Credit Policy and Practice of Private Commercial Bank: A Case Study on Mutual Trust Bank Ltd.

Abstract

The internship report is based on Credit risk management policy of a private commercial bank as required by the supervisor Mohammad Amzad Hosaain, Asst. professor of AIS, School of Business and Economics at United International University (UIU). The objective of this study or the report is to investigate and assess credit risk management and also identify the credit risk management difficulties and offer some strategies to address the MTB Ltd. Issues. This research is based on both primary data as well as secondary data.

This report is based on six chapters. Its first chapter of this study is dedicated to the introduction, which includes the study's aims, methodology, as well as scope of limitations. In order to comprehend the banks on which the research is based. The study's second chapter examines several theoretical concepts related to MTB Bank Limited's profile such as MTB’s profile, mission-vision, bank structure, products and services, their loan and recovery procedures etc. The study's third chapter is based on the methodology and sources of information are used in this report. The study's fourth chapter is based on internship experience, internship position and responsibilities. The study's fifth chapter examines the tools that are using in MTB for credit risk management and different types of analysis and findings on evaluation on investment and their all credit management activities. In its study's six chapters examines the problems that are identified as well the solution or recommendation of the problem and conclusion.

The main finding of this study is as follows: MTB ltd is following the regulatory policy. Their credit deposit ratio is increasing from previous year which indicates that bank can invest properly and utilize more funds to maximize profit. Though their credit distribution is increasing but its growth rate is fluctuating over the year. Bank should diversify their credit in other divisions. The bank should take the appropriate steps to reduce the percentage of bad and loss loans as well as dubious loans, such as carefully identifying lending sources that can help lower the percentage of bad and loss loans.

Some recommendation of the study is: Bank should not approver advances to customer without all necessary documents. To reduce the fraction of nonperforming advances, a genuine and effective notice system should be implemented.