loans & advances of jununa bank limited
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ÂTRANSCRIPT
Chapter:Chapter: 11
(Introduction)(Introduction)
1.1 B1.1 B ackground:ackground:
Banking system occupies an important place in a nation economy. A banking institution is indispensable in a modern society. Banks safeguard money and valuables and provide loans, credit, and payment services, such as checking accounts, money orders, and cashier’s checks. Banks also may offer investment and insurance products, which they were once prohibited from selling. As a variety of models for cooperation and integration among finance industries have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to maintain and perform their primary role accepting deposits and lending funds from these deposits.
Jamuna Bank Limited a private sector commercial bank. The bank has its head office at Dhaka and 97 branches. The management of the bank is vested in 13-member board of directors, including representatives of the 3 sponsor firms. The managing director is its chief executive. The bank conducts all types of commercial banking activities including foreign exchange business and other financial services. During the first two years of operations, the bank's main focus was on the delivery of personalized customer services and expansion of its clientele base. Jamuna Bank started its operation on October 24, 1999 as a private sector bank with an authorized capital of Tk. 10000 million .The paid up capital of the bank amounted to Tk. 6,141.2 million as on November 12, 2015.
1.21.2 Origin of the Report: Origin of the Report:
The BBA internship program is a required course for the students who are graduating from the Department of Business Administration from Dhaka International University. It is a 4 credit hour course with duration of 12 weeks in the internship program; I was attached with an organization named ‘Jamuna Bank ltd.’ in Chistia Market Branch for 12 weeks. During this period I learned how an organization works and help the customers. As a result I have decided to prepare a report on “Consumer Banking and Credit Management of Jamuna Bank Ltd.”
1.31.3 Objective of the Study: Objective of the Study:
To Assessing the Credit structure of the bank in practice
To identify types of Loan given by Jamuna Bank.
To asses loan disseverment of the selected bank
To evaluate loan recovery position of the Jamuna bank
To identify problems affecting loan performances.
To suggest to overcome the problem.
1.41.4 S S cope of the Study:cope of the Study:
The scope of the report is limited at drawing descriptive and analytical rather than critical
presentation of Jamuna Bank Ltd.
1.51.5 Research Methodology: Research Methodology:
Some fundamental steps of research methodology have been adopted through my specialization field of study of BBA program and also from the fields of other areas. In my study I had to go for personal interaction with the organizational people of Jamuna Bank Ltd., (Chistia Market Branch) to conduct the research work.
1.61.6 Sources of Information: Sources of Information:
Both primary and secondary sources of information were being pursued with regards to the presentations of this study. The following procedure and sources I accessed:
Primary Source: Secondary Source:
• Personal observation• Working at different desks of the bank• Face to face conversation with other
officer• Face to face conversation with client
• Annual report of JBL 2013, 2014• Files and Folders• Statement affairs• Bank rate sheets• Progress report of Bank• Websites• Different circulars sent by Head Office and
Bangladesh Bank• Some books on Banking
1.71.7 Limitation: Limitation:
• Limitation is a usual part of report analysis. Whenever any report is going on to analysis,
there are several lacking to find out the result of the particular topic. To make this report,
I am also faced lacking or limitation. These are given below
• Time duration is not enough for such an extensive study. It is very difficult to collect all
the required information in such short period.
• JBL is fully centralized bank and all information is available in head office. Branch gets
information when special request is made. Branch employees only know the information
that the head office informed.
• Due to some legal obligation and business secrecy banks are reluctant to provide data.
For this reason, the study limits only on the available published data and certain degree of
formal and informal interview.
• A worthwhile study requires the analysis of as much data as possible covering various
aspects of the study. But I did not have access to the various types of information about
Loans & advances.
• To protect the organizational loss in regard of maintaining confidentiality some parts of
the report are not in depth.
• I carried out such a study for the first time. So, in-experience is one of the main factors
that constituted the limitation of the study.
Chapter:Chapter: 22
(Organizational(Organizational Profile)Profile)
2.1 At a Glance of JBL
Jamuna Bank Ltd. is a third generation bank in Bangladesh. It provides commercial banking services in the Bangladesh. It is playing an important role to develop the business sector. The growth of this bank is very good. Its motto is to provide a prompt and quick service to the clients. Jamuna Bank Ltd. has implemented well structured online banking systems that make it easier to provide prompt services to the customer. The bank primarily engages in corporate banking, trade finance, project finance, retail banking, small enterprise finance, consumer finance, and syndication. Its range of service offerings include cash management services, payments and clearings, safe deposit locker services, employee benefits, collection services, treasury services, asset management, services and SWIFT for foreign trade.
Corporate Slogan: Your Partner for Growth
2.2 HistoryJamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation from 3rd June 2001.Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital and Paid-up Capital of Tk.10000 million and Tk.4488 million respectively. The Paid-up capital has been raised to 6141.2 million and the total equity of the bank stands at 9908.8 million as on November 11, 2015.
JBL undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL's services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd. the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the field of trade, commerce and industries. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customers’ needs. The scenario of banking business is changing day by day, so the bank's responsibility is to device strategy and new products to cope with the changing environment.
Jamuna Bank Ltd. has already achieved tremendous progress within only fifteen years. The bank has already ranked at top of the quality service providers & is known for its reputation.
Jamuna Bank Ltd. offers different types of Corporate and Personal Banking Services involving all segments of the society within the purview of rules and regulations laid down by the Central Bank and other regulatory authorities. As per the provisions of Bangladesh Bank license, the Bank has offered initially its shares to public by Pre – IPO and subsequently sold shares to the public through IPO in the year 2004. The shares of the Bank are listed with both Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange Ltd.
2.3 Mission and Vision
Mission
The bank is committed to satisfy diverse need of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensure with a motivated and professional workforce.
Vision
To become a leading banking institution by playing a significant role in the development of the country
2.4 Objectives of JBL
To establish relationship banking and improve service quality through development of Strategic Marketing Plans.
To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
To ensure an adequate rate of return on investment.
To keep risk position at an acceptable range (including any off balance sheet risk).
To maintain adequate liquidity to meet maturing obligations and commitments.
To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels
2.5 Core Values
Place customer interest and satisfaction as first priority and provide customized banking products and services.
Value addition to the stakeholders through attaining excellence in banking operation.
Ensure higher degree of motivation and dignified working environment for our human capital and respect optimal work-life balance.
Committed to protect the environment and go green.
Employees of JBL share certain common values, which helps to create a JBL culture
Search for professional excellence.
Quick decision‐making.
Flexibility and prompt response.2.6 Bank Profile
Type of Banking : Conventional Commercial BankIncorporated On : April 02, 2001Started Operation on : June 03, 2001No, of Branches : 97No, of Employee : 2,204Authorized capital : 10,000.00 Million Paid Up Capital : 5,160.67 Million No, of Directors : 18Chairman : Md. Shirajul Islam VaroshaManaging Director : Md Shofiqul Alam
Table 1: Bank Profile (Source: Annual Report of JBL 2014)
2.7 Corporate Directory
Registered Office Jamuna Bank Limited3, Dilkusha C/A, Dhaka-1000, BangladeshTel: 9570912, 9555141, Ext. 130Fax: 880-2-9565762Web: www.jamunabankbd.com
Auditor
ACNABINChartered AccountantBSRS Bhaban( 13th floor)12, Kawran bazaar commercial area Dhaka -1215
Legal Adviser
Mr. Habibul Islam BhuiyanSenior AdvocateBhuiyan Islam & ZaidiHouse #29, Road#9/ADhanmondi R/ADhaka -1209
Table 2: Corporate Directory (Source: Annual Report of JBL 2014
2.8 Management
JBL is managed by highly professional people. The present Managing Director of the Bank is a forward looking senior banker having decades of experience and multi discipline of knowledge to his credit both at home and abroad. He is supported by an educated and skilled professional team with diversified experience in finance and banking. The management of the bank constantly focuses on the understanding and anticipating customers’ needs and offer solution thereof. Jamuna Bank Limited has already achieved tremendous progress within a short period of its operation. The Bank is already ranked as one of the quality service providers and known for its reputation.
2.9 Ownership structure
Leading industrialists of the country having vast experience in the field of trade and commerce own 52.48% of the share capital and the rest n held by the general public. JBL’s board currently consists of 19 directors. Authorized capital is tk.4000 million and paid up capital is tk.2230 million on 2010.
2.10 Product /Service Offering
The Bank has a collection of mode that prepared financial products and services. Such products are based on Monthly Savings Schemes, Consumer Credit Schemes, Lease Finance and Personal Loan for Women and Shop Finance Scheme etc. Jamuna Bank Ltd, also familiar with Q-cash ATM cards for its valued customers providing 24 hours banking services through Debit Cards.JBL offers the following services to valued customer. The Bank is providing different types of services. Some of them are mentioned in below:
Product /Service Offering
Deposit Schemes
Remittance and Collection
Import and Export handling and Finance
Loan Syndication
Project Finance
Investment Banking
Lease Finance
Hire purchase
Personal Loan for Woman
24-hours Banking: Q-Cash ATM facility
Islamic Banking
Corporate Banking
Consumer Credit Scheme
International Banking Table 3: Product / Service Offering (Source: Jamuna Bank Website)
2.11 Islami Banking Service
In the year 2004, Jamuna Bank Limited opened another Islamic banking branch at Jubilee Road, Chittagong on November 27, 2004. The already existing Nayabazar Islamic Banking Branch started its operations from October 25, 2003, the total Islamic banking branches stands at 02 (Two). The operational performance of the branches as on 31-12-2008 is shown through the Balance Sheet, Profit & Loss Account of the Islam! Banking Branches below: JBL’s Shariah Council consists of 06 (Six) members, among them 02 (two) are Khatib, 01 (one) is Ex-Economic Advisor, 01 (One) is Vice chancellor, Islami University, 01 (One) is Principal and other one is Banker. During the year 2009, the Shariah council of JBL conducted 03 meetings to discuss all aspects of Islamic Branches operation.
2.12 Portfolio Management Service
Since inception, we have achieved an unparalleled reputation as a leading Merchant Banker through providing portfolio management services by maintaining a high level of professional expertise and integrity in client relationships. Keeping customer preferences as an investor in mind, Jamuna Bank Ltd. has designed Investors’ Discretionary Account (IDA) and Bank’s Discretionary Account (BDA). In these accounts the customers may enjoy loan facilities at a ratio 1:1 for investments in private placement, IPO, and secondary market operations.
2.13 JBL Special Banking Services:
Special Banking services of Jamuna Bank are considering the Personal services. The bank is offering wide-ranging products and services. These services and products are matching with the
customer’s requirements. Transactions of accounts, savings schemes or loan facilities from Jamuna Bank Ltd make available for every customer in a unique and uniform mixture of easy and expert service superiority.
JBL offers the Special Banking Services like Current Deposit Account, Savings Deposit Account, Short Term Deposit Account, and Fixed Deposit Accounts. It also offers attractive rates on various deposit schemes.
2.14 JBL Corporate Banking Services
Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. The corporate Banking specialists will render high class service for speedy approvals and efficient processing to satisfy customer needs.
Corporate Banking business envelops a broad range of businesses and industries. You can leverage on the know-how in the following sectors mainly:
JBL Corporate Banking Services
Industry (Import Substitute / Export oriented)
Agro processing industry
Textile, Spinning, Dyeing/Printing
Export Oriented Garments, Sweater.
Engineering, Steel Mills
Chemical and chemical products etc.
Telecommunications.
Wholesale trade
Transport · Hotels, Restaurants
Non Bank Financial Institutions
Loan Syndication
Export Finance
Import Finance
Table 4: JBL Corporate Banking Service (Source: Jamuna Bank Website)
2.15 Types of Deposit account
There are several types of deposit accounts. Each account has different characteristics and every account has some specific purpose to serve.JBL offers the following key Personal Banking Services. According to their uniqueness they are described as follows:
i. Savings Account:
It is the general account of the JBL individual or more than two persons can open a savings account on JBL. The officers and authorize persons are issuing cheque book, deposit slips and statement of account to the holder of savings. The officer justifies the information that is submitted by the account holder for r opening of the account. The officers of the bank process account-opening formalities. ii. Current Deposit Account:
JBL is one of the newly established well-reputed third generation private commercial bank in Bangladesh. It operates very diverse current account operation. They serve various types of customers, like current account for private limited company, current account for public limited company, current account for partnership business, etc.
iii. Foreign Currency Account:
The JBL also operate Foreign Currency Account for Bangladeshi Wage Earners or for Foreign Nationals/Company/Firms etc. to send their valued earned foreign currency into the country.
iv. Short Term Deposit Account (STD):
JBL also offers Short Term Deposit to its valued customers. Short Term Deposit is a deposit account where the payment of interest is paid on month basis. These items include the deposits for a period ranging from 7 (seven) days to 89 (eighty-nine) days. These types of liabilities are payable on special notice or after a specified period other than the fixed deposits. Some of these types of deposits are of the nature of time deposits. The rate of interest on STD account is 4.5% per annum. There are some rules and regulations that must be maintained by the STD account holder. If the STD account holder wants to withdraw the money from the account they have to inform the bank before, otherwise the account holder may not get the interest in full amount
2.16 Special Deposit Schemes
Lakhpati Deposit Scheme Millionaire Deposit Scheme Kotipati Deposit Scheme Double Growth Deposit Scheme
Triple Growth Deposit Scheme Monthly Benefit Scheme Monthly Savings Scheme Marriage Deposit Scheme Education Savings Scheme
Table 5: Special Deposit Schemes (Source: Jamuna Bank Website)
Board of Directors
Managing Director & CEO
Deputy Managing Director
Senior Executive Vice President
Executive Vice President
Senior Vice President
3.17 Types of loan of what are offered by Jamuna Bank Limited
Loan (General)
House Building Loan (General
House Building Loan (Staff)
Other Loans to Staff
Cash Credit (Hypo.)
Cash Credit (Pledge)
Corporate Social Responsibilities of
the Jamuna Bank Limited
Hire Purchase
Lease Financing
Time Loan
SOD (General)
SOD (Export)
PAD
LIM
LTR
IBP
Export Cash Credit (ECC)
Packing Credit (PC)
F D B P
IDBP
F B P
3.18 Online Banking and Software
Jamuna Bank Limited has introduced real-time any branch banking on December 31, 2010. Now, customers can withdraw and deposit money from any of its 97 branches located at Dhaka, Chittagong, Sylhet, Rajshahi, and Khulna. The valued customers can also enjoy 24 hours banking service through ATM card from any of Q-cash ATMs
Flora Software: Flora is in-house banking software. Almost every bank in Bangladesh uses this software. Jamuna Bank bought this software from Flora Ltd. Its requirement is WINNT platform this software is use in every department of branch; (Cash, Account, Credit, Clearing, Foreign exchange).
3.19 Organizational Structure
The organizational hierarchy of Jamuna Bank Limited can be shown in the following diagram:
Graph 1: Organizational Structure (Source: Jamuna Bank Website)
3.20 Swift Code
The Swift address or BIC of Jamuna Bank is: JAMUBDDH
3.21 BranchJamuna Bank Limited has 97 Branches all over the country
Chapter:Chapter: 33
(Credit Management(Credit Management policy of JBL)policy of JBL)
3.1 Credit Department of JBL
Bank’s basic work is to create a channel through depositing money from the surplus unit and
provide funding to borrowers. Thus the necessity of credit department in bank occurs. The credit
department is a very important department of a bank. The money mobilized from ultimate
surplus units are allocated through this department to the ultimate deficit unit (borrower). The
success of this department keeps a great influence over the profit of a bank. Failure of this
department may lead the bank to huge losses or even to bankruptcy. Jamuna bank’s credit
department also tries to do their job perfectly.
Credit Policy of JBL
Lending is one of the most important function of commercial bank, every bank should have own
credit policy. The credit policy of JBL has been formulated on the basis of the following
objectives:
• Outlines the steps to take to collect from past-due or late-paying customers and how to
eliminate bad debt.
• Provides guidelines to legally collect money that is due to your company from slow or
nonpaying customers and from bad checks
• To ensure that all customers are treated fairly when making credit decisions
In JBL most of the credit officers are familiar with their written credit policy or lending
guidelines but few of them not know about credit policy. So they have got only some oral
instruction from the senior management or in charge of credit. If all the Credit officers of JBL
thoroughly know and understand their credit policy it will be very helpful for them to do their
job more efficiently.
Credit Principles
In the feature, credit principles include the general guidelines of providing credit by branch
manager or credit officer. In Jamuna Bank Limited they follow the following guideline while
giving loan and advance to the client.
Credit advancement shall focus on the development and enhancement of customer relationship.
All credit extension must comply with the requirements of Bank’s Memorandum and
Article of Association, Banking Company’s Act, Bangladesh Bank’s instructions, other
rules and regulation as amended from time to time.
Loans and advances shall normally be financed from customer’s deposit and not out of
temporary funds or borrowing from other banks.
The bank shall provide suitable credit services for the markets in which it operates. It
should be provided to those customers who can make best use of them.
The conduct and administration of the loan portfolio should contribute with in defined
risk limitation for achievement of profitable growth and superior return on bank capital.
Interest rate of various lending categories will depend on the level of risk and types of
security offered
Credit Ratings
As per Bangladesh Banks mandatory requirement vide BRPD circular No. 06 dated July 05
2006 Credit Rating of Jamuna Bank Limited was done by the Credit Rating Agency of
Bangladesh Limited (CRAB) on the audited Balance Sheet as on 31.12.2014 CRAB has
submitted their report as under:
Credit Rating Report (Surveillance Rating)
Long Term Short TermRating 2014 AA (Very Strong Capacity and Very High Quality) ST-2 (High Grade)Rating 2013 A-1( Strong Capacity and High Quality) ST-2 (High Grade) Date of Rating June 18, 2015Validity of Rating June 30, 2016
Table 6: Credit Rating Ratio (Source: Jamuna Bank Website)
Credit rating agency of Bangladesh Limited (CRAB) Upgrades the rating of Jamuna Bank
Limited to AA3 from A-1 and reaffirms short term rating to ST-2. The above rating has been
done in consideration of Banks visible improvement in fundamentals such as capital adequacy,
liquidity position, profitability, introduction of real time online banking etc. However, the
above rating is moderated, to some extent, by limited market share, increase in NPL, high cost
of fund, moderate corporate governance, dependency on team deposit etc.
Financial institutions rated in this category are adjudged to offer adequate safety to timely
repayment of financial obligation. This level of rating indicates a corporate entity with an
adequate credit profile. Risk factors are more variable and greater in period of economic stress
than those rated in the higher categories. The short term rating indicates well certain of timely
payment. Liquidity factors and company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to capital markets is good. Risk factors
are small
Credit Facilities of Jamuna Bank Limited
The main focus of Jamuna Bank Limited is financing business, trade and industrial activities
through an effective delivery system.
Jamuna Bank Ltd. offers credit to almost all sectors of commercial activities having
productive purpose.
The loan portfolio of the Bank encompasses a wide range of credit programs.
Credit facilities are offered to individuals including housewives, businessmen, small and
big business houses, traders, manufactures, corporate bodies, etc.
Loan is provided to the rural people for agricultural production and other off-farm activities.
Loan pricing system is customer friendly.
Prime customers enjoy prime rate in lending and other services.
Quick appreciation, appraisal, decision and disbursement are ensured.
Credit facilities are extended as per guidelines of Bangladesh (Central Bank of
Bangladesh) and operational procedures of the Bank.
Lending Criteria of JBL
Entrepreneur has to be creditworthy and competent enough to run the proposed industry. The
project should be viable from organizational technical, commercial, financial and economic
points of view.
Technical Viability
The project should be technically sound and environment-friendly.
Technology transfer in case of borrowed know-how ought to be ensured.
Building should be well planned and well constructed.
Commercial viability
Market prospect and potential for the product has to be fully assured at competitive prices.
Marketing channel for the product should be accessible to the entrepreneur.
Financial Viability
There should be reasonable debt equity ratio as determined by the Bank on individual case basis.
Debt service coverage ratio should be at least 2.5 times at the optimum level of production.
IRR should preferably be not less than 20%
Economic Viability
The project should ensure benefit to the national economy and create sufficient
employment opportunity and be environment friendly.
Credit Evaluation PrinciplesSome principles or standards of lending are maintained in approving loans in order to keep credit
risk to a minimum level as well as for successful banking business. The main principles of
lending are given below:
Liquidity:
Liquidity means the availability of bank funds on short notice. The liquidity of an advance means
it repayment on demand on due date or after a short notice. Therefore, the banks must have to
maintain sufficient liquidity to repay its depositors and trade off between the liquidity and
profitability is must.
Safety:
Safety means the assurance of repayment of distributed loans. Bank is in business to make
money but safety should never be sacrificed for profitability, To ensure the safety of loan. The
borrower should be chosen carefully
Profitability:
Banking is a business aiming at earning a good profit. The difference between the interest
received on advances and the interest paid on deposit constitutes a major portion of the bank
income, besides, foreign exchange business is also highly remunerative.
Intent:
Banks sanction loans for productive purpose. No advances will be made by bank for
unproductive purposes though the borrower may be free from all risks.
Security:
The security offered for an advance is an insurance to fall bank upon in cases of need. Security
serves as a safety value for an unexpected emergency. Since risk factors are involved, security
coverage has to be taken before a lending.
National interest:
Banking industry has significant role to play in the economic development of a country. The bank would lend if the purpose of the advances can contribute more to the overall economic development of the country.
3.2 Different Types of Credit Facilities
Credit The word "Credit" is derived from the Latin word “Credo” or “Krado” meaning I believe.
It is usually defined as one's ability to buy to a promise to pay. From the Banker's point of view
Credit is the confidence of the lender on the ability and willingness of the borrower to repay the
debt as per schedule of repayment. A bank provides loan to a company, with a fixed maturity and
often featuring amortization of principal. If this loan is in the form of a line of credit, the funds
are drawn down shortly after the agreement is signed. Otherwise, the borrower usually uses the
funds from the loan soon after they become available.
Types of loan of Jamuna Bank Limited:
Depending on the various nature of financing, all the lending activities have
been brought under the following major heads:
Loan (General)
Short term, Medium term & Long term loans allowed to individual/firm/industries for a specific
purpose but for a definite period and generally repayable by installments fall under this head.
This type of lending is mainly allowed to accommodate financing under the categories
(i) Large & Medium Scale Industry and
(ii) Small & Cottage Industry.
(iii) Very often term financing for (i) Agriculture & (ii) Others are also included here.
House Building Loan (General)
Loans allowed to individual/enterprises for construction of house (residential or commercial)
fall under this type of advance. The amount is repayable by monthly installment within a
specified period. Such advances are known as Loan (HBLGEN).
House Building Loan (Staff)
Loans allowed to our Bank employees for purchase/construction of house shall be known as
Staff Loan (HBL-STAFF).
Other Loans to Staff
Loans allowed to employees other than for House Building shall be grouped under head - Staff Loan (Gen).
Cash Credit (Hypo.)
Advances allowed to individual/firm for trading as well as wholesale purpose or to industries to
meet up the working capital requirements against hypothecation of goods as primary security fall
under this type of lending. It is a continuous credit. It is allowed under the categories
(i) "Commercial Lending" when the customer is other than a industry and
(ii) "Working Capital" when the customer is an industry.
Cash Credit (Pledge)
Financial accommodations to individual/firms for trading as well as for whole-sale or to
industries as working capital against pledge of goods as primary security fall under this head of
advance. It is also a continuous credit and like the above allowed under the categories
(i) "Commercial Lending" and
(ii) Working Capital". Hire Purchase
Hire-Purchase is a type of installment credit under which the Hire-Purchaser agrees to take the
goods on hire at a stated rental, which is inclusive of the repayment of Principal as well as
interest for adjustment of the loan within a specified period.
Lease Financing
Lease Financing is one of the most convenient sources of acquiring capital machinery and
equipment whereby a client is given the opportunity to have an exclusive right to use an asset
usually for an agreed period of time against payment of rent. It is a term financing repayable by
installment.
Time Loan
This is one time financial accommodation for short period maximum 12 months to meet some
specific purpose. The loan is adjustable within the validity and not renewable and no transaction
is allowed.
SOD (General)
Advances allowed to individual/firms against financial obligation (i.e. lien on FDR/PSP/
BSP/Insurance Policy/Share etc). This may or may not be a continuous Credit.
Consumers Credit Scheme
It is a special credit scheme of the Bank to finance purchase of consumers' durable to the fixed
income group to raise their standard of living. The loans are allowed on soft terms against
personal guarantee and deposit of specified percentage of equity by the customers. The loan is
repayable by monthly installment within a fixed period.
SOD (Others)
Advances allowed against assignment of work order for execution of contractual works falls
under this head. This advance is generally allowed for a definite period and specific purpose i.e.
it is not a continuous credit. It falls under the category "Others".
SOD (Export)
Advance allowed for purchasing foreign currency for payment against L/Cs (Back to Back)
where the exports do not materialize before the date of import payment. This is also an advance
for temporary period which is known as export finance and falls under the category "Commercial
Lending".
PAD
Payment made by the Bank against lodgment of shipping documents of goods imported through
L/C falls under this head. It is an interim advance connected with import and is generally
liquidated against payments usually made by the party for retirement of the documents for
release of imported goods from the customs authority. It falls under the category "Commercial
Lending".
LlM
Advances allowed for retirement of shipping documents and release of goods imported through
L/C taking effective control over the goods by pledge in godowns under Bank's lock & key fall
under this type of advance. This is also a temporary advance connected with import which is
known as post-import finance and falls under the category "Commercial Lending".
LTR
Advance allowed for retirement of shipping documents and release of goods imported through
LC falls under this head. The goods are handed over to the importer under trust with the
arrangement that sale proceeds should be deposited to liquidate the advances within a given
period.
Export Cash Credit (ECC)
Financial accommodation allowed to a customer for exports of goods falls under this head
and is categorized as "Export Credit". The advances must be liquidated out of export proceeds
within 180 days.
Packing Credit (PC)Advance allowed to a customer against specific L/C/firm contract for processing/packing of
goods to be exported falls under this head and is categorized as "Packing Credit". The
advances must be adjusted from proceeds of the relevant exports within 180 days. It falls
under the category "Export Credit".
IDBPPayment made against documents representing sell of goods to Local export oriented
industries which are deemed as exports and which are denominated in Local Currency /
Foreign Currency falls under this head. This temporary liability is adjustable from proceeds
of the Bill.
F D B P
Payment made to customer through purchase/ negotiation of foreign documentary bills falls under this head. This temporary advance is adjustable from the proceeds of the shipping export documentation . It falls under the category “Export Credit”
F B P
Payment made to customer through purchase a foreign Currency Cheques/Drafts falls this head. This temporary advance is adjustable from the proceeds of Cheque/Draft
3.3 Interest Rates of Loans & Advances
SL # Types of Loan and Advance Interest rate1 Agriculture 11%2 Construction 15%3 Credit Card Monthly 2.554 Export 7%5 Forced Loans 17%6 Import, Wholesale, Retail Trade 15%7 Lease Finance, Hire Purchase 15.5%8 NBFI’s 14%9 Overdraft against FDR/ Scheme by JBL or Other Bank 14%10 Power, Gas, Water, Sanitary 15%11 SME Priority Sector 10%12 SME-With Collateral 15%13 SME-Without Collateral 16.5%14 Term Loan for Large and Medium Scale Industry 15%15 Term Loan for Small Scale Industry 14%16 Transport Storage and Communication 16%17 Working Capital to Large and Medium Industry 15%18 Working Capital to Small Industry 15%
Table 7: Interest Rate of Loan & Advance (Source: Jamuna Bank Website)Table 7: Interest Rate of Loan & Advance (Source: Jamuna Bank Website)
3.4 Securities against Advances
Types of Credit Securities
House building loanPrimary securities: mortgage of the land or any property
Car loan Primary securities: joint registration and comprehensive insurance policy. Two valuable guarantors.
Collateral securities: mortgage of land or any property. Any type financial obligation.
Auto loanPrimary securities: joint registration and comprehensive insurance policy.
Two valuable guarantors and post dated cheques
Any purpose loanPrimary securities: two valuable guarantors and post dated cheques.
Payments against documents(PAD)
Pledge or hypothecation of stock-in trade, goods, produce and merchandise, machineries, land or building on which machineries are installed
Loan Against imported merchandise Pledge of imported merchandise
Loan against trust receipt Trust receipt in lieu of import document
Local bills purchased Bill itself
Overdraft Primary securities: hypothecation of book depth
Collateral securities: mortgage of landed property and IPA.
Cash credit
Primary securities: Hypothecation of stock of goods in trade duly insured produce merchandise.
Collateral securities: Mortgage of land and building, any financial obligation
Table 8: Security against Advance (Source: Credit Division, JBL-Chistia Market Branch)
3.5 Sector Wise payment of Loans
SL No.
Sectoral Structure of Lending Outstanding as on 31.12.2012
As % of Total Loans & Advances
1 Agriculture And Agro-based Industry 106.68 1.94%2 RMG 350.77 6.39%3 Textile 156.10 2.84%4 Ship Breaking 41.61 0.76%5 Other Manufacturing Industry 41.61 0.76%6 SME Sector 987.70 18.00%7 Construction 313.13 5.70%8 Power, Gas 12.52 0.23%9 Transport, Storage and Communication 166.55 3.03%10 Trade Service 1689.62 30.78%11 Commercial real estate financing 83.27 1.52%12 Residential real estate financing 85.85 1.56%13 Consumer Credit 109.58 2.00%14 Capital Market 87.58 1.60%15 Credit Card 12.90 0.24%16 Non-bank financial institutions 21.49 0.39%17 Bank Acceptance ( i.e. LDBP, FDBP ) 767.28 13.98%18 Others 188.04 3.43%
Total Loans & Advances 5488.70 100.00%Table 9: Sector Wise payment of Loans (Source: Annual Report of JBL 2014)
3.6 How Jamuna bank recovers their Loan
When Jamuna Bank sanctions loans and advances to its customers, they clearly state the
repayment pattern in the loan agreement. But some credit holders do not pay their credit in due
period. The nationalized and private sector commercial banks have to face this sort of problems.
This situation is also found in Jamuna Bank. To overcome the problem of overdue loan, the bank
has taken particular loan recovery programs.
Recovery Programs taken by Jamuna Bank Limited:
Establishing credit supervision and monitoring cell in the bank
Re-structuring the loan sanctioning and distributing policy of the bank
Sanctioning loans and advances against sufficient securities as best as possible
Giving more powers to the branch manager in credit management decision making process
Offering a package of incentives to the sound borrowers Giving more emphasis on short term loans and advances Imposing restrictions on loans and advances for sick industries
Taking legal actions quickly against unsound borrowers as best as possible within the
period specified by the law of limitations.
3.7 Problems in Loan Recovery
Though Jamuna bank is performing better in managing loan and advances, still 12.39% of total
loan and advances are classified. There are a lot of reasons for which the loan recovery of the
bank is still now defective. In most cases, problems may be raised from sanctioning procedures
of loan, investigation of the project, and investigation of the loans etc. that is, the problem in loan
recovery proves the outcomes of the default process in loan disbursement.
The main reasons of poor loan recovery are categorized in four broad types as follow:
A. Problems created by economic environment
i. . Changing in the management pattern: Changing of management patterns may delay the
recovery of mature loan.
ii. Changing in industrial patterns: The banks sometimes sanction loan to the losing concern
for further improvement of the respective sector, but in most cases, they fail to achieve
progress.
iii. Operation of open market economy: In our country mainly industries become sick and
also close their business on account of emerging of open market economy. The cost of
production is high and the quality of goods is not of required of standard. As a result,
they become the losing concerns and the amount of bad loan increases.
iv. Rapid expansion of business: There are many companies which expand their business
rapidly, but the expansion is for short time. In the long run, the amount of classified loan
increases
B. Problems created by government:
i. External pressure: Jamuna Bank has also faced many problems in the loan recovery
process as a part of continuous pressure from various interested groups.
ii. Legal problems: Existing rules and regulations are insufficient to cover the legal aspects
of loan recovery. As a result, defaulters can get release easily from all charges against
them.
iii. Instability of Govt. policy: Frequent changes in government policies in regard to recovery of loan.
C. Problems created by the bank:
i. Lack of analysis of business risk: Before lending, Sometime Jamuna Bank fails to
properly analyze the business risk of the borrowers and the bank cannot forecast whether
the business will succeed or fail. If it fails to run well, the loan becomes classified.
ii. Lack of proper valuation of security or mortgage property: In some cases, bank fails to
determine the value of security against the loan. As a result, if the loan becomes
classified, the bank cannot recover its loan through the sale of mortgage.
3.8 Overall Procedure for Sanctioning Loan
The following procedure need to be followed for giving advances to the customer. These are:
a. Party’s application
b. Filling form-A
c. Collecting CIB report from Bangladesh Bank
d. Processing loan proposal
e. Project appraisal
f. Head office approval
g. Sanction letter
h. Documentation
i. Disbursement
a. Party’s application
At first borrower had to submit an application to the respective branch for loan, where he has to
clearly specify the reason for loan. After receiving the application form the borrower Bank
officer verifies all the information carefully. He also checks the account maintains by the
borrower with the Bank. If the official becomes satisfied then he gives form-X (prescribed
application form of Bank) to the prospective borrower.
b. Filling Form -X
After satisfying with party’s application the applicant need to fill Form-X. It is the prescribed
form provides by the respective branch that contains information of the borrower. It contains-
Name with its factory location, Official address and telephone number, details of past and
present business, its achievement and failures, type of loan needed etc.
c. Collecting CIB Report from Bangladesh Bank
After receiving the application for advance, Jamuna Bank sends a letter to Bangladesh Bank for obtaining a report from there. This report is called CIB (Credit Information Bureau) report. Jamuna Bank generally seeks this report from the head office for all kinds of investment. The purpose of this report is to being informed that whether the borrower has taken loan from any other Bank.
d. Processing loan Proposal
After receiving CIB report from Bangladesh Bank, then respective branch prepare an Investment
proposal, which contains terms and conditions of Investment for approval of Head Office.
Documents those are necessary for sending Investment proposal are:
Necessary Documents
While advancing money, banks create a lot of documents, which are required to be signed by the
borrowers before the disbursement of the loan. Of them some are technically called charge
documents. Necessary steps and documents:
Loan application form duly signed by the customer.
Acceptance of the term and conditions of sanction advice.
Trade license.
In Case Of Partnership Firm, copy of registered partnership deed duly certified as true
copy or a partnership deed on non-judicial stamp of taka-150 denomination duly
Notarized.
Demand promissory notes.
Letter of hypothecation of stocks and goods.
Personal letter of guarantee
Letter of hypothecation of books debts and receivable.
Letter of hypothecation of plant and machinery.
d. Project Appraisal
It is the pre-investment analysis. Project appraisal in the Banking sector is important for the
following reasons:
To achieve organizational goals
To recommend if the project is not designed properly
To justify the soundness of an investment
To ensure repayment of Bank finance
e. Techniques of Project Appraisal
An appraisal is a systematic exercise to establish that the proposed project is a viable preposition.
Appraising officer checks the various information submitted by the promoter in first information
sheet, application for Investment and Investment proposal.
The Head Office (HO) mainly checks the technical, commercial and financial viability of the
project. For others, HO is dependent on branch’s information. But when the investment size is
big, then the HO verifies the authenticity of information physically.
f. Head Office Approval
When Head office receive appraisal from the branch then, Head Office again appraises the
project. If it seems to be a viable one, the HO sends it to the Board of Directors for the approval
of the Investment. The Board of Directors (BOD) considers the proposal and takes decision
whether to approve the Investment or not. If the BOD approves the investment, the HO sends the
approval to the concerned branch.
The respective officer of Head Office appraises the project by preparing a summary named “Top
Sheet” or “Executive Summary” and then he sends it to the Head Office Credit Division for the
approval of the Loan. The Head Office Credit Division considers the proposal and takes decision
whether to approve the Investment or not. If the committee approves the investment; the HO
sends the approval to the concerned branch.
Graph 2: Loan Approval Flow Chart
g. Sanction Letter
After getting the approval of the HO the branch issues sanction letter to the borrower. A sanction
letter contains:
• Name of borrower,
• Facility allowed,
• Purpose,
• Rate of interest,
• Period of the Investment and mode of adjustment,
• Security and Other terms and condition.
h. Documentation
If the borrower accepts the sanction letter, the Documentation starts. Documentation is a written
statement of fact evidencing certain transactions covering the legal aspects duly signed by the
authorized persons having the legal status. The most common documents used by the Jamuna
Bank for sanctioning different kinds of Investment are:
Joint Promissory Note,
Letter of Arrangement,
Letter of Disbursement,
Letter of Installment,
Letter of Continuity,
Trust Receipt,
Counter Guarantee,
Stock Report,
Letter of Lien,
Status Report,
Letter of Hypothecation,
Letter of Guarantee
Documents Relating to Mortgage.
i. Disbursement
After sanction and completion of all formalities the respective officer disburses the loan. The
officer writes cheque and provides it to the borrower. For this borrower has to open an account
through which he/she can withdraw the money.
Graph 3: Process Flow for Loan Disbursement
J. Strategies for Recovery: Recovery of loan can be made in the following three methods:
i. Persuasive Recovery: The first step in recovery procedure is private communication that
creates a mental pressure on borrower to repay the loan. In this situation bank can provide
some advice to the borrower for repaying the loan.
ii. Voluntarily: In this method, some steps are followed for recovering loan. These are:
. Building Task Force
Arranging Seminar
Loan Rescheduling Policy
Waiver of Interest Rate
iii. Legal Recovery: When all steps fail to keep an account regular and the borrower does not
pay the installments and interests then the bank take necessary legal steps against the
borrower for realization of its dues. In this case “Artha Rin Adalat Law 2003” plays an
important role for collecting the loan.
3.9 Computation of Credit Risk Grading
To measure the actual risk associated with the loan that is going to be paid by the bank to the
particular client, we have to follow some steps and get a statistical parameter of the risk. There
are five steps follow the JBL to compute credit risk grading. Those are given and described
below:
Step 1: Identify all the Principal Risk Components
Credit risk for counterparty arises from an aggregation of the following:
a) Financial Risk
b) Business/Industry Risk
c) Management Risk
d) Security Risk
e) Relationship Risk
Each of the above mentioned key risk areas require be evaluating and aggregating to arrive at an
overall risk grading measure.
a) Evaluation of Financial Risk
Risk that counterparties will fail to meet obligation due to financial distress. This typically
entails analysis of financials i.e. analysis of leverage, liquidity, profitability & interest coverage
ratios. To conclude, this capitalizes on the risk of high leverage, poor liquidity, low profitability
& insufficient cash flow.
b) Evaluation of Business/Industry Risk
Risk that adverse industry situation or unfavorable business condition will impact borrowers’
capacity to meet obligation. The evaluation of this category of risk looks at parameters such as
business outlook, size of business, industry growth, market competition & barriers to entry/exit.
To conclude, this capitalizes on the risk of failure due to low market share & poor industry
growth.
c) Evaluation of Management Risk
Risk that counterparties may default as a result of poor managerial ability including experience
of the management, its succession plan and team work.
d) Evaluation of Security Risk
Risk that the bank might be exposed due to poor quality or strength of the security in case of
default. This may entail strength of security & collateral, location of collateral and support.
e) Evaluation of Relationship Risk
These risk areas cover evaluation of limits utilization, account performance,
conditions/covenants compliance by the borrower and deposit relationship.
Step 2: Allocate weights to Principal Risk ComponentsPrincipal Risk Components Weight
Financial Risk 50%
Business/Industry Risk 18%
Management Risk 12%
Security Risk 10%
Relationship Risk 10%
Table 10: Allocate weights to Principal Risk Components
According to the importance of risk profile, the following weightings are proposed for corresponding principal risks.
Step 3: Establish the Key Parameters
Principal Risk Components WeightFinancial Risk Leverage, Liquidity, Profitability & Coverage ratio
Business/Industry Risk Size of Business, Age of Business, Business Outlook, Industry Growth, Competition & Barriers to Business
Management Risk Experience, Succession & Team WorkSecurity Risk Security Coverage, Collateral Coverage and SupportRelationship Risk Account Conduct ,Utilization of Limit, Compliance of
covenants/conditions & Personal Deposit
Table 11: Establish the Key Parameters
Chapter:Chapter: 44
(Financial(Financial Analysis)Analysis)
4.1 Company Highlights Taka in BDT. Million Taka in BDT. Million
Particular Particular Year 2014 Year 2013Year 2014 Year 2013Authorized Capital 10,000.00 10,000.00Paid Up Capital 5,160.67 4,487.54Reserve and Retained surplus 5,650.00 4,393.40Total Shareholder’s Equity 10,810.67 8,880.94Deposits (Core & Bank) 114,635.13 97,485.61Total Liabilities 128,683.91 106,282.01Total Liabilities and Shareholder’s Equity 139,494.58 115,162.95Long Term Liabilities 32,922.17 32,618.54Loan and Advances 77,899.79 67,669.38Investments 39,963.54 31,392.20Property, Plant and Equipment 2,278.50 2,195.05Total Asset 139,494.58 115,162.95Earning Asset 74,563.30 66,608.33Net Current Asset 71,648.34 61,412.87
Table 12: Company Highlights (Source: Annual Report of JBL 2014)Table 12: Company Highlights (Source: Annual Report of JBL 2014)
Basic Market InformationFace value 10.00Market lot 152 week ‘s Range 9.7-13.7Total No of Securities 614,119,386
Table 13: Basic Market Information (Source: Jamuna Bank Website)Table 13: Basic Market Information (Source: Jamuna Bank Website)
4.2 (Five) Year key Financial Data & Ratio of JBL
Shareholder’s Information Shareholder’s Information
Taka in BDT. Million Taka in BDT. Million ParticularsParticulars Yr 2014Yr 2014 Yr 2012Yr 2012 Yr 2012Yr 2012 Yr 2011Yr 2011 Yr 2010Yr 2010
Income Statement InformationInterest IncomeInterest Income 10,269.6110,269.61 9,697.929,697.92 9,626.689,626.68 8,473.448,473.44 5,207.525,207.52Interest expencec Interest expencec 8,838.968,838.96 8,078.048,078.04 7,787.487,787.48 6,310.596,310.59 3,726.523,726.52Net Interest IncomeNet Interest Income 1,430.651,430.65 1,619.881,619.88 1,839.201,839.20 2,162.852,162.85 1,481.001,481.00Income from InvestmentIncome from Investment 3,267.683,267.68 2,660.312,660.31 2,007.152,007.15 1,404.671,404.67 1,152.791,152.79Non Interest IncomeNon Interest Income 1,392.311,392.31 1,355.471,355.47 1,438.771,438.77 1,296.371,296.37 1,112.781,112.78Non Interest ExpencecNon Interest Expencec 3,021.833,021.83 2,666.752,666.75 2,078.222,078.22 2,046.502,046.50 1,335.611,335.61Net Non-interest Income & Investment Income Net Non-interest Income & Investment Income 1,638.161,638.16 1,349.031,349.03 1,367.701,367.70 654.54654.54 929.96929.96Profit before Provision and TaxProfit before Provision and Tax 3,068.613,068.61 2,968.912,968.91 3,206.903,206.90 2,817.392,817.39 2,410.962,410.96Provision for Loans and AssetProvision for Loans and Asset 1,221.431,221.43 684.02684.02 1,126.381,126.38 347.39347.39 344.44344.44Profit after provision before Tax Profit after provision before Tax 1,847.411,847.41 2.284.892.284.89 2,080.522,080.52 2,470.002,470.00 2,066.522,066.52Contribution to Jamuna Bank Foundation Contribution to Jamuna Bank Foundation 36.9536.95 22.8522.85 20.8120.81 12.3512.35 10.3210.32Tax including deferred taxTax including deferred tax 463.31463.31 1,126.851,126.85 1,017.661,017.66 1,127.461,127.46 990.18990.18Profit after contribution to foundation and tax Profit after contribution to foundation and tax 1,347.121,347.12 1,135.191,135.19 1,042.051,042.05 1,330.191,330.19 1,066.021,066.02
Balance Sheet InformationAuthorized CapitalAuthorized Capital 10,000.0010,000.00 10,000.0010,000.00 10,000.0010,000.00 10,000.0010,000.00 10,000.0010,000.00Paid Up CapitalPaid Up Capital 5,160.675,160.67 4,487.544,487.54 4,487.544,487.54 3,648.403,648.40 2,230.092,230.09Reserve and Retained surplus Reserve and Retained surplus 5,650.005,650.00 4,393.404,393.40 3,837.293,837.29 3,633.113,633.11 4,178.104,178.10Total Shareholder’s Equity Total Shareholder’s Equity 10,810.6710,810.67 8,880.948,880.94 8,324.838,324.83 7,281.517,281.51 6,408.16,408.1Deposits (Core & Bank)Deposits (Core & Bank) 114,635.13114,635.13 97,485.6197,485.61 79,623.1379,623.13 70,508.0570,508.05 60,673.5660,673.56Total LiabilitiesTotal Liabilities 128,683.91128,683.91 106,282.01106,282.01 101,353.68101,353.68 79,783.6279,783.62 63,605.7163,605.71Total Liabilities and Shareholder’s Equity Total Liabilities and Shareholder’s Equity 139,494.58139,494.58 115,162.95115,162.95 109,678.51109,678.51 87,065.1387,065.13 70,013.9070,013.90Long Term Liabilities Long Term Liabilities 32,922.1732,922.17 32,618.5432,618.54 15,395.8315,395.83 13,788.2413,788.24 11,564.2611,564.26Loan and Advances Loan and Advances 77,899.7977,899.79 67,669.3867,669.38 54,887.0354,887.03 56,611.7956,611.79 49,734.8049,734.80Investments Investments 39,963.5439,963.54 31,392.2031,392.20 39,118.9339,118.93 16,314.9316,314.93 10,891.0210,891.02Property, Plant and Equipment Property, Plant and Equipment 2,278.502,278.50 2,195.052,195.05 2.082.032.082.03 1,971.721,971.72 1,822.661,822.66Total AssetTotal Asset 139,494.58139,494.58 115,162.95115,162.95 109,678.51109,678.51 87,065.1387,065.13 70,013.9070,013.90Earning AssetEarning Asset 74,563.3074,563.30 66,608.3366,608.33 58,969.0358,969.03 62,461.6262,461.62 50,886.8050,886.80Net Current Asset Net Current Asset 71,648.3471,648.34 61,412.8761,412.87 53,959.7353,959.73 54,381.7954,381.79 44,476.3044,476.30
Credit Quality InformationVolume of Non-performing Loans (NPLs)Volume of Non-performing Loans (NPLs) 4,422.154,422.15 5,133.765,133.76 5,337.875,337.87 1,618.731,618.73 905.52905.52% of NPLs to Total Loan and Advances % of NPLs to Total Loan and Advances 5.685.68 7.597.59 9.739.73 2.862.86 1.821.82Provision for Un-classified LoansProvision for Un-classified Loans 1,096.861,096.86 937.67937.67 814.67814.67 804.87804.87 718.17718.17Provision for Classified LoansProvision for Classified Loans 1,796.861,796.86 2,256.682,256.68 1,698.251,698.25 627.30627.30 453.76453.76
Table 14: Five Year Key Financial Data (Source: Annual report of JBL 2014)Table 14: Five Year Key Financial Data (Source: Annual report of JBL 2014)
4.3 Financial Highlights Taka in BDT. Million Taka in BDT. Million
Particular Year 2014 Year 2013Gross Revenue 14929.60 13,713.70Operating Income 6,090.62 5,635.66Profit before Tax 1,847.38 2,284.89Profit after Tax 1,347.12 1,135.19Total Capital 11,058.24 9,259.80Shareholder’s Equity 1,0810.67 8,880.94Deposits 114,635.13 97,485.61Investments 39,963.54 31,392.20Loan and Advances 77,899.79 67,669.38Investments 39,963.54 31,392.20Premise , Furniture & Fixture 2,278.50 2,195.05Total Asset 139,494.58 115,162.95Import and Export 124,898.40 115,162.95Return on assets after Tax (%) 1.06 1.01Classified Advance (%) 5.68 7.59Return on Equity (%) 13.68 13.20Liquidity Ratio (%) 17.11 14.84Capital Adequacy Ratio (%) 11.21 11.10No. of Deposit Account’s 605,039 525,347No. of Advance Account’s 28,042 24,654No. of Employees 2,204 2,138No. of Branches (Including SME center) 97 91No. of ATM 167 140
Table 15: Financial Highlights (Source: Annual report of JBL 2014)
4.4 Distribution of Share in 2014ParticularsParticulars Number’s of ShareNumber’s of Share % of Share% of Share
20142014 20132013 20142014 20132013
Sponsor’sSponsor’s 3,216,544.1603,216,544.160 2,608,273.7302,608,273.730 62.33%62.33% 58.12%58.12%Financial InstitutionsFinancial Institutions 558,532.940558,532.940 473,593.740473,593.740 10.82%10.82% 10.55%10.55%Foreign InvestorsForeign Investors 6,5893.5806,5893.580 4,369.2004,369.200 0.31%0.31% 0.10%0.10%Non-Resident BangladeshiNon-Resident BangladeshiGeneral PublicGeneral Public 1,379,006.4301,379,006.430 1,401,299.9501,401,299.950 26.72%26.72% 31.23%31.23%TotalTotal 5,160,667.1105,160,667.110 4,487,536.6204,487,536.620 100.00%100.00% 100.00%100.00%
Table 16: Distribution of Share in 2014 (Source: Annual report of JBL 2014)Table 16: Distribution of Share in 2014 (Source: Annual report of JBL 2014)
4.5 Total Capital Structure- JBL Taka in BDT. Million Taka in BDT. Million
2014 2013Core Capital (Tier-I) Paid Up Capital 5,160.67 4,487.54Statutory Reserve 2,966.02 2,596.54Right Issue subscription moneyRetained Earning 983.75 679.25Total :Tier-1 Capital 9,110.44 7,763.33Supplementary Capital (Tier-II)General Provision maintained against unclassified Loan & Advance 721.72 645.33General Provision maintained against off Balance sheet exposure 376.02 292.34Revaluation Reserve of HFT Securities (50% of Total Revaluation reserve)
318.32 27.05
Asset revaluation reserve (50% of Total Revaluation reserve) 531.75 531.75Tier -II Capital 1,947.81 1,496.47Tier-I & Tier –II Capital 11,058.25 9,259.80Total risk Weighted Assets 98,298.68 83,421.38999Required Capital (%) 10.00% 10.00%Required Capital Amount 9,861.20 8,342.14Capital Adequacy Ratio maintained (%) 11.25% 11.10%Core capital to Risk Weighted Assets 9.24% 9.31%Supplementary Capital to Risk Weighted Assets 1.98% 1.79%
Table 17: Total Capital Structure (Source: Annual report of JBL 2014)Table 17: Total Capital Structure (Source: Annual report of JBL 2014)
4.6 Market Price Information 2014
Month Month Yr 2014Yr 2014
DSE Price indexDSE Price index Volume inVolume inmillion Tkmillion Tk
CSE Price indexCSE Price index Volume inVolume inmillion Tkmillion Tk
Total VolumeTotal Volume of DSE & CSEof DSE & CSEHighHigh LowLow HighHigh LowLow
JanuaryJanuary 18.5018.50 10.9010.90 4407444074 17.9017.90 15.5015.50 7.257.25 51.9951.99FebruaryFebruary 18.0018.00 10.8010.80 50.6050.60 18.3018.30 15.7015.70 5.065.06 55.6655.66MarchMarch 18.0018.00 11.0011.00 91.3091.30 16.3016.30 14.0014.00 3.633.63 94.9394.93AprilApril 18.4018.40 11.2011.20 56.5556.55 16.1016.10 12.5012.50 6.586.58 63.1363.13MayMay 17.6017.60 11.2011.20 52.0252.02 13.4013.40 12.1012.10 2.972.97 54.9954.99JuneJune 19.0019.00 10.5010.50 59.9459.94 12.7012.70 11.5011.50 2.852.85 62.5162.51JulyJuly 16.3016.30 10.8010.80 24.4924.49 12.8012.80 11.5011.50 5.045.04 27.3427.34August August 17.0017.00 10.7010.70 185.48185.48 12.7012.70 11.6011.60 5.045.04 190.52190.52SeptemberSeptember 17.9017.90 10.8010.80 64.2764.27 13.7013.70 11.8011.80 4.184.18 68.4568.45OctoberOctober 18.0018.00 10.8010.80 86.9686.96 14.4014.40 12.5012.50 4.274.27 91.2391.23
NovemberNovember 17.5017.50 10.8010.80 26.8326.83 13.2013.20 11.7011.70 2.782.78 29.6129.61DecemberDecember 13.1013.10 10.9010.90 23.6623.66 13.8013.80 11.5011.50 3.193.19 26.8526.85
Table 18: Market Price Information (Source: Annual report of JBL 2014)Table 18: Market Price Information (Source: Annual report of JBL 2014)
Chapter:Chapter: 55
(Empirical Analysis & Findings) (Empirical Analysis & Findings)
5.1 Credit Distribution
From previous 5 year annual report I have analyzed some important data which is related to
credit activities of JBL. The analyzed information is shown below by creating different chart
graphs etc.:
Year wise Deposit Taka in BDT. Million
Year Total Deposit
2010 60674.56
2011 70508.05
2012 79623.13
2013 97485.61
2014 114,635.13
Table 19: Year wise Deposit (Source: Annual report of JBL 2014)Table 19: Year wise Deposit (Source: Annual report of JBL 2014)
2010 2011 2012 2013 20140
20000
40000
60000
80000
100000
120000
140000
60674.5670508.05
79623.13
97485.61
114635.13
Deposit
Deposit
Graph 4: Year wise Deposit Graph 4: Year wise Deposit
Year wise deposits of JBL are increasing year by year. In 2010 the total deposit was TK.
60674.56 million. It was increased to TK. 114,635.13 million in 2014. From the graph it is seen
that growth rate from year 2013 to 2014 is 23% which indicates positive perception toward JBL
from clients point of view.
Year wise Loans & Advances
Taka in BDT. Million
Year Total loan and Advances
2010 49,734.8049,734.80
2011 56,611.7956,611.79
2012 54,887.0354,887.03
2013 67,669.3867,669.38
2014 77,899.7977,899.79
Table 20: Year wise loan & Advances (Source: Annual report of JBL 2014)Table 20: Year wise loan & Advances (Source: Annual report of JBL 2014)
2010 2011 2012 2013 20140
20000
40000
60000
80000
100000
120000
140000
60674.5670508.05
79623.13
97485.61
114635.13
Deposit
Deposit
2010 2011 2012 2013 20140.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
49,734.8056,611.79 54,887.03
67,669.38
77,899.79
Loan
Loan
Graph 5: Year wise loan & Advances Graph 5: Year wise loan & Advances
Here we see that total loans & advances of JBL are increasing 2008 – 2011. This is because of
their attractive and flexible loan packages. But in 2012 their total loans and advances is
decreased by 3.14% compare to 2011. the main reason of decreasing loans and advances, the
competitive bank come up with a new loan policy which is more attractive than our loan policy.
5.2 Sector Wise Credit Distribution
2010 2011 2012 2013 20140.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
49,734.8056,611.79 54,887.03
67,669.38
77,899.79
Loan
Loan
5%
6% 1%
3%
7%
6%
7%
6%
6%6%4%
6%
7%
6%
6%
7%
6%
6%
Sector Wise Credit Distribution
AgricultureConstructionCredit Card MonthlyExportForced LoansImport, Wholesale, Retail TradeLease Finance, Hire PurchaseNBFI’sOverdraft against FDR/ Scheme by JBL or Other BankPower, Gas, Water, SanitarySME Priority SectorSME-With CollateralSME-Without CollateralTerm Loan for Large and Medium Scale IndustryTerm Loan for Small Scale IndustryTransport Storage and Communi-cationWorking Capital to Large and Medium IndustryWorking Capital to Small Industry
Graph 6: Sector Wise Credit Distribution Graph 6: Sector Wise Credit Distribution
From the figure it can easily be said that JBL provides more loan in Trade service sector. In 2014
it provided total loan and advances to several sector. But in agriculture sector they discourage to
sanction loan because they think this sector is risky, in 2014 JBL provide loan in agriculture
sector only 5%.
5.3 Geographical Location Wise Loan & Advance
5%
6% 1%
3%
7%
6%
7%
6%
6%6%4%
6%
7%
6%
6%
7%
6%
6%
Sector Wise Credit Distribution
AgricultureConstructionCredit Card MonthlyExportForced LoansImport, Wholesale, Retail TradeLease Finance, Hire PurchaseNBFI’sOverdraft against FDR/ Scheme by JBL or Other BankPower, Gas, Water, SanitarySME Priority SectorSME-With CollateralSME-Without CollateralTerm Loan for Large and Medium Scale IndustryTerm Loan for Small Scale IndustryTransport Storage and Communi-cationWorking Capital to Large and Medium IndustryWorking Capital to Small Industry
69%
17%
2%10%
2%
1%0%
Geographical Location wise loans & Advances
Dhaka DivisionChittagong DivisionSylhet DivisionRajshahi DivisionKhulna DivisionRangpur DivisionBarisal Division
Graph 7: Geographical location wise and & advancesGraph 7: Geographical location wise and & advances
In above chart we see that JBL provide huge amount of loans and advances in Dhaka division.
They provide 69.44% loans and advices in Dhaka division. JBL also provide their loans and
advances 16.67% in Chittagong division and and the others division they provide fewer
percentage of loans and advances, as 9.75% in Rajshahi division. 1.69% in Sylhet division,
1.53% in Khulna division, 0.67% in Rangpur division, and 0.25% in Barisal division.
5.4 Classification Status of Loan
Classification Status % Total Loan Outstanding ( In Million)
Standard 93.45% 7,279.63
Special mention Account 0.87% 68.13
Sub-standard 0.50% 38.76
Doubtful 0.43% 33.19
Bad/Loss 4.75% 370.27
Total 100.00% 7,789.98
Table 21: Classification status of Loan (Source: Annual report of JBL 2014)Table 21: Classification status of Loan (Source: Annual report of JBL 2014)
69%
17%
2%10%
2%
1%0%
Geographical Location wise loans & Advances
Dhaka DivisionChittagong DivisionSylhet DivisionRajshahi DivisionKhulna DivisionRangpur DivisionBarisal Division
Standard Special mention Account Sub-standard Doubtful Bad/Loss
Graph 8: Classification Status f loan Graph 8: Classification Status f loan
5.5 Interest Earn on Lending
Year Total Interest on Lending
2014 10269.61
2013 9697.92
2012 9626.68
2011 8473.44
2010 5207.52
Table 22: Interest earn on Lending (Source: Annual report of JBL 2014)Table 22: Interest earn on Lending (Source: Annual report of JBL 2014)
1
2
3
4
5
2014
2013
2012
2011
2010
10269.61
9697.92
9626.68
8473.44
5207.52
Interest earn on Lending
Graph 9: Interest on Lending Graph 9: Interest on Lending
5.6 Ratio Analysis
Non-performing Loan ratio
A sum of borrowed money upon which the debtor has not made his or her schedule payments for at list 90 days. A nonperforming loan is either in default or close to being in default. Once a loan is nonperforming, the odds that it will be repaid in full are considered to be substantially lower. If the debtor starts making payments again on a nonperforming loan, it becomes a reperforming loan, even if the debtor has not caught up on all the missed payments.
Year Non-performing Loan Total Loan NPL Ratio2010 905.52 49734.80 1.82%
Nonperforming loanNonperforming Ratio = ×100 Total loan
2011 5133.76 56611.79 2.86%2012 5337.87 54887.03 9.73%2013 5133.76 67669.38 7.59%2014 4422.15 77899.79 5.68%
Table 23: Non Performance Loan Ratio Table 23: Non Performance Loan Ratio
2009.5 2010 2010.5 2011 2011.5 2012 2012.5 2013 2013.5 2014 2014.5
1.82%
2.86%
9.73%
7.59%
5.68%
Graph 10: Non Performance Loan RatioGraph 10: Non Performance Loan Ratio
Loan to Deposit ratio
A Commonly used statistic for assessing a bank’s liquidity by dividing the banks total loans by its total deposit. This number, also known as the LTD ratio, is expressed as a percentage. If the ratio is too high, it means that banks might not have enough liquidity to cover any unforeseen fund requirement; if the ratio is too low, banks may not be earning as much as they could be.
Year Total Loan (Taka in Million)
Total deposit (Taka. In Million) LDT Ratio
2014 77,899.79 114,635.13 67.95%2013 67,669.38 97,485.61 69.41%2012 54,887.03 79,623.13 68.93%2011 56,611.79 70,508.05 80.29%
Total LoanLDT Ratio =
Total Deposit
2010 49,734.80 60,673.56 81.97%
Table 24: Loan to Deposit Ratio Table 24: Loan to Deposit Ratio
67.95% 69.41% 68.93%
80.29% 81.97%
Graph 17: Loan to Deposit Ratio Graph 17: Loan to Deposit Ratio
6.7 Provision for Loan
Provision for Unclassified Loans
Year Provision for Unclassified Loan2010 718.172011 804.8972012 814.672013 937.672014 1,097.74
Table 25: Provision for Unclassified Loan (Source: Annual report of JBL 2014)Table 25: Provision for Unclassified Loan (Source: Annual report of JBL 2014)
2014 2013 2012 2011 2010
0
200
400
600
800
1000
1200
718.17
804.897 814.67
937.67
1097.74
Graph 11: Unclassified loan Graph 11: Unclassified loan
The Percentage of Un-classified loans decrease in 2014 due to recovery, regularized and written off of bad loans following Bangladesh Bank guidelines. Required provision has been kept against all non-performing loans and advances as per directive of Bangladesh Bank law.
Provision for Classified Loans
Year Provision for Classified Loan
2010 453.76
2011 627.30
2012 1,698.25
2013 2,256.68
2014 1,796.86
Table 26: Provision for Classified Loan (Source: Annual report of JBL 2014)Table 26: Provision for Classified Loan (Source: Annual report of JBL 2014)
2010 2011 2012 2013 2014
453.76
627.3
1698.25
2256.68
1796.86
Graph 11: Classified loan Graph 11: Classified loan
The Percentage of Classified loans decrease in 2014 due to recovery, regularized and written off of bad loans following Bangladesh Bank guidelines. Required provision has been kept against all non-performing loans and advances as per directive of Bangladesh Bank law.
6.8 Trend Analysis
2014 2013 2012 2011 2010
Net earn on interest on lending 10269.61 9697.92 9626.68 8473.44 5207.52
Provision for Loans 1121.43 684.02 1126.38 347.39 341.4
Loans 77899.79 67669.38 54887.03 56611.09 49430.50
Loan to deposit Ratio 67.95% 69.41% 68.93% 80.29% 81.47%
2010 2011 2012 2013 2014
Current year amount – Base year amountPercent change = ×100 Base year amount
Non-performing loan ratio 5.68% 7.59% 9.73% 2.86% 1.82%
Debt Equity ratio 9.43 9.41 10.46 10.33 10.56
Table 27: Trend Analysis Table 27: Trend Analysis
In 2014 JBL provide more loan so JBL earn more interest than previous year and provisions for loan also high than other year. Loan to deposit ratio is low than other year that means JBL maintain more liquidity than other year. Their debt equity ratio also lowers by year by year. That means JBL minimizing its finance by debt than other year.
So I can say that JBL year by year performing good credit management.
2014 2013
Classified Loan 5.68% 7.59%
Unclassified Loan 94.32% 92.41%
Substandard Loan .50% .35%
Doubtful Loan .43% 2.32%
Bad/Loss Loan 4.75% 4.91%
6.9 Asset Quality Standards
Year Loan Provision Non-performing loan Ratio2011 278.58 5133.76 5.42%2012 987.15 5337.87 18.49%2013 1684.02 4422.15 15.46%2014 1221.43 5133.76 23.79%
Loan Provision Loan provision to Non performing loan ratio = ×100 Nonperforming loan
Classified Loan Unclassified Loan Substandard Loan Doubtful Loan Bad/Loss Loan0.00%
10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%
100.00%
Table 28: Loan provision to nonperforming loan ratio Table 28: Loan provision to nonperforming loan ratio
Year Loan Provision Total loan Ratio2011 278.58 56611.79 .49%2012 987.15 51887.03 1.90%2013 684.02 67669.38 1.01%2014 1221.43 77899.79 1.57%
Table 29: Loan provision to loan ratioTable 29: Loan provision to loan ratio
Year Total provision Total Asset Ratio2011 3473.93 870506.51 .39%2012 1126.37 109678.50 1.02%2013 3878.37 115162.95 3.36%2014 4116.03 139494.58 2.95%
Table 30: To provision to asset ratio Table 30: To provision to asset ratio
Overall analyses I can say that JBL is now do better credit management than before. That’s why in Long term JBL rated by A1 (Strong Capacity and high quality) and in short term graded by ST-2
6.10 Hypothesis Testing
Summarization of variables
Year ROE ROA NPL/TL
2010 21.0 1.8 7.3
2011 19.45 1.69 2.85
2012 13.35 1.06 9.72
2013 13.20 1.06 5.68
Loan Provisions Total provision to Asset ratio = ×100 Total Asset
Loan Provisions Loan provision to loan ratio = ×100 Total loan
2014 13.68 1.01 7.59
Table 31: Summarizations of variables Table 31: Summarizations of variables
Significance level = 5%
ROE vs. Percentage of NPL
2010 2011 2012 2013 20140
5
10
15
20
25
ROE NPL/TL
Graph 12: ROE vs. Percentage of NPL Graph 12: ROE vs. Percentage of NPL
Diagram shows a slight negative correlation between ROE and NPL. Since non-performing loans is an indicator to poor credit risk management. If JBL can reduce the percentage of Non-performing loan it will earn more profit. We therefore expect better credit risk management is related to lower non-performing loans.
6.11 SWOT Analysis
SWOT analysis refers to analysis of strengths, weaknesses, opportunities and threats of an
organization. This facilitates the organization to make its future performance improved in
comparison to its competitors. An organization can also study its current position through
SWOT analysis. For all of these, SWOT analysis is considered as an important tool for making
changes in the strategic management of an organization. Through direct observation and
discussion with the JBL officials I am able to point out some major strength and weaknesses as
well as some threats and opportunities regarding the various issues of the Bank such as –
Organizational identity
Service level
Operational efficiency
Technology
Employee efficiency etc. along with many other issues.
Strengths
Top management Corporate culture Various Products and Services Strong employee bonding Efficient Performance Strong financial position
Weaknesses
Dependent on fixed deposits Moderate risk management system Absence of strong marketing activities Not enough innovative products
Opportunities
Country wide network Introducing more branches Introducing special corporate scheme Real time online banking Creation of brand image
Threats
Similar products are offered by others Default Loans Industrial Downturn Increased competition in the market
Strengths
Top Management
The Jamuna Bank Limited is operated by a very efficient management group. The top
management officials have all worked in reputed banks and their years of banking experience,
skill, and expertise will continue to contribute towards further expansion of the bank. So, the top
management of the bank is the major strength for JBL.
Corporate Culture
JBL has an interactive corporate culture. The working environment of JBL is very friendly,
interactive and informal. And, there are no hidden barriers or boundaries while communicate
between the superior and the employees. This corporate culture works as a great motivation
factor among the employees of the bank.
Various Products and Services
JBL offers various types of products and services to their clients. So those, Customers can
choose the right products that will fulfill their needs.
Strong employee bonding and belongings
JBL employees are one of the major assets of the company. The employees of JBL have a strong
sense of commitment towards organization and also feel proud and a sense of belonging towards
JBL. The strong organizational culture of JBL is the main reason behind its strength
Efficient Performance
It has been seen from customers’ opinion that JBL provides hassle-free customer services to its
client comparing to other financial institutions of Bangladesh. Personalized approach to the
needs of customers is its motto.
Strong Financial Position
It has been seen that the net profit has been gradually rising over the years. Furthermore, JBL is
not just sitting on its previous year’s success, but also taking initiatives to improve. One of the
employees has said.
Weakness Dependent on fixed deposits
Jamuna Bank heavily dependents on fixed deposit. The bank have to pay large amount of interest
for the just because of highly depend on fixed deposit.
Moderate risk management system
JBL risk management system is not that much secured. They need to develop their risk grading system.
Absence of strong marketing activities
JBL currently don't have any strong marketing activities through mass media e.g. Television. TV
ads play vital role in awareness building. JBL has no such TV ad campaign. Although they do a
lot of CSR activities compared to other banks.
Not enough innovative products
In order to be more competitive in the market, JBL should come up with more new attractive and
innovative products.
Opportunities
Country wide network
The ultimate goal of JBL is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase JBL's profitability but also will secure its existence in the log run.
Introducing more branches
There are many important places in Bangladesh, where customers are eagerly waiting for doing banking transactions. But no existence of banks is in those places. Although JBL already has 97 branches to provide services to its customers, it must also open more branches in those places where people needs banking facilities.
Introducing special corporate scheme
JBL can introduce special corporate schemes for the corporate customers or officers who have an income level higher from the service holders. At the same time, they can introduce schemes or loans for various service holders. And the schemes should be separate according to the professions, such as engineers, lawyers, doctors etc.
Real time online banking
Today online banking is the best way to earn profit for the bank. So JBL have to earn more profit
by developing online banking system.
Creation of brand image
As we know that brand creates value. So JBL need to develop their brand image by developing
their products and services.
Threats
Similar products are offered by other banks
Now-a-days different foreign and private banks are also offering similar type of products with an
almost similar profit margin. So, if all competitors fight with the same weapon, the natural result
is declining profit.
Default Loans
The problem of non-performing loans or default loans is very minimum or insignificant.
However, this problem may rise in the future thus; JBL has to remain vigilant about this problem
so that proactive strategies are taken to minimize this problem.
Industrial Downturn
Bangladesh is economically and political unstable country. Flood, draught, cyclone, and newly
added terrorism have become an identity of our country. Along with inflation, unemployment
also creates industry wide recession. These caused downward pressure on the capital demand for
investment.
Increased competition in the market
In banking sector day by day competition are increased and lots of new bank are coming into the
competition. So it is big threat for JBL.
6.12 Findings
The study has been made to find out the credit operating system, their credit policies and procedures of loan supervision and recovery, especially their classified loans of Jamuna Bank Ltd. And after discussing their credit system, procedure of loan recovery and analyze their performance of loan and advance department including the classified loans,
The findings of the study are as following:-
Jamuna Bank, Chistia Market branch, is able to achieve excellent rating from their clients in two important criteria of branch location & comfortable interior decoration.
Branch managers are made fully liable for the selection of the new borrower in the bank. It prohibits the way to improper selection of the new borrower by the branch manager.
Jamuna Bank Ltd. provides working capital facilities like Cash Credit, in against of stock of manufacturing goods. And continuously supervise to ensure that appropriate stocks are there to support the financing.
The employees are very good in nature, highly educated and helpful, if subordinate makes a mistake, higher authority motivates politely rather than blaming.
The employees of credit departments that are so crucial matter are highly experienced and can handle smartly the clients.
Important factors such as- good reputation in the market, personal & corporate relationship etc.
ATM service is week.
The branch manager, officer and executive who have achieved target in all respect may be rewarded.
Advertising and promotional activities are not very effective for informing customers about new and (financial) attractive service. So, advertising campaign should be stronger for quick improvement of the bank.
From the study it has been found that the pricing policy of JBL is not much satisfactory. For this reason they should hire marketing specialists who will help them to develop effective service strategy, different critical decision and prepare various plans.
Chapter:Chapter: 77
(Recommendation & Conclusions)(Recommendation & Conclusions)
7.1 Recommendations
As we all know JBL is one of the well known banks in our country. From my little knowledge
it’s quite hard to give recommendation to such a well established bank. Still from my learning
and observation, I am giving following recommendation to follow:
JBL need to more concentrate on loan and advance services. And they need to offer attractive packages to promote their loan and advance product.
Maximum amount of loan is provided to the long-term industrial sectors. They intentionally ignore the agriculture sector because of riskiness and safety issues. But for the overall economic development of the country they should diversify their loans in agriculture sector.
JBL has only 97 branches all over the country. Since day by day their demand is increasing so it is quite hard to provide full range services with those branches. So they need to put more attention toward the expansion of branch network as well as ATM Booths.
For improving the recovery position and reducing huge over due loans, first action needed to attract political support and urge upon the govt. and political parties to take necessary steps for repayment of defaulted loans within a limit.
New credit culture needs to be developed in place of default culture. Efforts to be taken as soon as possible to safeguard the interest of banking sector.
Real value of business can come from making regular visits to the customer's place of business rather than holding all meetings in the Bank.
JBL earn Maximum profit from Dhaka City. So JBL need to spread their all over the Bangladesh.
7.2 Conclusions
Jamuna Bank Ltd. is a commercial bank launched its operation in 2001. It has already developed
goodwill among its clientele by offering its excellent services by different divisions. This success
has resulted from the dedication, commitment and dynamic leadership among its management
over the periods. The working atmosphere of the Jamuna Bank Limited is very simulating.
During the short span of time of its operation, the bank has been successfully to the position
itself as a progressive and dynamic financial institution in the country.
Credit policy is a very convenient banking tool for the business world. The value of this service
is immense. It has gathered such a position in the banking sector that people at developed and
also developing counties are very much depended on this service. In Bangladesh credit facilities
or loans started to become very attractive in recent periods. But still lots improvements in
services and facilities have to be made in this department.
Credit Division of Jamuna Bank has a very qualified and dedicated group of officers and staffs
who are always trying to provide the best service to the clients. They always monitor the credit in
different sectors and their position. Before providing the loan they analyze whether the loan will
be profitable and whether the client is good enough to repay the loan within the given period of
time.
The main competitive advantage JBL is enjoying that it has online banking where as other local
commercial bank cannot yet achieve that advantage. But all the commercial banks are now trying
to achieve this. In this bank the employees are highly motivated by their remunerations and other
benefits. Here, all the employees are very much cooperative with their customers, colleagues and
simply visitors. JBL Improved economic conditions of both rural and urban area.
7.3 Reference
Annual Reports
Jamuna Bank Limited (2010-2014)
Published Document & Banking manual
Credit Division Manual of JBL
Several Booklets from Jamuna Bank Limited
Other internship reports of JBL
JBL Half Yearly Report (2015)
Websites
www.jamunabankbd.com (Jamuna Bank Ltd. Home)
www.bb.org.bd (Bangladesh Bank Home)
www.dsebd.org (Dhaka Stock Exchange Home)
www.cse.com.bd (Chittagong Stock Exchange Home)
www.bibm.org.bd (Bangladesh Institution of Bank Management Home)
www.wikipedia.org
www.banglapedia.org