Loan Diversification System of Janata Bank

The study is mainly designed to know the different credit programme of Janata Bank and to know its performance.

There are many institutions which play a vital role for charging the social structure and for the economic development for our country. Janata bank is one of the most important financial institutions of them. It is playing a vital role for economic development and employment generation by its different credit programme. As a banking financial institution it provides different loan & advances (with micro credit) to poverty alleviation and income generation.It provides different loan for development of our agricultural and for development of rural area. It has different rural credit programmes.

For business man it provides cash credit (Hypo), and cash credit (Pledge) loan. For development of industry Janata Bank provides different loan and advances.The major credit programme of Janata bank are business loan (cash, credit), Agricultural loan (crops loan), Palli loan, General loan, Secured overdraft, weavers cash credit, clean loan, SHBL, Packing credit, Loan against important merchandise (LIM), General House Building Loan (GHBL), Small cottage, Handicraft loan etc. very year it is introducing new credit programme. Although Janata bank provides loan and advances in different sector but its total classification loan is more than 12% (2005).

But now it is decreasing at 5. 6% in 2011.The bank has cumulatively created specific provision of Tk8, 175 million as on 31 December 2011 against classified loans of Tk14, 343 million. Accordingly the bank has been rated by Credit Rating Information and Services ltd. (CRISL). The CRISL assigned A+ rating (meaning adequate safety) in the long term and ST2 rating (means high grade) in the short term.

Capital adequacy is 10. 20% and earnings per share Tk60. 45 in -2011. Despite the global financial crisis and downturn in its economy, the bank earned an operating profit of Tk15, 722 million in -2011. In the present context, targeting towards vision 2021, Janata Bank is committed to ensuring social justice, environmental protection, human rights, equal opportunities, for all the citizens with a manifesto of turning Bangladesh into a prosperous and progressive welfare state with high level of democratic culture.In this context, we focus to channelize substantial amount of credit to agriculture and small scale industries sectors with an aim to reduce poverty by creating new job opportunities.

Our credit involvement in agricultures and agro based industries sector was tk. 16,854 million as compared to Tk14, 578 million in the previous year witnessing a rise by 15. 16%.1.

1 Background of the study: Janata Bank presents a significant role of economic development of Bangladesh. It plays an important role for the poverty alleviation of Bangladesh. Janata Bank acts as a commercial consideration with due regard to the interest of the industry, commerce, depositors, and investors and to the public in general. As a financial institution Janata Bank plays a vital role in the economic development process of the country.To play this vital role effective as well as for providing better customer services and credit to the client’s adequate disclosure of information necessary and to what extend Janata Bank in Bangladesh should disclose the required information is a matter of deep concern.1.

2 Objectives of the study: The major of the study are- i. To know the different credit program of Janata Bank and evaluation their performance. ii. To identify the problem of credit program of Janata Bank. iii.

To know the contribution of Janata Bank in Agricultural, Business and Industry. v. To know how Janata Bank plays an important role in economic development of Bangladesh.1. 3 Vision: To become the effective largest commercial Bank in Bangladesh to support socio- economic development of the country and to be a leading Bank in South Asia.1.

4 Mission: Janata Bank limited will be an effective commercial Bank by maintaining a stable growth strategy, delivering high quality financial products, providing excellent customer service through an experienced management team and ensuring good corporate governance in every step of banking network.1. 5 Importance of the study: Janata Bank is the second largest nationalized commercial Bank in Bangladesh, having a network of 873 branches including 4 overseas branches operating in UAE and one wholly owned Exchange Company in Italy. It is playing a significant role towards socio- economic development of the country by operating a commercially sound Banking system and by financing non- Banking financial institutions, dealing with home loan, corporate finance and syndicate loan.In 2011, Janata Bank has done exceedingly well surpassing the achievement of previous year. Operating profit growth was 30.

62%. higher than preceding year and so was in deposit parameter. Advance increased 14. 21%, Investment 58.

05%, Export 29. 74%, Import 7. 38%, and increased foreign remittance by 37. 32%. It’s able to earn operating profit of Tk15, 722 million during year 2011.

1. 6 Methodology of the Study:The methodology of the report includes direct observation, oral communication with the employees of the bank, interviewing the officers and executives, studying files, circulars etc. The report includes both quantitative as well as qualitative data. In this report, no hypothesis is considered.

In order to prepare the assigned project paper I have collected necessary information by the following ways: a) Primary source of information b) Secondary source of information.1.7 Techniques of Collecting Data:Data collection method/technique is a one kind of process of collecting data. To prepare the report, I used the following methods of collecting data in complying with my study objectives. Personal interview method:Personal interview method requires a person known as the interviewer asking questions generally in a face-to-face contact to the other person or persons. I have collected information and data by personal interviewing of the officers and staffs of Janata Bank.

For this purpose I took interviews of them.Observation method:Observation method is the act of watching something or somebody carefully for a period of time especially to learn something. To collect data whatever required preparing the report a comprehensive observation to management and to other activities of the bank is made. Questionnaire method:I developed a set of questionnaire (for depositors/creditors and other clients) for collecting the relevant data about Janata Bank. Also I used the random sampling to obtain information by questionnaire method.

I delivered the questionnaires to the sample consisting of 10 respondents.1.8 Analyzing the collected data:The techniques that I have applied in data analysis are as follows:a) Tabular representationb) Graphic representation through Bar Diagram, Pie Chart.I tried to represent & analyze the gathered data using some charts showing the frequency of the client’s response on a number of statements. For this purpose I used the Microsoft Excel for making the charts more understandable.