Internship Report on Core Risk Management Practices of Sonali Bank Limited

An internship program is very important & essential for acquiring experience through learning and spreading the scope of Knowledge. I have done my internship program in Sonali Bank Campus Corporate Branch, Dhaka.

This internship Report is aimed at providing a comprehensive picture to the areas of core risk management of Sonali Bank. The Report has been divided in to five parts. These are: 1) Introduction, 2) An Overview of Sonali Bank, 3) Asset Liability Management, 4) Credit Risk Management, 5) Foreign Exchange Risk Management 6) Money Laundering Risk Management 7) Internal Control and Compliance 8)Findings, Recommendation, Conclusion and References.

Sonali Bank is the largest commercial Bank of Bangladesh. The Bank is fully owned by the government of the People’s Republic of Bangladesh. The main objective of the Bank is to provide all of banking services at the doorsteps of the people. The Bank also participates in various Social and Development programs and also takes part in implementation of various policies and promises made by the Government.

The most important financial institution in the financial system is the Central Bank, the government agency responsible for the conduct of monetary policy, which in our country is the Bangladesh Bank. Because monetary policy affects interest rates, inflation, and business cycle, all of which have a major impact on financial markets and institutions. Banks are financial institutions that accept deposits and make loans. In recent years, there are

huge risks involved in the banking activities due to interest rate fluctuation, volatility of stock market, high inflation rate etc that affect on profit. To avoid wild swings in profitability resulting from the environment, financial institution must concentrate how to cope with increased risks.

Bangladesh Bank, the central bank of Bangladesh sets guideline for the financial institutions to operate effectively in the financial activities. Out of the guidelines, one major issue is “Core Risk Management”. It involves 5 (Five) areas of risk management of financial institutions as follows;

1.Asset Liability Management

2.Credit Risk Management

3.Foreign Exchange Risk Management

4.Money Laundering Risk Management

5.Internal Control and Compliance

In this report, I analyze the above risk management in Pubali Bank Limited and to what extent it is followed as well as the current performance based on Financial Statements. Generally speaking this analysis is used to show banks risk management process, assets and liabilities are management procedure.

In this report I mention the overall performance of Sonali Bank for the economic development of Bangladesh.

I also mention the findings of my report and describe the recommendation to overcome the limitation.

I have taken all the reasonable care to ensure the accuracy and quality to make the report standard. And I believe that it has included all the necessary information to be relevant, reliable and useful.

Banking is one of the most important sectors for country’s wealth building activities. Commercial banks are certainly profit making Financial Institutions. These institutions play great role in the money market of every economy.

Due to globalization, technological innovation and deregulation the banking system all over the world has been changing rapidly. Now a day’s banks have to compete in the market place not only with local institutions but also with foreign financial institutions.

Sonali Bank Limited is one of the leading commercial bank in Bangladesh. Its pioneer role in handling foreign trade and foreign exchange transactions ever before independence of the country still remains unchallenged. With wide network of branches at home and also a large number of correspondent banks worldwide it is singularly handling the largest volume of export-import business including homebound remittances.

For this reason Foreign Exchange of Sonali Bank Limited is very much essential. But now a day the banking sector of Bangladesh is suffering from the diseases of default culture which is the consequence or result of bad performance of most of the banks.

Sonali Bank Limited is playing an important role toward the growth and economic development of Bangladesh.

As a part of fulfilling the requirements of completing the degree of BBA I was placed in the Risk management Division of Sonali Bank Limited under the internship program of the Department of Finance, University of Dhaka. During the six weeks of internship in the said division, beside regular job orientation, the topic of study that was officially assigned to me was “Core risk management of Sonali Bank Limited”.

As my program director directed me to present the report in different way that will be based on the personal observations from every department. I have described every department by following way: