My supervisor assigned me to submit an internship project on ''Credit Risk Management of Social Islami Bank Limited''. Samaun Kabir student of BBA program, Department of Business Administration, Faculty of Business and Entrepreneurship, Daffodil International University, majoring in finance, has successfully completed his internship program at social Islami Bank Limited. I am also very grateful to my supervisor Shah-Noor Rahman for his tips containing specific guidelines on the successful preparation of the term paper.
The charter work focuses on the "differences between Islamic banks and banking institutions". In the clothing industry, most of the institutions participate in the loan from the bank and also give the payment of the buyers through the bank, for the opening of the bank LC is also required. The report entitled "Credit Risk Management Analysis of Social Islami Bank Limited" has been prepared as a practical report of the fulfillment of the BBA program authorized by the Bachelor of Business Administration, Daffodil International University.
All things fall under the theory of credit risk management and finally I would conclude with a critical assessment of credit risk management under the guidelines of the Banking Companies Act 1995 and a discussion of the main findings and recommendations. A wealth of basic information is not provided to me by bank employees as security and other functions of the company.
CHAPTER-02
OVERVIEW OF SOCIAL ISLAMI BANK LIMITED
- History of Social Islami Bank Ltd
- Mission of SIBL
- Vision of SIBL
- International Banking
- Principle Activities of SIBL
Work closely with our valued customers and partners to deliver their one-stop service, access to current state-of-the-art products using the most advanced technology. Social Islami Bank has all the company's key features and services for its customers. The bank with its network spread across the country is unique and invests in them to different lenders.
Social Islami Bank Limited has built international connections and business relationships within the company through its 4 (four) foreign branches and 219 foreign branches. He is one of the experts in supporting back-to-back letters for certification in the Planned Parenthood (RMG) industry. The bank's mission is to contribute to the development of healthcare in the country through the management of a healthy economy.
It is stated that the Social Islami Bank's reserve increased in FY2019 compared to the FY2018 reserve. So we can see that the customers are interested in Social Islami Bank Ltd to get a higher return.
Deposit
Investment
Net Profit
Growth of Profit
CHAPTER- 03
THEORETICAL FRAMEWORK
- Definition of Credit
- Factors Related with Credit
- Types of Credit Risk Management
- Objectives of Credit Risk Management
- Definition of Credit Risk Grading
- Credit Assessment & Risk Grading
- Process of Credit Risk Management
- Credit approval
Credit Default Risk: The risk of failure to pay all or part of the liability due to the liability of a product more than 90 days prior to the risk that can affect all exchanges, including unimpeded transactions, including loans, securities and financial investment. The credit risk level (CRG) is a composite term based on a fixed measure and affects the credit risk for exposure. A Security Code borrows a number/letter/symbol that is an early indication of the risks associated with debt.
The risk distribution is an important measure of the quality of a bank and therefore it is important that the risk is a robust process. The initial notification process must be completed in a timely manner by the RM and must be submitted to the CRM for approval at all costs. After approval, the report must be submitted to the credit management, which is responsible for ensuring that the actual debtors/receipts are corrected on a regular basis.
The risk management procedure must cover the entire loan cycle from the history of the credit in the books of the financial institution to the point where the credit passed through the books (MortonGlantz, 2002). The next phase of the credit investigation is the credit assessment in which the financial institution assesses the customer's ability to perform its functions. In the case of loan syndication, there must be a policy to ensure that a participating financial institution is not unfairly based on a credit risk analysis performed by a lead underwriter.
Physical inspection of the beneficiary's business premises as well as the facilities subject to the proposed funding. The integrity and reputation of the applicant, as well as his legal capacity to hold credit liability. Sensitivity of the industrial sector applicable to the risk profile of the recipient and economic fluctuations.
A financial institution must have written guidelines based on the credit approval process and the approval authority of the person or committee, as well as these decisions. Depending on the size of the financial institution, it should develop a group of credit risk experts with a high level of expertise and experience and demonstrate appreciation in the assessment, approval and management of credit risk. A system of accountability must be introduced along with the decision-making process, including a clear way to monitor the decisions made with a correct identification of the persons / committees involved.
CHAPTER-04
CREDIT RISK MANAGEMENT
- Types of Credit Facilities
- General System & Procedure Related to Credit
- Credit filesMaintenance
- Risk Management Division
- Types of Risk
A bank's strength largely depends on the quality of its progress and the ratio between the amounts of all deposits. The MBL loan process includes various steps to comply with Bangladesh Bank terms and conditions. The bank must identify the key factors of the client's business, as well as the main risks for its business.
Or there is an age limit for the recipient, the age of the owner/partner/manager must be between 21 and 60 years. The bank must identify the root causes of the customer's business as well as the most significant risks for its business. Or there is an age limit for the recipient, the age of the owner/partner/manager must be between 21 and 60 years.
When the bank is about to issue a loan to a borrower after examining the character, power, parallelism and capital of the borrower, the bank must obtain the appropriate documents from the borrower which are submitted by the borrower be used to protect the intended borrower. Finally, the Credit Department of the Headquarters completed the loan documentation authorized by them. A set of photocopies of the loan documents is maintained by the credit team at the head office, rooting the distribution branch.
Once the documentation and approval is complete, the Credit Department will send a copy of the "Distribution Order" to the Credit Administration Manager (CAD) and the concerned branch for distribution to the department. Loan guarantee documents approved by the head office are signed by the customer(s) at the distribution branch and photocopies of the originals are to be sent to the head office. After the bank has gone through all the steps, it creates and manages the "credit file" of the customer in question.
The analysis includes details about the security, including the recipient, the purpose of the loan, the location of the loan repayment, the cost and the cost sharing. According to the Bank of Thailand, the "Securities Administration" bank has been reorganized into an office called "Securities Management" approved by the Board. The management bank organized a meeting of the 285 board, held in 2019, to ensure good governance and risk management. For example, passion and decision-making / decision-making are a prerequisite for a good investment and are therefore essential for the viability and success of the bank.
It is more important to consider the risk profile of the investing company in order to match the finance and investment. Interpretation: The loan/deposit ratio method will measure the balance of the deposit used for the loan, the higher the percentage, the more often banks will use loan-based deposits.
Credit / Deposit ratio
Total Loan & Advance
Collection of Loan & Advance
Interpretation: The table and figure above show that the compounding of mortgage rates and the promotion of the SIBL have changed from year to year from 2015 to 2019. Interpretation: The words and graphs above show the amount of the loan received and the advance The SIBL is rising in the years from 2015 to 2019. SIBL has an increasing level of non-performing loans which is an alarming concern for the bank.
Its non-performing loans and also NPL to total loans and advances are increasing every year.
Classified Loan
Non-performing Loan and Advance of SIBL
CHEPTER-05
FINDING, RECOMMENDATION &
CONCLUSION
Finding
Recommendation
Conclusion
