Credit Management at Rupali Bank Limited

Conceptual Framework

Credit is general sense means an act of allowing person or persons immediate use of money with payment deferred until an agreed future date.

Steps in Credit Operations

Client of the bank A/C
Receiving loan application
Collecting necessary information
Credit analysis
Taking final decision
Preparing documents
Sign of agreement and loan disbursement
monitoring and supervising the implementation of loan agreement

Considerable factors of sanctioning advances

1. Liquidity

2. Safety

3. Solvency of Client

4. Honesty of Client

5. Profitability

6. Qualities of Security

7. Marketability of Security

8. Business efficiency of client

Two Kinds of Securities followed by Rupali Bank

1. Primary Security :

Five Cs Approach to follow the Rupali Bank Limited in Loan Sanction :

Character
Capital
Collateral
Capacity
Capability

2. Collateral Security

* Land

* Pledge

* Mortgage

* Hypothecation

Small and Medium Enterprise

Small and medium Enterprise Financing contributes to a positive impact in the economy of the country. In developing countries like Bangladesh, the demand for expanding SME business is increasing day by day. Even the donors are also encouraging to expand the volume of such kinds of business to face the challenge of poverty and to create employment opportunities in the country. Rupali Bank Ltd. also play a vital role in this sector and can help to promote the expansion of SME business in the country.

Activities & Achieving of SME in 2011

SME circular issued for extending SME

Publishing loan policy guideline brochures and booklest encompassing the procedure for entrepreneurs seeking loan, loan proposal preparation, sanction and disbursement of SME loan.

Field level executive and officers have been empowered for approval loan within short time

Young officers have been trained in SME program and services to proper entrepreneurs

Formation of SME monitoring cell in all divisional workstation and corporate branches for running SME activities

In the year 2011 TK 274.52 crore has been disbursed to 2287 clients

Project supported by Rupali’s SME financing support are supposed to generate 6610 permanent and 3018 temporary employment position

Successful participation of RBL on several SME fair conducted by NASIB in collaboration with Bangladesh Bank

Target for SME loan disbursement in the year 2012

The SME sector loan disbursement target set by Rupali’s board for 2012 is taka725 crore

The plan aim at promoting women entrepreneurs increasing loan distribution to the manufacturing sector and reaching the target through prompt activities financial solvency of the low income peoples alleviate poverty and increase employment with the help of SME

Strengthening 45 clusters for cluster based financing development of f sustainable and competent opportunities through technology development and expansion development of entrepreneurs experience reducing risk of loan and in general starting from introduction of product development

Planning for special upgraded training for development of bank officials in the year 2012

There are four Product under SME financing.

These are

Sahaj Rin

Sulav Rin

Businessman Rin

Majhari (medium) Rin

Sahaj Rin

Loan facilities up to 2.00 (two) lac

Proprietorship and partnership firm only included in this scheme

Loan will be approved by branch manager (But loan information must be furnished by weekend)

Personal guarantee of a solvent family member and 3^rd party guarantee of an acceptable individual or collateral security of equal value of loan will be taken against this loan.

A plan about the use of loan will be taken by borrower. And how much worker / employee (Full time or part time) will be employed should be mentioned in this plan.

Post dated cheques equivalent to loan installment with interest and one cheque covering full loan from borrower.

Loan processing fee TK= 1000/=(Nonrefundable)

Trade license, photograph, partnership deed (if applicable) stock report, Income& Expenditure statement will be taken from borrower.

Term loan (1-3) year by monthly or quarterly installment and exiting rules will be applicable in case of working capital / continuous loan.

Interest rate 15 % (changeable), 1% rebate in case of regular payment.

Interest rate 14% in following specialized sectors.

Solar installation.

Bio-gas based project.

Agro – based project.

Skillness (at least three months Training from government approved institution

Women enterprenure can get loan up to10,00,000(ten lac)without any security& interest rate is 14%

Sulav Rin:

Loan facilities up to 5.00 (five) lac

Proprietorship & partnership firm included in this scheme. Besides professionals (engineer, doctors, lawyers etc.) will be given priority.

Inially branch manager will approve and Zonal head will counternigh after verification

Personal guarantee of a solvent family member and Declaration of asset (equimlent to loan amount) must be given. 3^rd party guarantee of an acceptable individual to Bank will be taken.

A plan about the use of loan will be taken by borrower. And how much people (full time or part time) will get employment opportunity should be mentioned in plan.

Post dated cheques equivalent to loan installment with interest and one cheque covering full loan will be taken from borrower.

Loan processing fee TK = 5000/=(Nonrefundable)

Trade license, Rupali Bank account, photograph, partnership deed (if applicable) stock report will be taken

Term loan (1-4) years by monthly or quarterly installment and exiting rules will be applicable in case of working capital / continuous loan.

Interest rate 15 % (changeable), 1% rebate in case of regular payment.

Interest rate 14% in following specialized sectors.

Solar installation.

Bio-gas based project.

Agro – based project.

Female entrepreneur will get 10.00 lac loan facilities under this scheme by complying same formalities.

Business Rin

Loan facility up to 3 (three) crore.
Approval authority
Managing director : Above 30.00 to 3.crore
DGM (Zonal head): Upto 30.00 lac
AGM: Upto 20.00 lac

Personal guarantee of a solvent family member and collateral security of forced sole Value equivalent to loan.

A detailed plan about the objective, uses and payment of loan must be submitted. How much people will get employment opportunity (full time or part time) must be mentioned in this plan.

Post dated cheques equivalent to loan installment with interest and one cheque covering full loan will be taken from borrower.

Loan processing fee TK = 10000 /= (Nonrefundable)

Business license, trade license, Rupali Bank account, photograph, partnership deed (if applicable) Income expenditure statement, stock report, and personal networth statement will be furnished.

Interest rate 15 % (changeable), 1 % rebate in case of regular payment
Interest rate 14% in following specialized sectors.
Solar installation.
Bio-gas based project.
Agro – based project.

Mazhari (medium) Rin

Loan facility above 3.00 core to 20.00 core.
Approval authority – board of directors
Personal guarantee of a solvent family member and collateral security of force sale value 1:1.25]
A plan about the objective, use and payment of loan will be taken from borrower. How much people (full time or part time) will work in this project must be mentioned in this plan.
Post dated cheques equivalent to loan installment with interest and one cheque covering full loan will be taken from borrower.
Loan processing fee TK = 15000 /=(Nonrefundable)

Business license, trade license, Rupali Bank account, photograph, partnership deed (if applicable), profit and loss statement, memorandum or article of association, audited balance sheet, financial statement, stock report, and other related paper will be furnished.

In case of term loan period will be 1 – 5 years by monthly or quarterly installment and in case of working capital, existing rules will be applicable.

Interest rate 15 % (changeable), 1 % rebate in case of regular payment.
Interest rate 14% in following specialized sectors.
Solar installation.
Bio-gas based project.
Agro – based project.

Household loan (consumer financing)

People of developing countries like Bangladesh earn low income. They can not purchase household item like TV, refrigeration, Air cular etc. in spite of being necessary. For this reason they cannot improve their life standard. In order to help people specially limited income service holder to buy household item Rupali Bank Ltd. introduce this loan scheme.

Objectives of scheme

To help people / service holder in buying house item.

To help people / service holder in improving life standard

Qualification of applicant

Employee of government institution, semi government, sector, corporation and autonomous body, state owned commercial banks and insurance company, universities, government college, government school and madrasha , teacher of government primary, member of armed forces (military, BGB, Police and Ansar)

Besides Executives of NGOs, professional (doctor, engineer, lawyers, chartered accountant, journalist etc.) and business.

Age of applicant: Age limit will be from 21 to 55 years.

Usages of loan

Only in buying household item- such as refrigerator, TV, DVD, motorcycle, washing machine, ac, sewing machine, personal computer

Type of household item & highest loan limit

Sl. No.	Types of item	Highest limit	Down payment	Interest	Period
1	Refrigerator	25000	25%	16%	2 years
2	Color TV	20000	25%	16%	2 years
3	Motorcycle,	50000	25%	16%	2 years
4	Personal computer	75000	25%	16%	2 years
5	Washing Machine	20000	25%	16%	2 years
6	Furniture	36000	25%	16%	2 years
7	Air Cooler	30000	25%	16%	2 years

Principles of Borrower Selection

Incase of borrower mentioned in 2.1 serial, personal guarantee of employer/departmental head must be taken, loan proposal will be considered according to their recommendation and guarantee. Personal guarantee from an acceptable person to bank in case of borrower mentioned in 2.2.

Rules of application

Applicant must apply with prescribed bank form mentioning name, address, monthly salary etc. At least 3 quotations of desired articles will be submitted with application. Price of articles will be paid to seller/ supplier through bank draft/cheque/pay order. Cash memo will be in the name of bank and it will be changed in favour of client after realizing payment of bank.

Loan approval power