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1.

0 Introduction to the Study


Generally by the word “Bank” we can easily understand that the financial institution deals
with money. But there are different types of banks like; Central Banks, Commercial
Banks, Savings Banks, Investment Banks, Industrial Banks, Co-operative Banks etc. But
when we use the term “Bank” without any prefix, or qualification, it refers to the
‘Commercial banks’. Commercial banks are the primary contributors to the economy of a
country. So we can say Commercial bank is a profit-making institution that holds the
deposits of individuals & business in checking & savings accounts and then uses these
funds to make loans. For these, people and the government is very much dependent on
these banks as the financial intermediary. As banks are profit -earning concern; they
collect deposit at the lowest possible cost and provide loans and advances at higher cost.
The differences between two are the profit for 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 arena is becoming
wider. As the demand for better service increases day by day, they are coming with
different innovative ideas & products. In order to survive in the competitive field of the
banking sector, all banking organizations are looking for better service opportunities to
provide their fellow clients. As a result, it has become essential for every person to have
some idea on the bank and banking procedure. Internship program is essential for every
student, especially for the students of Business Administration, which helps them to know
the real life situation. For this reason a student takes the internship program at the last
stage of the MBA Program, to launch a career with some practical experience.

1.1 Origin of the Report


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 (Mirpur Branch) to take
the real life exposure of the activities of banking financial institution for three months
only starting from 15thApril. This research is a partial requirement of BBA Internship
Program in the Bhuiyan Academy and report is being prepared from three months
extensive knowledge and research.

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1.2 Objective of the Report
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 customer’s satisfaction. Objectives of
the study are summarized in the following manner:

To identify the present state of Mercantile Bank Limited (MBL), Main Branch.
To describe the General Banking, SMS Banking, ATM facilities and other
facilities provided by MBL.
To discuss the potential of MBL.
To provide the recommendation for improvement of MBL.
Finally, to sketch out the overview of Mercantile Bank Limited (MBL).

1.3 Methodology of the Report

For achieving the specific objective of this study, I will collect the related data both from
primary & secondary sources. For the primary sources of data collection. To collect the
secondary sources of data I will go through the annual reports of MBL, different papers of
MBL, various records of the bank, unpublished data, different textbooks, journals,
booklets and web site of MBL.

Couple of methods will be adopt simultaneously or successively so that it may achieve


predetermine objectives of the study to involve collection of data from direct and indirect
sources either. Formal and oral discussions, direct observation, questioning, questioning
client’s printed papers of the bank were found useful data.
a) Primary Data Sources:-
Data originated by the researcher for the specific purpose of addressing the research
problem.
All the necessary information are collected by using------
Conversation with the different clients and officials of the bank.
Observing the total environment.
Observation while working in different desk.
Informal discussion with professional of MBL.
In depth interview.

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b) Secondary Data Sources:-
Data collected for some purpose other than the problem at hand.
Brochure of MBL
Leaflet
Different files and document of the bank
Annual Reports of the Bank.
Website address (www.mblbd.com)
1.4 Scope of the Report
The scope of this report mainly focuses on Mercantile Bank Limited at Mirpur Branch.
So this is not possible to collect all information based only one branch. The study will
conduct to make an investigation of the banks, on the study in this field some problems
should be creating that may be term as limitation. These are as follows.
In many cases, up to date information always not publish. The information is
difficult to get and cover derive is very limited
Relevant papers and documents may not be sufficient enough.
Many procedural matters may not be available sufficiently available
Because of the limitation of information some assumption will made. So there
may be some personal mistake in the report
Hope so, the officials will try cooperate but sometimes their working pressure
couldn’t allow them to do so.
Another problem was time constraints.
Being sophisticated business sector bank was not interested to provide
confidential data to me due to that there were data limitations.

1.5 Limitations of the Report


Although I have received co-operation from concerning body but most of the time they
were busy with their work that’s why, I did not get so many time as I would like to have.
The administration authority, management policy and decision making policy is in the
hand of Head Office. As a BBA student it is needed to gather the experience that how to
take the decision when the bank fall into a plan and what it’s management policy, how to
set up their portfolio, what is their business strategy but a branch does not do so.
The following limitations are apparent in the report:
Time is the first limitation as the duration of the program is very few only.
Another limitation of the report of Bank policy is not disclosing some data and
information for obvious reason which could be very much useful.
It requires lot of assistance from all level officers and staff but as a bank the
officer was busy in doing their jobs.

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2.0 Introduction
This chapter discusses the overview of the banking sector which gives us a better
understanding regarding the ancient banking and modern banking. After all that deals
with the organizational overview which includes the history, vision, and mission.
A bank is a financial institution whose main objective is the mobilization of fund from the
surplus unit to deficit unit. In the process of acceptance of deposits and provision of loan,
Bank creates money. This characteristics feature sets bank apart from other financial
institutions. A bank is an economic institution whose main objective is to earn profit
through exchange of money and credit instrument.

2.1 Banking industry in Bangladesh and its operation


Bank is very old institution that is contributing toward the development of any economy
and is treated as an important service industry in modern world. Now a day the function
of bank is not limited to with in the same geographical limit of any country. Due to
globalization and free market economy, this industry is facing severe competition in any
country and implementation of WTO will further increase competition. The overall
performance of Bank does not only depend upon the banking industry itself but also on
the performance of economy where it is operating.
After the birth of Pakistan in 1947, the State Bank of Pakistan, the central bank of the
country, came into being in 1948. Later, the National Bank of Pakistan, a commercial
bank was set up in 1949. In all, 36 scheduled commercial banks were in operation
throughout Pakistan. Pakistanis owned most of these banks. Only three of them, namely,
National Bank of Pakistan, Habib Bank, and the Australasia Bank had a branch in East
Pakistan in 1949. During 1950-58, three other Pakistani-owned banks, the Premier Bank,
Bank of Bawalpur and Muslim Commercial Bank had opened branch offices in East
Pakistan. Four Pakistani-owned banks, the United Bank, Union Bank, Standard Bank and
Commerce Bank conducted business in the province during 1959 - 1965. The province
had only two banks owned by local business groups and with headquarters at Dhaka, the
Eastern Mercantile Bank (now ) and Eastern Banking Corporation (now
PUBALI BANK UTTARA

BANK ), established in 1959 and 1965 respectively.


The banking system in the territory of Bangladesh grew slowly during the British and
Pakistan periods. There were only 25 bank branches in 1901 and the number grew to 668
in 1946. Creation of Pakistan was a deterrent in the sector as was evidenced by the

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closure of bank branches, which came down to 148 in 1950. In 1965, the number rose
again to 545. Subsequent years, however, showed dramatic changes in the situation and
the number of bank branches increased to 1,025 in 1970. The banking system in
Bangladesh started functioning with 1,130 branches of 12 banks inherited from Pakistan.
Subsequently, these banks were nationalized and renamed after being merged into six
banks. The new names of the banks were the SONALI BANK (The National Bank of Pakistan,
The Bank of Bawalpur, The Premier Bank), AGRANI BANK (Habib Bank, Commerce Bank),
JANATA BANK (United Bank, Union Bank), RUPALI BANK (Muslim Commercial Bank, Standard
Bank), PUBALI BANK (Australasia Bank, Eastern Mercantile Bank) and UTTARA BANK (Eastern
Banking Corporation).
Bangladesh
Bank

Commercial Bank Specialized Bank and


Credit Agents

Nationalize Private Foreign


d bank Bank Bank

Traditional Islamic Bank


BSBL
Bank

BKB RAKUB BSB BSRS CCBL

PSC
BASIC Grameen Karmasanghta Ansar-VDP
Bank n Unnayan Bank
Bank

Figure: Banking Operation under BB

Sources: Chowdhry, L.R. (2002, 2nd edition), “A Text Book on Banker Advances

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Some words used as a abbreviate form in the diagram are:
BKB - Bangladesh Krishi Bank
RAKUB- Rajshahi Krishi Unnayan Bank
BSB- Bangladesh Shilpa Bank
BSRS- Bangladesh Shilpa Rin Shangshta
BASIC- Bangladesh Small Industries & Commerce.
BSBL- Bangladesh Samabaya Bank Ltd.
CCBL- Central Co-operative Bank Ltd.
PCS- Primary Cooperative Societies.

2.2 MBL in Bangladesh

Banking system occupies an important place in a nation’s economy. Banking institution is


indispensable in a modern society and it plays a vital role in the economic development of
a country. Against the background of liberalization of economic policies in
Bangladesh, Mercantile bank Limited emerged as a new commercial bank to provide
efficient banking services with a view to improving the socio-economic development of
the country.
The Bank provides a broad range of financial services to its customers and corporate
clients. The Board of Directors consists of eminent personalities from the realm of
commerce and industries of the country.

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2.3 Organizational Overview of MBL
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 June 2, 1999. The Authorized capital of the bank was BDT
8,000.000 million of ordinary shares of BDT 10 each as on December 31, 2012. Paid up
capital of the Bank was value of BDT 4,072.21 million of 40,722,0660 ordinary Shares,
face value of BTD 10 each and listed both in Dhaka and Chittagong Stock Exchange
Limited. The Bank provides a broad range of financial services to its customers and
corporate clients. The Board of Directors consists of eminent personalities from the realm
of commerce and industries of the country.

Mercantile Bank Limited is a scheduled private commercial Bank established on May 20,
1999 under the Bank Company Act, 1991 and incorporated as a Public Limited Company
under Companies Act, 1994. The Bank started commercial Banking operations from June
02, 1999. From then with in a short time MBL established itself in a strong position in the
economy of the country. It has earned significant reputation in the country’s Banking
sector as Bank and created a wide image in the eye of the people.

The dream of creating MBL, which is ‘A Bank of 21st Century’, has become successful
because of the initiative of some persons who are the sponsors of MBL. There are 30
sponsors in Mercantile Bank Limited and all of them are highly regarded for their
entrepreneurial competence.

2.4 Historical background


The Bank had been widely welcome by the business community, from small
entrepreneurs for forward-looking business outlook business outlook and innovative
financing solutions. Thus, within this very short period it has been able to create an image
for itself and has earned significant reputation in the country’s banking sector as a bank
with vision. The company Philosophy -“efficiency is our strength” has been exactly the
essence of success of this Bank.

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Mercantile Bank Limited has been licensed by the Government of Bangladesh as a
scheduled Bank in the private sector in the process of the policy of liberalization of
banking and financial services or Bangladesh. In view of the above, the Bank has, within
a period of eight years of its operation, achieved a remarkable success and has always met
up capital adequacy requirement set by Bangladesh Bank.
There are twenty-seven sponsors involved in creating Mercantile Bank Limited; the
sponsors of the Bank have a long heritage of trade, commerce and industry. They are
highly regarded for their entrepreneurial competence. The sponsors happen to be member
of different professional groups among whom are also renowned banking professionals
having vast range of banking knowledge. There are also members who are associated
with other financial institution like companies, leasing company’s etc.

The board of directors consists of 20 members elected from the sponsor of the bank. And
the board of directors is the apex body of e bank. All route matters beyond delegated
owners of management are decided upon by or routed through the executive committee,
subject to ratification by the board of directors.

Fig: Historical Background


Sources: Annual Report of MBL 2012

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2.5 Approach of MBL
The aim of Mercantile Bank Limited is to become a leading Bank of the 3rd generation by
providing better service to the clients along with other quality operations in Private
Banking Sector. The bank has some mission to achieve the organizational goals. This are-
MBL intend to provide the better service for the customer.
MBL intend to provide the good return for their respectable shareholders.
MBL work as medium of exchange on behalf of their potential clients.
MBL is much responsive in case of provide the optimum benefit of the customers.
MBL is always concentrated to enhance the competitive advantages by upgrading
banking technologies and information system.
MBL believes in discipline growth strategy.
MBL always encourages investors to boost up the share market.
MBL maintain high standard of corporate and business ethics.
MBL intends to play more important role in the economic development of
Bangladesh and its financial relations with the rest of the world through
international trade.
There are also other missions of MBL, which are also plays significant role to reach the
ultimate target.

2.6 Nature of Business


Mercantile Bank Limited offer services for all banking needs of the customers, which
include deposits, making loans and advances, discounting bills, conducting money
transfer and foreign exchange transactions and performing other related services such as
safe keeping, collections, issuing guarantees, acceptances and letters of credit.

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2.7 Vision, Mission and Core values:

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2.8 At a Glance of MBL

Name Mercantile Bank Limited


Date of incorporation 20th May, 1999
Date of inauguration of
2nd June, 1999
operation
61, Dilkusha Commercial Area
Dhaka –1000, Bangladesh
Registered Office Tel-02-9559333, 0171-1535960
Fax: 880-2-09561213
Telex: 642480 MBLMB BI
Mercantile Bank Limited
Logo
efficiency Is our strength
Name of the founder Chairman
MP.Md. Abdul Jalil
of the Board
Name of the managing
A.K.M. Shahidul Haque
Director & CEO
Number of branches 65
Deposit Scheme, credit facility and
Services provided
foreign exchange services
Diversification of Product And
Corporate banking, Retail Banking
Services
Paid up capital 4072.21(Million)
Profit after tax & provision 1425.34(Million)
Publicly Traded Company Shared quoted daily in DSE & CSE
Credit Card Member of Master Card
Both conventional and foreign
Banking operation system
exchange system
Member of SWIFT, online banking,
Technology used
UNIX based computer system
Market value per share BTD 580.50 (395.00)
Earning per share 41.04
E-mail mbl@bol-online.com
Website www.mblbd.com
SWIFT MBLBBDDH
Sources: Company profile of MBL 2013

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2.9 Features of Mercantile Bank Limited
There are so many reasons behind the better performance of Mercantile Bank Limited
than any other newly established banks:

Highly qualified and efficient professionals manage the bank.


Mercantile Bank Limited has established a core Research & Planning Division
with efficient persons.
The bank has established correspondent relationship with 102 of foreign banks.
The computerized operation system in all branches of MBL has provided the
frequent and prompt customer service.
The strict leadership along with the supervision of efficient management directs
all the branches.
The inner environment and team work, of all branches in MBL motivated all
experienced employees to achieve the ultimate objective of MBL.
Mercantile Bank Limited has become a member of the SWIFT system to expedite
foreign trade transaction.
Mercantile Bank Limited has become introduced some scheme for the purpose of
saving of low income people which are not available in other banks like “Ajebon
Pension Scheme”.
The Bank offer attractive saving rate than other financial institutes.
Mercantile Bank Limited provides loan to the customers at lower interest with
easy & flexible condition than the others do.
Along with the profit generation Mercantile Bank Limited also maintain social
responsibilities.
Mercantile Bank Limited changes lower commission from their customer in
comparison with other banks.
The Bank always guided their potential customers by giving valuable advice.

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2.10 Management
The board of director consists of eminent personality from commerce and industry in the
country.chairman of the board of directors is a businessman besides beginning eminent
personality of our country. They are manned and manage by the highly qualified and
efficient professional. The Chief Executive of the bank is A.K.M. Shahidul Haque who
has rich experience of managing one public sector bank as a Managing Director.

Management hierarchy of Mercantile Bank Ltd.


The board of directors consists of eminent personalities from commerce and industry of
the country.

Highly qualified and efficient professionals manage this bank. Board of Directors who
also decides the composition of each committee determines the responsibilities of each
committee. All routine matters beyond delegated powers of management are d decided by
or routed through the executive committee, subject to rectification by the board of
directors.

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Management Hierarchy of MBL

CHAIRMAN

Board of Chief Advisor


Managing director -HRD
Directors
Deputy Managing Deputy Managing
Director Executive Vice President Director
GSD, CAD, A&I, GB, Company Secretary ID, IT, CREDIT, R&P
D&M
Senior Vice Senior Vice President Senior Vice
President President
Vice President

Senior Asstt. Vice


President
Asstt. Vice President
Abbreviations
GSD General Service
F.A.V.P Division
CAD Central Account
Division
Principal Officer ASI Audit and Inspect
CB Central bank
D&M Developing &
Senior Executive Officer Marketing
ID International Division
R&P Research and Planning
Executive Officer

Officer

Asst. Officer

Figure: Management Hierarchy of MBL


Source: HRD, Head Office MBL

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Corporate Level:

Chairman Advisor Board of Director

Chart of Corporate Management Level

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2.11 Human Resource Development
In today’s competitive business environment the quality of human resource make the
different. The bank committed to attach high quality persons to work for it is reflected in
the effort of the bank. In the face of today’s globalization the bank envisages developing
highly motivated work force and equipped them in skill and latest technology. The bank
involves human resource development strategy with the view to ensuring good work
environment, a high level of loyalty and commitment on the part of employee.
The bank has set up training institute for providing training facility its executive/officers.
The training institution has already conducted a number of foundations and specialize
training courses. A number of officers went to Intuition of Bangladesh Bank management
(BIBM) at training instruction in home and abroad to develop their efficiency.

2.12 The organizational structure

The organization structure and corporate of Mercantile Bank Limited (MBL) strongly
reflect its determination to establish, uphold and gain a stronger footing as an
organization which is customer-oriented and transparent in its management.

1. Board of Directors

The Board of Directors consists of 20 member elected from the sponsors of the Bank. The
Board of Directors is the apex body of the bank.
2. Board Committees

The Board of Directors who also decides on the composition of each committee
determines the responsibilities of each committee.
3. Audit Committee
The audit committee is formatted with three (3) members of the board of directors. The
audit committee assist the board of director is ensuring that the financial statement
reflects true and faire view of the state of affairs of company and in ensuring a good
working system in the bank as per frame work imposed by BRPD.

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4. Executive Committees

All routine matter beyond delegated powers of management are decided upon by or
routed through the Executive Committee, subject to ratification by the Board of Directors.

5. Policy Committee

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

2.13 Network of the Branches


From MBL start 1999 to 2013 they are trying to enhancing their number of branches. At
the present time they have 65 branches in Bangladesh (BD) including 5 SME Banking &
31 ATM booths and 7 Brokerage house. MBL main branch is Dhaka, Dilkusha. Now
MBL is trying to give banking service all over the country.
The objective of MBL is not only to earn profit but also keep the social commitment and
to ensure its co-operation to the persons of all levels, to the businessmen, industrialists-
specially who are engaged in establishing large scale industries by consortium and the
agro-based export oriented medium and small scale industries by self inspiration. MBL as
the largest private bank is committed to continue its endeavor by rapidly increasing the
investment of honorable shareholders into asset.

2.14 Environment
MBL finances mainly in those projects, which are environment friendly. Early
recognition of ecological risks is an integral part of credit evaluation system of mercantile
bank limited. Ecological damage will eventually harm not only the community but also,
mercantile bank limited, in the form of loan losses or image problems. In this regard,
MBL has sent their officials to The Hague, Netherlands for training on ‘Environment and
social management Course for Financial Institutions’ conducted by FMO Netherlands

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2.15 Function of Mercantile Bank Limited
The functions of commercial Banks are now wide and varied. However, the functions of
Mercantile Bank Ltd. may broadly be classified under the following two categories-
A. Primary Functions; and
B. Secondary Functions

A. Primary Functions
The primary functions of Mercantile Bank Limited are same as other Commercial Banks.
These functions includes-
i. Accepts deposits;
ii. Lends money;
iii. Creates credit;
iv. Creates medium of exchange.
i. Accepts Deposits
The first primary functions of bank are to accept deposits of money from the
public or savers group. The total deposits held by the banker are broadly classified
as-
a) Demand deposits
Demand deposits are withdrawn able on demand and thus no Prior notice is
needed. Deposits in Current Account and Savings Accounts fall in this category.
b) Time deposits
Time deposits are repayable on the expiry of a fixed period of time only. Fixed
Deposit Accounts, Recurring Deposit Accounts and deposits payable at
specified notice fall in this category. The banks usually pay interest on all
types of deposit accounts except the current accounts.
ii. Lends Money
Banking business essentially involves lending. In fact the deposits are accepted for
lending or investment. Depending on the requirements of the borrower, banks lend
money in the forms following-
a) Loans
b) Overdraft
c) Cash credit and
d) Bills purchased & discounted

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iii. Creates Credit/Money
The creation of credit is one of the important functions of Commercial Banks. In
the ordinary course of business, banks accept deposits from the public and lend
money to its customers. When a bank extends loan, it does not pay the amount in
cash. Rather, the bank credits the amount in the bank account of the borrower and
allows withdrawing the required amount by cheques. In this way, a bank creates
credit or deposits, which are regarded as money and can be used for the purchase
goods and services and also for the payment of debt just like currency notes.

iv. Creation of Medium of Exchange


Commercial Banks usually issues cheque, which circulates like money in the
society and thus creates the medium of exchange.

B. Secondary Functions
Modern commercial Banks like MBL, besides performing the functions, cover a wide
range of financial and on-financial services to meet the growing needs of the time. Some
of these services are available only to the customers while others are available to the
public in general.
The subsidiary services provided by a modern banker may be classified into following
three groups-
i. Agency Services; and
ii. Generally Utility Services
iii. Foreign Exchange Business

2.16 Operations
The importance of the mobilization of saving for economic development of our country
can hardly be over emphasized. The bank considers savings and deposit as life-blood of
the bank. More the deposit, greater is the strength of the bank. So, they intends to launch
various new savings schemes with greater is the strength of the bank and prospect of
higher of return duly supported by a well-orchestrated system of customer services.

Technology such as computer, ATM, Tele-communication etc. all would be harmonized


and adapted to the system in order to provide round-the-clock and any-branch services to
the clients. Travelers’ cheques, credit cards and other ancillary services including

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payment of different bills from one counter will also be introduced to achieve the ultimate
goal of ONE-STOP service to the customers’ value.

The bank would cater to the credit needs of individuals as well as corporate clients.
Initially it will emphasize on trade finance, which would be short-term and self-
liquidating in nature. Considering the importance of Export and Import and also handing
of foreign remittance business would be given top-most priority.
Customer credit is a relatively new field of micro-credit activities. People with limited
income can avail with this credit facility to buy any household effects including car,
computer and other durable. Mercantile Bank Limited (MBL) will play a vital roll in
extending the consumer credits in line with its policy of people-oriented banking.
Lease-Finance is an area of business where the bank would activity participates. Because
of certain built-in advantages, the industrial entrepreneurs are being increasingly attracted
to this type of financing. Moreover, Mercantile Bank Limited (MBL) intends to expand
the scope of this finance to include financing of agricultural equipment's as well.

The bank would not depend only on interest earnings; rather it would strive hard to go for
fee-based income from non-activities of the bank. This type of business include capital
market operations like Underwriting, Portfolio management, Mutual fund management,
Investors’ account as well as commission-based business like Letter of Guarantee, Inland
remittance, Foreign remittance etc.

2.17 MBL Card Facilities


MBL cardholder can enjoy the following benefits and much more
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 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

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covers various kinds of merchants like hospital, hotel, restaurant, department store and
the card has accessibility to any outlet having VISA logo.
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.
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 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.
Credit card 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.

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2.18 Online Banking
Online Banking has so far been activated with 41 Branches of the Bank from January 01,
2006. Online service is now available for all customers –Both Cash deposit and
withdrawals, Cheque Deposits and Transfer in CD, SB, STD, Loan accounts and Monthly
Savings Scheme (MSS).
Online Banking Times
Sunday to Thursday, Hours - 10:00 am to 4:00 pm
Saturday, Hours - 10:00 am to 1:00 noon (only in open branches on Saturday)
For Monthly Savings Scheme (MSS) TK. 20 only (includes 15% VAT per
transaction). Yearly service charge is not applicable.
Account wise Online Banking Limit (cash withdrawal, deposit and transfer):
Maximum Deposit Limit : No Limit for Online Cash Deposit Transaction per day per
Client.
Maximum Deposit Limit: Tk. 500,000.00 per transaction
Cumulative deposit shall not be more than TK.10, 00,000.00 per day
Maximum Withdrawal Limit: Tk. 300,000.00 per transaction
Cumulative withdrawal shall not be more than TK.600, 000.00 per day
Charges for Online Banking
Intra City* Inter City** Mode of realization

Up to BDT 1,00000 - TK. 50.00


Up to BDT 2,00000 - TK. 100.00
Free Up front Cash
Up to BDT 3,00000 - TK. 150.00
Up to BDT 4,00000 - TK. 200.00

*Intra City Transaction: Branches under Same City Corporation Areas.


*Inter City Transaction: Branches outside City Corporation Areas.
Service Charge Applicable

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2.19 Total Income
Total income increased to BDT 9951.81 million in 2012 from BDT 8247.81 million in
2011. Interest income accounted for 77.07%, exchange gains 5.75%, commission 6.32%
and other income 10.86% to total income 2012 as against 81.74%, 6.93%, 5.92%, and
5.41% respectively in 2013.
Components Amount (%) of Total
Interest Income 7669.42 77.07

Exchange Gains 571.83 5.75

Commission 629.22 6.32

Other Income 1081.34 10.86

Total 9951.81 100.00

Fig: Contribution of Total Income


Source: Financial Statement analysis of MBL 2012

23
2.20 Financial Position

ASSET PORTFOLIO

Year-2013 (BDT in Million)


Components Amount % of Total
Loans and Advances 66,377.70 76.17
Investments 10,937.20 12.55
Cash 4,877.12 5.60
Balances with other Banks 908.55 1.04
Other Assets 4039.54 4.64
Total 87140.11 100.00

Figure: Asset Portfolio of MBL


Source: Financial Statement analysis of MBL 2012

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2.21 Economic impact report
Particulars 2013 2012
Shareholders Equity 7,185.69 4296.25
Total income 9,951.81 8247.81
Total expenses (7,104.69) (6336.11)
Corporate Tax (1,010.59) (855.26)
Capital Charges* (718.57) (429.63)
Economic Value Addition 1,117.96 626.82

Fig: Economic impact


Source: Economical Report MBL
Particulars 2013 2012
Market value of total 23639.16 8525.73
Equity
Book value of total Equity 7185.69 4296.25
Market value Added 16453.47 4229.48

25
3.0 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.

During my practical orientation I was placed in Mercantile Bank Limited. First I was
placed in Mirpur Branch. I have completed overall Banking, and some exposure in
Advance in this branch. General Banking of this branch consists of different sections,
namely Account Opening section, checkbook Issue, Remittance Section, Clearing and
Bills Section, Accounts Section, Cash Section, credit realization, and financial control.
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,
Locker Service
Foreign Exchange Department of MBL:
Letter of Credit (L/C)
REMITTANCE

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3.1 Account Opening
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 selecion of customers.

Types of Account
MBL has the following types of accounts:
Current Account
Savings Account
Fixed Deposit Account

Current Deposit (CD) Account


Current Deposit Account is the net flow of current transactions with no restriction. It is an
easy-to-use, convenient current account. Current Deposit Accounts are suitable for those
customers who need unlimited transactions because of no restriction on withdrawal either
in amount or in frequency.
Interest Rate: Nil
Cheque-book facility
Types of Current Deposit Account:
 Individuals
 Two or more persons jointly
 Sole Proprietorship Concerns
 Partnership Firms
 Limited Companies (Both Public and Private)
 Societies / Clubs / Associations / Local Bodies
 Banks
 Govt. / Semi Govt. Offices / Corporations / Autonomous bodies.
 Others

27
Required Documents
Personal Account
 Name of applicant(s) together with name(s) of parents and spouse(s).
 Present and Permanent Address.
 Date of Birth.
 Nationality.
 TIN (if any).
 Duly attested photocopy of valid Passport / Employer’s Certificate / ID Card /
Driving Licence / Voter ID Card / National ID Card or Certificate about
credentials by the local Ward Commissioner / Chairman of Union Parishad.
 Two copies of recent passport size Photographs of account holder duly attested by
the Introducer.
 One copy of Passport Size Photograph of Nominee duly attested by the Account
Holder.

 Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone Bill /
Gas Bill / WASA Bill, etc. in the name of applicants.
Savings Bank (SB) Accounts
This account has been designed and developed for savers who want to save their income.
There are restrictions of withdrawal in both amount and frequency.
Rate of Interest on Savings Deposit

Rate of Interest

Savings Deposit 6.00%

Savings Account may be opened in the name of


Individual (Single).
Two or more individuals (joint) who are not partners.
Minor jointly with Natural / Legal Guardian.
Clubs / Societies / Associations or Similar Institutions / non-profit organizations.
Required Documents
Personal Account:
 Name of applicant(s) together with name(s) of parents and spouse(s).
 Present and Permanent Address.
 Date of Birth.

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 Nationality.
 TIN (if any).
 Duly attested photocopy of valid Passport / Employer’s Certificate / ID Card /
Driving License / Voter ID Card / National ID Card or Certificate about
credentials by the local Ward Commissioner / Chairman of Union Parishad.
 Two copies of recent passport size Photographs of account holder duly attested by
the Introducer.
 One copy of Passport Size Photograph of Nominee duly attested by the Account
Holder.
 Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone Bill /
Gas Bill / WASA Bill, etc. in the name of applicants.
Fixed Deposit Receipt (FDR)
Unlike CD, SND and SB account, Branch shall accept deposit of fixed amount of money
from the customers for a fixed period of time with interest under the term plan time to
time. FDR is neither Transferable nor Negotiable and as such payment against this
instrument with interest shall normally be made to the depositor on maturity. Payment
against FDR can also be made to nominee or assignee after observing essential
formalities.

Fixed Deposit Account can be opened in the name of:


• Individual (Single).
• Two or more persons (joint).
• Sole Proprietorship Concern.
• Partnership Concern (Firm).
• Limited Companies (both Public and Private).
• Society / Club / Association / Local Bodies / Govt. / Semi Govt. Organization, etc.

Opening of Fixed Deposit A/C


Any Bangladeshi National (Adult, sound-minded having bonafide income) and
institutions / organizations incorporated and operating in Bangladesh who are not
adjudicated as insolvent by any Court of Law of the land can open Fixed Deposits
Account for fixed tenure with any amount but not less than BDT 10,000 (Ten thousand).

29
FDR Rates
Period Interest Rate for Any Amount

1 Month FDR 12.00%


3 Months to 6 Months FDR 12.00%
Above 6 Months to 1 year 12.00%

Required Documents
Personal Account:
 Name of applicant(s) together with name(s) of parents and spouse(s).
 Present and Permanent Address.
 Date of Birth.
 Nationality.
 TIN (if any).
 Duly attested photocopy of valid Passport / Employer’s Certificate / ID Card /
Driving Licence / Voter ID Card / National ID Card or Certificate about
credentials by the local Ward Commissioner / Chairman of Union Parishad.
 Two copies of recent passport size Photographs of account holder duly attested by
the Introducer.
 One copy of Passport Size Photograph of Nominee duly attested by the Account
Holder.
 Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone Bill /
Gas Bill / WASA Bill, etc. in the name of applicants.
3.2 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), introducer’s 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.

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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 chequebook
requisition slip by the customer. Then it distributes all relevant papers to respective
department.

Activities & papers necessary for opening an account


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
“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.”

Partnership firm
The following documents have to be submitted for preparing an account of a partnership
firm:
 Account must be opened in the name of the firm.
 Three forms should describe the names and addresses of all partners.
 Partnership deed is required.
 Trade license from City Corporation is needed.
 Letter of authority is achieved.

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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 Bank’s records.
Certificate from the Registrar of Joint 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 Bank’s 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).
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.
Certified copy of Bye-Law and Regulations/Constitution.
Copy of Government Approval (if registered).

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.
Non-Govt. College / School / Madrasha / Muktab
Following documents have to be obtained in case of the account of non-govt. College
/ school / madrasha / muktab:

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Up to date list of Governing Body/Managing Committee.
Copy of Resolution of the Governing Body/Managing Committee authorizing
opening and operation of the account duly certified by Gazetted Officer.
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.

Minor’s 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.
Account opening procedure in a flow chart

Applicant fills up the He/she is required to fill up For individual introduction


relevant application form in the specimen signature is needed by an account
the prescribed manner. card holder

The authorized officer


Account is opened scrutinizes the introduction
and examine the documents
submit

Issuance of deposit slip and


the deposit must be made in
After depositing the cash cash. No cheque or draft is
one cheque book is issued acceptable to the Bank

33
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.
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.

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 bank’s 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 customer’s 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 PBL
General Account.

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.

34
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.

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.

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 bank’s use.
Calculate the total amount including the bank’s 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 holder’s signature verified properly, from signature
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 customer’s copy.

35
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.

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 purchaser’s 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
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”.

36
3.3 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.
Manager’s 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.

Payment of L.D.
While payment of L.D. PBL 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.
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.

37
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.

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.

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. 50.00 Tk. 8
TK. 10,001.00 - TK .1,00,000.00 TK. 100.00 Tk. 15
TK. 1,00,001.00 - Above TK. 200.00 Tk. 30
Table : Charges on issuing pay order commission and vat
Payment of Pay Order
The pay order is presented to the bank either through clearance or for credit to the client’s
account. While payment, relative entry is given in the pay order register with the date of
payment.
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.
Manager’s prior permission is to be obtained before refunding the amount of the
pay order.

38
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.

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
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)


Mashik Sanchaya Prokalpa (MSK) or Monthly Savings Scheme (MSS)
Family Maintenance Deposit (FMD)

39
Double Benefit Deposit Scheme (DBDS)

Objectives Mode

Give maximum benefit.


Help in meeting specific needs like Tenure of the deposit is 6
education, marriage etc. years.
Deposit becomes double in 6 years.

Amount of Deposit Period Amount Payable

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

Table: 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.
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.
Mashik Sanchaya Prokalpa (MSK) or Monthly Savings Scheme (MSS)

Objectives Mode

Build up habit of savings. Monthly installments of various


Attract small savers. sizes.
Saving for rainy days.

Benefits:

40
Monthly Installment
Period 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

Monthly Installment
Period 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: Monthly Savings Scheme (MSS)


Other Features
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.
In case of premature encashment interest will be paid on Saving A/C Rate.
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.
Loan processing fee be realized BDT 50.00 only and stamp costs also be realized.

Family Maintenance Deposit (FMD)

Objectives Mode

Help the retired Deposit a fixed amount of money for


persons for investing 05 (Five) years.
their retirement Depositor will get a certain sum of
benefits. money in each month proportion to
Create investment his/her deposit during the entire tenure.

41
opportunities for Non-
Resident Bangladeshi. Benefits:
Explore investment Tenure of deposit is 05 (Five) years.
opportunities for Minimum amount of required deposit
school, college, is TK.50,000.00 or its multiple
university etc.
Give investment
opportunities for Trust;
Foundation etc.

Deposit Monthly Benefit (Amount in TK.)

50,000 500

1,00,000 1,000

2,00,000 2,000

Table: Family Maintenance Deposit (FMD)


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.
In case of premature encashment interest will be paid on Saving A/C Rate.
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.

42
Documents that are given to the account holders
After all the account opening formalities have been completed, Bank opens an account in
the name if the applicant. Bank then provides customers with –
 Deposit Slip
 A cheque book
 A thank giving letter to the customer’s present address

Issuing Cheque Book to the Customers


 Issuance of Cheque Book (For New Account)
 When a new account is opened and the customer deposits the minimum required
money in the account the account opening form is sent for issuance of a cheque
book.
 Respected officer first draws a cheque book kept under his own disposal. (S) He
then sealed it with branch name.
 (S) He enters the number of the cheque Book in Cheque Issue Register. (S) He
also writes down the name of the customer and the account number in the same
Register.
 Account number is then writing down on the face of the Cheque Book and on
every leaf of the cheque book including Requisition Slip.
 The name of the customer is also written down on the face of the Cheque Book
and on the Requisition slip.
 The word “Issued on” along with the date of issuance is written down on the
requisition slip.
 Number of Cheque book and date of issuance is also written on the application
form.
 Next, the customer is asked to sign in the Cheque book issue register.
 Then the respected Officer signs on the face of the requisition slip put his initial in the
register and hand over the cheque to the customer.

43
Issuance of Cheque Book (Existing Account)
 All the procedure for issuing a new cheque book for existing account is same as the
procedure of new account. Only difference is that customer has to submit the requisition
slip of the old cheque book with date, signature and party’s address. Computer posting is
then given to the requisition slip to know the position of account and to know how many
leaf/ Leaves still not used. The number of new check book is entered on the back of the
old requisition slip and is signed by the officer.

 If the cheque is handed over to any other person then the account holder an
acknowledgement slip is issued by the bank addressing the account holder with details of
the checkbook. This acknowledgement slip must be signed by the account holder and
returned to the bank. Otherwise the bank will not honor any cheque from this checkbook.
 At the end of the day all the requisition slips and application forms are sent to the
computer section to give entry to these new cheques.

Transfer of an Account
 When an account is transferred from one branch to another, the account opening form
etc. signed at the time of opening account and any forms or documents signed
subsequently which are necessary for its proper conduct at the time of transfer, must
be forwarded under cover of form, to the branch to which the account is transferred.
Specimen signature card(s) and standing instruction if any must also be transferred.
No charge is taken on such transfer.

Closing of an Account
A banker can close the account of his / her customer. The stoppage of the operation of the
Account can be under following circumstances:
 Notice given by the customer himself
 Death of customer
 Customer’s insanity and insolvency
 Order of the court / Injunction of the court
 Garnishee Order.

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An application to close the account from customer is received.
Signature must be verified by the respective officer. The following activities are the part
and parcel of account closing:
 Draw amount Tk.100 for all A/C as closing charge.
 Cheque book or outstanding cheque leaf (if any) is destroyed.

3.4 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.
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.

3.4.1 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.

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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.

3.5 Foreign Exchange Department of MBL:


The procedures used to exchange currency in international trade are called foreign
exchange system, banks plays vital roles in this procedures world widely. The
Bangladeshi banks provide foreign exchange services under, Foreign Exchange Act, 1947
is for dealing in foreign exchange business, and Import and Export Control Act, and 1950
is for Documentary Credits. MBL has also become a member of SWIFT (Society For
Worldwide Inter Bank Financial Telecommunication) in 2000, which provides a fast,
secured & accurate communication network for financial transactions such as letter of
credit, fund transfer etc. As an authorized dealer under regulations of BB, MBL Elephant
Road Branch provides the followings three type services under their foreign exchange
department.

 Import Services
 Export Services
 Remittance Services

Foreign Currency Accounts offered by MBL:


Following the liberalization of exchange controls Bangladesh Bank has authorized the
banks to maintain different types of foreign currency accounts and convertible Taka
accounts. The following are the regulations laid down by Bangladesh in respect of these
accounts.
Who can open the accounts?
Branches of Mercantile Bank Limited may open Foreign Currency Accounts in the names
of:
A. Bangladesh nationals residing abroad
B. Foreign nationals residing abroad or Bangladesh and foreign firms operating in
Bangladesh or abroad,
C. Foreign missions and their expatriate employees.

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Resident Foreign Currency Deposit (RFCD):
This is a foreign currency denominated account. Those who domicile in Bangladesh but
have to remit money to abroad because of various reasons.

Non Resident Foreign Currency Deposit (NFCD):


This is a foreign currency denominated account. Those who doesn’t domicile in
Bangladesh but have to remit money to Bangladesh because of various reasons.

Requirements for opening RFCD Account:


 Two copies of recent passport size photograph
 Photocopy of passport
 Photocopy of work permit
 Salary certificate or employers certificate

For the Officers of Different Embassy they need not to submit all these documents but the
Employers certificate is must.

Requirements for opening NFCD Account:


 Photocopy of passport
 Citizenship certificate if available
 Certificate or approval from our authority for exporting manpower
 A nominee or authorized person will be selected by the account holder for
transactions.
 Under this account the nominee will receive local currency TK against any Foreign
Currency.
Import Section of MBL:
As a authorized dealer the major import items financed by MBL, Elephant Road branch
are capital machinery, Hot Roll Steel, electronic equipment, rice, wheat, seeds,
polyolefin, cement clinkers, dyes, chemicals, raw cotton, garments accessories, fabrics,
cotton etc. To import, a person should be competent to be an ‘importer’. According to
Import and Export (Control) Act, 1950, the officer of Chief Controller of Import and
Export provides the registration (IRC) to the importer. After obtaining this, the person has

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to secure a letter of credit authorization (LCA) from Bangladesh Bank. And then a person
becomes a qualified importer. He requests or instructs the opening bank to open an L/C.

Import procedures:
1. Registration with CCI&E
a. For engaging in international trade, every trader must be first registered with the
Chief Controller or Import and Export.
b. By paying specified registration fees and submitting necessary papers to the
CCI&E. the trader will get IRC (Import Registration Certificate). After obtaining
IRC, the person is eligible to import.

2.Purchase Contract between importers and exporter:


a. Now the importer has to contact with the seller outside the country to obtain the
Performa invoice/indent, which describes goods.
b. Indent is got through indenters a local agent of the sellers.
c. After the importer accept the preformed invoice, he makes a purchase contract
with the exporter declaring the terms and conditions of the import.
d. Import procedure differs with different means of payment. In most cases import
payment is made by the documentary letter of credit (L/C) in our country.
3.6 Letter of Credit (L/C)
Collection of LCA form:
Then the importer collects and Letter of Credit Authorization (LCA) from MBL Elephant
Road Branch.
Opening a Letter of Credit (L/C)
Bank provides guarantee to importer and exporter through Letter of Credit. Thus the
contract between importer and exporter is given a legal shape by the banker by its ‘Letter
of Credit’. The process of opening L/C regarding to import through MBL, Elephant Road
branch are as following:
A. Interview of probable L/C opener:
At first in case of import L/C opening opener must give an oral interview to the
responsible officers of MBL. If the officer is satisfied with opener’s motive of import,
type of import goods, quality of imported goods and marketability of goods than they will
give approval to opener to further steps.

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B. Application for L/C limit:
Before opening L/C, importer applies for L/C limit. To have an import L/C limit, an
importer submits an application to the Department of MBL furnishing the following
information,-
I. Nature of business.
II. Required amount of limit.
III. Payment terms and conditions.
IV. Goods to be imported.
V. Offered security.
VI. Repayment schedule.
VII. Full particulars of bank account maintained with MBL Elephant Road Branch.

C. The L/C Application:


After getting the importer applies to the bank to open a letter of credit on behalf of him
with required papers. Documentary Credit Application Form:
I. Tax Identification Number Certificate.
II. VAT Registration Certificate.
III. Membership Certificate of recognized Trade Association as per IPO.
IV. Proforma Invoice: It states description of the goods including quantity, unit price
etc.
V. L/C Form: MBL provides a printed form for opening of L/C (MF-fx 13) to the
importer. This form is known as Credit Application form. A special adhesive
stamp is affixed on the form. While opening, the stamp is cancelled. Usually the
importer expresses his desire to open the L/C quoting the amount of margin in
percentage.
VI. L/C authorization form (LCAF) duly signed by the importer.
VII. The insurance cover note: The name of issuing company and the insurance
number are to be mentioned on it.
VIII. IMP form duly signed by the importer.
IX. Forwarding for Pre-Shipment Inspection (PSI): Importer sends forwarding letter
to exporter for Pre-Shipment Inspection. But all types of goods do not require
PSI.

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Time limit for opening L/C:
L/C (s) shall be open within 180 days from the date of issuance of LCAF or from the date
of registration of LCAF with Bangladesh Bank.

Terms of L/C:
Full description of the goods along with quantity and unit price to be incorporated in the
L/C and shall take all precautions to quote the correct H.S. Codes of the goods. Prices to
be quoted on CER or FOB basis according to the P/Invoice or Indent. No import shall be
made on CIF basis without prior approval from the Ministry of Commerce.

Shipment Validity & Expiry:


All L/Cs must specify shipment validity as per terms of the P/Invoice or indent or L/C
application. However, shipment validity under any circumstances shall not exceed 9
(nine) months from the date of issuance of LCAF or registration LCAF with Bangladesh
Bank excepting capital machinery and spare parts shipments of which shall be made
within 17 (seventeen) months. All L/Cs must stipulate an expiry date and a place for
presentation of documents for payment/acceptance.

Transmission of L/C to Beneficiary through Advising Bank:


In this step the transmission of L/C is done through tested telex or fax to advise the L/C
by MBL to the advising bank. The advising bank verifies the authenticity of the L/C.
MBL has corresponding relationship or arrangement throughout the world by which the
L/C is advised. Actually the advising bank does not take and liability if otherwise not
requested.

3.7 REMITTANCE
Foreign remittance refers to the transfer of funds from one country to another which may
be within the country or between two countries through banking channel post office or the
informal channel.
Foreign Remittance means purchase and sale of freely convertible foreign currencies as
admissible “Foreign Exchange Regulation Act 1947” and “Guidelines For Foreign
Exchange Transaction-VOL, 1 & 2” of the country. Purchase of foreign currencies

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constitutes inward foreign remittance and sale of foreign currencies constitutes outward
foreign remittance.

Types of Remittance

REMITTANCE SERVICES

Mercantile Bank Limited maintains a strong network with the Overseas Exchange
Companies & Banks in different parts of the world ensuring better remittance services for
its customers. The following are the list of Overseas Exchange companies/Banks having
arrangement with mercantile Bank Limited

Name of the Exchange Company Presence


umana Money Services UK

Wall Street Exchange Centre UAE


Al-Ahalia Money Exchange Bureau UAE
Naaz Exchange Limited Canada
Xpress Money Services Global
Euro-Bangla Money Transfer Ltd UK
National Exchange Company S.R.L Italy
Al Moosa Exchange Company Kuwait
AN Express Ltd UK
SN Money Exchange Limited UK

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Trust Exchange UK limited UK
Economic Exchange Company UAE
Maniflo Money Exchange Inc USA
Bangladeshi Money Exchange Ltd Canada

Global Exchange Italia Srl, Italy Italy


Rupali Exchange (Europe) Ltd UK

Al-Zaman Exchange W.L.L Qatar

ICICI Bank Canada

3.8 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. 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.

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Processing for clearing cheque collection

Crossing
“Received” sealthe chequeson
is stamped arethe
done
cheque

“Payees A/C Credited” and disbursement

Entries are given in the Outward Clearing


Register.

“Clearing” seal is given on cheque

Cheques are sorted bank wise and entries


are given to the computer

Entries are giveneque.


to the “Clearing House
Register”

Figure : Processing for clearing cheque collection

puter

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Outward clearing bills:
It refers the instruments drawn on the other Banks received by the MBL. They are of
Three kinds:

 Cheques drawn on another branch of MBL. The settlement process -

Cheques are OBC received along Entry passed


directly sent to the the instrument by the in OBC
respective branch respective branch register of that
branch

When IBCA comes


customer’s account IBCA is sent from that
is credited branch to this branch.

Cheques are IBDA along with These bills are


collected by MBL, bills are sent to sent to clearing
Banani Branch. Banani Branch. house from Mirpur
Branch

Depositor’s account is If drawer’s Bank


credited with respective honors the bill
Branch. then

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Procedures for outward bills for collection (OBC)
Cheques drawn on another Bank or a branch of MBL which is situated outside the
clearing house area. These bills are called OBC. The process of collection is described
below.
If the bill is drawn on a branch of MBL –
Bills are sent to Branch collects
that branch the bills and Depositor’s
through mail or sends an IBCA to account is
courier. this Br. credited.

If the bill is drawn on another Bank and there is a branch of MBL

The branch of
This branch sends Request them to MBL can collect
the bills direct to send the process the through
the branch of MBL by IBCA and clearing house
by OBC schedule collect the bill. arrangement
exists there
If the bill is drawn on another Bank but there is no branch of MBL –
By an OBC
That Bank sends
The bills are schedule
a Demand Draft
directly sent to requested them to
mentioning the
that Bank. send a draft in
Paying Bank.
favor of this Bank.

Then the bill is


collected through
clearing house
process.

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PROCEDURE:
 After filling the deposit in slip bearer of the instrument deposits the instrument to
the respective officer.
 Upon receiving the instrument the respective officer checks the essential features
of the instrument and whether the deposit in slip is filled accordingly or not.
 Then (s) he crosses the instrument with a seal containing Banks and Branch’s
name, signs the deposit in slip and provides the customer with counter foil of the slip.
 Then both the instrument and slip is sealed with ‘Clearing’ seal and date seal
containing the date of clearing.
 An endorsement seal is also sealed on the back of the instrument and the officer
endorses it on behalf of MBL Mirpur.
 Then the officer separates the instrument from the deposit in slip. Deposit in slip
is kept in the bank and the instrument is sent for clearing.
 Non-IBC instruments are sent to the clearinghouse with two different forms. Both
the forms contain almost similar information.
 These instruments are sent to the clearinghouse by messenger.

Inward clearing bills:


It refers to the instrument drawn on MBL Mirpur Branch received from other Banks in
the clearing house by the representative. Settlement process-

Bills collected from Bank Debits the MBL main branch


other banks through A/C of MBL send new bills to
clearing house by maintained with BB other branches
Main branch drawn on
it and other branch.

Main branch sends the bills


Main branch debits to other branches with an
customers A/C IBDA

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If cheques are returned –
 Other branch sends an IBDA to Mirpur.
Procedure:
 When instruments are sent to the bank vie clearinghouse, it is entered into the
clearing in register.
 The officer checks the instruments thoroughly before it is sent to the computer
section for posting.
 If any kind of error is found in any instrument it is dishonored and sent back with
appropriate reason for doing so.
 The information is then sent back to the clearinghouse for taking appropriate
action.

Dispatch Section
 All documents coming in the branch or going out of the branch must pass this
section.
 Maintaining all records of the documents send to other branches or banks
 Makes best effort to send these documents safely and correctly.
 Letters are disbursed to their respective destination.
 Receives documents come through different medium, such as postal service,
courier service, via messenger etc.
 Dispatch section of MBL, Mirpur Branch performs an important role in smooth
and up-to-date banking for 21st century.
 Two types of letters are continuously received in this branch. These are:
 Inward (Registered /Unregistered) letters
 Outward (Registered/Unregistered) letters

3.9 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

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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.

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.
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.
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.

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Dishonor of Cheque:
If the cheque is dishonored, MBL sends a memorandum (cheque return memo) to the
customer stating the reason in the following way;
i. Refer to drawer
ii. Not arranged for.
iii. Effects not cleared, may be presented again.
iv. Exceeds arrangements.
v. Full cover not received.
vi. Payment stopped by drawer.
vii. Payee’s endorsement irregular/illegible/required.
viii. Payee’s endorsement irregular/require Bank’s confirmation.
ix. Drawer’s signature differs/required.
x. Alteration in date/figures/words requires drawer’s full signature.
xi. Cheque is posts dated/out of date/mutilated.
xii. Amount in words and figures differs.
xiii. Crossed cheque must be presented through a bank.
xiv. Clearing stamp required/requires cancellation.
xv. Addition to Bank’s discharge should be authenticated.

xvi. Cheque crossed “Account Payee Only”.


xvii. Collecting Bank’s discharge irregular/required.

Sorting of the Voucher:


At the day end an authorized officer keep the voucher after doing the following work-
Collects all the vouchers.
Then sort those voucher according to the account. Like Savings, Current, Loan
etc.
Separates the Debit a Credit vouchers.
Check those vouchers with supplementary (Printed from the computer).
Then those vouchers are stored in the store house.

3.10 Locker Service


MBL, Kawran Bazar Branch offers their valued customer the Locker Service. This
service helps the customer to keep their important documents, paper, and instrument and
precious item in safe and sound.
These facilities are maintained by two responsible and senior personnel. Both the person
maintains separate keys for each account or locker for highest safety.

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4.1 Findings
I have observed various positives as well as some negative aspects of the Branch MBL
but I have mentioned most of the negative findings rather than positive findings as well as
believe the negative or poor activities need to be considered management for their
betterment. The positives are negative findings are described below:

 It’s a brand to all types of customers.


 The Credit department now performs relatively better than previous as they have
batter but precious information about this.
 Credit department is also smooth in processing the necessary investment
documents and in sanctioning credit/investment to the customers.
 It has a lot of clients and they are very faithful to the Mirpur Branch.
 This Bank is now technologically updated. There are online banking facilities,
they have ATM services, Debit card & Credit card system.
 Loan transaction process is very lengthy.
 Mirpur branch has not much space for performing banking activities and for
relaxation of the customer.
 This branch is not well designed.
 They have no proper management services for the customer.
 Relationship among the employees is not good in all cases.

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4.2 Recommendations:
From all of my observation to make this report successful I felt some suggestion to give
for the company and my university. Hope my suggestion would also be grateful for the
SIBL & as well my university to make proper concern for future strategic action.

 To attract more clients MBL should create a new making strategy which will
increase the export import business.
 Effective & efficient initiatives are necessary to recovery the default loans.
 Long term training very much required for the officers.
 New investment sector is booming rapidly. MBL should identify those untapped
areas & invest those sector such as gas plant, condensed milk project, ship
breaking etc.
 It is note that delay in service is one of the major problems faced by clients.
Attempts should be made to straighten the procedure.
 Proper communication needs to establish with clients .
 To create better client the bank should increase the amount of consumer loans in a
short term basis.
 The Bank can provide student loan. This may encourage students to come forward
for the economy.
 MBL should diversify their loans more in agriculture, new industries etc for better
economic growth of the country.
 Improve & maintain a consistent relationship with customers, especially at
retailing.

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4.3 Conclusion

The Mercantile Bank Limited has been trying to operate its business successfully in
Bangladesh since 1999. Mercantile Bank Limited has already developed an image of
goodwill among its clientele by offering its excellent services. This success has resulted
from dedication, commitment and dynamic leadership of its management over the period.
The Bank is spreading its operation through all over the Bangladesh. At present the Bank
has 78 Branches all over Bangladesh. It is trying to increase more Branches into different
areas. In this modern world, Banks are playing its vital role for the economic
development of a country. Banks are helping for the development of Small Enterprise by
providing SME loan which is very much helpful for the economic development of a
country. It helps to reduce the unemployment rate of a country. The Banking Sector is
now very much competitive because we can see that a lot of new Commercial Banks have
been established in last few years. To survive in this competitive environment Banks need
to manage its assets and liabilities in an efficient way. The overall success of credit
management depends on the Banks credit policy, portfolio of credit, monitoring,
supervision and follow-up of the loan and advance. Banks are also playing a vital role to
earn foreign currency by helping the businesses to import the raw materials and exporting
the finished goods. The Foreign Exchange Department of MBL is doing well in this
Sector and earning good amount of profit .MBL has link with various Foreign Banks to
facilitate this service more efficiently. The General Banking Department of MBL is also
doing well in terms of collecting deposits. So in my Report, I have tried my best to give
more importance in these areas. I think that, it will help me a lot in my future life and I
believe that MBL will become the leader in the Banking Sector of Bangladesh within a
very short period of time and will expand it business outside Bangladesh.

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BIBLIOGRAPHY

 A training program book by BIBM


 Annual Report of Mercantile Bank Limited (2011,2012,2013)
 Banking, Jebon Nahar Tuhin
 Different types of Brochures of MBL
 Lecture sheet serve from MBL training institute
 MBL Annual Report; , 2011, 2012 & 2013 (half-yearly, unauthorized)
 MBL Procedure Manual- General Banking.
 Several Booklets from Mercantile Bank Limited.
 Statistical problem solving software.(SPSS)
 Operational manual

Web References
 www.google.com
 www.mblbd.com
 http://www.mblbd.com
 http://www.bangladesh-bank.org

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