SME Banking Scope In Bangladesh (Part-5)

SME Banking Scope In Bangladesh (Part-5)

Corporate Lending

There are so many banks in Bangladesh providing SME banking services. But I choose 5 well reputed banks. They are also providing SME banking service. Not only this, they are doing this from the very beginning of the SME banking.

The Banks are:

  •   AB Bank
  •   BRAC Bank
  •   Dutch Bangla Bank Limited
  •   EXIM Bank
  •   Standard Chartered Bank.

Background of AB Bank Limited

AB Bank Limited, the first private sector bank was incorporated in Bangladesh on 31st December 1981 as Arab Bangladesh Bank Limited and started its operation with effect from April 12, 1982.

AB Bank is known as one of leading bank of the country since its commencement 29 years ago. It continues to remain updated with the latest products and services, considering consumer and client perspectives. AB Bank has thus been able to keep their consumer’s and client’s trust while upholding their reliability, across time.

During the last 29 years, AB Bank Limited has opened 82 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited. To facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the World.

In spite of adverse market conditions, AB Bank Limited which turned 28 this year, concluded the 2008 financial year with good results. The Bank’s consolidated profit after taxes amounted to Taka 230 cr which is 21% higher than that of 2007. The asset base of AB grew by 32% from 2007 to stand at over Tk 8,400 cr as at the end of 2008.

The Bank showed strong growth in loans and deposits. Deposit of the Bank rose by Tk. 1518 cr ie., 28.45% while the diversified Loan Portfolio grew by over 30% during the year and recorded a Tk 1579 cr increase. Foreign Trade Business handled was Tk 9,898 cr indicating a growth of over 40% in 2008.

The Bank maintained its sound credit rating in 2008 to that of the previous year. The Credit Rating Agency of Bangladesh Limited (CRAB) awarded the Bank an A1 rating in the long term and ST-2 rating in the short Term.

AB Bank believes in modernization. The bank took a conscious decision to rejuvenate its past identity – an identity that the bank carried as Arab Bangladesh Bank Limited for twenty five long years. As a result of this decision, the bank chose to rename itself as AB Bank Limited and the Bangladesh Bank put its affirmative stamp on November 14, 2007.

The Bank decided to change its traditional color and logo to bring about a fresh approach in the financial world; an approach, which like its new logo is based on bonding, and trust. The bank has developed its logo considering the contemporary time. The new logo represents our cultural “Sheetal pati” as it reflects the bonding with its clientele and fulfilling their every need. Thus the new spirit of AB is “Bonding”. The Logo of the bank is primarily “red”, as red represents velocity of speed and purity. Our new logo innovates, bonding of affiliates that generate changes considering its customer demand. AB Bank launched the new Logo on its 25th Anniversary year.

AB Bank commits to nation to take a lead in the Banking sector through not only its strong financial position, but also through innovation of products and services. It also ensures creating higher value for its respected customers and shareholders. The bank has focused to bring services at the doorstep of its customers, and to bring millions into banking channels those who are outside the mainstream banking arena. Innovative products and services were introduced in the field of Small and Medium Enterprise (SME) credit, Women’s Entrepreneur, Consumer Loans, Debit and Credit Cards (Local & International), ATMs, Internet and SMS Banking, Remittance Services, Treasury Products and Services, Structured Finance for Corporate, strengthening and expanding its Islamic Banking activities, Investment Banking, specialized products and services for NRBs, Priority Banking, and Customer Care. The Bank has successfully completed its automation project in mid-2008. It envisages enabling customers to get banking services within the comfort of their homes and offices.

AB Bank has continuously invests into its biggest asset, the human resource to drive forward with its mission “to be the best performing bank in the country.” The bank has introduced Dress Code for its employees. Male employees wear designed ties and females wear Sharee or Salwar Kamiz, all the dresses are consisted with the unique AB Bank logo.

AB is recognized as the people’s choice, catering to the satisfaction of its cliental. Their satisfaction is AB’s success.

Corporate Information of AB Bank Limited

Name of the Company : AB Bank Ltd

Legal Form: A public limited company incorporated on 31st December, 1981 under the Companies Act, 1913 and listed in the Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd.

Vision & Mission

Vision Statement
“To be the trendsetter for innovative banking with excellence & perfection”
Mission Statement
“To be the best performing bank in the country”

Core Values
Our Compliances
We consider adherence to national policies and objectives a priority for giving our customers the best financial support with corporate integrity, meaning a fully compliant bank along with involvement in social development.
Our Customers
We give the best priority on our customer demand and through our endless effort we assure the best satisfaction to our customers.
Our Shareholders
We assure the best return to our shareholders’ by commenced performance over a rolling year.
Our Team Members
We provide secure, satisfying employment, ensuring the contribution of each individual to the success of ABBL.

Products & Services

Retail Banking

Personal Banking Loan Products

Product NamePersonal Loan
PurposePersonal loan may be availed for any purpose deemed appropriate for lifestyle and personal exigencies including purchase of household items, marriage, travel, medical treatment, CNG conversion, Festival, renovation etc.
Loan LimitMinimumTk.50,000/-
Maximum Tk. 5,00,000/- ( upto Tk. Ten lac covered by tangible security acceptable to the bank.)
ChargesApplicationfee: Tk.500/-
Processing fee: 1% on the approved loan amount or Tk. 2000/- whichever is higher
TenorMin 12 months
Max 36 months
Max 60 months (for house/office renovation loan)
Rate of Interest14.50% p.a. – 17.50% p.a.
SecurityHypothecation of the product to be purchased.
GuaranteePersonal guarantee of spouse/parents only.
Product NameAuto Loan
  1. Purchase of Brand new cars
  2. Purchase of Re-conditioned cars
Loan Limit80% of the value of the brand new car or reconditioned car but not exceeding BDT 20,00,000/-
ChargesApplication fee: Tk. 500/-
Processing fee: 1% on the approved loan amount or Tk. 5000.00 whichever is higher
TenorReconditioned Car: Max 60 months
Brand new Car: Max 72 months
Rate of Interest14.50% p.a. – 17.50% p.a.
SecurityHypothecation of the vehicle to be purchased.
GuaranteePersonal guarantee of spouse/ parents only.
Product NameEducation Loan (disbursed to parents/guardian)
PurposeTo assist Parents/guardians for  Admission/Education Fees, Semester Fees, Study abroad for their children/wards
Loan LimitMinimum Tk. 50,000/-
Maximum Tk. 5,00,000/- (upto Tk.Ten lac covered by tangible security acceptable to the bank)
ChargesApplication fee: Tk. 500/-
Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher
TenorMin 12 months
Max 48 months
Rate of Interest14.50% p.a. – 17.50% p.a.
GuaranteePersonal guarantee of spouse/parents only
Product NameEducation Loan (for executive)
PurposeTo assist Executives pursue Higher Studies/professional qualification at local/overseas institutions
Loan AmountMinimum Tk. 50,000/-
Maximum Tk. 5,00,000/- (upto Tk.Ten lac covered by tangible security acceptable to the bank)
ChargesApplication fee: Tk. 500/-
Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher
TenorMin 12 months
Max 48 months
Rate of Interest14.50% p.a. – 17.50% p.a.
GuaranteePersonal guarantee of spouse/parents
Product NameHome Loan
Purpose1. Purchase of apartment/house within the Municipal areas of town/cities in Bangladesh.
2. Purchase of independent house not more than 5 years old.
3. Completion of construction of a new house.
Loan LimitMinimum BDT 500,000/-
Maximum 80% of the value of the flat or construction cost for completion but not more than Tk. 1,00,000,00/-
ChargesApplication fee: Tk. 500/-
Processing fee: 1% on the approved loan amount
  • Minimum 3 Years
  • Maximum 15 Years
Rate of Interest13.00% p.a.
SecurityRegistered mortgage of property supported by a registered irrevocable general power of attorney
GuaranteePersonal guarantee of spouse/ parents/legal heir

Secured Loan

Product NamePersonal Loan
PurposeTo meet personal requirement of fund
Loan AmountMaximum 95% of the present value of the security
ChargesProcessing fee: Tk. 1000/-
TenorMin 12 months
Max 36 months
Rate of InterestFor ABBL FDR, 3% higher than the rate of deposit
12.00 % p.a. -15.00 % p.a. (for other Bank FDR)
SecurityLien over FDR, ICB Unit Certificate, RFCD, NFCD, CD account(s) etc. One personal guarantee in case of third party cash collateral
Product NamePersonal Overdraft
PurposeTo meet personal requirement of fund
Loan AmountMaximum 95% of the present value of the security
ChargesProcessing fee: Tk. 1000/-
TenorRevolving with annual review
Rate of InterestFor ABBL FDR, 3% higher than the rate of deposit
12.00 % p.a. -15.00 % p.a. (for other Bank FDR)
SecurityLien over FDR, ICB Unit Certificate, RFCD, NFCD, CD account(s) etc. One personal guarantee in case of third party cash collateral

Corporate Lending

Our specialist teams offers a comprehensive service providing finance to large and medium-sized business based in Bangladesh. For more information as to how we might best meet your corporate debt needs, please contact us at our Corporate Head Office.

Structure Finance

We have a specialist Structured Finance Team who arrange and underwrite finance solutions including Debt and Equity Syndication for financial sponsors, management teams and corporates. Also we provide corporate advisory services. We aim to provide tailored financing solution 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 Services

SME Banking

SME Loan

Considering the volume, role and contribution of the SMEs, in the last two decades AB Bank has been patronizing this sector by extending credit facilities of different types and tenor. As of now 54% of the bank’s total loan portfolio is segmented to the SMEs which deserve all out attention in our plans, projections and forecasting.

As such the bank has emphasized on the following issues:

  • To provide the best services to the SME sector
  • To increase the SME portfolio of ABBL significantly
  • To improve the quality of ABBL’s portfolio

SME Sectors in which AB Bank has participated so far:

  • Agro machinery
  • Poultry
  • Animal Feed
  • Dairy Product
  • Fruit Preservation
  • Hotel & Restaurants
  • Garments Accessories
  • Leather products
  • Plastic product
  • Furniture : Wooden & Metal
  • Ink
  • Paint
  • Printing & Packaging
  • Wire & Cable
  • Aluminum
  • Cement and Lime Plaster
  • Clinics and Hospitals
  • Engineering & Scientific Instruments

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:
SLSectorABBL Exposure (Limit)
(Fig. in Lac Tk.)
1Agro- Business12,717.56
2Cement Power, Glass38,691.92
3Consumer Products21,855.00
4Edible Oil36,057.53
5Engineering & Construction18,106.42
6Financial Institution1,414.70
7Food & Beverage27,044.24
9Health Care3,928.62
10Printing & Packaging11,867.61
11Real Estate10,451.49
14RMG & Backward Linkage94,826.13
15Ship Breaking18,029.20
17Telecom & Computer Accessories11,479.89
Total ( including syndicated exposure)444,585.21
Less Syndicated Exposure51,560.29
Total Large Loan & Project Finance portfolio without syndicated exposure3930,24.92

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, EXIM Bank, Bank Asia, Oriental Bank, NCC Bank, The City Bank, Trust Bank, 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:
SLSectorABBL Participation
(Fig. in Lac Tk.)
4Energy & Power11,997.00
5Telephone (PSTN)5,500.00
8Steel Mills9081.72

Lending Rates 

ProductsMid RateInterest Rate W.E.F
September 19, 2011
1) Agriculture (As per Bangladesh Bank Directives)13.00%13.00%
2) Large and medium scale industries (Term) (As per Bangladesh Bank Directives)13.00%13.00%
3) Small Industries (Term Loan) (As per Bangladesh Bank Directives)13.00%13.00%
4) Working Capital
a) Large and medium scale industries15.50%14.00%-17.00%
b) Small Industries16.50%15.00%-18.00%
5) Export (As per Bangladesh Bank Directives)7.00%7.00%
6) Commercial Lending15.50%14.00%-17.00%
7) Housing Loans15.50%14.00%-17.00%
8) Consumer Credit18.50%17.00%-20.00%
9) Credit Card2.00% per month2.00% per month
10) Finance to NBFI’s14.50%13.00%-16.00%
11) Others
i) Cash Collateral – ABBL FDR16.50%15.00%-18.00%
ii) Cash Collateral – Other Banks FDR or WDB16.75%15.25%-18.25%
iii) Women Enterpreneur upto Tk 50.00 lac (As per Bangladesh Bank Directives)10.00%10.00%
iv) Special Scheme Loans – SME16.50%15.00%-18.00%
v) Import Finance against essential items (Rice, wheat, edible oil (refined & crude), lentils, peas, onion, dates and sugar) (As per Bangladesh Bank Directives)12.00%12.00%
vi) Import Finance against chemical fertilizer(As per Bangladesh Bank Directives)14.00%14.00%


  1. For lending against ABBL FDR, the rate is minimum 3.00% above the rate of the instrument or minimum 15.00% p.a.
  2. Exposure under cash collateral of other banks requires clearance from FI & Treasury.
  3. For taking exposure on “Digun Loan” under Special Scheme, the rate will be 8% above the instruments’ rate; subject to maximum 18% p.a.
  4. For Women Entrepreneur (above Tk. 50.00 lac) under Special Scheme, the rate will be 14.00%-17.00%.

Deposit Rates

Interest Rates with effect from August 08, 2011

ProductsInterest Rate
Savings Deposits6.00%
FSP (Family Savings Plan)8.00%
SND (Special Notice Deposit)
Upto 1,00,00,0004.00%
1,00,00,001 to 25,00,00,0005.00%
25,00,00,001 to 50,00,00,0006.00%
50,00,00,001 to 100,00,00,0007.00%
Above 100,00,00,0008.00%
Security Deposit Receipts(SDR)/Call Deposit3.00%
NFCDRate as per Daily FX rate
FC & RFCD (Minimum balance USD 1000 or GBP 500 or its equivalent for other currency & minimum tenor one month)Rate as per Daily FX rate
Fixed Deposit (Time Deposits)
1 (One) Month12.00%
3 (Three) Months12.00%
6 (Six) Months12.00%
1 (One) Year12.00%
2 (Two) Years12.00%
MSDS (Monthly Savings Deposit Scheme)Rate of Return on Maturity
3 (Three) Years11.79%
5 (Five) Years11.84%
7 (Seven) Years11.30%
10 (Ten) Years11.87%
MIDS (Monthly Income Deposit Scheme)Interest Rate
1 (One) Year10.20%
3 (Three) Years11.00%
5 (Five) Years12.00%
DDS (Deposit Double Scheme)Tenor
Deposit DoublesAfter 6 years

Foreign Exchange Rates

DAYSBUYSELL1 MONTH0.256560.729381.13813
30 DYS76.350678.00602 MONTHS0.368830.839691.25000
60 DYS76.700478.87633 MONTHS0.487781.018691.41500
90 DYS77.098079.66644 MONTHS0.561391.108001.48813
180 DYS78.704981.87806 MONTHS0.698611.305441.65063
12 MONTHS1.018111.796252.00313
TEL: 880-2-9564169,PABX 9560312-6, EXT :148, 256, FAX: 9566265
In the call money market the rate was 7.00%-9.00% on Sunday
and we forecast that it may range between 7.00% to 09.00% today.
In the local FX market Dollar was traded at Tk 76.55 – Tk 76.58 on Sunday
and we forecast that it will be traded at Tk 76.57 -Tk 76.60 today.
1 MONTH0.140.440.780.060.290.40
2 MONTH0.250.550.89
3 MONTH0.360.721.04
6 MONTH0.560.991.27
12 MONTH0.871.461.60
As a Primary Dealer, we Sell/Buy T-Bills and T-Bonds to customers. Cut-off Yields for T-Bills and T-Bonds of last Auction is given above for reference only. For customer transactions, rates to be obtained from Dealing Room, Treasury, Head Office, Dhaka.
BD Govt. T-Bonds
91 DAYS8.6010 YEARS9.55
182 DAYS8.9015 YEARS11.00
364 DAYS9.0020 YEARS11.50



More parts of this post-

SME Banking Scope In Bangladesh.(Part-1)

SME Banking Scope In Bangladesh.(Part-2)

SME Banking Scope In Bangladesh (Part-3)

SME Banking Scope In Bangladesh (Part-4)

SME Banking Scope In Bangladesh (Part-5)

SME Banking Scope In Bangladesh (Part-6)

SME Banking Scope In Bangladesh (Part-7)

SME Banking Scope In Bangladesh (Part-8)

SME Banking Scope In Bangladesh (Part-9)