foreign exchange product and practice of mercantile bank(1)

8/21/2019 Foreign Exchange Product and Practice of Mercantile Bank(1)

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INTERNSHIP REPORTON

Foreign Exchange

Product and Practice of Mercantile BankLtd.

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12-April-2012


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Foreign Exchange Product and Practice of Mercantile Bank

SUPERVISED BY

Syeda Kamrun AhmedLecturer

Bachelor of Business AdministrationSoutheast ni!ersity

. Signature of the su"er!isor

Prepared By

Mohammad Asif #ossain$ho%dhury

&'( )**+*,****,-,Batch( ,+ Ma/or in Marketing

Bachelor of BusinessAdministration

Southeast ni!ersity

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Letter of 0ransmittal

April 15, 2012

Syeda Kamrun Ahmed

Lecturer

Bachelor of Business Administration

Southeast ni!ersity

Su"#ect$ Su"mission of internship report

%onora"le &adam,

' am !ery glad to inform you that ' ha!e finally completed the internship study successfull y,

(hich (as a partial fulfillment of the re)uirement for the Bachelor of Business Administration

program*

+he topic of my internship study is Foreign Exchange Pro!c" an Prac"ice o# $ercan"ile

%an& '"() ' en#oyed !ery much "y preparing this study as (ell as it (as a (orth(hile

eperience for me to (or- in the challenging en!ironment of a leading pri!ate commercial "an-*

' am undenia"ly than-ful to you . my department for gi!ing me the opportunity to o"tain

practical s-ills as (ell as to learn ho( to cope (ith the practical situations, (hich is !ery much

!alua"le for my future career*

/inally ' assure you that ' ha!e tried my "est to ma-e a systematic and informati!e summary

"ased on my practical (or-* 'f you need further clarification, ' am al(ays ready to ans(er your

)uestions*

ours Sincerely,

&ohammad Asif %ossain ho(dhury

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'3$ 200401000011

Batch$ 14, &a#or$ &ar-eting

Bachelor of Business Administration

Southeast ni!ersity

Su"er!isor1s $erti2cate

+his is to certify that &ohammad Asif %ossain ho(dhury, '3$ 200401000011, Batch$ 14astudent of &ar-eting 3epartment, Southeast ni!ersity (or-ed under my super!ision* %isinternship placement is at &ercantile Ban- Limited, &ain Branch* ' am pleased to state that&ohammad Asif %ossain ho(dhury (or-ed hard in preparing this report and she has "een a"leto present a good picture of the concerned topic area* +he data and findings presented in thereport seem to "e authentic*

&ohammad Asif %ossain ho(dhury possesses a good moral character and pleasing personality*' (ish her all success*

Syeda Kamrun AhmedLecturerBachelor of Business AdministrationSoutheast ni!ersity3ha-a, Bangladesh*

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A$ K 3 4 5 L E ' 6$ K 3 4 5 L E ' 6E M E 3 0E M E 3 0

To complete any task successfully, we need inspiration, guidance, and

nancial and logical help from others. It is also applied in case of my

preparation of this report. . In preparing this report, dierent persons hae

e!tended their helping hands to me. It would hae not "een possi"le for me

to prepare this report without their help. I am ery much fortunate to get the

sincere guidance and superision from a num"er e!perienced persons.

#t rst I would like to e!press my deepest gratitude to the almighty god for

giing me the opportunity to complete this report within the scheduled time.

My heartfelt appreciation goes to my family mem"ers for their assistance

and cooperation.

I would like to e!press my inde"tedness and deep sense of gratitude to my

Institution$s superisor Syeda Kamrun Ahmed, Lecture Bachelor of

Business #dministration, and %outheast &niersity whose scholasticsuperision' wholehearted guidance, warm adice and encouragement hae

ena"led me to prepare this report.

I am especially inde"ted to Mr. Taposh (umar Paul, #)M, Mercantile Bank *td.

whose direct cooperation + recommendation helped me to get such a nice

internship facility in this reputed organiation. -ery special thanks to Mr. %.M

%hamasuaman, /cer, Main Branch, Mercantile Bank *td. for assisting me

in preparing this internship report. The other personnel, stas and

employees of Main Branch of Mercantile Bank *td. also assisted me to go

through the "anking actiities. Their oerwhelming support during the

internship program gae me the inspiration to complete the report

successfully.

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0uring my preparation of the report work I hae come to ery supportie

touch of dierent indiiduals of "usiness world, especially in the "anking

arena. I would like to tri"ute my felicitations to them.

I am also grateful to our 0epartmental 1hairman, for giing me an identity

with which I could work at Main Branch of Mercantile Bank *td. 2inally, I

would like to e!press thanks to my entire course teacher and the 0epartment

for introducing such academic work.

Executi!e Summary

Ban-ing sector is one of the sta"le financial institutions of a country* &ercantile Ban- Limited

has "y no( attained the uni)ue position of a leading pri!ate commercial "an- in Bangladesh and

a leading financial institution in the "an-ing sector* Ban- has the reputation of "eing the pro!ider

of good )uality ser!ices to their customer* +hese institutions play a !ital role in the field of

financial sta"ility of a country* 3ate of the incorporation is &ay 20th, 1777* 't started its

operations on 2 8une 1777*

+his report has "een prepared through etensi!e discussion (ith Ban-9s employees and "an-ing

performance* +he report (ill also present the current position of &ercantile Ban- Limited on the

"asis of their performance* :ecessary data and information is collected from "oth primary and

secondary sources*

Ban- has a significant role in the economic de!elopment process of a country* +oday "an-ing

sectors are "eing pro!ed the most important sector in the economy of Bangladesh* Ban-s are the

custodians of the society economic resources and total economies de!elopment depends on the

proper utili;ation of these resources* +he successful "an-ing "usiness ensures the gro(th of the

economy "y the effecti!e uses of the funds* 'n order to de!elop the national economy, "an-s-eep in mind for going lending, maintaining safety, li)uidity and profita"ility* +he study is

designed "ased on the issue li-e ho( &BL is operating its /oreign


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/oreign


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Ta*le o# +on"en"

'e""er o# Trani""al

Ac&no.legeen"

Acrony

Exec!"i/e !ery

Ta*le o# +on"en"

+hap"er One -- In"ro!c"ion

1)1In"ro!c"ion

1)2 %ac&gro!n o# "he S"!y

1) O*ec"i/e o# "he S"!y

1) Scope o# "he S"!y

1)3 $e"hoology o# "he "!y

1)4 'ii"a"ion o# "he "!y

+hap"er T.o -- O/er/ie. o# $ercan"ile %an& 'ii"e

2)1 A*o!" $ercan"ile %an& 'ii"e

2)2 Hi"ory

2) 5iion, $iion an O*ec"i/e O# $%'

2) +ore 5al!e

2)3 Tieline o# $%'

2)4 Fea"!re o# $ercan"ile %an& 'ii"e

2)6 Technology

2)7 $echani

2)8 $anageen" S"r!c"!re o# $%'

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2)10 9i/iion o# $%'

2)11 Ser/ice O##er *y $ercan"ile %an& 'ii"e

2)12 9epoi" $ix

2)1 loan an A/ance

2)1 Ne" Pro#i"

2)13 O"her Ser/ice

2)14 Per#orance o# "he *an&

+hap"er Three : Theore"ical %ac&gro!n o# Foreign Exchange

)1 Foreign Exchange

)2 Foreign Exchange $ar&e" An %anglaeh

) F!nc"ion o# Foreign Exchange 9epar"en"

) Type o# Foreign Exchange Opera"ion

)3 The $o" +oonly ;e 9oc!en" In Foreign Exchange

)4 Ipor"ance o# Foreign Exchange %an&ing

+hap"er Fo!r:Foreign Exchange Pro!ce an Prac"ice o#

$ercan"ile %an& 'ii"e

)1 Foreign Exchange anageen" "r!c"!re o# $%'

)2 Ipor"

) Ipor" proce!re

) Ipor" $echani

)3 Neee 'egal Re

)4 Tren o# ipor"

)6 'e""er o# +rei"

)7 Type o# 'e""er o# +rei"

)8 Ter an +oni"ion

)10Par"ie in/ol/e in '=+ Opera"ion

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)11 Een"ial paper neee #or Opening 'e""er o# +rei" >'=+?

)12 Regi"ra"ion o# a '=+

)1 'a.#!l o##icial proce!re #or opening 'e""er o# +rei"

)1 Opening '=+

)13 A/iing a '=+

)14 +oni"ion o# '=+

)16 Aenen"

)17 +ancella"ion o# '=+

)18 Expor"

)20 Expor" policy

)21 Expor" incen"i/e

)22 Expor" proce!re #ollo.e *y $%'

)2 Expor" #inancing

)2 Expor" earning

)23 Foreign Rei""ance

)24 Type o# Rei""ance

)26 In.ar rei""ance

)27 O!".ar Rei""ance

)28 Ipor", Expor" @ Rei""ance Poi"ion

)0 !an"i"a"i/e Analyi o# Foreign exchange *!ine

)1 Foreign exchange incoe o# $ercan"ile %an& 'ii"e

)2 Analyi

+hap"er Fi/e

Fining

Recoena"ion

+oncl!ion

%i*liography

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$ha"ter ,

&ntroduction

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,., &ntroduction

'n order to -no( a"out a financial organi;ation li-e a "an-, a person should -no( all section of

the financial organi;ation in times* So ' thin- that foreign echange management procedures are

an important topic* +his section is intended to pro!ide minimum "ac-ground and procedural

guidelines to eaminers responsi"le for e!aluating a "an-9s foreign currency acti!ities (ithin

indi!idual "an-s, foreign currency money mar-et and echange trading operations may "e

com"ined or completely separate (ith regard to policies, procedures, reporting, and e!en

dealing* +his section discusses "oth functions as if they (ere performed "y the same traders,

processed "y the same "oo--eepers and managed "y the same officers* &ost importers,

eporters, manufacturers, and retailers tend to let "an-s handle their foreign echange needs*

+hey rely on "an-s to ma-e and recei!e their foreign currency payments, to pro!ide them (ith

foreign currency loans, to fund their foreign currency "an- accounts and purchase their ecess

foreign currency "alances* +hey may as- "an-s to pro!ide such ser!ices for immediate deli!ery,

this course group pro!ides an indepth understanding of the !arious ris-s ?transaction, translation

and economic eposure ris-s@ a corporate is eposed to, (hen dealing in foreign echange*

Ban- is defined as a financial institution that collects deposits from !arious indi!idual and

organi;ations and pro!ides loans to those (ho need it* But modern "an-s do not mean only the

means of collecting and dis"ursing money to !arious entities* ather it pro!ides !arious ser!ices

to !arious entities (hich facilitate their "usiness operations* A foreign echange operation of

"an-s is one of those ser!ices that not only facilitates the "usiness of "usinessmen "ut also

contri"utes to the de!elopment of the economy as a (hole* /oreign echange is defined as the

mechanisms "y (hich the currency of one country is con!erted into the currency of another

country* /oreign echange is the means and methods "y (hich rights to (ealth in a countryCs

currency are con!erted into rights to (ealth in another countryCs currency* /oreign echange

department of "an-s plays significant roles through pro!iding different ser!ices for the

customers*

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,.) Background of the study

:o -no(ledge is fully complete unless it is fully supported "y e!ents on ground* Dhate!er may

"e the )uality of theoretical -no(ledge, it is not complete (ithout practical implication on

ground* Any academic course of study has a great !alue (hen it has practical application in reallife* +his reali;ation is more pronounced in the study of Business Administration (here

eperience on ground plays a dominant role* Bachelor of Business Administration ?BBA@ is

designed (ith an ecellent com"ination of practical and theoretical aspects* After completing the

BBA, it is re)uired for e!ery student to complete the internship or dissertation program (ith

duration of three months* As a student of BBA to fulfill the re)uirement of this 3egree, ' (as

assigned to pursue 'nternship in &ercantile Ban- Limited, &ainBranch, 3ha-a*

&ercantile Ban- Limited is a speciali;ed financial institution that performs most of the standard

"an-ing ser!ices and in!estment acti!ities on the "asis not only profit sharing "ut also social

partnership* +his study attempts to analy;e the nature of modern "an-ing acti!ities and

performance of &ercantile Ban- Limited* All through the internship program, close o"ser!ation

(as made on different "an-ing acti!ities of &ercantile Ban- Limited* 'ts performance (as

re!ie(ed and analy;ed through the annual reports, and internal records of the "an-* ' ha!e tried

my "est to use this opportunity to enrich my -no(ledge on "an-ing system* After o"ser!ing

thoroughly, ' ha!e prepared this report on the "asis of my findings and o"ser!ation relating to the

topic*

,.7 48/ecti!e of the study

+he o"#ecti!e of the study is to o"tain an understanding of the practical "an-ing acti!ities and

relate them (ith theoretical -no(ledge that ' gained through the theoretical training in the

uni!ersity and from !arious documents of the "an-* Beside this, the follo(ings are the specific

o"#ecti!es (hich '(ill try to co!er in my report

Beneral o*ec"i/eC

+o apply theoretical -no(ledge in the practical field*

+o o"ser!e the (or-ing en!ironment in commercial "an-s*

+o get an o!erall idea of "an-ing from "an-er9s point of !ie(*

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+o "e familiar (ith rules, regulations theories and practices for "an-ing*

+o -no( the "an-ing guideline and gather idea a"out operational procedure*

Speci#ic O*ec"i/eC

+o analysis the import trade, eport trade and remittance flo( of &BL*

+o analysis the gro(ths of foreign echange operation and profit*

+o re!ie( the techni)ues used "y the &ercantile Ban- Limited in /oreign opening, acceptance and foreign echange import . eport reporting* Actually my report

in, L> opening, acceptance and foreign echange import . eport reporting* Actually my report

topic is Eforeign echange management of &ercantile Ban-F this report (ill "e prepared "ased

on my practical des- (or- and "ased on annual report* /or this reason ' ha!e tried to (or- that

place (hich is interrelated (ith my report topic li-e L> opening, acceptance and foreign

echange import .eport reporting etc*

,.: Methodology

+his report has "een prepared on the "asis of eperience gathered during the period of

internship* /or preparing this report, ' also got information from annual report and (e"site of the

&ercantile Ban- Ltd* ' ha!e presented my eperience and findings* Actually, this study is

descripti!e in nature* &aimum data (ere collected from the primary sources* +he details of the(or- plan are furnished "elo(

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Fig!re 1C S"r!c"!re o# So!rce o# 9a"a

Priary 9a"a

ollecting data directly from the practical field is called primary sources of data* +he method

that (ill "e used to collect the primary data is as follo(s

In"er/ie.C/ace to face con!ersation (ith the respecti!e officers and stuffs of the

"ranch and head office help me collect information*Prac"ical .or& experienceCDor-ing in the different des- of the "ranch ' collect

some information that ma-e the report information*Bro!p ic!ionCGroup discussion (ith other internee of the "ranch and my

classmates is another (ay to ma-e me informati!e*

Seconary 9a"a

+he secondary data is collected from the &'S of &ercantile Ban- Limited* +o clearly different

conceptual matters, internet and different article pu"lished in the #ournals and maga;ines (ill "e

used* Sources of secondary information can "e defined as follo(s

In"ernal o!rce

Ban-9s annual report

Group "usiness principal manual* Group instruction manual and "usiness instruction manual prior

research report*

Any information regarding the "an-ing sector*

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Ex"ernal o!rceC

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3eleant "ooks, 4ournals, newspapers and dierent

newsletters

Pu"lications regarding "anking function, products

and serices

Bangladesh Bank report

5.6 %cope of the 3eport

The report coers the organiational structure, "ackground, o"4ecties,

functions, management and actiities of the "ank. The scope is also limited

to dierent products and serices of MB*. The scope of the study is 4ust to

ac7uaint with the operational mechanisms of MB*, its "anking systems and

the serices it proides to the customers. MB* proides or oers the commonand usual serices like the other commercial "anks. This study will show the

types of actiities and how e/ciently it performs its actiities.

5.8 3ationale of the study

In this 95stcentury Banks are the life:"lood of modern economy irrespectie

of its sie + pattern. Banks are esta"lished to earn prot and help economic

and nancial actiities so as to help economic deelopment of a county. In

such a conte!t, the main "usiness of Banking is to take deposits fromcustomers and sanction credit to the "orrowers. In performing

multidimensional actiities like "orrowing and lending of money, the world of

"anking is undergoing a transformation. Beside "anks are direct agents to

create opportunities for the deelopment of a country and also proide large

scale of employment opportunities. Banks are the most important

functionary of nancial system of a country and Mercantile Bank *imited is

one of them. It plays a dynamic role in the economic deelopment of a

nation through of saing and allocation of credit to priates and industrial

sectors. It dierts and employs the funds in such aenues which are aimed to

deelop a country$s economy.

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,.- Limitations of the study

+he report is presented on the "asis of face to face con!ersation (ith the officer and the practical

eperience in the "an-* &ercantile Ban- Limited organi;ational en!ironment (as !ery helpful,

"ut ' felt some limitations such as$

+ime constraint prohi"ited the preparation of an effecti!e report*

Hast areas of tas-s operated "y the "an-*

+he hea!y pressure of tas- on each des- therefore they could hardly pro!ide little

time to discuss*

3ue to some ris-y monetary transaction*

+he secondary data that ha!e "een o"ser!e (as in a form, (hich (as not helpful

for this study*

3ue to the safety and security reasons, access to all the confidential data (as not

o"tained*

+he information that is pro!ided is the synopsis of the real !olume of information,

so the complete pictures of the concerned aspects are not e!ident*

+oo much of "ul- data in the internet, (hich made (or- more difficult*

Lac- of self-no(ledge concerning report preparation, (as also a limiting factor

in preparing a "etter report*

'n many cases, up to date information is not pu"lished*

+he information regarding the competitors is difficult to get*

And it is my first (or-, and ineperience (as a pro"lem

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Chapter 2

Historical BackgroundOf

Mercantile Bank Limited

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9.5 #"out Mercantile Bank *imited

&ercantile Ban- Limited emerged as a ne( commercial "an- to pro!ide efficient "an-ing

ser!ices (ith a !ie( to impro!ing the socioeconomic de!elopment of the country* +he

philosophy of &ercantile Ban- Ltd is not to Icarry coal to the ne( castleC* +he main target is to

ma-e credits a!aila"le to the poor people and their acti!ities are aimed at comprehensi!e gro(th

(here people from all economic strata (ill en#oy the "enefits of "etter li!ing standard, dignity of

la"or and self (orth*

+he Ban- determined to "uild a longterm customer relationship (ith its corporate . general

clients* As a part of this, &ercantile Ban- ltd* is trying to epand their "usiness (ith the mar-et

leaders of each sector of "usiness* &ercantile Ban- ltd* emphasi;es not only on customer

satisfaction "ut also emphasi;es general "an-ing and credit management system* So that

customer can get "etter ser!ice from e!ery side of o!erall "an-ing*

&ercantile Ban- Ltd is al(ays ready to maintain the highest )uality ser!ices "y upgrading

Ban-ing technology, (ell management system and applying high standard of "usiness ethics

through its esta"lished commitment and heritage and is representing itself (ith true concept as

EBanglar Ban-F*

9.9 ;istory

&ercantile Ban- has "een incorporated on &ay 20, 1777 in 3ha-a, Bangladesh as a limited

company (ith the permission of the Bangladesh Ban-J &BL commenced formal commercial

"an-ing operation from the 8une 2, 1777* At present, the "an- has 5 Branches and S&So!rce Ann!al Repor" o# $%' 2010?

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3ecem"er 0, 2010pening of =5thBranch

cto"er 20, 2010pening of =0thBranch

August 2, 2010pening of 55thBranch

3ecem"er 0, 2007pening of 50thBranch

cto"er 22, 2007pening of 65thBranch

8une =, 2007Bro-erage %ouse peration

:o!em"er 26, 2004pening of62ndBranch

3ecem"er 1, 200pening of 60thBranch

3ecem"er 05, 200=pening of 0thBranch

3ecem"er 27, 2006

pening of 25thBranch

/e"ruary 2=, 2006Listed in hittagong S*


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9.8 2eatures of Mercantile Bank *imited

+here are so many reasons "ehind the "etter performance of &ercantile Ban- Limited than any

other ne(ly esta"lished "an-s$

&ercantile Ban- Limited has esta"lished a core esearch . Planning 3i!ision

comprising s-illed person from the !ery inception of the "an-*%ighly )ualified and efficient professionals manage the "an-*+he inner en!ironments of the all "ranches of &ercantile Ban- Limited are (ell

decorated*Ban-ing operations of the all "ranches of &ercantile Ban- Limited ha!e "een

computeri;ed to pro!ide the promptly . fre)uently customers ser!ice*

+he "an- has esta"lished correspondent relationship (ith 102 of foreign "an-s*+he "an- has launched some financial products, (hich is not a!aila"le in any other

"an-s, li-e A#e"on Pension Scheme*&ercantile Ban- Limited pro!ides attracti!e interest rate li-e the other financial

institutions*+he "an- pro!ides loan to the customers lo(er interest (ith easy . flei"le condition

than the other do*+he "an- fre)uent arranges customers meeting to achie!e their !alua"le suggestions*Letter of redit ?L>@ commissions and other charges are !ery lo(er than the other

"an-s*

Profit earning is not the main aim of the &BL* +he "an- is responsi"le to maintain the

social duties*

9.E Mechanism

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ommercial "an-ing is the core acti!ities of &ercantile Ban- Limited* +he "an- ser!es all types of

customer ranging from indi!idual to corporate entities, "oth pri!ate and pu"lic* +he standard ser!ice

offered "y mercantile "an- Limited 'nclude

ne counter ser!ice for all "an-ing needs of the customer*

ustomer counseling

Personali;ed ser!ices and relationship "an-ing

3eposit "an-ing

Loan and ad!ances


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9.F Board %tructure

#s stated earlier Mercantile Bank *imited Pu"lic *imited 1ompany with

limited lia"ility under the Bank 1ompanies #ct 5FF5. #ll the 0irectors of the

Board and 1hairman of the Bank are appointed according to act. The

Managing 0irector is an e!:o/cio mem"er of the Board of 0irectors. Thereare at present 99 directors including the Managing 0irector.

Board of 'irectors and Board su""orting $ommittee

The Board of 0irectors, the ape! "ody of the Bank, formulates policy

guidelines, proides strategic planning and superises "usiness

actiities and performance of management while the Board remains

accounta"le to the company and its shareholders. The Board is

assisted "y the >!ecutie 1ommittee and #udit 1ommittee.

The Board of the Bank has two supporting committees, %hich are asfollo%s(

Executi!e $ommittee

The mem"ers of the >!ecutie 1ommittee are chosen from the

directors of the Board The mem"ers of the >!ecutie 1ommittee

decides upon all routine and day to day operational matters "eyond

delegated power of the Management, su"4ect to ratication of Board of

0irectors.

Audit committee

The audit 1ommittee is formed with three mem"ers of the Board o

0irectors. The audit 1ommittee assists the Board of 0irectors to

ensuring that the nancial statements reGect true and fair iew of the

state of aairs of the 1ompany and in ensuring a good working system

in the Bank as per frame work. The #udit 1ommittee is responsi"le to

Board of 0irectors.

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!ecutie is concerned.

The Branch Managers are called ;ead of Branch report to the 0eputy

Managing 0irector and, for functional purposes, to the ;eads of

0epartments. 1onse7uently, 7uick decision making in disposal of cases is

ensured. In addition to the diisions departments "ranches, the following

committees, among others are in for smooth function of the Bank

Management $ommittee

The Management 1ommittee comprising of seniors mem"ers of the

management meets weekly to discuss releant agenda and to take

appropriate actions for running the Bank smoothly

Asset Lia8ility Management $ommittee

#sset *ia"ility Management 1ommittee is headed "y Managing

0irector and 1>. It is responsi"le of "alance sheet risk management.

$redit $ommittee

The 0eputy Managing 0irector of the Bank is the head of the credit

committee. The committee ealuates the credit proposal and gies

either recommendations for approal or declines it.

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9.5H Management %tructure of MB*

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+hairan

5ice +hairan

%oar o# 9irec"or

AuditCommittee

CompanySecretary

ManagingDirectors

Eecuti!ecommittee

"olicycommittee

Chief Ad!isor

A") $)9)

9ep!"y $)9)

Senior Exec!"i/e 5ice Preien"

Exec!"i/e 5)P

+rei" 9i/iion Senior 5)P) Trea!ry an $oney$ar&e"ing 9i/iion

5ice preien"

Beneral

Ser/ice

9i/iion

In#ora"ion

Technology9i/iion

9e/elopen"

an $ar&e"ing9i/iion

H!an

Reo!rce

9i/iion

Fir" 5)P*


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Source$ Statement of affairs of &BL

9.55 0iisions of MB*

Beneral %an&ing @ 9epoi" $anageen"

Account opening and K procedures*

'ssuance of 33>++>P>/3*

'nter"an- +ransaction, B>'B*

Account section*

learing Section*

'+ Section*

+rei" 9epar"en"

redit Proposals Processing Procedures*

3ocumentation and Loan 3is"ursement Procedures*

!er!ie( on all returns*

Foreign Exchange 9epar"en"

I) +ah '=+

pening of L>*

Lodgment of 'mport Bill*

Payment against 'mport Bill*

B>< &atching*

'&P eporting*

2 | P a g e


33/89

II) %T% '=+

hec-ing*

pening of B+B L> ?Local> /oreign> < &atching . eporting*

III) Expor"

Scrutini;ing> :egotiation> Send on ollection*

/ollo(up*

eali;ation*

eporting*

I5) Foreign Rei""ance

'n(ard

/33*

/++*

thers*

ut(ard

thers*

ash e"ate*

/ issuing*

/33> /++ etc*

| P a g e


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9.59 Branches of Mercantile Bank at a glance

Division Branches

Dhaka Main

Branch61,Dilkush

a, Dhaka

Dhanmond

i BranchKawranBazar

Branch

Satmasji

d RoadBranch

JoyparaBranch

BananiBranch

BoardBazar

Branch

Elephant

RoadBranch

Dhaka Mohakhali Branch

Mirpur

Branch

Ashulia

Branch

Uttara

Branch

aya!az

ar

Branch

Motijheel

Branch

Rampura

BranchKona!ari

Branch

Dhaka "ulshanBranch

#emayetpur Branch

Bijoyna$ar

Branch

Mo$hBazar

Branch

"reenRoad

Branch

En$ineers

%nstitution

Branch

MazarRoad

Branch

&ro$atiSaraniBranch

Dhaka arayan

$onjBranch

Demra

SME'Krishi

Branch

A$ana$ar

Branch

Mymensi

n$hBranch

Dholaik

halBranch

Ban$la!

azarBranch

Rin$

RoadBranch

Bhajeshw

ar BazarBranch

Chittago

ng

A$ra!adBranch

Khatun$onj Branch

Ju!ileeRoad

Branch

MadamBi!ir #at

Branch

Jhilon$j

a

Branch

( R

izam

Road

Branch

)howmuhani

Branch

*eniBranch

Chittago

ng

)omillaBranch

Shaikh

Muji! Road

Branch

Da$on!huiyan

Branch

)hitta$on$ E&+Branch

*arid$onj

Branch

Amishap

ara

SME '

KrishiBranch

&atiaSME 'Krishi

Branch

Rajna$ar

SME'

Krishi

Branch

Chittago

ng

Ran$am

atiBranch

Ban$la!az

ar Branch

Maijdi

)ourtBranch

Ashu$anj

Branch

A K

KhanMoor

Branch

Rajshahi RajshahiBranch

ao$aonBranch

Bo$raBranch

SapaharBranch

)hapaiawa!$onj

Branch

Shishahat

Branch

6 | P a g e


35/89

Khulna KhulnaBranch

JessoreBranch

KushtiaBranch

Sylhet SylhetBranch

Moul,i

BazarBranch

Beani!az

arBranch

a!i$onj

SME 'Krishi

Branch

Sunam

$onjBranch

Barisal BarisalBranch

&atuakhaliBranch

Damudya

Branch

Rangpur Ran$purBranch

DinajpurBranch

-hakur$aon

Branch

ilphamari

Branch

De!i$anj

Branch

5 | P a g e

3ote(

Repreen" 9i"ric" co/ere *y %ranch Ne".or&


36/89

9.5< peration of Mercantile Bank *imited

+here are three main operating di!isions of &ercantile Ban- Ltd* (hich are as follo(s$

6eneral Banking(

It is the most important side for a "ank. Bank is nothing "ut a

middleman "etween lenders ?surplus sector@ and "orrowers ?decit

= | P a g e


37/89

sector@. To proide loan, "ank needs a huge amount of money from the

lenders. )eneral "anking is the side where "ank oers dierent

options to the clients to deposit ?sae@ and remit their money. To inite

the clients, "ank oers dierent options in front to their clients. Most

of these options are ery much similar "etween the "anks, "ut the

customer serices and facilities may not "e the same.

'i!isions of 6eneral Banking in MBL(

,. Account 4"ening(

&sually a person needs to open an account with the "ank to

take serices from it. =ithout opening an account, one can get a

few serices from the "ank. %o we can say that "anking "egins

with the opening of an account with a "ank. )enerally, there arethree types of accounts in our countryJs "anking system

1urrent 0eposit #ccount ?10 #ccount@'

%aings Bank #ccount ?%B #ccount@'

Time 0eposit #ccount'

). $learing(

There are two type of clearing

ut:ward 1learing

In:ward 1learing.

ther "anks$ che7ues, which are su"mitted to MB* for collection,

are known as ut:=ard 1learing che7ue. The "earer of the

che7ue must hae an account in MB* to clear the che7ue. #fter

su"mission of the che7ue, the "earer has to ll up a deposit slip

against the che7ue, then the in charge of that department entry

the information of the che7ue in the log "ook and send thedeposit slip to the computer section for computer entry. #t the

end of the day, the in charge make clearing slip for each che7ue

through computer using a customie software ?DI(#%;@ supplied

"y Bangladesh Bank ?BB@. #nd nally these che7ues are sent to

| P a g e


38/89

the BB clearinghouse then clearing house sends these to the

dierent "anks.

7. Pro/iing +ah Ao!n" "o "he +rei"or? C

er 0raft and loan comes under this section. By taking a

collateral ?most of the time holding nay nancial instrument, like

203, %anchay Patra etc.@ from the "orrower "ank allow to take

oer draft facility is a continuous process ?"orrower can depositand withdraw money at same time@ "orrower has to pay interest

on the withdrawn money. Interest of credited amount is 15%.To

proide a loan, "ank 4o" is to do:lending risk analysis. There are

two types of loan

Time loan ?not more than one year@.

Term loan ?more than one year@.

Non-F!ne Par" >No +ah Ao!n" In/ol/e? C

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There is no cash amount inoled in this kind of loan. B*1 ?Bill for

*1@ and "ank guarantee falls in this kind of loan. In case of B*1

foreign e!change department mainly deals with it.

Foreign Exchange

This department deals with foreign currency and the transaction of it.

The ma4or 4o"s of this department are listed "elow

*etter of 1redit ?2or >!port and Import@.

0ollarTraeler 1he7ue ?T1@ endorsement,

2oreign 3emittance.

2oreign 1urrency #ccount

7 | P a g e


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9.5A Mercantile Bank *imited #t a )lance

$or"orate &nformation=As on 'ecem8er 7, )*,*>

0ate of Incorporation 9HthMay,5FFF

Inauguration of Main Branch 9ndKune, 5FFF

peration started 9ndKune, 5FFF

Share of $a"ital

#uthoried 1apital E,HHH.HH million

Paid up 1apital A,HC9.95 million

0eposits C6,89F.5A million

Inestments 5H,F!port 6F,AHA.9H million

3emittances 6,5HE.5H million

Branches

Total num"er of Branches C6

Dum"er of %hareholders AH,9E application form duly attested*

'nsurance co!er note (ith money receipt*

thers*

A.A Import Mechanism

+o import, a person should "e competent to "e an importer* According to import and eport

control Act, 1750, the office of chief controller of import and eport pro!ides the registration

57 | P a g e


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certificate ?'@ to the importer* After o"taining this person has to secure a Letter of credit

authori;ation ?LA@ from Bangladesh Ban- and then a person "ecomes a )ualified importer*%e

is the person (ho re)uest or instructs the opening "an- to open an L>* %e is also called opener,

applicant, or the credit*

A.6 Deeded *egal 3e7uirements during Import

'mport of goods into Bangladesh is synchroni;ed "y the 'mport Policy rder ?'P@ announced

"y the &inistry of ommerce or :otifications and Pu"lic :otices issued "y the &inistry of

ommerce or **'* . < ?hief ontroller of 'mport .


61/89

Fig!re 8C Bro."h o# Ipor" %!ine

?B3+ in &illion@

Par"ic!lar 200 2003 2004 2006 2007 2008 2010

Ipor" 2030 2723)2 261)4 22)7 000)1 33327 40382)3

Source$ Annual report of &BL 2010

Fig!re 10C Tren 'ine o# Ipor"


A.C *etter of 1redit

Letter of credit is a (idely used instrument "oth local and in international +rading, a (ritten

underta-ing gi!en "y a "an- on "ehalf of importer> client to pay a certain sum of !alue of goods

or ser!ices to the seller on fulfillment of some terms and conditions imposed "y importer or "y

itself ?"uyer9s "an-@*

=1 | P a g e

Trend Line Of Import Of MBL

20350

28325.233271.6

42442.8 40300.1

5552860592.5

0

10000

20000

30000

40000

50000

60000

70000

2004 2005 2006 2007 2008 2009 2010

YEAR

IMPORT

Linear (IMPORT)


62/89

A.E Types of *etter of 1redit

3ocumentary letter of credit, "asically, can "e classified into t(o segments

e!oca"le letter of credit

'rre!oca"le letter of credit

Re/oca*le 'e""er o# +rei"

+his type of letter of credit can "e re!o-ed or cancelled at any time (ithout consent of, or notice

to the "eneficiary* As per article 4 ?a@ of P3500, EA re!oca"le credit may "e amended orcancelled "y the issuing "an- at any moment and (ithout prior notice to the "eneficiaryF

'n case of seller ?"eneficiary@, re!oca"le credit in!ol!es ris-, as the credit may "e amended or

cancelled (hile the goods are in transit and "efore the documents are presented, or although

presented "efore payments has "een made* +he seller (ould then face the pro"lem of o"taining

payment on the other hand re!oca"le credit gi!es the "uyer maimum flei"ility, as it can "e

amended or cancelled (ithout prior notice to the seller up to the moment of payment "uy the

issuing "an- at (hich the issuing "an- has made the credit a!aila"le* 'n the modern "an-ing the

use of re!oca"le credit is not (idespread*

Irre/oca*le 'e""er o# +rei"

An irre!oca"le credit is a documentary credit, (hich cannot "e re!o-ed, !aried or

changed>amended or cancelled (ithout the consent of all parties "uyer ?Applicant@, seller

?Beneficiary@, 'ssuing Ban-, and onfirming Ban- ?in case of confirmed L>@* As per Article

=2 | P a g e


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7?a@ of P3 500, an irre!oca"le credit constitutes a definite underta-ing of the 'ssuing Ban-,

pro!ided that the stipulated documents are presented to the :ominated Ban- or to the 'ssuing

Ban- and that the terms and conditions of the credit are complied (ith* 'rre!oca"le redit gi!es

the seller greater assurance of payments, "ut he>she remains dependent on an underta-ing of a

foreign "an-*

+here are also some other types of L>, Some of them are gi!en "elo($

+on#ire le""er o# crei"$ 'n confirmed letter of credit the "eneficiary recei!es not

only an underta-ing "y the issuing "an- "ut also an independent promise of payment on

the part of the correspondent "an-*

;ncon#ire le""er o# crei"$+he letter of credit (hich does not itself gi!e anyunderta-ing to pay and is under no o"ligation to honor documents presented "y the

"eneficiary is -no(n as unconfirmed letter of credit*

9oc!en"ary le""er o# crei"$A documentary letter of credit is an underta-ing made

"y a "an- at the re)uest of the applicant for the credit to pay a specified amount in an

agreed currency to a "eneficiary presents stipulated documents (ithin a prescri"ed time

limit*

+lean le""er o# crei"$+he letter of credit in (hich the "an- imposes no conditions forhonoring is called clean letter of credit*

Re/ol/ing le""er o# crei"$e!ol!ing letter of credit can "e used "y the "eneficiary for

a particular time period and for a particular amount "y re!ocation*

Fixe le""er o# crei"$+he letter of credit (hich is opened for a particular period of

time and amount and it is cancelled after the epiry of such time or if such amount is used

up*

Re/oca*le or open le""er o# crei"$ A re!oca"le letter of credit is a letter of credit

(hich can "e amended or cancelled "y the issuing "an- at any time (ithout prior notice

to the "eneficiary is -no(n as open letter of credit*

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Irre/oca*le or #ir le""er o# crei"$ An irre!oca"le letter of credit cannot "e

amended or cancelled "y the issuing "an- at any time (ithout prior notice to the

"eneficiary is -no(n as firm letter of credit*

$arginal le""er o# crei"$ +he letter of credit (hish9s margin contains a form and the

eporter is as-ed to ma-e the "ill on it is the marginal letter of credit*

An"icipa"ory le""er o# crei"$ An anticipatory letter of credit (hich is opens (ith a

condition of ma-ing ad!ance payment is -no(n as anticipatory letter of credit* +here are

t(o types of anticipatory letter of credit

Re +la!e$ ed clause anticipatory letter of credit$ 'n this letter of credit the "an- pays

the eporter in ad!ance for insurance, transport, interest and for some other epenses*Breen cla!e$ Green clause anticipatory letter of credits$ 't permits ad!ance for storage

of goods in the name of "an- in addition to preshipment ad!ance*

Tra/eler le""er o# crei"$ +his type of letter of credit is issued in fa!or of tra!elers*

A.F Terms and 1ondition

't should stipulate the name of loan>credit>Grant*

't should "ear the name of the designated "an-*

'tems mentioned in the LA from must contain (ith the permissi"le items*

+he "an- offices periodically inspect the gods and !erify that they conform to the

)uantity and the )uality etc* as mentioned in the particular L>*

'n case of first class customer, the facility may, ho(e!er, "e granted against firm

contracts (ith o!erseas "uyers*

A.5H Parties inoled in *1 peration

+he letter of credit signifies a commitment on "ehalf of the "uyer ?importer@ "y &BL to effect

payment to the seller ?eporter@ su"#ect to fulfillment of certain conditions "y the seller*

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According to terms and conditions of the L>, the letter is re)uired to "e routed through some

intermediary "an-s in order to get his claim* +here are a num"er of parties in!ol!ed in a L> and

the rights and o"ligations of the different in!ol!ed parties (ill also differ from each other* +he

in!ol!ed parties to a L> are named "elo(

'mporter>Buyerpening>'ssuing Ban- Seller>BeneficiaryAd!isingonfirming Ban-:egotiating Ban-Paying>eim"ursing Ban-

The %!yer= The Opener >The Applican" o# "he crei"?

+he "uyer or importer re)uests his Ban- to issue a documentary credit on his "ehalf to supplier

along (ith re)uisite documents>papers as current import policy and $%' %an&?

+he issuing "an- is the "uyer9s "an- and it issues the redit instrument* 'n the case of an

irre!oca"le credit, &BL underta-es a definite lia"ility*

The A/iing %an& >The no"i#ying *an&?

Generally, credits are ad!ised "y &BL ?'ssuing "an-@ to the "eneficiary through as

correspondent "an- operating in the same center as the seller* +he ad!ising "an- has the onlyresponsi"ility of passing on the authenticated ca"le or the airmail creditJ the case may "e to the

"eneficiary* +he notification of the credit "y itself does not commit to the ad!ising "an- to the

lia"ilities under the credit*

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The Nego"ia"ing *an&

+he "an- (hich negotiates the drafts under the credit is called the negotiating "an-* +he

negotiating "an- ?i*e* Standard hartered Ban-@ must negotiate the documents under a

documentary credit only if the documents confirm strictly (ith the terms and conditions of thecredit*

The +on#iring %an&

Dhen a "an- ?i*e* %SB@ in the seller9s country confirms a credit, that "an- is called a

confirming "an-* ften the "eneficiary of the credit stipulates that a "an- in his o(n country

must confirm the credit so that he is assured of payment as soon as the documents are presented

to it* nce the credit is confirmed "y the "an-, it is legally lia"le to honor its commitment

pro!ided the "eneficiary fulfils the terms and conditions of the credit* /or underta-ing this

lia"ility the confirming "an- recei!es a confirming commission either from the &BL "an- or

from the "eneficiary*

The Paying %an& >The Rei*!reen" %an&?

+he "an- on (hich the drafts or the "ill of echange is to "e dra(n under the credit is called the

paying "an-* Generally, the paying "an- maintains the account of the issuing "an- and honors

the reim"ursement claim of the negotiating "an- "y de"iting the issuing "an-s account* At

present a separate reim"ursement authority is "eing sent to the paying "an- "y the issuing "an-

?&BL@ at time of issuance of the credit pro!ided that the ad!ising and paying "an-s are the

same*

A.55 >ssential paper needed for pening *etter of 1redit ?*1@

'mporter shall present follo(ing papers for opening L>$

+a 'dentification :um"er ertificate*

Halid 'mport egistration ertificate ?industrial>commercial@*

Association ertificate of a recogni;ed +rade Association as per 'P*

HA+ egistration ertificate*

on!ersion and rate of echange correctly applied*

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Proforma 'n!oice or 'ndent duly accepted "y the importer +a returns for the

preceding year*

'nsurance en!elop letter (ith &oney Paid eceipt co!ering !alue of goods to "e

imported plus 10 percent a"o!e*

L> re)uest /orm accordingly signed "y the importer*

'&P structure accordingly signed "y the importer*

Letter of redit Authori;ation /orm ?LA/@ commercial*

A.59 3egistration of a *1

+he letter of credit ?L>@ registration function shall allo( the user to register a ne( L> upon

receipt of an application for issuance > opening of L>*'t shall pro!ide the follo(ings$

A"le to automatically generate and assign a uni)ue reference num"er for each ne( L>

according to the "an- pre defined format* +he system assigned num"er (ill "e the L>

reference num"er and shall "e used for all future transactions on the L>*A"le support and indicate the follo(ing types of L>$

:ormal L>e!ol!ing L>+ransfera"le L>estricted L>Bac- to "ac- L>ed clause L>

apture "rief information on L>, such as type of L>, customer, application date, date

of receipt of application, currency and amount of L>*Boo->earmar- on the customer9s L> credit line, using L> amount in local e)ui!alent >

currency of facility, computed using pre!ailing counter mid rate echange rate*+o log the name of user (ho perform the registration and the date of registration in the

registration record*

Allo( user to Ecancel>deleteF the registration record 7mar-ed unused@ (ith reason,should the "an- decide not to proceed (ith the issuance transaction* eference num"ers

that are9 deleted, cannot "e re used*

A.5< *awful o/cial procedure for opening *etter of 1redit= | P a g e


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Authori;ation of %ead ffice or Branch &anger ?Dhere L>s are to "e opened under his

allocation@ to "e o"tained "efore opening L>* Safe-eeping records to "e finished as per

sanction>appro!al terms prior opening L** harge /orms such as Letter of nderta-ing, Letter

of 3e"it Authority . Letter of Guarantee to "e o"tained (ith due stamps as per pre!ailing Stamp

Act*

A.5A pening *1

/oreign echange "an-ing Letter of credit ?L>@ opening is !ery essential* At first importer need

to contact (ith on "ehalf of importer* After preparing L> proposal need

to send %ead office of issuing "an- for appro!al* After appro!al, issuing "an- open L> on

"ehalf of importer, signed it "y proper authority of "an- officer, and send it their authori;ed

eport country "an- for authentication and !ery important entry to "e gi!en in the L> opening

register "y allocating an L> num"er* +he process is done through SD'/+* +he "an- that

pro!ides authentication then it called ad!ising "an-* After gi!en the authentication seal ad!ising

"an- send it to the eporter "an- as per re)uirement of in!oice*

A.56 #dising a *1

't is customary to ad!ise a credit to the seller through an ad!ising "an-* Ad!ising through a "an-

is a proof of apparent authenticity of the credit to the "eneficiary to (hom it is addressed* Before

for(arding> ad!ising the credit to the seller under appropriate for(arding co!erage, the ad!ising

"an- ha!e to !erify the signature of the officer of the opening "an- and ensure that the terms and

conditions of the credit are not !iolation of the eisting echange control regulations and other

regulations relating to eport* Hery often ad!ising "an- recei!es re)uests from issuing "an to add

their confirmation (hile ad!ising credit to the "eneficiary*

A.58 1onditions of *1

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/ull information of the produce along (ith )uantity and unit price to "e incorporated in the L>*

:o import shall "e made on '/ ?customer information form@ "asis (ithout prior appro!al from

the &inistry of ommerce*


70/89

A.5F >!port

/rom the !ery "eginning a ommercial Ban- li-e &BL is in!ol!ed in financing foreign trade

apart from financing internal credit re)uirements in the economy* +his in!ol!es handling of

import "usiness through opening Letter of redit and %andling of eport "usiness* As "an-ing

has "ecome !ery -eenly competiti!e, "an-s find it con!enient to in!ol!e in foreign echange

"usiness as lucrati!e sources of earning income and profit* Bangladesh eports a large )uantity

of goods and ser!ices to foreign households* eadymade tetile garments ?"oth -nitted and

(o!en@, 8ute, 8utemade products, fro;en shrimps, tea are the main goods that Bangladeshi

eporters eports to foreign countries*

Garments sector is the largest sector that eports the lion share of the countryCs eport*Bangladesh eports most of its readymade garments products to *S*A and operation* /or

eporting goods "y the local eporter, "an- may act as ad!ising "an-s and collecting "an-

?negotia"le "an-@ for the eporter*


71/89

(ise annual target* 't has "een decided to formulate these policies to co!er a fi!eyear period to

ma-e them contemporaneous (ith the fi!eyear plans and to pro!ide the policy regime* +he

eportoriented pri!ate sector, through their representati!e "odies and cham"ers are consulted in

the formulation of eport policies and are also represented in the !arious eport promotion

"odies set up "y the go!ernment*

A.95 >!port incenties


72/89

Pro!ision for transfer of shares held "y foreign shareholders to the local

shareholders>in!estor (ith the permission of the B' and the !port procedures followed "y MB*

+he import and eport trade in our country are regulated "y the 'mport and


73/89

+otal eport earnings during 2010 amounted to S3 17*14 "illion compared to S3 15*04

"illion in 2007, indicating an increase of 2*22O eport gro(th in 2010 o!er 2007* +his dou"le

digit eport gro(th is mainly attri"utes to the &G sector (hich contri"utes almost 5O of our

total eport earnings*

Fig!re 11C$on"h .ie Expor" earning Tren >$illion ;S9? o/er 2007-2010

Source$ Annual eport 2010

A.96 2oreign 3emittance

/oreign remittance refers to the transfer of funds from one country to another (hich may "e(ithin the country or "et(een t(o countries through "an-ing channel post office or the informal

channel* According to the /oreign


74/89

constitutes in(ard foreign remittance and sale of foreign currencies constitutes out(ard foreign

currencies*

/oreign remittance is !ery important for the country as !alua"le foreign echange is in!ol!ed in

the transfer mechanism* /rom the year 1770, financial li"erali;ation has "een started (hich is

still going on* 3ue to li"erali;ation, restrictions on foreign remittance "ecome ease* Bangladesh

ta-e is con!erti"le for current account transactions on &arch 26, 1776 (ith the !ie( to achie!e

"etter echange rate management system* And from April 1776 Bangladesh Go!ernment has

accepted the status of Article H''' of international monetary fund*

A.98 Types of 3emittance

&ercantile Ban- Ltd* plays an important role in foreign remittance acti!ities "oth in(ard and

out(ard* 'n &BL main components of foreign echange remittance are +*+, &*+ and 3raft*

/oreign remittance is of t(o -inds* ne is in(ard and another is out(ard remittance*

De can see it "y the follo(ing figure*

Fig!re 12C Type o# Rei""ance

RE$ITTAN+E

Foreign Rei""ance 'ocal Rei""ance

Foreign Foreign 9ean Tel Pay Tran#er

O!".ar In.ar 9ra#" Orer

A.9C Inward remittances

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/oreign 'n(ard emittance refers to the currency > remittance in foreign currency that is recei!ed

from a"road to our country* 'n case of foreign in(ard remittance, ++, &+, 3raft etc are dra(n in

local "an- "y the foreign "an-s of echange houses* Dhen a local "an-

Purchases foreign "ills, +s and cash foreign currency is also -no(n as in(ard remittance* Alocal "an- also recei!es indenting commission of local firm, trademar-s, patent fee etc*

:ormally, 'n(ard /oreign emittance comprises of all incoming foreign currencies* emittances

issued "y the correspondent "an-s situated in the foreign countries and there"y dra(n on &BL,

&ain "ranch are considered to "e its 'n(ard /oreign emittances*

5 | P a g e


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/ollo(ings are the 'n(ard /oreign emittances of &BL,

/33 Paya"le

/++ Paya"le

+ Paya"le


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Ipor" Trae

&ercantile Ban- has ehi"ited )uality financing (hile facilitating import trade in 2007* 3uring

the year, the "an- handled a total of 22760 Letters of redit amounting to B3+ =0570*50 million

compared to 2021 Letters of redit amounting to B3+ 5=524*40 million in the year 2004* +he

"an- engaged in opening Letter of redit in different sectors including machineries, garments

and accessories , rice, (heat, sugar, 3S, !egeta"le oil, cement clin-ers, hot roll steel, ra(

cotton, ship"rea-ing etc*

Expor" Trae

+he Ban- handled total 172= eport "ills (orth B3+ 6=274*=0 million in 2007 as against that

of 1541 eport "ills and B3+ 6104*50million during 2004* +he focal point of the "an- ineport financing (as garments industry , the lone dri!ing force of the economy of Bangladesh in

single "iggest source of foreign echange and employment pro!ider of the country* ther nota"le

items (ere #ute and #ute goods, leather, handicrafts, tea, fro;en food and fish*

Foreign Rei""ance

+otal foreign remittance in a single year in 2007 made a record high to the tune of B3+ 50=1*0

million compared to that of B3+ 622*70 million in 2004* +he Ban- has deepened its step on the

foreign soils further "y esta"lishing more and more remittance arrangements (ith o!erseas

echange companies (here Bangladeshi epatriates are (or-ing* +hese 'nclude *K, *A*


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A.TG $illion?

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+he "an- is !ery much supporti!e in eport financing since its inception* As an outcome of its

positi!e attitude, in eport performance it is holding the top position among leading "an-s of

ne( generation* +he graph sho(s the eport operation progress of &ercantile Ban- Limited*

3iagram represents a significant gro(th in eport trading (ithin the last fi!e year* 'n 200 the

eport trade (as little "it slo(er as li-e as import and the reason (as political condition of the

country* 'n 2004 (e can see a significant gro(th in eport operation* +he main eport items of

the "an- (ere readymade garments, leather, products etc*

A.


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Analyi

INTERNA' FA+TORS ETERNA' FA+TORS

EAGNESS OPPO;RT;NIT THREATSSTRENBTH

+he different sources of income for foreign echange "usiness are re!ealed and the income is

sho(ing a continuous increasing trend from 2006 to 2007* +he most dominant !aria"le in

foreign echange income is echange gain* +his is achie!ed from import, eport and remittance

"usiness* +he graph is sho(ing that foreign echange income is increasing* 'n year 2007 as

achie!ed highest income from foreign echange*

A.


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Fig!re 13C Analyi o# in"ernal an ex"ernal #ac"or

'n this analysis t(o factors act as prime mo!ers

'nternal factors (hich are pre!ailing inside the concern (hich include Strength and

Dea-ness*

n the other hand another factor is eternal factors (hich act as opportunity and threat*

eternal opportunities and threats in its (hole life cycle*

S"reng"h

3edicated group of employees*Long "usiness relationship (ith eisting customer*ne of the highest "usiness portfolio? (ith respects to !olume@ordial relationship (ith the customer*tili;es state of the art technology to ensure consistent )uality and operation*Superior ser!ices

ea&nee

ffice en!ironment is so congested:e( customer is una!aila"leses old soft(are:um"er of employees is una!aila"le*


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ses ne( soft(are+hey can recruit eperienced, efficient and -no(ledgea"le officers and staffs as

it offers good (or-ing en!ironment*:e( correspondent "an-*

Threa"Lots of ne( "an-s are coming in the scenario (ith ne( ser!ice*ost of fund gradually high*Local competitors can capture huge mar-et share "y offering similar products*:e( product design*ules are changes*

$#AP0E< :

Findings


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6.5 Ma4or 2indings

Dhen ' (as (or-ing at &ercantile Ban- Ltd, &oti#heel, &ain Branch, ' ha!e attained to some

-ind of eperience* By analy;ing the !arious data the follo(ing finding ha!e "een found$

&ercantile Ban- Ltd is one of the leading pri!ate sector commercial Ban- in Bangladesh*

+he Ban- recogni;es its responsi"ility to its customers, as (ell as the society* &ercantile

Ban- Ltd has already esta"lished a fa!ora"le reputation in the "an-ing industry in the

country*

3eposit !arious set"ac-s in economy, &ercantile Ban- Ltd Ban-s performance may "e

termed satisfactory in respect of 3eposit mo"ili;ation and Profit earning in the year 2004*

3ue to &odern Ban-ing the num"er of 3eposit are increasing rapidly*

&ost of the clients in &ercantile Ban- Ltd are satisfied (ith /oreign echange ser!ice of

gi!ing statement*

+he (or-ing en!ironment of &ercantile Ban- Ltd is so much friendly* All the officers are

so much helpful* +hey help each other, (hen any officer falls in trou"le*

+he /oreign opening and amendment of L>, are !ery muchepedient to the foreign Ban-* 't is gi!ing a competiti!e ad!antage to the &ercantile

Ban- Ltd* /or this, "usinessmen li-e to deal their "usiness (ith the &ercantile Ban- Ltd*

+he top eecuti!es and officers are !ery helpful to the clients* Some of our "usinessmen

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do not -no( the eact procedures of international trade* +he officers of &ercantile Ban-

Ltd help them to properly eecute their "usiness*

&ercantile Ban- Ltd pro!ide little assistance in relation (ith foreign echange to the

small entrepreneur comparing to large "usiness houses* Small entrepreneur has to -eep

higher margin, sometimes 100O, regarding opening a L>*

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6.9 3ecommendations

't is not unepected to ha!e pro"lems in any organi;ation* +here must "e pro"lems to operate an

organi;ation* But there must "e remedies to follo(* +he follo(ing recommendations can "e

suggested to sol!e the a"o!e mentioned pro"lems$

&BL should impro!e central online facility*

&BL should increase its manpo(er le!el in /oreign


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6.< 1onclusion

Ban-ing is "ecoming more and more !ital for economic de!elopment of Bangladesh in

mo"ili;ing capital and other resources* &ercantile Ban-, "eing a third generation "an-, is also

etending such contri"utions as to the ad!ancement of the socioeconomic condition of the

country* 't is not possi"le to get 100O from any(here especially for those organi;ations (hich

(ith mass people* &BL has some pro"lems "ut it is encouraging that they are trying to o!ercome

these o"stacles* +o -eep pace (ith the current demand &BL should "e more responsi!e* 't

should ta-e necessary steps t. spread o!er their products all o!er the country* Dithout a strong

footing of deposit it is not possi"le to grant huge amount of loans and ad!ances i*e* one of the

ma#or sources of income of a "an-* And (ithout huge amount it is not possi"le to attract the

ma#or portion that en#oys credit facilities* 't (ill more #ustify for &BL to concentrate on

corporate "an-ing than consumer "an-ing i*e* the ma#or portion of the profit (ill "e generated

from corporate sector not from consumer section*

'n !ie( of the findings, the pro!ision of high standards of automated ser!ice )uality and

maintaining a significant le!el of customer satisfaction (ill lead to impro!ed financial

performance* &ercantile Ban- is one of the pioneers in many criteria* &ercantile Ban- Ltd is

committed to(ards the ecellence in the ser!ice (ith efficiency, accuracy and proficiency* Li-e

of most of the commercial "an-s, foreign echange department is one of the most important

departments of &ercantile Ban- Ltd* Perhaps, it is the most important department of the Ban-*

+his department is dri!ing the "an- from the front* +hrough the import, eport and foreign

operations, this department is ma-ing a great contri"ution to the "an- and the economy as a

(hole* 'f it is said that this department of the "an- is running according to all of the ideal

principles of modern foreign echange "usiness mentioned in the "oo-, it (ill "e o!erstated*

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3espite pro"lems and (ea-nesses, therefore, it is "etter for &ercantile Ban- Ltd to thin- a"out

their eisting steps and ta-e the necessary initiati!es to fi up the pro"lems and imply the

recommended steps to "e successful and "ecome the mar-et leader in near future*

6.ABi"liography

1* Annual eport of &ercantile Ban- Limited

2* :e(spapers, daily affairs reports

* (((*"angladesh"an-*org*

6* 3aily Statement of &ercantile Ban- Limited at &ain Branch, 3ha-a*

5* Statement of affairs of &BL, &ain Branch*

=* /oreign


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6.6 #cronyms

BB $ Bangladesh Ban-

./ $ learing and /or(arding

/ $ lean eport of /inding

& $ redit is- &anagement

33 $ 3emand 3raft


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SD'/+ $ Society for Dorld(ide 'nter Ban- /inancial +elecommunication

+ $ +ra!elers he)ues

++ $ +elegraphic +ransfer

foreign exchange product and practice of mercantile bank(1)

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