Introduction

The primary purpose of this report is to get an idea about the operations of Credit
Performance of Janata Bank Limited. Credit Performance plays an important role in the
balance of trade in our economy. In this regard Credit Performance of Bangladesh, Banks plays
an vital role. The word Bank refers to the financial institution, which deals with money
transaction.
This report is an attempt to reflect the position of Credit Performance of Janata Bank Limited
side by side Bangladesh.
Origin of the Report
BBA program is designed with an excellent combination of theoretical and practical aspects. As
the classroom discussion alone cannot make a student perfect in handling the real business
situation, so it is an opportunity for the students to know about real life situation through this
internship program. This internship program provides the students to link up their theoretical
knowledge with practical fields. In this connection, I was assigned to Janata Bank, Sheraton
Hotel Corporate Branch, Credit department for my practical orientation.
I am required to prepare an internship report under the supervision of our honorable teacher
Mahmood Osman Imam on Credit Performance analysis of Janata Bank Limited to conduct a
depth analysis on this subject matter. I have tried my level best to present my experience of the
practical orientation in this report.
Objectives of the report:
Determine the ways of measuring the creditworthiness of potential borrowers.
Assessing the performance of different types of Loan products.
Identification of weaknesses and problems regarding Credit management system.
Analyzing Loan disbursement and collection procedure as well as their effectiveness and
efficiency.
Assessing existing Loan innovation system and practices.
Scope of the report
The report intends to cover Janata Bank Limiteds company profile, historical background,
organizational overview, management, capital structure, products and functions regarding
social responsibilities performed by the bank.
Main focus will be given to Credit performance analysis.
Rationale of the study
Bangladesh is one of the developing country in the world. The economy of the country has a lot
left to be desired and there are lots of scopes for massive improvement. In an economy like
this, Credit Performance can play a vital role to improve the overall economic condition of the
country. The banks by playing the role of an intermediary can mobilize the excess fund of
surplus sectors to provide necessary finance, to those sectors, which are needed to promote for
the sound development of the economy.
This report is an effort to reflect a clear idea about the strategies, activities, and performance of
Bangladesh regarding Credit Performance Business.
Limitations
To prepare this report, I have faced some limitations, which are mentioned below.
Limitation of time: It was one of the main constraints that hindered to cover all aspects of the
study.
Lack of Secondary Information: The secondary source of information was not enough to
complete the report.
Limitation of the Scope: Some confidential information was not disclosed by various
personnel of their respective department.
Techniques of Analysis
Secondary Data will be collected from different sources. Then those data includes repayment
pattern, disbursement pattern, recovered amount, amount due to be recovered, loan overdue
amount of different types of loan will be collected. The necessary information need to be
collected to calculate Cost of Capital of the Branch.
Data Required
To prepare this report I have mainly focused on numerical data. I have also used theoretical
portion as reports demand. Because to analyze Credit Performance of a bank both theoretical
and technical knowledge are necessary. Then based on everything I have analyzed and made
conclusion.


Sources of Data
Sample Information
Information is mainly collected from annual report of Janata Bank Limited, annual meeting
report, brochures and web sites. The information incorporated in this report is also collected
both from the primary sources and as well as from the secondary sources.
Primary Source of Data
I collect data directly from the practical field of different sectors that is Janata Bank head office.
This data is called primary source of data.
Secondary Sources of Data
The secondary data is also collected from annual report, different conceptual matters, internet
and different articles published in different sessions.
Secondary Sources are:
Annual Reports of different years of Janata Bank Limited.
Annual Report of Bangladesh Bank of 2009.
Other published documents of Janata Bank Limited.
Respective sectors of foreign department of head office
Internal Reports
Banks Record Books.
Different types of manuals related to banking, its credit policy etc.
1 Organizational Profile
Historical Background of the organization
Janata Bank Limited is the 2
nd
largest state owned commercial bank in Bangladesh. Immediately
after the emergence of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank
Limited were named as Janata Bank. It was established under the Bangladesh Bank order 1972.
During the privatization process it was incorporated as a public Limited Company on 21, May 07
vide certificate of incorporation No-C66933(4425)07. The Bank has taken the over the business
of Janata Bank at a purchase consideration of Tk. 2593.90 million as a going concern through a
vendor agreement signed between the Ministry of Finance of the Peoples Republic of
Bangladesh and the Board of Directors on behalf of Janata Bank Limited on 15
th
November
2007. Janata Bank Limited operates through 851 branches including 4 overseas branches at
United Arab Emirates and a subsidiary company named Janata Exchange Company Srl in Italy. It
is linked 1202 foreign correspondents all over the world.
Objectives of the organization
Mission:
To be recognized as the leading commercial bank in the Bangladesh market providing retail and
corporate banking services and as a trusted and respected partner in the social and economic
development program of our nation.
Vision:
To become effective largest commercial bank in Bangladesh to support socio-economic
development of the country and to be a leading bank in South-Asia.
Services of the organization
Besides normal banking operation, Janata Bank Limited offers special services to a large
number of clients/agencies throughout the country. Under the network of utility service,
customers of different govt. organizations, corporate bodies, local bodies, educational
institutions, students, etc are continuously getting benefits from the Bank. Janata Bank
Limiteds utility services are:
Bills Collection:
Gas bills of Titas, Bakhrabad and Jalalabad Gas Transmission and Distribution Companies.
Electricity bills of Dhaka Electricity Supply Authority, Dhaka Electricity Company,
Bangladesh Power Development Board and Rural Electrification Board.
Telephone bills of Telegraph and Telephone Board.
Water/Sewerage bills of Water and Sewerage Authority.
Municipal holding tax of City Corporation/ Municipalities.
A pilot scheme is underway to provide personalized services to our clients.
Payments made on behalf of Govt.
Non- Govt. teachers salaries
Girl Students scholarship/stipend & Primary Student Stipend.
Army pension
Widows, divorcees and destitute Women Allowances
Old-age Allowances
Food procurement Bills
As per decision of the govt. 46 (Forty Six) branches of our bank (40 branches in Dhaka city,
1(one) branch in N.gonj city and 5(five) branches in Chittagong city) are involved to receive the
all utility bills in a same station from January04.
Services Areas
Branches
There are 851 branches of Janata Bank Limited in home and abroad. Among them 443 branches
are situated in urban areas including four foreign branches and 408 branches are in rural areas.
And all foreign branches are situated in United Arab Emirates.
Division Town Rural zone Total
Dhaka 162 82 244
Chittagong 100 88 188
Rajshahi 80 131 211
Sylhet 22 36 58
Khulna 75 71 146
Overseas 4 0 4
Total 443 408 851
Source: Annual Meeting Report 2011
Overseas Branches:
SL.No: City No of Branch Status
01. Abu Dhabi 01 Foreign
02. Al-Ain 01 Foreign
03. Sharjah 01 Foreign
04. Dubai 01 Foreign
Total 04
Source: Annual Meeting Report 2011



Organizational structure
Management Aspect
Like every other business organization, the top management makes all the major decisions of
Janata Bank. The board of directors being at the highest level of organizational structure plays
an important role in policy formulation, but it is not directly concerned with the day-day
operations of the bank. They have delegated this duty to the management committee. The
board mainly establishes the objectives and policies of the bank.
One chairman, eleven directors, one CEO & MD and one company secretary are consist of
Board of Directors of Janata Bank Limited.
Mid and lower level employees get the direction and instruction from the Board of Directors
about the duties and tasks they have to perform. The chief executive provides the guideline to
the managers and employees, but delegates responsibility for determining how tasks and goals
are to be accomplished.
Future plans of the organization
1. To involve in export activities in a large scale by maintaining good communication with
various parties.
2. To collect new members in FY2011 to start export related new business.
3. At least 2 new AD branch will open in FY2011.
4. More facilities will provide to the exporters on the basis of export priority.
5. New Credit Product will start in a large scale by name of BMRE Loan for export project
to expand factory, import machineries, purchase transport among exiting parties.
6. To take the competitive position charge, decrease commission and other facilities will
continue.
7. To increase export business monitoring system has made stronger in head office and
respective branches.
8. To increase export business has appointed sufficient manpower, providing special
services and related different training program of officers has been will be started.
Loans & Credit Department:
Credit decisions are heart of all credit works. Generally branch manager and the credit in-
charge of a branch are held responsible for appraising of a loan proposal. The customer request
for credit limit and the credit officer prepares a credit memo and send it to the head office,
credit division. After taking all the relevant information from the branch the head office credit
division sent the credit memo to the credit committee. Credit committee of JBL is comprised of
Managing Director and other top-level executives, that is, DGMs and EVPs. If credit committee
is convinced about the merit of the proposal then it is sent the broad of directors. The board is
final authority to approve or decline a proposal. The whole process takes a month or more.
Credit Evaluation Principles
Some principles or standards of lending are maintained in approving loans in order to keep
credit risk to a minimum level as well as for successful banking business. The main principles
of lending are given below:
Liquidity:
Liquidity means the availability of bank funds on short notice. The liquidity of an advance
means it repayment on demand on due date or after a short notice. Therefore, the banks must
have to maintain sufficient liquidity to repay its depositors and trade off between the liquidity
and profitability is must.
Safety:
Safety means the assurance of repayment of distributed loans. Bank is in business to make
money but safety should never be sacrificed for profitability, To ensure the safety of loan. The
borrower should be chosen carefully. He should be a person of good character & capacity as
well as bank must have to maintain eligible number of security from borrower.
Profitability:
Banking is a business aiming at earning a good profit. The difference between the interest
received on advances and the interest paid on deposit constitutes a major portion of the bank
income, Besides, foreign exchange business is also highly remunerative. The bank will not enter
into a transaction unless a fair return from it is assured.
Intent:
Banks sanction loans for productive purpose. No advances will be made by bank for
unproductive purposes though the borrower may be free from all risks.
Security:
The security offered for an advance is an insurance to fall bank upon in cases of need. Security
serves as a safety value for an unexpected emergency. Since risk factors are involved, security
coverage has to be taken before a lending.
National interest:
Banking industry has significant role to play in the economic development of a country. The
bank would lend if the purpose of the advances can contribute more to the overall economic
development of the country.
Pre-disbursement Compliance
When the credit proposal are approved the credit officer must have to be ensured that the
disbursement of the credit facilities must comply with the directions written in the credit policy
and circular made by time to time along with checking all the following terms and conditions.
Steps Involved in Credit Processing
Application for loan:
Applicant applies for the loan in the prescribed form of bank. The purpose of this forms is to
eliminate the unwanted borrowers at the first sight and select those who have the potential to
utilize the credit and pay it back in due time.
Getting Credit information:
Then the bank collects credit information about the borrower from the following sources:
1. Personal Investigation
2. Confidential report from other bank/ Head office/Branch/Chamber of commerce
3. CIB report from central bank
Scrutinizing and Investigation:
Bank then starts examination that whether the loan applied for is complying with its lending
policy. If comply, than it examines the documents submitted and the credit worthiness. Credit
worthiness analysis, ie. analysis of financial conditions of the loan applicant are very important.
Then bank goes for Lending Risk Analysis (LRA) and spreadsheet analysis, which are recently
introduced by Bangladesh Bank. According to Bangladesh Bank rule, LRA and SA is must for the
loan exceeding Dhaka core.
If these two analyses reflect favorable condition and documents submitted for the loan appears
to be satisfactory then, bank goes for further action.
Existing process of handling loans:
The process of sanctioning loans is as follows:
The Cs of Good & Bad Loan:
The Branch manager of DBL try to judge the possible client based on some criteria. These
criteria are called the Cs of good and bad loans. These Cs are described below:
Character
The outcome of analyzing the character is to have overall idea about the integrity, experience,
and business sense of the borrower. Two variables; Interaction/interview, and Market Research
are used to analyze the character of the borrower.
1. Interaction/interview: the indicators are
a) Prompt and consistent information supply, information given has not been found false
(Willingness to give information).
b) CIB also reveals business character.
c) Willingness to give owns stake/equity & collateral to cover.
d) Tax payer.
2. Market Research:
a) Information on business is verified.
b) Dealing with supplier and or customer as supplier is also a kind of lender; the payment
character can also be verified.
Capital
For identifying the capital invested in the business can be disclosed using the following
indicators.
a) Financial Statements
b) Receivable, Payable, statements to practically assess the business positions. Net worth
through financial statements or from declaration of Assets & Liabilities.
Capacity (Competence)
Capability of the borrower in running the business is highly emphasized in the time of selecting
a good borrower. As the management of the business is the sole authority to run the business
that is use the fund efficiently, effectively and profitably. The indicators help to identify the
capacity of the borrower.
a) Entrepreneurship skills i.e. risk taking attitude shown by equity mobilization.
b) Management competencies both marketing and products detail, ability to take decision.
c) Resilience or shock absorption: Connection, Back up (if first time falls second lines come to
help.)
Collateral
Make sure that there is a second way out of a credit, but do not allow that to drive the
credit decision.
Cash Follow:
Cash flow is the vital factor that is used to identify whether the borrower will have enough cash
to repay the loan or advance. Cash keeps the liquidity to ensure repayment. The relationship
managers try to identify the annual cash flow from the submitted statements.
Conditions:
Understanding the business and economic conditions can and will change after the loan is
made.
Complacency:
Do not rely on past history to continue. Stay alert to what can go wrong in any loan.
Carelessness:
Remember that documentation, follow-up and consistent monitoring are essential to high
quality loan portfolios.
Communication:
Share credit objectives and credit decision making both vertically and laterally within the
bank.
Contingencies:
Make sure that you understand the risks, particularly the downside possibilities and that you
structure and price the loan consistently with that understanding.
Competition:
Do not get swept away by what others are doing.
Credit Query:
The loans and advance department gets a form filled up by the party seeking a lot of
information.
The officer of Loan Administration must collect the acceptance of the customers of the
terms and conditions on the duplicate copy of the sanctioned advice.
They will thoroughly examine and ensure that the subject credit facility does not contradict
to any law, rules and regulation of the country, Bangladesh Bank and
Deed of the Mortgage and power of the Attorney to be drafted and executed under the
Supervision of the Banks Legal Advisor.
Lawyers certificate to the effect that all the legal formalities (Equitable/ Registered
Mortgaged) has been properly created on the land and building in favor of the bank & bank
has acquired the effective title of the property.
Registered power of attorney has been collected form the borrower (contractor) assigning
the work order favoring the JBL and the power of attorney has been registered with the work
order given agency and they have agreed that they will issue all the cheques favoring JBL.
The legal documents of the vehicle have been obtained.
Collection of the satisfaction certificate in respect of all the documents both legal and
banking from the lawyer.
Entry has been made in the Safe -in and Safe-out register and the documents are
preserved.
After being satisfied all the above terms and conditions the credit in-charge will disburse the
loan amount to the client.
Documentation of the Loan:
Documentation is obtaining such agreement where all the terms and condition and securities
are written and signed by the borrower. It specifies rights and liabilities of both the banker and
the borrower. In documentation each type of advances requires a different set of documents. It
also differs with the nature of securities. The documents should be stamped according to the
stamp Act. There are no hard and fast rules of documentation and it varies from bank to bank.
Generally, the documents are taken in the case of a secured advance by JBL:
i. Demand promissory note: Here the borrower promises to pay the loan as and when demand
by bank to repay the loan.
ii. Letter of arrangement.
iii. Letter of continuity.
iv. Letter of hypothecation of goods and capital machinery.
v. Stock report: This report is used for OD and CC. In this report, information about the quality
and quantity of goods hypothecated is furnished.
vi. Memorandum of deposit of title deed of property duly signed by the owners of the property
with resolution of Board of Directors of the company owning the landed.
vii. Personal guarantee of the owners of the property.
viii. Guarantee of all the directors of the company.
ix. Resolution of the board of directors to borrow fund to execute documents and completes
other formalities
x. Form no. XVII/XIX for filling charges with the register of joint stock companies under relevant
section.
xi. Letter of Revival
xii. Letter of lien for advance against FDR.
Loans and Credit Facilities:
Credit Facilities and Program
General Credit Line:
v The main focus of Janata Bank Limited Credit Line/Program is financing business, trade
and industrial activities through an effective delivery system.
v Janata Bank Limited offers credit to almost all sectors of commercial activities having
productive purpose.
v The loan portfolio of the Bank encompasses a wide range of credit programs covering
about 200 items.
v Credit is also offered to 15 (fifteen) thrust sectors, as earmarked by the Government., at a
reduced interest rate to develop frontier industries.
v Credit facilities are offered to individuals, businessmen, small and big business houses,
traders, manufactures, corporate bodies, etc.
v Loan is provided to the rural people for agricultural production and other off-farm
activities.
v Loan pricing system is customer friendly.
v Prime customers enjoy prime rate in lending and other services.
v Quick appreciation, appraisal, decision and disbursement are ensured.
v Credit facilities are extended as per guide-lines of Bangladesh Bank (Central Bank of
Bangladesh) and operational procedures of the Bank.v This rate may change from time to
time depending on the level of competition in the financial sector.
Rural Banking Credit Program:
A vast majority of the Bangladeshis live in the rural areas and their main source of income is
agriculture and agro-business. Janata Bank Limited has opened branches in rural areas to cater
to the banking needs of rural people. Apart from accepting deposits from the rich and
moderately well-off villagers, Janata Bank Limited encourages the poor people to make small
savings through different mechanisms.
So far lending in rural areas is concerned, Janata Bank Limited has been financing agricultural
production and poverty alleviation programs since 1977. It also lends to the poor landless so
that they can make a living. The average loan size is about Taka 20,000.00 (around US$ 285).

1.
Special Agricultural Credit program/ short
term crop production loan
2.
Horticulture development (cultivation of
banana, betel leaf, pineapple etc.)
3. Fish/ Shrimp production:-

(a) Fishery loan program
(b)
Credit program for fish cultivator selected by
Directorate of Fisheries
(c) Shrimp culture credit program
4. Irrigation and agricultural equipment
Objectives:
v To increase agricultural production and improvement its quality.
v To gear up socio-economic activities among rural people.
v To create employment opportunities among rural people through providing economic
support.
v Creating confidence among the beneficiaries on institutional credit and their access to
improved production practices / activities.
v To build up asset by creating saving habit among the rural population.
v Poverty reduction.
The main features of the major agricultural / rural credit programmes are narrated below:
1. Special agricultural credit program / Short term crop production loan programme:
01. Purpose of loan : Sanctioning of loan to farmers for crop production.
02. Area of operation : Unions allocated by Bangladesh Bank under Lead Bank System.
03. Eligibility of loanee : Farmer possessing 16
1
/
2
- 250 decimals of cultivable land or share
croppers.
04. Sanctioning Authority : Branch Manager is sanctioning loan as per credit norms.
05. Security : Crop hypothecation and personal guarantee of the borrowers.
06. Rate of interest : 8%.
07. Duration of loan : 6 months to 9 months, Maximum 12 months.
08. Mode of disbursement : In cash in a single installment.
09. Repayment of loan : Repayable at a time after harvesting and marketing of crops.
2. Horticulture development loan programme:
01. Purpose of loan : To extend financial help to the farmers who are interested to cultivate
betel-leaf, banana, pine apple etc.
02. Area of operation : Allocated unions under Lead Bank System
03. Eligibility of loanee : Genuine farmer.
04. Sanctioning Authority Branch Manager is sanctioning loan as per credit norms.
05. Security : Hypothecation of produced crops and personal guarantee.
06. Rate of interest : 8%.
07. Duration of loan : Maximum 1
1
/
2
year from the date of disbursement.
08. Mode of
disbursement
: Loan is disbursed in cash in a single or more than one installment.
09. Repayment of loan : Repayable in weekly / monthly / a single installment after crop
harvesting and marketing
3 (a). Fishery Loan Programme:
01. Purpose of loan
:To increase fish production in pond and to create employment opportunity for pond owners
and lease holders by providing credit for pond re-excavation and fish cultivation.02.Area of
operation :Allocated unions under Lead Bank System.03.Eligibility of loanee :a) Pond owner
b) Lease holder of pond.04.Security :Pond, in case of pond owner and other properties in case
of lease holder are being taken as a registered mortgage.05.Rate of interest :8%.06.Duration of
loan :4
1
/
2
years07.Mode of disbursement :Loan is disbursed in installments.08.Repayment of
loan :Entire amount of loan with interest is repayable by 4 equal installments. First installment
is due for recovery after 18 months from the date of disbursement.
3. (b) Credit programme for fish cultivator selected by the Directorate of Fisheries:
Fishery resource is an important sector in our economy. It can play a vital role in creating
employment opportunity for reduction of poverty. A memorandum of understanding has been
signed between Directorate of fisheries and Janata Bank Limited. As per memorandum bank is
financing fish cultivators selected by Directorate of Fisheries. Under this programme, no
collateral security is required up to Tk.0.05 million of loan amount.Purpose of the loan & rate
of interest is same as that of fishery loan programme.
3. (c) Shrimp Culture Credit Programme:
01. Purpose of loan
:To encourage the shrimp cultivator to produce more shrimps by utilizing modern production
practices in order to earn more foreign exchange.02.Eligibility of loanee :Individual / Group /
Cooperative society are eligible for loan.03.Security :Hypothecation of produced shrimp.
Collateral security such as land & building are being taken as a registered mortgage.04.Rate of
interest :8%.05.Duration of loan :10 months.06.Mode of disbursement :(a) Loan is disbursed in
2/3 installments from January to March.
(b) Cash credit (C/C) is disbursed as per usual practice of bank
for the10 (ten) acres of land or above.07.Repayment of loan :(a) Loan is repaid by 4 equal
monthly installments from July to October.
(b) Cash credit is adjustable 3(three) times within 1(one) year.
4. Irrigation & Agricultural Equipment Credit Programme.
01. Purpose of loan : Loan is given for the purchase of irrigation equipments i.e Shallow Tube
Well (STW), Low Lift Pump(LLP), Deep Tube Well (DTW) etc & Agriculture
equipment i.e Tractor, Power Tiller etc. to increase agricultural
production.
02. Area of operation : Allocated unions under Lead Bank. System.
03. Eligibility of loanee : Owner of at least 0.5 acre of land in case of irrigation equipment loan and
genuine farmer in case of agricultural equipment loan are eligible.
04. Security : a) Hypothecation of equipments purchased by loan money.
b) Registered mortgage of land & building which is equivalent to loan
amount.
05. Rate of interest : 8%
06. Mode of
disbursement
: Loan is disbursed to the supplier through Pay-order against bill.
07. Repayment of loan : Entire loan amount with interest is repayable by 11 equal half yearly
installments within 6(six) years with a grace period of 6(six) months.
Our banks position on Retail Customer Department-3 (RCD-3) / Retail Customer
Department-4 (RCD-4) as on 30-09-2008 is as under :-
No. of Borrowers covered : 5,81,801
No. of Branches involved in Micro-credit : 844
No. of Branches dealing with crop loan : 555
Range of interest rate : 2% to 14%
No. of Programmes Financed : 40
Nos. of Micro-Credit Programes : 29
Micro Enterprise and Special Credit:
The Micro Enterprise & Special Program Division (MESPD) is responsible for implementing of (i)
Micro Credit Programs related with the poverty reduction, (ii) Special credit programs related
with employment generation and (iii) Financing of agro-based industries.
Bank has different micro-credit programs of its own & in collaboration with other
agencies. For successful implementation of these credit programs specially poverty reduction
credit programs it requires close supervision and monitoring. Considering Banks
manpower/field staff it is not always possible to ensure intensive supervision at the grass root
level. To make the micro credit programs time & cost effective bank has initiated linkage
program using intermediaries/collaborating agencies (GOs & NGOs). Collaborating agencies are
responsible for organizing the target groups (conducting survey, formation of groups, providing
training etc.) including supervision and recovery of credit .
The main features of different micro-credit programs are narrated below:-
1. Diversified credit program -1992.
Objectives : For creation of self employment & poverty reduction.
Area of
operation
: Throughout the country.
Activities &
Appraisal
:
(a) Initially 45 IGAs. Presently any viable IGAs.
(b) Production plan/appraisal is prepared on the basis of
activities and market rate.
(c) Loans are determined on the basis of credit
norms/ceiling given by Head Office or present market
rate subject to the prior approval from the concerned
authority.
Associate
agencies
: Banks own program.
Approach : Individual.
Term : ST & MT.
Security :
(a) Up to Tk.50,000/-, no collateral is required
(b) Personal guarantee in favour of loanee from an
acceptable person.
(c) Hypothecation of goods ( If applicable).
Disbursement :
Disbursement is made in cash by installments. Purchase
receipts/documents to be kept in respective loan file.
Repayment :
Repayable by weekly/fortnightly/monthly
installment. Repayment period and mode of repayment
is fixed depending on the nature of activities &
generation of income
Rate of interest : 11%
Delegation :
Delegation of business powers as per RCD circular no-
281 dated: 29-06-2004
(in lacs)

Branch Managers RM AGM DGM GM

Gr-4 Gr-3 Gr-2 Gr-1


0.20 0.30 0.40 0.50 2.00 3.00 4.00 5.00
Related
Circulars/Letters
: RCD- 215 dt: 10-04-1993 & 281 dt: 29-06-2004

Letter No: cFwe/cwj-wWwewc(mKj Aj)/Avwkl/95/4399
Zvs-03-01-95Bs Ges cFwe /eaK-wbqgvPvi/Avwkl/96/7
Zvs-06-01-96 Bs|
2.Small Farmers & Landless Labourers Development Project(SFDP)-1976
Objectives : Employment generation of the poor.
Collaborating
agency
:
Bangladesh Academy for Rural
Development (BARD),comilla.
Activities : All types of IGAs.
Approach : Group. A group consists of 7-10 members.
Term : ST.
Security :
a) Hypothecation of goods.
b) Group guarantee.
c) Lien of group savings.
Rate of interest : 11%
Disbursement :
Disbursement is made in cash or through groups savings
account.
Repayment :
Loan is repayable in installments (weekly/monthly etc.)
It depends on the nature and purpose of loan.
Delegation : (Fig. in Lac.)

Branch RM AGM DGM GM DMD MD

Max.0.80
per
group
2.00 3.00 4.00 5.00 5.00 5.00
Related
Circular/letter
:
Banking plan/work manual Ges c bs Fwe-
4/GmGdwWwc Kvt wbt/98 Zvs-16-09-98B
3.Swanirvar Credit Scheme -1978
Collaborating
agency
: Swanirvar Bangladesh
Area of operation
:
:
247 unions of 87 Upazillas. 167 branches
are designated.
Major activities
under credit :
: Off-farm IGAs..
Approach : : Group. Each group consists of 5 members.
Appraisal : :
Amount of loan is determined on the basis of
activities & prevailing market rate. ( Maximum
Tk.10,000/- per member).
Security : :
a) Hypothecation of goods.
b) Group guarantee.
c) Lien of Group savings.
Rate of Interest : : 11%
Disbursement : : Disbursement is made in cash.
Repayment : :
Loan is repayable with interest by 52 weekly
installments.
Delegation : :
Concerned Branch Managers sanction loan subject to
the recommendation of credit supervisor/unit
manager of Swanirvar Bangladesh.
Related
circular/letter :
: As per work manual of Swanirvar credit program.
4. Co-operative credit for rural poor-1980
Collaborating
agency
: BRDB(Bangladesh Rural Development Board).
Area of operation : Noakhali, Luxmipur & Feni District.
Objectives :
Financing to the co-operative members of primary
societies ( eg. Farmers society, Womens society
etc.) under 2-tier co- operative.
Major activities
under credit
:
Crop & other different production oriented income
generating activities.
Proposal :
Co-operative members apply for loan to the
concerned primary society. Primary society
consolidates the loan applications and applies for loan
to respective UCCA(Upazilla Central Co-operative
Association). UCCA consolidates the society wise loan
requirement and finally the UCCA applies for loan to
the bank.
Appraisal :
Crop- as per credit norms of SACP & other short term
credit- on the basis of production plan prepared as
per market price.
Irrigation & Ag.Implements- on the basis of
actual market price. Maximum 80% loan is
sanctioned. i.e. minimum down payment is 20%.
Security :
a) Members of managing committee of UCCA are to
give guarantee individually and jointly.
b) Lien of Group share/savings.
Disbursement :
Disbursement is made amongst the members of the
primary societies in cash in presence of Upazilla credit
committee(consists of bank, UCCA & primary society
representative)
Delegation :
Regional Head- upto Tk.50.00Lac/UCCA & Area Head-
up to Tk. 1.00 crore/UCCA for single instance.
Reference
circular/letter
: Agreement between Janata Bank Limited & BRDB
7. Ghoroa Prokalpa/ Family based micro credit:
Target Group :
Rural poor people male or female and should be
capable to conduct the activity for which the credit to
be applied for.
Area of
operation
: Unions under SACP(approved by H.O.).
Objectives :
(a) Accommodating maximum rural dwellers in
production/ income generating activities.
(b) Making each household a Production Farm. &
thereby to make them economically sustainable.
Eligibility :
(a) Permanent inhabitant of the allotted union.
(b) Applicant must be capable and keen to conduct the
concerned activity.
(c) Head of the family will execute the charge
documents and will provide guarantee on behalf of the
loanee members of the family.
Proposal :
(a) Any one can apply for loan from the
command area of branch.
(b) Loan application to be duly & correctly filled in
along with the production plan ( in a prescribed form).
(c) By conducting survey group pass book to be issued
for the eligible family members
Appraisal :
(a) Loans are determined on the basis of credit
norms/ceiling given by Head Office.
(b) Production plan/ appraisal is prepared on the basis
of activities and market rate.
Sanction :
Loans are sanctioned for different income generating
activities.
Loan size :
Maximum TK.40,000/- per family. Loan size depends
on the nature of loan and varies from purpose to
purpose.
Security :
(a) Hypothecation of the goods against which loan has
been given.
(c) Under this program security has not been given priority. Importance has been given
on close supervision , monitoring and evaluation. Disbursement:Disbursement is made in cash
or kind through single or 2 installments.
In kind, through payment order to supplier. Purchase receipts/ documents to be kept in
respective loan file. Repayment:Repayment by fortnightly/ monthly/ half yearly installment.
Mode of repayment depends on nature and purpose of credit. Documentation:D.P. note and
other charge documents. Delegation:Branch Managers can sanction loan up to maximum
40,000/- per family. Reference letter:Fwe-4/ wewbqvM cwiKbv/ wmB/2000 ZvwiLt
24/07/2000 Bs|
Entrepreneurship development Programs
1. Women Entrepreneur Development Credit program.
Target Group :
Prospective women entrepreneurs those who are
(a) producing/marketing goods by themselves or
through others.
(b) eager to utilize their educational/professional
experience and like to set up new projects or BMRE
of existing projects and need working capital.
Purpose of loan :
Dress making, Bed cover, Bed sheet, Pillow cover,
Embroidery, Block, Screen Printing, Doll making,
Artificial flower making, Gift item, Small printing
industry, Foods processing (Jam, Jelly etc.), Spices
processing, Store running, Fast food item, Leather
products, Jute products, Bamboo and cane
products, Plastic products, Pottery, Service-
oriented Tele-Phone-Fax-e-mail & computer
service, Day-care centre, Nursing home, Diagnostic
centre, Clinic set-up and running etc.
Eligibility of clients :
The women entrepreneurs asking for loan should
have minimum literacy. She should be agile,
having will power & innovation traits. Women who
have need based/job specific training & skill.
Appraisal :
On receipt of proposal, Branch manager makes spot
verification and verifies the genuineness and credit
need of the entrepreneur.
Sanction/Delegation :
Head Office and field level sanction the loan on the
basis of market price, P.P and equity of the
entrepreneur. Minimum equity/margin is 25%
Security :
Personal guarantee of the applicant, Personal
guarantee of the applicants husband/father or
earning members from any dears & near ones,
guarantee from any known & highly acclaimed
person of the society/organization to be obtained.
Disbursement :
Disbursement is made in cash. But in case of
procurement of machineries/equipments
disbursement is to be made through pay order to
the supplier of goods.
Delegation : Sanction power lies with Head Office and field level.
Rate of interest : 10%
Repayment :
To be repaid in three years on monthly installment
basis with a grace period of 3 months. For working
capital, C.C. loan procedure is being followed.
Reference
circular/letter
: -
2.Cyber Cafe
Target Group : Trained youth in computer technology.
Area of
operation
:
10 designated branches of Dhaka city and
corporate branches-I & II of Chittagong, Khulna,
Rajshahi, sylhet and Barisal divisional head- quarters.
Objectives :
(1) To create employment opportunity for the
unemployed trained youth and expansion of
information technology.
(2) To purchase computer, server, networking,
Internet connection, Printer, Scanner, CD writer, UPS,
Decoration etc.
Eligibility :
(a) Applicants must have minimum diploma degree in
computer science or company formed by them.
(b) Companies having prior experiences in cyber caf
business .
(c) Concerned business at project area to be verified
before loan sanction/disbursement. In regards cyber
cafs work station appraisal of viability to be
considered.
(d) Age Limit: Minimum-25 yrs
Maximum- 65 yrs
(e) The applicant who can repay monthly loan
installment excepting the 1/3 of his monthly income.
Proposal :
Loan proposal has to be submitted with detailed
production plan.
Appraisal :
On receipt of proposal, Branch manager makes spot
verification and verifies the genuineness & credit need
of the applicants.
Sanction :
Head Office sanctions the loan for expansion & setting
up of cyber caf (for purchase and installation of
Computer, Server, Net working, Internet connection,
Printer, Scanner, UPS & cost of decoration etc.).
Minimum equity/margin is 40%.
Security :
(a) Loans up to Tk. 3.00 Lac, no collateral is required
and above Tk. 3.00 Lac collateral is required (1.5 times
of loan).
(b) In case of no collateral , advance dated cheques
(one for each installment and additional one) are to
be taken.
(c) Hypothecation of computer and all other
equipments
(d) In case of no collateral security, 3
rd
person
guarantee is required.
Documentation : D.P note & other charge documents.
Disbursement :
Disbursement is to be made in cash by installments.
Purchase voucher/receipts to be kept in respective
loan file.
Delegation : Sanction power lies with Head Office

Designation
Delegation
of power without
collateral
Delegation of
power with
collateral

MD 3.00 Lacs 10.00 Lacs

DMD 3.00 Lacs 7.00 Lacs

GM 3.00 Lacs 5.00 Lacs
Rate of interest : 12%
Repayment :
To be repaid in 36 monthly installments, starting next
month from disbursement.
Reference
circular/letter
: RCD No. 287 dt: 30/06/2005
3.Doctors Loan Scheme:
Target Group :
MBBS or its equivalent degree holders registered
Doctors like Medical Practitioners, Eye Specialist,
Cardiologists, Surgeons, Dentists etc, any group of
doctors or any institution/company formed by the
doctors may apply for availing this loan in the banks
prescribed form.
Area of
operation
:
(a) All branches of divisional head quarters
(b) All corporate branches-I & II
(c) All main branches of district towns.
Objectives :
(a) Inducing health services through all over the
country.
(b) To create employment opportunity of Doctors
.
(c) Making Chamber and purchase of required
machineries and equipments.
Eligibility :
(a) The aforesaid categorized doctors must possess
valid approval or license for general practices from
the competent authority.
(b) Those doctors who are not fully engaged may get
preference for enjoying this new facility.
(c) Age Limit: Minimum-25 yrs
Maximum- 65 yrs
(d) The doctors who can repay monthly loan
installment excepting the 1/3 of his monthly income.
(e) Experience: 2 yrs.
Proposal :
Loan proposal has to be submitted with detailed
production plan.
Appraisal :
On receipt of proposal, Branch manager makes spot
verification and verifies the genuineness and credit
need of the applicants.
Debt-Equity
Ratio
: 80:20(Minimum).
Security :
(a) In case of no collateral security, advance dated
cheques (one for each installment and additional
one) are to be taken.
(b) Guarantee from the person acceptable to bank to
be obtained in case of loan without collateral/Original
certificate of degree
(c) Personal guarantee of borrowers
husband/wife/parents/mother/father/adult children
to be obtained.
(c) Hypo. of all furniture & machineries of chamber.
(d) Original copy of license of general practitioner to
be obtained.
(e) In case of group loan, one person will give
guarantee for another.
(f) Having been verified certificate/license/guarantee
submitted by applicants carefully, these to be
obtained.
(g) The equipment purchased shall duly be insured
covering all risks.
(h) Personal guarantee of borrowers
husband/wife/parents/adult children to be obtained.
(i) Encashable securities equitable to loan or mortgage
of landed property (1.3 times of loan) to be obtained.
Sanction :
Loans are sanctioned on the basis of production plan
at field level and Head Office as per delegation.
Documentation : D.P note and other charge documents.
Disbursement :
Disbursement is to be made in cash by installments.
Purchase voucher/receipts to be kept in respective
loan file.
Delegation :
Designation
Delegation of Power

Without
collateral
With collateral

MD 5.00 lac Taka 10.00 Lac Taka

DMD 4.00 ,, 8.00 ,,

GM 3.00 ,, 6.00 ,,

DGM 2.00 ,, 4.00 ,,

AGM(Corp.2, Regional
Office)
1.00 ,, 2.00 ,,
Rate of interest : 13%
Repayment :
To be repaid in 5 years in 57 monthly installment with
a grace period of 3 months.
Reference
circular/letter
: RCD No. 287 dt: 30/06/2005
4.Small business development loan scheme
Target Group :
Those who are running the business by purchasing
shops possession or renting for a specific time.
Area of
operation
:
Corporate branches-I & II. Besides these, all branches
of divisional and old districts towns and main
branches of new districts towns .
Objectives :
Expansion of existing shop & providing term
loan/working capital to existing shop
Eligibility :
Those unemployed educated youth who have no
ability to give collateral but involved in businesses
such as all types of handicrafts, book, crokeries, all
kinds of furniture, grocery & stationery shops,
departmental store or any other income generating
activities.
Proposal :
Loan proposal has to be submitted with detailed
production plan.
Appraisal :
On receipt of proposal, Branch manager makes spot
verification and verifies the genuineness and credit
need of the applicants.
Sanction :
Loans are sanctioned on the basis of production plan
at Head Office level as per delegation.
Security :
(a) Loans up to 5.00 Lac, no collateral is required in
both term loan & working capital. Up to maximum Tk.
25.00 Lac, collateral is required in both term loan &
working capital (1.5 times of loan).
(b) In case of no collateral, 3
rd
person guarantee is
required.
(c) Shops possession right/ rental agreement to be
obtained with consent letter of house/shops owner.
(d) In case of group loan, one person will give
guarantee for another.
Debt-Equity
Ratio
: 70:30
Documentation : D.P. note and other charge documents.
Disbursement : Disbursement is to be made in cash by installments.
Purchase voucher/receipts to be kept in respective
loan file.
Repayment :
To be repaid in 5 years in 60 monthly installment in
case of term loan. For working capital C.C. loan
procedure is being followed.
Rate of interest : 11%
Delegation : Sanction power lies with Head Office.

With
Collateral
Without
Collateral

(a) MD :
25.00 Lac
Taka
5.00 Lac Taka

(b) DMD :
15.00 Lac
Taka
4.00 Lac Taka

(c) GM (HO/DO) :
10.00 Lac
Taka
3.00 Lac Taka

(d)
DGM
(AO/RO/Corp.-1)
: 2.00 Lac Taka -

(e)
DGM
(AO/RO/Corp.-1)
: 1.00 Lac Taka -
Major activities
under loan
:
Handicrafts, Book, Crokeries, All kinds of furniture,
Stationary shop , departmental store or any other
income generating activities.
Reference
circular/letter
:
RCD Cir. No.280 dt: 17/06/2004, 07/08 dt. 12.02.08
Letter No.GgBGGmwcwW/z` eemvqx
Dbqb/2004 ZvwiLt 04/08/2004Bs|
Special Credit Program:
1.Seed Development Programme
Target Group : Farmers Seed Company (FSC).
Area of
operation
:
FSC are located in the following 10 districts:
Gopalgong, Naogaon, Bhola, Sherepur, Maulvibazar,
Dinajpur, Chuadanga, Jhenaidah, Patuakhali and Cox,s
bazar.
Objectives :
To extend loan to farmers seed company for
procurement, processing & marketing quality seeds
for the development of private seed sector.
Eligibility :
(a) The concerned (FSC) are to be duly registered
under the companies act,1994 of Bangladesh.
(b) The shareholders and directors of such companies
must be residing in the concerned locality.
(c) The loan taking FSC must maintain their
fund/deposit companys account with the financing
branch.
(d) The concerned (FSC) or its directors/shareholders
are not defaulter loanee of other bank/financial
institution.
Proposal :
Loan proposal has to be submitted with detailed
production plan.
Appraisal :
On receipt of proposal, Branch manager makes spot
verification and verifies the genuineness and credit
need of the applicants.
Sanction :
Loans are sanctioned on the basis of production plan
at Head Office level as per delegation.
Security :
(a) The guarantee fund to be provided by GTZ will be
treated as collateral security.
(b) Hyp. of crops/goods/assets to be
produced/procured with loan money.
(c) The members of the Board of Directors shall
provide to the bank a group guarantee stating their
joint and individual liability to repay the loan.
(d) Seeds/goods/assets procured by bank loan and
stored by the company shall duly be insured as per
banks clause covering all risks.
Documentation :
(a) List of all share holders with full particulars.
(b) Duly attested copy of Memorandum & Articles of
Association.
(c) Duly attested photographs of all directors.
(d) Resolution of the Board of Directors with decision
regarding taking loans as per sanction.
Disbursement :
Loan to be disbursed for procurement of different
seeds/cereals as per schedule. Purchase
voucher/receipts to be kept in respective loan file.
Debt-Equity
Ratio
: 75:25
Delegation : Sanction power lies with Head Office.

(a) DGM : 10.00 Lac Taka

(b) GM : 15.00 Lac Taka

(c) DMD : 20.00 Lac Taka

(d) MD : 25.00 Lac Taka
Repayment : Loan for each crop shall be repaid within 9 months
from the date of disbursement of that item. If any FSC
for genuine reasons is not able to repay the loan in
time, the branch may allow a grace period of
maximum 3 months.
Major activities
under loan
:
Credit will be provided for mainly- Wheat, Boro, Aus
,Paddy and other potential crops of the locality.
Rate of interest : 10%
Collaborating
agency
: Seed Business Promotion Project/GTZ
Reference
circular/letter
: As per agreement between Janata Bank Limited & GTZ

2. Loan for Handicapped/disabled people
Target Group :
Physically handicapped/disabled people who has the
expertise and intelligence to conduct the economic
activity.
Area of
operation
: All branches up to union level.
Objectives :
(a) To raise the income and living standard
of handicapped people by self employment.
(b) To help build self reliance and to bring them into
the mainstream of economic activities.
(c) To provide assistance for increasing efficiency at
work and in their own professions.
Proposal :
(a) Loan application to be duly & correctly filled in
along with the production plan ( in a
prescribed form).
(b) By conducting survey pass book to be issued for
the eligible people.
Appraisal :
Amount of loan is determined on the basis of
activities. Initially amount of loan will be maximum TK.
25,000/-. Later amount of loan will be fixed up to TK.
50,000/- on the basis of the efficiency level.
Eligibility :
(a) The age of the handicapped borrower should be at
least 18 years.
(b) The borrower/entrepreneur should be capable and
keen to conduct the concerned project/activity. If any
individual is physically handicapped but he has the
expertise and intelligence to conduct the economic
activity for which he has applied for in those cases the
borrower/individual will be selected as eligible for the
credit to conduct the activity through his or her
wife/husband/father/ mother/brother/sister.
(c) The handicapped individual who have training on
the concerned subject/project from
Government/private organization
Documentation : D.P. Note and other charge documents.
Disbursement :
Disbursement of credit on installment basis( one or
more) as per requirement and will depend on nature
and sector of the credit policy.
Repayment :
Loan repayment
on weekly/fortnightly/monthly/quarterly basis will
depend on nature, sector and income generating kind
of the credit facility.
Rate of interest : 10%
Major activities
under credit
:
All income generating activities suitable for disabled
people such as fish cultivation, milking cow, goatery,
beef fattening etc.
Reference
circular/letter
: RCD Cir. No.- 270 dated: 2002
Agro-based projects.
The agro-based projects (e.g. dairy, poultry, hatchery, fishery, mixed projects, agricultural
processing units, agri.- products storing and marketing etc.) have been considered as thrust
sector.
Financing in this sector following aspects are to be considered:
(a) Selection of entrepreneurs-
-solvency,
-good will,
-professional and technical experience,
-capable to provide equity and security etc.
(b) Selection of projects-
-cost- effective & viable,
-suitable in respect of communication and infrastructural facilities,
-demand of the produced goods & favourable marketing facilities.
(c) Debt-Equity Ratio- minimum margin 40%(Working Capital), 70:30 -Project loan.( 15% of
total project cost as land value or actual value of land whichever is lower to be adjusted with
the total equity).
(d) Land development, link road development, electricity connection etc. are to be completed
from entrepreneurs own source.
(e) Recommendation from branch and regional office in respect of loan sanction is required.
(f) Loan is to be sanctioned after completing technical and financial analysis of the project by
the Head Office.
(g) Equity is to arrange at a time or phase-wise as decided by H.O.
Security:
i) Project loan: a)1:1-the value of mortgaged property to be equivalent of loan
b) Hypothecation of machinery & equipments (floating assets of the project).
Working capital: a) 1:1.5 the value of mortgaged property to be equivalent to 1.5 times of
loan..
b) Hypothecation of goods produced & procured.
Delegation :
AGM DGM GM DMD MD
a. Project Loan Public Ltd Co. 250.00
Private Ltd Co. 200.00
Individual 20.00 30.00 50.00 60.00 150.00

b. W/C Loan Public Ltd Co. 30.00 50.00 75.00 200.00
Private Ltd Co. 20.00 30.00 40.00 40.00
Individual 15.00 20.00 30.00 30.00
Ref: Circular/Letter: Ins. Circular 3401 Dt: 05/03/02
Ins. Circular 3449 dt: 10/08/02
Other Credit Programs:
1. Credit for Employees-2000
Target group :
Employees of different Govt/Semi Govt./Autonomous
body/University/College/School/NGOs etc.
Objectives :
To meet up the emergency/personal need (e.g.
treatment, marriage, travel cost, maternity or for
specific activities (e.g. agri. or non agri. purposes etc.)
of employees.
Eligibility :
(a) The employees of above mentioned
organizations excepting Janata Bank Limited.
(b) Preference to be given those who are taking salary
from our branches.
Appraisal :
(a) In case of salary is being disbursed from Janata
Bank Limited branch, 12 months basic salary or
maximum TK.1,00,000/- whichever is lower may be
sanctioned.
(b) If salary is not disbursed from Janata Bank Limited
branch, 6 months basic salary or maximum TK.
50,000/- whichever is lower may be sanctioned.
Sanction :
For sanctioning loan following papers to be obtained:
(a) Employers certificate.
(b) Salary certificate/statement from the concerned
organization.
(c) Name of nominee (Husband/Wife/Children etc.) to
be mentioned in the A/C opening form.
Security :
(a) Personal guarantee of borrowers
husband/wife/parents/adult children or any other 3
rd

party guarantee to be obtained.
(b) 24 for 24 monthly installments and additional
one-total 25 advance dated cheques to be obtained.
Rate of interest : 13.50%(Changeable)
Repayment :
To be repaid in 2(two) years at equal monthly
installment
Reference
circular/letter
: RCD Cir. No.- 287 dated:- 30-06-2005
3. Mushroom Cultivation Loan Program:
Objectives : To meet up nutritional requirement of most of the people of the country,
Creation of self-employment and reducing of poverty.
Area of operation : Branches involved in diversified credit program of the bank
Eligibility : Trained/Experienced people in mushroom cultivation and will be capable of
building room in own home land.
Selection of borrower : Concerned branch of Janata Bank Limited will select borrower.
Loan application form
& fee
: Prescribed form for crop loan (except the un useful part). Loan application form
to be used as per given proforma (RCD Cir.No.293 dt:05-04-2007). No.
application fee is required.
Mushroom varieties : Oyster, Straw, Milky, Button and Shiitake mushroom
Loan limit : Minimum 5000/- and maximum 25,000/-
Loan repayment
period
: Short term (Maximum 10 months)
Security &
Documentation
: (a) No collateral is required. However hypothecation of goods/assets to
be produced with loan money and 3 party guarantee from the person
acceptable to bank to be obtained.
(b) Usual charge documents to be obtained.
Rate of interest : 8% (Changeable from time to time as per banks interest norms).
Repayment schedule : To be repaid by 8(Eight) equal monthly installments including 2 months grace
period.
Sanction : Branch Manager( irrespective of grade) as per RCD Cir.No.293 dt:05-04-2007.
Disbursement period : Throughout the year.
Reference : RCD Cir.No.293 dt:05-04-2007.
New and Special Product :

Financing IT Sector
Financing of Industries
Ready Cash
Windows for SMEs
Loan to Travel Agencies
Loan to Diagnostic Centers


A) Financing IT sector :
The importance of Information Technology and the role it can play in the socio-economic
development of a nation cannot be over emphasized. The world has witnessed a phenomenal
growth in IT over the last two decades, and the countries, which made a conscious decision to
take advantage of such growth, have made unprecedented progress. To day we are living in the
Internet world. To hasten the growth of information Technology and to attract young energetic
IT professional Janata Bank Limited has launched a credit scheme titled Financing Computer
Software Development & Data Export. The maximum loan amount is Tk. 10 million, with debt
to equity ratio being 80 : 20. The rate of interest is 11%. But anybody with export market
exposure can get the benefit at 7% interest rate plus 1% service charge. The main feature of
this scheme is to set up industrial based IT projects for development of software for data export
and that too on a very soft term. Janata Bank Limited has issued detailed guidelines for
facilitating IT entrepreneurs.
IT Related Field And Experience:
Computer Software Development and data export is a specialized job and requires skill, knack &
innovative traits of an individual.
Vision of Promoters:
What the promoters want to do with the loan?
If we can know the interests of the sponsors, their technopreneurial abilities and IT related
expertise we may really help the potential clients in developing their enterprises through
positive support.
Eligibility to be Loanee:
The loanee (sponsors) should have a degree in Computer Science / or related subjects like
Electronics Engineering, Electrical Engineering, Telecommunication Engineering, Applied
Physics, etc or proven record of managing IT companies.
Computer literate and sponsors having a Diploma in Computer, young energetic and qualified
sponsors whom the Bank considers fit to take loan.
The sponsors should form a limited company.
Preferences:
Sponsors/companies having prior experiences in the related field will be given priority.
Loan Limit & Debt-Equity Ratio:
This scheme provides maximum of TK.10 million (around US$ 1,44,000). For a loan up to TK.5
million (around US$ 72,000) debt-equity ratio will be 80: 20 and over TK.5 million (US$ 72,000)
the ratio will be 70:30.
Repayment Mode & Period:
5(Five) years including 6-12 months grace period (Including construction period). Repayment of
half yearly installment with interest compounding for term loan. Repayment period for working
capital loan and export cash credit is 1(one) year. Interest During Construction Period (IDCP)
will be repayable in 3 (three) yearly installments.
Rebate on Interest:
In case of regular repayment, the sponsor company will be given 5% rebate on total interest
charged.
Security:
No collateral security is required. If any loanee willingly shows interest to provide collateral
security, they will be given priority.
Sanctioning Authority:
Janata Bank Limited, Head Office, Dhaka.
Submission of Loan Application:
Loan application has to be submitted through any one of Janata Bank Limiteds 118 designated
branches using prescribed format available in those branches.
Besides, sponsors willing to apply loan above TK.10 million ( around US$ 1,44,000) may apply to
our normal window instead of the existing scheme.
Janata Bank Limited has entered into an agreement with American International Investment
(AII) to provide financial plastic card services to Janata Bank Limiteds clients. This product is a
Debit Card called the Ready Cash.
Currently, the Ready Cash system is operating in Dhaka and will soon be expanded to other
urban areas of Bangladesh.
Cardholders primary benefits are Safety, Shopping at a wide merchant network, Payment of
Utility Bills, flexible saving plan and the convenience of not having to carry cash.
As the only micro-processor chip based debit card available in Bangladesh for financial
payment, the Ready Cash card is very reliable and secure.
It combines the most desirable aspects of the credit card, together with the advantages of
the Debit or ATM card.
It is the first step that most Bangladeshi citizens will take on the path to a cashless
economy.
Ready Cash is a debit card as it allows the cardholder to spend no more money than he/she
has in his/her Bank account unless a credit line has been extended.
It increases the consumption base and allows the cardholder to establish a credit history.
For these and many other reasons, the Ready Cash card is the fastest growing system in
Bangladesh.
Windows for Small &Medium Enterprises :
Janata Bank Limited has been financing Small and Medium Enterprises with a view to
developing a balanced and dynamic industrial sector having a strong base of SMEs throughout
the country.
Besides normal financing special tailor-made programs are undertaken by the Bank.
Under this program a credit line has been extended to MIDAS while another program is under
way.
Financing in SME Sector:
From the very inception of Industrial credit financing of Janata Bank (Currently Janata Bank
Limited) SME division has sanctioned term loan in small and medium industries sector in 4535
projects of taka 941.36 crore. Among which taka 548.69 crore has been disbursed against 4310
projects. Outstanding as 31.12.2007 is taka 446.12 crore and recovery of loan is 70%.
Loan to Travel Agencies :
Salient Features :
Eligibility : Annual business turnover should be satisfactory
Loan Sanction : On a case to case basis
Nature of Loan : CC(HYP).
Purpose of Loan : For running travel agency business
Rate of Interest : 15%
Security : Hyp. of recievables/tickets, all office furniture and equipments Collateral
to be
twice the value of the loan
Mode of repayment : Sale proceeds of tickets.
Duration of the Loan : One year
Loan to Diagnostic Centres :
Salient Features :
Eligibility : Anual business turnover should be good;the diagnostic centre should have been set
up as per Govt. health policy and this must be confirmed by the loanee.
Loan Sanction : On a case to case basis
Nature of Loan : CC(HYP).
Purpose of Loan : For running a diagnostic centre
Rate of Interest : 15%
Margin : 40%
Security : Hyp. of all chemical and medical equipments; Value of collateral
security to be twice that of loan.
Duration of the Loan : One year
Credit Performance Analysis of the Sheraton Branch of JBL:
Types of Loans and Advances provided from the branch:
Rural Credit:
Loan Outstanding BDT 18,13,886.00 ;
Interest Rate 13.5%
Term 2 years
Renewable after maturation.
Interest income Per Year:
Year 2005 2006 2007 2008 2009
Interest
Income
2,05,231 2,16,227 1,85,658 2,59,327 2,76,064
Loan General : Provided to FDR holder against to the clients deposit.
Loan Outstanding BDT 1,38,416
Interest rate 11.50 %
Term 2 Years.
Renewable after maturation.
Year 2005 2006 2007 2008 2009
Interest
Income
15223 20130 14698 19356 15567
Security Overdraft :
Loan Outstanding BDT 16,10,321
Interest Rate 11.50 %
Term 1 years
Renewable after maturation.
Year 2005 2006 2007 2008 2009
Interest Income 154871 167243 174589 200310 185916

General House Building loan :
Loan Outstanding BDT 1 06, 88,430.
Interest Rate 13.00%
Year 2005 2006 2007 2008 2009
Interest
Income
13,52,345 12,96,841 1324723 13,97,220 13,89,496

Cash Credit (Hypo) :
Loan Out Standing BDT 30,83,162.
Interest Rate 13.00%
Term 1 Years
Renewable after maturation.
Year 2005 2006 2007 2008 2009
Interest
Income
4,32,507 3,93,070 4,00,880 4,11,309 4,76,392
Loan for Staffs:
Staff house Building Loan
Provident fund
Motorcycle Loan
Staff Computer Loan
Executive car Loan
The Loan Recovery Rate:

Year

2005 2006 2007 2008 2009 2010
Loan Amount Recovered 4374025 4500952 5114200 5308490 4978951 5419667
Loan amount to Be
recovered 5715319 6002111 6294417 6613515 6851883 7094460
Recovery Rate

0.765316 0.749895 0.812498 0.802673 0.726654 0.763929
CONCLUSION AND RECOMMENDATION
A banker cannot sleep well with bad debts in his portfolio. The failure of commercial banks
occurs mainly due to bad loans, which occurs due to inefficient management of the loans and
advances portfolio. Therefore any banks must be extremely cautious about its lending portfolio
and credit policy. So far Dhaka Bank Limited has been able to manage its credit portfolio
skillfully and kept the classified loan at a very lower rate thanks goes to the standard and
stringent credit appraisal policy and practices of the bank.
But all things around us are changing at an accelerating rate. Today is not like yesterday and
tomorrow will be different from today. Given the fast changing, dynamic global economy and
the increasing pressure of globalization, liberalization, consolidation and disintermediation, it is
essential that Dhaka bank limited has a robust credit risk management policies and procedures
that are sensitive to these changes. To improve the risk management culture further, Dhaka
bank limited should adopt some of the industry best practices that are not practiced currently.
These are
Dhaka Ban should have a clear written lending guideline. The lending guideline should
include Industry and Business Segment Focus, Types of loan facilities, Single Borrower and
group limit, Lending caps, Discouraged Business Types, Loan Facility Parameters and Cross
boarder Risk.
It should adopt a credit grading system All facilities should be assigned a risk grade. And the
borrowers risk grades should be clearly stated on credit application.
Approval authority should be delegated to individual executives rather than Executive
Committee/ Board to ensure accountability. This system will not only ensure accountability of
individual executives but also expedite the approval process.
All lending functions should be segregated in the following way
* Credit Approval / Risk Management
* Relationship Management / Marketing
* Credit Administration
The segregation of duties will improve the knowledge levels and expertise in each
department
The organization structure should have to be changed to put in place the segregation of the
Marketing/ Relationship Management function from Approval / Risk Management /
Administration function.
The responsibilities of the key persons of the above function must also be clearly specified.
An Early Alert Account system should be introduced to have adequate monitoring,
supervision or close attention by management.( An early Alert Account is one that has risk and
potential weaknesses of a material nature)
There should be a Recovery Unit to manage directly accounts with sustained deterioration.
To encourage Recovery Unit incentive program may also introduced.
It is clear that the Janata Bank Limited Credit Performance department has ensured both
quality and services which helps to improve the overall status of the Bank. For this reason
Janata bank Limited has able to achieve second position in country and top position among
public banks in export sector in 2009. However the branch may have scope to improve in a few
areas. Such as-
01. The number of exporter and importer who operate through this bank is not enough to
achieve the goal. So JBL should offer more facilities to attract their clients.
02. In addition with the present services they should include more services. It is badly needed
to provide more quality services to their clients in order to compete in the market.
03. Credit Performance department should be fully computerized that the exchange process
would be convenient for both the bankers and the clients.
04. Bank should offer more facilities to the customers such as debit card, credit card, ATM
machine etc. to survive in the competition.
05. One of the business strategies is promotion. Successful business depends how they can
promote their products or services to the customers. In this connection to improve the business
status the JBL should introduce more promotional programs.
Lastly it can say that there are a lot of opportunities for increasing Credit Performance in
Bangladesh if stay political stability. The Human Resources are cheapest here which play an
important role in any business. Bangladesh government should take proper steps to maintain
congenial atmosphere for sustainable Credit Performance business in the country.