INTERNSHIP REPORT

ON
Foreign Exchange
Product and Practice of Mercantile Bank
Ltd.

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12-April-2012

Foreign Exchange
Product and Practice of Mercantile Bank
SUPERVISED BY
Syeda Kamrun Ahmed
Lecturer
Bachelor of Business Administration
Southeast ni!ersity
.
Signature of the su"er!isor

Prepared By
Mohammad Asif #ossain
$ho%dhury
&'( )**+*,****,-,
Batch( ,+. Ma/or in Marketing
Bachelor of Business
Administration
Southeast ni!ersity
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Letter of 0ransmittal
April 15, 2012
Syeda Kamrun Ahmed
Lecturer
Bachelor of Business Administration
Southeast ni!ersity
Su"#ect$ Su"mission of internship report
%onora"le &adam,
' am !ery glad to inform you that ' ha!e finally completed the internship study successfull y,
(hich (as a partial fulfillment of the re)uirement for the Bachelor of Business Administration
program*
+he topic of my internship study is Foreign Exchange Pro!c" an Prac"ice o# $ercan"ile
%an& '"() ' en#oyed !ery much "y preparing this study as (ell as it (as a (orth(hile
e,perience for me to (or- in the challenging en!ironment of a leading pri!ate commercial "an-*
' am undenia"ly than-ful to you . my department for gi!ing me the opportunity to o"tain
practical s-ills as (ell as to learn ho( to cope (ith the practical situations, (hich is !ery much
!alua"le for my future career*
/inally ' assure you that ' ha!e tried my "est to ma-e a systematic and informati!e summary
"ased on my practical (or-* 'f you need further clarification, ' am al(ays ready to ans(er your
)uestions*
0ours Sincerely,
&ohammad Asif %ossain 1ho(dhury
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'3$ 2004010000151
Batch$ 14, &a#or$ &ar-eting
Bachelor of Business Administration
Southeast ni!ersity
Su"er!isor1s $erti2cate
+his is to certify that &ohammad Asif %ossain 1ho(dhury, '3$ 2004010000151, Batch$ 14a
student of &ar-eting 3epartment, Southeast ni!ersity (or-ed under my super!ision* %is
internship placement is at &ercantile Ban- Limited, &ain Branch* ' am pleased to state that
&ohammad Asif %ossain 1ho(dhury (or-ed hard in preparing this report and she has "een a"le
to present a good picture of the concerned topic area* +he data and findings presented in the
report seem to "e authentic*
&ohammad Asif %ossain 1ho(dhury possesses a good moral character and pleasing personality*
' (ish her all success*
Syeda Kamrun Ahmed
Lecturer
Bachelor of Business Administration
Southeast ni!ersity
3ha-a, Bangladesh*
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A
$ K 3 4 5 L E ' 6
$ K 3 4 5 L E ' 6
E M E 3 0
E M E 3 0
To complete any task successfully, we need inspiration, guidance, and
fnancial and logical help from others. It is also applied in case of my
preparation of this report. . In preparing this report, diferent persons hae
e!tended their helping hands to me. It would hae not "een possi"le for me
to prepare this report without their help. I am ery much fortunate to get the
sincere guidance and superision from a num"er e!perienced persons.
#t frst I would like to e!press my deepest gratitude to the almighty god for
giing me the opportunity to complete this report within the scheduled time.
My heartfelt appreciation goes to my family mem"ers for their assistance
and cooperation.
I would like to e!press my inde"tedness and deep sense of gratitude to my
Institution$s superisor Syeda Kamrun Ahmed, Lecture. Bachelor of
Business #dministration, and %outheast &niersity whose scholastic
superision' wholehearted guidance, warm adice and encouragement hae
ena"led me to prepare this report.
I am especially inde"ted to Mr. Taposh (umar Paul, #)M, Mercantile Bank *td.
whose direct cooperation + recommendation helped me to get such a nice
internship facility in this reputed organi,ation. -ery special thanks to Mr. %.M
%hamasu,aman, ./cer, Main Branch, Mercantile Bank *td. for assisting me
in preparing this internship report. The other personnel, stafs and
employees of Main Branch of Mercantile Bank *td. also assisted me to go
through the "anking actiities. Their oerwhelming support during the
internship program gae me the inspiration to complete the report
successfully.
5 | P a g e


0uring my preparation of the report work I hae come to ery supportie
touch of diferent indiiduals of "usiness world, especially in the "anking
arena. I would like to tri"ute my felicitations to them.
I am also grateful to our 0epartmental 1hairman, for giing me an identity
with which I could work at Main Branch of Mercantile Bank *td. 2inally, I
would like to e!press thanks to my entire course teacher and the 0epartment
for introducing such academic work.
Executi!e Summary
Ban-ing sector is one of the sta"le financial institutions of a country* &ercantile Ban- Limited
has "y no( attained the uni)ue position of a leading pri!ate commercial "an- in Bangladesh and
a leading financial institution in the "an-ing sector* Ban- has the reputation of "eing the pro!ider
of good )uality ser!ices to their customer* +hese institutions play a !ital role in the field of
financial sta"ility of a country* 3ate of the incorporation is &ay 20
th
, 1777* 't started its
operations on 2 8une 1777*
+his report has "een prepared through e,tensi!e discussion (ith Ban-9s employees and "an-ing
performance* +he report (ill also present the current position of &ercantile Ban- Limited on the
"asis of their performance* :ecessary data and information is collected from "oth primary and
secondary sources*
Ban- has a significant role in the economic de!elopment process of a country* +oday "an-ing
sectors are "eing pro!ed the most important sector in the economy of Bangladesh* Ban-s are the
custodians of the society economic resources and total economies de!elopment depends on the
proper utili;ation of these resources* +he successful "an-ing "usiness ensures the gro(th of the
economy "y the effecti!e uses of the funds* 'n order to de!elop the national economy, "an-s
-eep in mind for going lending, maintaining safety, li)uidity and profita"ility* +he study is
designed "ased on the issue li-e ho( &BL is operating its /oreign <,change Acti!ities*
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/oreign <,change 3epartment is an integral part of "an-ing "usiness* &BL9s foreign e,change
dept* plays a !ital role to earn the "an-9s ma,imum profit* L>1 is the main instrument of /oreign
<,change "usiness* +he dept* is classified according to their acti!ities* +he foreign e,change
dept* consists of three sections$ 'mport section* <,port section, foreign remittance section*
/irst section focused on introduction, o"#ecti!e, scope, limitations, and methodology of the
report* +he second section focused on the o!er!ie( of the organi;ation ?&BL@, represented some
critical and important information a"out the historical "ac-ground, o"#ecti!es, mission, etc* of
&BL on (hich report has "een prepared* +he third section focused the foreign e,change
department of &BL* /oreign e,change department has e,port, import and remittance section, the
detail procedure of these sections are descri"ed and also some pre!ious history of foreign
e,change are gi!en in this section* And the last part includes the findings and some
recommendation for &BL from my perspecti!e and conclusion*
'n this phase ?three months@ of my education ' recei!ed the practical -no(ledge related (ith my
education* +he goal, o"#ecti!e, features and function of main "ranch is to assist the o!erall goal,
o"#ecti!e, feature and function of &ercantile Ban- Limited* &ercantile Ban- tries to introduce
international standard products and ser!ices to attract the customers . upgrade their satisfaction
le!el* ' e,pressed my o"ser!ation and personal e,perience to(ards the "an-* ' made necessary
recommendations to "e ad#usted to maintain the organi;ations #ourney to the e,cellence
according to my !ie(point* +o summari;e the (hole situation, ' (ould li-e to say that, this
organi;ation is trying their "est and putting a lot of efforts to standardi;e the "an-ing system in
our country* And as per my understanding, this "an- (ill definitely progress (ith the
moderni;ation of "usiness en!ironment*
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Ta*le o# +on"en"

'e""er o# Tran,-i""al
Ac&no.lege-en"
Acrony-,
Exec!"i/e ,!--ery
Ta*le o# +on"en"
+hap"er One -- In"ro!c"ion
1)1In"ro!c"ion
1)2 %ac&gro!n o# "he S"!y
1)0 O*1ec"i/e o# "he S"!y
1)2 Scope o# "he S"!y
1)3 $e"hoology o# "he ,"!y
1)4 'i-i"a"ion o# "he ,"!y
+hap"er T.o -- O/er/ie. o# $ercan"ile %an& 'i-i"e
2)1 A*o!" $ercan"ile %an& 'i-i"e
2)2 Hi,"ory
2)0 5i,ion, $i,,ion an O*1ec"i/e, O# $%'
2)2 +ore 5al!e,
2)3 Ti-eline o# $%'
2)4 Fea"!re o# $ercan"ile %an& 'i-i"e
2)6 Technology
2)7 $echani,-
2)8 $anage-en" S"r!c"!re o# $%'
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2)10 9i/i,ion o# $%'
2)11 Ser/ice, O##er *y $ercan"ile %an& 'i-i"e
2)12 9epo,i" $ix
2)10 loan, an A/ance,
2)12 Ne" Pro#i"
2)13 O"her Ser/ice,
2)14 Per#or-ance, o# "he *an&
+hap"er Three : Theore"ical %ac&gro!n o# Foreign Exchange
0)1 Foreign Exchange
0)2 Foreign Exchange $ar&e" An %anglae,h
0)0 F!nc"ion o# Foreign Exchange 9epar"-en"
0)2 Type, o# Foreign Exchange Opera"ion
0)3 The $o," +o--only ;,e 9oc!-en", In Foreign Exchange
0)4 I-por"ance o# Foreign Exchange %an&ing
+hap"er Fo!r:Foreign Exchange Pro!ce an Prac"ice o#
$ercan"ile %an& 'i-i"e
2)1 Foreign Exchange -anage-en" ,"r!c"!re o# $%'
2)2 I-por"
2)0 I-por" proce!re,
2)2 I-por" $echani,-
2)3 Neee 'egal Re<!ire-en", !ring I-por"
2)4 Tren o# i-por"
2)6 'e""er o# +rei"
2)7 Type, o# 'e""er o# +rei"
2)8 Ter-, an +oni"ion
2)10 Par"ie, in/ol/e in '=+ Opera"ion
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2)11 E,,en"ial paper neee #or Opening 'e""er o# +rei" >'=+?
2)12 Regi,"ra"ion o# a '=+
2)10 'a.#!l o##icial proce!re #or opening 'e""er o# +rei"
2)12 Opening '=+
2)13 A/i,ing a '=+
2)14 +oni"ion, o# '=+
2)16 A-en-en",
2)17 +ancella"ion o# '=+,
2)18 Expor"
2)20 Expor" policy
2)21 Expor" incen"i/e,
2)22 Expor" proce!re, #ollo.e *y $%'
2)20 Expor" #inancing
2)22 Expor" earning
2)23 Foreign Re-i""ance
2)24 Type, o# Re-i""ance
2)26 In.ar re-i""ance,
2)27 O!".ar Re-i""ance
2)28 I-por", Expor" @ Re-i""ance Po,i"ion
2)00 A!an"i"a"i/e Analy,i, o# Foreign exchange *!,ine,,
2)01 Foreign exchange inco-e o# $ercan"ile %an& 'i-i"e
2)02 Analy,i,
+hap"er Fi/e
Fining,
Reco--ena"ion,
+oncl!,ion
%i*liography
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$ha"ter ,
&ntroduction
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,., &ntroduction
'n order to -no( a"out a financial organi;ation li-e a "an-, a person should -no( all section of
the financial organi;ation in times* So ' thin- that foreign e,change management procedures are
an important topic* +his section is intended to pro!ide minimum "ac-ground and procedural
guidelines to e,aminers responsi"le for e!aluating a "an-9s foreign currency acti!ities (ithin
indi!idual "an-s, foreign currency money mar-et and e,change trading operations may "e
com"ined or completely separate (ith regard to policies, procedures, reporting, and e!en
dealing* +his section discusses "oth functions as if they (ere performed "y the same traders,
processed "y the same "oo--eepers and managed "y the same officers* &ost importers,
e,porters, manufacturers, and retailers tend to let "an-s handle their foreign e,change needs*
+hey rely on "an-s to ma-e and recei!e their foreign currency payments, to pro!ide them (ith
foreign currency loans, to fund their foreign currency "an- accounts and purchase their e,cess
foreign currency "alances* +hey may as- "an-s to pro!ide such ser!ices for immediate deli!ery,
this course group pro!ides an inAdepth understanding of the !arious ris-s ?transaction, translation
and economic e,posure ris-s@ a corporate is e,posed to, (hen dealing in foreign e,change*
Ban- is defined as a financial institution that collects deposits from !arious indi!idual and
organi;ations and pro!ides loans to those (ho need it* But modern "an-s do not mean only the
means of collecting and dis"ursing money to !arious entities* Bather it pro!ides !arious ser!ices
to !arious entities (hich facilitate their "usiness operations* A foreign e,change operation of
"an-s is one of those ser!ices that not only facilitates the "usiness of "usinessmen "ut also
contri"utes to the de!elopment of the economy as a (hole* /oreign e,change is defined as the
mechanisms "y (hich the currency of one country is con!erted into the currency of another
country* /oreign e,change is the means and methods "y (hich rights to (ealth in a countryCs
currency are con!erted into rights to (ealth in another countryCs currency* /oreign e,change
department of "an-s plays significant roles through pro!iding different ser!ices for the
customers*
12 | P a g e


,.) Background of the study
:o -no(ledge is fully complete unless it is fully supported "y e!ents on ground* Dhate!er may
"e the )uality of theoretical -no(ledge, it is not complete (ithout practical implication on
ground* Any academic course of study has a great !alue (hen it has practical application in real
life* +his reali;ation is more pronounced in the study of Business Administration (here
e,perience on ground plays a dominant role* Bachelor of Business Administration ?BBA@ is
designed (ith an e,cellent com"ination of practical and theoretical aspects* After completing the
BBA, it is re)uired for e!ery student to complete the internship or dissertation program (ith
duration of three months* As a student of BBA to fulfill the re)uirement of this 3egree, ' (as
assigned to pursue 'nternship in &ercantile Ban- Limited, &ain Branch, 3ha-a*
&ercantile Ban- Limited is a speciali;ed financial institution that performs most of the standard
"an-ing ser!ices and in!estment acti!ities on the "asis not only profit sharing "ut also social
partnership* +his study attempts to analy;e the nature of modern "an-ing acti!ities and
performance of &ercantile Ban- Limited* All through the internship program, close o"ser!ation
(as made on different "an-ing acti!ities of &ercantile Ban- Limited* 'ts performance (as
re!ie(ed and analy;ed through the annual reports, and internal records of the "an-* ' ha!e tried
my "est to use this opportunity to enrich my -no(ledge on "an-ing system* After o"ser!ing
thoroughly, ' ha!e prepared this report on the "asis of my findings and o"ser!ation relating to the
topic*
,.7 48/ecti!e of the study
+he o"#ecti!e of the study is to o"tain an understanding of the practical "an-ing acti!ities and
relate them (ith theoretical -no(ledge that ' gained through the theoretical training in the
uni!ersity and from !arious documents of the "an-* Beside this, the follo(ings are the specific
o"#ecti!es (hich ' (ill try to co!er in my report
Beneral o*1ec"i/eC
+o apply theoretical -no(ledge in the practical field*
+o o"ser!e the (or-ing en!ironment in commercial "an-s*
+o get an o!erall idea of "an-ing from "an-er9s point of !ie(*
12 | P a g e


+o "e familiar (ith rules, regulations theories and practices for "an-ing*
+o -no( the "an-ing guideline and gather idea a"out operational procedure*
Speci#ic O*1ec"i/eC
+o analysis the import trade, e,port trade and remittance flo( of &BL*
+o analysis the gro(ths of foreign e,change operation and profit*
+o re!ie( the techni)ues used "y the &ercantile Ban- Limited in /oreign <,change
operation*
+o identify the ne( rising pro"lems and the possi"le solutions*
,.9 Sco"e of the re"ort
/or fulfilling partial re)uirement of BBA degree a student has to do course of internship from
different institution* ' ha!e learnt theoretical seasons in last four years at the uni!ersity and its
practical implement leading internship* So ' ha!e chosen &ercantile Ban- Limited for
completing internship course* /rom my #oining date ' ha!e (or-ed different des-* ' ha!e (or-ed
in, L>1 opening, acceptance and foreign e,change import . e,port reporting* Actually my report
in, L>1 opening, acceptance and foreign e,change import . e,port reporting* Actually my report
topic is Eforeign e,change management of &ercantile Ban-F this report (ill "e prepared "ased
on my practical des- (or- and "ased on annual report* /or this reason ' ha!e tried to (or- that
place (hich is interrelated (ith my report topic li-e L>1 opening, acceptance and foreign
e,change import .e,port reporting etc*
,.: Methodology
+his report has "een prepared on the "asis of e,perience gathered during the period of
internship* /or preparing this report, ' also got information from annual report and (e"site of the
&ercantile Ban- Ltd* ' ha!e presented my e,perience and findings* Actually, this study is
descripti!e in nature* &a,imum data (ere collected from the primary sources* +he details of the
(or- plan are furnished "elo(
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Fig!re 1C S"r!c"!re o# So!rce, o# 9a"a
Pri-ary 9a"a
1ollecting data directly from the practical field is called primary sources of data* +he method
that (ill "e used to collect the primary data is as follo(s
In"er/ie.C /ace to face con!ersation (ith the respecti!e officers and stuffs of the
"ranch and head office help me collect information*
Prac"ical .or& experienceC Dor-ing in the different des- of the "ranch ' collect
some information that ma-e the report information*
Bro!p i,c!,,ionC Group discussion (ith other internee of the "ranch and my
classmates is another (ay to ma-e me informati!e*
Seconary 9a"a
+he secondary data is collected from the &'S of &ercantile Ban- Limited* +o clearly different
conceptual matters, internet and different article pu"lished in the #ournals and maga;ines (ill "e
used* Sources of secondary information can "e defined as follo(s
In"ernal ,o!rce,
Ban-9s annual report
Group "usiness principal manual*
Group instruction manual and "usiness instruction manual prior
research report*
Any information regarding the "an-ing sector*
15 | P a g e


Ex"ernal ,o!rce,C
1= | P a g e


3eleant "ooks, 4ournals, newspapers and diferent
newsletters
Pu"lications regarding "anking function, products
and serices
Bangladesh Bank report
5.6 %cope of the 3eport
The report coers the organi,ational structure, "ackground, o"4ecties,
functions, management and actiities of the "ank. The scope is also limited
to diferent products and serices of MB*. The scope of the study is 4ust to
ac7uaint with the operational mechanisms of MB*, its "anking systems and
the serices it proides to the customers. MB* proides or ofers the common
and usual serices like the other commercial "anks. This study will show the
types of actiities and how e/ciently it performs its actiities.
5.8 3ationale of the study
In this 95
st
century Banks are the life:"lood of modern economy irrespectie
of its si,e + pattern. Banks are esta"lished to earn proft and help economic
and fnancial actiities so as to help economic deelopment of a county. In
such a conte!t, the main "usiness of Banking is to take deposits from
customers and sanction credit to the "orrowers. In performing
multidimensional actiities like "orrowing and lending of money, the world of
"anking is undergoing a transformation. Beside "anks are direct agents to
create opportunities for the deelopment of a country and also proide large
scale of employment opportunities. Banks are the most important
functionary of fnancial system of a country and Mercantile Bank *imited is
one of them. It plays a dynamic role in the economic deelopment of a
nation through of saing and allocation of credit to priates and industrial
sectors. It dierts and employs the funds in such aenues which are aimed to
deelop a country$s economy.
15 | P a g e


,.- Limitations of the study
+he report is presented on the "asis of face to face con!ersation (ith the officer and the practical
e,perience in the "an-* &ercantile Ban- Limited organi;ational en!ironment (as !ery helpful,
"ut ' felt some limitations such as$
+ime constraint prohi"ited the preparation of an effecti!e report*
Hast areas of tas-s operated "y the "an-*
+he hea!y pressure of tas- on each des- therefore they could hardly pro!ide little
time to discuss*
3ue to some ris-y monetary transaction*
+he secondary data that ha!e "een o"ser!e (as in a form, (hich (as not helpful
for this study*
3ue to the safety and security reasons, access to all the confidential data (as not
o"tained*
+he information that is pro!ided is the synopsis of the real !olume of information,
so the complete pictures of the concerned aspects are not e!ident*
+oo much of "ul- data in the internet, (hich made (or- more difficult*
Lac- of selfA-no(ledge concerning report preparation, (as also a limiting factor
in preparing a "etter report*
'n many cases, up to date information is not pu"lished*
+he information regarding the competitors is difficult to get*
And it is my first (or-, and ine,perience (as a pro"lem
14 | P a g e


17 | P a g e


Chapter 2
Historical Background
Of
Mercantile Bank Limited
20 | P a g e


9.5 #"out Mercantile Bank *imited
&ercantile Ban- Limited emerged as a ne( commercial "an- to pro!ide efficient "an-ing
ser!ices (ith a !ie( to impro!ing the socioAeconomic de!elopment of the country* +he
philosophy of &ercantile Ban- Ltd is not to Icarry coal to the ne( castleC* +he main target is to
ma-e credits a!aila"le to the poor people and their acti!ities are aimed at comprehensi!e gro(th
(here people from all economic strata (ill en#oy the "enefits of "etter li!ing standard, dignity of
la"or and self (orth*
+he Ban- determined to "uild a longAterm customer relationship (ith its corporate . general
clients* As a part of this, &ercantile Ban- ltd* is trying to e,pand their "usiness (ith the mar-et
leaders of each sector of "usiness* &ercantile Ban- ltd* emphasi;es not only on customer
satisfaction "ut also emphasi;es general "an-ing and credit management system* So that
customer can get "etter ser!ice from e!ery side of o!erall "an-ing*
&ercantile Ban- Ltd is al(ays ready to maintain the highest )uality ser!ices "y upgrading
Ban-ing technology, (ell management system and applying high standard of "usiness ethics
through its esta"lished commitment and heritage and is representing itself (ith true concept as
EBanglar Ban-F*
9.9 ;istory
&ercantile Ban- has "een incorporated on &ay 20, 1777 in 3ha-a, Bangladesh as a limited
company (ith the permission of the Bangladesh Ban-J &BL commenced formal commercial
"an-ing operation from the 8une 2, 1777* At present, the "an- has 55 Branches and 2 S&<
ser!ice center* +he Authori;ed 1apital of the Ban- is 4000*00million ta-a and the PaidAp
1apital is 6052*21million ta-a as on 3ecem"er 21, 2010* +he Ban- (ent for pu"lic issue of
shares on in 2002 and its shares are listed (ith 3ha-a Stoc- <,change and 1hittagong Stoc-
<,change* +he Ban- pro!ides a "road range of financial ser!ices to its customers and corporate
21 | P a g e


clients* +he Board of 3irectors consists of eminent personalities from the realm of commerce
and industries of the country*
&ercantile Ban- Limited emerged as a ne( commercial "an- to pro!ide efficient "an-ing
ser!ices and to contri"ute socioAeconomic de!elopment of the country* +he commercial "an-ing
acti!ities of the Ban- encompasses a (ide range of ser!ices including accepting deposits,
ma-ing loans, conducting money transfer and foreign e,change transactions, and performing
other related ser!ices such as safe -eeping, collections, issuing guarantees and letters of credit*
&ercantile Ban- Limited is committed to(ards e,cellence in ser!ice (ith efficiency, accuracy
and proficiency and e,tended its arms to(ards meeting its social o"ligations* &ercantile Ban-
Limited is fully committed to the deli!ery of superior shareholders !alue, 'nitiati!e ranging from
ha!ing more efficient capital structures*
+here are thirty Sponsors in!ol!ed in creating &BL the Sponsors of the Ban- ha!e a long
heritage of trade, commerce and industry* +hey are highly regarded for their entrepreneurial
competence* +he Sponsors happen to "e mem"ers of different professional groups among (hom
are also reno(ned "an-ing professionals ha!ing !ast range of "an-ing -no(ledge* +here are
also mem"ers (ho are associated (ith other financial institutions li-e insurance companies,
leasing company9s etc*
&ercantile "an- Limited continued its e,pansion program during the year ended as on 3ecem"er
21, 2010* 'ts core lending and deposit ta-ing "usiness ha!e increased significantly* Bising trend
of the "an-9s profita"ility o!er the last 11 years is also materiali;ed* +he &BL is committed to
the deli!ery of the superior shareholders9 !alue* Dith the aim to "e the I"an- of choice9, it is
operating in the industry (ith a team of personnel de!oted to e,cel "oth their o(n career and the
"an-9s future*
22 | P a g e


9.< -ision, Mission and ."4ecties of MB*
;ision
=ould make fnest corporate citi,en
Mission
=ill "ecome most caring, focused for e7uita"le growth "ased on
diersifed deployment of resources, and neertheless would
remain healthy and gainfully profta"le Bank.
48/ecti!es
Strategic o8/ecti!es
5. To achiee positie >conomic -alue #dded ?>-#@ each
year.
9. To "e market leader in product innoation.
<. To "e the top 2inancial Institution in Bangladesh in terms
of 1#M>* rating.
A. To "e one of the top three 2inancial Institutions in
Bangladesh in term of market share in all signifcation
market segment we sere.
6. To share diferent type of social welfare actiities.
Financial o8/ecti!es
To make more proft and ma!imi,e return on asset, return on
e7uity and earnings per share.
$ore !alues
For the customers
Proiding with caring serices "y "eing innoatie in the
deelopment of new "anking products and serices.
22 | P a g e


For the shareholders
Ma!imi,ing wealth of the Bank.
For the em"loyees
3especting worth and dignity of indiidual employees deoting
their energies for the progress of the Bank.
For the community
%trengthening the corporate alues and taking enironment and
social risks and reward into account.
3e% technology
#dopting the state:of:the art technology in "anking operations.
MB* has adopted the modern hardware and software
technologies to make the serices easier and 7uicker. They are
proiding 9A hours "anking serices to their clients through on:
line "anking, %M% "anking and #TM "ooths across the country.
9.A %pecial features of the BankB
MB* is engaged in conentional commercial "anking. It is the
pioneer to introducing and launching diferent customer friendly
0eposit %chemes to tap saings of the people for channeling the
same to the productie sector of the economy.
2or updating the standard of liing of the limited income group of
the population, the Bank has introduced 1onsumer 1redit %cheme
"y proiding fnancial assistance in the form of loan to the consumer
for procuring household dura"les, which already hae encouraging
responses.
The Bank is committed to continuous research and deelopment so
as to keep pace with modern "anking.
The operations of the Bank are computeri,ed to ensure prompt and
e/cient serice to the customers.
26 | P a g e


The Bank has introduced camera sureillance system to strengthen
the security serice inside the Bank premises.
The Bank introduced customer relation management to assess the
needs of the customers and resole any pro"lem on the spot.
9.6 Physical and Technological 3esources
# great deal of inestment for deeloping the physical and technological
resources "ase of the Bank has "een made. The Bank has its presence in all
the ma4or industrial and commercial areas of Bangladesh in order to cater to
the needs of industry and trade. #t present, there are C6 coneniently
located "ranches throughout Bangladesh. There are "ranches in the capital
city of 0haka, 1hittagong, )a,ipur, %ylhet, Daogaon, 3a4shahi, Bogra,
(hulna, 3angpur, and Doakhali.
Ma/or features of these 8ranches are(
2ully computeri,ed accounts maintenance.
=ell decorated air conditioned facilities.
# fully operational computer network which is currently "eing
implemented. The work of *ocal #rea Detwork ?*#D@ and =ide
#rea Detwork ?=#D@ installation haing relia"le and secured
communication "etween the "ranches and the ;ead ./ce is in
progress to facilitate any Branch Banking and #TM %erices.
Money counting machine for making cash transactions easy and
prompt.
2ifteen out of twenty eight "ranches are authori,ed dealers of
foreign e!change. This facilitates speedy disposal of transaction of
e!port and import trade.
25 | P a g e


9.6 Mercantile Bank *imited ?MB*@ Timeline

Fig!re 2C The "i-eline o# $%' >So!rce Ann!al Repor" o# $%' 2010?
2= | P a g e

3ecem"er 20, 2010
Kpening of =5
th
Branch
3ecem"er 20, 2010
Kpening of =5
th
Branch
Kcto"er 20, 2010
Kpening of =0
th
Branch
Kcto"er 20, 2010
Kpening of =0
th
Branch
August 2, 2010
Kpening of 55
th
Branch
August 2, 2010
Kpening of 55
th
Branch
3ecem"er 20, 2007
Kpening of 50
th
Branch
3ecem"er 20, 2007
Kpening of 50
th
Branch
Kcto"er 22, 2007
Kpening of 65
th
Branch
Kcto"er 22, 2007
Kpening of 65
th
Branch
8une =, 2007
Bro-erage %ouse Kperation
8une =, 2007
Bro-erage %ouse Kperation
:o!em"er 26, 2004
Kpening of62
nd
Branch
:o!em"er 26, 2004
Kpening of62
nd
Branch
3ecem"er 15, 2005
Kpening of 60
th
Branch
3ecem"er 15, 2005
Kpening of 60
th
Branch
3ecem"er 05, 200=
Kpening of 20
th
Branch
3ecem"er 05, 200=
Kpening of 20
th
Branch
3ecem"er 27, 2006
Kpening of 25
th
Branch
3ecem"er 27, 2006
Kpening of 25
th
Branch
/e"ruary 2=, 2006
Listed in 1hittagong S*<*
/e"ruary 2=, 2006
Listed in 1hittagong S*<*
/e"ruary 1=, 2006
Listed in 3ha-a S*<*
/e"ruary 1=, 2006
Listed in 3ha-a S*<*
3ecem"er 26, 2002
Kpening of 20
th
Branch
3ecem"er 26, 2002
Kpening of 20
th
Branch
Kcto"er 21A22, 2002
Su"scription for Shares
Kcto"er 21A22, 2002
Su"scription for Shares
8une 20, 2002
Pu"lication of Prospectus for 'PK
8une 20, 2002
Pu"lication of Prospectus for 'PK
8uly 02, 2002
Kpening of 15
th
Branch
8uly 02, 2002
Kpening of 15
th
Branch
Kcto"er 27, 2000
Kpening of 10
th
Branch
Kcto"er 27, 2000
Kpening of 10
th
Branch
8une 02, 1777
1ommencement of Business
8une 02, 1777
1ommencement of Business
&ay 20, 1777
'ncorporation of the Ban-
&ay 20, 1777
'ncorporation of the Ban-

9.8 2eatures of Mercantile Bank *imited
+here are so many reasons "ehind the "etter performance of &ercantile Ban- Limited than any
other ne(ly esta"lished "an-s$
&ercantile Ban- Limited has esta"lished a core Besearch . Planning 3i!ision
comprising s-illed person from the !ery inception of the "an-*
%ighly )ualified and efficient professionals manage the "an-*
+he inner en!ironments of the all "ranches of &ercantile Ban- Limited are (ell
decorated*
Ban-ing operations of the all "ranches of &ercantile Ban- Limited ha!e "een
computeri;ed to pro!ide the promptly . fre)uently customers ser!ice*
+he "an- has esta"lished correspondent relationship (ith 102 of foreign "an-s*
+he "an- has launched some financial products, (hich is not a!aila"le in any other
"an-s, li-e A#e"on Pension Scheme*
&ercantile Ban- Limited pro!ides attracti!e interest rate li-e the other financial
institutions*
+he "an- pro!ides loan to the customers L lo(er interest (ith easy . fle,i"le condition
than the other do*
+he "an- fre)uent arranges customers meeting to achie!e their !alua"le suggestions*
Letter of 1redit ?L>1@ commissions and other charges are !ery lo(er than the other
"an-s*
Profit earning is not the main aim of the &BL* +he "an- is responsi"le to maintain the
social duties*
9.E Mechanism
25 | P a g e


1ommercial "an-ing is the core acti!ities of &ercantile Ban- Limited* +he "an- ser!es all types of
customer ranging from indi!idual to corporate entities, "oth pri!ate and pu"lic* +he standard ser!ice
offered "y mercantile "an- Limited 'nclude
Kne counter ser!ice for all "an-ing needs of the customer*
1ustomer counseling
Personali;ed ser!ices and relationship "an-ing
3eposit "an-ing
Loan and ad!ances
<,port and import financing
'nland and foreign remittance facilities
'ong Ter- "arge" Ser/ice, o# $ercan"ile *an& 'i-i"e incl!e
'n!estment "an-ing supported technology -no(s ho( transfer program*
Leasing and lease financing*
1apital mar-et operation*
To reach "he o*1ec"i/e,, $%' ha, i", *a,&e" o# ,er/ice, a-ong o"her
'n house -no( ho( for feasi"ility study and strategic planning*
Automated and computeri;ed offices*
Glo"al net(or- "an-ing facilities*
24 | P a g e


9.F Board %tructure
#s stated earlier Mercantile Bank *imited Pu"lic *imited 1ompany with
limited lia"ility under the Bank 1ompanies #ct 5FF5. #ll the 0irectors of the
Board and 1hairman of the Bank are appointed according to act. The
Managing 0irector is an e!:o/cio mem"er of the Board of 0irectors. There
are at present 99 directors including the Managing 0irector.
Board of 'irectors and Board su""orting $ommittee
The Board of 0irectors, the ape! "ody of the Bank, formulates policy
guidelines, proides strategic planning and superises "usiness
actiities and performance of management while the Board remains
accounta"le to the company and its shareholders. The Board is
assisted "y the >!ecutie 1ommittee and #udit 1ommittee.
The Board of the Bank has two supporting committees, %hich are as
follo%s(
Executi!e $ommittee
The mem"ers of the >!ecutie 1ommittee are chosen from the
directors of the Board The mem"ers of the >!ecutie 1ommittee
decides upon all routine and day to day operational matters "eyond
delegated power of the Management, su"4ect to ratifcation of Board of
0irectors.
Audit committee
The audit 1ommittee is formed with three mem"ers of the Board o
0irectors. The audit 1ommittee assists the Board of 0irectors to
ensuring that the fnancial statements reGect true and fair iew of the
state of afairs of the 1ompany and in ensuring a good working system
in the Bank as per frame work. The #udit 1ommittee is responsi"le to
Board of 0irectors.
27 | P a g e


<.5H .rgani,ational %tructure
To achiee its organi,ational goals, the Bank conducts its operations in
accordance with the ma4or policy guidelines laid down "y the Board of
0irectors, the highest policy making "ody. The day to day operation of the
Bank is looked after "y the management.
Management
The management is headed "y the Managing 0irector. #t present M0 is
assisted "y the one #dditional Managing 0irector and .ne 0eputy Managing
0irector and 0epartmental ;eads in the ;ead ./ce. Bank is diferent in
respect of hierarchical structure from other "anks in that it is much more
ertically integrated as far as reporting to the 1hief >!ecutie is concerned.
The Branch Managers are called ;ead of Branch report to the 0eputy
Managing 0irector and, for functional purposes, to the ;eads of
0epartments. 1onse7uently, 7uick decision making in disposal of cases is
ensured. In addition to the diisions I departments I "ranches, the following
committees, among others are in for smooth function of the BankB
Management $ommittee
The Management 1ommittee comprising of seniors mem"ers of the
management meets weekly to discuss releant agenda and to take
appropriate actions for running the Bank smoothly
Asset Lia8ility Management $ommittee
#sset *ia"ility Management 1ommittee is headed "y Managing
0irector and 1>.. It is responsi"le of "alance sheet risk management.
$redit $ommittee
The 0eputy Managing 0irector of the Bank is the head of the credit
committee. The committee ealuates the credit proposal and gies
either recommendations for approal or declines it.
20 | P a g e


9.5H Management %tructure of MB*
21 | P a g e

+hair-an
5ice +hair-an
%oar o# 9irec"or
Audit
Committee
Company
Secretary
Managing
Directors
Eecuti!e
committee
"olicy
committee
Chief Ad!isor
A,,") $)9)
9ep!"y $)9)
Senior Exec!"i/e 5ice Pre,ien"
Exec!"i/e 5)P
+rei" 9i/i,ion
Senior 5)P)
Trea,!ry an $oney
$ar&e"ing 9i/i,ion
5ice pre,ien"
Beneral
Ser/ice
9i/i,ion
In#or-a"ion
Technology
9i/i,ion
9e/elop-en"
an $ar&e"ing
9i/i,ion
H!-an
Re,o!rce
9i/i,ion
Fir," 5)P*

Source$ Statement of affairs of &BL
9.55 0iisions of MB*
Beneral %an&ing @ 9epo,i" $anage-en"
Account opening and K01 procedures*
'ssuance of 33>++>PK>/3B*
'nter"an- +ransaction, KB1>'B1*
Account section*
1learing Section*
'+ Section*
+rei" 9epar"-en"
1redit Proposals Processing Procedures*
3ocumentation and Loan 3is"ursement Procedures*
K!er!ie( on all returns*
Foreign Exchange 9epar"-en"
I) +a,h '=+
Kpening of L>1*
Lodgment of 'mport Bill*
Payment against 'mport Bill*
B>< &atching*
'&P Beporting*
22 | P a g e


II) %T% '=+
<,port L>1 1hec-ing*
Kpening of B+B L>1 ?Local> /oreign> <3/> <PM@*
Lodgment and confirmation of maturity date*
Allo(ing of P1*
Payment against reali;ation of <,port Proceeds> /orced Loan*
B>< &atching . Beporting*
III) Expor"
Scrutini;ing> :egotiation> Send on 1ollection*
/ollo(Aup*
Beali;ation*
Beporting*
I5) Foreign Re-i""ance
'n(ard
/33*
/++*
Kthers*
Kut(ard
<ndorsement of +ra!eling*
<ducation> +reatment> Kthers*
1ash Be"ate*
/1 issuing*
/33> /++ etc*
22 | P a g e


9.59Branches of Mercantile Bank at a glance
Division Branches
Dhaka
Main
Branch
61,Dilkush
a, Dhaka
Dhanmond
i Branch
Kawran
Bazar
Branch
Satmasji
d Road
Branch
Joypara
Branch
Banani
Branch
Board
Bazar
Branch
Elephant
Road
Branch
Dhaka
Mohakha
li Branch
Mirpur
Branch
Ashulia
Branch
Uttara
Branch
aya!az
ar
Branch
Motijheel
Branch
Rampura
Branch
Kona!ari
Branch
Dhaka
"ulshan
Branch
#emayetp
ur Branch
Bijoyna$
ar
Branch
Mo$h
Bazar
Branch
"reen
Road
Branch
En$ineer
s
%nstituti
on
Branch
Mazar
Road
Branch
&ro$ati
Sarani
Branch
Dhaka
arayan
$onj
Branch
Demra
SME'
Krishi
Branch
A$ana$ar
Branch
Mymensi
n$h
Branch
Dholaik
hal
Branch
Ban$la!
azar
Branch
Rin$
Road
Branch
Bhajeshw
ar Bazar
Branch
Chittago
ng
A$ra!ad
Branch
Khatun$o
nj Branch
Ju!ilee
Road
Branch
Madam
Bi!ir #at
Branch
Jhilon$j
a
Branch
( R
izam
Road
Branch
)howmu
hani
Branch
*eni
Branch
Chittago
ng
)omilla
Branch
Shaikh
Muji! Road
Branch
Da$on!h
uiyan
Branch
)hitta$o
n$ E&+
Branch
*arid$o
nj
Branch
Amishap
ara
SME '
Krishi
Branch
&atia
SME '
Krishi
Branch
Rajna$ar
SME'
Krishi
Branch
Chittago
ng
Ran$am
ati
Branch
Ban$la!az
ar Branch
Maijdi
)ourt
Branch
Ashu$anj
Branch
A K
Khan
Moor
Branch
Rajshahi
Rajshahi
Branch
ao$aon
Branch
Bo$ra
Branch
Sapahar
Branch
)hapai
awa!
$onj
Branch
Shishah
at
Branch
26 | P a g e


Khulna
Khulna
Branch
Jessore
Branch
Kushtia
Branch
Sylhet
Sylhet
Branch
Moul,i
Bazar
Branch
Beani!az
ar
Branch
a!i$onj
SME '
Krishi
Branch
Sunam
$onj
Branch
Barisal
Barisal
Branch
&atuakhali
Branch
Damudya
Branch
Rangpur
Ran$pur
Branch
Dinajpur
Branch
-hakur$
aon
Branch
ilpham
ari
Branch
De!i$a
nj
Branch
25 | P a g e

3ote(
Repre,en", 9i,"ric", co/ere *y %ranch Ne".or&


9.5< .peration of Mercantile Bank *imited
+here are three main operating di!isions of &ercantile Ban- Ltd* (hich are as follo(s$
6eneral Banking(
It is the most important side for a "ank. Bank is nothing "ut a
middleman "etween lenders ?surplus sector@ and "orrowers ?defcit
2= | P a g e


sector@. To proide loan, "ank needs a huge amount of money from the
lenders. )eneral "anking is the side where "ank ofers diferent
options to the clients to deposit ?sae@ and remit their money. To inite
the clients, "ank ofers diferent options in front to their clients. Most
of these options are ery much similar "etween the "anks, "ut the
customer serices and facilities may not "e the same.
'i!isions of 6eneral Banking in MBL(
,. Account 4"ening(
&sually a person needs to open an account with the "ank to
take serices from it. =ithout opening an account, one can get a
few serices from the "ank. %o we can say that "anking "egins
with the opening of an account with a "ank. )enerally, there are
three types of accounts in our countryJs "anking systemB
1urrent 0eposit #ccount ?10 #ccount@'
%aings Bank #ccount ?%B #ccount@'
Time 0eposit #ccount'
). $learing(
There are two type of clearingB
.ut:ward 1learing
In:ward 1learing.
.ther "anks$ che7ues, which are su"mitted to MB* for collection,
are known as .ut:=ard 1learing che7ue. The "earer of the
che7ue must hae an account in MB* to clear the che7ue. #fter
su"mission of the che7ue, the "earer has to fll up a deposit slip
against the che7ue, then the in charge of that department entry
the information of the che7ue in the log "ook and send the
deposit slip to the computer section for computer entry. #t the
end of the day, the in charge make clearing slip for each che7ue
through computer using a customi,e software ?DI(#%;@ supplied
"y Bangladesh Bank ?BB@. #nd fnally these che7ues are sent to
25 | P a g e


the BB clearinghouse then clearing house sends these to the
diferent "anks.
7. <emittance(
3emittance refers to sending of money that is the process of
sending money from one place to another is called remittance.
Banks remit funds one place to another through the network of
their "ranches. The main instrument for remittance of funds is
drafts, mail transfer, telephone transfer and traelerJs che7ues.
+rei" 9epar"-en"
It is a ery important department and itJs a ma4or income side for a
"ank. This department mainly deals with loans and adances. There is
two ma4or part of this departmentB
F!ne Par" >Pro/iing +a,h A-o!n" "o "he +rei"or? C
.er 0raft and loan comes under this section. By taking a
collateral ?most of the time holding nay fnancial instrument, like
203, %anchay Patra etc.@ from the "orrower "ank allow to take
oer draft facility is a continuous process ?"orrower can deposit
and withdraw money at same time@ "orrower has to pay interest
on the withdrawn money. Interest of credited amount is 15%. To
proide a loan, "ank 4o" is to do:lending risk analysis. There are
two types of loanB
Time loan ?not more than one year@.
Term loan ?more than one year@.
Non-F!ne Par" >No +a,h A-o!n" In/ol/e? C
24 | P a g e


There is no cash amount inoled in this kind of loan. B*1 ?Bill for
*I1@ and "ank guarantee falls in this kind of loan. In case of B*1
foreign e!change department mainly deals with it.
Foreign Exchange
This department deals with foreign currency and the transaction of it.
The ma4or 4o"s of this department are listed "elowB
*etter of 1redit ?2or >!port and Import@.
0ollarITraeler 1he7ue ?T1@ endorsement,
2oreign 3emittance.
2oreign 1urrency #ccount
27 | P a g e


9.5A Mercantile Bank *imitedB #t a )lance
$or"orate &nformation
=As on 'ecem8er 7,. )*,*>
0ate of Incorporation 9H
th
May,5FFF
Inauguration of Main Branch 9
nd
Kune, 5FFF
.peration started 9
nd
Kune, 5FFF
Share of $a"ital
#uthori,ed 1apital E,HHH.HH million
Paid up 1apital A,HC9.95 million
0eposits C6,89F.5A million
Inestments 5H,F<C.9H million
Foreign Exchange Business
Import EF,69A.5H million
>!port 6F,AHA.9H million
3emittances 6,5HE.5H million
Branches
Total num"er of Branches C6
Dum"er of %hareholders AH,9E<
Dum"er of 1orrespondence
3elationship
6EF
Manpower 5,8H6
60 | P a g e


9.56 2inancial Performance of MB*B #t a )lance
Mercantile Bank *td. through its steady progress and continued success has,
"y now, earned the reputation of "eing one of the leading priate sector
"anks of the country. Lear wise comparatie fnancial information is gien
"elowB
?B0T in millions@
Particulars )**? )**- )**+ )**@ )*,*
AuthoriAed
$a"ital
7.***.** 7.***.** 7.***.** +.***.** +.***.**
Paid u"
$a"ital
,.,@@.,) ,.9@+.@* ,.-@+.?+ ).,:+.9) 9.*-).),
Shareholder1
s EBuity
).):).?7 ).@)@.7* 7.9-*.*@ 9.)@?.): -.,+:.?@
0otal $a"ital
Fund
).::9.)@ 7.7+-.,- 9.,7,.), 9.@@:.97 +.?+9.7)
'e"osits 77.77).?
:
7@.79+.*
*
9@.:7+.7
:
:+.*77.9
-
-:.?)@.,
9
&n!estments :.9*-.@* -.*@@.@- ?.)?9.-, @.??9.-) ,*.@7-.)
*
&m"ort 9).99).+
*
9*.7+*.,
*
:?.:)+.+
*
?*.:@).:
*
+@.:)9.,
*
Ex"ort 79.:@).,
*
7).?-*.,
*
97.,*+.:
*
9?.)@+.?
*
:@.9*9.)
*
<emittance ).@+@.,* 7.:,*.9* 9.-)).@* :.*?,.7* :.,*+.,*
&nterest
&ncome
7.9@+.?- 9.9:*.@* :.?*9.7? ?.-9,.?@ -.??@.9)
61 | P a g e


&nterest
Ex"ense
).??).:+ 7.,:@.7* 9.*9:.@- 9.-::.@* :.,-?.**
3et &nterest
&ncome
+7?.*@ ,.)@,.?* ,.::+.7@ ,.@+:.-@ ).9@7.9)
3on &nterest
&ncome
,.,7).-9 ,.,,*.*: ,.)-7.,9 ,.:*?.,) ).)+).7@
3on &nterest
Ex"ense
-@*.*- ,.*,?.:, ,.):*.*) ,.:+*.), ,.@)+.?@
Pro2t After
0ax
9@9.)) :*9.:* ?,:.++ +*-.:) ,.9):.79
Fixed Assets 9?-.@@ :@7.)* ?+7.** ,.*7).+7 ,.?9-.:+
0otal Assets 7-.,:@.?
:
99.@9*.:
9
::.@)+.-
)
??.,??.:
)
+-.,9*.,
,
Earnings "er
Share
Basic
'iluted
9,.))
nCa
7*.*:
nCa
)+.:7
nCa
7*.?-
nCa
9,.*9
nCa
'i!idend "er
Share
$ash
Stock
D
):.**E
D
)*.**E
D
)*.**E
D
)).**E
D
)).**E
'i!idend
Payout <atio ?*.?:E ??.:?E -*.,*E -,.-7E :7.?,E
<eturn on
Assets
,.77E ,.)*E ,.,*E ,.))E ,.?9E
<eturn on
EBuity
),.@9E ,+.9:E ,-.-:E ,+.+*E ,@.+9E
62 | P a g e


9.58 %erices .fered "y MB*
+he Ban- launched se!eral financial products and ser!ices since its inception* Among them are$
9epo,i" Sche-e,
/amily &aintenance 3eposit ?/&3@*
&onthly sa!ing scheme ?&&S@*
Pension and /amily Support 3eposit ?P/S3@*
&onthly Benefit Scheme*
Nuarterly Benefit 3eposit Scheme*
1*5 times Benefit 3eposit Scheme*
3ou"le Benefit 3eposit Scheme ?3B3S@*
Special Sa!ing Scheme ?SSS@*
+rei" Sche-e,
1onsumer 1redit Scheme ?11S@*
1ar Loan Scheme*
3octors 1redit Scheme*
Bural 3e!elopment Scheme*
Lease /inancing*
Personal Loan*
Small Loan Scheme*
Pro!c" Sche-eC
+he Ban- has launched a num"er of financial products and ser!ices since its inception* Among
these, &onthly Sa!ings Scheme, /amily &aintenance Scheme, 3ou"le Benefit 3eposit Scheme,
Nuarterly Benefit 3eposit Scheme, 1*5 +imes Benefit 3eposit Scheme, Ad!ance Benefit 3eposit
Scheme, 1onsumer 1redit Scheme, Small Loan Scheme, Lease /inance Scheme, K!erseas
62 | P a g e


<mployment Loan Scheme, 1ar Loan Scheme, %ome Loan Scheme and S&< Loan ha!e
recei!ed (ide acceptance among the people*
9.5C 0eposit Mi!
:o( a day, 3eposit mo"ili;ation has "ecome a challenging tas- for the commercial "an-s* 'n
2010, the "an- mo"ili;ed total deposit of B3+ 55=27*16 million compared to that of B3+
54,022*65 million up to 2007 end* +he gro(th rate is 20*22O*1ompetiti!e interest rates,
attracti!e deposit products, deposit mo"ili;ation efforts of the "an- and confidence reposed "y
the customers on the "an- contri"uted to the nota"le gro(th in deposit* +he "an- introduces a
num"er of attracti!e deposit schemes to cater the re)uirement of small and medium sa!ers* +his
impro!ed not only the )uantum of deposits, "ut also "rought a"out )ualitati!e changes in the
deposits structure*
Fig!re 2C 9epo,i" $ix
66 | P a g e


Source$ Statement of affairs of &BL
9.5E *oans and adances
1redit is the confidence of the lender in the a"ility and (illingness to the "orro(er to repay the
loan at a future date* 't is generally "elie!ed that confidence is the "asis of all credit transaction*
+he fundamental principle upon (hich credit is generally "ased on character, capacity, capital,
responsi"ility, relia"ility and resources of "orro(er* Lending is a function that is crucial to the
"an-er, "ecause of the associate ris- and profit potential* Nuality of lending depends on safety,
li)uidity, yield, di!ersity, producti!ity, and purpose national and social interest, management
a"ility, "orro( analysis and "usiness analysis*
Fig!re 3C Sec"or, D Ei,e 'oan, @ A/ance, $ix
Source$ Statement of affairs of &BL
65 | P a g e


9.5F Det Proft

/rom this figure (e may come to -no( "an-ing functions of &BL has smooth up(ard gro(th of
profit from the year of incorporation to present*

Fig!re 4C Ne" Pro#i"
Source$ Statement of affairs of &BL
9.9H .ther serices
S$E Ser/ice
+o ma-e customers life more con!enient and comforta"le, &ercantile "an- offer !ariety of
lending option for their customer*
On-line *an&ing Ser/iceC
KnAline ser!ice is no( a!aila"le for all customers of the "an-* KnAline "an-ing ha!e so far
acti!ated (ith 62 "ranches* As a result, it sa!es the time and efforts of the customers* +hey
can easily deposit and (ithdra( money, transfer money from one place to another place "y
using online "an-ing facility*
S$S %an&ing
S&S ser!ice is one of the most modern "an-ing ser!ices* 't is con!enient safe, lo(Acost,
fast and a!aila"le round the cloc-* &BL S&S Ban-ing ser!ice offers the follo(ings$
Access to account "alance
6= | P a g e


Last 2 transaction in)uiry
1he)ue leaf status in)uiry
AT$ %oo"h an S$E Ser/ice +en"re
+he "an- ser!es the customers "y pro!iding A+& Booth and S&< Ser!ice 1entre
facilities* A num"er of A+& Booths and S&< Ser!ice centers ha!e "een unloc-ed at
different commercially significant places of the country to ser!e the customers, to sa!e
their time, conse)uently, to ma-e them free from hassle*
+ar, o# $%'
9!al +ar >".o in one?C Single 1ard (ith dou"le "enefits* :o hassle to carry t(o
cards ?local and international@* A single credit card can "e used "oth locally and
internationally to (ithdra( cash from A+& for PKS transaction* +his is the special
feature of &BL Hisa card*
9e*i" +arC Hisa de"it card is mainly tagged (ith deposit account ?13>SB>S+3@
that is automatically de"ited from the A>1 ha!ing a!aila"le "alance* 3e"it card can
also "e used for purchasing goods, ser!ices, payment of utility "ills etc as (ell as
(ithdra(al of cash from A+&*
Pre-Pai +arC +hose (ho ha!e no account (ith &BL may a!ail PreAPaid card
facilities* +he PreAPaid cardholders pay first "uy later* PreAPaid card offers the
con!enience and security of electronic payment in situations (here one might
other(ise use cash, such as "irthday gift or a monthly allo(ance for a young adult*
<,amples include gift cards and salary payment etc*
9.95 Performance of the "ank
&ercantile Ban- pro!ides "est ser!ices to clients "y maintaining "etter performance on the follo(ing
(ay$
'n &ercantile Ban- ha!e enough highly )ualified managers and professionals*
&ercantile Ban- Limited is maintaining Besearch . Planning 3i!ision (ith efficient persons*
+he "an- has esta"lished correspondent relationship (ith 260 of foreign "an-s*
65 | P a g e


+he computeri;ed operation systems in all "ranches of &ercantile Ban- Limited ha!e
pro!ided the fre)uent and prompt customer ser!ice*
+he strict leadership along (ith the super!ision of efficient management directs all the
"ranches
* &ercantile Ban- Limited pro!ides loan to the customers at lo(er interest (ith easy and
fle,i"le condition than the others do*
Along (ith the profit generation &ercantile Ban- Limited also maintain social responsi"ilities*
't can "e said that &ercantile Ban- Limited ta-es lo(er commission charges than other
"an-s*
+he Ban- is al(ays guided their potential customers "y gi!ing !alua"le ad!ises
+he "an- offers attracti!e sa!ing rate than other financial institutes*
&ercantile Ban- Limited has "ecome a mem"er of the SD'/+ system e,pedite foreign trade
transaction*
9.99 2inancial Performance of MB*B #t a )lance
64 | P a g e


Mercantile Bank *td. through its steady progress and continued success has,
"y now, earned the reputation of "eing one of the leading priate sector
"anks of the country. Lear wise comparatie fnancial information is gien
"elowB
?B0T in millions@
Particulars )**? )**- )**+ )**@ )*,*
AuthoriAed
$a"ital
7.***.** 7.***.** 7.***.** +.***.** +.***.**
Paid u"
$a"ital
,.,@@.,) ,.9@+.@* ,.-@+.?+ ).,:+.9) 9.*-).),
Shareholder1
s EBuity
).):).?7 ).@)@.7* 7.9-*.*@ 9.)@?.): -.,+:.?@
0otal $a"ital
Fund
).::9.)@ 7.7+-.,- 9.,7,.), 9.@@:.97 +.?+9.7)
'e"osits 77.77).?
:
7@.79+.*
*
9@.:7+.7
:
:+.*77.9
-
-:.?)@.,
9
&n!estments :.9*-.@* -.*@@.@- ?.)?9.-, @.??9.-) ,*.@7-.)
*
&m"ort 9).99).+
*
9*.7+*.,
*
:?.:)+.+
*
?*.:@).:
*
+@.:)9.,
*
Ex"ort 79.:@).,
*
7).?-*.,
*
97.,*+.:
*
9?.)@+.?
*
:@.9*9.)
*
<emittance ).@+@.,* 7.:,*.9* 9.-)).@* :.*?,.7* :.,*+.,*
&nterest
&ncome
7.9@+.?- 9.9:*.@* :.?*9.7? ?.-9,.?@ -.??@.9)
&nterest
Ex"ense
).??).:+ 7.,:@.7* 9.*9:.@- 9.-::.@* :.,-?.**
67 | P a g e


3et &nterest
&ncome
+7?.*@ ,.)@,.?* ,.::+.7@ ,.@+:.-@ ).9@7.9)
3on &nterest
&ncome
,.,7).-9 ,.,,*.*: ,.)-7.,9 ,.:*?.,) ).)+).7@
3on &nterest
Ex"ense
-@*.*- ,.*,?.:, ,.):*.*) ,.:+*.), ,.@)+.?@
Pro2t After
0ax
9@9.)) :*9.:* ?,:.++ +*-.:) ,.9):.79
Fixed Assets 9?-.@@ :@7.)* ?+7.** ,.*7).+7 ,.?9-.:+
0otal Assets 7-.,:@.?
:
99.@9*.:
9
::.@)+.-
)
??.,??.:
)
+-.,9*.,
,
Earnings "er
Share
Basic
'iluted
9,.))
nCa
7*.*:
nCa
)+.:7
nCa
7*.?-
nCa
9,.*9
nCa
'i!idend "er
Share
$ash
Stock
D
):.**E
D
)*.**E
D
)*.**E
D
)).**E
D
)).**E
'i!idend
Payout <atio ?*.?:E ??.:?E -*.,*E -,.-7E :7.?,E
<eturn on
Assets
,.77E ,.)*E ,.,*E ,.))E ,.?9E
<eturn on
EBuity
),.@9E ,+.9:E ,-.-:E ,+.+*E ,@.+9E
50 | P a g e


Chapter #
$heoretical Background
Of
%oreign Echange
<.5 2oreign >!change
51 | P a g e


/oreign e,change refers to the process or mechanism "y (hich the currency of one country is
con!erted into the currency of another country* /oreign e,change is the means and methods "y
(hich rights to (ealth in a countryCs currency are con!erted into rights to (ealth in another
countryCs currency* 'n "an-s (hen (e tal- of foreign e,change, (e refer to the general
mechanism "y (hich a "an- con!erts currency of one country into that of another* /oreign +rade
gi!es rise to foreign e,change* &odern "an-s facilitate trade and commerce "y rendering
!alua"le ser!ices to the "usiness community* Apart from pro!iding appropriate mechanism for
ma-ing payments arising out of trade transactions, the "an-s gear the machinery of commerce,
especially in case of international commerce, "y acting as a useful lin- "et(een the "uyer and
the seller, (ho are often too far a(ay from and too unfamiliar (ith each other*
According to /oreign <,change Begulation Act ?/<BA@ 1765, PAnything that con!eys the right
to (ealth in another country is foreign e,change* /oreign e,change means and includes all
deposits, credits and "alances paya"le in foreign currency as (ell as foreign currency
instruments such as drafts, +1s* Bill of <,change, promissory :otes and Letters of 1redit
paya"le in any foreign currency* P
+his definition implies that all "usiness acti!ities relating to 'mport, <,port, Kut(ard . 'n(ard
Bemittances, "uying . selling of foreign commissions, etc* come under the pur!ie( of foreign
e,change "usiness* /oreign e,change department of "an-s plays significant roles through
pro!iding different ser!ices for the customers*
7.) Foreign Exchange Market and Bangladesh
52 | P a g e


/oreign <,change &ar-et allo(s currencies to "e e,changed to facilitate international trade and
financial transactions* <!olution of the mar-et in Bangladesh is closely lin-ed (ith the e,change
rate regime of the country* 't had !irtually no foreign e,change mar-et up to 1772*
BA:GLA3<S% BA:K, as agent of the go!ernment, (as the sole pur!eyor of foreign currency
among users* 't tried to e)uili"rate the demand for and supply of foreign e,change at an officially
determined e,change rate, (hich, ho(e!er, ceased to e,ist (ith introduction of current account
con!erti"ility* 'mmediately after li"eration, the Bangladesh currency ta-a (as pegged (ith
pound sterling "ut (as "rought at par (ith the 'ndian rupee* Dithin a short time, the !alue of
ta-a e,perienced a rapid decline against foreign currencies and in &ay 1755, it (as su"stantially
de!alued* 'n 175=, Bangladesh adopted a regime of managed float, (hich continued up to
August 1757, (hen a currencyA(eighted "as-et method of e,change rate (as introduced* +he
e,change rate management policy (as again replaced in 1742 "y the tradeA(eighted "as-et
method and S the dollar (as chosen as inter!ention currency* By this time a secondary
e,change mar-et ?S<&@ (as allo(ed to gro( parallel to the official e,change rate*
p to 1770, multiple e,change rates (ere allo(ed under different names of e,port "enefit
schemes such as, <,port Bonus Scheme, QPL, QPB, </AS, '<1S, and %ome Bemittances
Scheme* +his led to a (ide di!ergence "et(een the official rate and the S<& rate* +he situation
also gradually ga!e rise to a num"er of conflicting regulations, poor ris- management, and
!arious types of implicit or e,plicit go!ernment guarantees to the users of foreign e,change* +his
resulted in a num"er of macroAeconomic im"alances prompting the go!ernment to ad#ust the
official rate in phases*
<.< 2unctions of foreign e!change department
52 | P a g e


/ollo(ing are the functions that /oreign e,change department performs to facilitate the
transaction of foreign e,change$
/acilitating import and e,port trades*
Pro!iding funded and nonAfunded credit facility*
Pro!iding nonAcommercial remittance*
&aintaining foreign currency accounts*
Selling foreign currency "ond*
Preparing and su"mitting statements relating to foreign currency*
<.A Types of foreign e!change operation
+here are mainly three types of transactions (hich lead to foreign e,change* +hese are
'mport
<,port
/oreign Bemittance
Fig!re 6C Type, o# Foreign Opera"ion

0)3 The -o," co--only !,e oc!-en", in #oreign exchange
56 | P a g e


3ocumentary letter of credit*
Bill of e,change*
Bill of Landing*
1ommercial 'n!oice*
1ertificate of origin of goods*
'nspection certificate*
Pa-ing List*
'nsurance certificate*
Proforma in!oice> indent*
&aster receipt*
GSP certificate*
<.8 Importance of 2oreign >!change Banking
+he foreign mar-et ?fore,, /Q, or currency mar-et@ is a (orld(ide change decentrali;ed o!erA
theAcounter financial mar-et for the trading of currencies* /inancial centers around the (orld
function as anchors of trading "et(een a (ide range of different types of "uyers and sellers
around the cloc-, (ith the e,ception of (ee-ends*
+he primary purpose of the foreign e,change mar-et is to assist international trade and
in!estment, "y allo(ing "usinesses to con!ert one currency to another currency* /or e,ample, it
permits a S "usiness to import <uropean goods and pay <uros, e!en though the "usinessCs
income is in S dollars* 't also supports speculation, and facilitates the carry trade, in (hich
in!estors "orro( lo(Ayielding currencies and lend ?in!est in@ highAyielding currencies, and
(hich ?it has "een claimed@ may lead to loss of competiti!eness in some countries*
'n a typical foreign e,change transaction a party purchases a )uantity of one currency "y paying
a )uantity of another currency* +he modern foreign e,change mar-et started forming during the
1750s (hen countries gradually s(itched to floating e,change rates from the pre!ious e,change
rate regime, (hich remained fi,ed as per the Breton Doods system*
55 | P a g e


+he foreign e,change mar-et is uni)ue "ecause of its$
%uge trading !olume, leading to high li)uidity
Geographical dispersion
1ontinuous operation$ 26 hours a day e,cept (ee-ends, trading from 20$15 +1 on
Sunday until 22$00 +1 /riday
+he !ariety of factors that affect e,change rates
+he lo( margins of relati!e profit compared (ith other mar-ets of fi,ed income
+he use of le!erage to enhance profit margins (ith respect to account si;e
5= | P a g e



Chapter& %our
%oreign Echange
"roduct and "ractice
Of
Mercantile Bank Limited
A.5 2oreign >!change management structure of MB*
Fig!re 7C Foreign Exchange $anage-en" S"r!c"!re O# $%'
55 | P a g e


Source$ /oreign e,change manual of &BL
A.9 Import
'mportation is foreign goods and ser!ices purchased "y customer, firms and Go!ernments in
Bangladesh*
54 | P a g e


An importer must ha!e import registration certificate ?'B1@ gi!en "y chief controller of import
and e,port ?11' . <@ to import anything from other country* +o o"tain import registration
certificate ?'B1@ the follo(ing certificates are re)uired$
+rade License*
'ncome ta, clearance certificate*
:ational certificate*
Ban-s sol!ency certificate*
Asset certificate*
Begistration partnership deed ?if any@
&emorandum and article of association*
1ertificate of incorporation ?if any@
Bent of the "usiness premises*
A.< Import procedures
+o import through &ercantile Ban- Limited a customer > client re)uiresA
Ban- account*
'mport registration certificate*
+a,paying identification num"er*
Proforma in!oice> indent*
&em"ership certificate*
L>1 application form duly attested*
'nsurance co!er note (ith money receipt*
Kthers*
A.A Import Mechanism
+o import, a person should "e competent to "e an importer* According to import and e,port
control Act, 1750, the office of chief controller of import and e,port pro!ides the registration
57 | P a g e


certificate ?'B1@ to the importer* After o"taining this person has to secure a Letter of credit
authori;ation ?L1A@ from Bangladesh Ban- and then a person "ecomes a )ualified importer* %e
is the person (ho re)uest or instructs the opening "an- to open an L>1* %e is also called opener,
applicant, or the credit*
A.6 Deeded *egal 3e7uirements during Import
'mport of goods into Bangladesh is synchroni;ed "y the 'mport Policy Krder ?'PK@ announced
"y the &inistry of 1ommerce or :otifications and Pu"lic :otices issued "y the &inistry of
1ommerce or 1*1*'* . < ?1hief 1ontroller of 'mport . <,port@ and Bangladesh Ban-* Pre!ious
to incoming into an import transaction country9s has to follo( some regulation these are on the
follo(ing (ay
+ariffs and ta,ation*
<,change regulations*
Beporting to the controlling authorities*
Bestricti!e go!ernmental policy

A.8 Trend of import
3uring the financial year 2006 to 2010, the gro(th of 'mport of &ercantile Ban- Limited
's gi!en "elo(
=0 | P a g e


Fig!re 8C Bro."h o# I-por" %!,ine,,
?B3+ in &illion@
Par"ic!lar, 2002 2003 2004 2006 2007 2008 2010
I-por" 20030 27023)2 00261)4 22222)7 20000)1 33327 40382)3
Source$ Annual report of &BL 2010
Fig!re 10C Tren 'ine o# I-por"
Source$ Annual report of &BL 2010
A.C *etter of 1redit
Letter of credit is a (idely used instrument "oth local and in international +rading, a (ritten
underta-ing gi!en "y a "an- on "ehalf of importer> client to pay a certain sum of !alue of goods
or ser!ices to the seller on fulfillment of some terms and conditions imposed "y importer or "y
itself ?"uyer9s "an-@*
=1 | P a g e

Trend Line Of Import Of MBL
20350
28325.2
33271.6
42442.8
40300.1
55528
60592.5
0
10000
20000
30000
40000
50000
60000
70000
2004 2005 2006 2007 2008 2009 2010
YEAR
IMPORT
Linear (IMPORT)

A.E Types of *etter of 1redit
3ocumentary letter of credit, "asically, can "e classified into t(o segments
Be!oca"le letter of credit
'rre!oca"le letter of credit
Re/oca*le 'e""er o# +rei"
+his type of letter of credit can "e re!o-ed or cancelled at any time (ithout consent of, or notice
to the "eneficiary* As per article 4 ?a@ of 1P31A500, EA re!oca"le credit may "e amended or
cancelled "y the issuing "an- at any moment and (ithout prior notice to the "eneficiaryF
'n case of seller ?"eneficiary@, re!oca"le credit in!ol!es ris-, as the credit may "e amended or
cancelled (hile the goods are in transit and "efore the documents are presented, or although
presented "efore payments has "een made* +he seller (ould then face the pro"lem of o"taining
payment on the other hand re!oca"le credit gi!es the "uyer ma,imum fle,i"ility, as it can "e
amended or cancelled (ithout prior notice to the seller up to the moment of payment "uy the
issuing "an- at (hich the issuing "an- has made the credit a!aila"le* 'n the modern "an-ing the
use of re!oca"le credit is not (idespread*

Irre/oca*le 'e""er o# +rei"
An irre!oca"le credit is a documentary credit, (hich cannot "e re!o-ed, !aried or
changed>amended or cancelled (ithout the consent of all partiesA "uyer ?Applicant@, seller
?Beneficiary@, 'ssuing Ban-, and 1onfirming Ban- ?in case of confirmed L>1@* As per Article
=2 | P a g e


7?a@ of 1P31 500, an irre!oca"le credit constitutes a definite underta-ing of the 'ssuing Ban-,
pro!ided that the stipulated documents are presented to the :ominated Ban- or to the 'ssuing
Ban- and that the terms and conditions of the credit are complied (ith* 'rre!oca"le 1redit gi!es
the seller greater assurance of payments, "ut he>she remains dependent on an underta-ing of a
foreign "an-*
+here are also some other types of L>1, Some of them are gi!en "elo($
+on#ir-e le""er o# crei"$ 'n confirmed letter of credit the "eneficiary recei!es not
only an underta-ing "y the issuing "an- "ut also an independent promise of payment on
the part of the correspondent "an-*
;ncon#ir-e le""er o# crei"$ +he letter of credit (hich does not itself gi!e any
underta-ing to pay and is under no o"ligation to honor documents presented "y the
"eneficiary is -no(n as unconfirmed letter of credit*
9oc!-en"ary le""er o# crei"$ A documentary letter of credit is an underta-ing made
"y a "an- at the re)uest of the applicant for the credit to pay a specified amount in an
agreed currency to a "eneficiary presents stipulated documents (ithin a prescri"ed time
limit*
+lean le""er o# crei"$ +he letter of credit in (hich the "an- imposes no conditions for
honoring is called clean letter of credit*
Re/ol/ing le""er o# crei"$ Be!ol!ing letter of credit can "e used "y the "eneficiary for
a particular time period and for a particular amount "y re!ocation*
Fixe le""er o# crei"$ +he letter of credit (hich is opened for a particular period of
time and amount and it is cancelled after the e,piry of such time or if such amount is used
up*
Re/oca*le or open le""er o# crei"$ A re!oca"le letter of credit is a letter of credit
(hich can "e amended or cancelled "y the issuing "an- at any time (ithout prior notice
to the "eneficiary is -no(n as open letter of credit*
=2 | P a g e


Irre/oca*le or #ir- le""er o# crei"$ An irre!oca"le letter of credit cannot "e
amended or cancelled "y the issuing "an- at any time (ithout prior notice to the
"eneficiary is -no(n as firm letter of credit*
$arginal le""er o# crei"$ +he letter of credit (hish9s margin contains a form and the
e,porter is as-ed to ma-e the "ill on it is the marginal letter of credit*
An"icipa"ory le""er o# crei"$ An anticipatory letter of credit (hich is opens (ith a
condition of ma-ing ad!ance payment is -no(n as anticipatory letter of credit* +here are
t(o types of anticipatory letter of credit
Re +la!,e$ Bed clause anticipatory letter of credit$ 'n this letter of credit the "an- pays
the e,porter in ad!ance for insurance, transport, interest and for some other e,penses*
Breen cla!,e$ Green clause anticipatory letter of credits$ 't permits ad!ance for storage
of goods in the name of "an- in addition to preAshipment ad!ance*
Tra/elerF, le""er o# crei"$ +his type of letter of credit is issued in fa!or of tra!elers*
A.F Terms and 1ondition
't should stipulate the name of loan>credit>Grant*
't should "ear the name of the designated "an-*
'tems mentioned in the L1A from must contain (ith the permissi"le items*
+he "an- offices periodically inspect the gods and !erify that they conform to the
)uantity and the )uality etc* as mentioned in the particular L>1*
'n case of first class customer, the facility may, ho(e!er, "e granted against firm
contracts (ith o!erseas "uyers*
A.5H Parties inoled in *I1 .peration
+he letter of credit signifies a commitment on "ehalf of the "uyer ?importer@ "y &BL to effect
payment to the seller ?e,porter@ su"#ect to fulfillment of certain conditions "y the seller*
=6 | P a g e


According to terms and conditions of the L>1, the letter is re)uired to "e routed through some
intermediary "an-s in order to get his claim* +here are a num"er of parties in!ol!ed in a L>1 and
the rights and o"ligations of the different in!ol!ed parties (ill also differ from each other* +he
in!ol!ed parties to a L>1 are named "elo(
'mporter>Buyer
Kpening>'ssuing Ban-
<,porter> Seller>Beneficiary
Ad!ising
1onfirming Ban-
:egotiating Ban-
Paying>Beim"ursing Ban-
The %!yer= The Opener >The Applican" o# "he crei"?
+he "uyer or importer re)uests his Ban- to issue a documentary credit on his "ehalf to supplier
along (ith re)uisite documents>papers as current import policy and <,change Begulation of
Bangladesh Ban-*
The %ene#iciary
+he seller or the e,porter is the "eneficiary of the credit* +he credit is opened on his fa!or is
addressed to him* +he credit is opened on his fa!or and is addressed to him* +he credit is (ritten
underta-ing issued "y &BL*
The I,,!ing %an& >$%' %an&?
+he issuing "an- is the "uyer9s "an- and it issues the 1redit instrument* 'n the case of an
irre!oca"le credit, &BL underta-es a definite lia"ility*
The A/i,ing %an& >The no"i#ying *an&?
Generally, credits are ad!ised "y &BL ?'ssuing "an-@ to the "eneficiary through as
correspondent "an- operating in the same center as the seller* +he ad!ising "an- has the only
responsi"ility of passing on the authenticated ca"le or the airmail creditJ the case may "e to the
"eneficiary* +he notification of the credit "y itself does not commit to the ad!ising "an- to the
lia"ilities under the credit*
=5 | P a g e


The Nego"ia"ing *an&
+he "an- (hich negotiates the drafts under the credit is called the negotiating "an-* +he
negotiating "an- ?i*e* Standard 1hartered Ban-@ must negotiate the documents under a
documentary credit only if the documents confirm strictly (ith the terms and conditions of the
credit*
The +on#ir-ing %an&,
Dhen a "an- ?i*e* %SB1@ in the seller9s country confirms a credit, that "an- is called a
confirming "an-* Kften the "eneficiary of the credit stipulates that a "an- in his o(n country
must confirm the credit so that he is assured of payment as soon as the documents are presented
to it* Knce the credit is confirmed "y the "an-, it is legally lia"le to honor its commitment
pro!ided the "eneficiary fulfils the terms and conditions of the credit* /or underta-ing this
lia"ility the confirming "an- recei!es a confirming commission either from the &BL "an- or
from the "eneficiary*
The Paying %an& >The Rei-*!r,e-en" %an&?
+he "an- on (hich the drafts or the "ill of e,change is to "e dra(n under the credit is called the
paying "an-* Generally, the paying "an- maintains the account of the issuing "an- and honors
the reim"ursement claim of the negotiating "an- "y de"iting the issuing "an-s account* At
present a separate reim"ursement authority is "eing sent to the paying "an- "y the issuing "an-
?&BL@ at time of issuance of the credit pro!ided that the ad!ising and paying "an-s are the
same*
A.55 >ssential paper needed for .pening *etter of 1redit ?*I1@
'mporter shall present follo(ing papers for opening L>1$
+a, 'dentification :um"er 1ertificate*
Halid 'mport Begistration 1ertificate ?industrial>commercial@*
Association 1ertificate of a recogni;ed +rade Association as per 'PK*
HA+ Begistration 1ertificate*
1on!ersion and rate of e,change correctly applied*
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Proforma 'n!oice or 'ndent duly accepted "y the importer +a, returns for the
preceding year*
'nsurance en!elop letter (ith &oney Paid Beceipt co!ering !alue of goods to "e
imported plus 10 percent a"o!e*
L>1 re)uest /orm accordingly signed "y the importer*
'&P structure accordingly signed "y the importer*
Letter of 1redit Authori;ation /orm ?L1A/@ commercial*
A.59 3egistration of a *I1
+he letter of credit ?L>1@ registration function shall allo( the user to register a ne( L>1 upon
receipt of an application for issuance > opening of L>1*
't shall pro!ide the follo(ings$
A"le to automatically generate and assign a uni)ue reference num"er for each ne( L>1
according to the "an- preA defined format* +he system assigned num"er (ill "e the L>1
reference num"er and shall "e used for all future transactions on the L>1*
A"le support and indicate the follo(ing types of L>1$
:ormal L>1
Be!ol!ing L>1
+ransfera"le L>1
Bestricted L>1
Bac- to "ac- L>1
Bed clause L>1
1apture "rief information on L>1, such as type of L>1, customer, application date, date
of receipt of application, currency and amount of L>1*
Boo->earmar- on the customer9s L>1 credit line, using L>1 amount in local e)ui!alent >
currency of facility, computed using pre!ailing counter mid rate e,change rate*
+o log the name of user (ho perform the registration and the date of registration in the
registration record*
Allo( user to Ecancel>deleteF the registration record 7mar-ed unused@ (ith reason,
should the "an- decide not to proceed (ith the issuance transaction* Beference num"ers
that are9 deleted, cannot "e re used*
A.5< *awful o/cial procedure for opening *etter of 1redit
=5 | P a g e


Authori;ation of %ead Kffice or Branch &anger ?Dhere L>1s are to "e opened under his
allocation@ to "e o"tained "efore opening L>1* Safe-eeping records to "e finished as per
sanction>appro!al terms prior opening L*1* 1harge /orms such as Letter of nderta-ing, Letter
of 3e"it Authority . Letter of Guarantee to "e o"tained (ith due stamps as per pre!ailing Stamp
Act*
A.5A .pening *I1
/oreign e,change "an-ing Letter of credit ?L>1@ opening is !ery essential* At first importer need
to contact (ith <,porter and (ith their understanding e,porter prepare proforma in!oice and sent
it to the importer* After recei!ed the proforma in!oice importer present it to their "an- that is
-no(n as issuing "an- that prepare L>1 on "ehalf of importer* After preparing L>1 proposal need
to send %ead office of issuing "an- for appro!al* After appro!al, issuing "an- open L>1 on
"ehalf of importer, signed it "y proper authority of "an- officer, and send it their authori;ed
e,port country "an- for authentication and !ery important entry to "e gi!en in the L>1 opening
register "y allocating an L>1 num"er* +he process is done through SD'/+* +he "an- that
pro!ides authentication then it called ad!ising "an-* After gi!en the authentication sealA ad!ising
"an- send it to the e,porter "an- as per re)uirement of in!oice*
A.56 #dising a *I1
't is customary to ad!ise a credit to the seller through an ad!ising "an-* Ad!ising through a "an-
is a proof of apparent authenticity of the credit to the "eneficiary to (hom it is addressed* Before
for(arding> ad!ising the credit to the seller under appropriate for(arding co!erage, the ad!ising
"an- ha!e to !erify the signature of the officer of the opening "an- and ensure that the terms and
conditions of the credit are not !iolation of the e,isting e,change control regulations and other
regulations relating to e,port* Hery often ad!ising "an- recei!es re)uests from issuing "an to add
their confirmation (hile ad!ising credit to the "eneficiary*
A.58 1onditions of *I1
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/ull information of the produce along (ith )uantity and unit price to "e incorporated in the L>1*
:o import shall "e made on 1'/ ?customer information form@ "asis (ithout prior appro!al from
the &inistry of 1ommerce* <ach and e!ery one L1s should gi!e for payment to "e made against
full sets of on "oard transport documents dra(n or authori;ed to the order of &ercantile Ban-
Limited sho(ing dispatch of goods co!ered "y the credit to a destination in Bangladesh* All L1s
must specify o"edience of signed in!oices, certificates of origin . preAshipment 'nspection
1ertificate* L1s shall also incorporate any other documents, (hich are mandatory specified for
that commodity in Bangladesh Ban- 1irculars*
A.5C #mendments
+he Branch can permit amendments to the L1s only upon re)uirements of the L>1 applicants
that do not "rea- foreign e,change regulations and import control regulations* Amendment of
irre!oca"le L>1 is not accepta"le (ithout the #oint consent of all the parties in!ol!ed in
document credit operation* <ach and e!ery part of the L>1 can "e amended pro!ided the parties
in!ol!ed in the L>1 consents to it* <!ery amendment of L>1 must "e noted in the L>1 file and
copies of each amendment "e -ept in the L>1 file ?date (ise@* +he amendment may relate toA +he
amount, the date of shipment or negotiation*
A.5E 1ancellation of *I1s
An unchangea"le L>1 cannot "e cancelled (ithout the agreement of the "eneficiary and the
confirming "an-* +he "ranch at the re)uest of the importer may approach the L>1 ad!ising "an-
for deletion of the L>1 and such cancellation (ill only "e effecti!e upon appro!al of the
"eneficiary ad!ised to the "ranch through the L>1 ad!ising "an-* +he "ranch may cancel the L>1
(ithout the consent of the "eneficiary, ad!ising "an- and confirming "an-, if the L>1 e,pires and
the "ranch recei!es no shipping documents (ithin 15 days of e,piry of the L>1* +he "ranch
should send a message to the concerned "an- ad!ising such cancellation and closure of L>1 file
due to e,piry of the same* +he "ranch then cancels the repayment Authori;ation (hich has "een
pro!ided to the Beim"ursement Ban- (hile opening the L>1* +he "ranch (ill re!erse L>1 contra
lia"ilities, refund margin and reco!er charges from the L>1 applicant as per schedule of charges*
=7 | P a g e


A.5F >!port
/rom the !ery "eginning a 1ommercial Ban- li-e &BL is in!ol!ed in financing foreign trade
apart from financing internal credit re)uirements in the economy* +his in!ol!es handling of
import "usiness through opening Letter of 1redit and %andling of e,port "usiness* As "an-ing
has "ecome !ery -eenly competiti!e, "an-s find it con!enient to in!ol!e in foreign e,change
"usiness as lucrati!e sources of earning income and profit* Bangladesh e,ports a large )uantity
of goods and ser!ices to foreign households* Beadymade te,tile garments ?"oth -nitted and
(o!en@, 8ute, 8uteAmade products, fro;en shrimps, tea are the main goods that Bangladeshi
e,porters e,ports to foreign countries*
Garments sector is the largest sector that e,ports the lion share of the countryCs e,port*
Bangladesh e,ports most of its readymade garments products to *S*A and <uropean
1ommunity ?<1@ countries* Bangladesh e,ports a"out 60O of its readymade garments products
to *S*A*

&ost of the e,porters (ho e,port through &BL are readymade garments e,porters* +hey open
e,port L>1s here to e,port their goods, (hich they open against the import L>1s opened "y their
foreign importers* <,port L>1 operation is #ust re!erse of the import L>1 operation* /or
e,porting goods "y the local e,porter, "an- may act as ad!ising "an-s and collecting "an-
?negotia"le "an-@ for the e,porter*
<,port is a 1ountries 1lassification of 'nternational +rading . &anufacturing of goods shipped
from the manufacturing 1ountry, Goods are not classified as e,ported until all e,port
documentation is completed and the ship>plane is outside of the countries "oundaries at sea, or
air space* Simply put, merchandise sold to other countries*
A.9H >!port policy
<,port policies formulated "y the &inistry of 1ommerce, (hich pro!ide the o!erall guideline
and incenti!es for promotion of e,ports in Bangladesh* <,port policies also set out commodityA
50 | P a g e


(ise annual target* 't has "een decided to formulate these policies to co!er a fi!eAyear period to
ma-e them contemporaneous (ith the fi!eAyear plans and to pro!ide the policy regime* +he
e,portAoriented pri!ate sector, through their representati!e "odies and cham"ers are consulted in
the formulation of e,port policies and are also represented in the !arious e,port promotion
"odies set up "y the go!ernment*
A.95 >!port incenties
<ncouraging e,port oriented industries is one of the ma#or o"#ecti!es of the 'ndustrial Policy,
1771 and as such go!ernment ensures all support and coAoperation on priority "asis as per e,port
policy* Some of the facilities and incenti!es offered are as follo(s$
Financial Incen"i/e,
Bestructuring of <,port 1redit Guarantee Scheme . con!erti"ility of +a-a in
current account
<,porters can deposit 60O of /KB !alue of their e,port earnings in o(n accounts
in dollar and pound sterling*
<,pansion of e,port credit period from 140 days to 250 daysJ50O ta, re"ate on
e,port earningsJ 3uty dra( "ac-*
Bonded (arehouse facilities to 100O e,port oriented firms*
3uty free import of capital e)uipment for 100O e,port oriented firms
Beneral incen"i/e,
:ational <,port +rophy to successful e,portersJ training course on e,ternal trade*
Arrangement of international trade fairs, commodityA"ased e,hi"itions in the country
and participation in foreign trade fairs*
+a, e,emption on capital gains from the transfer of shares "y the in!esting company*
A!oidance of dou"le ta,ation in case of foreign in!estors on the "asis of "ilateral
agreements*
:o restriction in issuing (or- permits to foreign nationals in Bangladesh*
/acilities for repatriation of in!ested capital, profits and di!idends*
51 | P a g e


Pro!ision for transfer of shares held "y foreign shareholders to the local
shareholders>in!estor (ith the permission of the BK' and the <,change 1ontrol
3epartment of the Bangladesh Ban-*
Allo(ing long term loan and (or-ing capital loan to foreign in!estors from local
commercial "an-s*
Permanent resident ship to a foreign citi;en in!esting a minimum of SR 55,000 or
e)ui!alent amount similarly city hip to any foreign citi;en in!esting SR 000 or
transferring SR 1,000,000 to any recogni;ed Bangladeshi financing institution
O"her incen"i/e
Assistance in impro!ement of )uality and pac-aging of e,porta"le items*
Simplification of e,port procedures etc*
A.99 >!port procedures followed "y MB*
+he import and e,port trade in our country are regulated "y the 'mport and <,port ?1ontrol@ Act,
1750* nder the e,port policy of Bangladesh the e,porter has to get !alid <,port registration
1ertificate ?<B1@ from 1hief 1ontroller of 'mport . <,port ?11'.<@* +he <B1 is re)uired to
rene( e!ery year* +he <B1 num"er is to incorporate on <QP forms and other papers connected
(ith e,ports*
A.9< >!port fnancing
/inancing e,ports constitutes an important part of a "an-9s acti!ities* <,porters re)uire financial
ser!ices at four different stages of their e,port operation* 3uring each of these phases e,porters
need different types of financial assistance depending on the nature of the e,port contract*
PreAshipment credit
PostAshipment credit
A.9A >!port earning
52 | P a g e


+otal e,port earnings during 2010 amounted to S3 17*14 "illion compared to S3 15*04
"illion in 2007, indicating an increase of 25*22O e,port gro(th in 2010 o!er 2007* +his dou"le
digit e,port gro(th is mainly attri"utes to the B&G sector (hich contri"utes almost 55O of our
total e,port earnings*
Fig!re 11C $on"h .i,e Expor" earning, Tren >$illion ;S9? o/er 2007-2010
Source$ Annual Beport 2010

A.96 2oreign 3emittance
/oreign remittance refers to the transfer of funds from one country to another (hich may "e
(ithin the country or "et(een t(o countries through "an-ing channel post office or the informal
channel* According to the /oreign <,change Begulation Act 1765 /oreign Bemittance means
purchase and sale of freely con!erti"le foreign currencies* Purchase of foreign currencies
52 | P a g e


constitutes in(ard foreign remittance and sale of foreign currencies constitutes out(ard foreign
currencies*
/oreign remittance is !ery important for the country as !alua"le foreign e,change is in!ol!ed in
the transfer mechanism* /rom the year 1770, financial li"erali;ation has "een started (hich is
still going on* 3ue to li"erali;ation, restrictions on foreign remittance "ecome ease* Bangladesh
ta-e is con!erti"le for current account transactions on &arch 26, 1776 (ith the !ie( to achie!e
"etter e,change rate management system* And from April 1776 Bangladesh Go!ernment has
accepted the status of Article H''' of international monetary fund*
A.98 Types of 3emittance
&ercantile Ban- Ltd* plays an important role in foreign remittance acti!ities "oth in(ard and
out(ard* 'n &BL main components of foreign e,change remittance are +*+, &*+ and 3raft*
/oreign remittance is of t(o -inds* Kne is in(ard and another is out(ard remittance*
De can see it "y the follo(ing figure*
Fig!re 12C Type, o# Re-i""ance
RE$ITTAN+E
Foreign Re-i""ance 'ocal Re-i""ance
Foreign Foreign 9e-an Tel Pay Tran,#er
O!".ar In.ar 9ra#" Orer
A.9C Inward remittances
56 | P a g e


/oreign 'n(ard Bemittance refers to the currency > remittance in foreign currency that is recei!ed
from a"road to our country* 'n case of foreign in(ard remittance, ++, &+, 3raft etc are dra(n in
local "an- "y the foreign "an-s of e,change houses* Dhen a local "an-
Purchases foreign "ills, +1s and cash foreign currency is also -no(n as in(ard remittance* A
local "an- also recei!es indenting commission of local firm, trademar-s, patent fee etc*
:ormally, 'n(ard /oreign Bemittance comprises of all incoming foreign currencies* Bemittances
issued "y the correspondent "an-s situated in the foreign countries and there"y dra(n on &BL,
&ain "ranch are considered to "e its 'n(ard /oreign Bemittances*
55 | P a g e


/ollo(ings are the 'n(ard /oreign Bemittances of &BL,
/33 Paya"le
/++ Paya"le
+1 Paya"le
<ncashment of foreign currencies endorsed in the passport*
Purchase of foreign currency
A.9E .utward 3emittance
+he term PKut(ard BemittanceP include not only remittance i*e* sale of foreign currency "y ++,
&+, 3rafts, +ra!elers che)ue "ut also payment against imports into Bangladesh . Local
currency credited to :onABesident +a-a Accounts of /oreign "an-s or con!erti"le +a-a account*
+(o forms are used for Kut(ard Bemittance of /oreign 1urrency, such as
'&P /orm$ All out(ard remittances on account of imports are done "y form '&P*
+*&* /orm$ /or all other out(ard remittances from +& is used*
O!".ar Re-i""ance can *e cla,,i#ie in"o ".o gro!p,
Hisi"le Kut(ard Bemittance such as payment against import
'n!isi"le Kut(ard Bemittance such as mem"ership fee, su"scription fee etc*
$oe o# O!".ar Re-i""ance
/oreign +elegraphic +ransfer ?/++@*
/oreign &ail +ransfer ?/&+@*
/oreign 3emand 3raft ?/33@*
/oreign 1urrency :otes*
+ra!eler 1hec-
A.9F Import, >!port + 3emittance Position
5= | P a g e


I-por" Trae
&ercantile Ban- has e,hi"ited )uality financing (hile facilitating import trade in 2007* 3uring
the year, the "an- handled a total of 22760 Letters of 1redit amounting to B3+ =0570*50 million
compared to 20221 Letters of 1redit amounting to B3+ 5=524*40 million in the year 2004* +he
"an- engaged in opening Letter of 1redit in different sectors including machineries, garments
and accessories , rice, (heat, sugar, 13SK, !egeta"le oil, cement clin-ers, hot roll steel, ra(
cotton, shipA"rea-ing etc*
Expor" Trae
+he Ban- handled total 1572= e,port "ills (orth B3+ 6=274*=0 million in 2007 as against that
of 15541 e,port "ills and B3+ 62104*50million during 2004* +he focal point of the "an- in
e,port financing (as garments industry , the lone dri!ing force of the economy of Bangladesh in
single "iggest source of foreign e,change and employment pro!ider of the country* Kther nota"le
items (ere #ute and #ute goods, leather, handicrafts, tea, fro;en food and fish*
Foreign Re-i""ance
+otal foreign remittance in a single year in 2007 made a record high to the tune of B3+ 50=1*20
million compared to that of B3+ 6522*70 million in 2004* +he Ban- has deepened its step on the
foreign soils further "y esta"lishing more and more remittance arrangements (ith o!erseas
e,change companies (here Bangladeshi e,patriates are (or-ing* +hese 'nclude *K, *A*<,
Ku(ait, Baharain, 1anada, 'taly, /rance etc* &oreo!er, for prompt and safe distri"ution of this
hard earned money to their near and dear ones in e!ery corner of the country, the Ban- has made
an arrangement (ith Bangladesh Post Kffice, Destern nion and some other agencies*
55 | P a g e


A.<H Muantitatie #nalysis of 2oreign e!change "usiness
I-por" Trae
Fig!re 10C I-por" Trae
Source$ Annual report of &BL 2010
+he graph sho(s the import operation progress of &ercantile Ban- Limited* 3iagram represents
a significant gro(th in import trading (ithin the last fi!e year* 'n 2005 the import trade (as little
"it slo(er "ecause of political condition of the country* 'n 2004 (e can see a significant gro(th*
+he principal items (ere capital machineries, garments and accessories, ships "rea-ing etc*
Expor" Trae
Fig!reC Expor" Trae >TG $illion?
54 | P a g e


Source$ Annual report of &BL 2010
+he "an- is !ery much supporti!e in e,port financing since its inception* As an outcome of its
positi!e attitude, in e,port performance it is holding the top position among leading "an-s of
ne( generation* +he graph sho(s the e,port operation progress of &ercantile Ban- Limited*
3iagram represents a significant gro(th in e,port trading (ithin the last fi!e year* 'n 2005 the
e,port trade (as little "it slo(er as li-e as import and the reason (as political condition of the
country* 'n 2004 (e can see a significant gro(th in e,port operation* +he main e,port items of
the "an- (ere readymade garments, leather, products etc*
A.<5 2oreign e!change income of Mercantile Bank *imited
/oreign e,change income is a great source of re!enue for the "an-* +his re!enue comes in t(o
forms$ commission and e,change gain* %ere, fi!e years data of foreign e,change income is
presented on the follo(ing (ayA
Fig!re 12C Foreign exchange inco-e o# $ercan"ile %an& 'i-i"e
Source$ Annual report of &BL 2010
57 | P a g e

Analy,i,
INTERNA' FA+TORS EHTERNA' FA+TORS
EEAGNESS OPPO;RT;NITI THREATS STRENBTH

+he different sources of income for foreign e,change "usiness are re!ealed and the income is
sho(ing a continuous increasing trend from 2006 to 2007* +he most dominant !aria"le in
foreign e,change income is e,change gain* +his is achie!ed from import, e,port and remittance
"usiness* +he graph is sho(ing that foreign e,change income is increasing* 'n year 2007 as
achie!ed highest income from foreign e,change*
A.<9 #nalysis
'n the competiti!e area of mar-eting analysis is "ased on product, price, place and promotion of
a financial institution li-e pri!ate Ban-* By doing the analysis it is possi"le to find out the
strengths, Dea-nesses, opportunities, and threats of the &BL* /rom the analysis (e can figure
out on going scenario of the Ban-*
3uring my internship period of /oreign <,change in &BL ' ha!e found some aspects relating to
the Ban-9s strength, opportunity, (ea-ness and threats, (hich are more or less* ' thin- affecting
the Ban-9s performance in total, (hich are e,plained "elo(
40 | P a g e


Fig!re 13C Analy,i, o# in"ernal an ex"ernal #ac"or,
'n this analysis t(o factors act as prime mo!ers
'nternal factors (hich are pre!ailing inside the concern (hich include Strength and
Dea-ness*
Kn the other hand another factor is e,ternal factors (hich act as opportunity and threat*
<!ery organi;ation is composed of some internal strengths and (ea-nesses and also has some
e,ternal opportunities and threats in its (hole life cycle*
S"reng"h,
3edicated group of employees*
Long "usiness relationship (ith e,isting customer*
Kne of the highest "usiness portfolio? (ith respects to !olume@
1ordial relationship (ith the customer*
tili;es state of the art technology to ensure consistent )uality and operation*
Superior ser!ices
Eea&ne,,e,
Kffice en!ironment is so congested
:e( customer is una!aila"le
ses old soft(are
:um"er of employees is una!aila"le*
<mployees are not moti!ated in some areas*
Oppor"!ni"ie,
+hey can introduce more inno!ati!e and modern customer ser!ice*
:e( customer add
41 | P a g e


ses ne( soft(are
+hey can recruit e,perienced, efficient and -no(ledgea"le officers and staffs as
it offers good (or-ing en!ironment*
:e( correspondent "an-*
Threa",
Lots of ne( "an-s are coming in the scenario (ith ne( ser!ice*
1ost of fund gradually high*
Local competitors can capture huge mar-et share "y offering similar products*
:e( product design*
Bules are changes*
$#AP0E< :
Findings
<ecommendations
$onclusion
42 | P a g e


6.5 Ma4or 2indingsB
Dhen ' (as (or-ing at &ercantile Ban- Ltd, &oti#heel, &ain Branch, ' ha!e attained to some
-ind of e,perience* By analy;ing the !arious data the follo(ing finding ha!e "een found$
&ercantile Ban- Ltd is one of the leading pri!ate sector commercial Ban- in Bangladesh*
+he Ban- recogni;es its responsi"ility to its customers, as (ell as the society* &ercantile
Ban- Ltd has already esta"lished a fa!ora"le reputation in the "an-ing industry in the
country*
3eposit !arious set"ac-s in economy, &ercantile Ban- Ltd Ban-s performance may "e
termed satisfactory in respect of 3eposit mo"ili;ation and Profit earning in the year 2004*
3ue to &odern Ban-ing the num"er of 3eposit are increasing rapidly*
&ost of the clients in &ercantile Ban- Ltd are satisfied (ith /oreign e,change ser!ice of
gi!ing statement*
+he (or-ing en!ironment of &ercantile Ban- Ltd is so much friendly* All the officers are
so much helpful* +hey help each other, (hen any officer falls in trou"le*
+he /oreign <,change 3epartment is !ery much Strong* Because they use in dealing
(ith the foreign Ban- in term of L>1 opening and amendment of L>1, are !ery much
e,pedient to the foreign Ban-* 't is gi!ing a competiti!e ad!antage to the &ercantile
Ban- Ltd* /or this, "usinessmen li-e to deal their "usiness (ith the &ercantile Ban- Ltd*
+he top e,ecuti!es and officers are !ery helpful to the clients* Some of our "usinessmen
42 | P a g e


do not -no( the e,act procedures of international trade* +he officers of &ercantile Ban-
Ltd help them to properly e,ecute their "usiness*
&ercantile Ban- Ltd pro!ide little assistance in relation (ith foreign e,change to the
small entrepreneur comparing to large "usiness houses* Small entrepreneur has to -eep
higher margin, sometimes 100O, regarding opening a L>1*
46 | P a g e


6.9 3ecommendations
't is not une,pected to ha!e pro"lems in any organi;ation* +here must "e pro"lems to operate an
organi;ation* But there must "e remedies to follo(* +he follo(ing recommendations can "e
suggested to sol!e the a"o!e mentioned pro"lems$
&BL should impro!e central online facility*
&BL should increase its manpo(er le!el in /oreign <,change Kperation*
+echnological pdate such as hi speed net(or- and soft(are*
A+& Booth should "e esta"lished in more areas*
&BL should try to reduce their dis"ursement timing*
Arrangement of monthly >)uarterly training courses >(or-shops for the selected "y the
authority in order to promote employee to their desired le!el*
ShiftA (ise (or-ing hour can "e applied*
/oreign e,change e,pertise should "e recruited*
&BL needs to increase the #o" satisfaction le!el of its employees "y pro!iding se!eral
performance "ased a(ards*
<nhancement of remuneration pac-age should "e competiti!e and attracti!e*
&BL should utili;e P'nternship ProgramP as one -ind of promotion policy* +o do so this
Ban- should pro!ides facilities to the internees through proper placement and practical
operations as (ell as #o" certainty to those (ho "ring introduce themsel!es the "est
performers in doing their particulars*
&a,imum clients do not -no( a"out &BL9s /oreign e,change policy* +hey should carry
out more promotional acti!ities to ma-e clients a(are a"out their offers*
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6.< 1onclusion
Ban-ing is "ecoming more and more !ital for economic de!elopment of Bangladesh in
mo"ili;ing capital and other resources* &ercantile Ban-, "eing a third generation "an-, is also
e,tending such contri"utions as to the ad!ancement of the socioeconomic condition of the
country* 't is not possi"le to get 100O from any(here especially for those organi;ations (hich
(ith mass people* &BL has some pro"lems "ut it is encouraging that they are trying to o!ercome
these o"stacles* +o -eep pace (ith the current demand &BL should "e more responsi!e* 't
should ta-e necessary steps t. spread o!er their products all o!er the country* Dithout a strong
footing of deposit it is not possi"le to grant huge amount of loans and ad!ances i*e* one of the
ma#or sources of income of a "an-* And (ithout huge amount it is not possi"le to attract the
ma#or portion that en#oys credit facilities* 't (ill more #ustify for &BL to concentrate on
corporate "an-ing than consumer "an-ing i*e* the ma#or portion of the profit (ill "e generated
from corporate sector not from consumer section*
'n !ie( of the findings, the pro!ision of high standards of automated ser!ice )uality and
maintaining a significant le!el of customer satisfaction (ill lead to impro!ed financial
performance* &ercantile Ban- is one of the pioneers in many criteria* &ercantile Ban- Ltd is
committed to(ards the e,cellence in the ser!ice (ith efficiency, accuracy and proficiency* Li-e
of most of the commercial "an-s, foreign e,change department is one of the most important
departments of &ercantile Ban- Ltd* Perhaps, it is the most important department of the Ban-*
+his department is dri!ing the "an- from the front* +hrough the import, e,port and foreign
operations, this department is ma-ing a great contri"ution to the "an- and the economy as a
(hole* 'f it is said that this department of the "an- is running according to all of the ideal
principles of modern foreign e,change "usiness mentioned in the "oo-, it (ill "e o!erstated*
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3espite pro"lems and (ea-nesses, therefore, it is "etter for &ercantile Ban- Ltd to thin- a"out
their e,isting steps and ta-e the necessary initiati!es to fi, up the pro"lems and imply the
recommended steps to "e successful and "ecome the mar-et leader in near future*
6.A Bi"liography
1* Annual Beport of &ercantile Ban- Limited
2* :e(spapers, daily affairs reports
2* (((*"angladeshA"an-*org*
6* 3aily Statement of &ercantile Ban- Limited at &ain Branch, 3ha-a*
5* Statement of affairs of &BL, &ain Branch*
=* /oreign <,change &anual of &ercantile Ban- Limited*
5* 1* B* Kothari, Besearch &ethodology*
4* (((*google*com
7* www.m"l"d.com
10* 3aily Affairs, Beport*
11* 3ifferent +ypes of /orm of &BL*
12* By o"ser!ing different research papers*
12* Bangladesh Ban- /oreign <,change Guidelines, Holume
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6.6 #cronyms
BB $ Bangladesh Ban-
1./ $ 1learing and /or(arding
1B/ $ 1lean Beport of /inding
1B& $ 1redit Bis- &anagement
33 $ 3emand 3raft
<1 $ <uropean 1ommunity
<3BP $ /oreign 3ocumentary Bill Purchase
<PB $ <,port Promotion Bureau
<B1 $ <,port Begistration 1ertificate
<QP $ <,port
/BPAB $ /oreign Bills Payment A (aiting
/3B $ /i,ed 3eposit Beceipt
/KB $ /ree on Board
'B1A $ 'nter Branch 1redit Ad!ice
'B3A $ 'nter Branch 3e"it Ad!ice
'/B1 $ 'n(ard /oreign Bills for 1ollection
'/33 $ 'ssuance of /oreign 3emand 3raft
'&P $ 'mport
L>1 $ Letter of 1redit
LBP $ Local Bill Purchase
L1A $ Latter of 1redit Authori;ation
&BL $ &ercantile Ban- Limited
KB1 $ Kut(ard Bill 1ollection
K3 $ K!er 3raft
PA3 $ Payment against 3ocument
PK $ Payment Krder
S+3 $ Short +erm 3eposit
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SD'/+ $ Society for Dorld(ide 'nter Ban- /inancial +elecommunication
+1 $ +ra!elers 1he)ues
++ $ +elegraphic +ransfer
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