Report on Overall activity on AB Bank ltd [part-2]

General Banking:

(Department in Elephant Road  Branch):

      Customer Service

This department mainly gives service to their customer. The officers of this department always solve the problem of their customer. Provide information and aware people about the products of ABBL are the main jobs of the officers.

   Trade Finance:

MTB provides a wide range of banking services to all types of commercial concerns such as Import & Export Finance and Services, Investment Advice, Foreign Remittance and other specialized services as required. Although they are a private commercial Bank, they have a strong global network that helps them to undertake international trade smoothly and efficiently.

   Some Additional Service:

    ATM/Debit Card Service

A debit card is a plastic card which provides an alternative payment method to cash when making purchases. Its functionality is more similar to writing a check as the funds are withdrawn directly from either the cardholder’s bank account (often referred to as a check card).

ABBL debit card is start from the 3^rd August. The ABBL customer can use the booth of Duch Bangla bank Ltd. Every Debit card has an expiry date. It as well requires replacements. The request for debit card (with prior notification) is dealt by the account service department. Customer collects the card after 5 working days. Customer can easily withdraw cash and make purchases whenever he/she wants using this Debit card.

    Statement and certificate preparation

Statement is send to the correspondence address of the account holder in two times a year (June & December). Some time customer need bank statement on urgent basic for some purpose. Then the account holder come to any branch of ABBL and can take the statement. The statement is given when he or she can prove that he or is the account holder or the authorized person of the account holder. He or she can get this statement is office working hour. It is charged from customer’s account.

    Account Service

š Address change

Customers sometime want to change mailing and permanent address. They have to fill up a form and give supporting documents for address alteration (in case of permanent address change). Supporting documents should be photo id (passport/driving license/ voter id) and one copy of photograph of the account holder is required to change any kinds of account service form. This is free of cost.

š Signatory change (Delegation of authority)

Sometime customer wants to add new person or nominee as joint signatory. Customers have to fill up a form and a signatory card where new applicant’s signature (duly attested by him or her), a copy of passport or voter ID or driving license is required.

š Signature change

If a customer wants to change his signature he has to provide his previous valid documents (which were supplied at the time of account opening) and Write an application and copy of photograph with a complete form.

š Account Maintaining

If a customer wants to maintain his account he has to pay Bank some charges. For savings and current account- Charge is TK. 500 and VAT is TK. 75 for per six month.

š Account Closing

Customers have to surrender his cheque-book at the time of closing or surrendering the account. Closing charge is Tk. 300 and VAT is TK.45 for savings and current account.

š Account Transfer

Customer can transfer their account from one branch to another branch of ABBL. For this purpose he or she has to submit an application. The new branch opens a new account with a new account number. This transfer takes maximum 3 days. The transfer charge is TK. 200.

    Locker Service

Bank provides safety locker service to its customers. Any account holder can obtain it. Account holder needs to fill up a form with specimen signatory card. Signatory may not be more than three. In the form, locker holder must mention the account number from where locker charge will be debited. After clarifications all documents allocation of a locker and key takes place.

Type                       Annual charge                     

           Small                              1500

           Medium                          2000

           Large                              3000

Locker holder can visit the locker any time within 9 a.m to 5 p. m- from Sunday to Thursday. Customers had to sign the visiting record and locker’s custodian verifies it. If any one wants to surrender the locker, he or she needs to surrender the locker key and visit the locker finally with custodian. The manager keeps the key in the volt and reallocates it. If any one lost the key of the locker, he or she has to pay one thousand take as punishment or for the new key.

Credit Department banking business primarily involves accepting deposits from the public and investing or lending the same and thereby making profit out of it. No single bank can lend out more than its excess reserves, the entire banking system can create a multiple volume of deposit money through credit creation. However, lending money is not without risk and therefore banks make loans and advances to farmers, traders, businessmen and industrialist against either tangible (land, building, stock etc.) or intangible security. Even then, the banks run the risk of default in repayment. Therefore, the banks follow cautious measures while lending money to others. This core function of a Bank is performed by the Credit Department of the bank.

At AB bank This Department is known as Relationship Management (RM) and Credit Administration & Monitoring (CAM).

The objective of the credit management is to maximize the performing asset and the minimization of the non-performing asset as well as ensuring the optimal point of loan and advance and their efficient management. Credit management is a dynamic field where a certain standard of long-range planning is needed to allocate the fund in diverse field and to minimize the risk and maximizing the return on the invested fund. Continuous supervision, monitoring and follow-up are highly required for ensuring the timely repayment and minimizing the default. Actually the credit portfolio is not only constituted the banks asset structure but also a vital factor of the bank’s success. The overall success in credit management depends on the banks credit policy, portfolio of credit, monitoring, supervision and follow-up of the loan and advance.

 Types of Credit Facilities:

                                                   Modem banking operations touch almost every sphere of economic activity. The extension of bank credit is necessary for expansion of business operations. Bank credit is a catalyst for bringing about economic development. Without adequate finance there can be no growth or maintenance of a stable output. Bank lending is important to the economy for it makes possible the financing of agricultural, commercial and industrial activities of a nation. The credit facilities are generally allowed by the bank may be in two broad categories.

    Overdraft:

When a current account holder is permitted by the banker to draw more than what stands to his credit, such an advance is called an overdraft. The banker may take some collateral security or may grant such advance on the personal security of the borrower. ABBL has given this overdraft facility to its clients.

Eligibility: Overdraft facilities are generally granted to businessmen for expansion of their business, against the securities of stock-in-trade, shares, debenture, Government promissory notes, fixed deposit, life policies, gold and gold ornaments etc.

Nature – short term loan

Interest rate: 14% – 17%

Terms and Conditions:

• Bank may cancel / alter the sanction without assigning any reason whatsoever.
• In case of client failure to pay the Bank’s dues within the validity of the limit bank may en cash client pledge without any prior intimation to client.

    Consumer credit:

Consumer credit, popularly referred to as Consumer Banking, is high value personal banking catering to particular need aspects of individuals, professionals, businessmen among others. Through its large branch network AB has been successful in propagating this personalized banking service to the desired customers. Your Bank’s consumer banking has many diversified products to fulfill customer needs which include Personal Loan, Personal Overdraft, Education Loan, Auto Loan, House Furnishing/Renovation Loan, Home Loan, etc.

In the coming months, few more products will be launched for the target group of service holders, entrepreneurs and businessmen in mind. AB recently signed up with a reputed private university to provide Education Loans to students. This particular model will be replicated to other institutions gradually. Recently, your Bank also joined hands with a big name in the jewellery market to re-Launch its product named “Gold Grace”.

At present, AB’s clientele base in this segment comprises of 7200 customers having a portfolio size of over Taka 350.0 crore.

Eligibility: The borrower must be confirmed official of any of the following organizations:

• Government Organization
• Semi-Government Organization
• Multinational Organization
• Bank and Insurance companies
• Reputed Commercial Organization
• Professionals

Nature: Mid-Term micro credit.

Interest Rate: 17.5%

Terms and Conditions:

• Clients will procure the specified articles from the dealer/agent/shop(s) acceptable to bank.
• All the papers/cash memos etc. related to the procurement of the goods will be in the name of the Bank ensuring. Ownership of the goods. Where applicable, the ownership shall be transferred in the name of the clients after full adjustment of Bank’s dues.
• The client shall have to bear all the expenses of License, Registration, Insurance etc. of the articles wherever necessary.
• The client shall have to bear the cost of Repair and Maintenance of the acquired articles.

    Time Loan:

When an advance is made in a lump sum repayable either in fixed monthly installments or in lump sum and no subsequent debit is ordinarily allowed except by way of interest, incidental charges, etc. it is called a Time loan. The whole amount of loan is debited to the consumer’s name on a loan account to be opened in the ledger, and, is paid to the borrower either in cash or by way of credit to current/savings account.

Eligibility: Loans are normally allowed to those parties who have either fixed source of income or who desire to pay it in lump-sum.

Interest Rate: 15% – 16%

Terms and Conditions:

• Disbursement will be made after completion of all formalities.
• Bank reserve the right to cancel or amend the terms and condition partly or wholly at is direction without assigning any reason whatsoever.
• When the principal debtor defaults in fulfilling the obligation or promise liability bestow on guarantor.

    Term Loan:

Term Loan is only provided in selective cases in Bank. The basic characteristic of the loan is almost the same as Time loan except that the repayment period is more than one year.

Interest rate: 15%- 17%

    Trust Receipt Facility (T.R):

This type of loan is also connected with import facility and is only provided to very selective clients only.

Sometimes as per earlier arrangement or under compelling situation we allowed our valued clients to retire the L/C documents without adjusting the demand loan or outstanding BLC. The documents are provided to the client after transferring the outstanding liabilities to T.R account.

Eligibility: Loan against trust receipt is generally granted to Exporter for exportation of goods.

Interest rate: 15% – 16%

Terms and Conditions:

• Disbursement will be made after completion of all formalities as per sanction terms.
• Suppliers credit report to be obtained before opening of L/C’s.
• Excess drawing over the sanction limit is strictly prohibited.
• Excess drawing over the sanction limit is strictly prohibited
• Customer will maintain effective and constant supervision and follow up to ensure timely adjustment of the loan to avoid overdue.

    Letter of Credit:

Opening or issuing letter of credit is one of the important services provided by ABBL. A letter of credit is a document authorizing a bank to pay the bearer a specified sum of money; it provides a useful means of settlement for a foreign trade transaction, the purchaser establishing a credit in favor of his credit at a bank.

Letter of Credit is of two types:

• Traveler’s letter of credit issued for the convenience of the traveling public, and
• Letter of commercial credit issued for the purpose of facilitating trade transaction.

Eligibility: Letter of credit facilities are given to exporter, manufacturers/producers.

Terms and Conditions:

• It should stipulate the name of the loan/credit/Grant.
•  It should bear the name of the designated bank.
•  Items mentioned in the LCA form must contain with the permissible items.
• The bank officers periodically inspect the goods and verify that they conform to the quantity and quality etc. as mentioned the particular letter of credit.
• In case of first class customers, the facility may, however be granted against form contracts with overseas buyers.

    Letter of Guarantee:

A letter of guarantee has special significance in the business of banking as a means to ensure safety of funds lent to the customers. In case, the borrower is unable to provide the security of tangible assets or, the vale of the assets falls below the amount of the loans, and the borrower’s personal security is not considered sufficient, an additional security is sought by the banker in the form of a guarantee given by a third person.

Terms and Conditions:

• The banks legal adviser must verify all the security documents.
• When the principal debtor defaults in fulfilling this obligation or promise the liability bestow on guarantor.

• Bank reserves the right to cancel or amend the terms and condition partly or wholly at its direction without assigning any reason whatsoever.

These facilities of credit department of ABBL are divided into three parts: Corporate, SME & Retail.

Corporate:

                                    AB Bank provides complete range of solutions to meet Corporate Customers’ requirement. Corporate Banking solutions include a broad spectrum of products and services backed by proven, modern technologies.

Corporate Lending

ABBL specialist teams offer a comprehensive service providing finance to large and medium-sized businesses based in Bangladesh.

Structured Finance

ABBL have a specialist Structured Finance Team who arrange and underwrite finance solutions including Debt and Equity Syndication for financial sponsors, management teams and corporate. Also we provide corporate advisory services.

We aim to provide tailored financing solutions with a dedicated team who can rapidly respond to client needs.

Following are some of the products and financial tools of Corporate Banking:

• Project Finance
• Working Capital Finance
• Trade Finance
• Cash Management
• Syndicated Finance, both onshore & off-shore
• Equity Finance, both onshore & off-shore
• Corporate Advisory Service      

     Large Loan & Project Finance:

• In order to cater the demand of client AB Bank has segmented its portfolio in terms of loan size. As per this segmentation any loan over Tk. 10.00 Crore falls under the purview of Large Loan Unit.

• In AB Bank, there is also a separate Project Finance unit who evaluate the business. The unit is entrusted to handle the portfolio in a focused manner. AB Bank is always in fore front to support   establishment of new projects of diverse nature which will help to broaden the manufacturing arena vis-à-vis to generate to employment.

• At the moment AB Bank ‘s exposure in Large Loan & Project Finance portfolio is distributed in the following  sectors:

          Loan Syndication:

• Syndication or club financing is a growing concept in Banking Arena of Bangladesh. Syndicated finance diversifies the risk of one bank on a single borrower and increases the quality of loan through consensus or cumulative judgment and monitoring of different banks / financial institutions.
• AB Bank, the first bank in the private sector also took initiative to adapt to this growing concept.
• In 1997, AB Bank for the first time arranged a club financing with Dhaka Bank Ltd to raise Tk. 6700 lac – out of which ABBL financed Tk. 5700 Lac and Dhaka bank financed Tk. 1000 Lac.
• In 1999, AB Bank arranged its second syndicated credit facility with IPDC to raise Tk 3563 Lac.
• Since then AB Bank did not look back.
• Since 1997 to 2007 (till date), AB Bank has raised total Tk. 25989.56 Lac as Lead Arranger. The following banks from time to time have been our partners in these syndications:  Dhaka Bank, IPDC, AB Bank, Bank Asia, Oriental Bank, NCC Bank, The City Bank, Trust Bank, and Bank Asia.
• AB Bank has also participated in different syndications arranged by other Banks, out of which till date 6 (six) syndication has successfully been completed. AB Bank exposure in these completed syndications was   Tk. 4700 Lac.
• At the moment AB has participation in 19 (nineteen) syndicated facilities. AB Bank’s exposure in the ongoing syndication is Tk. 51560.29 Lac which is diversified in the following ten sectors:

 Lending Rates:

Notes:

• Interest rate on overdraft (OD) under Working Capital & Commercial Lending categories will be higher by 0.50% than that of other funded limits availed by same customer.
• For lending against ABBL FDR, the rate is 2.00% above the rate of the instrument subject to minimum 13.00%.
• Exposure under cash collateral of other banks requires clearance from Financial Institutions.

 Credit Assessment:

A thorough credit and risk assessment is conducted by ABBL prior to the granting of loans, and at least annually thereafter for all facilities. The results of this assessment are presented in a Credit Application that originates from the relationship manager (“RM”), and is approved by Credit Risk Management (CRM). The RM is the owner of the customer relationship, and must be held responsible to ensure the accuracy of the entire credit application submitted for approval. RMs are familiar with the ABBL’s Lending Guidelines and conduct due diligence on new borrowers, principals, and guarantors.

It is essential that RMs know their customers and conduct due diligence on new,” borrowers. Principals and guarantors to ensure such parties are in fact who they represent themselves to be. ABBL have established Know Your Customer (KYC) and Money Laundering guidelines which is adhered to at all times.

Credit Applications summarize the results of the RMs risk assessment and include, as a minimum, the following details:

• Amount and type of loan(s) proposed.
• Purpose of loans.
• Loan Structure (Tenor, Covenants, Repayment Schedule, Interest)
• Security Arrangements

In addition, the following risk areas are also addressed by ABBL:

* Borrower Analysis:

The majority shareholders, management team and group or affiliate companies are assessed. Any issues regarding lack of management depth, complicated ownership structures or inter­-group transactions are addressed, and risks mitigated by ABBL.

* Industry Analysis:

The key risk factors of the borrower’s industry are assessed. Any issues regarding the borrower’s position in the industry, overall industry concerns or competitive forces are addressed and the strengths and weaknesses of the borrower relative to its competition are identified.

* Supplier/Buyer Analysis:

Any customer or supplier concentration is addressed, as these could have a significant impact on the future viability of the borrower.

* Historical Financial Analysis:

An analysis of a minimum of 3 years historical financial statements of the borrower is presented. Where reliance is placed on a corporate guarantor, guarantor financial statements are also analyzed. The analysis addresses the quality and sustainability of earnings, cash flow and the strength of the borrower’s balance sheet. Specifically, cash flow, leverage and profitability are analyzed.

* Projected Financial Performance:

Where term facilities (tenor> 1 year) are being proposed, a projection of the borrower’s future financial performance is provided, indicating an analysis of the sufficiency of cash flow to service debt repayments. Loans are not granted if projected cash flow is insufficient to repay debts.

* Account Conduct:

For existing borrowers, the historic performance in meeting repayment obligations (trade payments, cheques, interest and principal payments, etc) is assessed.

* Adherence to Lending Guidelines:

Credit Applications clearly state whether or not the proposed application is in compliance with the ABBL’s Credit Policies. The Bank’s Head of Credit or Managing Director/CEO approve Credit Applications that do not adhere to the bank’s Credit Policies.

* Mitigating Factors:

Mitigating factors for risks identified in the credit assessment are identified. Possible risks include, but are not limited to: margin sustainability and/or volatility, high debt load (leverage/gearing), overstocking or debtor issues; rapid growth, acquisition or expansion; new business line/product expansion; management changes or succession issues; customer or supplier concentrations; and lack of transparency or industry issues.

*Loan Structure:

The amounts and tenors of financing proposed are justified by ABBL, based on the projected repayment ability and loan purpose. Excessive tenor or amount relative to business ABBL increases the risk of fund diversion and adversely impact the borrower’s repayment ability.

* Security:

A current valuation of collateral is obtained and the quality and priority of security being proposed are properly assessed. Loans are not granted by ABBL, based solely on security. Adequacy and the extent of the insurance coverage are assessed.

* Name Lending:

Credit proposals are not unduly influenced by an over reliance on the sponsoring principal’s reputation, reported independent means, or their perceived willingness to inject funds into various business enterprises in case of need. These situations are discouraged and treated with great caution. Rather, credit proposals and the granting of loans are based on sound fundamentals, supported by a thorough financial and risk analysis.

* Limit will be determined by the stock and/ or volume of sales.

 * Maximum 80% of the stock value to be financed.Interest Rate:15% p.a. to 17% p.a.Service Charge:1.00%Tenor: Maximum 3 YearsRepayment: Through EMI/Lump sumSecurity or Collateral:

• Hypothecation of stock or receivables
• Registered Mortgage of land and buildings or Tripartite agreement for shop or business premises or any other collateral

“Proshar Loan”

It is long term finance for infrastructure development/ capacity building etc.; i.e. Term loan for expansion.

(Moratorium period:  Maximum 6 months)Security or Collateral:

• Hypothecation of stock and/ or receivables and/ or machineries and/ or furniture and fixture etc.
• Registered Mortgage of land and building and/or Tripartite agreement for shop or business premises or any other Collateral.

  “Digun Loan”

Double amount of loan against value of the savings instrument ‘ ABBL FDR, DDS ‘ to meet any type of business requirement.

  “Sathi  Loan”

Term loan for CNG Refueling conversion/ Light Engineering/ project finance ‘Package deal including Non- funded’.

“Chhoto Puji Loan”

Mortgage free Term Loan for working capital/ fixed investment requirement.

         “Uddog Loan”

Loan for New entrepreneur/ businesss. (Working capital as well as fixed capital investment.)

“Awparajita Loan”

A Loan facility for meting working capital requirement as well fixed investment in businesses for women entrepreneurs.

Retail Banking:

   Retail Banking provide mainly two types of loan-

    Secured Loan

     Unsecured Loan

 Secured Loan:

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan.

Feature of Product:

Personal Loan

 Personal Overdraft

Secured Loans are allowed against the following securities:

• Shares of various Companies approved by Head Office from time to time and listed in the Stock Exchange.
• Term Deposit Receipts issued by any Branch of our Bank.
• Lien on balance in Savings NC, Current Ale. and other Savings Schemes Government Promissory Notes .
• Various Sanchaya Patras
• Surrender value of Life Insurance Policies.
• WEDB
• Assignment of bills against work orders/supply orders and receivables
• Stock of goods in trade (Permissible goods only) pledged or hypothecated
• Hypothecation of power driven vehicles or watercrafts.
• Hypothecation of capital Machineries and equipments.
• Immovable Property.
• Imported merchandise – pledged or hypothecated
• Trust Receipts.
• Bills Purchased
• Scheduled Bank/Insurance Guarantees
• Export Bills gghghgyghghgghhjh
• Inland Bills.
• Personal Guarantee
• Corporate Guarantee

Unsecured Loan:

An unsecured loan is one, which is granted to a constituent without obtaining any security subject to restrictions imposed from time to time by Bangladesh Bank or any competent authority. In such case only charge documents are held.

Personal Loan

Processing fee: 1% on the approved loan amount or Tk. 2000.00 whichever is higherTenorMinimum12months, Maximum 36 months.Rate of Interest15.00% p.a. – 16.50% p.a.SecurityHypothecation of the product to be purchased. Two personal guarantees (as per our list of eligible guarantors)

Auto Loan

Processing fee: 1% on the approved loan amount or Tk. 5000.00 whichever is higherTenorFor Reconditioned Car: Max 36 months
For Brand new Car: Max 60 monthsRate of Interest15.00% p.a. – 16.00% p.a.SecurityHypothecation of the vehicle to be purchased. Two personal guarantees (as per our list of eligible guarantors)

Easy Loan for Executives

Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher.TenorMinimum12months &Maximum 36 months.Rate of Interest15.00% p.a. – 16.50% p.a.SecurityLetter of confirmation from the employer. One personal guarantee (as per our list of eligible guarantors)

Gold Grace( Jewelry Loan)

Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher.TenorMinimm12months & Maximum 36 months.Rate of Interest15.00% to 16.50% p.a.SecurityLetter of confirmation from the employer. Personal guarantee from the parents and spouse (if married)

House/ Office/Furnishing/ Renovation Loan

Processing fee: 1% on the approved loan amount or Tk. 2000.00 whichever is higher.TenorMinimum12months & Maximum 48 months.Rate of Interest15.50% to 16.50% p.a.SecurityTitle deed of the House/Office to be furnished/renovated along with memorandum of deposit of title deed duly supported by a notarized power of attorney to be kept by the bank as a matter of comfort. Two personal guarantees (as per our list of eligible guarantors). Registered mortgaged of the property if the loan amount is more than Tk. 5.00 lac

Education Loan

Undergraduate & Post graduate Level

Professional degrees like -CA, ICMA, MBA, MBM, PHD, FCPs etc.

PurposeTo  financially assist the parents:Loan AmountMinimumTK50,000.00 & MaximumTK. 3,00,000.00ChargesApplicationfee:Tk.500.00

Processing fee: 1% on the approved loan amount or Tk. 2000.00 whichever is higherTenorMinimum12months & Maximum 36 months.Rate of Interest14.00%  to 17.00% p.a.SecurityOffer latter from related institutions. Original Certificates, Conformation from Head of Deptt. /Dean/Principal, One guarantor to be same level or higher than the customer. Age must be 17 to 40 years, Names of referees acceptable to the Bank.

Staff Loan

VISA Credit Card

 Processing of Credit Proposals:

A secured credit facility may be allowed to a customer only after getting a limit     sanctioned by the authorized officials. AB bank follows some systematic process of   Credit Proposal, those are given below-

 Application for loan:

Applicant applies for the loan in the prescribed form of Bank. The purpose of this forms is to eliminate the unwanted borrowers at the first sight and select those who have the potential to utilize the credit and pay it back in due time.

 Getting Credit information:

Then the bank collects credit information about the borrower from the following sources:

• Personal Investigation.
• Confidential report from other bank/ Head office/Branch/Chamber of commerce.
• CIB report from central bank

Scrutinizing and Investigation:

Bank then starts examination that whether the loan applied for is complying with its lending policy. If comply, than it examines the documents submitted and the credit worthiness. Credit worthiness analyses, i.e. analysis of financial conditions of the loan applicant are very important. Then bank goes for Credit Risk Grading (CRG) and spreadsheet analysis, which are recently introduced by Bangladesh Bank. According to Bangladesh Bank rule, CRG and SA is must for the loan exceeding Dhaka core.

If these two analyses reflect favorable condition and documents submitted for the loan appears to be satisfactory then, bank goes for further action.

CIB Report From Central Bank:

Credit Information Bureau (CIB) of Bangladesh bank has a central database for all the lenders of Bangladesh. It contains the total credit history of a client and act as the most dependable source to analyze the credit worthiness of a prospective client. Obtaining the CIB clearance is a precondition of fund disbursement and all type of Retail, SME and corporate loan require CIB report before disbursement. For some retail unsecured assets, BBL obtains post-facto CIB clearance. However, in most cases AOD obtains the CIB for a client before disbursement of fund.

To obtain a CIB report, AOD fills up the following Bangladesh bank prescribed forms for each loan application:

             I.      Inquiry Form: CIB – 1A:        For each individual/ institution

          II.      Inquiry Form: CIB – 2A:        Owner information if borrower is institution

       III.      Inquiry Form: CIB – 3A:        Group/ related business information of borrower

       IV.      CIB Undertaking form “KA”: For each individual/proprietor/director/partner

These forms are filled up by the business units and sent to the CIB segment of AOD. CIB segment maintains a central database for all the CIB inquiry forms. Each form is registered under a Head Office serial number and a Branch/ Unit office serial number. Therefore AOD prepares a forwarding letter with reference to 20 such inquiry forms, and sent them to Credit Information Bureau of BB once in a day.

Usually the CIB reports are received within 7-10 working days.

After receiving the reports from BB, AOD prepares a summary of the report and put that as reference in the loan file along with the photocopy of the CIB inquiry forms, undertaking and copy of the original CIB report.

For any mistakes made in the forms, writing wrong spelling, incomplete name of individuals or institutions, CIB report may show error as mismatch exists there. Those CIB inquiry forms require to be sent again correcting the facts. CIB reports are usually updated quarterly and half-yearly. Therefore most updated CIB reports are required to be obtained and CIB report is also require for the same client for repeat loan.

All forms need to be supported by the Applicant’s Undertaking and all the forms are signed by designated officers of the business division; e.g.

• Relationship manager for Corporate Application.
• Sales Manager for Retail Application.
• Credit Risk Officer for SME Application.

The designated officers also require to attest the undertaking form “KA” filled up by the loan applicant (individual/ institution/ group). CIB information for Group is mainly required for the corporate loan applications.

CIB is a regulatory requirement for Loan Documentation.

The following Papers/documents are to be submitted by the Branch Managers along with the proposals:

• Request for Credit limit of customers.
• Project Profile / Profile of Business.
• Copy of Trade License duly attested.
•  Copy of TIN Certificate.
•  Certified copy of Memorandum and Articles of Association. Certificate of Incorporation, Certificate of commencement of business in case of Public Ltd. Co. Resolution of Board of Director, Partnership Deed, (where applicable)
• Personal Net worth Statement of the Owner/ Director/ Partner/ Proprietor in Bank’s Format.
• Valuation Certificate in Bank’s Format along with photograph of collateral security (land & building with detail particulars on the back duly authenticated by the Branch Manager.
•  In case the value of the property offered as security exceed Tk.5O.OO lac, the value to be assessed by bank’s enlisted surveyor and report thereof to be obtained.
•  3 years Balance sheet and profit and loss A/C.
•  cm Enquiry Form duly filled in (For proposal of Tk.l0.00 lac and above) CJ Lending Risk Analysis for Credit facilities of Tk.50.00 lac and above.
•  Inspection/Visit Report of Factory/Establishment/Business premises of the customer.
• Stock Report duly verified (where applicable)
•  Credit Report from other Banks.
• Indent/Proforma Invoice/Quotation (Where applicable)
• Price verification report (where applicable)
• Statement of A/C (CD/SB/CC) for the last 12 months. In case the customer maintaining account with other Bank, Statement of Account for the last 12 months of the concerned Bank should be furnished.
•  In case of renewal/ enhancement of credit facility, Debit Turnover, Credit Turnover Highest drawing, lowest drawing, and Total income earned detailed position of existing liabilities of the customer i.e. Date of sanction. Date of expiry, Present outstanding, Remarks, if any.
•  Declaration of the customer of the name of sister/allied concerns and liabilities with other Banks, if any, and an undertaking to the effect that they have no liability beyond those declared.
• In case of L/C proposal, detailed performance of L/C during the last year i.e. No. and date of L/C opened, commodity, L/C value, etc.
• Whether the applicant is Shareholder/Director of AB Bank Ltd. as per definition or Banking Companies Act.
• Financial Analysis to be prepared by the Branch Manager based on the financial performance of the company which should show trends in sales/profitability, liquidity, leverage etc. It should also contain an assessment of the competence and quality of the business management, the general economic & competitive environment of the borrower’s industry and any other pertinent factors that is relevant for management’s credit decision.
• Justification/consideration for the facility.

Approval of Limit:

The sanctioning authority on receipt of the proposal shall scrutinize the same and ensure that:                                     

• The proposal contains all pertinent information relating to the proposed facility and the borrower.
• All necessary papers and documents have been submitted.
•  The proposal has been duly signed by the members of the Branch Credit Committee including the Manager.
•  The proposal has been duly recommended.
• The proposal does not fall within the existing credit restriction.
•  Minimum margin requirement against the credit facility has been proposed.
•  The primary security has got easy marketability, durability and storability.
•  The value of the propel1y offered as collateral security is judiciously assessed.
•  The proposal is viable and stands all credit tests.
•  The proposed borrower is not defaulter of any Bank/Financial Institution.
•  There is no request from other Bank/Financial institution for not    allowing/stoppage or facility to the prospective borrower.
•   The proposal meets all the provisions/requirement of Bank Companies Act/Rules of Bangladesh Bank/Other Laws / Rules.
•  Where the proposed accommodation in the form of working capital may be considered on the project financed by any other Bank including DFI. Favorable status report and No Objection Certificate (NOC) from the financing Institution to be obtained.
•  Where 2^nd charge on the fixed and floating assets (in case of a limited company) or 2^nd mortgage on real estate is offered, clearance in respect of creation of 2^nd charge on the property together with confirmation that documents will be held by them on behalf of the Bank and that they shall not part with the same without consent of the Bank, is obtained from the 1st mortgagee.

 Loan Documentation Check list of action to be taken by the Branch Manager/Second Officer/Credit Officer before disbursement of Credit facilities –

A.GENEAL DOCUMENTS:

1. Letter of Borrower requesting for new facilities/renewal.

 2.  Authority of borrow to borrower (Later of authority from partners in case of partnership concern and resolution in case of limited company) with list of partners/ Directors.

1. From XII certified by RJSC regarding list of existing directors for limited company.
2. Facilities Advice Letter: accepted unconditionally by browser.
3. Demand Promissory Note.
4. Letter of Continuity
5. Deed of Partnership (for partnership borrower/third party), B-Laws etc.
6. Memorandum & Articles of Association (for limited company borrower/third party) with certificate of incorporation.
7.  Letter of Arrangement/Agreement.
8. Letter of Disbursement.
9. Revival Letter.

B. LIEN OF ACCOUNT

1. Resolution to lien account (for third party/partnerships and limited companies).
2. Letter of Lien & set-off (Pledge Agreement.

C. LEDGE OF DEPOSITS/S.PATRAS

1. Resolution to deposit (for third party/partnerships and limited companies).
2. Fixed Deposit Receipts/Sanchayapatras/Bonds/MIDS endorsed by holder(s).
3. Letter of Guarantee by depositors (if the deposits stand in the name of third party).
4. Letter of Lien & set-off (Pledge Agreement).
5. Letter of Authority for encashment of Fixed Deposits/Sanchayapatra(s)/MIDS.

D. LEDGE OF SHARES

1. Resolution to deposit (for third party/partnerships and limited companies.
2. Share Certificates.
3. Bank Transfer forms for each share certificate (From 117).
4. Memorandum of deposit of shares.
5. Letter of Guarantee by the Shareholder (if the share stands in the person other than borrower).
6. Irrevocable Letter of Authority for collection of dividends, bonus etc addressed by the shareholder to the related company.
7. Notes of Pledge by the shareholder to the related company.

E. PLEDGE OF INVENTORY

1. Letter of pledge/Pledge Agreement.
2. Letter of disclaimer (if required).
3. RJSC Search report (for limited companies/partnerships borrower/third party etc).
4. RJSC from 18, and receipt of filing with RJSC.
5. Certificate of registration from RJSC.
6. Modification of letter of pledge/Pledge Agreement of inventory.
7. RJSC From 19 and of filling with RJSC.
8. Insurance Policy with ABBL and jointly insured.

F. HYPOTHECATION OF INVENTORY

1. Resolution to hypothecate (for third party/partnerships and limited companies.
2. Letter of  Hypothecation /Hypothecation Agreement
3. RJSC Search Report (for limited companies)
4. RJSC Form 18, and receipt of filing with RJSC
5. Certificate of registration from RJSC
6. Modification of Letter of Hypothecation of Inventory
7. RJSC Form 19, and receipt of filing with RJSC
8. Insurance Policy with ABBL and jointly insured.

G. TRUST RECEIPT

      1. Trust Receipt Agreement         

H. HYPOTHECATION OF RECEIVABLES BOOK DEBTS        

1. Resolution to hypothecate  receivable book debts (for A third party/partnerships and limited companies)
2. Letter of Hypothecation of Receivables Book debts (Hypothecation Agreement)
3. RJSC Search Report (for limited companies partnerships borrower/third party etc)
4. RJSC Form 18, and receipt of filing with RJSC
5. Certificate of registration from RJSC
6. Modification of Letter of Hypothecation of Receivables
7. RJSC Form 19, and receipt of filing with RJSC

I. HYPOTHECATION OF MACHINERY & EQUIPMENT

1. Resolution to hypothecate of machinery and equipment (for third party/partnerships and limited companies)
2. Letter of Hypothecation of machinery & equipment/Hypothecation Agreement
3. RJSC Search Report (for limited companies/ partnerships borrower/third party etc)
4. RJSC Form 18, and receipt of filing with RJSC
5. Certificate of registration from RJSC
6. Modification of Letter of Hypothecation of machinery & equipment
7. RJSC Form 19, and receipt of filing with RJSC
8. Latest list of machinery & equipment
9. Insurance Policy with ABBL And jointly insured

J. ASSIGNMENT OF RECEIVABLES                                                        

1. Resolution to assign receivables (for third party/partnership/Limited company borrower)
2. Deed of Assignment of Receivables a (IGPA)
3. Notification and acknowledgment of assignment and confirmation of receivables from the debtors.

K.  MORTGAGE                                                                                                      

1. Letter of nomination of third party mortgage from Borrower with attested specimen signature of mortgagor
2. Resolution to mortgage and guarantee (for third party/partnership, limited company borrower)
3. Copy of valid ID (for third party individual mortgagor)
4. Personal Guarantee from Third Party Mortgagor
5. Original Title Deed of mortgagor and previous owners (Bia-Deed) (Certified Copy)
6. C.S. S.A & RS Parches
7. Mutation Parches in mortgagors’ name, certified by Assistant Commissioner of Land
8. Duplicate Carbon Receipt for mutation case# 27345
9. Letter of no objection of lessor for mortgagor to (for leasehold property)
10. Land and development tax receipt of immediate preceding Bengali year
11. Municipal Holding Tax Receipts for property ill municipalities
12. Building/Factory Plan with Approval Letter
13. Real Estate Appraisal /Va1uation Report (UDDL)
14. RJSC Search Report (for limited companies/registered partnerships borrower/third party etc)
15. Memorandum of deposit of Original Title Deed (for equitable mortgage) with legal counsel’s approved draft
16. Mortgage Deed and registration receipts endorsed by mortgagor (for legal/registered mortgage) along- with Power of Attorney (Certified Copy)
17. RJSC Form 18, and receipt of filing with RJSC
18. Certificate of registration from RJSC
19. Modification of Memorandum of deposit of title deed
20. RJSC Form 19, and receipt of filing with RJSC
21. Income Tax Clearance Certificate as required for registration
22. Non-encumbrance Certificate from Land registrar                                        

L. GUARANTEE                                                                                          

1. List of             directors/partners with specimen signatures certified by company’s Secretary or Chairman/Managing Director (for limited company, partnerships)
2. Resolution to guarantee (for limited company, partnerships)
3. Net Worth Statements (NWS) for individual/guarantors
4. Letter of Guarantee
5. Letter of Counter Indemnity/ Guarantee

M. TERM LOAN AGREEMENT                                                                             

1. Term Loan Agreement between Borrower & ABBL
2. Draft Term Loan Agreement approved by Head of Credit Risk Management Division and Legal Counsel

N  SECURITY SHARING AGREEMENT                                                              

1. Security Sharing Agreement Draft security sharing Agreement approved by Head of Credit Risk Management Division and Legal Counsel
2. RISC Farm 18, and receipt of filing with RJSC

O. SYNDICATION                                                                                                   

1. Accepted Mandate Letter
2. Accepted Term Sheet
3. Information Memorandum
4. Participation Letters
5. Facilities Agreement
6. Power of Attorney of             participants
7. Accepted Fee Letter
8. Legal Counsel’s opinion
9. Head of Credit Risk Management Division and Legal Counsel approval documents.

 Pre-disbursement Compliance:

When the credit proposal are approved the credit officer must have to be ensured that the disbursement of the credit facilities must comply with the directions written in the credit policy and circular made by time to time along with checking all the following terms and conditions.
The officer of Loan Administration must collect the acceptance of the customer’s of the terms and conditions on the duplicate copy of the sanctioned advice.

They will thoroughly examine and ensure that the subject credit facility does not contradict to any law, rules and regulation of the country, Bangladesh Bank and Deed of the Mortgage and power of the Attorney to be drafted and executed under the Supervision of the Bank’ s Legal Advisor.

Lawyers certificate to the effect that all the legal formalities (Equitable/ Registered Mortgaged) has been properly created on the land and building in favor of the bank & bank has acquired the effective title of the property.

Registered power of attorney has been collected form the borrower (contractor) assigning the work order favoring the ABBL and the power of attorney has been registered with the work order given agency and they have agreed that they will issue all the cheques favoring ABBL .The legal documents of the vehicle have been obtained.

Collection of the satisfaction certificate in respect of all the documents both legal and banking from the lawyer.Entry has been made in the Safe -in and Safe-out register and the documents are preserved. After being satisfied all the above terms and conditions the credit in-charge will disburse the loan amount to the client.

Credit Risk Grading:

ABBL adopts a credit risk grading system. The system defines the risk profile of borrower’s to ensure that account management, structure and pricing are commensurate with the risk involved. Risk grading is a key measurement of a Bank’s asset quality, and as such, it is essential that grading is a robust process. All facilities are assigned a risk grade. Where deterioration in risk is noted, the Risk Grade assigned to a borrower and its facilities are immediately changed. Borrower Risk Grades are clearly stated on Credit Applications.

The following Risk Grade Matrix is followed by ABBL which is provided by Bangladesh bank Lending Guidelines. With it, ABBL also follows the Risk Grade Scorecard. The more conservative risk grade (higher) is applied if there” is a difference between the personal judgment and the Risk Grade Scorecard results. It is recognized that the banks may have more or less Risk Grades; however, monitoring standards and account management are appropriate given the assigned Risk Grade:

2

The repayment capacity of the borrower is strong. The borrower should have excellent liquidity and low leverage. The company should demonstrate consistently strong earnings and cash flow and have an unblemished track record. All security documentation should be in place. Aggregate Score of 95 or greater based on the Risk Grade Scorecard.Acceptable – Fair Risk

3

Adequate financial condition though may not be able to sustain any major or continued setbacks. These borrowers are not as strong as Grade 2 borrowers, but should still demonstrate consistent earnings, cash flow and have a good track record. A borrower should not be graded better than 3 if realistic audited financial statements are not received. These assets would normally be secured by acceptable collateral (1^st charge over stocks / debtors / equipment / property). Borrowers should have adequate liquidity, cash flow and earnings. An Aggregate Score of 75-94 based on the Risk Grade Scorecard.Marginal – Watch list

4

Grade 4 assets warrant greater attention due to conditions affecting the borrower, the industry or the economic environment. These borrowers have an above average risk due to strained liquidity, higher than normal leverage, thin cash flow and/or inconsistent earnings. Facilities should be downgraded to 4 if the borrower incurs a loss, loan payments routinely fall past due, account conduct is poor, or other untoward factors are present. An Aggregate Score of 65-74 based on the Risk Grade Scorecard.Special Mention

5

Grade 5 assets have potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in a deterioration of the repayment prospects of the borrower. Facilities should be downgraded to 5 if sustained deterioration in financial condition IS noted (consecutive losses, negative net worth, excessive leverage), if loan payments remain past due for 30-60 days, or if a significant petition or claim IS lodged against the borrower. Full repayment of facilities is still expected and interest can still be taken into profits. An Aggregate Score of 55-64 based on the Risk Grade Scorecard.Substandard

6

Financial condition IS weak and capacity or inclination to repay is in doubt. These weaknesses jeopardize the full settlement of loans. Loans should be downgraded to 6 if loan payments remain past due for 60-90 days, if the customer intends to create a lender group for debt restructuring purposes, the operation has ceased trading or any indication suggesting the winding up or closure of the borrower is discovered. Not yet considered non-performing as the correction of the deficiencies may result in an improved condition, and interest can still be taken into profits. An Aggregate Score of 45-54 based on the Risk Grade Scorecard.Doubtful and Bad (non­performing)

7

Full repayment of principal and interest IS unlikely and the possibility of loss is extremely high. However, due to specifically identifiable pending factors, such as litigation, liquidation procedures or capital injection, the asset is not yet classified as Loss. Assets should be downgraded to 7 If loan payments remain past due excess of 90 days, and interest income should be taken into suspense (non-accrual). Loan loss provisions must be raised against the estimated unrealizable amount of all facilities. The adequacy of provisions must be reviewed at least quarterly on all non­performing loans, and the bank should pursue legal options to enforce security to obtain repayment or negotiate an appropriate loan rescheduling. In all cases, the requirements of Bangladesh Bank in CIB reporting, loan rescheduling and provisioning must be followed. An Aggregate Score of 35-44 based on the Risk Grade ScorecardLoss (non-performing)

8

Assets graded 8 are long outstanding with no progress in obtaining repayment (in excess of 180 days past due) or in the late stages of wind up/liquidation. The prospect of recovery is poor and legal options have been pursued. The proceeds expected from the liquidation or realization of security may be awaited. The continuance of the loan as a bankable asset is not warranted, and the anticipated loss should have been provided for. This classification reflects that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Bangladesh Bank guidelines for timely write off of bad loans must be adhered to. An Aggregate Score of 35 or less based on the Risk Grade Scorecard At least top twenty five clients/obligors of the Bank may preferably be rated by an outside credit rating agency.

The Early Alert Report is completed in a timely manner by the RM and forwarded to CRM of ABBL for approval to affect any downgrade. After approval, the report is forwarded to Credit Administration, who is responsible to ensure the correct facility/borrower Risk Grades are updated on the system. The downgrading of an account is done immediately when adverse information is noted, and is not postponed until the annual review process.

Classification Procedure:

After the date of expiry, if the borrowers do not adjust their loan, ABBL at first gives a notice to them.

The period of giving notice depends on the nature of the loan. For continuous loan, ABBL gives notice for three months. For five-year term loan, ABBL gives notice for six months. And for more than five-year term loan, ABBL gives notice for more than 12 months.

After giving notice, if the borrower does not repay the loan, the loan will be considered as classified.

Pursuant to Bangladesh Bank’s Banking Regulation and policy Department’s Circular No. 16 (1998), loans and advances are classified both on aging and functional criteria as follows:

Unclassified:

The loan account is performing satisfactorily in the terms of its installments and no overdue is occurred. This type of loan and advances are fall into this class.

Substandard:

This classification contains where irregularities have been occurred but such irregularities are temporarily in nature. To fall in this class the loan and advance has to fulfill the following factor.

Substandard

S-T Agri & Micro Credit3 months & above but less than 6 months.Continuous loan Demand LoanUn-recovered for 3 months & above but less than 6 months from the date of the loan is claimed.

Fixed Term loanRepayable within 5years: If the overdue installment equals or exceeds the amount repayable within 6 months.Repayable more than 5years: If the overdue installment equals or exceeds the amount repayable within 12 months.

The main criteria for a substandard advance is that despite these technicalities or irregularities no loss is expected to be arise for the bank. These accounts will require close supervision by management to ensure that the situation does not deteriorate further.

Doubtful:

This classification contains where doubt exists on the full recovery of the loan and advance along with a loss is anticipated but can not be quantifiable at this stage. Moreover if the states of the loan accounts fall under the following criterion can be declared as doubtful loan and advance.

Doubtful

S-T Agri & Micro Credit6 months & above but less than 12 months.Continuous loan Demand LoanUn-recovered for 6 months & above but less than 12 months from the date of the loan is claimed.

Fixed Term loanRepayable within 5years: If the overdue installment equals or exceeds the amount repayable within 12 months.Repayable more than 5years: If the overdue installment equals or exceeds the amount repayable within 18 months.

Bad and Loss:

A particular loan and advance fall in this class when it seems that this loan and advance is not collectable or worthless even after all the security has been exhausted. In the following table the criteria to be fulfilled to fall in this category are summarized:

Bad and Loss

S-T Agri & Micro CreditNot recovered within more than 12 months.Continuous loan Demand LoanUn-recovered more than 12 months from the date of the loan is claimed.

Fixed Term loanRepayable within 5years: If the overdue installment equals or exceeds the amount repayable within 18 months.Repayable more than 5years: If the overdue installment equals or exceeds the amount repayable within 24 months.

Following measures are available for non-repayment of loan-

• To issue notice for adjustment
• To issue legal notice for filing suite.
•  To encash securities (in case of demand loan)
• To issue legal notice for selling the hypothecated goods (in case of transport loan, cash credit-hypo).
•  To issue suite for foreclosure.
•  Finally to sue in money loan court or insolvency court which is suitable.

Credit Risk Management (CRM):

Credit Risk:

Banking is essentially a business dealing with money and credit. Like every other business activity, banks are profit oriented. A bank invests its funds in many ways to earn income. The bulk of its income is derived from loans and advances. On the other hand, this (loan) is also the major source of risk for the bank management. A prudent bank management should always try to make an appropriate balance between its return and risk involved with the loan portfolio.

Credit risk is the possibility that a borrower or counter party will fail to meet its obligations in accordance with agreed terms. Credit risk, therefore, arises from the bank’s dealings with or lending to corporate, individuals, and other bank’s or financial institutions. Credit risk management needs to be a robust process that enables banks to proactively manage loan portfolios in order to minimize losses and earn an acceptable of return for shareholders.

Given the fast changing, dynamic global economy and the increasing pressure of globalization, liberalization, consolidation and dis-intermediation, ABBL has robust credit risk management policies and procedures that are sensitive and responsive to these changes. This policies help its to improve risk management culture establish minimum standards for segregation of duties and responsibilities arid assist to identify the volume of risk and can take positive steps to control the risk as soon as possible.

Measuring Credit Risk:

   Classified Loan and Advances

Credit Risk=                                                                         X 100

                                              Total Loan and Advances

 Million in TK.

Credit Risk Management:

• Oversight of the bank’s credit policies, procedures and controls relating to all credit risks arising from corporate/ commercial/ institutional banking, personal banking, & treasury operations.

• Oversight of the bank’s asset quality.

• Directly manage all Substandard, Doubtful & Bad and Loss accounts to maximize recovery and ensure that appropriate and timely loan loss provisions have been made.

• To approve (or decline), within delegated authority, Credit Applications recommended by RM. Where aggregate borrower exposure is in excess of approval limits, to provide recommendation to MD/CEO for approval.

• To provide advice/assistance regarding all credit matters to line management/RMs.

• To ensure that lending executives have adequate experience and/or training in order to carry out job duties effectively.

Credit Administration:

The Credit Administration function is critical in ensuring that proper documentation and approvals are in place prior to the disbursement of loan facilities. For this reason, it is essential that the functions of Credit Administration be strictly segregated from relationship management in order to avoid the possibility of controls being compromised or issues not being highlighted at the appropriate level.

Credit Administration procedure should be in place to ensure the following-

• To ensure that all security documentation complies with the terms of approval and is enforceable.

• To monitor insurance coverage to ensure appropriate coverage is in place over assets pledged as collateral, and is properly assigned to the bank.

• To control loan disbursements only after all terms and conditions of approval have been met, and all security documentation is in place.

• To maintain control over all security documentation.

• To monitor borrower’s compliance with covenants and agreed terms and conditions, and general monitoring of account conduct/performance.

Credit Risk Management controls the activities of Credit Admin and Monitoring department which consist three main activities:

• Documentation
•  Monitoring
•  Recovery

 Documentation:

Documentation can be described as the process or technique of obtaining the relevant documents. In spite of the fact that banker lends credit to a borrower after inquiring about the character, capacity and capital or the borrower, he must obtain proper documents executed from the borrower to protect him against willful defaults. Moreover, when money is lent against some security of some assets, the document must be executed in order to give the banker a legal and binding charge against those assets. Documents contain the precise terms of granting loans and they serve as important evidence in the law courts if the circumstances so desire. That’s why all approval procedure and proper documentation shall be completed prior to the disbursement or the facilities.

Charge Documents:

Following charge documents are necessary while giving loans:

  Letter of guarantee

  Counter guarantee

  Letter or authority

 Letter of recall the loan

  Letter of continuity

  Letter of revival

  Joint promissory note

  Single promissory note

  Letter of undertaking

  Loan disbursement letter

  Charge over bonds or certificate of shares etc.

  Letter of lien against fixed deposit receipt

  Letter of authority to en cash FDR

  Memorandum of deposit of title deeds

  Hypothecation of goods to secured a demand cash credit or overdraft or loan account

  Guarantee by third party

  Hypothecation of vehicle

Credit Disbursement:

Having completely and accurately prepare the necessary loan documents, the loan officer ready to disburse the loan to the borrower’s loan account. After disbursement, the loan needs to be monitored to ensure whether the terms and conditions of the loan fulfilled by both bank and client or not.

Process Flow for Loan Disbursement:

Loan Disbursement:

After the loan documents are checked by AOD, complete and OK files are sent for disbursement. All the files in AOD have a checklist attached and the officers who check the documents initial the files and approve them for disbursement clearance. Disbursement process for retail, SME and corporate are different as discussed below:

SME client ID is created in the AOD and details customer information are filled in MYSIS client information module. Repeat applicants have the same client ID but a new Loan Account number. After the client ID creation, a list of SME clients is created where the following information are entered:

• Client ID
• Name of the business
• Bank information (Rupali, Agrani, Janata, Pubali, City, BKB, and BBL)
• Accounts information (Branch, A/C No.)
• Approved Loan amount
• Unit Office & CRO information
• Disbursement date (As per the Loan application)

The senior officers check this file and after loan account activation, disbursement is made to clients’ link account, which is mentioned in loan application. Disbursement process flow is: