Credit Risk management of Jamuna bank Ltd. bangladesh.

1. Md. Ruhul Islam Arif
ID: 50814058

2.  Jamuna Bank Limited (JBL) is a Banking Company registered under
the Companies Act, 1994 with its Head Office at Chini Shilpa
Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation
from 3rd June 2001. The Bank undertakes all types of banking
transactions to support the development of trade and commerce of the
country.

3. “Your partner for growth”

4. Particulars 2011 2010 2009 2008 2007
Deposit 70508.05 60673.56 42356.20 27307.94 20924.02
Loans & 56611.79 49430.50 32287.66 21036.86 16617.45
Advances
Import 55907.00 61034.50 46685.00 30311.71 22191.84
Export 57929.40 41860.40 21407.00 18617.43 13990.33
Guarantee 5687.20 6620.00 2908.50 2648.40 2032.50
Remittance 3360.03 1594.11 2657.64 3165.00 2506.00
% NPLs 2.86 1.83 2.2 2.84 5.06
Profit after tax 1330.20 1066.38 923.12 476.43 89.11
Total Capital 7552.79 6350.02 3997.66 2444.34 1872.72
EPS (in Tk.) 3.65 2.92 5.67 3.62 0.73

5.  To look at the types of credit offered by Jamuna Bank Limited & its
overall Credit Management.
 To critically evaluate the avenues of credit policies & guidelines
followed by Jamuna Bank Limited.
 To know the techniques of Credit Risk Management of Jamuna Bank
Limited.
 To evaluate the Credit performances of Jamuna Bank Limited.

6.  The respondents of the population were limited in terms of size and
composition. Since, I have conducted survey, there were lot of
chances that all the respondents was reluctant to fill up the
questionnaire.
 Some of the data were collected from online sources. So there was
every chance of some misrepresentations of information from the part
of Bank.
 The sample size was kept restricted within 50 only, which may fail to
represent the actual scenario of the relationship between measured
variables.
 There are many other factors which can influence customers’
satisfaction regarding credit management practices. However, I have
not considered those because of the simplicity of the research.

7.  Research Design: Descriptive Research will be done to find out the
present Credit Management Practices of Jamuna Bank Limited.
 Population Size: The population of the research was all the Credit
Customers of Jamuna Bank Limited.
 Sample Size: 10 customers of each of the five branches of Jamuna
Bank Limited were selected as a sample for this research.
 Sampling Technique: Here Simple Random Sampling (SRS)
technique is followed due to shortage of time which means that it was
a probability sampling technique.
 Scaling Technique: A 5-point Likert scale was used in the study in
which the respondents were asked to indicate their degree of
agreement with the statement.

8.  Sampling Unit: The customers of five branches of Jamuna Bank
Limited who come frequently in the Bank for different services. The
branches are:
Foreign Exchange Branch Dilkusha Branch
Dhanmondi Branch Mohakhali Branc
Gulshan Branch
 Data collection method
 Primary source: The data on the customer perception about credit
facility will be collected from the cooperative respondents through a
structured questionnaire
 Secondary source: The data has been collected from brochures,
journal, magazine & annual report of Jamuna Bank Limited.

9. Customer Opinion on Customer Opinion on
Sl. No. Sl. No.
Jamuna Bank Limited Jamuna Bank Limited
1. Quick disposal of loan 11. Convenient branch location
proposal
2. Competitive intt. rate for 12. Loan for all types of
loans & advances customers
3. Complicated loan 13. Collateral security free
documentation lending
4. Risk based lending 14. Privacy of credit information
5. Provides prompt desk 15. Trustworthy banker-
service customer relationship
6. Reduced bank charges 16. Fastest solution of credit
complain
7. Enables electronic banking 17. No hidden charge
facilities
8. Delivers secured lending 18. Dependable credit
service counseling
9. Cordial reply to credit 19. Diversified credit product
queries
10. Customized credit service 20. Widest branch network for
to corporate client credit operation

10.  On a five-point Likert scale, the maximum mean score obtained is 9.4
(SD = 17.20) for variable F2 i.e. for Competitive intt. rate for loans &
advances. It means that most of the customer is satisfied with Jamuna
Bank’s Competitive intt. rate for loans & advances policy among other
variables. Next, they prioritized Reduced bank charges, Enables
electronic banking facilities & No hidden charge where mean is 9.2
(SD=14.79), 9.2 (SD=14.79) & 9.2 (SD=17.30) respectively. Thereafter,
Delivers secured lending service is rated by the customers measuring
mean 9.00 (SD=12.73). The customers also opine that Jamuna Bank
provides Dependable credit counseling where mean is 8.6 (SD=12.32).
 Very Poor performance was observed regarding Collateral security free
lending & Loan for all types of customers where mean is 4.2 (SD=6.80)
& 4.6 (SD=4.22) only respectively.

12.  Maximum response obtained for Trustworthy banker-customer
relationship where mean is 7.8 (SD = 8.32) for variable F15. Next,
they prioritized variable F 18 where mean is 7.8 (SD=9.18). It
means that the customers are satisfied with Jamuna Bank’s
Dependable credit counseling policy. Thereafter, Privacy of credit
information & Diversified credit product are rated by the customers
measuring mean 7.8 (SD=9.81) for both of them.
 Very Poor performance was observed regarding Collateral security
free lending for all types of customers & Customized credit service
to corporate client where mean is 4 (SD=3.67) & 5.2 (SD=4.60)
only respectively.

14.  The maximum mean score obtained is 8.2 (SD = 11.80) for variable
F15 i.e. for Trustworthy banker-customer relationship. It means
that most of the customer is satisfied with Jamuna Bank’s policy of
Trustworthy banker-customer relationship among other variables.
Next, they prioritized Cordial reply to credit queries where mean is
8.0 (SD=8.92). Thereafter, Reduced bank charges is rated by the
customers measuring mean 8.0 (SD=9.90). Delivers secured
lending service also important choice of customers of Jamuna Bank
Ltd. where mean is 7.8 (SD=8.32).
 Collateral security free lending & Diversified credit product is not
attracted as mean is 4.6 (SD=4.77) & 5.4 (SD=4.98) only
respectively.

16.  The maximum mean score obtained 8.0 (SD = 8.92) for
variable F17 i.e. for No hidden charge. Next, they priority was
found for Risk based lending where mean is 7.8 (SD=7.36).
 Poor performance was observed regarding Collateral security
free lending & Customized credit service to corporate client
where mean is 4.4 (SD=3.85) & 4.8 (SD=3.36) only
respectively.

18.  F 15 variable is the maximum scorer here where mean is 8.2
(SD=11.80) which represents Trustworthy banker-customer
relationship. The customers next prioritized no hidden charge
where mean is 8.0 (SD=8.92). Thereafter, Privacy of credit
information is rated by the customers measuring mean 8.0
(SD=8.92). The customers also opine that Jamuna Bank
maintains a Cordial reply to credit queries where mean is 8.0
(SD=8.92).
 Very Poor performance was observed regarding Collateral
security free lending, Diversified credit product & Widest
branch network for credit operation where mean is 4.8
(SD=5.76), 5.4 (SD=4.98) & 5.4 (SD=4.98) respectively.

20.  On a five-point scale, the maximum mean score obtained is 40 (SD
= 41.39) for variable F6 i.e. for Reduced bank charges. It means
that most of the customer is satisfied with Jamuna Bank’s reduced
bank charges policy among other variables. Next, they prioritized
No hidden charge, Trustworthy banker-customer relationship &
Dependable credit counseling where mean is 39.8 (SD=41.84),
39.8 (SD=52.60) & 39.2 (SD=41.31) respectively. Thereafter,
Delivers secured lending service is rated by the customers
measuring mean 39.00 (SD=39.34). The customers also opine that
Jamuna Bank provides Privacy of credit information where mean is
38.6 (SD=48.47).
 Very Poor performance was observed regarding Collateral security
free lending & Widest branch network for credit operation where
mean is 22.00 (SD=24.05) & 28.4 (SD=23.59) only respectively.

22.  From the above observations it was found that most of
customers liked the policy of the bank regarding reduced bank
charges. Moreover, the clients are also satisfied with the
bank’s policy on no hidden charge, trustworthy banker-
customer relationship and dependable credit counseling. The
customers also opine that Jamuna Bank provides privacy of
credit information. But very Poor performance was observed
regarding collateral security free lending and widest branch
network for credit operation. However most of the customers
(73%) give favorable opinion regarding credit management of
Jamuna Bank Limited

23.  The primary objectives of the Bank should be directed towards rendering
best services to the clients by prompt granting /sanctioning of loans.
 JBL should initiates different credit product with minimum interest rate
according to changing/ diverse needs of clients by conducting huge
research and study.
 Complete analysis needed to know the bank customers to the highest
possible extent, so that the offered banking products/ services match their
needs and the sale is ensured.
 Applying strategies in relation with the market, efficiently using Bank’s
own resources in order to create new banking products/services and to
diversify them according to the consumers’ wishes and expectations.
 The Bank should adopt new technological equipment.
 The Bank should concentrate on improving their service quality and
efficiency. Bank should train its employee for better service providing.