Loans & Advance Management of Sonali Bank

INTRODUCTION

Economy is a complicated dynamic system of relationship between different agents of society where banks play a vital role to mobilize the economy. In a dynamic economy, the banking institutions make the monetary system more dynamic. Modern economic functions are meaningless and seedless without bank. To make the social system developed and dynamic no one can deny the role of bank by any means. Banks act as a financial intermediary to mobilize fund from the surplus to deficit economic units. Now a day's banks play a vital role as leading financial intermediary to meet the growing needs of every economy.

After the emergence of Bangladesh, the banking system has expanded to a lot in the last three decades. Though many private commercial banks have been established, the major portion of banking business is covered by the four nationalized commercial banks such as: Sonali, Janata, Agrani and Rupali Bank Ltd. In our country, Sonali Bank is treated as the leading banking institution after the Bangladesh Bank.

The National Bank of Pakistan, the bank of Bahawalpur Ltd. and the Premier Bank Ltd. were jointly declared as Sonali Bank by the Presidential order in 1972. Now, Sonali Bank continues its operations with 1304 branches. Its head office is situated at Motijheel, Dhaka. It started its activities with tk.1000 core as authorized capital and tk. 262.42 core as paid up capital.

Sonali Bank, Rajshahi Medical College Hospital Branch started its operation in 19/05/1975. It is situated in Laxmipur; a Senior Executive Officer and 18 employees head this branch. This is one of the busiest commercial bank in Rajshahi city. This branch serves all types of loan facilities authorized by the Head Office except C.C (Pledged). The special feature of this branch is that the Head Office declares it as a special investment branch. This branch provides credit to fisheries project, poultry firm and livestock project. It also provides small loans.

As a student of Finance & Banking, it is imperative to know the technical knowledge of banking. For this purpose, I had to undergo an internship program. This program is a part of our BBA program 2010. During my training at Sonali Bank Ltd., Rajshahi Medical College Hospital Branch, I learnt about general banking procedure such as: cash receipt and payment, remittance, demand draft (DD), mail transfer (MT), telegraphic transfer (TT), statement of affairs, loans and advances, token issue etc.

The main two tasks of commercial banks are to collect deposit at lower interest rate and to provide loan as vital role in the development of an economy through mobilizing deposit. Because banks collect idle savings of people and turn into investment. From this point of view, I was assigned to do an analytical discussion on deposit behavior and mobilization of Sonali Bank Ltd., Rajshahi Medical College Hospital Branch.

1.1 Functions of Sonali Bank:

The main functions of Sonali Bank are: -

1. Receiving money on deposits

2. Conducting cash transaction of customers who have current accounts

3. Attending bills of exchange and drafts of customers.

4. Sanction of loan

5. Providing other services to the customers, e.g.;

a) Transfer of money

b) Collection of receipts

c) Collecting interest, dividends, rents, pensions, etc.

d) Act as an advisor.

1.2 An Organizational Setup of Sonali Bank Ltd., Rajshahi Medical College Hospital Branch:

Conventionally the branch is headed by a manager who is a senior executive officer (S.E.O). there are as many as some senior officers and officers who are assigned to look after four important departments namely :-

a) Cash Department

b) Remittance Department

c) Accounts Department

d) Loan and Advance Department

DATA COLLECTION AND METHODOLOGY

2.1 Data Collection Methods:

There are two sources of data one is primary source of data and other is secondary source of data.

A) Primary Data Collection Method :

Primary data was collected from Sonali Bank Ltd., Medical College Hospital Branch, Rajshahi. To prepare a report I have collected data and information by following three types of Primary methods. These are described below:

A.1 Questionnaire Method :

At first, I made a questionnaire with the help of my supervisor. After preparing the questionnaire I collected the information and data from the affaires. Personnel and other concerned people of my targeted bank.

A.2 Interview Method :

I have collected information and data through the interview. I have taken interview of the officers, executives and supervisors and they all responded all of questions friendly.

A.3 Observation method :

I was present physically in very department of Sonali Bank Ltd., Medical College Hospital Branch, Rajshahi for the Purpose of our internship; training. During 1st February 2012 to 30th April 2012 and I observed all the functions of Bank. From this observations and with the help of my practical knowledge. I have collected some information and data about the Bank.

B) Secondary Data Collection Method :

The only source of secondary data was the official record of the Bank. Other sources of secondary data are given below:

1. Some Published and unpublished research report.

2. Books, Magazines and Papers.

3. Business and Technical Journals.

4. Public records and statistics.

5. Documents

To evaluate the banking performance of the Sonali bank Ltd., RMC hospital branch I have used annual data from 2009 to 2011 and various current financial position as the bank.

2.2 Limitations of Data Collection :

The Manager and Officers of Sonali Bank were on