Internship Report on Banking Business Activities of Mercantile Bank Limited, Satmasjid Road Branch Dhaka.

Internship chronicle On shoreING BUSINESS ACTIVITIES OF MERCANTILE BANK hold, SATMASJID ROAD BRANCH DHAKA. pic Submission Date fifteenth n aneember, 2009 Prepargond for Prof. Md. Ashraf Hossain Dean, aim Of melody Asiatic University of Bangladesh Dhanmondi Complex House 36, way 27 (Old), 16 (New) Dhanmondi R/A, Dhaka-1209 pic Prep bed ByJOBYDA JESMIN ID 200521050 Batch 24th Section Finance Program BBA Dhanmondi Complex Asian University of Bangladesh Letter of Transmittal 15th November, 2009 Prof. Md. Ashraf Hossain Dean, School of task Asian University of BangladeshSubject Submission of Internship field. Sir, Its my great pleasure to go on the Internship stem titled coasting Business Activities of Mer chamberpottile m geniusy box particular that you concur asked me to prep are as a fond(p) ful take onment of my graduation. I fork out tried my best during tether months ca-caing extent to fol suffering the bid of you in preparing this deal. Throughout the impertinentspaper I tried to demonst step the available operate matter of this break of billsmaking(a) propertybox Limited. Fin bothy, I would like to thank you for your valuable guidance and advice for preparing this report.I thereby strongly hope and believe that you would be kind enough to accept this report and introduce me a pleasure to be obliged. Thanking for your sentence and reviews. Sincerely Yours, JOBYDA JESMIN ID 200521050 Batch 24th Section Finance Program BBA Dhanmondi Complex Asian University of Bangladesh Acknowledgement prototypal of all I would like to express my dense gratitude to the almighty apiece(prenominal)ah for preparing this internship report successfully. Internship is the rive of the Bachelor of Business Administration (B. B. A. ) program that provides on the job experience for the scholars.The students get chance to work closely with the battalion of the organization and l make up roughly the functions, responsibility and the enviro nment of the organization. The internship program enables a student to develop their analytical skills and scholastic aptitudes and to have a real-life orientation of the academic knowledge. I express my deep gratefulness to Mr. Md. Sadruzzaman, Executive criminality President, for his kind permission to allow me for three months practical orientation in Mercantile wedge. My special gratitude goes to Mr.Shamim Ahmed, Senior Vice-President & Manager of Mercantile wedge Ltd, Satmasjid Road sort, for his modern outlook and meticulous supervision to carry out the job perfectly. I am rattling grateful to Mr. Mamun Hossain, Executive military mathematical functionr, for dowery me a lot. More all over I am very much thankful to my internship in- sprout in versatile departments and all the officers of Mercantile margin Ltd of Satmasjid Road weapon system for helping me very much although having their busyness. Without their help and friendly co exercise it could be very much dif ficult for me to complete the report in magazine.So aadd-on I take to express my gratitude to all of them. Acronyms MBL = Mercantile chamfer Ltd. AD = Authorize Dealer PO = Pay locate A/C = Account CDS = Central puzzleory System DD = Demand Draft ERC = trade adaptation Certificate FDBC = inappropriate Documentary Bills For Collection OBC = external Bills for accretion IBC = Inward Bills for Collection GDP = gross Domestic Product TT = Telegraphy Transfer L/C = Letter Of reliance BR = brinkers Report IBCA = Inter branch attribute advice IBDA = Inter arm Debit Advice IMF = world-wide Monitory storehouse IRC = Import Registration Certificate KYC = Know Your Customer CCI & E = Chief Controller Of Import & trade LDBP = Local Documentary Bills Purchases FC = contradictory Currency TIN = Tax Identification Number LCAF = Letter of realization Authorization Form BTB = Back to Back FDBC = Foreign Document Bill Collection SWIFT = edict For Worldwide Inter Bank pecuniary Telecommunication FDBP = Foreign Documentary Bill Purchased Executive summer-floweringThis is an internship report based on the internship program took stain in Mercantile Bank Ltd, Satmasjid Road Branch, The of import objective of this report is to tumble the Banking Business Activities and performance of Mercantile Bank Ltd. I got only three months to gather practical knowledge from this branch, although it was too difficult to gather upper limit and proper knowledge indoors this short-change range of m. on that point is a great makeive role of stranding system in kind society. It plays a vital role for the economic ontogeny of a solid ground. Banks are fiscal-service firms, producing and selling professional revolve about of the publics funds as puff up as performing m either other roles in the economy. The ask was to analyze Banking Business Activities of Mercantile Bank Ltd, Satmasjid Road Branch especially ? habitual camber ing ? Foreign Exchange and remission of sin book of facts & get on department Firstly, I worked for one month in General Banking. During this period I tried my best to describe most of the basic stuffs. alter section was in-chief(postnominal) part to focus on. There were other sections such as Account unmannerlying section, Com stupefyer section, hard currency counter section. second month I worked in the give and Advance sector. And I tried my best to netherstand what to atomic pile about, what to think about when approaching for any loan proposal. In the final days, I was in Foreign Exchange department. There I was involved in learning the Import LC, Export LC, the operation of prat to back LC, Lodgment & settlement of LC, IBP & FBP etc.Most of all I tried heart & understanding to present all that I have learnt & thought to be comprehensive to me. Though a short time I got to be introduced with all the activities of situate but I tried my best to give full of me in t he practical orientation in patois as well as in the report writing. TABLE OF CONTENTS Chapter One Introduction Page No. 1. 1 Introduction 11 1. 2 Background of the reckon. .. 12 1. 3 Rational of the Report.. . 12 1. 4 Objectives of the Report 13 1. 5 Methodology . 14 1. 6 Scope of the report . 15 1. 7 Limitations of the Study. 5 Chapter Two Overview of Mercantile Bank Ltd. 2. 1 Banking sector in Bangladesh 17 2. 2 historical background of MBL . 18 2. 3 Vision military mission & objectives of MBL20 2. 4 Core values 21 2. 5 Management tone of MBL.. 22 2. 6 constituental aspect of MBL.. 23 2. 7 Branch Ne devilrk 24 2. 8 Information about the Satmasjid Road Branch. 26 2. 9 fiscal Performance of MBL.. 27 2. 10 Nature of Business28 2. 1 Financial Products and Services of MBL 29 2. 12 address Policy of MBL.. 33 Chapter Three General Banking Activities 3. 1 Introduction. 35 3. 2 Account Opening 36 3. 3 Different Types of dodge and Features 39 3. 4 Cash segment 45 3. 5 Clearing H ouse 46 3. 6 issuing PO, DD, TT .. 47 3. 7 Dispatch 7 3. 8 military issue Cheque 48 3. 9 Closing of an Account49 Chapter Four Foreign Exchange division 4. 1 Introduction .. 52 4. 3 Letter of acknowledgment (L/C) .. 53 4. 4 Parties to Letter of Credit 54 4. 5 Import Procedures. 57 4. 6 Requirements of an importer to open an L/C 58 4. 7 Lodgment of Import Document 62 4. 8 Export Section. .. 65 4. Back to Back L/C .. .. 66 4. 10 Documents required for enterprise a Back to back L/C.. 66 4. 11 Foreign Remittance.. 67 4. 12 Foreign Correspondent Bank. 68 TABLE OF CONTENTS Chapter Five Credit DepartmentPage No. 5. 1 Introduction .. 72 5. 2 Importance of Credit.. .. 73 5. 3 Forms of Advances. 74 5. 4 Process of loan sanction 75 5. 5 Different types of loan and interest rates.. .. 78 5. 6 Types of Credit scheme make by the MBL .. 79 5. bring categories and their Features.. .. 83 . 5. 8 Credit Policy of MBL94 5. 9 Credit bump Management of MBL . 95 5. 10 Credit Risk Grading. 97 5. 11 Mechanism of Credit Distribution of the MBL.. 101 5. 12 Necessary Documents for Loan Settlement 103 5. 13 Credit Recovery of MBL.. 104 Chapter Six Others Services of MBL 6. 1 Cards of MBL. 108 6. 2 Online Banking 109 6. 3 SMS Banking services.. .. 110 6. 4 SME Service Centre. 10 6. 5 MBL Brokerage House111 Chapter septet Conclusion 7. 1 Findings.. 113 7. 2 Recommendation 114 7. 3 Conclusion119 7. 4 Bibliography. 120 pic Chapter 01 INTRODUCTION 1. 1 Introduction 1. 2 Background of the believe 1. 3 Rationale of the report 1. 4Objectives of the Report 1. 5Methodology 1. 6Scope of the report 1. 7Limitations of the scan 1. 1 Introduction Internship is a temporary work program in which a student can gain supervised practical experience in a particular professional field.It is the period of time during which a novice in a field serves in a subordinate capacity and continues to gain experience the learning period before one becomes an expert. Practical friendship is highly invo lve to chalk up with the theoretical idea and knowledge. Banking industries are the best organization to practice the theoretical knowledge. This sector plays very significant role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. Although banks crap no sore wealth but their acquire, lend and related activities assuage the process of production, distribution, exchange and usage of wealth. In this way they become very effective partners in the process of economic teaching.Within our boorish there are government banks, semi government banks, backstage sector technical banks of Bangladesh and in addition it is the second-generation private bank in Bangladesh. It started its important moment when Bangladesh economy was undergoing by means of massive economy reforms and pursing unilateral and miscellaneous trade liberalization with the backdrop of the World Bank made international Monitory Fund *IMF* r oot onation. This Mercantile Bank Ltd with its 42 Branches in Manipulate location of the country providing the best feature services to the clients and customers. For the age of my 3 months internship period from 1st July to 8th October , 2009 in Mercantile Bank Ltd.Those types of experiences I have acquired these are bring together to formulate this report. 1. 2. Background of the think over Banks play an important role in the occupation sector and promoting industrialization and economic teaching of a country. Banks provide necessary funds for executing various programs underway in the process of economic development. This paper is entitled Overall Banking Activities of Mercantile Bank Limited originated from the fulfillment of the internship program. I have selected this topic to have insight knowledge about the Activities of Mercantile Bank Limited and to get an idea about the various types of stay put, loan which are mostly provided.This study allow for also give me a va gue idea about the rules and regulations of providing loan, loan recovery and overall lending functions of a commercial message bank. afterward three months of internship period I am supposed to prepare this report revealing findings, knowledge as well as experience gathered during internship period. 1. 3. Rationale of the report Knowledge and learning become perfect when it is associated with theory and practice. Theoretical knowledge gets its perfection with practical application. As our educational system predominantly text based, inclusion practical orientation program, as an academic component is as exception to the norm.As the parties, educational institution and the organization substantially benefit from such a program, it seems a win-win situation. It establishes contracts and networking contracts. Contracts whitethorn help to get a job. That is, students can train and prepare themselves for the job market. A poor country like Bangladesh has an overwhelming number of unem ployed educated graduates. As they have no internship experience they have non been able to gain normal professional experience of establish networking system, which is important in getting a job. Recognizing the importance of practical experience, an opportunity is offered by Asian University of Bangladesh for ts potential byplay graduates to get three months practical experience, which is kn possess is as Internship Program. For the competition of this internship program, the author of the study was spaced in a bank namely, Mercantile Bank Limited. Internship Program brings a student impending to the real life situation and thereby helps to launch a career with some prior experience. 1. 4. Objectives of the Report ? Broad Objective The study was conducted to make a review and analysis of the activities of MBL which include General banking, Credit Department and Foreign Exchange Sector. This paper attempts to discuss overall activities of MBL prescribed so far by Bangladesh Ba nk with a view to ensuring pecuniary soundness of the banking sector.The purpose was also to make recommendations for improving the quality and soundness of those processes for consideration of the bank management. ? Specific Objectives The specific objectives of this study are as follows To present an over view of MBL. To know about the area of general Banking. To analysis the Lending procedures maintained by MBL. To key chief(prenominal) Lending activities of MBL. To evaluate Lending performance of MBL. To know Foreign Exchange operations of MBL. To recommend suggestions for the successful Banking Operations of MBL. 1. 5. Methodology For teaming up the data & data collected through primary & alternate comes, I have employ both qualitative & quantitative method.During my study I followed some methodological analysis to find out the fact & feature of the Bank which are attached as follows (A) Area of study My project is the overall activities of MBL with reference to Saatmasjid Road Branch, Dhaka. In order to carry out the research work, I focused on taking the interviews of the Personnel involved in the different departments, Manager and Senior train Employees, Business Clients and Account Holders and Particular departmental honchos. (B) Sources of data/ study I have collected my information/data from the adjacent sources, which helped me to make this report. The source has divided by two parts. Such as, 01.Primary source 02. Secondary source Primary sources Many of the data and information were collected from my practical experience and queries from the executives and from related instruments while doing my internship at MBL. Secondary sources Secondary data are collected basically from observation & collection from Journals, Brochures, Annual Reports, Paper, Magazines, Publications, Books and others form of publications as well as websites. Different statistical tools like mean, frequency distribution, tabular and graphical presentation ar e used to analyze data. 1. 6. Scope of the report In this report I tried to describe overall banking performance.This report is a descriptive study which tries to focus on the theories and practices of banking activities in the context of the financial institutions in Bangladesh. It impart not focus on the comparable practices of other banks. The study has covered a curtail idea on MBL, operational scenario of three departments of Mercantile Bank Limited, Saatmasjid Road Branch. Mentioning that, operations of three departments are closely related to to each one departments activity as well. This give eventually refer that how the bank help the customers securing their cash and assets, getting credit facility, repaying loan add and banks regulatory compliance ,lending policy etc. Overall banking system for gathering experience, my plan time was divided in various departments, such as Department Days General Banking 25 Clearing 15 Investment & Credit 25 Foreign Exchange Div ision 25 1. 7. Limitations of the study In conducting the study, some problems were created which may be confinesed as encumberations of the study. They are as follows The study does not cover critical analysis and implementations of comparative study in an intensive manner. During my internship program up to date information was not published. Relevant papers and documents were not available sufficiently. The time of this study was very inadequate to happen depth knowledge in every department. The bank officials though helpful in every appreciate do not have much time to explain the internal procedures. Another limitation of this report is Banks policy of not disclosing some data and information for obvious reason, which could be very much useful. This study completely depended on official records and annual reports. Sufficient record, publications, facts and figures were not available, these constraints narrowed the electron orbit of accurate analysis. This report is restricted only to Mercantile Bank Ltd. pic Chapter 02 Overview of Mercantile Bank Ltd. 2. 1. Banking sector in Bangladesh 2. 2.Historical Background of MBL 2. 3. Vision, Mission and objectives of the bank 2. 4. Core values 2. 5. Management aspect of MBL 2. 6. Divisional aspect of MBL 2. 7. Branch Network 2. 8 Information about the Satmasjid Road Branch. 2. 9Financial Performance of MBL 2. 10Nature of Business 2. 11. Financial products and services of MBL 2. 12 Credit Policy of MBL 2. 1. Banking sector in Bangladesh Banking system occupies an important place in an economy. A banking institution is indispensable in modern society. It plays a liberalization of economics policies in Bangladesh. Certainly banks can be identified by the functions they perform in the economy.Banks act as financial in lineediary by deportationring funds from inditers to borrowers and in paying for goods and services. In 1971, Bangladesh, was East Pakistan, emerged as an independent country. In immedia tely nationalized the entire Banks expanding 3 Foreign Banks, six home(a)ize Banks were thus formed. In 1983 a spic-and-span policy was implemented allowing private sector participation in the industrialization. As a part of this process, two national commercial Banks were against denationalization and a number of Private Commercial Banks were allowed to operate. Among these Pubali Bank and Uttara Bank were the original to be decentralized. Particulars Number of Banks Nationalized commercial Bank 04 Privatized commercial Bank 30 Specialize Bank 05 Foreign Bank 10 Co- Operative Bank 01 Grameen Bank 01 Total = 51 Table 1 order of business Banks in Bangladesh. 2. 2. Historical Background of MBL Mercantile Bank Limited emerged as a new commercial bank to provide efficient banking services and to contribute socio-economic development of the country. The Bank commenced its operation on June 2, 1999. The Bank provides a broad range of financial services to its customers and bodied clients. The poster of Directors consists of gallant personalities from the realm of commerce and industries of the country.Mercantile Bank Ltd (MBL) was in unifiedd in Bangladesh as a Public Company, Limited by shares under the Companies Act 1994 as on May 20, 1999 and subsequently obtained Banking Operation License from Bangladesh Bank under the Bank Companies Act 1991 and commenced commercial operation on 02 June 1999 to provide efficient banking services and to contribute socio-economic development of the country. The bank has 42 branches and 3 SME service center. It has listed in the Stock Exchanges at Dhaka and Chittagong in 2003 and 2004 respectively. The Founder of MBL is commit to make it a little more different and a bit special qualitatively. This bank has new vision to fulfill and a new goal to achieve. The bank has been manned with talented and experienced military force equipped with most modern technology so as to make it most efficient to discover the need of 21st century. The read/write head Office of the Bank situated at 61, Dilkusha commercial Area, Dhaka.The circuit board of Directors consists of eminent personalities from the realm of commerce and industries of the country. The Authorized metropolis of the Bank is Tk. 3000 million and the Paid -up Capital is Tk. 1798. 68 million. The Bank provides a broad range of financial services to its customers and corporate clients It has a large asset grade comprising of Tk. 55928. 72 million in December 2008. pic 2. 3. Vision, Mission and objectives of the bank Vision Would make finest corporate citizen Mission Will become most caring, focused for equitable produce based on diversified deployment of resources, and all the same would remain healthy and gainfully profitable Bank. Objectives of Mercantile BankThe objective of MBL is not only to earn profit but also to keep the social commitment and to ensure its co-operation to the persons of all level, to the businessman, industr ialist specially whom are engages in establishing large scale pains by consortium and the agro based export oriented speciality and small scale industries by self inspiration. Strategic Objective ? To achieve Economic Value Added (EVA) each year. ? To be market leader in product innovation. ? To be one of the top three financial institutions in Bangladesh in terms of cost efficiency. ? To be one of the top five financial institutions in Bangladesh in terms of market share in all significant market segments that the bank serve. Financial Objective To achieve a give up on share pallbearers equity of 20% or more, on average. 2. 4. Core values For the Customers providing with the caring services by being innovation in the development of new banking products and services. For the Shareholders maximizing wealth of the bank. For The Employees respecting worth dignity of individual employees devoting their energies for the progress of the bank. For the Community strengthening the corpor ate values and taking environment and social risks and reward into reputation. INVESTORS INFORMATION Investor can be informed about any information from Dhaka Stock Exchange Website and Banks website www. dsebd. org www. mblbd. com 2. 5.Management aspect of MBL The wag of Directors being at the highest level of organizational structure plays an important role on the policy formulation. The Board of Directors is not figurely concern with day-to-day operation of Bank. They had delegated their authority to the Managing Director and CEO to look after the day-to-day affairs of the Bank. The Bank is running by an excellent management team under the direct supervision of a competent Board of Directors. The Board of Directors comprises total thirteen members, which is within the maximum limit as imposed by BPRD circular-12, dated April 26,2003of Bangladesh Bank, headed by the Chairman.Md. Abdul Jalil, is the present Chairman of the Board. The Managing Director (MD) and CEO head managem ent team. Mr. Dewan Mujibur Rahman is the present Managing Director and CEO of MBL. The management hierarchy of Mercantile Bank Limited is given up below Board of Directors Managing Director Additional Managing Director Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President First Vice President Asst. Vice President First Asst. Vice President Senior Principal Officer Principal Officer Senior Officer Officer Junior Officer Assistant Officer conformation The management hierarchy of MBL 2. 6. Divisional aspect of MBL There are total fourteen divisions in the Head Office of MBL. List of various divisions of MBL is given below Audit and Inspection division Central Accounts Division Credit Division Marketing, organic evolution Banking Division General Services Division Human Resources Division International Division Information Technology Division Research Division Tr easury Market Division Board Secretariat& Share Dept. Cost Control Dept. Law & Recovery Dept. Card Cell Fig Divisions of MBL 2. 7. Branch Network MBL is one of the 3rd generation commercial Bank in private sector of Bangladesh. The Bank within stipulation lay down by the Bank Company Act 1991 and directives as authoritative from Bangladesh Bank from time to time provide all types of commercial Banking services. It has 42 branches all over the country and also enlisted the Dhaka and Chittagong stock exchange as publicly quoted company for its general class of share. Banks stimulate Name of Region/Zone No. f Branches Dhaka 19 MERCANTILE BANK LIMITED Gazipur 02 Chittagong 06 Sylhet 02 Moulvibazar 01 Comilla 01 Noakhali 01 Bogra 01 Rajshahi 01 Rangpur 01 Barisal 01 Khulna 01 Naogaon 02 Coxsbazar 01 Feni 01 Shariatpur 01 Total Branches 42 Table Branches of MBL pic 2. 8 Information about the Satmasjid Road Branch Address of Bran ch Satmasjid Road Branch House 735(old), 82/A (New) Road 8/A (New), Satmasjid Road Dhanmondi, Dhaka-1205 e-mailemailprotected com Phone 9139183, PABX 8112463-4, 9141148 Fax +88029139183 SWIFT MBLB BD DH Opening Date 1st November, 2004 as twenty-second Branch of MBL. Number of Employees 22 Name of Manager Shamim Ahmed, Vice President & Head of Branch. Mercantile Bank has bargain ford the land and building of this Branch Last month where it operates. 2. 9 FINANCIAL PERFORMANCE OF MERCANTILE BANK LIMITED (BDT in million) MERCANTILE BANK LIMITED AT A GLANCE Particulars 2005 2006 2007 2008 Authorized Capital 1,200. 00 3,000. 00 3,000. 00 3,000. 00 Paid-up Capital 999. 27 1,199. 12 1,498. 90 1,798. 68 Total Assets 28,890. 48 37,159. 65 44,940. 54 55,928. 72 Deposits 25,087. 43 33,332. 65 39,348. 00 49,538. 36 Loan & Advances 21,857. 05 26,842. 14 31,877. 86 41,993. 5 Import 33,271. 90 42,442. 80 40,380. 10 56,528. 80 Export 24,108. 57 34,592. 10 32,670. 10 43,108. 50 Remittance 6 79. 10 2,989. 10 3,510. 40 4,722. 90 Profit after taxation 386. 83 494. 22 540. 50 615. 88 No. Of Branches 28 35 41 42 No.Of Employees 663 879 945 1115 No. Of Foreign Correspondents 266 306 584 586 2. 10. Nature of Business The Bank engaged in all types of commercial Banking services within the stipulations laid down by Bank Companies Act 1991 and directives as received from Bangladesh Bank from time to time. All types of Commercial Banking Services are provided by the Bank within the stipulations laid down by Bank Companies Act. 1991 and directives as received from Bangladesh Bank from time to time.Commercial Banking is the core activity of Mercantile Bank Limited. The bank serves all type customers ranging from individuals to corporate bodies, both private and public. Mainly MBL collects cohere from the people at lower rate and invests the same to the people again at higher rate. And difference between lower rate of define and higher rate of investment is the meshing of t he Bank. MBL mainly invests in industrial sector like short term, Middle term as well as long term for import of capital machineries, establish new industry and working capital assistances with this Bank plays a significant role in Bangladesh economy. The functions of commercial banks are now wide and varied. However the unctions of commercial banks may broadly be classified into the side by side(p) three categories 1. General Banking 2. Credit and investment 3. Foreign Trade (Import, Export & Remittance) 2. 11. Financial products and services of MBL The bank has launched a number of financial products and services since its inception. Among them the followings have attained wide acceptance among the people ? non-homogeneous Deposit dodgings ? Double Benefit Deposit intent (DBDS) ? Family Maintenance Deposit (FMD) ? Mashik Sanchaya Prokalpa (MSK) Or Monthly nest egg Scheme (MSS) ? Quarterly Benefit Deposit Scheme ? 1. 5 Times Benefit Deposit Scheme ? Advance Benefit Deposit Sc heme (ABDS) OrAgrim Munafa Amanat Prokolpo (AMAP). Deposit Schemes Monthly Saving Scheme The crest objective of this scheme is to encourage the people to develop their habit of saving. beneath this scheme, one can save a immovable tot up of return every month and get a lucrative tot up of return after five, eight or ten geezerhood. Family Maintenance Deposit Scheme Under this scheme, one can deposit a certain step of gold for five years and in return he/she go forth receive benefits on monthly basis. Benefit start right from the stolon month of opening an greenback under the scheme and continue up to five years. On adulthood the principal total will be nonrecreational back. Double Benefit Deposit SchemeUnder this scheme, one can deposit a certain total of specie for a six year period. After six years, the deposit amount will be doubled. Quarterly Benefit Deposit Scheme Under the Quarterly Benefit Deposit Scheme, one can deposit for a period of three years and in ret urn depositor will receive benefits on tooshiely basis. Benefit starts right from the first quarter of opening an composition under the scheme and continues up to three years. On maturity the principal amount will be paid back. 1. 5 Time Benefit Deposit Scheme Under the 1. 5 Times Benefit Deposit Scheme, one can deposit a certain amount of money for 42 months or three and half years. On maturity, the depositor will receive 1. 5 time of the deposited amount.Advance Benefit Deposit Scheme Under this Scheme, one can deposit a certain amount of money for two years. The depositor will receive the benefit on yearly basis. The benefit amount of first year will be received in advance at the time of deposit. On maturity, the depositor will get back the principal amount with the benefit amount of second year. ? Various Credit Schemes ? Consumers Credit Scheme (CCS) ? Car Loan Scheme ? Doctors Credit Scheme ? Rural Development Scheme ? accept Financing ? personalised Loan ? Small Loan Loa n Products Consumer Credit Scheme Consumers Credit Scheme is one of the popular areas of collateral-free finance of the Bank.People with limited income can avail of credit facility to purchase household goods including computer and other consumer durables. Small Loan Scheme This scheme has been designed especially for the business community who need credit facility for their business and cant provide tangible securities. Lease Finance This scheme has been designed to assist and encourage the genuine and capable entrepreneurs and professionals for acquiring capital machineries, medical equipments, computers, vehicle and other items. tractableness and easier terms and conditions of this scheme have attracted the potential entrepreneurs to acquire equipments of production and services and repay gradually from earnings on the basis of Pay as you earn.Doctors Credit Scheme Doctors Credit Scheme is designed to facilitate financing to fresh medical graduates and established physicians t o acquire medical equipments and set up clinics and hospitals. Rural Development Scheme Rural Development Scheme targeted for the rural people of the country to make them self-employed through financing various income-generating projects. This scheme is operated on group basis. Woman Entrepreneurs Development Scheme Women Entrepreneurs Development Scheme has been introduced to encourage women in doing business. Under this scheme, the Bank finances the small and cottage industry projects sponsored by women. SME Loan SchemeSmall and Medium Enterprise (SME) Loan Scheme has been introduced to provide financial assistance to new or experienced entrepreneurs to invest in small and intermediate scale industries with a comparatively low rate of interest as the same is assisted by the Bangladesh Bank with refinancing facilities. Personal Loan Scheme Personal Loan Scheme has been introduced to extend credit facilities to cater the needs of low and fondness-income group for any purpose. Gove rnment and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations and teachers of recognized public and private schools, colleges and universities are eligible for this loan. Car Loan Scheme Car Loan Scheme has been introduced to enable middle-income people to purchase Cars/SUVs/Jeeps.Government and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations, teachers of recognized public and private universities and businessmen are eligible for this loan. Home Loan Scheme To meet the growing need of housing for middle and lower-middle income people, MBL has introduced Home Loan Scheme. We also support the Bangladesh Banks Home Loan Refinance Scheme. The Scheme boosts up the growth of housing sector. Such loan shall be available for purchase or construction of new apartments for self-residin g purpose. foreign Employment Loan Scheme Overseas Employment Loan Scheme is designed to facilitate the East Pakistani youths seeking employment aboard but who are unable to meet the expenses to reach the workplace from their own sources.The ultimate objectives of the scheme is to promote skilled / semi-skilled manpower to different countries across the world as well as to provide support to Government Policy considering priority of this sector. By availing loan under this scheme, the fighting(a) youths of middle and lower middle class can get overseas employment by avoiding borrowing from the illustrious class or village mohajon at a very high cost or selling their paternal properties. The scheme helps fetching foreign currency for the country as well as fulfill the Banks commitment to encourage micro-lending for poverty alleviation, improve the quality of life and thereby contribute to socio-economic development of the country. ? Foreign Exchange Services ? Export Finance ? Imp ort Finance ? Inward Remittance ? disregard L/C ? Shipping Guarantee 2. 12. Credit Policy of MBLMBL credit policy contains the views of total macro-economic development of the county as a whole by way of providing financial support to the Trade, Commerce and Industry. Throughout its credit operation Mercantile Bank Limited goes to very possible corners of the society. They are financing large and medium scale business house and industry. At the same time they also takes care entrepreneurs through its operation of lease financing and some micro credit, Small Loan scheme etc. As a part of its Credit Policy MBL through its credit operation maintains commitment for social welfare. The bank is glide path up with a scheme where the under privileged children will be given financial support for education and self-employment.From operational aspects it is observed that as a matter of policy. i. Mercantile Bank Limited put emphasis on the customer i. e. the Man and the Business not on the S ecurity in selecting borrowers. ii. It takes of variation in credit portfolio. iii. It takes care maintaining proper Mix of short, medium and ling term finance in its credit portfolio usually they do not go for long term Finance for a period not exceeding 5 years. iv. Charging of interest is flexible depending on insisting of the proposal and the customer pic Chapter 03 General Banking Activities 3. 1 Introduction 3. 2 Account Opening 3. 3 Different Types of Scheme and Features 3. Cash Department 3. 5 Clearing House 3. 6 Issuing PO, DD, TT 3. 7 Dispatch 3. 8 Issuing cheque 3. 9 Closing of an Account 3. 1 Introduction All business concerns earn a profit through selling either a product or service. A bank does not produce any tangible product to sell but does offer a variety of financial services to customers. General banking is the starting point of all the banking operations. It is the department, which provides day-to- day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring cheque. It opens new accounts, remit funds, issue bank draft and pay orders etc.Since bank is confined to provide the service everyday, general banking is also known as retail banking. This section provides the following services Primary Information Account Opening Cheque Issuing Pay order Issuing Issuing Telegraphic Transfer (TT) Issuing Demand Draft (DD) Dispatch patch Clearing Cash department PRIMARY INFORMATION Customer gets primary information about the banks services from this section. Then they are sent the other section under their demanding services. 3. 2 score OPENING There are different types of account as offered by MBL i. Savings Account ii. Current account iii. STD (Short term deposit) iv. FDR (Fixed deposit receipt) v. MSS (Monthly saving scheme) SAVINGS ACCOUNT This account is basically offered those customers who indirect request to save money at any time. Customer can save his/ her money tall y to his/ her firmness of purpose. The minimal amount of opening charge of savings account is TK. 1,000. But it should be point of referenceed that when customer want to close the tax is deducted from the interest and have to pay closing charge TK. 100. If want to transfer customer have to pay TK. 200 for transfer charge. Requirements Form must be properly filled up turn out a introducer who introduce the account holder Two copies of notch size of it picture of account holder One likeness of passport size photograph of nominee substantiate to fill up declaration form where must mention amount of each execution and annual turnover Have to fill KYC (Know Your Customer) form, Have to submit National ID Card ( for all customer) Have to submit student ID Card (for student) Have to submit trade clear (for business) Deed (for partnership) Have to submit TIN number Have to submit photocopy of passport. ? CURRENT ACCOUNT Current account mainly opened for the Companies and partnership firm. The amount of this accounts transaction would be big. The requirements of opening this account are given below. Requirements For Individual / Joint Account Two photographs of account holder. indistinguishability (copy of passport, National ID card, Commissioner Certificate). Joint Declaration Form (For joint a/c only). Employees Certificate (in part of service holder). One photographs of nominee. For Limited Company retroflex of valid trade license. retroflex of certificate of incorporation. certifiable Copy of Memorandum of Associations and Articles of Associations. Up to Date List of Directors. Board Resolution Regarding Opening and Operations of Bank Account With Mercantile Bank Limited Branch. (Resolution should be in accordance with the provision of Articles of Association of the Company. Copy of Certificate of Commencement of Business- for Public Limited Company Only. For Partnership Firms Copy of valid trade license. Copy of Partnershi p Deed. Letter of Account Agreement (Partnership) Duly Signed by all The Partners in Their Personal Capacity. Letter of Partnership Duly Signed by All the Partners in Their Personal Capacity. Club / societies account Two photographs of each account holder. Board Resolution for Opening A/C duly assured by President/ Secretary. List of Existing Managing Committee. Registration (if any). Rubber Stamp. Permission letter from Bureau of N. G. O. (In drive of N. G. O. A/C). ? SHORT TERM DEPOSIT(STD) This account is basically offered those customers who want to save money/ make transaction of a big amount at any time. The businessmen are mainly the customer of this account who makes huge amount transaction in a month.Customer can save his/ her money according to his/ her declaration. The minimum amount of opening charge of savings account is TK. 100,000. But it should be mentioned that when customer want to close, the tax is deducted from the interest and have to pay closing charge TK. 100. If want to transfer customer have to pay TK. 200 for transfer charge. Requirements Form must be properly filled up Have a introducer who introduce the account holder Two copies of passport size photograph of account holder One copy of passport size photograph of nominee Have to fill up declaration form where must mention amount of each transaction and annual turnover Have to fill KYC (Know Your Customer) form, Have to submit National ID Card ( for all customer) Have to submit student ID Card (for student) Have to submit trade license (for business) Deed (for partnership) Have to submit TIN number Have to submit photocopy of passport 3. 3Different Types of Scheme and Features ? MASHIK SHANCHOY SCHEME The money is fixed up to a certain months or year. Bank gives them interest against this money. If customer doesnt encashment his/ her fixed deposit at a time the amount is auto renewed and the interest is applied automatically at the account. substance TK. d TK. 1000 TK. 1500 TK. 2500 TK. 000 historic period 5 years 38250 76500 114750 191250 382500 8 years 71500 143000 214500 357500 715000 10 years 100000 200000 300000 500000 one thousand thousand ? DOUBLE advantage SCHEME Objectives ? ordain maximum benefit. ? Help in meeting specific needs like education, marriage etc. Deposit becomes double in seven and half years. Mode kick upstairs of the deposit is 7. 5 years. Amount of DepositPeriod Amount Payable 1, 00,000 7. 5 Years 2, 00,000 Other Features ? The Minimum amount of deposit is BDT 50,000. 00(Fifty thousand) or its doubles. ? All taxes/ trade/levy and /or any other surcharges concisely in force or that may be imposed by the Government of Bangladesh (GOB) from time to time will be deducted/ recovered from the deposit account under this scheme. ? In case of premature encashment interest will be paid on Saving A/C Rate. ? Loan may be grant up to maximum 80% of the deposited amount but minimum principle amount must be BDT 20,000. 00. Loan treat fee be realized BDT 50. 00 only and usual stamp costs also be realized. For example Initial amount is TK. 1000,000 The bank give interest TK. 100,000 against TK. 100,000 deposit Customer gets TK. 190,000 (200,000-100,emailprotected% tax = TK. 190,000) Requirements Form must be properly filled up, One copy of passport size photograph of account holder, One copy of passport size photograph of nominee, ? ADVANCED DEPOSIT SCHEME Objectives ? chafe Extra benefit from Minimum Deposit. Mode Maintained for a period of 2 (Two) years. Minimum deposit amount 1,00,000(One Lac) only. Interest Rate Per BDT One Lac BDT 1 Lac (One Lac) , Tk. 9,500. 00 for first year Tk. ,09,250. 00 for second year. Other Features o All taxes/duty/levy and/or any other surcharges presently in force or that may be imposed by the government of Bangladesh from time to time in Deposit Accounts will also be applicable for the account for the account opened under this scheme and such taxes/duty/ levy and/or any other surcharges shall be deducted/ recovered from the deposit account under this schemes. o Loan may be minded(p) up to maximum 70% of deposit. ? Times Benefit Deposit Scheme Under the 1. 5 Times Benefit Deposit Scheme a deposit of minimum BDT 50,000. 00 (fifty thousand) or its multiples will be received for a period of 4. 2 years.On maturity, 1. 5 times of the deposited amount will be paid back to the account holder as per example given below Example Initial Deposit (BDT)50,000. 001, 00,000. 005, 00,000. 00 Return after 4. 2 years (BDT) 75,000. 00150000. 00 750000. 00 Other Features ? All taxes/duty/levy and /or any other surcharges presently in force or that may be imposed by the Government of Bangladesh (GOB) from time to time will be deducted/ recovered from the deposit account under this scheme. ? In case of premature encashment interest will be paid on Saving A/C Rate. However, no interest shall be paid if premature encashment take place before expiry of 1 ( one) year. In the event of death of the depositor before the maturity, the deposit account may be encased (premature) as per rule or may be continued up to maturity on written approach by the nominee(s). ? Loan may be give up to maximum 80% of the deposited amount but minimum principle amount must be BDT 20,000. 00. ? Loan touch on fee be realized BDT 50. 00 only and usual stamp costs also be realized. ? FAMILY precaution SCHEME Objectives ? Help the retired persons for investing their retirement benefits. ? Create investment opportunities for Non-Resident Bangladeshi. ? Explore investment opportunities for school, college, university etc. ? Give investment opportunities for Trust Foundation etc. Mode Deposit a fixed amount of money for 05 (Five) years.Depositor will get a certain sum of money in each month equaliser to his/her deposit during the entire tenure. Benefits Tenure of deposit is 05 (Five) years. Minimum amount of required deposit is TK. 50,000. 00 or its multiple Dep ositMonthly Benefit (Amount in TK. ) 1, 00,000800 2, 00,0001, 600 3, 00,0002, 400 Other Features o The Minimum amount of deposit is BDT 50,000. 00 (Fifty thousand) or its multiples. o All taxes/duty/levy and /or any other surcharges persently in force or that may be imposed by the Government of Bangladesh (GOB) from time to time will be deducted/ recovered from the deposit account under this scheme. o In case of premature encashment interest will be paid on Saving A/C Rate. A saving account will be needed to be maintained to receive quarterly benefit recompense. o Loan may be granted up to maximum 80% of the forced encashment value on the date of loan processing. During the period of continuance of loan, monthly benefits of FMD account will be credited only to loan account. o Loan processing fee be realized BDT 50. 00 only and stamp costs also be realized. ? QUARTERLY BENEFIT SCHEME The Quarterly Benefit Deposit Scheme will be maintained for a period of 3 (three) years and the mi nimum amount of deposit is BDT 50,000. 00 (fifty thousand) or its multiples. Interest will be paid on quarterly basis as per example given below. On maturity the principal amount will be paid back.Initial Deposit (BDT)TermQuarterly Benefit Payable (BDT) 50,000 3 Years 1,200 100,000 3 Years 2,400 200,000 3 Years 3,600 Other Features ? All taxes/duty/levy and /or any other surcharges presently in force or that may be imposed by the Government of Bangladesh (GOB) from time to time will be deducted/ recovered from the deposit account under this scheme. ? Loan may be granted up to maximum 80% of the forced encashment value on the date of loan processing. During the period of continuation of loan, quarterly benefits will be credited only to loan account. ? Loan processing fee be realized BDT 50. 00 only and usual stamp costs also be realized. FIXED DEPOSITThe money is fixed up to a certain months or year. Bank gives them interest against this money. If customer doesnt encashment his/ her fixed deposit at a time the amount is auto renewed and the interest is applied automatically at the account. Amount Months/ Year Interest TK. 10,000 1 month/ 2 months/ 3 months 8. 5% TK. 10,000 3 months 11. 50% o Form must be properly filled up One copy of passport size photograph of account holder o One copy of passport size photograph of nominee 3. 4 Cash Department Opening of Cash Beginning balance is used to start daily transaction & maintenance of Receipt and Payment Registers while receiving & paying different amount of cash. Previously issued cheque will be paid if issued 6 months before. Advance issued cheque cannot be made payment even one day before. Evening Banking Can only receive cash. No payment can be made except some special cases. Issue Note Notes issued by the bank & accepted by the people, fresh notes. Non-issue Note Notes cannot be issued for public like torn, mutilated notes impure Notes etc. 3. 5 Clearing House Functions of Clearing Clearing stands for mut ual settlement of claims made in among member banks at an agreed time and place in respect of instruments drawn on each other. Clearing house is an arrangement under which member banks agree to meet, through their representative, at the appointed time and place to deliver instruments drawn on them. The net amount payable or receivable as the case may be, is settled through an account kept with the controlling bank (Bangladesh Bank). pic Types of clearing Outward clearing Inward clearing Types of returns Outward return Inward return Clearing (Outward) process grade First tier Collection Branch Second tier Principal Branch/local office Third tier Clearing house (Bangladesh Bank) Clearing (Inward) process tierFirst tier Clearing house (Bangladesh Bank) Second tier Principal Branch/ Main Branch Third tier give Branch 3. 6 ISSUEING PO, DD, TT ? Pay Order This is one type of security. This can not be transferred. Anyone can draw a pay order. The pay order can be encashment from an y bank. Amount Commission Vat 110,000 25 4 10,000 1,000,000 50 8 100,000