A STUDY ON GENERAL BANKING & CREDIT MANAGEMENT SYSTEM OF JANATA BANK LIMITED: STUDY IN UNIVERSITY GRANTS COMMISSION BHABAN BRANCH(UGC BRANCH), DHAKA

Abstract

Financial institutions are very much essential for the overall development of a country. Especially banks play an important role in the field of promotion of capital, encouragement of entrepreneurship, generation of employment opportunities etc. So the purpose of this study is to assess the customer perception on general banking system and find the Credit management system (its outstanding, recovery, classified loans etc), approval and monitoring process of Janata Bank Limited. To fulfill the objectives of this report data were collected from both primary and secondary source. Collected information have then processed & compiled with the aid of MS Word, Excel & other related computer software.Major findings of this report are Janata Bank Limited has a significant role in long term project financing in both agriculture and industrial sectors. Again Janata Bank Limited has a deep concern for rural farmersMost of the loans that Janata Bank Limited distributes are as cash credit hypothecation and Janata Bank Limited emphasizes less on demand loan. Janata Bank Limited distributes loans without sufficient security in some cases. This is violation of the Bangladesh bank order. In many cases bank face this problem because bank’s credit officer fails to value collateral property. Proper valuation means collateral will exactly cover the risk of bad loan. Officials must do it with due care. The recovery performance of Janata Bank Limited is not in a satisfactory level at all and the position of those in that respect deteriorated heavily during last two phases. The recovery performance in agriculture is worse than in other sectors. On the other hand, as private sector banks distribute more loans on short term basis and relatively better than public sector. But if we compare it from the efficiency point, then it is clear that they are not still efficient in credit management as they are unable to recover half of their distributed loan in different sectors. During first phase 15.71% of the total loan of Janata Bank Limited became classified and this classified loan came down to 23% in the second phase. Janata Bank Limited does not keep enough provisions against classified loans and advances.Private sector banks are relatively efficient in processing and executing legal actions against defaulters for their nonpayment of loans and advances in due time that of public sector bank.