A Study of Mercantile Bank

Chapter-1
Introduction

Chapter-2

Overview of
Mercantile Bank Limited

Chapter- 3

Service & Customers
Feedback

Chapter- 4

Analysis & Discussion

Chapter-5

Recommendations
&
Conclusion

Customer Evaluation of Banking Service Quality:
A Study of Mercantile Bank, Dhanmondi Branch

Zenith Alam Prity

Report Submitted To

The School of Business & Economics
United International University
In Fulfillment of Requirement for the Degree of
Bachelor of Business Administration

Customer Evaluation of Banking Service Quality: A Study of
Mercantile Bank, Dhanmondi Branch

By
Zenith Alam Prity
ID: 111091044
BBA Program
Major In Marketing
School of Business & Economics

Supervised By
Kawsar Ahmmed, Phd
Assistant Professor in Marketing

Submission Date: June, 2014

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LETTER OF TRANSMITTAL

Date: 14.06.2014

Kawsar Ahmmed, Phd

Subject: Submission of internship report on Customer Evaluation of Banking
Service quality: A study Of Mercantile Bank, Dhanmondi Branch.

Dear Sir,
Here is my internship report on Customer Evaluation of Banking Service quality:
A study Of Mercantile Bank, Dhanmondi Branch. I tried my best to follow the
instructions that you have given me. This report is prepared for the fulfillment the
requirement of the BBA Program.
The entire report is based on my practical experiences in bank. I have furnished all the
things what I have learnt during the internship program at Mercantile Bank Ltd.
Dhanmondi Branch, Dhaka.

I shall be highly encouraged if you are kind enough to receive this report.

Thanking you.

Sincerely yours,

--------------------------
Zenith Alam Prity
ID: 111091044
BBA Program

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LETTER OF AUTHORIZATION

First of all, I would like to declare that this internship is not a copy of another persons
report. The study is original in nature. I have tried my best to make this report as
informative as possible. I also ensure that, this report has not been submitted to any
other person earlier and will not be submitted to anybody in the future.

-----------------------------
Zenith Alam Prity
ID: 111091044
BBA Program

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CERTIFICATE OF THE SUPERVISOR

This is to certify that the Internship report on, Customer Evaluation of Banking
Service quality: A study Of Mercantile Bank, Dhanmondi Branch is done by
Zenith Alam, ID: 111 091 044, Major In Marketing, School of Business & Economics
as a partial fulfillment of requirement of Bachelor of Business Administration
(BBA) degree from United International University.

This report has been carried out under my guidance and supervision. This report is a
record of the work carried out successfully.

________________________
Kawsar Ahmmed, Phd
Dhaka
Date:

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ACKNOWLEDGEMENT

At first, I would like to express my gratitude to almighty Allah for enabling me the
strength and opportunity to complete the report with in the schedule time successfully.

I like to thank from the core of my heart to the internship Supervisor, honorable
teacher Kawsar Ahmmed ,Phd (Assistant Professor in Marketing) who helped me in
every steps of my internship.

I am very much grateful to Syed Ahmadul Karim Manager of Dhanmondi Branch
& Mostaque Uddin Ahmed (Operation Manager) for giving me the opportunity to
complete my internship in Mercantile Bank ltd. I am sure that their dynamic
managerial activities with give inspiration to anybody to build ones career properly.

In the premises of Mercantile Bank Ltd of Dhanmondi Branch another person who
makes my internship fruitful is Nur-E-Ferhanaz (Principal Officer) and I am very
grateful to her.

I also want to thank Syeda Pervin, Saifur Rahman, Sujan Chakraborty and all
individual of the Mercantile Bank, Dhanmondi Road Branch for their support that I
have been provided for preparing my report. I practically work with them, try to share
their perception feelings and on the basis of my realization, I prepared report from my
own point of view.

Then at last I shall be grateful to those persons who read this report and who shall get
benefit from this report at present and in future.

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ABSTRACT

The aim of this study or report is to analyze the customers evaluation of banking
services at the Mercantile Bank Limited Dhanmondi Branch.

The economic development of the country depends largely on the activities of
commercial Banks. Especially in a country like Bangladesh, our agricultural,
industrial and economic developments are very much depending on smooth operation
of Banks. So we must ensure efficient and effective performance of Banks. In this
respect I have tried to find out General Banking activities, SMS Banking activities,
ATM Banking service and some parts of Credit and Foreign Exchange activities of
Mercantile Bank Limited.

The general banking department does the most important and basic works of the bank.
All other departments are linked with this department. It also pays a vital role in
deposit mobilization of the branch. Mercantile Bank Limited provides different types
of accounts, locker facilities and special types of saving scheme under general
banking for their valued customers.

Foreign Exchange operations of Mercantile bank Limited is the largest businesses
carried out by the Mercantile bank is foreign trading. Main transactions with overseas
countries are respects of import; export and foreign remittance come under the
preview of foreign exchange department of Mercantile Bank. International trade
demands, a flow of goods from seller to buyer and of payment from buyer to seller. In
this case Mercantile bank plays a vital role to bridge between the buyer and seller.

Coming up with innovative service is easier than making subscribers aware of
services. Hence through this internship report I have tried to analyze the present
situation of the Mercantile Bank Limited in Bangladesh and Mercantile Banks
position there in banking industry & try to find out the services that Mercantile Bank
Limited is presently providing to its valued customers & their satisfaction level.
Mercantile Bank Limited marketing strategy should be Profitable growth &
expanding market share through satisfying existing customers. I have also made a

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comparative service analysis of various Banks in Bangladesh and drawn some
valuable recommendation to Mercantile Bank Limited to be the market leader in
future in this competitive market.
I also conducted the SERQUAL, here Grand Mean scores of Mercantile Bank
Limited, Dhaka Bank Ltd, Southeast Bank Ltd, Dutch-Bangla Bank Ltd and Bank
Asia Ltd for the five service quality dimensions. Those dimensions are Reliability
dimension, Responsiveness dimension, Assurance dimension, Empathy dimension,
Tangible dimension.

A comprehensive survey was conducted to know about Mercantile Bank Limited
present position in the market and its present service condition that is providing to its
valued customers. The survey report shows that Mercantile Bank Limited operates
better operation in this industry but as it is becoming more competitive day by day so
Mercantile Bank Limited should revise its service packages, quality with more
conveniently for the customers.

On the basis of the findings several areas are indentified which require special
attention. The report ends with several important recommendations necessary for the
important of service quality at the Mercantile Bank Limited.

Keywords: Bank Service, Service Quality, SERVQUAL, Mercantile Bank Limited,
Bangladesh
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Topic Page No
Letter of Transmittal i
Letter of Authorization ii
Certificate of Supervisor iii
Acknowledgement iv
Abstract v

Chapter 1 - Introduction
1.1 Introduction 1
1.2 Background of the report 1
1.3 Origin of the report 2
1.4 Objective of the report 2
1.5 Scope of the study 3

Chapter 2 - Overview of Mercantile Bank Limited
2.1 MBL Timeline: 4
2.2 Vision, Mission and Objective 5
2.3 Core Values of the MBL 6
2. 4 Corporate Structure of MBL 7
2.5 Management of MBL 8
2.6 Corporate Social Responsibility 9
2.7 Contribution to the Economy 10
2.8 Contribution to the National Exchequer 11
2.9 Offerings Of the Bank 11
2.10 Network of Branches 12
2.11 General Banking 14
2.12 SMS Banking 33
2.13 ATM Banking Service 37
2.14 Credit or Loan Department 42
2.15 Foreign Exchange Department 44

Chapter 3 - Services & Service Quality
3.1 Service 48
3.2 Service Characteristics 49
3.3 Service Quality 50
3.4 Service Quality Dimensions 52
3.6 Customer Service 54

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Chapter 4 Analysis & Discussion
4.1 Methodology 55
4.2 Comparative Analysis on Service Quality 57
4.3 The five SERVQUAL Dimensions 63

Chapter 5 - Recommendations & Conclusion
5.1 Findings of the Research 65
5.2 Recommendations 67
5.3 Conclusion 69

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SL No Table Name Page No

1 CSR Contribution of MBL 10
2 Contribution to Economy in 2012, 2011 and 2010 11
3 Charges on issuing Pay Order Commission and VAT 22
4 Double Benefit Deposit Scheme (DBDS) 23
5 Times Benefit Deposit Scheme 24
6 Monthly Saving Scheme (MSS) 26
7 Family Maintenance Deposit (FMD) 27
8 Quarterly Benefit Deposit Scheme 28
9 Advance Benefit Deposit Scheme (ABDS) 29
10 Papers/documents required for issuance Local Credit
Card
40
11 Mean Quality Scores of Five Banks for Reliability
Dimension
58
12 Mean Quality Scores of Five Banks for Responsiveness
Dimension
59
13 Mean Quality Scores of Five Banks for Assurance
Dimension
60
14 Mean Quality Scores of Five Banks for Empathy
Dimension
61
15 Mean Quality Scores of Five Banks for Tangible
Dimension
62
16 Grand Mean Quality Scores for five SERVQUAL
Dimension
64
17 Ranking of Five Banks based on perception of the
customers on five SERVQUAL Dimension
64

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SL No Figure Name Page No

1 Corporate Structure of MBL 7
2 Processing for clearing cheque collection 31
3 Procedures for Outward Bills for Collection (OBC) 32
4 SMS Banking Service application form 35

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Abbreviations Used

A/C- Account.
ATM-Automated Teller Machine
BBA-Bachelor of Business Administration
BDT- Bangladeshi Taka
BTB LC- Back to Back Letter of Credit.
BM- Branch Manager
CD-Current Deposit
Cr- Credit.
CSE-Chittagong Stock Exchange
Dr-Debit
DSE-Dhaka Stock Exchange
EPS-Earnings per Share
ERC-Export Registration Certificate
E.g. - For Example
ETCA-Exchange Transaction Credit Advice
ETDA-Exchange Transaction Debit Advice
EXP Export Form
FC A/C- Foreign Currency Deposit Account
FCB-Foreign Commercial Bank.
FCY-Foreign Currency
FDBC- Foreign Documentary Bills for Collection
FDBP- Foreign Documentary Bills for Purchase
FDD-Foreign Demand Draft
IRC-Import Registration Certificate
KYC-Known Your Customer
LC-Letter of Credit
MBL-Mercantile Bank Limited
NRB- Non-Resident Bangladeshi
NFCD A/C- Non- Resident Foreign Currency Deposit Account
Tax PAT-Profit after
PBT-Profit before Tax
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PC- Packing Credit
PO-Pay Order
PIN-Personal Identification Number
PSR-Profit Sharing Ratio
RFCD A/C- Resident Foreign Currency Deposit Account
ROA- Return on Assets
ROE- Return on Equity
ROI-Return on Investment
SLR-Statutory Liquidity Requirement
SME s-Small and Micro Enterprises
STD-Short Term Deposit
SWIFT -Society for World Wide Inter Financial Telecommunication
SWOT- Strengths, Weaknesses, Opportunities and Threats.
TIN-Tax Identification Number
TT-Telegraphic Transfer
UAE-The United Arab Emirates
UP- Union Parishad
U.K.-The United Kingdom
U.S.A.-The United States of America
VAT-Value Added Tax

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1.1 Introduction

Mercantile Bank Limited emerged as a new commercial bank to provide efficient banking
services and to contribute socio-economic development of the country. The Bank
commenced its operation on J une 2, 1999.In this 21
st
century Banks are the life-blood of
modern economy irrespective of its size & pattern. Banks are established to earn profit and
help economic and financial activities so as to help economic development of a county. In
such a context, the main business of Banking is to take deposits from customers and sanction
credit to the borrowers. In performing multidimensional activities like borrowing and lending
of money, the world of banking is undergoing a transformation. In Bangladesh, banking is
the second largest industry where a very good number of employees are working. Banking is
the backbone of national economy. All sorts of economic & financial activities revolve round
the exits of the bank. Banking sector is expanding its hand in different financial events every
day. At the same time the banking process is becoming faster, easier and the banking area is
becoming wider, as the demand for better service increases day by day. Generally by the
word Bank we can easily understand that the financial institution deals with money.
Mercantile Bank Limited is one of the most flourishing banks of Bangladesh with wide
growth opportunities in the industry.

1.2 Background of the report

As the student of Bachelors of Business Administration (BBA) every student has to conduct
a practical orientation (Internship) on any organization for fulfilling the requirements of the
B.B.A program. In order to fulfill this requirement of the Internship program I choose
Mercantile Bank Limited (MBL). The main purpose of the program is to know the real world
situation. The topic of my report is Evaluation of Banking Services and Performance
appraisal of Mercantile Bank Limited. In this regard I have opportunity to make my
internship in Mercantile Bank Limited from February, 2014 to May 2014. The Mercantile
Bank Limited is a scheduled private commercial bank established on May 20, 1999 under
Bank Company Act, 1991 and incorporated as a public limited company under companies
act, 1994. The bank started commercial banking operation from J une 02, 1999. During this

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short span of time, the bank has been successful to position itself as a progressive and
dynamic financial institution in the country. Involvement of the banking sector in different
financial events is increasing day by day. At the same time the banking process is becoming
faster, easier and the banking arena is becoming wider. As the demand for better service
increases, the banking organizations are coming with innovative ideas. In order to survive in
the competitive field of the banking sector, all banking organizations are looking for better service
opportunities to provide to their clients. Within short time MBL expand its branch more than 67
areas by following their slogan Efficiency is our strength. But as their experience in terms
of success rate in each branch which includes profit, client size, etc. the performance of Main
branch is not aggressive than other branch. As a part of my topic I will try to identify the
cause behind this by a scientific research on its existing clients.

Present world is changing rapidly to face the challenge of competitive free market economy.
To keep pace with the trend banks need executive with modern knowledge and provide fresh
graduate with modern theoretical and practical knowledge in banking and financial
institution management. As the practical origination is an integral part of the BBA degree
requirement, I was sent to Mercantile Bank Limited (Dhanmondi 27 Branch) to take the real
life exposure of the activities of banking financial institution for three months only starting
from 23rd February. This research is a partial requirement of BBA Internship Program in the
United International University and report is being prepared from three months extensive
knowledge and research.

The primary objective of this report is to comply with the requirement of my course. But the
objective behind this study is something broader. The principal intent of this report is to
analyze the trends of overall banking and their and Performance appraisal. Objectives of the
study are summarized in the following manner:

1.3 Origin of the report
1.4 Objective of the report

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Getting an inside into financial service of Mercantile Bank Limited.
An evaluation of the application service quality dimension by Mercantile Bank Limited.
Customer evaluation of practice of service quality dimension by Mercantile Bank Limited.

Mercantile Bank Limited is one of the new generation banks in Bangladesh. The scope of the
study is limited to the Dhanmondi 27 Branch only. The report will cover the functions of
different departments of Mercantile Bank Ltd (MBL), Dhanmondi 27 Branch like General
banking, Loan and Advances, and Foreign Exchange. It will also present a brief scenario of
the Mercantile Bank Ltd in total.

I will include on my report first of the introduction of Mercantile Bank Ltd .Then the overall
banking activities, products and services. Finally, I shall provide a financial analytical view
on a real project that Mercantile Bank Main Branch facing, and it is the special focus of my
report.

1.5 Scope of the study

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2.1 MBL Timeline:

- 5 -

2.2 Vision, Mission and Objective

2.2.1 Vision
Would make finest corporate citizen
MBL dreams to become the bank of choice of the general public that includes both the
consumer and the corporate clients. They want to build such an image that whenever people
will think of a bank, they will think of Mercantile Bank Limited. MBL have created a cadre
of young professionals (YP) in banking profession. This has helped boosting productivity in
the bank

2.2.2 Mission
Will become most caring, focused for equitable growth based on diversify
development of resources, and nerveless would remain health and gainfully profitable bank
Mercantile Bank Limited aims to become one of the leading banks in Bangladesh by
prudence, flair and quality of operations in their banking sector. The bank has some mission
to achieve the organizational goals

2.2.3 Objective
To exceed customer expectations through innovative financial products and services and
establish a strong presence to recognize share holders expectations and to optimize their
rewards through dedicated workforce.
Strategic Objective:
To achieve positive Economic Value Added (EVA) each year.
To be market leader in product innovation.
To be one of the top Financial Institution in Bangladesh in terms of
cost efficiency.
To be one of the top five Financial Institutions in Bangladesh in
terms of market share in all significant market segments we serve
Financial Objective:
To achieve 20% return on shareholders equity or more, on
average.

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2.3 Core Values of the MBL

2.3.1 For the customers:
Provide with caring services by being innovative in the development of new Banking
products and services.

2.3.2 For the shareholders:
Maximize the wealth of the bank.

2.3.3 For the employees:
Respect worth and dignity of individual employees devoting their energies for the progress of
the Bank.

2.3.4 For the community:
Strength the corporate values and taking environment and social risk and reward in to
account.

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2. 4 Corporate Structure of MBL

Figure 1: Corporate Structure of MBL

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2.5 Management of MBL

Mercantile Bank Limited has formulated a board of director and some different committee
for the management of the organization like Board Committee, Executive Committee, Policy
Committee and Audit Committee

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2.5.1 Board of Directors
The Board of Directors consists of 14 member elected from the sponsors of the Bank. The
Board of Directors is the apex body of the Bank. Their duty to formulates policy guidelines,
provides strategic planning and supervises business and performance of management and
also accountable to the company and its shareholders.

2.5.2 Executive Committee
Member of Executive Committee (9 person) are selected from of Directors. The executive
committee ensures the implementation of policies, approves credit and others business
proposals as per approved policy of the Board.

2.5.3 Policy Committee
All mater relating to the principles, policies, rules, and regulation, ethics etc. for operation of
the Bank are recommended by the Committee to the Board of Directors.

2.5.4 Audit Committee
Audit committee is formed with 3 members from board of directors. They review the
Financial Statement and also discuss with external auditors, review the audit plan of the
Banks internal audit and inspection as well as internal audit report of Head office

2.6 Corporate Social Responsibility

MBL believes that Corporate Social Responsibility (CSR) is integral and inseparable part of
the long-term business and sustainable growth and success, which plays an important role in
promoting values both locally and internationally. The Bank integrates all social,
environmental and socio economical issues in the time of its decision making. In line with its
slogan- "Banglar Bank" MBL is fully committed to conduct its banking business in an
economically, environmentally and socially sustainable manner. Contribution in CSR
programs is always supported and encouraged by the Board of Directors of the Bank. The
Management reports to the Board on CSR activities and is responsible to implement a
specific line of approving authority, control and monitoring for financial support to such

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activities.
MBL sets its Vision Statement-"Would make finest corporate citizen" and Mission
Statement-"Will become most caring, focused for equitable growth based on diversified
deployment of resources, and nevertheless would remain healthy and gainfully profitable
Bank", which in fact focuses on the peoples' interests and the Bank's profitability as well. In
line with Bank's Vision and Mission Statement, CSR activities have been fully integrated
into the business functioning, which ultimately acting as a catalyst to build up an ever-lasting
warm relationship with all the stakeholders and society people. The Bank does CSR
activities, besides its own fund, through Mercantile Bank Foundation, which acts as a helping
hand to the distressed people of the country. In the table below, sector-wise spending of the
Bank for CSR purpose in 2010 has been furnished:

Sectors (BDT in Millions)
Education 7.19
Health 13.15
Disaster Management 11.87
Sports 7.88
Art & Culture 14.42
Others 11.40
Total 65.91
Table 1 : CSR contribution of MBL

2.7 Contribution to the Economy

The Bank has contributed to the economy by generating employment of 1,981 full time
employees. It also plays a vital role in creating job opportunities by financing the productive
sectors. The Bank recruits a number of fresh graduates and experienced officers every year.
In the intermediation process, the Bank mobilized resources of BDT 132,093.64 million from
the surplus economic unit and deployed BDT 93,610.87 million in 2012 to deficit group.

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Following table depicts the Banks performance in terms of deposit mobilization, its
deployments, international business, inward foreign remittance and employments as at
December 31 of 2012 and 2010:
(BDT in million)
Contribution to Economy In 2010 In 2011 In 2012
Mobilization of Deposit 75,629.14 102,262.02 132,093.64
Deployment of Loans and 66,377.70 79,999.80 93,610.87
Export Business 59,404.20 81,311.80 81,477.10
Import Business 89,524.10 95,008.70 113,434.10
Inward Foreign Remittance 5,108.10 7,150.00 15,792.80
Employment (in numbers) 1,605 1,668 1,981

Table 2: Contribution to Economy In 2012 In 2011

2.8 Contribution to the National Exchequer

The Bank plays its responsibility to the Government of Bangladesh paying corporate tax
regularly. As per tax law, the bank deducts income tax at source, VAT, excise duty from
various payments and services for ultimate credit to government exchequer the Bank has
made provision of BDT 1,000.00 million for corporate tax in 2012 against BDT 1,270.00
million in 2011.

2.9 Offerings Of the Bank
The Mercantile Bank offers different types of services to its customers. And day by day they
are expanding the area of services. From the very beginning they gave more emphasis on
satisfaction of customers.

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2.10 Network of Branches

- 13 -

2.10.1 Corporate Office

61,Dilkusha Commercial Area
Dhaka-1000,Bangladesh
Tel: 80-2-9559333, 0171-535960, Fax: 880-2-9561213,
Telex: 642480 MBLMB BI
SWIFT: MBLBBDDH,
E-MAIL: mbl@bol-online.com

Corporate Slogan: Efficiency is our strength.
Department of Mercantile Bank Ltd.

Services Provided
2.11 General Banking
2.1 2 SMS Banking
2.13 ATM Banking Service
2.14 Credit or Loan Department
2.15 Foreign Exchange Business

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2.11 General Banking

1.0 Introduction
Bangladesh is one of the less development countries. So the economic development of the
country depends largely on the activities of commercial Banks. So I need to emphasis
whether these commercial Banks are effectively and honestly performing their functions,
assign their duties, and responsibilities and whether the customers are really satisfy or
not. In thus respect I need to know about the general banking function of Mercantile Bank
Limited, Main Branch, Dhaka.
The general banking department does the most important and basic works of the bank. All
other departments are linked with this department. It also pays a vital role in deposit
mobilization of the branch. MBL provides different types of accounts, locker facilities
and special types of saving scheme under general banking. For proper functioning and
excellent customer service this department is divided into various sections namely as
follows.

Account Opening Section,
Local Remittance Section,
Deposit Schemes Section,
Accounts Section,
Clearing Section,
Collection Section,
Cash Section,

1.1 Account Opening Section
To establish a Banker and customer relationship account opening is the first step.
Opening of an account binds the banker and customer into contractual relationship. But
selection of customer for opening an account is very crucial for a Bank. Indeed, fraud and
forgery of all kinds start by opening account. So, the Bank takes extremely cautious
measure in its selection of customers.

1.1.1 Types of Account
MBL has the following types of accounts:

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Current Account
Savings Account
Fixed Deposit Account

1.1.2 Procedure to open an Account:
(1) For opening an account, at first the prospective account holder will apply for
opening an account by filling up account opening form. Account opening form
consists of the name of the branch, type of account, name of the applicant(s),
present address, permanent address, passport number (if any), date of birth,
nationality, occupation, nominee(s), special instruction (if any), initial deposit,
specimen signature(s) of the applicant(s), introducers information etc.
(2) The prospective customer should be properly introduced by the followings:
i. An existing customer of the bank.
ii. Officials of the bank not below the rank of Assistant Officer.
iii. A respectable person of the locality who is well known to the manager or
authorized officer.
(3) Two copies of passport size photograph duly attested by the introducer.
(4) Signature of the prospective account holder in the account opening form and on the
specimen signature card duly attested by the introducer.
(5) Then the concerned authority will allocate a number for the new account.

The customer than deposit the initial deposit by filling up a deposit slips. Initial deposit
to open a current account in MBL is Tk. 10000.00 and saving account is Tk. 5000.00.
When the following requirements are fulfilled, the account is considered to be opened.
MBL maintains all of its accounts in computer. After depositing the initial deposit, MBL
records it in the computer by giving new account number. Then it issues cheque book
requisition slip by the customer. Then it distributes all relevant papers to respective
department.

1.1.3.1 Joint Account:
If the account is a joint account, then the joint account holder should submit a declaration
and operational instructions of the account along with their signature. The declaration is

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Any balance to the credit of the account is and shall be owned by us as joint depositors.
Any liability whatsoever incurred in respect of this account shall be joint and several.

1.1.3.2 Partnership firm:
The following documents have to be submitted for preparing an account of a partnership
firm:
Partnership deed.
If the partnership firm is a registered one, then one copy of registration forms.
If not, then a copy of certificate from the notary public.

1.1.3.3 Limited Company:
For the opening of an account of a limited company, following documents have to be
submitted:
A copy of resolution of the company that the company decided to open an account
in Mercantile Bank Limited.
Certified true copy of the Memorandum & Articles of Association of the Company.
Certificate of Incorporation of the company for inspection and return along with a
duly certified Photocopy for Banks records.
Certificate from the Registrar of J oint Stock Companies that the company is
entitled to commence business (in case of Public Ltd. Co. for inspection and
return) along with a duly certified Photocopy for Banks records.
Latest copy of balance sheet.
Extract of Resolution of the Board/General Meeting of the company for opening
the account and authorization for its operation duly certified by the
Chairman/Managing Director of the company.
List of Directors with address (a latest certified copy of Form-XII).

1.1.3.4 Club/Society:
Following documents have to be obtained in case of the account of the club or society:
Up to date list of office bearers.
Certified copy of Resolution for opening and operation of account.

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Certified copy of Bye-Law and Regulations/Constitution.
Copy of Government Approval (if registered).
1.1.3.5 Cooperative Society:
Following documents have to be obtained in case of the account of Cooperative Society:
Copy of Bye-Law duly certified by the Co-operative Officer.
Up to date list of office bearers.
Resolution of the Executive Committee as regard of the account.
Certified copy of Certificate of Registration issued by the registrar, Co-operative
societies.
1.1.3.6 Non-Govt. College / School / Madrasha / Muktab:
Following documents have to be obtained in case of the account of non-govt. College /
school / madrasha / muktab:
Up to date list of Governing Body/Managing Committee.
Copy of Resolution of the Governing Body/Managing Committee authorising
opening and operation of the account duly certified by Gazetted Officer.

1.1.3.7 Trustee Board:
Following documents have to be obtained in case of the account of trustee board:
Prior approval of the Head Office of MBL.
Certified copy of Deed of Trust, up to date list of members of the Trustee Board
and certified copy of the Resolution of Trustee Board to open and operate the
account.
1.1.3.8 Minors Account:
Following documents have to be obtained in case of the account of minor:
Putting the word MINOR after the title of the account.
Recording of the special instruction of operation of the account.
The AOF is to be filled in and signed by either the parents or the legal guardian appointed
by the court of law and not by the minor.

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1.2 Local Remittance Section
Local remittance is one of the main components of general banking. The activities of
local remittance are ---
Telegraphic Transfer,
Demand Draft issue,
Pay order.

1.2.1 Telegraphic Transfer
It is an order from the issuing branch to the drawee bank / branch for payment of a certain
sum of money to the beneficiary. The payment instruction is sent by telex and funds are
paid to the beneficiary through his account maintained with the drawee branch or through
a pay order if no account is maintained with the drawee branch.

1.2.1.1 Procedure of issuing TT:
Following procedures are followed while issuing of TT:
The applicant fills up the relevant parts of the prescribed application form in
triplicate, duly signed the same and gives it to the GB.
GB will fill up the commission part for banks use and request the applicant to
deposit necessary cash or cheque at the cash booth.
The first copy of the application form will be treated as Debit Ticket while the
second copy will be treated as Credit Ticket. The third copy will be handed over
to the applicant as customers copy.

GB will prepare telex in appropriate form, sign it and send it to the telex operator
for transmission of the message.
GB will prepare necessary advice. Debit advice is sent to the client if clients
account is debited for the amount of T.T.
T.T. Confirmation Advice is sent to the drawee branch.
Credit Ticket (second copy of the application form) is used to credit the MBL
General Account.

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1.2.1.2 Payment of T.T.
On receipt of T.T. payment instructions the following entries are passed by the drawee
branch if the T.T. is found to be correct on verification of the Test number.

In case the beneficiary does not maintain any account with the drawee branch a pay order
will be issued in favor of the payee and sent to his banker / local address as the case may
be.

Every branch maintains a prescribed T.T. Payable Register. All the particulars off T.T.
are to be properly recorded in this register duly authenticated. A separate Type of T.T.
confirmation advice is sent to the drawee branch on the same day. On receipt of T.T.
confirmation advice, the particulars of T.T. are verified with reference to particulars
already recorded in the T.T. payable register.

1.2.2 Demand Draft (DD) Issue
Sometimes customers use demand draft for the transfer of money from one place to
another. For getting a demand draft, customer has to fill up an application form. The form
contains date, name and address of the applicant, signature of the applicant, cheque
number (if cheque is given for issuing the DD), draft number, name of the payee, name of
the branch on which the DD will be drawn and the amount of the DD. The form will be
duly signed by the applicant and by the authorized officer. MBL charges .15%
commission on the face value of DD as service charge.

1.2.2.1 Process of issuing Local Draft :
Followed procedures are followed while issuing local draft-
Get the application form properly filled up and signed by the applicant.
Complete the lower portion of the form for the banks use.
Calculate the total amount including the banks commission.
If the cheque is presented for of the local draft, the officer should get the cheque
duly passed for payment by the authorized person and record the particulars of
local draft on the back of the cheque.
If the client wants to debit his account for the payment of the draft amount, the
officer should get the account holders signature verified properly, from signature

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card on record of the branch and debit clients account for the total amount
including commission.
The first copy of the application form will be treated as Debit Ticket while the
second copy will be treated as Credit Ticket and kept by the GB. The third copy is
handed over to the applicant as customers copy.
The GB Department maintains a prescribed L.D. Issue Register. All the required
particulars of LDs issued and should be entered in that register duly authenticated.

1.2.2.2 Issue of Duplicate Draft:
Duplicate Draft is not normally issued unless getting of satisfactory evidence is produced
regarding loss of the draft. If the L.D. is reported to be lost or stolen, the issuing branch
on receipt of a written request from the purchaser may issue a duplicate draft.
Before issuing duplicate L.D. the branch should observe the followings-
Verify the purchasers signature on the request letter from the signature appearing
on the original application form.
Immediately issue a stop payment instruction to the drawee branch under advice of
head office and obtain confirmation of non-payment the L.D. in acquisition.
After the drawee branch has acknowledged the stop payment order and confirmed
that the local draft in acquisition remains unpaid at their end, the issuing branch
Should obtain an Indemnity Bond on stamp paper as per prescribed format from
the purchaser duly signed by him. The branch will thereafter write to head office
for their approval to issue a duplicate draft.
The head office on receipt of the request from the issuing branch will immediately
issue a caution circular to all the branches regarding the lost of the local draft
asking them to record stop payment.
The head office will thereafter issue clearance to the issuing branch for issuing for
issuing a duplicate draft in lieu of original reported lost.
On receipt of the clearance from head office, the issuing branch will issue a
completely fresh draft marking clearly the words duplicate issued in lieu of
original draft no. dated .in bold letters on the top of the
front page of the draft. The printed serial number on the draft should not however

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be struck off. Intimation should be given to the drawee branch furnishing full
particulars of the duplicate draft.
The particulars of the duplicate draft must resemble those of the original draft in
all respects, i.e., all the particulars to the duplicate draft must be identical with
those in the original draft. No further IBCA is to be issued for the duplicate draft.
Prescribed duplicate issuance charge is to be recovered for issuing the duplicate
draft and credited to Income Account.

1.2.2.3 Cancellation of Local Draft
The followings are followed while canceling a L.D.-
The purchaser should submit a written request for cancellation of the L.D.
attaching therewith the original L.D.
The signature of the purchaser will have to be verified from the original
application form.
Managers prior permission is to be obtained before refunding the amount of draft.
Cancellation charge is to be recovered from the applicant and only the amount of
the draft less cancellation charge should be refunded. Commission charge, posted
charge etc. recovered for issuing the L.D. should not be refunded.
The original entries are to be reversed giving proper narration. An IBDA for the
cancelled L.D. should be issued on the drawee branch.
Cancellation of L.D. should also be recorded in the L.D. Issue Register.

1.2.2.4 Payment of Local Draft
While payment of L.D. MBL performs the following functions-
On receipt of Credit Advice (IBCA) from the issuing branch the receipt amount is
credited in responding branch.
When L.D. is presented for payment at the paying branch, its details are to be
carefully examined with reference to the following points-
Whether the draft is drawn on the Local office.
Whether the draft is crossed or not. Amount of crossed draft is not paid in cash
to the payee but to be paid to his account with a bank.

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Draft must have to be signed by two authorized officers of the issuing branch.
Their signatures are to be verified from the specimen signature book for being
sure that draft that the draft is genuine. The verifier should put his initial.
Endorsement on the back of the draft must be regular in case the draft is
presented through clearing.
The amount of the draft should not exceed the amount written in red ink at the
top of the draft.
The payee is to be properly identified in case of cash payment.
The particulars of the draft i.e. the draft number, date, amount and the name of
the payee should be verified from the L.D. Payable Register.
In case of payment, the draft should be cancelled with red ink. The date of
payment should be recorded in the L.D. Payable Register.
1.2.2.5 Stop payment of Local Draft
The payee or purchaser of the draft cannot give stop payment instruction to the drawee
branch. If the paying branch receives a request from the purchaser of the draft for
stopping payment of the draft, it will ask the purchaser to approach the issuing branch
about the purpose. The paying branch should however exercise necessary precaution in
this regard. Only the issuing branch can issue instruction for stop payment of the draft
under special circumstances.
1.2.3 Pay Order
For issuing a pay order, the client is to submit an application to GB in the prescribed
form. This form should be properly filled up and signed. The procedure of the issuing pay
order is similar to that of the Local Draft. For issuing pay order MBL charges commission
on the following rate-
Total amount of Po Commission Vat
Up to TK. 10,000.00 TK. 25.00 Tk.4
TK. 10,001.00 - TK .1, 00,000.00 TK. 50.00 Tk.8
TK. 1, 00,001.00 - TK. 5,00,000.00 TK. 100.00 Tk.16
TK. 5,00,001.00 and above TK. 150.00 Tk.23

Table 3: Charges on issuing pay order commission and vat

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1.2.3.1 Payment of Pay Order:
The pay order is presented to the bank either through clearance or for credit to the clients
account. While payment, relative entry is given in the pay order register with the date of
payment.
1.2.3.2 Cancellation of Pay Order:
The following procedure should be followed for the cancellation of the pay order:
The client should submit a written request for canceling the pay order attaching
therewith the original pay order.
The signature of the purchaser will have to be verified from the original
application form.
Managers prior permission is to be obtained before refunding the amount of the
pay order.
Cancellation charge is to be recovered from the applicant and only the amount of
the pay order less cancellation charge should be refunded. Commission recorded
for issuing of the original pay order should not be refunded.
Then the officer should write cancelled on the pay order.
The original entries should be reversed with narration.
Cancellation of the pay order should also be recorded in the register.

1.2 Deposit Scheme Section

Bank is the largest organization of mobilizing surplus domestic savings. For poverty
alleviation, we need self-employment, for self-employment we need investment and for
investment we need savings. In the other words, savings help capital formations and the
capital formations help investments in the country. The investment in its turn helps
industrialization leading towards creation of wealth of the country. And the wealth finally
takes the country on road to progress and prosperity. As such, savings is considered the
very basis of prosperity of the country. The more the growth of savings, the more will be
the prosperity of the nation.

The savings rate in Bangladesh is one of the lowest in the world rate of domestic saving
being 17.78 %. In order to improve the savings rate, Financial Institutions responsible for

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mobilization of savings should offer attractive Savings Schemes so that the marginal
propensity to save increases. The savings do not, of course, depend only on the quantum
of income but largely depend on the habit of savings of the people.
MBL has formulated the following Savings Schemes:
Double Benefit Deposit Scheme (DBDS)
Times Benefit Deposit Scheme
Mashik Sanchaya Prokalpa (MSK) or Monthly Savings Scheme (MSS)
Family Maintenance Deposit (FMD)
Quarterly Benefit Deposit Scheme
Advance Benefit Deposit Scheme (ABDS)

1.3.1 Double Benefit Deposit Scheme (DBDS)
Objective Mode

. Give maximum benefit Tenure of the deposit is 06 (six) years
. Help in meeting specific needs like
education, marriage etc.
. Deposit becomes double in six years

Amount of Deposit Period Amount payable

1, 00,000 6 Years 2, 00,000

Table 4: Double Benefit Deposit Scheme (DBDS)

Other Features
The Minimum amount of deposit is BDT 50,000.00(Fifty thousand) or its
multiples.
All taxes/duty/levy and /or any other surcharges presently in force or that may be
imposed by the Government of Bangladesh (GOB) from time to time will be
deducted/ recovered from the deposit account under this scheme.

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In case of premature encashment interest will be paid on Saving A/C Rate.
Loan may be granted up to maximum 80% of the deposited amount but minimum
principle amount must be BDT 20,000.00.
Loan processing fee be realized BDT 50.00 only and usual stamp costs also be
realized.
1.3.2 Times Benefit Deposit Scheme

Under the 1.5 Times Benefit Deposit Scheme a deposit of minimum BDT 50,000.00
(fifty thousand) or its multiples will be received for a period of 42 months (3.5 years). On
maturity after 42 months, 1.5 times of the deposited amount will be paid back to the
account holder as per example given below:

Example: Initial Deposit (BDT) 50,000.00 1, 00,000.00 5, 00,000.00
Return after 42 months (BDT) with benefit 75,000.00 1, 50,000.00 7, 50,000.00
Table 5: Times Benefit Deposit Scheme
Other Features
However, no interest shall be paid if premature encashment take place before
expiry of 1 (one) year.
In the event of death of the depositor before the maturity, the deposit account may
be encased (premature) as per rule or may be continued up to maturity on written
approach by the nominee(s). Loan may be granted up to maximum 80% of the
deposited amount but minimum principle amount must be BDT 20,000.00.
Loan processing fee be realized BDT 50.00 only and usual stamp costs also be
realized.

- 26 -

1.3.3 Mashik Sanchaya Prokalpa (MSK) or Monthly Savings Scheme (MSS)
Objectives Modes
Build up habit of savings * Monthly installments of various sizes
Attract small savers
Saving for rainy days.
Benefits:

Period
Monthly Installment
250 500 1,000
Benefits
5 Years 20,625 41,250 82,500
8 Years 40,375 80,750 1,61,500
10 Years 57,500 1,15,000 2,30,000

Period Monthly Installment
1500 2500 5,000
Benefits
5 Years 1,23,750 2,06,250 4,12,500
8 Years 2,42,250 4,03,750 8,07,500
10 Years 3,45,000 5,75,000 11,50,000

Table 6: Monthly Savings Scheme (MSS)

Other Features
Upon deposit of installment for at least 01 year (minimum deposit amount must be
BDT 12,000.00) under this scheme, loan may be granted up to maximum 82% of
the deposited amount.

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1.3.4 Family Maintenance Deposit (FMD)
Objectives Mode
Help the retired persons for
investing their retirement
benefits.
Create investment
opportunities for Non-
Resident Bangladeshi.
Explore investment
opportunities for school,
college, university etc.
Give investment opportunities for
Trust; Foundation etc.

Deposit a fixed amount of money
for 05 (Five) years.
Depositor will get a certain sum
of money in each month
proportion to his/her deposit
during the entire tenure.
Benefits:
Tenure of deposit is 05 (Five)
years.
Minimum amount of required deposit is
TK.50,000.00 or its multiple

Deposit Monthly Benefit (Amount in TK.)

1, 00,000 1,000
2, 00,000 2,000
3, 00,000 3,000

Table 7: Family Maintenance Deposit (FMD)
Other Features
The Minimum amount of deposit is BDT 50,000.00 (Fifty thousand) or its multiples.
In case of premature encashment interest will be paid on Saving A/C R

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A saving account will be needed to be maintained to receive quarterly benefit
payment.
Loan may be granted up to maximum 80% of the forced encashment value on the
date of loan processing. During the period of continuation of loan, monthly
benefits of FMD account will be credited only to loan account.
Loan processing fee be realized BDT 50.00 only and stamp costs also be realized.
1.3.5 Quarterly Benefit Deposit Scheme
The 'Quarterly Benefit Deposit Scheme' will be maintained for a period of 3 (three) years
and the minimum amount of deposit is BDT 50,000.00 (fifty thousand) or its multiples.
Interest will be paid on quarterly basis as per example given below. On maturity the
principal amount will be paid back.
Example:
Initial Deposit (BDT) Term Quarterly Benefit Payable (BDT)
50,000 3 Years 1,500
100,000 3 Years 3,000
200,000 3 Years 6,000
Table 8: Quarterly Benefit Deposit Scheme

Other Features
However, no interest shall be paid if premature encashment take place before
expiry of 1 (one) year.
In the event of death of the depositor before the maturity, the deposit account may
be encased (premature) as per rule or may be continued up to maturity on written
approach by the nominee(s).
A saving account will be needed to be maintained to receive quarterly benefit
payment.

- 29 -

Loan may be granted up to maximum 80% of the forced encashment value on the
date of loan processing. During the period of continuation of loan, quarterly
benefits will be credited only to loan account.
1.3.6 Advance Benefit Deposit Scheme (ABDS)

Objectives Mode
Get Extra benefit from minimum Maintained for a period of 2 (Two) years
Deposit Minimum deposit amount
1, 00,000 (One Lac) only.

Interest Rate per BDT One Lac

BDT 1 Lac (One Lac) Tk. 11,112.00 for 1
st
year Tk. 13,000.00 for 2
nd
Year

Table 9: Advance Benefit Deposit Scheme (ABDS)
Other Features
All taxes/duty/levy and/or any other surcharges presently in force or that may be
imposed by the government of Bangladesh from time to time in Deposit Accounts
will also be applicable for the account for the account opened under this scheme
and such taxes/duty/levy and/or any other surcharges shall be deducted/ recovered
from the deposit account under this schemes.
Loan may be granted up to maximum 70% of deposit.

1.4 Account Section

In banking business transactions are done every day and these transactions are to be
recorded properly and systematically as the banks deal with the depositors money. Any
deviation in proper recording may hamper public confidence and the bank has to suffer a
lot. Improper recording of transactions will lead to the mismatch in the debit side and
credit side. To avoid these mishaps, the bank provides a separate department whose
function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery.

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This department is called Accounts Department. Besides these, the branch has to prepare
some internal statements as well as some statutory statements, which are to be submitted
to the Central Bank and the Head Office. This department prepares all these statements.
1.4.1 Functions of Accounting Department
We can divide the functions of accounting department into two categories. This are-
a. Day to day functions: Here day-to-day function refers to the every day tasks.
Accounting department of MBL performs the following day to day functions:
] Recording of transaction in the cashbook, general and subsidiary ledger.
] Preparing the daily position of deposit and cash.
] Making the payment of the expense of the branch.
] Recordings of inter branch fund transfer.
] Checking whether all the vouchers are correctly passed.
] Recording the voucher in the voucher register.
] Packing and maintains the total debit and total credit vouchers.
b. Periodical functions: Periodical functions of accounts department include the
preparation of different weekly, fortnightly, monthly, quarterly and annual statement.
The accounts department prepares the following statements:
Monthly statement of deposits, loans and advances, profit and loss etc.
Quarterly statement of deposits, loans and advances, profit and loss etc.
Yearly statement of deposits, loans and advances, profit and loss etc.
Yearly statement of classified Loans and Advances.
Statement of Affairs.
Yearly Budget of the Branch, etc.

1.5 Clearing House:
According through the 37(2) of Bangladesh Bank Order 1972, which are the member of
the clearinghouse, are called as Scheduled Bank. The scheduled banks clear the cheques
drawn upon one another through the clearinghouse. This is an arrangement by the central
Bank where every day representative of the member banks gather to clear the cheques.
Banks for credit of the proceeds to the customers account accept cheques and other
similar instruments. The banks receive many such instruments during the from account
holders. Many of these instruments are drawn payable at other banks. If they were to be
presented at the drawer banks to collect the proceeds it would be necessary to employ

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many messengers for the purpose. Similarly there would many cheque drawn on this the
messengers of other banks would present bank and then at the counter. The whole process
of collection and payment would involve considerable labor, delay, risk and expenditure.
All the labor, risk, delay and expenditure are substantially reduced by the representative
of all the banks meeting at a specified time, for exchanging the instruments and arriving
at the net position regarding receipt of payment.
The place where the banks meet and settle their dues is called the Clearinghouse. The
Clearinghouse sits for two times a working day. The members submit the climbable
cheque in the respective desks of the banks and vice-versa. Consequently the debit and
credit entries are given. At the debit summation and the credit summation are calculated.
Then the banks clear the balances through the cheque of Bangladesh Bank. The
dishonored cheque are sorted and returned with return memo.
1.5.1 Processing for clearing cheque collection

The following procedures are taken for collection

Figure 2: Processing for clearing cheque collection

Payees A/C Credited and disbursement

Received seal is stamped on the cheque

Crossing the cheques are done

Cheques are sorted bank wise and entries are
given to the computer

Clearing seal is given on cheque

Entries are given in the Outward Clearing
Register.

Entries are given to the Clearing House
Register

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1.5.2 Procedures for outward bills for collection (OBC)

Figure 3: Procedures for outward bills for collection (OBC)

1.6 Cash Section

Cash section is a very sensitive organ of the branch and handle with extra care. Operation
of this section begins at the start of the banking hour. Cash officer begins his/her
transaction with taking money from the vault, known as the opening cash balance. Vault
is kept in a much secured room. Keys to the room are kept under control of cash officer
and branch in charge. The amount of opening cash balance is entered into a register. After
whole days transaction, the surplus money remain in the cash counter is put back in the
vault and known as the closing balance. Money is received and paid in this section.

1.6.1 Cash Receipt
At first the depositors fill up the Deposit in Slip. For saving account and current
account same Deposit in Slip is used in this Branch.
After filling the required deposit in slip, depositor deposits the money.
Officers at the cash counter receives the money, count it, enter the amount of money
in the register kept at the counter, seal the deposit in slip and sign on it with date and
keep the banks part of the slip. Other part is given to the depositor.

Depositing the cheque along with deposit slip
Crossing of the cheques are done indicating
Principal Branch as collecting bank
Endorsement Payees A/C will be credited on
realization is given
Entries are given in the outward clearing
register

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In this branch, i.e., Elephant Road Branch, two different officers maintain two
different books for entering such entries. All deposits of saving account are
maintained by one officer and other accounts by another officer.
At the end of the day entries of both of these registers are cross checked with the
register kept at the cash counter to see whether the transactions are correct or not.
1.6.2 Cash Payment

When a person comes to the bank to cash a cheque, s/he first gives it to the
computer desk to know the position of the check and posting of the cheque. If the
account has sufficient fund the computer in charge will post it into the computer,
will sign it and seal it.
This cheque is then sent to the concerned officer. There are two officers who
verify the cheques - one for savings and similar types of account and another for
current and similar types of account.
After receiving the cheque respective officer first checks it very carefully for any
kind of fraudulent activity. S/he also checks the date of the cheque, amount in
word, amount in figure and signature of the drawer.
If the instrument is free of all kind of error the officer will ask the bearer to sign
on the back of it.
He will then put his/her initial beside the bearers signature. S/he will also sign it
on its face; will write down the amount by red pen.
Then the cheque will be sent to the cash counter. At the cash counter bearer will
be asked again to sign on the back of the instrument.
The cash officer will then enter the details of the cheque in his/her register and
will pay the money to the bearer.
At the end of the day these registers will be compared to ensure the correctness of
the entries

2.12 SMS Banking

2.0 Introductions
The telecommunications industry worldwide has scrambled to bring what is available to
networked computers to mobile devices. Presently, the use of electronic banking is

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considerably high and as more and more users sign up for electronic- banking, the
maturity as regards remote banking (i.e. banking outside the banking hall) is on the
increase. With electronic banking, users can now conveniently carry out banking
transactions, but this convenience cannot be achieved if the user does not have access to
the internet, hence, in other words, the user cannot carry out a banking transaction while
waiting for a bus, or perhaps while having lunch in a restaurant. With SMS banking,
convenience can be achieved 24 hours a day. This is because a user has access to his
mobile phone all day, at all times. So, to effectively achieve a truly convenient banking
mode, a truly mobile mode of banking has to be explored, hence the need for SMS
Banking.

The SMS banking solution targets the retail banking industry and enables customers to
make account enquiries and transact bank accounts through mobile phones. Banks can
automatically send transaction notifications and alerts to mobile phones, if specific events
in the banking business work-flow occur. The solution provides convenient and latest
front-end technology and a flexible architecture to support an SMS based delivery
channel and to provide significant benefits for both the bank and the customer.

As the time goes by, life style changes. To keep up, MBL welcomes to SMS Banking
Service, one of the most modern banking services. MBL SMS banking Service is
convenient, safe, low-cost, fast and available round the clock. Mercantile Bank provides
the following SMS banking services.
1. Access to account balance
2. Last 3 transaction inquiry
3. Cheque status inquiry

2.1 To get Account Balance
SMS format: BALA#PIN OR BALA#PIN#A/C No or Serial.
Response: UP-to date available balance will appear
2.2 To get last 3 Transactions
SMS format: TXNA#PIN OR TXNA#PIN#A/C No or Serial.
Response: Last 3 Transaction (Dr/Cr) will appear
2.3 Information about Cheque leaf Status

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SMS format: CHQS#PIN#Cheque number
Response: Cheque 10649099 of Tk 10,000 was paid on 15/06/2006
2.4 Procedure to get SMS facility:
All Valued Account holder of Mercantile Bank Limited are eligible to apply SMS
Banking Service.

2.4.1 Application Formality

Figure 4: SMS Banking Service application form

Fill in the attached form clearly and completely and just send in or drop it to the branch
that maintains your account.

2.4.2 Enrollment Procedure:
After submitting the filled-in application form you will receive a PIN on your mobile
phone confirming your request. Memories or save the PIN to avail of SMS Banking
Service.

2.4.3 Getting Started
Once you have confirmed PIN through a return message, you are ready to use SMS
operation. Use the same PIN and send SMS at the format mentioned below to mobile
phone Number 01713044838 and enjoy MBL SMS banking facilities.

2.4.4 SMS format and Key words
Response: All commands and SMS format will be sent to your mobile phone.

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Write: Help #PIN#Keyword
Send to: 01713044838
Response: Keyword usages and details.

2.5 Method of SMS Banking
SMS service conducted under the two procedures by which customer get all the facilities.
The procedures are:

2.5.1 SMS Push service
When any amount is debited or credited from clients account then within 5-10 seconds
he will get a message. The message includes the beginning balance, the amount debited or
credited and the last balance. This facility is only available for Grameen Phone and City
cell subscribers.

2.5.2 SMS Pull service
Every registered Grameen Phone and City cell subscribers can check their account
balance through this service. They can get a mini statement of last five transactions of
their account.

2.6 Business Process:
SMS Banking is a Mobile technology that allows you to request and receive banking
information from your bank on your mobile phone via Short Message Service (SMS).
Individuals or corporate bodies can manage their bank accounts, check their account
balances, perform check requests, money transfers, pay some bills, and perform other
banking transactions using their mobile phones. There are two methods of SMS widely
used in applications; they are the PUSH & PULL. Push SMS is sending a message from
an application (i.e. SMS Server in this case) to the Mobile Phone. It is a one way
message. In other words, its the mobile application (in this case, the SMS banking
application) that initiates a message. An example could be a deposit alert, which alerts the
user when a deposit is made to his/her account. Pull SMS is sending a request and
obtaining a reply. This is a full duplex scenario where a user sends a request to the SMS
banking application and the application replies with the information requested. An
Example is when a user requests his bank account balance.

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A customer willing to have this service has to have an account with Mercantile Bank. He
can open his account following the traditional method but he has to mention about the
specific services at the time of opening the account to get SMS banking facilities. The
customer must be a subscriber of Grameen Phone or Citycell Telecommunication
Company. Mercantile Bank maintains a symmetric dedicated line with Grameen Phone
and Citycell. This line is like intranet and not for public use. A customer willing to have
this service will provide his account number and PIN code through sms to a specific
number provided by the bank. After getting the SMS Grameen Phone or Citycell will
check the code and tracking number of the customer. Then the companies will send the
requirement of the customer with the specific tracking number to Mercantile Bank.
Mercantile Bank will then check the number whether they match with the information
kept by them. If the information matches with the information kept in the database of the
bank then the bank send the information to the GrameenPhone or Citycell. Then the
company provides the information to the customer.

2.13 ATM Banking Service

3.0 Introduction
Automatic teller machines (ATMs) ensure that cash is easily accessible, whenever and
wherever someone needs cash. It helps businesses facilitate cash-only transactions and
you avoid the mounting fees of credit card processing or check cashing, while also
generating revenue for your business via a share of the transaction fees collected by the
ATM provider. The Bank carries its banking activities through 41 branches in the
country. Mercantile Bank customers have access to 59 ATMs as a member of ETN.
Under the ATM network the software enables direct linking of a client's account, without
the requirement of a separate account. Mercantile Bank Limited has already set up its
own ATM machine at 15 corresponding branches and is also in the process of setting up
its own ATM network at every focused point in the city with a view of providing retail
banking services.
3.1 Benefits of MBL cards:

No Cash Withdrawal Fee: For withdrawals of cash from MBL ATM by MBL
cardholders no cash advance fee is necessary and from any other Q-cash ATM the

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fee is Tk.10 only. MBL is the only bank offering such unique facility. Moreover,
our VISA Cardholders can also withdraw cash from any Visa logo ATM locally
and internationally.
Acceptability: International/Dual card is accepted all over the world at millions of
outlets and ATMs. A Dual card is also accepted in most of the big cities like
Dhaka, Chittagong, Khulna, Rajshahi, Sylhet at more than 10,000 outlets
including 4500 POS. It covers various kinds of merchants like hospital, hotel,
restaurant, department store and the card has accessibility to any outlet having
VISA logo.
Credit Facility: Mercantile Bank Ltd. Visa Credit card offers maximum 45 days
credit facilities free of interest and minimum payment is 5% of outstanding billing
payment for easy repayment and convenience of the customers.
Supplementary Card: A Principal cardholder (local) may apply for more than one
supplementary card where one supplementary card is free. Expenses made by
supplementary card will be charged to the principal card.
Advance against Credit card: MBL cardholder can take advance as term loan up to
50% of the card limit to be repaid on the monthly installment basis. Any POS
transaction over TK. 20000 but not exceeding 50% of the credit limit is convertible
to Personal loan/CCS and to be repaid on monthly installment basis. Repayment
period of such loan may be from 6 months to 36 months.
Overdraft Facilities: Overdraft facilities up to 80% of the credit card limit may also
be allowed for payment of the installment of scheme deposit with our Bank.
Payment of Utility Bill: Payment of utility bills like telephone bills, gas bills,
electric bills, water bills, may be settled by card.

3.2 MBLS Cards
Dual Card (two in one): Single Card with double benefits. No hassle to carry two
cards (local and international). A single credit card can be used both locally and
internationally to withdraw cash from ATM for POS transaction. This is the special
feature of MBL Visa card.

Debit Card: Visa debit card is mainly tagged with deposit account (CD/SB/STD)
that is automatically debited from the A/C having available balance. Debit card can

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also be used for purchasing goods, services, payment of utility bills etc as well as
withdrawal of cash from ATM.

Pre-Paid Card: Those who have no account with MBL may avail Pre-Paid card facilities.
The Pre-Paid cardholders pay first buy later. Pre-Paid card offers the convenience and
security of electronic payment in situations where one might otherwise use cash, such as
birthday gift or a monthly allowance for a young adult. Examples include gift cards and
salary payment etc.

- 40 -

3.3 Papers/documents required for issuance Card
3.3.1 For Local Credit Card
Items with asterisk (*) are mandatory. Depending on customer profile and business
relation bank may ask for other documents if necessary on case-to-case basis.
Name of Documents

Service
Holder
Proprietorship

Partnership

Limited
Company
2 copies of passport size
photograph
Yes Yes Yes Yes
TIN Certificate* Yes Yes Yes Yes
Trade License* Yes
Salary Certificate* Yes
Letter of Comfort Yes

Bank Statement
For last
6
months
For last 1 year
personal & Co.
A/C
For last 1
year personal
& Co. A/C
For last 1 year
personal & Co.
A/C
Proof of Residence:
Gas/Electricity/Mobile Phone
Bill/Land Phone Bill
Yes Yes Yes Yes
Blue Book of own Vehicle (if
applicable)
Yes Yes Yes Yes
Other Bank Credit Card bill (if
applicable)
Yes Yes Yes Yes
Memorandum and Article of
Association
Yes
Deed of Partnership Yes
Letter of Incorporation Yes
Corporate Guarantee Yes
Letter of Commencement

For Public
Limited Co.
Copy of Passport/Driving/
License/Visiting Card
Yes Yes Yes Yes
Club Membership, if any Yes Yes Yes Yes
Table 10: Papers/documents required for issuance Local Credit Card

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However, minimum charge documents (DP Note, Letter of Lien, Letter of Encashment,
Letter of Guarantee etc.) to be obtained.

3.3.2 For Debit Card/Pre-Paid Card
Two copies of passport size photograph.
Customer should maintain a deposit (SB/CD/STD) A/C with any branch of MBL.
Other than MBL account holders may also avail Pre-Paid card against deposit of
money.

3.3.3 For International Credit Card
Two copies of passport size photograph.
TIN certificate.
Photocopy of passport from 1 to 7 pages including endorsement pages if any.
Lien confirmation of RFCD A/C is required from the concerned Branch/Bank for
issuance of card against RFCD A/C.
For issuance of card against the balance in ERQ A/C maintained with us or with
other bank, lien confirmation should be obtained from the respective Bank/branch.
For issuance of card against new exporters and importers/producers quota relevant
papers such as, recommendation letter from EPB/ copy of tax return etc. is
required.

3.4 Business Process:
After opening a bank account in the bank the customer is provided with ATM card and
also his password. Customer will go to any ATM booth of the bank and punch his card
and then provide the password with mentioning the required amount of money. When he
provides his password the bank check it with their database information. If there is
balance in the customers account the server of the bank give the ATM machine
confirmation to provide the customer the required money.

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2.14 Credit or Loan Department

4.0 Introduction
Mercantile Bank Limited is a third generation bank, which is committed to provide high
quality financial services/products to contribute to GDP through stimulating trade &
commerce, accelerating the pace of industrialization and boosting up export by allowing
credit facilities. The failure of the commercial bank is mainly occurs due to bad loans,
which occurs due to inefficient management of the loan and advance portfolio. The
objective of the credit management is to maximize the performing asset and the
minimization of the non-performing asset as well as ensuring the optimal point of loan
and advance and their efficient management. Credit management is a dynamic field
where a certain standard of long-range planning is needed to allocate the fund in diverse
field and to minimize the risk and maximizing the return on the invested fund.
Continuous supervision, monitoring and follow-up are highly required for ensuring the
timely repayment and minimizing the default.

General loan scheme, depending on the various nature of financing, all the lending
activities has been brought under the following General loan:
1. Short Term Loan
2. Medium Term Loan
3. Long Term Loan
4.1 Types of Credit or Loan
4.1.1 Secured Overdraft (SOD):
It is a continuous advance facility. By this agreement the banker allows his customer to
overdraft his current account up to his credit limits sanctioned by the bank. The interest is
charged on the amount, which he withdraws, not on the sanctioned amount. MBL
sanctions SOD against different security. Based on different types of security, we can
divide the following category of the facility:

SOD (General): Advances allowed to the individuals/firms against financial
obligations i.e. lien of F.D.R or Defense Savings Certificate (P.S.P), ICB Unit
Certificate etc.

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SOD (Others): Advances allowed against assignment of work order for execution
of contractual works falls under this head. The advance is generally allowed for
specific purposes. It is not a continuous loan.

4.1.2 Cash Credit:
Cash credit is a favorite mode of borrowing by traders, industrialists etc. for meeting
their working capital requirements. It is operated like overdraft account. Depending on
the needs of the business, the borrower can draw on his cash credit account at different
time and when he gets money can adjust the liability. MBL charges interest on the daily
balance in the account. Depending on charging security there are two forms of cash
credit:

Cash Credit (hypothecation): It is a short-term arrangement by which a customer is
allowed to borrow money up to a certain limit sanctioned by the bank for a certain time.
Under he condition the borrower is required to submit the stock fortnightly in the bank
specimen form. It is allowed to maximum a period of one year.

Cash Credit (pledge): It is also a continuous loan allowed against pledge of goods
as primary securities fall under this head of advance.
4.1.3 Foreign Documentary Bills Purchased (FDBP):
Payment made against documents representing sell of goods to local export oriented
industries, which are deemed as exports, and which are denominated in Local currency/
foreign currency falls under this head. The bill of exchange is held as the primary
security. The client submits the usance bill and the bank discounts it. This temporary
liability is adjustable from the proceeds of the bills.
4.1.4 Term Loan:
MBL considers the loans, which are sanctioned for more than one year as term loan.
Under this facility, an enterprise is financed from the starting to its finishing, i.e. from
installation to its production. MBL offers this facility only to big industries. The loans are
allowed to individual or firm or industries for a specific purpose but for a definite period

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and generally repayable by installments fall under this lead. These types of lending are
mainly allowed to accommodate financing under the categories.

Large & Medium Scale Industry
Small & Cottage Industries and
Agriculture

Mercantile Bank has offered the public, the businessperson, or the entrepreneur, even
service holder, to know the policy and get the benefit this policy. This bank has also
offered this scheme:
d Consumers credit Scheme (CCS)
d Car Loan Scheme
d Doctors Credit Scheme
d Rural Development Scheme
d Lease Financing
d Personal Loan
d Small Loan

2.15 Foreign Exchange Department

5.0 Introduction
The foreign exchange has played a vital role in the last decade or so in guiding the
purchase and sale of goods, services and raw materials globally. Every country has
certain natural advantages and disadvantages in producing certain commodities while
they have some natural disadvantages as well in other areas. As a result, we find that
some countries need to import certain commodities while others need to export their
surpluses. Foreign trade brings the fruits of the earth to the homes of the humblest among
the countries. These transactions are the basis upon which international trade is made.

As more than one currency is involved in foreign trade, it gives rise to exchange of
currencies, which is known as Foreign Exchange. The term Foreign Exchange has three
principal meanings. Firstly, it is a term used referring to the currencies of other countries

- 45 -

in terms of any single one currency. To a Bangladeshi, Dollar, Pound Sterling, etc. are
foreign currencies and as such foreign exchanges. Secondly, the term also commonly
refers to some instruments used in international trade, such as bill of exchange, drafts,
travelers cheque and other means of international remittance. Thirdly, the term foreign
exchange is also quite often referred to the balance is foreign currencies held by a
country.

In the fiscal year 2010 Bangladesh economy was confronted with serious challenge,
among others, the impact of divesting floods, the excessive price hike of oil and some
other importable in the international market, in addition to the termination of the multi
fiber arrangement. To cope with these challenges, the government and the Bangladesh
Bank adopted a series of policies to enhance the resilience of the economy, while
maintaining macroeconomic stability. These polices significantly contributed toward
maintaining real GDP growth at a satisfactory level of 6.5 percent in the fiscal year 2010-
2011 as against 6.3 percent in 2009.The reduction in growth of agriculture sector in
Bangladesh affected the economy. Economic growth was aided by continuing rebounded
exports, import and remittance. In U.S dollar terms exports earning recorded a growth of
14.7 percent while imports payments surged by 21.4 percent. At the same time,
remittance from by 11.8 percent non-residence Bangladeshi nationals increased in the
fiscal year 2010. Although the countrys external current account balance swung from
surplus to deficit, the overall balance of payments continued to maintain a surplus that LD
to further accretion to foreign exchange reserves, foreign exchange reserves stood at USD
at more than 10.0 billion at the end of fiscal year 2010-2011.

5.1 Category of the Foreign Exchange Business

In terms of section 2(d) of the Foreign Exchange Regulations -1947, as adopted in
Bangladesh Foreign Exchange means foreign currency and includes any instrument
drawn, accepted, made or issued under clause 13 of article 16 of the Bangladesh Bank
Order, 1972, all deposits, credits and balances payable in any foreign currency and draft,
travelers cheque., letter of credit and bill of exchange expressed or drawn in Bangladesh
currency but payable in any foreign currencies.

- 46 -

In exercise of the powers conferred by sec. 3 of the Foreign Exchange Regulation-1947,
Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These
banks are known as Authorized Dealers (AD). Bangladesh Bank also issues licenses to
persons or firms to exchange foreign currency instruments such as Currency notes and
coins.
Foreign exchange department of MBL is divided into three sections:

d Import (L/C Operation)
d Export (L/C Operation)
d Foreign Remittance

5.1.1 Import Business

Import means purchase of goods and services from the foreign countries into Bangladesh.
Normally consumers, firms industries and Government of Bangladesh import foreign
goods /materials to meet their various necessities. So, in brief, it can say that import in the
flow of goods and services purchased by economic agent staying in the country from
economic agent staying abroad.

The Ministry of Commerce in terms of the import and Export (Control) Act-1950
regulates import of goods into Bangladesh with Import Policy Order issued periodically
and public notices issued time to time b y the office of the Chief Controller of Import and
Export (CCI & E). A present, it is regulated by the Import Policy (1997-2006), which
was come into effect on J une 14, 1998. And Import Policy directs certain Import
Procedure, which administers the whole activity.

5.1.2 Export Business
Creation of wealth in a country depends on the expansion of production and increasing
participation in international trade. By increasing production in the export sector this bank
can improve the employment level. Bangladesh exports a large quantity of goods and
services to foreign households. Readymade textile garments both knitted and woven),
J ute, J ute-made products, frozen shrimps, tea are the main goods that Bangladeshi
exporters export in foreign countries. Garments sector is the largest sector that exports the
lion share of the countrys export. Bangladesh exports most of its readymade garments

- 47 -

products to U.S.A and European Community (EC) countries. Bangladesh exports about
40% of its readymade garments products to U.S.A. Most of the exporters who export
through MBL are readymade garments exporters. They open export L/Cs here to export
their goods, which they open against the import L/Cs opened by their foreign importers.

Export L/C operation is just reverse of the import L/C operation. For exporting goods by
the local exporter, bank may act as advising bank and collecting bank (negotiable bank)
for the exporter.

5.1.3 Remittance Business
Foreign remittance section of MBL is an integral part of Foreign Exchange Department.
And this section of Foreign Exchange Department deals with incoming and outgoing
foreign currencies. Therefore based on its function, foreign remittances are divided into
two types.
Outward Foreign Remittance and
Inward Foreign Remittance.

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3.1 Service
In economics, a service is an intangible commodity. That is, services are an example of
intangible economic goods.
Service provision is often an economic activity where the buyer does not generally,
except by exclusive contract, obtain exclusive ownership of the thing purchased. The
benefits of such a service, if priced, are held to be self-evident in the buyer's willingness
to pay for it. Public services are those that society (nation state, fiscal union, regional) as
a whole pays for, through taxes and other means.
4.1.1 Service Marketing
Services marketing is a sub field of marketing which covers the marketing of both goods
and services. A goods marketing includes the marketing of fast moving consumer goods
(FMCG) and durables. Services marketing typically refer to the marketing of both
business to consumer (B2C) and business to business (B2B) services. Common examples
of service marketing are found in telecommunications, air travel, health care, financial
services, all types of hospitality services, car rental services, and professional services.
A service, according to Vargo and Lusch (2004), is the application of specialized
competences (knowledge and skills) through deeds, processes, and performances for the
benefit of another entity or the entity itself. Services are economic activities, rather than
tangible products, offered by one party to another. Rendering a service to recipients,
objects, or other assets depends on a time-sensitive performance to bring about the
desired result. In exchange for money, time, and effort, service customers expect value
from access to goods, labor, professional skills, facilities, networks, and systems; but they
do not normally take ownership of any of the physical elements involved.

- 49 -

3.2 Service Characteristics

5 Major Characteristics of Services
Perishability
Intangibility
Variability
Inseparably
Non-ownership
1. Perishability
Perhaps of all the suggested special characteristics of service products, this is one of the
most difficult to appreciate. Why? Services are highly perishable compared to physical
products. But how could, for example, the services of say, an airline be considered to be
more perishable than, say, fresh food and vegetable products?
The reason is that unlike most physical products, many services cannot be stored. For
instance, if an airline does not sell all the seats on a particular flight, then those seats or
rather the sales revenue of filling of them would have carried, has immediately and
irreversibly gone.
2. Intangibility
Physical products in the store are widely displayed for customers to see, feel, touch,
weigh or sniff at before deciding whether or not to buy.
Comparing this with the choice of the service of say, an insurance policy. You cannot
touch, see or smell the products before choosing, although clearly you can make some
assessment based on past experience, word of mouth, or even the location and decor of
the insurance office. The intangible nature of most services gives rise to special problems
both for suppliers and consumers.
3. Variability
In the production and marketing of physical products, companies have increasingly paid
special attention to ensuring consistency in quality, feature, packaging, and so on. More

- 50 -

often than not all customers can be sure that every bottle of Coke he/she buys, even in a
life-time of purchases, will not vary. The provision of services, however, invariably
includes a large measure of the human element
Indeed, with many services, we are purchasing nothing else but the skills of the suppliers.
Because of this, it is often very difficult for both supplier and consumer to ensure a
consistent product or quality of service.
4. Inseparability
A key distinguishing feature of service marketing is that the service provision and
provider are inseparable from the service consumption and consumer. For example, we
cannot take a hotel room home for consumption; we must consume this service at the
point of provision. Similarly, the hairdresser needs to be physically present for this
service to be consumed. This has implications both for channels of distribution and scale
of operations.
5. Non-ownership
The final distinguishing feature of a service is that, unlike a physical product, the
consumer does not secure ownership of the service. Rather the customer pays only to
secure access to or use of the service. Again the hotel room is a good example. Similarly,
with banking services, although the customer may be given a Cheque book, credit cards,
etc, they serve only to allow the customer to make use of what he or she is actually
buying, namely, bank services.

3.3 Service Quality

Lehtinen and Lehtinen (1982) defined service quality in terms of physical quality,
interactive quality and corporate (image) quality. Physical quality relates to the tangible
aspects of the service. Interactive quality involves the interactive nature of services and
refers to the two-way flow that occurs between the customer and the service provider, or
his/her representative, including both automated and animated interactions. Corporate
quality refers to the image attributed to a service provider by its current and potential
customers, as well as other publics. Lewis and Booms' (1983) definition clearly states that

- 51 -

service quality is a measure of how well the service level delivered matches customer
expectations and delivering quality service means conforming to customer expectation on
a consistent basis. In some earlier studies, researchers define service quality as the extent
to which a service meets customers' needs or expectations (Lewis & Mitchell, 1990;
Dotchin & Oakland, 1994; Asubonteng, McCleary, & Swan, 1996; Wisniewski &
Donnelly, 1996). Zeithaml (1987) defined that service quality is the consumer's judgment
about an entity's overall excellence or superiority. It is a form of attitude, and results from
a comparison of expectations to perceptions of performance received. Zeithaml, Berry,
and Parasuraman (1990) on the other hand, have chosen to define service quality as the
extent of the discrepancy between customers' expectations or desires and their
perceptions. Service quality has been also defined as the consumers overall impression
of the relative inferiority or superiority of the organization and services (Zeithaml et al.,
1990; Taylor & Baker, 1994).
Christopher, Payne, and Ballantyne (1993) have defined service quality as the
ability of the organization to meet or exceed customer expectations. Service quality is
believed to depend on the gap between expected and perceived performance (Anderson,
Fornell, & Lehmann, 1994). Gitlow, Oppenheim, and Oppenheim (1989) also stated that
service quality is the extent to which the customer or users believe the service surpasses
their needs and expectations.
Parasuraman, Zeithaml, and Berry (1985) proposed that service quality is a
function of the differences between expectation and performance along the quality
dimensions. Service quality is also defined as a consumer attitude reflecting the perceived
overall superiority and excellence in the process and outcome of a service provider
(Parasuraman et al., 1988). Gronroos (2001) recently defined service quality as a mixture
of three elements: quality of the consumption process itself, the quality of the outcome of
the process; and image of the provider of the service.
Service quality has become an increasingly important factor for success and
survival in the banking sector. Provision of high quality service aids in meeting several
requirements such as customer satisfaction and its consequent loyalty and market share,
soliciting new customers, improved productivity, financial performance and profitability
(Collet et al., 1990; J ulian & Ramaseshan, 1994; Lewis, 1989, 1993; Llosa et al., 1998).
Bank Service quality has become an important factor in determining market shares and
profitability (Andereson et al., 1994; Spathis, Kosmidou, & Doumpous, 2002).

- 52 -

3.4 Service Quality Dimensions

Since a conceptual model concerning perceived service quality was proposed by
Parasuraman, Zeithaml, and Berry (1985), service quality dimensions have become an
area of interest in marketing research (Bolton & Drew, 1991b; Brown & Swartz, 1989;
Carman, 1990; Cronin & Taylor, 1992, 1994; Parasuraman et al., 1988, 1994; Teas, 1993,
1994; Zeithaml et al., 1996). One of the important issues related to service quality is the
dimensions of service quality, and the measurement tool, SERVQUAL developed by
Parasuraman et al. (1988) has been the starting point of the controversy in this area.
Parasuraman et al. (1988) identified five quality dimensions that link specific
service characteristics to consumer expectations of quality. These five basic dimensions
are reliability, responsiveness, assurance, empathy, and tangibles.

(1) Reliability: Reliability is defined as the ability to perform the promised service
dependably and accurately (Parasuraman et al., 1988). Reliability involves consistency of
performance and dependability. It means that the firm performs the service right first
time. It also means that the firm honors its promises. Specifically it involves accuracy in
billing, keeping records correctly, and performing the service at the designated time.
(Parasuraman, Zeithaml, & Berry, 1985).
Reliability refers to the extent to which the retail service provides what was
promised when it was promised (Dabholkar, Thorpe, & Rentz, 1996). Zeithaml et al.
(1990) defined reliability as the ability to perform the promised service dependably and
accurately. Reliability refers to an absence of errors, precision of filing, and precision in
transactions (Spathis, Petridou, & Glaveli, 2004). Reliability is the ability to perform the
promised service consistently, dependably, and accurately. Reliability has often been
cited as the most important dimension in assessing the quality of service and is therefore a
fundamental requirement for businesses to compete in the marketplace (Cook, Bowen,
Chase, Dasu, Stewart, & Tansik, 2002).

(2) Responsiveness: Responsiveness is defined as the willingness to help customers and
provide prompt service (Parasuraman et al., 1988). It concerns the willingness or
readiness of employees to provide services. Responsiveness involves timeliness of service

- 53 -

like posting a transaction slip immediately, returning a phone call quickly, giving prompt
service, setting up appointments quickly. According to Zeithaml et al. (1990),
responsiveness refers to the motivation to help (internal) customers and provide prompt
service to them.

(3) Assurance: Parasuraman et al. (1988) defined assurance as the knowledge and
courtesy of employees and their ability to convey trust and confidence. Assurance
involves trustworthiness, believability, honesty. It involves having the customers best
interests at heart. Contributing to credibility includes company name; company
reputation; personal characteristics of the contact personnel; how much a hard sell is
employed in interactions with the customer (Parasuraman et al., 1985). According to
Bahia and Nantel (2000), assurance represents the friendliness and courtesy of employees
- personalized attention to the customer and the ability of employees to inspire
confidence. Zeithaml et al. (1990) defined assurance as the awareness and good manners
of the employees and their ability to convey trust and confidence to the customers.

(4) Empathy: According to Parasuraman et al. (1988), empathy is defined as caring and
individualized attention provided to customers. Empathy refers to graciousness, respect,
consideration and friendliness of contact personnel including receptionists, telephone
operators, etc. It includes consideration for the consumers property, clean and neat
appearance of the contact personnel.

(5) Tangibles: Tangibles are the physical facilities, equipment, and appearance of
personnel in services (Parasuraman et al., 1988). It includes all the physical evidence of
the service like the facilities, appearance of personnel, tools or equipment used to provide
the service, physical representations of the services (e.g. statements), and even other
customers. Tangibles of service are the tangible facets of the service facility (equipment,
signage, employee appearance, etc.) or the man-made physical environment, popularly
known as the servicescapes (Sureshchandar, Rajendran, & Anantharaman, 2003). Bahia
and Nantel (2000) stated that tangibles assessed the appearance and cleanliness of a
bank's physical facilities.

- 54 -

3.5 Customer Service

In the competitive environment of retail banking there is constant pressure to innovate
and develop new ways to improve customer service. In the context of retail banking,
customer service is the long-term person-to-person relationship between a financial
institution, its distributors and its customer (Wong & Perry, 1991). Customer service is
considered as an important factor if a retail bank is to achieve a competitive advantage
(Kelley, 1990; J avalgi, 1992). The term customer service is used today in the field of
service management to describe a host of different but critically interrelated activities.
Some authors view customer service as all activities which bind a corporation and its
customers together to further a sales relationship (Hopkins & Bailey 1970; Christopher &
Wills, 1974). Other authors view customer service as a package of measurable activities
which provide utility to customers (Perreault, 1973) or optimum levels of service
(LaLonde & Zinszer, 1976).
Lewis (1989) stated that in the financial services industry, the marketing key is
now customer service. In brief, good customer service is the key to a successful
organization and customer retention. Furthermore, good customer service fosters growth
because each satisfied customer will tell at least five other people about the business,
some of whom will become customers (Seller, 1989).

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4.1 Methodology

5.1.1 Research design

As the purpose of this study is to make a comparative analysis of customer service quality
of different private commercial banks, therefore descriptive research was undertaken to
fulfill the main purpose of the study.
The current study will compare the customer service performance of Mercantile Bank
Limited with the private commercial banks like Dhaka Bank Ltd, Dutch-Bangla Bank
Ltd, Bank Asia Ltd and Southeast Bank Ltd under five key dimensions like tangibles,
reliability, responsiveness, assurance, and empathy. This research will use a descriptive
study to discover the ideas and insights of these different service quality dimensions.
Therefore, the current study will be characterized as a descriptive study.

5.1.2 Sampling method
For the current study, the researcher will use the customers of five different
private commercial banks like Mercantile Bank Limited, Dhaka Bank Ltd, and Southeast
Bank Ltd as the sample for the study. The population will be the customers of these five
private commercial banks operating in Dhanmondi.

The researcher will use non-probability convenient sampling technique to collect the
sample for this study. From each of the banks, about 20 customers will be conveniently
selected and thus the sample size will be 100. Data will be collected using the personal-
contact approach, i.e. the respondents have been approached personally and given a
detailed explanation about the survey.

5.1.3 Survey Instrument

In the current study, the researcher will use a questionnaire to collect the data from the
sample. Structured questionnaire will be used in this research. Each of the questionnaires
will have 5 sections such as reliability, responsiveness, assurance, empathy, and tangibles.
This 21-item SURVQUAL scale is developed by Parasuraman, Zeithaml, and Berry
(1988).

- 56 -

5.1.4 Data Collection
The study was conducted on the basis of both the primary and secondary sources of
information.

Primary data
Primary data will be collected through questionnaire from the customers of Mercantile
Bank Limited, Dhaka Bank Ltd, Southeast Bank Ltd, Dutch-Bangla Ltd, Bank Asia Ltd
(only in Dhanmondi branches).

Secondary data
Annual reports of MBL, Instruction circular of Head Office, Brochures of different
Banks, News Paper & Magazine regarding Banking issues and Internet.

5.1.5 Data analysis procedure

In the current situation, the study is a comparative study that intended to analyze the
customer service quality of Mercantile Bank Limited with other private commercial
Banks. As a result, after collecting the data the researcher has used mean score for each of
the five dimensions of service quality measurement to make the comparison with other
private commercial banks.

Several studies have utilized the mean value to analyze the service quality dimensions
(J oseph & Stone, 2003; Dotchin & Oakland, 1994; Cuthbert, 1996; Allred & Addams,
2000). In this study, the researcher also utilized factor analysis to analyze the data for the
proposed study. The researcher intended to check if the scale items included in the
questionnaire constituted a single dimension in the specific context of the different private
commercial banks and then make a comparison between the banks.

Some previous studies have also utilized factor analysis to study service quality of
different service organizations (Cui, Lewis, & Park, 2003; Cuthbert, 1996; Arasli,
Mehtap-Smadi, & Katircioglu, 2005). To analyze the data gathered from the survey
Microsoft Excel 2007 will be utilized

- 57 -

5.1.6 Time
The survey time for the current study is May 2014

4.2 Comparative Analysis on Service Quality

Parasuraman et al. (1988) suggested that a service quality measure could be used as a tool
for competitive analysis. To accomplish this objective, it was necessary to administer the
same questionnaire to a group of competitor's customers. This allows for a comparison of
the level of service quality delivered by service providers with the level of service quality
delivered by the competitive companies. This comparison illuminates the service quality
gap between the competitors. By identifying this gap the company will be able to isolate
areas in which the company is excelling (those areas showing a competitive gap favors
the sponsoring company), as well as those areas that need improvement (the areas where
the competitive gap is in favor of the competitors).
For comparative analysis, the data retrieved from the perception score given by
the customers of Mercantile Bank Limited, Dhaka Bank Ltd, Southeast Bank Ltd, Dutch-
Bangla Bank Ltd and Bank Asia Ltd are analyzed in the current study. By analyzing the
mean value of the results, the researcher has intended to find which Bank's customer
service quality is more appreciable to the customers. The comparative analysis is based
on the mean score of the actual score given by the customers on the items of each of the
service quality dimensions.

5.2.1 Comparative Analysis on Reliability dimension:
In reliability dimension, the customers were asked to give score about their perception on
five scale items. The following Table 1 shows the comparative results in the reliability
dimension for Mercantile Bank Limited, Dhaka Bank Ltd, Southeast Bank Ltd, Dutch-
Bangla Bank Ltd and Bank Asia Ltd. The result shows that Mercantile Bank receives
maximum scores in four scale items except the one, which asks whether the bank
provides its services at the time it promises to do so. For that particular scale item,
Mercantile Bank receives a mean score of 4.95 whereas the mean score for Dhaka Bank is
5.0.

- 58 -

In terms of scale item 1, the customers of Mercantile Bank have relatively high
perception than the customers of other banks as the bank does the work within the
promised time. Mercantile Bank receives a mean score of 5.7 in this aspect while Dhaka
Bank, Southeast Bank, Dutch-Bangla Bank Ltd and Bank Asia Ltd 5.3, 4.75, 4.82 and 5.3
respectively. Mercantile Bank also receives a mean score of 5.2 as the bank shows sincere
interest to solve the problems of the customers than the other banks do. Mercantile Bank
also receives a comparatively high mean score in the aspect of that the bank keeps
customers informed about when services will be performed.

Mean Quality Scores of Mercantile Bank Limited, Dhaka Bank Ltd, Southeast Bank
Ltd, Dutch-Bangla Bank Ltd and Bank Asia Ltd for Reliability dimension

Perception Statements in
Reliability Dimension
Mercantile
Bank
Dhaka
Bank
Southeast
Bank
Dutch-
Bangla
Bank
Bank Asia
1. When your bank promises
to do something by a certain
time, it does so.
5.7 5.3 4.75 4.82 5.3
2. When you have a problem,
your bank shows a sincere
interest in solving it.
5.2 4.95 4.3 4.32 4.45
3. Your bank performs the
right service at first time.
5.2 4.45 4.7 4.55 4.80
4. Your bank provides its
services at the time it
promises to do so.
4.95 5.0 4.55 4.36 4.6
5. Your bank keeps you
informed about when services
will be performed.
5.2 4.4 4.45 4.70 4.6
Table 11: Mean Quality Scores of Five Banks for Reliability Dimension
5.2.2 Comparative Analysis on Responsiveness dimension:
The responsiveness dimension consists of three items. The following Table 2 shows the
comparative results in the responsiveness dimensions for the banks. The result shows that

- 59 -

Mercantile Bank receives comparatively low scores in all three items of the dimension.
The mean score of Mercantile Bank for scale item 6 is 4.65, which is lower than Dhaka
Bank ,Southeast Bank and Dutch-Bangla Bank. .

Ltd, Dutch-Bangla Bank Ltd and bank Asia for Responsiveness dimension

Responsiveness Dimension
Mercantil
e
Bank
Dhaka
Bank
Southeast
Bank
Dutch-
Bangla
Bank
Bank Asia
6. The employees in your bank
give you prompt service.
4.65 5.1 4.95 4.85 4.45
are always willing to help you.
4.8 5.15 4.05 4.25 4.55
are never too busy to respond to
your request.
4.5 4.9 5.05 4.80 4.3
Table 12: Mean Quality Scores of Five Banks for Responsiveness Dimension
The customers of Dhaka Bank perceive more about the willingness of the employees to
help them than the customers of Mercantile Bank do perceive. For the item 8 Mercantile
Bank again receives a mean score of 4.5 whereas the mean score for Southeast Bank is
5.05, Dhaka Bank is 4.9 and Dutch-Bangla bank is 4.80.

5.2.3 Comparative Analysis on Assurance dimension
According to the SERVQUAL scale developed by Parasuraman et al. (1988), the
assurance dimension of service quality consists of four items. The following Table 3
shows the comparative results in the assurance dimensions for the preferred banks. The
result shows that the customers of Mercantile Bank have given low score in aspect of
employees behavior and employees courteousness than the score given by the customers
of other banks. The customers of Mercantile Bank perceive that the behavior of the
employees does not inspire enough confidence in them. Thus, the mean score of
Mercantile Bank for item 9 is 4.6 which is lower than all other banks. In terms of

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employees courteousness Mercantile Bank again receives a mean score of 4.7, which is
lower than Dhaka Bank and Southeast Bank.

Ltd, Dutch-Bangla Bank Ltd and Bank Asia for Assurance dimension

Perception Statements
in Assurance
Dimension
Mercantile
Bank
Dhaka
Bank
Southeast
Bank
Dutch-
Bangla
Bank
Bank Asia
9. The behavior of the
employees of the bank
inspires confidence in
you.
4.6 5.35 5.25 4.88 4.8
10. You feel safe in
your transactions with
your bank.
5.35 5.25 4.25 4.57 4.25
11. The employees in
your bank are
consistently courteous
with you.
4.7 5.25 4.9 4.78 4.65
12. The employees in
your bank have the
knowledge to answer
your questions.
4.7 4.8 4.3 4.5 4.4
Table 13: Mean Quality Scores of Five Banks for Assurance Dimension
The customers also perceive that the employees of Dhaka Bank are more
knowledgeable (Mean score 4.8) than that of Mercantile Bank (Mean score 4.7).
However, in this dimension Mercantile Bank receives a high score than other banks in
terms of safe transactions with the bank. The customers of Mercantile Bank perceived
that they feel safer while transacting with the bank than that of other banks.

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5.2.4 Comparative Analysis on Empathy dimension
The following Table 3 shows the customers perception on empathy dimension of service
quality, which consists of four items.
This comparative analysis evaluates that the customers of Mercantile Bank perceives high
individual attention from their bank. In this aspect, Mercantile Bank receives a mean
score of 5.0 whereas Dhaka Bank, Southeast Bank, Dutch-Bangla Bank and Bank Asia
receive 4.7, 4.2, 4.6, and 4.2 respectively.

Ltd, Dutch-Bangla Bank Ltd and Bank Asia Ltd for Empathy dimension

Empathy Dimension
Mercantile
Bank
Dhaka
Bank
Southeast
Bank
Dutch-
Bangla
Bank
Bank Asia
13. Your bank gives you
individual attention.
5.0 4.7 4.2 4.6 4.2
14. Your bank has employees
who give you individual
attention.
4.75 4.9 4.35 4.25 3.65
15. Your bank has your best
interests at heart.
4.9 4.35 4.15 4.45 4.55
16. The employees in your
bank understand your specific
needs.
4.65 4.8 4.75 4.70 4.45
Table 14: Mean Quality Scores of Five Banks for Empathy Dimension
However, when it comes to the aspect of employees individual attention towards
the customers, Mercantile Bank receives a relatively low mean score of 4.75 whereas
Dhaka Bank receives 4.9. The customers of Mercantile Bank also perceive more in the
aspect that the bank has their best interests at heart than the customers of other banks do.
Mercantile Bank receives a mean score of 4.9 in this item. On the other hand, Mercantile
Bank receives a relatively low mean score in case of employees understanding of
customers specific needs. Mercantile Bank receives a mean score of 4.65 whereas Dhaka
Bank, Southeast Bank and Dutch-Bangla Bank receive mean scores of 4.8, 4.75 and 4.70.

- 62 -

5.2.5 Comparative Analysis on Tangible dimension
The tangible dimension of service quality consists of five items. The subsequent Table 5
shows the comparative results in the tangible dimension for the private commercial banks
that is based on the perceptions of the customers.
The result explains that the physical facilities of Mercantile Bank are more visually
appealing than other banks. In this aspect, Mercantile Bank receives a mean score of 5.35,
which is higher than the scores of other banks. The customers of Mercantile Bank also
perceive more that materials associated with the service are visually appealing at the bank
than the customers of other banks do.

Ltd, Dutch-Bangla Bank Ltd and Bank Asia Ltd for Tangibles dimension

Tangible Dimension
Mercantile
Bank
Dhaka
Bank
Southeast
Bank
Dutch-
Bangla
Bank
Bank Asia
17. The bank has modern-
looking and hi-tech
equipments.
5.2 5.4 5.0 4.98 4.4
18. The banks physical
facilities are visually
appealing.
5.35 4.6 4.25 4.50 4.35
19. The employees of the
bank appear neat.
4.6 5.1 4.65 4.70 4.65
20. Materials associated
with the service are
visually appealing at the
bank.
5.45 5.35 4.8 5.21 4.65
21. Your bank has
convenient business hours.
5.5 5.6 5.1 5.25 5.3
Table 15: Mean Quality Scores of Five Banks for Tangibles Dimension

- 63 -

However Dhaka Bank receives a mean score of 5.4 in the scale item which refers
that the bank has modern-looking and hi-tech equipments whereas Mercantile Bank
receives a mean score of 5.2 in this scale item. The customers of Mercantile Bank also
perceive less about the employees appearance than the customers of Dhaka Bank do. In
this aspect, Mercantile Bank receives a mean score of 4.6 while Dhaka Bank receives a
mean score of 5.1.

4.3 The five SERVQUAL dimensions: An overall comparison of bank
customers perception and grand mean scores

The following table (Table 6) represents the Grand Mean scores of Mercantile Bank
Limited, Dhaka Bank Ltd, Southeast Bank Ltd, Dutch-Bangla Bank Ltd and Bank Asia
Ltd for the five service quality dimensions. In the reliability dimension Mercantile Bank
obtained the highest grand mean score of 5.25 as the customers of Mercantile Bank think
the bank is highly reliable than the customers of other banks do.

However, in responsiveness dimension which refers to the willingness of the employees
to help customers and provide prompt service, Mercantile Bank obtained a relatively low
grand mean score of 4.65. In this dimension Dhaka Bank and Southeast Bank receive
5.25 and 4.83 respectively. This result evaluates that the customers of Mercantile Bank
are not getting adequate and prompt response from the employees of the bank. Again in
terms of assurance Mercantile Bank obtained a grand mean score of 4.83 whereas Dhaka
Bank receives a grand mean score of 5.25. This dimension is defined as the knowledge
and courtesy of employees and their ability to convey trust and confidence. The
customers of Mercantile Bank perceive less about the employees courteousness than the
customers of Dhaka Bank do perceive.

Five Dimensions of
Service Quality
Mercantile
Bank
Dhaka
Bank
Southeast
Bank
Dutch-
Bangla
Bank
Bank Asia
Reliability 5.25 4.82 4.55 4.94 4.75
Responsiveness 4.65 5.05 4.83 4.53 4.36
Assurance 4.83 5.25 4.67 4.80 4.52

- 64 -

Empathy 4.84 4.68 4.36 4.58 4.21
Tangibles 5.17 5.21 4.76 5.08 4.54
Table 16: Grand Mean Quality Scores for five SERVQUAL Dimension
The next service quality dimension is empathy, which is defined as caring and
individualized attention provided to customers (Parasuraman et al., 1988). Mercantile
Bank obtained a grand mean score of 4.84 which is relatively higher than the other banks.
The customers of Mercantile Bank also think that the bank has adequate modern looking
and hi-tech equipments and the physical facilities are visually appealing. Therefore, the
bank obtained a grand mean score of 5.17 in tangibles dimension while in the same
service quality dimension Dhaka Bank, Southeast Bank, Dutch-Bangla Bank and Bank
Asia received 5.21, 4.76, 5.08 and4.54, respectively.
According to results of the Grand Mean scores, Table 7 represents the rankings of
the banks in five different dimensions and which is prepared on the basis of customers
perceptions on the service quality dimensions. The result shows that Mercantile Bank is
ranked first in reliability, empathy and tangibles dimensions. However, in terms of
responsiveness Mercantile Bank is ranked as third while Dhaka Bank is ranked first.
Again in case of assurance Mercantile Bank is ranked second whereas Southeast Bank is
ranked first.

Ranking of the Private Commercial Banks on the basis of the perception of the
customers on five SERVQUAL dimensions

Name of the Private
Commercial Banks
Reliabilit
y
Responsivenes
s
Assuranc
e
Empath
y
Tangible
s
Mercantile Bank
Limited
1 3 2 1 2
Dhaka Bank Ltd 3 1 1 2 1
Southeast Bank Ltd 5 2 4 4 4
Dutch-Bangla Bank
Ltd
3 4 4 4 4
Bank Asia Ltd 4 5 5 5 5
Table 17: Ranking of Five Banks based on perception of the customers on
fi ve SERVQUAL Dimension

- 65 -

4.4 Findings of the Research

On the base of survey, theoretical analysis and practical experience of 3 months
internship program, the following findings are identified during the research period:

In case of Mercantile Bank Limited, the customer service quality is not
satisfactory enough according to the perceptions of the customers, in terms of
responsiveness and assurance of the employees in comparison with the studied
private commercial banks. Customers perceived a relatively low service quality in
these dimensions than the customers of other private commercial banks. The result
shows that Mercantile Bank receives comparatively low scores in most of the
items of these dimensions. It has been identified that courteousness, promptness,
and attitude of the employees towards their work are the critical issues and need to
improve significantly to provide better quality service to the customers.

Mercantile Bank has no segmentation to handle different type of customers. They
are providing service to the all customers under one umbrella. Nevertheless high
status clients seek on extra honor from the bank or institution. Moreover, as the
studied branch is in such a location like Dhanmondi it is more possibilities that
high status clients are more likely to seek for quality services from the bank. It has
been identified that most the employees are not aware of the segmentation of the
customers, which results into dissatisfaction of those customers.

It has been found that the recruitment policy of the bank is not always fair.
Intelligence and competence are not always the criteria for selection. People who
have good relation with influential persons have the chance to enter through
backdoor. Most of the times, these people do not have the ability to compete with
other banks workforce in terms of performance. As a result, the customer service
quality and innovativeness of the bank is deteriorating day by day whereas the
other studied private commercial banks have a good recruitment policy are doing
well and are enhancing their reputation among talented job seekers.

- 66 -

MBL has a very long hierarchy than other private commercial banks. In some
other private commercial banks, there are only 9-10 posts before the Managing
Director whereas in MBL the number is 15, which might not inspire the
employees significantly. Moreover, it has been identified that the promotion of the
employees into senior positions in the hierarchy depends on the duration of their
current position and not considering their performance and quality to deliver
services.

Most of the customers of the bank ask for more quality service especially quick,
accurate service and good behavior from bankers as they think a private bank
should provide such quality sufficiently. It has been found that inappropriate and
slow work process often compels the customers to compare the bank with
government bank, which is not a good indication for the reputation of the bank.
And most of the customers say that MBL is a higher category government bank.

Lack of good cooperation is identified among the work procedures and among the
employees of the bank which results in lengthiness and ineffective service. The
employees of the general banking department did not seem to work as a team to
provide effective and efficient services to the customers.

Finally, from the factor analysis it has been identified that the scale items from the
SERVQUAL measurement scale do not constitute a single dimension for the five
service quality dimensions in terms of different private commercial banks.

- 67 -

5.1 Recommendations

As per earnest observation, some suggestions for the improvements of the situation are
given below:

Bank is a service-oriented organization. Its business profit depends on its service
quality. That is why the authority always should be aware about their service
quality and performance as service quality can lead to increased customer
satisfaction, and thus can contribute significantly to performance. Moreover, the
customer service quality is consequently indispensable in this aspect.

One of the most important factors to maintain service quality for a service
organization is its ability to enhance customer feedback, both positive and
negative. Effectively managed, customer feedback helps to create numerous
opportunities for the development of interpersonal relationships between the
customer and a firm's employees. This close alignment with the customer will be
of vital importance to the bank. It will provide regular and reliable customer
feedback and, thereby, the opportunity to make the necessary proactive changes to
improve services of Mercantile Bank Limited. This will enable the bank not only
to act quickly to satisfy the customer, but also to prevent similar problems in the
future.

Appropriate human resource management (HRM) policies can play a significant
role in improving customers' perceptions as far as the responsiveness and
assurance factors of quality are concerned. This can be achieved by employing
people who possess communication skills, selling skills, and interpersonal skills;
by special training in these particular skills; and by developing a remuneration
system that encourages these skills.

As Mercantile Bank Limited is the financial institution and one depends to another
to complete a process completely. Lack of cooperation should be minimized to
provide prompt service. Different departments of the bank should work like a

- 68 -

team to provide prompt and efficient services to the customers. Internal conflict
among and within the departments should be removed in this aspect.
The recruitment policy of Mercantile Bank Limited should be a fair one.
Manipulating in the recruitment process should be reduced. The human resources
department should conduct all the procedure and they work according to a specific
guideline. Written tests and interviews should be held for management trainee and
other position because of its importance and only qualified and skillful person
should be recruited.

The behavior of the employees should be modified enough to maintain positive
attitude toward their job. They should always think it is a private bank and fully
service oriented organization. They should remember it almost every time in
office or out side the office.

In general banking department it is necessary to implement modern banking
process instead of traditional system. It should be more computerized. Different
processes for Pay Order issue, Demand Draft, Cheque Book issue, Fixed Deposit
etc should be done by automated process rather than manual process.

Finally, in the customer service department there should be adequate workforce to
provide the services to the customers effectively and efficiently. Frequently
transfer of the employees from the customer service department and frequently
leave of absence of the employees should be minimized to ensure consistent
service.

- 69 -

5.2 Conclusion

Banking Industry in Bangladesh is now in right track. The bankers are contributing much
than the previous years for the growth and development of the country. Banking is
becoming more and more vital for economic development of Bangladesh in mobilizing
capital and others resources. As an organization, the Mercantile Bank Limited has earned
the reputation of top banking operation in Bangladesh. The organization is much more
structured compared to any other local bank operating in Bangladesh. It has a reputation
as a partner of consumer growth. Transparent and quick decision making, efficient team
of performance, satisfied customers, online banking, effective internal control,
diversification of investments etc are the major strengths of MBL(specially of Motijheel
Branch ). On the other hand, the absence of using modern technological support, too
narrow service line, weak sharing network, not covering all the branches under online
banking, unavailable of ATM card and ATM booth, low geographical coverage of service
(only 65 branches at present).lack of proper market policy etc are the major weaknesses
of MBL (mainly of Motijheel Branch). However, it is not possible to get 100% from
anywhere especially for those organizations which with mass people. MBL has some
problems but it is encouraging that they are trying to overcome these obstacles. To keep
pace with the current demand MBL should be more responsive. It should take necessary
steps & spread over their products all over the country. Without a strong footing of
deposit it is not possible to grant huge amount of loans and advances i.e. one of the major
sources of income of a bank. It will more justify for MBL to concentrate on corporate
banking than consumer banking i.e. the major portion of the profit will be generated from
corporate sector not from consumer section.

In other words, foreign remittance inflow of a developing country like Bangladesh has
greater impact on the economy of the country. GDP, export, import has greatly affected
by the revenue generated from the inflow. The trend of remittance inflow shows that the
remitting amount is gradually increasing through years, which is a positive sign for the
country. Remittance contribution of GDP, export and import is also higher in the recent
years than the past, which is also a good sign.

MBL is involved with both the form transactions of inward and outward remittance

- 70 -

processing service. MBL started its remittance business in Bangladesh since December,
1996. MBL is trying their level best to increase the flow of remittance through banking
channel although the major threats of MBL (Motijheel Branch) such as competitive
environment, entrance of new commercial banks, high standard customer service
provided by the foreign bank, political instability in the country etc may hinder to reach
the goal.

Thus, it is expected that the Foreign Exchange Banking activities and performance of
MBL will be increased day by day and it will achieve more popularity among the people
in future.

- 71 -

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Appendix - 1

74

Internship Program

Questionnaire for Customers
Dear Sir/Madam,

I need your valuable opinion for my internship research project that I am currently doing
in Mercantile Bank Limited. It will be an immense help if you take the time to fill in this
questionnaire. This study will be used to improve the service quality of Mercantile bank Limited
and my academic purposes. I thank you in advance for your kind cooperation.

General Information

Dear Sir/Madam, Please fill the following questions accordingly

Perception Statements in the Reliability Dimension
Strongly Strongly
disagree agree

1. When your bank promises to do something
by a certain time, it does so. 1 2 3 4 5 6 7
2. When you have a problem, your bank shows
a sincere interest in solving your problems. 1 2 3 4 5 6 7
3. Your bank performs the right service at first time. 1 2 3 4 5 6 7

4. Your bank provides its services at the time it
promises to do so. 1 2 3 4 5 6 7
5. Your bank keeps you informed about when services
will be performed. 1 2 3 4 5 6 7

Name: ______________________________________________________ Age: ____________
Address: _____________________________________________________________________
Occupation: __________________________________________________________________
Contact Number: __________________________ Email: _____________________________
Types of Account currently holding _______________________________________________

75

Statements in the Responsiveness Dimension

Strongly Strongly
disagree agree

6. The employees in your bank give you prompt service. 1 2 3 4 5 6 7

7. The employees in your bank always willing to help you. 1 2 3 4 5 6 7
8. The employees in your bank are never
too busy to respond to your request. 1 2 3 4 5 6 7

Statements in the Assurance Dimension

9. The behavior of the employees of the bank inspires
Confidence in you. 1 2 3 4 5 6 7
10. You feel safe in your transactions with your bank. 1 2 3 4 5 6 7
11. The employees in your bank consistently courteous with you. 1 2 3 4 5 6 7
12. The employees in your bank have the knowledge to
answer your questions. 1 2 3 4 5 6 7

Statements in the Empathy Dimension

13. Your bank gives you individual attention. 1 2 3 4 5 6 7
14. Your bank has employees who give you individual attention. 1 2 3 4 5 6 7
15. Your bank has your best interests at heart. 1 2 3 4 5 6 7
16. The employees in your bank understand your specific needs. 1 2 3 4 5 6 7

Statements in the Tangibles Dimension

17. The bank has modern-looking and hi-tech equipments. 1 2 3 4 5 6 7
18. The banks physical facilities are visually appealing. 1 2 3 4 5 6 7
19. The employees of the bank appear neat. 1 2 3 4 5 6 7
20. Materials associated with the service (such as signs or
statements) are visually appealing at the bank. 1 2 3 4 5 6 7
21. Your bank has convenient business hours. 1 2 3 4 5 6 7

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