CHAPTER 1

INTERODUCTION
Background of the Study
The Credit department has an important function in identifying, measuring, monitoring, and
controlling credit and market risks, reinforcing the Bank’s own carefully developed systems
and meeting the regulatory requirements specified by the Central Bank of Bahrain (CBB) and
the Basel Convention.

It seeks to ensure efficient customer service by developing smoother processes to increase

credit-risk awareness and keep business managers updated about the changes in business
environment that may affect the quality of the portfolio.

The department is committed to ensuring that credit approval procedures and practices are
consistent with the Bank's lending principles and policies, thereby meeting the objective of
maintaining the balance between operational efficiency and quality of assets.

Objective of the study

1. To know about the credit management system of Uttara Bank.
2. To identify factors\problem affecting credit management system of Uttara Bank.
3. To recommendation suggestion to improve the credit management of Uttara Bank.
Methodology of the Study
a. Data Collection
I. Primary data Sources
 Face to face conversation with current bank employees

 Working in credit direct job experience.

 Observation

 Practical Banking Work.

II. Secondary data Sources
 Annual Report of Uttara Bank Limited.
  Published booklet of the bank.
 Various published documents.
 Website of Uttara Bank Limited.
 Different text books.
 Different circular sent by head office of Uttara Bank Limited.
b. Presentation
c. Analysis
 MS Word, Excel, Chart & Graph
Limitations of the study
The present study was not out of limitations. But as an internee it was a great opportunity
for me to know about banking activities in Bangladesh especially in Uttara Bank Limited, I
have faced the following problems that may be termed as the limitation or shortcomings of
the study. These are given bellow:
 No remuneration was provided.
 Lack of records.
 Lack of Time.
 Insufficient data.
 Lack of proper support.
 Lack of my experience.
 CHAPTER 2

Overview of the Uttara Bank Limited

History of Uttara Bank Limited

Uttara Bank Limited celebrated 50th anniversary of its Banking Service in 2015. This well
established and ancient bank has a rich history. With the initiation of some renown Bengali
businessmen it was established to facilitate the disadvantaged people of the then East Pakistan
and started its banking operation officially on 28th January of 1965 in name of “Eastern Banking
Corporation” with four branches which soon reached 60 just before the independence. During
Non-cooperation movement in 1971, this bank performed the treasury function of East Bengal.

After independence, Eastern Banking Corporation was nationalized and renamed as “Uttara
Bank” and resumed its banking operation from 26th March 1972. Embarking on a progressive
journey, Uttara Bank continued to grow and expand in the successive years. It took the name
“Uttara Bank Ltd.” after privatization from June,1983 and became one of the largest privet
sector bank of Bangladesh. In the later years, Uttara Bank became the trend setter in the
banking industry, acquiring lion's share in inward foreign remittances and a major market share
in loans to large, medium and small industries, traders and farmers. Based on the bank’s
consistent strong financial performance and its expanding presence, Uttara Bank Ltd. is
currently ranked as the most trusted bank in Bangladesh.

At present the bankhas 233 branches and all are under online network. In addition, its effective
and diversified approach to seize the market opportunities is going on as continuous process to
accommodate new customers by developing and expanding rural, SME financing and offshore
banking facilities. Besides these traditional delivery points, the bank is also very active in the
alternative delivery area. It currently has the facilities of SMS Banking, Internet Banking and a
large number of ATMs of its own with ATM sharing arrangement with other partner banks.

The Bank is proud of its management team headed by Managing Director, Mr. Mohammed
Rabiul Hossain and it encourages all employees to devote a measure of their time and talent to
support distressed community by participating in CSR programs. Its main objective is to render
service to the people whether rich or poor and to contribute to the development of the nation.

Number of Employee 3,746

Number of Branches 233

Number of ATMs 25

Number of Debit & Prepaid Cards 39,218

Total Assets (Crore) 24,881,606,698
 Mission of UBL:

We always strive-
1. To continuously provide quality banking service with enhanced customer focus and innovate
a wide variety of need based products with widely popular solutions.

2. To achieve supremacy in customer service through state-of-the-art delivery channels and

user-friendly tools and technology.

3. To sharpen leadership with the standard of a learning organization well supported by the
finest team of banking experts and professionals.

4. To maintain a healthy and diversified financial profile for inclusive economic growth.

5. To be a responsible social enterprise by effectively blending commercial pursuits with social

banking.

6. To be the benchmark for the regulators in terms of compliance, corporate governance and
ethics.

7. To build long-term shareholder value with consistent growth momentum.

Vission of UBL:

We seek to be the first choice of our customers as a distinct financial service provider, trusted,
respected and valued by all stakeholders within the region and beyond pursuing an endless voyage
towards excellence in every respect.

Strategic objectives:
 To facilitate the transferring of fund from the surplus unit to deficit unit
 To accelerate the savings
 To accelerate the investment
 To enhance the economies development
 To facilitate the trades and commerce’s

To be one of the top five financial institutions in Bangladesh in terms of market share in all
significant market segments we serve.
UBL Product & Services:

UBL has launched a number of financial products and services since its inception. These
products and services are given bellow:

Deposit Product:

 Savings Bank Account (Clients)

 Savings Bank Account (School Banking)
 Savings Bank Account (Garments Workers)
 Double Benefit Deposit Scheme
 Savings Bank Account (Farmers)
 Savings Bank Account (Leather Factory Workers)
 Bank Account (Non Privileged Farmers, Woman & Young Entrepreneurs)
 Current Account (Individual)
 Current Account (Non-Individual)
 Special Notice Deposit
 Fixed Deposit Receipt Account
 Monthly Deposit Scheme
 Uttaran Swapna puran Sanchaya Prokolpa
 Uttaran Bibaha Sanchaya Prokolpa
 Uttaran Shikksha Sanchaya Prokolpa
 Mashik Munafa Prokalpa
 Uttaran Taka 10 SB Account
 Uttaran Street Urchin and Working Children SB A/C
 Uttaran Physically Challenged Persons SB A/C
 Uttaran Footwear and Leather Products Workers SB A/C
 National Service Program SB A/C
 Under Privileged SB A/C
 The inhabitants of earlier enclaves taka 10 SB A/C
Loans & Advances:

 Uttaran Small Business Loan (USBL)

 Nari Swanirbor Rin Prokalpo (NSRP)
 Uttaran SME Sector Development Project Loan (USSDPL)
 House Hold Durables
 Uttaran House Repairing / Renovation Loan
 House Finance for Freedom Fighters
 Travel Loan
 Marriage Loan
 Working Capital Loan
 Education Loan
 Doctor’s Loan
  Uttaran Home Loan
 Car/Motorcycle Loan
 Trade Finance
 Green Financing
 Agricultural Credit
 Lease Finance
 Fixed Term Loan to Enterprise
 Loan for Foreign Employment

Corporate loans
1. Lease Finance
2. Bad Loan Management

SME Financing
 Personal loan
 Consumer Credit Schemes (CCS)
 Poverty alleviation sector financing
 Financing in Women Empowerment
 Development Scheme
 Syndicated Finance

UBL Card:
1. Credit Card
2. PSO Auto credit Card


E-banking Services:
• Online banking
• Mobile financial services (M Cash)
• NRB banking
• Locker services

Corporate social responsibility:

Being a corporate citizen, UBL plays an important role for well-being of the society where it
conducts business, UBL believes that, true success does not consist in profit maximization only
rather in doing something for the betterment of deprived part of the society. With this
consideration, UBL has established a foundation in the name and style, Uttara Bank.

Foundation” in 2000. UBL contributes 1% of its Operating Profit to the UttaraBank Foundation
every year but not less than BDT 4 million. Poor children get education facilities through Uttara
Bank Education, Mr. Mohammed Rabiul Hossain Scholarship.
 CHAPTER 3

Results & Findings

Loans & Advances:

Uttara Bank Limited is a new generation Bank. It is committed to provide high quality
financial services/products to contribute to the growth of GDP of the country through
stimulating trade & commerce, accelerating the pace of industrialization, boosting up
export, creating employment opportunity for the educated youth, poverty alleviation,
raising standard of living of limited income group and over all sustainable socio-economic
development of the country.

In achieving the aforesaid objectives of a Bank, Credit Management has paramount

importance as the greatest share of total revenue a Bank generates from it. Existence of the
bank depends on prudent management of its credit operation where maximum risk is
centered in it and. In most of cases, the failure of a commercial bank is usually associated
with the problem in credit management as well as the result of reduction in the value of
assets. Therefore, credit management has not only featured domination in the assets
structure of the bank but also critically important to the success of the bank.

The standards of credit relate to safety, liquidity and profitability whereas these dynamic
factors are also related to different aspects such as interest or margin, credit spread nature
and extent of risk and credit dispersal. In the Uttara Bank Limited BKSP Branch’s Credit
Department, there are 3 (Three) officials are working continuously with great effort and
teamwork and they have quite efficient skills and talent to perform the jobs in this
department. The Bangladesh Bank, Credit Division at Head Office of Uttara Bank Limited
and the respective officers of branch in the section control this credit department. The
officers believe in teamwork and extreme hard working. In all business dealings, credit
officers are guided by the principles of honesty, integrity and safe-guard the interest of the
depositors and credit customers of the bank. Credit officers principally perform credit
management task by providing loan (credit) to customers and receiving loan back by
charging interest along with installments with obeying rules and regulations of the
Bangladesh Bank and Head Office as well as maintaining the best business practices in the
Bank.

Uttara Bank Limited provides different types of loan. Those loan products are given bellow:

Uttaran Small Business Loan (USBL)

Category / Loan type: Term Loan

Purpose:

 To help the genuine businessmen having entrepreneurship, initiative, sincerity,

honesty to expand and run their business smoothly under Small Enterprise
category.
 To enable a section of people having small capital to do business with the help of
Bank Finance.
 To improve the banking habit of self employed persons of the society.
 To contribute towards development of socio-economic condition of the country.
Customer Eligibility :

 Must be a growing Business Concern.

 At Least 2 Years Business History.
 Must be a Current Account Holder of the Bank.
 Up dated clean CIB Report.

Uttaran SME Sector Development Project Loan (USSDPL)

In order to enhance investment of SMEs in productive sector Uttara Bank Limited

introduced a new product named “Uttaran SME Sector Development Project Loan
(USSDPL)" to the new as well as BMRE projects.

Category / Loan type: Term Loan

 Purpose :To procure

 Fixed Assets, including Machinery & Equipment and Factory buildings and
related civil works.
 Technical know how, Consultation Services & Training3) For RMG Sector –
retrofitting, rebuilding & relocation of the factory buildings.
Customer Eligibility :

 Must be a Business Concern.

 Must be a Current Account Holder of the Bank.
 Up dated clean CIB Report.

Uttaran House Repairing / Renovation Loan

A section of People owns house or building as legal heirs from their parents living in the
house which may require renovation or repair. Some people also owns house of their own.
in spite of their necessity and capability to repay , they cannot afford to make such
expenditure at a time. In such a situation Uttara Bank Limited introduced a Scheme named
“Uttaran House Repairing / Renovation Scheme (UHR Scheme) to help the aforesaid section
of people to cater their need for repair/renovation of the house. This scheme will come
under the purview of the Consumer Financing of the Bank.

Features Key:

 Category / Loan type: Term Loan

 Maximum Loan Ceiling
Purpose : To help genuine House / Building/ Flat owners to undertake repairing, renovation
works for better living or increasing rental income

SL no. Area Maximum Ceiling

01.Dhaka Metropolitan Area Tk.30.00 Lac

02. Chittagong Metropolitan area, Areas of Gazipur City Corporation, Poura shava areas
of Savar & Narayanganj. Tk.25.00 Lac

03. District Head Quarter (Other than Dhaka and Chittagong Metropolitan area)
Tk.15.00 Lac

04. All other places (Except areas of sl no.01,02& 3) Tk.7.50 Lac

Customer Eligibility :

 For salaried individual, must be confirmed employee.

 For self employed individual, a business record of minimum 2 years.
 Age limit from 25 years to 60 Years.
 Adequate disposable income to pay the Loan installment.
Marriage Loan

For making the precious moments of wedding dreams wonderful and memorable, Uttara
Bank Limited will stand beside the people with its “Marriage Loan” Scheme with market
competitive rate

Any Bangladeshi individual who has the means and capacity to repay bank loan, In specific
terms, these could be salaried employees/executives of multinational and middle to large
size local corporate, Government, Semi-autonomous body, in reputed NGOs (Non
Government Organizations) international aid agencies and UN bodies, and other employees
acceptable to the bank.

Purpose: To meet the financial need for Marriage purpose of self and/or his dependent
(Son/Daughter).

Eligibility:
  Age: Minimum age 25 years ( At the time of application), Maximum age at loan
maturity up to 40 years for self and 60 years for dependent (Son/Daughter)
 Minimum Service/length: For permanent and confirmed salaried person,
minimum three (3) years experience with 1 year employment in present
organization.
 Minimum Yearly income (Net BDT): At least three times of the total yearly
installments amount of applied loan
 Borrower must reside for at least 6 month in the same address.

Loan Size: Minimum Tk.25000.00, Maximum Tk.3.00 lac (Taka Three Lac)

Loan to Value Ratio: 30% of the cost of the item is allowed.

 Guarantee of spouse/parents or any other family members acceptable to the bank.

 Post dated cheques for all installments.
One undated cheque covering total amount of all installments.

Working Capital Loan:

Financing to the every operations of the company, Uttara Bank Limited provides working
capital Loans in different forms to the Enterprises with the following details :

Key Features :

 Category / Loan type:

 Cash Credit (Hypo)
 Cash Credit (Pledge)
 O/D (General)
Customer Eligibility :

 Must be a growing Business Concern.

 At Least 2 Years Business History.
 Must be a Current Account Holder of the Bank.
 Up dated clean CIB Report.

Education Loan:

Any Bangladeshi individual who has the means and capacity to repay bank loan, In specific
terms, these could be salaried employees/executives of multinational and middle to large
size local corporate, Government, Semi-autonomous body, in reputed NGOs (Non
Government Organizations) international aid agencies and UN bodies, and other employees
acceptable to the bank

Purpose: To meet the Educational Expenses of Self/ son/daughter or any other dependant.
(Local/Foreign)
Eligibility:

Age: Minimum age 25 years ( At the time of application), Maximum age at loan
maturity up to 60 years (At the end of Loan Tenor)
 For permanent and confirmed salaried person, minimum three (3) years
experience with 1 year employment in present organization
 Minimum Yearly income (Net BDT): At least three times of the total yearly
installments amount of applied loan
 Borrower must reside for at least 6 month in the same address
 Professional Certificate issued by the concerned Institution.
Doctor’s Loan:

Professionals like doctor may have the dream to establish a chamber or mini clinic to serve
the patients with small scale purchase of medical equipments, tools and machineries.
Consumer Credit- Doctor’s Loan scheme of the Bank will co-operate the doctors to make
their dream come true with market competitive rate.

Customer Segment


Professor of reputed Medical College/Hospital/Private Practitioner.

Associate/Assistant Professor of reputed Medical College/Hospital having a post-
graduate degree (FCPS, MS, MD, FRCS or equivalent) / Practitioner.
MBBS Doctors/Dentists

Purpose:

Setting up operation Theatre/Chamber (New/Expansion/Renovation/Modernization)

Purchase of Medical/Diagnostic/Office equipments

Eligibility:

 Age: Minimum age 25 years ( At the time of application) Maximum age at loan
maturity up to 65 years (At the end of Loan Tenor)
 Minimum Service/Length of business: For salaried individual, must be Permanent
& Confirmed employees of any reputed hospital with minimum 2 years
professional experience., For self employed doctors, minimum 02 (two) years
professional experience
 Minimum Yearly income (Net BDT): At least three times of the total yearly
installments amount of applied loan
 Borrower must reside for at least 6 month in the same address
Interest Rate: 14.00% per annum with quarterly rest. The rate of interest will remain fixed
thought the tenure of the Loan.

Availability Period : Maximum 6 months from the date of sanction advice.

Prepayment : Loan to be prepaid on payment of 2% breakage cost on prepayment amount.

Green Financing:

Green Financing Means funding for environment-oriented technologies, projects, industries

or businesses. In Banking sector Green Financing refers to environment-oriented financial
products or services, such as loans, credit cards, insurances or bonds that may help to
protect our environment from pollution. Uttara Bank has a wide range of Green Financing
products under Bangladesh Bank’s Green Bank Refinance Scheme.

Category / Loan type: Term Loan

Purpose :Uttara Bank Limited offers Green Financing for the following purposes :

 Solar Home System.

 Solar Mini Grid.
 Solar Irrigation Pumping System.
 Solar Photo voltaic Assembly Plant.
 Bio-Gas Plant.
 Effluent Treatment Plant (ETP)
 Traditional Chunchulli conversion to Modern Chunchulli
 Vermicom post Production
 Hydro Power Plant.
 PET Bottle reprocessing Plant.
 Solar Battery reprocessing Plant.
 LED Bulb production
 Hybrid Hoffman Kiln (HHK/Tunnel Kiln)
Customer Eligibility :

 Must be a Current Account/Saving Account Holder of the Bank.

 Up dated clean CIB Report.
Agricultural Credit

Agricultural financing refers to the credit facilities allowed to the farmers directly engaged
in firming, fishing, forestry or livestock. We provide Credit facilities to the farmers directly
engaged in farming, fishing, forestry or livestock or for purchasing equipments and
machineries & other agricultural work. We also finance to the MFI / NGOs to facilitate
micro credit to the primary producers (farmers) engaged in the agriculture sectors as well
as in poverty alleviation.

Category / Loan type: Term Loan (Short , Mid-term and Micro Credit)

Purpose : Uttara Bank Limited offers Agri Credit for the following purposes :
  Crop Production.
 Fish farming
 Animal Husbandry.
Crop Storage.

 Poverty Alleviation.
 Irrigation Equipments Procurement.
 Agri Equipments Purchase
 Seed Production
others:

 Customer Eligibility :
 Must be genuine farmer.
 Must be a Current Account/Saving Account Holder of the Bank.
 Up dated clean CIB Report.
 Loan Tenor :6 Months to 3 years.
Basic Documents Requirements (not limited to) :Valid Trade

Corporate loans

Uttara Bank Limited always adopt strategy for widespread service for the large and medium
sizedcorporate customers and Bank’s business is focused to a considerable extent on the
corporate clients bymaintaining a relationship and extending financial assistance based on a
deep understanding of the clients’ business environments, financial needs and internal
strategies for growth. The Bank extends its financial up port to the corporate clients either
from own finance or by arranging syndicated/club finance. The investment in corporate
sector is the combination of amixed and balanced allocation in various natures of
business/industries based on the socio-economic perspectives and long term planning.

Lease Finance
This scheme has been designed to assist and en courage the genuine and capable
entrepreneurs and professional for acquiring capital machineries, medical equipment,
computers, vehicle and other items. As part of its diversification of credit products Uttara
Bank Limited introduced Lease financing Scheme. The Bank continues to disburse loan
under this Scheme and the Major sectors where the Bank has extended its business are
mainly Imports and Exports, Commercial Enterprises, Steel Re-rolling Mills, Readymade
Garments, Textiles, Edible oil and Cement Factories etc.

Bad Loan Management

Credit Monitoring is a continuous process to maintain and upgrade the health of assets of
the Bank. The Bank continued its efforts to maintain high quality assets. Besides giving
emphasis on the satisfactory business performances of the customers and collateral
support, the Bank geared up loan monitoring and follow up systems through Monitoring
Department to check the loans from becoming non-performing. Then on-performing loans
of the Bank stood at Tk. 6,272.6 million at the end of 2015 compared to Tk. 5,875.7million
in 2014.

SME Financing

Personal loan

Personal loan scheme has been introduced to extend credit facilities to cater the needs of
low and middle income group for any purpose. The outstanding balance of the same stood
at Tk. 1.7 million at the end of the year 2015.

Consumer Credit Schemes (CCS)

The outstanding balance of consumer credit scheme under two special projects namely
“Uttaran Consumer Loan Scheme” and “Uttaran House Repairing and Renovation Scheme”
stood at Tk. 222.7 million and Tk. 3,332.3 million respectively at the end of the year2015. It
may be mentioned here that the recovery ratein these schemes is satisfactory. Poverty
alleviation sector financing Bank continued to extend commercial loan to the enthusiastic
youths and small entrepreneurs for various sectors through its different branches on
priority basis during the year. For this purpose the Bank disburses loan in dairy and poultry
to obliterate the poverty and to create employment opportunities for the destitute .The
outstanding balance in this sector stood at Tk. 177.2 million at the end of the year
015.Financing in Women Empowerment.

Development Scheme

Uttara Bank believes that empowerment of women can be truly achieved if they get
opportunity to attain their economic emancipation. Women Empowerment Development
Scheme has been introduced in the Bank named “Nari Shanirvar Rin Prokalpa” to encourage
the women in doing business in Small & Cottage industry and others. The outstanding
balance in this sector stood at Tk 105.7 million at the end of the year 2015.

Syndicated Finance

Syndicated loans allow arranging funds for large projects spreading the risk amongst the
partners Banks. Clients also enjoy the benefits of having access to larger pool of funds from
multiple financial institutions but have to deal with one Agent Bank and one set of
documentation. The Bank disbursed Tk. 277.0 million as funded and non funded facility in
Syndication mixed and balanced allocation in various natures of business/industries based
on the socio-economic perspectives and long term planning.
General system & procedure related to credit:

To grant advances is one of the most important functions of a bank. The strength of bank
depends considerably on the quality of its advances and proportion of bearing to the total
deposits. Traditionally bank has been following three cardinal principle of lending in
different credit schemes, these are: safety, liquidity and profitability. Another
determination but not principle, the bank also consider humanity where bank always looks
for true entrepreneur who can really support society by establishing own-self. Confidence in
the borrower is the basis of secured advances. The confidence is judged by five
considerations-Character, Capacity, Capital, Collateral and Condition. Lending process of
UBL goes through different steps with complying terms and conditions of Bangladesh Bank.
The Credit department of UBL follows the following steps in lending.

Application for loan proposal:

Firstly, the borrower who willing to make a commitment with bank by taking loan, he must
write an application through the ‘Head of Branch” of bank and submit it to the officer at
credit department.

On proper scrutiny of the application, branch will inform the initial decision (acceptable for
processing/decline) to the applicant within 3(three) working days from the date of receiving
application. Applicant must present the following additional papers along with application-

• Trade license and TIN certificate for business

• Voter id card or birth certificate

• Details papers of business

• Salary certificate for service holders

• Bank statement of last six month

• Attested photocopy of current tax receipt, electric bill & lease agreement when the sours
of income is house rent as a landlord.

CIB (Credit Information Bureau) Inquiry:

A bank does not know full information about a customer. But knowing the customer’s
whole information is very important before giving loan. A customer all information is store
in Bangladesh bank. Such as a customer kept loan from BRAC Bank. This customer came to
UBL and applying for loan. When UBL filled CIB form and send to the Bangladesh bank, then
Bangladesh bank will send all information about this customer and UBL will know that this
customer has loan in BRAC Bank. A customers CIB report need to update after 2 month
basis. When customers want to loan above 5 lac, those customers need CIB report. Below 5
lac customers do not need CIB report.

Security analysis:

To make the loan secured, charging security on the credit facilities is very important
because it represents commitment of the borrower; it protects the interest and ensures the
recovery of the money lent. The important modes of charging a security are the following:

• Lien: Here, bank will give loan against customers’ assets or properties.

• Pledge: A bank will give loan against customers’ products. Bank is Bailee and
customer is Baylor.

• Mortgage: A bank will provide loan against customer’s land, building, properties
etc. it is famous in UBL. To make the loan secured, UBL charging mortgage

Documentation
Contain the precise terms of granting loans and these serve as important evidences in the
law courts if the circumstances so desire. That’s why proper documentation must be
completed prior to the disbursement of the facilities. Charged documents as required for
documentation are Documentation can be described as a process or technique of obtaining
the relevant documents. When bank is going to lend to a borrower after inquiring the
character, capacity, collateral and capital of the borrower, the bank must obtain proper
documents which are executed from the borrower to protect against willful defaults.
Moreover, when money is lent against some security of assets, the document must be
executed in order to give the bank a legal and binding charge against those assets.
Documents mentioned bellow:

Uttaran Small Business Loan (USBL)

Required Documents:

• Valid Trade License.

• Up to date TIN Certificate.

• KYC

Uttaran SME Sector Development Project Loan (USSDPL)

Required Documents :
• Valid Trade License.

• Up to date TIN Certificate.

• KYC

• Regulatory papers

Uttaran House Repairing / Renovation Loan

Basic Documents Requirements (not limited to) :

• Salary Certificate.

• Income Statements.

• Up to date TIN Certificate.

• KYC.

• National Identification Cards.

• Bank Statement for last 6 months.

• Loan Tenor :1 years to 8 years .

• Debt Equity Ratio : 70 : 30

Marriage Loan

Documents Requirement:

• Recent Passport size photographs of applicant(s) and guarantor (s).

• Photocopy of NID/Passport of applicant (s) and guarantor (s)

• Latest Utility Bill (Gas/Water/Electricity)

• Details of expenditures with supporting papers..

• Business Card/Office ID of applicant (s) and guarantor (s), if any.

• Latest Tax Certificate / E-TIN

• Personal Net Worth statements of applicant (s) and guarantor (s).

• Bank Statement of last 6 months.

• Rent or Lease agreement of house/property (if applicable)

• Interest Rate: 15.00% per annum with quarterly rest. The art of interest will
remain fixed

throught the tenure of the Loan.

• Availability Period : Maximum 6 months from the date of sanction advice.

• Prepayment : Loan to be prepaid on payment of 2% breakage cost on prepayment

amount.

Working Capital Loan

Documents Required:

• Valid Trade License.

• Up to date TIN Certificate.

• KYC.

• Regulatory papers.

• Loan Tenor :1 (One) Year (Renewable)

• Margin : 50:50

Education Loan

Documents Requirement:

• Recent Passport size photographs of applicant(s) and guarantor (s).

• Photocopy of NID/Passport of applicant (s) and guarantor (s)

• Latest Utility Bill (Gas/Water/Electricity)

• Study plan with budget..

• Business Card/Office ID of applicant (s) and guarantor (s), if any.

• Latest Tax Certificate / E-TIN

• Personal Net Worth statements of applicant (s) and guarantor (s).

• Bank Statement of last 12 months for businessmen and 6 months for others.
• Rent or Lease agreement of house/property (if applicable)

• Salary Certificate / Letter of Introduction.

• Professional Certificate issued by the concerned Institution.

Doctor’s Loan

Documents Requirement

• Recent Passport size photographs of applicant(s) and guarantor (s).

• Photocopy of NID/Passport of applicant (s) and guarantor (s)

• Latest Utility Bill (Gas/Water/Electricity)

• Price Quotation of items to be purchased with detailed budget

• Business Card/Office ID of applicant (s) and guarantor (s), if any.

• Latest Tax Certificate / E-TIN

• Personal Net Worth statements of applicant (s) and guarantor (s) to assess the
repayment capacity.

• Bank Statement of last 6 months.

• Attested photocopy of the certificate of the last degree and BMDC/BMA

membership Certificate

• Rent or Lease agreement of house/property (if applicable)

• Salary Certificate / Letter of Introduction.

• Professional Certificate issued by the concerned Institution.

• Two years Bank transaction record.

• Proof of sufficient Income

Green Financing
Basic Documents Requirements (not limited to) :

• Valid Trade License.

• National ID
• Up to date TIN Certificate.

• KYC

• Regulatory papers

• Loan Tenor :6 Months to 8 years

Agricultural Credit
Basic Documents Requirements (not limited to) :

• Valid Trade License (if borrower is a firm).

• Certificate as Genuine Farmer

• National ID

• KYC

• Regulatory papers

• Loan Tenor :6 Months to 3 years.

• Personal guarantee of 2 guarantors acceptable to the Bank.

Sanction of loans or advances:

When a branch manager writes letter to the customer accepting all terms and conditions of
loan, it is called loan sanction. The most important conditions which are taken in loan
sanction are given below:

• Limit of the loan amount

• Primary securities of the loan

• Rate of interest of the loan

• Expire date

• Repayment

• Documentation

• Brach authority as per their business delegation must take decision within
maximum of 37 days.
 • The head office credit committee, executive committee of the board of director,
board of directors take decision within maximum of 5-7 days for simple types of finance
facility, 15-30 days for project loan, 30-60days for loans under syndication .

• Sanction letter to be issued within 1-2 days time from the date approval. items in
credit files include:

Disbursement of loans:

Approval Letter
Loan disbursement has to be made after completion documentation. Disbursements of loan
facilities are made when all documentation is in place. The steps of the disbursement-

• Finally Credit division at Head Office has completed documentation of the loan that
sanctioned by them.

• After completion of the documentation and sanction, Credit Division sends a copy
of Disbursement Order” along with “Approval letter” to Head of Credit Administration
Division (CAD) & the respective branch for disbursement of the loan.

• Security Documents of the loans sanctioned from Head Office are signed by
customer(s) in branch of disbursement and retained original. A set of photocopy of originals
is required to be sent to Head Office.

• A set of photocopy of loan documents is retained by Credit team at Head Office,

the disbursement branch retains the originals.

• At the time of disbursement, the officer prepares the vouchers and writes the pay
order slip that is signed and approved by the Second Officer and the Manager. The
accounting treatment of disbursing the loan is given below:

Loan Account………….Dr. Or

Pay order…………….Cr. Loan Account………….Dr.

Saving Account..…….Cr.

Apart from sanctioned the loan amount, the client is to incur some incidental charges for
the loan, like stamp fee and service charge and risk fund charge. Accounting treatment of
these charges are given below:
Savings Account or Current Account…………..Dr.

Risk fund…………………………………………Cr.

Service charge……………………………………Cr

Credit file management

After completion of all steps in lending, the bank makes and reserves a ‘Credit File’ of the
respective customer. The maintenance of credit files is disciplined to force the lending
officer to obtain all relevant documents and encourages him to consider all relevant
information when analyzing customer risk. Primary

• Credit application & Credit approval notes/analysis. The analysis contains

information about the borrower, credit purpose, credit repayment sources, details of
collateral security with valuation and guarantee. It also contains an assessment of the
competence and quality of the borrower’s management, the general economic and
competitive environment of the borrower’s industry and any other pertinent factors, which
present the borrower’s ability to repay the facility.

• All supporting data such as financial statements, reference, credit investigation

results, CIB & other Bank reports and notes of all discussions with the borrower and other
relevant parties with paper clipping.

• Correspondences, call reports, site visit reports stock reports etc. Each credit file is
maintained in a secured location and access restricted to authorized personnel.

• Evidence of credit approval and data upon which approval was granted together
with any comments, if appropriate. Copy of sanction & disbursement letter, a check list
along with copies of all Legal & Banking documents.

Credit risk management:

the installment rules. When a loan holder failed to pay monthly installment, in this time
bank take some steps: There are many reasons to default a loan. Uncertainty, political bad
condition, natural disaster can create huge losses for any business. Sometime loan holder
willingly breaks.

• Such as the installment date is 30 January. But loan holder did not pay the
installment.
After 3 days of the installment date (2 February) bank officer will call the loan holder and
ask him to pay the installment immediately.

• If the loan holder did not pay after telephone him. Then ULB send (10-15 days
later) an official letter and call him again.

• After all those process, if the loan holder did not take seriously then UBL will go to
the loan holder organization(1-2 month later) and give him 2 days extra time for installment
payment.

• If the loan holder failed to installment payment or do not want to pay the
installment then UBL will take a lawyer and go to the organization and take the mortgaged
property.

Then UBL can sale this property for cash.

But if the loan holder is good person and he personally come to bank and discussed his
business problem with credit officers. At this time, credit officer will send a letter in Head
Office for requesting extend some time for installment payment. Head Office will discuss
this issue in board meeting. In this condition, bank will give opportunity of 3 month to the
loan holder. In this 3 month loan holder will focus in his business and try to earn profit.
After 3 month the regular installment payment will continue. If the loan holder did not
make any success in 3 month then bank will take his mortgaged property and can sale any
time for cash.
 CHAPTER 5

Conclusion
Uttara Bank Limited is a leading commercial bank in our country for its goodwill, large number of
branch, interactive corporate culture and team work among employees. The Midford Branch of UBL
offers various types of loans and advances to customers according to banking rules and regulations
of our country. The main source of income of the Bank is its credit sanctioned to various parties. The
focus of the bank lies large clientele base and their expectation from the bank.on its. The
performance of the Branch is satisfactory but not enough to be a top banking

company. From the Branch position as on recent year ended, it can say that more emphasize is given
to finance for the trade and commerce sector but consumer loan, corporate (large) enterprise
financing is not prioritized by the Bank. Skilled manpower and professionalism of employees are
necessary for the Bank to provide better services, increase customers and retain them. Introduction
of credit card facility, online banking, credit sales and marketing may bring positive result and
increase profit of the Bank, which may help the Bank to hold a top position in banking sector.
Moreover, proper monitoring, supervision and recovery activities can reduce loan loss and increase
credit realization for the bank.

UBL has opportunity to proliferate product line to enhance its sustainable competitive advantage
and ensure earning more profit. Business innovation and improvement and removal of present
problems may strong the Bank’s position in banking sector and thus the Bank will be able to reach
its ultimate goal.
References
Annual Reports

• Annual Report of Uttara Bank Limited 2018 Websites

• www.uttarabank-bd.com

• www.bangladesh-bank.org

• Other References

• Credit Department Manuals

• UBL Guidelines for Credit Operation

• Different Types of Forms of UBL

• Monthly & Annual Statement of Credit Transaction