report on genaral banking of mercantile bank limited
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8/12/2019 Report on Genaral Banking of Mercantile Bank Limited
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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
BBS degree reuirement! " was sent to #ercantile Bank $imited %#ain Branch& to take
the real life exposure of the activities of banking financial institution for three months
only starting from 'nd(ebruary. This research is a partial reuirement of #BA "nternship
Program in the Southeast )niversity and report is being prepared from three months
extensive knowledge and research.
1.3 Objective of the report
The primary ob*ective of this report is to comply with the reuirement of my course. But
the ob*ective behind this study is something broader.The principal intent of this report is
to analy+e the trends of overall banking and their customer,s satisfaction. -b*ectives of
the study are summari+ed in the following manner
To identify the present state of #ercantile Bank $imited %#B$&! #ain Branch.
To observe the customers and their satisfaction towards the #B$.
To observe the customers reaction towards service of #B$.
To describe the /eneral Banking! S#S Banking! AT# facilities and other facilities
provided by #B$.
To draw S0-T analysis of #B$! #ain branch.
To discuss the potential of #B$.
To provide the recommendation for improvement of #B$.
(inally! to sketch out the overview of #ercantile Bank $imited %#B$&.
1.4 Scope of the study
#ercantile Bank $imited is one of the new generation banks in Bangladesh. The scope of
the study is limited to the #ain Branch only. The report will cover the functions of
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different departments of #ercantile Bank $td %#B$&! #ain Branch like /eneral
banking! $oan and Advances! and (oreign xchange. "t will also present a brief scenario
of the #ercantile Bank $td in total.
" will include on my report first of the introduction of #ercantile Bank $td .Then the
overall banking activities! products and services. (inally! " shall provide an analytical
view on a real pro*ect that #ercantile Bank #ain Branch facing! and it is the special
focus of my report.
1.5 Methodoogy of d!tcoection
(or achieving the specific ob*ective of this study! " will collect the related data both from
primary 2 secondary sources. (or the primary sources of data collection3 customer,s
opinion will be collected through uestionnaire and also personal observation. To collect
the secondary sources of data " will go through the annual reports of #B$! different
papers of #B$! various records of the bank! unpublished data! different textbooks!
*ournals! booklets and web site of #B$ %www.mblbd.com&.
1." S!mping design
#!ri!bes Procedure$!rget Popu!tion Branch customers and employees.
S!mpe units Branch customers and employees.
S!mping %r!me
Priority customer! general customer! corporate
customer and also the different levels of employees in
the branch.
S!mping techni&ue Stratified sampling by different account holder.
S!mpe si'e 45.
S!mping P!n6ata gathered based on the focus group interview and
experience survey through the uestionnaire.
()ecutionAllocate sample by strata! select 4 strata and
conducted survey on them.
Table 1 Sampling design
1.* +imit!tions of the study
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A. Although " have obtained wholehearted co3operation from employees and
customers of #B$! #ain Branch but they could not manage enough time to deal
with my report.
B. The annual report is the main secondary source of the information but thisinformation was not enough to complete the report and it was not identified clear
idea about this bank.
8. 6ue to some policies of the bank " couldn,t collect the organi+ational hierarchy to
show the organi+ational decisions flow.
6. The main limitation for me was the fact " was working away from the "T
department section for one week for the internship program. Therefore! " have too
short time to understand the whole process of P8 bank under which the whole
online banking system is operated and there was some restriction for me such as "
couldn,t open their P8 and some program without their password. That,s why "
couldn,t able to provide precise data on "T department due to restriction.
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,.- ntroduction
,.1 M/+ in /!ng!desh
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 liberali+ation of economic policies in
Bangladesh! #ercantile bank $imited emerged as a new commercial bank to provide
efficient banking services with a view to improving the socio3economic development of
the country.
The Bank provides a broad range of financial services to its customers and corporate
clients. The Board of 6irectors consists of eminent personalities from the realm of
commerce and industries of the country.
,., 0istoric! b!cground
#ercantile Bank $imited is a scheduled private commercial bank established on #ay '5!
1::: under the Bank 8ompany Act! 1::1 and incorporated as a Public $imited 8ompany
under 8ompany Act! 1::9. The Bank started commercial banking operations from ;une 5'!
1:::. 6uring this short span of time! the Bank has been successful to position itself as a
progressive sand dynamic financial institution in the country.
The Bank had been widely welcome by the business community! from small
entrepreneurs for forward3looking business outlook business outlook and innovative
financing solutions. Thus! within this very short period it has been able to create an image
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for itself and has earned significant reputation in the country,s banking sector as a bank
with vision. The company Philosophy 3=efficiency is our strength> has been exactly the
essence of success of this Bank.
#ercantile Bank $imited has been licensed by the /overnment of Bangladesh as ascheduled Bank in the private sector in the process of the policy of liberali+ation of
banking and financial services or Bangladesh. "n 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 adeuacy reuirement set by Bangladesh Bank.
There are twenty3seven sponsors involved in creating #ercantile Bank $imited? 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 '1 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!
sub*ect to ratification by the board of directors.
,.3. Objectives of the Merc!ntie /!n +imited
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%or the customers2Providing with caring services
by being innovative in the
development of new banking
products and services.
%or the sh!rehoders2
#aximi+ing wealth of the bank.
%or the empoyees2
especting worth and dignity of
individual employees devoting
their energies of the
progress of the bank.%or the community
Strengthening the corporate
values and taking environment
and social risks and reward into
account.
,.4 #ision Mission !nd ore v!ues
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would make the finest
corporate citi+en
0ill become most caring!
focused for euitable growth
based on diversified
deployment of resources! and
nevertheless would remain
healthy and gainfully profitablebank
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,.5 At ! !nce of M/+
6!me #ercantile Bank $imited
7!te of incorpor!tion '5th#ay! 1:::
7!te of in!ugur!tion of oper!tion 'nd;une! 1:::
8egistered Office
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,.5.1 $0( O8PO8A$( S$8
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Audit ommittee
#d. Tabibul Gu
Subrota Darayan oy
Saber Gossain 8howdhury
M!n!ging 7irector 9 (O
6ewan #u*ibur ahman
Syful Shamsul Alam 2 8o.
8hartered Accountants
$!) Advisor
I # Gasan 2 8o.
8hartered Accountants
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,.5., M/+ $imeine
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,.5.3 6etwor of the /r!nches
#ercantile Bank has 91 existing branches and some other proposed branch all over
Bangladesh to provide better services to their valuable customer. The ob*ective of #B$ is
not only to earn profit but also keep the social commitment and to ensure its co3operationto the persons of all levels! to the businessmen! industrialists3specially who are engaged
in establishing large scale industries by consortium and the agro3based export oriented
medium and small scale industries by self inspiration. #B$ as the largest private bank is
committed to continue its endeavor by rapidly increasing the investment of honorable
shareholders into asset.
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(igure 1 Detwork of the Branches
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,.5.4/r!nch +oc!tion of M/+
(igure ' Branch $ocation of #B$
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,." $he org!ni'!tion! structure
The organi+ation structure and corporate of Merc!ntie /!n +imited =M/+>strongly
reflect its determination to establish! uphold and gain a stronger footing as an
organi+ation which is customer3oriented and transparent in its management.
,.".1 /o!rd of 7irectors
The Board of 6irectors consists of '1 member elected from the sponsors of the Bank.
The Board of 6irectors is the apex body of the bank.
,."., /o!rd ommittees
The Board of 6irectors who also decides on the composition of each committee
determines the responsibilities of each committee.
,.".3 ()ecutive ommittees
All routine matter beyond delegated powers of management are decided upon by or
routed through the xecutive 8ommittee! sub*ect to ratification by the Board of
6irectors.
,.".4 Poicy ommittee
All mater relating to the principles! policies! rules! and regulation! ethics etc. for
operation and management of the bank are recommended by the 8ommittee to the Board
of 6irectors.
,.* M!n!gement
The management of the bank is vastly on a Board of 6irectors! 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.
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,.*.1 M!n!gement 0ier!rchy of M/+
The board of directors consists of eminent personalities from commerce and industry of
the country. #r. #d. Abdul ;alil! the (ounder 8hairman of this Bank! is the member of
parliament of the Dational Assembly and a businessperson! besides being an eminentpersonality of the country.
Gighly ualified and efficient professionals manage this bank. Board of 6irectors 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! sub*ect to rectification by the board of
directors.
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M!n!gement 0ier!rchy of M/+
Source: HRD, Head Oice M!"
(igure 7 #anagement Gierarchy of #B$
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0 A 8 M A 6
M!n!ging director :087
()ecutive #ice President
omp!ny Secret!ry
Senior #ice President
/o!rd Of 7irectors hief Advisor
7eputy M!n!ging 7irector
7 $ 8(7$ 89P
7eputy M!n!ging 7irector
S7 A7 A9 / 79M
Senior #ice President Senior #ice President
#ice President
Senior Asstt. #ice President
Senior ()ecutive Officer
%.A.#.P
Princip! Officer
Asstt. #ice President
()ecutive Officer
Officer
Asst. Officer
Abbrevi!tions
S7 ener! Service 7ivision
A7 entr! Account 7ivision
AS Audit !nd nspect/ entr! b!n
79M 7eveoping 9 M!reting
7 ntern!tion! 7ivision
89P 8ese!rch !nd P!nning
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,.? 7ivision of M/+
#B$! being one of the best financial intermediaries in the country! blended in operation
in conventional banking! #erchant banking and etail banking. The blending has been
done with the ob*ective of diversifying the operations for catering to the needs of thecustomers of the different sterna of the society from one viewpoint and for having
sustainable growth in profitability and business with the least possible risk. The bank,s
operations were diversified into the following areas of activities as a dynamic financial
intermediary.
8onventional Banking operation
$ease finance operation
#erchant banking
etail banking
"n order to carry out the above operations of #ercantile Bank $td has set up the
following divisions! departments and units in its head office. (or the operations by the
above3mentioned divisions! the bank has established the following divisions to provide
support and internal services.
Guman resource division /eneral service division
"nformation Technology division #arketing divisionPublic relation division ShareKcustomer care division
(inancial administration division Branches control division
Table 7 6ivision of #B$
The professionalism! dedication and loyalty demonstrated by the client and people are the
corner stone of the success in this bank. And the main aim of #B$ is to improve the
competitive position in the chosen market segments and make steady investment in the
core business.
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,.@ Oper!tions
The importance of the mobili+ation of saving for economic development of our country
can hardly be over emphasi+ed. The bank considers savings and deposit as life3blood of
the bank. #ore 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 well3orchestrated system of customer services.
Technology such as computer! AT#! Tele3communication etc. all would be harmoni+ed
and adapted to the system in order to provide round3the3clock and any3branch services to
the clients. Travelers, cheues! credit cards and other ancillary services including
payment of different bills from one counter will also be introduced to achieve the
ultimate goal of -D3ST-P service to the customers, value.
The bank would cater to the credit needs of individuals as well as corporate clients.
"nitially it will emphasi+e on trade finance! which would be short3term and self3
liuidating in nature. 8onsidering the importance of xport and "mport and also handing
of foreign remittance business would be given top3most priority.
8ustomer credit is a relatively new field of micro3credit activities. People with limited
income can avail with this credit facility to buy any household effects including car!
computer and other durable. #ercantile Bank $imited %#B$& will play a vital roll in
extending the consumer credits in line with its policy of people3oriented banking.
$ease3(inance is an area of business where the bank would activity participates. Because
of certain built3in advantages! the industrial entrepreneurs are being increasingly attracted
to this type of financing. #oreover! #ercantile Bank $imited %#B$& intends to expand
the scope of this finance to include financing of agricultural euipmentLs as well.
The bank would not depend only on interest earnings? rather it would strive hard to go for
fee3based income from non3activities of the bank. This type of business include capital
market operations like )nderwriting! Portfolio management! #utual fund management!
"nvestors, account as well as commission3based business like $etter of /uarantee! "nland
remittance! (oreign remittance etc. These businesses usually do not involve bank,s fund!
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but on the contrary! offer immense opportunity and scope to expand bank services to the
members of public at large.
,.@.1 Services Provided
ener! /!ning
redit or +o!n 7ep!rtment
%oreign ()ch!nge /usiness
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3.- ntroduction
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Bangladesh is one of the less development countries. So the economic development of
the country depends largely on the activities of commercial Banks. So " 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. "n thus respect " need to know about the general banking function of #ercantile
Bank $imited! #ain Branch! 6haka.
The general banking department does the most important and basic works of the bank.
All other departments are linked with this department. "t also pays a vital role in deposit
mobili+ation of the branch. #B$ provides different types of accounts! locker facilities
and special types of saving scheme under general banking. (or proper functioning and
excellent customer service this department is divided into various sections namely as
follows.
Account Opening Section
+oc! 8emitt!nce Section
7eposit Schemes Section
Accounts Section
e!ring Section
oection Section
!sh Section
3.1 Account Opening Section
To establish a Banker and customer relationship account opening is the first step.
-pening 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. "ndeed! fraud and
forgery of all kinds start by opening account. So! the Bank takes extremely cautious
measure in its selection of customers.
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3.1.1 $ypes of Account
#B$ has the following types of accounts
8urrent Account
Savings Account
(ixed 6eposit Account
3.1., Procedure to open !n Account2
%1& (or 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.
%'& The prospective customer should be properly introduced by the followings
i. An existing customer of the bank.
ii. -fficials of the bank not below the rank of Assistant -fficer.
iii. A respectable person of the locality who is well known to the manager or
authori+ed officer.
%7& Two copies of passport si+e photograph duly attested by the introducer.
%9& Signature of the prospective account holder in the account opening form and on the
specimen signature card duly attested by the introducer.
%4& 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. "nitial deposit
to open a current account in #B$ is Tk. 15555.55 and saving account is Tk. 4555.55.
0hen the following reuirements are fulfilled! the account is considered to be opened.
#B$ maintains all of its accounts in computer. After depositing the initial deposit! #B$
records it in the computer by giving new account number. Then it issues cheuebook
reuisition slip by the customer. Then it distributes all relevant papers to respective
department.
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3.1.3 Activities 9 p!pers necess!ry for opening !n !ccount
3.1.3.1 oint Account2
"f the account is a *oint account! then the *oint 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.
3.1.3., P!rtnership firm2
The following documents have to be submitted for preparing an account of a partnership
firm
Partnership deed.
"f the partnership firm is a registered one! then one copy of registration forms.
"f not! then a copy of certificate from the notary public.
3.1.3.3 +imited omp!ny2
(or 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 #ercantile Bank $imited.
8ertified true copy of the #emorandum 2 Articles of Association of the 8ompany.
8ertificate of "ncorporation of the company for inspection and return along with a
duly certified Photocopy for Bank,s records.
8ertificate from the egistrar of ;oint Stock 8ompanies that the company is
entitled to commence business %in case of Public $td. 8o. for inspection and
return& along with a duly certified Photocopy for Bank,s records.
$atest copy of balance sheet.
xtract of esolution of the BoardK/eneral #eeting of the company for opening
the account and authori+ation for its operation duly certified by the
8hairmanK#anaging 6irector of the company.
$ist of 6irectors with address %a latest certified copy of (orm3E""&.
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3.1.3.4 ubBSociety2
(ollowing documents have to be obtained in case of the account of the club or society
)p to date list of office bearers.
8ertified copy of esolution for opening and operation of account.
8ertified copy of Bye3$aw and egulationsK8onstitution.
8opy of /overnment Approval %if registered&.
3.1.3.5 ooper!tive Society2
(ollowing documents have to be obtained in case of the account of 8ooperative Society
8opy of Bye3$aw duly certified by the 8o3operative -fficer.
)p to date list of office bearers.
esolution of the xecutive 8ommittee as regard of the account.
8ertified copy of 8ertificate of egistration issued by the registrar! 8o3operative
societies.
3.1.3."Don3/ovt. 8ollege K School K #adrasha K #uktab
%oowing documents h!ve to be obt!ined in c!se of the !ccount of non:govt.
coege B schoo B m!dr!sh! B mut!b2
)p to date list of /overning BodyK#anaging 8ommittee.
8opy of esolution of the /overning BodyK#anaging 8ommittee authorising
opening and operation of the account duly certified by /a+etted -fficer.
3.1.3.* $rustee /o!rd2
(ollowing documents have to be obtained in case of the account of trustee board
Prior approval of the Gead -ffice of #B$.
8ertified copy of 6eed of Trust! up to date list of members of the Trustee Board
and certified copy of the esolution of Trustee Board to open and operate the
account.
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3.1.3.? MinorCs Account2
(ollowing documents have to be obtained in case of the account of minor
Putting the word =#"D-> after the title of the account.
ecording of the special instruction of operation of the account.
The A-( 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.
3., +oc! 8emitt!nce Section
$ocal remittance is one of the main components of general banking. The activities of
local remittance are 333
$eegr!phic $r!nsfer
7em!nd 7r!ft issue
P!y order.
3.,.1 $eegr!phic $r!nsfer
"t is an order from the issuing branch to the drawee bank K 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.
3.,.1.1 Procedure of issuing $$2
(ollowing 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 /B.
/B will fill up the commission part for bank,s use and reuest the applicant to
deposit necessary cash or cheue at the cash booth.
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The first copy of the application form will be treated as 6ebit Ticket while the
second copy will be treated as 8redit Ticket. The third copy will be handed over
to the applicant as customer,s copy.
/B will prepare telex in appropriate form! sign it and send it to the telex operator
for transmission of the message.
/B will prepare necessary advice. 6ebit advice is sent to the client if clients
account is debited for the amount of T.T.
T.T. 8onfirmation Advice is sent to the drawee branch.
8redit Ticket %second copy of the application form& is used to credit the PB$
/eneral Account.
3.,.1., P!yment of $.$.
-n 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.
"n 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 K local address as the case may
be.
very branch maintains a prescribed T.T. Payable egister. 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. -n 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.
3.,., 7em!nd 7r!ft =77> ssue
Sometimes customers use demand draft for the transfer of money from one place to
another. (or 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! cheue
number %if cheue is given for issuing the 66&! draft number! name of the payee! name of
the branch on which the 66 will be drawn and the amount of the 66. The form will be
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duly signed by the applicant and by the authori+ed officer. #B$ charges .14M
commission on the face value of 66 as service charge.
3.,.,.1 Process of issuing +oc! 7r!ft2
(ollowed procedures are followed while issuing local draft3
/et the application form properly filled up and signed by the applicant.
8omplete the lower portion of the form for the bank,s use.
8alculate the total amount including the bank,s commission.
"f the cheue is presented for of the local draft! the officer should get the cheue
duly passed for payment by the authori+ed person and record the particulars of
local draft on the back of the cheue.
"f 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 6ebit Ticket while the
second copy will be treated as 8redit Ticket and kept by the /B. The third copy is
handed over to the applicant as customer,s copy.
The /B 6epartment maintains a prescribed $.6. "ssue egister. All the reuired
particulars of $6s issued and should be entered in that register duly authenticated.
3.,.,., ssue of 7upic!te 7r!ft2
6uplicate 6raft is not normally issued unless getting of satisfactory evidence is produced
regarding loss of the draft. "f the $.6. is reported to be lost or stolen! the issuing branch
on receipt of a written reuest from the purchaser may issue a duplicate draft.
Before issuing duplicate $.6. the branch should observe the followings3
Herify the purchaser,s signature on the reuest letter from the signature appearing
on the original application form.
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"mmediately issue a stop payment instruction to the drawee branch under advice of
head office and obtain confirmation of non3payment the $.6. in acuisition.
After the drawee branch has acknowledged the stop payment order and confirmed
that the local draft in acuisition remains unpaid at their end! the issuing branch
should obtain an "ndemnity 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 reuest 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.
-n 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. "ntimation 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. Do further "B8A is to be issued for the duplicate draft.
Prescribed duplicate issuance charge is to be recovered for issuing the duplicate
draft and credited to ="ncome Account>.
3.,.,.3 !nce!tion of +oc! 7r!ft
The followings are followed while canceling a $.6.3
The purchaser should submit a written reuest for cancellation of the $.6.
attaching therewith the original $.6.
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The signature of the purchaser will have to be verified from the original
application form.
#anager,s prior permission is to be obtained before refunding the amount of draft.
8ancellation charge is to be recovered from the applicant and only the amount ofthe draft less cancellation charge should be refunded. 8ommission charge! posted
charge etc. recovered for issuing the $.6. should not be refunded.
The original entries are to be reversed giving proper narration. An "B6A for the
cancelled $.6. should be issued on the drawee branch.
8ancellation of $.6. should also be recorded in the $.6. "ssue egister.
3.,.,.4 P!yment of +.7.
0hile payment of $.6. PB$ performs the following functions3
-n receipt of 8redit Advice %"B8A& from the issuing branch the receipt amount is
credited in responding branch.
0hen $.6. is presented for payment at the paying branch! its details are to be
carefully examined with reference to the following points3
0hether the draft is drawn on the $ocal office.
0hether 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.
6raft must have to be signed by two authori+ed 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.
ndorsement 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 $.6. Payable egister.
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"n case of payment! the draft should be cancelled with red ink. The date of
payment should be recorded in the $.6. Payable egister.
3.,.,.5 Stop p!yment of +oc! 7r!ft
The payee or purchaser of the draft can not give stop payment instruction to the drawee
branch. "f the paying branch receives a reuest 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. -nly the issuing branch can issue instruction for stop payment of the draft
under special circumstances.
3.,.3 P!y Order
(or issuing a pay order! the client is to submit an application to /B 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 $ocal 6raft. (or issuing pay order #B$ charges
commission on the following rate3
$ot! !mount of PO ommission #!t)p to TI. 15!555.55 TI. '4.55 Tk. 9
TI. 15!551.55 3 TI .1!55!555.55 TI. 45.55 Tk. TI. 1!55!551.55 3 TI. 4!55!555.55 TI. 155.55 Tk. 1 on the pay order.
The original entries should be reversed with narration.
8ancellation of the pay order should also be recorded in the register.
3.3 7eposit Scheme Section
Bank is the largest organi+ation of mobili+ing surplus domestic savings. (or poverty
alleviation! we need self3employment! for self3employment we need investment and for
investment we need savings. "n the other words! savings help capital formations and the
capital formations help investments in the country. The investment in its turn helpsindustriali+ation 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 1@.@ M. "n order to improve the savings rate! (inancial "nstitutions responsible for
mobili+ation of savings should offer attractive Savings Schemes so that the marginalpropensity to save increases. The savings do not! of course! depend only on the uantum
of income but largely depend on the habit of savings of the people.
#B$ has formulated the following Savings Schemes
7oube /enefit 7eposit Scheme =7/7S>
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$imes /enefit 7eposit Scheme
M!shi S!nch!y! Pro!p! =MSD> or Monthy S!vings Scheme =MSS>
%!miy M!inten!nce 7eposit =%M7>
Eu!rtery /enefit 7eposit Scheme
Adv!nce /enefit 7eposit Scheme =A/7S>
3.3.1 7oube /enefit 7eposit Scheme =7/7S>
Objectives Mode
/ive maximum benefit.
Gelp in meeting specific needs like
education! marriage etc.
6eposit becomes double in six years.
Tenure of the deposit is 5
Objectives Mode
Gelp the retired
persons for investing
their retirement
benefits. 8reate investment
opportunities for Don3
esident Bangladeshi. xplore investment
opportunities for
school! college!
university etc.
/ive investment
opportunities for Trust?
(oundation etc.
6eposit a fixed amount of money for
54 %(ive& years. 6epositor will get a certain sum of
money in each month proportion to
hisKher deposit during the entire tenure.
/enefits2
Tenure of deposit is 54 %(ive& years.
#inimum amount of reuired deposit
is TI.45!555.55 or its multiple
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7eposit Monthy /enefit =Amount in $D.>
1!55!555 1!555
'!55!555 '!555
7!55!555 7!555
Table (amily #aintenance 6eposit %(#6&
Other %e!tures
The #inimum amount of deposit is B6T 45!555.55 %(ifty thousand& or its multiples.
All taxesKdutyKlevy and Kor any other surcharges persently in force or that may beimposed by the /overnment of Bangladesh %/-B& from time to time will be
deductedK recovered from the deposit account under this scheme.
"n case of premature encashment interest will be paid on Saving AK8 ate.
A saving account will be needed to be maintained to receive uarterly benefit
payment.
$oan may be granted up to maximum 5M of the forced encashment value on the
date of loan processing. 6uring the period of continuation of loan! monthly
benefits of (#6 account will be credited only to loan account.
$oan processing fee be reali+ed B6T 45.55 only and stamp costs also be reali+ed.
3.3.5 Eu!rtery /enefit 7eposit Scheme
The LJuarterly Benefit 6eposit SchemeL will be maintained for a period of 7 %three& years
and the minimum amount of deposit is B6T 45!555.55 %fifty thousand& or its multiples.
"nterest will be paid on uarterly basis as per example given below. -n maturity the
principal amount will be paid back.
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()!mpe2
niti! 7eposit =/7$> $erm Eu!rtery /enefit P!y!be =/7$>
45!555 7 Nears 1!455
155!555 7 Nears 7!555'55!555 7 Nears
Table : Juarterly Benefit 6eposit Scheme
Other %e!tures
All taxesKdutyKlevy and Kor any other surcharges presently in force or that may be
imposed by the /overnment of Bangladesh %/-B& from time to time will be
deductedK recovered from the deposit account under this scheme.
"n case of premature encashment interest will be paid on Saving AK8 ate.
Gowever! no interest shall be paid if premature encashment take place before
expiry of 1 %one& year.
"n the event of death of the depositor before the maturity! the deposit account may
be encased %premature& as per rule or may be continued up to maturity on written
approach by the nominee%s&.
A saving account will be needed to be maintained to receive uarterly benefit
payment.
$oan may be granted up to maximum 5M of the forced encashment value on the
date of loan processing. 6uring the period of continuation of loan! uarterly
benefits will be credited only to loan account.
$oan processing fee be reali+ed B6T 45.55 only and usual stamp costs also be
reali+ed.
3.3." Adv!nce /enefit 7eposit Scheme =A/7S>
Objectives Mode
/et xtra benefit from #aintained for a period of '
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minimum
6eposit
%Two& years.
#inimum deposit amount
1!55!555 %-ne $ac& only.
"nterest ate per B6T -ne $ac
B6T 1 $ac %-ne $ac& Tk. 11!11'.55 for 1styear Tk. 17!555.55 for 'ndNear
Table 15 Advance Benefit 6eposit Scheme %AB6S&
Other %e!tures
All taxesKdutyKlevy andKor any other surcharges presently in force or that may be
imposed by the government of Bangladesh from time to time in 6eposit Accounts
will also be applicable for the account for the account opened under this scheme
and such taxesKdutyKlevy andKor any other surcharges shall be deductedK recovered
from the deposit account under this schemes.
$oan may be granted up to maximum @5M of deposit.
3.4 Account Section
"n 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. "mproper 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 6epartment.
Besides these! the branch has to prepare some internal statements as well as some
statutory statements! which are to be submitted to the 8entral Bank and the Gead -ffice.
This department prepares all these statements.
3.4.1 %unctions of Accounting 7ep!rtment
0e can divide the functions of accounting department into two categories. This are3
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!. 7!y to d!y functions2 Gere day3to3day function refers to the every day tasks.
Accounting department of #B$ performs the following day to day functions
ecording of transaction in the cashbook! general and subsidiary ledger.
Preparing the daily position of deposit and cash.
#aking the payment of the expense of the branch.
ecordings of inter branch fund transfer.
8hecking whether all the vouchers are correctly passed.
ecording the voucher in the voucher register.
Packing and maintains the total debit and total credit vouchers.
b. Periodic! functions2 Periodical functions of accounts department include the
preparation of different weekly! fortnightly! monthly! uarterly and annual statement.
The accounts department prepares the following statements
#onthly statement of deposits! loans and advances! profit and loss etc.
Juarterly statement of deposits! loans and advances! profit and loss etc.
Nearly statement of deposits! loans and advances! profit and loss etc.
Nearly statement of classified $oans and Advances.
Statement of Affairs.
Nearly Budget of the Branch! etc.
3.5 e!ring 0ouse2
According through the 7@%'& of Bangladesh Bank -rder 1:@'! which are the member of
the clearinghouse! are called as Scheduled Bank. The scheduled banks clear the cheues
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 cheues.
Banks for credit of the proceeds to the customers account accept cheues and othersimilar instruments. The banks receive many such instruments during the from account
holders. #any of these instruments are drawn payable at other banks. "f 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 cheue drawn on this the
messengers of other banks would present bank and then at the counter. The whole process
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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 8learinghouse. The
8learinghouse sits for two times a working day. The members submit the climbable
cheue in the respective desks of the banks and vice3versa. 8onseuently 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 cheue of Bangladesh Bank. The
dishonored cheue are sorted and returned with return memo.
3.5.1 Processing for ce!ring che&ue coection
The following procedures are taken for collection
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Payees AK8 8redited> and disbursement
=eceived> seal is stamped on the cheue
8rossing the cheues are done
ntries are given in the -utward 8learing egister.
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(igure 9 Processing for clearing cheue collection
3.5., Procedures for outw!rd bis for coection =O/>
(igure 4 Procedures for outward bills for collection %-B8&
3." !sh Section
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8heues are sorted bank wise and entries are given
to the computer
=8learing> seal is given on cheue
ntries are given to the =8learing Gouse egister>
6epositing the cheue along with deposit slip6epositing the cheue along with deposit slip
8rossing of the cheues are done indicating
Principal Branch as collecting bank
8rossing of the cheues are done indicatingPrincipal Branch as collecting bank
ndorsement = Payees AK8 will be credited on
reali+ation = is given
ndorsement = Payees AK8 will be credited on
reali+ation = is given
ntries are given in the outward clearing
register
ntries are given in the outward clearingregister
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8ash section is a very sensitive organ of the branch and handle with extra care.
-peration of this section begins at the start of the banking hour. 8ash officer begins
hisKher transaction with taking money from the vault! known as the opening cash balance.
Hault is kept in a much secured room. Ieys to the room are kept under control of cash
officer and branch in charge. The amount of opening cash balance is entered into a
register. After whole days, transaction! the surplus money remain in the cash counter is
put back in the vault and known as the closing balance. #oney is received and paid in
this section.
3.".1 !sh 8eceipt
At first the depositors fill up the 6eposit in Slip. (or saving account and current
account same 6eposit in Slip is used in this Branch.
After filling the reuired deposit in slip! depositor deposits the money.
-fficers 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. -ther part is given to the depositor.
"n this branch! i.e.! lephant oad 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.
3."., !sh P!yment
0hen a person comes to the bank to cash a cheue! sKhe first gives it to the
computer desk to know the position of the check and posting of the cheue. "f the
account has sufficient fund the computer in charge will post it into the computer!
will sign it and seal it.
This cheue is then sent to the concerned officer. There are two officers who
verify the cheues 3 one for savings and similar types of account and another for
current and similar types of account.
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After receiving the cheue respective officer first checks it very carefully for any
kind of fraudulent activity. SKhe also checks the date of the cheue! amount in
word! amount in figure and signature of the drawer.
"f the instrument is free of all kind of error the officer will ask the bearer to sign
on the back of it.
Ge will then put hisKher initial beside the bearers, signature. SKhe will also sign it
on its face? will write down the amount by red pen.
Then the cheue 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 cheue in hisKher 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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4.-ntroduction
The telecommunications industry worldwide has scrambled to bring what is available to
networked computers to mobile devices. Presently! the use of electronic banking is
considerably high and as more and more users sign up for electronic3 banking! the
maturity as regards remote banking %i.e. banking outside the banking hall& is on the
increase. 0ith electronic banking! users can now conveniently carry out banking
transactions! but this convenience cannot be achieved if the user does not have access to
the internet! hence! in other words! the user cannot carry out a banking transaction while
waiting for a bus! or perhaps while having lunch in a restaurant. 0ith S#S banking!
convenience can be achieved '9 hours a day. This is because a user has access to his
mobile phone all day! at all times. So! to effectively achieve a truly convenient banking
mode! a truly mobile mode of banking has to be explored! hence the need for S#S
Banking.
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The S#S banking solution targets the retail banking industry and enables customers to
make account enuiries and transact bank accounts through mobile phones. Banks can
automatically send transaction notifications and alerts to mobile phones! if specific events
in the banking business work3flow occur. The solution provides convenient and latest
front3end technology and a flexible architecture to support an S#S based delivery
channel and to provide significant benefits for both the bank and the customer.
As the time goes by! life style changes. To keep up! #B$ welcomes to S#S Banking
Service! one of the most modern banking services. #B$ S#S banking Service is
convenient! safe! low3cost! fast and available round the clock. #ercantile Bank provides
the following S#S banking services.
1. Access to !ccount b!!nce
,. +!st 3 tr!ns!ction in&uiry
3. he&ue st!tus in&uiry
4.1 $o get Account /!!nce
S#S format BA$AP"D - BA$AP"DAK8 Do or Serial.
esponse )P3to date available balance will appear
xample
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S#S format TEDAP"D - TEDAP"DAK8 Do or Serial.
esponse $ast 7 Transaction %6rK8r& will appear
xample
(igure @ To get last 7 Transactions
4.3 nform!tion !bout he&ue e!f St!tus
S#S format 8GJSP"D8heue number
esponse 8heue 15
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(igure : S#S Banking Service application form
(ill in the attached form clearly and completely and *ust send in or drop it to the branch
that maintains your account.
4.4., (nroment Procedure2
After submitting the filled3in application form you will receive a P"D on your mobile
phone confirming your reuest. #emories or save the P"D to avail of S#S Banking
Service.
4.4.3 etting St!rted
-nce you have confirmed P"D through a return message! you are ready to use S#S
operation. )se the same P"D and send S#S at the format mentioned below to mobile
phone Dumber 51@175997 and en*oy #B$ S#S banking facilities.
4.4.4 SMS form!t !nd Dey words
esponse All commands and S#S format will be sent to your mobile phone.
0rite GelpP"DIeyword
Send to -1*13-44?3?
esponse Ieyword usages and details.
4.5 Method of SMS /!ning
S#S service conducted under the two procedures by which customer get all the facilities.
The procedures are
4.5.1 SMS Push service
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0hen any amount is debited or credited from client,s account then within 4315 seconds
he will get a message. The message includes the beginning balance! the amount debited
or credited and the last balance. This facility is only available for /rameen Phone and
8ity cell subscribers.
4.5., SMS Pu service
very registered /rameen Phone and 8ity cell subscribers can check their account
balance through this service. They can get a mini statement of last five transactions of
their account.
4." /usiness Process2
S#S Banking is a #obile technology that allows you to reuest and receive banking
information from your bank on your mobile phone via Short #essage Service %S#S&.
"ndividuals or corporate bodies can manage their bank accounts! check their account
balances! perform check reuests! money transfers! pay some bills! and perform other
banking transactions using their mobile phones. There are two methods of S#S widely
used in applications? they are the P)SG 2 P)$$. Push S#S is sending a message from
an application %i.e. S#S Server in this case& to the #obile Phone. "t is a one way
message. "n other words! it,s the mobile application %in this case! the S#S banking
application& that initiates a message. An example could be a deposit alert! which alerts the
user when a deposit is made to hisKher account. Pull S#S is sending a reuest and
obtaining a reply. This is a full duplex scenario where a user sends a reuest to the S#S
banking application and the application replies with the information reuested. An
xample is when a user reuests his bank account balance.
A customer willing to have this service has to have an account with #ercantile Bank. Ge
can open his account following the traditional method but he has to mention about the
specific services at the time of opening the account to get S#S banking facilities. The
customer must be a subscriber of /rameenPhone or 8itycell Telecommunication
8ompany. #ercantile Bank maintains a symmetric dedicated line with /rameenPhone
and 8itycell. This line is like intranet and not for public use. A customer willing to have
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this service will provide his account number and P"D code through sms to a specific
number provided by the bank. After getting the S#S /rameenPhone or 8itycell will
check the code and tracking number of the customer. Then the companies will send the
reuirement of the customer with the specific tracking number to #ercantile Bank.
#ercantile Bank will then check the number whether they match with the information
kept by them. "f the information matches with the information kept in the database of the
bank then the bank send the information to the /rameenPhone or 8itycell. Then the
company provides the information to the customer.
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AT# machine at 14 corresponding branches and is also in the process of setting up its
own AT# network at every focused point in the city with a view of providing retail
banking services.
5.1 /enefits of M/+ c!rds2
6o !sh ;ithdr!w! %ee2(or withdrawals of cash from #B$ AT# by #B$
cardholders no cash advance fee is necessary and from any other J3cash AT# the
fee is Tk.15 only. #B$ is the only bank offering such uniue facility. #oreover!
our H"SA 8ardholders can also withdraw cash from any Hisa logo AT# locally
and internationally.
Accept!biity2 "nternationalK6ual card is accepted all over the world at millions
of outlets and AT#s. A 6ual card is also accepted in most of the big cities like
6haka! 8hittagong! Ihulna! a*shahi! Sylhet at more than 15!555 outlets
including 9455 P-S. "t covers various kinds of merchants like hospital! hotel!
restaurant! department store and the card has accessibility to any outlet having
H"SA logo.
redit %!ciity2#ercantile Bank $td. Hisa 8redit card offers maximum 94 days
credit facilities free of interest and minimum payment is 4M of outstanding billing
payment for easy repayment and convenience of the customers.
Suppement!ry !rd2A Principal cardholder %local& may apply for more than
one supplementary card where one supplementary card is free. xpenses made by
supplementary card will be charged to the principal card.
Adv!nce !g!inst redit c!rd2#B$ cardholder can take advance as term loan up
to 45M of the card limit to be repaid on the monthly installment basis. Any P-S
transaction over TI. '5555 but not exceeding 45M of the credit limit is convertible
to Personal loanK88S and to be repaid on monthly installment basis. epaymentperiod of such loan may be from < months to 7< months.
Overdr!ft %!ciities2-verdraft facilities up to 5M of the credit card limit may
also be allowed for payment of the installment of scheme deposit with our Bank.
P!yment of
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5., M/+CS !rds
7u! !rd =two in one>2Single 8ard with double benefits. Do hassle to carry
two cards %local and international&. A single credit card can be used both locally
and internationally to withdraw cash from AT# for P-S transaction. This is the
special feature of #B$ Hisa card.
7ebit !rd2Hisa debit card is mainly tagged with deposit account %86KSBKST6&
that is automatically debited from the AK8 having available balance. 6ebit card
can also be used for purchasing goods! services! payment of utility bills etc as
well as withdrawal of cash from AT#.
Pre:P!id !rd2 Those who have no account with #B$ may avail Pre3Paid card
facilities. The Pre3Paid cardholders pay first buy later. Pre3Paid 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. xamples
include gift cards and salary payment etc.
5.3 P!persBdocuments re&uired for issu!nce !rd
5.3.1 %or +oc! redit !rd
"tems with asterisk %Q& are mandatory. 6epending on customer profile and business
relation bank may ask for other documents if necessary on case3to3case basis.
6!me of 7ocumentsService
0oderProprietorship P!rtnership
+imited
omp!ny
, copies of p!ssport si'e Nes Nes Nes Nes
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photogr!ph
$6 ertific!teF Nes Nes Nes Nes
$r!de +icenseF Nes
S!!ry ertific!teF Nes
+etter of omfort =%rom
empoyer>Nes
/!n St!tement(or last
< months
(or last 1 year
personal 2 8o.AK8
(or last 1
year personal2 8o. AK8
(or last 1
yearpersonal 2
8o. AK8
Proof of 8esidence2
!sB(ectricityBMobie Phone
/iB+!nd Phone /i
Nes Nes Nes Nes
/ue /oo of own #ehice =if
!ppic!be>Nes Nes Nes Nes
Other /!n redit !rd bi =if
!ppic!be>
Nes Nes Nes Nes
Memor!ndum !nd Artice of
Associ!tionNes
7eed of P!rtnership Nes
+etter of ncorpor!tion Nes
orpor!te u!r!ntee Nes
+etter of ommencement(or Public
$imited 8o.
opy of P!ssportB7rivingB
+icenseB#isiting !rdNes Nes Nes Nes
ub Membership if !ny Nes Nes Nes Nes
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Table 11 PapersKdocuments reuired for issuance $ocal 8redit 8ard
Gowever! minimum charge documents %6P Dote! $etter of $ien! $etter of ncashment!
$etter of /uarantee etc.& to be obtained.
5.3., %or 7ebit !rdBPre:P!id !rd
Two copies of passport si+e photograph.
8ustomer should maintain a deposit %SBK86KST6& AK8 with any branch of #B$.
-ther than #B$ account holders may also avail Pre3Paid card against deposit of
money.
5.3.3 %or ntern!tion! redit !rd
Two copies of passport si+e photograph.
T"D certificate.
Photocopy of passport from 1 to @ pages including endorsement pages if any.
$ien confirmation of (86 AK8 is reuired from the concerned BranchKBank for
issuance of card against (86 AK8.
(or issuance of card against the balance in J AK8 maintained with us or with
other bank! lien confirmation should be obtained from the respective
BankKbranch.
(or issuance of card against new exporters and importersKproducers uota relevant
papers such as! recommendation letter from PBK copy of tax return etc. is
reuired.
5.4 /usiness Process2
After opening a bank account in the bank the customer is provided with AT# card and
also his password. 8ustomer will go to any AT# booth of the bank and punch his card
and then provide the password with mentioning the reuired amount of money. 0hen he
provides his password the bank check it with their database information. "f there is
balance in the customer,s account the server of the bank give the AT# machine
confirmation to provide the customer the reuired money.
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".- ntroduction
#ercantile Bank $imited is a third generation bank! which is committed to provide high
uality financial servicesKproducts to contribute to /6P through stimulating trade 2
commerce! accelerating the pace of industriali+ation and boosting up export by allowing
credit facilities. The failure of the commercial bank is mainly occurs due to bad loans!
which occurs due to inefficient management of the loan and advance portfolio. The
ob*ective of the credit management is to maximi+e the performing asset and the
minimi+ation of the non3performing asset as well as ensuring the optimal point of loan
and advance and their efficient management. 8redit management is a dynamic field
where a certain standard of long3range planning is needed to allocate the fund in diverse
field and to minimi+e the risk and maximi+ing the return on the invested fund.
8ontinuous supervision! monitoring and follow3up are highly reuired for ensuring the
timely repayment and minimi+ing the default.
/eneral loan scheme! depending on the various nature of financing! all the lending
activities has been brought under the following /eneral loan
1. Short $erm +o!n
,. Medium $erm +o!n
3. +ong $erm +o!n
".1 $ypes of redit or +o!n
".1.1 Secured Overdr!ft =SO7>2
"t is a continuous advance facility.By this agreement the banker allows his customer to
overdraft his current account up to his credit limits sanctioned by the bank.The interest is
charged on the amount! which he withdraws! not on the sanctioned amount. #B$
sanctions S-6 against different security.Based on different types of security! we can
divide the following category of the facility
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SO7 =ener!>2 Advances allowed to the individualsKfirms against financial
obligations i.e. lien of (.6. or 6efense Savings 8ertificate %P.S.P&! "8B )nit
8ertificate etc.
SO7 =Others>2Advances allowed against assignment of work order for execution
of contractual works falls under this head. The advance is generally allowed for
specific purposes."t is not a continuous loan.
".1., !sh redit2
8ash credit is a favorite mode of borrowing by traders! industrialist,s etc . for meeting
their working capital reuirements."t is operated like overdraft account .6epending on
the needs of the business! the borrower can draw on his cash credit account at different
time and when he gets money can ad*ust the liability .#B$ charges interest on the daily
balance in the account.6epending on charging security there are two forms of cash
credit
!sh redit =hypothec!tion>2"t is a short3term arrangement by which a customer is
allowed to borrow money up to a certain limit sanctioned by the bank for a certain time.
)nder he condition the borrower is reuired to submit the stock fortnightly in the bank
specimen form. "t is allowed to maximum a period of one year.
!sh redit =pedge>2 "t is also a continuous loan allowed against pledge of
goods as primary securities fall under this head of advance.
".1.3 %oreign 7ocument!ry /is Purch!sed =%7/P>2
Payment made against documents representing sell of goods to local export oriented
industries! which are deemed as exports! and which are denominated in $ocal currencyK
foreign currency falls under this head. The bill of exchange is held as the primary
security.The client submits the usance bill and the bank discounts it . This temporary
liability is ad*ustable from the proceeds of the bills.
".1.4 $erm +o!n2
#B$ considers the loans! which are sanctioned for more than one year as term loan .
)nder this facility! an enterprise is financed from the starting to its finishing! i .e. from
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installation to its production.#B$ offers this facility only to big industries. The loans are
allowed to individual or firm or industries for a specific purpose but for a definite period
and generally repayable by installments fall under this lead. These types of lending are
mainly allowed to accommodate financing under the categories.
+!rge 9 Medium Sc!e ndustry
Sm! 9 ott!ge ndustries !nd
Agricuture
#ercantile Bank has offered the public! the businessperson! or the entrepreneur! even
service holder! to know the policy and get the benefit this policy. This bank has also
offered this scheme
onsumers credit Scheme =S>
!r +o!n Scheme
7octors redit Scheme
8ur! 7eveopment Scheme
+e!se %in!ncing
Person! +o!n
Sm! +o!n
This bank also formulated its policy to give priority to small and medium businessperson
while financing large3scale enterprises through consortium banks. Total loans and
advances of the bank stood at B6T 7@!@@.< million as end of 6ecember 71! '55.
Trade and commerce! garment "ndustry! large and medium scale industries and
construction are ma*or sectors to which this bank extended its credit.
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*.- ntroduction
The foreign exchange has played a vital role in the last decade or so in guiding the
purchase and sale of goods! services and raw materials globally. very country has
certain natural advantages and disadvantages in producing certain commodities while
they have some natural disadvantages as well in other areas. As a result! we find that
some countries need to import certain commodities while others need to export their
surpluses. (oreign trade brings the fruits of the earth to the homes of the humblest among
the countries. These transactions are the basis upon which international trade is made.
As more than one currency is involved in foreign trade! it gives rise to exchange of
currencies! which is known as (oreign xchange. The term O(oreign xchange, has three
principal meanings. (irstly! it is a term used referring to the currencies of other countries
in terms of any single one currency. To a Bangladeshi! 6ollar! Pound Sterling! etc. are
foreign currencies and as such foreign exchanges. Secondly! the term also commonly
refers to some instruments used in international trade! such as bill of exchange! drafts!
travelers, cheue and other means of international remittance. Thirdly! the term foreign
exchange is also uite often referred to the balance is foreign currencies held by a
country.
"n the fiscal year '55< Bangladesh economy was confronted with serious challenge!
among others! the impact of divesting floods! the excessive price hike of oil and some
other importable in the international market! in addition to the termination of the multi
fiber arrangement. To cope with these challenges! the government and the Bangladesh
Bank adopted a series of policies to enhance the resilience of the economy! while
maintaining macroeconomic stability. These polices significantly contributed toward
maintaining real /6P growth at a satisfactory level of 4.9 percent in the fiscal year '55
%oreign 8emitt!nce
*.1.1 mport /usiness
"mport means purchase of goods and services from the foreign countries into Bangladesh.
Dormally consumers! firms industries and /overnment of Bangladesh import foreign
goods Kmaterials to meet their various necessities. So! in brief! it can say that import in
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-utward (oreign emittance and
"nward (oreign emittance.
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?.1 /!!nce Sheet of M/+
#ercantile Bank $imitedBalance Sheet as at 6ecember 71! '55
P-PTN AD6 ASSTS6otes
,--?
=/7$>
,--*
=/7$>
!sh 7 43*411@34- 3*1*354-@5
8ash in hand %"ncluding (oreign 8urrencies& 997!79'!44 94'!5
/!!nce with Other /!ns !nd %in!nci!
nstitutions9 3,*@115-? ,-@,-1,@@
"n Bangladesh 1@@!:'!7 1'
Money !t ! !nd Short 6otice 4 3 5,-------
"nvestments < *"@-1,1*"* *-@@@""?*?
/overnment 4!
Other Assets : ?5@",31"4 @,,@51"3"
6on:/!ning Assets 3 3
$ot! Assets 55@,?*,144@ 44@4-53*1-?
$"AB"$"T"S AD6 8AP"TA$
+i!biities
/orrowings from other /!ns %in!nci!
nstitutions !nd Agents15 ,3,"3,5--- **4,5----
7eposits !nd other Accounts 11 4"3*41*??33 3?13@@-1*"*
8urrent Accounts and -ther Accounts 11.1 4!71!
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Bills Payable 11.'
-(( BA$AD8 SGT "T#S
O6$6(6$ +A/+$(S A
Acceptances and ndorsements 1@ !14@!9@@!555 4!@5!@5L1!555
$etters of /uarantee 1@.1 7!
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Profit and $oss Account
(or the year ended 6ecember 71! '55
6otes,--?
=/7$>,--*
=/7$>
"nterest "ncome 1.1 9!@4!'91!@: 7!$ess "nterest Paid on 6eposits!
Borrowings etc.1: 9!594!:@5!19' 7!14:!':4!''@
6et nterest ncome ?,@,*1*3* 5,*11@-55
"nvestment "ncome 1.9 @41!155!455 @
6irectorsL fees '' '!1
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Provision for Taxation 1'.1.1
etained Surplus 7
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'5 arning Per Share %B6T&79.'9
7 ,--* =/7$>
A. !sh %ows %rom Oper!ting Activities
"nterest eceived 4!9'7!17@!7199!74!947!9@
"nterest Paid %7!9'9!
"ncome Tax Paid %
xchange /ain 94!144!5:9'9!591!19'
-ther -perating "ncome 775!7:!'7 71:!
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$egal xpanses %4!594!'78hief xecutiveLs Salary and (ees %
-ther xpenses %1@:!7':!:1=5-35*,-4-1>
Other Assets =tem:wise> =3,51"5"11> =5*?311?">
Advance 6eposits %1!555!4&%11:!''1&
Stock of Stationery %15!919!:
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66 paid without advice %'95!555&%'!59@!555&
Premium on Bond 3%1'9!957&
#ercantile Bank /eneral Account 3 4'!7'!71
Ad*usting Account 6ebit %'55!1'
7eposit from ustomers 41@4,**-""5"**41-,*1
Other +i!biities on !ccount of
ustomers: :
Other +i!biities ,",51"-*=*1-535,3>
6et !sh 8eceived from Oper!ting
Activities1?-,4*4@,@
,"5,-*-*",
/. !sh %ows %rom nvesting Activities
Sale proceeds of (ixed Assets 451!@@ 3
6ividend eceived '!94@!11:@45!555
PurchaseKSale of Property! Plant and
uipment
%149!7@
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6et !sh from %in!ncing Activities 33
7 6et ncre!seB=7ecre!se> of !sh !nd
!sh (&uiv!ent =AH/H>1-"-@-,535
15???,34*?
ffect of xchange ate 8hanges on 8ash
2 8ash uivalent 3
( Opening !sh 9 !sh (&uiv!ent@3,,,35*43
**3341,,"5
% osing !sh 9 !sh (&uiv!ent
=7H(>F
1-3?313?,*? @3,,,35*43
?.5 %in!nci! Summ!ry of M/+
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@.- S;O$ An!ysis
very organi+ation is composed if some internal strengths and weaknesses and has some
external opportunities and threats in its whole life cycle. The following will briefly
introduce the customers to the mercantile bank ltd. internal strengths and weaknesses!
external opportunities and threats as " have exposed in the past few weeks.
@.1 S$8(6$0S
Superior &u!ity2 #ercantile Bank $td. provides its customers excellent and
consistent uality in every service. "t is of priority that customer is very satisfied.
7yn!mism2#ercantile bank $td. draws from the adaptability and dynamism it
possesses. "t has uickly adapted to excellent standard in terms of banking
services. #ercantile Bank $td has also adapted state of the art technology to
connect with the world better communication to integrate facilities.
(fficient M!n!gement2all the levels of the management of #ercantile Bank $td
limited are solely directed to maintain a culture for the betterment of the uality of
the service and development of a corporate brand image in the market through
organi+ation wide team approach and open communication system.
St!te of the Art $echnoogy2#ercantile Bank $td utili+es of the art technology
to ensure consistent uality and operation. The corporate office is euipped with
euters screen and S0"(T. All other A6 branches are also euipped with S0"(T
system.
xpertsthe key3contributing factor behind the success of #ercantile Bank $td is
its employees! who are highly trained and most components in their own field.
#ercantile bank ltd provides their employees training both in house and outside
*ob.
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"n house utility#ercantile Bank $td is free from dependence on ever3disruptive
power supply of our public sources. The company generates the reuired power
through generator fed on diesel.
@., ;(AD6(SS(S
+imited ;orforce2 #ercantile Bank $imited has limited human resources
compared to its financial activities. There are not many people to perform most of
the task. As a result many of the employees are burdened with extra workloads
and work late hours without any overtime facilities. This might cause high
employee turnover that will prove to be too costly to avoid.
Probem n 7eivery2(ew of the products that mercantile bank are offered to its
clients as if =Personal 8redit %P8&> is lying idle due to proper marketing initiative
from the management these products can easily be made available in attractive
ways to increase its client base as well as its deposit status.
Poor "nformation valuation System The performance evaluation system in
#ercantile Bank $imited is faulty. Though it is a private organi+ation! many times
are performance is evaluated in light of political performance.
Poor "nformation (acilityAs it has no library facility as this result! they cannot
provide total information. -therwise! they cannot provide and update their
website.
()tern! forces2As a new bank #B$ wants to follow the rules and regulation of
Bangladesh Bank very strictly! but other banks do not doing the same as they are
facing serious challenges in the market as well as to attaining their target also.
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of the vital sources of employment in the country now. Such government concern
will facilitate and support the long3term vision of #ercantile Bank $imited.
nvest Opportunity2 There is a great opportunity to take new dimension of
banking such as "slamic banking! speciali+ed banking. -therwise! there are many
sectors where this can give special privileges.
(voution of (:/!ning2mergence of 3Banking will open more scope for
#ercantile Bank $imited to reach the clients not only in Bangladesh but also in
the global banking arena. The bank has already entered the world of 3banking
and providing full electronic banking facilities to its customer.
nform!tion $echnoogy2Banking and information technology might give the
bank leverage to its competitors. Devertheless! there are many opportunities for
#ercantile Bank $imited to go for product innovation in lie with the modern day
need. The bank has yet to develop credit card facilities! lease financing and
merchant banking.
@.4 $08(A$S
Merger !nd Ac&uisition2The worldwide trend of merging and acuisition in
financial institution is causing concentration. The industry and competitors are
increasing in power in their respective areas.
Poor $eecommunic!tion nfr!structure2As previously mentioned! the world is
advancing Technology very rapidly. Though #ercantile Bank $imited has taken
effort to *oin the stream of information technology? it is not possible to complete the
mission due to poor technological infrastructure of our country.
nsufficient Attr!ctive Product2#any banks are entering the market with new
and lucrative products. Actually! the market for banking industry is now a buyer3
dominated market. )nless #ercantile Bank $imited can come up with attractive
financial products in the market? it will have to face steep competition in the days
to come.
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1-.- Soci! 8esponsibiity of this /!n
#ercantile Bank $imited has able to manage a sound liuidity positions for it is an
innovative deposits scheme. #B$ has performed well in the foreign trade. The volume of
trade is growing in both import and export business. The bank is increasing its level of
performance! which is evident in the increase of asset utili+ation ratio! net profit! and
asset portfolio. "n observation! we see that #ercantile Bank has a suitable position for its
foreign exchange reserve! liuidity positions and relationship with financial intuitions.
But the bank cannot operate with its full capacity for its conservative nature.
6espite the stiff competition in the banking industry! this bank also considers it essential
for company to behave in responsible manner towards both the environment and society.
This belief exists on two pillars.
(irst! to be successful on a long3term basis! they need to trust their stakeholders!
shareholders! customers! employee patrons and well3wishers and society.
Behaving responsibility towards society and the environment strengthens this
trust.
Second! by taking ecological and social risks and reward into account.
This bank commitment has always been to behave ethically and to contribute towards the
uality of life of our Rpeople! the local community and generally the society. The
corporate social responsibility focuses on
1-.1 Sust!in!be /!ning products
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These have introduced a number of banking products for people who have traditionally
been excluded from the banking services. And also introduced O0oman ntrepreneurs
6evelopment Scheme, for the women who have experience but do not have seed capital
to start business. This #ercantile Bank have also offered S# banking products for
marginal people. Small and marginal savers are encouraged to use banking services and
attractive rates of interest are offered for offered foe small savers as well.
1-., Supporting (duc!tion
This bank offers financial awards to #B# %#asters in Bank #anagement& students at
Bangladesh institution of Bank #anagement %B"B#& who excel in their studies! also
contribute to academic research. (or this reason! this bank contributed B6T 1.55 million
to Bangla Academy for research in Bangal literature.
1-.3 Supporting Sports !nd uture
#ercantile Bank limited has promoted a number of non3profit initiatives. #B$ sponsored
Dational 8hess 8hampionship and Tennis 8ompetition in '55
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