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INTERNSHIP STATEMENT ON CREDIT RATING POLICY , PRACTICE OF PRIVATE COMMERCIAL FINANCIAL INSTITUTIONS OF BANGLADESH, A STUDY UPON MERCANTILE TRADITIONAL BANK LTD. PRIMARY BRANCH 61, DILKUSHA INDUSTRIAL ARA DHAKA-1000, BANGLADESH. Submitted To: E.

M. Golam Mohiuddin Teacher Department of Accounting , Information Systems University of Chittagong. Submitted By: Shahinor Rahaman MBA 15th Batch Class Move: 14488 Exam Roll: 2006/35 Session: 2005-2006 University of Chittagong. Letter of Transmittal May 18, 2008 E. M. Golam Mohiuddin Teacher Department of Accounting , Information Systems

University of Chittagong. Re: Submission of Internship Survey. Dear Sir, I i am pleased to submit my Internship Report accordingly. The statement titled “Credit Policy , Practice of personal Commercial Banking institutions of BD. A Study about Mercantile Traditional bank Ltd.  was given to me by simply you, and was approved by my Faculty Supervisor while my “Project during my over 8 weeks Internship Period. In every sphere of preparation of this record I tried my best to make very good combination of my personal learning from the MBA software, my assumptive knowledge and working knowledge during my Internship Program.

I use concentrated my personal best work to achieve the objectives of the statement and wish that my personal endeavor is going to serve the purpose. Working 60 days in Mercantile Bank Limited, Main Department was a worthwhile experience to me as it helped to combine practical experience with my own theoretical know-how. Sincerely yours, Shahinor Rahaman MBA fifteenth batch Class Roll: 14488 Exam Roll: 2006/35 College or university of Chittagong. Acknowledgement Various people have contributed to the writing of this internships report. My spouse and i acknowledge my personal indebtedness with deep admiration to E.

M Golam Mohiuddin, ethical supervisor of my internship program and Assistant Professor of School of Business, who also assigned me personally to prepare this kind of report about “Credit Coverage , Practice of Private Business Banks of Bangladesh, A report on Mercantile Bank Limited. ”. My spouse and i am especially indebted to Md. Rabiul Islam, Older Vice President , Head of Branch of Mercantile Bank Limited. whose direct cooperation , recommendation allowed me to to receive such a good internship right away when getting a great internship was an urgent requirement. I would personally convey my cordial due to Md. Abdus Salam, Vice President , Supervisor Operation of Main Branch.

My countless thanks , heartiest honor always is to Mr. Maryland. Fakhruzzaman Chowdhury, AVP , In charge of Credit rating Division of MBL Main Department. I are indebted forever to him and without his help good preparation of this report was really impossible personally. I are also happy to the different executives , officers of Mercantile Traditional bank, Main branch. I was also happy to our Department Chairman, intended for giving me an identity with which I can work at Primary Branch of Mercantile Bank Limited. Through doing this report, I possess extracted even more precise knowledge about various terms related to plan , practice of credit.

Finally, I would really like to express because of my entire course educator and the Division for presenting such academics work. Shahinor Rahman Subjective In Banking institutions and Finance institutions, Credit Risk is considered because an essential aspect that needs to be been able. Credit Risk is the likelihood that a lender or table party can fail to meet up with its commitments in accordance with the agreed terms. Credit Risk, therefore , comes from the Bank’s dealings with or financing to corporate and business, individuals and other Banks or Financial Institutions.

Credit Risk Management needs to be a robust process that enables Banking companies to proactively manage mortgage portfolios in order to minimize losses and earn an acceptable degree of return pertaining to shareholders. Cargo Bank well prepared Credit Coverage in May 2k and circulated the same towards the Branches / concerned Business owners for Compliance which was revised in August 2003. In order to cope with the fast changing circumstance of energetic global overall economy, liberalization and globalization and in the light in the directives / suggestions in the Focus selection of Bangladesh Lender, the Credit rating Policy has become revised in October, 2005.

All Professionals / Officers of the Branch as well as Hq especially those will be entrusted with the responsibility of Credit promoting, approval digesting, credit monitoring, recovery and compliance, ought to maintain themselves completely conversant while using contents in the Credit Plan for careful compliance. MBL is to does everything inside the context of its insurance plan and Bangladesh Bank suggestions. Every private commercial lender formulates it is policy for his or her operations to hold banks practical and rewarding and also pertaining to the protect of depositors’ interest.

Techniques of Credit rating are however , subject to additions, alternations and modifications since may be warranted by the change of situations due to passageway of time, to accommodate the requirement of the Bank. Whatever the plan of Bangladesh Bank is most of the private commercial banking companies are inclined to buy the highly profitable sector concurrently where risks are reduce. Only the credit rating department has become covered in the internship program, it is not feasible to go to the interesting depth of each actions of branch because of time limitation.

Through this report all those credit techniques are excessive lighted only which are most familiar to common people as well as frequently utilized by a financial institution especially MBL Main Department. And only the parts tightly related to my focusing fields had been taken, thus the actual credit Policy have been shortened to facilitate the analysis. MBL discourages the individuals who are more likely to get financial loan for their vital purpose. Mode of payment, charge papers etc . creates bottleneck in loan acceptance process. Head office takes and so longer time in processing and approval of corporate loan. The total sanctioning process function takes week after week to give the ultimate decision.

MBL does not sanction mortgage to all areas equally as they need, rather it concentrates it is loan and advances within some limited fields and category. It includes Credit Card services, but ATM booths can be found only in a few commercial hubs in the town. Again the terms and conditions in the credit card aren’t changes together with the changing environment. That’s why ATM card holders most often avoid take credit card facilities also in some cases employee of MBL use various other banks’ mastercard. Consumer credit plans (CCS) are definitely more popular and required issues among the persons of various classes, but the powerful rate of interest is extremely high.

As well as the terms and conditions of CCS mortgage are also incredibly inconvenient and discourage persons. Loan sanctioning and disbursement procedure are certainly not so easy and versatile being considered as the requirements of numerous classes of people. Sector wise loans in agro primarily based industries and firms, leather technology could be convenient and versatile for the receiver. Mortgage facility unbekannte should be expanded so that all of the people could possibly get loan relating to their needs. Average expense of fund is extremely high. On the contrary Business Power for sanctioning loans and advances in branch level is negligible.

Lots of fresh commercial bank has been proven in last few years and these types of banks have made this banking sector very competitive. So , now financial institutions have to set up their procedure and do their very own operations in line with the need of the market. Bank sectors no longer depends on a traditional method of banking. In this competitive world this kind of sector features trenched its wings wide enough to pay any kind of finance anywhere in this world. The major task for banking companies, to survive in this competitive environment is by handling its property and debts in an efficient way.

Every single organization offers its confident as well as negatives and in case of Mercantile Bank Limited existence from the later the first is less then the earlier one and as the administration is determined to achieve the decide on of achievement it seems that in near future the negatives will be eliminated. 8 years is a very short span of time as well as the organization, which will establish itself as one of the the majority of reputed non-public commercial Traditional bank in the country within this short period warrants special credit rating and with the able frontrunners Mercantile Financial institution will reach the highest degree of success very shortly.

I wish the bank all accomplishment prosperity inside their field. CONTENTS Page Number CHAPTER-1: ADVANTAGES 1 . one particular Forward2 1 ) 2 Difficulty Statement: 2 1 . 3 Objectives with the report: two 1 . 5 Methodology with the Study3 1 . 4. 1 Sources of data3 1 . 5. 2 Techniques of Data Collection3 1 . 5 Limitations of the Study3 1 ) 6 Reason of the Study4 1 . 7 Scope of the Study4 CHAPTER-2: PROFILE OF MBL installment payments on your 1 History of Cargo Bank Limited6 2 . 1 ) 1 Goals of MBL6 2 . 1 . 2 The Structure of MBL6 2 . 3 Sections of MBL9 2 . a few. 1 Credit rating Division9 2 . 3. 2 Human Resources Division9 2 . several. Audit and Compliance Division9 2 . 3. 5 Central Accounts Division10 2 . several. 6 Technology Division10 2 . 3. six International Division10 2 . a few. 8 Promoting Division10 installment payments on your 3. on the lookout for Training and Development Division11 2 . a few. 10 Research and Development Division11 CHAPTER-3: CREDIT TECHNIQUES OF MBL OR CREDIT DEPARTMENT OF MBL several. 1 Level , Restrictions13 3. 2 Credit Office , the Function13 a few. 3 Business Powers: 16 3. three or more. 1Responsibilities: 16 3. 5 Processing of Credit Plans: 14 three or more. 5 Credit rating Categories: nineteen 3. five. 1 Cultivation: 19 3. 5. 2 Term Mortgage for Significant , Medium Scale Industry: 20. a few. 3 Term Loans to Small , Cottage Industries: 20 a few. 5. four Working Capital: 20 3. a few. 5 Foreign trade Credit: 21 3. a few. 6 Business Lending: 21 years old 3. a few. 7 Different Lending: twenty-one 3. 6 Loan Syndication , Structured Finance: twenty one 3. six. 1 Types of Syndicated facilities: twenty two 3. 6. 2 Get-togethers to the Syndication: 22 three or more. 6. several Advantages of Loan providers / Banking institutions: 22 a few. 6. some Advantages of Buyers: 22 a few. 6. 5 Important factors intended for syndication: twenty-two 3. 7 Project Finance: 24 a few. 8 SME Lending: twenty four 3. almost 8. 1 Goal: 24 three or more. 8. two Target Client Segment: twenty-four 3. almost 8. 3 Degree of Services: 24 a few. 8. 5 Product Varieties: 24 a few. 8. 5 Tenor of Loan: 25. 8. 6 Bank Charges/Pricing: 25 a few. 8. several Equity with the Borrower: 25 3. 8. 8 Repayment Method: twenty-five 3. almost 8. 9 Training: 25 3. 9 Foreign trade Finance: 21 3. 15 Finance in Garments Sector: 26 several. 11 Particular Loan: dua puluh enam 3. doze Small Mortgage Scheme: 21 3. 13 Earnest Money Financing Scheme: 27 3. 13 Doctors Credit Scheme: 28 3. 12-15 Personal Loan Plan: 27 three or more. 16 Credit Scheme: twenty seven 3. seventeen Women Entrepreneurship Development Job: 28 three or more. 18 Rental Finance Structure: 28 3. 19 Types of Credit rating Activities: 28 3. nineteen. 1 Loan (General): twenty-eight 3. 19. 2 Property Building Financial loan (General): twenty-eight 3. nineteen. 3 Residence Building Loan (Staff): 29. 19. 4 Car Loan Strategies 29 three or more. 19. five Cash Credits , Overdrafts (Against Hypothecation of Goods/30 Stocks)30 3. 20 Sector wise aides of Financial loans and Developments: 33 CHAPTER-4: HOW DOES BANK MEASURE FINANCIAL LOANS? 35, 36 CHAPTER-5: RISK GRADING UPON 10 LOAN BORROWER OF MBL Risk Grading38-60 Risk grading About 10 Bank loan Borrower of MBL6-162 CHAPTER-6: PROVISION INTENDED FOR LOANS UPON 10 MORTGAGE BORROWER OF MBL Provision for financial loans On 15 loan debtor of MBL64-67 CHAPTER-7: GETTING AND EVALUATION 7. you Observation69 7. 2 Recommendations69 7. a few Conclusion70 Bibliography¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦¦. 72

CHAPTER-1: INTRODUCTION 1 ) INTRODUCTION 1 . Forward: This report has been done in accordance with the requirement for effective completion of the Internship program. Exposure to the business world and obtaining practical work experience was the major objective of this report. I was attached with Mercantile Lender Ltd at its Main Branch for my personal internship. The report targets credit section as I was attached with that division throughout my internships program. The topic for this survey was made the decision upon after approval by simply my Honorable Program Boss Prof. E. M. Golam Mohiuddin.

Section of Accounting , Info Systems, University of Chittagong, Bangladesh. installment payments on your Problem Affirmation: Banks Credit Policy , Practice, and how it runs and what function it will in offering loans to clients are technical job and have an excellent prospect in our country. Credit Policy of all the private industrial banks is practically same, because they follow and are also to follow the normal instructions and guidelines of Bangladesh Lender. But they fluctuate in actual practice of loans and advances. Once again each bank has some particular schemes of loans and advances that are fully or partly unique.. 3 Aims of the record: The present research has been designed to achieve this objectives:? The first aim is to find out about the MBL Credit Policy as a non-public commercial traditional bank.? Secondly just how MBL functions its credit division being controlled with rules , regulations of Bangladesh Traditional bank.? The another basic target of the survey are to observe whether the process of Credit Practice Operation in Mercantile Bank Ltd. is usually complying with all the guideline given by Bangladesh Bank and how Mercantile Traditional bank Ltd. is usually handling the loans , advances. To discover barriers or bottlenecks in sanctioning the entire loans and advances process.? To recommend on those problems. 1 . four Methodology with the Study: The study was based upon secondary data. In order to prepare practical schooling report various source , method of info collection utilized. 1 . 4. 1 Types of data: In this report just Secondary info have been used. For both the Corporation part and Project component, quantitative info from the Total annual reports of MBL and qualitative data from other literary works regarding the several divisions and the functions, procedures were used.

So , simply secondary info were applied. For the project portion, primary info were gathered by keeping informal selection interviews with the personnel to learn of the response/reaction to the change that may be occurring in the organization. While I was carried out the study I actually collected various types secondary data. Data continues to be collected through different sources, by meeting with the responsible officers, bank’s annual statement, and coming from different circular published by Bank. 1 . 4. 2 Methods of Data Collection: There are several methods of data collection which has been relevant , important for the research.

The methods utilized in this record were as follows: – Interview Method: To get information immediate interview was taken of the manager of operation, mortgage in charge, business owners, officials etc . Observation Method: To collect a lot of information associated with the practice of financial loans and advancements in terms of endorsement, sanctioning and mode of disbursement an observation was conducted. 1 ) 5 Constraints of the Examine: The following restrictions are noticeable in this record: -? There were little or no scope of work in credit label of the part for the internee students. So I could hardly realize well all the types of procedures of credit. Only all those loans , Schemes that are highest utilized by the department have been concentrated in this record.? No amount of sector wise allocation of loans and Advances of entire MBL was given. Rather than the figures in relation to Main Branch only has become used. Collecting all info of allocated loans of entire MBL was not possible being attached with a part.? For the Organizational part, almost no economical information pertaining to the year 2007 were obtainable, in some cases simply un-audited details could be gathered.? Credit Coverage is the Inner , Confidential matter to every bank.

So only the most crucial Parts and Provisions of policy linked to selected strategies, loans and advances were focused. 1 . 6 Reason of the Research: In this 21st century Banks are the life-blood of recent economy inspite of its size , style. Banks happen to be established to earn income and help economical and financial activities in order to help economic development of a county. In such a context, the main business of Banking is to take deposit from clients and calamité credit to the borrowers. In performing multidimensional activities like credit and loaning of money, the world of banking can be under going a transformation.

Beside banks will be direct brokers to create possibilities for the development of a country and also provide mass of employment opportunities. Banks will be the most important functionary of financial system of a country and Mercantile Lender Limited is one of them. It plays a dynamic role in the economic development of a nation through of saving and allocation of credit to privates and commercial sectors. It diverts and employs the funds in such paths which are aimed to develop a country’s economy. 1 . 7 Scope of the Study: Banking Sector is a strong and sensitive area.

A Bank features different items, different services and different clients. Different departments of a Financial institution perform distinct activities. Yet , scope from the study is limited within a specific area of an organization that is Mercantile Bank Limited. Again it had been prepared based on data and information accumulated from Key Branch. Which means this study says only about the activities of the Mercantile Bank Limited Main Part in the light of MBL as a whole. This kind of study addresses only various parts and provisions of MBL Credit Coverage and Practice as a sample of private business bans in Bangladesh.

CHAPTER-2: PROFILE OF MBL installment payments on your 1 Qualifications of Cargo Bank Limited: Mercantile Bank Limited began in 06 2, 1999 as a non-public commercial bank and started its operation. The then Prime minister Sheikh Hasina inaugurated the bank. The famous 30 industrialists establish this kind of bank with everybody’s consent Mr. Abdul Jalil elected as the chairman. Cargo Bank Limited is a personal commercial bank with Hq at sixty one, Dilkusha C/A, Dhaka, Bangladesh started procedure on 2nd June 1999. The Bank has 41 twigs spread nationwide and introducing some braches.

With assets of TK. 13078. 93 million, your bank has varied activities in retail bank, corporate banking and worldwide trade. Credit-Mercantile Bank is playing an important part while giving financial loan for the small and medium enterprises. Inside the terms of credit cargo bank has introduced new strategies mostly intended for the business people in Bangladesh. Different types of loan recently been provided to the businessman. The quantity of bank loan been offered was 26842. 14 million BDT till 2006 their main investing projects are business, apparel, micro credit, construction yet others.

Consumer Credit Plan: Mercantile Bank has been offering loan to medium and low-income people. This policy has obtained a great acceptance among buyers. 2 . 1 ) 1 Aims of MBL Mercantile Financial institution Limited (MBL) aims at excellence and is focused on explore a fresh horizon of banking and a wide range of quality products and services identical with these available with virtually any modern financial institution in the world. It is a bank intended for the common persons including entrepreneur and pros. It expects to provide with quality at a cost competitive to obtain in the financial market.

It will constantly continue on exploring the requirements of the consumers. The management of the bank bears at heart the fact they can be on the tolerance of a new millennium, that can pose extra ordinary issues to be experienced and at the same time open new possibilities and options. 2 . 1 ) 2 The Structure of MBL The organization structure and company of Mercantile Bank Limited (MBL) firmly reflect their determination to determine, uphold and gain a stronger ground as an organization which is customer-oriented and translucent in its administration. Board of Directors

The Board of Directors involves 13 affiliate elected from your sponsors with the Bank. The Board of Directors is the apex body system of the bank. Board Panel: The Board of Company directors who as well decides on the composition of every committee determines the responsibilities of each committee. Executive Committee: All schedule matter beyond delegated power of supervision are determined upon by or routed through the Professional Committee, subject to ratification by Board of Directors. Coverage Committee: Most mater concerning the principles, procedures, rules, and regulation, values etc . or perhaps operation and management of the bank will be recommended by the Committee for the Board of Directors. Managing: The managing of the financial institution is vastly on a Table of Company directors, for total supervision and directions on policy things by the board. The power of basic supervision and control of the affairs of the bank is usually exercise by president and managing overseer of the traditional bank who is the primary executive expert. Above all, your bank will be manned and been able by a galaxy of skilled professionals experienced in their specific fields and dedicated to the reason for the bank.. three or more Divisions of MBL: Every policy preparations and succeeding executions are carried out in the Hq. It consists of nine significant divisions particularly Credit Section, International Section, Central Accounts Division, Human Resources Division, Technology Division, Advertising Division, Training Division, Research and Development Division, Examine and Conformity Division. Besides these key divisions, you will discover forty 1 branches nationwide to look after the Bank’s day-to-day operations.

The structures and Sanctions of each and every of the partitions of MBL are referred to below: installment payments on your 3. 1 Credit Section: The primary objective of this section is to measure the credit worthiness and debt payment capability of present loan customers and bank loan applicants. Also, it is responsible for tracking the credit rating portfolio simply by obtaining standard information through the branches. It sets rates for credits and ensures affecting this at the limbs. This department also watches the various mortgage accounts from the branches and prepares various statements for Bangladesh Financial institution.. 3. two Human Resources Division: The employees are Mercantile Bank’s most valuable source. Having competent and professional employees has become increasingly crucial in today’s competitive world, and MBL contains a significant competitive advantage in this respect many of its employees have worked here since the BCCI location and therefore include vast knowledge in their individual fields. As well the new employees are hired with audio academic background given appropriate training following recruitment to groom on with their responsibilities.

They intend to inculcate a top performance tradition where the employees will work with fun and pride. 2 . several. 4 Review and Conformity Division: The main function of the division is to provide legal assistance to the branches also to ensure rigid adherence of rules and policies simply by all worried officials of the bank through routine and surprise inspection and taxation. 2 . a few. 5 Central Accounts Split: Finance and Accounts department task is always to maintain daily liquidity positions, treasury expenses, call cash, debentures, keeping of funds and so forth

Monthly-accrued interest calculation of interests bearing accounts, inter-branch calculation for Head Office, amortization of all fixed and other resources. It prepares statement of accounts and profit and loss are the cause of the bank. Each week deposit and advance research and Expense of fund analysis are the two major features done by this department. 2 . 3. 6th Information Technology Division: Previously, Mercantile Bank had a very low amount of automation. There is hardly any PC in the whole Lender before 2001. But when the newest management took over in 2001, they offered huge emphasis on computerizing the bank’s procedures.

After two years, almost all the operations inside the bank are actually automated. Your bank is also shifting to a new IT program, which is aimed at maintaining, functioning and strengthening the technology base from the bank to enable error totally free production of information that assures ongoing efficiency and success of operation, A world category banking software called Contract Cube have been installed that can centralize procedures and provide On-line Banking, Net Banking, Automated Teller Machine, Telephone Bank, Point of sale répartir, Credit Card service etc .

Previous November, 05 Introduced Fresh software named PC Financial institution 2000. installment payments on your 3. six International Split: International Split is responsible for aiding the approved branches to deal in international trades, that may be, import and export businesses on account of the customers of the lender by giving authorization for ventures and controlling them in various periods. It relates to all correspondents of foreign banks having arrangement while using bank. Yearly new providers are added.

The larger the quantity of correspondents and the wider the coverage location, the wealthier will be the worldwide connections in the bank. installment payments on your 3. eight Marketing Split: The main function of this split is to build relationship while using potential customers and strengthen the partnership with the existing customer. To inform and explain the potential customer about the facilities provided by the bank and searching for fresh area of organization and collect information about the potential sector along with prepare technique for getting competitive advantage.. a few. 9 Teaching and Creation Division: The key function on this division is usually to prepare the employee of the traditional bank as proficient and top quality workforce. The function of the division can be s uses:? Arrange training and positioning program pertaining to the fresh lenders.? Provide particular training program for the employee for making them even more professional. installment payments on your 3. 15 Research and Development Section: Excellence in banking operation depends typically on a well-equipped and useful Research and Development Division.

Such activities require the investment of substantive money and a set of highly qualified personnel with multidisciplinary background. Although it is not likely at this stage to undertake R, M activities just like those of the banks in the developed countries, Mercantile Lender has established a core Research and Planning Division comprising skilled folks from the very inception from the Bank. CHAPTER-3: CREDIT PROCEDURES OF MBL ON CREDIT DEPARTMENT OF MBL three or more. 1 Extent , Limitations It is put on all the Branches of Cargo Bank Limited in Bangladesh.

Extension of Credit features are susceptible to Credit Policy of the Traditional bank and credit restrictions, perimeter restrictions, fine prints regarding security, period of repayment and other guidance and limitations imposed every once in awhile in this respect by Head Office, Bangladesh Bank rules and regulations and overall Government insurance plan of Bangladesh. 3. 2 Credit Section , its Function The Credit Risk Management Department is assisted by the Credit Government Department, which is mainly interested in the post-approval functions of the Credit Section.

The aspects that are vitally tracked and monitored by Credit Admin are? Credit rating expiry? Previous dues? Excessive over limit? Document deficiency? Reporting Credit rating Division can be involved in quite simply 2 extensive functions: Loan Monitoring: The top aspects of this part happen to be:? Follow approval terms? Right loan payment? Monitor rates of interest and primary repayment? Equilibrium with general ledger Documentation: The important features of this component are:? Check out sanction terms and Complete loan documentation checklist,? Ensure Proper bank loan documentation and acquire client signal off Filing with the Registered Joint Share Corporation ( RJSC)? Registered mortgage action execution three or more. 3 Organization Powers: Almost all powers with the Bank will be vested inside the Board. They are the source of all powers, and any person or body can easily exercise only the powers delegated by the Table in ways and manners specified by them. Mercantile Traditional bank Ltd. believes in decentralization of powers. With a view to ensuring prompt and useful services to its size of clients spread everywhere, the Bank envisaged delegation of optimum powers to it is Executives and officials at different degree of operations. The Board can easily delegate the authority, not its responsibility.? The evil of dual Subordination may creep inside the chain of command if perhaps authority is usually not well defined and properly applied.? Exercise from the delegated authority must commensurate with the carrying of the responsibility. 3. several. 1Responsibilities:? Hq is responsible for formulating Credit Coverage for the financial institution, for the correct conduct in the advances inside the Branches and for the system of control over all of them.

Head office delegate business forces of Branch-in-charges, devise way of forwarding credit rating proposals to move Office pertaining to sanction and instructions relating to submission of periodical comes back.? Branch-in-Charges are primarily in charge of all improvements at their particular Branches. They have to exercise good sense, wisdom, prudence and judiciousness in the make use of powers assigned to them and in promoting proposals to Head Office intended for sanction. In most cases, they need to ensure that Bank’s interests happen to be fully safe.. 3. four Processing of Credit Plans: A properly secured credit facility may be permitted to a customer only after finding a limit sanctioned by the approved officials.? The client seeking a credit facility against suitable security need to make an application in bank’s imprinted form “Request for Credit rating Limit” PF-146 (Annexure-l) enclosing necessary papers/documents to his nearest Subset of the Bank where he maintains his operative accounts.? Arranging an interview with the planning borrower to be aware of on the pursuing points: Present and long term prospect of the customer’s organization 1 . Prior to finally choosing the lender, bank is satisfied that,?

The client possesses persona, capacity and capital , The accounts is remunerative one , Repayment layout is adequate.? Dealing items and primary security of the client possess the top quality of convenient marketability, durability and storability? Collateral protection offered owns the quality of convenient marketability and is not encumbered and its value is carefully assessed to be able to leave adequate margin following covering the improve and goes preferably for the borrower.? Means, standing and respectability of the applicant and the guarantor (if any) will be satisfactory. Credit history of the applicant is sensible? Location of the organization is good. The following Papers/documents have to be submitted by the Branch Managers along with the proposals: a) Ask for Credit limit of customers -PF-146 (Annexure-l) b) Project Profile as well as Profile of Business c) Copy of Trade Permit duly attested Copy of TIN License d) Authorized copy of Memorandum and Articles of Association, Qualification of Use, Certificate of commencement of business, Image resolution of Panel of Overseer, Partnership Deed, (where applicable) ) Personal Net worth Statement of the Owner/Director/Partner/Proprietor in Bank’s Format. f) Valuation Certificate in Bank’s Format along with picture of collateral security with detail specifics on the back again duly authenticated by the Part Manager. g) 3 years “balance sheet” and earnings and reduction A/C h) CIB Interrogation Form duly filled in (For proposal of Tk. 12. 00 lac and above) i) Lending Risk Research for Credit rating facilities of Tk. 55. 00 lac and above j) Inspection/Visit Report of Factory/Establishment/Business property of the customer-Annexure-5 k) Statement of NC (CD/SB/CC) the past 12 months.

In the event the customer retaining account with other Bank, Statement of Account for the last a year of the worried Bank should be furnished. l) In case of renewal/enhancement of credit facility, Charge Turnover, Credit rating Turnover, maximum drawing, lowest drawing, and Total cash flow earned thorough position of existing debts of the consumer i. elizabeth. Date of sanction, Date of expiry, Present exceptional, Remarks, if perhaps any. m) Declaration with the customer of the name of sister/allied concerns and financial obligations with other Banks, if any, and an undertaking for the effect they have no liability beyond individuals declared-Annexure-6 ) In case of UC proposal, in depth performance of L/C over the last year i actually. e. Number and day of L/C opened, commodity, L/C worth, Date of creation of PAD, time of retirement, mode of retirement etc . o) In the case of BTB UC proposal- p) Detailed list of machinery, development capacity, working capital (BTB UC) assessment, existing export UC in hand mentioning date of shipment, thorough position of outstanding BTB L/C/Accepted Bills, progress of production and expected day of delivery, statement of outstanding FDBP/IDBP, if any, Quota Position, Inspection Report, Copy of valid Fused Ware House License, Persuits Clearance or dispute, if any. ) Whether the consumer is Shareholder/Director of Cargo Bank Limited. as per definition of Banking Companies Act. r) Economical Analysis to get prepared by the Branch Administrator based on the financial functionality of the organization , should certainly shows trends in sales/profitability, liquidity, power etc . It will also have an analysis of the skills and top quality of the organization management, the typical economic , competitive environment of the credit seekers industry and any other important factors which can be relevant to get our credit rating decision. ) Justification/consideration to get the facility. 2 . The sanctioning authority on invoice of the proposal shall scrutinize the same and ensure that:? Almost all necessary documents and paperwork have been enclosed.? The proposal has been properly signed by the members of the Branch Credit rating Committee including the Manager.? The proposal continues to be duly advised.? The pitch does not fall within the existing credit limit? Minimum perimeter requirement up against the credit center has been suggested.? The primary reliability has got convenient marketability, strength and storability The property presented as guarantee security is usually judiciously evaluated? The pitch is viable and stands all credit tests? The proposed debtor is certainly not defaulter (classified) of virtually any Bank/Financial Company? There is no ask for from other Bank/Financial institution for not allowing/stoppage of facility towards the proposed customer.? Where the suggested accommodation in the form of working capital may be considered on the project borrowed by some other Bank which include DFI, beneficial status record and No Doubt Certificate (NOC) from the auto financing Institution can be obtained. Wherever 2nd demand on the set and suspended assets (in case of any limited company) or 2nd mortgage upon real estate emerges, clearance in regards to creation of 2nd impose on the home together with confirmation that documents will be kept by these people on behalf of the lender and that they will not part with a similar without consent of the Bank, is extracted from the you is mortgagee. 3. Guide of actions to be taken by the Branch Manager/Second Officer/Credit Expert before payment of Credit facilities Acceptance of customers being obtained of the terms , conditions within the duplicate duplicate of calamité advice.? They may thoroughly analyze and ensure which the subject credit facility will not contradict to any law, guidelines and regulation of the country, Bangladesh Bank and our Bank.? They will get hold of NOC from Bank in which the customer has existing responsibility.? CIB Report on the lender through Hq.? Lending Risk Analysis according to FSRP Method in case of credit of Tk. 50 lac and over.? No doubt certificate of Bangladesh Traditional bank in case the credit service exceeds 15% of Capital Funds in the Bank. Regularization/Adjustment of classified/overdue credit in the customer/their sister/allied concerns with the Bank/other Financial institutions, if virtually any. Rules of sanctioning financial loans:? Sanction advice will be communicated by Head Office to the Divisions and by the Branches towards the customers underneath Double signatures authorized by Bank.? Not any Executives/Officers shall exceed approved limit of delegated business powers under any circumstances.? Valuation of goods/produces/hypothecated to the Bank for getting any improve shall in no circumstance exceed. The landed expense at the interface of entrance is evaluated by the customized authority in case there is imported goods. Goods and produces against which improvements are made should be readily marketable.? Loans , Advances allowed against FDRs, PSPs, MBDRs, and DBDRs etc . shall be adjusted right away before the encounter value with the instruments and outstanding progress amount turns into equal or upon maturity, whichever is usually earlier.? In the event of advance against mortgage of property, original Title Deed and cycle of papers i. e. C. H Parcha, R. S. Khatian, Mutation Certificate, Non-encumbrance Certificate, Municipal Taxes Receipt, Accepted plan, Hire Receipt (Upto date) and so forth hould be checked by a paneled legal professional or by Bank’s Legislation Officer..? Cash suit/court situations against virtually any defaulting customer are to be recorded by the twigs after obtaining prior approval from Head Office. 3. your five Credit Classes: As started by Bangladesh Bank different types of lending had been subdivided in to 11 groups, and again to several prime industries for fixation of interest levels by the person banks on competitive basis with regards to the cost of cash, prevailing market condition and monetary plan of the nation.

Loans and advances have primarily been divided into two major groupings: a) Fixed term bank loan: These are the advances made by the financial institution with fixed repayment Agendas. The conditions of loan are understood to be follows: Short-term: Up to twelve months Medium term: More than 12 and up to 36 months Long-term: More than 36 months b) Ongoing credits: These are the advances having no set repayment routine, but have a great expiry time at which it is renewable on satisfactory overall performance. Further most categories of loans have been let in under the six prime industries as under as: a few. 5. Cultivation: Credit services to the gardening sector comes under its kind. It is subdivided into two major minds: a) Financial loans to principal producers: This sector of agricultural funding refers to the credit services allowed to creation units engaged in farming, angling, forestry or perhaps livestock. Loans to processors or traders of gardening products should not be classified as farming loans. Loans to tea gardens for production are treated while agricultural bank loan, but loans to tea gardens for export should be treated under the category “Export Credit”.

Likewise medium and long term loans to tea gardens will be categorized while industrial term lending. b) Loans to input dealers/distributors: It refers to the funding allowed to insight dealers and (or) suppliers in the farming sector. Gardening loans may include short, channel and long-term loans along with continuing credits. As such, it might fall under your head. (a) Financial loans (General), (b) Hire Obtain or (c) Lease Loans. c) Country , Mini credit: The bank will provide countryside credit through rural twigs and other non-urban institutions engaged in rural up liftment through credit delivery.

Small loan particularly tiny credits will probably be extended with out collateral protection through right supervision and monitoring. Individual supervising organization may be equiped for supervisory such micro credits. several. 5. 2 Term Bank loan for Significant , Moderate Scale Sector: This category of advances cater to the method and permanent financing intended for capital structure formation of new Industries or perhaps for BMRE of the existing units whom are engaged in manufacturing services and goods. Term loans to tea gardens can also be included in this category depending on the character and size.

As the financing underneath this category offers fixed repayment schedule it falls under the head Financial loan (General), Work with purchase or perhaps Lease Financial. 3. a few. 3 Term Loans to Small , Cottage Sectors: These are the medium. and long term financial loans allowed to little , new industries Tiny Industries will be presently thought as those establishments whose total investment in fixed capital such as terrain, building, machinery and equipment (excluding income taxes and duties) does not exceed 30 million taka and investment in machinery and equipment (excluding taxes and duties) would not exceed 15 million taka.

Cottage sectors also fall season within this description. Bangladesh Traditional bank gives fascination subsidy @3% to the Banks on loans prolonged under this category. No short term or continuing credits have to be included in this category. Medium , Long term weaver credits are usually included under this category. Like the Large , Medium Size Industry additionally it is allowed in the form of “Loan (Gen), Hire-Purchase or perhaps Lease Financing”. 3. a few. 4 Working Capital: Loans allowed to the developing units to fulfill their working capital requirements, irrespective of their size -big, channel or small , fall under the category.

These are usually continuing credit and as such come under the head “Cash Credit (Hypothecation) 3. your five. 5 Export Credit: Credit facilities allowed to facilitate foreign trade of all items against Notification of Credit rating /and/or verified export requests fall under its kind. It is let in under the mind “Export Funds Credit (ECC)”, Packing Credit rating (PC), Foreign Documentary Expenses Purchased (FDBP), Local Foreign trade Bills Acquired etc . 3. 5. six Commercial Loaning: Short term loans and continuing credits allowed for business purposes other than exports belong to this category.

It provides import financing, financing intended for internal trade, service institution, etc . Not any medium and long term financial loans are let in here. Its kind of improvements are allowed in the form of (i) Loan against Trust Receipt (LTR), (ii) Payment against Import Paperwork (PAD), (iii) Secured Overdrafts (SOD), (iv) Cash Credit rating (Hyp), (v) Loan (Gen), etc . intended for commercial uses. 3. five. 7 Various other Lending: Virtually any loan that will not fall in any of the above types is considered within the category of additional lending. It provides loan to (1) Transport Equipment, (ii) Construction Works including Real estate commercial/residential), (iii) Work Order Finance, (IV) Personal Loans, and so forth 3. six Loan The distribution , Structured Finance: Syndication means joint financing by simply more than one financial institution to the same clients against a common reliability. This is carried out basically to spread the chance. It also supplies a scope to get an independent evaluation of risk and centered monitoring by agent as well as lead bank. In The distribution financing banks also get into an agreement that you of the loan providers may become Lead Lender. In this kind of case, lead bank has to co-ordinate those activities at different stages of handling the proposal we.. appraisal, sanction, documentation, showing of security, disbursement, inspection, follow-up, restoration, distribution of installments. / interest etc . It may also call meeting on syndication users, whenever necessary to finalize virtually any decision. The syndicate might generally end up being worked in two ways: 1 . Best effort Method. 2 . Underwriting Method. At present the very best effort method is in practice within our country several. 6. one particular Types of Syndicated establishments:? Credit increased syndicated financial loan.? Working Capital Submission.? Loan for BMRE as well as New Jobs. Project Finance Loan? Regional Currency Financial loan under Organized Finance etc . 3. six. 2 Parties to the The distribution:? Arranger (Single Arranger / Co-Arranger / Arranger Group). Arranger need to obtain require from the buyer / Borrower.? Participants (Banks / Financial Institutions etc . ).? The Facility Manager / Agent (Banks / Financial Institutions). a few. 6. several Advantages of Lenders / Banking institutions:? Large Loan requirement within just legal loaning limit can be managed.? To get diversification of risk / sharing of risk.? Range of variation across buyers and sectors.. 6. some Advantages of Customers:? May get a big loan simply by contacting with one Bank / Disposer.? Less time consuming and affordable.? Answerable to one Traditional bank. 3. 6. 5 Important factors for submission:? Mandate to become obtained from the Borrower.? The debt / Value ratio ” whether the debts % is justifiable.? Market appetite ” whether it is saleable to the industry / participants.? Whether the members are assured enough in the capability of the Arranger.? If the due diligence happen to be properly conducted. Time Limit to get the agreement / Service. [pic] 3. 7 Job Finance: A different unit intended for Project Financing has been set up in the Head Office Credit Division. The capabilities of the unit are to assess / assess the Feasibility of the task, conduct due diligence, address the risk factors and to be put before the Head Office Credit Committee / Exec Committee as well as Board of Directors based upon the lending authority. a few. 8 SME Lending: Your bank intends to encourage the little and moderate entrepreneurs and hence structured it is SME auto financing activities.

The financial institution has collection the definition of small venture in line with Bangladesh Bank guidelines. A special credit rating scheme under the name and style “Small and Medium Enterprise (SME) Scheme have been introduced to extend credit services to the small and medium internet marketers of the country. 3. almost 8. 1 Purpose:? Contribute to the socio-economic development of the nation.? Encourage small , medium industry especially agro-based industry of the country.? Engage in reduction of poverty through employment technology and profits generating jobs. Provide monetary assistance to small and medium business, which have limited access to the formal monetary markets. a few. 8. a couple of Target Client Segment:? Micro Enterprise? Little Enterprise/Business? Method 3. almost eight. 3 Extent of Features:? Will be determined depending upon the experience of the businessman and the scale the task.? Small Enterprise: Project value up to Tk10. 00 lac.? Medium Business: Project value above Tk10. 00 lac but or/within Tk50. 00 lac? Nationality: Must be Bangladeshi citizen or perhaps company/firm must be registered in Bangladesh and shares owned by Bangladeshis.. 8. 4 Product Varieties:? Working Capital Loan-Overdraft/Cash Credit (Hypothecation)? Project Loan/Term Loan- Retain the services of Purchase 3. 8. a few Tenor of Loan:? Up to 1 (one) for Working Capital Loan? More than 1 (one) for Job Loan/Term Mortgage 3. almost 8. 6 Bank Charges/Pricing:? Rate of Interest: 13%p. a.? Service Charge: 1% for the outstanding equilibrium on month to month basis.? Risk Fund: 1% one time to get realized during the time of sanction the loan.? No charges will be realized for processing the money proposal. three or more. 8. 7 Equity with the Borrower:? Fresh entrepreneur: 10% Experienced businessman: 15%. Fairness must be transferred to the lender before availing the facility. 3. eight. 8 Repayment Method: It can be done by making payment of specific range of installments. Security/ Collateral:? Hypothecation on the products on hand, receivables, improve payments, flower , machineries.? Equitable home loan over steadfast properties with registered Poa.? Personal Guarantees of Spouse/Parents/other family members.? One third party personal guarantee,? Content dated cheques for each installment.? Collateral Securities viz.

Economic Instruments, Property and Building. 3. almost 8. 9 Teaching: Borrowers may also get schooling from their chosen institutions, which will must be identified by the Bank. BIM, BSCIC, MIDAS are preferred training establishments. 3. on the lookout for Export Finance: The Bank extended different types of credit facilities to the Export focused Industries / Exporter from your very creation of the Lender. Recently the lender has evaluated the position and revised their policy to improve the volume of export organization by advancing finance to well respected export oriented industries creating a track record.

This will bring the Traditional bank a substantial profit as well as foreign currency to meet the obligation against importance. The Bank runs facilities in both pre-shipment stage and port-shipment stage for working capital like purchase and getting of Raw materials, Packing and Transporting of products, insurance premiums, shipping charges, inspection fees etc . Pre-shipment fund will be allowed either against Irrevocable Notice of Credit rating of a respected foreign Bank or against finance agreement from well-known foreign customers acceptable to the Bank.

Your bank does not grant any Taking Credit center against (i) Restricted L/C and (ii) Revocable L/C. Before discussion, the dealing officer must check and scrutinize the documents thoroughly to ensure that they’ve been drawn in specific conformity while using terms and conditions stated in the Notification of Credit rating. 3. 15 Finance in Garments Sector: The Bank’s policy is to increase the amount of Export business substantially. In view of this the lender has established a separate unit beneath Head Office Credit rating Division for handling the Garments Business.

To be able to take required precautions during opening of Back to Back L/C for the import of fabrics and accessories, the Bank has strengthen its monitoring as well as supervisory features for protecting the Bank’s interest. a few. 11 Specialised Loan: In order to cope with all of the changes in the economy and society, the Bank’s policy is to develop and expose new products for different customers group. 3. 12 Small Loan Scheme: With a view to provide economic assistance to the shopkeepers of various shopping center as well as market located at several cities with the country, your bank has introduced an distinct program under Small Loan Structure.

The salient feature and terms and conditions has been circulated to any or all concerns vide Instruction Round # 09/99 dated Sept 30, 1999. 3. 13 Earnest Money Funding Scheme: Expecting to to inspire the Company financing against Works, an Earnest Money Funding Scheme continues to be introduced. The modus operandi and conditions under the Plan has been distributed to all problems vide Training circular # 50 old August 26, 2000. several. 14 Doctors Credit System: In order to provide modern day Medicare facility to the mass people of the ountry, a Plan namely “Doctors Credit Scheme has been released for newly passed MBBS Doctors, Expert Doctors and Owner(s) of Clinic / Hospital as well as Diagnostic Center. The in depth guidelines underneath the scheme have been circulated to all concerns vide Instruction spherical # 51 of Aug 2000. three or more. 15 Personal bank loan Scheme: With a view to provide the Credit rating needs of presidency / Semi Government Officials / Workers of Autonomous Bodies / Banks and financial Institutions / Multinational Firms / reputed private firm and Professors of General public / private School as well as Colleges as well as Universities, an individual loan Structure has been released.

The comprehensive guidelines and terms and conditions have been circulated vide Instruction rounded # 240 dated Come july 1st 7, 2004. 3. of sixteen Consumer Credit Plan: In order to provide financial assistance for choosing household consumable items, the financial institution has introduced an especial credit program under Consumer Credit Plan to up grade the living standard with the people who actually is the main power of the overall economy. A brief describe on the terms and conditions of the CCS has been circulated to all concerns vide Instruction circular # 05/99 went out with September 2009, 1999. 3. 7 Ladies Entrepreneurship Development Project: With a view to motivate women for taking active position in Socio-economic activities, a great especial project in the name of “Women Entrepreneurship Creation Project continues to be introduced intended for extending credit facility for establishment as well as Expansion of Small Cottage Industry and also as seed money to the project. The detail guidelines, terms and conditions and modus operandi with the Project continues to be circulated vide Head Office, Credit rating Division Teaching Circular # 139/2002 dated September 3, 2002. several. 18 Lease contract Finance Structure:

Lease Financing is one of the easiest sources of purchasing capital equipment and tools whereby a client is given the opportunity to have an special right to how to use asset usually for a great agreed time period against repayment of hire. It is a term financing repayable by installment. With a view to encourage the genuine and capable entrepreneurs for acquiring Capital machinery, medical equipment, Personal computers and various items, the bank has introduced Lease contract Finance Scheme. Interest rate fluctuates between 15-15. 5%. Other terms and condition are applicable like term loan. several. 19 Types of Credit Activities:

Depending on the various characteristics of funding, all the financing activities had been brought underneath the following major heads: three or more. 19. 1 Loan (General): Short term, Moderate term , Long term financial loans allowed to individual/firm/industries for a particular purpose but also for a definite period and generally repayable by payments fall under this kind of head. These kind of lending are mainly allowed to cater to financing beneath the categories (I) Large , Medium Level Industry and (ii) Little , New Industry. Often term loans for (I) Agriculture , (ii) Other lending’s can also be included here. 3. nineteen. 2 Property Building Bank loan (General):

Loans allowed to individual/enterprises for building of property (residential or commercial) belong to this type of improve. The amount is usually repayable by simply monthly installation within a specified period. These kinds of advances are known as Property Building Financial loan (General). a few. 19. 3 House Building Loan (Staff): The Board of Company directors of the Lender introduced a well- timed and practical revised Property Building Financial loan Scheme for the employees of the Bank consideringg increase of price of land, expense of construction materials, purchasing price of ready-made flat/house inside the major urban centers of the nation as also to improve well being of Executives/ Officers from the Bank.

The scheme is known as the “Employees House Building Loan Scheme of Cargo Bank The money under the plan is not claimed as being a matter of correct but can be extended in first come first served basis subject to accessibility to Annual Budgetary allocation of fund pertaining to the Scheme approved by the Board. Financial loan Ceiling: The quantity of the loan can not exceed you see, the cost and also other expenses concerning the terrain and/or structure of a house or price of a readymade flat/apartment. The loan ceiling has been determined which can be as follows: |Sl. No . Class of Employees |Amount of Mortgage | |01. |Senior Vp and Previously mentioned |Tk. 32. 00 lac | |02. |Asstt. Vp to Vp |Tk. 28. 00 lac | |03. |Senior Officer to Mature Principal Officer |Tk. 17. 00 lac | |04. |Asstt. Expert to Police officer |Tk. 2 . 00 lac | |05. |Employees other than Officer |Tk. 5. 00 lac | 3. 19. 4 Car loan package Schemes The Transport Insurance plan of MBL for providing Cars to the Executives against loan was approved by the Board of Directors. Inside the light of increase of value of car, fuel, motor parts, maintenance expense and the cost of living index (Driver purpose), it has been observed that existing monthly Car allocated allowed to the Executives do not commensurate while using real working cost of your vehicle.

As such, the current Car Loan Structure may be re-designed in a way that the loan facility does not become a burden for the concerned professionals. It is also seen from the Car loan package Schemes of some Financial institutions that they are providing Car loan for their Executives without any interest. Additionally, their Car allowances are higher than MBL. The threshold of financial loan, monthly loan installment and monthly car allowance, have been completely fixed by looking into making a comparison precisely the same with fresh generation Banking institutions (copy enclosed) are the following |Sl. Number Designation from the Executives |Loan Limit |Loan Limit (Recondition Car) |Monthly Allowance | | | |( New Car) | | | |01. |AVP/FVP |1500000/1800000 |Tk. 8, 290. 00 |Tk. 30, 000. 00 | |02. |SVP/VP |1800000/2000000 |Tk. 9, two hundred. 00 |Tk. 32, five-hundred. 00 | |04. |EVP |2000000 |Tk. 1, seven-hundred. 00 |Tk. 35, 500. 00 | |05. |SEVP/DMD/AMD |At Genuine | | | three or more. 19. 5 Cash Credit , Overdrafts (Against Hypothecation of Goods/Stocks) Advance might are sanctioned to a consumer against main security of hypothecation of raw materials and finished products. Under this kind of arrangement, the borrower simply by signing a letter of hypothecation properly stamped, makes a charge resistant to the goods intended for an amount of personal debt but neither the ownership nor carefully of the same can be passed on to the Bank.

Simply a right or perhaps interest on the goods is done in favour of your bank, but the lender binds himself to give own the goods to the Bank when ever called upon to accomplish this. Hence, to be able to secure the advance, Bank normally demands on the credit seekers to provide suited collateral security. While enabling credit service against hypothecation of goods/stocks the following points are considered be subject to restrictions enforced from time to time:? The facility is to be allowed only to the trusted having undoubted standing and credit worthiness. The products are sellable and customer has an overall title in goods.? Hypothecation advance is definitely allowed by simply banks only for working capital and not for capital investment.? The goods are not be subject to rapid destruction due to storage for long or short duration. The prices of the products are stable? The goods are generally not encumbered and/or hypothecated to the other Traditional bank.? In case agricultural crops, the crops needs to be of current season as well as the advance is adjustable before the plants of subsequent season will come in the market. Sale of Stocks:

In arrears of repayment of an enhance called upon by the Bank, the financial institution has the right to sell the stock agreed to that as reliability after offering reasonable recognize to the debtor (vide section 176 of the contract Act). Such see must be delivered by signed up letter, with acknowledgement credited, whenever it is necessary to realize the security. In the event of the listed letter staying refused, it must be kept unopened so that it can be produced in the court, if required, as evidence of notice having given Hire-Purchase:

Hire-Purchase is a type of installment credit underneath which the lender agrees for taking the goods on hire at a stated rental, which is including the repayment of Primary as well as fascination for adjustment of the bank loan within a particular period. SOD (General): These are advances allowed to individual/firms against financial requirement (i. elizabeth. lien about FDR/PSP/ BSP/ insurance Policy/Share etc). This may or may not be a continuous Credit. SOD (Export): Advance brought about purchasing foreign currency for repayment against LCs (Back to Back) where exports will not materialize prior to the date of import repayment.

This is also a great advance for temporary period which is generally known as export finance and falls under the category “Commercial Lending”. SOD (Others): Advances allowed against job of work buy for delivery of contractual works is catagorized under this kind of head. This advance is usually allowed for a particular period and specific goal. I. elizabeth. it is not a consistent credit. It falls under the category SOD “Others”. PROTECT (Payment against Document): Repayment made by your bank against lodgment of shipping documents of products imported through LCs falls under this kind of head.

Costly interim progress connected with import and is generally liquidated against payments generally made by the get together for retirement of the paperwork for release of imported goods in the customs authority. It declines under the category “Commercial Lending”. LTR (Loan against Trustee Received): Progress allowed for pension of shipping documents and release of goods imported through L/C falls under this head. The goods are paid to the distributor under Trust Receipt while using arrangement that sale earnings should be transferred with the Financial institution to exterminate the advances within a given period.

This is also a brief advance linked to import and known as post-import finance and falls under the category , Commercial Lending”. 3. twenty Sector smart allocations of Loans and Advances: MBL always likes in very well diversified stock portfolio investment. The portfolio remains free from undue concentrations when it comes to exposure of any certain industry. |SL |Sectors |Sector wise Allocation of financial loans | | | |for the Year 2007. |1 |Garments |4962848367 | |2 |Trading |9553142956 | |3 |Engineering: |1354138597 | |4 |Contractor Finance |1358690299 | |5 |Leasing Business |1484910625 | |6 |Housing |2296970264 | |7 |Food products and refreshment |1745497330 | |8 |Pharmaceuticals |671356398 | |9 |Telecommunication |1550000000 | |10 |Transport |485440761 | |11 |Textile |1256269275 | |12 |Information technology |221039999 | |13 |Hospital and medical Solutions |655049990 | |14 |Paper, Paper production and journals |297244722 | |15 |Plastic and plastic-type Materials |167971665 | |16 |Storage |6250904 | |17 |Glass and glass goods |265252222 | |18 |Agriculture |1125740077 | |19 |OTHERS |2420045653 | | |Total

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