Credit management system of IFIC Bank Ltd.

Abstract

The growth has started all over with the banking system and its contribution towards financial development of a country is highest in the initial stage. International Finance Investment and Commerce (IFIC) Bank Limited started banking operations on June 24, 1983. Earlier in 1976 it was set up as a joint venture finance company at the instance of the Government of the People’s Republic of Bangladesh. Credit is continuous process. Recovery of one credit gives rise to another credit. In this process of revolving of funds, bank earns income in the form of interest. A bank can invest its fund in many ways. Bank makes loans and advances to traders, businessmen, and industrialists. According to the borrower need bank provide various types of loan. But the total loan is divided into two categories – Consumer Finance and Small and Medium Enterprise Finance. Credit activities are the risky step for any types of the bank especially commercial bank. For getting assurance to recover the loan bank critically examine the loan and loan borrower depending on the information. In the time of loan appraisal credit management follow some steps like Collection of Application, Approval Process, Credit Administration, Security Types, Credit Documentation, CIB Report, Risk Measurement, Disbursement, Custodial Duties and Compliance Requirement. There should be formal procedures and a system in place to identify potential credit losses and remedial action has to be taken to prevent the losses. Beside that the systems should be in place to report the following exceptions to relevant executives in credit. Moreover, regular contact with customers will enhance the likelihood of developing strategies mutually acceptable to both the customer and the bank the collection process for personal loans starts when the account holder has failed to meet one or more contractual payment (installment). IFIC bank Ltd. Uttara branch mainly provides three types of credit, which are – Fixed term loan, Continuous loan and Micro credit. They avoid short term agriculture Loan. Performance in the field of deposit mobilization, credit disbursement, foreign Trade, remittance, and income has increased then that of previous year.