The main functions of a specialized bank are to extend credit to the deficit economic unit that comprises borrowers of all types
CHAPTER ONE 1.1
Introduction
The main functions of a specialized bank are to extend credit to the deficit economic unit that comprises borrowers of all types. Bank credit is essential of economic development. Without adequate finance, important for the economy in the sense that it can simultaneously finance all the sub sectors at financial area, which comprises agricultural, commercial and industrial activities of a nation. 1.2
Rationale/Justification of the Study
The main objective of the study is to examine the lending program of RAKUB, Gudagarie branch for the period 2001-02 to 2005-06. To achieve this objective, the study seeks to realize the following: 1. To assess an overview of RAKUB how it contribute in agriculture development at Rajshahi division. 2. To assess the loan disbursement position of RAKUB, Gudagarie branch during 2001-02 to 2005-06. 3. To assess the condition of credit management system of RAKUB, Gudagarie branch 4.
To assess the loan recovery position of RAKUB, Gudagarie branch during 2001-02 to 2005-06.
1.3
Technique of the Study
The study is concerned with the analysis of credit management system of the RAKUB, Gudagarie branch. The approach adopted is basically analytical and interpretation in nature considering the objectives of the study.
This study uses primary and secondary sources of data. The sources are: 1. Direct interview; 2. Personal communication; 3. Web site browsing; 4. Annual report of RAKUB; 5. Statement of affairs of RAKUB Gudagarie branch; To prepare this report 1 used the following methods of data collection. 1. Direct Interview Methods The collected data and information by direct interviewing of the executives and officers of the RAKUB, Gudagarie branch. For the purpose of interview prepared a set of questionnaire as the direction of supervisor. 2. Personal Communication The collected data through personal discussion with the officers of different level employees of the Gudagarie branch. They provide information about banking operations. Other information has been collected by personal communication with the officer, accounts officer. also have gathered data by communicating with the personal department of RAKUB head office. a. Time Lags: There was very short time to complete this study program. So, had to conduct with all functions within short time. b. Time Utilized and Covered: utilized my time properly and sincerely. But it was very limited time for proper observing and surveying every sector of RAKUB Gudagarie branch. So, could not able to interview with more respondent and covering survey area. CHAPTER TWO
An Overview of RAKUB 2.1
Establishment
Rajshahi Krishi Unnayan Bank (RAKUB) was established by the President's Ordinance No. 58 of 1986 with the aim of providing institutional agricultural credit for optimum utilization of agricultural potentials of Rajshahi division. Taking over the branches and offices along with assets and liabilities of the Bangladesh Krishi Bank within Rajshahi division, the bank started functioning on 15 March 1987. 2.2
Objectives of RAKUB
The main objects of RAKUB are as follows: a) To provide credit facilities for all kinds of agricultural and agro- based economic activities keeping in view the needs of small and marginal farmers. b) To earn a normal profit for meeting the operational expenses, building of reserve and expansion of activities to cover wider geographical area. c) To extend counseling and advisory services to the borrowers/ entrepreneurs etc. in utilizing credit facilities of the bank. 2.3
Functions of RAKUB
As the largest development partner in the northwest region Rajshahi Krishi Unnayan Bank aims at overall development of farmers and all the sectors and sub-sectors of agriculture in this region. Besides, catering to agricultural credit the bank performs ancillary functions as financing agri-business and agro-based industries and poverty alleviation programs. 2.4 Capital Authorized capital of the bank amounts to Tk 1500 million. At present paid-up capital amounts to Tk 1500 million and reserve Tk 208.49 million. 2.5 Sources of Capital RAKUB is a governmental banking institute. So the main sources of capital are government fund, details are as follows1) Authorized capita : Tk.150 core. 2) Paid up capital
: Tk.150 core (up to 30 June-2004)
3) Reserve capital
: Tk.208.49 (In million, as at June-05)
2.6 Regulatory Body The board is vested with the responsibility of formulation of policy in line with attainment of growth in agriculture and economic development of the region through agricultural credit support. The board of directors is constituted by seven members, all appointed by the government. Besides, for emergency decisions there is an executive committee constituted of the chairman of the board and two other members: the managing director and one of the directors elected by the board. The managing director is the chief executive of the bank. 2.7 Organizational Structure The head office is stationed at divisional headquarters city of Rajshahi.
The branches
network of the bank comprises 363 branches including one in Dhaka. Eighteen zonal offices stationed in district headquarters control branches under them. The General Manager's office at Rangpur oversees activities of 12 zones of greater Rangpur, Dinajpur and Bogra districts. There are 18 independent regional audit offices for conducting regular audit in branches and zonal offices. The only training institute of the bank is situated at Rajshahi. There are 4,171 employees of the bank of which 1,111 are first class officer, 897 are officers and 2,163 are other staffs. ORGANIZATIONAL STRUCTURE Board of Director Secretariat Managing Director Public Relation General Manager Adm.& A/C General Service Dept. Central Account Dept.-1
Secretariat of M.D General Manager Operating Resource & Development Dept. Budget & cost Control Dept.
Central Account Dept.-2
Branch control Dept.
Personnel Management Dept.
Loan & Advance Dept.-2
Training institute
Loan & Advance
General Manager Audit & Recovery Loan Recovery Dept.-1 Loan Recovery Dept.-2
Regional Audit Dept.-18
Dept-1 Source: Personnel department RAKUB head office.
2.8 Branch Network Table No. 1 Table showing the zonal office/ regional audit office/ branches office (up to November, 2006) Zonal office
No. of regional audit No. of branches office office Rajshahi 1 23 Naogaon 1 28 Natore 1 20 Chapai Nawabgonj 1 16 Bogura (North) 1 20 Bogura (South) 1 14 Pabna 1 24 Shirajgang 1 22 Jaipurhat 1 15 Rangpur 1 26 Gaibandha 1 24 Nilphamari 1 20 Kurrigram 1 21 Lalmonirhat 1 17 Dinajpur (North) 1 17 Dinajpur (South) 1 18 Thakurgoan 1 18 Panchagarh 1 18 Dhaka 1 L.P.O (Rajshahi) 1 Total 18 363 Source: Personnel department of RAKUB
Total branches 24 29 22 18 22 16 24 24 17 28 26 22 21 19 19 20 20 20 1 1 393
2.9 Employee Summary Table No. 2 Table showing the employee summary of RAKUB (up to November, 2006) Designation 1.Managing Directors (MD) 2.Deputy Managing Directors (DMD) 3.General Manager (GM) 4. Deputy General Manager(DGM)
Authorized
Exist
01 01 03 25
01 01 03 15
5.Assistant General Manager(AGM) 6.Senior Principal Officer(SPO) 7.Principal Officer(PO) 8.Senior Officer(SO) Total First Class Officer’s Total Second Class Officer’s (Data Entry/Control/ Supervisor) Employee Total
48 120 319 594 1111 897
29 77 211 412 749 744
2163 4171 Source: Personnel Department of RAKUB.
1826 3319
2.10 Office Automation The bank has been pursuing a five-year plan (2006-2010) of computerization through its computer department inaugurated on 8 September 2005. Training programs have been taken up for increasing computer literacy especially among junior and mid-level bank officials. The reform programs aim at raising the level of efficiency through increased use of computers. 2.11 Audit & Inspection Internal audit and inspection plays an important role in establishing transparency and accountability of the bank's accounting system. Besides there are commercial audit, Bangladesh Bank inspection and external audit for detecting and checking repetition of irregularities frauds and forgeries, if any, in different levels. The government appointed M/s Zoha Zaman Kabir Rashid & Company, Chartered Accountants and M/s Khan Wahab Shafiq Rahman & Company, Chartered Accountants for conducting audit for the financial year 2003-2004. The audit report submitted by them on 1301-2005 was sent to the ministry of finance on 26-02-2005 after approval of the Board of Directors. 2.12 Rakub Perspective Plan: 2001-2010 This was the third year of the RAKUB perspective plan. Bank's operational activities tracked the directives of the perspective plan throughout the year. On the backdrop of negative impact upon overall income and profit earning of the bank due to reduced interest rates of deposit and advance the bank took precautionary measures of counter balancing the shortfall by enhancing disbursement of new loans, recovery and rescheduling of classified loans and raising income from commercial banking activities. In addition, measures were taken to
curtail expenditure on controllable items. The bank plans to undertake a midterm evaluation on the RAKUB perspective plan as per demand of the changed scenario. Table No. 3 Table showing the estimated income under perspective plan (million Tk.) Sources of income
2003-04
2005-06
2007-08
Interest on unclassified loan 760 840 920 Interest on fresh loan 110 120 130 Recovery from classified loan • By adjusting deferred 200 220 230 income • By rescheduling 30 30 40 Interest income on deposit 130 140 140 Income from loan 260 290 310 provisioning Interest on staff loan 40 40 50 Commercial income 10 10 10 Miscellaneous 30 30 50 Total income 1570 1720 1880 Source: Internet (www.rakub.org.bd)
2009-10 1000 140
Average Amount % 840 48 120 7
250
230
13
50 150 330
40 140 280
2 8 16
50 20 50 2040
40 10 30 1730
3 1 2 100
Graph No. 1 Bar diagram showing the RAKUB estimated income under perspective plan (2003-04 to 2009-10) 1200
Sources of Income
Interest on unclassified loan Interest on fresh loan
Amount of Taka
1000 800
Recovery from classified loan • By adjusting deferred income • By rescheduling
600 400 200 0 2003-04
2005-06
2007-08
Year
2009-10
Interest income on deposit Income from loan provisioning Interest on staff loan Commercial income Miscellaneous
CHAPTER THREE Rakub Paba Branch at a Glance 3.1 Establishment Paba branch as one of an ideal branch of Bangladesh Krishi Bank (BKB) was established on 19 December, 1983. But it started its operation as a branch of RAKUB on 15 March, 1987. Its initial capital was only Tk. 80,000 after its establishment till to date it has passed 19 years of its operation. 3.2 Location of the Study Paba branch, Rajshahi Krishi Unnayan Bank is situated under the Rajshahi City Corporation. It is stayed at west side of Rajshahi to Nowgoan Road in the first floor of its own building and wastern side at paba post office is Paba Upazilla, about 10 km. from Rajshahi town. 3.3 RAKUB Paba Branch at a Glance Table No. 4 Table showing the Paba branch at a glance Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Chapter head Establishment date Starting date Total population (2005) Number of unions Numbers of village Numbers of loanee Total deposit account Current account Saving account Fixed deposit account DPS RPS RGPS STD Others
Requirement 19th December, 1983. 15th March, 1987. 15,800 A union and a ward of Rajshahi City Corporation 32 2100 2124 76 1247 44 4 151 59 111 543
Source: Manager, Paba branch, Rajshahi.
3.4 Organizational Structure of Rakub in Paba Branch
Second Officer Officer M A N A G E R
Supervisor Cashier Peon Source: Manager, Paba branch, Rajshahi.
3.5 Employee Summery of Paba Branch There are 13 employees of RAKUB, Paba branch, Rajshahi. Their designation is given below: Table No. 5 Table showing the employee summery of Paba branch S.L. No.
Designation
No. of Personnel
1.
Manager
1
2.
Second Officer
1
3.
Officer
1
4.
Supervisor
6
5.
Cashier
2
6.
Peon
1
7.
Guard
1
Total
13 Source: Manager, Paba branch, Rajshahi.
3.6 Accounting Procedure The main objectives of maintaining the accounting procedure of RAKUB Paba branch are to achieve the following goals: 1. To record day-to-day transaction 2. To reflect the financial position periodically 3. To supply necessary information for monitoring the bank activities In this cash transaction, other transaction is recorded in the books of accounts under the double entry system. In this bank, generally two types of books are used. A. Control Books It represents the immediate accounting picture of the bank at any time and it includes1. Cash scroll book 2. Clean cash book 3. General ledger abstract 4. Supplementary ledger book B. Subsidiary Books Subsidiary books are used to affiance the total particulars in general ledger and it includes 1. Saving account ledger 2. Fixed deposit ledger 3. Income ledger 4. Expenses ledger 5. The general ledger of RAKUB
CHAPTER FOUR
General Banking Activities of Rakub Paba Branch 4.1 Introduction Bank continuing his activities for human welfare Rajshahi Bangladesh Krishi Bank was established for the agriculture development at Rajshahi division. It is a nationalized bank. But like other commercial bank. The bank will have to operate general commercial activities. 4.2
The Main Activities of RAKUB
a)
Disbursement of Loans •
Major item of Loan Disbursement A. Crops loan B. Live stock C. Agro based industrial loan D. Fishery E. Continuous F. Poverty alleviation G. Irrigation equipment & firm machinery H. Cottage industry
Table No. 6 Table showing the interest on credit Particular’s Crops
Rates (in %) 8%
Exports
9%
Working capital
10%
Commercial
14%
Others of firm
14%
Cottage industry
12%
Source: Manager, Paba branch, Rajshahi. b) Recovery of Loan When a bank or other financial institutions distribute a loan to other organization or people, then after regaining from loanee it is called loan recovery, RAKUB, Paba branch, distributed loan to loanee and recovers this money. RAKUB, Paba branch, recovery’s loan under two basis a. Unclassified loan, and b. Classified loan c) Deposit Mobilization Deposit is the most important source of ready to invest fund. The bank initiated a special drive for collecting low cost deposit. A significant number of people in northwestern region are under employed with near to zero marginal income. Out of total 349 branches 208 are located at union level. As such, the bank continued small savings schemes suitable for this section of people and tried hard for hunting institutional deposits. 4.3
General Banking Activities
4.3.1 Opening an Account To its customers RAKUB gives opportunity to open an account like other banks. The following things are considered to open an account: ďƒ„ Observing whether the application form is properly filled in
Getting an preserving specimen signature of a customer Taking initial deposit in cash Special types of account: Basically a person whose age is 18 years or more can be competent to open an account with the bank. But there are some special types of account holder like joint account, minor account illiterate person account, blind person account, deaf and dumb account etc. Who cannot open an account: The following parties can never open an account with the bank The person who is still bankrupt The person whose mind is unsound The person who is totally mad
4.3.2 Different Types of Deposit Accounts The different types of clients mentioned above can open different types of deposit accounts. These deposit accounts have different features and phenomenon. The deposits that are taken by the Paba branch can be classified into two heads demand deposits and time deposits. (A) Demand Deposit This type of deposit is payable on demand. It includes current and serving account. The whole amount of current account and 16% of saving account is termed as demand deposit.
i) Current Account This account is normally opened by businessman or business organization No interest is given on it. The initial deposit of RAKUB, in this account is Tk. 1000 and balance must be maintained at least at this amount. In this case, the account holder can with draw or deposit
his or her money at his or her wish within the office hour. There are 76 current accounts in this branch. Basically a person whose age is 18 years or more can be open this account. ii) Saving Account This account is opened for the individual customer without the companies or firms or cooperative society. The minimum initial deposit of savings account is Tk 200 and this amount must always be maintained. RAKUB provides interest @ 4% per annum. There is 1247 savings account in this branch. Minimum 18 years man can open this account. ii) STD (Short Term Deposit Account) This account is opened for companies, firms, governments or the administrative bodies like the TNO, WDP etc. This account is operated like the current account. If 7 days written notice is placed before the bank, it gives interest @ 2.50% per annum. (B) Time Deposit Time deposit is not repayable on demand. This is repayable after the expiration of a certain period. Time deposits are classified into four deeds namely, DPS, RPS, FDR and RGPS. Deposit Pension Scheme (DPS) It is one kind of program circulated by the government. Under this savings scheme, a person receives the opportunity to build up savings by contributing monthly installments to get an attractive fixed amount at the end of specified period. The size of the monthly installments is Tk. 100, Tk. 200, Tk. 300, Tk. 400 which is to be deposited within the first week of each month In this case, compound rate of interest is charged. But this DPS has not been operating in RAKUB rather the old accounts have been continuing. Only 4 DPS account in this branch RAKUB provides interest @ 15% for this account.
(ii) FDR (Fixed Deposit Receipt) It is a deposit scheme where a receipt is issued for the full amount which is payable after a specified period of time against deposits of certain amount. Table No. 7
Table showing the term and interest rates of FDR Term
Rate of interest
3 months to less than 6 moths
6%
6 months to less than 1 year
6.25%
1 year to less than 2 years
6.50%
2 years to less than 5 years
7%
Source: Manager, Paba branch, Rajshahi. If any depositor whishes to withdraw his or her money before maturity he or she is allowed to do so but in this case interest will be given according to the prescribed rate for that term. This instrument is also accepted as primary security or collateral security against any advance or loan subject of the bank. (iii) RPS (RAKUB Person Savings Scheme) RAKUB has some savings schemes to motivate the people for savings. In this case RPS is regarded as the special product of this bank. The RPS is same as DPS. But the terms of savings of RPS are 5 years and 10 years. Interest is credited to the accounts of the depositors in June every year. The rate of interest is 10% and 12% for 5 and 10 years respectively. (iv) RGPS (RAKUB Grameen Pension Scheme) This scheme was lunched to support the liquidity problem arising from maturing of RPS. The interest rate of RGPS is 6% for both 5 and 10 years. 4.3.3 Remittance The Paba branch of RAKUB transfers money from one branch to another in following waysDemand Draft (DD) DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one branch payable to another branch on demand. DD is issued in against at Tk.15
commission up to Tk.1000. When the limit exceed commission amount increased in a certain rate. Mail Transfer (MT) This branch transfer’s money another branch of this bank in another place in against of commission money of this security paper has to be transferred to an account of another branch. Here the bank commission is Tk.1.5 per Tk.1000 and the postal charge is Tk.10. Telegraphic Transfer (TT) It is the quickest method of remitting fund from one place to another. In this procedure no instrument is sent to the paying branch. Only message is sent over telephone or telex and the paying branch makes payment after getting message. Due to lack of technology this branch cannot operate TT. Payment Order (PO) It is a written document. This PO can be encased on that branch from where it is issued. Several supplier organizations use this PO and here no account is needed to open with bank. It is issued locally. RAKUB becomes popular by following ways above. 4.3.4
Pure or Clean Cash Book
When the vouchers are closed the accounts are written in the pure cashbooks. It may be either deposit or expense. The transactions of each bead, which have been occurred, are written in the specific age of the cashbook under a specific head and debit and credit total are determine. Thereafter, total of the each head is written in the right page of the clean pass book. But in the cash book the closing balance of the previous day is shown as initial balance for the next day. Then the closing balance is determined for that day.
4.3.5
General Ledger
The transaction is carried out to the general ledger to find out the mistake of the clean cashbook. General ledger is not carried out in different name but come in main head. Ledger credit and debit balance must be equal. 4.3.6
General Ledger Abstract
The debit and credit balance of various accounts makes general ledger abstract. The debit and credit balance of the accounts are maintained in the abstract in the debit and credit side respectively. Since the double entry system is maintained therefore its debit and credit balance are equal. 4.3.7
Voucher
Voucher is a kind of document, which as a proof of accuracy Paba branch of RAKUB treats it as a journal. The following vouches are used in RAKUB•
Debit voucher: It's used for expenditure. Its color is white.
•
Credit voucher: it’s used for received. Its color is green.
•
Transfer voucher: This voucher is used for transfer taka from one account to another in case of inter banking, its color is yellow.
•
Debit and credit voucher is used to file or in books.
•
Transfer voucher is used in the bank.
4.3.8
Cash Scroll
At first those transactions are maintained in this cash scroll by the authorized officer, which occurred every day. Thereafter the cashier maintained those transactions in daily transaction register. For this official member are followed. 4.3.9
Loan and Advance
RAKUB was established mainly on the objective of the development of agriculture. But RAKUB not only delivers agricultural loan but also disburses different loan, such as: A) Agriculture Credit
RAKUB is a specialized bank and its main objective is to improve the agricultural production. For this reason it provides basically agricultural credit. B) Cash Credit It is a commons lending with this arrangement the drawn is allowed to borrow money up to a certain limit. But the borrower is not required to withdraw the sanctioned amount at once. He can draw money when he requires and also can put back money onetime. Interest is charged only the amount withdrawn not on the total amount sanctioned. C) Advance against Deposit This bank provides credit to the depositors under the following program•
Advance against fixed deposit
•
Deposit pension scheme
•
Short term over draft
The bank imposes some conditions in giving those loans. The required conditions are: •
Land ownership
•
Fixed margin
•
Necessary deposit etc
4.4 Special Programs Some special programs introduced in the previous years continued in 2002-2003. Those programs and some area based special programs undertaken by the bank cited below. •
Expanded maize cultivation
•
Nursery for medicinal plant and orchid
•
RAKUB milk village
•
Small scale poultry
4.4.1 Poverty Alleviation Program
•
RAKUB self help credit program (RSCP)
•
Potato seeds production program
•
Cotton production program
•
Fresh water shrimp culture
•
Fisheries & live stock department RAKUB joint program
•
Poverty alleviation through goat rearing program
•
Credit for small scale tea plantation project
4.4.2 Foreign Aided Projects Two foreign aided credit programs namely SECP (Small Enterprises Development Credit Project) & NCDP (North- West Crop Diversification Project) were introduced during the year 2000-2001. 4.5 Some Other Activities •
Long-term fund management.
•
Human resource development program. o Main objectives of HRD program were Enhancing self-motivation of the bank employees. Creating congenial working atmosphere Increasing professional skill through effective training programs Introducing need-based and output oriented training. CHAPTER FIVE Credit Management
5.1
What is Credit?
A credit may be defined as money lent at interest or on profit. It is nothing but temporary parting with one's [an individual or an institution] resources in order to augment the purchasing power of the receiver of such facility with a promise to return the same with interest profit or otherwise as mutually agreed upon."
"Formal agreement between a bank and borrower provide a fixed amount of credit for a specified period." Timothy W Koch. 5.2 Importance of Credit Bank credit is very much important for socio-economical development in our country. Most of the people of our country are poor/marginal farmer. Bank credit makes possible for the financing of the agricultural, commercial and industrial activities of the nation. The most important bank credit is also recommended as follows: •
To produce capital goods which are used later in the production of consumable goods
•
Banks loan also make possible production for inventory
•
Availability of bank loans the farmer is able to purchase seed, feed, fertilizer
5.3 Types of Credit As a partner of agricultural development, RAKUB generally deals with agro-base credit business. Credit is the main source to earn income. RAKUB Poba branch provides three terms of credit: a) Short term loan: A short-term loan is the loan, which is fully repaid within one year or below one year. b) Medium term loan: Medium term loan is the loan, which is fully repaid within more than one year to five years. c) Long term loan: Long-term loan is the loan, which is fully repaid more than five years. RAKUB Poba branch provides the term credit under the sectors: 1) Crop credit 2) Cash crop credit 3) Horticulture credit 4) Warehouse credit 5) Rural housing credit
6) Poultry & fisheries 7) Small & cottage industries credit 8) Agro mechanization credit 9) Improved seed Credit 10) Other tools machines credit. 5.4 Overdrafts In the case of advances sanctioned by way of overdrafts, the customer is sanctioned a limit up to which he can over draw his current account within a stipulated period In case where the customer can not offer any kind of security expect his personal security the facility is termed as a clean overdraft, on the other hand, where the customer offers a security acceptable to the bank facility is treated as a secured overdraft. 5.5
Doubtful Loans
Doubtful loan are those that are considered by bank examines to be doubtful of repayment, such loans are considered to contain some loss but the amount cannot be ascertained. 5.6
Credit Management
Lending is the one function of specialized banking. The successful banker is a successful lender. The tools used to manage lending are credit analysis, budgeting and supervision. Lending also has to be enlightened by a competitive but reasonable policy for interest charges on loans. Banks are major financial institutions, which coordinate between borrowers and lender. They mobilize funds from one group of people at low rate and lend the same to another group of people at the highest rate of return to maximize profit. Unless the fund functions are efficiently planned and executed the bank can not achieve its maximum potential profit, the specific objectives of credit management as well as the bank management in a specialized bank are: •
To provide service in special sector
•
To maximize earnings
•
To provide adequate liquidity and cash
•
To manage the loan and investment portfolios in the best possible manner so as to ensure profitability
•
To maintain reserve for contingencies
Credit management in banking is mainly liable to its concerned authority. At any cost they have to bind to keep its funds in safety and returnable with maximum profit from the investment.
5.7 Main Credit Portfolio of RAKUB Paba Branch Table No. 8 Table showing the main credit portfolio of RAKUB Paba branch a) Food crops
b) Cash crops c) Processing and marketing d) Agro-based industries project e) Commercial loan f) Live stock g) Transport h) Farm machineries i) Micro credit j) Special agricultural activities k) Others
Paddy, wheat, potato, sugarcane, master seed, sunflower seed, ginger, onion, water motor, winter/ summer vegetables, banana, mango etc. Jute, cotton, tobacco, betel leaf etc. Small and cottage industries, marketing capital etc. Rice/has king mills, flour mills, dall (pulses) mills, fruit processing industries, light earning work shops, ice plants etc. Loan against fertilizer and pesticide, cash credit loan for agro- products and small enterprise etc. Draft animals, dairy, poultry, goatery, beef fattering etc. Rickshaw-van, rickshaw, bullock cart, country boat etc.e Power tiller, tractor and other machineries. RSCP, SECP. Fishery, orchard, nursery etc.
Loan against fixed deposits. Source: Manager, Paba branch, Rajshahi.
5.8 Rate of Interest on Credit Bank usually determines various rates of interest in different sectors. The rate of interest changes overtime and becomes effective from prescribed date. But rate of interest can not be
changed when the disbursed loan is funded from the foreign aids. The variation of interest rate hinges upon credit program and tenure of the loan. The rate of interest, which exists at present, is as follows: Table No. 9 Table showing the rate of interest on credit Loan heads
Rate of interest
Crop (Without security)
16%
Continuous
14.50%
Poverty alleviation Fishery Live stock Irrigation equipment &firm machinery Agro-based industry Others agriculture loan Export credit Commercial Other off firm Cottage industries Large and medium scale industries RSCP SWANIR VAR MSFSCIPA Others special program
12% & 8% 10% 10% 10% 10% 14% 10% 15% 15% 15% 13%-14% 12% 11% 15% 10.50%-17%
Source: Manager, Paba branch, Rajshahi. CHAPTER SIX Loan Disbursement 6.1
Introduction
The strong base of RAKUB Paba branch is totally dependent on sound investment. As interest on loan is the main source of income. That is why qualitative loan disbursement is so much important as well as quality to increase total income of the bank.
6.2
Loan Sanction Procedure
Based on information available in the appraisal report, credit report, leg mate credit, Needs of the farmer client should be carefully analyzed by the sanctioning authority. Before according section analysis of status of application, credit worthiness liabilities, project viability from technical, financial, economic, and marketing and management point of view. As soon and the security is finalized and the sanctioning authority is satisfied he should proceed for sanction of loan advance. 6.3 Selection of Borrowers Borrower selection is an important factor of distribution of loan. The following factors are considered in selecting a borrower as below: 1. Borrower must be Bangladesh. 2. Borrower must be matured. 3. Borrower must have ability to use loan to repay the loan and he must be a possessor of goodwill in economic transaction. 4. Borrower must not loan defaulter. 5. Borrower must be registered with Joint Stock Company if it is limited company. 6. Borrower must be registered with the register of the co-operative if it is a co-operative society. 7. Borrower must not be insane. 4p may be mentioned in the loan selection procedure. Here 4p means •
P=Person
•
P= Purpose
•
P= Profitability
•
P= Property/ Security
6.4
Loan Handling Diagram
Getting Loan Proposal from the client
Collecting information
Evaluating proposal
Evaluating by agent
Branch level evaluation Sanctioning and documentation of loan Disbursing loan
Decision
Head office level
Supervision of the loan Recovery of the loan
Usual recovery
Legal recovery Source: RAKUB Paba branch, Rajshahi.
Branch level
6.5 Documentation After the loan or advance become effective, the manager should ask the borrowers promptly to comply with the loan covenants stipulations and execute the documents. Correct documentation is essential securing safe repayment of loan and advances. 6.6 Security RAKUB maintain the security listed below in recovering the loans without risk. 1.
Lien: It’s a right to retain the property /goods of the borrower as security until the debit are adjusted. In this case the banker can only hold the possession of the goods he cannot sell them. A banker’s lien is a general hen. He can sell the securities under lien after giving reasonable notice to the borrower.
2.
Pledge: Pledge is created only for movable property like goods document etc. In case of pledge the ownership of the goods remains with pledge but the possession of the goods vests with pledge until the loan is recovered. Pledge does not occur until the goods are transferred. The pledged goods are returned to the owner after the loan is adjusted. If the borrower fails to repay the loan the banker can sell the pledged goods after giving reasonable notice to him.
3.
Mortgage: Only the immovable properties are kept under mortgage. It is a method of creating charge on immovable properties.
4.
Hypothecation: Hypothecation is nothing but the mortgage of movable property. It is
an extended idea of pledge. In this case both possession and ownership remains with the borrower but by the hypothecation agreement he undertaken to transfer possession whenever required. Here the lender possesses the right of a pledge. Hypothecation is very much risky and RAKUB does not want utilize this method for creating charges. 6.7
Disbursement of Loan
Before release of sanctioned loan or advance, all terms and conditions as laid down in the sanction letter are to be fully complied with. To that effect, the following basic requirements: a)
Loan affectivity terms and conditions as to collateral security and equity of the borrower shall be fully met.
b)
Specified documentations as specified in the sanction letter must be completed.
c)
Verification of encumbrances of security properties.
d)
i.
Non-encumbrances certificate.
ii.
Execution of halapnama.
Creation of charge on the collateral security:
In case of limited company, the
charges on the company assets should be limited e)
With in 21 days from the date of creation of charge, by registered post to the register, Joint Stock Company.
f)
Insurance for: i.
Security properties, as applicable.
ii.
Assets creates or to be created out of a loan fund or with two equity.
iii.
Stock of goods pledged with the bank as collateral shall be taken with appropriate risk cover.
g)
Any other stipulations as per sanction letter.
6.8 Supervision and Monitoring of Loan Under its charter, the bank is required, as for as possible, to ensure that a loan is spent on the purpose for which it is made, and if this requirement is not complied with by the borrower, the bank may require the repayment of the loan forthwith. 1. Primary responsibility of the manager is to supervise and monitor the cash loan/WCL project and term loan stage by stage, ensure project constriction work, acquiring kind items and project goods as per approved arrangement specified in the sanction letter. 2. Bank finance project should be inspected by the regional manager and manager periodically, to assess physical conditions of the projects facilities and the level of the project’s capacity utilization. 3. Cash loans are liable to misuse for non-productive process. Special attention must, Therefore, by given on borrowers past antecedents. When releasing cash loans. When substantial cash amount is required to be drawing by a borrower for civil works of a project, WCL for requiring goods the managers must be particularly. Vigilant on the usage of loan. Total responsibility for credit super vision of cash credit/WCL lies with the manager. 4. The manager should deploy a project supervision officer after documentation is release of first loan installment with the assignment of over all project supervision the
duties of the PSO have been laid down in Ch: 25.07. The PSO should be stationed in the project site or nearby and see for himself the project developmental work and inform the progress to the manager through progress report predictably. 5. After inspection, the manager/authorized officer should countersign the borrower’s acknowledgement receipt under his signature and seal. Only after such countersignature in the Borrower’s acknowledgment receipt, supplier’s bill can be processed for payment the branch should complete the verification of goods supplied by a supplier with a week and process payment of supplier’s bill promptly when the same is in order. (WCL= Working capital loan) 6.9 Loan Disbursement Methods and Various Types of Application Forms Loan application should be written in specific form of bank must be submitted by the borrower in the bank. Various kinds of loan application forms given below: Table No. 10 Table showing the various kinds of loan application forms Serial No.
Description
Amount loan in Tk.
1 2 3
Crops loan Crops loan Crops loan
Upto 5000 5001 to 10,000 5001 to 10,000 above Upto 10,000 Above 10000
4 5 6 7
No. of necessary copy 1 1 1
Form No.
Charge per copy
L.F.6 L.F.6 L.F.6
10 20 40
Any loan 1 L.F.1 Any loan ½ L.F.2 beyond crops loan Project loan 2 L.F.4 Working capital 2 L.F.8 Source: RAKUB Paba branch, Rajshahi.
20 40 250 100
At that time of submitted loan application the loan should gives fee at various rates. The various types of loan application fee are as follows: Table No. 11 Table showing the loan application fee Amount of loan Upto 6,000 6001 to 7500 7501 to 10,000 1,00,000
Rate of free (in taka) No. need 15.00 Tk.2.00 per thousand 200 and Tk. 1.00 per thousand.
Source: RAKUB Paba branch, Rajshahi. 6.10 Loan Disbursement Scenario Paba Branch of RAKUB Table No. 12 Table showing the position of loan disbursement on last five year (Amount in lakh Tk) Financial year
Loan disbursement target
Total loan achievement disbursement against target
Achievement rate (%)
2001-02 2002-03 2003-04 2004-05
141.00 761.77 365.00 470.50
141.19 167.39 167.25 290.25
100.14 21.97 45.82 61.69
2005-06
186.50
221.77
119
Source: RAKUB Paba branch, Rajshahi. Note: Achievement rate =
Achievement T arg et
Ă—100
Comment: It is evident, from the above table that 2001-02 to 2002-2003. Loan disbursement target are increased gradually on the other hand Loan achievement is also increase gradually but in the financial year 2003-2004. Loan disbursement target decreased from the previous year also the Loan disbursement of this year is not satisfactory. Here highest achievement rate in the year 2005-2006 is 119% and lowest achievement rate in the year 2002-2003 is 22%.
Graph No. 2
Bar diagram showing the last five years loan disbursement (amount in lakh Tk.) Loan Disbursement target
800
Taka
700 600
Total loan Achievement Disbursement against target
500 400 300 200 100 0 2001-02
2002-03
2003-04
2004-05
2005-06
Year
a) Loan disbursement of 2001-2002 RAKUB, Paba branch projected a lending target of Tk. 141 lakh for the financial year 20012002. Disbursement of loan during the year amounted to Tk 141.19 Lakh (100.13 percent of the target). For a reform expansion of the loan portfolio the following seven sectors were given priority in investment planning. ∙ Crops ∙ Continuous ∙ Poverty alleviation ∙ Fishery ∙ Live stock ∙ Irrigation equipment and farm machinery ∙ Agro-based industries. The highest amount of Tk. 45 Lakh was disbursed for crop as rice, potato and sugarcane etc. The next highest amount of Tk. 44 Lakh was poverty alleviation. Total disbursement was Tk. 37.50 lakh higher than that of the previous year. Table No. 13 Table showing the position of loan disbursement for the financial year 2001-2002 (Amount in lakh Tk.) 2001-2002 Items
Crops Continuous loans Poverty alleviation Fishery Live stock
Loan
Total loan
Achievement
disbursement
achievement
rate
target
disbursement
45 5 44 33 18
against target 40.36 25.55 30.92
90% 511% 70.27%
25.32
140.66%
Irrigation equipment and farm
2
-
-
6
3.30
55%
machinery Agro-based industries Others Total
18 15.74 141 141.19 Source: RAKUB, Paba branch, Rajshahi.
Note: Achievement rate =
Achievement T arg et
87.44% 100.13%
×100
Comment: It is evident; from the above table that continuous loan is the highest achievement percentage which is 511% and Agro based industry is the lowest achievement percentage which is 55%. Others disbursement items is not considered here. Graph No. 3 diagram
Taka
Bar
showing
the
sector
wise
loan
disbursement
2001-02
50 45 40 35 30 25 20 15 10 5 0
2001-2002.
Target Achievement
Crops
Continuous loans
Poverty Alleviation
Fishery
Live stock
Irrigation Agro-based equipment industries and farm machinery
Others
b) Loan disbursement of 2002-2003 RAKUB Paba branch projected a lending target of Tk. 761.77 Lakh for the financial year 2002-2003. Disbursement of loan during the year amounted to Tk. 167.39 Lakh (22 percent of the target). For a reform expansion the Loan portfolio the following seven sections were given priority in investment planning. ∙ Crops ∙ Continuous ∙ Poverty alleviation ∙ Fishery ∙ Live stock ∙ Irrigation equipment and farm machinery ∙ Agro-based industries. The highest amount of Tk 47.39 lakh was disbursed for crops, the next highest amount of Tk. 44.95 lakh live stock. Total disbursement was Tk. 26.20 lakh higher than that of the previous year.
Table No. 14
Table showing the position of loan disbursement for the financial year 2002-2003 (Amount in lakh Tk.) 2002-2003 Items
Loan
Total loan
Achievement
disbursement
achievement
rate
target
disbursement against target 47.39 36.50 23.49 -
Crops Continuous loans Poverty alleviation Fishery
60 35 20 2
Live stock
44
44.95
102.15%
-
-
-
550
0.42
0.08%
Irrigation equipment and farm machinery Agro-based industries Others Total
79% 104% 117.45% -
50.77 14.64 761.77 167.69 Source: RAKUB, Paba branch, Rajshahi.
Note: Achievement rate =
Achievement T arg et
28.29% 22%
Ă—100
Comment: It is evident; from the above table that Poverty alleviation is the highest achievement percentage which is 117.45% and agro based industry is the lowest achievement percentage which is 0.08%. Others disbursement items is not considered here and fishery achievement is nil. Graph No. 4 Bar diagram showing the Sector wise loan disbursement 2002-2003 2002-03
Target Achievement
Taka
600 500 400 300 200 100 0 Crops
Continuous loans
Poverty Alleviation
Fishery
Live stock
Irrigation Agro-based equipment industries and farm machinery
Others
c) Loan Disbursement of 2003-2004 RAKUB Paba branch projected a lending target of Tk. 365 Lakh for the financial year 20032004. Disbursement of loan during the year amounted to Tk. 167.25 lakh (46 percent of the target). For a reform expansion the Loan portfolio the following seven sections were given priority in investment planning. ∙ Crops ∙ Continuous ∙ Poverty alleviation ∙ Fishery ∙ Live stock ∙ Irrigation equipment and farm machinery ∙ Agro-based industries. The highest amount of Tk 45.70 Lakh was disbursed for live stock. The next highest amount of Tk. 41.65 lakh is disbursement of cash credit. Total disbursement was Tk. 0.2 lakh higher than that of the previous year.
Table No. 15 Table showing the position of loan disbursement for the financial year 2003-2004 (Amount in lakh Tk.) 2003-2004 Items
Loan disbursement target
Achievement rate
80 43 19.90 -
Total loan achievement disbursement against target 40.73 41.65 14.40 -
Live stock
39
45.70
117.18%
Irrigation equipment and farm machinery Agro-based industries
13
3.08
23.69%
1.53
2.12
138.56%
Crops Continuous loans Poverty alleviation Fishery
Others Total Note: Achievement rate =
168.57 19.57 365 167.25 Source: RAKUB, Paba branch, Rajshahi. Achievement T arg et
51% 97% 72.36% -
11.60% 46%
×100
Comment: It is evident. From the above table that agro based industries loan in the highest achievement percentage which is 138.56% and Irrigation equipment farm machinery is the
lowest achievement percentage which is 23.69%. Others disbursement items is not considered here. Graph No. 5 Bar diagram showing the sector wise loan disbursement 2003-2004.
Taka
2003-04
Target Achievement
180 160 140 120 100 80 60 40 20 0 Crops
Continuous loans
Poverty Alleviation
Fishery
Live stock
Irrigation Agro-based equipment industries and farm machinery
Others
d) Loan Disbursement of 2004-2005 RAKUB, Paba branch projected a lending target of Tk.470.50 Lakh for the financial year 2003-2004. Disbursement of loan during the year amounted to Tk. 290.25 Lakh (61.69 percent of the target). For a reform expansion the loan portfolio the following seven sections were given priority in investment planning. Table No. 16 Table showing the position of loan disbursement for the financial year 2004-2005. (Amount in Lakh Tk.) 2004-2005 Items
Loan
Total loan
Achievement
disbursement
achievement
rate
target
disbursement
Crops Continuous loans Poverty alleviation Fishery
95 55 22 2
against target 65.50 52 18.25 -
68.95% 94.55% 82.95% -
Live stock
40
42.75
106.88%
Irrigation equipment and farm
10
-
-
machinery Agro-based industries
2.50
1.00
40%
Others Total
244 110.75 470.50 290.25 Source: RAKUB, Paba branch, Rajshahi.
Note: Achievement rate =
Achievement T arg et
45.39% 61.69%
Ă—100
Comment: It is evident. From the above table that live stock loan in the highest achievement percentage which is 106.88% and agro-based industries is the lowest achievement percentage which is 40%. Others disbursement items is not considered here. Graph No. 6 Bar diagram showing the sector wise loan disbursement 2004-2005 Target
2004-2005
Achievement
Taka
300 250 200 150 100 50 0 Crops
Continuous loans
Poverty Alleviation
Fishery
Live stock
Irrigation Agro-based equipment industries and farm machinery
Others
e) Loan Disbursement of 2005-2006. RAKUB, Paba branch projected a lending target of Tk.186.50 lakh for the financial year 2005-2006. Disbursement of loan during the year amounted to Tk. 221.77 lakh (119 percent of the target). For a reform expansion the loan portfolio the following seven sections were given priority in investment planning. The highest amount of Tk 60 lakh was disbursed for others loan. The next highest amount at Tk 51.25 and 50.54 lakh was disbursed for continuous and crops respectively. Loan disbursement at crops, continuous, poverty alleviation and others more than the target, there was no loan disbursement at agro-based industries sector.
Table No. 17
Table showing the position of loan disbursement for the financial year 2005-06 (Amount in lakh TK) 2005-06 Achievement rate Items Target Achievement (%) Crops 50.00 50.54 101.08 Continuous loans 50.00 51.25 102.50 Poverty alleviation
12.00
19.76
164.67
Fishery
0.50
0.35
70
Live stock
40.00
39.37
98.425
Irrigation equipment and farm machinery Agro-based industries
1.00
0.50
50
-
-
-
33.00 186.50
60.00 221.77
181.82 119
Others Total
Source: RAKUB, Paba branch, Rajshahi. Note: Achievement rate = Ă— 100 Comment: It is evident. From the above table that poverty alleviation is the highest achievement percentage that is 164.67% and irrigation equipment and firm machinery is the lowest achievement percentage, which is 50%. Others disbursement items are not consider here.
Graph No. 7 Bar diagram showing the sector wise loan disbursement: 2005-2006 Target
2005-2006
Achievement
Taka
70 60 50 40 30 20 10 0 Crops
Continuous loans
Poverty Alleviation
Fishery
Live stock
Irrigation Agro-based equipment industries and farm machinery
Others
CHAPTER EIGHT Major Findings and Recommendation 8.1
Findings
After studying and analyzing about credit management relative data and information, I can conclude that credit management of RAKUB Paba branch is satisfactory. How ever the bank is facing several problems that are mention in below very briefly: 1. Fund diversion 2. Shortage of efficient credit personnel 3. Lack of transportation facilities of the credit personnel 4. Inadequate training facilities for credit officers and their qualifications 5. Lack of proper mortgage against loan. 6. Lack of real loanee. 7.
Insufficient fund of the bank.
8. Loans are not disbursed properly as a result of the dishonesty of the officers. 9. Lack of sound guarantor. 10. Sector wise loan disbursement performance scenario is much fluctuated. 11. The loan recovery is hindered due to flood, thunderstorm etc. 12. Some time the loan-less recover show their unwillingness to pay the loan in order to have various advantages form the government. 13. If loan disbursement is not in accurate time, borrowers will not be able to use that loan in particular sector, As a result loan recovery will be impossible. 14. The notice are not issued just time, for this reason some time the recovery of loan is disturbed. 15. Lack of proper planning and inefficient -fund management. 16. Lack of proper supervision. 17. Loan is not paid through proper assessment. 8.2
Recommendation
RAKUB, Paba branch is the nationalized bank of Bangladesh. It must have to remove its limitation in banking service. In my study, I have recognized several weaknesses in banking services and my recommendation are given below: i)
Process and procedures of lending should be liberalized keeping in view the problems and constraints faced by the borrower.
ii)
Better publicity, Seminar and workshop on loan and advance may brighten the situation highlighting the needs, and problems of the borrowers.
iii)
Virtually for the interest of the borrower and intending borrower, more funds should be shifted to this branch considering the needs and requirement of that branch.
8.3
iv)
Steps should be taken to solve the problems of the borrower.
v)
Efficient and motivated man power for sanctioning loan
vi)
Selection of genuine borrower through fair investigation
vii)
Spot investigation for loan allotment
viii)
Prompt services are given to the borrower
ix)
Strong monitoring should be ensured for proper utilization of Loan
x)
To remove the limitation of managerial activities.
xi)
To take proper legal action against defaulter loanee.
xii)
To reduce political pressure
xiii)
To increase awareness of loanee about refunds the loan.
Conclusion
Bank distribute loan among various loanee and take all out efforts to recovery it. This is called credit management. Credit management is the principal function of a bank and large portion of bank income generated from loan disbursement and recovery. Bank should always remember that his dealing loan by money collected from others bank and depositors should always not only be attractive to higher yielding loan proposal but also bank should seriously think about whether the granted loan will be recovered timely or not. If bank once fail to recover loan will fail to meet depositors demand.
This branch has not yet produced better performance in recovering those loans given to small borrowers. The major causes behind this low recovery are poor implementation of loan procedures and policy by the bank. The branch should take care of this very important aspect to baking for its smooth survival in the coming days. So, we can say, that the overall efficiency of credit management system of RAKUB, Paba branch is not highly satisfactory position. But hopeful news is to us that the RAKUB, Paba branch has begun to earn profit and it become a model branch of RAKUB.
APPENDICES i) Balance Sheet Particulars
30 June 2005 (Taka)
Assets: Cash in hand (including foreign currency) Balance with Bangladesh Bank & Sonali Bank Balance with Other Bank & Financial Institution Investment Loans and Advances Land, Building & other fixed Assets Other Assets Total Assets Liabilities & Capital: Borrowing from other Bank and Agents Deposits and other Accounts Other Liabilities Total liabilities Capital Paid-up Capital Other reserves Profit & Loss Account Total Shareholders Equity Total Liabilities & Shareholders Equity Total Off Balance Sheet Items Contingent Liabilities
30 June 2004 (Taka)
8,84,01,903
6,12,45,244
85,75,20,735
92,69,23,085
19,450,23,771
252,49,39,590
344,99,04,412 2142,78,26,619 6,44,94,604 255,18,76,319 3038,50,48,363
343,67,18,512 1832,66,49,701 5,97,69,778 265,28,70,011 2798,91,15,921
1594,88,98,940 1157,80,52,369 295,62,93,686 3048,32,44,995
1383,12,66,442 1080,72,90,823 308,23,73,628 2772,09,30,893
150,00,00,000 20,84,90,150 (180,66,86,782) (9,81,96,632)
150,00,00,000 20,84,90,150 (144,03,05,122) 26,81,85,028
3038,50,48,363
2798,91,15,921
52,60,75,006
7,16,14,419
ii) Profit & Loss Account Profit & Loss Account as on 30 June 2005 Particulars Interest Income Less: Interest paid on Deposit and
30 June 2005 (Taka) 148,57,61,793 101,05,45,779
30 June 2004 (Taka) 166,62,46,029 97,39,99,600
Borrowing Net Interest Income Income from Investment Commission, Exchange & Brokerage Other Operational Income Total Operational Income Salary and Allowances Rent, Taxes, Insurance, Lighting etc. Law charges Postage, Telegram, Telephone and Stamp Stationary, Printing and Advertisement Pay and Allowances of Managing Director Audit Fee Directors and Local Committee Members Fee Expenditure for Interest Remission & Write off Depreciation and Repairs of Bank Property Other Expenses Total Operational Expenses Profit/ (Loss) before Provision Profit/ (Loss) before Tax Profit/ (Loss) after Tax Surplus
47,52,16,014 32,10,201
69,22,46,429 35,99,384
2,57,98,144
2,98,36,570
8,81,95,651 59,24,20,010 53,27,24,584
5,64,73,847 78,21,56,230 48,05,62,375
3,40,96,178
2,79,09,020
18,78,566
7,55,111
58,44,069
74,67,919
1,26,35,564
1,36,10,338
3,54,799
3,46,680
8,49,000
10,00,000
3,12,919
2,21,271
32,94,06,474
15,13,40,026
82,51,565
79,08,568
3,24,47,952 95,88,01,670 (36,63,81,660) (36,63,81,660) -
4,27,81,892 73,39,03,200 4,82,53,030 4,82,53,030 4,82,53,030 4,82,53,030
Select Statistics as on 30 June 2005 Particulars
Paid-up-Capital Total Capital Capital Surplus (Deficit) Total Assets
30 June 2005 (Taka) 150,00,00,000 (9,81,96,632) (212,41,00,000) 3038,50,48,363
30 June 2004 (Taka) 150,00,00,000 26,81,85,028 (150,55,00,000) 2798,91,15,921
Total Deposit Total Loans & Advances Total Contingent Liability Loan Deposit Ratio Ratio of Classified Loan against Total Loan & Advances Profit/ (Loss) before Tax Amount of Classified Loan Provision for Classified Loan Provision Surplus/ Deficit Cost of Fund Interest Earning Assets Non Performing Assets Return on Investment (ROI) Return on Assets (ROA) Interest on Investment Income per Share Income per Share Income Price Ratio
1157,80,52,369 2142,78,56,619 52,60,75,006 01:00.5
1082,03,40,444 1832,66,49,701 7,16,14,419 01:00.6
01:00.3
01:00.4
(36,63,81,660) 640,74,86,000 165,23,22,000 0 6.60% 1643,08,59,947 980,27,16,410 4.53% (-) 1.21% 32,10,201 0 0 0
4,82,53,030 730,15,19,000 174,71,94,000 0 97,39,99,600 1102,51,30,701 730,15,19,000 35,99,384 175,25,56,446 35,99,384 0 0
iii) Questionnaire 1. What are the historical backgrounds of RAKUB? 2. What are the main objectives of the bank? 3. What are the functions of the Bank? 4. What are the capital structure and the sources? 5. Who are the regulatory bodies of the bank? 6. What is the organizational structure? 7. How many employees are working in the bank? 8. How many branches of RAKUB have regulating now? 9. Have RAKUB any office automation system? 10. What is the auditing system of RAKUB? 11. What is the accounting period? 12. How annual report submitting?
13. What plan RAKUB takes for development? 14. When established Paba branch? 15. How much area recovered by the branch? 16. What is the organizational structure of the branch? 17. How many employees working in the branch? 18. What types of accounting procedure followed by the Paba branch? 19. How record day to day transaction? 20. What is bank credit? 21. What is the importance of bank credit? 22. How many types of credit? 23. What is overdraft and doubtful loan? 24. What is credit management? 25. State the rate of interest indifferent types of loan? 26. How does takes decision about the selection loanee? 27. What are the features of loanee? 28. Documentation and security against loan. 29. Sector wise loan disbursement target & achievement given during last four years. 30. Procedure of disbursement. 31. What are the problems of loan disbursement? 32. What are the policies of loan recovery? 33. Please explain the recovery policy followed by your bank. 34. Sector wise recovery target& achievement given during last five years. 35. Terms and conditions for various types of loan. 36. Causes of defaulter. 37. Causes of low recovery. 38. Steps taken for high recovery. 39. Which sector has highest recovery? 40. What incentives are given for early payment of advances? 41. How the project appraisal is done before giving loan?
42. How the supervision is made after giving loan? 43. How do you fixed-up the installment of the loan? 44. How to over come the disbursement and recovery problem?
REFERENCES 1.
Annual report of RAKUB Paba branch Rajshahi- 2001-2002 to 2005-2006.
2.
Annual report of RAKUB - 2005-2006.
3.
Dr.A R Khan, -Bank Management.
4.
K.c. Shekhar, -Banking Theory and Practice.
5.
KOTHARI-CR -Research Methodology.
6.
Loan manual (Part-I) published by-RAKUB, 7 January 1987.
7.
Managerial Effectiveness: A Case Study of Bangladesh Karishi
8.
The Ordinance of Rajshahi Krishi Unnayan Bank, 1986.
9.
W M H JAIM & M L RAHMAN, -Disbursement and Recovery of Agricultural Credit in Bangladesh.-- A Macro Level Analysis.
10.
Web site of RAKUB (www.rakub.org.bd)