Generally all facilities, except term loans are repayable on demand. Cash Credit /Overdrafts are reviewed annually or at regular intervals in case a closer monitoring of the accounts is necessary. Contingent liabilities are also self-liquidating in a broader sense. The credit worthiness of the client on whose behalf the liability is assured is very important. The different account heads appearing in the Statement of Affairs of the branch, DBBL are categorized as following:
1. Short-term agriculture and Micro credit: Short- term agriculture loan include the short- term credit mentioned in the circular issued by Agriculture Credit Department of Bangladesh Bank under annual credit program. Loan disbursed in agro-sector repayable within 12 months will also be treated under this head. Short-term small loan means loan up to Tk. 10000 and micro credit repayable within 12 months. Basis for loan classification for the Short- term agriculture loan includes: a.
If the advances remain irregular for 12 months the amount is treated as sub-
standard. b.
If the advances remain irregular for 36 months the amount is treated as
doubtful. c.
If the advances remain irregular for 60 months the amount is treated as
bad/loss
ii.
Continuing Advances:
The loan which is transacted without specific repayment schedule but there is an expiry date and credit limit is called continuous loan, such as C.C/O.D. A continuous loan will be treated as irregular or overdue if the advance has not been renewed, that is expiration date is passed. If the loans become irregular for 3 months or more but less than 6 months, the loan will be treated as sub standard. If the loan becomes irregular for 6 months or more but less than 12 months, the loan will be treated as doubtful. If the loan becomes irregular for 12inonths or above, the loan will be treated as bad loan. The loan which is payable after demand of bank is called demand loan. Moreover, if any contingent on other liabilities that is turned into forced loan (not sanction as regular loan earlier) is to be treated as demand loan. For example, Forced LIM (loan against imported merchandise), PAD (payment against document) etc. A demand loan will be treated as substandard, doubtful, bad loan for the period of 3 months or more but less than 6 months, 6 months or more but less than 12 months, 12months or above respectively