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Abstract:

Inbanking, a merchant bank is a financial institution primarily engaged in offering financial

services and advice to corporations and to wealthy individuals. The term can also be used to

describe the private equity activities of banking. Merchant bank is that a merchant bank

invests its own capital in a client company. Both merchant banks provide fee based corporate

advisory services, including in relation to mergers and acquisitions.

In Bangladesh we have a total number 37 merchant bank. In our country Merchant bank

provides verities of services including Issue management, Underwriting of share, portfolio

management, advisory etc. Through our project we have identified many important aspects of

merchant bank like- The capital market system of Bangladesh, advantages, and challenges

faces by merchant bank. By comparing merchant bank services in Bangladesh with the rest of

world we also have provides some recommendations on merchant bank service in our

country. But our main focus in on performance evaluation of some major merchant Bank in

Bangladesh like- Prime finance, IDLC, Uttora finance, Bey leasing, Lanka bangle, Swadesh,

GSP, Equity financing. Through this analysis we try to identify what services they are

providing, how much they have improved their services than in the previous year and their

position in the capital market.

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Some major activities of Merchant Bank in Bangladesh:

Securities and Exchange Commission (SEC) originates a regulation in 1996 on merchant

banking activities specifically- SEC (Merchant banker and Portfolio Manager) Regulation,

1996. As per regulations, a merchant bank is allowed to perform four types of activities:

Type of Activity Key Features Target Market

Issue

Management

The Issue Management group is

capable of devising innovativesolution for raising capital debt

e.g. placement of bonds and

debentures, and raising equity

through private and public

placement from the market

suiting the unique needs and

constraints of the corporate

clients.

All corporate bodies

Underwriting Underwriting refers to the

guarantee by the

underwriters that in the event ofunder-subscription, the

underwriter will take up the

under-subscribed amount on pro-

rata basis upon payment of price

of that option

All corporate bodies

Portfolio

Management

Merchant banks allow small

investors to open investor

account with merchant banks and

provide support for the purchase

and sales of shares. Clients shall

have absolute discretionary power to make investment

decision.

Individuals,

Professionals, &

Corporate Bodies

Corporate

Advising

Through corporate advising, the

merchant bank helps the issuer

analyses its financing needs and

suggests various ways to raise

needed funds.

All corporate bodies

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The scope of business of a merchant bank has been defined on the basis of its

capital base-

1. Minimum of BDT 2.5 million for issue management

2. Total BDT !0 million for underwriting and issue management

3. Total BDT lO million for portfolio management.

To operate as a full-fledged merchant bank (i.e., issue management,

underwriting, portfolio

management and corporate advising) BDT 20 mi llion is required. Active

participation of

merchant banks is essential in order to accelerate the capital market which

can expedite the

economic growth of the country.

But major problems faced by the companies are the limited scope of business

and high cost of

funds. In order to ensure the sustainability of merchant banks, the scope of

business needs to be .

expanded and diversified, issue expense is another cause of concern for the

merchant bankers

because it may reduce their earning potential since the size of the TPO market

in Bangladesh is

generally much smaller in comparison with that of the other regional

exchanges. If the above 7

mentioned problems can be addressed properly, they would be able toplaya

key role in the

development of the capital market through their market making activities in

both primary and

secondary markets.

Role of merchant banks

The role of merchant banks can be categorized into two broader phases-

1. Primary market making - here Merchant bank performs the role

of adv.smg,

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Administrative services, underwriting, private placement, and banker of

the issue.

2. Secondary market making - here merchant banks play an important

role in the development of the capital market for previously issued

securities providing a number of merchandising services.

Performance of merchant banks

The overall performance of the merchant banks Is not very impressive. Most

of the merchant banks are engaged only on issue management andunderwriting. In case of portfolio management, only three companies are folly

operational in the market. The remaining area, s untouched mainly because of

the limited scope of business in the context of an under-performing capital

market of Bangladesh. This makes some of the merchant banks become

dormant.

Actual picture of Merchant Banking activities in Bangladesh:

In reality, merchant, banksof Bangladesh operates only in three functionalareas, i.e., issue management, underwriting and portfolio management (as

corporate advising being untouched).Of those, the first two are fee-based

business, while the latter one is fund-based. But the cost of fund for merchant

banks is much higher than that of the commercial banks. In a step to make

merchant banks fully operational, SEC recently amended the Securities

and Exchange Commission (merchant banker and portfolio manager) Regulation,

1996 which permits the commercial bankers to conduct the portfolio

management business with their own fund. This -step was taken as an attempt to

help commercial banks to conduct portfolio management more profitably. As a

result, all the three companies that are doing portfolio management are the

commercial banks. Under the limited scope of business it would be very difficult

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for other merchant hanks to operate competitively as the earning potential for

these companies are very restricted.

The Financial Sector and Capital Market of Bangladesh:

The financial sector in Bangladesh comprises the money and capital markets, insurance and

pensions, and microfinance. In addition to the Bangladesh Bankthe central bank of

Bangladesh there are 4 state-owned commercial banks (SCBs), 5 state-owned specialized

banks, 30 domestic private commercial banks (PCBs), 9 foreign commercial banks, and 29

nonbank financial institutions (NBFIs) as of 2008.3 Figure 1 depicts the nature of the

financial sector in Bangladesh.

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The Capital Market:

The capital market is an important ingredient of the financial system, plays a significant role

in the economy of the country. After the share market scam in 1996 a number of regulations

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and policies have been developed to regain the confidence of the investors. Government

participants play an important role in the overall functioning of the market.

Regulatory bodies of the capital market:

The Securities and Exchange Commission exercises power under the Securities and

Exchange Commission act 1993. It regulates institutions engaged in capital market activities.

Bangladesh Bank exercises powers under the Financial Institutions Act 1993 and regulates

institutions engaged in financing activities including leasing companies and venture capital

companies.

Further to the regulations the following regulations also cover the capital market operation:

1. Dhaka stock exchange Automated Trading Regulation,1999

2. Dhaka stock Exchange Investors protection fund Regulations, 1999

3. The listing Regulation of the Dhaka Stock Exchange Limited

4. SEC Margin Rules,1999

5. DSE Settlement of Stock Exchange Transaction Regulation, 1998

6. Dhaka Stock Exchange ( Members Margin) Regulation,2000

7. SEC Corporate Governance Guidelines,2006

Activities in the capital market:

Activities in the capital market can be classified as follows:

1. Primary market activities

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Securities are issued in the primary market by one or more of the following methods:

a) Public Issue

b) Private placement

c) Right issue

d) Offer for sale

2. Settlement and securities administration:

a) Settlement: The Chittagong and Dhaka Stock Exchanges each have their own

automated trading system. The clearance system has daily netting facilities. The

settlement system allows for early settlement of securities and funds. Failed trades are

squared up by the stock exchanges and members are penalized for such failed trades.

b) Collection: Dividends on shares are usually paid to the holders annually. Interest on

debentures in paid semi-annually. Payments are made by banks cheques. The benefit

of the share/debenture goes to the person whose name is on register during a pre-

declared book closure period. Interest calculations are based on the normal calendar

year.

c) Capital changes and recognition : In case of right issues, existing shareholders are

required to accept or renounce the shares within a specific time period. On the other

hand, in case of bonus issues, share holders receive the share certificates by mail.

Bonus shares are issued within 60 days of reopening of share transfer register.

The recent development of Capital Market:

The role of capital market in financing private investment remained at a nascent stage in the

context of Bangladesh. Banks and financial institutions disbursed BDT 96.5 billion as

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industrial term loans during FY06, whereas only BDT 1.7 billion was raised in the capital

market through private placements and public offerings (BB Annual Report FY06). As of

December, 2006 a total of 310 securities were listed at DSE comprising 255 companies, 13

mutual funds, 8 debentures and 34 treasury bonds as opposed to a total of 249 securities

comprising 230 companies, 10 mutual funds and 9 debentures as of December 2001. Thus

during the last five years only 54 new companies got listed in the DSE of which only three

were listed by direct listing route, and the rest were listed by public offering. Total market

capitalization of all listed securities in DSE, however, increased substantially (by around 130

percent) in 2004 to BDT 224.9 billion. At the end of December '06 it stood at BDT 323.4

billion. DSE market capitalization as share of GDP fell to 5.41 in June '06 from 6.06 in June

'05.

Common Services Offered by Merchant Banks In Bangladesh

Issue Management

Issue management function of merchant banking helps capital market to increase the supply of

securities. The Securities and Exchange Commission stipulates that issuer must float the shares /

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debentures through a separate institution licensed by them (SEC) as issue manager or merchant

banker. Merchant Banks shall act as issue managers for the issuer companies which have good

institutional base, corporate structure and discipline. In the area of issue management the Bank will

also arrange placement prior to IPO

AAA Consultants

Ltd.

16%

Euity Partners Ltd.

16%

Sawdesh

Investment Ltd.

13%

ICB Capital

Management Ltd.

12%

Prime Finance andInvestment Ltd.

9%

Capital Market

Service

7%

First Securities

Ltd.

5%

IDLC Finance

Ltd.

4%Others.

18%

Amount of Total IPOs

Underwriting Operation

Underwriting operation in one of the important functions of a Merchant Banker by which it can

increase supply of stock/shares and debentures in the market. It is an arrangement whereby the

underwriter undertakes to subscribe the unsubscribed portion of shares/ debentures offered by any

public limited company. This encourages the prospective issuers to offer shares/debentures to the

public for subscription and they can raise fund from the public for implementation of their industrial

undertakings.

In undertaking public issue of shares and debentures the Merchant Banks evaluate the proposal

covering the following areas:

1. Whether the cost of the project has been estimated properly?

2. Whether the management capability of the sponsors is up to the mark?

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3. Whether the management capability of the sponsors is up to the mark?

4. Whether the project is technically feasible?

5. Whether the products/to be produced/ serviced by the project will have due share in the local

and overseas market?

6. Whether the sponsors are credit worthy?

7. Whether the project is financially viable and rewarding and is able to pay good dividend to

the shareholders who would invest in its share?

For underwriting, Banks are charging underwriting commission, which may range between 0.50% to

2.50% of the amount of public issue. The will, however, charges project examination at a

determinable rate will be charged on the issuer.

The following conditions may-be applied while considering underwriting proposal:

1) Merchant Banking Division should not underwrite alone the whole issue.

2) Merchant Banking Division single commitment should not more than 20% of outstandingunderwriting commitment during the year.

3) Merchant Banking Division should not underwrite the issue of companies having Debt/Equity

ration of more than 60/40 and Debt Coverage Ratio with less than 2.

4) Merchant Banking Division should not underwrite right issues of Bank defaulted companies

or companies under category of Z.

Portfolio Management

The two broad function outlined above are from the supply side of capital market. A merchant banker

has also the responsibility of creation demand for securities. Through portfolio management this task

can be accomplished. In the area of portfolio management merchant banka want to manage

investment portfolio of the customers through introduction and of Investors accounts of the following

three types:

a) Clients Discretionary Investment Account (CDI): This type of account will be allowed to

be opened by adult Bangladeshi and Wage Earners with minimum initial deposit of Tk. 1,00,000 against which the Bank will provide credit facility in the ratio of 1:1 carrying profit

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rate ranging from 12.50% to 12.00% p.a. subject to change by the Management of the Bank

time to time. In this case Tk. 5,000.00 will be kept as retention amount. If the margin falls

25% or below the Bank shall have the right to recover the outstanding by selling the shares

held in the account without notifying the account holder(s).

b) Bank Discretionary Investment Account (BDI): This types of accounts will be allowed to

be opened by adult Bangladeshi and Wage Earners with minimum initial deposit of Tk. 1,

00,000 against which the Bank will provide credit facility in the ratio 1:1 carrying profit

ranging from 13% to 13.50% p.a. (quarterly rest) subject to change by the Management of the

Bank time to time. The maximum limit of credit facility under this type of account will be Tk.

10.00 lac for individual investors and Tk. 50.00 lac for institutional investors.

c) Profit and Loss Sharing Account (PLS): This types of accounts will be allowed to be

opened by adult Bangladeshi and Wage Earners with minimum initial deposit of Tk. 5, 00,000

providing equal amount of deposit by the Bank i. e. at the ratio of 1:1. The profit/loss

earned /incurred will be equally shared by the investor and the Bank. Exclusively the Bank at

its discretion will design the portfolio. This is again a continuous and revolving Account. The

Bank shall also act as Portfolio Managers for Institutional investors who are approved to have

a portfolio Managers for Institutional investors who are approved to have a portfolio of

securities by the charter/Memorandum of Association. In this case the minimum amount of

deposit would be Tk. 10.00 lac providing equal amount of deposit by the Bank i.e. at the ratio

1: 1. The maximum Banks investment under this Account shall not exceed Tk.25.00 lac. The

PLS Account holder shall have to maintain 50% margin in the Account.If the margin falls to

25% below the Bank shall have the right to recover the out ding by selling the shares held in

the Account without notifying the account holder (s).

Criteria for opening Investment Account under Portfolio Management Services:

i. Individual Resident Bangladeshi:

The accountant. holder shall be an adult Bangladeshi having attained maturity and be eligible to enter

into a contract. The following particulars/papers/documents are to be obtained and looked into for

allowing him to open Investors Scheme Account:

a) Genuineness of official/business. residential address and permanent address is to be verified

b) Copy of Passport/ Voter ID Card, If applicable.

c) Monthly income indicating source of income

d) Transaction Profile

e) 3 copies of Passport size photograph attested by gazetted officer or a bank official not below

the rank of AVP/AGM

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f) Name of nominee with particulars, passport size photograph and signature.

g) TIN Certificate, if any.

ii. Wage Earners/Non-resident Bangladeshi:

For allowing wage earner or non-resident Bangladeshi to open an account the following particulars/documents are to be obtained:

a) Name of city and country where he is working

b) Copy of contract of employment

c) Copy of Passport with Valid Visa

d) Monthly salary in BDT

e) Name of Bank with Branch through which remittance of fund to be made available for

investment

f) Investment Objective:

1. Long-term for capital gains and dividend income

2. Intermediate term

3. short-term for trading

g) Mode of repayment of loan.

h) Name and address of nominee with relationship passport size photograph and signature.

i) Residential and permanent address of account holder

j) Transaction Profile

Criteria for Credit Facility and Investment under Investors Scheme Account:

For allowing credit facility for investment diversification policy shall have to be followed:

a. In case the loan amount is within Tk. 15 lac at least 3 selective stocks of different are to be

for investment.

b. In case loan amount exceeds Tk. 15 lac at least 5 selective of different companies are to be

taken for investment.

Only those securities are to be taken for investment under investor accounts fund of the Bank. Which

are approved by EC/Board?

The credit facilities shall be allowed in compliance with the following Criteria:

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a. 50% of credit facility may be allowed for investment in securities on the basis of NAV or

Book Value.

b. 50% of credit facility may be considered when Price Earning Ratio (PER) is within 10 or

lower, i. e. deposit credit ratio 1:1.

c. For securities having PER ranging between 15.01-20, 25% of facility may be allowed, i.e.

deposit credit ratio shall be 1:1.

d. For securities having PER ranging between 15.01-25% of credit facility shall be allowed, i.e.

deposit-credit ratio shall be 4:1.

e. No credit facility shall be allowed for securities having PER exceeding 20.

f. Securities of A categories shall be considered for allowing credit facilities,

g. For securities primary market credit facility may be considered to the extent of 50% as per

management decision.

h. In case of IPO application if an investor want to invest in balk amount we may consider it if

the management desire.

i. Credit facility under investors account shall be of revolving in nature. The loan may also be

recovered or repaid through sale of securities.

j. The term of credit facility may be renewed on the basis of satisfactory performance of the

account.

Margin Requirements

For investors account margin shall be 50% That is accountholders to total investment in securities

on account shall be 50% i.e. deposit ratio will be 50:50. Margin shall be calculated applying the

following formula:

{(Account holders Contribution- (Retention Money + Documentation fees)}*2

Margin maintenance

50% margin is to be maintained in structuring the portfolio of investment in securities of primary or

secondary market. In case the margin falls to 35% below the accountholders shall be asked to raise the

margin to 50% by way of injecting fresh fund in the account or by sale of securities.

Sale of securities by the Bank

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In case the margin falls to 25% the Bank shall sell the securities without without prior not to the

account holder to raise the margin to 50%.

Withdrawal of Fund

In this case the fund will be deposited/withdrawal

a. Withdrawal of fund may be allowed when there is credit balance in account keeping the

retention money.

b. Withdrawal of fund may be allowed to the extent, which is in excess of margin requirement.

That is, if the margin is 60% in an account the accountholder may be allowed to withdrawal of

fund to the extent of 10% of the total investment.

Documentation Standards

The following charge document are to be executed by the accountholders:

a) D. P. Not having revenue stamp worth of Tk. 20.

b) Letter of Agreement

c) Letter of Pledge with Supplementary Agreement

d) Letter of Authority for sale of securities

e) Letter of Continuity

f) Letter of Revivalg) Letter of Guarantee

h) Deed of Agreement for management of portfolio

i) Mandate/ Power of Attorney for purchase sale of securities.

Fees and Charges and Income:

a) Rate of Profit on Investment ranging from 12.50% to 13.00% p.a. with quarterly rests

b) Brokerage- 0.40% of Brokerage to be charged

c) Documentation Fees- Tk. 500 per Account (at the opening of the Account).

d) Portfolio Management Fees @ 1% p.a. on total portfolio.

Performance Evaluation of Some Major Merchant banks in

Bangladesh:

LankaBangla

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Merchant Banking Services

LankaBangla Finance Limited provides merchant banking services in the following areas:

Issue-Management LankaBangla provides such services to an issuer company which includes

inter alias regulatory compliance, placement arrangement, underwriting arrangement, post

issue service, distribution, etc.

Underwriting

LankaBangla by providing underwriting service offers comfort to the issuing company. Apart

from acting as underwriter to public issue, we also act as the Arranger of Underwriting.

Merger, Amalgamation and Private Placement

Lanka Bangla recognizes that the merger of two companies may represent the culmination of

years of effort by their owners and management. We guide shareholders and management

teams through the merger and acquisition process to maximize value and minimize disruption

to the business.

Portfolio-Management

LankaBanglas Portfolio Management service is designed to provide personalized, secure and

simple financial solutions for a wide variety of investors who wish to enhance their

opportunities while minimizing their administrative burden.

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Business Overview and Profit Growth

Bangladesh stock market has performed very well throughout the year 2008 promising

encouraging future ahead. Bull beating bear

for excess demand over shortage of supply of good securities was observed in the market.

Market capitalization at the end of

December 2008 was BDT 10 billion which is 15.88 percent of GDP while it was 7.59 percent

in 2007.

In 2008, our Company registered a tremendous business growth with leading market share in

terms of turnover in both the bourses. It

has consistently secured the top position in terms of turnover in the Dhaka Stock Exchange

and Chittagong Stock Exchange over the

last few years. The operating results and the performance graph are shown below:

Market Share of LankaBangla Securities in DSE & CSE

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Sawdesh Investment Ltd.

As a full-service investment bank, SIML offers public issue management, portfolio

management, merger & acquisition, joint venture, corporate finance advice, securities

dealing, research and underwriting capabilities in the financial markets of Bangladesh.

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SIML goal is to help you meet your agreed objectives, taking into account such factors as

capital growth, cash flow and security.

Under SIML Portfolio Management services as a client you retain full discretion over all

financial decisions while we administer and manage all investment documentation, collect

investment income, act as custodian for your assets (but without physical control), provide a

dedicated Client Service Officer, issue quarterly statements and last of all we provide loan

facilities to our portfolio account holder at a very competitive rate.

Trust Bank Ltd.

Merchant Banking Activities

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The Bank also carries out merchant banking activities under the license issued by the

Securities & Exchange Commission (SEC), Dhaka, Bangladesh. The overall increase of

activities of Merchant Banking Operations plays an important role in the improvement of

capital market of the country and enhances earning capability of the Banks. Trust Bank

Limited carries out Merchant Banking Operations under the license issued by the Securities

and Exchange Commission (SEC), Bangladesh. Merchant Banking Division (MBD) is

actively managed the portfolio of the customers by selling and buying of shares for them

through different brokerage houses. It also allows margin loan facility to the customers

against their equity for investment in the listed companies. MBD is also managing Banks

own portfolio through investing in listed shares for boosting up the profitability of the Bank

and also enhancing shareholders value. MBDs contribution to total operating profit of the

Bank was significant in the year 2009. We have a plan to form a wholly owned subsidiary

company for running the Merchant Banking Activities very soon. A Separate set of balance

sheet an d income statement of our Merchant Banking Division are shown in Annexure D &

E respectively.

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AB Bank Ltd.

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Background of AB Bank Limited AB Bank Limited, the first private sector bank was incorporated in

Bangladesh on 31st December 1981 as Arab Bangladesh Bank Limited and started its operation with

effect from April 12, 1982.

In spite of adverse market conditions, AB Bank Limited which turned 28 this year, concluded the

2008 financial year with good results. The Banks consolidated profit after taxes amounted to Taka

230 cr which is 21% higher than that of 2007. The asset base of AB grew by 32% from 2007 to stand

at over Tk 8,400 cr as at the end of 2008.

The Bank showed strong growth in loans and deposits. Deposit of the Bank rose by Tk. 1518 cr ie.,

28.45% while the diversified Loan Portfolio grew by over 30% during the year and recorded a Tk

1579 cr increase. Foreign Trade Business handled was Tk 9,898 cr indicating a growth of over 40% in

2008.

Capital Market

Bangladesh capital market is still quite small in terms of size compared to countries like India orPakistan. Present market capitalization accounts for roughly 6 percent of the GDP. During the first

half of the year 2006, liquidity crises had its affect in the market and towards the end of the year, the

market had to weather unstable and volatile political situation.

Brokerage Service

Introduction:

AB Securities Limited (ABSL) is a subsidiary company of AB Bank Limited having holding

99.60% shares of the ABSL. ABSL started its new journey on 2nd August, 2010 with

improved customer service, highly skilled professionals and state of art technologies.Memberships of both Dhaka Stock Exchange Limited and Chittagong Stock Exchange

Limited has been transferred in name of ABSL to provide more efficient and professional

broking services to the capital market investors.

Services of ABSL:

AB Securities Limited (ABSL) is one of the countrys leading securities broker houses of

Dhaka Stock Exchange and Chittagong Stock Exchange..

Services:

1. Brokerage Services, Margin Loan Facilities, Stock Dealer Service, CDBL

Services as full service Depository Participant (DP):

AB Investment Limited (ABIL)

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AB Investment Limited, a subsidiary of AB Bank Limited incorporated under the

companies act 1994 and running its Merchant Banking operations being licensed by the

securities and exchange commission.

Sector Wise LDOs position as on December 30, 2008

Figure in '000'

Industrial sectorSIC

CodeLimit % Outstanding % A/C

Trading 1000 15,064,919 25% 12,130,869 25% 3323

Agriculture 2000 6,444,920 11% 5,477,990 11% 393

Manufacturing 3000 23,816,061 40% 18,695,354 38% 1491

Services 4000 6,427,150 11% 5,376,696 11% 235

Contractual Works 5000 1,693,475 3% 1,108,986 2% 227

Energy & Mining 6000 1,016,647 2% 945,776 2% 51

Others 7000 393,408 1% 350,843 1% 42

100% Secured Loan 8000 2,633,006 4% 2,098,487 4% 1118Special Scheme

Loans9000 2,095,618 4% 2,730,863 6% 174

59,585,204 100% 48,915,864 100% 7054

Equity Partners Ltd.

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BRAC EPL: BRAC EPL Investments Limited (BRAC EPL) formally commenced operation under

a new management team on October 1, 2009. The predecessor of the company, known as Equity

Partners Limited (EPL), was formed in early 2000 as a merchant bank licensed by the Securities and

Exchange Commission of Bangladesh. BRAC Bank Limited acquired 51% of its equity in August of

2009.

BRAC Bank Limited is one of the fastest growing banks in Bangladesh. A member of BRAC

Enterprises, the Bank operates under a "double bottom line" agenda where profit and social

responsibility go together as it strives towards a poverty-free, enlightened Bangladesh.

Principal Activities

Investment banking

Issue Management & Underwriting of Public Offering

They provide issue management and underwriting services for:

Initial Public Offering (IPO),

Repeat Public Offering (RPO),

Rights Issue,

Direct Listing, et.

Our issue management services include/ cover:

Capital Restructuring, Structuring the size of the public offer,

Determine issue price,

Valuation of the Issuer Company using various techniques of financial modeling,

Ensure compliance with the regulatory authorities,

Liaising with the regulatory authorities on all issues regarding the public offer,

Arranging the underwriting syndication

Structured Finance and Corporate Advisory:

Our wide range of advisory services in this domain includes:

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Advising corporations, institutions and sovereign entities on the structure of new debt

issues and the refinancing of existing obligations

Advising on debt market opportunities and conditions

Arming our clients for negotiations with bankers and investors

Sharing our knowledge of the range of potential financiers, their appetite and their

attitude to credit, pricing and structure We have the expertise to raise debt and quasi equity through:

Preference shares

Loan syndication

Corporate bonds

Redeemable bonds

Convertibles and equity linked products

Asset-backed securitization

Private Equity:provide the following services in this regard-

Formulating business plans Conducting due diligence

Attracting and selecting investors

Providing legal and institutional support

Debt restructuring

Creating project documents

Mergers & Acquisitions: BRAC EPL acts as an intermediary for Bangladeshi/offshore

investment and joint-venture transactions, aligning the goals of those who seek and provide

investment and joint-venture opportunities in Bangladesh.

Portfolio management

"Cap Edge" Non-Discretionary Portfolio Account: Cap Edge is a dynamic investment

account that provides investors with the entire range of non-discretionary portfolio

management services including:

Minimum balance requirement to start Portfolio Investment Account.

Efficient execution of trades.

Extension of margin loan enabling the investors to earn enhanced return.

Collecting dividend and bonus shares on behalf of clients.

Subscription of the rights issues.

Completion of dematerialization process.

Keeping the securities in safe custody.

GSP Finance

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GSP Finance Company (Bangladesh) Limited a NON-BANKFINANCIALINSTITUTION incorporated

in Bangladesh on 29 October 1995 as a public limited company under the COMPANIESACT 1994.

It also received licence from SECURITIESANDEXCHANGECOMMISSION on 24 August 1999 for

working as a merchant banker. Five foreign sponsors hold 74.97% of its shares and the rest is

held by domestic sponsors. The company was established with an authorised and a paid up

capital of Tk 1,000 million and Tk 150 million respectively. The paid up capital in December

2009 was Tk 226 million.

Principal activities

Credit and Marketing: The principal focus of the company is on the business of lease financing ofcapital goods for industries such as plant, machinery and equipment, medical equipment, power

generation etc.

Merchant Banking : Under its unit their principal focus in on financing Capital Market such as

Mutual funds, Bridging loans, Underwriting, Issue management, Pre-IPO placement, Portfolio

management and Investments in Share, Bonds and Debenture.

Money Market Operations: The company also engaged in Money Market activities primarily in

connection with its lending/funding operations.

Other Financial Market Operations: The company also engaged in Lease Finance, Term Loan, BridgeFinance, Loan Against Fixed Deposit, Loan Against Property, Loan Against Securities, Bill

Discounting, Share Investment Service and also in Syndication and Club Financing.

Growth in Shareholders Equity: There has been a enormous growth in shareholders equity. On 31

December 2009, shareholders equity stood at TK. 632.29 million.

Growth in Total Assets: On 31 December 2009, total assets stood at TK. 2829.71 million

Growth in Lease Finance: As of 31 December 2009, the amount of lease finance stood at TH. 1883.04

million.

Sectorwise allocation of Total Lease Assets 2009

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Uttara Finance and Investment

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Uttara Finance and Investment Limited a joint venture leasing and financing company

registered as a NON-BANKFINANCIALINSTITUTIONS under the Financial Institution Act 1993 and the

COMPANIESACT 1994. It commenced business on 1 November 1995 with an authorised capital

of Tk 250 million divided in to shares of Tk 100 each. The paid up capital of the company is

Tk 120 million. Of the total share capital, 25% is held by Bangladeshi sponsors, 20.83% by

foreign sponsors (Singaporean), 14.10% by the INVESTMENTCORPORATIONOFBANGLADESH, 0.09%

by its employees and 39.98% by the general public. The company is listed with both

Chittagong and Dhaka Stock Exchanges.

Main areas of business operations of the company are related to leasing for providing benefits

of asset-based lease facilities. The company signed business contracts on lease and term

finance for Tk 423.44 million in 2000. Of the total contracts processed, those for Tk 383.71

million were executed. Up to 31 December 2000, total amount of net leased assets and net

term finance of the company stood at Tk 624.14 million. Assets of the company comprised

leased assets, term finance, investment in shares, and other current assets. The company

earned a net profit of Tk 33.99 million in 2000.

Principal Activities

General

Uttara Finance maintains an as and when decision making policy in both securing and

investing fund, basing on over-all micro and macro socio-economic-political scenario.

Lease : Uttara Finance extends Finance Lease facility to acquire capital assets to any sector

preferably to on going concerns.

Loans : Uttara Finance extends short to mid Term Loans in following lines: Working

Capital Loan, Bridge Finance, Personal loan, Home Loan

Small and Medium Enterprises : Uttara Finance extends this facility to enterprises asdefined by Bangladesh Bank from time to time.

Deposit schemes : Uttara Finance offers competitive rate of interest to individuals for tenure

of 12 months to 36 months and to and corporate business houses for tenure of 6 months to 36

months.

Merchant Banking Unit

Uttara Finance offers full range of asset management services like Underwriting; Portfolio

management; Bridge Finance; mutual fund; Individual investor's accounts in capital market.

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Zero Down Payment Scheme: The scheme has been introduced to assist individuals and

business concerns to facilitate acquiring of vehicles.

Profit and Loss Statement of Merchant Banking Operations

Prime Finance

Prime Finance has decades of experience in capital market operations. Our services to clientsin capital market operation are divided into four key areas: Public issue of shares,

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underwriting, portfolio management and corporate advisory services. Prime Finance provides

a broad range of services to the corporate clients supporting them in raising long term funds

from capital market. We provide consultancy services in designing capital structure ranging

from conversion of company into a public limited one to listing with stock exchanges.

Public Issue of shares:We assist corporate clients in meeting their financial needs and advising them on the most

advantageous means of raising capital. We manage or co-manage public offerings of shares

or arrange private placement of shares with institutional or individual investors. In addition,

we provide consulting services, including mergers and acquisitions and advising clients with

respect to financing plans and related matters.

Underwriting:

Underwriting services is another product of Merchant Banking Operation. During 2009,

Prime

Finance entered into agreements with 12 companies for underwriting of their shares for total

amount of Tk. 385.02 million. Participation in underwriting can expose us to financial risk

since the possibility exists that the securities we have committed to take up may not be fully

subscribed at the initial public offerings.

Private placement:

Prime Finance & Investment Limited arranges private placement of debt and equity securities

for the companies seeking a broad range of corporate finance alternatives. Through our

relationship with institutional and private investors, Prime Finance has developed an

outstanding private placement track record to help our clients expand their existing projects

or set up new projects. With a reputation for superior service and results in private capitalraising, Prime Finance &

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Investment Limited has broad experience in placement of:

Debt instrument

Convertible and

equity-linked securities Private equity

Portfolio management:

Own portfolio:Our investment in capital market performed well.In the second half of

the year, the stock Exchangewent up significantly. This rise was due to anumber of

factors. In 2009 total income from investment in capital market was Tk. 480.15

million made up as under: Capital gain from sale of share: Tk. 465.88 million

Dividend income: Tk. 14.27 million

Investors' portfolio: Prime Finance manages investors' portfolio of its 706 clients

worth Tk. 4.11 billion. Prime Financeprovides margin loan to its clients as per policy

and within the framework of regulatory authority, the Securities and Exchange

Commission. During theyear 2009 Prime Finance earned a total Tk. 196.98million

as interest on margin loan and a Tk 34.19 million as fee from managing investors'

portfolio.

Margin loan: Prime Finance provides margin loan to its portfolio investors for

investment in the listedsecurities against their equity. The Company'srevenues from

portfolio clients include interest on margin loan, portfolio management fees and

annual charges.

Corporate financial services:Prime Finance offers an extensive range ofprofessional

corporate financial services. We specialize in tailor-made, value-added solutions,which are particularly suited to small and midsizedcompanies. We serve our clients

in theirbest interest, creating value for them andcompliment their business expertise

with our own,to maximize their opportunities for growth.

Advisory services:

Corporate counseling services are provided in the form of customized solutions for better

corporate performance in terms of prolonged existence and steady growth. Project counseling

services include systematic development of an idea into a plan, development of a financialstructure and preparing project feasibility report.

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IDLC Finance Ltd

IDLC Finance: Industrial development Leasing Company of Bangladesh (IDLC) amultinational joint venture public limited company and the first leasing and multi-product

non- bank financial institution in Bangladesh. It became a listed company in Dhaka stock

Exchange on 20 March 1993 and in the Chittagong stock exchange on 25 November 1996.

IDLC started to accept deposits after receiving the license from BANGLADESH Bank on 10

September 1994.

Issue management:

The Issue Management Team is capable of devising innovative solution for raising capital -

debt and equity - from the market suiting the unique needs and constraints of the corporateclients. Issue Management services of Merchant Banking Division include Public Issue

Management of Initial Public Offering, Repeat Public Offering, Bond Issuance, Rights Share

Offering, Corporate Advisory Service in various matters. The team is staffed with some of

the most qualified, experienced and innovative personnel in the sector to offer corporate

clients the best solution in terms of managing public offers.

Under writing:

Scope of Work as Underwriter

Review valuation of the company to justify issue price

Review previous audited and current management accounts

Company's business appraisal and due diligence visits

Meeting with top management of the Company

Analyzing Financial Ratios and other indicators

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From the above charts we can easily identified that, Underwriting has increased than the year

2008.

Advisory service:

The Structured Finance Department offers a range of advisory services to our corporate

clients to meet their specific requirements. Our Fund Raising and Advisory Services can also

complement each other in satisfying the unique needs of our clients. We offer Advisory

Services for:

1. Merger and acquisition

2. Joint venture match making

3. Feasibility Study

Under its broader merchant banking functions, IDLC operates Trusteeship manager, bridge

financer and investor in the placement of shares and stocks.

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Bay Leasing and Investment Ltd.

Bay leasing and Financial Investment: Bay Leasing & Investment Limited (BLIL), a second

generation NBFI (Non Banking Financial Institution) was incorporated in 7 February 1996

sponsored by a group of prominent industrialists, businessmen and professionals. In 25 May

1996 the Company received license from the regulator to act as non-banking financial

institution under Financial Institution Act 1993 & Financial Institution Regulation of 1994

with a paid up capital of BDT 22.50 million. Initially BLIL provided services related to lease

financing, short term financing, corporate advisory services etc. In 25 June 1998, BLIL

received license from Securities and Exchange Commission (SEC) to act as a Merchant

Banker and Portfolio Manager in the capital market. As a merchant banker, the Company

provides services related to issue management, underwriting, private placement, portfolio

management etc.

As on 31st December 2007, the Company invested BDT 426.09 million in shares. During

2006, the amount was BDT 313.21 million with decline of 3% over previous year. In 2005,

the growth rate was 127%. The current share investment portfolio comprised share of eleven

(11) private commercial banks, five (5) insurance companies, three (3) NBFIs and ten (10)

different manufacturing/trading companies. As on 31st December 2007, total 12 companies

shares had market value below their book value. However, the Company made share wise

sufficient provision for such unrealized loss amounting BDT 4.14 million. According to

income statement of BLIL for 2007, the Company earned BDT 111.28 million through gainfrom sale of shares and dividend income. In 2006, the company received total income of

BDT 19.73 million which includes BDT 17.29 million from sale of shares and BDT 2.44

million from dividend income.

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ICB Capital Management

ICB Capital management Limited: ICB Capital Management Ltd. has been created as a

subsidiary of ICB to carry out merchant banking activities including issue management,

underwriting and portfolio management. The company was incorporated under the

Companies Act, 1994 on 5 December 2000 and registration from the Securities & Exchange

Commission was obtained on 16 October, 2001. The company started its' operation from 01

July, 2002 upon issuance of gazette notification by the government.

Functions:

Underwriting of initial public offering of shares and debentures

Underwriting of right issue of shares

Issue management

Managing Investors' Account

Providing investment counsel to issuers and investors' including financial engineering

and corporate advisory services

Purchase of shares and debentures including placement and equity participation

To provide consultancy services for disinvestments program of the Government

To provide financial consultancy services to different companies in respect of Equity

& Entrepreneurship Fund of Bangladesh Bank and others Dealing in other matters related to capital market operation.

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ADVANTAGES OF MERCHANT BANKING IN BANGLADESH

Effects on Capital market

A well organized and efficient capital market is the essence of a market based financial system.

The stock market is the first and foremost forum in which individuals can trade risk and return,

llamas can raise capital and stockholders can maximize the value of their shares.

in many countries of the world especially the countries of the continental Europe and Japan have

started their reforms based on bank-dominated system first. So a full pledged reform program of

fi na nc ial sector includes the development of both bank and non-bank financial institutions in the

financial system so th at the overall savings and investment activities improve significantly.

Merchant banking activities involves activities like a manager of the issue, underwriter, bridge

ll nancer and portfolio manager etc. Merchant bankers can venture in such types of risky

businesses because of their particular types of sources of fund, which facilitate them to provide

institutional support to the capital market. On the other hand, bank's money is the depositors

money and so thai they go for less risky short term financing. For this reason banks are subject to

h igh regulations and merchant bankers are little or no regulations around the world and thereby

can go easily for risky investment such as merchant banking, venture capital etc. Their funding is

not covered bv the government protection.

The merchant banks accelerate the capital market which can expedite the economic growth of the

country. More and more investors would be interested in buying securities as they have the

necessary fund. Citigroup can contribute to bringing good products, bonds and corporate entities

in t he stock market. They will help in bringing companies including foreign ones in the stock

market and all this will increase the supply side in the market.

Effects on the Investors

General investors as well as corporate investors will now focus more on investing in shares and

coming into the market as Citi Bank, a reputable and trustworthy firm will be leading them fund

which they lacked before. Now foreign investors have an opportunity to contribute to the stockV

market of Bangladesh. Through corporate advising, the merchant bank helps the issue analyze its

financing needs and suggest various ways to raise needed funds.

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Effects on the Economy

The economy will see a robust growth once merchant banking will start their operations..

Perfectly. Merchant banking causes a great impact on the economy of Bangladesh Bank. It

contributes to the National GDP as well as to contribute to the growth of national economy. Due

to the merchant banking, people will be more encouraged to use their unutilized money in the

investment of different stocks and securities which are expected to grow. As a result the

unutilized portion which was not counted earlier in GDP in included now. The investment area"

wi l t be more safe and predictive. As due to the merchant banking more and more investors will

invest in the market, the market will be spread and as market will spread, there will be less risk

ol'default.

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Problems And Restrictions of Merchant Bankers

Unscrupulous and frequent policy changes by SEC:

The Security and Exchange Commission of Bangladesh tends to change the policy frequently

which sometimes drastically affects the market situation. To temporarily control the market

they take at times take measures that affect the market negatively in the long term.

Consequently, it compels some investors to leave the market and merchant banks are

affected.

Reduced Margin ratio:

According to the new SEC guideline, the margin ration for disbursing loan has been reducedto 1:1 which was previously 1:1.5. So the amount of loan given by the merchant banks have

been reduced which ultimately affect their profit margin.

Ceiling for margin loan

The Securities and Exchange Commission set new ceiling for margin loan for merchant

banks and brokerage houses. Under the new directive, merchant banks and brokerage houses

are allowed to lend up to Tk 10 crore as margin loans to their clients, an official said.

Margin loans, meant for share trading purposes, are disbursed against the shares an individual

investor has in his or her possession. The impact of this decision sent a shockwave through

the market and on the following day, DSE general index fell by over 200 points.

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Challenges of Merchant Banking In Bangladesh

Supply of Funds:

Although share capital is perspective source of fund for merchant banks, many companies

have not utilized the opportunity fully. As most of the merchant banks are incorporated as

public limited companies, it could be as better alternative for them to raise fund through

initial public offerings in order to finance the expanding horizon of activities. It can be

noticed that the dominance of bank loan in the total fund is decreasing while the importance

deposit base is gaining momentum. Financial institutions have to raise capital reserve of at

least BDT 250 million, a portion of which must be collected through the issuance of IPO.

This arrangement will make their operations more transparent, bring accountability to theshareholders and reduce dependence on credit lines. Though all merchant banks were

required to raise the minimum capital requirement through IPOs by September 2006

(extended from June 2006,) eight (8) companies share yet to float their shares in the market.

Four of these have already submitted necessary documents to SEC for review while four

others are still in the process of doing so.

Cost of Fund:

Merchant Banks face comparative disadvantage in collecting funds compared to the banks

because Merchant Banks cannot collect short term (less than one year) deposits from individuals

due to the central banks restriction, and again deposits in Merchant Banks are perceived to be

less safe to the public. Due to the liquidity crisis, when interest rate goes up, the average rate of

interest on bank credit lines and deposit rate also increases, which causes significant rise in the

cost of fund for Merchant Banks. The high cost of fund for Merchant Banks compels them to

operate on a relatively low profit margin.

(c) Asset-Liability Mismatch

Asset-liability mismatch is another cause of concern for Merchant Banks. Demand for funds to

meet the increasing lending requirements has increased many times. But the availability of funds

has become inadequate. The average weighted life of its deposits and borrowing in its operating

guidelines for a leasing company. Therefore, Merchant Banks have to explore alternative ways

for raising funds.

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(d) Investment in High Risk Portfolio

It is already mentioned that cost of funds for Merchant Banks are higher than that of banks. In

order to sustain the high cost of borrowing, Merchant Banks may be inclined to invest in the high

return segments, which can expose them to commensurately higher risks. Moreover, fierce

competition among competitors may also force many Merchant Banks to reduce the margin at the

expense of quality of the asset portfolio. This strategy may eventually create the possibility of an

increase in the non-performing accounts. Unless adequate risk management capabilities are

developed, the growth prospects of Merchant Banks would not only be hindered but it might also

be misapprehended.

(e) Product Diversification

Merchant Banks emerged primarily to fill in the gaps in the supply of financial services which

were not generally provided by the banking sector, and also to complement the banking sector in

meeting the financing requirements of the evolving economy. the new customer base has not

been created and the growth of industrial entrepreneurship could not be facilitated through

Merchant Banks financing packages. Diversifying the product range is a strategic challenge for

Merchant Banks in order to become competitive in the rapidly growing market.

(f) Competition with Banks

With the advent of new Merchant Banks, the market share is being spread over the competing

firms and the demand facing each firm is becoming more elastic. Active participation of

commercial banks in the non-bank financing activities has further increased the level of

competition in the industry. For commercial banks, public deposit is one major source of funds

which they can collect with relatively lower cost. Thus the business environment for Merchant

Banks has become more challenging as they have to face uneven competition with banks in terms

of collecting funds.

(g) Lack of Human Resource

Skilled and trained human resource is considered as an important component for the development

of

any institution. Due to the recent growth of Merchant Banks, availability of experienced

manpower is a challenge for this industry. The supply shortage of efficient resource personnel has

been leading to a significant increase in the compensation package, which is also a cause of

concern for Merchant Banks. The industry experts believe that although there exists enormous

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growth opportunity the market is still quite small and scope of work for skilled personnel is very

limited compared to that of banks. This makes the competent personnel to switch from Merchant

Banks to other institutions after a certain period implying low retention rate of skilled human

resource.

h) Weak Legal System

Although the default culture has not yet infected Merchant Banks to any major extent, they face

difficulties in recovering the leased assets in case of a default. Moreover delays in court

procedures create another cause of concern. The situation cannot be improved only by making the

legal system stronger through enactment of new laws rather ensuring proper implementation

existing ones is more of concern.

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Comparison of Merchant Bank services between Bangladesh and

Globally

Merchant Banks in Bangladesh mainly offer services like issue management, underwriting

options and portfolio management. But internationally banks provide a wind range of service

which has not been introduced in our country. So, Bangladesh is far more behind from the

international market although there is a great potential here.

Many firms abroad are large enough to go international and have the potential to live up to the

expectations of the market beyond their boundary. For these organizations, international

merchant banks concentrated services which are solely dedicated in suggesting and

recommending the firms about how to approach the international business and become a

multinational service. But merchant banks in Bangladesh are yet to offer services like that.

Many firms in many countries have the potential to do a profitable servile by addressing its

populations varying needs. International merchant banks offer advices to their clients regarding

such differentiated needs by suggesting them realistic business ideas. Bangladeshi merchant

banks have to take it into account.

Many merchant banks educate their client about all the services and functions the banks offer and

the services the clients want. Though there are a few banks offering these services, it is only in

mere feature which is not widely effective and appreciable.

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Conclusion

The merchant banker plays a vital role in channelizing the financial surplus of the

society into productive investment avenues. A merchant banker plays multiple roles which

include those of an entrepreneur, a management advisor, an investment banker, and a

transaction broker.

This shows that the breadth and depth of a merchant bankers activity has changed over

the years. Bangladeshi capital market has been increasing in importance since the 1996

incident. Active participation of merchant banks is essential oto accelerate the cpital market

activity wjich can expedite economic growth. But the limited scope for fund and the elevated

cost pose problems for them.

Although 37 merchant banks are operating, officials said only a few are active while the

performance of the rest is far from being satisfactory. The merchant banks should focus on

forming their own portfolios in making the market sustainable. They should diversify their

functions other than lending. Right now, what are they doing is risky,

In order to ensure sustainability of the merchant banks, the scope of business needs to be

expanded. Issue expense is another cause of concern as it may reduce the earning potential

since the IPO floated in Bangladesh is much smaller than other countries.

Merchant banker can play highly significant role in mobilizing funds of savers to invisible

channels assuring promising returns on investment and thus can assist in meeting the

widening demand for invisible funds for economic activity. With growth of merchant

banking profession corporate enterprises in both private sectors would be able to raise

required amount of funds annually from the capital market to meet the growing requirement

for funds for establishing new enterprises, undertaking expansion, modernization and

diversification of the existing enterprises. This reinforces the need for a vigorous role to be

played by merchant banking.

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Recommendation

Exploring Alternative Sources of Funds

The finance and leasing companies across the world are using different sources for collecting

funds.

Merchant Banks in Bangladesh may also explore the possibilities of gaining access to new

sources of funds like issuance of commercial paper and discounting or sale of lease

receivables. However, in releasing such new products, some regulatory changes have to be

made. Another innovative and promising source of funds may be the securitization of assets.

Competition and Product Diversification

Merchant Banks in Bangladesh are operating in a highly competitive environment. The

competition for Merchant Banks is even more challenging as they have to compete with

banks. Given the changes in the business environment, the need for product diversification is

very important. At present, lease financing constitutes 55 percent of the total long term assets

of Merchant Banks. The remaining part concentrates mainly on term financing and housingfinance. Some of Merchant Banks are primarily engaged in leasing, some are also

diversifying into other lines of business like merchant banking, equity financing etc.

Currently, 22 Merchant Banks (out of 29) specialize in lease financing. Merchant Banks are

permitted to undertake a wide array of activities and therefore should not confine themselves

to one or two types of product only. Leasing, no doubt, presents a good alternative form of

term financing but Merchant Banks should also venture into diversified use of their funds

such as merchant banking, venture capital financing, factoring, etc. for a healthy growth of

the capital market.

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Enhancing Capital Market Activities

Merchant Banks around the world carry out a significant role in the development of the

capital market. Strong institutional support is necessary for a vibrant capital market which is

the core of economic development in any market based economic system. Merchant Banks

through their merchant banking wing can act in this regard. A total of 30 companies are now

listed as merchant banks in Bangladesh, of which 23 are full-fledged, 6 are issue managers,

and only one is a portfolio manager. Only nine Merchant Banks have registered with SEC for

performing merchant banking activities. But their activities in the capital market are rather

limited (Financial Sector Review, Bangladesh Bank, 2006). Active participation of merchant

banks is essential to accelerate the capital market activities which can expedite the economic

growth of the country. The success of merchant banking operations is largely linked to the

development of the security market. So Merchant Banks should concentrate more on their

opportunities in the capital market.

Issues of Taxation

The financing mode of lending and leasing are totally different from one another. The

concept and procedure particularly the accounting and taxation system are also quite

different. So it is advisable not to mix up the two different operations, otherwise it might

distort the basic financial norms. As the tax treatment is totally different in leasing business,

mixing up of lending and leasing in the same business portfolio might create the possibility of

tax evasion.

Market Segmentation

It has been discussed earlier that though banks and Merchant Banks compete with each other

they can also perform complementary functions. To function as complementary institutions

both banks and Merchant Banks should follow some ethical and technical norms. 15 Banks

wishing to enter in the leasing business, which is essentially a core operation of Merchant

Banks, should do so through opening subsidiaries so that a level playing field for Merchant

Banks can be maintained. This is needed as banks have access to lower cost funds compared

to Merchant Banks, which puts the former in an advantageous position. Alternatively, banks

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can go for joint financing under syndication arrangements with leasing companies on any

project proposal. Again, banks can concentrate on working capital finance and foreign

exchange operations, which matches more with their asset-liability management.

Long term investment like financing capital machineries can be done by Merchant Banks and

in the event when banks want to engage in such activities they can place their funds with an

NBFI to extend lease facility for those machineries. Jamal (2004) mentioned that this is

important for two reasons: first, in case of lease facility, the machineries will remain under

the ownership of leasing companies, who will have absolute authority and control on their

assets. Second, machineries will be imported in the name of a leasing company and letter of

credit will be opened against its name. So, over invoicing or under invoicing may be averted

and thereby more transparency will be ensured and tax evasion may be plugged.

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Bibliography

Bangladesh Bank Annual Report (Various Issues)

Bangladesh Bank, Economic Trends (Various Issues)

Bangladesh Bank (2006), Financial Sector Review,

vol.1, no.1, May, Policy Analysis Unit, Research Department

Bangladesh Bank, Financial Institutions Department

Bangladesh Leasing and Finance Companies Association (BLFCA) Year Book

Ministry of Finance, Government of Bangladesh,

Activities of Bank and Financial Institutions

Non Banking Financial Institutions (NBIFs), Annual Report, Financial report

Dhaka Stock Exchange

Overall Merchant Banking Information of,

AB Bank Ltd., LankaBangla Finance Ltd., IDLC Finance Ltd., Sawdesh Finace Ltd.,

Trust Bank Ltd., GSP Finance Ltd., Uttara Finance Ltd., Equity Partners Ltd., ICB

Finance Ltd. and others.

Banglapedia

Different Reports on Merchant Banking

Internet Sources