Submitted To Md.Jakir Hossain Lecturer of Finance BUBT.

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Submitted To

Md.Jakir HossainLecturer of Finance

BUBT

Ali Imam (ID - 122)Syed Azim al khair Kowshik (ID-124)Shujauddin (ID 139)Syeda Chowdhury Daina (ID- 142)Khairul Alam (157)Kamrul Islam (Intake - 18) (ID - 255)

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Presentation Topic

Money laundering, the cause & consequence.

The case of Bangladesh.

General procedure of sanctioning loan

The following procedure is applicable for giving advance to the customer. These are:

A. Party’s application B. Filling form-AC. Collecting CIB report from Bangladesh BankD. Processing loan proposalE. Project appraisalF. Head office approvalG. Sanction letterH. DocumentationI. Disbursement

Lending and investment Products

A Bank invests its funds in many ways to earn income. The bulk of its income is derived from loan. In 2011, total advance stood at Tk. 72733.54 million against Tk63230.14 million in 2010. It is a good indication that interest income getting greater and greater every year from this source. Distribution of loan for last four years is given following slide -

Figure- Loan & advances (Tk. in millions)Sources: Annual Report (2008-2011)

2008 2009 2010 2011

46332

50387

63230.14

72733.540709

year wise laon and advances (tk in million)

Sector wise distribution of loan

National Credit & Commerce Bank Ltd. Distribute the loan on the basis of their credit policy. NCC Bank provides loan to the following area:

Agriculture & agro based venturesTrade & commerceConsumer financingReal estate & civil constructionIndustryBusinessLease financingHousing Loan scheme

Sector wise distribution of loan (2011) has been illustrated below:

Figure : Sector wise Loan distribution (in 2011)Source: Annual Report 2011

Sectoral Distribution of Advances

Industry 40.87% Construction 1.77%

Transport and Communication 0.63% Business 17.48%

Storage 0.48% Agriculture 0.83%

Others 37.94%

Lending ProductsNCC Bank is one of the esteemed Banking Institutions in Bangladesh. It has been serving the people proudly with its different products since 1993 when it entered into the Banking Arena first. Different credit products offered by this Bank are very lucrative to its client. There are two types of credit products available in the Branch: I) Loans & II) Advance. Loans are of two types, I) Long Term Loans II) Short Term Loans. Again, there are several types of lending products offered by NCC Bank to its valued clients just as bellow: Loans have primarily been divided into four major groups:1. Continuous loan2. Term loan3. Demand loan4. Loan under SME

Fig: Continuous Loan (in million)Sources: Annual Report (2008-2011)

•Continuous Loan :•Secured overdraft against Financial obligation •Secured overdraft against Work Order/Real Estate •Cash credit Hypothecation •Cash credit pledge

Term Loan•Project Loan•Transport Loan•House Building Loan•Lease Finance•Loan under Syndication

Fig- Term Loan (in million)Sources: Annual Report (2008-2011)

Demand Loan•Loan General•Demand Loan against Ship-breaking (LAS)•Payment against Documents (PAD)•Loan against imported merchandise (LIM)•Loan against Trust Receipt ( LTR)•Forced Loan•Packing Credit•Secured overdraft against Cash Incentive•Foreign Documentary Bill Purchased (FDBP)

Fig: Demand Loan (in million)Sources: Annual Report (2008-2011)

SME Loan•Small Business Loan•Consumer Finance Loan•Lease Finance•Personal Loan•House Repairing & Renovation Loan•Working Capital Loan•Festival Business Loan•Festival Personal Loan•Car Loan Scheme

Figure- SME loan (Tk. in million)Sources: Annual Report (2008-2011)

Year wise Lending & Recovery

From the graph we see, the disbursement of loan gradually increase year by year.

Year Disbursement(Million)

Recovery

200846332 44430.1

200950387 48967.1

201063230.14 61804.9

201172733.54 70522.43

Figure : Year wise disbursement & Recovery of NCCBL.Sources: Annual Report (2008-2011)

2008 2009 2010 2011

advsnces 46332 50387 63230.14 72733.540709

recovery 44430.11 48967.11 61804.86 70522.43

10000

30000

50000

70000

90000

110000

130000

150000

Year wise advances and Recovery

Axis Title

From the graph we can see that loan and advance increases gradually year by year. Recovery amount also increases year by year in 2011 the total advances was tk 72733.54 and recovery amount was tk 70522.43, which maximum amount of total advances. From the graph we found that percentage of recovery is higher in 2011

Non Performing Loan Analysis

A loan is nonperforming when payments of interest and principal are past due by 90 days or more, or at least 90 days of interest payments have been capitalized, refinanced or delayed by agreement, or payments are less than 90 days overdue, but there are other good reasons to doubt that payments will be made in full. (IMF)

Year Non- Performing Loan (%)

2008 4.17

2009 4.14

2010 2.842011 2.27

Figure : Non Performing Analysis.Source: Annual Report (2008-2011)

2008 2009 2010 2011

Series1 4.17 4.14 2.84 2.27

0.25

0.75

1.25

1.75

2.25

2.75

3.25

3.75

4.25

Non performing loanFi

gure

in p

erce

nt

From the graph we can say, the non-performing loan of NCC bank is low. The industry average of non-performing loan in the year 2011 was 9.25%. But the non-performing loan of NCC bank is below industry average. It is positive sign for the bank. Only the non-performing loan of NCC bank was high in the year 2008 than any other year.

Major FindingsLoan disbursement is increasing year by year.Recovery of the Bank is increasing. It was increased from 95.05% to 97.73%.Non-performing loan of the Bank is decreasing. It was decreased from 4.95% to 2.27%.NCC bank set a target to 95% recovery of disbursed loan.NCC Bank is able to recover the loan more than their target of about 95%.

RecommendationsNCC bank should remove complexity and reduce time to sanction loan. If they can remove complexity & reduce time, they will be able to disburse more loans.The bank should try to increase its loan quality by accelerating its recovery policy.Nonperforming loan should be increased.To Fulfill a target 95% recovery of disbursed loan.

Thank You All

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