Credit risk management of Jamuna Bank

Abstract

The way bank operates is by lending the money to businesses and firms they get from many sources and getting the return and generate their own revenue. On this whole process, there comes many hinders and risks which banks has to overcome on the course of time. On those process, if the bank and the borrower agree on a mutual understanding there is a fixed time to set the money and related other issues on returning of the disbursement and all. The report is being operated by many hierarchical sub-division like IT system then credit committee and then being approved by the senior management etc. Along with all the process is done the bank always do some grading on the possibility of getting the right return from the borrower and minimizing the loss. Jamuna Bank Limited is one of many private banks who are operating properly with abiding by all the rules being set by Bangladesh Bank. The whole bank is divided into many sub-committees who divides the whole work in different segments. At the top they have Directors and later they got different committees such as Credit Committee, Finance Committee etc. Along with the directors there is CEO/Managing Director who has centered all the works and kept a harmony in all departments for the betterment and efficiency of the bank. The Credit Committee in Jamuna Bank Limited has been accountable for the work for managing the risk of lending money while a borrower is seeking for it on the purpose of any kind of development. They go through different analysis starting one thing of the borrower to market and as many possible samples they have in their hand. Then they have a higher committee who looks at some other reasoning before granting the loan, and altogether they have one promising IT system which works real time in managing all the related data about the approval of the disbursement. Jamuna Bank Limited has a strong financial support throughout their journey for their strong management and good distribution over the time. Their deposits and advances have grown 18% along with investments through the time which is a good sign. They also support many community services and maintain a green environment policy before agreeing or starting out anything new. Apart from all, today’s market is really hard to get into competition and existing on it competing against some world class financial sectors. Jamuna Bank has their own SWOT analysis for their sustainability and keeps trying to find out reaching new things out.