House Building Loan (Staff) Loans to Staff Inland Bills Purchased (IBP) Inland Documentary Bills Purchase (IDBP) Consumers Credit Scheme (CCS) Foreign Bill Purchase (FBP) Loan against Imported Merchandise (LIM) Loan against Trust Receipts (LTR) Payment against Document (PAD) Sod (Export) Export Cash Credit (ECC) Packing Credit (PC) Foreign Documentary Bills Purchase Small and Medium Enterprise (SME) Advances against Share The Lending Process The lending procedure starts with building up of relationship with customer through account opening. The stages of credit approval are done both at the branches and at the Head Office levels. The lending procedure as observed in Prime Bank Ltd. is described below in sequential order: Application from the Credit Applicant 19 | P a g e
A loan procedure formally starts with a loan application from a client who must have an account with the Bank. At first it starts from the branch level. Branch receives application from client for a loan facility Obtaining CIB Report After receiving the loan application from the client, the bank sends a letter to Credit Information Bureau of Bangladesh Bank for obtaining a credit inquiry report of the customer. This report is called CIB (Credit information Bureau) report. Collection of Documents If Bangladesh Bank sends positive CIB report on that particular borrower and if the Bank thinks the prospective borrower to be a good one, then the bank scrutinizes the documents. Required documents are: In case of corporate client, financial documents of the company for the last three to five years. If the company is a new one, projected financial data for the same duration is required. Personal net worth of the borrower(s). In this stage, the bank will ensure that the documents are properly filled in and duly signed. Credit-in-charge of the relevant branch is responsible for enquiring about the ins and outs of the customer’s business through discussing with him/them. Analysis of Collected Information Any loan proposal needs to be evaluated on the basis of financial information provided by the loan applicant. Financial spread sheet analysis which consists of a series of quantitative techniques is employed to analyze the risks associated with a particular loan and to judge the financial soundness and worthiness of the borrower Credit Proposal The branch starts processing the loan at this stage. Based on the analysis (credit analysis) done by the branch, the branch prepares a loan proposal. The proposal contains following important and relevant information: Name of the borrower(s) Nature of credit Purpose of credit Extent of credit Collateral Margin Rate of interest Repayment schedule Validity, etc. 20 | P a g e
Sanctioning Of Credit at Branch Level If the proposal meets Prime Bank’s lending criteria and is within the manager’s discretionary power, the credit line is approved. The manager and the sponsoring officer sign the credit line proposal and issue a sanction letter to the client.
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- Fall '19