CHAPTER 1
introduction
1.1 WHAT IS INTERNSHIP?
Internship is a field project for a student of Business Administration of final year
that gives the student a chance to apply business theory practically in any organizational
environment. The objectives of internship are:
1. Practical fulfillment of MBA program.
2. Application of theoretical knowledge into practice.
3. Gaining work experiences.
4. Having an exposure for searching a good job in future.
5. Knowing/understanding gap between theoretical knowledge and practical situation.
Parts of Internship Report:
There are two parts of internship report. They are:
Part A: Organization Part.
Part-B: Project Part.
1.2 Origin of the report
One of the most important factors for industrialization and economic development of a
country is the availability of the credit facility. The continuing crisis of accumulation of
non- performing and default banking loans has emerged as most of the serious
constraint in the path of economic development of Bangladesh as banking remains
the main intermediary vehicles in harnessing capital for accelerating the growth of
the productive sectors in Bangladesh in the absence of a healthy capital market.
But providing loans without proper appraisal are even more dangerous as the
depositors are put into great risk of losing their money and at the end, the crisis
Prepared By- Md. Alamgir 1
might go beyond overcome. So, I think it is very important to gather the technical know-
how regarding the critical analysis of credit approval procedure practiced by
the First Security Islami bank ltd. By preparing this report. This internship report on
First Security Islami Bank Limited is prepared to fulfill The partial requirement of the
internship program as full credit subject of the BBA program of The University. In Bangl
adesh today financial sector is one of the most established areas in the macroeconomic
sector. Economy and financial carrier of the country. So for the aspects of economic
development, banking sector must be reformed. In the process of forming a good
economic system, private banks are paling an important role compare to the government
banks in the country. For this reason I prepared my internship report on First Security
Islami Bank Limited.
1.3 Objective of the Study
To fulfill the partial requirement of the internship program as a full
credit subject of the BBA program.
To know about the sector of SME of FSIBL
To get an overall idea about the SME Banking in Bangladesh.
To know the operation of SME to develop the entrepreneur.
To describe the service of SME Banking of FSIBL
To analyze the barriers faced by the banks for SME Financing.
To know about the contribution of SME in economic development of country.
To know how the entrepreneur benefited from SME.
Prepared By- Md. Alamgir 2
To find out the sectors of SME in which such types of problems exist.
To identify whether all process of SME are perfectly and effectively practiced or not.
To suggest a supportive role in the progress of SME banking system in financial
sector.
1.4 Scope of the Study
This study covered the overall SME banking system of First Security Islami Bank
Limited and also includes the relationship of the credit management with the bank
as well as principle covered by the bank as SME banking system.
1.5 Limitation of the Study
It is an uphill task to study the on the management so the report was completed
under certain constrains which were:
Difficulty in gaining accesses to financial sector.
Non-availability of the most recent statistical data about the SME.
As I am student it is not possible for me to collect all the necessary information from
entrepreneur.
I had to complete this report within a very short span of time that was not sufficient for
investigation.
Lake of Experience about SME financing.
Prepared By- Md. Alamgir 3
1.6 Methodology of the study
This report is based mainly on observations that I experienced during the
internship period.
Data required for this report were collected from the annual report of First Security
Islami Bank. Apart form these; helpful information was collected from online resources.
1.7 Source of Data
The data sources used to prepare this report delineated as follows:
1. Primary Source:
a) Practical deskwork.
b) Face to face conversation with the officers and executives.
c) Face to face conversation with the clients.
2. Secondary Source:
a) Annual report of First Security Islami Bank Limited.
b) Prospectus of First Security Islami Bank Limited.
c) Bank’s financial statement.
d) Bank’s quarterly statement.
e) Bank’s daily affairs.
f) Broachers etc.
Prepared By- Md. Alamgir 4
CHAPTER 2
ABOUT THE FIRST SECURITY ISLAMI BANK LIMITED
2.1 Definition of Bank:
We can define A bank as an institution, usually incorporated with power to issue its
promissory notes intended to circulate as money (known as bank notes); or to receive the
money of others on general deposit, to form a joint fund that shall be used by the
institution, for its own benefit, for one or more of the purposes of making temporary
loans and discounts; of dealing in notes, foreign and domestic bills of exchange, coin,
bullion, credits, and the remission of money; or with both these powers, and with the
privileges, in addition to these basic powers, of receiving special deposits and making
collections for the holders of negotiable paper, if the institution sees fit to engage in such
business."
Generally there are two main way of operating commercial bank. They are conventional
banking and Islamic banking system.
2.2 Islamic Banking:
The Islamic banking has been defined in a number of ways. The definition that is given
approved by Organization of Islamic Conference is most popular. According to The OIC,
The Islamic bank is a financial institution whose status, rules, and procedures expressly
state its commitment to the principle of Islamic Shariah and to the banning of receipt and
payment of interest on any of its operations.
It appears from the definition that Islamic banking is a system of financial intermediation
that avoids receipt and payment of interest in its transactions and conducts its operation in
a way that it helps achieve the objectives of an Islamic economy. And also it is operated
on the basis of Mudaraba theory. According to Mudaraba theory, the relationship
between bank and clients is not debtors-creditors, it is a relationship of trusteeship.
The difference between Conventional and Islamic Banking are shown in terms of a
box diagram as shown below:
Prepared By- Md. Alamgir 5
Conventional Banks Islamic Banks
1 The functions and operating modes of conventional banks are based on manmade principles.
1 The functions and operating modes of Islamic banks are based on the principles of Islamic Shariah.
2 The investor is assured of a predetermined rate of interest.
2 In contrast, it promotes risk sharing between provider of capital and the user of funds.
3 It aims at maximizing profit without any restriction.
3 It also aims at maximizing profit but subject to Shariah restrictions.
4 It does not deal with Zakat. 4 In the modern Islamic banking systems, it has become one of the service-oriented functions of the Islamic banks to collect an distribute Zakat.
5 Leading money and getting it back with interest is the fundamental function of the conventional banks.
5 Participation in partnership business is the fundamental function of the Islamic banks.
6 It can charge additional money in case of defaulters.
6 The Islamic banks have no provision to charge any extra money from the defaulters.
7 For interest-based commercial banks, borrowing from the money market is relatively easier.
7 For the Islamic banks, it is comparatively difficult to borrow money from the money market.
8 The conventional banks give greater emphasis on credit-worthiness of the clients.
8 The Islamic banks, on the other hand, give greater emphasis on the viability of the projects.
9 A conventional bank has to guarantee its deposits.
9 Strictly speaking and Islamic bank cannot do it.
10 The status of a conventional bank, in relation to its clients, is that of creditor and debtors.
10 The status of Islamic bank in relation to its clients is that of partners, investors and trader.
11 The conventional Banking system has the recycling system. They charge interest on interest.
11 In Islami Banking system, there is no recycling of interest. There is mark-up/rebate system.
Prepared By- Md. Alamgir 6
2.3 History of the First Security Islami Bank
First Security Islami Bank Limited (FSIBL) was incorporated in Bangladesh on 29
August 1999 as a banking company under Companies Act 1994 to
carry on banking business. It obtained permission from Bangladesh Bank on 22
September 1999 to commence its business. The Bank went for public issue on 20 July
2008 and its shares are listed with Dhaka Stock Exchange (DSE) and Chittagong Stock
Exchange (CSE).The Bank carries banking activities through its Ninety two (92)
branches in the country. The Bank converted its banking operation into Islamic Banking
based on Islamic Shariah from traditional banking operation on 01 January 2009
after obtaining approval from High Court, Finance Ministry and Bangladesh Bank.
The commercial banking activities of the bank encompass a wide range of services
including mobilizing deposits, providing investment facilities, discounting bills,
conducting money transfer and foreign exchange transactions, and performing other
related services such as safe keeping, collections and issuing guarantees, acceptances and
letter of credit. The Bank and its first branch at the busiest commercial hub of the country
at 23, Dilkusha Commercial Area, Dhaka. Branch Networks and Inter Division and
Branch Coordination
All the 92 branches are computerized under distributed server environment. Another few
branches are planning to open within December 2010. FSIBL has already started their on-
line, SMS and ATM banking facilities for their clients.
The Banking license for the Bank was issued by Bangladesh Bank on August 29, 1999
was opened on October 25, 1999 by Mr. M. Saifur Rahman, Ex-Honorable Finance
Minister, Government of the People’s Republic of Bangladesh as the chief guest. The
Authorized Capital of the Bank is Tk. 4,600,000,000 It’s paid up Capital and reserve
reached at present Tk. 2,300,000,000 The sponsors of the Bank are the leading business
personalities and eminent industrialists of the country having stakes in various segments
of the national economy.
Prepared By- Md. Alamgir 7
2.4 Vision
To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver excellence in banking.
2.5 Mission
1. To contribute the socio- economical development of the country.2. Fast and accurate customer service.3. Balanced growth strategy.4. High standard business ethics.5. Steady return on shareholder’s equity. 6. Innovative banking at a competitive price.7. Attract and retain quality human resource.8. Firm commitment to the society and the growth of national economy.
2.6 First Security Islami Bank Now at Present
Having started its operations as a commercial bank in 1999, First Security Islami Bank is
today a synonym of quality banking products. It has a diverse array of carefully tailored
products and services to cater the needs of all customer segments. They have structured
their operational strategies to address the special and often complex needs of the
customers. In the growth graph, it has generated profit of Tk. 326,837,749 in the year
2012. The curve keeps soaring upward with dawn of everyday. Today First Security
Islami Bank is one of the leading and one of the most successful banking institutions in
Bangladesh with a total asset base of Tk. 47,978,552,952 as on 31.12.2009. First Security
Islami Bank has now emerged as a major player in the financial sector. Listed in both the
Dhaka and Chittagong stock exchange since late 2008 with an IPO that raised the paid-up
capital of the bank to Tk. 230,000,000 the current price levels of its shares and turnover
in trading is evidence of its high rating among investors. Banks are the pillars of the
financial system. Specially, in Bangladesh, the health of the banking system is very vital
because the capital market is little developed here. As the banks are still the major
sources of credit and exercise great influence on the financial system, it is extremely
Prepared By- Md. Alamgir 8
important that the country’s banking system should be in good health in the interest of
investment activities, meeting the needs of all kinds of finance and related matters. Over
the years, First Security Islami Bank Ltd. has built itself as one of the pillars of
Bangladesh’s financial sector and is playing a pivotal role in extending the role of the
private sector of the economy. The bank has a strong branch network nationwide with 61
branches to effectively address the needs of its cross- segment customer base.
Corporate Information
Name of the Company First Security Islami Bank Limited
Legal Form
A scheduled commercial bank incorporated
on august 29,1999 as a public limited
company under the companies act 1994 and
bank companies act 1991.
Commencement of
Business25th October 1999
Registered Office10, Dilkusha Commercial Area
Dhaka-1000.
Website www.fsiblbd.com
SWIFT FSEBBDDH
Chairman Mr. Saiful Alam (Masud)
Managing Director Mr. A. A. M. Zakaria
No. of Branches 92
No. of SME Centers 05
No. of Employees 929
Stock Summary:
Authorized Capital Tk. 4,600,000,000
Paid up Capital Tk. 2,300,000,000
Face Value per Share Tk. 100
Prepared By- Md. Alamgir 9
2.7 Board of Directors
2.8 Division of First Security Islami BankAll policy formulation and subsequent executions are done in the Head Office. It comprises nine major divisions. They are described below:
1. Credit & Administration Division2. Treasury and International Division3. Internal Control and Compliance Division4. Human Resources & Logistics Division5. Marketing Division6. Merchant Banking Division7. Share Division &Information Technology Division
Prepared By- Md. Alamgir 10
Alhaj Akkas Uddin Mollah Chairman
Alhaj Md FarooqVice Chairman
Mr. Muhammad AliManaging Director
Alhaj Syed Nurul Arefeen Vice Chairman
Alhaj Syed Nurul Arefeen Vice Chairman
Farzana Parveen Director
Farzana Parveen Director
Rahima Khatun Director
Rahima Khatun Director
MS. Shamshad JahanDirector
MS. Shamshad JahanDirector
Atiqun NesaDirector
Atiqun NesaDirector
Md. Sharif Hossain Director
Md. Sharif Hossain Director
Alhaj A.K.M Ali JoharDirector
Alhaj A.K.M Ali JoharDirector
Shahidul IslamDirector
Shahidul IslamDirector
Alhaj Md. Wahidul Alam Seth Director
Alhaj Md. Wahidul Alam Seth Director
Mohammed Oheidul AlamDirectorMohammed Oheidul Alam
Director
Dr. Muhammad Loqman Director
Dr. Muhammad Loqman Director
Alhaj Md. Saiful AlamChairman
Alhaj Md. Saiful AlamChairman
Alhaj Late Hamidul HaqDirector
Alhaj Late Hamidul HaqDirector
A.A.M ZakariaManaging Director
A.A.M ZakariaManaging Director
2.9 Shariah Council
Shariah Council of the Bank is playing a vital role in guiding and supervising the
implementation and compliance of Islamic Shariah principles in all activities of the Bank
since its very inception. The Council, which enjoys a high status in the structure of the
Bank, consists of prominent Ulema, reputed banker, renowned lawyer and eminent
economist.
Members of the Shariah Council meet frequently and deliberate on different issues
confronting the Bank on Shariah matters. They also conduct Shariah inspection of
branches regularly so as to ensure that the Shariah principles are implemented and
complied with meticulously by the branches of the Bank.
2.10 Shariah Board
Prepared By- Md. Alamgir 11
Chairman
Mr.Sheika ( Mowlana)Mohammad Qutubuddin
Chairman
Mr.Sheika ( Mowlana)Mohammad Qutubuddin
Vice ChairmanMufti Sayeed AhmedVice Chairman
Mufti Sayeed Ahmed
Member Secretary Moulana M. Shamaun Ali.
MemberMoulana Abdus Shaheed Naseem
MemberProf. Md. Sharif Hussain
MemberProf. Md. Sharif Hussain
MemberAlhaj Md. Saiful Alam
Chairman,First Security Islami Bank Limited
MemberAlhaj Md. Saiful Alam
Chairman,First Security Islami Bank Limited
MemberMohammad Azharul Islam
MemberMd. Abdul Maleq
2.11 Organizational structure of First Security Islami Bank Ltd:
Prepared By- Md. Alamgir 12
Deputy Managing Director
Senior –Executive Vice President
Vice President
Executive Vice President
Senior Vice President
First Vice President
Senior Assistant Vice President
Assistant Vice President
Senior Principal Officer
Principal Officer
Officer
Senior Officer
Junior Officer
First Assistant Vice President
Assistant Officer
Trainee Assistant Officer
Probationary Officer
Managing Director
First Security Islami Bank Ltd is one of the fastest growing banks among all the private
Commercial Banks in Bangladesh. The institution started its function back on 25th
October, 1999. As a branch of First Security Islami Bank Ltd Jubilee Road Br. started its
function on 9th August, 2001.
2.12 Management Hierarchy of FSIBL,
2.13 Different Departments involved in FSIBL,
There are various departments engaged in providing services to the clients in the FSIBL,
Jubilee Road Branch. These are:
1) Customer Care Department.
2) Cash Department.
3) Accounts Department.
4) Investment Department.
5) Foreign Department.
6) IT Department
2.14 Statements prepared by Accounts section:
1. Sector wise balance position
2. Maturity balance sheet
3. Foreign currency statement
4. Branch Trail Balance
Prepared By- Md. Alamgir 13
VP
Principal Officer
Senior Officer
Officer Junior Officer
Assistant Officer
Trainee Assistant
Officer
AVP
5. Liquidity position
6. Income expenses statement.
2.15 Products and Services of FIRST SECURTY ISLAMI BANK LTD.
1. General Productsa. Mudaraba Saving Account (MSD)b. Al-Wadiah Current Accountc. Mudaraba Short Term Deposit (MSTD)
2. Deposit Schemea. Mudaraba Term Deposit Scheme
(MTD)b. Mudaraba Double Benefit Scheme
(MDBS)c. Mudaraba Monthly Income Scheme
(MMIS)d. Mudaraba Monthly Saving Scheme
(MMSS)
3. Investment Schemea. Bai-Muajjal.b. Murabaha Wes Bills.c. Hire Purchase.d. Quard against TDR.e. Bills Purchase & Discount :
a) In-Land.b) Foreign
f. Loan against trust receiptg. Consumer credit schemes.h. Staff loan.
4. Servicesa. Western Union Money Transferb. First Solution & other money transferc. Locker Servicesd. Remittance- T.T., D.D., P.O, etc
Prepared By- Md. Alamgir 14
CHAPTER 3
CONCEPT OF SME BANKING
3.1 Definition:
According to the latest circular of BANGLADESH BANK (Date: 26/05/2008), the
definition of small and medium enterprise sector is given below:
Small Enterprise – Small enterprise refer to those enterprise which are not any public
limited companies and which fulfill the following criteria-
Service concern –Having an investment of TK. 50,000 to TK. 50,00,000 excluding
land and building or employing up to 25 worker.
Business concern – Having an investment of TK. 50,000 to TK. 50,00,000 excluding
land and building or employing up to 25 worker.
Manufacturing concern - Having an investment of TK. 50,000 to TK. 1,50,00,000
excluding land and building or employing up to 50 worker.
Medium Enterprise – Medium enterprise refer to those enterprise which are not any
public limited companies and which fulfill the following criteria-
Service concern –Having an investment of TK. 50,00,000 to TK.10,00,00,000
excluding land and building or employing up to 50 worker.
Business concern – Having an investment of TK. 50,00,000 to TK. 10,00,00,000
excluding land and building or employing up to 50 worker.
Manufacturing concern - Having an investment of TK.1, 50,00,000 to TK. 2,00,00,000
excluding land and building or employing up to 150 worker.
Prepared By- Md. Alamgir 15
3.2 Overview of the SMEs in the economy in our
country:
There is a great interest in small and medium enterprise (SME) as a major plank of
poverty reduction in Bangladesh. The government has formulated comprehensive
industrial policy 2005 by putting special emphasis for developing SMEs as a thrust sector
for balanced and sustainable industrial development in the country to help deal with the
challenges of free market economy and globalization.
Some data with a national scope that are pertinent characterizing SMEs in Bangladesh as
of 2001-2003 are presented in Table -1. The highlighted of this table is the following:
There are some 78,440 private sector establishment of various size in Bangladesh with
some 3.5 million workers employed with them. The urban Bangladesh accounts for some
60% of unit and 76% of employment in the private – sector enterprises. Rural Bangladesh
account for the rest. 93% of all unit in Bangladesh belong in the SME category, i.c. have
between 20 and 99 employees. However, SMEs account for only 44% of the total
employment of the enterprise sector.
Private limited company by liability account for strictly a very small proportion of the
total number of SMEs in Bangladesh.
Table-1: Number of unit and level of employment in small and medium enterprise, 2001-
03
Description Urbam
Small Medium Large
Rural
Small Medium Large
Total
Small Medium Large
No of unit 39.9 3.17 4.036 29.0 1.29 .88 68.96 4.46 5.01
% of total no of
units
50.9 4.o 5.1 38.1 1.6 1.11 87.9 5.9 6.4
Employment 740.4 211.5
1712.6
516.8 85.85
234.66
1257. 297.4
1947.3
Prepared By- Md. Alamgir 16
% of total no of
Employment
21.14 6.0 48.9 14.8 2.4 6.7 35.9 8.5 55.6
3.3 Contribution of SMEs in the economy:
In view of present economic development effort in Bangladesh the SME sector play in
important role. These are reflected in the following performance/ activity of this sector.
During the Fourth Five year plan, a total of 0.35 million jobs were created against
the target of 0.4 million.
Contribution of SME sector too GDP remained above 4.5% During the period from
2000- 2001 to 2004- 2005 despite decline in the amount of advance by the banking sector
to this sector.
SME sector employs 255 of total labor force. As a result, this sector is the present
available sector for creation jobs.
SME sector help alleviate poverty, increase income level of rural people and
promote agro- industrial linkage in Bangladesh.
SME sector require lower energy supply, lower infrastructure facility and this
sector impose less environmental risk.
This contribution toward better utilization of local resources and skills that might
otherwise remain unutilized.
Small industries being labor oriented are capable of generating more employment.
There are necessary to maintain and retail traditional skill and handcrafts.
There are the only medium for diversification of rural economy and for peaceful
and concurrent socio- economic development of all classes of people.
From the above discussion, We can say that SMEs can play an important role in our
economy and country.
Prepared By- Md. Alamgir 17
3.4 Loan document needed for SME financing by
Bank:
Criteria for loan selection are similar among financial institutions. Most frequently
requested document by financial institution as a part of the loan application process
include:
Personal guarantee
Business plan
Appraisal of assed to be finance
Purchases agreement
Cash flow projection
Personal financial statement
Formal application for financing
Business financial statement
Tin certificate
Citizenship certificate
Bank solvency certificate
Prepared By- Md. Alamgir 18
Vat certificate
Export license
3.5 About the sample Banks:
Dhaka Bank Ltd
Prime Bank Ltd
Dutch Bangla Bank Ltd
Eastern Bank Ltd
First security Islami Bank Ltd
Mercantile Bank Ltd
BRACK Bank Ltd
3.6 Criterion for Sample Selection :
The banks for comparative analysis have been chosen in the basis of the following
criterion:
3.6.1 Loan size:
1. Prime Bank Ltd – Taka 1 Lac to Taka 75.00 Lacs
2. Dhaka Bank Ltd - Taka 0.50 Lac to Taka 50.00 Lacs
3. Eastern Bank Ltd- Taka 1 Lac to Taka 300.00 Lacs
4. Mercantile Bank Ltd- Taka 0.50 Lac to Taka 2.00 Lacs
5. Dutch-Bangla Bank Ltd- Taka 3 Lac to Taka 50.00 Lacs
6. BRAC Bank Ltd- Taka 3 Lacs to Taka 30.00 Lacs
7. First security Islami Bank Ltd- Taka 3 Lacs to 50 Lacs
Among the banks EBL offers the highest loan amount to the customers where as the
BRAC bank offers the lowest loan to its customers.
Prepared By- Md. Alamgir 19
3.6.2 Rate of interest:
1. Prime Bank Ltd – 13% to 15% p.a.
2. Dhaka Bank Ltd - 12% to 13% p.a.
3. Eastern Bank Ltd- 14% to 15% p.a.
4. Mercantile Bank Ltd- 15% p.a.
5. Dutch-Bangla Bank Ltd- 13% to 15% p.a.
6. BRAC Bank Ltd- 18% to 24% p.a.18
7. First security Islami Bank Ltd- 15% p.a.
In terms of interest rate the Dhaka Bank Ltd offers the lowest rate of interest to its
customers. The highest rate is charged by BRAC Bank Ltd. The Mercantile Bank Ltd.
have the only bank that offers fixed rate for any loan customers.
3.6.3 Loan processing fees
1. Prime Bank Ltd – .50 % of the loan amount.
2. Dhaka Bank Ltd - .00 % of the loan amount.
3. Eastern Bank Ltd- not available
4. Mercantile Bank Ltd- not available
5. Dutch-Bangla Bank Ltd- not available
6. BRAC Bank Ltd- .50 % of the loan amount
7. First security Islami Bank Ltd- not available
All the banks do not provide data about loan processing fees to their customers.
The prime bank and BRAC bank limited only charges .50% as loan processing fess
3.6.4 Period of loan
1. Prime Bank Ltd – 1 to 5 years.
2. Dhaka Bank Ltd – 1 to 3 years.
3. Eastern Bank Ltd- up to 1 year.
4. Mercantile Bank Ltd- up to 2 years.
5. Dutch-Bangla Bank Ltd- 1.5 to 5 years.
6. BRAC Bank Ltd- 1 to 3 years.
Prepared By- Md. Alamgir 20
7. First security Islami Bank Ltd- 1 to 5 years.
Among the banks the highest loan maturity date is offered by DBBL and Mercantile
Bank Limited offers the lowest maturity period
3.6.5 Mode of Finance
1. Prime Bank Ltd – Term loan and working capital loan
2. Dhaka Bank Ltd – Term loan and working capital loan
3. Eastern Bank Ltd- Only working capital loan
4. Mercantile Bank Ltd- Only term loan
5. Dutch-Bangla Bank Ltd- Only term loan
6. BRAC Bank Ltd- Only term loan
7. First security Islami Bank Ltd-Only term loan All the Banks providing SME financing facilities do not provide long-term loan to its
customers. Among the banks Prime and Dhaka Bank limited both provides term loan and
working capital loan to their customers. Other bank either provides term loan or working
loan to its customers capital.
3.7 Portfolio Size of different banks in SME Sector.
(Tk in crore)Serial No Name of the Bank Portfolio Size
1 BRAC Bank Ltd. 950.00 2 Eastern Bank Ltd. 300.00 3 Prime Bank Ltd. 108.44
4 Dutch-Bangla Bank Ltd. 16.38 5 Mercantile Bank Ltd. 6.63
6 Dhaka Bank Ltd. 5.72 7 First security Islami Bank Ltd 11,31
Total 1,398.48 (Source: Annual Repots of Prime Bank Ltd., Dhaka Bank Ltd., Eastern Bank Ltd., Mercantile Bank Ltd., Dutch-Bangla Bank Ltd. First security Islami Bank Ltd and BRAC Bank Ltd. 2007)
From the table we can see that the BRAC bank has the highest investment in the SME
sector followed by Eastern Bank Ltd. in second position. While the Prime Bank Ltd.,
Prepared By- Md. Alamgir 21
Dutch-Bangla Bank Ltd., Mercantile Bank Ltd. and Dhaka Bank Ltd. are third, forth,
fifth and sixth respectively.
Graph 1: Portfolio Size of Six different banks in SME Sector :
Prepared By- Md. Alamgir 22
3.8 Problems for financing SMEs:
SME sector faces a number of problems (Ahmed, 2000) to facilitate institutional credit.
These problems were looked into from the perspective of both borrower and lenders.
Problems from borrowers perspective:
Access to loan
Collateral
Complexity increases cost of loan
Extremely short grace period
Absence of comprehensive guidelines
Longer loan processing time and associate cost of uncertainty
Lack of basic infrastructure, inputs, managerial efficiency and inadequate sanction
Problems from lenders perspective:
Lack of information on loan application requirement among the SME loan seekers
Absences of an appropriate and clear-cut legal framework for enforcing quick recovery
Prepared By- Md. Alamgir 23
In addition, the following problems are identified in the SME sector:
a. Inadequate allocation of fund for public sector.
b. Lack of co-ordination among lending agencies.
c. Shortage of long-term credit.
d. Unstable share market.
e. Lack of technological information.
f. Lack of uniform delivery model and training.
g. Absences of utilization of BSCIC services of NCBs for utilization of surplus fund.
h. Lack of technology assessment, innovation and adaptation of technology.
i. Lack of marketing effort and exploring new markets.
j. Competitive product market because of market economy.
Prepared By- Md. Alamgir 24
CHAPTER 4
SECTOR OF SME FINANCE
4.1 Bonik SME
Now our SME clients are being involved in foreign trade, their network has been
expanded throughout the world. To facilitate the foreign trade transactions of the SME
clients, FSIBL is offering a product named ‘ Bonik SME’.
Purpose
To settle foreign trade payment & import document retirement line (mainly import
financing, e.g., L/C and LTR facility).
Key Features
Loan Amount: Min. BDT 5.00 lac to Max. BDT 50.00 lac.
Tenure: For each L/C highest 04 months and for each LTR highest 06 months.
L/C Margin and Commission: As per negotiation.
Fast and quality service.
No hidden charge.
Eligibility
Having business experience for at least 2 years in the same line.
Age Limit: 20 years to 60 years.
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
Prepared By- Md. Alamgir 25
National Voter ID/ Passport of the borrower.
4.2 Chalantika SME
To operate your business with extra ease, term loan is not always the only solution.
Keeping this capital requirement for your business, FSIBL is offering a package of
working capital solution [50% term loan & 50% revolving credit (cash credit) facility] to
run the business smoothly.
Purpose
To meet up working capital requirement of the business
Key Features
Loan Amount: BDT 5.00 lac to BDT 50.00 lac.
Tenure: For revolving loan- Maximum 01 year (Renewable).
For Term Loan- Maximum 36 months. Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
Registered Mortgage of Property is required.
Eligibility
Having business at least 2 years in the same line.
Age Limit of the Borrower : 20 years to 60 years.
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of business.
Prepared By- Md. Alamgir 26
4.3 Green SME
To save our beloved earth from the disaster of Green House Effect, FSIBL is offering
ECO friendly product ‘Green SME’. Under this product, you can get finance for ETP
plants in different sectors, Eco friendly vehicles, Eco friendly fields (reduce CO2
emission), Bio Fertilizer, Bio gas plants, Solar plants and Eco friendly any other business.
Mode of finance shall be Term Loan mainly.
Purpose
To facilitate establishment of eco friendly projects.
Key Features
Loan Amount: Max. 300 lac.
Tenure: Max. 60 months.
Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
Eligibility
Having business for at least 2 years in the same line.
Age Limit: 20 years to 60 years.
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of the concerned business.
Prepared By- Md. Alamgir 27
4.4 Jantrik SME
When any SME client wants to purchase any machine or vehicle for business, FSIBL is
there with the offer of ‘Jantrik SME’ through which the client can get a lease finance
facility.
Purpose
To procure machinery or vehicle for SME business purpose.
Key Features
Loan Amount: BDT 5.00 lac to BDT 50.00 lac.
Tenure: Max. 60 months.
Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
Eligibility
Having business for at least 2 years in the same line.
Age Limit: 20 years to 60 years.
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of the concerned business.
Prepared By- Md. Alamgir 28
4.5 NGO Shohojogi SME
From the very beginning, one of the goals of First Security islamic Bank Ltd. is to
provide services to the under privileged people of remote areas. Keeping that idea in
mind, the First Security islamic Bank Ltd. has come forward with a product for SME
customers named ‘NGO Shohojogi SME’. ‘NGO Shohojogi SME’ ensures wholesale
financing through the reputed NGOs in the country whose past records are remarkable,
repayment behaviors are satisfactory, growth rates are significant and above all loan
monitoring & recoveries are above 95%.
Purpose
To provide loan facility to the small enterprise through wholesale lending to the
NGOs.
Key Features
Loan Amount: Max. limit BDT 500.00 lac
Tenure: Max. 48 months.
Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
Monthly installment basis.
Eligibility
Any type of NGO having certificate from Micro Credit Regulatory Authority to
operate business in Bangladesh.
Having business at least for 5 years in the same line.
Age Limit: 20 years to 60 years.
Prepared By- Md. Alamgir 29
Required Documents
Last twelve months’ sales statement. Last twelve months’ bank statement.
Valid Trade License of last two years.
Personal guarantee of all the directors.
4.6 Shachchondo SME
Who does not want ‘Shachchondo’ in life? For the financial ease in your business, FSIBL
is offering ‘Shachchondo SME’ product through which you can enjoy both overdraft and
term loan facilities.
Purpose
To meet up working capital requirement of the business.
Key Features
Loan Amount: BDT 15.00 lac to BDT 50.00 lac.
Tenure: For 1st time loan- 12 months to 30 months. For Repeat Loan- 36 moths to
48 months.
Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
A FDR shall be taken covering minimum 25% of the total ticket size. The SOD
facility shall be allowed upto 90% of the FDR amount.
Guarantor must be renowned business person and have permanent residence in
the commanding area/ possession of the shop.
Business premise must be owned/ possession held by the borrower.
Eligibility
Having business for at least 5 years in the same line.
Age Limit: 30 years to 55 years.
Prepared By- Md. Alamgir 30
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of the concerned business.
4.7 Sommriddhi SME
Can you imagine – FSIBL is offering you four times loan facility against your encephala
securities like FDR !!!!! To avoid encashment of your long held savings - FSIBL is with
you with this amazing product ‘Sommriddhi SME’. Suppose, you have Tk. 5 lac deposit
as FDR with our bank and now you want some capital in your business. But you intend to
avoid encasement of your long held savings. If so, do not think anything else, just grab
this offer.
Purpose
Any justifiable business purpose.
Key Features
Loan Amount: Max. limit 50.00 lac.
Tenure: Max. 48 months.
Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
Lien of FDR of 25% of the total loan amount.
Prepared By- Md. Alamgir 31
Eligibility
Having business for at least 2 years in the same line.
Age Limit: 20 years to 60 years.
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of the concerned business.
4.8 Swabolombi SME
As an entrepreneur, definitely you need working capital to run your business smoothly.
To get this working capital generally you need to keep some collateral security like land
as mortgage to the Bank. But you do not have any landed property or any cash security of
your own. So ? Would it be the end of your dream ? FSIBL will never let you stop
because your business is our responsibility. First Security Islamic Bank Ltd. has
‘Swabolombi SME’ – Collateral free Term Loan in its basket. Just come with proper
documents & get it.
Purpose
Any justifiable business purpose.
Key Features
Loan Amount: BDT 5.00 lac to BDT 25.00 lac.
Prepared By- Md. Alamgir 32
Tenure: For Trading & Service Industry 30 months. For Manufacturing industry
36 months.
Interest Rate: Competitive interest rate.
Fast and quality service.
No hidden charge.
Up to BDT 25.00 lac is collateral Free.
Eligibility
Having business for at least 2 years in the same line.
Age Limit: 20 years to 60 years.
Required Documents
Last twelve months’ sales statement.
Last twelve months’ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of the concerned business.
Prepared By- Md. Alamgir 33
CHAPTER 5
PERFORMANCE EVALUATION OF FSIBL
5.1 Comparative analysis of the total amount of depositOver the years 2005, 2006, 2007,2008,2009.
DepositYear In Taka (‘000)2005 4600002006 10162672007 12434752008 14256422009 1675246
Prepared By- Md. Alamgir 34
5.2 Total Capital (taka in million)
Year Total Capital2006 1147.282007 1347.912008 2862.192009 3379.032010 4582.212011 5622.11
Prepared By- Md. Alamgir 35
Total Capital
£ 4,582.21 million
4000.00
3000.00
1.0000.00
0.00
2.000.00
5000.00
2006 2007 2008 2009 2010
35.60%
2011
5.3 Remittance (taka in million)
Year Remittance2006 48.442007 3302008 585.842009 558.752010 843.472011 942.57
Prepared By- Md. Alamgir 36
Remittance
Tk. 843.47 million
800
700
500
400
600
900
2006 2007 2008 2009 2010
60%
2011
300
200
100
0
48.44
330
558.844
558.75843.47
2007
5.4 Foreign remittance
Foreign remittance of the bank stood at taka 843.47 million as of December 31 2010 as
against TK. 558.75 million in 2009. besides the bank has taken initiatives to make
remittance arrangements with some leading exchange houses at abroad.
5.5 Paid up capital (taka in million)
Year Total capital2006 900.002007 1000.002008 2300.002009 2300.002010 3036.002011 4000.00
Prepared By- Md. Alamgir 37
Paid up Capital
Tk. 3,036 million
2000
1500
500
0.00
1000
2500
2006 2007 2008 2009 2010
32%
2011
3000
5.6 LOANS & ADVANCE
Loan and advance is the main source of bank’s income. Commercial banks earn 80% of
its profit from loan and advances. The loan and advance of First security islami bank is
shown below:
Provide lone in different sector
Amount Agriculture & Fisheries 11.58%Large & medium Enterprise
18.79%
Working capital 32.30%Export credit .22%Commercial credit 17.93%Small & Cortege Industry 1.90%Others 17.29%
Concentration of lone & advance
Prepared By- Md. Alamgir 38
In FY05 after adverse impact of devastation flood and declining trend in interest rate
FSIBL, continued to explore its area of credit and was successful to build up a sizable
quantum of credit, which stood at tk.6.722.83 million as on 31.12.2008, registered an
overall increase by 63.80 percent over 2006. The total credit as on 31st December 2008
was Tk.6, 722.81 million. In compliance to regulatory requirement and to avoid risk of
single industry or large loan concentration and to maintain the Bank’s credit excellence
relating to proper risk management, yield exposure, tenor, collateral security proper
valuation etc. the credit portfolio of FSIBL was further diversified. FSIBL’s credit
facilities mainly concentrated on Trade Finance, Agriculture and related sector, project
finance, wholesale and retail trading, service sector, transport sector ,hospital, small
&medium entrepreneurs.
5.7 Credit Risk of First Security Islami Bank Limited:
Principal Risk Components Weight
Business/Industry Risk 18%Financial Risk 50%Management Risk 12%Security Risk 10%Relationship Risk 10%
Prepared By- Md. Alamgir 39
5.8Balance sheet
FIRST SECURITY ISLAMIC BANKBALANCE SHEET
AS AT 31 DECEMBER 2010
particulars Notes
2010 2009
Property & assetsCashIn handBalance with Bangladesh bank and its agent
34857543203
6121731464245369057
5033532439
4329077314600624708
Balance with other bank & financial institutionIn Bangladesh Out Bangladesh
4 1036199077
926081336110117741
731150321
494050218237100103
Investment in shares & securitiesGeneral investmentBills purchase & discounted
5 2859354561
2331134100528220461
1852026032
1610674000241352032
InvestmentGovernmentother
6 52123903164
476402386964483664468
38725874774
356164504933109424281
Fixed assets including premises, furniture &fixtures Other assetsNon banking assets
7 573610332
2169188462
376477387
1259491999
Total assets 8 63619797799
47978552952
LIABLITIES & CAPITAL
Deposits and other accounts
56344959167
42423092722
Other liabilities 3354827146 2690049475
Prepared By- Md. Alamgir 40
Total liabilities 59699786313
45113142197
Capital/shareholder equity 3920011486 2865410755
Total liabilities & shareholder equity
63619797799
47978552952
5.9 FSIBL Highlights
First Security Islamic Bank ltd.Highlights
For the year ended 31 December 2010
particulars 31.12.2010 31.12.2009Paid-up-capital 3036000000 2300000000
Total capital fund 4582217485 3379035832
Capital surplus 29266485 267692742
Total assets 63619797799 47978552952
Total deposit 56344959167 42423092722
Total investment 52123909164 38725874774
Total contingent liabilities & commitment
8859668340 5971673066
Investment deposit ratio 92.51 91.28
Percentage classified investment 2.61 2.14
Profit before tax & provision 1203600731 750837749
Amount of classified investment 1361392000 830515000
Provision kept against classified investment
542894000 507694000
Provision surplus 13658789 53834571
Prepared By- Md. Alamgir 41
Cost of fund 8.90 9.28
Profit earning assets 56040956802 41371529125
Non Profit earning assets 7578840997 6607023827
Return on investment 9.24 2.79
Return on assets 1.89 1.56
Income from investment 264208027 53510527
Earning per share (tk.) 2.33 1.42
5.10 FSIBL Statement of Fixed Assets
First Security Islamic Bank ltd.Statement of Fixed AssetsAs at 31 December 2010
COST DEPRECIATION
Particulars 2009 Addition during The year
Sales/Transfer duringThe year
Balance as on
2010
Balance as on
2010Jan.
Charge during theyear
AdjustmentSales/transfer
2010Dec.
Written down 2010 Dec.
Building 66227032 63953943
- 130180975
376990
1646781 - 2023771
128157204
Furniture & fixture
240090047
108041386
- 348131433
66587335
23233404
- 89820739
258310694
Office equipment
178410030
80889916
- 259299946
65294951
29916812
- 95211763
164088183
Vehicles 37845372 6631850 - 44477222
13843196
7586526 - 21429722
23047500
Books 78837 3442 - 82279 71459 4069 - 75528
6751
Total 2010 522651318
259520537
- 782171855
146173931
62387592
- 20856152
573610332
Prepared By- Md. Alamgir 42
3Total 2009 29737499
8235410820
- 522651318
113006566
41544826
8377461 146173931
376477387
CHAPTER 6
ANALYSIS AND FINDINGS OF FSIBL
6.1 Break Even Analysis:
Break-Even Analysis is commonly known as the Cost-Volume-Profit (CVP) analysis.
Break-even analysis shows the relationship between cost and revenue with respect to
profit. By showing the break-even point, this analysis says the minimum level of output
or sales that is required to equate the cost. Moreover, break-even analysis provides a
clear idea about the required volume of sales to earn a target profit. Thus break-even
analysis helps the decision criteria.
Fixed CostBEP = Sale per unit - Variable Cost per unit
6.2 Sensitivity Analysis:
Sensitivity analysis provides the picture of relative changes in overall profitability due to
change in any variable. Usually changes (increase) in material and other variable cost or
changes (decrease) in selling price are being taken into consideration for making
sensitivity analysis.
6.3 Ratio Analysis:
Ratio analysis is the analysis and interpretation of data given in the financial statement
such as: Balance Sheet, Income statement etc. Ratio is the quantitative expression of
Prepared By- Md. Alamgir 43
relationship between two accounting figures. Ratio analysis gives a clear picture about
the strength and weakness of a firm, its historical performance and current financial
condition. The common ratios that are being used in the analysis are:
Liquidity Ratio:
i. Current Ratio
ii. Acid test etc.
Activity Ratio:
i. Inventory turnover Ratio
ii. Debtors/Receivable turnover Ratio
iii. Total asset turnover Ratio etc.
Solvency Ratio:
i. Debt-Equity ratio
Ii. Debt to total asset ratio
iii. Debt service coverage ratio etc.
Profitability Ratio:
i. Profit Margin
ii. Return on Investment
iii. Return on Equity etc.
Ratio Analysis:
Ratio AnalysisSI.NO. Particular 2011 2010 2009 2008 20071 Return on Average Assets
(ROAA)2.98 1.74 2.70 2.39 2.35
2 Return on Average Assets (after tax)
1.65 0.38 1.37 1.32 1.34
3 Return on Average 25.12 5.54 21.39 28.25 29.46
Prepared By- Md. Alamgir 44
Equity (after tax)4 Net Interest
Margin(average)4.78 4.39 4.39 3.32 3.35
5 Net Interest Margin 4.46 3.88 4.06 2.39 2.87
6 Efficiency Ratio 40.46 37.96 38.64 38.40 39.74
7 Return on Investment 15.72 8.80 10.20 6.02 6.91
8 Profit Margin 21.25 13.05 18.18 21.03 19.59
9 Return on Risk Weighted Asset
4.22 2.69 4.35 4.03 4.68
10 Burden coverage 58.96 63.59 74.43 72.57 65.66
11 Ratio of fees income 10.31 10.34 11.96 11.00 9.75
12 Interest yield 13.77 12.77 13.87 10.68 11.58
13 Marginal cost of fund 8.38 7.64 8.89 6.82 7.08
14 Burden cost of fund 9.27 8.13 9.67 7.22 7.63
15 Burden yield on advances’ 14.73 13.58 15.34 12.09 11.90
16 Profit on lending 5.46 5.45 5.67 4.87 4.27
17 Yield on advanced 14.40 13.15 14.81 12.72 13.04
18 Interest expenses to total expenses
76.52 77.87 87.44 89.97 81.29
19 Salary exp. To total overhead exp
57.89 47.36 43.38 43.33 48.46
20 Salary exp. To total fees income
98.18 74.49 58.28 59.71 73.81
21 Expenses coverage 72.66 78.87 78.44 79.97 81.29
22 Return on paid-up capital 36.51 7.27 23.74 31.37 29.19
23 Productivity ratio 32.24 29.68 32.74 31.37 29.19
24 Per employee deposit 29.21 24.30 28.81 27.35 23.38
25 Staff per branch 23.97 24.60 21.43 21.88 22.35
26 Capital to deposit 8.95 8.95 9.85 6.34 6.46
6.4 Asset Quality Ratio (%):
Asset Quality RationSI.NO. Particulars 2011 2010 2009 2008 2007
Performance Ratio % 1 Nonperforming loan
to total loan2.84 5.06 5.03 0.46 0.04
2 Loan loss reserve to total loan
2.83 4.45 2.50 1.13 1.01
Prepared By- Md. Alamgir 45
3 Loan loss reserve to NPL
99.35 88.02 49.81 242.98 2404.24
4 NPL reserve to NPL 49.52 61.74 28.21 20.00 39.75
5 Loan to deposit 77.04 79.42 74.03 76.18 64.33
6.5 SWOT ANALYSIS:
SWOT analysis is the critical analysis about an organization, where the Strength,
Weakness, Opportunity, Threats to that organization is analyzed . It includes all internal
and external aspects of the organization . We can show the total thing by the following
figure:
Figure 11Strength:
The growth of the company has so far been very steady and very high.
Excellent management team.
First Security Islami Bank has a very good pool of human resource.
High commitment of customer.
Bank has many attractive schemes.
First Security Islami Bank is maintaining steady profitability.
Prepared By- Md. Alamgir 46
First Security Islami Bank offer online banking and evening banking service.
Prepared By- Md. Alamgir 47
Weakness: Short periods of experience of the bank .
Officers have limited experience of the bank .
Small market share .
Heavily depends on head office for decision making.
High interest rate of loan.
No ATM service booth for attracting more customers.
Absence of separate marketing division.
Opportunity: Increasing demand of customer finance.
Investment potential of Bangladesh .
Relationship management.
Introduction of online banking thought out all branches within Bangladesh.
Threats: Some commercial and foreign bank as well as private bank.
Similar type of retail banking products.
Certain Bangladesh bank rules and regulation.
Customer awareness of pricing and services.
Strong competitions in the banking sector.
Day to Day change economic condition of the world.
Deposit interest rate is low and loan interest rate is high other than competition bank.
Prepared By- Md. Alamgir 48
CHAPTER 7
FINDING, RECOMMENDATION AND CONCLUSION OF FSIBL
7.1 Findings of First Security Islamic Bank Limited:
While working at Jubliee Road Branch, Chittagong, I have attained a newer kind
of experience. After collecting and analysis data I have got some problem of the FSIBL.
These problems completely from my personal viewpoint, which is given below:
Lack of update products is a drawback of the general banking area of the
FSIBL . New products such as student loan, medical loan, marriage loan are not available
in FSIBL.
From the clients view introducer is one of the problems to open an account. It is general
problem to all commercial bank.
They face troubles with those clients who have not any knowledge in banking
transactions and banking rules.
As the deposit is heart of running the banking activities FSIBL Deposit growth not
good. Because FSIBL deposit rate is low other than commercial bank such as
Dhaka Bank, Prime bank Mercantile Bank, HSBC Bank, Bank Asia etc.
FSIBL has not recruited competent people to filling its lower and mid level position
they recruit only once a year. This is really tough to recruit high skilled
employees.
Lack of proper training arrangement of employees.
As a result of technological change such as use of new software There are few staffs
who have lacking in computer knowledge are not efficient enough to finish every task
immediately so before utilizing new technology proper training should be arrange.
Clients generally complain that rate of interest for various type of credit is quite high.
In many cases productivity from loaned investment is inadequate that borrower
become incapable in repaying loan.
Prepared By- Md. Alamgir 49
one problem is that bank always follows the policy of risk averse in the world today all
the organization are moving in approach of risk taking. As a result it is facing some
problems and also facing competition from other bank
The recovery of capital in small business loan section is threatened.
FSIBL has insufficiencies of Authorized Dealer Branch in respect of the total foreign
business. Bank has only six branches, which have AD licenses. As a result in total foreign
exchange business is very small in respect of total market.
Per-shipment inspection certificate should obtain from the exporter of back to back
L/C. Because it reduce it fraud and forgery in case of import against master export L/C,
but all the time this pre-shipment inspection certificate are not wanted by the bank
FSIBL does not promote itself for catering its services to the public or the business
organization.
7.2 Recommendations
The existing credit policy is good enough to run the bank. But as the competition is
increasing day by day the bank should take some measures so that they can distinguish it
from the others. The credit management of First Security Islami Bank Ltd. can follow the
following suggestion to improve their performance and distinguish from others:
1. Giving authority to the Branch officials to take decisions to sanction a loan. Right
now, for every loan decision is made by Head office. But to faster the speed of
loan sanction the branch should be authorized to take decision.
2. Rebate charge on loan should be increased so that more customers are attracted to
make loan.
3. The period of loan should be extended.
4. The bank management can give permission to its branches to design or change
lending products on the basis of local demand.
5. The bank should recruit some young and energetic executives to ensure timely
recovery of disbursed consumer credit loan.
6. The clients of loan should be facilitated with online Banks and other benefits.
7. FSIBL should upgrade its website regularly and provide details information of
loan Scheme.
Prepared By- Md. Alamgir 50
8. FSIBL Bank may also promote its loan program through different advertising
tools i.e. TV adds, News paper adds etc.
9. The Bank management can reduce the interest rate. Because of high interest rate,
some good loans turn to bad loans. But if the interest rate decreases than the
default loan will also decrease.
10. To risk grade the credit, the bank can follow other models besides the credit risk
grading model. Because the credit risk grading model is not hundred percent up to
the mark.
11. The bank management should always be concerned about the change in industry
so that they can notice the change and take proper actions to adopt the situation.
The credit management of Southeast Bank Ltd. can follow the abovementioned
suggestion to improve their performance so that they can be competitive in the market
and can gain some competitive advantage.
7.3 Conclusion
Banking has become the inspirable part of social transaction. From the very early age
it had taken in our society in the non-institutional form. After the Second World War as a
financial product lending had been fully structured and institutionalized in USA and other
developed countries. Now banking sector play an important role in modern society and
private commercial bank has competitive, diversified and dynamic compared to
traditional banking system. In banking sector FSBL is a name of trust, to improve the life
style of the people, to develop the business environment. Day by day its area of serving is
increased all over the country through setting up new branch at new place.
FSBL take a vital part in export and import business of Bangladesh through their
regulatory services and best quality services. The economy of any country depends with
the import and export position of the country. By observing the banking system in FSBL
jubilee Road Branch for one month it is clear to me without bank involvement that kind
of work cannot be possible.
FSBL is providing opportunity of gaining practical knowledge for the students like
internship program. During the period of my internship program I tried my best to
understand the concern. However it is also concern that this period of time was not
Prepared By- Md. Alamgir 51
enough to understand everything of the concern. If any one wants to work in banking
sector he must have to know about all the department in a bank because one department
works related with another department works. I wanted to know about the credit section
of the bank because bank’s main earnings depend with that section. But I can’t because of
the limited period. Even though I tried my best level to make the informative, this report
contain many errors, there may be some printing mistakes no doubt for this reason I
apologize.
Bibliography:
1. Annual Report of First Security Islami Bank Limited.
2. Prospectus of First Security Islami Bank Limited.
3. Web Site Of First Security Islami Bank Limited:
www.fsiblbd.com.
4. ‘Amader Barta’- A quarterly news bulletin, First Security
Islami Bank Limited.
5. ‘Industry’- A Weekly supplement- Special Supplement on
CAMELS Rating.
6. Various Web Sites related to Islami Banking Systems.
7. ‘Islamic Financial System’-By Md. Nusrat e Aziz- First
Edition,
8. Previous Internship Reports.
9. UCPDC-600, 2007 Revision.
Prepared By- Md. Alamgir 52