An Internship Report On

Credit Management of United Commercial Bank Limited

Nabinagar Branch, Dhaka.

 Internship Report on

Credit Management of United Commercial Bank Limited

Nabinagar Branch, Dhaka.

Submitted to:
Chairman
Internship Placement Committee
Department of Business Administration
Gono Bishwabidyalay
Mirzanagor, Savar, Dhaka.

Submitted by:
Exam Roll: 251
Program: B.B.A
Department of Business Administration
Gono Bishwabidyalay
Mirzanagor, Savar, Dhaka.

Date of Submission: October 30, 2016

 LETTER OF TRANSMITTAL

Date: October 30, 2016

The Chairman
Internship Placement Committee
Department of Business Administration
Gono Bishwabidyalay
Mirzanagar, Savar, Dhaka.

Subject: Submission of Internship Report

Dear Sir,

I am here by submitting my Internship Report, which is a part of the BBA Program

curriculum. It is great achievement to work under your active supervision. This report is based
on, “Credit Management of United Commercial Bank Limited”. I have got the opportunity to
work in United Commercial Bank Limited for three month. This project gave me both
academic and practical exposures. First of all I learned about the organizational culture of a
prominent Bank in our country. Secondly, the project gave me the opportunity to develop a
network with the corporate environment.

I shall be highly obliged if you are kind enough to receive this report and provide your
valuable judgment. It would be my immense pleasure if you find this report useful and
informative to have an apparent perspective on the issue.

Sincerely Yours

-------------------------------

Exam Roll: 251

Batch: 4th
Program: B.B.A
Concentration/Major: Finance
Department of Business Administration
Gono Bishwabidyalay
 STUDENT’S DECLARATION

I, Bearing No-251, student of Business Administration, Gono Bishwabidyalay, hereby state

that the report offered in the name “Credit Management of United Commercial Bank Limited,
Nabinagar Branch, Savar, Dhaka, has been prepared and carried by me under the supervision
of, Mohammad Arif Uddin Nabinagar Branch manager, United Commercial Bank Limited. I
also state that no part of this report has been or is being submitted elsewhere for the award of
any degree, diploma or recognition.

Exam Roll: 251

Batch: 4th
Major: Finance
Minor: Marketing
Bachelor of Business Administration
Gono Bishwabidyalay
 ACKNOWLEDGEMENT

First, I remember Almighty Allah for helping me to successfully prepare this report. I am
thankful to the United Commercial Bank Limited authority that has assisted me by giving
1efficient preferred information from their portal. I shall have to put my heart rendering
respect and appreciation for the consideration and co-operation which is given to complete my
project work assigned report on the topic “Credit Management of United Commercial
Bank Limited”.

I express my profound thanks to my supervisor, for being a co operative and very

accommodating advisor and providing me appropriate direction in carrying out my Internship
Report, as a part of the obligatory prerequisite for the Bachelor of Business Administration
Undergraduate Program.
I would like to take the opportunity to thank Mr. Mohammad Arif Uddin (Senior Vice
President & Head of Branch) for giving me a chance to do internship in his branch and also
want to thank Mr. MD. Alamgir Hossain (Vice President & Operation Manager) for giving me
opportunity to do work in every desk.
I would like to take the opportunity to thank Mr. MD. Ibrahim Kobir (Junior Officer) , United
Commercial Bank Limited (Nabinagar Branch) for being my on-site supervisor and providing
me time to time information, suggestion as well as procedures to work with my topic.
I also want to thank Mr. Sujan Chandra Debnath (Senior Officer) and Mr. Mazharul Islam for
being so cooperative in my work while I worked with them. I also thank to Mr. Md. Zahangir
kabir (Senior Executive Officer), Mr. Imdadul Haque (Senior Executive Officer), Mr. Md.
Mizanur Hasib (Junior Officer), Mr. Khaliqul Islam (Junior Officer), Mr. Hussain Mohammad
Rezaudowla (Junior Officer) for creating a friendly corporate environment and making me feel
that corporate working is enjoyable.

I heartily thank all the officials of UCBL, Nabinagar Branch and my friends who directly or
indirectly provided me their support in this regard.
I really enjoyed a lot every moments like internship period to preparing final report. I hope that
it will help me in my future professional work. Moreover I like to thank everyone who was
helped me for preparing this report.
Finally, I would like to humble thanks to all of my family members who gave me physical,
psychological and economical supports to complete my BBA Program.

Exam Roll: 251

Batch: 4th
Major: Finance
Bachelor of Business Administration
Gono Bishwabidyalay
 EXECUTIVE SUMMARY

This report is based on “Credit Management of United Commercial Bank Limited” which is
prepared from my experience of working in Credit Department at United Commercial Bank
Limited. Bank’s most important works are collecting deposit from clients and giving loan to
clients. Through this process banks are making revenue. The employees of United Commercial
Bank Limited are very serious about their work. They maintain a protocol to establish a good
relationship with existing clients and new clients. For their good services every month UCBL
collected big amount deposit from clients. Managing those deposit money is very important
work for any bank. UCBL believe that about 80% to 90% of deposit money must be invested
in loan section. This report focuses on different credit facilities provided by United
Commercial Bank Limited and its overall procedure of lending.

With the clear mission provide effective banking services and to contribute socio-economic
development of the country, United Commercial Bank Limited emerged as commercial bank
and launched its operation on mid 1983. The bank has 148 branches all over the country up to
2015. Those branches are always ready to provide good services for their clients. I did my
internship in UCBL Nabinagar Branch, Address: Hazi Nizam plaza, 1 st floor, Pollibiddut,
Ashulia, Savar, Dhaka.

Last 2 month I worked in General Banking Division. Here I learned how to open an account,
how to provide quick services because customer wants quick and good quality service. I also
learned how to Open an account, write pay order, taking deposit from customer and register
inward & outward. First 1 month I worked in Credit and LC department. I also learned to fill
up LC register and loan form. And gain clear idea about loan process and LC.

The major task for a bank is to survive in the competitive environment of credit service by
managing its assets and liabilities in an effective way. United Commercial Bank Limited
manages the assets and liabilities in effective way and earns success and prosperity constantly.
Is operates in a disciplined and prudent manner with a focus on driving productivity with
delivering sustainable simprovements in business performance.
 Table of contents

Serial no Contents Page no

1 Chapter - 01(Introduction) 1-4
1.1 Introduction 2
1.2 Background of the Study 2
1.3 Objective of the Report 2
1.4 Scope of the Study 3
1.5 Methodology of the Study 3
1.6 Limitation of the Study 4
2 Chapter – 02 ( Overview of the Organization ) 5 – 16
2.1 Overview of the Organization(UCBL) 6
2.2 History of the UCBL 6
2.3 Vision of the UCBL 7
2.4 Mission of the UCBL 7
2.5 Goal of the UCBL 7
2.6 Values of the UCBL 8
2.7 Purpose of the UCBL 8
2.8 Strategies of the UCBL 8
2.9 Slogan of the UCBL 9
2.10 Corporate Social Responsibilities 10
2.11 Products and Services by UCBL 10
2.12 Organogram 16
3 Chapter – 03 (Credit Management of UCBL Nabinagar) 17 – 36
Loan & Advances 18
3.1 Loan 18
3.1.1 Retail Loan 18
3.1.2 Household Durable Loan 19
3.1.3 Auto loan 19
3.1.4 House Loan 19
3.1.5 Doctor’s Loan 19
3.1.6 Advanced Against Salary Loan 19
3.1.7 Education Loan 19
3.2 Corporate Banking Loan 20
3.2.1 Export Finance 20
3.2.2 Import Finance 21
3.2.3 UCBL House Building Finance 21
3.2.4 Industrial Loan 21
3.2.5 Letter of Credit 21
3.2.6 Project Finance 22
3.2.7 Syndicated/Structured Finance 22
3.2.8 Working Capital Finance 22
3.2.9 More corporate Banking Loans 23
3.3 SME Banking Financing 25
3.3.1 UCB Dhrubo 25
3.3.2 UCB Onkur 25
3.3.3 UCB Durjoy 25
3.3.4 UCB Joyoti 25
3.3.5 UCB Dipti 26
3.3.6 Other SME Loans 26
3.4 Credit Card 27
3.5 General System & Procedure Relation to Credit 29
3.5.1 Application for loan proposal 29
3.5.2 Selection of borrower 30
3.5.3 Preliminary screening of credit proposal 31
3.5.4 CIB ( credit Information Bureau ) Inquire 31
3.5.5 Security Analysis 31
3.5.6 Site Visit 32
3.5.7 Documentation 32
3.5.8 Sanction of Loan or Advances 33
3.5.9 Disbursement of Loan 33
3.6 Credit Risk Analysis 34
4 Chapter – 04 ( Role As An Intern ) 36-39
4.1 Internship 37
4.2 Job Description 37
4.3 The daily work routine 37
4.4 Team Work 37
4.5 Learning points 37
4.5.1 Posting of the Account 38
4.5.2 Issuing pay order slip 38
4.5.3 Issue of the Cheque Book 38
4.5.4 Clearing House Register 38
4.5.5 Deliver of debit card 38
4.5.6 Call the Cline for Received Cheque Book and Debit Card 39
4.5. Write down Deposit Slip 39
5 Chapter-05 (SWOC Analysis) 40-43
5.1 Strength of UCBL 41
5.2 Weakness of UCBL 42
5.3 Opportunity of UCBL 42
5.4 Challenges for UCBL 43
6 Chapter –06 ( Conclusion )
Recommendation
Conclusion
Reference
Appindix
 Chapter 1
Introduction
1.1 Introduction

To complete the academic requirement of BBA (Bachelor of Business Administration) students

of Gono Bishwabidyalay have to complete their internship to gather practical experience by
working professionally. This experience helps the students to know how to deal with the
practical job related responsibilities. Inters are generally placed according to their major subject
or concentrated area to gather knowledge. As student of finance and marketing I got the chance
to do my internship in “United Commercial bank Limited”- Nabinagar branch, Dhaka. I started
my internship in - United Commercial Bank Ltd on Nabinagar Branch, Dhaka from August 7,
2016 and ended on November 7, 2016. A report on a particular topic is a mandatory part of the
internship program. I was authorized to make a report on the “Credit Management of United
Commercial Bank Limited, Nabinagar Branch.” It was a great experience for me to work as an
intern at United Commercial Bank Ltd.

1.2 Background Study

Internship report is an essential part of BBA program. It is considered as an edge between

academic knowledge and practical field. This report is prepared as a requirement for the
completion of the BBA program conducted by the Department of Gono Bishwabidyalay. I have
completed my internship report for my academic curriculum purpose. The objective of the report
is to blend our academic knowledge with that of practical ones and give us an insight in to the
management of organization in real life situation. Theoretical knowledge achieved perfection
with the implication of practical knowledge. Professional experience is very important to be
established in the corporate world. In this situation I got a bit practical experience by analyzing
the overall banking activities of United Commercial Bank.

1.3 Objective of the report

Primary objectives:
Ø To get an overall idea about the banking system of United Commercial Bank Ltd.
Ø To get an idea about the “Credit Management of United Commercial Bank Limited,
Nabinagar Branch” and “General Banking Activities of United Commercial Bank Ltd”.
Ø To get idea about the relationship between real life learning and theoretical learning.

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Specific objectives:

Ø To know the General banking system of United Commercial Bank.

Ø To know Credit Management of United Commercial Bank Limited, Nabinagar Branch.
Ø To present my observation and suggestion to the bank.
Ø To apply hypothetical knowledge in real-world field.
Ø To observe the purposes of general banking.
Ø Getting idea about how commercial bank works.
Ø To understand entire branch banking procedures.
Ø To gain practical experience that will help us in our practical life.
Ø To understand how other departments of the branch function.
Ø To know the strength and weakness of the bank.
Ø To understand in which sector the bank is working with proper efficiency.
Ø To find out the problems of the bank and suggesting the way to solve the problems.
Ø To analyze the current performance and making future predictions.

1.4 Scope of the Study

This report is based on my practical work experience with United Commercial Bank Limited. It
will also help the students to reduce the distinction between realistic and hypothetical
knowledge. This report significantly helped me a lot to understand the atmosphere and
environment of an organization. As I am an internee of UCBL, I have access to many different
sectors like account opening procedure, clearing, chaque division, pay order writing, foreign
remittance etc. It was almost impossible for me to learn everything about all banking sectors as it
was a large financial sector with limited time.

1.5 Methodology of the Study

I have designed the methodology of the study in the following way:
Ø Primary data sources:
1. Inspection in different desks
2. Talking with professionals in casual manner and planned analysis
3. Observation
4. Personal interview
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 Ø Secondary data sources:
1. Leaflets and manuals of UCBL
2. Different publications of Bangladesh Bank
3. Yearly Annual Reports
4. Newspaper
5. Web sitess
Extensive study of the existing files, convenient case clarifications, observation and
reimbursement practice interview with the employee were done to identify the execution and
control and monitoring of the banking system.

1.6 Limitations of the Study

Current study of this report was limited. But as I was an internee, it was a big chance for me to
know the actions and behaviors of banking system, especially UCBL. I had to face some
obstacles while doing this report. Some of them are given below:

Ø Limited data resources: All types of information were not available for access, so it was
not possible to access and summarize them properly. Though I had assistance from other
employees but it was not enough for me due to their high work pressure in the bank.
Some assumptions were made due to limited information, so there may be some personal
mistakes
.
Ø Lack of experience: It was my first time, doing a report on a banking system in a
practical corporate life. So my limited experience was the main obstacle of this study.

Ø Privacy of Information: Every establishment has its secrecy that is not shared with
everyone. So this confidentiality of information was also an obstacle faced in this study.

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 Chapter: 2
Overview of the Organization
2.1 Overview of the Organization (United Commercial Bank Ltd.)
“United Commercial Bank” one of the leading and fastest growing privately owned Bangladesh
based financial institution. UCBL offers all kinds of Commercial Corporate and Personal
Banking services covering all segments of society within the framework of Banking Company
Act and rules and regulations laid down by our central bank. Diversification of products and
services include Corporate Banking, General Banking Retail Banking and Consumer Banking
right from industry to agriculture, and real state to software that provides financial services
including- personal and business banking, loans, credit and debit cards, money transfer facility,
online banking and other services. United Commercial Bank, from its beginning gave more
importance in technology integration in order to remain competitive in the region of banking to
hold their position. Keeping the network within a reasonable limit, their strategy is to serve the
customers through capacity building across multi-delivery channels.

This bank successfully establishes itself as one of the leading first generation banks in the
country with a huge network of 158+ branches. Also consumer products like UCB cards have
been showing incredible success and soon became the leader in local market with around 40000+
card holders with 152+ ATM booths. This bank has already made a separate entity in the
territory of private sector banking through personalized service, innovative practices, dynamic
approach and efficient management by the help of 3,679 employees who always show their
dynamic performance to keep their leading position in the banking sector. They are better
positioned and balanced to make their customers capable enough for changing times and
facilitate them to compete more effectively in the market they operate. This bank is aiming to
play a fundamental role in the economic activities of the country by the expansion of trade,
commerce and industry thorough an inventive credit policy.

2.2 History of the UCBL

United Commercial Bank Limited incorporated on 26 June 1983 as a private company with
limited liability under the Companies Act 1993. The bank obtained authorization to commence
business with effect from 26 June 1983 and started banking operations on 29 June 1983 with an
authorized capital of TK 35.50 million in hand with the object of fineness in customer service
and contentment.

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2.3 Vision of the UCBL
Their vision for the future is to be the bank of first preference through increases the value of their
clients, shareholders and employees and contributing to the national economy with social
commitments. Beside these they want to take some initiatives very soon. Those are:

Ø To hold the position of best private commercial bank in Bangladesh with loyalty with
particular compliances of rules and regulations.
Ø They are departing to amplify the quantity of Small and Middle - Size Enterprise (SME)
loan for the entrepreneurs in our country by different attractive products or services. So
that people can contribute more on the growth of national economy in the country.
Ø UCBL feel the need for the society and wants to give more attention on this issue.
Therefore, they are concentrating more on Corporate social responsibility (CSR)
activities in the upcoming year.
Ø UCBL emphasizes on having proficient employees to serve their customers in the best
possible way. In order to do that, UCBL is planning to emphasis more on employees and
want to send them abroad for efficient training.
Ø They have a vision to raise their ATM (Automated Teller Machine) booths with modern
machines and high securities by this year to expand their service and serve their
customers to make them satisfied.

2.4 Mission of the UCBL

“United Commercial Banks” mission is to present financial solutions which can create, supervise
and amplify their client’s wealth by improving the quality of life in the communities they serve.

2.5 Goals of the UCBL

Ø Enlarge a map for offering better customer services

Ø Build up a realistic deposit draft
Ø Develop initial capital plan
Ø Extend a system to make good advances
Ø Widen appropriate management structure, system, procedures and approaches
Ø Develop scientific Management Information System (MIS) to monitor banks activities

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2.6 Values of the UCBL

Ø Promote participative management

Ø Sustain quality at all levels in the organization
Ø Place customers first and give importance
Ø Emphasize on professional ethics and loyalty
Ø Consider in being a dependable corporate citizen
Ø Say or do what they believe

2.7 Purpose of the UCBL

Ø The main task of the bank is to accept deposited from various customers through various
accounts.
Ø Provides loans on easy terms and condition.
Ø It creates loan deposit.
Ø It transfers money by Pay Order (PO) and Telegraphic Transfer etc
Ø The bank is doing the transaction of bill of exchange, cheque etc. on behalf of the clients.
Ø United Commercial Bank assists in the Foreign Exchange by issuing Letter of Credit.
Ø The bank insures the securities of valuable documents of clients.
Ø Above all, United Commercial Bank Ltd helps the businessmen financially by giving
discount facility for bill of exchange and by providing the facility of Letter of Guarantee.

2.8 Strategies of the UCBL

Ø Make the most of all available resources to develop various plan, policies and procedures
in each of the objective and goal areas.
Ø Execute plans, policies and procedures.
Ø Utilize term of professional employees.
Ø Synchronized and steady growth of the bank.
Ø Search for a total customized solution of IT for the purpose of full automation step.

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2.9 Slogan of the UCBL:

The slogan of United Commercial Bank was “Happy Banking”. After completing thirty years of
journey it has changed its slogan and now its slogan is “United We Achieve”. Because they
believe that if we work together we can achieve everything.

2.10 Corporate philosophy

For customers

Ø To provide the most courteous and efficient service in every aspect of its business.
Ø To be innovative in the development of new banking products and services.

For employees

Ø By promoting good staff morale through proper staff training and development, and
provision of opportunities for career development.

For shareholders

Ø By forging ahead and consolidating its position as a stable and progressive financial
institution.
Ø By generating profits and fair return on their investment.

For community

Ø By assuming our role as a socially responsible corporate citizen in a tangible manner by

adhering closely to national policies and objectives thereby contributing towards the
progress of the nation.
Ø By upholding ethical values and best practices.

2.11 Ethics, Integrity and Trust

Banking deals with public money where Ethics, Integrity and Trust is utmost important. United
Commercial Bank upholds these principles in every section by its management and customer
service. The following are the key principles of Employee codes of Ethics and Business conduct.

Ø Provide service to customers with uncompromising integrity, utmost respect, unwavering

responsibility and dedicated citizenship.
Ø Protect privacy and confidentiality of customer information.
Ø Prevent money laundering and fraud.
Ø Demonstrate workplace respect.

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2.12 Corporate social responsibilities
As one of the leading bank UCB acknowledge their responsibilities toward the society as a
whole in which we live. We care for all stakeholders, ethical functioning, and respect for
employee’s rights and welfare, respect for human beings, respect for environment and
disseminate information on CSR policy. UCB participates in social development, education,
health, sports, environment etc.

2.13 Products and services by UCBL

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1) Deposit Products:

UCBL has launched a number of financial products and services since its inception. These
products and services are given below:
v UCB Money Maximizer
v Current Deposit
v UCB DPS Plus
v UCB Women DPS
v Short Notice Deposit
v Fixed Deposit Receipt
v UCB Staff Savings
v UCB Non Interest Savings
v UCB women savings
v UCB Youngster Savings
v UCB Youngster DPS

UCB Money Maximizer:

An individual can open this account and he needs to keep money in this account for at least 11
years and he will get interest rate 6.50%. To open this account he needs at least 50,000 taka. If he
take money from this account before 1 year he will get no interest and after 1 year if he take
money from this account then he will get Interest 4.5%.

Current Deposit:
It is popularly known as Current Account. Any individual (Businessman) , companies, firm, are
eligible to open this type of account in its own name or company's name. This is non- interest
bearing account. The account holder can deposit or withdraw money from his or her account any
time if he or she wants. The code for Personal CD account is 3101 & Organizational CD account
is 2101 . To open current account a customer needs:

§ 3 copy picture of account holder

§ 1 copy picture of nominee
§ Account holders voter ID card photocopy, trade license photocopy, company's seal
§ Nominees voter ID card/Birth Certificate photocopy
§ Current/Gas Bill photocopy

UCB DPS plus:

UCB DPS Plus is one of the popular deposit schemes of UCBL. UCB DPS Plus is a monthly
saving scheme and an individual can give monthly installment 100 to 25000. If an individual
give 100 taka and he needs to give same amount in every month.
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The prime objective of this scheme is to encourage the people to develop their habit of saving.
Under this scheme, monthly installments are in various sizes, such as 2 years, 3 years, 5 years, 7
years and 10 years.

UCB Women DPS:

UCB Women DPS is a monthly saving scheme for encouraging women for savings. Women
DPS interest rate is higher than UCB DPS Plus. . Under this scheme, monthly installments are in
various sizes and one can adopt the schemes for a period of 2 years,3 years, 5 years, 7 years and
10 years.

Special Notice Deposit:

Normally people who need to do lot of transaction in a month, they open this account. This type
of account opened by businessman or company and interest is given on daily basis. Interest is
given on depending on the amount of taka.

Fixed Deposit Receipt:

Individuals, Firms, Companies, Associations can open this account. The deposit is taken for a
specific fixed period of time, such as 3 months, 6months, 1 year etc. FDR rate of UCB is 5.25%.

UCB Staff Savings:

UCB staff saving is for UCB bank employees. No service charge is cut down for this account.
Only excess duty is cut down once in a year.

UCB NON Interest savings:

Some people don’t need any interest from bank, they only want to save money and so they open
this type of account. Bank doesn’t have to give interest in this account and this type of account is
profitable for bank.

UCB Women's Savings:

To encourage women's for savings UCB offer this type of savings. Women's saving account
interest is higher than normal savings account. Women savings account interest rate is 4.5% and
Debit Card charge is free. There is no service charge in women's savings account.

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UCB Youngster Savings:

Below 18 year old children can open this type of account. Interest rate is 4.5% in this account.
There is no service charge in account and Debit Card is free. Cheque book will not provide for
this account.

2) Loan Products:

Funded:
Secured overdraft (SOD):
When overdraft is allowed against lien of FDR or other financial instruments, it is termed as
Secured Overdraft (SOD). Secured Overdraft (SOD) facility to the borrower may be allowed
generally in the following ways:

i. Overdraft against guarantee

ii. Overdraft against FDR in the name of borrower
iii. Overdraft against savings certificate
iv. Overdraft against DPS

Cash Credit (CC):

Cash credit account is like a current account with a limit up to which one can withdraw from the
bank. Cash credit is normally sanctioned for a period of one year where a regular limit is
sanctioned against goods to meet day to day expenses of business.

Loan against trust receipt (LTR):

Loan against Trust Receipt (LTR) is a funded facility provided to importer to retire L/C related
shipping documents. Advance against a LTR obtained from the customer is allowed when the
documents covering an import shipment are given without payment. The customer holds the
goods or their sale proceeds in trust for the bank until the LTR is fully paid off. Letter of Trust
Receipt is kept as primary security, which creates the banker's lien on the goods. LTR facility is
adjusted from sale proceeds of Imported goods or cash from own sources of the customer within
the validity. Validity of the LTR A/C vary from 30 to 180 days depends on the nature and
amount of items imported or as per Bangladesh Bank guidelines.

TERM LOAN:
This facility is used to meet the expenditure of civil construction and other infrastructure
development. Term Loan facility is repayable by depositing equal monthly installments.

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LEASE FINANCE:
UCB also provide loan under lease agreement to finance capital machinery, equipment and
vehicle to the manufacturing and other business units. In this case the leaseholder is given the
exclusive right to use the leasehold asset for an agreed period of time against payment of rent.

LOAN GENERAL:
Payment against Documents (PAD): Arrangement under which a buyer can get the delivery
(shipping) documents only upon full payment of the invoice or bill of exchange.

Export Cash Credit (ECC):

ECC is essentially a short term credit and allowed to supplement requirement of finance of an
exporter to meet genuine costs and expenses related to the exportable commodity. It is allowed to
execute a specific export order or to execute multiple exports against ECC limit. Maximum ECC
limit would be 90% of FOB value of export L/C. For allowing ECC limit, exporters past 3 years
export performance to be considered. For the purpose of extending ECC, L/C of those importers
will not be accepted, whose record of past payments is not satisfactory i. e. has record of late
payment, nonpayment, payment at discount.

Local Documentary Bills Purchased (LDBP):

LDBP facility is allowed to negotiate/purchase Inland/local Documentary bills duly accepted for
payment by scheduled Banks in Bangladesh.

FBPD (Foreign Documentary Bills Purchased):

FDBP facility is allowed to the customer to negotiate/purchase foreign documentary export bills
drawn under valid Export L/C.

RETAIL LOAN:
Retail loans are like car loan, doctor’s loan, home loan etc.

NON FUNDED:
SLC (LOCAL/FOREIGN):
SLC means sight LC. Here after getting shipping documents bank payment within 5 working
days.

ULC (BACK TO BACK):

The export letter of credit backs a second letter of credit which is used to pay a supplier. When
the exporter received an export letter of credit from the overseas buyer for export of goods, but
the concerned exporter are not the actual manufacturer/ producer of the exportable goods. He is
required to collect the goods/ raw materials from the actual producer/ manufacturer.

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In such a situation the exporter request his bank to open a letter of credit in favor of the actual
producer against the export letter of credit he has obtained. In this situation bank open a letter of
credit in favor of the actual producer of the goods keeping the export letter of credit as security.
Since the letter of credit on the strength of and backed by the export letter of, the second letter of
credit called back to back letter of credit. Bank may provide pre-shipment credit facilities up to
90% of export order including BTB LC. However banks are generally not in favor of back-to-
back letters of credit as a means of financing export transactions due to risk they are exposed to.

3) Other Products:

SERVICE:

UCBL Nabinagar Branch provides 3 type of locker service like small, medium and large. Small
locker yearly charge fee is Tk.3440, medium locker yearly charge fee is Tk.4730, and large
locker fee is 6500.

CARD FACILITY:

UCBL Provides debit card and credit card facility to its customers. Debit card holder is 1,50,000
and among them 70,000 to 80,000 card holders is actively use it. UCBL provides 3 types of
credit cards such as platinum, gold and classic. Platinum card is for high value customer and card
limit is Tk.1,50,000 to Tk.5,00,000, yearly charge fee Tk.5,000, and platinum client is 2,000
approximately. Gold card limit is Tk.50, 000 to Tk.1, 45,000, yearly charge fee Tk.3, 000, and
gold client is 25,000 approximately. Classic card limit is Tk. 20,000 to Tk.45, 000, yearly charge
fee 1,500, and classic client is 20,000 approximately.

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2.14 Organogram of UCBL

2.15 Divisions of United Commercial Bank Ltd.

Page-16
 Chapter 3
Credit Management of United
Commercial Bank Limited
Nabinagar Branch
 Loans & Advances:
United Commercial 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. 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 UCBL Nabinagar Branch’s Credit Department, there are 2 (Two)
senior executive officers 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 UCBL 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.

3.1 Loan:
We can divided into two way such as Retailer/Personal loan and corporate loan

3.1.1 Retail Loan:

Retail banking is the direct execution of transactions between a bank and its consumers, rather
than with corporations or other banks. Services offered include savings and transactional
accounts, mortgages, personal loans, debit cards, and credit cards. Retail loan is mean direct
sale loan product to consumers. Bank hires some non permanent people who will directly contact
with customers to sell the retail loan products. Some retail products are:

Page - 18
3.1.2. House hold - Durable loan: Consumer’s credit scheme is one of the popular areas
of collateral free finance of the bank. People with limited income (minimum salary 10000 to
12000) can avail the credit facility to buy household goods including computer and other
durables. Here rate of interest 10% and period of loan 4 years. Maximum loan limit is 5 lac.

3.1.3. Auto loan: Auto loan is a vehicles buying loan. UCBL allows under auto loan scheme
for purchasing car, jeep, station wagon, pick up van, covered van capacity up to 3000kg. People
who want to take this type of loan their monthly minimum salary need to be Tk. 20000 and
business people income Tk. 40000. Loan limit us 20 lac and period of loan 5 years.

3.1.4. Home loan: To meet the growing need of housing for people, UCBL has introduced
home loan scheme. Such loan will be available for flat purchase or purchase of new apartments
under construction for self residing purpose. Bank will take mortgage against home loan. Period
of loan is within 10 to 20 years and rate of interestm10%.

3.1.5. Doctor’s loan: Doctors loan scheme is designed to facilitate financing to general
practitioner and established specialist physicians to acquire medical equipments and set up
clinics and hospitals. Loan limit of general practitioner is 5 lac and loan limit of specialist
physicians 10 lac. Period of loan will be 5 years and rate of interest 13%.

3.1.6. Advanced Against Salary Loan: Employees of reputed Multinational Companies

and large local corporate. Employees of medium sized or mid-range local companies such as
reputed schools & colleges, pathology labs, hospitals, restaurants, hotels, newspapers, airlines,
real-estate developers of repute, insurance & leasing companies, NGOs, aid agencies, UN
bodies, reputed trading firms and business establishments and all other salaried employees
including employees of Government, Semi-government & Autonomous bodies. Loan Limit is
10,000 to 10 Lac. Interest rate is 8.50%

3.1.7. Education loan: For educational purpose students can take loan maximum 15 lac.
Here rate of interest is 13% and period is 4 years.

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3.2. Corporate Banking Loan:

Corporate Loan is loans that are taken by business people for doing business. Corporate lending
is essentially the same thing as a personal loan, except instead of being made from a bank to an
individual, it is made from a bank to a company. As a result, the amounts of money being dealt
with tend to be substantially larger, and some of the protections are a bit different.

3.2.1. Export Finance

• Pre-shipment Financing:
This facility is offered to an exporter by way of packing credit to enable him to finance
purchase or import of raw materials, processing and packing of the goods meant for
exports.
• Post-shipment Financing:
Post-shipment Credit is offered to an exporter to finance export sales receivables after
the date of shipment of goods till the date of realization of export proceeds.
• Advances against accepted bills for collection:
This offering is in the form of a loan provided to the exporter to bridge the working
capital gap that exists before the export proceeds are realized. Once the export proceeds
are realized the loan is liquidated.

3.2.2 Import Finance:

Importers are given this sort of facility to import different commodity items, capital machinery
and any other permissible items. L/C related shipping document is kept as primary security. Cash
margin and counter guarantee are obtained from the customer to secure its position. Two types of
L/C facility are provided:

• Sight L/C- payment should be made just after receiving the documents
• Deferred L/C-the beneficiary allows the importer time to pay the documents

Loan against trust receipt:

Loan against Trust Receipt (LTR) is a funded facility provided to importer to retire L/C related
shipping documents. Advance against a LTR obtained from the customer is allowed when the
documents covering an import shipment are given without payment. The customer holds the
goods or their sale proceeds in trust for the bank until the LTR is fully paid off. Letter of Trust
Receipt is kept as primary security, which creates the banker's lien on the goods. LTR facility is
adjusted from sale proceeds of Imported goods or cash from own sources of the customer within
the validity. Validity of the LTR A/C vary from 30 to 180 days depends on the nature and
amount of items imported or as per Bangladesh Bank guidelines.
Page - 20
3.2.3. UCBL House Building Finance
Housing is one of the five prime needs of mankind. Everybody has a dream to have a dwelling
house of his own. UCBL Housing Loan with competitive rates, convenient features and simple
procedures will enable you to turn your dream into reality

Purpose of the loan

• Commercial purposes
• Post-shipment Financing:
It includes medium to long-term finance to construct commercial or residential
buildings/apartments

3.2.4. Industrial Loan

Since independence, the aim of successive Governments has been rapid industrialization of the
country. UCB being a socially responsible Bank is providing short, medium and long term
financing to the industrial enterprises to accelerate the economic development of the country and
to generate employment for the mass people. UCB is extending industrial loans to
• RMG
• Textile
• Food Processing
• Jute Industries
• Leather & Leather Products
• Paper & Paper Products
• Chemical Industries
• Transport & Communication
• Power & Energy
• Telecommunication Sector, etc.

3.2.5. Letter of Credit

Whether you are an exporter or an importer, UCB offers an array of services to meet your Letter
of Credit requirement which includes
• Opening, Negotiating or Discounting
• Advising, Confirming, Reimbursement
• Foreign Exchange services
We have an extensive correspondent bank network across the globe.

Page - 21
3.2.6. Project Finance
UCB provides Project Finance to various industries namely:
• RMG–Woven & Knit
• Power
• Yarn Spinning
• Footwear
• Battery
• Pharmaceuticals
• Poultry Feeds
• Steel & Billet
• ICT
• Garments Accessories
• Plastics
• Particle Board
• Glass & Tubes
• Ceramics
• Petro-Chemical
• Dyeing
• Printing and Finishing
• Food Processing
• ICT
• Renewable Energy, etc.

3.2.7. Syndicated/Structured Finance

UCB provides tailor made solutions to meet our clients’ requirements while mitigating the credit
and price risk at the same time. UCB has a dedicated and professional Structured Finance Team
who arranges and underwrites financial solutions incorporating Debt and Equity Syndication as
well as Financial Advisory Services. Our expert team co-ordinates the activities at various stages
of syndication proposal through appraisal, sanction, documentation, sharing of security,
disbursement, inspection, follow-up, recovery, arranging meetings of syndication members, etc.
as a Lead Bank. UCB also works as a Participating Bank.

3.2.8. Working Capital Finance

UCB offers working capital finance by way of:
• Cash credit
• Overdraft
• Working capital loans

Page - 22
Cash Credit (CC):

Cash credit account is like a current account with a limit up to which one can withdraw from the
bank. Cash credit is normally sanctioned for a period of one year where a regular limit is
sanctioned against goods to meet day to day expenses of business. Cash credit is also known as a
continuous loan and it can also renew of demand of customer.

Purpose: The purpose for which loan is required is essential to ascertain, as for different
purposes different types of loan can be taken. Eg. Incase the loan is required to purchase fixed
assets like plant and machinery, term loan must be taken as plant and machinery are long term
assets it will take time in repayment of the loan and repayment can be done in EMI’s (Equated
Monthly Installments). Where as a loan required for working capital needs a long term loan is
not required as repayment does not require long period, hence cash credit may be availed.

Overdraft (OD):

Loan arrangement under which a bank extends credit up to maximum amount (called overdraft
limit) against which a current account customer can write checks or make withdrawals. The most
common form of business borrowing, an overdraft is a type of revolving loan where deposits are
available for re-borrowing, and interest is charged only on the daily overdraft(debit) balance. It
is, however, also a demand loan: the facility can be cancelled (and entire outstanding amount
‘called’) at any time by the lender at its discretion, without any warning notice or explanation.

These are suitably structured to your needs and your risk profile as a part of consortium or as a
sole banker. These products are designed to ease the liquidity position of the client.

Secured overdraft (SOD):

When overdraft is allowed against lien of FDR or other financial instruments, it is termed as
Secured Overdraft (SOD). Secured Overdraft (SOD) facility to the borrower may be allowed
generally in the following ways:
• Overdraft against guarantee.
• Overdraft against FDR in the name of borrower.
• Overdraft against savings certificate.
• Overdraft against DPS.

3.2.9. More Corporate Banking Loans

• Equity Finance
UCB is active in building partnership with the entrepreneurs by extending Equity and
Venture Capital financing.

Page – 23
• Hire Purchase
UCB provides Hire Purchase (HP) facility to finance capital machinery, equipment and
vehicle of industrial and other business units. In a Hire Purchase facility the borrower
agrees to take the machinery and equipments on hire at a stated rental on an agreed
tenure payable in equal installments that includes both principal and interest. Once
payments of all required installments are made the ownership of the goods is
transferred to the borrower.
• Lease Finance
UCB also provide loan under lease agreement to finance capital machinery, equipment
and vehicle to the manufacturing and other business units. In this case the leaseholder is
given the exclusive right to use the leasehold asset for an agreed period of time against
payment of rent.
• Transport Loan
UCB is extending its facility to the transportation sector by providing transport loan to
help purchase vehicles used in the public transportation services.
• Work Order Finance
UCB provide work order finance for execution of work order against assignment of
work order/bill for implementation of contractual works. This facility is provided both
in funded and non-funded form for both short and medium term as Overdraft against
Work Order or OD (Work Order), Performance Guarantee (PG), Advance Payment
Guarantee (APG), Guarantee against Retention Money, Earnest Money, and Bid Bond.
• Developer Finance
UCB is actively involved in the development of the Real Estate Sector of Bangladesh.
We provide all kinds of finance to the real estate developers who are involved in real
estate business.
• Off-Shore Banking
UCB is providing all kinds of commercial banking services to the non-resident
customers through our two Off-Shore Banking Units in Dhaka and Chittagong.
• Purchase of Bills
UCB purchases export documents against valid Sight/Usance Export L/C and Local
Usance L/C under the head of Foreign Documentary Bills Purchased (FDBP) and Local
Documentary Bills Purchased (LDBP) as Post-shipment finance.
• Guarantee
UCB provides both foreign and local Letter of Guarantee on behalf of our valued
customers. Our guarantee services include Bid-Bond, Performance Guarantee, Advance
Payment Guarantee, Customs Guarantee, Shipping Guarantee, etc.

Page - 24
3.3. SME Banking Financing:
3.3.1. UCB Dhrubo:

Ø Product Feature: Overdraft landing product for small Enterprise.

Ø Amount Range: Up to 500Lac
Ø Tenor: 1year renewable each year
Ø Eligibility: The Business must be going concern with a minimum 1year operation.
Ø Purpose: Working Capital, Agriculture production/trading, and other business purpose
for small sized trading, service, manufacturing concerns.

3.3.2. UCB Onkur:

Ø Product Feature: Overdraft landing product for small Enterprise.

Ø Amount Range: Up to 500Lac
Ø Tenor: 12 to 60 months
Ø Eligibility: The Business must be going concern with a minimum 1year operation.
Ø Purpose: Working Capital, Agriculture production/trading, and other business purpose
for small sized trading, service, manufacturing concerns.

3.3.3. UCB Durjoy:

Ø Product Feature: Overdraft landing product for small Enterprise.

Ø Amount Range: Up to 500Lac
Ø Tenor: 1year renewable each year
Ø Eligibility: The Business must be going concern with a minimum 1year operation.
Ø Purpose: Fixed asset (Machinery, Equipments, Furniture, Vehicle For commercial use
etc.) for small sized trading, service, manufacturing concerns.

3.3.4. UCB Jyoti:

Ø Product Feature: Overdraft landing product for Women small Enterprise.

Ø Amount Range: Up to 500Lac
Ø Tenor: 1year renewable each year
Ø Eligibility: The Business must be going concern with a minimum 1year operation.
Ø Purpose: Working Capital, Agriculture production/trading, and other business purpose
for small sized trading, service, manufacturing concerns.

Page - 25
3.3.5. UCB Dipti:

Ø Product Feature: Overdraft landing product for Women small Enterprise.

Ø Amount Range: Up to 500Lac
Ø Tenor: 12 to 60 months
Ø Eligibility: The Business must be going concern with a minimum 1year operation.
Ø Purpose: Working Capital, Agriculture production/trading, and other business purpose
for small sized trading, service, manufacturing concerns.

3.3.6. Other SME Loans

Ø Hire Purchase UCB provides Hire Purchase (HP) facility to finance capital machinery,
equipment and vehicle of industrial and other business units. In a Hire Purchase facility
the borrower agrees to take the machinery and equipments on hire at a stated rental on an
agreed tenure payable in equal installments that includes both principal and interest. Once
payments of all required installments are made the ownership of the goods is transferred
to the borrower.
Ø Lease FinanceUCB also provide loan under lease agreement to finance capital
machinery, equipment and vehicle to the manufacturing and other business units. In this
case the leaseholder is given the exclusive right to use the leasehold asset for an agreed
period of time against payment of rent.
Ø Transport Loan UCB is extending its facility to the transportation sector by providing
transport loan to help purchase vehicles used in the public transportation services.
Ø Work Order Finance UCB provide work order finance for execution of work order
against assignment of work order/bill for implementation of contractual works. This
facility is provided both in funded and non-funded form for both short and medium term
as Overdraft against Work Order or OD (Work Order), Performance Guarantee (PG),
Advance Payment Guarantee (APG), Guarantee against Retention Money, Earnest
Money, and Bid Bond.
Ø Purchase of Bills UCB purchases export documents against valid Sight/Usance Export
L/C and Local Usance L/C under the head of Local Documentary Bills Purchased
(LDBP) as Post-shipment finance.
Ø Guarantee UCB provides both foreign and local Letter of Guarantee on behalf of our
valued customers. Our guarantee services include Bid-Bond, Performance Guarantee,
Advance Payment Guarantee, Customs Guarantee, Shipping Guarantee, etc.

Page - 26
SME stands for Small and Medium Enterprises, companies whose number of employees or
income falls below certain limits. United Commercial Bank Limited SME and Corporate
products are same. To be SME, a service, trade or manufacturing company need to follow some
criteria:

Small enterprise Medium Enterprise

Fixed Assed No. of Fixed Assed No. of
Excluding Land Manpower Excluding Land Manpower
and Building and Building

Service Tk. 5 Lac to Tk. 1 10-25 Tk. 1 Crore to Tk. 50-100

Crore 15 Crore
Trade Tk. 5 Lac to Tk. 1 10-25 Tk. 1 Crore to Tk. 50-100
Crore 15 Crore
Manufacturing Tk. 50 Lac to Tk. 25-99 Tk. 10 Crore to 100-250
10 Crore Tk. 30 Crore

3.4. Credit Card:

Credit Card is another working capital loan.

Card Account means the credit card account opened by the Bank for the purpose of entering all
credits received and debits incurred by the Cardholder under these Terms and Conditions.

A statement or statements prepared/sent by UCB to Principal Cardholder which contain the

detail transactions/ Charges of principal and supplementary Cardholder during the statement
period. Card means, as appropriate, a VISA and MasterCard credit card, issued by the Bank and
includes the Primary Card and any Supplementary Card. When the context requires, the term
shall also mean the numbers indicated on the Card.

Card Transaction is the purchase of goods and/or services, and/or cash advance availed or
obtained through the use of card account number or the PIN of a card. If the card is used by
someone else other than the Cardholder or Supplementary Cardholder with or without
permission or consent or signature of the aforesaid Cardholder¡¦s, in case of that transaction all
the liabilities will be put into principal Cardholder¡¦s card account and which he/she has to settle
while paying the bills.

Page - 27
Types of credit card

• VISA Classic
• MasterCard Classic
• VISA GOLD
• MasterCard Gold
• VISA Platinum
• MasterCard Platinum

Schedule
• of Charges for Credit Card

Classic Gold Platinum International

General
Payment Due Date from Statement 15 Days
Date
Minimum Amount Due 5% or BDT 500 or $25 whichever is higher
Cash Advance Limit 50% of Credit Limit
Maximum Interest Free Period 45 Days
Fees
Annual Fees(Primary card) BDT 1,500 BDT 3,000 BDT 5,000 $50
Supplementary Card(1st BDT 500 BDT 1,000 BDT 1,500 $25
Supplementary Card free)
Replacement Card Fee BDT 300 BDT 500 BDT 800 $12
Late payment Fee BDT 300/$4 BDT 500/$6 BDT 750/$10 $15
Over Limit Fees BDT 450/$6 BDT 600/$8 BDT 1000/$13 $15

Other Fee and Chrges

Cheque/auto debit return BDT 300 BDT 500 BDT 1,000 $5
Duplicate Statement BDT 100 BDT 100 Free $5
Charge Slip Retrieval fee BDT 700 BDT 1,000 BDT 1,000 $10
PIN replacement fee BDT 300 BDT 300 Free $12
CIB Processing Fee BDT 100 BDT 100 BDT 100
NOC/Certificate Charge BDT 300 BDT 500 BDT 600 $5
Card Cheque(1st 5 leaves Free) 20 Leaves BDT 350
Cheque processing Fee 1.65% of the card cheque amount.(Minimum BDT 300)
SMS Banking BDT 200 pa $5
E-Statement Free Free
Finance Charges 30% per annum
Cash Advance Fees 3% or BDT 150 of the withdrawl Amount
Access to Airport Lounge in Dhaka NA Cardholder +1 Cardholder +2 Cardholder +1

Priority Pass Re-Issue BDT 500

15% VAT applicable on all fees and charges.

Page - 28
3.5. General System & procedure related to credit:
To grant loan is one of the most important functions of a bank. The strength of bank depends
considerably on the quality of its loan and proportion of bearing to the total deposits.
Traditionally bank has been following three basic 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 loan.
The confidence is judged by five (5 C's) considerations-

i. Character: It denotes borrower's reliability. This indicates borrower's honesty and

willingness to repay the borrowed money as per repayment schedule.
ii. Capacity: Borrower's ability of doing business and generating sufficient funds there
from, that is, credit worthiness.
iii. Capital: Borrower's contribution in the business. Financial strength to cover business
risk.
iv. Condition: General business conditions.
v. Collateral: Borrower's ability to produce additional security to cover borrowed money.

Lending process of UCBL goes through different steps with complying terms and conditions of
Bangladesh Bank. The Credit department of UCBL follows the following steps in lending-

3.5.1. 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 study 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-

For Corporate loan & SME checklist:

1. Approach for required credit limit in detail.

2. CIB undertaking from dully filled up.
3. Board resolution (Mentioning credit facilities, operation & loan documentation).
4. Project profile/ company profile/ Company backgrounds.
5. Group profile.
6. Photocopy of up to date Trade License.
7. Photocopy of certificate of Incorporation.
8. Photocopy of Tax identification Number (TIN) of Proprietor/ Partners/ Directors.
Page-29
 9. Photograph of Proprietor/ Partners/ Directors.
10. Personal Net - Worth of proprietor/ Partners /Directors. ( Format enclosed)
11. Latest list of directors duly certified by RJSC (The Register of Joint Stock Companies
and Firms).
12. Approval letter from all concern authorities.
13. Financial statement ( incorporating cash flow statement. profit & loss account, balance
sheet etc) for last three years ( audited plus management copy)
14. List of machinery / equipments.
15. List of buyers and sellers.

Retail loan Check list:

1. National ID photocopy.
2. Photograph 3 copies.
3. Visiting card.
4. Up to date bank statement for last one year (personal & company).
5. Trade License old & new (establishment minimum 2 years).
6. TIN certificate (personal & company).
7. Nominee photograph 1 copy (For account opening).
8. Salary Certificate.
9. Office ID photocopy.
10. Utility bills photocopy.
11. Self Declaration.
12. Evidence of other income document.
13. Guarantor 2 persons: National ID, visiting card, Utility bills copy, photograph 1 copy.
14. IF the applicant has any other loan then he needs to submit the sanction letter and loan
repayment statement.

3.5.2 Selection of borrower:

The selection processes include identifying source of repayment and assessing customer s ability
to repay, expected future cash flows, his / her past dealings with the bank, the net worth and
information from CIB (Credit Information Bureau ). The Bank must identify the key drivers of
the borrower s business as well as the key risks to their businesses. There is an age limit for
borrower, age of the proprietor/partners/directors must be range between 25 years to 60 years.

Page-30
3.5.3. Preliminary screening of credit proposal:
The management committee of credit department of bank gathers different documents and then
evaluates all of the papers, documents. The credit management committee obtains these
mandatory following documents-

1. Formal application for financing

2. Business plan
3. Personal guarantee
4. Appraisal of asset to be financed
5. Personal financial statement
6. Business financial statement
7. Purchase agreement
8. Cash flow projection
9. TIN certificate
10. Bank solvency certificate
11. Vat certificate
12. Export license (applicable for export oriented business)
13. Market reputation

3.5.4. 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. For example - a customer take loan from AB Bank. This customer came to
UCBL and applying for loan. When UCBL filled up CIB form and send to the Bangladesh bank,
then Bangladesh bank will send all information about this customer and UCBL will know that
this customer has loan in AB 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.

In every month UCBL ready all customers loan information, customer s new loan and old loan
documents also if UCBL has any defaulter or not, all these information send to Bangladesh bank.

3.5.5. 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
loan. The important modes of charging a security are the following:

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

Page-31
 • Pledge: A bank will give loan against customers products. Bank is Bailee and customer
is Bailor.
• Mortgage: A bank will provide loan against customer s land, building, properties etc. it is
famous in UCBL. To make the loan secured, UCBL charging mortgage.

3.5.6. Site visit:

The bank management visits at borrower’s land, property which is placed as security against
credit. Here, Head Office Credit Team assists (on need basis) in site visitation. After site visit,
Bank at first analyses the business condition, the products, products market price and inventory.
Then analysis the mortgage land and tried to calculate land’s market value.

Then, Branch credit team forwards a detailed site visit report regarding the project to the Head
Office of UCBL duly signed by the officer and Head of Branch / Operation Manager.

3.5.7. Documentation:
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 lend 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 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 mentioned bellow:

1. Demand promissory note signed on revenue stamp

2. Letter of arrangement
3. Letter of undertaking
4. Letter of installment
5. Letter of authority
6. Letter of disbursement
7. Balance confirmation slip
8. Letter of revival (renewal)
9. Letter of hypothecation
10. Letter of continuity (stability)
11. Letter of guarantee
12. Legal documents for mortgage of property
13. Valuation certificate of the collateral security in Bank’s form with photograph
14. Site visit report

Page-32
3.5.8. Sanction of loans or advances:
When head office satisfied with all the loan documents then they approve the loan. Then 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:

ü Limit of the loan amount

ü Primary securities of the loan
ü Rate of interest of the loan
ü Expire date
ü Repayment
ü Documentation

Time requirement for approval of credit proposal:

ü Brach authority as per their business delegation must take decision within maximum of 3-
7 days.
ü 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
ü Sanction letter to be issued within 1-2 days time from the date approval.

3.5.9. Disbursement of loans:

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-
A)
Finally Credit division at Head Office has completed documentation of the loan that
sanctioned by them.
B)
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.
C)
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.

Page-33
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

3.6. Credit Risk Analysis:

The objective of credit risk analysis is to look at both the borrower and the lending facility being
proposed and to assign a risk rating. The risk rating is derived by estimating the probability of
default by the borrower at a given confidence level over the life of the facility, and by estimating
the amount of loss that the lender (bank) would suffer in the event of default. In Bank there are
five type of risk analysis is done. They are-
1. Financial Risk: To calculate the financial risk, bank checks the customer’s stock market
condition, the customer’s suppliers and buyers, Importers, yearly business turnover.
2. Business Risk: Bank want to know clients current business condition, business will
running well or not, clients business is how much risky for bank to invest it in.
3. Security Risk: Bank always tries to be in safe guard when they give loan. So, they verify
the collateral which against client takes loan. They also verify that, if the client is default
to pay back bank can easily sell the collateral and get the money back.
4. Management Risk: Here Bank see client’s social value, how well he related with this
business and do his reputation analysis. Bank want to know actually how well the client
can handle the business.
5. Relationship Risk: Here bank investigate that the clients relation with their exporter and
importer. The clients better relation with their exporter and importers, it make client less
risky for bank.
After all this credit risk analysis bank give three risk rating, they are high risk, medium risk and
low risk.

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Credit risk management:

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 the installment
rules. When a loan holder failed to pay monthly installment, in this time bank take some steps:
th
A) Such as the installment date is 30 January. But loan holder did not pay the installment. After
nd
3 days of the installment date (2 February) bank officer will call the loan holder and ask him to
pay the installment immediately.
B) If the loan holder did not pay after telephone him. Then UCBL send (10-15 days later) an
official letter and call him again.

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

D) If the loan holder failed to installment payment or do not want to pay the installment then
UCBL will take a lawyer and go to the organization and take the mortgaged property. Then
UCBL can sell this property to generate 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 sell any time for cash.

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 Chapter 04
Role As An Intern
4.1Internship
Internship is very significant for anyone because one can gather realistic information in this time.
I have completed my internship program within August 08 to November 07, 2016. I have learnt
many things about General Banking in this three months internship program. I found a
responsive working atmosphere and I felt like I was one of them. Each of my colleagues assisted
me very much to understand the assignment easily.

4.2 Job Description

I occupied myself in a variety of types of works throughout the time of my internship period
which is given below.
Ø Opening accounts
Ø Preparing pay orders
Ø Issuing cheque books
Ø Providing client statements
Ø Changing Account information
Ø Checking cheques whether its fraud or real
Ø Calling clients to deliver their cheque book and debit card.
Ø Write down deposit slip and cheque.

During this period of internship program, I primarily worked in General Banking segment. Still,
this short period of time.

4.3 The daily work routine

I start my work in the bank in the official time, at 10.00 am and end working at 6.00 pm. I used
to work in different desks from starting the office to till the end of the office.

4.4 Team working

I was not alone when working as an intern. Many other students like me were there to complete
their assignment too. So to get better result, we worked together as a team.

4.5 Learning Points

I have learned different documents throughout my internship program which are given below:

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4.5.1 Posting of the accounts
Firstly, I make the KYC number and input the customer name and separate the customer Retailer
or Corporate then I input the client’s personal information such as date & place of birth mobile
number and save the KYC. Secondly, I make the CIF number and input the customer personal
information such as name, father’s name, mother’s name, if spouse has, then his/her name,
address, phone number, etc. then I go to MIS function and input the sector code of the account
holder, i.e. service holder, businessman, student or housewife, etc. is also posted. Finally, I make
account number and input the customer transaction and nominee’s information like name,
address, age, relation with the client, and share of the percentage is also put. Then the amount of
money as well as if it is a savings or current account, the introducer’s information is also
necessary.

4.5.2 Issuing pay order slip

The pay order form must be filled up at first. The form includes information like, to which
individual it issued, and the sum of money and the name of the client. Then the commission and
vat are included according to the sum of money. The pay order block is prepared in which in the
front of the page, “NOT OVER ……. TK ONLY” is written in block letter after receiving cash
in the cash counter.

4.5.3 Issue of the cheque book

Many steps are followed while issuing cheque book. The verification of client’s signature is done
at first. Then the cheque book is given. The books serial number is written down in the
requisition slip and cheque register. After completing all steps, the client’s signature is taken on
the cheque register.

4.5.4 Clearing House Register

A vital part of general banking is Clearing House Register. Received cheques are written in this
book. Client’s name and account number, amount of money, name of the bank, clearing date,
branch of that bank, cheque number and again amount of money are the basic things which are
included in the book.

4.5.5 Deliver of Debit Card

To deliver debit card, Firstly, we verified the signature card and see photo to match the person.
Then we take the signature in debit card register. then finally, we handover the card to the
customer

Page - 38
4.5.6Call the cline’s for received cheque book and debit card
We call the cline’s for receive the cheque book and debit card. When cheque book and card
come to bank, we receive them and entry the register. Then we call the cline and say for receive
them and also said that if you late to receive the cheque book and debit card, then we send them
to head office. So you should come soon for receive them.

4.5.7 Write down Deposit slip

We also write down the deposit slip for helping the clines.

Page-39
 Chapter 04
SWOT Analysis
SWOC Analysis
SWOC mean strength, weakness, opportunity and Challenges. The detailed study of an
organization’s coverage and prospective in perception of its potency, flaws, chances and risks is
called SWOC analysis. It is needed to make the current way of performance and also predict the
outlook to develop their performance compared to opponents. The organization can learn about
their current situation in the market with the help of this tool. It also plays an important role in
making modification in the planned administration of the organization. The SOWC of UCBL is
given here in brief:

5.1. Strength of UCBL

ü A very experienced administration group operates the United Commercial Bank Limited.
The top managing executives of the bank is the main strength for UCBL. Because they
have all worked in reputed banks and their years of banking knowledge, proficiency, and
capability will continue to help towards more development of the bank. As it is one of the
top private sector commercial banks in Bangladesh, It has shown a marvelous expansion
in the profits and deposits sector.
ü The bank has 158 branches (come soon to open a new branch in hemayatpur) all over the
country to provide better service to the customers. Every branch is located in a
comfortable, convenient and secure place so that customer’s feels safe and secure while
doing transactions.
ü The management of UCBL has created a very friendly, interactive and informal culture
inside the bank. And, there are no concealed obstacles or limitations while corresponding
between the low level employees and the high level employees. By working in this type
of environment, employees feel more motivated and encouraged to work.
ü UCBL is one of the top banks which give quality service to the customers.
ü UCBL has various types of products and services to offer, so the customers can choose
the best products according to their needs.
ü The bank has a fully operational and fast online service all across the country.
ü The bank gives highest interest rate for women savings deposit scheme. It also gives
special offer for student and women. For student and women they offer accounts which
offer zero maintenance cost, free cheque book and debit cards.

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5.2 Weakness of UCBL
ü Sometimes it seems that because of centralized management system it takes time to take
any decision.
ü They are giving less interest rate on FDR and savings scheme compare with other private
banks. The profit rate UCBL is provided is not sufficient compared to other banks. So
when it comes to making investments, customers feel less interested to invest in UCBL.
ü The bank does not have any long-term strategies whether it wants to focus on retail
banking or become a corporate bank. The path of the future should be determined now
with a well-built practical strategy.
ü The bank has an insufficient work force. As it has a weak recruitment policy, it has failed
to provide more human resource and as a result it has failed to provide efficient customer
service.
ü Some of the job in UCBL has no path for promotion. So people feel less motivated to
work in those positions. This weakness of UCBL is creating a group of unsatisfied
employees.
ü When it comes to marketing, UCBL has to give more emphasis on that.

5.3 Opportunity for UCBL

ü In the recent time, a great number of private banks coming into the market. In this
competitive atmosphere UCBL must develop its product line to improve its prolonging
spirited benefit. They can introduce the ATM to participate with the local and the foreign
bank in that product line. They can initiate credit card and debit card system to attract
their potential customers.
ü In addition, Special corporate scheme can be introduced for the corporate level customers
or customers with a high income. They can also initiate various schemes for service
holders. The schemes for the service holders must be created according to their type of
profession, level of earning etc.
ü The country’s increasing population is learning to adopt consumer finance. Opportunity
in retail banking lies here. The average people in our country are of middle class. Various
types of retail lending products have immense appeal to this class. So a wide variety of
retail lending products has a very large and easily pregnable market.
Page: 41
ü They should develop their IT system and start SMS banking at least every district.
ü They should deduct their commission charge for online money transfer.
ü They should start mobile banking like DBBL.
ü UCB can introduce internet banking service

Page-42
5.4 Challenges for UCBL
ü There is an increase in the growth of new multinational banks and upcoming foreign,
private banks. It poses massive threats to UCBL. If it happens, UCBL has to develop
their current marketing strategy or create new strategy to prevail successfully in the
banking business.
ü The default risks of all terms of loan have to be minimizing in order to sustain in the
financial market. Because default risk leads the organization towards to bankrupt. UCBL
has to remain vigilant about this problem so that proactive strategies are taken to
minimize this problem if not elimination.
ü The payment scale for middle to lower employees must be reconsidered or the good and
efficient employees will look for employment somewhere else. If it happens, it will
greatly affect the management of the bank.
ü The economy of Bangladesh is not stable. The variation of economic situation may affect
the banking business.

Page-43
Chapter 06
Conclusion
Recommendation:
While workings at UCBL, there were certain things that came in front of my eyes which I have
mentioned in findings, I think UCBL should consider those criteria for the development of credit
management. Perhaps UCBL has its own options and strategy to follow in these issues, however
I am not fully acknowledged about those. Here are some recommendations as per my findings-

Ø The bank must analyze all evidences of mortgaged property: As title of mortgaged
properties may have complexity, so a comprehensive and accurate appraisal of the
property in every credit proposal of the bank is important and mandatory. No proposal
can be put on place unless there has been found a complete, accurate evaluation of
property. In order to safeguard the mortgage over the entire period of the advance, a
comprehensive view of the capital of borrower, adequacy, and nature of security should
be compliance with all regulatory/legal formalities and condition of all documentation. It
is absolute responsibility of the Credit Officer to ensure that all the necessary documents
are analyzed properly before the loan is placed for approval. On the other-hand, where
Loans/Advances/Credit facilities are granted against the guarantee of the third party, that
guarantor must be subject to the same credit assessment as made for the principal
borrower.
Ø Valuation task should be assigned to confident party: Sometimes the bank becomes
swindled by valuation party. So the bank must assign property valuation task to that kind
of confident party who strictly follows the terms and condition in evaluating proper value
of the property, assets as well as maintaining confidentiality. Enlisted Surveyor Company
approved by the bank should make valuation of property and properly assess the quality
and priority of the proposed security. The bank should keep a pleasant relationship with
valuation party in order to acquire proper valuation.
Ø Bank need to hire best lawyer to justify the mortgage land
Ø The bank should being independent from pressures: Credit proposals should not be
influenced by any political person whether it is the matter between bank and client.
Ø The bank must keep close follow up after the disbursement: The loan should be utilized
for the specified purpose for which it has been sanctioned. Furthermore, the bank must be
vigilant so that the disbursed funds for a particular purpose are not diverted elsewhere
without their knowledge.

Therefore, the bank must accept any difficulties and think of them as objective to pursue future
goals by solving the problems instead of blaming other factors and UCBL must be able to keep
on playing its important roles in our economy.
Conclusion:
United Commercial Bank has established credit relationship with many reputed multinational
companies, semi-government organization as its customer group ranges from individuals,
organizations and small businesses covering all sectors of Corporate and Retail businesses.
UCBL has aim to contribute in potential sectors like as agriculture, electronics, SME, healthcare
etc. by providing not only credit services but also taking essential steps to expand these sectors
through participating actively in economic development of the country.

UCBL will make a positive attempt to be more outward looking in their goals and emphasize on
the domestic scenario more closely and analyze any certain trends and strategies of their
competitors.
References:
Ø www.ucbl.com
Ø Annual report of UCBL
Ø UCBL official documents
Ø Some previous Internship report
Appendix
Corporate Information at a Glance:

Name United Commercial Bank Limited

Date of Incorporation 26 June, 1983
Commencement of Business 27 June, 1983
Registered Office Bulus Center, Plot – CWS – (A) – 1, Road No – 34,
Gulshan Avenue, Dhaka – 1212, Bangladesh
Date of Listing with DSE & CSE DSE, 30 November, 1986 & CSE – 15 November, 1995
Chairman Mr.M.A.Sabur
Managing Director Mr. Muhammed Ali
No. of Branches 158 and come soon to open Hemayetpur Branch
No. of ATM Booth 152+
No. of SME Centers 2
No. of Women’s Branches 1
Off-Shore Banking Unit 1
Auditors Hoda Vasi Chowdhury & Co. Chartered Accountants
Swift Code UCBL BDDH
Telephone No +88-02-55668070, +88-09611999999
E-mail [email protected]
Website www.ucbl.com
Fax +88-02-55668070-6000, +88-09611999911-520
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