality by accelerating its recovery policy. The bank can
concentrate on the loan sector where default risk is low and its investments are profitable. The loan
procedure has been made more calculative, logical to keep the credit sound.
BIBLIOGRAPHY
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• Brochures of NCC Bank Ltd.
• Service Marketing by Zeithaml -4th edition, 2010, SERVQUAL Model (pg: 116-
155).
Websites:
• www.NCCbank-bd.com
• www.bangladesh-bank.org.bd
Chapter- 06
APEENDIX
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NCC BANK LTD.
Where Credit and Commerce Integrates
Questionnaire on
Name :
Age : 18 to 24 25 to 30 31 to 40 41 to 50 50 to 60
Type of A/C : Current Savings SND /SSS/ FDR/MDDP Loan A/C
Occupation : Service Business Student Other
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Contact No :
[Please rate (√) your opinion about the following statements range from Strongly Disagree to
Strongly Agree]
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Perceptions Statements in the Empathy Dimension
Thank You
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“Loan Disbursement and Recovery System of NCC Bank Limited”
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“Loan Disbursement and Recovery System of NCC Bank Limited”
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“Loan Disbursement and Recovery System of NCC Bank Limited”
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“Loan Disbursement and Recovery System of NCC Bank Limited”
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“Loan Disbursement and Recovery System of NCC Bank Limited”
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“Loan Disbursement and Recovery System of NCC Bank Limited”
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