Full Chapter - baixardoc

Chapter-One

INTRODUCTION1.1 Prelude

Internship is an assigned work performed usually by the students

of BBA at the end as partial fulfillment of the requirements for the degree of

BBA in the Dept. of Business Administration of the University of

Information Technology & Sciences. The aim of internship is to apply one’s

theoretical knowledge in practical fields. As a student of Accounting. I am

interested to complete internship program at financial institutions. And for

this purpose I was sent to Rajshahi Krishi Unnayan Bank (RAKUB), Local

Principle Office, Rajshahi. The program is completely supervised by our

respected teacher Monaj Ash, Department of Business Administration

UITS, Rajshahi Campus. .After joining the branch, I was first introduced

with Manager, Local Principle Office, Rajshahi Krishi Unnayan Bank

(RAKUB). Later on, he introduces me with other officers of the branch who

accept me cordially. They were very helpful in collecting information and

helped me as much as possible.

This was the first practical experience of mine, so that I have

enjoyed it very much. The cordial help of manager and officers make it more

enjoyable. Since I have completed a course on Bank management, I have

some theoretical knowledge about different activities of bank. And practical

experiences of bank activities enrich my knowledge through getting real

view.

The report is prepared from the knowledge which I have had

from theoretical learning and practical experience which I have got from the

internship program. Though I have got a conception about overall banking

functions but in this report I have focused on loan disbursement policy of

RAKUB, Local Principle Office, Rajshahi.

University of Information Technology & Sciences 1

1.2 Objective of the study

The main objective of the study is to examine the loan

disbursement policy of RAKUB, Local Principle Office, Rajshahi for the

period of 2009-10 to 2012-13 to achieve the objective: the study seeks to

realize the following:

1. To assess the activities of RAKUB, how it contributes in agricultural

development of Rajshahi division.

2. To assess the loan management system during the period 2009-10 to

2012-13.

3. To assess the loan disbursement condition of Local Principle Office for

the period 2009-10 to 2012-13.

4. To determine various sources of loan able fund.

5. To know the security evaluation system before providing loan to the

customer.

6. To examine the loan monitoring system of the bank.

7. To know the different services provided by the bank to its customers.

8. To know how they deal with problem loan.

9. To know the criteria of classifying loan.

10. To know the competitive position of the bank in the area with different

financial institutions providing agricultural credit.

1.3 Scope of the study

Evaluation of General Banking is one of the most important

parts for evaluating any commercial or specialized bank.. The study is

emphasized on whether the bank providing bank considering all required


aspect in timely manner and what initiative they are taking in respect of

problem.

1.4 Methodology of the study

Methodology can be termed as underlying principles and rules of

organization or the philosophical systems that work at the back drop of any

study. To fulfill an internship program and prepare a complete report we

need organizational data. The data was collected from the Rajshahi Krishi

Unnayan Bank during the internship period. To make the report more

meaningful and presentable two sources of data and information have been

used widely those are;

1. Primary sources of information

2. Secondary sources of information

Above mentioned sources are described below:

1. Primary sources:

Primary data are measurements observed and recorded as part of

an original study. Primary sources are the sources from where information is

collected from Rajshahi Krishi Unnayan Bank. The ways through which I

have collected information in my internship program are described below:

a. Questionnaire method: Questionnaire method is one of the most

usual systems used in collecting data or information. Questionnaire

is two types such as open ended questionnaire and close ended

questionnaire. I have prepared an open ended a questionnaire under

the supervision of my respected supervisor about different

functions and mainly loan disbursement policy of Local Principle

Office, Rajshahi of RAKUB. The manager and specially the


second officer of the branch answer most of my questions. The

questionnaire is given at the end of the report.

b. Observation method: According to oxford dictionary the

observation means “the act of watching something carefully for a

period of time specially to learn something”. I went to the RAKUB

Local Principle Office, Rajshahi and observed the different

activities of officers and the different problems and requirements

of customers through which I have collected some information.

But one true thing is that I could not ask question to the officer in

all the time when I cannot understand, the reason is that in my

branch the month of general banking is going on, so most of the

officer stay busy in most of the time.

c. Interview method: The interview is face to face interpersonal

discussion in which one person asks pertinent question to a person

called respondent about a selected topic or area. I have collected

some information through asking the officers.

2. Secondary sources: When an investigator uses the data which has

already been collected by others, such sources or data are called

secondary sources or data. I have collected some secondary information

which is already published by the bank authority. I have collected

secondary information from the following sources:

a. Statement of affairs of the branch

b. Documents supplied by branch

c. Different articles


d. Magazines and papers

e. Bank’s website

f. Rules and regulations provided by agricultural credit department of

Bangladesh bank.

g. Annual report of the bank from 2009-10 to 2012-13.

h. Some statistical graphs and charts of the bank.

Analysis of questionnaire:

There are different techniques of analyzing questionnaire. I have

asked different questionnaire about the functions of RAKUB, activities of

Local Principle Office, Rajshahi and specially their credit policy, loan

disbursement policy initiatives taken to improve etc. I have analyzed this

information giving special emphasis on loan disbursement policy.

1.5 The significance of the study

Now-a-days the banks are playing a vital role in the economic

development of any country. The RAKUB is a specialized bank which is

established with a view to developing the agricultural condition of the

northern region of our country. The success of any bank depends upon how

properly they are utilizing their funds. RAKUB is Loan money to the people

related to agriculture and contributing a lot in agricultural development of

our country. The bank should provide loan after examining some important

aspects and should recover cent percents of its loan. I have chosen the topic

loan disbursement policy for the reason to analyze what problems are related

behind the scene.

1.6 Limitations of data collection

Nothing is out of limitation. So my report also has some

limitations. For these reasons, I cannot prepare it properly. The common


culture of Bangladesh is that some government officers are not interested to

do more than their assigned work. The major problem I have faced at the

time of data collection because the manager and officers are busy and do not

get enough time to discuss frankly. The major limitations are given below:

1. I have been sent to RAKUB, Local Principle Office,, Rajshahi for

only three months which is not sufficient to understand different

activities of the bank.

2. In my branch the month of disbursement is going on, so the

officers are always remain busy.

3. The reports is basically prepared on published income statement,

Balance sheet, information about loan and advances but for

preparing report more details information are required.

4. Since we are student so we have no in depth knowledge about

preparing report.

5. The bank’s accounting period is from July to June, so now the

officers are busy in making arrangements for preparing financial

statement.

6. Some officers are too much conservative, they are not interested to

discuss about any matter.

7. In some cases, officers are not interested to disclose information

because of secrecy.

8. To prepare report minimum four to five years information is

required, but the branch has no computer, all records are kept

manually. So the officers are not interested to provide information

other than recent year.


9. To complete internship program a lot of money is required but we

do not get necessary money.

10. Information collection through observation method is possible

when one’s have complete knowledge about the work, but I have no

clear knowledge about different activities, so the effort to collect

information through observation is go in vain.

This is the first internship program and report preparation of my life,

so for the limitation of my knowledge I cannot prepare it more effectively.


Chapter- TwoAN OVERVIEW OF RAKUB

2.1 Introduction

Rajshahi Krishi Unnayan Bank (RAKUB) is a state- owned

Bank in Bangladesh with regional approach. The bank emerged as a

government’s plan of intensive care to agriculture of Rajshahi division

providing livelihood to 35 million people of the area. The region is less

developed compared to other parts, yet full of potentials in agriculture.

Rajshahi division characterized by its surplus food grain production is

popularly called the “granary of the country”. Besides catering to

agricultural credit, RAKUB, as it is acronym renders deposit banking service

through all the 364 branches. The headquarters of the bank is stationed at

Rajshahi city, some 270 kilometer to the north of Dhaka.

2.2 Historical background of RAKUB

Bangladesh is agriculture based country from the very

beginning. Most of the people are depended on agriculture. From British

period till today, farmers of this country are dominated by different quarters

of the society. In village level farmers take loan from different money

lenders at high interest which is totally unreasonable. To save the farmers

from village money lenders, British Govt. took step under special program

in order to disburse the agricultural loan to the farmers in 1905.

Later on, in 1932 India-British Govt. took a step for the socio-

economic development of the small and marginal farmers, which was

implemented through providing agricultural loan to them.


In 1952 the Government of Pakistan established a financial

institution named “Agricultural Development Finance Corporation” (ADFC)

in order to disburse loan in agricultural sector. Feeling the importance of

agricultural production and agricultural loan the Pakistani Govt. established

another bank namely “Pakistan Krishi Bank” in 1957.

In 1971 Bangladesh has been emerged as an independent

country through a historic war of nine months. After the liberation of

Bangladesh the Government renamed the Pakistan Krishi Bank as

Bangladesh Krishi Bank (BKB) in 1973 according to the Presidential order

27. As Bangladesh is an agro-based country, the demand for the agricultural

loan of Krishi Bank is in increasing trend. To manage agricultural loan it

becomes very difficult for Dhaka based head office of Krishi Bank to serve

the remote areas of the country. For this reason the government takes the

decision to decentralize the Krishi Bank in the divisional areas. The people

of the northern areas of Bangladesh are lagging behind in all respects than

the other parts of the country. Rajshahi Krishi Unnayan Bank (RAKUB)

was established by the president’s ordinance no 58 of 1986 with the aim of

providing institutional agricultural credit for optimum utilization of

agricultural potentials of Rajshahi division. Taking over the branches and

offices along with assets and liabilities of the Bangladesh Krishi Bank

within in the Rajshahi division, the bank started functioning on 15 March

1987.


2.3 Objective of RAKUB

The main objects of RAKUB are as follows:

a) To provide credit facilities for all kinds of agricultural and agro-

based economic activities keeping in view the needs of small and

marginal farmers.

b) To earn a normal profit for meeting the operational expenses,

building of reserve and expansion of activities to cover wider

geographical area.

c) To extend counseling and advisory services to the borrowers/

entrepreneurs etc. in utilizing credit facilities of the bank.

2.4 Functions of RAKUB

As the largest development partner in the northwest region

Rajshahi Krishi Unnayan Bank (RAKUB) aims at overall development of

farmers and all the sectors and sub-sectors of agriculture in this region.

Besides, catering to agricultural credit the bank performs ancillary functions

as financing agri-business and agro-based industries and poverty alleviation

programs.

2.5 Management

The board is vested with the responsibility of formulation of

policy in line with attainment of growth in agriculture and economic

development of the region through agricultural credit support. The board of

directors is constituted by seven members, all appointed by the government.

Besides, for emergency decisions there is an executive committee
