Creditmanagement

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Credit Credit management
• credit is generally defined as a • It is the process of granting
contract agreement in which a credit, setting the terms on which
borrower receives a sum of it is granted, recovering this
money or something of value credit when it is due, and
and repays the lender at a later ensuring compliance with
date, generally with interest. company credit policy, among
other credit related functions.
About United Commercial Bank
• United Commercial Bank Limited (UCBL) is a Bangladesh based
private commercial bank that provides banking services. The services
include corporate and retail banking, loans, and credit cards, online
Banking and money transfer services.
• As a fully licensed commercial bank, UCBL is being managed by a
highly professional and dedicated team with long experience in
banking
Credits Product of UCB
SME & Micro Credit • Home Loan
• This program Small & Medium Home loan amount depends on your
Enterprises Financing is being repayment capability. A number of
implemented in the Bank from 2005.
The main objective is to promote and factors such as your monthly net
establish the Small & Medium disposable income, age,
Enterprises of Bangladesh as an qualifications, value of immoveable
efficient and profitable business property, Number of family
concern with a view to ensure the members and dependents, monthly
economic development of the country expense, other fixed obligations,
by increasing local productions, nature of Job/business, saving habits
generating income & employment risks.
etc. are taken into consideration.
Loan Issuing Procedures of UCB
Getting Credit Information
United Commercial Bank Limited collects credit information about the
applicant to determine the credit worthiness of the borrower. The bank
collects the information about the borrower from the following sources:
• Personal investigation
• Confidential report from other bank head Office/ Branch/ chamber of
the commerce
• CIB report of Central Bank
Loan Issuing Procedures of UCB
Information Collection
• Name and address of the borrower (present and permanent)
• Constitution or status of the business
• Date of establishment and place of incorporation
• Particulars of properties, Partners and Directors
• Background and business experience of the borrowers.
Analyzing this Information
United Commercial Bank Limited then starts examination whether the
loan applied for, is complying with is landing policy. If comply, then
examines the documents submitted and the credit worthiness. Credit
worthiness analysis, i.e. analysis financial conditions of the loan
applicant is very important
Lending Risk Analysis (LRA) Analyzing this Information
• LRA is very important and vital • United Commercial Bank Limited
analysis for deciding whether then starts examination whether
the loan proposal is potential or the loan applied for, is complying
not. Many types of scientific, with is landing policy. If comply,
mathematical, statistical and then examines the documents
managerial tools and devices are submitted and the credit
required to perform this worthiness. Credit worthiness
analysis. analysis, i.e. analysis financial
conditions of the loan applicant is
very important
Final Decision about the Project Proper Supervision of the Project
• If the loan decision remains with • If such provision is kept in the
the branch level, that branch sanction contracts, the United
sanctions the loan and if the Commercial Bank Limited
approving authority is Head officials go to the project area to
Office then the decision comes to observe how the loan is utilized.
the branch by telex or fax. If no such clause to supervise the
loan is added, even then the bank
can see the performance of the
project
Documentation on the loan
• Demand Promissory Note: Here • Latter of Hypothecation: It is the

the borrower promises to pay the written document of the goods
loan as and when demanded by hypothecated thus to put in case
the bank to repay the loan. of need.
• Latter of Arrangement: Here the • Stock Report: This report is used
written amount of the loan for SOD and CC. In this report
sanctioned to the borrower is information about the quality and
specified. Letter of Continuity: It quantity of goods hypothecated
is used to take continuous have furnished.
facilities as proving continuous
securities.
Documentation on the loan
• Personal Guarantee: It is the • Personal Guarantee: It is the
additional confirmation of the additional confirmation of the
borrower to repay.  Guarantee borrower to repay.  Guarantee
of the directors of the company. of the directors of the company.
• Resolution of the Board of • Resolution of the Board of
Directors: it is used to borrow Directors: it is used to borrow
the fund to execute documents the fund to execute documents
and complete other documents. and complete other documents.
Creation of Charges for securing loan
• For the safety of loan, United Commercial Bank Limited requires

security from the loaner so that it can recover the loan by selling
security if borrower fails to repay.
• The method of charging should be legal, perfect complete. Importance
of charging securities is as—
• Protection of interest.
• Ensuring the recovery of the money lent.
• Provision against unexpected changes.
• Commitment of the borrower.
Conclusion
• As an organization the United Commercial Bank Limited has earned
the reputation of top listed banks operating in Bangladesh. The
organization is much more structured compared to any other listed
bank operating in Bangladesh.
• UCBL does very good in credit risk management. Bangladesh Bank
has introduce a good numbers of circulars, guidelines, tools and
techniques for managing the credit risk in a prudent manner as well as
to minimize the rate of default/ non-performing loans at a standard
level.

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Welcome

• Demand Promissory Note: Here • Latter of Hypothecation: It is the

• For the safety of loan, United Commercial Bank Limited requires

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