1.0 Introduction: 1.1 Origin An internship is an opportunity to integrate career related experience into an undergraduate education by participating in planned, supervised work. It is a pre-requisite to obtain BBA degree. Only after preparing & submitting the report this program becomes completed. With this requirement, after completion of forty academic courses the 14 th intake of BBA program was instructed to start internship by the School of Business, Bangladesh University of Business & Technology (BUBT). An Internship position at Trust Bank Limited was acquired and topic of the report was proposed to the supervisor of my internship program, Md. Aslam Uddin. With his approval and conscience this report was prepared. 1.2 Broad objective The main objective of this report is to understand customer perception about Retail Banking of Trust Bank Limited (TBL).’’ 1.3 Specific objectives There are some parts that are needed to fulfill the general objective which are known as specific objective. These are - To identify the various products of the Retail banking unit of Trust Bank Limited. 1
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1.0 Introduction:
1.1 Origin
An internship is an opportunity to integrate career related experience into an undergraduate education by
participating in planned, supervised work. It is a pre-requisite to obtain BBA degree. Only after preparing
& submitting the report this program becomes completed. With this requirement, after completion of forty
academic courses the 14th intake of BBA program was instructed to start internship by the School of
Business, Bangladesh University of Business & Technology (BUBT). An Internship position at Trust Bank
Limited was acquired and topic of the report was proposed to the supervisor of my internship program, Md.
Aslam Uddin. With his approval and conscience this report was prepared.
1.2 Broad objective
The main objective of this report is to understand customer perception about Retail Banking of Trust
Bank Limited (TBL).’’
1.3 Specific objectives
There are some parts that are needed to fulfill the general objective which are known as specific
objective. These are -
To identify the various products of the Retail banking unit of Trust Bank Limited.
To measure the customer perception about different products of Retail Banking unit of
Trust Bank Limited by questionnaire survey
To evaluate the market position of Retail banking unit of Trust Bank Limited
To identify some major weaknesses and problems faced by Trust Bank Limited in respect
of Retail banking unit.
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1.4 Scope of the Study:
Scope of the study is quite clear. Since TBL is dealing with all types of banking activities in the bank, this
report has been prepared through my work experience, discussing with my mentors in specific desk , and
my acquired knowledge, Studying these core themes, Opportunities are there to learn other aspects of
RETAIL or Consumer matters. Market positions along with other facts and figures were gathered
from research reports conducted by me, on behalf of Trust bank LTD.
1.5 Methodology:
1.5.1 Type of research:
In this report descriptive research is used. In home personal interviewing method has been used to
conduct this research.
1.5.2 Sources of data
In this report all necessary information are collected from both sources of data.
The sources are as follows:
1.5.3 Primary sources:
Data originally collected for an investigation are known as primary data. The primary data has been
collected by using questionnaire survey to the clients of Retail banking unit of Trust Bank Limited (TBL),
Mirpur Branch.
1.5.4 Secondary sources:
The data which are collected for some earlier research work and are applicable or usable in the study.
Secondary information required for the industry part and organization part was collected from the annual
report and website of Trust Bank Limited (TBL).
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1.6 Data collection procedure:
1.6.1 Collection of Primary Data:
Questionnaire survey
Observation
Face to face interview with questionnaire survey to the customers of Trust Bank Ltd.
1.6.2 Collection of Secondary Data:
Annual report of Trust Bank Ltd. (2009 to 2010)
Website of Trust Bank Ltd.
Organizational broachers
1.6.3 Population:
The population of the study is the clients of Retail Banking Unit of Mirpur Branch.
1.6.4 Sample size:
50 Peoples have been taken from Mirpur for this study.
1.6.5 Sampling technique:
Non probability convenience sampling technique is used to conduct this study.
1.6.6 Research instrument (Questionnaire):
Questionnaire is very flexible and easy to collect answer than other instrument. So I choose questionnaire
research instrument to collect primary data for the report. All details about questionnaire are given below:
No of question: 20 questions are in the questionnaire
Questionnaire format: structured
Font size: 11
Required time to complete answers of questionnaire: 15-20 minutes
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1.7 Limitations of the Study:
There are some limitations of the report and therefore it may lack some crucial data. In preparing the
report I faced some problems, which are as follows:
The main constrain of the study was insufficiency of information, which was
required for the study. There are various information the bank would not provide
due to security and other corporate obligations.
Due to time limitation many of the aspects could not be discussed in the present
report. Learning all the functions within just 90 days is really tough.
Since the bank personnel were very busy, they could not provide enough time to
me.
Lack of opportunity to visit more than one branch.
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2.0 OVERVIEW OF TRUST BANK LIMITED
2.1 ABOUT TRUST BANK LIMITED
Trust Bank Limited is one of the leading private commercial banks having a spread network of 53
branches and 7 SME center across Bangladesh and plans to open few more branches to cover the
important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2010. The bank, sponsored
by the Army Welfare Trust (AWT), is first of its kind in the country. With a wide range of modern
corporate and consumer financial products Trust Bank has been operating in Bangladesh since 1999 and
has achieved public confidence as a sound and stable bank.
In 2001, the bank introduced automated branch banking system to increase efficiency and improve
customer service. In the year 2005, the bank moved one step further and introduced ATM services for its
customers.
Since bank’s business volume increased over the years and the demands of the customers enlarged in
manifold, our technology has been upgraded to manage the growth of the bank and meet the demands of
our customers.
In January 2007, Trust Bank successfully launched Online Banking Services which facilitate Any Branch
Banking, ATM Banking, Phone Banking, SMS Banking, & Internet Banking to all customers. Customers
can now deposit or withdraw money from any Branch of Trust Bank nationwide without needing to open
multiple accounts in multiple Branches.
Via Online Services and Visa Electron (Debit Card), ATMs now allow customers to retrieve 24x7 hours
Account information such as account balance checkup through mini-statements and cash withdrawals.
Trust Bank has successfully introduced Visa Credit Cards to serve its existing and potential valued
customers. Credits cards can now be used at shops & restaurants all around Bangladesh and even
internationally.
Trust Bank is a customer oriented financial institution. It remains dedicated to meet up with the ever
growing expectations of the customer because at Trust Bank, customer is always at the center.
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2.2 Vision & Mission of Trust Bank
VISION :
We aim to provide financial services to meet customer expectations so that customers feel we are always
there when they need us, and can refer us to their friends with confidence. We want to be a preferred bank
of choice with a distinctive identity.
MISSION:
Our mission is to make banking easy for our customers by implementing one-stop service concept and
provide innovative and attractive products & services through our technology and qualified human
resources. We always look out to benefit the local community through supporting entrepreneurship, social
responsibility and economic development of the country.
POSITIONING STATEMENT:
Trust Bank is a contemporary, upbeat brand of distinctive quality of service and solution that offers a
rewarding banking experience as preferred choice of banking partner every time, every where.
OUR VALUE:
1) Trustworthy
2) Dependable
3) Reliable
4) Professional
5) Dynamic
6) Financial inclusion
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2.3 PERFORMANCE OF THE BANK
TBL a blend of expertise and technological excellence is in place to meet varied needs of modern
customers. The bank aims at mobilizing untapped money of the country and prudent deployment for
productive activities in the form of lending at a competitive interest rates/loan pricing. Towards
attainment of its goals and objectives, the bank pursues diversified credit policies and strategic planning
in credit management. To name a few, the bank has extended micro credit, consumers durable scheme
loans, house building loans etc. to cater to the needs of the individuals, which in turn has helped
thousands of families. The bank also extends loan in the form of trade finance, industrial finance, project
finance, export & import finance etc. The bank’s credit polices aimed at balanced growth and harmonious
development of all the sectors of the country’s economy with top most priority to ensure quality of
lending by averting growth of non-performing assets.
2.4 BRANCHES
Trust Bank Limited now continues its operation with 53 branches and 7 SME center across the country.
The management is feeling that they need more branches all over the Bangladesh to provided ardent
services to more clients. In association of this view, TBL has taken up a program to expand its branches
in commercially important areas within the country in near future.
2.5 ORGANOGRAM OF TRUST BANK LIMITED, MIRPUR BRANCH
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SUB-MANAGER
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MANAGER
2.6 MANAGEMENT OF THE BANK
2.7 CORPORATE INFORMATION OF THE TRUST BANK LIMITED
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Managing Director (MD)
Deputy Managing Director (DMD)
Executive Vice-President (EVP)
Senior Vice-President (SVP)
Junior Officer (JO)
Management Trainee Officer (MTO)
Vice-President (VP)
Senior Assistant Vice-President (SAVP)
Assistant Vice-President (AVP)
Senior Executive Officer (SEO)
Senior Officer (SO)
Principal Officer (PO)
Executive Officer (EO)
Top
Level
Chairman
Vice-Chairman
Board of Director
Company SecretaryMid
Level
Executive Level Management
Low Level Management
LEGAL FORM
The company was incorporated on 17 June 1999 under the Companies Act 1994 as a public company limited by shares for carrying out all kinds of banking activities.
Registration Number & Date C-37960(2260)/99,
17 June 1999
Sponsor Shareholders Army Welfare Trust
Certificate of Incorporation Received on 17 June 1999
Interest Rates (%) 17%Down Payment / Equity NilLoan Period / Tenor 1 – 5 yearsRisk Fund Nil
VI. MARRIAGE LOAN:
Tying the marital knot is an event of a life time and its celebration and memories should last forever. TBL
"Marriage Loan" will help you to arrange celebrate the marriage in style.
ELIGIBILITY FOR MARRIAGE LOAN:
Employees of confirmed service holders, Businessman, Professionals
This Loan is applicable for first marriage
This Loan may be availed by the guardian and/or Applicant as the case may be
Supportive cash flow to repay the loan
Maximum age limit of the borrower – 60 yrs; in exceptional case, MD can relax the age limit up
to any age depending on the merit of the case.
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For Marriage LoanLoan Limit: Tk.0.6 lac - 3.00 lac Interest Rates (%) 17%Down Payment / Equity 20% Loan Period / Tenor 1 – 3 yearsRisk Fund 1%
VII. EDUCATION LOAN:
A substantial amount of finance is required to give your child the best education or to get a higher degree
either at home or abroad.TBL, "Education Loan" relief you from this burden and ensure uninterrupted
study through steady flow of cash.
ELIGIBILITY FOR EDUCATION LOAN APPLIED BY THE EMPLOYEES OF:
Employees of confirmed service holders, Businessman, Professionals
Adequate cash flow to repay the loan
Maximum age limit of the borrower – 60 yrs; in exceptional case, MD can relax the age limit
up to any age depending on the merit of the case.
For Education LoanLoan Limit: Tk. 0.5 lac -3.00 lac Interest Rates (%) 17%Down Payment / Equity 10%Loan Period / Tenor 1 – 3 yearsRisk Fund Nil
VIII. TRAVEL LOAN:
When you plan to travel local or global exotic location, financing is the key issue. Don't be worried; TBL
Travel loan is ready to provide instant financial support.
ELIGIBILITY FOR TRAVEL LOAN:
Employees of confirmed service holders, Businessman, Professionals
Adequate cash flow to repay the loan
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For Travel LoanLoan Limit: Tk. 0.5 lac -3.00 lac Interest Rates (%) 17%Down Payment / Equity 20%Loan Period / Tenor 1 – 2 yearsRisk Fund 1%
IX. HOSPITALIZATION LOAN:
Crisis comes at anytime and well being comes at a price. When the urgency comes for medical treatment
of your family, there can never be compromised. At any urgency if you feel, please remember us to
provide financial support through our "Hospitalization Loan" scheme.
ELIGIBILITY FOR HOSPITALIZATION LOAN:
Employees of confirmed service holders, Businessman, Professionals
Supportive cash flow to repay the loan
Maximum age limit of the borrower – 60 yrs; in exceptional case, MD can relax the age limit up
to any age depending on the merit of the case.
For Hospitalization l LoanLoan Limit: Tk. 0.5 lac -3.00 lac Interest Rates (%) 15%Down Payment / Equity 10%Loan Period / Tenor 1 – 2 yearsRisk Fund Nil
X. CREDIT CARDS:
Credit Cards forms of clean lending with a maximum limit of Tk. 500,000/- to a single borrower.
Supplementary credit cards shall be considered part of the principal borrower for this purpose. The limits
exceeding Tk. 500,000/- shall be secured appropriately by the banks. Corporate Card will not fall under
this category and shall be regulated by exiting guideline/regulations for lending.
For Charge Cards, pre-set spending limits generated by the standardized systems, as in the global
practice, shall be allowed.
Types of cards:-
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There are four types of Credit Cards:Sl Types of cards Limit Service Charge
1 Visa Domestic Classic (VDC) 20,000 to less than 1.00 lac Tk. 500 plus 15% VAT
2 Visa Domestic Gold (VDG) More than 1.00 lac to 5.00 lac Tk.1500 plus 15% VAT
3Visa Domestic Gold (VDG) SAARC country: US$1,500
Out of SAARC country: US $5,000US $30 plus 15% VAT
4Visa International Classic (VIC) SAARC country: $1,500
Out of SAARC country: $5,000US $60 plus 15% VAT
FOR DEFENSE PERSONS:
I. ANY PURPOSE LOAN:
Any purpose loan is a terminating facility offered by retail Banking Unit of the Bank for customizing the
need of Defense Officer. This product is designed for confirmed defense officers having certain years of
unexpired service with supporting cash flow to repay the loan installment. It is a secured Loan in the
sense that defense officers have to take NOC from our Bank to get service benefits.
ELIGIBILITY FOR ANY PURPOSE LOAN APPLIED BY THE DEFENSE OFFICER OF:
Confirmed and active in service Defense Officers with 3 years of service ahead and having
supportive cash flow to repay the installment.
Maximum age limit of the borrower – 21 yrs;
For Any Purpose LoanLoan Limit: Tk 3.00 lac Interest Rates (%) 13%Down Payment / Equity N/ALoan Period / Tenor 1 – 2 yearsRisk Fund Nil
II. HOUSE HOLD DURABLE SCHEME LOAN:
Household Durable Loan is a loan is designed to facilitate Defense Officers to purchase different
household items such as Motorcycle, Television, Refrigerator, Air-Conditioners, Washing machine,
Computers and other household furniture etc. for personal use. Under this scheme, the consumer durable
product is hypothecated to the bank.
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ELIGIBILITY FOR HOUSE HOLD DURABLE SCHEME LOAN:
Any confirmed and active in service Defense Officers with 4 years of service ahead who have the
means and capacity to repay bank loan.
Maximum age limit of the borrower – 21 yrs;
For House Hold Durable Scheme LoanLoan Limit: Tk. 5.00 lacInterest Rates (%) 13 %Down Payment / Equity 20%Loan Period / Tenor 1 – 3 yearsRisk Fund Nil
III. CAR LOAN:
Car loan is a terminating credit facility designed to facilitate active in service Defense Officers to
purchase a car for their personal usage. Under this scheme, the vehicle is hypothecated to bank only. In
addition to this registration requirement, the loan is also partially secured by the commonly acceptable
form available in the market as hypothecation.
ELIGIBILITY FOR NEW AND RECONDITIONED CAR LOAN:
Any confirmed and active in service Defense Officers who have the means and capacity to repay
bank loan
Maximum age limit of the borrower – 21 yrs
For New & Reconditioned CarLoan Limit: 80% of the vehicle price but no
exceeding Tk. 12 lacInterest Rates (%) 13%(New)Down Payment / Equity 20%Loan Period / Tenor 1 – 5 yearsRisk Fund Nil
IV. APON NIBASH LOAN :
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TBL offers Apon Nibash Loan (House Finance) to you with easy repayment schedule matching your
affordability. You have unlimited options of choosing your home with limited means and standing. Here,
TBL Apon Nibash Loan helps you to match your long cherished dream.
ELIGIBILITY FOR APON NIBASH LOAN :
IN SERVICE:
Officers who have completed 18 years of active service will be entitled to the facility up to the last day of
service (excluding LPR) which means that the branch has to receive loan application up to the last day of
active service.
RETIRED :
Retired Defense Officers who have allotment of plot in DOHS will be eligible to apply for the loan
facility.
For Apon Nibash LoanLoan Limit: Tk.upto 55.00 lac Interest Rates (%) 11%Loan Period / Tenor Up to 15 yearsRisk Fund Nil
V. EDUCATION LOAN:
Education Loan is a credit facility designed for Defense Officers to facilitates financial needs for higher
education for him / her or family members. This is an unsecured loan because no additional security is
arranged against this loan.
ELIGIBILITY FOR EDUCATION LOAN :
Confirmed and active in service Defense Officers with 6 years of service ahead and having
supportive cash flow to repay the loan installment.
Maximum age limit of the borrower – 21 yrs.
For Education LoanLoan Limit: Tk. 5.00 lac
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Interest Rates (%) 13%Down Payment / Equity 10%Loan Period / Tenor 1 – 5 yearsRisk Fund Nil
3.7 UP COMING PRODUCT OF RETAIL BANKING UNIT ON THE TRUST BANK LIMITED:
There are some upcoming products in retail banking unit on the Trust Bank limited, these are given below:-
1. Trust Echo
2. Trust Assurance Deposit Scheme (TADS)
3. Trust Maxmill Deposit Scheme
4. Trust Porua Account
5. Trust Sristi
6. TRUST THIKANA(HOME LOAN)
3.8 LOAN DISBURSEMENT PROCESS
According to Prudential Guideline for Consumer financing of Bangladesh Bank, “Loan Administration
dept will disburse the loan amounts under loan facilities only when all security documentation is in place.
CIB report is obtained, as appropriate, and clean.
Strict security controls over the storage of blank cards, the embossing of blank cards and dispatch of cards
to holders is essential. There must be procedures for evaluating, authorizing and monitoring credit card
facilities that are at least as stringent as those of normal loans.
3.8.1 LOAN DOCUMENTATION & PREPARATION OF CHECKLIST:
Loan documentation is basically a post sanction & pre-disbursement process that involves compliance
with sanctioned terms and conditions which is done at the branch level. Documentation against all types
of credit facilities is important as through the process, the borrower empowers the bank to exercise some
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privileges in case of any irregularity against the credit facility the borrower has been sanctioned. Proper
loan documentation is mandatory for a bank to secure its credit portfolio.
3.8.2 DOCUMENTATION PROCESS:
i. Must be completed in compliance with sanctioned terms and condition prior to disbursement for establishment of rights or creation of charges on securities as approved.
ii. It is completed in according with the nature of securities by creating proper charges.
iii. Bank can not be able to exercise its rights on securities in case of adverse situation.
iv. No disbursed unless documentation is completed.
3.8.3 PREPARATION OF CHECKLIST:
Upon completion of all documentation process, the branch is required to obtain disbursement
order from Head office providing information regarding documentation status. The branch can
prepared a checklist and sent it to the head office to understand easily the documentation status
and takes the decision regarding disbursement. The checklist provided by Head Office contains the
following information:-
General Documents
Credit Application of the borrower, unconditional acceptance of sanction letter, D.P
Note, Letter of Disbursement, Letter of Arrangement or agreement, Letter of
Undertaking, Letter of installments, Letter of continuity, Letter of Revival.
Mortgage
Lawyer’s opinion, approved plan & NOC of the concerned authority, NEC along
with search fee paid receipt. Mortgage Deed duty registered with District or sub-
registry office, Registered IGPA to sale the mortgaged property, personal guarantee
of the owner as mortgagor etc
Hypothecation Letter of Hypothecation, IGPA to sell the hypothecated goods etc.
Pledge Letter of Pledge, IGPA to sell the pledged goods etc.
AssignmentAssignment of bills by way of obtaining IGPA, Letter of Acceptance from the
issuing authority etc.
Lien Letter of Lien, Letter of Authority of encash, Lien Confirmation from issuing
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authority etc.
Set – Off Letter of Authority to debit Current Account / Savings Account / Loan account.
Fixed / Floating Charge
Deed of Hypothecation & mortgage for creation of charge, PPSSA duty singed by all
lenders, Charge creation certificate from RJSC etc.
Syndication
Facility Agreement, ESCROW Account Agreement, Deed of Floating charge on the
balance for ESCROW Account, Agreement for Assignments (Insurance), Project
fund & share retention agreement, Subordination Agreement, Loan Agreement.
Insurance PolicyCopy of comprehensive insurance policy in the bank’s name, original insurance
premium paid receipt, Insurance cover note etc.
Undertaking No liability with any other bank excepting as declared , deposit of sales proceeds etc.
GuaranteeAll partners / directors, spouse, third party counter guarantee, corporate guarantee etc.
Other Documents
Letter of Trust Receipt, Hire purchase agreement, NOC from other bank, Lawyer’s satisfaction certificate on complete documentation, lien on valid export L/C, post / undated cheque etc.
3.9 Charge Documents for Retail Unit
Following charge documents are compulsory while giving loans:
1. LETTER OF GUARANTEE
This is a document given by the proprietor, directors or the third party in favor of the principal debtor.
The beneficiary of this document is the bank. Surety is bound to pay the guaranteed amount if such
situation arises.
2. COUNTER GUARANTEE
The principal debtor agreeing that if the guarantor pays any amount, the principal debtor is bound to pay
this amount gives this guarantee.
3. LETTER OF AUTHORITY
BY this letter, the principal debtor gives the authority to the bank to debit the current account or
investment account of the principal debtor for the following cases:
i. Wages of the godown keeper and godown guard.
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ii. Rent of the godown.
iii. Insurance premium and
iv. Any other expenses regarding these functions.
4. LETTER OF RECALL THE LOAN
This letter is given to the bank by the borrower, giving the bank the right of recalling the loan amount at
any time if the borrower fails to repay any one of the installments. And the borrower cannot protest such
recalling.
5. LETTER OF CONTINUITY
By this letter, the borrower agrees that the promissory note given by the bank will be act as security for
the repayment of the ultimate balance or sum remaining unpaid on account of the overdraft or advance.
6. LETTER OF REVIVAL
By this letter, the borrower agrees that he will be liable to bank for payment of the promissory note with
interest in respect of all present and future indebtedness liabilities secured thereby which promissory note
is to remain in force with all relative securities, agreements and obligations.
7. JOINT PROMISSORY NOTE
This promissory note is given to the bank by the borrower if the borrowers are more than one person.
8. SINGLE PROMISSORY NOTE
The borrower to the bank gives this promissory note if the borrower is a single person.
9. LETTER OF UNDERTAKING
This document is given to the banker by the borrower acknowledging the right to cancel the facility at any
time with or without intimation to the borrower.
10. LOAN DISBURSEMENT LETTER
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By this letter, the borrower request to disburse the loan sanctioned in his favor by the bank. All the
persons, in whose names the account is opened, should sign the letter.
11. MEMORANDUM OF DEPOSIT OF TITLE DEEDS
It is a deed that is necessary in case of mortgage by deposit of title deed or equitable mortgage. Here the
mortgagor agrees that he has deposited necessary documents of the property to the bank.
12. HYPOTHECATION OF GOODS TO SECURED A DEMAND CASH CREDIT OR OD OR LOAN ACCOUNT
Here the amount of loan, interest, and the name of the borrowers are written. Here the bank and the
borrowers agree on the following terms:
Security
Balance due to the bank
Borrowers not to the encumber or parts of the goods
Sale
Inspection
Insurance
Margin
Interest rate
Repayment
Sale of goods
Deficiency
Surplus
Statement of account
Continuing security
Title
Saving
Change of borrowers and
Notices.
13. GUARANTEE BY THIRD PARTY
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Sometimes third party guarantee is needed for allowing loan. Here third party gives the guarantee that of
the principal debtor fails to repay the loan, and then the guarantor will be bound to repay the loan to bank.
14. HYPOTHECATION OF VEHICLE
This document is necessary in case of transport loan. Here the borrower hypothecated the vehicle to the
bank. In case of failure of repay the loan, bank will sell the vehicle to collect the money.
15. INFORMATION ABOUT THE LOAN CUSTOMERS
The bank relies principally on outside information to assess the character, financial position, and
collateral of a loan customer. Such an analysis begins with a review of information supplied by the
borrower in the loan application. The bank may contact other lenders to determine their experiences with
this customer regarding the following information:
Were all scheduled payments in previous loan agreements made on time?
Were deposit balances kept at high enough levels?
How much was borrowed previously and how well were those earlier loans handled?
Is there any evidence of slow or delinquent payments?
Has the customer ever declared bankruptcy?
16. SOURCES OF INFORMATION ABOUT THE LOAN CUSTOMERS
Physical Investigations
Customer financial statements
Experience of other lenders with this customer
Customer Annual Report
Local or regional credit bureaus
Local Newspapers
Local chamber of commerce
3.10 MECHANISM OF RETAIL DISBURSEMENT OF TBL
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The primary factor determining the quality of the bank’s credit portfolio is the ability of each borrower to
honour, on a timely basis. All credit comities made to the bank. The authorizing credit personnel prior to
credit approval must accurately determine this. If the report of the project appraisal is very satisfactory to
approve the loan proposal, than the following steps furnish the approval procedure:
Make a proposal by the client to the bank
Give all the necessary documents
Bank will send the parties statement to the Bangladesh Bank, their CIB (Credit Information
Bureau) will inquiry that whether this party is defaulter or a new one.
Bank will take the collateral from the party and analysis that how much it will cover the total
loans.
Bank will send this proposal to the head office. In the head office the Board of Directors and
Managing Director will approve the loan.
Head office will send the approval to the branch office.
Branch office will give the sanction letter to the party.
Bank will take the security and make it in their favour.
3.10.1 DISBURSEMENT:
After completing all the necessary steps for sanctioning loans bank will create a loan account by the name
of the party and deposit the money to that account. Bank will give chequebooks to the party and advise
them to draw the money and use it as soon as possible, because whenever the money will transfer to the
account interest will count from that time.
3.10.2 LOAN DISBURSEMENT OF TRUST BANK LIMITED:
Here we try to find out the periodical, sector wise and industry wise loan distribution of the bank.
Total Loan(retail unit)
Years Amounts2008 87765000002009 1114160000
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2010 10041630000Figure: Total Retail Loan during the year 2008 – 2010
3.11 LOAN PRICING METHOD USED BY TBL
In pricing a business loan, Bank management must consider the cost of raising loan able funds and the
operating costs of running the Bank. This means that Banks must know what their costs are in order to
consistently make profitable, correctly priced loans of any type. There is no substitute for a well-designed
management information system when it comes to pricing loans.
The Trust Bank Limited is generally used the simplest loan-pricing model which assumes that the rate of
interest charged on any loan includes four components, these are
(1) The cost to the Bank of raising adequate funds to lend,
(2) The Bank’s non-funds operating costs (including wages and salaries of loan personnel and the cost of
materials and physical facilities used in granting and administering a loan),
(3) Necessary compensation paid to the Bank for the degree of default risk inherent in a loan request,
(4) Bank’s desired profit margin.
3.11.1 RATE OF INTEREST OF TBL FOR LENDING
These sector-wise interest rates have been introduced by the Head Office of the Trust Bank Limited. They
use cost-plus pricing method in case of pricing the loans. All branches of the Trust Bank Limited have
maintained these rates strictly except in case of some quality and credit-worthy lenders. After judging the
lenders’ credit-worthiness, the Trust Bank Limited gives some beneficiary to this kind of lenders. They
can enjoy a decreasing interest rate, which maintained by the Trust Bank Limited’s branches internally.
Other wise, the scheduled rates are maintained by all the TBL branches. Actually, the Lending rate is
based on the prescription, which is given by Bangladesh Bank.
3.11.2 RATE OF PROVISION
The summery of rate of provision for different types of classified and unclassified loans & advances:
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Rate of ProvisionParticulars Rate of Provisioning (%)