PERFORMANCE OF UCB

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Performance of United Commercial Bank

1. ORGANIZATION OVERVIEW United Commercial Bank Limited is a scheduled commercial bank registered by the Bangladesh Bank. United Commercial Bank follows the rules and regulations prescribed by the Bangladesh Bank for Scheduled commercial banks. The functions of the bank cover a wide range of banking and functional activities to individuals, firms, corporate bodies and other multinational agencies.

The prime objective of United Commercial Bank is to serve the people for attainment of their economic goal and success in life here and hereafter. United Commercial Bank Limited stands not only for material well-being but also for ethical development of its customers. The Government of Bangladesh has licensed United Commercial Bank Ltd. (UCBL) as a private commercial bank, which is focused on the established and emerging markets of Bangladesh.

United commercial Bank has started their operation in Bangladesh as a local bank in 1983 under company Act 1994. UCBL has Tk. 1000 million as authorized capital and Tk. 230 million as paid-up capital.

The Bank has made a significant progress within a very short period of its existence and occupied an enviable position among its competitors after achieving remarkable success in all areas of business operation. The Bank is operating its business according to maintain all the rules and regulations that the Government of Bangladesh imposed for sound performance in the Banking Industry.

1.1 History of UCBL United commercial Bank Ltd. is one of the leading private commercial bank in Bangladesh. It sponsored by some dynamic and reported entrepreneurs and eminent industrialists of the country and also participated by the eminent. UCBL started its operation in the mid 1983. It renders banking services to its customers. With an outstanding lance, the company is heading towards the new millennium though focusing on leadership, service innovations and all other is required for earning excellence and continued growth. This is offering service-keeping harmony with the changing demands customers and is getting customer satisfaction by assuring quality and by delivery better service value comparing with its competitors.

The emergence of UCBL in private sector is an important event in the arena of Bangladesh. It has been able to establish the network of 102 branches throughout the country. A team of highly qualified and experienced professionals headed by the Managing Director of the Bank who has vast banking experience bank and at the top there is an efficient Board of Directors for making policies.

With its firm commitment to the economic development of the country, the Bank has already made a distinct mark in the realm of Private Sector Banking through personalized service, innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a leading role in the economic activities of the country, is firmly engaged in the development of trade, commerce and industry thorough a creative credit policy. UCBL currently works with 329 correspondents covering 102 countries. Moreover, the Bank has arrangement with a number of Exchange House at Singapore, U.A.E, Oman, Qatar, and Kuwait to facilitate remittances from expatriate Bangladeshis. UCBL offers various types of products and services include Western Union money transfer, SMS banking, and online services, debit card, credit card, dual currency VISA credit card, various deposit schemes etc.

They have total online banking facilities along with no charge in the local transactions. They have 10 (Ten) Automated Teller Machine (ATM) Booth in Chittagong Sylhet and Dhaka Division. But they also have the contract with Dutch Bangla Bank Limited to use their booths in all over Bangladesh by the UCBL customers. With its firm commitment to the economic development of the country, the Bank has already made a distinct mark in the realm of Private Sector Banking through personalized service, innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a leading role in the economic activities of the country, is firmly engaged in the development of trade, commerce and industry thorough a creative credit policy.

1.2 Vision United Commercial Bank Limited wants to be the market leader in the local banks in Bangladesh. Their target is to be the highest profitable bank in local banking sector.

1.3 Mission • • • • • •

To provide quality services to customers To set high standards of integrity To make quality investment To ensure sustainable growth in business To ensure maximization of Shareholders' wealth To ensure human resource development to meet the challenges of the time

1.4 Strategies  To strive for customers best satisfaction & earn their confidence  To manage & operate the Bank in the most effective manner

 To identify customers needs & monitor their perception towards meeting those requirements  To review & updates policies, procedures & practices to enhance the ability to extend better services to the customers  To train & develop all employees & provide them adequate resources so that the customer’s needs are reasonably addressed  To promote organizational efficiency by communicating company plans, polices & procedures openly to the employees in a timely fashion  To cultivate a congenial working environment  To diversify portfolio both the retail & wholesale markets

1.5 Motto •

happy banking

1.6 Values of the UCBL

• • • • • •

Put customer first Emphasize on professional ethics.

Maintain quality at all levels Believe in being a responsible corporate citizen Say on the believes Foster participative management

1.7 Branch information of UCBL UCBL has 105 Branches in Bangladesh

Total Branch: 09

Total Branch: 14

Total Branch: 40

Total Branch: 34

Total Branch: 07 Total Branch: 01 Year

2006

2007

2008

2009

2010

No. of Branches

80

80

84

84

107

1.8 Special Features of the UCBL  It has been performing commercial banking activity and striving to introduce dynamic Banking functions.  It is the pioneer in introducing and launching different customer friendly deposit schemes to tap the savings of the people for channelizing the same to the productive sectors of the economy.  For uplifting the standard of living of the limited income group of the population the Bank has introduced Consumer Credit Schemes by providing financial assistance in the

form of loan to the consumers for procuring household durables, which have had encouraging responses.  The Bank is committed to continuous research and development so as to keep pace with modern technology.  The operations of the Bank are fully computerized so as to ensure quick, prompt flawless and services to the customers.  The Bank has introduced camera monitor system (CCTV) to strengthen the security services inside the Bank premises.

1.9 Credit Rating United Commercial Bank Limited was rated by Credit Rating and Information Services Limited (CRISL). In their report on April 2009, they rated the Bank as AA- for long term and ST-2 for short term. The gradation in long term rating has been done in consideration of its good capital adequacy, appropriate asset quality, increased non funded business and sound liquidity position.

The short term rating indicates high certainty with regard to the obligators capacity to meet its financial commitments.

2.1 BOARD OF DIRECTORS: Chairman Mr. M. A. Hashem Vice-Chairman Mr. Kazi Enamul Hoque Chairman, EC Hajee Yunus Ahmed Chairman, Audit Committee Mr. Md. Jahangir Alam Khan Managing Director Mr. M. Shahjahan Bhuiyan

2.2 Organizational Chart of United Commercial Bank Ltd. Chairman Board of Directors

Sponsors Managing Director

Deputy Managing Director GSD, CAD, A&I, CB, D&M

Senior Executive Vice President

Deputy Managing Director ID, IT, CREDIT, R&P

Executive Vice President Senior Vice President Vice President First Asst Vice President

Asst. Vice President Executive Officer Senior Officer Management Trainee Officer Officer Junior Officer

Abbreviations: GSD – General Service Division CAD – Central Account Division ASI – Audit and Inspect CB – Central Bank D&M – Developing and Marketing ID – International Division R&P – Research & Planning

2.3 United Commercial Bank Limited at a glance Name of the Company

United Commercial Bank Limited

Commencement of Business 1983 Head Office

CWS (A) Dhaka-1212.

1,

Telephone No.

01710 36 66 66

Website

www.ucbl.com

SWIFT

UCBLBDDH

E-mail

info@ucbl.com

Chairman

M. A. Hasem

Managing Director

M. Shahjahan Bhuiyan

Auditors

Md. Jahangir Alam Khan M. A. Sabur (Director) Mrs. Qamrun Nahar (Director)

No. of Branches

102

No. of ATM Booth

10

No. of Employees

2485

Stock Summary: Authorized Capital

Tk. 1000 million

Paid up Capital

Tk. 230 million

Face Value per Share

Tk. 100

3.1 Analysis and Interpretation of the Data Main Departments of United Commercial Bank Ltd.

Road

#

34,

Gulshan

Avenue

(Uttara Branch)

3..2 PRODUCTS & SERVICES OF UCBL UCB Multi Millionaire UCB Money Maximizer UCB Earning Plus UCB DPS Plus Western Union Money Transfer SMS Banking Serving Online Service Credit Card One Stop Service Time Deposit Scheme Monthly Savings Scheme Deposit Insurance Scheme Inward & Outward Remittances Travelers Cheques Import Finance Export Finance Working Capital Finance Loan Syndication Underwriting and Bridge Financing Trade Finance Industrial Finance

Foreign Currency Deposit A/C NFCD ( Non Resident Foreign Currency Deposit Account ) RFCD ( Resident Foreign Currency Deposit Account ) Consumer Credit Scheme Locker Service

3.3 FEATURES OF CORE PRODUCTS & SERVICES OF UCBL 3.3.1 UCB Multi Millionaire UCBL provides an opportunity to be a millionaire at maturity by depositing a certain amount in monthly basis.

Maturity of this scheme: • 5 – 10 years • 7 – 12 years • 10 – 15 years Value at Maturity • Minimum 10 lacs • Maximum 1 crore Special features • 90% margin for loan against the scheme • Minimum amount of loan is Tk. 50,000 • One person can open more one scheme

3.3.2

UCB Money Maximizer

UCBL provides an opportunity to get double amount of deposited money at maturity by depositing in monthly basis.

Maturity of this scheme: • 8 years Value at Maturity • Double of deposited amount Special features • 90% margin for loan against the scheme • Minimum amount of loan is Tk. 50,000 • One person can open more one scheme

3.3.3

UCB Earning Plus

UCBL provides an opportunity to withdraw an attractive amount of profit in every one or three months by depositing a specific amount of money.

Maturity of this scheme: • 3 years • 5 years Value at Maturity • Minimum Tk. 50,000 • Maximum a multiplier of Tk. 50,000 Special features • 90% margin for loan against the scheme • Minimum amount of loan is Tk. 50,000 • 0.10% extra interest is provided for elder person ( age: 55 year or above) • One person can open more one scheme 3.3.4

UCB ONLINE

We are happy to announce that UCB has stepped into the electronic banking age. Now, you can deposit and withdraw cash, get mini statement, check balance and even transfer money within your accounts and pay installments from any of the branches with online facility. This is just beginning of our any branch banking under which other branches will come soon.

For the convenience of our valued customers, this is the way UCB would like to modernize it and serve them better by introducing state-of-the-art banking concept as the first generation local private bank.

3.3.5

SMS Banking Service

The Application form must be filled up & sent directly to United Commercial Bank and not by facsimile. The Bank may require three working days after receiving the Application Form for activation of the service.

The account holder is solely responsible to stop misuse of SMS Banking Services and also to maintain the confidentiality of his/her financial information by ensuring safe holding of the mobile phone/connection assigned to SMS Banking Service provided by United Commercial Bank. If the Mobile Phone/ Connection is lost, stolen or sold to another individual, the account holder shall immediately notify the Bank and cancel the SMS Banking Service. The account holder hereby agrees that United Commercial Bank shall not be responsible for any disruption in SMS Banking Service due to any mechanical failure on the part of United Commercial Bank/Mobile Phone Service Provider.

Registration form should be submitted to the branch, where the account is maintained.

SMS Banking Service shall remain effective until otherwise advised in writing by the account holder.

The Bank may revise and/or change any of the Terms & Conditions at any time with notice to you but does not require any consent.

By providing SMS Banking Service United Commercial Bank may collect service charge from the linked account. United Commercial Bank may revise and/or change the service charge at any point of time.

3.3.6(a)

CREDIT CARD

Features of UCB Credit Card:  Truly global - Locally & internationally transactable with the same card. This is a dual product.  Higher coverage of acceptance globally in POS terminals & ATMs.  Latest & best quality product at lowest price (annual fee) in the market.  Reward point for spending leads to wining of attractive prizes.  Choice of colors in Classic (Silver) products.  Credit Card for ladies - first time in Bangladesh.

Product Type & Annual Fees: Card Type

Fee

VISA Classic Blue - Local

Tk. 800/-

VISA Classic Blue - Dual

Tk. 1,700/-

VISA Classic Blue - International

Tk. 1,500/-

VISA Gold - Local

Tk. 1,800/-

VISA Gold - Dual

Tk. 3,000/-

VISA Gold - International

Tk. 2,800/-

VISA Classic Black - Local

Tk. 1,000/-

Supple Card - Local Classic

Tk. 500/-

Supple Card - Local Gold

Tk. 750/-

Supple Card - Dual/Int'l Classic

Tk. 1,000/-

Supple Card - Dual/Int'l Gold

Tk. 1,500/-

ERQ Cards

$75/=

Minimum payment per month

3%

3.3.6(B) Documents Required for UCB Card 1. Salaried: a) Two copies of passport or stamp size photograph b) Latest Salary Certificate or pay slip c) Personal bank statement for last 6 months d) TIN Certificate photocopy e) Passport photocopy (first 5 pages & last 3 pages)

2. Self Employed (Proprietorship): a) Two copies of passport or stamp size photograph b) Trade License photocopy c) Personal bank statement for last 6 months d) TIN Certificate photocopy e) Passport photocopy (first 5 pages & last 3 pages) 3. Self Employed (Partnership): a) Two copies of passport or stamp size photograph b) Trade License photocopy c) Partnership deed photocopy d) Personal bank statement for last 6 months e) TIN Certificate photocopy f) Passport photocopy (first 5 pages & last 3 pages) 4. Self Employed (Limited Company): f) Two copies of passport or stamp size photograph g) Memorandum of Association Personal bank statement for last 6 months h) TIN Certificate photocopy i) Passport photocopy (first 5 pages & last 3 pages)

4. “UCB AUTO LOAN

Maintaining a car now a days is no more a luxury but an essential part of daily working life to add speed to its performance and taking this as view United Commercial Bank Ltd. has introduced ‘UCB Auto Loan’. Potential users of personal cars can contact any of the branches of the bank for availing the facility within shortest possible time at very easy terms.

4.1 SCHEME INFORMATION 1. Customer segment of auto loan: Any Bangladeshi (single and jointly with other coowners/co-borrowers e.g. spouse also) to be more specific the falling group of people will be eligible for UCB Auto loan.

Professional (a)Doctor b) Engineer

c) Accounts Self- Employed: Businessman (in business at least for 2 years), land lord having significant rent income etc Salaried people: a) Employees of Govt/Semi Govt/Autonomous body b)) Employees of financial institution c) Employees of different public limited company/private limited Company having corporate structure d) Teacher of any School/collage/university 4.2Purpose of UCB AUTO loan Purchasable Car Brand New or Reconditioned • Private Car • Microbus • Jeep • Pick-up van Eligibility • Age between 20 to 55 years • Permanent employees of  Govt., Semi Govt. and Autonomous Bodies  Banks and financial institutions  Teachers of University, School, College  Executives/Officers of Multinational Companies and renowned NGOs • Worthy businessman having trade license, VAT certificate and TIN • Professionals like Physicians, Engineers, etc.

Ceiling  Maximum 80% for Private Car, Microbus, Jeep  Maximum 60% - 70% for Van Period  Maximum 5 years for brand new  Maximum 4 years for reconditioned Down payment • Minimum 10 % for brand new • Minimum 20 % for reconditioned Profit Rate or Interest Rate • Private Car, Microbus, Jeep - 15% • Van - 16%

Insurance • It is mandatory for the client to take an insurance against the car.

• UCBL specified some insurance company from where the clients have to take the insurance for their car.

Special Feature • Registration cost and comprehensive insurance cost can be included in the total cost • 1.00% rebate, if all the installments are paid in due time Nationality Bangladeshi only Minimum income TK. 20000 for salaried individuals and TK40000 for the business man.

Loan size: TK.2000000 For both brand new& Recondition cars.

Debt Equit ration Loan amount will not exceed 80% of the vehicle price.

Maximum term of loan: 05 (five) years.

Repayment method: Equal monthly installments based on the tenor of the loan Security/collateral A. Hypothecation over the car (registration of the vehicle in the joint name of the bank) B. First part comprehensive insurance of the car.

C. Post dated cheques based on the loan tenor.

D. Additional security in the form of personal guarantee may be obtained of.

E. Parents or an individual having minimum solvency/income not less than that of the borrower supported by income proof Legal documents A. Duly filled of car loan application form terms and condition signed.

B. Demand Promissory Note.

C. Letter of set-of.

D. Irrevocable letter of authority to repossess the vehicle.

E. Ownership transfer form signed by customer.

F. Letter of offer with full terms and conditions stated therein and dual accepted.

Disbursement mode After loan approval vendor will receive a facility confirmation letter. On the basis of that vehicle will be registered in joint name of the bank. Upon submission of registration vendor will be paid the total value of the vehicle in the form of pay order. Customer should pay the downpayment/total value prior to issuance of faculty confirmation letter Verification of personal details and quotation.

A. Details of an applicant to be verified of a third party/internal assessment officers before an approval accorded B. Letter from employed with details of employment and salary.

C. Borrower and guarantors details both present and permanent all telephone numbers of residence office and mobile number.

D. Personal net-worth statement.

Substantiation of income Proper substantiation of income will be mandatory. All or any of the following original/true copy of original documents are accepted for the purpose.

A. Bank statements for minimum 6 months.

B. Personal net-worth statements.

C. Any other document that may stand as a proof of income such as last tax return deed of enfant agreement etc.

5. Different Consumer Scheme of UCB Ltd.  Doctor’s Loan of UCB Ltd. This is a new product of UCB. With the emerging concept of global village the medical profession is becoming sophisticated. In our country the number of doctors is higher than other professionals. The doctors need money to purchase modern medical equipments to provide better services to the patients. UCBL launched the doctor’s loan to promote the health services of our country Eligibility of applicants: 1) Bangladeshi citizen 2) Minimum graduate in medical science 3) Allopathic medical professionals 4) Adequate earning capacity to service the loan 5) Within 25 to 65 years Purpose of the loan: 1) To set up and renovate chambers 2) To purchase medical equipments Loan features: (in broad sense) Loan limit-----------------------BDT 5 Lac to 10 Lac Down payment-----------------10%

Interest rate---------------------17% Service charge------------------1% on the loan amount Risk fund------------------------1% on the loan amount

 Loan Against salary of United commercial Bank Ltd. Life is full of surprises. We often tumble into unforeseen cost that leaves the fixed income people unprepared. To support the fixed income people in those sudden events UCB launched “Loan against salary”. This product is tailored to provide loan to fixed income people against salary to mitigate any emergency need.

Eligibility of the applicants: Only salaried employee within the age limit of 21-65 years can apply for this loan.

Security and documents: I. 24 post dated cheques.

II. Letter of undertaking of the employer to deposit monthly installments directly to the bank and to adjust the outstanding loan amount from the employee’s terminal service benefits in case of early separation from the current organization III. Terminal service benefits are to be lien against the loan.

Loan features: Loan limit----------------------- 3 Lac (If the account is in UCBL bank salary account than 8times or if the account is in other bank than 6times Loan period---------------------3; Interest rate---------------------17% Service charge------------------1% on the loan amount Risk fund------------------------1% on the loan amount Remarks: Loan against Salary is a special retail product united commercial bank limited which is only for Service holder’s .In the last 2 years disbursement amount is not satisfactory.

However the bank should try to attract new customers by altering this loan features such as by better pricing & repayment periods. Recovery percentage under this loan is very good.  Any purpose loan of UNITED COMMERCIAL Bank Ltd. United commercial Bank introduces this loan scheme very recently. The loan scheme is under the retail credit scheme of UCBL. Purpose of the loan: The purpose of the loan is basically to meet the need of cash money in the time of emergency.

Eligibility of the applicants: Any people with a stipulated fixed income within the age limit of 25-65 years can apply for this loan.

Loan features: Loan limit-----------------------BDT up to 3 Lac (Monthly income minimum 10000 to 12000tk) Loan period---------------------3 years Interest rate---------------------17% Service charge------------------1% on the loan amount Risk fund------------------------2% on the loan amount Security and documents: a) b) c) d) ďƒ˜ ďƒ˜

One socially recognized personal guarantor Letter of introduction from the employer Salary certificate Application for the loan with specification of the purpose of the loan \Maximum 80% for Private Car, Microbus, Jeep Maximum 60% - 70% for Van

Marriage Loan

This scheme is to meet the fund requirement for marriage purpose of salaried person in Govt. /Semi govt. /Autonomous bodies/ Multinational Co./Banks/Insurance/Financial Inst. /Educational Inst. with confirmed 3-years service ahead and businessman having adequate cash flow.

Travel Loan This scheme is for meeting fund for travel purpose of salaried person in Govt./Semi govt. /Autonomous bodies/ Multinational Co./Banks/Insurance/Financial Inst./Educational Inst. with confirmed 3-years service a Loan Limit and Period of Loans

Type of Customer

Loan Limit

Duration of the Loan

Salaried Person/

Tk. 2,00,000

3-yrs

\ Businessman

Tk. 2,00,000

3-yrs

Education Loan: Purpose of the loan: For educational purposes like study in abroad or within the country.

Eligibility of the applicants: Any people with a stipulated fixed income within the age limit of 25-65 years can apply for this loan.

Loan features: Loan limit-----------------------BDT up to 5 Lac Minimum income: Tk.10000 for salaried individuals and Tk.15000 for businessman Loan period---------------------4 years Interest rate---------------------17% Service charge------------------1% on the loan amount Risk fund------------------------2% on the loan amount

Loan Limit and Period of Loans Type of Customer Salaried Person

Loan Limit

Duration of the Loan

Tk. 5,00,000

2-yrs

Required Documents 01.

Employer Certificate Photocopy of Tin Certificate, if any Photocopy of Passport, Telephone(T&T) Bill, if any

02.

03.

Security 01.

02.

Personal guarantee from an individual having means, standing and social status acceptable to the bank and another from his/her family Undated cheques in favor of the Bank covering the whole amount

5.1 Required documents for the scheme 1) Photograph of client (Two Copies) attested by the client 2) Quotation of Car accepted by client 3) Photograph of two guarantors (Two Copies each) 4) Income Expenditure Statement with supported documents 5) Visiting Card (Client & Guarantors) 6) CIB of client and Guarantors 7) Salary Certificate of client & guarantors 8) TIN certificate 9) Copy of National ID Card for client & guarantors 10) Net worth statement of client and Guarantors 11) Bio-data of the client & guarantors 12) Other Income with supported documents 13) Other Bank’s Liability 14) Others Bank statement 15) Memorandum & Article of Association for Business purpose car loan 16) Company profile, if applicable 17) Trade license 18) 3 years financial statement 19) Vat registration certificate

6. PERFORMANCE ANALYSIS 6.1 PORTFOLIOS UCBL Total Investment Portfolio of 2009

Sl. NO. Modes of Investment

Taka in million

1 2 3 4 5 6 7 8

30.3 32.5 37.2 35.1 54.1 259.2 21.6 15.3 485.3

UCB Money Maximizer UCB Multi-millionaire UCB Earning Plus UCB DPS & DPS Plus UCB Auto Loan UCB Home Loan UCB Any-purpose Loan Other Investment Total

Percentage of Total Investment 6.24 6.70 7.66 7.23 11.15 53.41 4.45 3.16 100.00%

6.2 COMPARISON WITH OTHERS Bank Name

Loan maximum (TK/-)

limit Period

20,00,000

5 years

5 years

16%

75%

20,00,000

15,00,000

6 years

5 years

14% 15%

75% 80%

20,00,000 20,00,000

20,00,000 20,00,000

5 years 6 years

5 years 6 years

16% 15%

80% 75%

20,00,000 20,00,000

20,00,000 20,00,000

6 years 5 years

5 years 5 years

15%

90%

20,00,000

20,00,000

5 years

6 years

Recondition

20,00,000

Brand new

80%

Recondition

Range of loan amounts of total cost

15%

Brand new

(Per Annum)Interest Rate % United Commercial Bank Ltd. Mercantile Bank Ltd. Trust Bank Ltd. Dhaka Bank Ltd. One Bank Ltd. HSBC Bank Ltd. Standard Chartered Bank Ltd.

6.3 Trend of UCB Auto Loan from 2006 to 2010(November)

This Line chart shows us the financial growth Trend of the “UCB Auto Loan” from 2006 to 2010(November). And we can find that the Trend is gradually increasing from year to year. That Means it is growing from 2006 to 2010.

7. SURVEY REPORT Frequency Table Name of the respondents Gazi Abdur Rob Lutfor Rahman Mawlana Kazi Mujibur Rahaman Md. Shamim Istiaq Md. Zillur Rahman Mridha Mr. Md. Iftakher Hossain Harun Mr. Nazmul Kabir Mr. Syed Golam Mawla Total

Frequency

Percent

Valid Percent

Cumulative Percent

1

12.5

12.5

12.5

1 1 1 1 1 1 1 8

12.5 12.5 12.5 12.5 12.5 12.5 12.5 100.0

12.5 12.5 12.5 12.5 12.5 12.5 12.5 100.0

25.0 37.5 50.0 62.5 75.0 87.5 100.0

In this survey we have chosen eight individual people, those have taken the “UCB Auto Loan” in year 2010 by using stratified sampling method.

Occupation

Businessman Service-holder Total

Frequency 7 1 8

Percent 87.5 12.5 100.0

Valid Percent 87.5 12.5 100.0

Cumulative Percent 87.5 100.0

Occupation Businessman

Service-holder

In this Survey eight respondents were chosen & they have different occupations. From them 87.5% Businessman & 12.5% Service-holder. It is revealing from the study that most of the investors of UCB Auto Loan’s are Businessman. ď ś Have you taken car loan from which bank?

UCBL

Frequency 8

Percent 100.0

Valid Percent 100.0

Cumulative Percent 100.0

The purpose of the study was to indentify whether the loan borrowers of this scheme have taken any loan from the other banks for the same reason. However it is found that none of the loan borrowers have taken loan from the other bank except United Commercial Bank Limited.

Because the Clients are loyal to the Bank, they have to do some other transactions with the bank & they want to make a good relation with the bank.

 Did you have any account in this bank?

Frequency 8

Yes

Percent 100.0

Valid Percent 100.0

Cumulative Percent 100.0

All respondents said ‘yes’, they had to open a bank account in United Commercial Bank Ltd. Because it is mandatory & it also provides some help to the Clients & the Bankers for doing any kind of transition.  Was it mandatory to have an account in this bank?

Yes

Frequency 8

Percent 100.0

Valid Percent 100.0

Cumulative Percent 100.0

All respondents said ‘yes’, opening a bank account was mandatory.  Did you have to full fill the bank's requirements for this loan?

Yes

Frequency 8

Percent 100.0

Valid Percent 100.0

Cumulative Percent 100.0

All respondents said ‘yes’ & full filling the bank's requirements were mandatory not only for UCBL but also for all banks. And this rule remain unchanged now on.  What was your monthly income level?

Income level 40,000 TK/50,000 TK/60,000 TK/70,000 TK/80,000 TK/90,000 TK/More than 90,000 TK/Total

Frequency 1 1 1 1 2 1 1 8

Percent 12.5 12.5 12.5 12.5 25.0 12.5 12.5 100.0

Cumulative Percent 12.5 25.0 37.5 50.0 75.0 87.5 100.0

This Pie chart shows that the income level of the respondents is differ from each other. It is found that all of the respondent’s monthly income is more than 40,000 TK/-.

It is found that 50% of respondents had taken this loan for 1 time, 37.5% for 2 times & 12.5% for 3 times. It differs from their needs of the vehicle. ď ś You had taken loan for how many cars?

Number of Cars 1 2 3 Total

Frequency 4 3 1 8

Cumulative Percent 50.0 62.5 100

Percent 50.0 12.5 12.5 100.0

It is found that the respondents had taken loan for as many cars as their need. The pie chart shows that 50% had taken by one respondents & rest of the respondents had taken at the rate of 12.5%. ď ś For which type of vehicle you had taken this loan?

Private Car Jeep Microbus Total

Frequency 5 1 2 8

Percent 62.5 12.5 25.0 100.0

Cumulative Percent 62.5 75.0 100.0

United Commercial Bank Ltd. gives Car loan for 3 types of vehicle- Private Car, Jeep & Truck.

It is found that according to the Borrowers need they had taken loan for different kinds of vehicles. And the percentage is 62.5% for Private Car, 12.5% for Jeep & 25% for Truck. So the highest rate of loan browed for the Private Car. ď ś Had you taken loan for-

Brand new car Recondition car Total

Frequency 2 6 8

Percent 25.0 75.0 100.0

Valid Percent 25.0 75.0 100.0

Cumulative Percent 25.0 100.0

From the survey it found that the most of the loan borrowers had taken this loan for commercial purpose & as we now the intention of all commercial organization is how minimize cast. So in here we found that the percentage rate for the Recondition Car is high 75% & only 25% for the Brand new Car. Though in our country people are naturally like to use the Recondition car, so That may be another reason behind this highest rate. ď ś What was the profit/interest rate for this loan?

15%

Frequency 8

Percent 100.0

Cumulative Valid Percent Percent 100.0 100.0

All respondents said that they had taken the loan in 15% rate of interest/profit from the UCBL. Here we found that the rate is fixed but sometimes it can be changed according to the roles under the purpose of taking loan, that mean Personal purpose & Commercial purpose. In Commercial purpose the rate should be higher that the Personal purpose. However here the respondents said the rate is fixed. It all depends on the Banks roles & regulations.  What was the range of loan amount on total cost?

Loan-able fund on Total cost 90% 80 % 70% 60% TOTAL

Frequency 2 3 1 2 8

Percent 25.0 37.5 12.5 25 100.0

Cumulative Percent 25.0 62.5 75.0 100.0

Maximum time bank sanctions 80% loan on total car-purchase amount but only for Brand-new car they allow 90% loan on total car-purchase amount.  What was the loan amount (TK. in Lac)?

(Tk. in ‘Lac’)

Frequency

Percent

Cumulative Percent

1 to 5 5 to 10 10 to 15 15 to 20 Total

1 5 1 1 8

12.5 62.5 12.5 12.5 100.0

12.5 75.0 87.5 100.0

It is found that the highest loan amount is not-more than 20, 00,000 Tk/-. Car is the long term asset, so investors had to invest a handsome amount of money for this Investment Scheme. ď ś What was the period limit of the loan?

4 years 5 years TOTAL

Frequency 4 4 8

Percent 50.0 50.0

Cumulative Percent 50.0 100.0

50% respondents said that the period limit of the loan is 4 years & bank allow highest 5 years period limit. ď ś What was the rate of Down payment or 1st installment?

Frequency

Percent

Valid Percent Cumulative

20%

8

100.0

Percent 100.0

100.0

All respondents said that the Down payment or 1st installment rate was 20%.  Did you paid installment-

Yearly Monthly Total

Frequency 2 6 8

Percent 25.0 75.0 100.0

Cumulative Percent 25.0 100.0

All respondents said that the UCBL gave them the opportunity to pay the installment in yearly or monthly basis. But for that they have to follow the banks instructions.  Did you paid all installment in due time?

Yes

Frequency 8

Valid Percent Percent 100.0 100.0

Cumulative Percent 100.0

Here is no Loan borrowers have been found that which payments were due. Because they know that if they had any due then they have to bear some penalty & its rate is 1% to 1.5%.  What will be your satisfaction level for this loan?

Excellent Good Moderate Total

Frequency 6 1 1 8

Percent 75.0 12.5 12.5 100.0

Cumulative Percent 75.0 87.5 100.0

Here it is found that the satisfaction level of the Clients differs from each other. The Clients satisfaction level depends on many reasons. Like as• Service of the bank • Length of the process • Excess papers of documents • 3rd party’s involved etc.

8. SOWT ANALYSIS SOWT means• Strength • Weakness • Opportunity • Threat According to my survey I am going to find out the SWOT analysis of “UCB Auto Loan” of United Commercial Bank Ltd. 8.1 Strength  It provides a average range of loan & interest rate  It provides a sweet able time limit  It provides some special features  It gets some advantages to attract the client because of religious perspective 8.2 Weakness  Some commercial banks charge less interest rate than this bank  Some commercial banks provides more rage of loan amount than this bank 8.3 Opportunity • Bank provides a pleasant service for the customers • It has lots of branches & all branches practice “UCB Auto Loan” • It providing some special features, but they can offer some extra features 8.4 Threat • Some foreign banks provides some special features • Low Investors/ Clients for this scheme • Flowing the same rate for this scheme from the last 3 years

9.Findings • • • • • • • •

It is a lengthy process.

To get the loan Client have to open an account in the bank Bank provides average range of loan amount.

In yearly they get low Investors/ Clients for this scheme Bank is flowing the same rate for this scheme from the last 3 years.

The Banks in Bangladesh has faces a lot of illegal pressure from Political persons, Directors and Management of the Bank for approval of loan. In that cases UCBL also are bound to approve the loan without any assessment and rationality for them.

The risk managers have often insufficient time for credit risk management. Huge workload and hurries for loan approval prevent them from through assessment. So, it is very troublesome to manage the risk in a prudent manner for the risk managers.

A third party (CPV- Contract Person Verification) verifies the account holders or grantors all documents as the relevant required document are perfect or not perfect. In CPV there

is no one for bank and customers. Banks have to depend on CPV verification to approval the loan.

10. Recommendations • • • • • • • • •

The process of sanctioning an auto-loan is very time consuming. Management should give more effort to reduce the time of processing a loan.

The branch manager should have some discretionary power to sanction the Auto loan.

They should renew their Scheme rate by proper authorization of Bangladesh bank.s They should create awareness among the new investors for this Scheme by providing some advertisement in newspaper, magazine or in other media.

The Auto Loan Policy of the Bank is very complicated. Bank need to make it easy and understandable. So that all credit officer can understand the instruction and follow this instruction correctly at the time of risk management.

The management must be careful to sanctioning that auto-loan which is recommended by powerful bodies. Because these loans sometimes become more risky.

To reduce the auto-loan risk the original documents of the client must be verified thoroughly. If manager sanction the auto-loan without the verifying original documents, that may involves more risk.

To reduce the default risk the repayment capacity of loan of the auto-loan client should be properly investigated. Otherwise, here have the chance to default.

Bank has a few numbers of tools and techniques such as DBR (Debt-Burden Ratio) to assessment the auto-loan risk. Bank need to introduce new and advance risk assessment tools and techniques.

11.CONCLUSION It is a great pleasure for me to have practical exposure in United Commercial Bank Limited, Uttara Branch. Because without practical exposure it could not be possible for me to compare the theory with practice, and it is well established that theory without practice is blind.

Its performance specially based on prompt and swift services is busier than other department of United Commercial Bank Limited of Uttara Branch & the Bankers are maintaining a peaceful & reliable relation with the clients or customers.

In a word, the performance of United Commercial Bank Limited, Uttara branch is growing rapidly and the volume of remittance is increasing effectively.

At last it can be said that, United Commercial Bank Limited will be turned into a dynamic Islamic Bank in the country and will expand its Banking Business all over the country to provide the banking services to the groups including the deserving Economic groups of the society who have no easy access to the banking channel. This will help for alleviation of the poverty, income generation, creation of employment opportunity, up-gradation of the standard of living of the lower economic groups, which will also contribute to the emancipation of national economy of the country.