This internship report is prepared on the basis of my three months particle experience at BASIC Bank Limited (Gulshan Branch). The internship report is on “Credit Management of BASIC Bank Limited”. It covered its overall position as well as an overview of this Bank.
BASIC Bank is meant to patronize mainly the small industries of Bangladesh and that is why its credit policy obligates to forward at least 50% of its Total Loans and Advances to small industries. BASIC Bank channels its loans through a number of ways which can be divided into General and Trade Financing (Import & Export). General Loan includes – OD, CC, Term Loan etc. whereas Trade Financing includes L/C, B2B L/C, PAD, LTR, LIM and so many others. A number of steps are followed while granting loan to a client some of which claim more attention are - calculating the creditworthiness of the clients, his ability to create sufficient cash flow to repay the loan i.e. project appraisal, proper securitization and documentation of the loan and strict follow-up activities to ensure that the loan is being used for which it meant.
Credit is the most fundamental issue in our banking sector. Default culture is the most common phenomenon in the banking sector of Bangladesh. Like other Govt. banks, private banks also suffer from this problem. But, the Credit Management in BASIC Bank is relatively sound compared to all other similar banks operating in the country. As a result, the bank has a very low rate of classified loans, which is around 4% only.
Since the process of recovery of classified loan involves lengthy legal procedures, the percentage of recovery of such loans is very low. BASIC Bank therefore emphasizes on persuasion rather than going for legal action in order to recover its classified loans. Bank considers the practical aspects of the projects being sick and extends further finance or reschedules the repayment period.
Thus, BASIC Bank is playing a pivotal role in developing and promoting the small scale industries in Bangladesh which hardly draw the attention of today’s private commercial banks as they are now aggressively consumer loan oriented. At the same time, it’s also serving the interest of its shareholders (Govt.) as well as other stakeholders by making a handsome return on its investments.
Now we are living in the age of competition at anything in any places. From that tendency recently Education is also in the age of competition. So the procedures and standards of teaching are upgraded by different universities and institutions in our country. In respect to that, internship is mandatory for our M.B.A program offered by University of Dhaka. This program is a partial fulfillment of our M.B.A curriculum. To do so I decided to complete my internship in BASIC Bank Limited. In connecting, HRD of BASIC Bank Limited sent me to the Gulshan Branch and assigned to prepare this report.
Internship program is the practical aspect of our theoretical learning. It makes a bridge between the gap of classroom learning and practical learning. In this view, Internship plays a pivotal role for each professional degree like M.B.A. The study will help formulate suitable policies taking into consideration different ideas, suggestions and feelings of the customers and bankers. Further more, it may note that BASIC Bank executives who are really executing the policies undertaken by the top management will have a chance to communicate their interaction and provide necessary feedback.
The Report mainly focuses on the following areas:
ü The kinds of credit facilities extended by BASIC Bank Limited.
ü General procedures for getting those credit facilities.
ü What kinds of standard documents are required for getting those credit facilities
ü How different kinds of projects are appraised and financed at BASIC Bank Limited.
ü Present scenario of recovery rate and classified loan of BASIC Bank.
The major limitations of this study are:
Ø Sufficient records, publications were not available as per my requirement.
Ø Time constraint.
Ø Non-cooperative behavior of some officials of the bank.
Ø 3 months are very short time to prepare this.
Ø Lack of opportunity to work in all the departments for a longer time.
Ø Lack of opportunity to visit more than one branch.
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