American International University-Bangladesh

Internship Report Proposal on

Credit

Approval Process & Performance analysis of RFC.(Retail Finance Center).

Prepare For: M. Taseen Chowdhury Assistant Professor, Department of Finance

Prepare By: Md. Riyadh Hossain Id: 08-10789-1 Student, School of Business Administration

Date of Submission: March 3, 2012

Introduction:
Credit Approval Process & Performance analysis of RFC. (Retail Finance Center). Background of the report Credit is an arrangement whereby bank acting at the request and on the instructions of a customer or on its own behalf to make a payment to or to the order of a third party or is to accept and pay bills of exchange drawn by the beneficiary. In an economy banks play the role of an intermediary that channel funds from the surplus economic units to the deficit economic units. So obviously the fundamental and most important task of any commercial bank is to sanction credit facility to its customers as per requirement. City Banks mission is to actively participate in the growth and expansion of our national economy by providing credit to variable borrowers in most efficient way of delivery and at a competitive price. Bank can lend up to 84% of the total amount of its total time and demand liabilities. The rest 16% is kept as Statutory Liquidity Reserve (SLR) with Bangladesh Bank. But in practice banks

do not lend the whole 84% and a certain portion is set aside to meet up the day to day banking operations and also meet up the liquidity requirement of the depositors. Bank can lend up to 15% of its core capital without the approval of Bangladesh Bank but above that level approval from Bangladesh Bank is required. City Bank Limited is a service and profit oriented organization. It gains profit through successful efficient management, which is achieved through its human resources. Getting and keeping good people is critical to the success of every organization, whether profit or non-profit, public or private. Those organizations that are able to acquire, develop, emulate, and keep outstanding workers will be both effective and efficient. The report will give and overall idea about the loan classification of City Bank Limited. City Bank, too, recently has started its journey in Retail Banking. Retail Finance Centre is a part of the Retail Banking. Giving the unsecured loans is one of the activities of the RFC. City Bank offers three types of unsecured loans.

Objectives of the report:

Before any work, setting up of objectives is half of completing the job. The reason behind this study is clear; I am motivated enough towards achieving my goal. My objective is to give special emphasis on achieving and gathering knowledge about Retail Lending of Retail Finance Center in detail. The objectives of the study are highlighted below

Broad Objective: Without objective any mission will not be successful. The objective of the study may be spelled out as follows: To fulfill the requirements of BBA program. To know about the role of Retail Finance Centre of CBL. To gather comprehensive knowledge on overall banking activities of CBL. To know how to deal with Loan Products and maintain good relationship banking. To find out the problems of Retail Lending from RFC of City Bank Limited.

Specific Objectives To observe the very latest statistically analysed data regarding Customer Satisfaction of Retail Finance Centre, CBL. To identify the vital issues those are hampering in the service of City Bank Ltd. To find out the very best solution that may improve the service quality of Retail Finance Centre in favour of Retail Lending. To make recommendations and corresponding implementations regarding the Banks credit management activities.

Scope of the study:

This report has prepared to gain a clear view of the Credit Approval Process & Performance analysis in of RFC City Bank Ltd It includes all my experience in the City Bank Limited. I tried to show how the City Bank handles all the credit approval & monitoring activities necessary to approve credit, disburse, sanction, monitor, which documents will be checked for disbursement etc. I focus on how the loan and advances were marketed to the customers, how the relationships were built and how each customer were followed up or handled by the Relationship Managers. Purpose of the report would be to focus on how the credit management practice is being carried out by the respective department like what is the mode of operation, what is the evaluation techniques followed by the officers during evaluating a loan proposal and so on so forth. In addition, the report will not cover various legal issues regarding disbursement and recovery procedures of a loan. Finally entire risk management issues in the report will revolve around corporate loan proposals only.

Limitation:
The following limitations are apparent in the report Duration of the program was two months only which seemed to be not enough for the details study. Because of policy restrictions many useful data was not available. Availability of time on the part of the bank officers was not as per requirement due to heavy workload. Sufficient records, Publication, facts & figures were not available as per requirements for preparing this report.

Methodology:
SOURCES OF DATA COLLECTION Information used in this report has been collected from both primary and secondary sources. Primary data were collected mainly through the application form of customers who wants to get loan and credit card from The City Bank and some data were collected through the credit analyst and other department. Majority of the information were collected from the secondary sources, which include Annual report of City Bank Limited. Product Program Guidelines. Different Finance and Marketing related Books. Memorandum, articles, brochures and handbook. Work experience in the Bank helped to accumulate diverse information. Home page of CBL. Website of the CBL.

DATA ANALYSIS This is a descriptive report mainly aiming to depict the credit approval process and monitoring techniques of The City Bank Limited. The data gathered from both primary and secondary sources were arranged orderly to get a clear picture of The City Banks credit management policy regarding lending process and monitoring. The study includes quantitative analysis of loan approval process and monitoring tools. Based on the observational information writer also tries evaluate and analyze the problems involved in various phases of the credit approval process and monitoring techniques.

Schedule of activities:
Date 6-02-12 20-02-12 to 23-02-12 24-02-12 to 15-03-12 15-03-12 to 31-03-12 01-04-12 to 05-04-12 05-04-12 to 18-04-12 19-05-12

Activity Starting of interne Outline preparation Data Collection Observation Data Analysis Preparation of the draft Finalization of the report Submission of the report