Sunteți pe pagina 1din 313

A Study on Mercantile Bank Limited

An Internship Report
On
Foreign Exchange Operations of Mercantile Bank Limited: A Case Study on Main Branch, Dilkusha, Dhaka.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

An Internship Report
On Foreign Exchange Operations of Mercantile Bank Limited:

A Study on Mercantile Bank Limited

A Case Study on Main Branch, Dilkusha, Dhaka. Prepared for ABIDA SAYEEDA MALLIKA
Lecturer in Marketing Department of Business Administration Stamford University Bangladesh.

A Study on Mercantile Bank Limited

Prepared by Md. Rashedul Haque


ID: BBA03010280 Department of Business Administration Stamford University Bangladesh.

A Study on Mercantile Bank Limited

Letter of Transmittal

To

A Study on Mercantile Bank Limited

Abida Syeeda Mallika Lecturer in Marketing Department of Business Administration Stamford University Bangladesh. Subject: Submission of Internship Report. Dear Sir, It is my privilege to let you know that as partial fulfillment of the requirements for the degree of Bachelor of Business Administration (BBA), I have completed my internship program in the Mercantile Bank Limited, Main Branch. I have to furnish a report based

A Study on Mercantile Bank Limited

on my practical experience. The report focuses mainly on the foreign exchange operations of Mercantile Bank Limited. It was stimulating opportunity and a valuable experience for me to the real business world. I am grateful for providing me such an opportunity to gather practical experience of working in a private commercial bank, like Mercantile Bank Limited. Hope that you would be very pleased to accept my report and oblige me. Sincerely Yours

A Study on Mercantile Bank Limited

Md. Rashedul Haque Rony ID BBA 03010280 Department of Business Administration Stamford University Bangladesh.

ACKNOWLEDGEMENT

A Study on Mercantile Bank Limited

First and foremost, I would be grateful to the Almighty Allah as I have successfully completed this report within due time and for all the incidences I had to undergo while preparing this report. Then I would like to take the opportunity to express my gratitude to my honorable faculty Abida Syeeda Mallika, Lecturer in Marketing, Department of Business Administration, Stamford University Bangladesh. Without his continuous support and suggestion, this report would not come into light. I would like to thank K.M.Alamgir Kabir, Mohammed Shamim Hossain, Ajit Kumar Datta (Principal Officer of Mercantile Bank Ltd), Muktader ( Probationary Officer), S.M

A Study on Mercantile Bank Limited

Shamsuzzaman and all other employees of Mercantile Bank Limited who helped me a lot to collect information for preparing my report. Besides I am also grateful to the authors, researchers, and article writers whos Books, Reports, and Journals have helped me to prepare my Internship Report successfully.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

Executive Summary
A few years back also, banks are nothing but a medium whose only task is to collect money from people who have excess of it and give it to those people who need it.But very recently banks have diversified their operations into various sectors. Even, they have notification able contribution in maintaining the global relation among various countries of the world. The MBL is one of the newest banks of Bangladesh; in fact, it has been doing business just over 10 years in the country. However, in this short period of time, it has already made a significant impact on the economic, financial, and social system of Bangladesh. Mercantile Bank Ltd has a long and relishing heritage. Mercantile Bank Limited (MBL) started its journey in the financial sector of the country as an investment

A Study on Mercantile Bank Limited

company back in May 20, 1999. The company operated up to 1999 with 9 branches and thereafter with the permission of the Central Bank converted in a full-fledged schedule private commercial bank in June 2, 1993 with paid up capital of Tk. 39.00 crore to serve the nation from a broader platform. The Bank and its first Branch at the busiest commercial hub of the country at 61, Dilkusha commercial Area, Dhaka was opened. My Report titled Foreign Exchange Practices in Private Banks: A Case Study of Mercantile Bank Ltd. is conducted to describe the section as well as the organization where I was placed as an Intern. This includes an overview of the organization, structures, products and services offered by the bank, and various customer services facilities. In addition to that, this report also aims to shed some light on the Foreign Exchange Department. The first chapter gives a broad over view about the origin of the report, objective of the report, methodology of preparing the report, data collection procedure and its source, scope and limitations faced while preparing the report. After the first part it has been

A Study on Mercantile Bank Limited

focused in the second part of the report. The overview consists of the definition and objective of the bank, historical background of the banking institutions and banking operations in Bangladesh. The report part started from the third chapter. In that chapter, describe the theoretical framework of foreign exchange and other foreign exchange activities. The fourth chapter is highlighted of Mercantile bank with SWOT analysis. The fifth chapter consists General foreign exchange policy of the bank. The sixth chapter consists of performance evaluation of the bank in 2009. The seventh & last chapter highlighted with recommendations, problems and Conclusion.

A Study on Mercantile Bank Limited

Table of Contents
Chapte r Letter of Transmittal Acknowledgement Executive Summary

Topic

Page No.

Chapter-1 Introduction

A Study on Mercantile Bank Limited


1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Title of the Report Background of the Study Origin of the Study Rationale of the report Objectives of the Study

Justification of the study


Limitations Sources of data Methodology of the Study

Chapter-2 Banking sector in Bangladesh


2.1 Definition of Bank

A Study on Mercantile Bank Limited


2.2 2.3 2.4 Objectives of Bank Historical background of banking sector in Bangladesh Banking operation in Bangladesh

Chapter-3 Foreign exchange: A theoretical framework


3.1 3.2 3.3 3.4 3.5 3.6 Define foreign exchange Types of foreign exchange Importance of bank foreign exchange Foreign exchange planning Foreign exchange and Bangladesh Bank Tools for foreign exchange

A Study on Mercantile Bank Limited

Chapter-4 Overview of Mercantile Bank LTD.


4.1 4.2 4.3 4..4 Background Corporate information Organizational Structure Number of branches

A Study on Mercantile Bank Limited


4.5 4.6 4.7 4.8 4.9 4.10 Number of employees Vision statement of the Bank Mission statement of the Bank Product scheme Principal Activities General Banking Foreign Exchange policy of the bank SWOT analysis of MBL

4.11
4.12

Chapter-5 General Foreign exchange policy of MBL

A Study on Mercantile Bank Limited


5.1

General Foreign exchange policy of MBL

Chapter-6
6.1

Performance Evaluation of the Bank Performance Evaluation of the Bank

Chapter-7 Recommendations and Conclusions

A Study on Mercantile Bank Limited


7.1 8.2 8.3 Problems for the MBL Recommendation for the MBL Concluding remarks 72 73 74

CHAPTER-1

A Study on Mercantile Bank Limited

INTRODUCTION

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

1.1 Title of the report


To write a report it is necessary to select a topic. A well-defined topic reflects what is going on to be discussed throughout the report. The topic that has been assigned by organization supervisor is The foreign exchange operations the ultimate way to success. The report has discussed how the bank can improve the foreign exchange operations.

A Study on Mercantile Bank Limited

1.2 Background of the report


As a requirement for the fulfillment of our BBA program, in the Faculty of Business, Stamford University Bangladesh we have to perform three months internship. As a student of BBA I have gathered enough theoretical knowledge, and now I want to put my potentiality in the practical field. Mercantile Bank Ltd has given me the opportunity to commence my internship. During the internship program, students are required to prepare a report on the organization where they have been attached. Mercantile Bank Ltd. and all the officials always encourage and welcome the students for their internship program. I have tried my best to properly apply my potentiality and theoretical knowledge to make the report

A Study on Mercantile Bank Limited

reliable and information worthy. My honest effort will be regarded as successful if this dissertation fulfills the objective of the program.

1.3 Origin of the report


In todays world only academic education does not make a student perfect to become competitive with the outside world. Internship is highly needed to gain idea, knowledge and experience.

A Study on Mercantile Bank Limited

Stamford University Bangladesh (SUB), one of the reputed private universities in Bangladesh, has designed the curriculum of the BBA course such a way that the international standard graduates will be produced. After completing 129 credit hours, one student needs to go for further 03 credit hours internship program in a commercial organization. From this internship program students get the opportunity to learn facing the real business world. Mercantile Bank Limited is a place where I could learn the business dealings. This organization has created a positive image to the customers mind by providing better

A Study on Mercantile Bank Limited

service. This bank has introduced some modern banking scheme that has got high market demand. As it maintain the pace with the competitive business world, its activities, culture, philosophy and style leads an intern student to be the best at any field of working life. As an intern student I have got the opportunity to work with this organization for three months and acquire idea about real business world.

1.4 Rationale of the Study

A Study on Mercantile Bank Limited

This report is broadly organized into Introduction (Chapter-1),Banking sector in Bangladesh (Chapter-2), Foreign Exchange Framework (Chapter-3), Overview of Mercantile Bank LTD. (Chapter-5), General foreign exchange policy of the bank (Chapter-6), Performance evaluation of the bank (Chapter-7), Recommendations and Conclusion (Chapter-8) on the assigned topic Foreign Exchange of Mercantile Bank Limited : A Case Study on Main Branch, Dilkusha, Dhaka of the bank. Finally it includes the evaluation of foreign exchange performance, findings, and recommendation to make understood the scope of foreign exchange operation with its constraints of MBL.

1.6 Justification of the study

A Study on Mercantile Bank Limited

As a requirement for the fulfillment of our BBA program, in the Faculty of Business, Stamford University Bangladesh we have to perform three months internship. As a student of BBA I have gathered enough theoretical knowledge, and now I want to put my potentiality in the practical field. Mercantile Bank Ltd has given me the opportunity to commence my internship. During the internship program, students are required to prepare a report on the organization where they have been attached. Mercantile Bank Ltd. and all the officials always encourage and welcome the students for their internship program. I have tried my best to properly apply my potentiality and theoretical knowledge to make the report reliable and information worthy. My honest effort will be regarded as successful if this dissertation fulfills the objective of the program.

A Study on Mercantile Bank Limited

1.7 Methodology of the Study


I use both primary and secondary data for collecting information. How I went through the process is mentioned here: Primary Data: Data has been collected primarily through correspondence with the personnel working in different department of MBL, Dilkusha Branch, Head Office. Secondary Data: Sources of secondary data are showing below by the following table for easy and quick understanding.

A Study on Mercantile Bank Limited

Table Sources of Secondary Information


Sources Validity Reliability Practicality

Annual Report Of 2009 Internet Text book

Moderate High High

High High High

High High High

A Study on Mercantile Bank Limited

FRAMEWORK OF THE OVERALL STRUCTURE OF THE TOTAL WORK

A Study on Mercantile Bank Limited Appointing as an intern Dividing the study work Doing work in different department of ABBL Collecting information from ABBL Preparation of the Final Report Selecting the topic of the study Analysis of collected data ninformatio Preparing outline

Collecting secondary information

A Study on Mercantile Bank Limited

1.8 Sources of Data


Collection of Data: Primary data are collected by using interviewing technique. The report is an exploratory research and for qualitative survey open ended question were ask to the Bank official.

A Study on Mercantile Bank Limited

Population: All the Branches of MBL located in everywhere in Bangladesh has been taken into consideration as population. Sample: MBL, Motijheel Branch, is the vital sample.classification, analysis, interpretations and presentation of data; some arithmetic and graphical tools are used in this report for analyzing the collected data and to classifying those to interpret them clearly.

Findings of the study:

A Study on Mercantile Bank Limited

The collected data were scrutinized very well and were pointed out and shown as findings. Few recommendations are also made for improvement of the current situation. Final report preparation: On the basis of the suggestions of our honorable faculty advisor some corrections were made to present the paper in this form.

1.9 Limitation of the study


To prepare a report on the achieved practical experience in a short duration

A Study on Mercantile Bank Limited

(only three months) is not an easy task. In preparing this report some problems and limitation have encountered which are as follows: Time frame for the research was very limited. Large-scale research was not possible due to constraints. In many cases, up to date information is not published. The information regarding the competitors is difficult to get. Time was one of the concerns for not having the exact scenario. And it is my first work, and inexperience was a problem.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

CHAPTER-2

A Study on Mercantile Bank Limited

BANKING

SECTOR IN

A Study on Mercantile Bank Limited

BANGLADESH

A Study on Mercantile Bank Limited

2.1 Definition of the bank


Bank is defined as a financial institution that collects deposits from various individual and organizations and provides loans to those who need it. But modern banks do not

A Study on Mercantile Bank Limited

mean only the means of collecting and disbursing money to various entities. Rather it provides various services to various entities which facilitate their business operations. The functional definition of bank is that it is a financial institution, which accepts money from its customers as deposit and gives money as loan to the borrowers. According to a prominent economist R.S. Sayers, A Bank is an institution whose debts are widely accepted in settlement of other peoples debts to each other. Another economist C. Cross defined , A Bank is financial intermediary-a dealer in loans and debts.

2.2 Objective of Mercantile Bank


Strategic Objectives:

A Study on Mercantile Bank Limited

To achieve positive 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 it serves. Financial Objectives: To achieve a return on shareholders equity of 20% or more, on average.

A Study on Mercantile Bank Limited

2.3 Historical Background of the banking instituions in Bangladesh


The word bank, which means a financial intermediary that collects deposits from savers and disburses loans to the fund seekers and acts as the principal medium internal resources mobilization of an economy, is not the result of a short period. Instead, it has to pass through a very long period. In the ancient age, people had to satisfy all of their needs by themselves. At this stage, there was no surplus production. Hence the concept of transaction was yet to be introduced. But, as the division of work took place in the society, there was surplus as well as deficit production in each society. This lead to the introduction of BARTER

A Study on Mercantile Bank Limited

SYSTEM in which commodities were exchanged for commodities directly. But this transaction system could not last for a long time for some problems such as: Double coincidence of needs: this means the needs of two persons must meet the surplus that they have. For example, one person has some surplus rice and another person has some surplus cloths. If they the person with rice has the need of cloths and the person with cloth needs rice, only then the transaction will take place. But it was difficult Indivisibility of goods: all goods are not divisible and not of same worth. This caused a big problem for transaction. For example, a cow is not exchangeable for 1 meter cloth, neither it can be dividable in smaller units. As result, people had o think for a mechanism that would solve these problems and facilitate the transaction process. This resulted in the introduction of money in the form of stone, metals, bones etc.

A Study on Mercantile Bank Limited

After the introduction of money, the volume of transactions increased to a great extent. People with surplus money started to feel insecure about their money. At that stage, goldsmiths, priests, businessmen were the most honorable and trusted people in the society. People started to keep their surplus money and jewelry deposited with them. They lent this money without any charge to those who needed money. This was the transaction of utmost faith. From here, the history of bank counts. After some time, businessmen started to charge some charges on those who took loan from them. It was the goldsmiths who introduced the deposit slips in the history. Day by day, volume and complexity of transactions kept increasing, so as the concept of bank.

A Study on Mercantile Bank Limited

The banking systems of ancient age and the banking systems of modern age are two distinctively separate entities. The situations and flaws that resulted the banking systems in the present form are highlighted below: As early as 2000 B.C., Babylonians had developed a system of bank. In ancient Greece and Rome the practice of granting credit was widely prevailed. Traces of Credit by compensation and by transfer orders were found in Assyria, Phoenicia and Egypt before the system attained full development in Greece and Rome. The book of old Hindu saw giver, MANU, is full of regulations for governing credit. He speaks of judicial proceedings credit instruments were called for, interest on loans, on bankers, users and even of the renewals of commercial papers.

A Study on Mercantile Bank Limited

In Rome, bankers were called Argentarii. Some banks carried business on their own account and others were appointed by the Government to receive the taxes. They used to transact their business on the similar lines as those of the modern banks. Loan banks which lent money to the poor without any interest on the security of land for a period of 3 of 4 years were also common in Rome. The Bank of Venice, established in 1157, is supposed to be the most ancient bank. It was not a bank in the modern sense being simply an office for the transfer of public debt. History shows the existence of a Monte in the Florence in 1336/ the meaning of Monte is given in the Italian Dictionary 1959 as a standing bank or mount of money, as they have in diverse cities of Italy. Banbrigge, an English writer, speaks about the three banks of Venice meaning the three public loans of Monte.

A Study on Mercantile Bank Limited

As early as 1349, the drapers of Barcelona carried on business of banking. It was subject to official regulations. The drapers were not allowed to commence business until they had given sufficient security. During 1401, a public bank was established in Barcelona. It used to exchange money, receive deposits, discount bills of exchange, both for citizens and foreigners. During 1407, the Bank of Genoa was established. The Bank of Amsterdam was established in 1609 to meet the needs merchants of the city. It accepted all kinds of specie on deposits. These deposits could be withdrawn on demand or transferred from the account of one person to another. The bank also adopted a plan by which a depositor received a kind of certificate entitling him to withdraw his deposits within six months. These written orders, in the course of time, came to be used in the same manner as the modern cheque. It is interesting to see that most on the European banks now in existence were formed on the modes of the Bank of Amsterdam.

A Study on Mercantile Bank Limited

The beginning of the English banking may correctly be attributed to the London goldsmiths. They used to receive their customers valuables and funds for safety custody and issue receipts acknowledging the same. These notes, in the course of time, became payable to bearer on demand and hence enjoyed considerable circulation. In fact, the goldsmiths notes may be considered as the precursor of the bank note. The business of the goldsmiths got a rude shock by the ill treatment of the Government of Charles II, under the Cabal ministry. In the words of Bagehot; It had perpetrated one of those monstrous frauds which are likewise gross blunders. The goldsmiths used to deposit their reserve of treasure in the Exchequer with the sanction and under the care of government. But Charles II shut down the Exchequer and paid nothing to the goldsmiths. However, the ruin of goldsmiths marks a turning point in the history of the English

A Study on Mercantile Bank Limited

banking. It led to the growth of private banking and the establishment of the Bank of England. In the India, as early as Vedic period, banking existed in the crudest form. The bloods of Manu contain references regarding deposits, pledges and policy of loans and rates of interest. Truly, banking in those days largely meant money lending and they did not know the complicated mechanisms modern banking. This is true not only in case of India but also in case of other countries. The evolution of banking institutions became more and more organized as the time passed. In various periods, different amendments were made in different countries throughout the world. So, different countries have different contributions to the banking institutions to appear in the present form.

A Study on Mercantile Bank Limited

2.4. Banking operation in Bangladesh


Economic history shows that development has started everywhere with the banking system and its contribution towards financial development of a country is highest in the initial stage. The case studies of some particular developed countries also show the useful roles played by the banks in economic development process of local communities. Bank is a financial intermediary accepting deposits and granting loans; offers the widest menu of services of any financial institution.

A Study on Mercantile Bank Limited

Banks are the most important financial institution in the economy. They are the principal sources of credit (loan able funds) for millions of individuals and families for many units of the government. At middle of 2001 there were 52 scheduled Banks. But during 2000, two foreign banks. Standard Chartered Bank and ANZ Grind lays Bank PLC have been Marged as standard chartered Grindlays reducing the total number of scheduled Bank in Bangladesh to 51. Thus there are 51 scheduled Banks in Bangladesh of which 4 are nationalized , 29 are private Banks of which 5 are Islamic Banks, 12are foreign Banks including Islamic Bank and 5 are specialized Banks.

A Study on Mercantile Bank Limited

In India the first bank, The bank of Hindustan was established in 1700. During the 18th and 19th century there were several banks like the bank of Calcutta, Central Bank of India, the Bank of Madras and the Bank of Bombay established. The Banking Companies Ordinance was promulgated on the 7th June 1962. This has been adopted in Bangladesh and is applicable to the banking companies only. Nothing of this ordinance shall apply to a co-operative bank registered under the cooperative Securities Act. 1912. Bangladesh has a mixed banking system comprises of nationalized, private and foreign commercial banks. Bangladesh Bank (BB) has working as the central bank of the country since the independence of the country. Its prime jobs include issuing currencies,

A Study on Mercantile Bank Limited

maintaining foreign exchange reserve and providing transaction facilities of all public monetary mattes. BB is responsible for planning and implementing the governments monetary policy. The banking sector of Bangladesh comprises of four categories of scheduled banks. These are nationalized commercial banks (NCBs), government owned development finance institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs).

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

CHAPTER 3 FOREIGN
EXCHANGE:

A Study on Mercantile Bank Limited

THEORETICAL FRAMEWORK

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

3.1 Foreign Exchange- its meaning and definition: Foreign exchange refers to the process or mechanism by which the currency of one country is converted into the currency of another country. Foreign exchange is the means and methods by which rights to wealth in a country's currency are converted into rights to wealth in another country's currency. In banks when we talk of foreign exchange, we refer to the general mechanism by which a bank converts currency of one country into

A Study on Mercantile Bank Limited

that of another. Foreign Trade gives rise to foreign exchange. Modern banks facilitate trade and commerce by rendering valuable services to the business community. Apart from providing appropriate mechanism for making payments arising out of trade transactions, the banks gear the machinery of commerce, specially in case of international commerce, by acting as a useful link between the buyer and the seller, who are often too far away from and too unfamiliar with each other. According to Foreign Exchange Regulation Act (FERA) 1947, "Any thing that conveys the right to wealth in another country is foreign exchange. Foreign exchange means and

A Study on Mercantile Bank Limited

includes all deposits, credits and balances payable in foreign currency as well as foreign currency instruments such as drafts, TCs. Bill of Exchange, promissory Notes and Letters of Credit payable in any foreign currency. ". This definition implies that all business activities relating to Import, Export, Outward & Inward Remittances, buying & selling of foreign commissions, etc. come under the purview of foreign exchange business. Foreign exchange department of banks plays significant roles through providing different services for the customers.

A Study on Mercantile Bank Limited

The international trade can be illustrated by the following diagram


Contract

of sale (1)

Contract of sale (1)

Exporter
(Beneficiary)

Ships Goods to

(5)

Importer (Applicant)

Forwards L/C to

(4)

Presents documents and obtains payment from (6)

Recovers Amount from

(8)

Applies for opening of L/C (2)

Advising/ negotiating

Bank

Obtains reimbursement from (7)

Issuing Bank

Opens L/C and send it to (3)

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

3.2 Types of Foreign Exchange:


There are mainly three types of transactions which lead to foreign exchange. These are: a) Import

A Study on Mercantile Bank Limited

b) Export c) Foreign Remittance

Foreign Exchange Department

L/C

Foreign Remittance

A Study on Mercantile Bank Limited


Import Export Foreign Currency A/C Inward Remittance Outward Remittance

3.3 Importance of bank foreign exchange


The foreign market (forex, FX, or currency market) is a worldwidechange decentralized over-the-counter financial market for the trading of currencies. Financial centers around

A Study on Mercantile Bank Limited

the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The primary purpose of the foreign exchange market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import European goods and pay Euros, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) highyielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.[1] In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started

A Study on Mercantile Bank Limited

forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system. The foreign exchange market is unique because of its* Huge trading volume, leading to high liquidity * Geographical dispersion * Continuous operation: 24 hours a day except weekends, ie trading from 20:15 UTC on Sunday until 22:00 UTC Friday * The variety of factors that affect exchange rates * The low margins of relative profit compared with other markets of fixed income

A Study on Mercantile Bank Limited

* The use of leverage to enhance profit margins with respect to account size As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding market manipulation by central banks.[citation needed] According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, as of April 2007. $3.21 Trillion is accounted for in the world's main financial markets. The $3.21 trillion break-down is as follows: * $1.005 trillion in spot transactions * $362 billion in outright forwards * $1.714 trillion in foreign exchange swaps

A Study on Mercantile Bank Limited

* $129 billion estimated gaps in reporting Forex is an international currency trading market. In the modern world, national currencies are independently valued due to their backing in a central banking system that is specific to its nation. However, each currency, from the most valuable and influential to the weakest with little influence, are all interconnected and dependent upon each other for stabilization and value. The trade between currencies is an important part of the overall value of a single nation's currency. This active exchange also provides a snapshot in time that tells financial industry experts what the state of the global economy is in response to a variety of external events and influences. The Forex market is the place where all of this happens. Foreign exchange trading is always happening, and its reach spans the globe. For example, as the currency markets open at the beginning of the day on European continent, the Forex markets in Asia to the east are closing for the trading

A Study on Mercantile Bank Limited

day. After Europe completes its trading day, the countries in the north, central and southern Americas are opening for their turn at the Forex market. The markets in Japan, China, Australia, including all the regional markets in that part of the world, will be soon awake to a new trading day as the Americas close theirs. This cycle of trading activity continues in sequence around the world, creating an active market. Who engages in Forex trading? The major players in foreign exchange markets are banks, large commercial enterprises, national central banks, hedge funds, investment management firms, retail traders, and individual investors. National central banks and hedge funds are the two most influential participants in the foreign currency market. Central banks trade on the market for a variety of reasons. Two examples are to stabilize their own currencies, or to synchronize

A Study on Mercantile Bank Limited

their interest rates with other national interest rates. Central banks also trade on the foreign currency market to manipulate their currency in order to manage economic influences like inflation, and to control the supply of money. Hedge funds represent the more speculative end of the foreign exchange trading spectrum. The trading done by hedge funds in the international currency exchanges often takes advantage of the environment where regulation is scarce. Hedge funds can control significant blocks of a nation's securities, and can actually undermine the attempts of national central banks to stabilize a currency if recent market and world events make such adjustments necessary. The recent Asian currency crisis demonstrates how critically exchange rates impact economic developments. A key factor leading to the crisis was the maintenance of pegged exchange rate regimes which encouraged external borrowing and resulted in

A Study on Mercantile Bank Limited

excessive foreign exchange risk exposure. Wide swings of the yen/dollar exchange rate also contributed to the crisis. Since the international business environment has no universal medium of exchange, exchange rates are a necessity for international trade. Presently, both translation and conversion of foreign currency involve the use of exchange rates. Therefore, in order to gain a more through understanding of foreign currency translation, it is important to examine the nature of exchange rates and the critical role they play in the international economy. The recent Asian currency crisis demonstrates how critically exchange rates impact economic developments. Stanley Fischer, First Deputy Managing Director of the International Monetary Fund (IMF), noted that one of three key factors that led to the crisis was the maintenance of pegged exchange rate regimes for too long which encouraged external borrowing and led to excessive exposure to foreign exchange risk in both the financial and corporate sectors. Also contributing to the crisis were wide swings

A Study on Mercantile Bank Limited

of the yen/dollar exchange rate over the past three years. Fischer explained that the crisis erupted during the summer in Thailand and the contagion to the regions other economies appeared relentless. As currencies continued to slide, debt service costs rose. This led domestic residents to hedge their external liabilities and intensified exchange rate pressure. One of the problems the IMF has faced in trying to help stem the crisis is that it took months to gauge the magnitude of the problem in the face of Asia's opaque accounting and financial secrecy. This was compounded by a "crazy quilt" of currency regimes and financial systems in the region (Bremner and Engardio 1998). The key to stemming the crisis remains restoring confidence in and stabilizing the regions currencies. The $1.5 trillion-per-day foreign exchange (FX) market surpasses stocks and bonds as the largest market in the world. Foreign exchange markets are critical for setting exchange rates between countries.

A Study on Mercantile Bank Limited

Liquidity In terms of international trade, liquidity is the ease in which foreign currency is converted into domestic currency. FX markets, such as the New York Mercantile Exchange, match buyers and sellers to bring about speedy, orderly transactions. Rates Buyers and sellers set prices using the auction method in the FX market. Sellers try to earn the highest "ask" price possible, and buyers try to purchase currency at the lowest "bid." Buyers and sellers meet at the "spot" price, the current value and exchange rate for a particular currency against others. Reserves

A Study on Mercantile Bank Limited

International governments enter the FX market to build and manage foreign exchange reserves. They build the reserves to make official payments and influence domestic currency values. International Trade Businesses rely on FX markets to buy currency that is spent to obtain overseas goods. Corporations will also look to FX markets to convert international earnings back into the domestic currency. Hedging

A Study on Mercantile Bank Limited

Traders use foreign exchange derivatives, which "derive" their valuations and costs from the spot market. Options and futures contracts effectively lock in exchange rates for a set period, to hedge against the risks of currency fluctuations. The importance of foreign exchange is described in brief as under:1) Foreign exchange reserves shows the financial strength and the stage of development of the economy. 2) The acceptance of currency at a predetermined rate makes the international trade easy. 3) The foreign exchange ratio shows direct relationship between the prices of the commodities in the national and international market. 4) The foreign exchange balances of a country directly affect the rates of exchange. A hard currency nation has stability in foreign exchange rate.

A Study on Mercantile Bank Limited

5) The rising foreign exchange balances of a nation increases its credit worthless in the international capital market.

3.4 Foreign Exchange planning


We offer full Foreign Exchange facilities. Whether you need Foreign Currency, Traveller's Cheques, Letters of Credit, Forward Exchange Contracts or Drafts, we ensure that your Foreign Exchange requirements are handled quickly and efficiently. Drafts The following should be taken into consideration when considering Drafts: Drafts are not drawn on the issuing bank, but on the issuing bank's foreign correspondent.

A Study on Mercantile Bank Limited

Drafts are not a substitute for Traveller's Cheques. Drafts are cheques and will be treated as such - some companies might want to ensure that the Draft is cleared and paid before they will release goods or perform services against it. Electronic payments are more secure and reliable and can be used in lieu of drafts. Mercantile Bank branches will usually need advance notice to prepare a Draft and we recommend using registered mail services to send your cheque to the beneficiary. Key Benefits: Pre-pay your hotel. Pre-pay your car hire. Pre-pay your sightseeing tours. Pay your foreign subscriptions. Send a Draft as a gift or as a student allowance. Exchange Control Services

A Study on Mercantile Bank Limited

Our International Banking/Group Settlement Division also offers the following products and services; Open Account Foreign Payments (Payment Orders or Telegraphic Transfers Inward and Outward) CFC (Customer Foreign Currency) Accounts Currency Investment Accounts Foreign Currency Accounts (FCAs) Offshore Trade Finance Visit any one of our branches for assistance with your export/import documentation. Foreign Cash If you intend travelling abroad you benefit from having some foreign currency available to pay for taxis, food, tips and other small items. You can buy foreign notes from a Mercantile Bank branch.

A Study on Mercantile Bank Limited

For your convenience it is advisable to order your foreign notes at least 48 hours before your trip. For charges, visit our Pricing Schedule. Imports and Exports Businesses all around the world are increasingly depending on buying and selling from other countries. Although the international trade environment has changed substantially over the last 100 years, the risks have essentially remained the same. Mercantile Bank is ready to assist you with your trade documentation and adherence to exchange control regulations. SWIFT

A Study on Mercantile Bank Limited

Electronic payments are the most commonly used method of transferring any currency. These payments are most commonly used for imports and exports, but holidaymakers may also use them. They are done using SWIFT, a worldwide electronic payment and receipts network. Key Features and Benefits: SWIFT transfers are secure and fast. Pre-pay hotels, car hire and sightseeing tours. Use to transfer student allowance. Payments can be made in 25 different foreign currencies. Due to time zones, payments should be made two days before the due date. Traveller's Cheques

A Study on Mercantile Bank Limited

If you are travelling out of the country either for business or holiday, you can buy Traveller's Cheques directly from us. Using your Traveller's Cheques Safeguarding your Traveller's Cheques: Immediately sign each Traveller's Cheque in the top left corner to protect yourself in case of loss or theft. Keep the serial numbers of your Traveller's Cheques separate from the Cheques. Safeguard your Traveller's Cheques, as you would cash. Spending Your Traveller's Cheques: Use them directly at hotels, shops, restaurants and services.

A Study on Mercantile Bank Limited

If your Traveller's Cheques are in the local currency, they can be spent directly for goods or services - acceptors need only watch you sign your Traveller's Cheques, compare the signatures, and give appropriate change. Key Features and Benefits: Traveller's Cheques are welcomed throughout the world as a means of payment. A wide range of currencies and denominations are available, offering you the flexibility you need. Safer than cash - if lost or stolen they can be replaced virtually anywhere in the world, usually within 24 hours. No wastage - we'll buy back your leftover Traveller's Cheques on your return.

3.4 Foreign exchange and Bangladesh bank

A Study on Mercantile Bank Limited

INTRODUCTORY 1. Foreign Exchange Regulation (FER) Act, 1947 (Act No. VII of 1947) enacted on 11th March, 1947 in the then British India provides the legal basis for regulating certain payments, dealings in foreign exchange and securities and the import and export of currency and bullion. This Act was first adapted in Pakistan and then, in Bangladesh. The Act is reproduced at Appendix-1. Bangladesh Bank is responsible for administration of regulations under the Act. Appendix 4 provides a list of Bangladesh Bank's offices and their jurisdictions.

A Study on Mercantile Bank Limited

2. Basic regulations under the FER Act are issued by the Government as well as by the Bangladesh Bank in the form of Notifications which are published in the Bangladesh Gazette. Notifications issued by the Bangladesh Government and the erstwhile Government of Pakistan and the Bangladesh Bank and the erstwhile State Bank of Pakistan are reproduced at Appendices 2 and 3. Directions having general application are issued by the Bangladesh Bank in the form of notifications, foreign exchange circulars and circular letters. 3. Authorized Dealers (ADs) in foreign exchange are required to bring the foreign exchange regulations to the notice of their customers in their day-to-day dealings and to ensure compliance with the regulations by such customers. The ADs should report to the Bangladesh Bank any attempt, direct or indirect, of evasion of the provisions of the Act, or any rules, orders or directions issued there under.

A Study on Mercantile Bank Limited

4. The ADs must maintain adequate and proper records of all foreign exchange transactions and furnish such particulars in the prescribed returns for submission to the Bangladesh Bank. They should continue to preserve the records for a reasonable period for ready reference as also for inspection, if necessary, by Bangladesh Bank's officials. 5. This publication summarizes the instructions issued under the FER Act as well as the prudential instructions issued by Bangladesh Bank (as of 30th September, 1996) to be followed by ADs in their day-to-day foreign exchange transactions. 6.Specimen forms prescribed in this publication are given in Appendix 5. 7. Terms having a special meaning for the purpose of the FER Act are defined

A Study on Mercantile Bank Limited

under Section 2 of that Act. However, for the purpose of this publication and the instructions issued by the Bangladesh Bank from time to time, the following terms as defined below shall be used in addition to those defined under Section 2 of the FER Act: (i) Resident and Non-Resident A resident is a person bank or firm who/which resides in Bangladesh. A non-resident is a person, bank or firm who/which resides outside Bangladesh. Non-residents include Bangladesh nationals who go out of Bangladesh for any purpose A person is presumed to be ordinarily resident if he maintains a home in Bangladesh or resides in the country for a substantial part of each year or pays income tax as a resident of Bangladesh. On the other hand, the fact that a person gives an address in Bangladesh

A Study on Mercantile Bank Limited

does not necessarily mean that he should be regarded as a resident if he is, in fact, only a temporary visitor and is ordinarily resident elsewhere. (ii) Bangladesh Bank Bangladesh Bank (BB) means the Bangladesh Bank established under the Bangladesh Bank Order, 1972 (President's Order No. 127 of 1972). (iii)Taka Taka means the Bangladesh Taka unless otherwise specified. (iv) Dollar

A Study on Mercantile Bank Limited

Unless otherwise indicated the term dollar used in this publication shall mean the US dollar. (v)Authorized Dealers Wherever used in this publication, the term Authorized Dealer or AD would mean a bank authorized by Bangladesh Bank to deal in foreign exchange under the FER Act, 1947. AUTHORIZED DEALERS AND MONEY CHANGERS 1. Bangladesh Bank issues licenses normally to scheduled banks to deal in foreign exchange if it is satisfied that the bank applying for this license has adequate

A Study on Mercantile Bank Limited

manpower trained in foreign exchange, there is prospect to attract reasonable volume of foreign exchange business in the desired location and the applicant bank meticulously complies with the instructions of the Bangladesh Bank especially with regard to submission of periodical returns. Bangladesh Bank may issue general licenses or licenses with authority to perform limited functions only. 2. Licenses with limited scope are also issued to persons or firms to exchange foreign currency notes, coins and travellers' cheques in places where money changing facilities are required. The authorizations are granted to persons or firms of adequate means and status who, in the opinion of the Bangladesh Bank, will be able to conduct their dealings strictly in accordance with the Foreign Exchange Regulations.

A Study on Mercantile Bank Limited

3. Applications for the grant of AD licenses should be made to the General Manager, Foreign Exchange Policy Department, Bangladesh Bank, Head Office, Dhaka. The applications should contain information on availability of trained staff 4. Applications for the grant of licenses to act as Authorized Money Changers should be made to the Foreign Exchange Policy Department of the area where the applicant's business is located. The applications should contain full particulars as regards the main business conducted by the applicant, the location of the business premises, the names and addresses of the applicant's bankers. The application should be routed through the applicant's banker who should furnish a report on the financial status of the applicant. FORWARD DEALINGS IN FOREIGN EXCHANGE

A Study on Mercantile Bank Limited

1. ADs, on their own, are free to buy and sell foreign currencies forward in accordance with tile internationally established practices however, in all cases the ADs must ensure that the cover is intended to neutralize the risks arising from definite and genuine transactions. 2. Be it forward sale or purchase, ADs must cover their own risk within die shortest possible time. 3. All forward contracts should be treated as firm and should be closed out on expiry. In such cases the ADs should charge the difference between the contracted (booked) rate and the TT clean spot buying or TT spot selling rate, as the case may be, ruling on the date the contract is closed out. The forward contract should be closed without charging any difference if the rate moves in favour of the customer on the date of

A Study on Mercantile Bank Limited

the closure. In other words, in case of a forward purchase by Authorized Dealer no difference will be charged if the TT spot selling rate on the date of closure is at par or lower (i.e., inferior from the point of view of tile customer) than the booked rate. Similarly, no difference should be charged for closing out a forward sale contract if the TT clean spot buying rate on the date of closure is at par or higher (i.e., costlier than the booked rate from the point of view of the customer) than the booked rate. No forward contract should be renewed at the old rate. All cases of renewal should be treated as new contracts and the rates as applicable for purchase-sale of forward contracts on the date of renewal should be applied. 4.The ADs may undertake swap transactions to cover their risks arising from forward transactions. However, they are advised to refrain from taking speculative positions through swap transactions.

A Study on Mercantile Bank Limited

5.All documents (copy of LC, contracts etc.) relating to forward contracts and Swap transactions must be, preserved for subsequent inspection by the Bangladesh Bank. OUTWARD REMITTANCES 1. Most outward remittances are approved by the ADs, on behalf of the Bangladesh Bank following declaration of Taka as convertible for current accounts payments from March, 1994. Only a few remittances of special nature require Bangladesh Bank's prior approval. 2. All remittances from Bangladesh to a foreign country or local currency credited to on resident Taka accounts of foreign banks or convertible Taka account constitute outward remittances of foreign exchange. ADs must exercise utmost caution to ensure that foreign

A Study on Mercantile Bank Limited

currencies remitted or released by them are used only for the purposes for which they are released, they should also maintain proper records for submission of returns to Bangladesh Bank as also for the latters inspection from time to time. 3. In all cases of purchase of foreign currency an application must be made to an AD and, wherever necessary to Bangladesh Bank. For payments against imports into Bangladesh, the prescribed application form is form IMP (Appendix 5/13) and for other types of remittances form TM .TM form must be used for reporting by the ADs even when remittance is approved by Bangladesh Bank in any other manner, for instance by issuing a special permit. On receipt of the application in the prescribed form, the ADs may effect the sale of foreign exchange if they are empowered to approve the application. If the transaction requires prior approval of the Bangladesh Bank, the form should be forwarded by the AD to the Bangladesh Bank for consideration.

A Study on Mercantile Bank Limited

4. Applications for Bangladesh Bank's prior approval for outward remittances, wherever required, should be submitted to Bangladesh Bank only through the Ads and not by their customers directly; all such applications should be forwarded by the ADs to Bangladesh Bank by their own messengers or by post. 5. In respect of the forms or permits etc. approved from the Bangladesh Bank, the ADs should see that these have been approved by duly authorized officers and that they bear the Bangladesh Bank's embossing sea. In case the authorization is signed by an official of Bangladesh Bank whose specimen signature may not be available with them such authorization should be resented to the nearest office of the Foreign Exchange Policy Department and the signatures authenticated. It is most important that, once forms have been approved by or on behalf of the Bangladesh Bank, the ADs carry out the

A Study on Mercantile Bank Limited

transactions only on behalf of the original applicants for whom the forms were approved. 6. Permits issued (where applicable) by the Bangladesh Bank must be utilized within the period of its validity indicated in the permits. The amount released must not exceed the authorized limit. Also, the instructions, if any, given in the permits with regard to the amounts to be released periodically e.g. monthly or quarterly must be strictly adhered to. 7. When the permit is exhausted or no longer required, it should be returned to the Bangladesh Bank by the AD alongwith the TM form on which the last remittance is reported. 8. All authorisations excepting TM forms approved by the Bangladesh Bank or by the ADs on behalf of the Bangladesh Bank remain valid for a period not exceeding 30 days

A Study on Mercantile Bank Limited

from the date of approval unless they are expressly stated as valid for a specified longer period or unless they have been revalidated for a further period. TM form approved by the Bangladesh Bank will, however, remain valid for a period of three calendar months from the date of approval by the Bangladesh Bank. Permits issued by the Bangladesh Bank are also valid for specified periods as stated on the permits. The ADs should not effect any remittance against approved Forms or Permits which have lapsed unless they have been duly revalidated. 9. Original copies of all IMP forms, TM forms covering remittances effected by the ADs must be submitted to the Bangladesh Bank alongwith the appropriate Returns as laid down. 10. In the event of any remittance which has already been reported to the Bangladesh Bank on the prescribed return being subsequently cancelled either in full or in part, the

A Study on Mercantile Bank Limited

ADs must report the cancellation of the outward remittance as an inward remittance. The return in which the reversal of the transaction is reported should be supported by a letter giving the following particulars: a) The date of the return in which the outward remittance was reported. b) The name and address of the applicant. c) The amount of the sale effected originally. d) The amount cancelled. e) Reasons for cancellation.

3.6 Tools for foreign exchange

A Study on Mercantile Bank Limited

Importer (Buyer)/Applicant The Issuing Bank (Opening Bank) The Advising Bank/Notifying Bank Exporter/Seller (Beneficiary) Confirming Bank Negotiating Bank The Paying/Reimbursing/Accepting/Remitting Bank.

A Study on Mercantile Bank Limited

a) Applicant The person/body (customer of the bank) who requests the bank (opening bank) to issue letter of credit. As per instruction and on behalf of the applicant, bank open L/C in line with the terms and conditions of the sales contract between the buyer and seller. b) Opening bank/Issuing Bank

A Study on Mercantile Bank Limited

The bank which open/issue L/C on behalf of the applicant/importer. Issuing banks obligation is to make payment against presentation of documents drawn strictly as per terms of the L/C. c) Advising/Notifying Bank The bank through which the L/C is advised/forwarded to the beneficiary (exporter). The responsibility of advising bank is to communicate the L/C to the beneficiary after checking the authenticity of the credit. The

A Study on Mercantile Bank Limited

advising bank acts only as agent of the issuing bank without having any engagement on their part. d) Beneficiary Beneficiary of the L/C is the party in whose favor the letter of credit is issued. Usually they are the seller or exporter. e) Confirming Bank

A Study on Mercantile Bank Limited

The Bank, which under instruction in the letter of credit, adds confirmation of making payment in addition to the issuing bank. It is done at the request of the issuing bank having arrangement with them. This confirmation constitutes a definite undertaking on the part of confirming bank in addition to that of issuing bank. f) Negotiating Bank The Bank, which negotiate documents and pays the amount to the beneficiary when presented complying credit terms. If the negotiation

A Study on Mercantile Bank Limited

of documents is not restricted to a particular bank in the L/C, normally negotiating bank is the banker of the beneficiary. g) Reimbursing/Paying Bank The Bank nominated in the credit by the issuing bank to make payment stipulated in the document, complying with the reimbursing bank.

A Study on Mercantile Bank Limited

Chapter4

A Study on Mercantile Bank Limited

Overview of

A Study on Mercantile Bank Limited

Mercantile Bank LTD.

A Study on Mercantile Bank Limited

4.1 Background
Mercantile Bank Limited was incorporated in Bangladesh as a Public Limited Company with limited liability under the Bank Companies Act, 1991 on 20 May 1999 and commenced commercial operation on 02 June 1999. The Bank went for public issue of shares on in 2003 and its shares are listed with Dhaka Stock Exchange and Chittagong

A Study on Mercantile Bank Limited

Stock Exchange. The Mercantile Bank Limited is a highly capitalized new generation Bank with an Authorized Capital and paid-up Capital of Tk. 3000.00 million and Tk. 1498.90 million respectively. The Bank provides a broad range of financial services to its customers and corporate clients. The Board of Directors consists of eminent personalities from the realm of commerce and industries of the country. The main branch of Mercantile Bank Limited is located in the Dilkusha commercial area. The total manpower of this branch is 118.The total number of the senior vice president is 10.As it is the main branch of the bank, the customer appearance in the bank is very high.

A Study on Mercantile Bank Limited

In the Mercantile Bank Limited, Main Branch, the people are mostly courteous, friendly in nature and eager to help despite the tremendous workload. Manpower is sufficient in the branch but there is no information booth for customer information. So as a new private bank, Mercantile Bank Limited is running steadily.
The Mercantile Bank Limited (MBL) undertakes all types of banking transactions to support the development of trade and commerce in the country. MBLs services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. The bank gives special emphasis on Export, Import, Trade Finance, SME Finance, Retail Credit and Finance to women

A Study on Mercantile Bank Limited Entrepreneurs. To provide clientele services in respect of International Trade it has established wide correspondent banking relationship with local and foreign banks covering major trade and financial centers at home and abroad.

In 2007, Mercantile Bank Limited remained at forefront of the banking industry of the Bangladesh, in the face of challenges of intense competition, on going reforms in the banking industry and a more challenging business and economic environment confronting its customers. The bank continued to play an important role in the governments drive to strengthening the rural economy as the driver of the future economic driver of the Bangladesh. Mercantile Bank Limited emerged as a new

A Study on Mercantile Bank Limited

commercial bank to provide efficient banking services and to contribute socio-economic development of the country. With the passage of time it has expanded its number of branches and variety of services along with its core business of taking deposits and granting loans. Now MBL has emerged as a new commercial bank to provide efficient banking services and to contribute socio-economic development of the country. Rising trend of the banks profitability over the last 8 years is also materialized. The MBL is committed to the delivery of the superior shareholders value. Foreign Exchange Department of the bank is one of the most important departments. Now it has become the backbone of the bank. With the aim to be the bank of choice, it is operating in the

A Study on Mercantile Bank Limited

industry with a team of devoted personnel to excel both their own career and the banks future. Objectives Mercantile Bank Limited aims at excellence and its committed to explore a new horizon of banking and provide a wide range of quality products and services comparable with those available with any modern bank in the world. It is a bank for the common people including businessmen and professionals. It intends to serve with quality at a price competitive to anyone in the financial market. It would constantly keep on exploring the needs of the clients. The management of the bank bears

A Study on Mercantile Bank Limited

in mind the fact that we are on the threshold of a new millennium, which would pose extra ordinary challenges to be faced and at the same time open up new opportunities and possibilities. A young and talented team of business entrepreneurs and managers shall be required to guide the density of our nation in the 21st century. So the bank shall also develop a youthful and exuberant management team technologically sound and rich in experience. They would work hand in hand with zeal and enthusiasm to achieve the objectives of the bank in the new millennium. Structure & Management

A Study on Mercantile Bank Limited

The bank will have an Authorized Capital of TK. 800 million and Paid-up Capital of TK. 245 million contributed by sponsors. The Head Office of the bank is situated at 61, Dilkusha C/A, Dhaka 1000. The Sponsor Directors of the bank are well-established businessmen and professional of the country having business in and out of Bangladesh. The Chairman of the board, Mr. Md. Abdul Jalil is a renowned businessman besides being an eminent personality of the country. The Chief Advisor of the bank, Mr. Lutfar Rahman Sarkar brings with him a vast wealth of experience of managing both public and private sector banks. Mention may be made that Mr. Lutfar Rahman Sarkar had been the Governor of Bangladesh Bank till recently.

A Study on Mercantile Bank Limited

The Managing Director of the bank, Mr. M. Taher Uddin has also got vast experience in both private and public sector banks as Chief Executive. His initiative and drive as a dynamic leader always inspires his colleagues and instills a new vigor in the management of the bank. Above all, the bank will be manned and managed by a galaxy of talented professionals proficient in their individual fields and dedicated to the cause of the bank. Mercantile Bank Limited is fully committed to the delivery of superior shareholders value. Initiative ranging from having more efficient capital structures and improving return on equity, pursuing a high dividend payout policy to the pursuit of excellence

A Study on Mercantile Bank Limited

corporate governance have been undertaken with a view to enhancing superior shareholders value. The Bank does believe that it has differentiated itself from other banks through its products and services. It is banking for the people to fulfill their needs conceptualizing product and services to meet their aspiration and expectations. The bank is proud to have exemplified the true concept as Banglar Bank.

A Study on Mercantile Bank Limited

4.2 Corporate information at a glance


Name of the Bank Status Date of Incorporation Date of Commencement Subscription for Shares Listed in Dhaka Stock Exchange Mercantile Bank Limited Public Limited Company May20, 1999 June 02, 1999. October 21-22, 2003 February 16, 2004

A Study on Mercantile Bank Limited


Listed in Citation Stock Exchange Head Office Phone E-mail Website Chairman Managing Director February 26, 2004 61, Dilute Commercial Area, Dhaka- 1000 +880-2-9559333, 01711-535960 mbl@bol-online.com www.mblbd.com Md. Abdul Jail Dean Manipur Raman

A Study on Mercantile Bank Limited


Number of Employees Number of Branches 1104 42

Table: General Information of MBL

A Study on Mercantile Bank Limited

4.3Management Structure of MBL:


Organization Chart of Mercantile Bank Limited
Chairman Board of Directors Managing Director - HRD Deputy Managing Director GSD, CAD, A&I, GB, D&M Executive Vice President/ Company Secretary Deputy Managing Director ID, IT, CREDIT, R&P Chief Adviser

Senior Vice President

Senior Vice President Vice President

Senior Vice President

Senior Asst. Vice President Asst. Vice President Senior Principle Officer Principle Officer Senior Officer Officer Junior Officer Asst. Officer

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

A Study on Mercantile Bank Limited

Figure: 3.3 Organization chart of MBL

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

4.4 Branch Network of the Organization

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

Branch Information Branch: 50 & SME / Krishi Branch : 3 Head Office 61, Dilkusha Commercial Area Dhaka-1000, Bangladesh PABX : 9559333, 9553892, 9561140 Fax : 88-02-9561213, Tlx : 642509 MBL ID BJ Swift : MBLBBDDH

A Study on Mercantile Bank Limited

E-mail : mbl@bol-online.com Website : www.mblbd.com

Zonal Office Hotel Hawai Building 39, Agrabad C/A, Chittagong Phone : 031-2529445, 031716421 723181, 721772

Training Institute Swadesh Tower, Level-6 41/6, Purana Paltan Lane Dhaka-1000 Phone: 7174016, 7172282

A Study on Mercantile Bank Limited Mobile : 01711-722925 Fax : 88-031-2529445 Sl.No. 01. Branch Name & Address Main Branch 61, Dilkusha C/A Dhaka-1000 Phone : 9559333, 9571618 Mobile : 01711-535958 Fax : 88-02-9554410 Sl.No. 02. Branch Name & Address Dhanmondi Branch 2/1, Cosmos Tower Road No.- 28 (Old), 15 (New) Dhanmondi R/A, Dhaka -1205. Phone : 9130500, 9142691,

A Study on Mercantile Bank Limited 8126768, 8124234 Mobile : 01713-452824 Fax : 88-02-8126768 03. Kawran Bazar Branch 99, Kazi Nazrul Islam Avenue Kawran Bazar C/A, Dhaka- 1215. Phone : 8112440, 8141910 Mobile : 01711-535953 Fax : 88-02-8126882 04. Agrabad Branch Hotel Hawai Building (1st Floor) 39, Agrabad C/A, Chittagong Phone : 031-716421, 723181, 721772 Mobile : 01713-384491, 01711-722924 Fax : 88-031-716459

A Study on Mercantile Bank Limited 05. Joypara Branch Samabay Super Market Joypara Bazar, Dohar, Dhaka. Phone : 03894-680032 Mobile : 01711-535949 Fax : 03894-680032 07. Rajshahi Branch JODIAC Plaza, Shaheb Bazar, Rajshahi Phone : 0721-771214, 772562 Mobile : 01711-419079, 01713-193961 08. 06. Banani Branch Awal Centre, (2nd Floor) 34, Kemal Ataturk Avenue Banani C/A, Dhaka-1213 Phone : 8816473, 8816474 Mobile : 01711-535954 Fax : 88-02-8827807 Naogaon Branch Main Road, Chakdev, Naogaon. Phone : 0741-63331, 69181,

A Study on Mercantile Bank Limited Fax : 88-0721-771215 69182 Mobile : 01711-419057 Fax : 88-0741-63230 10. Board Bazar Branch Board Bazar, Gazipur Phone : 9291604, 9293639 Mobile : 01711-535950 Fax : 88-02-9291660 12. Khatunganj Branch 599, Ramjoymohajan Lane

09.

Sylhet Branch Laldighirpar, Sylhet Phone : 0821-723650, HOB : 723651 Mobile : 01711-922810 Fax : 88-0821-723722

11.

Nayabazar Branch 25/1, Zinda Bahar (1st Lane)

A Study on Mercantile Bank Limited Nawab Akhtar Uddin Mansion Nayabazar, Dhaka-1100. Phone : 7393827, 7393655 Mobile : 01711-535956 Fax : 88-02-7390869 13. Mohakhali Branch 17, Mohakhali C/ A (2nd Floor) Red Crescent Concord Tower, Dhaka1212 Phone : 9888346, 9891520 14. Khatunganj, Chittagong Phone : 031-626101, 626102, 622751 Mobile : 01711-723051, 01711-724147 Fax : 88-031-635514 Mirpur Branch Rokeya Sarani, Razia Plaza (1st Floor) 184, Shenpara Parbota, Mirpur - 10, Dhaka- 1216

A Study on Mercantile Bank Limited Mobile : 01711-535957 Fax : 88-02-9895797, 9863215 (M) Phone : 9008852, 9015661, 8034577, 8034588 Mobile : 01711-535955 Fax : 88-02-8034577 16. Uttara Branch House- 10(A), Road- 7/D Sector- 9, Uttara Model Town Uttara, Dhaka -1230 Phone : 8955879, 8958177, 8958244

15.

Ashulia Branch Bhuiyan Complex, Jamgora Bazar Ashulia, Savar, Dhaka Phone : 7790708 Mobile : 01711-535948 Fax : 88-02-7702491

A Study on Mercantile Bank Limited Mobile : 01711-535942 Fax : 88-02-8955881 17. Jubilee Road Branch Kamal Chamber (2nd Floor) 61, Jubilee Road, Kotwali Chittagong Phone : 031-621018, 624819 Mobile : 01711-724874 Fax : 88-031-626072 19. Motijheel Branch 20. 18. Elephant Road Branch Osman Plaza 75, Elephant Road, Dhaka1205 Phone : 8618732, 9677364 Mobile : 01713-044832 Fax : 88-02-9669458 Madam Bibir Hat Branch

A Study on Mercantile Bank Limited Malek Mansion 128, Motijheel C/A, Dhaka-1000 Phone : 7161923-4, 9570131 Mobile : 01819-260289 Fax : 88-02-7161925, HOB : 9561178

Bhatiary, Shitakund, Chittagong. Phone : 031-2780465, 2780686 Mobile : 01713-103107, 01713-105062 01730-076127 (M 22. Rangpur Branch Press Club Complex Station Road, Rangpur

21.

Khulna Branch Kastury Plaza 73, KDA Avenue, C/A, Khulna

A Study on Mercantile Bank Limited Phone : 041-813561-2 Mobile : 01711-343080 Fax : 88-041-813563 23. Satmasjid Road Branch House : 735 (Old), 82/A (New) Road : 8/A (New) Satmasjid Road, Dhanmomdi Dhaka-1209 Phone : 8112463-4, 9141148 Mobile : 01713-039792 Fax : 88-02-9139183 24. Phone : 0521-51299, 51323 Mobile : 01713-201636 Fax : 88-0521-51110 Jhilongja Branch Hotel Sea Palace Ltd. Kalatoli Road, Cox's Bazar Phone : 0341-62234 Mobile : 01713-103662 Fax : 88-0341-63734

A Study on Mercantile Bank Limited 25. O R Nizam Road Branch 191, CDA Avenue East Nasirabad, Chittagong. Phone : 031-657512, 2550876 Mobile : 01713-103663 Fax : 88-031-2550877 27. Chowmuhani Branch Somobay Bhaban (2nd Floor) Karimpur Road, Chowmuhani Begumgonj, Noakhali Phone : 0321-52960, 52966 28. 26. Bogra Branch Barogola, Bogra Sadar, Bogra Phone : 051-69840 Mobile : 01713-044835 Fax : 88-051-69190 Konabari Branch Motiur Rahman Plaza, Konabari Union Gazipur Sadar, Gazipur Phone : 9298484-5

A Study on Mercantile Bank Limited Mobile : 01713-036991 Fax : 88-0321-52966 29. Gulshan Branch CES (A), 54(A), Gulshan Avenue Gulshan Model Town, Dhaka-1212 Phone : 8835276-7, 8835614 Mobile : 01713-045296 Fax : 88-02-8835615 31. Feni Branch 32. 30. Mobile : 01713-044846 Fax : 88-02-9298486 Hemayetpur Branch Hatem Ali Complex, Singair Road Hemayetpur, Savar, Dhaka Phone : 7741532, 7741533 Mobile : 01713-452995 Fax : 88-02-7741531 Moulvibazar Branch

A Study on Mercantile Bank Limited 105, S.S. Kaiser Road, Feni Sadar, Feni Phone : 0331-63558, 63559 Mobile : 01713-452994 Fax : 88-0331-63557

152-2 (1st Floor), Court Road, Moulvibazar Phone : 0861-62871, 62872 Mobile : 01713-068126 Fax : 88-0861-62873 34. Moghbazar Branch 331 (Old), 227 (New) Outer Circular Road (1st Floor) Ramna, Dhaka-1227

33.

Bijoynagar Branch Kaizuddin Tower, 47, Bijoynagar (Old) 176 (New) S.S. Nazrul Islam Sarani Paltan, Dhaka-1000 Phone : 8333048, 8333161

A Study on Mercantile Bank Limited Mobile : 01713-068127 Fax : 88-02-8333043 35. Sapahar Branch Village & P. O. : Sapahar Union & Thana: Sapahar, Naogaon Phone : 07432-74080, 74081 Mobile : 01713-068096 Fax : 88-07243-74080 36. Phone : 8333016, HOB : 8333017 Mobile : 01711-643281 Fax : 88-02-8333018 Beanibazar Branch Zaman Plaza, Beanibazar, Sylhet Phone : 03799-288656 Mobile : 01713-384495 Fax : 88-03799-288657

A Study on Mercantile Bank Limited 37. Barisal Branch 141, Sadar Road, Barisal Phone : 0431-2176209 Mobile : 01713-384496 Fax : 88-0431-2176208 39. Comilla Branch 1042/945, Jhautola, Comilla Phone : 081-65275 Mobile : 01713-384498 Fax : 88-081-65276 40. 38. Bhojeshwarbazar Branch Naria, Shariatpur Mobile : 01713-384497

Green Road Branch 151/6, Green Road, Dhaka Phone : 8157266, 9136809, 9136822 Mobile : 01730-013453 Fax : 88-02-8157155

A Study on Mercantile Bank Limited 41. Sheikh Mujib Road Branch 304, SK Mujib Road, Chittagong Phone : 031-2514235, 2514236 Mobile : 01730-013454 Fax : 88-031-2514235 42. Engineers' Institution Branch The Institution of Engineers, Bangladesh 8/A, Ramna, Dhaka-1000 Phone : 7110651, 7110684 Mobile : 01713-199852 Fax : 88-02-7110610 44. Mazar Road Branch Hazrat Shah Ali Girls High School & College

43.

Dagonbhuiyan Branch Mizan Tower 273, Basurhat Road

A Study on Mercantile Bank Limited Dagonbhuiyan, Feni Phone : 03323-79105 Mobile : 01730-328684 Fax : 88-03323-79106 Market Complex, Mazar Road Mirpur-1, Dhaka-1216 Phone : 8035529, 8035539 (PABX) Mobile : 01730-328681 Fax : 88-02-8035529 46. Jessore Branch A. Ali Complex 45, R. N. Road, Jessore Phone : 0421-62933 Mobile : 01713-452667,

45.

Dinajpur Branch Dinajpur Plaza, Goneshtola Sadar Upazilla, Dinajpur Phone : 0531-61217 Mobile : 01730-328682

A Study on Mercantile Bank Limited Fax : 88-0531-61218 47. Progati Sarani Branch Green Orlando, 42/4, Progati Sarani Baridhara, Dhaka Phone : 8411503, 8411501-2 Mobile : 01730-318186 Fax : 88-02-8411504 49. Faridgonj Branch Faridgonj Bazar, Chandpur 50. 48. 01730-328683 Fax : 88-0421-65392 Chittagong EPZ Branch S A Tower Airport Road, Chittagong Mobile : 01730-318185

Narayangonj Branch H R Plaza, 64 (Old), 90

A Study on Mercantile Bank Limited Mobile : 01730-318187 (New) Bangabandhu Road, Narayangonj Mobile : 01730-318188

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

4.5 Number of employees Number of employees in the main branch of Mercantile bank is 122.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

4.5 Functions of the Organization


Chairmans Sect. MDs Sect. Board Directors (Chairman, vice Chairman, Members) Board Division Public Relations

A Study on Mercantile Bank Limited Managing Director Additional Managing Director Deputy Managing Director Human Resource Division Training Institute Marketing & Branch Central Accounts Division ICC (i) Audit (ii) Marketing (iii) Compliance Estt. Division Share Dept. Operations Brokerage House Credit Addmn. (RM) Dept. Card Division IT Division Credit Div. Operations LAN/WAN Security Branches Gen. Credit & Trade Finance Small Loan Housing Loan Unit Recovery/Law Debt. Collection Transport Pool Intl Division Treasury Div. Correspondent Dealing Room Returns/Report Treasury Remitt. Dept. MIS Branches Area Office Chittagong

A Study on Mercantile Bank Limited

4.6 Vision statement of the bank


To be in the forefront of national development by providing all the customers inspirational strength, dependable support and the most comprehensive range of business solutions, through our team of professionals who work passionately to be outstanding in everything we do.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

4. 7.Mision statement of the bank


Mercantile Bank Ltd will become most caring, focused for equitable growth based on diversified deployment of resources, and nevertheless would remain healthy and gainfully profitable Bank. Will become most caring, focused for equitable growth based on diversified deployment resources, and nevertheless would remain healthy and gainfully profitable Bank.

A Study on Mercantile Bank Limited

Mercantile Bank Limited aims to become one of the leading banks in Bangladesh by prudence, flair and quality of operations in their banking sector. The bank has some mission to achieve the organizational goals. Some of them are as follows as: Mercantile Bank Limited provide high quality financial services to strengthen the well being and success of individual, industries and business communities. Its aim to ensure their competitive advantages by upgrading banking technology and information system.

A Study on Mercantile Bank Limited

MBL intends to play more important role in economic development of Bangladesh and its financial relations with the rest of the world by interlining both modernistic and international operations. MBL encourages investors to boost up share market. The bank creates wealth for the shareholders. The bank believes in strong capitalization. It maintains high standard of corporate and business ethics. Mercantile Bank Limited extend highest quality of services, which attracts the customers to choose them first.

A Study on Mercantile Bank Limited

The bank creates wealth for the shareholders. The bank maintains congenial atmosphere for which people are proud and eager to word with Mercantile Bank Limited. Mercantile Bank Limited intend to provide better benefits to their customers and good returns to their shareholders. The bank intends to meet the needs of their clients and enhance their profitability by creating corporate culture.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

Mercantile Bank Ltd will become most caring, focused for equitable growth based on diversified deployment of resources, and nevertheless would remain healthy and gainfully profitable Bank.

4.8 Product Scheme

A Study on Mercantile Bank Limited

The Bank has launched a number of financial products and services since its inception. Among these, Monthly Savings Scheme, Family Maintenance Scheme, Double Benefit Deposit Scheme, Quarterly Benefit Deposit Scheme, 1.5 Times Benefit Deposit Scheme, Advance Benefit Deposit Scheme, Consumer Credit Scheme, Small Loan Scheme, Lease Finance Scheme, Overseas Employment Loan Scheme, Car Loan Scheme, Home Loan Scheme and SME Loan have received wide acceptance among the people. Deposit Products Monthly Saving Scheme It is our significant product; introduced to attract small savers for building up their habit

A Study on Mercantile Bank Limited

of savings and thereby build up a healthy capital base for the economy. The monthly installments are in various sizes and one can adopt the schemes for a period of 05 years, 08 years or 10 years. Investor gets a lump sum (principal plus interest) at the maturity of the scheme. Installment amount should be deposited within the first 10 days of each month. In case of failure, 5% of monthly installment will be charged as late payment fee which will be added with the installment amount. In case of premature encashment, interest will be paid at Savings rate. The incumbent depositor can get a loan facility of maximum 80% of his deposited amount. At the end of 2009, BDT 13.58 billion was deposited against that of BDT 9.79 billion in 2008 recording 38.71% growth in this scheme. Family Maintenance Deposit

A Study on Mercantile Bank Limited

Under this scheme, depositor will get a certain sum of money in each month proportion to his/her deposit during the entire tenure. Benefit starts right from the first month of opening an account under this scheme and continues upto five years. On maturity, the principal amount is paid back. Objectives of this scheme are: help the retired persons for investing their retirement benefits, create investment opportunities for Non-Resident Bangladeshi, etc. Minimum deposited amount is BDT 50,000 or its multiples and the tenure is Five (05) years. This scheme is also known as "Family Maintenance Deposit Scheme (FMD)". Under this scheme total amount of BDT 1.86 billion was deposited upto the end of 2009. Double Benefit Deposit Scheme Under this scheme, deposited amount will be double in a tenure of Seven and Half (7.5)

A Study on Mercantile Bank Limited

years. Minimum deposited amount should be BDT 10,000 or its multiples. In case of premature encashment interest will be paid on Saving A/c Rate. Loan may be granted up to maximum 80% of the deposited amount, but minimum principle amount must be BDT 20,000. At the end of 2009 total amount of BDT 6.93 billion was deposited under this scheme. Quarterly Benefit Deposit Scheme The 'Quarterly Benefit Deposit Scheme' will be maintained for a period of 3 (three) years and the minimum amount of deposit is BDT 50,000.00 (fifty thousand) or its multiples. Interest will be paid on quarterly basis. Benefit starts right from the first quarter of opening the account. On maturity, principal amount will be paid back. Savings account is

A Study on Mercantile Bank Limited

needed to maintain 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 the loan account. Deposit under this scheme increased to BDT 229.40 million in 2009 from BDT 145.35 million in 2008. 1.5 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 4.25 years. On maturity, 1.5 times of the deposited amount will be paid back to the account holder. In case of premature encashment interest will be paid on Saving A/c Rate. However, no interest shall be paid if premature encashment takes place before expiry of 1 (one) year. Loan

A Study on Mercantile Bank Limited

may be granted up to maximum 80% of the deposited amount. Total amount of Deposit under this scheme increased significantly to BDT 233.67 million from just 139.37 million at the end of 2008. 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. That is Interest is paid in two phases, first phase paid initially BDT 9,500 and second phase paid BDT109,520 after maturity against BDT 1,00,000. Loan may be granted up to maximum 70% of the

A Study on Mercantile Bank Limited

deposit. This is Also known as "Agrim Munafa Amanat Prokolpo (AMAP)". BDT 76.92 million was deposited under this scheme at the end of 2009. Loan Products Consumer Credit Scheme Consumer 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 buy household goods including computer and other consumer durables. Total exposure under this scheme was BDT 49.83 million at the end of 2009.
Sl. No. Category of Employees Amount of Loan

A Study on Mercantile Bank Limited


01. 02. 03. 04. 05. Senior Vice President and Above Asstt. Vice President to Vice President Senior Officer to Senior Principal Officer Asstt. Officer to Officer Employees other than Officer Tk.32.00 Tk.27.00 Tk.17.00 Tk.12.00 Tk.5.00 lac lac lac lac lac

SOURCE: Adapted from the MBL database

Small Loan Scheme This scheme has been designed especially for the businessmen longing for credit facility for their business and can't provide tangible securities. Total amount of BDT 15.40 million was deployed under this scheme at the end of 2009.

A Study on Mercantile Bank Limited

Lease Finance This scheme has been designed to assist and encourage the genuine and capable entrepreneurs and professionals for acquiring capital machinery, medical equipments, computers, vehicle and other items. Flexibility and term 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." Total exposure under this scheme was BDT 356.50 million at the end of 2009. Doctors' Credit Scheme Doctors' Credit Scheme is designed to facilitate financing to fresh medical graduates and established physicians to acquire medical equipments and set up clinics and hospitals and thereby make the medical facilities upgraded and available to the mass people. BDT 7.06 million was disbursed under this scheme till the end of 2009.

A Study on Mercantile Bank Limited

SME Loan Scheme Small and Medium Enterprise (SME) Loan Scheme has been introduced to provide financial assistance to new or experienced entrepreneurs to invest in small and medium scale industries with a comparatively low rate of interest as the same is assisted by the Bangladesh Bank with refinancing facilities. Exposure under this scheme experienced significant growth of 44.39% and amounting to BDT 983.39 million at 2009 end from that of BDT 681.08 million at the end of 2008. Personal Loan Scheme Personal Loan Scheme has been introduced to extend credit facilities to cater the needs of low and middle-income group for any purpose. Government and semi-government

A Study on Mercantile Bank Limited

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. Total Loans and Advances under this scheme increased to BDT 364.38 million upto 2009 from that of 279.78 million at the end of 2008. 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

A Study on Mercantile Bank Limited

eligible for this loan. Total amount of BDT 201.98 million was disbursed under this scheme upto December 2009. Sl. No. 01. 02. 04. 05. Designation of the Loan Limit Executives AVP/FVP SVP/VP EVP SEVP/DMD/AMD ( New Car) 1500000/1800000 1800000/2000000 2000000 At Actual Loan Limit Monthly Allowance Tk.30,000.00 Tk.32,500.00 Tk.35,000.00 (Recondition Car) Tk.8,290.00 Tk. 9,200.00 Tk.11,700.00

SOURCE: Adapted from the MBL database

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

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 Bank's Home Loan Refinance Scheme. The Scheme will also boost up the growth of housing sector. Such loan shall be available for purchase or construction of new apartments for self-residing purpose.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

Overseas Employment Loan Scheme Overseas Employment Loan Scheme is designed to facilitate the Bangladeshi youths seeking employment abroad but unable to meet the expenses to reach the workplace from their own sources. The ultimate objective of the scheme is to promote skilled -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 active 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 will also help fetching foreign currency for the country as well as fulfill the Bank's commitment to encourage Micro-lending for poverty alleviation, improve the quality of life and thereby contribute to socio economic development of the country.

A Study on Mercantile Bank Limited

4.9 Principal activities of Mercantile bank Ltd.


The principal activities of the bank are to provide all kind of commercial bank activities encompass a wide range of services including excepting deposits, making loans, discounting bills, conducting money transfer and foreign exchange transactions and performing other related services such as safe keeping, collections, issuing guarantees, acceptances and letters of credit to its customers through its branches in Bangladesh.

4.10 GENERAL BANKING

A Study on Mercantile Bank Limited

THE BANKER CUSTOMER RELATIONSHIP The Banker Customer relationship is essentially a debtor-creditor contractual relationship. This relationship may be divided into two categories, a. Legal relationship b. Behavioral relationship After the contractual relationship is established between the banker and customer, they have to avoid by some implied conditions of the contract as well as practices of the bank. Some of the conditions and practices are as follows:

A Study on Mercantile Bank Limited

i. ii. iii. iv. v.

Customer is to use chequebooks while demanding payment from his account. Customer should keep chequebooks in his safe custody. Customer must inform the bank on time for any loss of cheque leaf or chequebooks. Customer while depositing money or presenting cheque, they must do that during business hour of the bank. Banker also should give necessary banking advice and help the customer in various banking activities.

A Study on Mercantile Bank Limited


Rights of a customer Duties & obligations of a banker

Right to deposit money in his A/C on time.

Must credit the deposited the amount to the customers A/C.

Right to demand repayment by issuing cheque or Must honor cheque if otherwise in order. written order properly in proper time and place. Right to get pass book/statement of A/C. Right to stop payment on his cheque. Right to give standing instructions. Must supply pass boo/statement of A/C as demanded. Must abide by the stop payment order. Must abide by the instructions.

A Study on Mercantile Bank Limited Right to claim interest of his deposit balance in Must pay/credit interest as per rule. the interest bearing account. Right to have secrecy of his account. Must maintain secrecy of customers A/C if the bankers not bound to disclose it under certain conditions.

Right to claim damages of any loss and for Must compensate the loss. defamation due to wrongful/willful dishonor of cheque by bank. Right to demand the proceeds of the instrument Must collect the proceeds of the instrument in deposited for collection and collected customers A/C and honor the cheque drown accordingly. against the amount.

A Study on Mercantile Bank Limited Right to claim money paid by bank from his A/C Payment should be made in due courses in good wrongly or payment is not made in due courses. faith and without negligence. Right to return deposit if not in proper manner Must deposit the amount properly and in time. and time. Right to return the cheque if not drown properly Must demand payment by issuing cheque or or in time or for some other reason. written order properly. Right to debit customers A/C for any charges, Must pay the bank charges, interest and interest and commission if recoverable. commission if payable. Right to lien, right of set off etc. Must abide by the law.

A Study on Mercantile Bank Limited

4.11 SWOT ANALYSIS OF MBL


In the competitive area of marketing are SWOT analysis is based on product, price, place and promotion of a financial institution like private Bank. By doing the SWOT analysis it is possible to find out the strengths, Weaknesses, opportunities, and threats of the MBL. From the SWOT analysis we can figure out on going scenario of the Bank.

A Study on Mercantile Bank Limited


SWOT Analysis

A Study on Mercantile Bank Limited

Internal Factors Internal Factors

External Factors External Factors

Strength

Weakness Weakness

Opportunity Opportunity

Threats

A Study on Mercantile Bank Limited

SWOT analysis two factors act as prime movers Internal factors which are prevailing inside the concern which include Strength and Weakness. On the other hand another factor is external factors which act as opportunity and threat.

Strength:

A Study on Mercantile Bank Limited

1. The bank provides quality service to the clients compared to it other contemporary competitors. 2. Experienced bankers and corporate personnel have formed the management. 3. The bank recently introduce on line banking which enable it to automate all of its operations. At present, several banking functions are performed by computers. The bank is also a member of SWIFT (Society for Worldwide Inter bank Financial Telecommunication) alliance Access which enables the bank to exchange critical financial messages swiftly and cost effective.

A Study on Mercantile Bank Limited

Weaknesses: 1. Delegation of authority is centralized which makes the employee to realize less responsibility. Thus, the employee morale is deteriorated. 2. The credit proposal evaluation process is lengthy. Therefore, sometimes valuable clients are lost and the bank becomes unable to meet targets. 3. No substantive use of Annual Confidential Report (performance evaluation form of the employee) to reward or to punish the employee. Hence the employee becomes ineffective.

A Study on Mercantile Bank Limited

4. The bank lacks aggressive advertising and promotional activities to get a broad geographical coverage. 5. Computer facility for all the officers is not available. Moreover, all the officers have no computer knowledge. 6. The bank has no any research and development division.

A Study on Mercantile Bank Limited

Opportunities: 1. The bank can introduce more innovative and modern products and services for then customers. 2. It can diversity its portfolio by taking new sector. 3. Many branches can be opened to reach the banks services to the remote areas. 4. It can recruit more efficient and experienced persons to give fast and efficient service to the customers Threats:

A Study on Mercantile Bank Limited

1. The common attitude of Bangladeshi clients is default. 2. Multinational as well as the fast growing local banks with modern products and services are capturing huge market within short period a resulting to switch over the existing customers of the bank. 3. Bangladesh Bank Sometimes requires Private Commercial Banks to be abides by such rules and regulations which are not suitable foe every commercial Bank

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

Chapter- 5

A Study on Mercantile Bank Limited

General Foreign

A Study on Mercantile Bank Limited

Exchange Policy of Mercantile Bank LTD.

A Study on Mercantile Bank Limited

5.1 General foreign exchange policy of the Mercantile Bank LTD.


Import: Import trade in Bangladesh is controlled under the Import and Export control Act 1950. Authorized Dealer Banks will import the goods into Bangladesh following the import

A Study on Mercantile Bank Limited

policy, public notice, F.E. circular and other instructions from competent authorities from time to time. The import functions of the branch as far I have understood are discussed bellow: Documentary Requirements for Opening L/C Importer shall submit following documents for opening L/C: (a) Valid Import Registration Certificate (IRC) (commercial/industrial)

A Study on Mercantile Bank Limited

The following persons/purposes are exempted from Registration: i) Govt. Departments ii) Local Authorities & Statutory Bodies iii) Recognized Educational Institutions iv) Hospitals v) Import of Capital Machinery for own use (b) Tax Identification Number Certificate (c) VAT Registration Certificate (d) Membership Certificate of a recognized Trade Association as per IPO

A Study on Mercantile Bank Limited

(e) A declaration, in triplicate, that the importer has paid income-tax or submitted income lax return for the preceding year
(f) Pro forma Invoice or Indent duly accepted by the importer

(g) Insurance Cover Note with Money Paid Receipt covering value of goods to be imported plus 10 (Ten) percent above h) L/C application Form (MF-fx l3) duly signed by the importer i) Letter of Credit Authorization Form (LCAF), commercial or industrial as the case may be, duly signed 'by the importer and incorporating New ITC number of at least 6(six) digits under the Harmonized System as given in the Import Trade Control Schedule 1988.

A Study on Mercantile Bank Limited

j) IMP Form duly signed by the importer Precautionary Steps: a) The Branch must ensure that they deal only with known customers

having a place of business in Bangladesh and can be traced easily, should any occasion arise for this purpose.

A Study on Mercantile Bank Limited

b) documents.
c)

The Branch shall all assess the financial standings & credibility of

the customers with a view to ensure satisfactory arrangement for retirement of the The Branch should also obtain confidential report on the exporter in

all cases where the amount of the L/C exceeds Tk.2, 00,000.00 against P/invoice and Tk.5, 00,000.00 against indents. d) The Branch shall verify prices so as to ascertain competitiveness of the commodities to be imported.

A Study on Mercantile Bank Limited

e) imported.
f)

The Branch shall also see the marketability of the commodities to be The Branch shall verify signature of the Importer on L/C Application The Branch will not open L/Cs for import of goods through the

Forms, LCAF & IMP Form. g) customs stations/routes like Sonamasjid, hili, Burimary. Birol etc. unless the importers pay 100% margin or prior Head Office approval is obtained. Sanctioning; Documentation & Legal Formalities

A Study on Mercantile Bank Limited

Approval of Head Office and/or Branch Manger (where L/Cs are to be opened under his delegation) is to be obtained before opening L/C(s). Security documentation is to be completed as per sanction/approval terms prior to opening of L.C. Charge Forms such as Demand Promissory Note, Letter of Undertaking, Letter of Debit Authority & Letter of Guarantee (where applicable) to be obtained with due stamps as per prevailing Stamp Act rate. Opening L/C

A Study on Mercantile Bank Limited

With the little understanding of L/Cs and after completing necessary formalities, the branch may now proceed for opening the credit on behalf of their own customers who maintain accounts with them, except government organizations. Necessary entries to be given in the L/C opening Register (MB/FX-03) by allocating an L/C number and following vouchers are to be passed for completion of opening transactions at Bill Clean (BC) Selling rate (Spot): (a) Creation of L/C liability: (Register MBFx-12) Dr. Customers Liability on L/C Cash

A Study on Mercantile Bank Limited

Cr. Bankers (Liability on L/C Cash (Amount to be rounded off to the nearest thousand Taka) (b) Margin/Commission & Charges: Dr. Customers A/c: Margin + Commission + F.C.C + Postal/Telex + Stamp + Misc. Cr. Sundry Deposit A/c: Margin on L/C (Cash) Cr. Income A/c: Commission on L/C Foreign Cr. Income A/c: Postal/Telex Recoveries

A Study on Mercantile Bank Limited

Cr. Income A/c: Miscellaneous Earnings (Handling charges, stationery charges, etc.) Cr. Sundry Deposit A/c.: F.C.C Cr. Other Assets A/c: Stamps in Hand Time Limit for Opening of L/C: L/Cs shall be opened within 150 days from the date of issuance of LCAF.

A Study on Mercantile Bank Limited

Terms of L/C S All description of the goods along with quantity and unit price is to be incorporated in the L/C and shall take all precautions to quote the correct H.S. Codes of the goods. Prices to be quoted on CFR or FOB basis according to P/Invoice or indent. No import shall be made on CIF basis without prior approval from the Ministry of Commerce. L/Cs should provide for payment to be made against full sets of On Board (shipped) transport documents drawn or endorsed to the order of Mercantile Bank Limited showing despatch of goods covered the credit to a destination in Bangladesh. All LCs must specify

A Study on Mercantile Bank Limited

submission of signed invoices, certificates of origin & pre-shipment Inspection certificate. L/Cs shall also incorporate any other documents which are mandatorily specified for that Commodity in the IPO/Public Notices/Bangladesh Bank Circulars. It is not permissible to open import L/Cs in favor of beneficiaries or to use shipping carriers of the countries from which import into Bangladesh are banned by the competent authority. Is also not permissible to open clean or revolving or packing credits.

A Study on Mercantile Bank Limited

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

A Study on Mercantile Bank Limited

Additional Confirmation to the L/Cs By the request of the importer, the branch may request a third correspondent bank (having prior arrangement of credit line) to add their confirmation to the L/Cs. The branch shall send a request letter to the International Division, Head Office for their record and necessary instructions to be advised to the concerned confirming bank for this

A Study on Mercantile Bank Limited

purpose. Confirmation charges are to be recovered from the importer as per schedule of charges of the bank unless it is waived or directed otherwise as per agreement between the supplier and the importer. Vouching Procedure: Dr: Customers A/c. Cr: Income A/c: Commission on L/C (confirmed)

A Study on Mercantile Bank Limited

Manipulation of Reimbursement terms and issuance of Reimbursement Authorization The branch shall stipulate reimbursement term in the L/Cs mentioning name of the Reimbursing Bank and Nostro Account Number (preferably in the country of the currency denominated in the L/Cs so as to avoid possible loss due to conversion of' differential currencies). The branch shall issue and send Reimbursement Authorization to the Reimbursing Bank immediately after opening of the L/Cs. Amendments

A Study on Mercantile Bank Limited

The Branch may allow amendments to the L/Cs only upon requests of the L/C applicants that do not violate foreign exchange regulations and import control regulations. Necessary charges and/or margin (where L/C value is increased by subsequent Amendments) arc also to be realized /recovered from the customer before amending the L/Cs. Vouching Procedure Dr. Party Account (for margin and/or commission + Postage/Telex + F.C.C)

A Study on Mercantile Bank Limited

Cr: S/D A/c: Margin on L/C (Cash) (if the L/C value is increased) Cr. Income A/c: Commission on L/C Foreign Cr. Income A/c: Postal/Telex Recoveries Cr. Sundry Deposit A/c: F.C.C Contra liability if the L/C value is increased: Dr. Customers liability on L/C cash (for increased amount) Cr. Backer's liability on L/C cash Cancellation of L/Cs:

A Study on Mercantile Bank Limited

An Irrevocable L/C can not be cancelled without the agreement of the beneficiary and the confirming bank, if any. The branch, at the request of the importer, may approach the L/C advising bank for cancellation of the L/C and such cancellation will only be effective upon consent of the beneficiary advised to the branch through the L/C advising bank. However, the branch may cancel the L/C without the consent of the beneficiary, advising bank and confirming bank, if any, if the L/C expires and the brand", receives no shipping documents within 15 days" of expiry of the L/C. The branch should send a message to the concerned bank advising; such cancellation and closure of L/C file due to expiry of the

A Study on Mercantile Bank Limited

same. The branch will then cancel the Reimbursement Authorisation which has been provided to the Reimbursing Bank while opening the L/C. The branch will reverse L/C contra liabilities, refund margin and recover charges from the L/C applicant as per schedule of charges. Scrutiny/Examination of Documents: Upon receipt of the documents the branch shall examine the documents with the LCs and determine whether (to take up or refuse the documents and to inform the negotiating bank

A Study on Mercantile Bank Limited

from which it received the documents within seven banking days following the day of receipt of the documents. If the documents appear on their face not to be in compliance with the terms and conditions of the credit, branch must refuse the documents by sending Notice to that effect by telecommunication or by other expeditious means to the negotiating bank without delay but not later than the close of the seventh banking day following the day of receipt of the documents.

A Study on Mercantile Bank Limited

Such Notice must state all discrepancies in respect of which the bank refuses the documents and must also state whether it is holding the documents at the disposal of or is returning them to the presenter. The branch may then approach the L/C applicant for a waiver of the discrepancy(ies). Import Bill Scrutiny Checklist: (a)Forwarding schedule of the negotiating bank Whether there is any discrepancy mentioned in it Whether there is any 'special instruction that cannot be complied with

A Study on Mercantile Bank Limited

Whether there is any commission/charge payable/realized beyond L/C terms (b)General Late shipment Late Presentation Early shipment L/C expired L/C over-drawn Partial shipment or transshipment beyond L/C terms

A Study on Mercantile Bank Limited

Bill of exchange Amount of B/E differ with Invoice Not drawn on L/C issuing Bank Not signed Tenor of B/E not identical with L/C Full set not submitted Invoice: Not issued by the beneficiary

A Study on Mercantile Bank Limited

Not signed by the beneficiary Not made out of the name of the applicant Description, price, quantity, sale terms of the goods not correspond to the credit Not marked one fold as original Shipping marks differ with B/L & packing list Packing list: Gross weight, net weight, measurement, number of cartoons/ packages differ with B/L. Not marked one fold as original

A Study on Mercantile Bank Limited

Not signed by the beneficiary Shipping marks differ with B/L Bill of Lading/ Airway bill, etc: Full set of B/L is not submitted B/L is not drawn or endorsed to the order of Mercantile Bank Limited Shipped on Board, Freight Prepaid etc notations are not marked on the B/L Name address of the notify parties are not mentioned or differ with L/C B/L does not indicate the name and capacity of the party

A Study on Mercantile Bank Limited

Shipped on Board notation not showing the name of pre-carriage vessel/intended vessel Shipped on Board notation not showing the port of loading and vessel name Short form of B/L Charter party B/L Description of goods in B/L not agreed with that of invoice. B/E, P/L Alteration of B/L not authenticated Loaded on Deck Stale B/L

A Study on Mercantile Bank Limited

PSI Certificate: CIF value not shown Description, quantity, quality, H.S. code and price of goods differ with L/C and invoice. Etc Others: Inadequate number of Invoice, Packing list, B/L, and others submitted Certificate of origin differ with L/C terms Shipping Company Certificate regarding ownership of vessel not submitted

A Study on Mercantile Bank Limited

LCA Form, IRC, HS Code, and L/C Number are not mentioned in all the documents, etc. Disposal of Discrepant Documents: If the importer refuses to accept the documents because of discrepancies advised to him, the branch should immediately advise the same to the negotiating bank by telex/cable and dishonored documents will then be handled, according to the instruction of the negotiating bank. If no reply is received regarding disposal of the document, the bank

A Study on Mercantile Bank Limited

will return the full sets of documents to the presenter by courier service/Registered postal Mail. The branch should cancel the Reimbursement Authorization provided to the Reimbursing Bank while the opening branch of the L/C and/or claim refund of reimbursement with interest from the remitting bank, of any reimbursement which has been made to the negotiating bank. The branch shall reverse the contra liability which has been passed at the time of opening and recover/realize postal and other charges incurred by the bank on his behalf. Lodgment of Documents:

A Study on Mercantile Bank Limited

If the documents are found in order or the discrepancies in the document, if any, are subsequently accepted by the applicant, the branch will record the particulars of the documents in the PAD Register (MB fx-05) and the following vouchers are to be passed for completion of lodgment transactions: i) Reversal of L/C 1iability to the extent of documents: Dr. Bankers liability on L/C Cash\ Cr. Customers liability on L/C Cash ii) PAD Vouchers:

A Study on Mercantile Bank Limited

Dr. PAD A/c for Bill value including interest @ B.C selling rate prevailing on the date of lodgment less Margin amount Cr. Sundry Deposit A/c: Margin on L/C Cash Dr. MBL General A/c: CAD ID on respective Nostro A/c. for bill value at Ready Selling Rate in case of USD & ACU Dollar or TT OD rate for all other currencies. Cr. Income A/c: Interest on PAD Cr. Income A/c: Exchange Gain on F.C. Retirement of Documents:

A Study on Mercantile Bank Limited

Importer is to be advised on the date of lodgement of documents with full particulars of shipment to retire the documents against payment or to dispose the import documents as per pre-arrangement, if any. Subsequent reminders are also to be issued every week till retirement of the bill. Such bills will be considered and be reported as overdue if the importer fails to retire the documents within 21 days of arrival of the relative import consignments at the port of destination. When the importer intends to retire the documents, the branch will prepare the following retirement vouchers or adjustments of PAD liabilities there against:

A Study on Mercantile Bank Limited

Dr. PAD A/c for the interest amount accrued from the date of lodgement to the date of retirement. Cr. Income A/c: Interest on PAD Dr. Party A/c for PAD amount with accrued interest Cr. PAD A/c

A Study on Mercantile Bank Limited

There after the documents may be handed over to importer after certification and endorsement. The certification should be as follows:

A Study on Mercantile Bank Limited

1. On the Invoice under L/C

Certified
NO..........:......

that the invoice has been drawn

For USD.............. Mercantile Bank Limited Authorized Signature 2. On the Bill of Exchange Received Payment Mercantile Bank Limited

A Study on Mercantile Bank Limited

Authorized Signature 3. On the Transport Document Please Deliver to the order of M/s......................... Mercantile Bank Limited Authorized Signature Authorized Signature

A Study on Mercantile Bank Limited

Sometimes importer may not come forward to retire the documents, and for safeguarding bank's interest the branch; should arrange clearance of the consignment under forced circumstances with prior approval of Head Office since consignment are liable to be auctioned by the custom authority within 45 days from the date of arrival of the vessel.

A Study on Mercantile Bank Limited

However, in case of perishable goods or seasonal items, Branch must take immediate action for retirement of documents or clearance of goods to safeguard Bank's interest. Documents must not be handed over to the importer without payment or without making any arrangement for disposal. Branch shall keep in mind that the Bank does not have any policy to allow LIM facility under any Circumstance. L/C on Deferred Payment basis

A Study on Mercantile Bank Limited

L/Cs may be opened on deferred payment (DA) basis in the following cases subject to approval of' Head Office: (i) (ii) (iii) (iv) Capital machinery imports on up to 360 days usance basis, Industrial raw material imports for own use of industrial importers on up to 180 days usance basis, Import of coastal vessels including oil tankers and ocean going vessels including those procured for scrapping on up to 360 days usance basis, Import of agricultural implements and chemical fertilizer on up to 180 days basis, (v) Import of life saving drugs on up to 90 days usance basis.

A Study on Mercantile Bank Limited

For such deferred payment imports, the prices must be internationally competitive and since interest, if any, should not be at rate higher than the LIBOR for the relative period or the equivalent rate prevailing in the currency of the country of the supplier. Import against Supplier's Credit: The industrial enterprises in the private sector may open L/Cs on longer usance terms against supplier's credit as per general or specific BOI approval. Vouching Procedure: (i) Creation of L/C liability

A Study on Mercantile Bank Limited

Dr. Customers liability on L/C (Deferred) Cr. Banker's liability on L/C (Deferred) (Rate applicable BC Selling) (ii) Margin/Commission & Charges Dr. Customer's A/c: Margin + Commission + FCC + Postal/ Telex + Stamp-f Misc. Cr. Sundry Deposit A/c: Margin on L/C (Deferred) Cr. Income A/c: Commission on L/C Foreign

A Study on Mercantile Bank Limited

Cr. Income A/c: Postal/Telex recoveries Cr. Income A/c: Miscellaneous earnings (Handling charges, stationery charges, etc.) Cr. Sundry Deposit A/c: FCC Cr. Other Asset A/c: Stamps in Hand Acceptance & Lodgment of Deferred Bill

A Study on Mercantile Bank Limited

On receipt of import documents against the L/C, the documents should be subjected to usual scrutiny. If found in order, the customer should be asked to accept the usance bill of exchange. When the bill of exchange is returned by the drawee (i.e. importer) after duly accepted by him, the maturity date of the bill is worked out and noted in the PAD register and also in the Due Date Diary (MBFx-16). The date of maturity of the bill of exchange is communicated to the negotiating or collecting bank by telex/ fax. Simultaneously the documents are lodged under ABP (Accepted Bills for Payment).

A Study on Mercantile Bank Limited

(iii) Vouchers for charges, such as Telex/ Postal charges for advising maturity date and others Dr. Party's Account Cr. Income A/c: Postal/ Telex Recoveries Payment of Deferred Bill: The branch, on maturity or at the instruction of the drawee before maturity, will make payment of the deferred bill.

A Study on Mercantile Bank Limited

Vouchers to be passed: (i) Reversal of Acceptance liability Dr. Bankers liability on PAD (Deferred) Cr. Customers liability on PAD (Deferred) (ii) Dr. Sundry Deposit A/c. Margin on L/C (Deferred) Dr. Party's Account: Balance Amount Cr. MBL General A/c: CAD, ID on respective Nostro A/c for bill value with interest (if any) at Ready selling rate in case of USD & ACUD or TTOD rate for all other currencies. Cr. Income A/c: Exchange Gain on FC

A Study on Mercantile Bank Limited

The branch will issue payment Instructions to the Reimbursing Bank under intimation to the Beneficiary Bank or advise the Beneficiary Bank to claim reimbursement, if an R/A was advised earlier at the time of opening \JC or advising maturity date of accepted bill. BACK TO BACK L/Cs: The branch may open back to back import L/C against export L/C received by export oriented industrial unit operating under the bonded warehouse system, subject to

A Study on Mercantile Bank Limited

observance of domestic value addition requirement prescribed by the NBR/Ministry of Commerce from time to time. The following instructions should be complied with while opening Back to Back Import L/C: (i) (ii) The unit requesting for this facility should possess valid IRC, ERC and valid bonded warehouse licence,. The branch shall hold the Master Export L/C affixing Bank's lien stamp thereon and keep in safe for security purpose.

A Study on Mercantile Bank Limited

(iii)

The Master Export L/C should have validity period adequate to cover the time needed for importing inputs, manufacture of merchandise and shipment to consignee.

(iv)

The Back to Back L/C value shall not exceed the admissible percentage of net FOB value of the relative Master Export L/C (as per prescribed value addition requirement). For computation of net FOB value of a master export L/C, the freight charge, insurance cost and commission if payable by the exporter shall be deducted from the L/C value. If the freight element is not shown separately, freight certificate from the shipping company or agent should be asked for,

A Study on Mercantile Bank Limited

(v)

The Back to Back import L/C shall be opened on up to 180 days usance (DA) basis, except in case of those opened against Export Development Fund, administered by Bangladesh Bank, in which case the back to back L/C will be opened on sight (DP) basis,

(vi) (vii)

Interest for the usance period shall not exceed LIBOR or the equivalent interest rate in the currency of settlement, All amendments of the master export L/C should be noted down carefully to rule out chances of excess obligation under the back to back import L/C.

A Study on Mercantile Bank Limited

(viii) Back to Back L/C can either be local or foreign. Inland BTB L/C denominated in foreign exchange may be opened in favour of local supplier/ manufacturer of inputs against master export L/C and BTB L/C may, in turn, be opened for import of inputs against inland BTB L/C in favour of local (ix) supplier/manufacturer under bonded warehouse system up to value limits applicable as per prescribed value addition requirement. Vouching Procedure

A Study on Mercantile Bank Limited

(a) Creation of L/C liability Dr. Customers liability on BTB L/C Cr. Banker's liability on BTB L/C (Applicable rate: B.C Selling rate) (b) Commission & others charges Dr. Customers A/c: Commission for 180 days + FCC + Postal/ Telex Recoveries + Misc. Cr. Income A/c: Commission on L/C foreign. Cr. Income A/c: Postal/ Telex Recoveries. Cr. Income A/c: Miscellaneous earnings (Handling charges, stationery, etc.) Cr. Sundry Deposit A/c: FCC

A Study on Mercantile Bank Limited

Cr. Other Assets A/c: Stamps in Hand c) Amendment charges i) If the L/C value is increased Dr. Customers liability on BTB L/C (for increased amount) Cr. Banker's liability on BTB L/C Dr. Customers A/c: Commission for increased amount + other charges Cr. Income A/c: Postal /Telex Recoveries Cr. Income A/c: Miscellaneous earnings (Handling charges if any) Cr. Sundry Deposit A/c: FCC

A Study on Mercantile Bank Limited

ii) If L/C expiry time is extended beyond 180 days Dr. Customers A/c: Commission for further one quarter Cr. Income A/c: Commission on L/C (Foreign) & other vouchers

Acceptance & Lodgment of BTB Import Bill: On receipt of import documents against the L/C, the documents should be subjected to usual scrutiny. If found in order, the customer should be asked to accept the usance bill of

A Study on Mercantile Bank Limited

exchange. When the bill of exchange is returned by the drawee (i.e. importer) after duly accepted by him, the maturity date of the bill is to be worked out and noted in the PAD register and also in Due Date Diary (MBFx-16). The date of maturity of the Bill of Exchange is communicated to the negotiating or collecting bank by telex/ fax. Simultaneously the documents are lodged under ABP (Accepted Bills for Payment). Vouchers to be passed: i) Reversal of L/C liability Dr. Banker's liability on BTB L/C Cr. Customer's liability on BTB L/C

A Study on Mercantile Bank Limited

ii) Creation of Acceptance liability Dr. Customer's liability on BTB Bills From: Mercantile Bank Limited Cr. Banker's liability on BTB Bills (Applicable rate: B.C Selling rate) (iii) Vouchers for charges such as Telex/ Postal charges for advising maturity date and others Dr. Party's Account Cr. Income A/c: Postal/ Telex Recoveries of Back to Back L/C

A Study on Mercantile Bank Limited

Payment of BTB L/C shall be made at maturity, out of export proceeds. The required foreign exchange, out of repatriated export proceeds, will be set aside in a separate foreign currency account called FC held for BTB L/C. The branch will pay BTB bills according to their maturity within 3 working days from the date of realization of export proceeds. If export proceeds are not available, the ABP liability should be liquidated by grant of SOD (Export). Voucher to be passed:

A Study on Mercantile Bank Limited

(i) Reversal of acceptance liability Dr. Bankers liability on BTB bills Cr. Customer's liability on BTB bills (ii) Out of export proceeds settlement in FC Dr. Exporters F.C held A/c: Bill value with usance interest @ prevailing O.D sight (export) Cr. MBL General A/c: On Nostro A/c @ prevailing OD sight (export) (iii) Out of Export Proceeds settlement in B.D Taka Dr. Experts F.C held A/c

A Study on Mercantile Bank Limited

Cr. MBL General A/c: On Nostro A/c Dr. MBL General A/c: F.C amount on Nostro Account Cr. Income A/c: Exchange gain on FC Cr. Bills payable A/c: Payment Order Dr. Income A/c: Commission on Pay Order Cr. Income A/c: Postage recoveries (iv) If export proceeds arc not available - settlement in FC Dr. SOD (export) A/c Cr. MBL General A/cCr. Income A/c: Exchange gain on FC

A Study on Mercantile Bank Limited

(v) If export proceeds are not available - settlement in BD Taka Dr. SOD (export) A/c: Cr. Bills Payable A/c Cr. Income A/c: Exchange gain on FC Cr. Income; A/c: Commission on Pay Order Cr. Income A/c: Postage recoveries (vi) If export proceeds are not adequate to cover BTB Bill - settlement in FC Dr. Exporters FC held A/c Cr. MBL General A/c

A Study on Mercantile Bank Limited

Dr. SOD (export) A/c Cr. MBL General A/c Cr. Income A/c: Exchange gain on FC (vii) If export proceeds are not adequate to cover BTB bill - settlement of BD Taka Dr. Exporters F.C held A/c Cr. MBL General A/c Dr. MBL General A/c Dr. SOD (export) A/c: Cr. Income A/c: Exchange gain on FC

A Study on Mercantile Bank Limited

Cr. Bills payable A/c (export) less PO commission & Postal charges Cr. Income A/c: Commission on Pay Order Cr. Income A/c: Postage recoveries FOREIGN REMITTANCE Opening and Operation of Different Types of Foreign Currency Accounts: Convertibility of Taka in current account transactions symbolised a turning point in the country's exchange arrangement and exchange rate system. Now the operation of foreign

A Study on Mercantile Bank Limited

currency accounts have been more liberalized. Funds from this A/Cs are freely remittable to any country according to the needs of A/c holders.

A Study on Mercantile Bank Limited

Types of FC Account (a) Resident Foreign Currency Deposit (RFCD) Account: Persons ordinarily resident in Bangladesh may maintain foreign currency accounts with foreign currency brought in at the time of their return in Bangladesh from visits abroad. These accounts are termed as RFCD accounts. (b) Non-resident Foreign Currency Deposit (NFCD) Account:

A Study on Mercantile Bank Limited

Non resident Foreign Currency accounts may now be maintained as long as the account holder desire. Amount brought in by non-resident Bangladeshi can be deposited in FC account any time after to Bangladesh. Who can Open FC Accounts: The Branch with Authorized Dealership Licence may, without prior approval of Bangladesh Bank, open foreign currency A/Cs in their books in the name of:

A Study on Mercantile Bank Limited

(a)Bangladeshi nationals residing abroad (b) Foreign nationals residing abroad or in Bangladesh (c) Foreign firms and companies registered abroad and operating in Bangladesh or abroad (d) Foreign missions/Embassies/UN organizations and their expatriate employees (e) Diplomatic bonded warehouses (duty free shops) (f) Local and Joint venture contracting firms employed to execute projects financed by foreign donors/international donor agencies.

A Study on Mercantile Bank Limited

(g) Bangladeshi nationals working as employees/consultants in international bodies in Bangladesh and drawing pay and allowances/consultancy fees/honorarium in foreign currency. (h) Merchandise and service exporters (i) Bangladeshi Nationals who are ordinarily resident in Bangladesh may open foreign currency accounts with foreign exchange brought in at the time of their return to Bangladesh from visits abroad. (j) Industrial enterprises in EPZ.

A Study on Mercantile Bank Limited

Currency in which FC A/C can be Opened: FC Accounts can be opened either in (a) Pound Sterling (b) USD (c) EURO (d) Japanese Yen Documents required for Opening FC A/Cs:

A Study on Mercantile Bank Limited

(a) For Bangladeshi Wage Earners: Photocopy of first 7 (seven) pages of valid passport and visa page/arrival page Photocopy permit Two copies of passport size photograph of each account holder and nominee duly attested. (b) For Foreign National/Company/Firm of employment contract/appointment letter/work

A Study on Mercantile Bank Limited

Two copies of photograph of account holder for individual and operators of other account holder Copies of relevant pages of passport for individual and operators of other account holder Copy of service contract/appointment letter/work permit, if any for individual Copies of registration in Bangladesh with Board of Investment / Bangladesh Bank for Foreign Joint Venture Firm.

A Study on Mercantile Bank Limited

Copies of the Memorandum and Articles of Association/Laws/Bye Laws, etc. or Joint Venture Agreement for Joint Venture Company Mode of Operation: Foreign currency accounts opened in the name of Bangladesh nationals working abroad or self employed abroad can now be maintained as long as the account holder desires. Such accounts may also be opened by the eligible persons within six months of their return to Bangladesh.

A Study on Mercantile Bank Limited

Deposits: Credit to a foreign currency account may be made against inward remittance of foreign exchange in any form or transfer from another FC account or Non-Resident Taka Accounts of bankers abroad. ADs may also raise credits to such accounts with the proceeds of convertible foreign exchange viz. currency note, travelers' cheques, drafts, etc. brought into Bangladesh by the account

A Study on Mercantile Bank Limited

holders while on temporary visit to Bangladesh, provided such foreign exchange in excess of US$ 5000 or its equivalent has been duly declared by them to the customs at the time of their arrival. Portion of repatriated export proceeds of Merchandise/service exporters are allowed to credit to the exporters retention quota account. Foreign exchange earned through business done or services rendered in Bangladesh cannot be put into F.C account.

A Study on Mercantile Bank Limited

Withdrawals: Payments may be made freely abroad from these FC accounts to the extent of balance lying therein. Local disbursements may also be made freely in Taka from such foreign currency accounts. Funds lying in FC Accounts can be utilized for import of goods and commodities as per instructions issued by the CC1&E and Bangladesh Bank.

A Study on Mercantile Bank Limited

No payment in foreign exchange may be made to or on behalf of any resident in Bangladesh out of the FC accounts except foreign diplomats or privileged persons who have specific authority from Bangladesh Bank to accept such payment. OUTWARD REMITTANCE:

A Study on Mercantile Bank Limited

The term "Outward Remittance" include not only remittance i.e. sale of foreign currency by TT, MT, Drafts, Travelers cheque but also payment against imports into Bangladesh & Local currency credited to Non-Resident Taka Accounts of Foreign banks or convertible Taka account. Two forms are used for Outward Remittance of Foreign Currency, such as (a)IMP Form: All outward remittances on account of imports are done by form IMP. (b)T.M. Form: For all other outward remittances form TM is used. I. Private Remittance: For the following private purposes, outward remittances are permitted:

A Study on Mercantile Bank Limited

1. Family remittance facility: 2. Remittance of Membership Fees/Registration Fees etc.: 3. Education: 4. Remittance of Consular Fees: 5. Remittance of Evaluation Fees: 6. Travel 7. Health & Medical: 8. Seminars and workshops: 9. Foreign Nationals:

A Study on Mercantile Bank Limited

10. Remittance for Hajj: 11. Other Private Remittances II. Official & Business Travel: For the following official and business purposes, outward remittance is permitted:
1. 2. 3.

Official Visit: Business Travel quota for New Exporters: Business producers: Travel Quota for Importers and Non-exporting

A Study on Mercantile Bank Limited


4.

Exporters' Retention Quota:

III. Commercial Remittance: For the following commercial purposes, outward remittances are permitted:
1. 2. 3. 4. 5.

Opening of branches or subsidiary companies abroad: Remittance by shipping companies, Airlines & Courier Service: Remittance of Royalty and Technical Fees: Remittance on account of Training & Consultancy: Remittance of Profits of Foreign Firms/Branches:

A Study on Mercantile Bank Limited


6. 7. 8. 9.

Remittance of Dividend: Subscriptions to Foreign Media Services: Costs/Fees for Reuters Monitors: Advertisement of Bangladeshi Products in mass media abroad: Changes:

10. Bank

INWARD REMITTANCE: The term inward remittance includes not only the purchase of foreign currencies y TT, MT, Draft etc., but also purchase of TC.

A Study on Mercantile Bank Limited

Utmost care to be taken wile purchasing notes, TC, DD and similar instruments for protecting the Bank from probable loss as well as safety of the bank officials concerned.

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

A Study on Mercantile Bank Limited

Chapter-6 Performance

A Study on Mercantile Bank Limited

evaluation of

A Study on Mercantile Bank Limited

6. MERCANTITE BANK LTD AT A GLANCE (BDT in millions)


PARTICULARS Paid up capital Total capital fund Capital surplus/deficit Total assets Total deposits Total Loans & Advances 2006 2158.42 4995.43 226.86 66166.52 58033.72 48295.55 2007 1798.68 4131.21 120.41 55928.72 49538.35 43419.36

A Study on Mercantile Bank Limited


Total contingent liabilities and commitments Credit deposit ratio ( in % ) Percentage of classified loans against total loans and advances Profit after Provision before Tax Amount of classified loans during the year Provision kept against classified loans Provision surplus Cost of fund (in %) Interest earning assets Non-interest earning assets Return on investment (in %) Return on assets (in %) Income from investment Earnings per share (BDT) 807.52 261.24 629.70 1.09 8.81 57471.28 8695.24 8.75 1.22 696.66 37.41 615.88 348.47 578,20 9.19 49941.85 5986.87 10.46 1.10 52o.33 28.53 21757.17 83.22 2.59 19917.86 87.65 2.96

A Study on Mercantile Bank Limited


Net income per Share (BDT) Price earnings ratio (Approximate) 37.41 11 times 28.53 12 times

Date: 23- May-2010


Sl. No 1.a 1.b 1.c 1.d 1.e Particular s Base Deposit Bank Deposit Bills Payable Other Liability Total Upto Last Date on 10,555,014,000,00 295,026,000.00 1,730,444,000.00 12,580,484,000.00 As on 10,632,661,00. 00 212,892,000.0 0 1,653,033,000. 00 12,494,588,00 Increase/Decreas e 77,647,00.00 0.00 -82,134,000.00 -77,409,000.00 -81,896,000.00 Banks Name Int. Rate Taka In Lakh

A Study on Mercantile Bank Limited


2 **3 **4 **5 Deposit Total Advances Total Income Total Expenditur e Profit 16,705,122,000.00 741,402,700.62 419,589,734.50 321,812,966.12 0.00 16,803,397,00 0.00 74,534,432.49 419,709,528.0 0 322,824,903.5 7 303,055,673.6 2 80,777,962.15 19,769,229.95 98,275,000.00 1,131,731.87 119,794.42 1,011,937.45

Total Profit Cumulative (Up to Last Month) Profit last month (April) Profit this month (May) ** Excludes all accruals Import, Export & Remittance

A Study on Mercantile Bank Limited


Particulars Upto Last Date on 19/05/2010 No Amount 741 447.35 2389 397.23 890 3279 3992 374 2350 1626 290.80 688.03 1135.38 107.16 711.01 229.87 As on 20/05/2010 No. 15 17 3 20 35 1 19 12 Amount 5.29 2.82 4.15 6.97 12.26 0.67 5.33 1.88 Total Amount is Crore Tk. No. Amount 756 452.64 2406 400.05 893 3299 4027 375 2369 1638 294.95 695.00 1147.64 107.83 716.33 231.75

a. b.

L/C (Cash) L/C (BTB Local) c. L/C (BTB Foeign) Sub Total BTB L/C Total a)Export Bill (Gen) b) Export Bill (RMGF c) Export Bill

Import Export

A Study on Mercantile Bank Limited


(RMGL) Total Inward Outward Total 4350 0 0 1048.03 51.57 5.30 56.87 32 0.00 0.00 7.88 4382 0 0 1055.91 51.57 5.30 56.87

Amt in Crore

Remi ttanc

Performance of the Previous Year Particulars Year-2006 Total Deposit Base-66,791.93 Bank-11,100.00 Other Liability9,181.92 Bills Payable-1,191.11 Total-88,264.97 Total Advance 105,355.35 Total Income 15,111.45 Total Expenditure 10,893.05

Figure in lakh Taka Year-2007 Year-2008 Base-76,633.66 Base-76,633.66 Bank-12,503.30 Bank-12,503.30 Other LiabilityOther Liability10,077.72 10,077.72 Bills Payable-4,705.25 Bills Payable-4,705.25 Total-103,919.93 Total-103,919.93 133,845.01 162,797.41 15,111.45 21,953.34 17,183.05 16,422.57

Year-2009 Base-89,584.93 Bank-2705.55 Other Liability15,489.64 Bills Payable-2,049.38 Total-109,829.50 154,286.29 23,134.22 16,514.08

A Study on Mercantile Bank Limited


Profit L/C Cash L/C BTB Total L/C Total Export Bill 4,238.40 No. 1454 Tk. 951.25 No. 5503 Tk. 958.54 No. 6930 Tk. 1908.75 No. 8405 Tk. 2072.54 Total Deposi t Yearly Budget Budget Upto This Month 1335 Total Advances 1850 5,196.25 No. 1351 Tk. 951.14 No. 6188 Tk. 988.22 No. 7539 Tk. 1939.34 No. 8561 Tk. 2022.78 Total Import 3000 Total Export 3000 5,530.77 No. 160 Tk. 1,320.70 No. 6973 Tk. 2,281.93 No. 8671 Tk. 2,603.65 No. 10,960 Tk. 2,602.75 Total Remittan ce 545 Profit This Month 6,620.14 No. 1765 Tk. 1,157.13 No. 7225 Tk. 1,273.74 No. 8,990 Tk. 2,372.31 No. 10,210 Tk. 2,570.00 Tota l Prof it 100

Export

A Study on Mercantile Bank Limited Total export earnings during FY09 amounted to USD 15.54 billion compared to USD 14.11 billion in FY08, indicating an increase of 10.12% export growth in FY09.tThis double digit export growth is mainly due to RMG, thanks to the so-called Wal-Mart effect that sustained demand for low- end garments in the US-EU markets. Export earnings falls sharply after the first quarter of FY10 and then gained back since the end of second quarter of FY10.

A Study on Mercantile Bank Limited

Import Import payments during FY09 amounted to USD 22.51 billion compared to USD 21.63 billion in FY08 showing 4.06% growth in import cost. Import trend, during the last two quarter in FY09 fall below Compare to that of FY08.

A Study on Mercantile Bank Limited Trade Balance Trade balance for FY09 displayed a deficit of USD 6.97 billion compared to USD 7.52 billion deficit in FY08. The trade gap declined due to the fall in import cost resulting from the world economic meltdown that became evident on October 2008. Remittance Remittance earning crossed USD 10.00 billion mark first time in Bangladesh in 2009 as migrants, a main driver of the countrys economic progress, sent huge amount of their hard earned foreign currency despite all odds during global recession. Total remittance inflow in 2009 recorded to USD 10.72 billion against USD 8.97 billion in 2008 showing 19.44% growth in 2009 turning down World Banks forecast of only 12-15% of such growth.

A Study on Mercantile Bank Limited

Foreign Exchange Market

A Study on Mercantile Bank Limited The exchange rate between Bangladesh Taka (B D T ) and the United States Dollar (USD) has remained fairly stable with the B D T 69.27 as of December 2009 when compared to B D T 68.89 in December 2008. There is no Euro/BDT Bangladesh and of USD/BDT rate is calculated from the traded rates of USD/BDT . At the end of December 2009, every Euro was equivalent to BDT 99.57 compared to BDT 92.57 in December 2008.

A Study on Mercantile Bank Limited

Chapter-7

A Study on Mercantile Bank Limited

Recommendatio ns

A Study on Mercantile Bank Limited

and conclusion

7.1 Identified Problems for the Mercantile Bank

A Study on Mercantile Bank Limited

The main constraint of the study was insufficiency of information that was highly required for the study. Since the bank officials are very busy with their activities, as a result it was though to have proper knowledge as was required for the study. The duration was not enough to cover all aspects of banking. Lack of depth knowledge and analytical ability for writing import. The data and information related with the topic was not easily available because of confidentiality of the concern.

A Study on Mercantile Bank Limited

Foreign Exchange dealing is a technical job and has a great prospect in our country. Floating Exchange Rate has been introduced and it has put the banking sector into a new era. Bangladesh Banks total control is not there but there is some risk factor involved in it. Mercantile Bank Ltd wanted to find whether the process of their foreign exchange operation is good enough to avoid any unwanted risk and the prospect in foreign exchange dealing in their present standing, The office of MBL, Mohakhali Branch, and Dhaka is not sufficient enough. In MBL, Mohakhali Branch, Dhaka maximum officers are working in a specific desk for a long time and for this reason they may feel monotony and certainly they

A Study on Mercantile Bank Limited

are not be able to know the overall banking activities through they have enough eagerness to know. Foreign Exchange Section is one of the busiest sections in Bank. Sometimes it is found that all works are not performed efficiently due to insufficiency to Officer/Staffs. Training facility isnt sufficient especially for the lower level officers. Still now, like most of the branches of MBL, Mohakhali Branch, Dhaka, follows the traditional banking system.

A Study on Mercantile Bank Limited

MBL, Mohakhali Branch, Dhaka, has no reception section and has no receptionist that may receive phone calls and complains from customer and supply the enough information. In this branch there is lack of modern equipments.

7.2 Recommendations
In view of the facts, the following recommendations are made to the respective concerned for the consideration and implementation.

A Study on Mercantile Bank Limited

The bank should have standardized system of measuring customer satisfaction. Need for integrity of the officials within reasonable limits. The officials should have a through knowledge of the product. The officials should be trained up for their efficiency. Reasonable interest rate for all kinds of loan. Increasing number of staffs and cash terminals. Officials should be more cooperative with the clients. Officials should be trained up for self-management. Customized new financial product development. Officials should be faster during transaction. Bank can accept new ideas from the customers for regarding improvement the quality of their service.

A Study on Mercantile Bank Limited

They need to maintain an upgraded guideline for the employees to avoid any kind of confusion. They should enhance their savings facilities by introducing many other saving schemes, because customers really look for various savings programs. Special increment should be given to middle and junior level managers and executives also to increase their motivation level.

7.3 Conclusion

A Study on Mercantile Bank Limited

From the beginning of greater change in the world economic structure, banking activities has becoming an important thing. Now a day the idea of banking is also developed and a huge number of private commercial banks are just on waiting for business. So it is a matter of think that how to establish an idea with different techniques, In Bangladesh, Commercial banks are playing vital role in the development of our economy and financial system. Standard Charted Bank Limited has a strong position in the todays competitive market. The MBL, Mohakhali Branch, Dhaka also contributing a better proportion of profit in MBLs total earning. Total analysis of the bank has the greater opportunity to do better in the future.

A Study on Mercantile Bank Limited

Day by day MBLs area of service is increased all over the country through setting up new branches at new places. The reliability of the customer on MBLs increasing day by day for its better services. But they may introduce online and ATM services comparing with other commercial bank to improve their services and to make efficient and easy customer services. They also may follow the given recommendations in order to improve day by day. Mercantile Bank Limited may contribute a vital role in the socio-economic prospective and in the development of our economy.

A Study on Mercantile Bank Limited

The MBL has been trying to operate its business successfully in Bangladesh since 1999. MBL has already developed an image of goodwill among its clientele by offering its excellent services. This success has resulted from dedication, commitment and dynamic Leadership of its management over the periods. During the short span of time of its operation, the bank bas successfully grabbed a position as a progressive and dynamic financial institution in the country. If the bank goes this way. It is expected that in the near future MBL may become one of the top performers in the banking sector. Here I observed its deposit figure is strong. The bank should take necessary action for maintaining .MBL has been able to maintain its recovery position in sector wise credit

A Study on Mercantile Bank Limited

financing is up to the satisfactory level. At last it should give more emphasis in this sector to acquire more profit.

S-ar putea să vă placă și