CONSUMER CREDIT SCHEME AND ITS RISK MANAGEMENT
OF DIFFERENT COMMERCIAL BANKS IN BANGLADESH: IMPLICATIONS FOR IFIC BANK LIMITED BANGLADESH
1. INTRODUCTION AND BACKGROUND
Credit is the means of investment made by the bank to the entrepreneurs and business community. Alternatively this is the way of channeling fund to the deficit units where various risks and uncertainties are involved. Therefore every decision on credit matter should be taken with utmost care that can be ascertained through in-depth analysis, meticulous calculation and prudent judgment. A detailed and very comprehensive credit policy can guide the dealing credit officer to successfully maneuver the credit portfolio
Thus the problem can be approached from various angles for analysis. So the management of IFIC Bank Ltd. wants to about the consumer credit scheme and its risk management with comparison of some others commercials banks in Bangladesh.
1.2 Problem Statement
“To analyze the consumer credit scheme and its risk management procedure of IFIC bank Ltd. in comparison with some others commercial banks in Bangladesh”.
1.2 Objectives of the Study
1.2.1 Broad Objective
To determine the consumer credit scheme operation, credit risk management and credit performance including the credit payment system and to identify the ways for improvement.
1.2.2 Specific Objectives
The specific objectives of this study are as follows:
i. To find out the customers perception of interest rate charged by IFIC Bank for consumer credit scheme.
ii. To determine the demand of CCS by analyzing the growth of disbursement amount of loan under CCS.
iii. To find out the service charges and other expenses of consumer credit scheme loan reasonable or not.
iv. To find out the consumer perception about the procedural obligations of bank for obtaining loan.
v. To find out the contribution level of CCS on overall performance of banks through identify the profit generate from CCS.
vi. To identify and suggest scopes of improvement in credit management of IFIC Bank Ltd.
vii. To find out the preference of the segment of consumers of the society.
viii. To have better orientation on credit management activities specially credit policy and practices, credit appraisal, credit-processing steps, credit management, financing in various sector and recovery of IFIC Bank Limited.
ix. To find out the risk management procedure of consumer credit scheme loan.
1.3 Benefits of the Study
In recent days, people are becoming more aware about the management of their resources. As the banks do business by lending their depositors' money, they have even more responsibility to manage their credit portfolio smoothly. Bank's reputation is a critical factor for its success and therefore modern banks must follow appropriate guidelines, policies and relevant manuals regarding credit extension and recovery. The usage of banking service for any type of financial activities is increasing day by day. People are taking loans to start different types of businesses. It is now very important to know the internal processes of the banks and financial institutions to make informed decisions regarding their integrity, scope, ability and capacity.
1.4 Scope and Limitations of the Study
This report is focused on consumer credit scheme IFIC Bank Limited. The research was restricted with the clients of Banani Branch of IFIC Bank Ltd. However, for comparison with other commercial banks, Premier bank, Trust Bank, Shajalal Islami Bank, Dutch Bangla Bank Limited credit scheme offers were also studied. This report is a descriptive study which tries to focus on the...