Chapter One

INTRODUCTION

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INTRODUCTION
An internship is a period of work experience offered by an organization for a limited
period of time. This term is used to refer gathering knowledge through appearing at the
work place. Theoretical knowledge enhances the eagerness to know about something and
practical knowledge for giving the real taste of knowledge of work place. The most
important feature of internship is that it is an activity which is combined by both
educational institution and business establishment. We can say the knowledge is
successful, only when if we can implement the theoretical knowledge practically.
Otherwise, the acquired knowledge is absolutely worthless. An internship program
basically provides the way of implementing the theoretical knowledge practically at a
work place for a certain period of time. So as a student of Bachelor of Business
Administration, for acquiring practical knowledge I got involved myself in a business
organization (Sonali Bank Limited) through an internship program.

Bangladesh is a developing country which consistently trying hard to develop its

economy following the economically developed countries. Banking sector plays a very
vital role boosting up any economy. Sophisticated and wealthy banking system is the
prior condition of development. Smooth banking network played a vital role for national
economy as well as social development. For the past few years, the banking system all
over the world has been undergoing a lot of changes due to deregulation, fraud,
technological innovation and globalization. These changes also affected the major
functions of a countries economy. Qualified and skilled management as well as better
trained and dynamic staff is a prerequisite to run a sound financial institutional banking
sector. Bangladesh is fairly challenged from different angles though its prospect is bright
in the future. Banks are the main tool of the financial system of the country like

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Bangladesh. Though Bangladesh boost up economic growth rates in recent years, a
majority of countries population still remains unbanked. To achieve inclusive
development and growth, all section of society as well as the financially backward
pockets are important to be involved in the financial services of country for smooth
growth of the economy.

A strong and healthy banking sector plays the role as a backbone in the economy for
development. A sound lending management, appropriate strategies and legation are
required as the performance of banking sector in the recent past has not been satisfactory.
At present key performance of commercial banks in the country reflects the poor health
of Banks. Most banks have not been able to show significant improvements on conditions
such as capital risk weighted asset, non-performing loans, return on equity, return on
asset, liquid asset and excess liquidity. In recent years government and Bangladesh bank
has taken initiatives to reform in financial sector such as maintaining discipline in
banking sector, Steps for prevention of money laundering, loan write-off policy,
guidelines for rescheduling of various types of loans and measures to gain transparency
in banking sector. As a result, the image of banking sector is improving day by day.

1.1) Background of the Study

As a student of Business Administration, every student must have some practical

knowledge regarding what one has learnt from academic institution. As our
educational system is mostly text based, inclusion of practical orientation program is
an exception to the norm. From practical knowledge, we will be able to know real life
situations and start a career with some practical experience. Our BBA program is
designed in such a way with an excellent combination of practical and theoretical
aspects. After completing BBA, certain times are preserved for internship.

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As a student of BBA, internship is an academic requirement. For internship every
student is required to work in a selected institution to enhance ones practical
knowledge and experiences. For the requirement of my course I was assigned to
Sonali Bank Limited (SBL), Raajshahi Medical College Hospital Branch for my
internship. In this situation I was assigned to prepare report on “Loan Disbursements
and Recovery Performance of Sonali Bank Limited.’’
Actually, my report is highlighted on Loan disbursement and Recovery of the bank,
Recommendation and Conclusion.

1.2) Significance

This internship report is an important partial requirement of my four years BBA

graduation program. This is because knowledge and learning become perfect when it
is associated with theory and practice. By this internship program students can
establish contacts and networking. Contacts may help to get a job in practical life.
That is, student can train and prepare themselves for the job market. A poor country
like Bangladesh has an overwhelming number of unemployed educated graduates. As
they have no internship experience they have not been able to gain normal
professional experience of establish networking system, which is important in getting
a job. Therefore, it is obvious that the significance of internship is clearly justified as
the crucial requirement of four years BBA graduation.

1.3) Origin of the Report:

Our Bachelor of Business Administration (BBA) course requires 90 days or three

month attachment with any business organisation (The Sonali Bank Limited)
followed by a report assigned and endorsed by the faculty advisor. I took the
opportunity to do my internship in The Sonali Bank Limited (SBL). My topic of
internship is authorized from the head office of SBL .My faculty supervisor Professor
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Dr. Muhammad Rafikul Islam, Institute of Business Administration (IBA), University
of Rajshahi, also approved the topic and authorized me to prepare this report as part
of the fulfillment of internship requirement. The report thus was titled as ‘Loan
Disbursement and Recovery Performance of Sonali Bank Limited.’

1.4) Background of the Report:

The business world is getting dynamic and competitive. It is hard for an organization
to run & even survive in a fast paced, growing and uncertain world if it cannot keep
tracks with the go of business dynamism. Business plays and links important roles in
developing the economy of a country. So, as a business graduate, I think I need to be
attached with any organization to get a handy & versatile experience about the
business world before starting my career. Internship is the arrangement, which makes
a bridge between our academic knowledge and practical world to have an
acquaintance with the real business world as well as to gear me up to lead the future
competitive business. I have worked in Different divisions of SBL Rajshahi Medical
College Hospital Branch, Rajshahi. In this report, I will try to make an overall
analysis on Loan Disbursement and Recovery performance of SBL.

1.5 Objectives of the Study:

“To be precise the main objective of the study is to gain practical knowledge about the
existing banking business in Sonali Bank Ltd through loan disbursement and recovery
system and its functions. Then determined the policy, rules and regulation of loan
disbursement and recovery system.”

Hence, to achieve this board objective, the following specific objectives are established.

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Specific objectives of the study:

 To present an overview of Sonali Bank.

 To acquire practical experience in different banking services of Sonali Bank

Limited, Rajshahi Medical College Hospital Branch.

 To gather knowledge about the transactions of different departments of the bank

 How it disburses loan in various categories and the rate of successful recovery.

 Ascertaining the policy, rules and regulation of loan disbursement and recovery
system it follows.

 Determining the efficiency of loan management of this branch.

1.6 Methodology of the Study:

Data Collection Methods:

Basically for any research work, there are two sources of data. One is primary and other
one is secondary source of data from which data are collected. This report has utilized
data from both Primary and Secondary Source.

A) Primary Data Collection Method:

Primary data was collected from Sonali Bank Ltd. Rajshahi Medical College Hospital
Branch, Rajshahi. To prepare this report, data and information has been collected by
following types of primary methods. These are described below:

1. On the job observation of officers

2. Direct working with officials of Sonali Bank Ltd.

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 3. Face to face conversation with Loan and advance department.

4. Practical deskwork.

5. Observation for the total internship period.

B) Secondary Data Collection Method:

 The main source of secondary data was the official record of the Bank.

 Some Published and unpublished research reports.

 Website of the Bank

 Magazines and internet.

To evaluate the banking performance of the Sonali Bank Limited, Rajshahi Medical
College Hospital Branch, Rajshahi, I have used annual data from 2016 to 2020 and
various current financial statements of the bank.

1.7 Tools Used:

In order to analyze data the following statistical tools have been used:

 Various table;

 Graphical presentation (bar diagram);

 Graphical presentation (Pie Chart);

 Times series;

 Profit analysis.

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1.8 Limitations of Data Collection:

I have faced some problems during my study period. The pandemic COVID-19 has
changed everything very badly and as a result, the officers and other staffs were getting
very busy than the usual schedule. Besides safety was an important issue. So, they could
not give us enough time for discussion about loan and recovery of Sonali Bank Limited,
Rajshahi Medical College Hospital, Rajshahi . The problems are as follows:

1. Time of data collection was not sufficient.

2. The unexpected pandemic COVID-19 was at its peak during my internship period.
Hence, every study is widely speeded and as a result, it was not sufficient enough to
acquire complete knowledge.

3. Some data was not readily available.

4. Limited scope of collecting information in some important aspects due to the security
issues occurred by the pandemic.

5. Finally, my inexperience about research work was also a hindrance to complete task
smoothly.

So, collecting the whole data about the loan and recovery was not possible for me.

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 Chapter Two
BACKGROUND OF
SONALI BANK LIMITED

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BACKGROUND OF SONALI BANK
LIMITED
2.1 Historical background of Sonali Bank Limited:

The independence of our country was assured on December 16, 1971 when Pakistani
troops in the region surrendered to a joint force of Bangladesh and Indian troops. In 19 th
December 1971, all offices were opened but banks were unable to open their functions
due to lack of liquidity.

Soon after independence of the country, Sonali Bank was emerged as the largest and
leading Nationalized Commercial Bank by proclamation of the Bank ”Nationalized Order
1972 (Presidential Order-26) liquidating the three, National Bank of Pakistan, Premier
Bank and Bank of Bahwalpur. As a fully state-owned institution, the bank had been
discharging its nation-building responsibilities, by undertaking government entrusted
different socio-economic schemes as well as money market activities of its own volition,
covering all spheres of the economy.

The bank was converted to a Public Limited Company with 100% ownership of the
government and started functioning as Sonali Bank Limited from November 15, 2007
taking over all assets, liabilities and business of Sonali Bank. After incorporating the
management of the bank has been given required autonomy to make the bank competitive
& to run its business effectively. Sonali Bank Limited is governed by a Board of
Directors consisting of 11 (eleven) members. The Bank is headed by the Chief Executive
officer (CEO) & Managing Director (MD), who must be a well-known banker and a
reputed professional.

At present, Authorized capital of Sonali bank is Tk. 6000.00 crore and paid up capital is
Tk. 4530.00 crore. The Head office of Sonali Bank situated in Motijheel, Dhaka which is
considered as the planning office. It has 41 divisions and 58 department and many
sections. Address of head office is Sonali Bank, Head Office, 35-44 Motijheel C/A,

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Dhaka-1000.PABX of Head Office is 9550426-31, 33, 34 and 9552924 and Fax Number
is 88-02-9561410.

2.2 Vision, Mission & Slogan:

a) Vision Statement:

“Socially committed leading banking institution with global presence.”

b) Mission Statement:

“Dedicated to extend a whole range of quality products that support divergent needs of
people aiming at enriching their lives, creating value for the stakeholders and
contributing towards socio-economic development of the country.”

c) Slogan:

“Your trusted partner in innovating banking.”

2.3 Core values of Sonali Bank Limited:

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SBL’s core value proposition consists of ten key elements. The value would assist the
bank in perceiving its employees to work as a team towards accomplishment assigned
duties and responsibilities for achievement of desired objectives.

The core values of Sonali Bank Limited are mentioned briefly:

1) Team Work: Open communication, discussion and interaction amongst the employees
would ensure unification of actions and efforts towards achieving the common goal.

2) Ethics: Everyone must ensure adherence to ethical practices of banking.

3) Objectivity: All persons will have definite objective in carrying out their tasks.

4) Integrity: Protection and safeguard of national and customer’s interest are vital
elements for social trust.

5) Excellence: Excellent performance and effectiveness are precondition to ensure to

quality service to the large customer base of the bank.

6) Innovation: New and innovative products are the needs of the time for which
continuous action oriented researches are carried out.

7) Commitment: Every employee is committed to work up to the expected level to

ensure satisfaction of valued customers.

8) Self-Reliance: Each employee will have ownership attitude towards the bank and self-
confidence in his work for betterment of the bank.

9) Transparency: Information is to be kept open for all so that stakeholders can have
proper ideas about the bank’s activities.

10) Accountability: All employees are responsible for their activities and will remain
accountable to their respective superior for accomplishment of tasks.
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Corporate Profile

Name of the Company : Sonali Bank Limited

Chairman : Mr. Ziaul Hasan Siddiqui

CEO & Managing Director : Mr. Md. Ataur Rahman Prodhan

Company Secretary : Mr. Tauhidul Islam

Legal Status : Public Limited Company

Emerged as Nationalized Commercial Bank in 1972,

Genesis : following the Bangladesh Bank (Nationalized), Order

No. 1972 (PO No.26 of 1972)
Date of incorporation : 03 June, 2007

Date of Vendor’s Agreement : 15 November

Registered Office : 35-42, 44 Motijheel Commercial Area, Dhaka, Bangladesh

Authorized Capital : Taka 6000.00 Crore

Paid up Capital : Taka 4530.00 Crore

Number of Employee : 19,609

Number of Branches : 1226

Phone- PABX : 9550426-31, 33, 34, 9552924

FAX : 88-02-9561410, 9552924

SWIFT : BSONBDDH

Website : www.sonalibank.com.bd

E-mail : [email protected]

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2.4 Organizational Structure of Sonali Bank Limited:

Head Office

General Manager’s General Manager’s

Office At Head Office Office
and Local Office-8 General Manager’s At Field GM Office and
Office At Zone-2 London GM Office-8

Corporate Branch-22 Principal Office-42

Division at HO-33
Regional Office-19

Inland Branch-1196
Overseas Branch-2

Figure: Organizational Structure of Sonali Bank Ltd

2.5 Management Hierarchy of Sonali Bank Ltd:

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Board of Directors
 Managing Directors & CEO

Deputy Managing Director at Head

Office-5

Figure: Management Hierarchy of Sonali Bank Ltd

2.6 Sonali Bank at a Glance:

Capital Structure:

Authorized Capital Tk. 6000.00 Core.

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Paid up Capital Tk. 4530.00 Core.

Branches & subsidiaries:

Total No of Branches : 1226

No. of foreign branches :2

No. of local Branches : 1224

No of Rural Branches : 756

No of Urban Branches : 467

No of Regional Offices : 16

No of Principal Offices : 46

No of G.M Offices : 11

Subsidiaries :2

1. Sonali Exchange company Incorporated (SECI) 10 (Ten) branches in USA.

2. Sonali Investment Limited (Merchant Banking) having 4 (Four) branches at
Motijheel, Paltan, Uttara, Mirpur in Dhaka and 1(one) branch Khulna,
Bangladesh.

Associates:
1. Sonali Bank Limited having 2 (Two) branches in UK.
2. Sonali Polaris Limited.
Representative Offices: 3: 1(one) in Jeddah, KSA; 1 (one) in Riyadh, KSA and 1 (one)
in Kuwait
Correspondence : 639

2.7 Product and Services:

2.7.1 Deposit Schemes:

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1. Sonali deposit scheme (SDS)
2. Educational deposit scheme (EDS)
3. Medicare deposit scheme (MDS)
4. Rural deposit scheme (RDS)
5. Marriage savings scheme (MSS)
6. Monthly earnings scheme (MES)
7. Double benifit scheme (DBS)
8. Sonali Bank daily profit (SBDP)
9. Nonresident deposit scheme (NRDS)
10. School banking scheme (SBS)
11. Retirement saving scheme (RSS)
12. Sonali bank deposit pension scheme (SBRSS)
13. Tripple Benifit Scheme (TBS)
14. Sonali Bank Millionior Scheme (SBMS)

2.7.2 Credit Schemes:

Bank loans provided to individual

 Overdrafts
 Cash Credit
 Small Loan
 House Building Loan (Staff)
 House Building Loan (General)
 Term Loan on Freedom Fighter
 Staff Transportation Loan (Motor Cycle)
 Consumer Loan
 Grameen Khudro Business Loan
 Education and medical Loan
 Wedding and social ceremony Loan
 Agricultural Loan
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Bank loans provided to Business Organization

 Working capital loan

 Seasonal deficit loan
 Economic cycle requirement loan
 Asset replacement loan
 Fixed asset acquisition loan

Fund Transfer
 Payment orders
 Demand Draft
 Sale of Traveler’s cheque

Major Product Segment

Sonali Bank Limited usually serves the following products to its customers.

Product
 Real Time Online Any Branch Banking
 Islamic Banking
 Merchant Banking
 ATM Services
 Education Loan Scheme
 Monthly Saving Scheme
 Double Benefit Scheme
 Locker Services

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  Muradaba Monthly Saving Scheme
 Muradaba Monthly Income Scheme
 Muradaba Hajj Scanchay Prokalpo

The Main Functions of Sonali Bank Limited

 Collection of Deposits.

 Transfer of Money.

 Sanction of Loan.

 Collecting interest dividends, rents, pension etc.

 Attending bills of exchange and draft of customers.

 Control of Loan.

 To expand of trade and commerce.

 To help in industrialization.

 To provide the customers service.

8 SWOT Analysis:
SWOT analysis is the detailed study of an organization’s exposure and potential in
perspective of its strength, weakness, opportunity and threats. These facilitate the
organizations to make their existing line of performance and also foresee the future to
improve their performance in comparison to their competitors.

Strengths:
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  Branch employees done an excellent performance in doing the daily transaction.
 This branch has an excellent performance in mobilizing deposits.
 Recently this Branch has introduced mew loan category as a government bank
such as Grameen Khudro Business and Khudro Khamar Loan.
 Its place is its main strengths, because most of the students and the teachers of
Rajshahi Medical College Hospital transect all their transactions in this branch.
 Most of the default loans are secured so the chance of recovery is very high.
 Interactive corporate culture.

Weaknesses:

Exposure in large loans.

 Service of this bank is not fully modernized.
 This office space of this branch is not large as its operation.
 Lack of smooth co-ordination in management results in suffering of customers.
 Lack of proper supervision.
 Automation in banking is not implementing properly.
 Inadequate infrastructure.

Opportunities:

 It can offer credit scheme for students.

 Scope of market penetration through diversified products and banking network.
 To diversity online facility to more customer.
 To use of technology from entry level to top level.
 To introduce scheme or loan for various service holder.

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Threats:

 Market pressure for students.

 All sustain multinational banks and upcoming foreign, privet bank possess
enormous to Sonali Bank Ltd.
 Another threaten is the technology, the bank must be adjusted with new
technologies and information.
 Otherwise the profitability of the bank may hamper.

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 Chapter Three
Overview of Sonali Bank Limited,
Rajshahi Medical College Hospital Branch,
Rajshahi

Overview of Sonali Bank Limited

Rajshahi Medical College Hospital Branch, Rajshahi

3.1 Location:

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 Sonali Bank Limited, Rajshahi Medical College Branch, Rajshahi has started its
operation in 19/05/1975. It is situated in Lakshmipur, Rajpara, Rajshahi. This Branch
operates in the ground floor of the building. However, the bank does not own the land
property of the building. Sonali Bank Ltd. Its office layout, personal skills and counter
service are quite similar like about all other branches of Sonali Bank Limited.

3.2 Functions of Sonali Bank Limited Rajshahi Medical College Hospital Branch:

There are various functions that the Rajshahi Medical College Hospital Branch performs
as a representative of Sonali Bank Limited. These functions are as follows:

i. Collection of money on deposit.

ii. Conducting cash transaction of customers.

iii. Attending bills of exchange and drafts of customers who have current
accounts.

iv. Sanctions of Loan.

v. Providing other services to the customers

vi. Transfer of money.

vii. Collection of receipts.

viii. Collections interest, dividends, rents, pensions etc.

ix. As doing the usual functions Rajshahi Medical College Hospital Branch done
some other functions in favor of Bangladesh government such functions are:

 Giving salary of the teachers of University School and Colleges.

 Giving allowance to old aged.
 Giving allowance to the widow.

3.3 Goals of Installation:

Sonali Bank, Ltd. Rajshahi Medical College Hospital, Rajshahi has some goals of
installation. There are as follows:
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 i. To give money for setting up of a new firm;

ii. To supply credit of existing business institute;

iii. It serves to get of banking system to any stage of businessmen;

iv. To give money for setting up a new agro-based industrial unit; To give money
for setting up a new industry.

3.4 Activities of Sonali Bank (Ltd.) Rajshahi Medical College Hospital, Rajshahi:

Banking business is primarily concerned with the activities of deposit collection and loan
disbursement. Sonali Bank Ltd. is not different from these activities.

The main activities of Sonali Bank Ltd. Rajshahi Medical College Hospital, Rajshahi are
as follows:

i. Deposit collection and mobilization

ii. Loan disbursement and recovery

iii. Collection of Electric Bill, Telephone Bill.

iv. Widow allowance, old age allowance, stipend for girls.

v. Foreign remittance collection.

3.5. Management Structure of the Sonali Bank, Rajshahi Medical College Hospital,
Rajshahi:

SENIOR PRINCIPAL OFFICER (MANAGER) (1)

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 SENIOR OFFICER (3)

OFFICER (4) OFFICER CASH (4)

SUB ACCOUNTANT (5)

SENIOR CLERK (Nil)

CLERK (2)

CARE TAKER (1)

MESSENGER (1)

Figure: Organizational Structure of Sonali Bank Ltd. Rajshahi Medical College Branch,
Rajshahi.

3.6 Employees of Sonali Bank Limited Rajshahi Medical College Hospital,

Rajshahi:

There are 21 employees in Sonali Bank Limited, Rajshahi Medical College Hospital,
Rajshahi.

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 Sl. No. Position Number

1 SENIOR PRINCIPAL OFFICER (MANAGER) 1

2 SENIOR OFFICER 3

3 OFFICER (CASH) 4

4. OFFICER 4

5. SUB ACCOUNT 5

6. CLERK 2

7. CARE TAKER 1

8. MESSENGER 1

3.7 Managerial Functions of the Branch:

Manager (Mr. A.B.M. Iqbal Hossain) is indeed a key person in this branch, who is
responsible for all sorts of banking activities answerable to the Head Quarter and
Regional officers. The manager is responsible for overall development and
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administration of the bank. Therefore, he keeps himself busy for mobilization and
management of fund. The officers are therefore delegated powers from the manager,
who excise maximum power excepting few important cases. Other officers also enjoy
powers, of course, restricted to certain degree.

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 Chapter Four

LOAN DISBURSEMENT
AND RECOVERY
PERFORMANCE

LOAN DISBURSEMENT

4.1 Introduction:

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One of the two primary functions of a commercial bank is to extend credit to the deficit
economic unit that comprises borrowers of all types. Without adequate finance, there can be
no growth in the economy. Bank lending is important for the economy in the sense that it can
simultaneously finance all of the sub-sectors of financial areas which comprise agricultural,
commercial and industrial activities of a nation.

So the whole banking sector is very important for our daily life. Loan administration
section is very important part of banking function. Loan administration includes loan
disbursement procedure, loan supervise and loan recovery. Sonali bank Ltd., Rajshahi
Medical College Hospital Branch, Rajshahi has various types of loans. These loans are
provided to meet up the personal and business needs to the different people. A bank earns
profit by giving loan. The loan department of Sonali Bank Ltd. Rajshahi Medical College
Hospital Branch, Rajshahi is charged by one officer under bank manager.

4.2 Definition of Loan:

The main function of bank is to collect money from public or institution and to give loan
to them. Lending of money in productive purpose by the bank is called loan which is
acceptable for the country. Its duration is longer than that of advance.

Money and loan are closely related. Loan is essentially on extension of money. The most
elementary fact about credit is that there must be two parties to the transaction. The
borrower is a debtor; the lender is a creditor. The one is impossible without the other.
Credit involves giving goods or purchasing power now in return for a promise to receive
the goods or purchasing power of lender.

Credit based upon money transfer from the creditors to the debtors and back to the
creditors. They are backed by a particular party’s promise to pay at same future stipulated
date.

4.3 Objective of Loan:

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The goal of a commercial bank is to earn profit. So the objective of loan of Sonali Bank
Limited, Rajshahi Medical College Hospital, Rajshahi is to earn profit. But “Sonali Bank
Ltd.” is a state owned bank. That is why economic development is the main objective of
the bank loan.

4.4 Classification of Loan:

1 (A) GENERAL CLASSIFICATION OF LOAN:

1) Small loan: Small loan is specially given to small businessmen to run their
businesses. Small loan includes loan to small and cottage industries, shop owners
etc.

2) Staff loan: This type of loan is particularly for employee of the bank. This type of
loan is given against provident fund. Amount of loan depends on deposited
amount of provident fund. This type of loan is given for the purpose of buying
bicycle and motorcycle, construction of houses etc.

3) Rural Credit: This loan is given to the rural people to elevate poverty. This loan
is given to run poultry farm, dairy farm, agricultural activities etc.

4) Industrial Credit: This type of loan is especially for building or running

industry. Generally this type of loan is large amount and duration is also
comparatively longer.

(b) Classification of loan on the basis of time duration:

1) Short-term loan: The loan which is given for short period of time is called
short-term loan. Duration of this type of loan is up to two years. Small loan,
rural credit includes in this type of loan.

2) Middle term loan: Middle term of loan is comparatively longer in time than
short term loan. Two years to five years loans is come under this head.

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 3) Long-term loan: The loan which is given for more than 5 years is called long
term loan. The period of loan becomes also longer than other two types of loans.
House Building loan, Industrial loan are mainly long-term loans.

(c) Classification loan on the basis of security:

On the basis of security loan can be classified into two types:

1) Secured loan: The loan which is given against security is called secured loan.
There is no risk in this kind of loan. If loan holder does not pay interest or
principal amount, bank has the right to sell mortgage property.

2) Unsecured loan: Unsecured loan is given against the personal guarantee.

Maximum loan limit is Tk. 25000. If the loan holder is unable to pay the loan,
bank collects money from guarantor.

(d) Classification of loan on the basis of collection:

1) Unclassified loan: Unclassified loan means the loan which is collected duly.

2) Classified loan: Classified loan is the loan which is not collected duly. Following
are the types of classified loan.

i) Substandard loan: The loan which is not collected duly but not more
than 3 months. The bank expects that this type of loan may be
collected.

ii) Doubtful loan: Doubtful loan includes that sort of loan which is not
collected within 3 months to 6 months after the expiry of collection
date.

iii) Bad / Loss loan: The loan which is considered that this kind of loan
will not be collected is called bad loan. This loan is considered loss of
the bank.

4.5 Source of Credit:

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Now-a-days credit is provided by a wide variety of sources. These sources may be
conveniently classified in the following figure:

Source of Credit

Intuitional Non-Intuitional

Banks Non- banks Money- Open Sellers

Lenders & (Trade)
Market
Indigenous

B.B Other Banks

Commercial Co-Operatives

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4.6 Security:

At the time of giving loans, bank takes some personal and impersonal securities from the
loan holder. Sonali bank Ltd., Rajshahi Medical College Hospital, Rajshahi takes tangible
and intangible assets against sanctioning loan. In special case bank also takes impersonal
securities. If loan holder is not able to pay loan, bank can collect loan by selling these
securities.

Types of security can be shown in the following way:

Security

Personal security Impersonal security Collateral security

Land Building Hypothecation Mortgage Charge Actionable

claim

4.7 Banker’s Precaution in Accepting Securities

In the time of accepting securities banks observe closely the following things:

a. Marketability of the security.

b. Transferability of the security.

c. Stability of price.

d. Absence of liability.

e. Sufficient margin.

f. Clear title.

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 g. Acceptability.

h. Financial soundness.

i. Profits.

4.8 Disbursement:

After preparing loan documents completely and accurately, the loan officer will be ready
to disburse the loan to the borrower’s loan account. After disbursement, the loan officer
needs to be monitored to ensure whether the terms and conditions of the loan fulfilled by
both bank and client or not.

4.9 What is Loan Disbursement?

There are two wards in loan disbursement i.e. loan and disbursement. When an advance
is made is a lump sum repayable either in fixed monthly installment or in lamp sum and
no subsequent debit is ordinarily allowed except by way of interest incidental charges etc.
it is called loan on the other hand disbursement means distributing anything. So loan
disbursement means distribute or sanction the loan against their various kinds of security
and facility.

4.10 Why is Loan Disbursement Necessary?

There are two sides of loan disbursement. One side is the interest of bank and another
side is the benefit of general people, who takes loan from the bank.

(a) From the interest of Bank:

1. To earn profit by giving loan and to take interest from the loaner.

2. To expend bank investment facility so that the bank can easily invest its idle
money by giving loan.

3. To expend banking activities.

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(b) From the benefit of the loaner:

It is one kind of social service by the bank. Bank gives loan to the small trader small or
cottage industry. Generally who cannot expand their business due to lack of capital. The
bank helps them by supplying sufficient capital.

By giving short-term or long term loan the bank helps the people to achieve self-
sufficient.

4.11 Policy of Loan Disbursement of Sonali Bank, Rajshahi Medical College

Hospital, Rajshahi:

Every Branch has its own policy of loan disbursement. Policy of loan disbursement of
this branch is as like as policy of loan disbursement of Sonali Bank Ltd.

The Sonali Bank Ltd. gives loan to its client according to banking act 1971. This Branch
also follows this act. Generally this branch follows this policy.

a. Any client wants to take loan from this branch. The bank manager advised him/her to
submit application by an application from. After filling the application form
accurately, he/she should submit to the bank.

b. After receiving application the bank verifies the purpose of the loaner to take the
loan. This time the bank generally verifies the solvency of the client. The Bank
does not give any loan without any security. For this reason, the bank verifies the
security of loan, against which bank gives loan to its clients.

So analysis of the security of the loan is very important for the bank.

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At last, when all verified matter is Ok i.e. when bank will be sure about the solvency of
loaner then the bank will disburse loan among the loaners. If the bank is not satisfied
about security or if the bank realizes that the loaner cannot repay the loan at just time the
bank will reject that project.

4.12 Procedure of Loan Disbursement:

To issue loan Bank has to maintain some specific steps. Following are the procedure of
loan approval:

1) Application:

First step of sectioning loan is giving an application to the bank by the client. Generally
application is submitted by specific form.

2) Analysis of application:

After receiving application, bank analyses all information, which is given by the client. If
the loan officer is satisfied then he considers the application.

(3) Analysis of mortgage:

Bank evaluates the value of mortgage. In this case bank never issues more than 50% of
mortgage value. In case of deposit loan, bank considers 80% of the collected money and
for provident fund bank considers 100% of provident fund balance.

(4) Analysis of Personal Security:

If bank disburses loan against personal securities then bank will analyze the financial
conditions and social status of the guarantor.

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(5) Analysis the Purpose of Loan:

Bank needs to investigate purpose of loan. Loan can be sanctioned if the purpose of loan
becomes legal and creative.

(6) Approval of Loan:

If the bank authorities satisfy above criteria, then bank disburses loan. In disbursing loan,
bank never pays direct cash. For this reason, the client needs to open bank account and
bank deposit money on that account. Client can withdraw money whenever he likes from
his account.

4.13 Sources of Credit Information:

Loans are sanctioned on the basis of loan application. Loan cases are not processed
merely observing the loan amount or the purposes of mentioned in the loan application
form rather bank examines whether the purposes of loan are acceptable to bank. This
consideration is made to ensure the return of loan amount.

4.14 Sources of Information:

(a) Internal source

a. Filled in application

b. Interview

c. Financial statements

d. Bank’s own records

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(b) External source

 Govt. or Regulatory Authority:

a. Income tax office/Revenue Board

b. Government gazette

c. Records from the other govt. offices

d. Register of joint stock companies.

 Other:

a. Inspection/investigation

b. Market report

c. Credit information Bureau

d. News paper

e. Audit Firm

f. Other Bank’s Records

g. Trade Journal

h. Trade Directories

4.15 Problems Incase of Loan Disbursement:

Bank faces various problems in case of loan disbursement. For the lack of adequate
measures of evaluating assets, guarantor, these sorts of problem arises. Sonali bank Ltd.,
Rajshahi Medical College Hospital, Rajshahi faces the following problems when it
disburses loan.

 The first problem is selection of appropriate promoters.

 Another problem is the promoter does not supply equity in due time.

The lack of management of the project cannot be evaluated accurately

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4.16 Types of Loan and Advances:

Loan and Advances:

Sonali Bank Ltd Rajshahi Medical College Hospital, Rajshahi collects deposit from
depositor and provides loan to the borrower against predetermined interest. Sonali Bank
Ltd. provides following type of loans and advances.

Sonali Bank Ltd., Rajshahi Medical College Hospital, Rajshahi gives following types of
loans and advances are discussed below:

(a) Overdraft

(b) Cash credit

(b) Small Loan Disbursement

(d) Grameen Khudro Business Loan

(e) Other loan.

(a) Overdraft:

Overdraft is issued against FDRDPS, JBSPS and savings certificate. Opening of an

overdraft arrangement enables a customer to draw money above his own balance up to
the limit stipulated. This branch issues overdraft up to 80% of the deposit money.

(b) Cash credit:

This is a special type of advance allowed to the businessmen who want to expand their own
business but cannot be able due to shortage of capital. Bank allows cash credit to genuine
traders, exporters and manufactures industrial that are highly reputed, credit worthy and
sufficiently experienced and proficient in their profession.

Procedure of Cash Credit:

 Must have a current account with the bank.

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  At least 6th mount transaction must be maintained with the current account.

 Must be a legal business according to the rules and regulation of the country.

 Submit application to the branch manager to sanction cash credit.

 Branch manager checks loan appraisal application and sees account transaction
statements.

 Land and building are used as register mortgage for the cash security of credit. It
may be owner security or third party security.

 Valuation of security.

 Security assets value (Land and Buildings) must be 1.5 against loan.

 If above all things are satisfactory to the branch manager, then branch manager
sends the proposal of cash credit to the corporate office of bank.

 Corporate office sanctions Cash credit up to Tk. 100000 by DGM. Above

1000000 sanctions by head office.

 It interest rate is 14%.

 In 45 intervals a banker adjusts of withdraw amount.

(d) Small Loan Disbursement:

Supervise credits are given to the small businessmen who deal in poultry farms, dairy
farms etc. The main purpose of this loan is to remove unemployment, reduce poverty.

Procedure of SLD credit:

 To get supervise loan application should be submitted to the loan officers with
following the papers.

 Trade license.

 Deed of agreement of shop fare with city corporation.

 Shop fare agreement with city corporation minimum three years.

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  Electricity bills and city corporation tax payment documents and these documents
are submitted to the bank.

 Grantors may be honorable person of the society such as doctors, engineers etc.

 Supervise loan is sanctioned by branch manager up to 30000, above 30000

sanctioned by corporate office without security, above 50000 is sanctioned by
corporate office with security, (Register mortgage or equitable mortgage).

 Supervise loan is sanctioned up to 3 years with 36 installments.

 Its interest is 12%.

(e) Grameen Khudro Business Loan:

Grameen Khudro Business Loa is new scheme of Sonali Bank Ltd. GKBL is given to the
landless people without security. The main purpose of these loans are social development of
self-employment and to remove poverty. Its interest rate is 6%.

Procedure of GKB Loan:

 Loan holder must be landless.

 These type loans are payable without security.

(f) House building staff loan (Service loan):

It is provided only for bank stuffs.

i) Eligibility of Client:

 Only for bank stuffs.

ii) Interest and other charges:

 Its interest rate is 14%

iii) Repayment period:

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  For lower employees and higher employees 1 and 2 year respectively
on the monthly basis.

These types of loans are provided to the members of the bank staffs. This loan is
repayable as installment from the staff monthly salary.

House building staff loan disbursement of the branch from 2016 to 2020. Comparison is
done between total staff loan & total loan disbursement.

LOAN RECOVERY

4.17 Introduction:

Recovery of loan is one of the important functions of banking activities. Principally, bank
operates its business depending on money collected from people. Banks distribute loans
& advances from their collected money. So it is their key responsibility to recover loans
within the pre-scheduled period. Recollection of loan in due time creates the opportunity
to disburse more loans to the income generating people which strengthens the circle of
economy. A good performance of loan recovery indicates the efficiency & effectiveness
of the management of a bank. To recover loans in due time & with due mobility the bank
follows some strategies. These are discussed bellow:

4.18 The Procedure of Loan Recovery:

The main responsibility of bank manager and loan officer is to recover the outstanding
loan in Sonali Bank Ltd, Rajshahi Medical College Hospital, Rajshahi. The loan recovery
procedure is divided into several steps. They are as follows-

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(a) Issue of demand notice:

Demand notice is issued before one month being due of outstanding loan or installment.
It is sent to the borrower.

(b) Legal Notice:

If the borrower does not repay their respective loans and interest after maturity being
received the demand notice by the bank them bank sends legal notice under registered
with acknowledgement by post to the borrowers. Before taking any legal action against
the borrower the bank should send lawyer notice to him.

(c) Special Notice:

Besides the above two notices, special notice signatured by DC, TNO is send to the
respective barrower to keep mental pressure on him for repaying the loan.

(d) Field recovery:

Loan officer the recovers loan through I.O. receipt by visiting the spot and houses of the
borrower.

(e) Personal communication:

If the borrower fails to repay his loan installment the loan officer communicates with the
respected persons of that area to give mental pressure to the borrower so that he repays
his respective loan.

(f) Campaigning:

The manager and other officer present in the camp and communicate with the borrowers.
They give them moral persuasion and try to encourage them so that they repay their
loans.
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(g) Case filling:

If all the procedures except legal action of recovering loan become failed then case is
filed against the borrower. If the borrower is in the following category then the case has
to be filed with priority:

i) Unwilling to repay the loan although he is financially solvent.

ii) Every effort of loan recovery becomes failure.

iii) Detrimental to the interest of bank loan.

4.19 Loan Supervision Activities:

Loan supervision should be done in three ways-

1. Observe and supervise the loan applicant before approving the loan.

2. After approving and disbursing the loan supervise and monitor the cash inflow and
outflow until the full repayment of the loan.

3. Bank should try to retain the most creditworthy borrowers based on their past
repayment history and make them repeat customers. Because, they are proven as
secured and profitable to the bank. In this case, a bank may provide profitable
investment advice to borrow profitable investment advice to the borrowers.

Phases Percentage of time spent

First Phases- Before Disbursement 20℅

Second Phase- Disbursement to repayment 70℅

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 Third Phase- After the repayment of the loan 10℅

Total 100℅

4.20 Various Types of Loan Recovery System in Sonali Bank Ltd. Rajshahi Medical
College Hospital, Rajshahi:

Recovery systems vary from one type of loan from another type of loans. Various types
of loan are recovered by following ways:

(a) Overdraft Secured:

The loan holders have to pay within the time duration which varies from loan types. In
case of non-payment, Bank collects money from deposit of loan holders. In case of TOD,
Bank cuts from salary of army personnel.

(b) Cash credit/ Small loan:

Loan holders have to pay with in one year. They can renew the loan after paying full
amount of loan. If the loan holder is unable to pay the loan the bank collects money by
selling property.

4.21 Recovery Problems of Loan:

This branch does not deal with long-term loan except staff loans. It also does not allow
any industrial loan. The bank issues short-term loan against adequate mortgage. For this
reason, it does not face any complex problem. Problems can be raised only in case of fake
documents and fake guarantor’s dealing with the bank.

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4.22 How to Overcome Recovery Problem:

Though generally this branch does not face any difficulty for collecting loan but if faces
following problems that can be solved by the following ways:

 At first, influence is made directly to repay the loan.

 If negotiation fails to recover than bank can issue advocate notices.

 File case against client.

 Confiscate mortgage assets and sale assets by auction.

4.23 Position of Loan Disbursements and Recovery:

The loan amount which becomes more than twice in principal and interest and which is
not possible to recover with the help of legal action then these loans can be recovered by
exemption of interest. By this way bad loans can be recovered.

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CHAPTER FIVE

ANALYSIS

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 LOAN DISBURSEMENT
AND RECOVERY ANALYSIS

Loan Disbursement:

1. Secured Overdraft Disbursement (SOD).

2. Personal Loan (PL)

3. Small and Medium Loan (SME).

4. Grameen Khudro Business Loan (GKBL).

5. House Building Loan (HBL).

1. Secured Overdraft Disbursement (SOD).

The branch sanctions SOD from 2016 to 2019. The relationship between total SOD
outstanding and total disbursement for particular year are shown below:

Table-1: Total SOD Outstanding and total Disbursement

Year Total SOD Disbursement for Percentage of

( in Lakh) the year ( in Lakh) disbursement to total
SOD (%)

2016 13.55 11.52 .85

2017 22.30 13.38 .60

2018 29.67 16.32 .55

2019 28.98 21.74 .70

Source: Loan Section of Sonali Bank Limited, Rajshahi Medical College Hospital,
Rajshahi.
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 Fig. 1: Total disbursement was the highest in year of 2019 and the lowest amount
was in 2016

Discussion:

From the above table & graph, we see that the total disbursement was the highest in year
of 2019 and the lowest amount was in 2016.

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2. Personal Loan (PL)

The branch sanctions Personal Loan (PL) from 2016 to 2019. The relationship between
Personal Loan (PL) outstanding and total disbursement are shown below:

Table-2: Personal Loan (PL) outstanding and total disbursement

Year Total Disbursement (in Total PL ( in Lakh) Percentage of PL to

Lakh) Total loan (%)

2016 26.42 27.82 .95

2017 34.24 48.91 .70

2018 16.00 19.51 .82

2019 129.00 198.46 .65

Source: Loan Section of Sonali Bank Limited, Rajshahi Medical College

Hospital, Rajshahi.

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Fig 2: Amount of PL disbursement is the highest in the year of 2019 and the lowest
in the year of 2018.

Discussion:

From the above table and figure, we can see that amount of PL disbursement is the
highest in the year of 2019 and the lowest in the year of 2018.

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3. Small and Medium Loan Disbursement:

SME Loan disbursement of Sonali Bank Rajshahi Medical College Hospital, Rajshahi from
2016 to 2019. Comparison of total disbursement to total SME loan outstanding.

Table-3: Comparison of total disbursement to total SLD loan outstanding

Year Total Disbursement Total SME Percentage of

(in Lakh) ( in Lakh) SME to Total loan
(%)

2016 35.52 37.79 .94

2017 49.00 59.76 .82

2018 16.00 18.18 .88

2019 12.60 17.03 .74

Source: Loan Section of Sonali Bank Limited, Rajshahi Medical College

Hospital, Rajshahi.

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 Fig. 3: The loan disbursement against Small and Medium Loan Disbursement
was the highest in the year of 2017 & the lowest in the year of 2019.

Discussion:

From the above table & figure, it is seen that the loan disbursement against Small
and Medium Loan Disbursement was the highest in the year of 2017 & the lowest
in the year of 2019.

4. Grameen Khudro Business Loan:

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Grameen Khudro Business Loan Sonali Bank Ltd. Rajshahi of Rajshahi Medical
College Hospital from 2016 to 2019. Comparison is made between total GKBL
outstanding and total disbursement.

Table-4: Comparison is made between total GKBL outstanding and total

disbursement

Year Total GKBL( in Lakh ) Total Percentage of

Disbursement disbursement to Total
(in Lakh) GKBL (%)

2016 7.87 6.85 .87

2017 9.65 5.50 .57

2018 6.72 4.30 .64

2019 14.03 10.80 .77

Source: Loan Section of Sonali Bank Limited, Rajshahi Medical College

Hospital, Rajshahi.

Fig.4: Amount of GKBL disbursement is the highest in the year of 2019 and the
lowest in the year of 2018.

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Discussion:

From the above table and graph, we can see that the amount of rural GKBL
disbursement is the highest in the year of 2019 and the lowest in the year of 2018. It
is noted that total rural outstanding is obtained after adjusting of disbursement &
recovery for the year.

5. House Building Loan (HBL):

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Table-5: Comparison is done between total staff loan & total loan disbursement

Year Total House Building Total Percentage of total

staff loan(In Lakh) Disbursement (in loan
Lakh)

2016 -- -- --

2017 -- -- --

2018 -- -- --

2019 20.83 10.00 .48

Source: Loan Section of Sonali Bank Limited, Rajshahi Medical College

Hospital, Rajshahi.

Fig.5: House Building Loan was provided only in 2019 within the previous four
years.

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Discussion:

We see from the table and figure, the House Building Staff loan is provided in
2019 only.

The total loan Outstanding of the branch from 2016 to 2019 is shown in the following
table (amount in lakh)

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 Types of loan 2016 2017 2018 2019

Grameen Khudro
Business Loan 7.87 9.65 6.72 14.03

Loan Against SME 37.79 59.76 18.18 17.33

General HB 46.72 48.8 42.53 42.93

Loan General 25.26 29.43 32.35 22.73

Loan Against LTR 75.48 76.63 67.30 70.63

Staff House
Building -- -- -- 20.83

SOD 13.55 22.30 29.67 28.98

Personal Loan 27.82 48.91 19.51 198.46

Others loan 16.50 15.32 14.17 36.05

Total 250.99 310.80 230.43 451.97

Source: Loan Section of Sonali Bank Limited, Rajshahi Medical College Hospital, Rajshahi.

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Loan Recovery:

The bank sanctions SOD from year 2016–2019 & recovers the following amounts:

Table-6: Sanctions SOD from year 2016 – 2019 & Recovers

Year Total SOD (in Total recovery (in Percentage of total recovery to
Lakh) Lakh) total SOD

2016 13.55 9.76 .72

2017 22.30 12.27 .55

2018 29.67 19.29 .65

2019 28.98 13.04 .45

Source: Loan Recovery Section of Sonali Bank Limited, Rajshahi Medical College Hospital,
Rajshahi.

Fig.6: Secured SOD Loan recovery is the highest in the year of 2016 & the
lowest in 2019

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From the above table and figure, we can see that loan recovery is the highest in the
year of 2016 & the lowest in 2019.

Table-7: The branch sanctions Personal Loan (PL) & recovers the following
amounts

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 Year Total Personal Loan Total recovery (in Percent of recovery to total
(in Lakh) Lakh) personal loan

201 27.82 22.82 .82

6

201 48.91 34.73 .71

7

201 19.51 15.61 .80

8

201 198.46 113.12 .57

9

Source: Loan Recovery Section of Sonali Bank Limited, Rajshahi Medical College
Hospital, Rajshahi.

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Fig.7: Personal Loan (PL) recovery is the highest in 2016 & the lowest in 2019.

Discussion: From the above figure it is seen that personal loan recovery is the
highest in 2016 & the lowest in 2019.

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Small & Medium loan Disbursement (SME):

Table-8: The branch sanctions SME loans from 2016-2019 and recovery the
following amounts

Year Total SME (in Total recovery (in Percent of recovery to total
Lakh) Lakh) SME

201 37.79 27.21 .72

6

201 59.76 46.02 .77

7

201 18.18 14.54 .80

8

201 17.03 11.07 .65

9

Source: Loan Recovery Section of Sonali Bank Limited, Rajshahi Medical College
Hospital, Rajshahi.

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 Fig.8: SME loan recover is the highest in 2018 & the lowest in 2019

Discussion: From the above figure it is seen that loan recover is the highest in
2018 & the lowest in 2019.

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House Building loans (staff):

This type of loan is repaid monthly installment basis and installment is paid from
per month salary.

Table-9: The branch sanctions HB loans & recovers the following amounts.
(The data of Staff House Building Loan is available only for 2019)

Year Total House building Total recovery(in Percent of recovery to total

loan (in Lakh) Lakh) House building loan

2016 -- -- --

2017 -- -- --

2018 -- -- --

2019 20.83 4.58 .22

Source: Loan Recovery Section of Sonali Bank Limited, Rajshahi Medical College
Hospital, Rajshahi.

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Fig.9: Staff HB Loan recovery is 4.58 in 2019

Discussion: From the above figure it is pointed that loan recovery is 4.58 in 2019.
The bank provided the data of Staff House Building Loan only for 2019.

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Grameen Khudro Business Loan:

This type of loan is given to the poor people.

Table-10: The branch sanctions the following amounts of GKBL loans from
2016 -2019

Year Total GKBL (in Lakh) Total recovery (in Percent of recovery to
Lakh) total GKBL

2016 7.87 6.77 .86

2017 9.65 5.02 .52

2018 6.72 3.83 .57

2019 14.03 4.63 .33

Source: Loan Recovery Section of Sonli Bank Limited, Rajshahi Medical College
Hospital, Rajshahi.

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Fig.10: Grameen Khudro Business Loan amount is the highest in the year of 2016
& the lowest in 2019

Discussion: From the above figure it is seen that loan recovery amount is the
highest in the year of 2016 & the lowest in 2019.

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Table-11: Position of loan disbursement and recovery from 2016 to 2019 is
shown in the table and is compared in figure

Year Total Disbursement Total Loan recovery Percentage of Loan

( in Lakh) recovery %
(in Lakh)

201 87.03 77.87 89.47

6

201 140.62 131.78 93.71

7

201 74.08 69.70 94.09

8

201 279.33 241.64 86.51

9

Source: Loan Recovery Section of Sonali Bank Limited, Rajshahi Medical College
Hospital Branch, Rajshahi.

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 Fig.11: Position of loan disbursement and recovery from 2016 to 2019 is
shown in the table and is compared in figure

Discussion:
From the above table and graph, it is seen that the amount of total loan
disbursement and recovery is the highest in the year of 2019.

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 Chapter Six
FINDINGS, RECOMMENDATIONS
& CONCLUSION

71 | P a g e
 FINDINGS, RECOMMENDATIONS & CONCLUSION

6.1 Findings:

Sonali Bank Ltd. is the largest nationalized commercial bank. Through this bank Govt.
does his important monetary activities. It is directed by the policies of Govt. The major
findings & recommendations of Sonali Bank Ltd. Rajshahi Medical College Hospital
Branch includes the following:

1. Overdraft/SOD is issued against FDR, and who has savings certificate. This branch
issues overdraft up to 80% of the deposit money.

2. Cash credit loan is given who has a current account with the bank. It interest rate is
14%. Corporate Office sanctions cash credit up to 100,000 by DGM. Above
10,000,000 is sanctioned by head office.

3. Supervised loan or SME is given to the small businessmen who deal in farms, dairy
etc. Most of the businessmen take this loan.

4. Grameen Khudro Business Loan: This loan is given to the landless people without
security. Its interest rate is 6%. This loan is given most of the poor people.

5. HB loan or service loan: This loan is provided only for bank stuffs. Its interest rate is
14%.

6. Recovery systems vary from one type of loan from another types of loans. The loan
recover of SOD is the highest in 2016 and the lowest in 2019.

7. SME loan recovery is the highest in 2018 & the lowest in 2019.

8. Personal loan and GKBL: In loan recovery these loans are pointed the highest in 2016
& the lowest in 2019.

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6.2 Recommendations:

Since Sonali Bank Ltd. is the leading nationalized commercial bank in Bangladesh, it
should remove its limitations in banking service. In my study, I have recognized several
findings. These are given are below-

 We know that the main source of revenue for a bank is interest on loan. So, if the
bank wants to earn handsome revenue, it should expand its loan disbursement
activity.

 A task force should be formed to find out profitable and less risky projects for proper
loan disbursement. It will help the bank to recover loan timely and maintain a stable
pattern of cash inflow.

 Success of financial institution and credit program is mainly judged by the recovery
performance. As percentage of recovery of loan against disbursement is not in a
satisfactory level so the branch should pay more attention in this sector.

 Selection of genuine borrower through proper investigation.

 To increase the awareness of debtors about repayment of loan,

 The bank should consider the character, capability, credit worthiness of capital and
collateral of the borrower before granting a loan. The bank should put more emphasis
on the viability/feasibility of the project rather than the security of the loan.

 In order to have a better satisfaction of the customer online banking services should
be adapted.

 All sub sections should ensure prompt services.

 To reduce political pressure.

 In order to increase the growth of deposit, the branch should organize seminar,
symposium on modern banking. Therefore the bank must take some corrective
measures, so that it might face the challenges of 21st century.

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6.3 Conclusion:

The three months internship program was a great experience for me. Through this
internship program I got the chance to exercise my theoretical knowledge in professional
field. The internship program gives me the opportunity to attain practical experience in
various activities. Though it was not possible to grasp the whole affairs of a commercial
bank in just three months. Whatever I learned was not insufficient in any count. My
special topic was “Loan Disbursement & Recovery Performance” of Sonali Bank Ltd.
Rajshahi Medical College Hospital Branch. Loan disbursement and recovery
performance of this branch is satisfactory. Although the banking performance of a single
branch does not indicate the overall performance of a bank.

All kinds of customary services rendered by this branch are not so good where as private
commercial bank has created an image in rendering customary service. The negligence in
providing the customary services is observed which are now practiced by other
nationalized commercial banks. This bank is not in satisfactory position in providing
large amount of loan and advance.

This branch has some limitations. It has to follow orders from the head office. It cannot
do any thing it wants. So, even though, it may have opportunities, it cannot implement
those at its disposal. However, as one of the leading commercial bank, Sonali Bank Ltd.
Rajshahi Medical College Hospital Branch is playing an important role in its area of
business in mobilizing financial resources through deposit collection and loan
disbursement. It helps creating and maintaining a sound business environment in its
business area.

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 BIBLIOGRAPHY

1) Loan Ledger of Sonali Bank Ltd., Rajshahi Medical College Hospital Branch.

2) Deposit ledger of Sonali Bank Ltd., Rajshahi Medical College Hospital Branch
.

3) Annual closing report of Sonali Bank Ltd., Rajshahi Medical College Hospital
Branch.

4) Papers of Sonali Bank Ltd. training center.

5) Kothary. C.R: Research Methodology.

6) Banking Theory and practice. By K C.Shekuar

7) Bank Management (A Fund Emphasis) By Dr.A.R Khan

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