Common practices and irregularities of Uttara Bank Limited, Shantinagar branch

Abstract

This summary deals with the analysis of credit risk management policies of UTTARA Bank Limited, a private commercial bank is the first private sector Bank fully owned by Bangladeshi entrepreneurs. Credit risk is most simply defined as the potential that a bank borrower or counter party will fail to meet its obligations in accordance with agreed terms. Credit risk, therefore, arises from the bank’s dealings with or lending to corporate, individuals, and other banks or financial institutions. I have based my conclusion by analyzing the bank's asset concentrations and portfolio quality using industry exposures, loan concentration level of non-performing loans and adequacy of provisioning requirements. I have done a comparison between the banks past and present performance as well as a comparison with the overall banking industry performance. The bank has in the past maintained a lax approach towards lending but has recently strengthened their credit appraisal process. Recently, the Bank has put in place policies, guidelines and procedures to control and monitor such risks. The risk parameters for accepting credit risks are clearly defined and complemented by policies and processes to maintain a well diversified and high quality credit portfolio. UBL primarily lends for trade finance, and export and import business.