merit of shipping document and which must conform to the terms & conditions of LC. Loan documentary Bill Purchase (LDBP) Payment made against documents representing sell of goods to local export oriented industries, which are deemed as exports, and which are deemed as exports, and which are dominated in local currency/foreign currency falls under this head. The bill of exchange is held as the primary security. The client submits the stance bill and the bank discounts it. This temporarily liability is adjustable from the proceeds off the bill. Interest rate is 10% Loan against Other Securities (LAOS) Loan against other securities is a 100% secured advance, which requires no sanction from the Head Officer. It is sanctioned by marketing lien of FDR, ICB Unit Certificate. Interest rate is16% 4.4 Credit Management System Getting Credit Information Page-31
Janata Bank collects credit information about the applicant to determine the credit worthiness of the borrower. The bank collects the information about the borrower from the following sources: Personal investigation. Confidential report from other bank Head Office/Branch/chamber of the commerce. CIB Report from Central Bank. Information Collection The loans and advances department gets a form filled by the party seeking a lot of information. The information is listed below: Name and address of the borrower (present and permanent). Constitution or status of the business. Data of establishment and place of incorporation. Particulars of properties, partners and Directors. Background and business experience of the borrowers. Particulars of personal assets, name of subsidiaries, percentage of share holding and nature of business. Details of liabilities in name of borrowers, in the name of any directors. Financial Statement of the last three years. Nature and details of business/products. Details of securities offered. Proposed debt equity ratio. Other relevant information. Analyzing these Information Janata Bank then starts examination whether the loan applied for, is complying with its lending policy. If comply, then it examines the documents submitted and the credit worthiness. Credit worthiness analysis, i.e. analysis financial conditions of the loan applicant is very important. If loan amount is more than 50, 00,000, then bank goes for Page-32
Lending Risk Analysis (LRA) and Spreadsheet Analysis (SA) which are recently introduced by Bangladesh Bank. According to Bangladesh Bank Rules, LRA and SA are a must for the loan exceed of one crore. If these two analyses reflect favorable condition and document submitted for the loan appeared to be satisfactory, then bank goes for further action. Lending Risk Analysis (LRA) LRA is a very important and vital analysis for deciding whether the loan proposal is potential or not. Many types of scientific, mathematical, statistical and managerial tools and devices are required to perform this analysis. Janata Bank maintains a prescribed format for Lending Risk Analysis, which includes a spreadsheet to analyze a lot of things. It is not possible to discuss the entire LRA in this report.
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