Performance Evaluation of Pubali Bank Limited

The main objective of this report is to analysis Performance Evaluation of Pubali Bank Limited, here focus on the general process of banking of banking in different departments like General banking, Loans and advance division and foreign Exchange etc. Other objectives of the report are comply with the entire branch banking procedures and analyze the performance of the branch as well as Uttara Bank Limited as a whole. Major focus on Performance Evaluation of general banking is the core banking facilities that provided by the branch to its customers.

Objective of the Study

• To comply with the entire branch banking procedures.
• To make a bridge between the theories and practical procedures of banking day to day operations.
• To analyze the performance of the branch as well as Uttara Bank Limited as a whole.
• To have some practical exposures that will be helpful for my courses in the MBA program.

Methodology of the study

The study requires a systematic procedure from selection of the topic to final report preparation. To perform the study the data sources are to be identified and collected, they are to be classified, analyzed, interpreted and presented in a systematic manner and key points are to be found out. The over all process of methodology is given in the following page in a form of flow chart that has been followed in the study.

Data sources: Essential data sources both primary and secondary are identified which will be needed to complete and work out the study. To meet up the need of data primary data are used and study also requires interviewing the official and staffs were necessary. The report also required secondary data.

Information collected to furnish this report is both from primary and secondary sources:

 i) The primary sources are:

• Face to face conversation with the officers
• Practical desk work
• Relevant files study as provided by the concerned officers.

ii) The Secondary sources are:

• Annual reports of PBL.
• Periodic reports of PBL.
• Annual Reports of Bangladesh Bank (BB).
• Publications of Bangladesh Bank (BB).
• Office circulars of PBL.
• Publicly published documents.
• Relevant books, newspapers, journals, etc.

Collection of data: Primary data are collected by using interviewing technique. The    reports are an exploratory research and for qualitative survey open ended question were ask to the Bank official.

Classification, analysis, interpretations and presentation of data: some arithmetic and graphical tools are used in this report for analyzing the collected data and to classifying those to interpret them clearly.

Bank Profile

History of Pubali Bank Limited

After liberation the eastern mercantile bank was converted into Pubali Bank and was taken under the government management because the government policy was nationalized of all financial institutions. The objective was strengthening the rural economy. The result of the policy was a mixed one. In late 70s when the government wanted to establish a market oriented economy with less public sector role. As pert of the privatization and liberalization process this bank was denationalized in the year 1983. It started function as a public limited company Limited and registered as Pubali Bank Limited. All liabilities and asset of the bank is transferred to the limited company.

The bank was incorporated under the Companies Act (Act VII) of 1913 as a limited company having its Head Office in Dhaka. The Bank started functioning with the approval of Bangladesh Bank under the guidelines, rules and regulations given for scheduled commercial banks in Bangladesh.

Vision

To excel as private Commercial Bank in Bangladesh with meticulous observance of rules and regulations and ensure commitment to corporate social responsibility.

Mission

To be the most admirable private commercial Bank in the country. To get recognition as a dynamic, innovative and customer supportive Bank. To maintain continuous & steady growth with utmost transparence and to diversify development of resources. To enhance continuous development of information & technology to meet the demand and challenges of the time.

corporate Objective

• Growth
• Value addition
• CSR
• Quality Standard

Financial Analysis of Information

General Banking

Introduction

General banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issues bank drafts and pay orders etc. Since bank is confined to provide the services everyday, general banking is also known as ‘retail banking’.

According to World Bank, the general people understand the depositing and withdrawal of money and credit financing. But Bank performs numerous types of services. To deal these services bank has to maintain many register/ ledger and documents.

Token Issue

The token issue department uses a register book and different types of tokens decorated with different letters for different types of accounts. There are two types of tokens. One is for savings A/C and another is current / other accounts.

Procedure

The client will encash money from his account will show his cheque to the respective officer of the desk. The officer will give him a token with particular number after being sure of his two signatures on the back of the cheque. The officer will give him a token with a particular number on the back of the cheque. The client will then proceed on for encashment. The officer then gives an entry about the token number, account name and the amount in the column of the register book.

The token will be checked by the responsible officer for maintaining at the end of each business day. Tokens are then handed over to the supervising official concern to keep them in a locked box. Tokens are checked once a month by the supervising officer in charge wheather tokens is ok or not. When a token is lost it is informed to the head office for a matter of precaution.

Maintenance of the subsidiary register for receipt of cheques, drafts :

At the counter every cheque, demand draft and other credit instrument tender for the credit of the customers account will be delivered. Deposits received by post will sent by the receiving officer to the bills department against acknowledgment of the dealing officer. The dealing officer is concerned here about four types entries. They are

1. Local Clearing
2. IBC (Inter Branch Collection )
3. SC (Short Collection )
4. BT (Bank Transfer)

In case of local clearing one bank sends money by  cheque or DD which will be collected in the name of the account holder of this branch. This cheque or DD will be be taken to the clearing house where agents of all banks exchange these instruments. Important thing is that the paying Bank must be in the local area (Dhaka). In case of IBC the branches must be of the same banks for short collection, the paying banker is in the area other than Dhaka whereas bank transfer will be between two accounts of the same branch.

The dealing officer of this desk should be aware of the following things about instruments:

• Name of the account is very clearly written on the deposit slip.
• Full particulars of the deposit instruments such as cheque numbers, name of bank, etc are properly recorded on the paying slip as required.
• The pay in slip has been signed by the depositor.
• Full particulars of the railway receipts and instruments of title goods, bills of exchange, invoice etc. associated with an inland documentary bill received from the depositors direct at the counter or by post from other branches/ banks endorsement thereon.
• All cheques, bills and other instruments are crossed with crossing seal .

After categorizing all the instruments and checked out the preliminary mandatory things, the dealing officer gives entries in the appropriate column of subsidiary ledger for crediting the accounts.

Account Opening Section

When a customer want to open a deposit account in bank, he/she will have to go the A/C opening section to know the rules and regulations for opening account and to have the set of documents required. Since PBL is an authorized dealer it can open deposit A/Cs denominated both in Taka and approved foreign currencies.

Deposits are like raw materials out of which credits are created. Deposit accounts are one of the important sources of funds. In order to attract customers the banks offer different facilities to various types of account holders. Competition in accepting deposits takes two forms:

(a) Improvement in customer service

(b) Offer a higher rate of interest.

In our country PCBs and foreign banks are appreciated to attract deposit because of their superior customer services. PBL principal office branch with its traditions customer service approaches faces difficulties to draw attention of new customers.

Main functions of account opening are given below:

• To give answers to the queries regarding account opening
• To supply the appropriate type of account opening form
• To put a/c number from a computerized sheet on advice of new account
• To input date into computer from a/c opening form.
• To maintain and update the a/c opening file for different types of accounts.
• To maintain a register for cash type of recording details of a/c opening
• To supply deposit slip books and cheque book on requisition
• To act on request for closing and transferring of deposit a/c
• To act on request for closing and transferring of deposit a/c

Classification of Customer

1. Individual (personal)
2. Proprietorship (Sole traders)
3. Partnership firms (Register or Unregistered)
4. Joint Stock Companies ( Private Limited and Public Limited )
5. Municipalities/Municipal Corporations/Local Bodies etc.
6. Clubs / Societies / Associations /School / Colleges / Universities etc.
7. Executors /Administrators
8. Trustees
9. Illiterate persons
10. Constituted Attorney
11. Wage Earners

Different types of A/C of PBL B.B. Avenue Branch

1. Current A/C : Interest free and generously withdraw able
2. Saving Bank A/C: Interest bearing and checkable with some restriction
3. Short Term deposit: Usually interest bearing and with draw able on short notice.
4. Fixed deposit: Interest bearing and definite period like one year or six month.
5. Non Resident foreign currency deposit: All non residents of Bangladesh can open this interest bearing account in the form of term deposit with a minimum amount of $1000 or equivalent.
6. Private Foreign Currency A/C: Bangladeshi National residing abroad or foreign nationals may open this a/c with deposit mode from inward.
7. Convertible Take Amount: A type of non-interest bearing current a/c designed specially for foreigners living here.
8. Private foreign Currency A/C: Bangladeshi nationals residing abroad or foreign nationals may open this a/c with deposit mode from inward.

Documents required for opening new account

Documents Common for all types of Account & Customers

1. Advise of New Account
2. Specimen signature cards
3. Account Opening Agreement Form
4. Photographs of Account Holder
5. Deposit Slips Book
6. Cheque book Requisition slips
7. Letter of mandate is required where necessary.

Precautionary Measures of A/C Opening:

1. Soon after the opening of a new Account a letter of Thanks should be sent to the introducer.
2.  A letter of thanks as per prescribed should also be sent to the account holder immediately upon opening the account, under registered post with a/c for verification of postal address as well as genuineness of the Account holder.
3. In case of a new account is opened a proprietorship / partnership firm, having local business address, a responsible officer of the branch will inform the firm to obtain the confidential report on the firm.

Formalities for opening Current A/C and STD A/C:

These accounts are meant for business firms and corporate bodies. Initial deposit requirement is Tk 5000 in addition to common documents required to open a saving a/c following additional documents will be required for depending upon the nature of the organization.

Joint Account of two or more persons

Mandate for Operation of Account: A clear authority by all the joint A/C holders containing instructions as to who will operate the account and how the account is to be operated should be obtained. The mandate should mention the name of the persons authorized to draw check. In case of death, insanity, insolvency of one or more of the joint a/c holders, the authority will cease to operate:

For sole traders:

1. Trade license
2. A certificate with tax identification number from income tax authority

Seal: In case of current account an agreement to accept all responsibilities for all over draws, interest cost and expenditures

For Partnership firms:

1. Trade license
2. Notarized deed of partnership

A mended in agreement form regarding operation of the account signed by the entire partnership firm

1. Sale/ Stump of the firms
2. 2 copy photo of all partners

For Private and Public Limited Companies

1. Memorandum and Articles of association
2. Certificate of incorporation

Certificate of commencement of business if it’s Public limited

1. Copy of board resolution to open a/c certificate by the chairman and secretary
2. Power of attorney to operate a/c in favor of any one or more of directors.
3. Balance sheet and income statement

Formalities for opening Private foreign currency A/C

Foreign Currency account may be opened in US dollar, Pound Sterling, Douche Mark and Japanese Yen. Credit may be made to this A/C against inward remittance from abroad. Usually this a/c operated like a current a/c but no checkbook are issued against his a/c. Withdrawals may be made through withdrawals slips. Interest may be paid on this a/c if it is maintained in the form of term deposit for a minimum of 90 Day’s Bangladeshis’ living abroad can open even without initial deposit. A nominee can be appointed.

Documents required: When an eligible person is interested to open an F/C account his passport is to be checked and signature verified. When he is staying abroad his signature is to be verified and attested by –

1. Bangladeshi embassy on that country
2. His banker in this country
3. Notary public of that country

Following documents are needed to:

1. Photocopy of 1^st 4 pages of passport
2. Photocopy of visa and work permit

Nominees photo and account no.

Declaration of source of income

Issue of Duplicate cheque book

Duplicate cheque book in lieu of lost one should be issued only when A/C holder personally approaches the bank with an application. Fresh Cheque Book in lieu of lost one should be issued after verification of the signature of the Account holder from the

Specimen signature card and on realization of required excise duty only with prior approval of manager of the branch. Cheque series number of the new cheque book should be recorded in ledger card signature card as usual. Series number of lost cheque book should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.

Closing of Account

Upon the request a customer an account can be closed. After received an application from the customer to close an Account, the following procedure are followed by a Banker.

The customer should be asked to draw the final cheque for amount standing to the credit of his a/c by deducting the amount of closing and other incidental charges.

In case of joint a/c the application for closing the a/c should be signed by all the joint holder.

Clearing Section

The Cheque Clearing Section of PBL principal office branch sends Inter Branch Debit Advice (IBDA) to the Head office on the receiving day of the instruments. The main Branch takes those instruments to the Clearing House on the following day. If the instrument is dishonored, Head office of PBL, sends IBDA to the PBL, Principal Office branch. The total procedure takes three days if everything goes orderly.

The Cheque Clearing Section of PBL, Principal Office branch sends Outward Bills for Collection (OBC) to the concerned Paying Bank to get Inter Branch Credit Advice (IBCA) from the paying Bank. If the instruments are dishonored by the Paying Bank, the Paying Bank returns it to the PBL, Local Officer Branch describing why the instruments are dishonored. The procedure takes around a week.

The Cheque Clearing Section of PBL, Principal office branch sends Outward Bills for Collection (OBC) to the concerned paying Branch to get Inter Branch Credit Advice (IBCA) from the paying returns it to the PBL, Local Office branch describing why the instrument is dishonored.

Local Remittance Section

Local Remittance is used to transfer of funds denominated in Bangladesh Taka between banks within the country. It is an order from the Issuing branch to the Drawee Bank/ Branch for payment of a certain sum of money to the beneficiary. The payment instruction is sent by Telex / Telegram and funds are paid to the beneficiary through his account maintained with the Drawee branch or through a pay order if no a/c is maintained with the drawee branch.

Demand Draft ( DD )

Demand Draft is an instrument containing an order of the Issuing branch upon another branch known as Drawee branch, for payment of a certain sum of money to the payee or to his order on demand by the beneficiary presenting the draft itself.

Precautions for  Demand Draft

1. Get the application form properly filled up and signed by the applicant.
2. Complete the lower portion of the Application form meant for Bank’s Use.
3. Calculate the total amount payable including Bank’s commission/charges etc.
4. If a cheque is presented for the payment of the DD officer should get the cheque duly passed for payment by the competent authority and record the particulars of DD on the back of the cheque.
5. If the purchaser desires his account with the branch to be debited for the amount of DD the officer should get the A/c holder’s signature verified properly, from signature card on record of the branch and debit client’s a/c for the total amount including commission charges etc.
6. If cash deposit is desired, request the purchaser to deposit the money at the Teller’s counter.
7. The teller, after processing the application form, cash or cheque, will validate the Application form.
8. The first copy of the Application form is treated as debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the Applicant as customer’s copy.

Each branch maintains a running control serial number of their own for issuance of DD on each Drawee Branch. This control serial number should be introduced at the beginning or each year which will continue till the end of the year.

Pay Order

Pay order issue process

For issuing a pay order the client is to submit an Application to the Remittance Department in the prescribed form (in triplicate) properly filled up and duly signed by application. The processing of the pay order Application form, despot of cash/cheque at the Teller’s country and finally issuing a order etc, are similar to those of processing of L.D Application.

As in case of L.D each branch should use a running control serial number of their own for issuance of a pay order. This control serial number should be introduced at the beginning of each year which will continue till the end of the year. A fresh number should be introduced at the beginning of the next calendar year and so on.

Charges

For issuing each pay Order commission at the rate prescribed by Head Office is realized from the client and credited to Income A/c as usual.

Entries

Dr. Teller’s Cash/client’s a/c

Cr pays Order a/c

Cr commission a/c

P.O issue Register

The remittance Department will issue the pay Order’s duly crossed “A/c payee” and will enter the particulars of the P.O Issued in the prescribed P.O Register duly authenticated.

Payment of pay orders

As the P. Os crossed A/c payee, the same are presented to the Issuing branch for payment either through clearing of for credit to the client’s A/c. Os when presented for payment are processed in the Remittance Department. On making payment, the relative entry in the P.O Register is marked of by entering the date of payment in the P.O Register duly authenticated. The paid instrument is treated as Debit Ticket.

Refund of Pay Order

The following procedure should be followed for refund of pay order by cancellation

1. The purchase should submit a written request for refund of pay order by cancellation attaching therewith the original pay order
2. The signature of the purchaser will have to be verified from the original application form on record.
3. Manager/Sub-manager’s prior permission is to be obtained before refunding the amount of pay order cancellation.
4. Prescribed cancellation charge is to be recovered from the application and only the amount of the pay order less cancellation charge should be refunded.
5. The pay order should be affixed with a stamps “ cancelled” under should also be canceled with RED ink but in no case should be torn. The canceled pay order should be kept with the relevant Ticket.
6. The original entries are to be reversed with proper narrations.
7. Cancellation of the pay Order should also be recorded in the pay order Issue register #Issue and payment of Pay-order:

Strictly speaking pay-order is not meant for remittance. Because it is payable by the issuing branch.

Loans and Advances

Introduction

Major source of income of a bank is the earning from credit. Borrower selection is the main and prime task of this department. Advancing loans is the primary function of the commercial banks. Without loans country’s industrial and commercial development is not possible. Therefore, smooth loan system in banking sector is a catalyst for economic development of a country.

Manager’s Concern

In the process of loan Manager has to ensure three things:

• How to locate purpose
• How to locate security
• How to locate borrower

How to locate purpose

Manger has to ensure that the loan will generate adequate cash. For that matter the loan should be engaged in productive activities. Such an employment will increase economic activities, promote trade and commerce, create employment avenues and increase movement of goods and flow of cash. This flow of cash is known in the banking concept as cash generation. If there is enough cash generation, funds will automatically flow into the borrowers accounts with the bank and will show a satisfactory turnover in accounts which the lending bank always demands. This is why the manager’s speculation should be making the highest cash through the employment of the advances.

How to locate security

As soon as the evaluation of purpose is done manager will examine and evaluate in the following manner the securities offered by the prospective borrower:

1. Security is the source of information on the prospective borrower. If offered are valuable properties like land, building, shares of stocks or pledged goods, these will offer adequate information about the borrower as to his financial position.
2. If securities are hypothecated stocks of raw materials for production, these will offer adequate information about the borrower as to his ability or capacity to utilities
3. Securities (tangible or intangible) offer a yardstick for measuring the extent of involvement of the borrower himself. The lending bank’s investment of funds is a joint venture of the banker and the borrower. The securities offered are the borrower’s portion of involvement i.e. his equity or capital. Thus the greater is his involvement, the better for the banks. The borrower in that case will think twice that if the business goes wrong, it is who will suffer most. Thus it will be in his own interest that he will avail and utilize the loan as per agreed stipulations. Thus the best way to safeguard the lending banks interest is, as far as possible to maximize the banks commitment.
4. The branch Manager’s responsibility as to security is also to see how much control he will be in a position to exercise on the entire stocks of the borrower.

How to locate borrower

In appraising a loan process, the selection of the prospective borrower is the most vital point. The borrower is the real actor and must be in position to achieve the purpose for which the loan has been requested. In selecting ideal borrower, the branch manager thus assumes the greatest responsibility. Capital is another point to indicate the borrower’s position. He should be given loan in proportion to this own investment as working capital. As a general rule a bank should not sanction loan more than the investment of the borrower. Then the consideration of borrower’s capacity – whether the borrower can utilize the funds or not.

Of all the qualifications of a prospective borrower, character is undoubtedly the greatest. While the capacity and capital are the factors upon which depends his ability to repay the money advanced, the character of the borrower indicates his intention to repay the loan.

To select the ideal borrower the following points have to consider:

1. Branch records: The manager may have first hand information on a prospective borrower by a reference to his records, if the banks with him. The turnover of his financial dealings is reflected in the ledger folios of his branch.
2. Borrower’s Record: The prospective borrower may be advised to submit his books of accounts balance sheet etc. for examination by the manager. These financial tools reflect the position of his assets and liabilities and a fair idea about the capital and capacity of the borrower.
3. Personal Enquires: As an individual the borrower must be a desirable person in the society. He must have integrity. There are some factors such as the sobriety, the promptness of payment goods habits personality, the ability and the willingness to carry a project

 Advance Secured and Unsecured

1. Secured Advance: Secured advance are those advance which are secured by tangible securities of adequate value over which the bank has either absolute or constructive control in addition to the personal guarantee of the customer.
2. Unsecured Advance: The advances which are granted to a constituent of undoubted standing and reliability and only in exceptional circumstances and for short period without any tangible security are called unsecured advances.

Types of Loan

Pubali Bank Principal Branch has the following loan schemes

• Continuous Loan
• Demand Loan
• Term Loan
• Cash Credit (CC)
• Overdraft (OD)
• Bank Guarantee
• Staff Loan(PBL)

Continuous Loan: The limited loans with expiry date of loan payment, which can be transacted without any particular payment schedule, are termed as continuous loan. Following are the various categories :

1. Small Enterprise Financing (SEF)
2. Consumer Financing (CF)
3. Other than SEF and CF

Demand Loan

The loans, which become eligible for payment when demanded by the bank, are termed as demand loan. If contingent or any other debt becomes forced loan, then those are also termed as demand loan.

Following are the various categories :

1. Small Enterprise Financing (SEF)
2. Consumer Financing (CF)
3. Other than SEF and CF

Term Loan

The loans which are to be paid within limited term with a particular payment schedule are known as  term loan.

Following are the various categories :

(a) Term loans up to 5 years

1. Small Enterprise Financing (SEF)
2. Consumer Financing (Other than HF & LP)
3. Housing Finance (HF)
4. Loans for Professionals to setup business. (LP)
5. Others

(b) Term loan over 5 years

1. Small Enterprise Financing (SEF)
2. Consumer Financing (Other than HF & LP)
3. Housing Finance (HF)
4. Loans for Professionals to setup business. (LP)
5. Others

Short term Agri and Micro Credit:   The short-term loans which are listed in yearly loan disbursement schedule served by the loan department of Bangladesh Bank are termed as short-term agricultural loan and micro-credit. The loan given to the agricultural sector for less than 12 months is also included in this category. By short-term loan we mean the loan below Tk 10,000 to be paid within 12 months.

Staff Loan

Staff House Building Loan – SHBL

1. 120 times of the basic salary is provided as SHBL
2. Bank Rate + 1%, interest is charged to the employee
3. Repayment is adjusted from their monthly salary
4. Repayment is made at equal monthly installment

Staff Loan Against Provident Fund – SPF

2. 10% of basic is contributed by employee in every month
3. 10% of basic is also contributed to the PF by the Bank
4. Repayment is adjusted from their monthly salary
5. Maximum Sanction from PF

State of Classification and Provision for 5 Years of PBL

(Figures in Million)

With the passage of time the bank is expanding day by day. Due to expansion the bank is offering more loans to its clients. That is what we see that the amount of loan is increasing gradually from year 2001 to 2005. Bangladesh Bank is promulgating improved and renewed rules to check the loan default and enhance recovery. Accordingly Pubali bank is also enacting newer policies. Here the amount of classified loan is decreasing and that is nearer to 32%. As the offering of loan is increasing day by day, so it is quite encouraging that the amount of classified loan should checked and it is becoming less than half.

Conclusion

2007 was considered to be a milestone for the banking sector. Under the guidance of finance minister government had promulgated new rules and regulations for the banks. A remarkable corruption took place in many of the private banks for which two of the managing director of two private banks lost their job.

According to a report published in the daily “Prothom Alo”, Private sector banks are becoming stronger day by day. Their participation in national business is also increasing. On the other hand participation of nationalized banks is reducing day by day.

Being the biggest private bank, besides their normal banking Pubali bank is undertaking a lot of economic program for poverty alleviation. By this, the bank has been able to link a huge population of rural areas with development activities of the whole country. The main aim or goals of these programs are to alleviate unemployment by transforming the overloaded population into manpower, improve their economic condition that is development of overall life and above all include them to the development activities of the country.

The bank is arranging a number of training for the officers and employees and also sending them to Bangladesh Institute of Bank Management (BIBM) to improve the quality of banking service through development of human resources.

Recommendations

Pubali Bank is the largest bank in the private sector of our country. Increment in the net profit of the banking sector was on an average 10% last year. Though it is observed that credit management of the bank is quite satisfactory, the following recommendations can be taken into consideration to make it more effective.

• Bangladesh Bank should monitor more closely the lending activities of Pubali Bank.
• As once upon a time it was a nationalized bank, various rules regulations, office norms and working environment still exist like other nationalized banks of our country. Pubali bank has to come out from that footing and be organized like some reputed private sector banks, which are doing very well.
• There exist various rules and also prescribed format for offering loans and advances to the customers. In maximum of the case these are not followed properly. Lending Risk Analysis (LRA) is not done regularly and properly.
• Application forms of the customers remain erroneous and full of wrong information. It has been observed that the information given by the customer regarding business, property holding, inventory, bio data of entrepreneur do not tally on ground. Even after that the banker provides these customers with loans after doing necessary correction in the customer’s application by the banker. Close monitoring and supervision has to be ensured by the bank authority in this respect.
• After assessing 3-4 years record it is found that near about half of the loans and advances have become classified. Moreover 4-5% of that classified loans are substandard or doubtful. Almost all the amount of classified loan is bad/loss percentage of which is 95%. Carrying forward of this loans have made the figure of the net profit of the bank an inflated one which is also misleading. Some bad/loss loan with long outstanding duration has to be written off.
• Assessing the five years credit statement of the bank, it is found that recovery rate of classified loan is only 10% to 15% which is very much alarming. Though it slightly increased last year, a coordinated effort has to be undertaken by the bank to increase the recovery rate.
• More incentive program needs to be undertaken for the officers and employees of the bank to improve the recovery rate. Here the incentive scheme taken by Bangladesh Krishi Bank named “MIRACLE” can be mentioned which has given fruitful result.
• Credit information bureau (CIB) should act more efficiently. All the necessary information of a prospective borrower should be available to the bank authority also. Here the bank should use upgraded computer software for this purpose.
• The bank itself should be much more cautious before sanctioning loan. The bank authority should strictly follow the loan appraisal procedure, and also ensure that all the information provided by the clients is correct.
• All the officers and employees working specially in the recovery section should be more sincere to their respective job.
• Long outstanding cases filed in the insolvency court should be resolved as early as possible with greater priority. For its own interest bank should employ well-reputed lawyers to settle all the outstanding cases.

Normally in our country most of the report does not see the light, they remain in pen and paper. Even if it is published, the recommendations are not implemented. It is nice to observe that Government has already promulgated some rules basing on those recommendations. So the recommendations should be implemented despite of any hindrance for the betterment of banking sector.