A Study in General Banking & Credit Management System of Janata Bank Limited

Abstract

n “Internship Program” course Students have to prepare an Internship Report at the end of the semester. The report is prepared on “General Banking &Credit Management System of Janata Bank Ltd” University Grants Commission Bhaban Branch (UGC Branch), Dhaka.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 secondary sources. 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 has a significant role in long term project financing in both agriculture and industrial sectors. Again Janata Bank has a deep concern for rural farmers. Most of the loans that Janata Bank distributes are as cash credit hypothecation and Janata Bank emphasizes l ess on demand loan. Janata Bank distribute 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 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. JanataBank 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.The overall credit activity of Janata Bank Limited is composed of corporate credit division and credit administration.They always trying to improve their credit policy for minimizing loss and maximizing profit and various measures are undertaken to develop the credit management system.