Mtbl

Chapter -1

1.1 Background of the Report Bangladesh Bank undertook a project to review the global best practices in the banking sector and examines in the possibility of introducing these in the banking industry of Bangladesh. Four 'Focus Groups' were formed with participation from Nationalized Commercial Banks, Private Commercial Banks & Foreign Banks with representatives from the Bangladesh Bank as team coordinators to look into the practices of the best performing banks both at home and abroad. These focus groups identified and selected five core risk areas and produce a document that would be a basic risk management model for each of the five 'core' risk areas of banking. The five core risk areas are as follows-

a) Credit Risks;

b) Asset and Liability/Balance Sheet Risks;

c) Foreign Exchange Risks;

d) Internal Control and Compliance Risks; and

e) Money Laundering Risks.

Bangladesh Bank in one of it’s circular (BRPD Circular no.17) advised the commercial banks of Bangladesh to put in place an effective risk management system by December, 2003 based on the guidelines sent to them.

I am working in the Credit Department of Dhaka Bank Limited, Motijheel Branch. In this report, I will try to make a comparative analysis between Bangladesh Bank’s suggested best practices guideline for managing credit risk and Dhaka Bank Limited existing credit policy .

1.2 Objective of the Report The study has been undertaken with the following objectives:

* To analysis the pros and cons of the conventional ideas about credit operation of a

Bank.

* To have better orientation on credit management activities specially credit policy and practices, credit appraisal, credit-processing steps, credit...