Annual Report - 2007-08 (RAKUB)

27
Annual Report 2007-2008 !"# $ %!& ’( ) *! +% ! , !- ./ ’ ! 012 345/ 6 7 ’ 0 $ 8 !-19 6 !": % --;< => !’ 3 "? 0@ ’ 3 -A= / BC )D 1.00 ESTABLISHMENT Rajshahi Krishi Unnayan Bank (RAKUB) was established by the President's Ordinance No.58 of 1986 with the aim of providing institutional agricultural credit for optimum utilization of agricultural potentials of Rajshahi Division. Taking over all the 253 branches and other offices along with assets and liabilities of the Bangladesh Krishi Bank within Rajshahi Division, RAKUB started functioning on 15 March 1987. E 7 BC . F G -H ’ ! I * 0 ! 8 0H ’ J !’ .-K’/ 6 / ! ’( 0 L D 8MN F O 12 J !J 0L !- 6 < -A-$ ’ - P +% % MN6 !’ % .! LD 2.00 FUNCTIONS As the largest development partner in the northwest region Rajshahi Krishi Unnayan Bank aims at overall development of the farmers and all the sectors and sub-sectors of agriculture in this region. Besides catering to agricultural credit, financing agri-business and agro- based industries, activities related to socio- economic development and poverty alleviation programs, the bank performs most commercial banking functions. 4E -$ ’@ )’ 0 Q - -$ ’@ -%M’ 3 -’5 7 3> 0 L M -’5 D 0 L M R M 0 Q - -$ ’@ 7 S - I T -’ 5 3 -’ 5 O % 7 -UV %’ 0Q - MD 0 LM . 0 Q - -$ ’@ M’ -’ 5 8 @-$ ’@6 -’5D !H -% M’ ER= -’5D 3.00 CAPITAL At the time of establishment authorized capital of the bank was Tk. 1500.00 million which was raised do Tk. 1800.00 million during the financial year 2005-2006. During fiscal 2007- 2008 the bank under look a plan, approved by the ministry of finance, to raise authorized capital of the bank in the four consecutive years and lift it to Tk. 7500.00 million. Accordingly authorized capital stood at Tk. 2200.00 million on 30.06.2008. Paid up capital was Tk 2200.00 million and reserve amounted to Tk. 208.40 million on 30.06.2008.

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Rajshahi Krishi Unnayan Bank Annual Report - 2007-08 (Last Annual Report of RAKUB)

Transcript of Annual Report - 2007-08 (RAKUB)

Page 1: Annual Report - 2007-08 (RAKUB)

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1.00 ESTABLISHMENT Rajshahi Krishi Unnayan Bank (RAKUB) was established by the President's Ordinance No.58 of 1986 with the aim of providing institutional agricultural credit for optimum utilization of agricultural potentials of Rajshahi Division. Taking over all the 253 branches and other offices along with assets and liabilities of the Bangladesh Krishi Bank within Rajshahi Division, RAKUB started functioning on 15 March 1987.

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2.00 FUNCTIONS

As the largest development partner in the northwest region Rajshahi Krishi Unnayan Bank aims at overall development of the farmers and all the sectors and sub-sectors of agriculture in this region. Besides catering to agricultural credit, financing agri-business and agro-based industries, activities related to socio-economic development and poverty alleviation programs, the bank performs most commercial banking functions.

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3.00 CAPITAL

At the time of establishment authorized capital of the bank was Tk. 1500.00 million which was raised do Tk. 1800.00 million during the financial year 2005-2006. During fiscal 2007-2008 the bank under look a plan, approved by the ministry of finance, to raise authorized capital of the bank in the four consecutive years and lift it to Tk. 7500.00 million. Accordingly authorized capital stood at Tk. 2200.00 million on 30.06.2008. Paid up capital was Tk 2200.00 million and reserve amounted to Tk. 208.40 million on 30.06.2008.

Page 2: Annual Report - 2007-08 (RAKUB)

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4.00 MANAGEMENT

A seven-member Board of Directors is entrusted with the responsibility of policy formulation for attainment of growth in agriculture leading to economic development of the country through agricultural credit support. The government appoints all the directors of the board. An executive committee constituted of the Chairman and two other directors including the Managing Director is there for taking emergency decisions. The Managing Director is the chief executive of the bank.

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5.00 ORGANIZATIONAL STRUCTURE The Head Office of the bank is stationed at Rajshahi. The branch network comprises 364 branches including one in Dhaka. One General Manager's office at Rangpur and one at Rajshahi eighteen zonal offices stationed at district headquarters control branches under them. There are 18 independent regional audit offices under direct control of the head office for conducting regular audit in branches as well as in zonal offices. The bank has a training institute at Rajshahi. Out of total workforce of 3,448 officers counted 1,419 and other staff 2,029 as on 30 June 2008 against approved strength of 4236 including 2110 officers and 2126 others staff.

MD’S Vigilance Cell

Public Relation Cell

MD’S Secretariat

Board of Directors

Managing Director

Board Secretariat

Administration

Division

Operation Division

Audit, Accounts &

Recovery Division

Divisional Office Rangpur

General Manager Office Personal Department HRD Dept. Common Service Dept Computer Department Training Institute

DMD’s Secretariat Loan & Advance-1 Loan & Advance-2 Research & Development Dept. ID Cell Branch Control Dept Budget& Expenditure Control Engineering, Procurement & Maintenance Dept. LPO Rajshahi Dhaka Branch ZM Office Rajshahi ZM Office Naogaon ZM Office Chapai ZM Office Natore ZM Office Pabna ZM Office Sirajganj

GM’s Office Central Accounts-1 Central Accounts-2 Recovery-1 Recovery-2 Law Department Audit & Inspection Dept

ZAO Rajshahi

ZAO Naogaon

ZAO Chapai ZAO Natore ZAO Pabna

ZM Office Bogra (N) ZM Office Bogra (S) ZM Office Joypurhat ZM Office Rangpur ZM Office Gaibandha ZM Office Nilphamary ZM Office Kurigram ZM Office Lalmonirhat ZM Office Dinajpur

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6.00 NATIONAL ECONOMIC TREND1

6.1 The world economy that registered an unprecedented average growth of 5.0 percent a year for consecutive four years entered a major down turn in the face of the most severe shock in mature financial makes since 1930s. The major advanced economics were already in recession while a number of emerging and developing countries were under inflationary pressure. The downturn in advanced economics were triggered by collapse of the US sub prime mortgage following major corrections in housing markets is US and a number of advanced economics. Advanced economics were protected to grow by 1.5% percent while the emerging market and developing countries were projected to grow at 6.9 percent in 2008.

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6.2 During FY08, the Bangladesh economy showed signs of resilience by maintaining a satisfactory growth momentum in the face of repeated floods and cyclone sidr, and spike prices of oil, rice and most commodities in the global market. The Government and Bangladesh Bank continued to adopt policies in bringing the economy back in its growth momentum. The Governments growth stimulating and poverty reduction programmes coupled with prudent monetary policies of B.B contributed toward a strong real growth of 6.2 percent in FY08, slightly lower than 6.4 percent of FY07. Economic growth was also aided by rapid growth in exports and surging remittances. Inflation was on uptrend during FY08 due mainly to rising import prices of fuel oil, food grains and some other essentials in the international markets; and lower growth of crop production. The annual average inflation increased to 9.9 percent in June 2008 from 7.2 percent in June 2007.

*!�f����'���������J������������5�J�����������1 Source: Bangladesh Bank, Annual Report 2006-2007

Page 4: Annual Report - 2007-08 (RAKUB)

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6.3 The 6.2 percent real GDP growth in FY08 was under pinned on the supply side, by a moderate growth in agriculture sector and continued strong growth with industry sector and in the services sector. Growth rate in the agriculture sector achieved a moderate growth of 3.6 percent in FY08 following two consecutive floods, cyclone sidr and an wide spread out break of the avian the in the country, resulting mainly from a lower growth in animal farming, and crops and horticulture sub-sector. Forest and related services sub-sector attained a slightly higher rate of growth in FY08. The industry sector attained a growth of 6.9 percent in FY08, which was lower than 8.4 percent in FY08. The growth was supported by sustained growth in export oriented manufacturing activity an expansion in domestic demand. Overall services sector grew by 6.7 percent in FY08, slightly dower than 6.9 percent of FY07.

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6.4 The agriculture sector achieved a moderate growth of 3.6 percent in FY08 against 4.6 percent of FY07. The deceleration in this sector was mainly due to lower growth in crops and horticulture sub-sector and animal tarming sub-sector. Overall output of food grains increased by 6.4 percent from 28.0 million metrictons in FY07 to 29.8 million metrictons in FY08 mainly due to higher Boro production. Aus output remained at the previous year’s level. Aman output decreased due to severe damage caused by two rounds of flood and devastating cyclone sidr. Wheat and maize production increased significantly

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6.5 Agriculture and rural finance programme

seemed to have boosted up as the private

commercial banks began to participate along

with State-owned commercial banks. The private

and foreign banks also came forward in

distributing agricultural credit in collaboration

Page 5: Annual Report - 2007-08 (RAKUB)

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with NGOs. SCBs and specialized banks still

played dominant role for the growth of

agriculture and rural economy with disbursement

of Tk. 61.67 billion.

The actual disbursement of TK. 61.67 billion in FY08 against target of 69.78 billion was 16.51 percent higher than 52.93 billion of FY07. Two specialized banks Viz BKB and RAKUB, four SCBs and BRDB although played key role in disbursement of agricultural and rural finance, the contribution of foreign and private commercial banks was also remarkable.

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6.6 Recovery of agricultural credit during FY08 decreased by 6.44 percent to Tk. 43.75 billion from the recovery made in FY07 mainly due to consecutive floods and cyclone sids causing huge damage to agriculture throughout the major part of the year. The incentive measures introduced previously for recovery of stuck-up loans also continued in FY08.

>E�� ����!�� ���'��������� .������ 0�L��� ���-�%�0L��M�� ���8�� 3=��E3� �-�'��� -����� a'��� �����=�RE����-�'���a'���� �������D��M��.����w������-Q�<��-�Q�������-�%��M'�>�R=��-�'���-�����a'��D�

6.7 Inward remittances from Bangladesh nationals working abroad increased by 32.4 percent to USD. 7914.80 million during FY08 from 5978.50 million in FY07. Total foreign exchange reserves stood at USD 6149 million as at the end of June 2008.

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Performance of RAKUB: 2007-08 7.00 RAKUB’S Work Strategy: The bank introduced a five year reform program for 1999-2004 and long term respective plan for 2001-2010, with the aim of offsetting large amount of accumulated loss of the bank by practicing progressive and profit oriented banking business and earning real profit in the culminating year. These programs included strategy and policy for prudent utilization of bank’s existing workforce and also left scope for formulation and incorporation of pragmatic and dynamic mechanism as and when required for commendable credit management and maximizing profit. Measures like MBO (Management by Objectives) and PARL (Participation of all in recovery of total loans) were on effect for stimulating activities and augmenting over all operation at field level as well and in the controlling officess. Bank’s attention and activities were concentrated on

Page 6: Annual Report - 2007-08 (RAKUB)

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important aspects like reducing rate of classified loan and raising rate of unclassified loan for increased performing asset of the bank, enhancement of commercial banking activities, expansion of branches network, raising skill and efficiency of the bank employees, efficient fund management and effective utilization of bank’s assets. In order to counter balancing shortfall in annual income emanating from reduced rate of interest on loans the bank set harmonized yearly target of loan disbursement and recovery and paid special attention to increased deposit collection for maintaining liquidity of fund. The bank could uphold expected momentum in disbursement and recovery of loan and also succeeded in substantial recovery of classified loan during the year under report. Table 1: Position of outstanding loan, classified loan and recovery of classified loan. Tk million

FY Outstanding loan

Classified Loan

Percentage Of

CL

Recovery of CL

1999-00 12135.33 7760.51 64 1071.48 2000-01 12944.20 7849.72 61 858.26 2001-02 14062.10 7614.80 54 1001.70 2002-03 15677.06 7465.03 48 1070.80 2003-04 17410.00 7302.00 42 1150.00 2004-05 20398.00 6425.00 31 1107.10 2005-06 23509.89 6716.25 28 1171.00 2006-07 24470.09 8063.60 33 1780.40 2007-08 25578.00 9334.10 36 1612.60

(*Excluding Staff Loan) �����!"�����"����� �����������0L��M�������E����-�'���5���+%�����%�'( �-�n��� ������������%��+�%�����-����M'�

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8.00 Loan Disbursement

8.1 Against the lending target of Tk. 8000.00 million for financial year 2007-2008 the bank disbursed Tk. 7650.30 million (96 percent of the target) among 229341 borrowers. With the rapid growth of population in the country agricultural land is decreasing day by day. In this context the bank formulated suitable lending policy and laid out necessary credit norms to facilitate effective credit supply on area approach basis and emphasised financing in local potential sectors and also provided credit facility as forward linkage and backward linkage in this sectors to ensure enhanced production. Local credit needs, economically viable sectors of finance and credit policy of the government were better considered towards fulfilling yearly disbursement target of Tk. 8000 million in the under mentioned main sectors of lending.

Page 7: Annual Report - 2007-08 (RAKUB)

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Table 2: Comparative position of sub-sector wise loan disbursement during financial year 2006-07 and 2007-08.

Tk million 2006-2007 Sub-sector

Target Achieve ment

Borrowers

Target Achieve ment

Borrowers

Crops 4262.50 3565.10 147477 4000 3390.00

143569

Fishery 69.00 50.20 286 80 45.00 341 Livestock 451.50 377.80 11643 450 507.00 13147 Farm machinery

118.00 56.40 306 100 92.00 551

Agro-based industries

400.00 268.34 765 250 342.00 188

Cash Credit

1680.00 1747.50 8604 2250 1796.00 8761

Poverty Alleviation

177.50 155.60 15967 270 152.00 16751

Others 841.50 1429.36 44293 600 1047.00 40923 Total 8000.00 7650.30 229341 8000 7371.00 224231

(Tk in million)

46%

1%5%1%4%

22%

2%

19%

Crop

Fishery

Livestock

Farmmachinery

Agro basedindustriesCash Credit

ProvretyAlleviation

Others

Page 8: Annual Report - 2007-08 (RAKUB)

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8.2 Recently Introduced Loan and Deposit Programs: During financial year 2007-2008 the bank introduced the following sub-sectors entitled ‘new products’ for providing necessary credit support. (a) Revolving crop credit program: with a view to strengthening and augmenting RAKUB’S usual crop-loan disbursement program the bank introduced revolving crop credit programme. Primarily this programme was introduced in the districts of Rajshahi, Naogoan, Borga, Pabna, and Dinajpur. Later on it was extended in the remaining districts of Rajshahi division. Credit norms of Bangladesh Bank are followed while sanctioning loans for cultivation in 2.5 acres of land.

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(b) RAKUB Fish-village for intensive fish Production: In the fish cultivation rules of the government cultivation of fish is given prime importance. Aim of the programme is to raise production of fish, achieve economic development and generate employment by producing fish by using modern and scientific technics (in the small ponds and water reservoirs). A fish-village to be established taking together 8 to 10 small ponds or water reservoirs owned by different persons but of the same locality. Six models, namely (1) cultivation of Pangus (2) Pangus and Carp-type fish (3) Carp-type fish (4) Mono-sex Tilapia fish (5) Thai-kai cultivation (6) Cultivation of Pangus and carp-fish in nursery ponds has been set up for cultivation of fish under thorough supervision, experiment and observation of the farmers with consultation and guidance of the fish research institute.

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(c) Financing small and medium enterprises: Rajshahi Krishi Unnayan Bank extends financial assistance for establishing small and medium enterprises since it started functioning. As per government rules of industrialization RAKUB has started financing small and medium enterprises following all rules and regulations in this regard. Objectives of financing SME’s are (i) Treating SME’s as tools of raising economic production and sector for poverty alleviation and extend sufficient financial assistance without hesitation (ii) Help-build promising, eligible and

Page 9: Annual Report - 2007-08 (RAKUB)

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dynamic SME’s entrepreneurs through necessary credit support (iii) Ensure extended scope of employment generation (iv) Extending credit be treated as relationship Banking to generate speed in disbursement and repayment of credits (v) Service asset be treated as substitute of venture capital and find out technics of financing new and dynamic entrepreneurs.

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(d) Cash Credit loan in High-breed Nursery: Nursery plays important role in producing forest and fruit plants. Keeping this in view many nursery were established in the country. As per demand of time production of high-breed plants by using developed technics has surpassed importance of plant production through days old bed-system plantation procedure. Though commercial cultivation of high-breed mango and jujube started in different parts of Rajshahi division production of high-breed plants has not yet started for establishing high-breed plant nursery. The objective of the program is to establish nursery for production of hish-breed amropaly, mallika, vastara, chosa, seedless mango and also bao-kul, apple-kul and narikel-kul plants.

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(e) Special Credit program for government primary school Teachers: Teachers of the schools lead their lively hood with limited source income. Most of them render service but reside at their own native homes or in the same locality. So they can engage themselves in some other income generating activities easily. They need financial support for such activities and also in educating their children. In this context RAKUB introduced the above credit program for primary school teachers who draw their salary through bank accounts with RAKUB. Under the program bank finances for purposes like maintaining kitchen-garden, milch cow rearing, beef fattening, poultry and duckery maintenance, fishy culture, establishment of nursery, small business related to computer, business related to phone-fax, sewing machine, marketing of agro-product, solar-power plant, bio-gas plant, education and higher education of children etc. Solar-power plant and bio-gas plant are preferred sectors.

Page 10: Annual Report - 2007-08 (RAKUB)

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��=���.'0�!"����(*�+���.>? �!"���� �#Consumer Credit Scheme) ������������!����J�1?���Y���!��6�0 �@��1?���Y���!������)����A�q����� !��-�� 0����� 12���� -����� 6� -�A��� �%�����������7��� .�� ���%��� A������ �$�%� 6� ����7�n��� -��� ������� '�( �� ������� !�- ��J� w��Q���� !�X�-���� 6�0 �!����n�S ��������+%�!Q��@��������0���������/�MD�+%�!�-���������!�- ��������4E���'( �5��J�w��Q����!�X�-����6�0 �!����n�S ���������E���'( �5����7�U9D�+%�!Q������������������ D����-�%�������������/�����12�� %�+%�-XQ������7��R��M��.-�����-��!���19���������@.7� �D�����������0L��M���0 ��'�A��/��������%��+�%�����-�%�=4E4���-�'��� 5��D� +%� ������� !�/��� ��4�� ��D� .�'�� �7�������>�5� ��/��� -�@��-� .��m �� +%� ����%� ��� ��}MD� 4���>�����������/������+�%�����-�%����E�3��-�'���5��D������2 345�+0 �6�2 345����+�+0����. �!"���4���H N�.�'���.� e�Q�'����A�����A����.�����6����A7����7�S -�k�[� ��� �� �� A��� �M�� �$���� 8��� ����� !$A��' �� .L�� 8_��7�S �-��!��L�!":Im �����MD���������'�����A��.���a���!��L�1?�( ���� Aq�m ���'�A�� .���a����FY��@���� ( q�<�A�� A������� -��p�+%�����%���MD�4���>�����������/��12�����E�4��-�'���5��D��!"�����A��+�%��8�������.S �a5��-�!�������������-�����RL���M���������+�%�����-���R3J4RR{�� �5�������>�J���{��5���� ������������MD�.���������0�Q�-����.7� ��+�%�� ���-�%� �e�N���� �J3�J���{�� 5��D� 8M�N��

�Development of Small Holding Tea Cultivation in Northern Bangladesh”���������-�������A��( q�<�A����6�( q�<����� A�� A��� ���O�� 8'��� !"��!����� ��� \�q� e�6� 6�'�'-�����5�.�'���A��+%�����%�-�!$A�� ��%��������MD����$@� ��A/�4�����(*�+������ ��8�a�!b�� Aq�m �T� A������� -�@��-� ���� 0 �'Q� *��������O����+%�������0������.��/�MD������8��=�5�.�������>�5���/���-�@��-�8_�+%�����%������D�!Q����������������� D������6���8�a�!�.7KL�����8_�+%�-�!$�A���19�������D� ��8�a�!� ���������� *����� ��%� .7-�f� ���0�'QJ�

8.3 Special Credit Programs

Consumers' Credit Scheme The bank coined a new credit scheme entitled “Consumers Credit Scheme” for the fixed income target group permanent staff of government agencies, autonomous bodies and semi-government organizations. The aim of the scheme is to empower them to purchase means of transportation, electronic gadgets and furniture etc. for improvement their of living standards. Maximum credit limit under the scheme has been fixed at Tk 300 thousand for vehicles, 100 thousand for electronic gadgets and furniture. Rate of interest under the scheme is 12 percent per annum. Branch managers are delegated with the business power to sanction the loans irrespective of amount. The loans are repayable in equal monthly installments in four years. Tk 91.52 million has been disbursed among 1249 borrowers up to 30-06-2007. During 2006-2007 sixteen district level branches disbursed loan under the Credit Scheme. Credit for Small Holding Tea Plantation Tea plantation in Tetulia under Panchagarh district began just 4 years back. RAKUB has been with the program since then. During fiscal 2007-2008 the bank reargued percale credit norms from TK. 48344.00 to TK. 62728.00 and approved TK. 1,50,000 per hectare to disbursed in four years. Besides, the bank under took a plan to expand area of tea cultivation by including the districts of thakurgaon and Lalmonirhat for financing in tea cultivates under the programme “Development os small holding tea cultivation in Northern Bangladesh” Potato Seeds Production The bank has been financing under the joint credit program to Contract Growers of BADC for potato seeds production. Sixteen branches of the bank spread over nine zones disburse credit at 8 percent interest per annum under the program. BADC supplies

Page 11: Annual Report - 2007-08 (RAKUB)

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��!����� !��J� �5���� !������ 6� ���������� !"��!��%�!��7�� ��� ���������8��� ����� Aq�m �T� A������� !���������!���g��+%���������D���8�a�!�Aq�m �T�A������� *���������0�'Q� !� ��� ��D� +%� ����%� ���� +%� 0 ����� �7�U9� ���!�12�� .7KL����� ��� ��D� 0 ��'�A�� 0L�� �M��� RR>� ��� +%� ��������=E4>��-�'���5���+%��������������MD�������4� ���� ��B�0�")�A/�4��z��0 �-����� ��O� ��� �%�� .7-�� ������� @����� a�'J� w�'���J�-!'������� h!'J� �Q��!�� �=�5� 0 �-����� ������ 0��A�'��0L����h!'� *������������0�@�^�[�Y����������8_�!'�/���� *������I�T���� %�� *!��������� �'�( ��+�%��!Q���� ���� -�n� �~ � � ��@���%� ��� ����MD� ����� 6� ���!"��!��%�0�@�Z����.7KL� ����� �!'�0�-�������O�h!'� *������ ����� *!����� ���� ����� �7�S -� ���� �������MD��

inputs like seeds, fertilizer, and pesticide to the farmers and provides extension services. RAKUB, on the other hand, provides crop hypothecation credit at moderate terms. Harvest is collected from the farmers by BADC as potato seeds and helps recover bank loans. An amount of Tk 19.36 million was disbursed among 446 borrowers during the year under report. The Production of import substitutes: The bank finances at the rate of two percent per annum for production for import substitutes. 19-agri-crops like various type of pulses, oil seeds, maize etc. and farmers are being inspired for cultivating such import substitute agri-crops under joint collaboration of agriculture extension and RAKUB.

��C�4��45���.�+�����(*�+������ .����� F�� ��G-�H�'�� ����<� ��� ��)�� �����<��$������� '�( �� ����)�' �� ���_� �>�5� .�'��� 0H'���F������<� ���-�A�� -$'� ( q�<� +%� -�!$�A� ���A�'��� ��MD���������� !����� ����-�'�� 0�Q7���� ����<� 6� .���� �� �%��0 ���@�� -�!�12��� !I�;�� �,���� 1?O� !-���� ���� ���m {�'��7�������-����������6�8�'���������0L��( q�<�+%���!���������� ��MD� A'��� 0L��M��� �$�-���� 6� ����U9� A�������0 ����������'�����'�( ��8/����+%�����%��7�S -�0��������/�� ��� ����.!�( �n��� ���M���� 0�����h'�h�'�����F���8��� 0����� 0 � ��� 7�A�_� !����( � �Q%f0L����� ����A���� �����'����D�

8.4 Poverty Alleviation Credit Programs The bank has been disbursing micro-credit for poverty alleviation in the 16 northwestern districts since inception. Besides, the bank finances short-term collateral-free credit under selected individual or group-based programs for income generating activities among poor and unemployed youths in compliance with government policy.

Page 12: Annual Report - 2007-08 (RAKUB)

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The bank financed Tk 155.60 million against Tk 270.00 million annual disbursement target poverty alleviation credit programs during the year under report. Following are the bank’s poverty alleviation credit programs: 1) RAKUB Self-help Credit Program (RSCP) RSCP is RAKUB's own group-based credit program introduced in 1994 in all the districts of Rajshahi division except Kurigram. The bank provides collateral-free small loans to poor and unemployed persons for income generating activities under the program through 129 branches. Rate of interest under the scheme is 12 percent per annum. Outstanding loan under the project amounted to Tk 153.46 million on 30-06-2008.

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2) Marginal & Small Farm System Crop Intensification Project (MSFSCIP Kurigram) The project meant for Kurigram district aims at increasing productivity in farm as well as off-farm activities, helping target group people achieve sustainable development, resist the increasing trend of losing land under cultivation and attain self-dependence. MSFSCIP, the ministry of agriculture assisted project, was originally funded by IFAD and technically supported by German agency GTZ. Rate of interest under the scheme is 12 percent per annum. Outstanding loan as on 30-06-2008 amounted to 98.19 million taka.

#=&�HI���>���!"����(*�+��=���!�'������������������ ��=�5�.�'������5���/���-�@��-� ����5� _ ������ ����� 1?������� +%� �7�S -����A��'�� ��}MD� 8� -�!$�A�� 0 �6���� ��F���� 6� !--����Q�[��0L���-��'��!�!�����������'� \���������%�����S ���%J� ����������J�-*!��A���6� ������k���'��!�� ������� 0 ���@��-$'� -���P�� ���� !����@��3���E���5����7�U9�� �-����������+%������������D�!Q���� ���� ����� ��� �� D� 4���>������ �����/� +%��12����=3E>���-�'���5��D�

3) Swanirvar Credit Program The bank has been implementing RAKUB-Swanirvar joint credit program since 1988 through its 77 branches in nine districts. The program finances Tk15,000 collateral-free credit per group of poor borrowers at 10 percent, per annum in such income generating activities as food processing, tree-farming, fishery and livestock farming. Outstanding loan as on 30-06-2008 amounted to Tk 295.62 million.

Page 13: Annual Report - 2007-08 (RAKUB)

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4) Shogorip (Food grain go-down credit program)

RAKUB has been implementing the program under Swiss government assistance since 1988 as support to the sharecroppers and marginal and small farmers opportune, so that they can sell their produces at favorable price. Seventeen warehouses are managed in 10 districts under the program. Rate of interest under the program is 11 percent. Outstanding loan as on 30-06-2008 amounted to 15.82 million taka.

#;&�K�$�A/�4���L�-����)���.'0�!"����(*�+��M� '� *����� �I�T�� -�@��-� �����<� ���-�A���� '�( ��0�@�����N��T�����M� '���'��/�-���12�����������+%�-�!$A�������!��'�k�[���D�8�����A����M��.-�������������� �!Q���8�+%������������D�����������0L��M��� 0��'�A�� /���� �>��� ��� !Q��@���� ��� -��p�����%��+�%�����-�%��>E4>��-�'���5��D�4���>������ �����/� ����� +�%�� ���-�%� ��E�3� �-�'���5��D�

5) Semi-intensive Goat-rearing Program The bank introduced the special credit program of semi-intensive goat rearing for poverty alleviation in 2002. The program extends collateral-free credit up to Tk15,000 for one to four years' term at eight percent per annum. The bank disbursed Tk 16.36 million under the program during fiscal 2007-2008.

Page 14: Annual Report - 2007-08 (RAKUB)

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.����� 1?O� ���( �� .���� ��� �)��� -�!�12��� !I�;J�!������ �I( � .����� -�!$�A� ��19����� 8��� 0��Q����� 6�_ ������A�*!����!��������%�������F���h'�J�����6��.���� �M� �MN�J� 0��a� ��!����� 6� ���S ��� ���%� ��O�12������ ���� +%� �������� -�!$�A� I���� ��D� ����� ���� �����!Q�����!������������i���������J����5���8���8�������3RJ����5����7�U9�+%������������D�����������0L��M��������� ����m ���RE����-�'���5���+%������� ��� ����MD� 4���>������ �����/� ����� +�%�����-�%�>E�>��-�'���5��D�

6) Medicinal Plants /Orchids Nursery Rajshahi Krishi Unnayan Bank launched a credit program for entrepreneurs of traditional Ayurvedic and Unani medicine nursery of medicinal plants, growing orchids and producing trees for fruits and timbers with a view to making tree plantation program of the government a success and creating self-employment opportunities for the less educated and unemployed youths. The bank provides credit of Tk 20,000 per bigha (0.33 acre) and Tk 54,000 per acre for nursery at eight percent interest per annum. An amount of Tk 4.02 million has been disbursed among 16 borrowers during the year under report.

#�&������O .4����)�!"�����"������<� ���-�A�J� 0 ���-�!�12��� !I�;� 6� 0�L��!�-���� ������ ����� �����g� %�� �e�!�-Q� �J� M� '���N�� 6��Q����� ���� ��'�J� �k� .-�5���� ��%J� .!'�_� .-���J�( q�<� ���!�� 6��": 5��� S ���� ����3�J���� 5��� �7�U9�!��������� �-���������+%����������L��D���������0L��M��� RR� ��� +%� ������� �ER4� �-�'��� 5��� +%������� ��� ����MD� � 4���>������ �����/� ����� +�%�����-�%�RE>���-�'���5��D�

7) Credit Program for the Disabled Persons RAKUB provides credit to the disabled persons for alleviation of poverty, creation of self-employment opportunities and development of socio-economic condition. The bank extends collateral-free credit up to Tk 50,000 for poultry, duckery, goatery, dairy, beef fattening, sewing machine, computer and small trading. An amount of Tk 0.43 million has been disbursed among 44 disabled persons during the year under report.

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8) Zero Poverty Loan Scheme The bank initiated a special group-based micro-credit program in 2005-2006 entitled "Zero-poverty Loan Scheme" for the extreme poverty stricken 35 upazilas of greater Rangpur district. The program implemented through 104 branches is expected to generate emply must land alleviatepoperty during “monga seasam”. Rate of interest is 6 percent. Outstanding loan as on 30-06-2008 amounted to Tk 65.64 million including Tk 29.90 million disbursed among 663 borrowers during 2007-2008.

��;��B�0�>�Q���' �.����� F����G-�H�'�� �����F� ��O� ������� ����0��\��-� �� 6� ��% �� !Q�7� � !Q��@�� !&�������� �,���� ����� 8/���� 0L����� -��P� ����'� ����!�A;� ����MD� !���� 8/����� ��� ^�[�Y� 0������ ��������F� ��O� !������ ����'� ������ ��MD� .!� ���%������ ���� � ����� e�A�-�'� *������� ���� !Q����A�� 8�0H�'� ������ �%�� !��( %� 6� ���S ������%� ��O�

8.5 Agro Based Industries: The bank undertook special scheme to intensify financial support for establishment and expansion of agro-based industries and exploiting infrastructural advantage and availability of huge raw materials of the north-west region of the country. The government also approves establishment of ago-based industries

Page 15: Annual Report - 2007-08 (RAKUB)

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and provides additional fund to banks and financial institutions. To best utilize the above opportunities the bank has taken pragmatic steps to enthuse potential entrepreneurs for establishing agro-based industries for preservation and processing of agricultural produces of this region of the country, famous for production of quality raw materials. The bank emphasises financing in small industries instead of a few large ones. Recently set three tier ‘credit committee’ at the head office, divisional office and zonal offices provide necessary support and advice to the intending entrepreneurs. An amount of Tk. 268.34 million was disbursed against target of Tk. 400.00 million for setting up different type of industries

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Table 3: Select Agro-based Industries financed by RAKUB during 2007-2008

Sl.No

Name of the project Purpose

1. Naboti Industries Natore

Production agri equipments

2. M/s Mallick Chaulkal, Naogaon

Production of rice

3. A.H.Z cold storage (pvt.) Ltd. Bogra

Preservation of potato

4. Homeland cold storage (pvt.) Ltd. Rangpur

Preservation of potato

5. Shapla cold storage (pvt) Ltd. Rangpur

Preservation of potato

8.6 Foreign Aided Projects

Small Enterprises Development Credit Project (SECP) Small Enterprises Development Credit Project (SECP) has been launched under Norwegian assistance to promote new small enterprises and streamline existing ones in fifty one upazilas of greater Rajshahi, Bogra and Pabna and Kurigram districts. The project, under active supervision of the ministry of finance, aims at disbursement of security free credit from Tk 25,000 to Tk75,000 during the project period of five years. The project expected to create 68,000 new jobs through entrepreneurship development and income generating activities. Twenty percent of total credit was earmarked for women entrepreneurs. Outstanding loan as on 30.6.08 was TK 136.35 million and borrowers counted 2854.

Page 16: Annual Report - 2007-08 (RAKUB)

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North West Crop Diversification Project (NCDP) The bank undertook a project named North-west Crop Diversification Project (NCDP) under financial assistance of Asian Development Bank. The project under implementation by the Department of Agricultural Extension (DAE) under the Ministry of Agriculture in sixty one upazilas of sixteen districts of Rajshahi division aims at production of high value crops by small and marginal farmers and expansion of agri-business. Four NGOs, BRAC, PROSHIKA, GKF & RDRS provide necessary support. Outstanding loan as on 30.06.2008 stood at TK. 22.99 million.

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8.7 Interest rate In line with government policy the bank lowered interest rate on loans and advances during the last year to smarten up credit flow in the agricultural sector. Interest rate on loans and advances remained within eight to twelve percent during the year. The bank charged six percent interest, for Zero Poverty Credit Program. To increase production of import substitutes, 19 crops like various type of pulses, spices, maize etc. the bank extends credit only at two percent interest rate.

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9.00 LOAN RECOVERY 9.1 The bank recovered Tk 8447.90 million during the year against target of Tk 8250.00 million hitting 102 percent.

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Work strategies followed during the year for recovery of outstanding loans were: setting specific zonal target for recovery of classified, WC, SME and over due loan and declassification of classified loan at the very outset of the fiscal year, evolving effective work plan to achieve 100% target by branches, updating borrowers list, issuing necessary notices, rescheduling of loan accounts to widen scope of interest income, ensure recovery from loan accounts rescheduled during the previous year, address cases with no repayment, keeping constant touch with top twenty defaulters of field workers, branch and zonal levels, write off target amount of loan accounts, disapprove interest remission proposals and entertain justified ones only to ensure

Page 17: Annual Report - 2007-08 (RAKUB)

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recovery of classified loan, ensure proper application of Arthareen adalat law, take initiatives for early disposal of certificate and arthareen cases in and outside the court and prevent loan cases from being time barred by law of limitations and follow procedure of monitoring daily performance, maintaining and observing weekly and monthly progress.

Recovery of Classified Loan

1

10

100

1000

10000

20002001

20022003

20042005

20062007

2008

Tk in milion

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9.3 Initiatives undertaken for recovery of

classified loan and profit earning of the bank: the

bank had to work out plans to buttress deficit of

interest income in the wake of lower interest rate.

Training courses were designed for managers,

other officers and field staff to impart guidelines

for enhancing interest income and profit earning

at branch level. Reen mela, recovery camps and

super camps were arranged to observe ‘shuvo

halkhata’ on bangla nababarsha, ‘modhumas’ in

jaistha and ‘nabannya’ in agrahayon where top

executives of the bank one members of mobile

team from the head office were present to

encourage the managers and field staff.

Borrower- friendly atmosphere of reenmela and

camps encourages customers to repay earlier

loan and enroll as fresh borrowers.

Page 18: Annual Report - 2007-08 (RAKUB)

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Table 4: Classified loan recovery position during 2007-2008

Tk million Item Number Amount Target of CL recovery - 2420.00 Achievement - 1612.60 • Target of closing CL account 65000 -

•Number of closed CL account 48958 - Recovery against closed accounts.

- 1079.20

Partly recovered cases, 42183 533.40

Table 5: Comparative position of classified and unclassified loan recovery

Tk million FY Recover

y Target Recovery

of CL Recovery of UC

loans

Total recovery

%

1998-99 4000 250.10 2305.44 2555.54 63 1999-00 3500 1071.48 2809.91 3881.39 110 2000-01 4200 858.26 3379.95 4238.21 99 2001-02 4700 1001.70 3735.00 4736.70 100 2002-03 5000 1070.80 4359.00 5429.80 108 2003-04 6000 1150.00 5110.20 6260.20 104 2004-05 7000 1107.10 5722.20 6829.30 98 2005-06 7500 1171.00 6299.00 7470.00 99 2006-07 8000 1780.40 6732.70 8513.10 106 2007-08 8250 1612.60 6835.30 8447.90 102

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10.00 DEPOSIT MOBILIZATION 10.1 Deposit is considered as the second important source for ready to invest fund, maintaining liquidity and strengthening financial condition of the bank. 364 branches including 304 in the rural areas are engaged for collecting deposit. Interest paid on deposit occupies largest part of the bank’s total expenditure. For curbing expenditure, besides collecting deposit for investment, the bank paid importance to collecting low cost deposit. Intensive tour of the field officers broaden scope of collecting deposit so provision of incentive was there for big deposit collecting employees. Rate of interest on deposit was within 3.50 percent to 8.75 percent during the year.

����� ����������0L���M���0�-����!� ���'( �-�n�� 10.2 The bank secured deposit of Tk 1454.48 million against annual target of Tk2500.00

Page 19: Annual Report - 2007-08 (RAKUB)

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million. Deposit as on 30.06.2008 amounted to Tk 13958.10 million and number of depositors reached 1217084.

Table 6:Deposit mix on 30 June 2008 Tk million

As on 30.06.2008 As on 30.06. 2007 Type of deposit

Number Amount Number

Amount Curren 28136 1360.97 28044 1256.36 Saving 887390 3000.73 882390 2645.99 Fixed 15280 5352.98 15052 4689.80 DPS 3050 169.93 3400 153.00 Other 283228 5527.97 277406 5212.95 Total 1217084 15412.58 1206292 13958.10

0

2000

4000

6000

8000

10000

12000

14000

16000

2000

2001

2002

2003

2004

2005

2006

2007

2008

Tk in million

Position of Deposit

Table 7: Year wise position of deposit Tk million Financia

l year Initial

balance Target Actual

achievement excluding interest

Balance at the end of the year

1998-99 3195.591100.00 173.60 3675.89 1999-00 3675.891100.00 1018.38 5051.94 2000-01 5051.941210.00 1182.74 6702.88 2001-02 6702.881400.00 1754.06 9052.10 2002-03 9052.101500.00 1289.77 10658.21 2003-04 10658.211700.00 162.10 10820.34 2004-05 10820.341500.00 756.60 11566.03 2005-06 11566.032650.00 1316.97 12883.00 2006-07 12883.002500.00 993.10 13598.10 2007-08 13958.102500.00 1454.48 15412.58

Page 20: Annual Report - 2007-08 (RAKUB)

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10.3 Some new deposit schemes like Rakub Grameen pension Scheme, Hajj Savings Scheme, Rural Pension Savings Scheme and Education Savings Scheme coined during 2005-2006 for extending service to the small depositors continued during the fiscal year 2007-2008 too. In addition, the bank introduced a new deposit scheme during year entitled RAKUB Sanchay Scheme (RSS) for all levels and low income members of the society. One can deposit TK. 300, 500, 1000, 2000, 3000, 4000 or 5000 per month for 7 (seven) years under the deposit scheme. Such small deposit schemes succeeded inviting attention of common people

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11.00 LONG TERM FUND MANAGEMENT As comprehensive refinance facilities from for investment in agriculture was not easily accessible the head office off the bank could not provide adequate fund to the field dies for investment. Zonal offices were advised to ensure recovery of loans and sufficient collect deposit for ready to invest fund. The bank repaid dues of Bangladesh Bank to the tune of TK. 1831.60 million and Bangladesh Krishi Bank TK. 82.02 million. Dues to these Banks stood at TK. 18511.99 million and TK. 82.02 million respectively 30.06.08. Borrowing through refinance window amounted to Tk 1989.91 million during the year

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Table 8: Position of loan disbursement, refinance drawn and repaid (1998-99 through 2007-08) Tk million

Financial year

Loan disbursed

Refinance drawn

Refinance repaid

1998-99 3166.10 1969.80 826.101999-00 3661.32 312.00 344.602000-01 4238.21 1.28 679.492001-02 4790.70 1751.88 862.392002-03 5744.34 2009.60 1653.402003-04 6767.30 2290.70 1596.002004-05 8696.80 3514.50 1681.002005-06 8879.00 2890.00 1109.00206-07 7371.00 924.10 1642.002007-08 7650.30 1989.91 1831.66

Page 21: Annual Report - 2007-08 (RAKUB)

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12.00 HRD PROGRAM 12.1 Effective human resource management and development is indispensable for success of any institution. The bank opened a separate Human Resource Development Department for accelerated human resource development planning of the bank. Human resource development planning of the bank was underpinned by • Enhancing self-motivation of the bank

employees • Creating congenial work atmosphere • Increasing professional skill through

effective training programs • Introducing need-based and updated

training. ���������( %�_��̀ �5 �5�!����6����'��������������Q��� ����� !��7����� 6� �������� ����� ���!��� 6� +%����12����� ���-�A��� 8��� ������� 0��U9��%� �7�S �-��!�� � !� ���$%�� ������ ����( %� ���O��� ��%� ��� ��D������������!���s;����I�T�8�������( �%������������'� ������'�( ��uu.�<_��;�-���.!�������A�'��������D�

12.2 Yearly training programs were tailored to cope with the objectives of successful implementation of the bank's programs and expansion of business as well as to familiarize the participants with new rules and regulations relating to banking business and credit management system introduced by Bangladesh bank and the government. Brain storming sessions were held for implementation of the techniques narrated in the training courses.

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Foundation Training, Computerized Branch banking, Law and Regulations in BanksJ� -*!��

A��J� ����� �kJ� �e�!-Q� �� 6� ��!����� /���� 0L����, Financing Small & Medium Enterprises, Credit Risk Managment, CIB, Lending Recovery & Deposit Collecting strategies in Banks, Branch Management Training, ���������!������8�����������������0���-�6�p eQ����������@�����( �����12����D��

12.3 During the year 692 officers and staff participated in 23 training courses and workshops held at the training institute on different professional fields like Asset & Liabilities Management, Foundation Training, Computerized Branch banking, Law and Regulations in Banks, Financing FisheryJ�Dairy, Poultry, Ducking & NurseryJ Financing Small & Medium Enterprises, Credit Risk Management, CIB, Lending Recovery & Deposit Collecting strategies in Banks, Branch Management Training, Accounting Procedure in Bank & Roles of audit in prevention of different irregularities and risks in banking sector.�

Page 22: Annual Report - 2007-08 (RAKUB)

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12.4 During the financial year 169 officers participated in training courses on different professional fields at the Bangladesh Institute of Bank Management (BIBM), Bangladesh Bank Training Academy (BBTA) swanirvar Bangladesh Dhaka, Shilpa Samparko sixaoton, Rajshahi and Bangladesh Tea Board Srimangal.

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12.5 Transparency in administration In order to increase quality of operational efficiency and affirm internal control MBO (management by objectives), a management tool for ensuring quantifiable and participative performance of the employees was followed meticulously both in the head office as well as at the field level.

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13.00 OFFICE AUTOMATION Computerized work atmosphere compoized of a server, necessary number of computers at all here departments under LAN(Local area network) connectivity is these at the head office of the bank. Dinsional and Zonal offices also posses of crop uterized work system with internet connectivity under the ministry of finance approved ICT plan 2006-2011 for introducing computerized branch banking in 364 branches computer based manpower are being recounted and the bank is also kin to impart computer literacy to us existing work forces of the bank. Computeriszed branch banking has been introduced Dhaka branches , LPO, Rajshahi, Rangpur, Bogra, Pabna and Dinajpur branch.

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14.00 BRANCH EXPANSION Number of branches of the bank as on 30 June 2008 was 364 including 304 branches in the rural areas.

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15.00 CERTIFICATE & ARTHA REEN CASES During the year 2306 certificate cases were disposed off effecting realisation of classified loans amounting to Tk 98.17 million. An amount of Tk 772.15 million was involved against 17663 unsettled certificate cases as on 30 June 2008. During the same period 875 Artha Reen cases were settled against which an amount of Tk 222.70 million was realised. Pending 4595 Artha Reen cases involved Tk. 1214.83 million as on 30 June 2008.

Page 23: Annual Report - 2007-08 (RAKUB)

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16.00 AUDIT & INSPECTION Internal audit and inspection plays an important role in ensuring transparency and affirming accountability of the bank's accounting system. Besides, bank’s own procedures there are commercial audit, Bangladesh Bank Inspection and external audit for detecting and checking repetition of irregularities, frauds and forgeries, if any, in different levels. Table 9: Position of audit objections

Number of objections Raised Settled

FY

Internal audit

Commercial audit

BB inspectio

n

Total

2000-01 93335 11537 14747 119619 17428 2001-02 100615 11113 18693 130421 35114 2002-03 94471 13236 17185 114892 53415 2003-04 70374 1288 7038 78700 28001 2004-05 59680 1095 5083 65858 31889 2005-06 43522 1123 3976 48621 19344 2006-07 35865 1536 1611 39012 8200 2007-08 15009 145 1670 16824 13271 The government appointed M/s Kazi Zohir Khan & Company Chartered Accountants and M/s Saha Mojumder Rahman & Company, Chartered Accountants for conducting audit for the financial year 2007-2008. The audit report submitted by them was sent to the ministry of finance on 27.04.2008 after approval of the Board of Directors.

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17.00 THE BOARD OF DIRECTORS' MEETINGS 170 memoranda were presented before the board of directors in 12 meetings held during the year. The board gave decisions on 170 and all 170 decisions have already been implemented during the year.

Page 24: Annual Report - 2007-08 (RAKUB)

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18.00 PROFIT & LOSS Total income during the year was Tk 1975.00 million and expenditure Tk 2616.00 million resulting in net loss of Tk 641.00 million. Accumulated loss at the year ending amounted to Tk 3274.78 million.

Table 10: Position of income and expenditure

Tk. million Heads of Income/ Expenditure

2007-2008 2006-2007

Income 1975.00 1940.00 Income from loans & advances

1875.00 1831.00

Other Income 100.00 109.00 Expenditure 2616.00 2356.00 Revenue expenditure

1145.00 1016.00

Financial expenditure

1471.00 1340.00

Table 11: Income-expenditure and profit & loss Tk. million

FY Income Expenditure Profit/ (Loss)

Accumulated loss

1998-99 655.26 1272.53 (617.27) 3071.10a 1999-00 1199.03 1177.68 21.35 1780.60b 2000-01 1134.37 1110.45 23.92 1756.68 2001-02 1462.65 1309.30 153.35 1603.33 2002-03 1650.10 1535.35 114.75 1488.58 2003-04 1756.16 1707.90 48.26 1440.30 2004-05 1602.97 1969.36 (366.39) 1806.69 2005-06 1735.69 2157.20 (421.51) 2228.20 2006-07 1940.00 2356.00 (416.00) 2644.20 2007-08 1975.00 2615.00 (641.00) 3284.78

Page 25: Annual Report - 2007-08 (RAKUB)

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a) It was decided that for agricultural loans up to Tk 0.30 million principal and equal amount of interest would be realized and rest interest would be waived. Accordingly Tk 976.60 million of provision and accumulated loss was reversed. b)Tk 1,269.10 million ,interest remitted on dues

to BKB adjusted against the accumulated loss. c) An amount of Tk 457,400,000 was received as subsside against reduction of rate of interest during 2003-2004 & 2004-2005.

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100

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Tk in million

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Page 26: Annual Report - 2007-08 (RAKUB)

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Table 12: Summary of approved budget for 2007-2008 financial year. Tk. million

SL No

Item Approval Budget of financial year 2007-08

Actual Expense of 2007-08 financial year

01. Revenue Income 2576.00 1974.72 02. Revenue Expenditure a) Administrative

Expenditure 770.80 660.80

b) Operational Expenditure 117.90 92.76 c) Others Expenditure 1490.50 1478.72 d) Incidental Expenditure 163.34 383.30 Total : (a+b+c+d) 2542.54 2615.58 03. Profit/Loss 32.26 (640.86) 04. Capital earned 13650.00 12158.38 05. Capital expense 11278.80 9938.60 06. Total (Revenue & Capital)

Income 16225.80 14133.10

07. Total (Revenue & Capital) expense

13820.80 12554.18

19..00 RAKUB’S PERSPECTIVE PLAN: 2001-2010 The bank, at the very outset of the fiscal, set annual loan disbursement, loan recovery and deposit collection target, along with detailed instruction and guidelines to reduce rate of classified loan, emphasise disbursement of small and medium size loan instead of big size term loan, to collect low cost deposit and to ensure profit making by improved commercial banking activities. On the back drop of negative impact upon over all income and profit earning of the bank due to reduced interest rates on investment and payment of larger amount of interest on deposit on the contrary, the bank took precautionary, measures for counterbalancing the shortfall by enhancement of disbursement of new loan, rescheduling of classified loan, enhancement of credit flow in more profitable sectors, refixing interest rate of investment by analysing cost of land and cost of lending, and paying kin attention to five risk factors identified in the banking sectors. Inspite of all such initiatives the bank could not achieve expected success. Repeated occurrence of flood, devastating natural calamities, continued socio-economic unrest in the country, scarcity in

Page 27: Annual Report - 2007-08 (RAKUB)

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timely supply of adequate agricultural inputs like quality seeds, fertilizer and diesel fuel and electricity for irrigation, and other disadvantageous environment largely damaged agricultural production causing in-capability the borrowers to repay bank’s dues and above all abnormal rise in field worker-borrower ratio (1:350 to 1:632) due to workforce shortage of the bank affecting close credit supervision impeded expected operational activities and profit making. In addition want of efforts to settle court cases out-side the court, social resistance to initiate legal action against defaulters, dependence upon high cost deposit to meet credit demand due to inadequate refinance support thwarted net profit earning of the bank. After threadbare analysis of all such problems the bank management has thrown a “Longer term management plan; 2008 to 2013” containing strategic guidelines and work plan, meant to be followed at all levels of bank management. The management specially focused on improvement of loan disbursement, loan recovery and deposit plan collection activities, expansion of foreign exchange business, fulfillment workforce shortage, branch computerization and monitoring yearly profit-loss and looks forward for effective and improved business performances to attain desired height of dynamic and profit oriented banking business to off set total out-standing loss and earn real profit in the culminating year.