Loan Pricing of The National Bank Limited

1.
1 INTRODUCTION
Generally by the word "Bank" we can easily understand that the financial institution
dealing with money. But there are different types of banks like Central Banks,
Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, and Cooperative Banks etc. Banking system occupies an important place in a nations economy
because of its intermediary role; it ensures allocation and reallocation of resources and
keeps up the momentum of economic activities (Bank Fund Management, by Peter S.
Rose). A banking institution is indispensable in a modern society. It plays a pivotal role
in the economic development of a country like Bangladesh the Banking system as a
whole has a vital role to play in the progress of economic development. The overall
purpose of banking is to collect money from surplus unit and transfer it to the deficit
unit.
Banking sector is expanding its hand in different financial events every day. At the
same time the banking process faster, easier and the banking arena is becoming wider. As
the demand for better customer service increases day by day, they are coming with
different innovative ideas & products. In order to survive in the competitive field of the
banking sector, all banking organizations are looking for better customer service
opportunities to provide their fellow clients. As a result it has become essential for every
person to have some idea on the bank and increase the customer satisfaction level.
1.2 Origin of Banking Industry

The history of banking is as old as the history of many. Generally, to the necessity
for keeping the money safe, the businesses of banking come in to existence. The
evolution if money solved the problem of Barter System. Earlier there are faithful
person to keep their surplus money safe and the other group owing to transaction felt the
need of some person who could provide money. As a result based on two groups a kind
of businessman came in to picture. They used to keep the money as deposit for security
and give loans to the needy people. How the banking sector has developed.
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The English word Bank is derived from the Italian word Banco. The Latin word
Bancus and the French word Banque which means a bench. They are of the opinion
that the medieval.
European banker (i.e. moneychanger and moneylenders) transacted their banking
activities on the benches in the market place. This money changing and money lending
business is known as banking business.
1.3 Development banking in Bangladesh

Bank system was practiced in the Indian subcontinent from the ancient period. In
Indian subcontinent merchants, goldsmith moneylenders were the primary bankers.
During the Moghal period banking and credit business was enchanted rapidly.
Then the agency house of jagth Seth was similar to the merchant house of
Lombardy Street.
In 1700 AD Hindustan Bank was established as the first joint stock bank. In
1784 Bengal Bank and in 1786 General bank of India was lunched. Then both
the bank absolved respectively in 1793 and 1832.
During the early period of nineteenth century in 1806 Bank of Bengal in 1840
Bank of Bombay and in 1843 Bank of Madras was established. These Banks were
called Presidency Bank. Then in 1920 these three banks merged to Imperial Bank of
India In 1947 after the separation bank business in our country faced a severe disaster as
non Muslim Bankers left to India. Then Reserve bank of India acted as the Central
Bank of Pakistan in 1948 to re-build the Bank Business State Bank of Pakistan was
established as central bank of Pakistan.
In 1971 Bangladesh became independent. After liberation Bangladesh Bank
was automated with the assets and liabilities of former State Bank of Pakistan. It is the
central bank of Bangladesh. During Pakistan period in our country there were 1090
branches of 12 commercial banks. Three foreign banks were also active with 14 branch
offices. Before liberation 80% of banking activities of our country was controlled by
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Pakistan. Consequently Bangladesh traders and industrialist s didnt get notable help
from the Commercial Banks. After liberation reformed the destroyed economy on 26th
March 1972 the banking sector of Bangladesh was nationalized. After nationalization
government of Bangladesh changed the entire bank to six banks. Which is Sonali Bank,
Rupali Bank, Janata bank, Agrani Bank, Pubali Bank & Uttara bank. But the last two
banks have been handed over two private sectors.
After liberation all the large industries were nationalized. But in 1962private
sector was given priority again in industrial polices the experience of public sector was
nor fruitful. Then in 1983 servile private banks were established now satisfactory number
of private banks is active in our country and playing their role in development of trade
and commerce of Bangladesh as well as in the development of economy.
1.4 Banking structure in Bangladesh

Banking system of Bangladesh comprises of different types of bank and financial
institutions. The name of our central bank is Bangladesh Bank it is the director and
regulator of banking system of Bangladesh. Banking structure in Bangladesh is briefly
described below.
Bangladesh Bank is the central bank of Bangladesh. It is director of money market in
Bangladesh. It regulates the activities of other banks of Bangladesh through credit
control, exchange control etc.
Commercial bank both the public and private sectors of commercial bank are active
in Bangladesh. There are 4 nationalized commercial bank Sonali Bank, Rupali
Bank, Agrani Bank.
In 1983 priority gives on private sector of banking business. As a result two
nationalize bank was handed over to private sector, which are Pubali and Uttara bank.
Now in our country a large number of private banks are doing banking business.
1.5 Hierarchy Analysis
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Banking sector has a vital role to play in the economic activities and development
of any country. This sector is much more important in a developing country like
Bangladesh. The whole scenario of the economy of a country can be ascertained by
examining the condition of the banking sector. In Bangladesh, the banking sector
dominates the financial sector and macroeconomic management largely depends on the
performance of the banking sector. Banking grew primarily in the public sector with
main emphasis on restructuring of the financial system and development needs of the
war-torn economy with gradual liberalization in subsequent years. It was increasingly
felt that banks should be allowed in the private sector for giving a fillip to development
process on the basis of private initiative.
In the 80s for the first time a number of banks in the private sector were allowed.
Subsequently in the mid 90s some more banks in private sector also commenced
operations. Finally, in 1999, 3rd generation of private sector banks was given permission
to operate. As a result while up to 80s public sector banks dominated financial sector,
banks in the private sector were given increased responsibility with the passage of time.
At present there are 51 scheduled banks operating all over the country. Out of
these, 9 are state-owned (including five specialized banks), 29 are private commercial
banks and the rest 13 are foreign commercial banks.
Private commercial banks are divided into three groups according to their
beginning of business. They are familiar in the name of 1 st generation, 2nd generation and
3rd generation banks.
1st Generation Banks (Established 1982-1988):

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National Bank Limited, The City Bank Limited, United Commercial bank Limited, AB
Bank Limited, IFIC Bank Limited, Islamic Bank Bangladesh Limited and Al-Baraka
Bank Bangladesh Limited.
2nd Generation Banks (Established 1992-1996):

Eastern Bank Limited, National Credit & Commerce Bank Limited, Southeast
Bank Limited, Dhaka Bank Limited, Al Arafah Islami Bank Limited, National
Bank LTD. And Dutch-Bangla Bank Limited.
3rd Generation Banks (Established 1999 to present):
Mercantile Bank Limited, Standard Bank Limited, One Bank Limited, EXIM Bank
Limited, Premier Bank Limited, Mutual Trust Bank Limited, First Security Bank
Limited, Bank Asia Limited, the Trust Bank Limited, Jamuna Bank, and BRAC Bank,
and Shahjalal Islami Bank Limited
2.1.1 Historical Background of the National Bank LTD.

National Bank Limited has its prosperous past, glorious present, prospective future and
under processing projects and activities. Established as the first private sector bank fully
owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private
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sector Bank with the passage of time after facing many stress and strain. The members of
the board of directors are creative businessmen and leading industrialists of the country.
To keep pace with time and in harmony with national and international economic
activities and for rendering all modern services, NBL, as a financial institution,
automated all its branches with computer networks in accordance with the competitive
commercial demand of time. Moreover, considering its forth-coming future, the
infrastructure of the Bank has been rearranging. The expectation of all class
businessmen, entrepreneurs and general public is much more to NBL. At present we have
157 branches under our branch network. In addition, our effective and diversified
approach to seize the market opportunities is going on as continuous process to
accommodate new customers by developing and expanding rural, SME financing and
offshore banking facilities.
The emergence of National Bank Limited in the private sector was an important event in
the Banking arena of Bangladesh. When the nation was in the grip of severe recession,
the government took the farsighted decision to allow the private sector to revive the
economy of the country. Several dynamic entrepreneurs came forward for establishing a
bank with a motto to revitalize the economy of the country.
National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in
the private sector. From the very inception, it was the firm determination of National
Bank Limited to play a vital role in the national economy. We are determined to bring
back the long forgotten taste of banking services and flavors. We want to serve each one
promptly and with a sense of dedication and dignity.
2.1.2 Mission of National Bank LTD.:

National Bank LTD. mission statement states:
Efforts for expansion of our activities at home and abroad by adding new dimensions to
our banking services are being continued unabated. Alongside, we are also putting
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highest priority in ensuring transparency, account ability, improved clientele service as

well as to our commitment to serve the society through which we want to get closer and
closer to the people of all strata. Winning an everlasting seat in the hearts of the people
as a caring companion in uplifting the national economic standard through continuous up
gradation and diversification of our clientele services in line with national and
international requirements is the desired goal we want to reach.
2.1.3 Vision of the National Bank LTD.

Ensuring highest standard of clientele services through best application of latest
information technology, making due contribution to the national economy and
establishing ourselves firmly at home and abroad as a front ranking bank of the country
are our cherished vision.
2.1.4 Core Values of the NBL

NBLs Core Values Consist of 6 key elements .these values bind our people together with
an emphasis that our people are essential to everything being in the bank.
1. Integrity : Nbl protects and safeguards all customer information

Nbl treats everyone in an equitable and consistent manner
Nbl creates an environment, which earns customer trust.
2. Open Communication : NBL builds customer relationship with integrity and respect
NBL offers a full line of products amd excellent service.
NBL is committed to the prosperity of the customer and shareholder.
3. Performance driven : In NBL, Customers and employees are judged in terms of their
performance.
4. Continuous self improvement :-
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Continuous learning, self-challenge and strive make ways for self

improvement of workforce at NBL.
5. Quality: NBL Offers hassle free better service timely
NBL Builds-up quality assets in the portfolio.
6. Teamwork: Interaction, open communication and maintain a positive attitude reflect
NBLs commitment to a supportive environment based on teamwork.
2.1.5 COMMITMENTS
Loyalty
Carrying
ourselves at
work
In Serving the
Bank
In Serving
Customers
Customer-first
Discipline
Integrity
Quality-focus
Total
commitment and
dedication
Credibility and
Secrecy
Sincerity
Caring
Excellence
through
teamwork
Creativity
2.1.6 Organizational Development of the National Bank LTD.:

In the 1450s and 1960s a new integrated type of training originated knows was
organizational development. Organizational development is an intervention strategy that
uses group processes to focus on the whole culture of an organization in order to bring
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about planned change, it seeks to change belief attitudes, values structure and practices
so that organization can better adapt to technology and live with the fast pace of change.
The general objective of organization development is to change all parts of the
organization in order to make humanly responsive, more effective, and more capable of
self-renewal.
The organizational development process does not preclude the use of conventional
training method, which is useful for some purpose. The management of National Bank
LTD. is also concern about the training for its development. They believe that if the
employees will be trained enough they would contribute more for the development of the
banking business that is why; they send some employee in every batch.
2.1.7 Organizational Structure of National Bank LTD.:

The development of on organization depends on the management style of their
organizations the same the development if the bank is being occurred only for the good
management team. Management of the National Bank LTD. controlling of all the
resources of the organization. To achieve the ultimate objective of making National Bank
LTD. the finest banking of the country, the workforce will be futuristic in outlook,
professional in attitude and honest in reputation.
The board of directors wants to repose in the management all executive powers to run
this service industry administration and credit portfolio independently without any undue
influence from outside. The board formulates policy and gives policy directives to the
management. Transparency and accountability are strictly ensured at all leaves of the
bank. Bank operate with integrity, competence and farsightedness abiding by all the
principals and provisions laid down in the bank company act 1991, 1994 and the
guidelines of Bangladesh Bank. The bank is committed to pursue a straight forward,
upright legitimate banking business, never be tempted by the abnormal prospect of large
returns to do anything. It will only do what may be done under the national policy.
2.1.8 Board of Directors of National Bank LTD.

Board of Directors of the Bank is a unique combination of both private and Government
sector experience. Currently it consists of 13 Directors. Of them eight represent the
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sponsors and general public and four senior officials in the rank and status of Additional
Secretary/Joint Secretary represent the Government. Managing Director is the ex-officio
Director of the Board.
Board of Director
Mr. Zainul Haque
Sikder
Chairman
Ms. Parveen Haque

Sikder
Mr. Zakaria Taher

Director
Mr. Salim Rahman

Director
Alhaj Khalilur
Rahman
Mr. Rick Haque

Sikder
Mr. Moazzam
Hossain
Mr. Ron Haque

Sikder
Mr. Md. Anwar

Hussain
Mrs. Monowara
Sikder
Mr. Mabroor
Hossain
Mr. Neaz Ahmed

Managing Director
Table: Management position of the executive position of the National Bank Limited.
2.1.9 Products and Services

The Bank has launched a number of financial products and services since its inception in
addition, to the scheme like Consumer Credit, ATM Card, Any branch banking. The
following are the main indicators for performance analysis:
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2.1.10 Performance of the NBL

Paid up
Statutory
General
Other
Retained
Particulars
Capital
Reserve
Reserve
Reserve
Earnings
Total
Balance on 01 January
2011
4,412,131,300
4,180,253,183
497,723,327
4,915334,354
5,112,856,189
19,118,298,353
Net profit for the year
6,112,987,510
6,112,987,510
Bonus shares for 2010

issued during the year
4,191,524,730
(4,191,524,730)
Addition during the year
1,878,388,499
(1,878,388,499)
Revaluation of Govt.
Treasury Bill, Bond and
other Investment
(3,668,733,726)
(3,668,733,726)
Issued during the year
Transfer from general

reserve
Balance at December
31,2011
8,603,656,030
6,058,641,682
497,723,327
1,246,600,628
5,155,930,470
21,562,552,137
Balance at December
31,2011
4,412,131,300
4,180,253,183
497,723,327
4,915334,354
5,112,856,189
19,118,298,353
2.1.11 Customer Services and Automation:

The amazing and dazzling touch of the fastest banking practice of National Bank LTD. is
outcome of exciting banking software where I relished the expertise. PC Bank opened up
the door of new horizon for the smarter, better and faster banking. The arenas covered by
the PC BANK are as follows:
1. SYSTEM INFORMATION
Set up branch code
6. STATEMENT
Cyclic
Set up parameter file
On demand
Set up overdraft limit
Up to date statement
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List of overdraft limit

Set up currency file
Maintain user password
Set up report parameter
Group of company information
System password
2. ONLINE
7. PERIOD PROCESS
New Accounts
Maintaining existing account

Inquirers
Instant statement
Add or delete stop payment
Mark clearing cheque
Maintain series
Enter instructions
Interest on demand
Month end processing

Yearly end processing
Debit charge
Print interest report
Interest report of classified advances
Alpa search
Standing order
Term loan
3. TRANSACTION INPUT
Enter transaction
List transaction
Edit transaction
Display transaction
Total transaction
4. UPDATE
Update all
8. GENERAL LEDGER
GL parameter
GL transaction
GL update
GL report
GL report
GL statement
GL period process
9. BACK UP AND RESTORE
Back up
Update transaction
Format
Update clearing
Restore
Update quick clearing

5. REPORT
Daily report
Management report
Listing
10.DAY START PROCESS
Transfer File
GL Transaction File
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Customer advice
Quarterly report
Optional report
Time Deposit Maturity

Scheme Maturity Process
Standing order Process
Clearing File
2.1.12 Social Commitment

The purpose of the banking business is, obviously, to earn profit, but the promoters and
the equity holders of National Bank LTD. are aware of their commitment to the society
to which they belong. A chunk of the profit is kept aside and/or spent for socio-economic
development through trustee and in patronization of art; culture and sports of the country
and the bank want to make a substantive contribution to the society where we operate, to
the extent of our separable resources.
2.1.13 Corporate Culture

This bank is one of the most disciplined Banks with a distinctive corporate culture. Here
we believe in shared meaning, shared understanding and shared sense making. Our
people can see and understand events, objects and situation in a distinctive way. They
mould their manners and etiquette, character individually to suit the purpose of the Bank
and the needs of the customers who are of paramount importance to us. The people in the
Bank see themselves as a tight knit team that believes in working together for growth.
The corporate culture they belong has not been imposed; it has rather been achieved
through their corporate conduct. The Bank achievement has been possible because of the
able leadership; dedicated and committed services provided by all levels of management
and staff which all possible because of a good and quality full corporate culture.
2.1.14 Branch Network

The Dhaka Main Branch of NATIONAL BANK LTD. has been in operations since
March 23, 1983. Its is in the at 45, Dilkusha Commercial Area. NBL has a total of 157
branches operating all over the country. Like other Banks, NBL has categorized its
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branches. The branches had been provided with authorized dealer licensees to handle
import, export, and all types of foreign exchanges. The overall branch activities of NBL
can be primarily divided into four different divisions.
These are:
General Banking Department
Accounts Department
Credit Department
Foreign Trade Department
2.1.15 Operation of NBL

All branches of the Bank including the Head Office have a PC Based Local Area
Network (LAN) on UNIX platform, which are a multi-user and most reliable and
internationally recognized secured Operating System. They use macfree antivirus their
security and bank Maintain software named A to Z .
2.1.16 Green banking

Green banking is a part of international initiative by a group of stakeholders to save the
environment from environmental hazards. Global warming, climate change greenhouse
effect, air pollution, water pollution, waste disposal, adverse weather pattern all these
contribute to environmental hazards. Green banking ensures contribution to transition to
resource efficient and low carbon industries; green industry. National Bank limited,
being environmentally responsible bank do improve its own standards and also
contributing to build up socially responsible business.
Environmental concerns are the focus point of green banking for NBL. Environmental
risk is a facilitating element of credit risk arising from environmental matters. It may be
mentioned that environment in Bangladesh is deteriorating due to:
Land de-gradation
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Water pollution & scarcity
Air pollution
Bio-diversity resources
Impact of natural disaster etc.
NBLs Green Banking policy is formal and structured manner in consistence with
recognized standards to protect environmental degradation and ensures sustainable
banking practices. NBL has taken initiative to implement green banking. A Green
Banking Unit [GBU] has been approved by the Board of Directors. The Audit committee
of the Board of Directors reviews the green Banking tasks in the Bank.
Banks are offering customized and innovative products and services to support activities
friendly to environment. Banks are continually supporting in such a way that help overall
reduction of carbon foot prints set of green house gas emissions caused by organization,
event, product or person.
It may be mentioned that Bangladesh Bank instructed all banks to take necessary
measures towards launching and implementation of green banking in each bank. The
entire implementation cycle is divided into three years sessions as under:
January, 2011 to December, 2011
January, 2012 to December, 2012 and
January, 2013 to December, 2013.
NBL has green products to support the cause and taken tasks for in-house environmental
risk management and also taken awareness creation initiatives for strengthening green
banking.
National Bank Limited is committed to play due role in the implementation of green
banking challenges and have taken different steps towards this goal. NBL believes green
banking preserves resources for next generations.
2.1.17 CSR (Corporate social Responsibility):15 | P a g e
Corporate social responsibility is integral to our business strategy. We need to ensure that
we are running our business in a responsible way. We need to demonstrate that we are
making a sustained, positive contribution to the economy and to society; by playing our
part in the overall economy. This means that the bank recognizes that its activities have
an impact on the environments in which NBL and its subsidiaries do business and that
society expects the highest standards of when it comes to ethics and corporate
responsibility. Our sustainability report is presented along the four major steps as being
those are most relevant for the financial sectors and those are:
Environment
We believe that we have an important role to play in facilitating and financing the
transition to a low carbon, resource efficient economy. Our vision is to be recognized by
our stakeholders as leading environmentally responsible organization. We have set out
our policies and procedures to reduce the environmental impact of our lending activities.
Responsibility In the marketplace
NBL serves more than 1 million customers approximately across the length and breath of
Bangladesh. The Bank has products and services to cover most banking needs of our
diverse customer base. The Bank has pioneered many of these products and services in
response to indentifying customers unique needs.
Responsibility In the workplace
NBL has been continuously creating new fields of employment every year by way of
expansion of its business activities and branch network. In 2011, created employment
for 529 personnel. In addition NBL also consented on human resource development to
build up an efficient workforce. The Bank invested a total sum of Tk. 3.13 million on
training in 2011 which worked out to an average of Tk. 1399.82 per employee. It is
mentionable here that during 2011, a total number of 2236 official took part 46 training
and workshop program conducted by NBTI and since establishment of this institute a
total of 9354 participants completed training successfully. Apart from this NBL provide
various short term benefits to its employees like medical services to the employees and
their family members.
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Responsibility in the community

National Bank foundation was established in 1989 to fulfill the responsibilities of
welfare for the society. National Bank public School and College in Moghbazr, Dhaka
has been established where about 1065 students are studying in the school section from
class 1 to class 10, while 100 students are at the college section. In 2011, 81 students
appeared at the SSC examination and 63 at the H.S.C examination and in both the
examinations 100% came out successfully. The bank has been accommodating
prospective graduates of recognized universities for completing their internship. NBL
also awarded scholarship to the brilliant children of the employees of the Bank and
contributed Tk. 31.51 Lac t various educational sectors.
Sports and cultural activities
National Bank has a tradition of patronizing and sponsoring sports and culture of the
country. NBL has contributed Tk. 23.08 Lac to various sports league of the nation.
Disaster relief
Natural hazards are common phenomenon in Bangladesh. Specially, those people whose
life is very challenging living in the coastal and northern area of the country. NBL
always extends its helping hands and stands beside the helpless people in times of natural
calamities. Some times NBL con tribute through the Prime Ministers Relief found.
Contribution to national exchequer
National Bank has contributed significantly to the government effort in collection of
revenue. In 2011 it has contributed to national exchequer an amount of Tk. 172.39 core
as tax in addition to VAT deducted & paid on its earnings. Besides the bank deducted tax,
vat, excise duties etc. from various payments and deposited the same to government
exchequer.
Welfare of freedom fighters
NBL family always remembers the sacrifice and contribution of our freedom fighters
with great respect. Every year we contribute for the development of freedom fighters and
their family members. During the year we contributed Tk.27.15 lac for well fare of
freedom fighter.
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Contribution to martyred army officers killed in BDR carnage

Nation bank has contributed significantly and continuously to the government for the
Martyred Army officers Killed in BDR carnage. In 2009 NBL has contributed over
Tk.76.10 Lac for the BDR carnage martyred army officers and freedom fighters.
Additionally we are paying Tk.24.00 lac each year to the family member of martyred
army officers.
For employees
NBL, which has 3, 758 employees provides due importance for the well being of its
employees by offering attractive remuneration and other fringe benefits. During the year
2011 NBL has contributed Tk. 141.47 Lac as medical expenses to its employees and their
family members.
2.2.1 Performance of the Bank (NBL): A brief review of the

activities:
I take this opportunity to place before you the present overall operational of the bank a
follows:
(Taka in Million)
SL.NO.
Particulars
2011
2010
Paid-up capital
8,603.66
4,412.13
Total Capital(Tier-l+ll)
24,905.03
19,190.79
Capital Surplus/ (Deficit)
5,223.79
5,137.42
Total Assets
169,037.38 134,732.31
Total Deposits
128,215.97 102,471.83
Total Loans and Advances
115,388.89
92,003.56
Total Contingent Liabilities and Commitments
44,392.67
45,045.10
Advance / Deposit Ratio
90.00%
89.78%
Percentage of Classified Loans against total Loans

and Advances
2.83%
3.96%
10
Profit after Provision & Tax
6,085.70
6,860.34
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11
Amount of Classified Loans
3,264.95
3,642.57
12
Provision Kept against Classified Loans
1,166.79
1,086.08
13
Provision Surplus / (Deficit)
325.41
268.79
14
Cost of Found (Including operating cost)
10.35%
9.12%
15
Interest Earning Assets
140,198.97
110,401.84
16
Not-interest Earning Assets
28,838.42
24,330.47
17
Return on Investment(ROI)
12.00%
32.78%
18
Return on Assets (ROA)
4.01%
6.05%
19
Income from Investment
3,320.22
6,115.41
20
Earnings per share(Taka)
7.07
7.97
21
Net income per share (Taka)
7.07
7.97
22
Price Earnings Ratio (Times)
9.45
24.03
23
Net Assets Value per shares (Taka)
25.02
43.30
24
Net operating cash flow per share (Taka)
8.88
7.90
To uphold the continuous growth National Bank Limited always manage Debt
equity ratio,Cost and income ratio, Advance ratio and the mirror of
organization performance shows by these following graph.
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Value added is the wealth created by National Bank Ltd through the banking services.
Value created from the income from banking services is the excess of cost of service
rendered. The Value added statement shows the total wealth created, how it was
distributed to meet certain obligations and reward those responsible for its creation, and
the portion retained for the continued operation and expansion of the Bank. The
comparative value added statement of the bank for the year 2011 and 2010 is given
below:
Operating Result &

Assets
Operating Income
Operating Profit
Total Assets
Return on Assets
Share Value
Earnings Per share
2012
2011
21,932m
9,952m
169,037m
4.01%
18,511m
8,941m
134,732m
6.05%
2012
7.07
2011
7.97
Marker value per

share
Price Earnings ratio
Foreign Trade
Import Export
Export
Remittance
66.80
191.60
9.45
24.04
2012
104,571m
60,894m
54,469m
2011
96,443m
47,812m
49,145
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Staff & Logistic

No. of employees
Branch & SME
centre
Foreign Subsidiary
2012
3,785
154
2011
3,442
145
Operating Income increased by 18.45% due to equal

contribution by each sector
Operating Profit increased by 7.28%
Total assets increased by 25.46% due to increase in
advance and govt. securities
Earnings per share has decreased due to more tax

provision
Market value has decreased due to adverse effect of
capital market
Eue to decrease in market value of shares
Import increased by 8.43%

Export increased by 27.36%
Foreign Remittance increased by10.83%
Manpower has increased by 9.18%

During the year 9(nine) more branches opened
One new subsidiary company formed in Maldives for
remittance business
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2.3.1 OVERVIEW OF THE ORGANIZATION

2.3.1.1GENERAL BANKING
General Banking is the starting point and main function of all the banking operations it is
the department that provides day-to-day service to the customers. Every day it collects
deposit from the customers by allowing broking interest rate, meets their demand for
cash by honoring Cheques and lends it to the customers against ending interest rate.
Lending interest rate in higher than borrowing interest rate, this is the profit for the bank.
2.3.1.1.1 Functions of this department
This department maintains following functions.
Account opening section.
Cash section Remittance section.
Clearing section.
Accounts section.
Establishment.
2.3.1.2 ACCOUNT OPENING SECTION

This section opens different types of account for their valued customers. Selection of
customer is very important for the bank because banks success and failure largely
depends on their customers. If customers are bad they creates fraud and forgery by their
account with bank and, this destroys the good will of the banks. So, this section takes
extreme caution in selecting its valued customer. There are five category of deposit
product in National Bank LTD.
1. Savings Deposit
National Bank Limited offers customers a hassle free and low charges savings account
through the branches all over Bangladesh.
22 | P a g e
Benefits (Condition Apply)
Interest rate of 4.00% on minimum monthly balance.
Minimum balance Tk.5000.
Maintenance charge yearly Tk. 600.
No hidden costs.
Standing Instruction Arrangement are available for operating account.
Account Opening
Copies of recent photograph of account holder.
Nominee's Photograph.
Valid photocopy of Voter ID Card.
2. Current Deposit
National Bank Limited offers customers current deposit facility for day-to-day business
transaction without any restriction.
Minimum balance Tk.2000.
Minimum maintenance charges half yearly Tk.400.
No hidden costs.
Standing Instruction Arrangement are available for operating account.
Easy access to our other facilities.
Account Opening
Copies of recent photograph of account holder.
TIN certificate.
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3. Monthly Savings
National Bank Limited offers monthly savings scheme for its retail customers.
Monthly installments of deposit will be Tk.500/-, Tk.1,000/- ,

Tk.2,000/- ,Tk.3,000, Tk.4000/- , Tk.5,000/- and Tk. 10,0000
Account may be opened for any installment and term , which is not
changeble.
A person is allowed to open more than one account for different

installment in a Branch/ Bank.
Sl Monthly Installments
Amount to be paid on completion of Term

3(Three) years
5(Five) years
8(Eight) years
@9.00%
@9.25%
@9.50%
no
(Taka)
01
500/-
20,627/-
37,896/-
70,849/-
02
1,000/-
41,255/-
75,791/-
1,41,691/-
03
2,000/-
82,510/-
1,51,583/-
2,83,394/-
04
3,000/-
1,23,765/-
2,27,374/-
4,25,091/-
05
4,000/-
1,65,020/-
3,03,166/-
5,66,788/-
06
5,000/-
2,06,274/-
3,78,957/-
7,08,485/-
07
10,000/-
4,12,549/-
7,57,914/-
14,16,970/-
Account Opening
1 copy of your recent photograph.
4. Monthly Income Scheme

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Under this scheme one will deposit a minimum of tk.1,00,000/- or its multiple for three
years and will enjoy monthly benefit of Tk.1,000/- for every Tk.1,00,000/-.
Benefits(Condition Apply)
Deposit of Tk.1,00,000/- and its multiple maximum of Tk 50,00,000/- shall be

acceptable under this scheme.
The account may be opened either singly or jointly.
Account Opening
1 copy of recent photograph of account holder.
5. Double Benefit Scheme

Dreams come true. National Bank Limited now offers Double Benefit Scheme for it's
customers. The benefits under this scheme shall become double after 6 years.
Deposit of Tk.50, 000/- and its multiple maximum of Tk 50, 00,000/- shall be
acceptable under this scheme.
A person is allowed to open more than one DBS Account.
All DBS account holder shall be offered with free Life Insurance Policy under
this scheme.
Account Opening
6. Millionaire Income Scheme

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Under this scheme one will deposit a fixed amount on monthly basis for 5, 7 or 10 years
and on maturity he/she will be just a millionaire.
Deposit of fixed monthly amount for 5, 7 or 10 years. Deposit size will be based
on tenure. Upon maturity the depositor will get Tk. 10,00,000/-.
A person is allowed to open more than one MIS Account.
Installment
Tenure
On maturity
12,450/-
10,00,000/-
7,870/-
10,00,000/-
4,550/-
10
10,00,000/-
Account Opening
Closing of Account
To close an account parties may be request to send an application along with
the unused leaves of the cheque book. On receipt of the application the
following steps are taken.
The signature of the account holder is verified.
The number of the unused cheque leaves shall be noted therefore.
Debiting the incidental charges to the account.
The account holder is advised to draw the remaining balance.
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2.3.1.3 CASH SECTION

Cash department is the most vital and sensitive organ of a branch as it deals with all
kinds of cash transactions. This department starts the day with cash in vault. Each day
some cash i.e. opening cash balances are transferred to the cash officers from the cash
vault. Net figure of this cash receipts and payments are added to the opening cash
balance. The figure is called closing balance. This closing balance is then added to the
vault. And this is the final cash balance figure for the bank at the end of any particular
day.
Functions of cash department

-Cash payment
-Cheque cancellation process
-Cash receipt
Cash payment
Cash payment is made only against cheque.
This is the unique function of the backing system, which is known as "payment
on demand.
It makes payment only against its printed valid cheque.
Cheque cancellation process

Receiving cheque by the employee in the cash counter and verification of the following
by the cash officer in the computer section:
Date of the cheque. (it is presented within 6 month from issue date)
Issued from this branch.
An amount in figure and in word does not differ.
Cheque is not torn or mutilated. Then gives pay cash seal and sends to the
payment counter and payment office makes payment.
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Cash receipt
.
Another important function of this department is receipt of cash. Depositors deposit

money in the account through this section by deposit slip.
It receives deposit from depositors in the form of cash.
So it is the "mobilization unit" of the banking system.
It collects money only its receipts from.
It receives cash for issuing pay order, DD.
Books maintained by this section:
Vault register: It keeps accounts of cash balance in vault at the bank.
Cash receipt register: Cash receipt in whole of the day is recorded here.
Cash payment register: Cash payments are made in a day are entries here.
Rough vault register: Cash collection for final entry in vault registers done here,
as any error and correction is not acceptable.
Cash balance book: Balance here is compared with vault register. If no deference
is found, indicate no error and omission.
2.3.1.4 LOCAL REMITTANCE

Sending money from one place to another place for the customer is another important
service of the bank. This service is an important part of transaction system. In this
service system, people, especially businessman can transfer funds from one place to
another place easily. There are three kinds of technique for remitting money from one
place to another these are:
-Demand draft (DD)

-Pay order (PO)
28 | P a g e
Demand Draft (DD)
DD is an order of issuing branch on another branch of the same bank to pay specified
sum of money to payee on demand. It is generally issued when customer wants to remit
money in any place i.e. outside or the clearinghouse area of issuing branch. Payee can be
the purchaser himself or another mentioned in the DD. It is safe technique of transferring
money from one place to another.
Pay Order (P.O)

Pay order gives the right to claim from the issuing bank. A payment is an instrument
from one branch to the branch of the bank to pay a specific sum of money. Unlike
cheque there is no possibility of dishonoring because before issuing pay order the bank
takes money in advance. There are three reasons behind use of P.O:
Remitting Purpose
Advice to Pay
Payment against bill submitted to the bank.
Pay Order consists of three parties:
Beneficiary
Applicant
Counter Part.
2.3.1.5 CLEARING SECTION

This section receives all kinds of cheque in favor of the valued client for clearing on the
part of their banking services. After receiving cheque it is necessary to endorse it and
cross it specially. Clearing of cheque is done through the clearinghouse in Bangladesh
Bank.
1st clearing
2nd clearing
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Types of cheque for clearing

There are four types of cheque for clearing:
Inward clearing cheque.
Outward clearing cheque.
Inward bills for collection.
Outward bills for collection.
2.3.1.6 ACCOUNTS SECTION

This is obviously an independent and unique department, which works as the
composition of all the departments of the branch. This section is fully computerized. So
the conventional large ledger and journal books are not kept like the some nationalized
bank. It receives the vouchers from all departments and prepares the subsidiaries and
maintains accounts.
ESTABLISHMENT SECTION
This section deals with employees salary, many types of internal expenses
such as purchases of stationary, equipment, machinery, payment of labor
cost and convince. In case of leave of absence employee collects prescribed
form from this section.
ICC (Internal control and compliance department)

Internal control and compliance department, this department checks all the
activities as per requirements of Bangladesh Bank.
2.3.1.7 LOANS AND ADVANCES

This is the survival unit of a bank because until and unless the success of this section is a
question to every bank. If this section is not properly working, the bank it self may
become bankrupt. This is important because this is the earning unit of the bank. Banks
are accepting deposits from the depositors in condition of providing interest to them as
well as safe keeping their deposits. Now the question may gradually arise how the bank
will provide interest to the clients and the simple answer is advance.
30 | P a g e
We often use loans and advances as an alternative to one another. But academically this
concept is incorrect. Advance is the combination of such items where loan is a part only
for this credit section of the bank.
TYPES OF ADVANCE
All loan and advance that are provided by this bank can be categorized into there heads
according to the nature and characteristics of each product:
ADVANCE
Term Loan
Continuous
Loan
Loan
General
Figure: Shows the different types of advances.
2.3.1.8 FOREIGN EXCHANGE DEPARTMENT

The Foreign Exchange Department is mainly divided into three sections. Such as1. Import Section
2. Export Section &
3. Remittance Section
The import Section deals with L/C in the perspective of the importers and the
Export Section deals with L/C in the perspective of the exporters.
2.4.1 SWOT Analysis of NBL

SWOT analysis refers to analysis of Strengths, Weakness, Opportunities and Threats of
the organization. This analysis helps the organization to facilitate improve its future
performance in comparison to its competitors. An organization can also study its current
31 | P a g e
position through SWOT analysis. For these reason, SWOT analysis is considered as an
important tool for making changes in the strategic management of an organization.
2.4.1.1 Strengths
National Bank LTD. has a Reputation all over the country for its excellent service
The bank has already achieved a high growth rate of deposit, Loans and advances,
Import and Export business.
A well-educated and trained workforce is the major strengths of National Bank LTD.
The bank has satisfactory IT infrastructure
National Bank LTD. has satisfied customers
Product Diversification is also a major strength of National Bank LTD.
Skilled, creative & committed manpower
They have their own training center.
The working environment of the bank is very friendly, interactive and informal.
There is no barrier or boundary to communicate with the superiors and the
employees.
2.4.1.2 Weaknesses
The promotional activities of National Bank LTD. are not adequate to gain market
share.
Most of the branch does not have any car parking facility.
Shortage of spaces.
In selecting people for providing services to the customers, the employees

personality, manners, attitudes and acceptability are not properly examined.
Only few branches have spacious car parking facility, which discourage some
customers to deal with National Bank LTD.
There are two major categorized employees one group who are from different banks
or joined through competitive exams, the other group who joined here from different
references. There is a big difference in term of attitude, manner, working style, and
32 | P a g e
behavior between the two groups, which has bad impact to the service. Branch
management also loves to ignore the problem.
2.3.1.3 Opportunities
National Bank LTD. has diversified product offering for Small and Medium
Enterprises (SMEs)
Foreign bank penetration may help in technology transfer in our banking system
catering the necessity of improving operational efficiency. To increase operational
efficiency, National Bank LTD. can adopt technology of foreign bank.
Different types of retail lending products have a great appeal to our middle class
people. National Bank LTD. can bring these products for retail lending.
They do not look forward to increase their product or service basket.
They have a big opportunity if they provide online Banking system.
2.3.1.4 Threats
Increasing competition. More private commercial banks are providing service in the
market.
Foreign bank penetration is a major threat for banking industry. It is too bad to lose
market share.
Regulatory restrictions may be a cause of threats.
In our country industries are becoming sick at an increasing rate and growth of
industrialization is very slow in the country. Therefore, it is very likely that poor
industrial growth will affect the potentiality of National Bank LTD.
33 | P a g e
3.1 INTRODUCTION OF THE REPORT

Heart business of the bank is to sell their loan products, as well as other activities. One of
the most difficult tasks in lending to business firm and other borrowing customers
is deciding how to price the loan the emergence of National Bank Limited in the
private sector was an important event in the Banking arena of Bangladesh. When
the nation was in the grip of severe recession, the government took the farsighted
decision to allow the private sector to revive the economy of the country. Several
dynamic entrepreneurs came forward for establishing a bank with a motto to
revitalize the economy of the country. National Bank Limited was born as the first
hundred percent Bangladeshi owned Bank in the private sector. From the very
inception, it was the firm determination of National Bank Limited to play a vital
role in the national economy. We are determined to bring back the long forgotten
taste of banking services and flavors. We want to serve each one promptly and with
a sense of dedication and dignity.
3.2 ORIGIN OF THE STUDY

This report will be prepared as a requirement of the internship program of Eastern
University Business faculty. The organization attachment has been started on 18th
October 2012 and will be end on approximately 19 th January 2012. This report on Loan
pricing of National Bank and Compare with competitor was assigned by Mr Oli ahad
Thakur, mentor and supervisor, Faculty of Business, Eastern University, Bangladesh,
Dhanmondi -5, Dhaka as a part our education program to complete our graduation.
3.3 RATIONALE OF THE STUDY

The study on the Loan pricing of National Bank and Compare with Competitor
helps and makes me understand the Importance of loan pricing of different products and
its impacts on loan Disbursement of National Bank and other documentation procedures.
34 | P a g e
3.4 OBJECTIVES
The main objective of the loan pricing is To Study different types of strategy and
methods of loan pricing of the National bank limited and Compare with Competitor.
Specific objective
To Study the last Two years loan pricing strategy of National bank.
To Study competitors pricing strategy.
Compare loan pricing with competitor.
3.5 SCOPE OF THE REPORT

The study will deal with the Loan Pricing undertaken by NATIONAL BANK
LIMITED. This will be a complete loan pricing report that will focus on the specific
organization and its competitors, and the study will be based on loan pricing activities of
different level of loan operations engaged with this organization. Therefore, it is required
to compile a better view of the overall loan pricing system. The scope of the study is
limited to organizational setup, functions and performances.
3.6 METHODOLOGY OF THE REPORT

The study requires various types of information on past and present policies, procedures
and methods of loan system. All the information incorporated in this report has been
collected both from the primary sources and as well as from the secondary sources.
Primary as well as secondary information are required because the loan pricing require
the customized information for the performance of its progression so primary
information is needed and the secondary information for the past comparison with the
present condition what is happening in the regular situation. The past performance tells
35 | P a g e
the feasibility relationship of the past performance with the present progression in the
each month cycle.
3.7 SOURCES OF DATA COLLECTION
Primary sources of information The primary information has been

collected through interview, observation, discussion.
Secondary sources of information The secondary information

have been collected through other reports journals,
magazines, web sites etc.
Study Approach
To prepare the report about the Loan pricing of National Bank and Compare with
competitor observation and interview approach, analysis of past and present
performances has been chosen because without interviewing any employee it will be
really hard to know about the past situation of the organization and without analyzing the
present situation a comparison and contrast of the loan pricing of the bank is impossible
along with observation as an employee.
Study Instruments
Analyzing, comparing and evaluating the differences and expected outcomes are helped
and taken and supported by the followings.
Financial
Ratio analysis
Accounting calculations.
Forecasting software.
Statistical
Graphs
Tables
Diagrams
Charts
Mechanical Instruments The instruments will be paper, pencil, pen, telephone, mobile,
scanner, computer, printer, pen drive, photocopy machine, punching machine etc.
Sampling Plan
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Sampling Unit: Onlyselected divisions of National Bank Limited (Motijheel) and the
Advance Department, Credit Risk Management.
Sampling Size: This study is limited within 2 peoples of different level of Advance
department and CRM Department.
Sampling Procedure: The sampling procedure will be personally selected.
Contract Method: Face to face interview, telephone and mobile.
3.8 LIMITATIONS OF THE STUDY

The major limitations of this study are given as follows:
There were some restrictions to have access to the data collection, which is
confidential by distress influence.
In each portion there are lots of activities and different procedure.
It is very difficult to understand each activity within this short period.
Three-month is not adequate time to gain practical knowledge and prepare a

report.
In many cases, up to date information is not published.
To protect the organizational loss in regard of maintaining confidentiality, some

parts of the report are not in depth.
3.9 TOPIC ANALYSIS AND DESCRIPTION
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One of the most difficult tasks in lending to business firm and other borrowing
customers is deciding how to price the loan. The lender wants to charge a high enough
rate to ensure that each loan will be profitable and compensate the bank fully for the
risks involved. However, the loan rate must also be low enough to accommodate the
business customer in such a way that he or she can successfully repay the loan and not be
driven away to another lender or into the open market for credit. The more competition
the bank faces for a customers loan business, the more it will have to keep the price of
that loan at a reasonable level consistent with competition in the financial marketplace.
Indeed, in a loan market characterized by intense competition, the lender is price taker,
not a price setter. With deregulation of banking under way in many nations, deregulated
competition has significantly narrowed the profit margins banks earn from selling
deposits making loans. This makes correct pricing of loans even more imperative for
bankers today than in the past.
Competition in the commercial loan market has increased dramatically over the
last decade. This is true for a number of reasons. First, there is more capital in the
industry than can be put to good purpose. Therefore, banks have been bidding down
existing deals and compressing margins. Second, institutions from other parts of the
financial sector have offered product innovations and product alternatives such as private
placement as direct competitors to the standard loan product. This, in turn, has caused
additional pressure on spreads in the marketplace. Third, given the well-known cycle in
credit spreads, we are now facing a market in which credit spreads are exceedingly tight.
As a result of the recent contraction in the credit spreads across all credit ratings,
individual banks are now facing a pricing grid with an unprecedented and unreasonable
compensation for the risk borne. Fourth, competitors and customers have learned more
about the value of structure. As a result, banks have been suffering from inappropriate
pricing of the imbedded options built into their loan products.
The net result is that many bankers are building loan portfolios that do not cover
their true costs, i.e., the cost of funding, the level of the risk, and the nature of the
imbedded options contained in the loan contract. In order to remedy this situation, the
banking industry will have to directly address the issue of appropriate and accurate loan
pricing. This is particularly true in the large corporate area where this problem is most
serious. It is the case for several reasons. First, it is a market that is highly contested with
the investment banking and insurance sectors vying for first class customers. Second,
38 | P a g e
with excess of capital in the industry, the large corporate market has been seen as a place
to employ large quantities with little cost. However, such competition has led to the tight
spreads being more pronounced in this market area.
Loan pricing gives an institution the ability to ensure coverage for the inherent
cost of credit risk associated with different risk grades of loans. Thus, risk-adjusted loan
pricing leads to better risk management. Once a bank has collected profitability data by
loan, it can analyze risk-adjusted profit performance from many points of view--for an
officer's portfolio, for a geographic segment, by industry, by loan size, or by credit grade.
A consistent pricing methodology avoids numerous questionable practices in loan
pricing by lenders. One questionable practice is demonstrated by lenders who typically
do not include any costs associated with the risk of the loan in their pricing. This
omission encourages bad credits to borrow at the same price that are being used to entice
better credits.
Another such practice is evident in lenders within the same organization who
make a wide variety of assumptions about what it costs the bank to originate and
maintain borrowers. Lenders typically don't have good personal knowledge about what it
costs to run the commercial banking organization. They may be estimating something,
pulling a number out of the air, or using the rules of thumb used at a previous bank-probably just as ill-founded.
A third questionable practice occurs when lenders associate too large an earnings
credit with corresponding balances. They don't take into account all factors associated
with deposit profitability. They know less about deposit profitability than loan
profitability--if that's possible!
3.9.1 BANK LOAN POLICY

One of the most important ways a bank can make sure its loans meet
regulatory standards & are profitable is to establish a reliable loan policy. Such a
policy gives loan offers & the banks management specific guidelines in making
individual loan decisions & in shaping the banks overall loan portfolio. The
actual make up of a banks loan portfolio should reflect what its loan policy
says. Otherwise, the loan policy is not functioning effectively & should be either
revised or more strongly enforced by senior management.
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3.9.2 THE CONTENTS OF BANK LOAN POLICY

The examinations manual, which the Federal Deposit Insurance Corporation
gives to new bank examiners, suggests the most important elements of a good
bank loan policy. These elements include:
A good statement for the banks loan portfolio (i.e. statement of the
characteristics of a good loan portfolio for the bank in terms of types,
maturities, sizes & quality of loans.
Specification of the lending authority given to each loan officer & loan
committee (measuring the maximum amount & types of loan that each person
& committee can approve & what signatures are required)
Lines of responsibility in making assignments & reporting information within

the loan department.
Operating procedures for soliciting, reviewing, evaluating & making decisions

on customer loan applications.
The required documentation that is to accompany each loan application &

what must be kept in the banks credit files (required financial statements,
security agreements etc.)
Lines of authority within the bank, detailing who is responsible for

maintaining & reviewing the banks credit files.
Guidelines for taking, evaluating & perfecting loan collateral.
A presentation of policies & procedures for setting loan interest rates & fees &
the terms for repayments of loans.
A statement of quality standards applicable to all loans.
A statement of the preferred upper limit for total loans outstanding (i.e. the
maximum ratio of total loans to total assets allowed)]
A description of the banks principal trade area, from which most loans should
come.
A discussion of the preferred procedures for detecting, analyzing & working

out problem loan situation.
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A written loan policy statement carries a number of advantages for the bank adopting it.
It communicates to employees working in the loan department what
procedures they must follow & what their responsibilities are. It helps the move
toward a loan portfolio that can successfully blend multiple objectives, such as
promoting the banks profitability, controlling its risk exposure & satisfying
regulatory requirements. While any written loan policy must be flexible due to
continuing changes in economic conditions & regulations, violations of a banks
loan policy should be infrequent events.
3.9.3 WHAT IS LOAN PRICING?
One of the most difficult tasks in lending to business firms and other borrowing
customers is deciding how to price the loan. The lender wants to charge a high
enough rate to ensure that each loan will be profitable and compensate the
bank fully for the risk involved. However, the loan rate must also be low
enough to accommodate the business customer in such a way that he or she can
successfully repay the loan and not be driven away to another lender or into the
open market for credit.
Pricing of bank loan means setting the interest rate for sanctioning loan to creditors.
Bank's clients must be individual or business firms. With deregulations of
banking
under
way
in
many
nations,
deregulated
competition
has
significantly narrowed the profit margins banks earn from selling deposits
and making loans. This makes correct pricing of loans even more imperative for
bankers today than the past.
3.10 WHAT ARE THE FACTORS OF PRICING THE BANK LOAN?
3.10.1 INTERNAL FACTORS:

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Supply of loan giving fund: Bank uses a part of deposits as loan which is
the excess after keeping a reserve for liquidity. Increase in the excess
amount increases the interest rate and vice versa.
Cost of fund collection: Bank uses a part of deposits as loan. If there are
many available sources from where bank can collect deposits then the
cost of collecting the fund will decrease and there by will decrease the
interest rate on investment.
Administrative cost: If the expenses of conducting the banking services
increase, the interest rate also increases.

Other overheads: Increase in other overhead (legal fees, advertisement,
donation, depreciation, etc.) will increase the interest rate.

Enquiring and analyzing cost:
Enquiry and analysis about the
applicant's financial condition incurs some expenses which ultimately

increases the interest rate.
Loan supervision collection cost: There are some expenses incurred in case of
loan supervision activities for which interest rate increases.

Possibility of income from alternative assets: If the possibility of income
from other sources (low investment requirement, high liquidity, risk free
investment such as T-bond) increases then there is a chance for the bank to
increase the interest rate.
Opportunity of income from other sources: Bank has many income
sources other than income from investment (Foreign exchange,

General banking service). When those income increases, the interest rate
decreases.
Bank-customer relationship: If bank knows the applicant very well then
it doesn't have to collect information about the applicant which

reduces the cost of information collection and thereby decreases the interest
rate.
Anticipated dividend rate of shareholders: In pricing bank loan, bank has to
consider the anticipated dividend rate of shareholders. If it increases,

the interest rate increases.
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3.10.2 EXTERNAL FACTORS:
Direction of Bank Regulatory Authority: Central Bank tries to control
the market interest rate on behalf of the Government to control the

supply of loan in the market. This activity of Central Bank has an impact
on the pricing of loan.
Competitor bank: In pricing of loan, Bank also considers the pricing of
loan of the competitor bank. If the competitor bank charges a low interest
rate then bank also charges low interest rate to keep the valuable
customers in the bank.
Other sources of loan procurement: There are other sources from which
a borrower can get loan such as Non-banking Financial Institutions,

Leasing Company, Share Market (bond), etc. If these sources provide loan
at flexible conditions to the borrower then this may affect the pricing
of loan of the bank.
Demand for loan: If demand for loan increases, the interest rate charged by the
bank also increases.

Risk of fluctuation in interest rate: Fluctuation of interest rate increases the
risk in banking business. Increases in interest rate decreases demand for loan.
Decrease in interest rate (after considering all the costs) increases
the demand for loan but decreases the bank profit, which consequently reduces
the ability of the bank. So in case of pricing loan, bank has to consider
about the risk of fluctuation in interest rate.
3.11 DIFFERENT TYPES OF LOAN PRICING MODELS.
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3.11.1 COST-PLUS LOAN-PRICING MODEL

A very simple loan-pricing model assumes that the rate of interest charged on any loan
includes four components:
The funding cost incurred by the bank to raise funds to lend, whether such funds
are obtained through customer deposits or through various money markets.
The operating costs of servicing the loan, which include application and payment
processing, and the banks wages, salaries and occupancy expense.
A risk premium to compensate the bank for the degree of default risk inherent in
the loan request; and
A profit margin on each loan that provides the bank with an adequate return on its
capital.
Marginal cost of
raising loan able
funds to lend to the
borrower
Non-funds
bank operating
Loan
+++interest
rate
Estimated margin to
compensate the Bank
for default risk
Banks desired profit

margin
Lets consider a practical example: how this loan-pricing model arrives at an interest rate
on a loan request of Tk. 10,000. The bank must obtain funds to lend at a cost of 7
percent. Overhead costs for servicing the loan are estimated at 3 percent of the requested
loan amount and a premium of 3 percent is added to compensate the bank for default
risk, or the risk that the loan will not be paid on time or in full. The bank has determined
that all loans will be assessed a 2 percent profit margin over and above the financial,
operating and risk-related costs. Adding these four components, the loan request can be
extended at a rate of 15 percent (10% loan interest rate = 7% cost of funds + 3%
operating costs + 3% premium for default risk + 2% banks targeted profit margin). As
44 | P a g e
long as losses do not exceed the risk premium, the bank can make more money simply
by increasing the amount of loans on its books.
3.11.2PRICE-LEADERSHIP MODEL
The problem with the simple cost-plus approach to loan pricing is that it implies a bank
can price a loan with little regard to competition from other lenders. Competition affects
a banks targeted profit margin on loans. In todays environment of bank deregulation,
intense competition for both loans and deposits from other financial service institutions
has significantly narrowed the profit margins for all banks. This has resulted in more
banks using a form of price leadership in establishing the cost of credit. A prime or base
rate is established by major banks and is the rate of interest charged to a banks most
creditworthy customers on short-term working capital loans.
Loan
Interest
rate
Default-risk premium
Paid by non-prime
rated borrowers
Base or prime rate
Term-risk premium
paid by borrower
seeking long term
credit
This "price leadership" rate is important because it establishes a benchmark for many
other types of loans. To maintain an adequate business return in the price-leadership
model, a banker must keep the funding and operating costs and the risk premium as
competitive as possible. Banks have devised many ways to decrease funding and
operating costs, and those strategies are beyond the scope of this article. But determining
the risk premium, which depends on the characteristics of the individual borrower and
the loan, is a different process.
3.11.3 CREDIT-SCORING SYSTEMS
45 | P a g e
Because a loans risk varies according to its characteristics and its borrower, the
assignment of a risk or default premium is one of the most problematic aspects of loan
pricing.
A wide variety of risk-adjustment methods are currently in use. Credit-scoring
systems, which were first developed more than 50 years ago, are sophisticated computer
programs used to evaluate potential borrowers and to underwrite all forms of consumer
credit, including credit cards, installment loans, residential mortgages, home equity loans
and even small business lines of credit. These programs can be developed in-house or
purchased from vendors.
Credit scoring is a useful tool in setting an appropriate default premium when
determining the rate of interest charged to a potential borrower. Setting this default
premium and finding optimal rates and cutoff points result in what is commonly referred
to as risk-based pricing. Banks that use risk-based pricing can offer competitive prices on
the best loans across all borrower groups and reject or price at a premium those loans
that represent the highest risks.
So, how do credit-scoring models and risk-based pricing benefit the borrower
who only wants a loan with reasonable repayment terms and an appropriate interest rate
charge? Since a bank is determining a reasonable default premium based on past credit
history, borrowers with good credit histories are rewarded for their responsible financial
behavior. Using risk-based pricing, the borrower with better credit will get a reduced
price on a loan as a reflection of the expected lower losses the bank will incur. As a
result, less risky borrowers do not subsidize the cost of credit for more risky borrowers.
3.11.4 RISK-BASED PRICING

Risk-based pricing is a system that evaluates the risk factors of your mortgage
application and credit profile and adjusts the interest rate and discount points up or down
based on this risk evaluation.
46 | P a g e
3.11.4.1 RISK-BASED PRICING FACTORS

Two other factors also affect the risk premium charged by a bank: the collateral required
and the term, or length, of the loan. Generally, when a loan is secured by collateral, the
risk of default by the borrower decreases. For example, a loan secured by a car typically
has a lower interest rate than an unsecured loan, such as credit card debt. Also, the more
valuable the collateral, the lower the risk. So it follows that a loan secured by the
borrowers home typically has a lower interest rate than a loan secured by a car.
However, there may be other factors to consider. First, the car may be easier to sell, or
more liquid, making the risk of the loan lower. Second, the term, or length of a car loan
is usually shortthree to five yearsas compared to the 15- to 30-year term of a home
loan. As a general rule, the shorter the term, the lower the risk, since the ability of the
borrower to repay the loan is less likely to change.
3.12 WHAT FACTORS CAN AFFECT ON LOAN PRICING?

Various factors interact to adjust loan pricing. The major factors include:
Credit Profile: A credit report will be obtained that shows the amount of debt one have
outstanding and how he or she has historically paid on that debt. The credit report will
also contain a "credit score" that ranks credit history. Credit scores look at five main
kinds of credit information, namely: payment history; amount owed; length of credit
history; new credit; and types of credit in use. Generally, if anyone has had any history of
nonpayment or late payments on any loans or debt, this may lower the credit score and
increase the interest rate and costs. People with high credit scores consistently: pay their
debts on time, keep balances low on credit cards and other revolving loans; and apply for
and open new credit accounts as needed.
Property: The property that are mortgaging also impacts on loan pricing. For example,
investment property, condominiums or multifamily housing are usually considered to
have a higher risk to lenders than single-family detached homes. The value of the
47 | P a g e
property (usually determined by an appraisal) as compared to the amount you wish to

borrow (the "loan-to-value ratio" or "LTV") also impacts on loan price. The higher the
LTV, the higher the interest rate and costs. LTVs over 80% also usually require
mortgage insurance. The price of mortgage insurance may vary based on the credit
profile.
Income/Debt: The amount of mortgage payments and total debt payments as

compared to income, ("debt-to-income ratios") may also impact on loan cost. The higher
the debt-to-income ratio, the higher the risk and so the higher the interest rate and fees.
Other Factors: Other factors may also affect lenders risk, and borrowers interest
rate and fees. These factors include, but are not limited to: previous bankruptcies,
foreclosures or unpaid judgments; and the type of loan product applied for, such as
adjustable rate versus fixed rate, or cash out refinance versus rate and term refinance.
3.13 HOW AND WHEN IS THE PRICE OF LOAN DETERMINED?
Evaluating all the risk factors that are involved in your loan and determining where you
fit into our risk/price range determine your price.
The lender will give an estimate of risk-based pricing after he has done an initial
evaluation of a borrowers credit history and a review of his or her proposed property.
One thing to remember, however, that the risk-based pricing may change from this initial
estimate if any of the risk factors discussed above change for example, if the appraised
value of the property is determined to be different than the value used for the initial
estimate or if the credit profile changes between the time of the initial estimate and
closing.
48 | P a g e
If anyone chooses to "lock" a rate prior to the final risk assessment, it will be locked for
the interest rate range available at that time. The actual price will be established based on
where the final risk level fits into that particular interest rate range. The final risk level is
determined at time of closing, when there are no further changes to the credit profile or
loan factors.
Assessing the interplay of credit score, collateral and term to determine the risk premium
is one of a lenders most challenging tasks. Whether loan-pricing models are based on a
simple cost-plus approach or price leadership, use credit scoring or other risk-based
factors; they are valuable tools that allow financial institutions to offer interest rates in a
consistent manner. Knowledge of these models can benefit customers as well as banks.
Although it cannot help customers make their payments, an awareness of loan-pricing
processes can ease the uncertainty that may be involved in applying for a loan.
49 | P a g e
3.14 FINDINGS
3.14.1 LOAN-PRICING STRATEGIES OF NATIONAL BANK LTD.
The banks in Bangladesh have been given almost full freedom to determine their
own deposit and lending rates till June 2009 but now Bangladesh bank give circular for
changing interest rate of loan and deposit. Because now world changing and there are
many bank in market and they forget corporate responsibility and charge attractive offer
for investor and its occur internal clash with bank to bank.
Loan pricing is a critically important function for National Bank Ltd. to continue
its operations. Loan-pricing decisions directly affect the safety and soundness of the bank
through their impact on earnings, credit risk, and, ultimately, capital adequacy. As such,
they must price loans in a manner sufficient to cover costs, provide the capitalization
needed to ensure the banks viability, protect the institution against losses, provide for
borrower needs, and allow for growth. The bank must have appropriate policy direction,
controls, and monitoring and reporting mechanisms to ensure appropriate loan pricing.
Determining the effectiveness of loan pricing is a critical element in assessing and rating
an institution's capital, asset quality, management, earnings, liquidity, and sensitivity to
market risks.
Loan-pricing models are used by many institutions to assist in loan pricing. The
models are typically spreadsheet programs that take a variety of information and
calculate the loan rate needed to meet the institution's goals. Loan-pricing models are
often used for pricing individual loans, rather than the entire portfolio, as they work well
for differential loan pricing programs. Simpler models use basic information such as
projected loan volume, interest rate, fees, and cost of funds, operating expenses, and loan
terms to calculate a projected ROA. More complex models can take into consideration a
variety of additional factors such as the quality of the loan, the institution's loan able
funds position, and projected loan prepayments. Some models require dozens of inputs,
and calculate ROA and ROE for multiple periods of time. Loan-pricing models provide
the opportunity to analyze a variety of factors and can be designed to meet the needs of
the institution. However, they can be complex, and are only as good as the information
inputted. Also, these models often do not consider the competition. From the Treasury
Department of national bank Ltd. I came to know that, they usually dont follow or use
50 | P a g e
any particular loan-pricing model or method. Their setting price of loan largely depends
on market condition, demand of loans, how much deposit they have and other banks
interest rates; that is competitors price.
Now days Bangladesh bank give to bank a mid-level interest rate bank can update
that rate by 1.5% add or cut .national bank do this like same way that other bank do. This
negotiable interest make bank to bank more competitive because now bank turn into
earning oriented to service oriented. Now bank loan disbursement and recovery system is
easier.
3.14.2 COMPETITORS PRICE
For National Bank Ltd. it is the simplest methods for establishing rates on loan products
is to match the competition in the loan market. In this scenario, the institution changes its
rates to meet market competition and to ensure it maximizes returns in a rising interest
rate environment. This practice will also ensure loan pricing practices are commensurate
with the market and help insulate the institution from criticism of predatory pricing in its
operating environment. Institutions often look to key interest rate indices to track the
competitive market. The prime rate, which is the rate theoretically, offered by
commercial banks to their best customers, is an example of a rate to which an institution
may index its loan rates. Other competitors rate information is obtained from surveys,
which are used in determining their price of loan. The major advantage of indexing
institution loan rates to national or local indexes is simplicity. The major disadvantage is
that it does not ensure the rate charged is sufficient to cover the institution's expenses,
risks and profitability needs.
Timely knowledge of how competitors price their loan products is a sound business
practice that is an essential part of loan-pricing system for National Bank Ltd. The extent
of the competitor market surveys may vary depending on the competitive environment in
which the institution operates. The best surveys will include rates from various types of
lenders in the operating environment for a variety of loan products and should be
updated throughout the year.
51 | P a g e
Failure to monitor the competitive environment, if it subsequently results in pricing of

loans well below prevailing market rates, may indicate pricing deficiencies and
unsafe and unsound practices. Adequate surveys are needed to ensure the institution
prices loans in a manner that maximizes the return it receives on its loan products.
However, a delicate balance must be achieved in pricing loans, as pricing above the
market can cause the institution to sacrifice good quality loan volume, which may
reduce profitability. Conversely, large increases in the volume of new loans may
signal potential concern with loan-pricing practices that may strain the adequacy of
capital. Institutions should support loan-pricing decisions with a documented
analysis of the competitive environment.
3.14.3 LOAN PRICING COMPARISON YEAR-2012
In the year 2012 from the table it can be understood that in agriculture loan
Rupali bank is the market leader with an interest rate of 12% where as all privet bank is
same because Bangladesh bank give slickly direction about this loan pricing. Where as
national has no charged 13% which is competitive based pricing strategy based on the
amount of money inflow into the bank.
In term loan to large & medium scale industries BRAC Bank is the market leader
with 15%,all bank are same but BRAC Bank have Varity in this product. Where as, bank
asia, ncc, exim bank, Dhaka bank, sibl, and rupali bank are also giving at 15%.on the
other side national bank give SME loan in different way named "Festival Small Business
Loan. So it can be understood from that the variation is very high that foreign
commercial bankis leading the term loan to large & medium scale industries loan market
of Bangladesh.
Cash credit loan market is lead by Rupali Bank followed by BRAC Bank 17 %
and our National Bank is possessing 18%. Loan general loan is followed by NCC, NBL
52 | P a g e
with 18.5%. In house loan bank Asia is the market leader with 16.5% and NBL
possessing 18% and other bank is market follower market follower.
Secure over draft loan is market leader is National bank 15.5% and bank Asia and
Dhaka bank offer 16% interest and other bank is remaining same 17%.
I also try to find out last 10 years records of rate of interest on different loans that are
published by head office to branch communicated through circular by which I realized
by comparing with other banks that National bank always follow market based loan
pricing techniques.
Interest on YEAR - 2012
53 | P a g e
Interest on YEAR - 2011
In 2011 all bank loan product interest rate reaming same, but there was some change
happened in SME and agriculture loan in Rupali Bank .there also some change happened
in cash credit and loan general in all privet bank.
54 | P a g e
3.14.4 NEGOTIATED RATES/PRICING EXCEPTIONS
National Bank Ltd. often allows for negotiated rates or pricing exceptions from the
established standard interest rates. In most cases, negotiated rates/exceptions are offered on
large and/or high quality loans that are highly desired. These borrowers typically have many
choices for financing and frequently shop around for the lowest price. Pricing exceptions may
also be made to borrowers experiencing financial difficulties. In these cases, the bank's
differential pricing mechanism may result in progressively higher rates to compensate for
higher risk. If the borrower is still a desirable customer, the institution may provide an
exception in order to keep the borrower's business. Another example of an exception is the
waiver of loan fees and default interest to retain business that may have higher risk but is still
acceptable business. If they find a borrowers CIB (Credit Information Bureau) report is
good, he has a very long and strong relation with the bank and good reputation in the market
the bank can negotiate with him for price. National Bank Ltd. allows negotiated rates or
pricing exceptions and tries to keep appropriate controls to ensure that it contributes to the
generation of sufficient earnings. They try to establish and maintain policies and procedures
that would help them to negotiate rates or grant exceptions. In addition, negotiated
rates/exceptions are monitored, summarized, and reported to the management in a routine and
timely manner.
There is another reason for negotiable price that is inspire the good regular loan taker
and DE inspire irregular loan taker .for example a regular businessman take loan from low
rate ,then national bank get payment clearly and from his deposit national bank get earn. But
when a bad loan taker take loan, national bank give him highest interest rate, by these he not
inspire to take loan .then when he defaulter by bank need to cut some interest rate for his
payment.
3.14.5 LOAN PRICING IMPACT ON LOAN APPROVAL
When Bank go for loan approval first bank think about that company or individual credit
report then they check for proper document for loan , but sometime loan interest rate can be
factor for loan disbursement .some bank offer low rate but for loan disbursement they charge
transaction charge .but some bank offer high interest rate but no transaction cost .
On the other hand bank some bank is popular for their own loan product and easy
disbursement system like National credit and commerce bank highest payable advance is
secure over draft for their easy disbursement system. BRAC bank highest funded loan
product is SME loan because they always think about market need. Rupali bank highest loan
paying product is LC loan and agriculture loan because they always connect about profit and
always follow govt. rule. SIBL popular for their cash credit loan because most of the branch
of SIBL located in Industrial Area.
3.15 RECOMMANDATIONS
Loans must be accurately rated, monitored and tracked through time. This history will
prove important, not only for the existing loan, but also for all subsequent loans that
can benefit from the migration pattern that is unique to the specific institution which
is absent to National Bank Limited at now.
The credit officer must more accurately value the underlying pricing conventions built
into the loan market. These are often neglected when loans are priced as bonds. The
existence of a re pricing grid, a periodic fee structure and various re pricing
techniques are often neglected in favor of the assertion that loans are merely small
bonds, which could be a good practice for National Bank Limited.
The officials of the bank shall be honest, sincere and free vices in their deal with
borrowers for personal gain should be skillfully detected and exemplary punished to
prevent others from indulging such irregularities. Steps should also be taken to arrest
growing moral degradation amongst the officials by improving their service benefits,
socio-economic condition and a standard of living where the officials shall have no
reasons to be allured by the borrowers.
The lenders shall sanction and disburse loan to the borrowers in proper time of
investment. They will see that no delay is caused in completing formalities and
processes which may create problem to the borrowers to divert funds elsewhere or
want of scope for investment and thus the funds become stuck up ultimately. So loans
should always be sanctioned & disbursed in proper time of investment to ensure
recovery of the loan in time from the borrowers.
Alertness and education amongst the sub-conscious about their obligation to return
bank's money in time and utilization of funds of funds only for productive purpose of
motivation and education field assistants of the lending bank may play vital role.
The lenders shall take legal action against the incorrigible defaulting borrows who are
avoiding payment on weak grounds without bonfires intention to square up their dues
without wasting of time. Money suits & criminal cases filed against the bad borrower
shall be closely followed up for early decision of the court and immediate steps shall
be taken for satisfaction of the decrees against the judgment debtors. Proper vigilance
is required to be kept over disposal of court cases & recovery of the decrials dues as
per judgment and in default, to file execution suit for attachment & sale of borrower's
properties for satisfaction of the decree.
All the loan price of each specific loan has been detected based on competition. Since
the market is competitive and intensity of competitiveness is increasing every day so
National Bank Limited always follow market-based loan pricing strategy rather than
cost based loan pricing strategy. Due to lack of knowledge on loan pricing method
and strategy and lack of knowledge on implementing different methods on loan
pricing National Bank Limited always market based loan-pricing strategy. So they
should follow a particular loan pricing model.
3.16 CONCLUSION
The reports title Loan pricing of National Bank and Compare with competitor. The core
and more important department is Credit department, which is responsible to disburse and
collect loan amount. To determine the price of each specific loan amount is very difficult and
right now Bangladesh Bank is responsible to determine the price of a specific loan. Based on
the selected loan price banks can change and set their price of each specific loan based on
competition, cost of fund of the bank and other economic factors that cannot be eliminate
from loan pricing.
According to our above findings and reasonable recommendations it is easy to say that
National Bank Limited use specific loan pricing model and by this they can select a price for
their loan amount. Since the market is competitive and so competitive pricing strategy has
been predominately followed to determine price of each specific loan.
So, in order to attract the right amount of customers by increasing earning spread, National
Bank ltd. needs to go out of their way to introduce a new method of their each loan pricing by
which they can earn higher amount of profit without incurring higher amount of cost. It has
been proved that without providing extra feature, aggressive marketing and promotional
strategy it is almost difficult to increase the spread (income expenses).
Experiences as an Internee
My Experience of Internship in National Bank

I started my internship in National Bank on 18th October, 2012. I understood that internship in
National Bank is mainly to learn the National Bank working process. Internship experience in
National Bank may be divided into two sects.
- Theoretical Experience
- Practical Experience
Theoretical Experience:
I attended one of meetings and five discussions about National Bank and its activities. I have
known that National Banks working procedures, loan system and repayment system
theoretically. National Bank has several kinds of loans as I explained before. National Bank is
working for spreading education among the children of National Bank members. National
Bank officials have explained everything we need to understand National Bank and we ask. I
have known got an understanding about National Bank branch office activities I worked for a
shadow staff in branch during my visit to Motijheel Branch, In Dhaka.
Practical Experience:
1st week:In first week national bank (Motijheel Branch ) branch manager told me you spend intern
period start with register department in that week I check every internal and outgoing cheque
,advice and mail .
2nd week:-
Then next week I work in accounts opening section ,Mrs. Nahar is head of this section she
was very helpful .first day of my internship period she make me understand every account
policy regulation and everything. After this she also gives me idea about cheque issue and
first bank transaction transfer and clearing and gives me responsibility for fill up KYC from,
and CTR.
3rd week to 5th week:-
Next three week I was work with deposit department, this department consist six member
.two officer maintain pay order and two officer maintain account transfer and two senior
officer do transfer every cheque and clearing every cheque. Actually this department was
very busy depart thats why they only give idea how they work.
6th week:-
Next week I go to work in foreign exchange department, I got a good experience about letter
of credit and exchange rate.
7th to 11th week:-
Then I go to the advance department and first day I check daily balance sheet .I think this
department was friendlier. I got very good experience about loan and related thing, actually
they give me lot of responsibility thats make me understand how its work.
Problems Encountered
During internship I have faced many problems before finding internship office and after
findings. These are
- As a student of Finance I tried engaged me such an organization which is compatible to my

discipline. But I failed to find that because of not having graduation.
- In 12th semester regular class and internship i went on together. It was difficult for me to be
regular in bath class and internship. I had to suffer hardship to do both at a time.
- According to the National Bank intern schedule motijheel branch office is must.
How internship experience impact on my carrier
Internship in National Bank might impact on my future career although it is not compatible
my discipline. I do not have any future plan to work in National Bank. But Banking is now
spreading all over the world. International organizational has recognized for loan. It added a
new era in Bangladesh business. So I think this experience will help progress in life.
Acknowledgement during Internship
During internship National Bank staffs in Motijheel branch office helped me very much. So I
want give them thanks for their kind assistance. During tour to branches I took many
interviews of old and new National Bank members. They talked with me frankly about their
experience from National Bank. I want to give them thank through my report.

Loan Pricing of The National Bank Limited

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1.

1.2 Origin of Banking Industry

1.3 Development banking in Bangladesh

1.4 Banking structure in Bangladesh

1.5 Hierarchy Analysis

1st Generation Banks (Established 1982-1988):

2nd Generation Banks (Established 1992-1996):

2.1.1 Historical Background of the National Bank LTD.

2.1.2 Mission of National Bank LTD.:

highest priority in ensuring transparency, account ability, improved clientele service as

2.1.3 Vision of the National Bank LTD.

2.1.4 Core Values of the NBL

1. Integrity : Nbl protects and safeguards all customer information

Continuous learning, self-challenge and strive make ways for self

2.1.6 Organizational Development of the National Bank LTD.:

2.1.7 Organizational Structure of National Bank LTD.:

2.1.8 Board of Directors of National Bank LTD.

Ms. Parveen Haque

Mr. Zakaria Taher

Mr. Salim Rahman

Mr. Rick Haque

Mr. Ron Haque

Mr. Md. Anwar

Mr. Neaz Ahmed

2.1.9 Products and Services

2.1.10 Performance of the NBL

Net profit for the year

Bonus shares for 2010

Addition during the year

Issued during the year

Transfer from general

2.1.11 Customer Services and Automation:

Set up parameter file

Set up overdraft limit

List of overdraft limit

Maintaining existing account

Month end processing

Update quick clearing

Time Deposit Maturity

2.1.12 Social Commitment

2.1.13 Corporate Culture

2.1.14 Branch Network

General Banking Department

Foreign Trade Department

2.1.15 Operation of NBL

2.1.16 Green banking

Water pollution & scarcity

Impact of natural disaster etc.

2.1.17 CSR (Corporate social Responsibility):15 | P a g e

Responsibility in the community

Contribution to martyred army officers killed in BDR carnage

2.2.1 Performance of the Bank (NBL): A brief review of the

Capital Surplus/ (Deficit)

Total Loans and Advances

Total Contingent Liabilities and Commitments

Advance / Deposit Ratio

Percentage of Classified Loans against total Loans

Profit after Provision & Tax

Amount of Classified Loans

Provision Kept against Classified Loans

Provision Surplus / (Deficit)

Cost of Found (Including operating cost)

Interest Earning Assets