Chapter-1

Introduction

1. BAckground of the study.

Four years back 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 produced 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 & Liability / Balance Sheet Risks; c) Foreign Exchange Risks; d) Internal Control & 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 credit approval and monitoring system by December, 2003 based on the guidelines sent to them.

In my study, I would try to put forward my findings about the “Credit Management Policy of Bangladesh Bank, and its implementation”. To illustrate my point, I am giving the example of Bank Asia Limited.

2. Objectives of the study.

Broad objective: ❖ The broad objective is to know the Credit Management Policy of Bangladesh Bank. ❖ To analyze its implementation at Bank Asia Limited.
Specific objective:

In order to reach the broad objective, some specific objectives are identified.In this report, I have attempted to give an overview of foreign exchange operation of BAL. Following are the main objective:

❖ To familiarize with the history and