Question No 02 (4+4=8)

a. Examine the intention and ability to repay the loan- Explain the statement.

b. Describe the contributing variables of the business which usually gets loan from the banks?

HAR FL Question No 01 (4+5+4=12) The management of both State-Owned Commercial Banks (SCBS) and Private Commercial Banks (PCBs) are highly controlled by the bank's owners. Accept foreign banks, 82 percent CEOs of both kinds are held responsible to their respective boards. The job contracts of CEOs of PCBs are directly linked to their performances whereas, CEOs of SCBS are appointed by the office of ministry of finance and therefore, instead of performance. loyalty is more crucial there. The executives of PCBs are more qualified than those of SCBs. In the year of 1972 to 1980, the SCBS disbursed a colossal amount of loan to such loss making public enterprises and projects which, not only addresses the excessive political allegiance but also, conveys the negligence of the feasible sector selection principle of credit management. After the liberation war in 1971, SCBS were involved in many subsidized social development projects such as: poverty alleviation, free female education and many other alike, which naturally did not have any commercial purposes at all. And investing in such unproductive non-commercial project can never be an ideal credit policy for a commercial bank. Those distributed loan has turned into a sizeable amount of bad loan by the lapse of time. Furthermore, the large amount of non-performing loan of SCBs shows the weaknesses in their collateral management. a. What are the challenges that create problem loans for state owned banks in Bangladesh according to the passage? b. What can be the steps that are used by the banks itself to overcome these problem loans? c. Before giving loans, what are the factors that should be considered by the banks? Question No 02 (4