Você está na página 1de 58

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

A Study On Mercantile Bank Limited.

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

An Internee Report is submitted in partial fulfillment of the requirement for the degree of Bachelor of Business Administration With concentration in Finance

Prepared for:
Shah Md. Al-Emran Sarkar Assistant Professor, Department of Business Administration ASA University Bangladesh

By: Syed Arafat Haque Pavel ID- 071-12-179 Batch-1st ASA University Bangladesh

Date of Submission: , 2011


2

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

DEDICATED TO MY FAMILY MEMBER

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

DECLARATION
I m Syed Arafat Haque Pavel, a student of faculty of Business Studies [BBA] ASA University Bangladesh. Hereby declare that the Internee Report entitled GENERAL BANKING ACTIVITIES OF MERCANTILE BANK is an original work done by me under the supervision of Shah Md. Al-Emran Sarkar Assistant Professor, Department of Business Administration Faculty of Business Student ASA University Bangladesh.

Syed Arafat Haque Pavel


ID# 071-12-179 BBA-1st (batch)

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

LETTER OF TRANSMITTAL
February 15,2011. Dhaka. Subject: A letter of transmittal to the Internship Supervisor. Dear Sir, It is my pleasure to submit my Internship Report on GENERAL BANKING ACTIVITIES OF MERCANTILE BANK (MBL) as a partial requirement for the BBA program. This report attempts to describe my observations, learning during the internship program me conducted by Human Resource Department of MBL. I made sincere efforts to study related materials, documents, annual report and operational system of MBL and examine relevant records for preparation of the report. I have tried my best to make this report as comprehensive and informative as possible within the time allowed for me. Due to various constrains; there may be some mistakes for which I beg your apology. Finally, I shall be glad to answer your any kind of query relating to this report, if necessary.

Thanking you Yours truly,

Syed Arafat Haque Pavel


ID# 071-12-179 BBA-1st (batch)

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

P EAE RF C
This internship report has been prepared as a part of the course of BBA Dept. of faculty of Business Studies, ASA University Bangladesh. The objective of the internship program is to enlighten the theoretical knowledge of students in practical field of operations.

I am assigned to submit my internship report on GENERAL BANKING ACTIVITIES OF MERCANTILE BANK (MBL). During the period of internship program, I have applied my academic knowledge as well as personal competence to the best. I have mainly tried to outline various performance issues with major functional areas. The report is organized by:
An Overview of Mercantile Bank Ltd.; General Banking Activities of Mercantile Bank Ltd.; . I tried my best to cover all significant dimensions of the topic. My effort will be meaningful if this report serves its purpose effectively.

Syed Arafat Haque Pavel

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

AK O LD E E T C N WE G M N
At this very moment I would like to express my deepest gratitude and humble submission to the almighty ALLAH but for whose support I would never be able to complete a huge task of preparing this Report Paper within the scheduled time. I am also very eager in my heart to acknowledge the support of some good hearted people who have sincerely helped me to complete the task.

The first name comes to my mind is Shah Md. Al-Emran Sarkar Assistant Professor, Department of Business Administration ASA University Bangladesh I am thankful and indebted to him for his whole-hearted supervision during the research period. His suggestions and comments to make the study a good one was really a great source of inspiration for me.
Secondly, I convey my thanks to Syed Ahmadul Karim, Vice President and Md. Abul Bashar, Assistant Vice President of Mercantile Bank Ltd., Nayabazar Branch. I am also thankful to Mr. Alamgir Kabir and Mr. Shamim officer of the same Branch for their great support and help in the Internship period. I also thank to my friend Shamol, Topu and Zahid from the core of my heart for inspiring me in completing the task. Finally, the inspiration, encouragement and support provided by our parents must be acknowledged.

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

E E U IV S M A Y XC T E U MR
It gives me immense pleasure that during internship period, as part of the BBA program, I have an opportunity of spending a period of three months with a reputable organization where I observed and learned the practice and management. I am to have an overall appreciation of corporate management but for lack of proper practice of management, which is not possible to achieve only customary education. If I dont go through various relevant functional departments of the organization, I have expressed a keen interest in spending my internship with banking sector, because I have learned from various sources that for developing country this sector plays a vital role, but our country has not given so much attention to this sector. Therefore, I choose Mercantile Bank Limited (MBL), a new generation private commercial bank, which has various tools for observation. I am very lucky that this bank gave me opportunity to work as an intern. MBL has stepped into the new millennium with vigor and new aspiration. MBL has a country wide branch network thorough which they provide a comprehensive banking service to their customers, which includes wealthy individuals, corporate clients, and financial institutions. The MBL has started its operation in June 2, 1999. Since then MBL has diversified its business concentration mainly on corporate clients and business banking. A detail of study of the past and present status of MBL with future outlook has been incorporated in this overview of MBL. MBL has put in place pragmatic policies and business strategies to ensure continued growth and success as the Bank moves towards new millennium. The Banks principle is to attain efficiency and excellence in everything the bank does and above all the bank focus on the needs of its customers. Diversity in its product and efficiency in delivering the services to customers will remain an important component of their long-term business plans. The bank has introduced various customer friendly products and services like different Deposit Schemes, Lease Finance, Consumer Credit Scheme, and Small Loan Scheme to encourage savings and to bring about qualitative changes in the lives of the people of our country. The practical activities of different desks what I have done is outlined in this report. Various rules and regulations, policies and procedures relating to different banking activities have also been enumerated here.

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

Acronyms
MBL BCC BCCI BIBM BMRE DD FDR GATT SME SSIs SWIFT B/E CIB CCI & E CAD CIF FDBC FDBP ERC EPB Mercantile Bank Limited. Bank of Credit and Commerce. Bank of Credit, Commerce and International. Bangladesh Institute of Bank Management. Balancing Modernization, Rehabilatation and Expension. Demand Draft. Fixed Deposite Receipt. General Agreement on Tariff and Trade. Small and Medium Enterprise. Small Scale Industries. Society For World Wide InterBank Financial Telecommunication. Bill of Exchange. Credit Information Bureau. Chief Controller of Import & Export. Cash Against Document. Cost Insurance & Freight. Foreign Document Bill Collection. Foreign Document Bill Purchase. Export Registration Certificate. Export Promotion Bureau.

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

CONTENTS
PARTICULARS PREFACE ACKNOWLEDGEMENT EXECUTIVE SUMMARY PART ONE INTRODUCTORY REMARKS SECTION-1 INTRODUCTION INTRODUCTION SECTION-2 THEORETICAL FRAME WORK OF THE STUDY ORIGIN OF THE REPORT BACKGROUND OF THE STUDY PURPOSE OF THE STUDY OBJECTIVE OF THE STUDY SOURCES OF DATA SCOPE OF THE STUDY METHODOLOGY OF THE STUDY CONSTRAINTS OF THE STUDY SECTION-3 AN OVERVIEW OF MERCANTILE BANK LIMITED INTRODUCTION HISTORICAL BACKGROUND OBJECTIVE THE STRUCTURE OF MBL MANAGEMENT MANAGEMENT HIERARCHY OPERATION CORPORATE INFORMATION CORRESPONDENT RELATIONSHIP HUMAN RESOURCES DEVELOPMENT R & D: INVESTING INTO THE FUTURE OFFICE AUTOMATION FINANCIAL PRODUCTS AND SERVICES MERCANTILE BANK FOUNDATION PAGE NO. V VI VII 2 3 4 5 5 5 5 6 6 6 6 7 8 8 8 9 9 10 11 12 12 13 13 13 14 15

10

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

PART TWO OVERALL PERFORMANCE OF MERCANTILE BANK LIMITED SECTION-4 GENERAL BANKING ACTIVITIES OF MERCANTILE BANK LIMITED INTRODUCTION DEPOSIT SECTION PARTICULARS ACCOUNT OPENING SECTION ISSUING OF CHEQUE BOOK TO THE CUSTOMER TRANSFER OF AN ACCOUNT CLOSING OF AN ACCOUNT CASH SECTION BILLS AND CLEARING SECTION REMITTANCE SECTION ACCOUNTS SECTION DISPATCHING SECTION LOCKER SERVICE PART THREE CONCLUDING REMARKS SECTION-5 OBSERVATIONS, RECOMMENDATIONS & CONCLUSION OBSERVATION RECOMMENDATION CONCLUSION

17 18 18 PAGE NO. 19 21 22 22 22 24 28 29 30 30

31 32 33

11

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

BIBLIOGRAPHY

PART ONE INTRODUCTORY REMARKS

12

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

SECTION-1 INTRODUCTION
1.0 INTRODUCTION
The word Bank refers to the financial institution deals with money. Commercial banks are the primary contributors to the economy of the country. On the other hand they are borrowing money from the locals and lending the same to the business as loans and advances. So the people and the government is very much dependent on these banks as the financial intermediary. Moreover, banks are profit - earning concern, as 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. Involvement of the banking sector in different financial events is increasing day by day. At the same time the banking process is becoming faster, easier and the banking arena is becoming wider. As the demand for better service increases, the banking organizations are coming with innovative ideas. In order to survive in the competitive field of the banking sector, all banking organizations are looking for better service opportunities to provide to their clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure. A student takes the internship program when he or she is at the last leg of the bachelors degree; internship program brings a student closer to the

13

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

real life situation and thereby helps to launch a career with some experience.

SECTION-2 THEORETICAL FRAME WORK OF THE STUDY

14

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

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. To provide fresh graduate with modern theoretical and professional knowledge in banking and financial institution management. This report is oriented as the course requirement of the course of BBA Program of ASA University Bangladesh. As the practical origination is an integral part of the MBA degree requirement, I was sent to Mercantile Bank Limited (Elephant Road Branch) to take the real life exposure of the activities of banking financial institution.

2.2 BACKGROUND OF THE STUDY


There are 12 semesters in BBA Program and final semester is the Internship program in any business organization. The program is an integral part of BBA degree requirement. After competition of coursed in the institute different in area of studies, students are sent to deferent organizations to expose them to real life management situation in the banks. The theoretical knowledge that we acquire from class lectures, books, journals, case study, seminar, project, workshop etc. is replenished in the practical setting. Here I also get an opportunity to realize the relevance and usefulness of the learning. Here I also placed in Mercantile Bank Limited, (Nayabazar Branch) from September 1 to November 30, 2004. Program office for Practical Orientation in Bank. To analyze the MBL overall performance I have need to find out the answer of following questions:

15

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

What help does it make? How much effectively it does its operations? Do all the wings of modern organization exit here? What are the situations of its various business functions?

2.3 PURPOSE OF THE STUDY


The report is prepared as partial requirement of the MBA Program of final term.

2.4 OBJECTIVE OF THE STUDY


The objectives of preparing this report are to provide: A general description of the traditional branch, Banking. To have an exposure of the banking environment of Bangladesh. An exposure of practices of different banking activities in MBL.
Observed existing rules, regulation theories and practices for banking.

Fulfilling the requirements of MBA program. Understanding the strategy and objectives of the banks.

2.5 SOURCES OF DATA


The report is based on both primary and secondary sources of information. Interviewing the managers and officers of the bank, employees of its

16

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

competitors & customers has provided the primary sources of information. Further more the secondary sources of information are the different annual reports, published documents, official files, printed forms, documents kept in the Bank.

2.6 SCOPE OF THE STUDY


Mercantile Bank Limited is one of the new generation banks in Bangladesh. The scope of the study is limited to the Nayabazar Branch only. The report covers the organizational structure, background, functions and the performance of the bank.

2.7 METHODOLOGY OF THE STUDY


The methodology of the report is given below: (a) For the procedure of different banking operations, I had observed the operations and worked with the Officers at the same time. I had interviewed the MBL Officials for getting more information. (b) For the analysis part, data have been collected from different statements and the annual reports of the bank.

2.8 CONSTRAINTS OF THE STUDY


The following limitations are apparent in the report:
a.

Time is the first limitation as the duration of the program was of three months only. Another limitation of this report is Banks policy of not disclosing some data and information for obvious reason, which could be very much useful.

b.

17

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

SECTION-3 AN OVERVIEW OF
18

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

MERCANTILE BANK LIMITED

3.0 INTRODUCTION 3.1 HISTORICAL BACKGROUND


Mercantile Bank Limited (MBL) provides various commercial banking services in Bangladesh. The company provides a range of services, including accepting deposits, making loans, discounting bills, and conducting money transfer and foreign exchange transactions, as well as performing other related services, such as safe keeping, collections, issuing guarantees, acceptances, and letters of credit. Its deposit products include double benefit deposit, family maintenance deposit, monthly savings, quarterly benefit deposit, special savings, advance benefit deposit, and pension and family support schemes. The company also offers consumers credit, doctors credit, car loan, and rural development schemes, as well as provides lease financing, personal loans, and small loans. In addition, it offers online services; and debit and credit card facilities. As of December 31, 2008, the company operated 64 branches and 3 small and medium enterprise service centers in Bangladesh. Mercantile Bank Limited was founded in 1999 and its headquartered in Dhaka, Bangladesh. Mercantile Bank has been incorporated on May 20, 1999 in Dhaka, Bangladesh as a limited company with the permission of the Bangladesh Bank; MBL commenced formal commercial banking operation from the June 2, 1999. The bank stood 15 branches all over the country up to 2001. The Authorized

19

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

Capital of the Bank is 3000.00 million taka and the Paid-Up Capital is 1498.90 million taka as on December 31, 2007.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

. There are thirty Sponsors involved in creating MBL. 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 members 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 institutions like insurance companies, leasing companys etc.

Mercantile bank Limited continued its expansion program during the year ended as on December 31, 2007. Its core lending and deposit taking business have increased significantly. Rising trend of the banks profitability over the last 8 years is also materialized. The MBL is committed to the delivery of the superior shareholders value. With the aim to be the bank of choice, it is operating in the industry with a team of personnel devoted to excel both their own career and the banks future.

As regards the second slogan of bank Efficiency is our strength is not a mere pronouncement but part of their belief, which will inspire and guide them in their long and arduous journey ahead.

20

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.2 OBJECTIVE
Mercantile Bank Limited (MBL) aims at excellence and is committed to explore a new horizon of banking and private a wide range of quality products and services comparable with those available with any modern bank in the world. It is a bank for the common people including businessman and professionals. It intends to serve with quality at a price competitive to achieve in the financial market. It would constantly keep on exploring the needs of the clients. The management of the bank bears in mind the fact they are on the threshold of a new millennium, which will pose extra ordinary challenges to be faced and at the same time open up new opportunities and possibilities. As young and talented team of business entrepreneurs and managers will be required to guide the destiny of nation in the 21st century. For this reason the bank will be developed a youthful and exuberant management team-technologically sound and rich in experience. They would work hand in hand with zeal and enthusiasm to achieve the objectives of the bank in the new millennium.

21

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.3 THE STRUCTURE OF MBL


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.

3.3.1 Board of Directors:


The Board of Directors, the apex body of the Bank, formulates policy guidelines, provides strategic planning and supervises business activities and performance of management while the Board remains accountable to the company and its shareholders. The Board is assisted by the Executive Committee and Audit Committee.

3.3.2 Executive Committee:


The Executive Committee, subject to ratification of the Board of Directors decides upon all routine and day by day operational matters beyond delegated powers of management.

3.3.3 Audit Committee


The Audit Committee assists the Board in fulfilling its auditing responsibilities. The Audit Committee maintains effective liaison with the Board of Directors, Management and the Internal and External Auditors.

3.4 MANAGEMENT

22

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

The management of the bank is vastly on a Board of Directors, for overall supervision and directions on policy matters by the board. The power of general supervision and control of the affairs of the bank is exercise by the president and managing director of the bank who is the chief executive officer. Above all, the bank will be manned and managed by a galaxy of talented professionals proficient in their individual fields and dedicated to the cause of the bank.

Chairman

Board of Directors

Chief Adviser

Managing Director - HRD

Deputy Managing Director GSD, CAD, A&I, GB, D&M


Executive Vice President/ Company Secretary

Deputy Managing Director ID, IT, CREDIT, R&P

Senior Vice President

Senior Vice President

Senior Vice President

Vice President
Senior Asst. Vice President

FAVP Principal Officer

Abbreviations: GSD General Service Division CAD Central Account Division ASI Audit and Inspect CB Central Bank D&M Developing and Marketing ID International Division R&P Research & Planning

Senior Executive Off: Executive Officer

Officer Asst. Officer

23

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.6 OPERATION
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 wellorchestrated 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 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 peopleoriented banking.

24

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

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. These 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. These businesses usually do not involve banks fund, but on the contrary, offer immense opportunity and scope to expand bank services to the members of public at large.

3.7 CORPORATE INFORMATION

25

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

Name of the Bank Status Date of Incorporation Date of Commencement Subscription for Shares Listed in Dhaka Stock Exchange Listed in Citation Stock Exchange Head Office Phone E-mail Website Chairman Managing Director Number of Employees Number of Branches

Mercantile Bank Limited Public Limited Company May 20, 1999 June 02, 1999. October 21-22, 2003 February 16, 2004 February 26, 2004 61, Dilkhusa Commercial Area, Motijheel, Dhaka- 1000 +880-2-9559333, 01711-535960 mbl@bol_online.com www.mblbd.com Md. Abdul Jalil Dean Manipur Raman 1715 64

26

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.8 CORRESPONDENT RELATIONSHIP


The Bank has established correspondent relationship across the world with a number of foreign banks namely Citibank N.A., The Bank of Tokyo Mitsubishi Ltd., Standard Chartered Bank, American Express Bank, HSBC, Commerzbank, MashreqBank, Commonwealth Bank of Australia, Scotia Bank, Toronto Dominion Bank, Unicredito Italiano, Wachovia Bank, N.A., Hutton National Bank, HypoVereinsbank, Bank Austria, Sumitomo Mitsui Banking Corp., ING Bank, United Bank of India, ICICI Bank etc. The number of foreign correspondents is 240 as of December 31, 2003. Efforts are being continued to further expand the correspondent relationship to facilitate Bank's growing foreign trade transactions.

27

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.9 HUMAN RESOURCES DEVELOPMENT


In todays competitive business environment, the quality of human resources makes the difference. The Banks commitment to attract high quality persons to work for it is reflected in the efforts of the bank. In the face of todays globalization, the Bank envisages to develop highly motivated workforce and equip them with latest skills and technologies. The Bank evolves human resources development strategy with a view to ensuring good working environment, a high level of loyalty and commitment, devotion and dedication on the part of the employees. The Bank has set up a Training Institute for providing training facilities to its executives/officers. The Training Institute has already conducted a number of foundations and specialized training courses. A number of officers were sent to Bangladesh Institute of Bank Management (BIBM) and other training institutes at home and abroad for specialized training on various aspects of banking. The Bank believes in professional excellence and considers its working force as its most valuable asset and the basis of its efficiency and strength.

3.10 R & D: INVESTING INTO THE FUTURE


Excellence in banking operation depends largely on a well-equipped and efficient Research and Development Division. Such activities require the investment of substantial resources and a set of qualified personnel with multidisciplinary background. Although it is not possible at this stage to undertake R&D activities similar to those of the banks in the developed countries, Mercantile Bank has established a core Research and Planning Division comprising skilled persons from the very inception of the Bank.

3.11 OFFICE AUTOMATION


Banking operations of the branches have been computerized to minimize costs and risks and to optimize benefits and increase overall efficiency for improved services. The Bank generates the relevant financial statements at the end of the day. The Bank has installed Reuters Screen for smooth operation of foreign currency dealings. The Bank has also hosted a web page of its own to take a place in the World Wide Web. On-line Banking has been introduced by the Bank to provide better services to the customer. The bank has already introduced ATM 'Q-Cash'. The Bank has installed SWIFT to facilitate quick international trade and payments arrangements. The Bank is going to introduce Credit Card soon.

28

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.12 FINANCIAL PRODUCTS AND SERVICES


The Bank has launched a number of financial products and services since its inception. Among them Monthly Saving Scheme, Monthly Benefit Scheme, Double Benefit Deposit Scheme, Special Saving Scheme, Life Long Pension Scheme, Consumer Credit Scheme, Small Loan Scheme and Lease Finance Scheme have attained wide acceptance among the people.

Monthly Savings Scheme

The prime objective of this scheme is to encourage people to build up a habit of saving. Under this scheme, one can save a fixed amount of money every month and get a lucrative amount of money after five, eight or ten years.

Monthly Benefit Scheme

Under this scheme, one can deposit certain amount of money for five or more years and in return he will receive benefits on monthly basis. Benefits start right from the first month of opening an account under the scheme and continue upto five or more years.

Double Benefit Deposit Scheme


Under this scheme, depositor's money will be doubled in a seven-year period and the scheme is one of the highest yielding deposit schemes in Bangladesh.

Special Savings Scheme


Under this scheme, depositor's money will be tripled in 11-year period. The main attraction of the scheme is that one can get his money after one year and onward with attractive benefits.

Life Long Pension Scheme


Life Long Pension Scheme has been evolved especially for old age. Under this scheme one can get life long benefit if he deposits specific amount per month for a period of 10, 15, 20, or 25 years. The scheme can also be opened in the name of minors.

Consumers Credit Scheme


Consumers' Credit is relatively new field of collateral-free finance of the Bank. People with limited income can avail of this credit facility to buy household goods including computer and other consumer durables.

29

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

Small Loan Scheme

This scheme has been evolved especially for small shopkeepers who need credit facility for their business and cannot provide tangible securities.

Lease Finance

This scheme has been designed to assist and encourage the genuine and capable entrepreneurs and professionals for acquiring capital machineries, medical equipments, computers and other items. Terms and conditions of this scheme have been made easier in order to help the potential entrepreneurs to acquire equipments of production and services and repay gradually from earnings on the basis of 'Pay as you earn'.

Doctors Credit Scheme


Doctors' Credit Scheme is designed to facilitate financing to fresh medical graduates and established physicians to acquire medical equipments and set up clinics and hospitals.

Rural Development Scheme


Rural Development Scheme has been evolved for the rural people of the country to make them self-employed through financing various incomes generating projects. This scheme is operated on group basis.

Women Entrepreneurs Development Scheme


Women Entrepreneurs Development Scheme has been introduced to encourage women in doing business. Under this scheme, the Bank finances the small and cottage industry projects sponsored by women.

SME Financing Scheme


Small and Medium Enterprise (SME) Financing Scheme has been introduced to assist new or experienced entrepreneurs to invest in small and medium scale industries.

30

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

3.13 MERCANTILE BANK FOUNDATION


The Bank has set up Mercantile Bank Foundation for extending benevolent services to the society. The Bank contributes 1% of operating profit or Tk.4.00 million, whichever is higher, to Mercantile Bank Foundation every year. The Foundation has been established with following objectives: 1. Mercantile Bank Prize to 8(eight) eminent personalities of the country for the outstanding contribution in the fields of Economics and Economic Research, Bengali Language and Literature, Science and Technology, Education and Culture, Journalism, Sports, Research on Liberation War and Industry and Commerce. 2. Interest free education loan for the meritorious but poor students. 3. To conduct research on Bengali language and literature. 4. Book purchase and Distribution Policy to encourage writers and publisher of the country. 5. Interest free Loan to the unemployed educated people.

31

GENERAL BANKING ACTIVITIES OF MERCANTILE BANK

6. Donation for handicapped artistes, litterateur and distressed people.

7. Project for the development of shelter-less childre

32

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

PART TWO OVERALL PERFORMANCE OF MERCANTILE BANK LIMITED

Observations, Recommendations & Conclusion 75

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

SECTION-4 GENERAL BANKING ACTIVITIES OF MERCANTILE BANK LIMITED

Observations, Recommendations & Conclusion 76

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

4.0 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. In thus respect I need to know about the general banking function of those banks as well as the MBL, is to provide the general banking service. The general banking department does the most important and basic works of the bank. All other departments are linked with this department. It also pays a vital role in deposit mobilization of the branch. MBL provides different types of accounts, locker facilities and special types of saving scheme under general banking. For proper functioning and excellent customer service this department is divided into various sections namely as follows: 1. 2. 3. 4. 5. 6. 7. 8. Deposit Section Account Opening Section Cash Section Bills and Clearing Section Remittance Section Dispatching Section Locker Service Accounts Section

4.1 DEPOSIT SECTION


A bank is essentially an intermediary of short-term funds. It can carry out extensive lending operations only when it can effectively channels the saving of community. A good banker is one who effectively mobilizes the saving of the

Observations, Recommendations & Conclusion 77

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

community as well as makes such use of saving by making it available to productive and priority sectors of the economy thereby fostering the growth and the development of the nation economy. Therefore deposit is the blood of bank. From the history and origin of the banking system, we can know those deposit collection the main function of a bank.

4.1.1 Accepting Deposit


The deposits that are accepted by MBL like other banks may be classified into, Demand deposits, Time deposits.

4.1.2 Demand Deposits


These deposits are withdrawn without notice, e.g. current deposit. MBL accepts demand deposit through the opening of, (1) Current account, (2) Saving account, (3) Call deposit from the fellow bankers.

4.1.3 Time Deposits


A deposit which is payable at a fixed date or after a period of notice is a time deposit. Mercantile Bank accepts time deposits through Fixed Deposit Receipt (FDR), Short Time Deposit (STD), Bearer Certificate Deposit (BCD) etc. While accepting these deposits, a contract is executed between the bank and the customer. This contract will be a valid one only when both the parties are competent to enter into contracts. As account initiates the fundamental relationship and since the Banker has to deal with different kinds of persons with different legal status, MBL officials remain very much careful about the competency of the customer.

Observations, Recommendations & Conclusion 78

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

4.2 ACCOUNT OPENING SECTION


Deposits the lifeblood of a bank, which is invested, in a bank through opening an account. The relationship between banker and customer begins with the opening of an account by the customer. Opening of an account binds the Banker and Customer into contractual relationship under the legal framework of the Contract Act1872. But selection of customer for opening an account is very crucial for a bank. In fact, fraud and forgery of all kinds start by opening account. So, the Mercantile Bank Ltd. takes highest caution in this regard.

General Account Opening Procedure is given below:


Applicant fills up the relevant application form in the prescribed manner.
He / She is required to fill up the specimen signature card in front of the Banker. For an individual

After depositing the cash one Chequebook is issued.

The authorized officer scrutinizes the introduction and examines the documents

Account is opened

Issuance of deposit slip and the deposit must be made in cash no cheque or draft is acceptable to the Bank.

4.2.1 Cautions Taken by the Banks


In the name of The client has to fill up a white account opening form. individual Terms and condition are printed on the back of the form. The form contains the declaration clause, special instruction etc. In joint name In this type, the formality is same as individual account, but in the special instruction clause, 'either or survivor' or 'former or survivor' clause is marked.

Observations, Recommendations & Conclusion 79

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

Proprietorship Partnership firm

Public limited company. Private Limited Company Non-trading concern (Societies, Club, Association) Joint account in the name of minor

In addition, the customer has to submit the valid trade license and Tax Paying Identification Number (T I N) along with the application. 1. A copy of partnership agreement (deed). 2. Resolution of the partner regarding account opening. 3. Photographs attested of those who will operate. 4. Trade license. 5. Mandate as to operate of account. 1. Certificate of incorporation. 2. Copy of memorandum and articles of association. 3. Certificate of commencement. 4. Copy of resolution of Board of Directors. 1. Certificate of commencement is not necessary. 2. Certificate of incorporation. 3. Copy of memorandum of and articles of association. 4. Copy of resolution of the board of directors. 1. Registration certificate under the societies acts 1962. 2. Certificate copy of bylaws and regulations constitution. 3. Copy of resolution. 4. Power of attorney to borrow. A minor can't operate an account in his own name due to the incapability to enter into a contract. He / she can open an account in M B L in joint name of the person who will be guardian.

4.2.2 Opening of Fixed Deposit Account


(a) Process
The depositor has to have to fill an application form. In case of a deposit in joint name, M B L also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes the specimen signatures of the depositor(s). Necessary entries are given on the FDR register. An F D R is then issued to the depositor acknowledging receipt of the some of money mentioned therein. It also contains the rate of interest & the date on which the deposit will fall due for payment.

(b)

Payment of Interest

It is usually paid on maturity of the fixed deposit. M B L calculates interest at each maturity date and provision is made on the "Miscellaneous Creditor Expenditure Payable Accounts" is debited for accrued interest. But the bank may pay you interest to depositor every 6 months or credit the amount of interest to his savings or current account, at his request.

Observations, Recommendations & Conclusion 80

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

In case premature F D R, M B L is not bound to accept surrender of the deposit before its maturity date.

(c) Premature Enchantment of FDR


In order to deter such a tendency, the interest on such a fixed deposit is made cut a certain percentage less than the agreed rate. Normally, S B rate is allowed.

(d) Loss of FDR


If the instrument is lost from the possession of the holder, the holder is asked to fulfill the following requirements: Party should inform it to the bank immediately. Record a G D in the police station. Furnish an indemnity bond. On fulfilling the above requirements a duplicate F D R is then issued to the customer by the bank.

(e) Renewal of FDR


F D R is automatically renewed within seven days after the date of its maturity if the holder does not come to encase the instrument. Renewal will be for the previously agreed maturity period.

4.3 ISSUING OF CUSTOM ER

CHEQUE

BOOK

TO

THE

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 Chequebook. Respected Officer first draws a Chequebook kept under his own disposal. (S) He then scaled it with branch name. (S) He enters the number of the Chequebook 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 write down on the face of the Chequebook and on every leaf of the Chequebook including Requisition Slip. The name of the customer is also written down on the face of the Chequebook and on the Requisition Slip. The word "Issued on" along with the date of issuance is written down on the Requisition Slip. Number of Chequebook and date of issuance is also written on the application form. Next, the customer is asked to sign in the Chequebook issue Register.

Observations, Recommendations & Conclusion 81

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

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.

4.4 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 and standing instruction if any must also be transferred. No charge is taken on such transfer.

The necessary information regarding the character, means and standing of the account holder and must be given to the receiving branch.

4.5 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. A customer may close his/her account any time by submitting an application to the branch. The respective officer must verify signature. The customer should be asked to draw the final check for the amount standing to the credit of his/her account less the amount of closing an other incidental charge and surrender the unused check leaves. The account should be debited for the account closing charge etc. and the authorized officer of the bank should destroy unused check. In case of joint account the application for closing the account should be signed by the joint account holder. The fee for closing of an account is TK.150.00 for Saving & Current account and TK 75.00 for STD account.

4.6 CASH SECTION

Observations, Recommendations & Conclusion 82

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

Cash section is a very important and busy section MBL, of any Branch handle with extra care. I was not authorized to deal in this section. But I was fortunate enough to know the procedures of this section. 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 very secured room. Keys to the room are kept under control of cash officer and branch incumbent. The amount of opening cash balance is entered into a register. After whole days' transaction, the surplus money remains in the cash counter is put hack in the vault and known as the closing balance. Money is received and paid in this section. This section perform the following functions:

4.6.1 Cash Receipt


At first the depositor fill up the Deposit in Slip. There are three types of deposit in slip in this branch. One for savings account, one for current account and another for term deposit account. 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 scroll register kept at the counter, seal the deposit in slip and sign on it with date.

Then this slip is passed to another officer who enters the scroll number given
by the cash counter in his / her register amounts of the money, sign the slip and keep the banks' part of the slip. Other part is given to the depositor. 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 arc correct or not.

4.6.2 Cash Payment


When a person comes to the bank to cash a cheque(s) he/she first gives it to the computer desk to know the position or 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 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. He / She 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 kinds or errors the respective officer will
request the bearer to sign on the back of it. He will then put his I her initial beside the bearers signature. He / She will also sign it on its face, will write down the amount by red pen and will put on a scroll number from his / her scroll register. It is known as passing of cheques.

Observations, Recommendations & Conclusion 83

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

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 scroll number in his / her register and will pay the money to the bearer. At the end of the day these scroll numbers of the registers will be compared to ensure the correctness of the entries.

4.6.3 Cash Packing


After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

4.6.4 Allocation of Currency


Before starting the banking hour all tellers give requisition of money through Teller Cash Proof Sheet. The head teller writes the number of the packet denomination wise in Reserve Sheet at the end of the day; all the notes remained are recorded in the sheet.

4.7 BILLS AND CLEARING SECTION


For safety and security in financial transaction people use financial instruments like DD, PO, Cheque etc. The duty of Commercial Banks is to collect these financial instruments on behalf of their customer. This process that the Banks use is known as clearing and collection. The mail function of this section is to collect instruments on behalf of the customers through Bangladesh Bank, clearinghouse, Outward Bills for Collection (OBC), Inward Bills for Collection (IBC). Upon the receipts of the instruments this section examines the following things:

(a)

Outward Clearing Bills


Observations, Recommendations & Conclusion 84

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

If refers the instruments drawn on the other Banks received by the MBL. They fall under two kinds.

1) When Cheques are drawn on another branch of MBL the settlement process is:
Cheques are directly sent to the respective branch. Received along he instrument by the respective. Entry passed in OBC register of that branch.

When IBTA comes customers account is credited.

IBTA is sent from branch to this branch.

the

2) When Cheques drawn on another Bank, which is situated within clearing house area.
MBL Nayabazar Branch collects cheques. CIBTA along with bills are sent to Dilkusha Branch. These bills are sent to cleaning house from Dilkusha Branch.

Depositors account is credited with respective Branch.

If drawers Bank honors the bill then,

Observations, Recommendations & Conclusion 85

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

(b)

Outward Bills for Collection

Cheques drawn on another Bank or a branch of MBL is situated outside the clearinghouse area. These bills are called OBC the process of collection is described below.

1) When the bills are drawn on a branch MBL:

Bills are sent to that branch through mail or

Branch collects the bills and sends

Depositor s account is

2) When the bill is drawn on another Bank and there is a branch MBL:
This branch sends the bill direct to the branch of MBL by OBC schedule. Request them to send the process by CIBTA and collect the bill. That branch of MBL can collect the through clearinghouse arrangement.

3) When the bill is drawn on another Bank out there is no branch of MBL:
By an OBC schedule requested them to send a draft in favour of this Bank.

The bill is directly sent to that Bank.

That Bank sends a demand draft mentioning the Paying Bank.

The bills are directly sent to that Bank.

By an OBC schedule requested them to send a draft in favor of this Bank.

Observations, Recommendations & Conclusion 86

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

The Bank sends a Demand Draft mentioning the Paying Bank.

Then the bills are collected through clearing house process.

(c) Inward Clearing Bills


If refers the instruments drawn on MBL Nayabazar Branch received from other Banks in the clearinghouse by the representative. Settlement process:
Bills collected from other Banks through clearing house by Nayabazar Drawn on it and other Branch By: Bangladesh Bank debits the A/C of MBL Maintained with B.B.

MBL: Branch sends the bills to other Branches.

Nayabazar Branch debts customers respective A/C

Nayabazar Branch sends the bills to other branches with CIBTA

4 .1C a in .7 le r g
According through the 37(2) of Bangladesh Bank Order 1972, which are the member of the clearinghouse, are called as Scheduled Bank. The scheduled banks clear the cheques drawn upon one another through the clearinghouse. This is an arrangement by the central Bank where every day representative of the member banks gather to clear the cheques. Banks for credit of the proceeds to the customers account accept cheques and other similar instruments. The banks receive many such instruments during the from account holders. Many of these instruments are drawn payable at other banks. If they were to be presented at the drawer banks to collect the proceeds it would be necessary to employ many messengers for the purpose. Similarly there would many cheque drawn on this the messengers of other banks would present bank and then at

Observations, Recommendations & Conclusion 87

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

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

Processing for Collection

T eF llo in P o e u e a et k nf r h o w g r cdr s r ae o C lle t n o c io Received seal is stamped on the cheque Crossing the cheques are done

Payees A/C Credited ends Entries are given in the Outward Clearing Register. Cheques are sortedrsement and entries are bank wise given to the com Clearing seal is given on cheque.

eque.

Entries are given to the Clearing House Register

Observations, Recommendations & Conclusion 88 puter

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

P o e u e f r O t a dB r c d r s o uw r ills f r C lle t n o o c io Depositing the cheque along with deposit slip

Crossing of the cheques are done indicating Principal Branch as collecting bank

Endorsement Payees A/C will be credited on realization is given

Entries are given in the outward clearing register

4.8 REMITTANCE SECTION


Banks have a wide range network of branches all over the country and offer various kinds of remittance facilities to the public. Telegraphic Transfer, Mail Transfer Travelers Cheque, and Demand Drafts and Cheque can do remittance. There are two steps of remittance:

Observations, Recommendations & Conclusion 89

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

(A) Inland Remittance


When one bank sends these T.T, M.T, T.C or Cheque to another bank then it will be called inland remittance.

(B) Foreign Remittance


When a bank got this T.T, M.T, T.C and Cheque from outside bank, which is not situated in the home country than it will be called foreign remittance.

Types of Remittance
Between Between Between Between Between Between banks and non-banks customer. banks in the same country. banks in the different country. banks in the different centers. banks and central bank in the same country. central bank of different customers.

The main instruments used by the MBL of remittance of funds are: Payment order (PO) Demand Draft (DD) Telegraphic Transfer (TT)

4.8.1 Payment Order (PO)


It is process of money transfer from payer to payee within a certain clearing area through banking channel. A person can purchase payment order in different modes such as Pay order by cash, pay order by cheque. MBL charges different amount of commission on the basis of Payment order amount. The bank charges for pay order are given in the following chart:

Commission and VAT of P.O.: Amount


Up to Tk.10,000 Tk.10,001 to Tk.1,00,000 Tk.1,00,001 to above

Commission
Tk.10 Tk.20 Tk.40

VAT
15% of Commission ,, ,,

4.8.2 Demand Draft (DD)


It is an instrument containing an unconditional order of one bank office to pay a certain amount of money to the named person or order the amount therein on

Observations, Recommendations & Conclusion 90

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

demand. DD is very much popular instrument for remitting money from one corner of money to another. Commission for DD is 0.15% of the principal amount and 0.15% vat on the Commission.

Difference between Pay Order and Demand Draft

There are some difference between Pay Order and Demand draft, which are: In case of demand draft both the payer and payee need to have accounts. But there is no certain rule for pay order. PO is used for same clearing area. DD is used for all kinds. DD cannot be done in the same clearing area. DD is drawn on a certain bank office. But there is no certain rule for PO.

4.8.3 Telegraph Transfer (TT)


A Telegraph Transfer (TT) is an instruction for transfer of money by telegraph cable and telex from a bank in one center to same bank in a different center. Generally this is an instruction from the importers bank to the exporters bank or some other bank in the exporters country for transfer of money to a named person. Here the remitter bears the additional charge of telex/ telephone. Charge for TT is 0.15% of the principal amount and the additional charge for telex. Telephone is TK. 40.00. And 0.15% vat on the T. T. charge.

4.9 ACCOUNTS SECTION


This is a very much crucial department for each bank of a commercial bank. Records of all the transactions of every department are kept here as well with other respective branches. Accounting Department verifies all financial amounts and contents of transactions. If any discrepancy arises regarding any transaction this department report to the concerned department.

4.9.1 Task of Account Department:


Account Department plays a vital role in commercial banking. In private banking sector Accounts Department of Mercantile Bank Limited performs its tasks properly. The activities of Account Section are as follows. Record all transaction in the casebook. Record all transaction in the subsidiary and general ledger. Prepare daily fund function, weekly position, periodic statement of affairs etc. Prepare necessary statement for reporting purpose.

Observations, Recommendations & Conclusion 91

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

Pay all expenditure on behalf of the bank. Make salary statement and pay salary. Branch to branch fund remittance and support for accounting treatment. Budgeting for branch. Make charges for different types of duties.

4.10DISPATCHING SECTION
All documents coming in the branch or going out of the branch must pass this section.

The Main Objective of this Section is: Maintaining all records of the documents send to other branches or banks. Makes best effort to send these documents safety and correctly. Letters are disbursed to their respective destination. Receives documents come through different medium, such as postal service, courier service, via messenger etc. MBL Nayabazar branch.

Dispatch

section or MBL Nayabazar 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: 1. Inward (Registered/Unregistered) letters. 2. Outward (Registered/Unregistered) letters. At first recording is required whether it is Inward or Outward Registered / Unregistered letters. Then letters are disbursed to their respect destination. Inward letters are firstly segmented according to their different sections and after that an entry is given to the Inward Register book. The chronological

Observations, Recommendations & Conclusion 92

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

number of the register (Both Inward & Outward) is known as inward & outward number receptively.

4.11 LOCKER SERVICE


MBL Nayabazar Branch has locker facility to secure the gold ornaments. Valuables etc. of the valued customers. This branch does not differentiate between Safe Deposit Receipt (SDR) and Safe Custody. All facilities are provided by locker service MBL Nayabazar Branch has two types of locker. Such as Large Locker and Small Locker. This branch charges Tk.1000 and Tk.600 per annum for large and small locker respectively. This facility is provided free of cost to the VIP customers of the branch.

Observations, Recommendations & Conclusion 93

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

PART THREE CONCLUDING REMARKS

Observations, Recommendations & Conclusion 94

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

SECTION-5 OBSERVATIONS, RECOMMENDATIONS & CONCLUSION

9.1 OBSERVATION
While working at MBL Nayabazar Branch, I got a newer kind of experience. After collecting and analyzing data, I have got some findings and

Observations, Recommendations & Conclusion 95

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

recommendations. These findings are completely my personal viewpoint, which are given below:

General Banking Department


In general banking department they follow the traditional banking system. The entire general banking procedure is not fully computerized. As a result some processing for example collecting money from the deposit take a long time to perform. The cash counter I think is congested and the procedure is also traditional. There is no computer in Accounts Opening Section and Remittance Section. Thats why the service is not as prompt as the customers demand. Lack of variety of services is also a drawback of the general banking area of the Mercantile Bank Limited. The Bank provides only some traditional limited services to its client. As a result the bank is falling behind in competition. The are not using Data Base Networking in Information Technology (IT) Department. So they have to transfer data from branch to branch and branch to head office by using floppy disk and sure it is not a good system. In case of opening an account some big parties are come to open accounts in reference with the high officials of the bank. They do not submit all papers that required to open an account and in future they do not feel any urge to submit those papers, but already they become accounts holders. I think that, in this case the authority is violating the rule. According to some clients opinion introducer is one of the problems to open an account. If a person who is new of the city wants to open account, it is a problem for him/her to arrange an introducer of SB or CD accounts holder.

9.2 RECOMMENDATION

Observations, Recommendations & Conclusion 96

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

Banking is a service-oriented marketing. Its business profit depends on its service quality. Thats why the authority always should be aware about their service quality.

To provide quality service to the customer it is necessary to have a trained team of an organization or an institution. For this reason the bank should recruit more fresh, bright and energetic persons such as MBA, BBA, and MBM etc. The bank has a provision for internship program, but it is not well organized. Although the officials are very careful and cooperative with the interns, the authority should be more structured. If they can properly make them trained it will be very fruitful to recruit them. Because they learn overall banking in the internship period, so in the beginning of the job they can work as experienced persons. It is also very important that they should give an honorarium to the intern. Bank should offer more facilities to the customers such as credit card, visa card, ATM machine etc. While the other bank is launching Consumer Credit Scheme Mercantile bank is failing to launch this king of scheme. The management can undertake such sort of schemes and earn more profit. One of the business strategies is promotion. Successful business depends how they can promote their products or services to the customer. In this connection to improve the business status bank should introduce more promotional programs. The recruitment process of the bank is very lengthy and expensive. The bank should the cost and select the employee by restructuring the lengthy process. In general banking department it is necessary to implement modern banking process instead of traditional system. It should be more computerized. Data Base Networking is the most modern technology to transfer data from branch to branch or branch to head oppose and vice versa. So they must use this technology in Information Technology (IT) Department of the bank.

Observations, Recommendations & Conclusion 97

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

As the clients are not in favor of introducing system, if possible the rule of introducing to open an account should be changed. Because many people face in problem to arrange an introducer in the time of opening accounts. The loan sanction process should be easier that the clients can feel convenient to take loan from the bank. To make exchange process more prompt the authority should use modern communication system such as e-mail, fax, win fax, Internet etc. Foreign exchange department should be fully computerized that the exchange process would be convenient for both the bankers and the clients. Supervision based credit should be introduced. Bank should have to ensure good use of fund. Total cost of bank should have to be reduced. Loan processing time, political invention should be reduced. Reward should be given to that borrower who paid early. As it profit of the bank is not satisfactory, therefore has to identify those sectors from which it can earn more profit and should invest in those sectors. Deposit mobilization of the bank should come to be increase.

Observations, Recommendations & Conclusion 98

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

9.3 CONCLUSION
From the practical implementation of customer dealing procedure during the whole period of my practical orientation in Mercantile bank limited I have reached a firm and concrete conclusion in a very confident way. I believe that my realization will be in harmony with most of the banking thinkers. It is quite evident that to build up an effective and efficient banking system to the highest desire level computerized transaction is a must. Success in the banking business largely depends on effective lending. Less the amount of loan losses, the more the income will be from Credit operations. The more the income from Credit operations the more will be the profit of the Mercantile Bank Limited and here lies the success of Credit Financing. Though there are some drawbacks in implementing Credit facilities in Mercantile Bank Limited as per manual, it can be further developed in light of the recommendations being discussed above. Finally it can be argued that though the results achieved so far are not satisfactory, Credit Financing is a modern scientific technique for enhancing Mercantile Banks strength and there lies the opportunities to make it more effective in the future for our own benefit.

Observations, Recommendations & Conclusion 99

Overall Performance & Financial Appraisal of Mercantile Bank Ltd.

BIBLIOGRAPHY
Gordon, E & Notorajan, Dr. K. Banking Theory, Law, and Practice, Himalaya Publishing House, Delhi, 1996. MBL Procedure Manual- General Banking. Credit Operation Manual- MBL Prospectus of MBL, Md. Muinuddin Khan, The Bangladesh Accountant

THE END

Observations, Recommendations & Conclusion100

Você também pode gostar