Internship report on Credit Management System of Bank Asia Limited

The new millennium is characterized by competition in all areas of business including banking business. A bank must innovate and evolve to be a leader with a unified goal of greater customer outreach and satisfaction.

Bank Asia Limited is one of the few banks permitted by the Bangladesh bank in the late 90s. In the beginning of 2001 Bank Asia acquired the operations of the Bank of Nova Scotia in Bangladesh. In September 2001 a Memorandum of Understanding was signed with the Muslim Commercial Bank Limited (MCB) of Pakistan to take over their operations in Bangladesh. Eventually MCB’s operation ware taken over through acquisition with effect from January 1, 2010. These events are mile stone in the forward march of the bank, first of their kind in Bangladesh and have added new dimensions to the banking industry in the country. The acquisitions have provided wider access to Bank Asia regionally and internationally and helped the Bank to expand its clientele.

Bank Asia has already shown impressive performance in relation to loan and advance on credit. Bank Asia’s credit mission is to actively participate in the growth and expansion of our national economy by providing credit to viable borrowers, efficiently delivered and competitively priced. Bank Asia has initiated some credit policies and procedures. This credit guideline begins with customer inquiry, and if satisfied then the process of credit progresses into approval stage. Client selection is the most important part of the credit guideline. If the credit officer makes a wrong judgment about a client, it could be vital for the Bank. Therefore, much emphasis is put on the selection process of the client and to make the correct decision different types of documents are also collected from the client. Based on those documents and on field investigation, the final decision is made by the approval authority. After the sanction of the loans, continuous monitoring is initiated to minimize the chance of credit default.

The market capital of Bank Asia is high and it is showing a growing trend of deposits and loans and advances made. The Bank’s assets also increased at a high rate and the profit after tax is also at a moderate level compared to its peer group – the third generation banks. Though the number of bad loan in Bank Asia is very low, its finance management is not impressive. The asset management of the Bank is pitiable and it is not able to meet the expectation of the investors by having a low return on equity than its peer group average – Brac Bank, Jamuna Bank, and Mercentile Bank. Hence, the Bank requires having more control over the assets utilization; monitor its expenditures and commencing marketing strategy in order to attract more investors and customers.

Nevertheless, the bank has a strong participation in fund syndication with other banks. It also is involved in international trade through which it contributes to the national economy of the country. Through all these myriad activities Bank Asia Limited has created a positive impact in the banking sector. 

Bank Asia Limited is a scheduled Bank under private sector established under the ambit of bank Company Act, 1991 and incorporated as a Public Limited Company under Companies Act, 1994 on September 28, 1999. Since its humble beginning, it set milestone by acquiring the business operations of the Bank of Nova Scotia in Dhaka, first in the banking history of Bangladesh. It again repeated the performance by acquiring the Bangladesh operations of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank. During this short span of time the Bank had been successful to position itself as a progressive and dynamic financial institution in the country. The Bank had been widely acclaimed by the business community, from small entrepreneur to large traders and industrial conglomerates, including the top rated corporate borrowers for forward-looking business outlook and innovative financing solutions. Thus within this very short period of time it has been able to create an image for itself and has earned significant reputation in the country’s banking sector.
by Anower Hosen