Brac sme banking activitis main body

SME Banking Activities of BRAC Bank Limited
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CHAPTER - 1
INTRODUCTION

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1.0 Background of the Study
BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance
Corporation (IFC) and Shorecap International, started its journey in 2001 and in just 8
years proved to country‘s fastest growing bank. The Bank operates under a "double
bottom line" agenda where profit and social responsibility goes hand in hand as it strives
towards a poverty-free, enlightened Bangladesh. BRAC Bank Limited is a scheduled
commercial bank in Bangladesh. It established under the Banking Companies Act, 1991
and its operation started on July 4, 2001 with a vision to be the market leader through to
providing all sorts support to people in term of promoting corporate and small
entrepreneurs and individuals all over the Bangladesh.
The bank consist of major divisions named 1) Corporate banking, 2) Retail banking, 3)
Treasury, 4) Small & Medium Enterprise (SME). At present the Bank operating its
business by 69 branches. BRAC Bank is the first local commercial banks that proving
online banking service to its customers from the very beginning of its starts.
BRAC Bank, for the first time among local commercial banks, starts providing loan
facilities to small and medium trading, manufacturing and service oriented enterprises all
over the country.
1.1 Rationale of the Study
As a part of the Internship Program of Bachelor of Business Administration course
requirement, I am assigned for preparing a report on the activities that I am currently
doing at BRAC Bank Limited (BBL) for the period of 12 weeks starting from 3th
June
2012 to 30th
August 2012 At BRAC Bank Limited (BBL), I am assigned in the SME
Reconciliation Department.
1.2 Objective
Broad objective
How BRAC BANK Ltd operates SME banking operation around the country though its
extensive network
1. Why Market concentration and product diversification are considered the main
strategies for expanding the SME business.

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Specific Objective
To support the broad objectives better we have developed some specific objectives. These
are:
1. How BRAC BANK Ltd operates SME banking operation around the country though
its extensive network
 What is the Structure of SME division of BBL
 History of BRAC Bank SME
 SME Product Details
 Operation Process of SME Loan Disbursement of BBL
2. Why Market concentration and product diversification are considered the main
strategies for expanding the SME business.
 Market segmentation
 Bases for segmenting consumer market
 Target consumer
 Target market
 Differentiated marketing
 Developing marketing mix
 SWOT Analysis
1.3 Scope of the report
The report has three parts. First part is the organization part where I covered brief about
the organization. Second part is the job part where I covered what I did in the office.
Though I worked in a project of SME Reconciliation department but I also covered the
reconciliation process. In the third part, this is assign by supervisor, SME Activities of
BRAC Bank Limited. In this part I covered how BRAC Bank operate SME banking
through its extensive network and why market concentration and product diversification
are considered the main strategies for expanding the SME business.
1.4 Limitation of the study
The study has suffered from a number of barriers – .
 Time is also a big constraint for this research. The topic of this report is vast in
compare to time.
 It was difficult to communicate with the customers, as many of them were
unable to give time for interview

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 Data from BRAC Bank is highly confidential for the outside people and I had
no authority to use the core banking software.
 BBL changes its core banking software, MBS to Finacle that‘s why all the
employees are very busy with their work, sometimes I had to wait more than
one week for a piece of information.
 This report is prepared based on the SME Loan activities, so it doesn‘t provide
information regarding Financial Statement and ratio analysis.
 Time is also a big constraint for my research. I have to submit a broader deal in
a shorter form of outcome.
 It was difficult to communicate with the customers, as many of them were
unable to give me much time for interview.
 As I have taken a sample of 37 observations, there may be sampling error.
 I had to go under my day to day job responsibility that I was supposed to do so.
So I could get few more time to spend in collecting data for preparing my
internship report.
I have done a small study basing the SME Sector of BRAC Bank limited. But, BRAC
Bank alone does not practice SME in Bangladesh. So, here is a scope of further study
regarding the other banks and their customer‘s repayment behavior. I have conducted my
research in urban area. So, it does not focus the scenario rural area. So, here exists a scope
of study.
1.5 Methodology
The report is divided into two parts. One is the Organization part and the other is the project part.
The parts are virtually separate from one another.
The information for the organization part of the report was collected from secondary sources like
books, published reports and web site of the BRAC Bank Limited (www.bracbank.com). For
general concept development about the bank short interviews and discussion session were taken as
primary sources.
The information for the project ―Analysis of SME loan in BRAC Bank Limited ―both were
collected from primary and secondary sources. For gathering concept of SME loan, the product
program Guideline (PPG) thoroughly analyzed. Beside this observation, discussion with the
employee of the SME department and loan administration division the said bank was also
conducted. More over a market survey was conducted with a specific questioner. To identify the
implementation, supervision, monitoring, and repayment practice –interview with the employee
and extensive of the existing file was and practical case observation was done.

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Table 1.1: Data Collection Method
Data can be collected through two sources:
Primary Data
 Raw data is a term for data collected on source which has not been subjected to
processing or any other manipulation. (Primary data), it is also known as primary
data. It is a relative term.
 New data gathered to help solve the problem at hand. As compared to secondary
data which is previously gathered data. As example is information gathered by a
questionnaire.
 Information collected directly from the source through observation, conversation,
and/or participation. The degree of reliability, validity, and precision required
depends on how you intend to use the information. Visitor response to surveys is
one example of primary data. In this report I used
 Interviews of Customer relationship officers (CROs)
 Focus group meetings
 Direct observation
Data Collection
Primary Data
Sources
Direct observation=5 month
Training
Secondary Data
Operational Manual
Official Website
Banking Journals
BBL Newspaper
Research Paper

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Secondary Data
 In research, secondary data is collecting and possibly processing data by people
other than the researcher in question.
 Information collected by others such as government agencies and/or nonprofits that
pertains to your area of interest. The degree of reliability, validity, and precision
secondary data depends on how it was collected and interpreted. Census data is one
example of secondary data.
 Any information collected from intermediate sources. Industry figures, databases
library sources, and so forth are example of secondary data. In this report I used
 Operational manual
 Official Website
 Banking journals
 BBL newsletters
 Research papers
After collecting all the data they will be coded and data will be processed analyzed and
graphically presented. Quantitative and qualitative data were collected and analyzed
according to acceptable standards of practice. Different tables and graphs were used to
make the data meaningful and comparable. Qualitative data were analyzed rationally and
in comparison with current market condition. Necessary percentages and averages were
calculated and the analyzed results were described step by step. To achieve the objectives I
collected the 37 customers before BRAC bank loan purpose and after the loan taken
purpose is used in the Questionnaire. The average Questionnaire administered time 25
min. for official and 20 min. for the customer.

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Chapter - 2
Organization Part

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2.0 Overview of the BRAC Bank Limited
BRAC Bank Ltd, a full service commercial bank with Local and International Institutional
shareholding, is primarily drive by creating opportunities and pursuing market niches not
traditionally met by conventional banks. BRAC Bank has been striving to provide ―best-
in-the-class‖ services to its diverse range of customers spread across the country under an
on-line banking platform.
Today, BRAC BANK Limited, one of the latest generation of commercial banks which
started its journey on the 4th of July 2001 with a vision to be the absolute market leader
through providing the entire range of banking services suitable to the needs of modern and
dynamic banking business as well as to promote broad based participation in the
Bangladesh economy through the provision of high quality banking services. The unique
strength of BRAC Bank lies in the fact that BRAC one of the world‘s largest private
development organization is its key shareholder and the bank‘s vision are thus aligned
with those of BRAC.
The reason BRAC Bank is in business is to build a profitable and socially responsible
financial institution focused on markets and businesses with growth potential, thereby
assisting BRAC and stakeholders build a ―just, enlightened, healthy, democratic and
poverty free Bangladesh‖. BRAC Bank fulfills the purpose by reaching for high standards
in doing everything for their customers, shareholders, associates and communities upon,
which the future prosperity of their company rests.
BRAC Banks envisages providing mass financing by increasing access to economic
opportunities for all individuals and business in Bangladesh with a special focus on
currently under-served enterprises across the rural-urban spectrum
BRAC Bank is surviving in the large banking arena through its unique and competitive
products and it is the only local bank providing 100% integrated on-line banking services.
BRAC Bank Limited consists of four major business divisions namely Corporate Banking
Division, Retail Banking Division, Small and Medium Enterprise (SME) and Foreign
Trade & Treasury. Corporate Division provides full range of commercial banking products
and services to any potential corporate clients including multinationals, large or medium
local corporate, NGOs, institutional bodies.
Retail Division offers a wide array of lucrative and competitive banking products to the
individual customers of the bank. Currently there are six lending products and a number of
other attractive new products will be launched shortly. It also offers different types of term

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deposit scheme and attractive STD & Savings deposit schemes giving interest on daily
balance.
As part of the total banking solution it has introduced an innovative and one of its kinds
Remittance Service under the style and name ―Secured & Easy Remittance Service‖
(SERS). The aim of the program is to introduce easy and secured remittance service
whereby people will be comfortable and secured in remitting funds without hassle and
delay. Using the countrywide network of BRAC comprising more than 1100 field offices
the SRS will ensure secured and only 24 hour lead time delivery of remittance anywhere
in Bangladesh.
BRAC Bank Limited, hereinafter called BBL, is a first growing third generation-scheduled
commercial bank incorporated on 20
th
May 1999 as a public limited company under
Companies Act, 1994 with multinational collaboration including IFC of The World Bank
Group & Shore Cap. BBL started its operation on 4
th
July 2001. The main sponsor of the
bank is the BRAC. The Bank is pioneer and focused on pursuing unexplored market
niches in the Small and Medium Enterprise Business, which hitherto has remained largely
untapped. BBL believes, this sector of the economy can contribute the most to the rapid
generation of employment in Bangladesh. BBL caters the banking services to its rapidly
growing customers through 69 branches and 429 SME Unit Offices.
International Finance Corporation
The International Finance Corporation (IFC) is a member of the World Bank Group and is
headquartered in Washington, DC. Established in 1956, IFC's mission is to promote
sustainable private sector investment in developing countries, helping to reduce poverty
and improve people's lives.
IFC is the largest multilateral source of loan and equity financing for private sector
projects in the developing world. The organization promotes sustainable private sector
investment in developing countries that is economically beneficial, financially and
commercially sound, and environmentally and socially sustainable; as a way to reduce
poverty and improve people's lives. It is the belief of the organization that sound
economic growth is the key to poverty reduction; that it is grounded in the development of
entrepreneurship and successful private investment; and that a business environment is
needed for the latter to thrive and contribute to improve people's lives.
International Finance Corporations (IFC) funding comes from the Asian Development
Bank, Canada, the European Commission, the Netherlands, Norway, the United Kingdom

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and IFC itself. IFC is a 19% shareholder in BRAC Bank. A new assistance program signed
in August 2005 aims to double the bank‘s number of small and medium enterprise clients
in 18 months through campaigns to target women entrepreneurs and rural clients,
introduce new products and train branch managers.
Shore Cap International
Shore Cap International Ltd. is an international private non-profit, equity company seeking
to invest in small business banks and regulated micro finance institutions in countries with
developing and transitional economies. Founded in mid 2003, Shore Cap has a current
base of $28.3 million in capital commitments and seeks to support the growth of
development finance institutions in Africa, Asia and Eastern Europe. The institution has
made investments totaling $7 million in Bangladesh, India, Cambodia, Armenia, Mongolia
and Kenya. Shore Bank is a 9% investor of Shore Cap and runs the management company,
which oversees investment activities.
Shore Cap typically invests between $500,000 and $2 million for an ownership position of
10-25% of a company. As a minority shareholder, Shore Cap seeks financial institutions
with a strong, experienced management team and a committed set of local development-
minded investors. Shore Cap currently owns 18% of BRAC Bank Limited.
Shareholding Structure
0
5
10
15
20
25
30
35
40
45
1
BRAC
International Finance
Corporation
Shore Cap International
General Public through IPO
Non-Residents
Bangladeshi’s
Mutual Funds
Others
Figure 2.1- Shareholders of BRAC Bank Limited
Shareholders Percent
BRAC 31.74%
International Finance Corporation 9.50%
Shore Cap International 8.75%
General Public through IPO 40%
Non-Residents Bangladeshi‘s 5%
Mutual Funds 5%
Others 0.01%
Total 100%
Table: 2.1- Shareholders of BRAC Bank Limited

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2.1 BRAC Bank: At a Glance
2.1.1. Name of the Organization
BRAC Bank Limited (BBL).
2.1.2. Location Head Office
BRAC Bank Limited
1 Gulshan Avenue
Gulshan -1
Dhaka 1212
Web: www.bracbank.com
2.1.3 Location of Branches, SME Centers & ATM
BRAC Bank Ltd is now going on with 69 Branches, 179 ATM Booths, 30 Cash Deposit
Machines(CDM), 1558 POS ternminals,19 Utility service bill payment booths & also 1900
Remittance delivery points.
2.1.4 LOGO
The logo of BRAC Bank has been prepared keeping in mind the goal of the organization.
The square structure of the logo means solid and strong.
The Golden Color in the lower portion of the logo means the ‗Golden Bangladesh & her
fertile land‘. The Blue color in the upper portion means ‗the sky with enormous &
unlimited opportunity‘. The white colored curve means ‗Growth and Progress‘. White
circles in the blue color mean the flashing sun that gives light to everywhere.
2.1.5 GOALS
BRAC Bank will be the absolute market leader in the number of loans given to small and
medium sized enterprises throughout Bangladesh. It will be a world - class organization in
terms of service quality and establishing relationships that help its customers to develop

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and grow successfully. It will be the Bank of choice both for its employees and its
customers, the model bank in this part of the world.
2.1.6 Corporate Vision
BRAC Bank will be a unique organization in Bangladesh. It will be a knowledge-based
organization where the BRAC Bank professionals will learn continuously from their
customers and colleagues worldwide to add value. They will work as a team, stretch
themselves, innovate and break barriers to serve customers and create customer loyalty
through a value chain of responsive and professional service delivery.
Continuous improvement, problem solution, excellence in service, business prudence,
efficiency and adding value will be the operative words of the organization. BRAC Bank
will serve its customers with respect and will work very hard to instill a strong customer
service culture throughout the bank. It will treat its employees with dignity and will build
a company of highly qualified professionals who have integrity and believe in the Bank‘s
vision and who are committed to its success. BRAC Bank will be a socially responsible
institution that will not lend to businesses that have a detrimental impact on the
environment and people. So BRAC Bank operates following a specific vision like:
―Building a profitable and socially responsible financial institution focused on Markets
and Business with growth potential, thereby assisting BRAC and stakeholders build a
"just, enlightened, healthy, democratic and poverty free Bangladesh".
2.1.7 Corporate Mission
• Sustained growth in ―Small and Medium Enterprise‖ Sector
• Continuous low-cost deposit growth with controlled growth in retail assets.
• Corporate assets to be funded through self-liability mobilization. Growth in assets
through syndications and investment in faster growing sectors
• Continuous endeavor to increase non-funded income
• Keep our debt charges at 2% to minimum a steady profitable growth
• Achieve efficient synergies between the Bank‘s branches. SME unit offices and
BRAC field offices for delivery of remittance and Bank‘s other product and
services
• Manage various lines of business in a fully controlled environment with no
compromise on service quality
• Keep a diverse, far flung team fully motivated and driven towards materializing the
Bank‘s vision into reality

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2.1.8 Core Values
• Value the fact that one is member of the BRAC family
• Creating an honest, open and enabling environment
• Have a strong customer focus and build relationships based on integrity, superior
service and mutual benefit
• Strive for profit and sound growth
• Work as team to serve the best interest of our owners
• Relentless in pursuit of business innovation and improvement
• Value and respect people and make decisions based on merit
• Base recognition and reward on performance
• Responsible, trustworthy and law-abiding in all that we do
2.1.9 Achievements
 Fastest growing bank: BRAC Bank has been the fastest growing Bank in 2004
and 2007. It is one of the local private commercial bank that set the standard of
banking for the leader bank of Bangladesh banking industry.
 Leader in SME financing through 429 SME unit offices: The idea of SME unit
are become very popular to the BRAC bank customer. In the last six years of
operation, the Bank has disbursed over BDT 7500 corer in loans to nearly
2,00,0,000 small and medium entrepreneurs.
 Biggest suit of personal banking & SME products: BRAC Bank has variety of
products for their customer in Branch and also in SME office.
 Large ATMs (Automated Teller Machine) & POS (Point of Sales) network.
Now
 BRAC Bank has 112 ATM Machine all over the country
2.1.10 Performance and Investment Impact
 Four-fold growth in size and earnings in three years.
 Loans outstanding grew by 87% during 2007 and total deposits increased by 51%
to US$200m.
 SME lending of US$81.7m to nearly 15,000 SME customers in 2007.
 Growing retail market presence with 125,000 account holders and 60,000 cash
cards in circulation.
 The bank now has a total of 2500 full-time staff (475 in 2003).

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 BRAC Bank customer surveys reveal that an estimated 18,000 new jobs have been
created thanks to SME loans helping business expansion.
2.1.11 Corporate Chronicle and information
• Registered office: 1, Gulshan Avenue, Gulshan 1, Dhaka-1212
• Company registered number: C – 37782(2082) of 1999
• Inaugurantion of Bankign operation: 4
th
July 2001
• First SME unit office: 1
st
January 2002
• Signing with Shorecap as investor: 29
th
December 2003
• Signign with IFC as investor: 8
th
May 2004
• First ATM installed: 3
rd
April 2005
• Preferential share issued: 31
st
January 2006
• Signing with Infosys and 3i Infotech for changing Bank‘s IT platform: 1
st
August
2006
• 24x7 Phone banking opening: 9
th
September 2006
• Intial public offering of shares held in 2006
• Listing with CSE: 24
th
January 2007
• Listing with DSE: 28
th
January 2007
• Commencent of share trading in DSE and CSE: 31
st
January 2007
• Credit card Launching: February 06, 2007
• 2500 remittance deliver point Gulshan-1, Dhaka-1212
• Introduced probashi Banking: April 14, 2007
• Launching of travel related services (TRS); November 20, 2007
• Auditor
S.F Ahmed & Co
Chartered Accountants
• Legal Advisor
Law valley, shajan Tower, Commercial Block
• Tax Advisor
Delwar Hossain & Associates
• 50
th
Branch: Bashundhara, H- 193, Block B, Safwan Road, Bashundhara R/A
• 100
th
ATM: Alliance Franciase, 26 Mirpur Road

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2.2 Shareholding Structure
2.3 Corporate Information
 Registered Office: 1, Gulshan Avenue, Gulshan-1, Dhaka-1212
 Company registration Number: C-37782(2082) of 1999
 Inauguration of Banking Operations: 4th July 2001
 First SME Unit Office: 1st January2002
 Signing with Shore Cap as investor: 29th December 2003
 Signing with IFC as investor: 8th May 2004
 First ATM installed: 3rd April 2005
 Preferential share issued: 31st January 2006
 Listing with CSE: 24th January 2007
 Listing with DSE: 28th January 2007
 Commencement of share trading in DSE and CSE: 31st January 2007
 Auditor – S.F Ahmed & Co (Chartered Accountants, House # 25, Road # 13A,
Block # D, Banani, Dhaka-1213.
 Legal Advisor, Law Valley, Shajan Tower, Commercial Block, Suit-202 (First
Floor). 4 Shegun Bagicha, Dhaka-1000.
2.4 Organizational Structure
Boards of directors are the sole authority to take decision about the affairs of the business.
Now there are 5 directors in the management of the bank. All the directors have good
academic background and have huge experience in business. The board of directors holds
meetings on a regular basis. The current management teams and board of directors‘ name
are given in the following table:

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2.4.1 Board of Directors:
2.5 Management Team:

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2.6 Hierarchy
2.7 Products and Services
2.7.1 SME Banking
BRAC Bank, being the youngest bank, took a step to break away from usual tradition and
tapped into the true suburb entrepreneurial initiatives.
Today, with over 10,000 crores of loans disbursed till date, BRAC Bank is country‘s
largest SME financier that has made more than 265,000 dreams come true! If you have a
dream on which you trust, let us make it true together.

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2.7.2 Loan Products
Deposit Products
Prapti Current Account
2.7.3 Retail Banking
With over 100 outlets, 300 ATMs and over 500,000 plastics in the market, BRAC Bank
offers a wide range of financial solutions to meet everyday need.
Be it home loan, car loan, or simply a quick loan.
Deposit Products

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Cards
Non-Stop Banking
Nonstop banking from 10 a.m. to 8 p.m.
Online banking facility in all of the sections
Up to 5 p.m. for the fixed branches
More Information
2.7.4 Wholesale Banking
BRAC Bank offers a full array of Financial Services to Corporations and Institutions.
Having access to the deepest end of the country, BRAC Bank is there to assist businesses
in Bangladesh. With us on your side, you have the power of local knowledge with the
capabilities of global standard.

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2.7.5 Probashi Banking
When you send your hard-earned money from abroad to dear ones at the farthest end of
Bangladesh, ask them to collect it from over 3,500 pay out locations of BRAC Bank.
Every month, Probashi Banking executes around 150,000 transactions; which has made
BRAC Bank one of the largest players among private commercial banks in channelizing
inward remittance in the country.
And with ELDORADO, now you can withdraw money from any of the Eldorado member
banks in addition to BRAC Bank outlets - that's too, instantly!

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Chapter - 3
Departments of BRAC Bank Limited

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3.0 Departments of BRAC Bank Limited
If the jobs are not organized considering their inter relationship and are not allocated in a
particular department it would be very difficult to control the system effectively. If the
departmentalization is not fitted for the particular works there would be haphazard
situation and the performance of a particular department would not be measured. Brac
Bank Limited does these works very well. Departments are as follows—
 Human Resource Department
 Financial Administration department
 Asset Operations Department
 Credit Division
 SME divisions
 Inter Control and Compliance Department
 Impaired Asset Management
 Probashi Banking Operations
 Treasury Front
 Treasury Back
 General Infrastructure Services
 IT
 Customer Service Delivery
 Cards Division
 Phone Banking
 Cash Management
 Payment Service
 Loan Administration Department
A. CORPORATE BANKING DIVISION:
Corporate Division provides full range of commercial banking products and services to
any potential corporate clients including multinationals, large or medium local corporate,
NGOs, institutional bodies.
The Corporate Banking Division has a centralized structure through on-line banking
system. Any credit facility is processed at the Corporate Banking Division, Head office.
After sanctioning of the facility, the limit is put on line and the customer can enjoy the
facility from any of the BRAC Bank branches. Strict adherence to internal control

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guidelines and other legal and statutory compliance are followed. The Credit approval
process involves separate Credit Division, the Managing Director and finally the Board.
Other departments like Foreign Trade, Treasury, and Credit Administration etc. play the
support role for a comprehensive range of service to the Corporate Banking Division.
B. RETAIL BANKING DIVISION
balance.
C. SMALL AND MEDIUM ENTERPRISE (SME)
SME is an additional and specialized horizon of the bank which serves the bank‘s special
focus in promoting broad based participation by catering to the small and medium
entrepreneur. The network of SME has already been established throughout Bangladesh.
The SME market in Bangladesh is large. BRAC Bank is the absolute market leader in the
number of loans given to small & medium enterprises throughout Bangladesh. The Bank
disburses almost BDT 700crore of their loan to the SME unit. SME unit is dealing with
small scale loan which is known as "ANONNO".
D. FOREIGN TRADE & TREASURY
Treasury Division is one of the major divisions of BRAC Bank. Treasury Division deals
with money market. All treasury related products are processed in conformity with the
Bank's Operational, Trading, Money market, Overnight, Term placing, Deal settlement,
Commercial position keeping, Treasury, Credit, Finance & other applicable policies.
Treasury Operations calculates investment figure, prepares the auction application,
forwards the application to Bangladesh Bank for Bid and Treasury Operations maintains
and reconciles all accounts with foreign and local banks.
The main wings of Brac Bank are described broadly below.

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3.1. A: CORPORATE BANKING
The Corporate Banking Division provides full range of commercial banking products and
services. Other Departments such as Foreign Trade, Treasury, and Credit Administration
etc. plays the support role for a comprehensive range of service to the Corporate Banking
Division.
Why Corporate Banking:
 Quality of service
 Value of innovative solutions
 Level of trust with clients
 Market knowledge
Through the corporate banking clients have access to a wide range of financial services
including:
 Debt capital
 Equity capital
 Ongoing relation support
 Financial markets
3.1. A.1 VALUES
 Services to customers
 Quality in everything we do
 Competitiveness and a will to win
 Growth and development of our people
 Continuous productivity improvement
 Professionalism and ethics in all our actions
 Growing profit for our stakeholders
3.1. A.2 BUSINESS CONCENTRATION (AREA WISE)
In line with our corporate strategy initially we will concentrate our business focus to the
following locations:
Dhaka Chittagong
Motijheel Agrabad
Nawabpur and old parts of Dhaka City Khatunganj
Gulshan
Dhanmondi

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Uttara
Kawran Bazar
3.1. A.3 TARGET MARKET
 Pharmaceuticals, toiletries, chemicals and pesticides
 Power Generation, oil exploration, industrial and household gases (Liquid
Petroleum Gases etc.)
 Edible Oil.
 Bulk Trading – Essential Commodities, Industrial Raw Materials, Agricultural
Inputs
 Cement
 Garments, Textiles and related backward linkages industries including spinning,
knitting, yarn, garments accessories etc.
 Food Processing and Beverage Industries
 Cable and Cable wire
 Information Technology
 Leasing Companies / Non Banking Financial Institutions
 Health Service Industry
 Non Governmental Organization (N.G.O) and other International Development
Organizations
 Importers/dealers of machinery, industrial, electrical equipment
 Educational Institutions
 Bone china, ceramics, melamine, plastic products
 Manufacturing and Trading of Consumer Durables.
 Telecommunication
 Ship Breaking, Re-rolling, Corrugated Iron (CI) Sheet Mfg. and related business
 Air Lines, Shipping Lines, Freight Forwarders, Testing and Inspection agencies
 Footwear and Leather
 Tobacco Products
 Tea
3.1. A. 4 TARGET CUSTOMER GROUP
 Leading Domestic Corporate and Trading Houses
 Local medium and large Corporate

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 MNCs
 NGOs
 Educational Institutions
3.1. A.5 PRODUCT/SERVICE OBJECTIVES
The Corporate Banking Group would try to serve the financial market of the country with
the following objectives as:

 To develop and sustain mutually beneficial customer relationships based on high
quality service and innovative products.
 Maintaining a diverse and quality asset base and pursue a sustainable growth
strategy.
 To provide and deliver services in a cost-effective manner.
3.1. A.6 CORPORATE PRODUCT
 Cash management
BRAC Bank's National Collection Services (NCS) is designed to assist corporate with
nationwide collection requirements by providing faster funds availability in a cost-
effective manner.
3.1. A.7 COMMERCIAL BANKING UNIT
This is another wing of corporate banking division dealing with all the corporate products
including non funded facilities to medium size enterprises where the requirement range
varies from BDT3.00 million to BDT20.00 million. We are catering financial services to

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manufacturing , trading as well as to the service industry irrespective of proprietorship,
limited company or non government organizations from Dhaka and Chittagong right at the
moment with a view to serve other metropolitan cities of Bangladesh very soon.
It started operation one and half years back and right at the moment dealing with more
than one hundred customers with total outstanding of BDT700.00 million including
BDT200.00 million as non funded facilities. Our customers are less structured than
corporate customers and more formal than the small enterprises customers, which is also
reflected in the loan pricing.
Since most of the target customers of commercial banking unit are having banking
relationship with other institutions they are very much rate and quality sensitive. Keeping
this in mind we are trying to develop a strong market presence within next two years to
support BRAC Bank‘s objective.
3.1. B: RETAIL BANKING
Division
balance. Retail Banking Division has the following departments:
 Alternative Delivery Channel
 Business Intelligence and Service Quality
 Cards Department
 Cross Selling
 Distribution
 Liability Value Center
 Non Funded Business
 Premium Banking
 Secured Value Center
 Unsecured Value Center
3.1. B.1 ALTERNATIVE DELIVERY CHANNEL
BRAC Bank‘s developments in alternative delivery channels are relatively new, reflecting
developments in, and the diffusion of, new information and communications technology.

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The focus of BRAC Bank‘s channels has, to date, been mainly on service providing
activity. Alternative channels provide a means for clients to obtain service and information
via such means as:
 ATM (Automated Teller Machine)
 CDM ( Cash Deposit Machine)
 POS (Point of Sale)
The main driver of the introduction of alternative channels was, initially, the desire to
widen the range of customer services available. Alternative channels were seen as a means
of adding to the frontline services and complementing face-to-face contact. Now BRAC
Bank Ltd. funding significantly and created a new focus on efficiency and cost is saving.
Developing the use of alternative channels is now seen as an important strategy for
delivering significant savings for BRAC Bank Ltd. BRAC Bank Ltd. plans to invest into
the development of alternative channels where efficiency savings can be realized. So far,
the take-up of the current alternative channels by clients has been low.
3.1. B.2 BUSINESS INTELLIGENCE UNIT (BIU)
The concept of BIU in the banking sector of Bangladesh is relatively new. The main
function of BIU is best described as to perform periodical analysis and on-demand
analytical reporting tasks related to Retail Business to ensure that report is provided to the
Top Management for effective performance at all times. Generating On-demand reports is
a regular exercise for BIU for different Channels and Value Centers. People might
correlate MIS with BIU but the major difference is that BIU thrives on the reports
circulated by MIS, which are scrutinized to find out any gap between the target and
achievement. It has also taken initiatives to do market analysis to understand the market
trend and competitor‘s position. As stated later BIU is also producing
daily/weekly/monthly reports for the Top Management.
3.1. B.3 SERVICE QUALITY
Service quality essentially deals with customer queries, interacting with aggrieved
customers, conducting frontline staff service quality assessments with regular reviews,
developing materials and methods to augment frontline staff‘s efficiency and standard,
providing operational aid to branches to ensure uninterrupted service etc. This unit also
provides training sessions to the OCCS and CSO periodically. Training sessions like
World Class Customer Service (WCCS) are conducted under this unit in a regular basis.

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At the same time to enhance the importance of standard quality service SQ launches
campaigns at different time. Providing streamlined solutions to customer service
problems, Investigate service-related complaints, Collect, report and apply service
intelligence to improve capabilities, Assist in coordination of all wide-scale service
enhancement projects based on the service complaints, Monitor every Service Enquiry is
answered properly within scheduled time frame And also monitor Enquiry Handling
activity to make it a standard in service industry.
3.1. B.4 CARDS DEPARTMENT
3.1 B.4.i Credit Card
Credit card is a completely unsecured loan facility for the customers. Through a credit
card a customer uses bank‘s money. One who wants to have it- need to show no guarantee
or something like that.He may use it for purchasing, bills payment etc. purposes without
having any cash deposit in bank or even in his pocket. He is allowed to do this against an
approved credit limit set up by the issuer organization. Non-a/c holders can also get the
Credit Cards.
3.1. B.4. ii ATM
ATM stands for ―Automated Teller Machine.‖ ATM card is a plastic card to be used in
ATM machine with some electronically encoded data on the magnetic stripe in it. This is
probably the most popular form of Plastic Money, which is totally machine-based
technology. ATM card is used to withdraw, deposit, balance inquiry, account transfer, bills
payment, account statement checking etc. ATM card works through Personal
Identification Number (PIN) pad facility.
Customers are given PIN numbers (usually 4 digits), which is totally secured. Every time
he wants to use his ATM card he needs this PIN to use.
3.1 B.4. iii VISA Debit Card
Debit Card means – the uses of one‘s own money through an electronically encoded card
from his pre-deposited account. It works against available money in the account. Without
having any money in the specific account-no transaction can take place through Debit
Card. Every Debit Card can be used both in ATM and Point-of-Sale (POS) terminals.
VISA is a very renowned Debit Card facility providing organization in the world. VISA
Debit Card means-any Debit Card using VISA logo in it.

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3.1. B.5 CROSS SELLING
The vision of cross selling is to ensure the retention of the existing client by increasing the
number of products own by each client. In other terms cross selling will be working with
the objective that a client will own a product portfolio rather than a single product. It will
enable to restrain the competition from snatching the client away.
Now the advantage that the competitors are taking is that they are offering an increased
benefit on one single attributes of the product like .25% increased interest rate, time
flexibility etc. and taking the clients away as most of the clients do not any other
involvement. But if the clients own a portfolio it will be difficult for the competitors to
offer the entire product portfolio as they do not have the entire range and at the same time
even they have the entire product line it will be difficult for them to offer an increased
benefit for all the products.
So cross selling would primarily work a sales channel for the retail banking division and
would deal the existing and upcoming client database. By devising interactive software
information regarding the clientele will be collected and basing on that information
Telesales would initiate the selling process and would be closed by the direct sales team.
As long as the required software which is named as Business intelligence Tool (B I Tool)
is not ready to be operated information regarding the existing clients would be generated
manually basing on various assumptions with the help of Business Solution Department.
With that information the team would carry on its operation.
Cross selling will also deal the references created from the existing client and references
provided by the other sources at the same time. It will collect secondary databases from
various organizations. So along with dealing the existing clients of the bank it will also
deal the fresh potential clients.
Cross selling team of BRAC Bank is first of its kind in the Bangladeshi banking industry.
No other bank so far has introduced the concept of cross selling as such BRAC Bank did.
Though it is a common practice of the individuals in the entire industry to cross sell but it
is neither a team effort nor backed up the organization of that individual.
3.1. B.6 RETAIL DISTRIBUTION
Retail Distribution under Retail Banking has further strengthened its position as a major
channel of business by stretching its horizon both in richness and richness. The thoughtful
distribution of branches helped the Distribution team to offer total banking solutions and
services through its online facilities to the customers. BRAC Bank at present has a total of
36-branch network in the country. Retail Distribution is responsible for carrying out all

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branch activities of the bank. It has been created to serve the acquired customers. The
main task of Distribution is to oversee that branches are performing their duties properly
and carrying out the day-to-day activities of the bank properly and efficiently and at the
same time increasing both asset & liability portfolio Of many deliverables, Retail
Distribution concentrates mostly to ensure ‗service excellence‘ which is by adding delight
across all touch-points to make massive contribution towards profitability.
3.1. B.7 LIABILITY VALUE CENTER
LVC, the most vital wing of Retail Banking Division, is the department that is the owner
of all the retail liability products, assuming ―innovation‖ as the key factor. LVC‘s
responsibility is to create, analyze, and modify all its liability products to ensure growth of
liability portfolio, both in number of customers as well as in deposit volume. In detail,
LVC is heavily involved in the following activities, but not limited to:
 Doing innovation and development of Liability Product based on the best market
practice.
 Adding muscles (innovative and stronger features) to existing products to increase
sales and volume.
 Taking necessary actions regarding products that are not producing expected sales
or volume.
 To do so as mentioned in no. 3, the VC takes on many campaigns, comes up with
special offers, and also encourages and motivates every single touch point, such as
branches, sales centers, etc. to work in a concerted fashion to boost the
performance of a product.
 LVC is also involved in selling through the Direct Sales Teams across the country .
 It ensures business through Direct Sales, Cross Sales, Premium Banking, and also
Branches.
 LVC also conducts regular market study to attain the competitive advantage in the
market. It looks for the untapped opportunities in the market as well as the scope
for improvements in the product features based on market practice to ensure its
products‘ competitiveness in the market.
3.1. C: SMALL & MEDIUM ENTERPRISE BANKING DIVISION
SME Banking Division is a business division of BRAC Bank Limited that deals with
Small and Medium sized Entrepreneurs involved in different types of business. SME
banking division primarily provides loans to small and medium sized trading,

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manufacturing, service, agriculture, non-farm activities and agro-based industries located
across the country.
Distribution
At present SME Banking Division has a reach in all 64 districts of the country through 427
unit offices. The functional designation of the loan officers who operate at the unit
offices is Customer Relations Officers (CROs).
A zone is comprised of 1-6 unit offices, where the person in-charge of the zone is known
as a Zonal Manager. The reporting manager of a CRO is the Zonal Manager (ZM) or
Associate Relationship Manager (ARM). Zonal Managers/ Associate Relationship
Managers have the authority to approve a loan up to BDT 6 lac. There are 137 Zonal
offices in SME Banking at present. A Territory is comprised of 6-12 zones. There are 14
territories at present. The reporting of a Zonal Manager is the Territory Manager. The
Associate Relationship Managers however eport to the Portfolio Managers.
UNITS OF SME BANKING DIVISION
There are 7 business wings in SME Banking Division.
1. General Business Unit
2. Women Entrepreneur Cell (WEC)
3. Large Business Unit (LBU)
4. Manufacturing Business Unit (MBU)
5. Supplier & Distributor Finance Unit (SDF)
6. Commercial Credit Unit (CCU)
7. Vehicle Financing Unit
3.1 C.1 GENERAL BUSINESS UNIT
This largest business unit of SME Banking Division has long been providing loans to
SME entrepreneurs. Regular business wing offers varying products. SME entrepreneurs
mostly require small finance that this business unit has successfully been offering to all
level of SME borrowers irrespective of business type. In addition to Small finance this
business unit is also offering finance to medium entrepreneurs.
3.1. C.2 WOMEN ENTREPRENEUR CELL (WEC)
Women Entrepreneurs Cell (WEC), one of its kinds in the banking industry of
Bangladesh, was launched in 2006 under SME Banking Division with an objective to offer

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access to formal finance along with training and technical assistance to the women
entrepreneurs across the country.
3.1. C.3 LARGE BUSINESS UNIT (LBU)
Large Business Cell started its journey from February 2007. The objective for this unit is
to increase the average ticket size of the overall SME portfolio and also to tap the
unexplored market.
3.1. C.4 MANUFACTURING BUSINESS UNIT (MBU)
The Manufacturing Business Unit was launched in August 2007 under SME Banking
Division. The objective of launching this unit is to better serve the manufacturing sector
by providing sector-focused loan & other services.
3.1. C.5 SUPPLIER & DISTRIBUTOR FINANCE UNIT (SDF)
Supplier & Distributor Finance Unit was launched in September 2007 to engine the
growth of inkage industry, an indispensable sector for any industry.
3.1. C.6 COMMERCIAL CREDIT UNIT (CCU)
The Commercial Credit Unit (CCU) was launched in October 2007 with the objective of
providing financial services in the Trade Finance sector with pre & post import facilities.
3.1. C.7 VEHICLE FINANCING UNIT
This newly formed business unit of SME Banking is aimed at financing the commercial
vehicles of SMEs. This unit will operate in some selected areas of the country. In addition
to the 7 business units there are 2 mor units in SME Banking Division.
3.1. C.8 PRODUCT DEVELOPMENT & RESEARCH UNIT
This unit primarily asses the market and observe the potential of developing product or
service to cater different requirements of the existing/potential customers of SME
Banking. Product Development wing also develop campaigns and takes initiative to design
merchandises, with the help of the creative and communication division.
3.1. C.9 SME OPERATIONAL RISK MANAGEMENT UNIT
This unit comprised of several wings one of which is Recovery & Compliance Reporting,
a wing that collects overdue from default clients of SME Banking, follow up litigation
against the default clients and ensure compliance of internal policies & Bangladesh Bank
regulations to the unit offices. Another wing named Coordination maintains liaison of

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SME Head office with SME unit offices & other departments. Loan Collection & Legal
Affairs wing provides legal assistance & knowledge to personnel at SME unit offices.
Monitoring unit reviews prevailing processes of ME Banking Division & ensures
meticulous business reporting for smooth operation.
3.1. C.10 SME PRODUCTS
SME is an additional and specialized horizon of the bank which serves the bank‘s special
focus in promoting broad based participation by catering to the small and medium
entrepreneur. The network of SME has already been established throughout Bangladesh.
The SME market in Bangladesh is large. BRAC Bank is the absolute market leader in the
number of loans given to small & medium enterprises throughout Bangladesh. The Bank
disburses almost BDT 700crore of their loan to the SME unit. SME unit is dealing with
small scale loan which is known as ANONNO"

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Chapter - 4
PRODUCTS AND SERVICES

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4.1 Products and Services
 Deposit product
 Loan product
 Card product
4.1. A. DEPOSIT PRODUCT
Deposit Account
Different Types of account
4.1. A.1 Current Account
An absolute transactional account through which a customer can transact any amount. This
is a Cheque bearing account normally no interest paid, no bar on deposit and withdraw and
it has easy access to other deposit and loan facilities. This account is normally operated by
Businessman.

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4.1. A.2. Savings Account
Type of transactional account through which a customer can transact on a daily basis.
Special features of this account include: Limitation on transaction & Size of transaction,
large withdrawal require prior notice, Cheque bearing account, Interest paid on saving
rate, Access to their deposit facilities and loan facilities except overdraft facility.

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4.1. A.3. Short term Deposit account
An absolute transactional account through which a customer can transact any amount with
prior notice. Special features of this account include: Normally operated by businesses
with less transaction and individual, more like current account, Interest paid, No bar on
deposit & withdrawal, Access to other deposit facilities and loan facilities, Bar may be
imposed on balance maintenance.
4.1. A.4. Term Deposit Account
A type of non transactional Account and the amount payable after maturity only. Special
features of this account include: Amount can be fixed by both business & individual with
permission from bank, Interest paid is comparatively higher than TA.
No access to other deposit facilities and loan facilities, Term Deposit receipts are given
from ank, Example 1/3/6 month Fixed Deposit ½ year fixed deposit, DPS etc.

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4.1. A.5. Foreign Currency account
A type of Transactional accounts both national & foreigners can open. Special features of
this account include: Rational require for opening such accounts (Business, Remittance,
Foreign income), Special documentation require, Only authorized dealer (AD) branches
can open, Can be interest bearing / noninterest bearing ,Maintained as per foreign
Exchange guideline of Bangladesh Bank.
Broad Classification
Different Types of account

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Account Type:
 Transaction Based
a. Transactional A/C
b. Non Transactional A/C
Transactional Account
Transactional account helps the customer to perform his/her daily transaction with deposit
and withdrawals. A customer is benefited with the interest payment by the bank and
receives cheque books and also can avail loan facilities that the bank offers.
Non Transactional accounts are accounts created specially the transactions of the
transactional accounts.
1. Office Accounts
2. Term Deposit Accounts
Transactional Accounts
Transaction
Basic Features:
Currency
 Currency Based
1. Local Currency A/C
2. Foreign Currency A/C
3. Convertible A/C

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4.1. B. LOAN PRODUCTS
Secured Value Center
Secured Value Center is a part of Retail Banking that oversees all the secured asset
products of the bank. Currently there are mainly five secured products that are being
offered by the bank and these are follows:
a. Auto Loan
b. Secured Loan
c. Secured Overdraft
d. Home Loan
Unsecured Value Center
Unsecured Value Center (UVC) is the owner of all the Unsecured Products of BRAC
Bank .The main purpose of this Center is to monitor, evaluate and boost business of UVC.
It is also involved in market study, New Product Development, PPG amendment,
maintaining extensive MIS and does everything for betterment of the business. UVC do
their business through all the channels, i.e. Direct Sales, Distribution, PB and Cross

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Selling. Out these channels, Direct Sales is directly attached with the UVC. The main
activity of the Value Center is to operate smooth business through the all the channels with
value added.
4.1. C. CARD PRODUCTS
VISA Debit Card is three types:
 VISA Debit
 VISA Electron Δ VISA Flag / Plus ATM
Again this is to inform that – Debit Card also needs PIN based technology to use it
through. Account number in VISA or any other Debit Card can be embossed or without
embossed (Indent printed).
Visa Debit Card: VISA cards are accepted at all BBL, VISA & Q-Cash ATMs & POSs.
DEPOSIT PREMIUM SCHEME (DPS)
A certain amount is deposited every month in an account (also called monthly pension
scheme), which is accumulated over a specified period of time. Deposit Premium Scheme
(DPS) is the most attracting deposit scheme that is offered by BRAC bank limited. Deposit
Premium Scheme is specially designed for the fixed monthly income group. Upon
maturity the total amount (total accumulated deposits with accumulated accrued interest)
is made available to the DPS account holder.
Special Feature of this Scheme:
Features
• Monthly installments can be as low as Tk. 500 or any multiples of it
• Choose any day as your installment date
• Receive a Savings a/c with a personalized cheque book

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• On-line banking facilities
• You don't need to stand in a long queue to deposit your DPS Installments. You can
always deposit more than one installment in your savings account and we'll
automatically transfer the installment to your DPS account on due dates
BRAC Bank is well poisoned to be the leading Personal Banking business amongst the
local private banks. Bank's conscious efforts in brand building, introducing and supporting
new packaged products, developing PB organization along with non-traditional delivery
channels have resulted in good brand awareness amongst its chosen target markets.
Installment based savings schemes are a major category of saving instruments amongst
mid to upper middle-income urban population.
DPS is an installment based savings scheme (Deposit Premium Scheme) of BRAC Bank
for individual clients. The key differentiators of the product will be –
 Amount of monthly deposit - The scheme offers the clients the flexibility of
tailoring the amount of monthly deposit based on his monthly cash flow position.
The minimum monthly deposit will be BDT 500.00 The client will have the option
of depositing any amount in multiples of BDT 500.00.
 Flexible tenor of the scheme- The client has flexibility of deciding on the tenor of
the scheme in-terms of number of months. However, the minimum tenor would be
10years.
 Flexibility to open any number of DPS Account- A client can open maximum
five DPS accounts in client‘s name, in his/her spouse‘s name or in the name of
his/her children or in joint names with any of his/her family members.
 Premature encashment – if any client closes the deposit account before one year,
s/he will not be entitled to any interest. Account running more than a year will be
eligible for the prevailing interest offered in the savings account.
 NO Late payment fee – Clients failing to deposit any installment will not pay any
late payment fee

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 Payment through Account – Clients will have to open an Account with BRAC
Bank Limited and a standing instruction will be executed for auto-debit to effect
the monthly installment.
 OD Facility against DPS - Clients will have the option of taking advance upto
90% of the deposited amount at the time of application. However, to be eligible for
the OD facility, the account must be at least 2 years old
Restrictions and Client Eligibility
 Any Bangladeshi Citizen attaining 18 years of age will be eligible to avail this
product by opening an account in any of the branches of BBL. Branch will ensure
compliance with account opening formalities.
 A minor operated by the legal guardian may also open the account.
 The tenor and the deposit amount agreed by the applicant and accepted by the
Bank at the time of opening the account cannot be changed afterwards.
Closure of Account The account will immediately cease to operate in case of the
following:
 Death of the account holder.
Settlement of the Account Documentation - In order to open the account, the account
holder will execute the following documentation:
 Fulfilling Account opening formalities
 Filling up the DPS Application form
 2 copy Pass port size Photograph of the applicant
 1 copy passport size photograph of the nominee attested by the applicant

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Chapter - 5
Job Part

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5.0 Introduction
The SME, Probashi and Cash management business of Brac Bank Limited is mostly
dependent on corresponding banking relationship. BRAC Bank has to open accounts with
the other banks in the remote areas where banks representation not available. The
corresponding bank accounts are used for SME disbursement, realization, remittance and
cash management purpose. Every month we have found a huge number of entries un-
reconciled between the bank and the corresponding banks book.
Bank has to prepare the periodic reconciliation statements to identify any mismatch.
Reconciliation is the process of systematically comparing the balance of bank statement
with the balance as per the company‘s ledger and explaining any differences and taking
necessary measures to correct the wrong entries. It is an important internal control
mechanism of the bank.
The responsibilities of reconciliation of BRAC Bank are centralized and given to Central
Operations. There is a separate devoted team under the Central Operations for identifying
the unmatched items, analyzing the same and guide to the initiating departments to do the
rectification. Reconciliation section of Central Operations prepares and submits a status
report on monthly basis and the same to all concerned departments and Operational Risk
Management Departments for their information and monitoring. Also submits a status
report to MD & CEO and DMD, CIO and Hoed of Operations for their information.
Why Reconciliation?
To identify the nature of reconciliation items and adjusts these to ensure that the profit and
loss and balance sheet reflect the true net position of the bank at the consolidated level.
1. Enhance the control environment.
2. Minimize the enterprises risk
5.1 Job Description
In order to achieve best service quality BRAC bank has separate department called
―SERVICE QUALITY DEPARTMENT‖, which is responsible of maintaining over all
services of the bank to satisfy customers. To establish world class guest experience in all
its operations it mainly focusing on people, infrastructure, technology, products and
process. To illustrate the fact, Brac Bank now uses the word ―Guest‖ instead of
―Customer‖. In order to ensure such experience Brac Bank always looks for enthusiastic
people as employee and interns as well.

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5.2 Key Responsibilities
Ensuring first hand services to the guest
Keep observing the service activities during the service hour
Guiding lost clients to have proper services
Having guest suggestion and complains and reporting to BM
Ensuring clients solutions and quality services
5.2.1 ENSURING FIRST HAND SERVICES TO THE GUEST:
Bank is a financial institution so it is very tuff for a guest to know each service point. They
sometimes come up with such problems for which they need not to talk to customer
service manager or Branch manager. Like – how to write a deposit slip or how to use
ATM card in booth etc. in that situation my primary duty was to greet them so that they
rely upon me to have on the spot service. On the other hand my primary duties are
understanding guest‘s problem and guide im or her to talk with the right person on the
right desk.
5.2.2 KEEP OBSERVING THE SERVICE ACTIVITIES DURING THE
SERVICE HOURS:
During the service hour, many unusual situations may arise. So my another duty was to
keep looking into those situations and make instant solutions like keep looking whether
staff behaving the way they should behave or not. To look after whether any staff is
ignoring any customers or ot, was my another job duty.
5.2.3 GUIDING LOST GUESTS TO HAVE PROPER SERVICES:
It is usual situation that different professions people come to bank every day. Some
profession people come to bank for the first time and doesn‘t know overall service
arrangement of the bank. They enter into the branch and starts wondering around within
the bank. They get completely lost. So, my responsibility was to listen and guide them in a
proper way.
5.2.4 HAVING CUSTOMER SUGGESTION AND COMPLAINTS
Since each branch is a touch point for the bank so it‘s the better option for SQ department
to have better guest experience. Another duty is to collect such suggestions and complain
from uests and reporting to the Branch Manager.

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5.2.5 ENSURING CUSTOMER SOLUTION AND QUALITY
SERVICES
A guest should have a complete solution of a problem from branch. If it is not possible for
customer service officer then take him/her to customer service manager even if it is not
possible for the CSM then take him/her to BM. In the meanwhile I have to ensure the
quality service to he guest.
5.3 Different Aspects of Job
There are five essential areas to excellence in guest experience. BRAC Bank guest
experience standard will apply it the five aspects for excellence in guest experience listed
below—
1) People 2) Premises 3) Papers 4) Processes and 5) Practices
 People: The team who serves the guests
 Premises: The location or place where we serve the guests
 Papers: The documents we use to provide and receive information and to
communicate with our guest and colleagues
 Process: the process that enable us to delight our guests
 Practices: the way we interact and talk with our guests.
For keep concentrating on service issues, Brac bank has prepared guest experience
fundamentals for its entire team member. Brac Bank‘s guest standards are—
 BOLD: All team members are will be bold and on behalf of their guests and
colleagues. They will be first to greet, first to listen and first to make any
suggestions. They are the persons who satisfy the demands of the guests even if
they are unexpressed
 RELIABLE: The team member will take full ownership in serving their guests to
their complete satisfaction
 APPEALING: The team members have to ensure that all guest touch points are
appealing and inviting
 CONSISTENT: The team members will ensure that their guests experience
quality is consistent in all aspects across all guest service point all the time.
Apart from the above mentioned jobs, I was appointed for following works as well.
Software called Finacle where I have to do:

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 CIF (Customer Information Form).
 A/C verify & close
 FDR, DPS opening
 Cheque book, ATM card issue, Active. 
My major job purpose & principle accountabilities in the banks are as follows:
 Ensure account opening, modification, closing, and ATM card & Cheque book
requisition and remittance activities.
 Implement client service strategies to achieve BRAC Banks objective and plans
 Ensure quick resoling of client quires and issues
 Efficiently handle customer complains
 Properly maintain FDR, ATM, Account and other registers
 Receiving checks, issue cheque book, Fund transfer
 Verifying check book register, Customer Signature verification
 Writing pay order, Statement inquire
 Checking balance as per individual customer request
 Providing all kinds of general banking information to the customers
 Issuing check books and posting them into the system.
5.4 Critical Observations & Recommendation
BRAC Bank is now mainly focusing on the service quality issue because it believes in long
term relationship with its guest. Bank believes that if every guest has a positive image about
the bank then they will wholeheartedly refer BRAC Bank to others. My observation shows
that positive word of mouth has more power than the promotion, products and price. To do so
it needs more priority on customer services than any other thing. Due to huge customer base
and cross cultural differences it seems very difficult for the team to properly manage customer
satisfaction. So from my point of view the team member should have more cross cultural
training in order to nderstand guest best.

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5.5 Reconciliation – Process Flowchart

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5.6 Description of Process Flow Chart
5.6.1 Statement collection
Wholesale Banking Operations Department is responsible for collecting the Bank
statements from correspondence Bank by 7
th
of the following month. Concern staff of
WBO collects Mother A/c statements.SME CRO‘s will collect Child A/c statements and
send those to FIS by 1
st
week of every month. After receiving a/c statements FIS will
deliver to original statement to Central Operations by 10
th
of every month for
reconciliation and preserve a copy duly received by Central ops. If any pending of found
any problems in the bank statements Wholesale Banking Operations Department will
communicate with the concerned CRO/ZM of SME for sending the corrected copy to
Central Operations Department within 05 working days from the date of receipts.
5.6.2 Reconciliation Process
i) After receiving Bank statement from Wholesale Banking Operations Department,
Reconciliation Team takes print of the GL account and cross/match all entries between
Bank statements and GL account to identify unmatched entries.
ii) Reconciliation statements of all unmatched entries are prepared by identifying team and
send to analyzing team for adjustment.
iii) Respective department will provide all supporting documents if required by
reconciliation team within 2/3 working days for analyzing entries
5.6.3 Analysis & Adjustment
Adjustment team prepare a statement of all identified mismatch entries with supporting
documents and send the same to respective departments to pass the necessary correction
entries for adjustments
Upon receipt the statement (Adjustment advice) from Central Operations, respective
departments will pass the correct entries within 03 working days and send a copy to
Central Operations for recording.

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5.7 Bangladesh Bank Reconciliation
5.7.1 Reconciliation Process
After receiving Bank statement from Wholesale Banking Operations Department,
Reconciliation Team takes print of Office account ledger and cross/ matches all entries
between Bank statements and Office ledger and identifies unmatched entries.
After identifying the entries the Identification wing prepare the reconciliation statement of
all unmatched entries and send to Analyzing team for Adjustment.
Analysis & Adjustment
After analyzing all un adjusted entries, Analysis and Adjustment team will prepare a
statements with supporting documents and send it to concern departments to pass the
necessary entries for adjustments.
REPORTS and MIS
Reports
 Prepares the detail monthly reconciliation statement of Inter- branch and send it to
Bangladesh Bank as per Bangladesh Bank DOS circular no-2 dated January 28,
2007.
MIS
 Prepares an aging analysis and forward it to:
 Managing Director and CEO
 Deputy Managing Director
 Chief Information Officer
 Head of operations
 All Concerned Department /Branch for information & necessary action
Meeting with Related Departments
 Arrange monthly meeting with all related departments regarding the status of
reconciliation.
 Minutes of the meeting are circulated to all participants.

Page | 53

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Chapter - 6
Project Part

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6.0 Definition of SME
An SME is defined as, ―A firm managed in a personalized way by its owners or partners,
which has only a small share of its market and is not sufficiently large to have access to
the stock exchange for raising capital‖. SMEs ordinarily have few accesses to formal
channels of finance and depend primarily upon savings of their owners, their families &
friends. Consequently, most SMEs are sole proprietorships & partnerships. As with all
definitions, this one is not perfect. Depending on context therefore definition of an SME
will vary.
Despite the common features globally, countries do not use the same definition for
classifying their SME sector. Also, a universal definition does not appear feasible or
desirable. SMEs have been defined against various criteria. The three parameters that are
generally applied by the Governments to define SMEs are:

 Capital investment in plant and machinery
 Number of workers employed
 Volume of production or turnover of business
Other definitions are based on whether the owner of the enterprise works alongside the
workers, the degree of sophistication in management, and whether or not an enterprise lies
in the "formal" sector. The definitions in use depend on the purposes these are required to
serve according to the policies of the respective countries/Governments.
A quantitative definition in each national context is, however, advantageous, as it makes it
easier to target macro-level policies for a specific group of enterprises. The countries with
such definitions have recorded a higher growth rate in the SME sector. This indicates that
the more precise the definition, the more effective the transaction of policies intended to
benefit the sector with actual results. In countries where no definition exists, the
enterprises are in a disadvantageous position.
Definition of SME as per Bangladesh Bank
Organizations not a public limited company meet the following criteria

Page | 56
Definition of SME as Per BRAC Bank
Based on the bank‘s perspective of SME and its stumbling blocks and considering the
context of Socio-economic status of our country SME investments become:
6.1 SME History of BRAC Bank
He wants to see poverty banished forever. This has been his single-minded pursuit in life.
Ever since a devastating cycle wreaked havoc on the lives of the people and property in
the coastal regions of pre-independence Bangladesh 1970, everything changed for a young
chartered accountant. The young man was so moved by the death and destruction that he,
along with some friends, dedicated to set up HELP to carry out relief and rehabilitation
efforts. Later after the independence of Bangladesh the young man sold his flat in London
and decided to set up a relief and rehabilitation center in the war ravaged Bangladesh. He
never looked back.
He is Sir Fazle Hasan Abed, the founder and chairperson of BRAC, the world‘s largest
NGO, arguably in terms of size and operation. BRAC has been working relentlessly to
realize the hidden potential of mankind, especially the ones who are most deprived of
opportunities.

Page | 57
It is this same vision that motivated him to come up with a bank that could realize the
untapped potentials of this country. Traditionally banking in Bangladesh has mainly
addressed the mid to large sized businesses or the professionals. When Sir Fazle Hasan
Abed established BRAC Bank he did it with the goal to serve the highly motivated group
of entrepreneurs who wanted to break out of the vicious cycle of poverty and take control
of their own future. We call them the ―Missing Middle‖. His long cherished dream of
availing quality finance services to these small to medium businesses finally come to
reality. BRAC Bank proud to be the pioneering and largest SME bank in Bangladesh,
discharging over 10,000 crore taka in SME loan and helping fulfillment of more than
256,000 dreams that change hundrerds and thousands of lives everyday.
SME banking division of BRAC Bank Limited has successfully made a mark in creating
platform for small and medium entrepreneurs in ―Access to Finance‖, the key to the prime
obstacle towards growth of SMEs. Since inception BRAC Bank upholds the motto to
finance the ―Missing Middle‖ the underserved market segment of SMEs. Years of market
knowledge and understanding, committed resources, countrywide coverage and well
aligned strategies have made the bank an expert in SME financing and the bank has
successfully developed an examined and successfully model in SME financing in
Bangladesh.
The bank has incorporated double bottom line approach in its operation –
1) Making profit by mobilizing fund from urban to rural areas.
2) Performing social responsibility by creating an entrepreneurial class.
Along with Small & Medium Enterprise financing, SME banking division is also actively
working in creating awareness and imparting knowledge to SMEs about financial record
keeping, dealing with modern banks and industry best practices in SME operation. In an
attempt to ensure customer awareness and to strengthen the relationship with customers,
SME banking division arranged informative campaigns and road shows for SMEs located
across the country.
6.2 Importance of SME
The main focus of BRAC Bank is to develop human and economic position of a country.
Its function is not limited only to providing and recovering of loan but also try to develop
the economy of a country.
So reasons for this program from the viewpoint of BBL:

Page | 58
6.2.1 Support Small Enterprise
The small enterprise, which requires BDT 2 to 30 lacks loan, but they have no easy access
to the banks/financial institutions. For example: In case of Anonno loan, an amount of 3 to
8 lacks is provided without any kind of mortgage.
26 SME Activities of BRAC Bank Limited
6.2.2 Economic Development
Economic development of a country largely depends on the small and medium seal
enterprises. Such as, if we analyze the development history of Japan, the development of
small & medium scale enterprises expedite the development of that country.
6.2.3 Employment Generation
The bank gearing employment opportunities by two ways: Firstly, by providing loan to the
small enterprises expanding, these businesses require more workers. Secondly, Small &
Medium Enterprise (SME) program requires educated and energetic people to provide
support to entrepreneurs.
6.2.4 Profit Making
SME program is a new dimensional banking system in the banking world. Most of the
CROs are providing door-to-door services to the entrepreneurs. Entrepreneurs are satisfied
by the service of the bank and make profit.

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6.2.5 Encourage Manufacturing
The focus of BRAC Bank is to encourage manufacturing by the entrepreneurs who
produce by purchasing various types of materials. CRO try to educate them to produce
material if possible because if they can produce in line of purchase profits will be high.
6.2.6 Spread the Experience
Another reason of BRAC Bank is to spread the knowledge on the importance of SME
banking regarding various businesses. The customer services officer share their knowledge
from various businesses and tries to help the entrepreneurs who have shortage of the
gathered knowledge. CRO‘s who are the driving force of SME division of BRAC Bank
also gather knowledge about various businesses and make stronger knowledge base.
6.3 SME Products
6.4 The process of SME Loan
Financial and development assistance designed especially for small and medium
enterprises in Bangladesh is a new and upcoming trend. After the surge of micro-finance
in the last two decades, small and medium enterprises have come to the limelight in the
financial sector on account of their contribution to economy and yet limited access to
finance. Both micro-finance institutions and banks are beginning to realize the potential of
this market and designing new financial products for it. BRAC Bank started providing
credit to small and medium enterprises in 2002 in recognition of their special needs. With
this end in view-BRAC Bank was opened to serve these small but hard working
entrepreneurs with double bottom line vision. As a socially responsible bank, BRAC Bank
wants to see the discharge of grass-roots level to their economic height and also to make
profit by serving the interest of missing middle groups. BRAC Bank is the market leader
in giving loans to Small and Medium Entrepreneurs and they have been doing it for the
last Eight years since 2002. BRAC Bank‘s SME Unit is the first of its kind to provide

Page | 60
financial services on a national scale to small and medium sized entrepreneurs. After 18
months of operation, BRAC Bank approached BRAC RED to undertake an exploratory
study on the effect of BRAC Bank‘s SME Unit lending on.
6.4.1 Anonno Rin
This is a small scale loan designed to finance small scale trading, manufacturing and
service ventures, especially to aid the purchase of fixed assets and to finance working
capital.
Eligibility
 Entrepreneurs aged between 18 to 60 years
 Entrepreneurs with minimum 2 years experience in the same line of business
 A business which must be a going-concern with more than 1 year in operation
Maximum Amount
 From minimum BDT 3 lac up to maximum of BDT 8 lac
Features
 Loan without mortgage
 For excellent borrowers who have paid or paying in due times, we offer discounted
rates
 Quick, quality banking throughout the country
 Potential women entrepreneurs will also get the facilities of this loan
6.4.2 Apurbo Rin
In order to help our SME borrowers for financing working capital or to purchase fixed
assets, BRAC Bank offers APURBO. It caters to the need of entrepreneurs who are
operating in trading, manufacturing, service, agriculture, non-farm activities, agro- based
industries and other sectors of our economy.
Eligibility
 Entrepreneurs having a minimum of 3 years of some business activities
 A business which must be a going concern for 3 years
 Age minimum 25 years and maximum up to 60 years
Maximum Amount
 Starting from BDT 8 lac to maximum of BDT 30 lac

Page | 61
Features
 Without mortgage loan below 10 lac
 Simple loan processing for expanding your business
 Quick disbursement
 Disbursement in one or two installment
 Flexible monthly repayment loan
6.4.3 Pathshala Rin
This is a loan designed to meet the needs of small and medium sized private educational
institutions, such as kindergartens, schools and colleges etc.
Eligibility
 A small & medium educational institute that is in operation for minimum 3 years
 The institution should be sole proprietorship, partnership, private limited company
or society
 The educational institute must be a profit making concern
Maximum Amount
 Minimum BDT 3 lac to maximum BDT 30 lac
Features
 Without mortgage for loan below 10 lac
 Laon for fixed assets purchase & civil construction
 Loan repayment can be spread up to 4 years
 Minimum documentation
 Monthly repayment loan
 Flexible interest rate based on security
6.4.4 Aroggo Rin
This loan is suitable for private clinics, diagnostics centers and doctors' chambers to
purchase fixed assets under equated monthly installments.
Eligibility
 Institutions with at least 2 years in operation & profit making concern
 Doctors having 5 years of experience
Maximum Amount

Page | 62
 Minimum of 3 lac to maximum of 30 lac
Features
 Loan without mortgage up to 8 lac
 Easy loan processing
 Loan repayment schedule is spread up to 3 years
 1% loan processing fee
 Flexible interest rate based on security
6.4.5 Digoon Rin
DIGOON RIN is a loan facility for Small and Medium enterprise. This product‘s main
objective is to help various Small and Medium entrepreneurs to meet their short-study
cash flow shortages or bridge the fund-flow gaps.
For your business expansion, you do not need to encash your savings rather you can take
double amount of loan on your deposit
Eligibility
 Entrepreneur having minimum 2 years of business activities
 The business which must be going concern for 2 years
 Aged between 18 years to 55 years
Maximum Amount
 Minimum of 5 lac to maximum of 30 lac BDT
Features
 Double amount of loan on your deposit
 Attractive return against the deposit
 Flexible repayment plan monthly installment and single installments
6.4.6 Supplier Finance
SUPPLIER FINANCE is a loan facility for the enlisted Suppliers of various large retailers,
marketing companies, distributors, exporters etc. This product‘s main objective is to help
various Suppliers to meet their short-study cash flow shortages or bridge the fund-flow
gaps.
Eligibility
 If you are an enlisted supplier of a corporate house with which BRAC Bank has a
corporate tie-up

Page | 63
 Have minimum 3 years of continuous operation
 Have 1 year continuous relationship with the purchasing firm
Maximum Amount
 Minimum BDT 3 lac up to maximum BDT 30 lac
Features
 Equal monthly installment and revolving loan facility
 1% of loan amount as the processing fee
6.5 Terms and Conditions of SME Loan
The SME department of BRAC Bank will provide small loans to potential borrower under
the following terms and condition:
 The potential borrowers and enterprises have to fulfill the selection criteria
 The loan amount is between Tk. 2 lacks to 3.5 crore.
 Loan can be repaid in two ways:
a) In equal monthly loan installment with monthly interest payment, or
b) By one single payment at maturity, with interest repayable a quarter ends residual
on maturity
 Loan may have various validates, such as, 3 months, 3 months, 6 months, 9 months, 12
months, 15 months, 18 months, 23 months, 30 months and 36 months.
 The borrower must open a bank account with the same bank and branch where the
SME has its account
 Loan that approved will be disbursed to the client through that account by account
payee cheque in the following manner: Borrower name, Account name, Banks name
and Branch‘s name
 The loan will be realized by 1st every month, starting from the very next month‘s
whatever the date of disbursement, through account payee cheque in favor of BRAC
Bank Limited A/C. With Bank‘s named and branches name
 The borrower has to issue an account payable blank cheque in favor of BRAC Bank
Limited before any loan disbursement along with all other security.
 The borrower will install a signboard in a visible place of business of manufacturing
unit mentioned that financed by ―BRAC Bank Limited‖.
 The borrower has to give necessary and adequate collateral and other securities as per
bank‘s requirement and procedures.

Page | 64
 SME, BRAC Bank may provide 100% of the Net Required Working Capital but not
exceeding 75% of the aggregate value of the Inventory and Account Receivables. Such
loan may be given for periods not exceeding 18 months. Loan could also be considered
for shorter periods including one time principal repayment facility, as stated in loan
product sheet.
6.6 Procedure of BRAC Bank SME Loan
Loan Sanction activities:
 Select potential enterprise: For SME loan, in this step the CRO conduct a survey and
identify potential enterprise. Then they communicate with entrepreneurs and discuss
the SME program.
 Loan Presentation: The function of CRO is to prepare loan presentation based on the
information collected and provided by the entrepreneur about their
 Business, land property (Where mortgage is necessary)
 Collect confidential information: Another important function of a CRO is to collect
confidential information about the client from various sources. The sources of
information are suppliers regarding the client‘s payment, customers regarding the
delivery of goods of services according to order, various banks where the client has
account, which shows the banks transactions nature of the client.
 Open clients accounts in the respective bank: When the CRO decided to provide loan
to the client then he/she help the client to open an bank account where BRAC bank
has a STD a/c. BRAC bank will disburse the loan through this account. On the other
hand the client will repay by this account. Although there is some exception occur by
the special permission of the authority to repay by a different bank account.
 Fill up CIB form: CRO give a CIB (Credit Information Burue) form to the client and
the client fill and sign in it. In some case if the client is illiterate then the CRO fill the
form on behalf of the client. Then CRO send the filled and signed form to the SME,
head office.
 Sending CIB to Bangladesh Bank: The SME, head office collects all information and
sends the CIB form to Bangladesh Bank for clearance. Bangladesh Bank return this
CIB form within 10-12 days with reference no.
 CIB report from Bangladesh Bank: In the CIB report Bangladesh Bank use any of
the following reference no:

Page | 65
 NIL: if the client has no loan facility in any bank or any financial institution then BB
(Bangladesh Bank) use ‗NIL‘ in the report
 UC (Unclassified): if the client has any loan facility in any bank or financial institution
and if the installment due 0 to 5.99 then BB use UC in the report
 SS (Substandard): if the client has any loan facility in any bank or financial institution
and if the installment due 6 to 11.99 then BB use SS in the report
 DF (Doubtful): if the client has any loan facility in any bank or financial institution
and if the installment due 12 to 17.99 then BB use DF in the report
 BL (Bad lose): if the client has any loan facility in any bank or financial institution and
if the installment due 18 or above then BB uses BL in the report. This report indicates that
the client is defaulter and the bank should not provide loan the client.
 Loan decision considering CIB report: Considering CIB report, BRAC bank decide
whether it will provide loan the client or not. If the bank decides to provide loan then the
SME of head office keep all information and send all papers to the respective unit office to
apply with all necessary charge documents.
Loan Sanction
The respective unit office sanctions loan to the client if it is 2 to 5 lacs, and then sends the
sanction letter including all necessary charge documents to the loan administration
division for disbursing the loan. If the amount is higher than 5 lacs then the respective unit
office sends the proposal to SME, head office for sanction. The head of SME sanctions the
loan and sends the sanction letter including all documents to the loan administration
division for disbursement and inform the respective unit office regarding sanction of the
loan.
Disbursement of SME loan
i. Pre Disbursement Manual Activities
 Prepare loan file: Receiving all documents, Loan Administration Division prepare
a loan file with all documents received from the unit office.
 Charge documents checking: The loan administration division checks all charge
documents. Following charge documents are checked:
 Money receipt (Risk fund).
 Sanction letter.
 Demand promising note (With stamp of Tk 20/=)

Page | 66
 Letter of arrangement (With stamp of Tk 150/=)
 General loan agreement (With stamp of Tk 150/=)
 Letter of undertaken (With stamp of Tk 150/=)
 Letter of stocks and goods (With stamp of Tk 150/=)
 Letter of hypothecation book debt and receivable (With stamp of Tk 150/=)
 Letter of disbursement
 Photocopy of trade license (attested by CRO)
 Insurance (Original copy)
 Blank claque with signature (one cheque for full amount and others same as no of
installment on Favor of BRAC bank, no date, no amount)
 Two guarantors (one must be Spouse/parents)
 If the loan provide for purchase of fixed assets or machineries and if the loan
amount is over Tk 50,000/= then the stamp of a certain amount is require)
 Documents deficiency and problem resolving: If there is any error found then it
informed to the respective CRO. If the application form is not filled properly then the file
send to the CRO to fill the application properly. If any document error found then the loan
administration division asked the CRO to send the require documents and the file stored to
the loan administration division.
 Prepare disbursement list: The loan administration division lists all new
sanctioned clients‘ details and send a request to the treasury through internal mail.
 Disbursement of the amount: Sending the list to the treasury of BRAC bank for
disburse the amount, the treasury disburse the amount to the client through the mother
account of the clients bank. BRAC bank disburse amount through any of the following
banks corporate branch nearer the BRAC bank head office and the corporate branch of the
respective bank send the amount to the client account in the respective branch. These
banks are:
 BRAC Bank Limited
 The City Bank Limited
 Janata Bank
 Bangladesh Krishi Bank
 Pubali Bank

Page | 67
 Agrani Bank
ii. Message sent to the unit office: Completing the disbursement, loan administration
division sent a SMS to the respective CRO informing the disbursement of the sectioned
loan.
MBS (Millennium Banking System) entries for loan disbursement:
 Initial ID generation: After sending the list to the treasury, the loan
administration division generates an initial ID against the borrower. Entering
required information, the banking software MBS automatically provide a ID no for
the borrower.
 Loan account opening: According to the ID, the loan administration division
opens a loan account in MBS against the borrower. Entering all required
information, the MBS automatically give an account no. For the borrower.
 Cost center assign: The loan administration division enter the following
information in MBS:
 Security details set-up
 Guarantor details set-up
 Loan other details set-up
 Risk fund collection: The loan administration division opens a different account
risk fund of the client. This is known as loan processing fees. Receiving the risk
fund, the loan administration division prints voucher and posting the voucher in the
MBS. The amount of risk fund is not refundable.
 Activision of the loan: Loan administration division do the following tasks to
activate the loan
 Loan sanction details set-up
 Repayment schedule set-up and printing
 Loan activation
 Disbursement and CC wise voucher print
 Disbursement voucher posting

Page | 68
Post Disbursement Manual Activities
 Repayment schedule sent to unit office: Completing the disbursement of the
sanctioned amount the loan administration division prepare a repayment schedule
in MBS and send it to the unit office. CRO from the unit office collect it and
reached to the respective client. The client repays the loan according to this
schedule.
 Loan details MBS entry: The loan administration division enters details
information regarding the loan in MBS. Each officer has an ID no in MBS and if
there is any error found then the respective officer would be responsible for it. So
everybody remain alert at the time of MBS entry.
 Document stamp cancellation: The loan administration division cancels all
document stamps. In future if any client found defaulter and the bank file sued
against him then stamps of these document help to get the judgment favor of the
bank. But If these stamps are not canceled then the judgment may not on favor the
bank.
 Send the loan file to archive: completing all activities, loan administration
division sends the loan file to the archive for future requirement. In future if any
document of the loan account requires then the bank can collect the file from
archive and get the necessary document. If the clients take repeat loan then it is not
require applying all documents because his all documents stored to the bank.
6.7 Analysis of SME Loan Repayment Behavior
SME loan in fact, a small loan ranging from 2 lacks to 30 lacks given to small or medium
enterprises not for initiating the business but for the purpose of working capital
management or for purchasing any long term asset. Any sound organization after one year
of their starting of business can apply for this loan. It almost a rare case for BRAC Bank
that an SME borrower will default to repay the loan he/she has taken even the loan is
given without taking any collateral. There are several reasons for which the SME loan
borrowers hardly default. These reasons may like:
 The loan amount is not as large as it would be difficult to repay it.
 Mediocre entrepreneurs hardly default to repay loans. They are very conscious
about their reputation in the market.

Page | 69
 As the loan is taken for meeting up of working capital, it can be easy to repay after
the sales revenue is collected from respective customers.
However, from the observation of 40 SME loan borrowers‘ personal and repayment
information we find the following results:
 Average age of SME borrowers is 39
 Average education of most of the SME borrowers is Class IX or X.
 Average Experience (As a promoter of the business) is 11 years (along with some
extreme values.
 Average Experience (As an employee of the same business) is 8 years
 Monthly income and expenditure of the Entrepreneur is around TK. 30000 and TK.
23000 respectively.
 Average personal and family assets are around TK. 150000 and TK. 240000
respectively
 Almost all of the borrowers are 55% retailer and 45% whole seller
 Average number of employees they have is 3
 Average Amount of loan taken by them is around TK. 379729.7
 Average time period of loan they take to repay is 26 months
 Average amount of loan suppose to be paid is 275314.47
 Average amount of loan currently repaid is TK. 286847.62 per person.
 Average amount of loan due for recovery is TK. 6679.62 per person.
We have gathered 8 variables to analyze the relationship of each variable with recovery
rate. These variables are:
 Age of the borrowers
 Education of the borrowers
 Experience of the borrowers related to their business.
 Amount of loan taken by the borrowers
 Term of loan
 Income of the borrowers
 Personal Asset of the borrowers

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 Nature of business
6.7.1 Relationship of recovery rate with age of the borrowers:
We can analyze the relationship sequentially:
The relationship of recovery rate with the age of the customers can be described from the
following charts:
From the above chart we can see that recovery rate increases as the age of the borrowers
increases. Here the recovery rate is lowest at the age group of 21-25 for the lacking of
experience and knowledge in the related business. They can‘t make the proper use of
funds. And that‘s why their business fails. At the age of 31-35 recovery rate is 100%. At
that age group people like to behave professionally and control everything with strict
discipline. They are highly concerned about their career which brings success to their
business. So at that time recovery rate is the highest. Again at the age of 50 and above
recovery rate is also 100% because of their huge experience and success in business.
6.7.2 Relationship of recovery rate with education of the borrowers:
From the above chart we can see that Small and medium businesses are not highly affected
with the educational background of the borrowers. That‘s why recovery rate also is not

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