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A Study on Mercantile Bank Limited

An Internship Report

On

Foreign Exchange Operations of Mercantile Bank Limited:

A Case Study on Main Branch, Dilkusha, Dhaka.


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An Internship Report

On

Foreign Exchange Operations of Mercantile Bank Limited:


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A Case Study on Main Branch, Dilkusha, Dhaka.

Prepared for

School Of BusinessAhsanullah University of Science & Technology


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Prepared by

Mst. Karimun Nisa KhanamID: 10.01.51.087

School Of BusinessAhsanullah University Of Science & Technology


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Letter of Transmittal

To


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Abida Syeeda MallikaLecturer in MarketingDepartment of BusinessAdministration

Subject: Submission of Internship Report.

Dear Sir,

It is my privilege to let you know that as partial fulfillment of the requirements for thedegree of Bachelor of Business Administration (BBA), I have completed my internshipprogram in the Mercantile Bank Limited, Main Branch. I have to furnish a report based


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on my practical experience. The report focuses mainly on the foreign exchangeoperations of Mercantile Bank Limited.

It was stimulating opportunity and a valuable experience for me to the real businessworld. I am grateful for providing me such an opportunity to gather practical experience

of working in a private commercial bank, like Mercantile Bank Limited.

Hope that you would be very pleased to accept my report and oblige me.

Sincerely Yours


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Md. Rashedul Haque RonyID BBA 03010280Department of Business AdministrationAhsanullah University of Science & Technology

ACKNOWLEDGEMENT


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First and foremost, I would be grateful to the Almighty Allah as I have successfullycompleted this report within due time and for all the incidences I had to undergo whilepreparing this report.

Then I would like to take the opportunity to express my gratitude to my honorable facultyAbida Syeeda Mallika, Lecturer in Marketing, Department of Business Administration,Ahsanullah University of Science & Technology Without his continuous support andsuggestion, this report would not come into light.

I would like to thank K.M.Alamgir Kabir, Mohammed Shamim Hossain, Ajit KumarDatta (Principal Officer of Mercantile Bank Ltd), Muktader ( Probationary Officer), S.M


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Shamsuzzaman and all other employees of Mercantile Bank Limited who helped me a lotto collect information for preparing my report.

Besides I am also grateful to the authors, researchers, and article writers whos Books,Reports, and Journals have helped me to prepare my Internship Report successfully.


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Executive Summary

A few years back also, banks are nothing but a medium whose only task is to collect

money from people who have excess of it and give it to those people who need it.Butvery recently banks have diversified their operations into various sectors. Even, they havenotification able contribution in maintaining the global relation among various countriesof the world. The MBL is one of the newest banks of Bangladesh; in fact, it has beendoing business just over 10 years in the country. However, in this short period of time, ithas already made a significant impact on the economic, financial, and social system ofBangladesh. Mercantile Bank Ltd has a long and relishing heritage. Mercantile BankLimited (MBL) started its journey in the financial sector of the country as an investment


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company back in May 20, 1999. The company operated up to 1999 with 9 branches andthereafter with the permission of the Central Bank converted in a full-fledged scheduleprivate commercial bank in June 2, 1993 with paid up capital of Tk. 39.00 crore to servethe nation from a broader platform. The Bank and its first Branch at the busiestcommercial hub of the country at 61, Dilkusha commercial Area, Dhaka was opened. My

Report titled Foreign Exchange Practices in Private Banks: A Case Study of MercantileBank Ltd. is conducted to describe the section as well as the organization where I wasplaced as an Intern. This includes an overview of the organization, structures, productsand services offered by the bank, and various customer services facilities. In addition tothat, this report also aims to shed some light on the Foreign Exchange Department.The first chapter gives a broad over view about the origin of the report, objective of thereport, methodology of preparing the report, data collection procedure and its source,scope and limitations faced while preparing the report. After the first part it has been


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focused in the second part of the report. The overview consists of the definition andobjective of the bank, historical background of the banking institutions and bankingoperations in Bangladesh.The report part started from the third chapter. In that chapter, describe the theoreticalframework of foreign exchange and other foreign exchange activities.

The fourth chapter is highlighted of Mercantile bank with SWOT analysis.The fifth chapter consists General foreign exchange policy of the bank.The sixth chapter consists of performance evaluation of the bank in 2009.The seventh & last chapter highlighted with recommendations, problems and Conclusion.


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Table of Contents

Chapter

Topic Page No.

Letter of Transmittal

Acknowledgement

Executive Summary

Chapter-1

Introduction


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1.1 Title of the Report1.2 Background of the Study

1.3 Origin of the Study

1.4 Rationale of the report

1.5 Objectives of the Study

1.6 Justification of the study1.7 Limitations

1.8 Sources of data

1.9 Methodology of the Study

Chapter-2

Banking sector in Bangladesh

2.1 Definition of Bank


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2.2 Objectives of Bank

2.3 Historical background of banking sector in Bangladesh

2.4 Banking operation in Bangladesh

Chapter-3

Foreign exchange: A theoretical framework

3.1 Define foreign exchange

3.2 Types of foreign exchange

3.3 Importance of bank foreign exchange

3.4 Foreign exchange planning

3.5 Foreign exchange and Bangladesh Bank

3.6 Tools for foreign exchange


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Chapter-4

Overview of Mercantile Bank LTD.

4.1 Background

4.2 Corporate information

4.3 Organizational Structure

4..4 Number of branches


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4.5 Number of employees

4.6 Vision statement of the Bank

4.7 Mission statement of the Bank

4.8 Product scheme

4.9 Principal Activities

4.10 General Banking4.11 Foreign Exchange policy of the bank4.12 SWOT analysis of MBL

Chapter-5

General Foreign exchange policy of MBL


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5.1 General Foreign exchange policy of MBL

Chapter-6

Performance Evaluation of the Bank6.1 Performance Evaluation of the Bank

Chapter-7

Recommendations and Conclusions


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7.1 Problems for the MBL 728.2 Recommendation for the MBL 738.3 Concluding remarks 74

CCHAPTERHAPTER-1-1


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IINTRODUCTIONNTRODUCTION


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1.1 Title of the report

To write a report it is necessary to select a topic. A well-defined topic reflects what isgoing on to be discussed throughout the report. The topic that has been assigned by

organization supervisor is The foreign exchange operations the ultimate way to

success. The report has discussed how the bank can improve the foreign exchange

operations.


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1.2 Background of the report

As a requirement for the fulfillment of our BBA program, in the Faculty of Business,Stamford University Bangladesh we have to perform three months internship. As a

student of BBA I have gathered enough theoretical knowledge, and now I want to put mypotentiality in the practical field. Mercantile Bank Ltd has given me the opportunity tocommence my internship.

During the internship program, students are required to prepare a report on theorganization where they have been attached. Mercantile Bank Ltd. and all the officialsalways encourage and welcome the students for their internship program. I have tried mybest to properly apply my potentiality and theoretical knowledge to make the report


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

1.3 Origin of the report

In todays world only academic education does not make a student perfect to become

competitive with the outside world. Internship is highly needed to gain idea, knowledge

and experience.


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Stamford University Bangladesh (SUB), one of the reputed private universities in

Bangladesh, has designed the curriculum of the BBA course such a way that the

international standard graduates will be produced. After completing 129 credit hours, one

student needs to go for further 03 credit hours internship program in a commercialorganization. From this internship program students get the opportunity to learn facing

the real business world.

Mercantile Bank Limited is a place where I could learn the business dealings. This

organization has created a positive image to the customers mind by providing better


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service. This bank has introduced some modern banking scheme that has got high market

demand. As it maintain the pace with the competitive business world, its activities,

culture, philosophy and style leads an intern student to be the best at any field of working

life. As an intern student I have got the opportunity to work with this organization forthree months and acquire idea about real business world.

1.4 Rationale of the Study


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This report is broadly organized into Introduction (Chapter-1),Banking sector inBangladesh (Chapter-2), Foreign Exchange Framework (Chapter-3), Overview ofMercantile Bank LTD. (Chapter-5), General foreign exchange policy of the bank(Chapter-6), Performance evaluation of the bank (Chapter-7), Recommendations andConclusion (Chapter-8) on the assigned topic Foreign Exchange of Mercantile Bank

Limited : A Case Study on Main Branch, Dilkusha, Dhaka of the bank. Finally itincludes the evaluation of foreign exchange performance, findings, and recommendationto make understood the scope of foreign exchange operation with its constraints of MBL.

1.6 Justification of the study


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As a requirement for the fulfillment of our BBA program, in the Faculty of Business,Stamford University Bangladesh we have to perform three months internship. As astudent of BBA I have gathered enough theoretical knowledge, and now I want to put mypotentiality in the practical field. Mercantile Bank Ltd has given me the opportunity tocommence my internship.

During the internship program, students are required to prepare a report on theorganization where they have been attached. Mercantile Bank Ltd. and all the officialsalways encourage and welcome the students for their internship program. I have tried mybest to properly apply my potentiality and theoretical knowledge to make the reportreliable and information worthy. My honest effort will be regarded as successful if thisdissertation fulfills the objective of the program.


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1.7 Methodology of the Study

I use both primary and secondary data for collecting information. How I went through theprocess is mentioned here:Primary Data:

Data has been collected primarily through correspondence with the personnel working indifferent department of MBL, Dilkusha Branch, Head Office.Secondary Data:

Sources of secondary data are showing below by the following table for easy and quickunderstanding.


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Table Sources of Secondary Information

Sources Validity Reliability Practicality

Annual ReportOf 2009 Moderate High High

Internet High High High

Text book High High High


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FRAMEWORK OF THE OVERALL STRUCTURE OF THE TOTAL WORK


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Doing work indifferentdepartment of


Selectingthe topic ofthe study

Preparingoutline

Collectingsecondary

Analysis ofcollecteddata

Collectinginformationfrom ABBL

Dividingthe studywork

Appointingas anintern

Preparation ofthe Final Report


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1.8 Sources of Data

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


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Population:All the Branches of MBL located in everywhere in Bangladesh has been taken intoconsideration as population.

Sample:

MBL, Motijheel Branch, is the vital sample.classification, analysis, interpretations andpresentation of data; some arithmetic and graphical tools are used in this report foranalyzing the collected data and to classifying those to interpret them clearly.

Findings of the study:


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The collected data were scrutinized very well and were pointed out and shown asfindings. Few recommendations are also made for improvement of the current situation.

Final report preparation:On the basis of the suggestions of our honorable faculty

advisor some corrections were made to present the paper in this form.

1.9 Limitation of the study

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


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(only three months) is not an easy task. In preparing this report some problemsand limitation have encountered which are as follows:

Time frame for the research was very limited.Large-scale research was not possible due to constraints.

In many cases, up to date information is not published.The information regarding the competitors is difficult to get.Time was one of the concerns for not having the exact scenario.And it is my first work, and inexperience was a problem.


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CCHAPTERHAPTER-2-2


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BBANKINGANKINGSECTORSECTORININ


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BBANGLADESHANGLADESH


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2.1 Definition of the bank

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


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mean only the means of collecting and disbursing money to various entities. Rather itprovides various services to various entities which facilitate their business operations.The functional definition of bank is that it is a financial institution, which accepts moneyfrom its customers as deposit and gives money as loan to the borrowers. According to aprominent economist R.S. Sayers, A Bank is an institution whose debts are widely

accepted in settlement of other peoples debts to each other.Another economist C. Cross defined , A Bank is financial intermediary-a dealer in loansand debts.

2.2 Objective of Mercantile Bank

Strategic Objectives:


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To achieve positive Economic Value Added (EVA) each year.

To be market leader in product innovation.

To be one of the top three Financial Institutions in Bangladesh in terms of costefficiency.

To be one of the top five Financial Institutions in Bangladesh in terms of marketshare in all significant market segments it serves.

Financial Objectives:

To achieve a return on shareholders equity of 20% or more, on average.


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2.3 Historical Background of the banking instituions in Bangladesh

The word bank, which means a financial intermediary that collects deposits from savers

and disburses loans to the fund seekers and acts as the principal medium internalresources mobilization of an economy, is not the result of a short period. Instead, it has topass through a very long period.

In the ancient age, people had to satisfy all of their needs by themselves. At this stage,there was no surplus production. Hence the concept of transaction was yet to beintroduced. But, as the division of work took place in the society, there was surplus aswell as deficit production in each society. This lead to the introduction of BARTER


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SYSTEM in which commodities were exchanged for commodities directly. But thistransaction system could not last for a long time for some problems such as:

Double coincidence of needs: this means the needs of two persons must meet the surplusthat they have. For example, one person has some surplus rice and another person has

some surplus cloths. If they the person with rice has the need of cloths and the personwith cloth needs rice, only then the transaction will take place. But it was difficultIndivisibility of goods: all goods are not divisible and not of same worth. This caused abig problem for transaction. For example, a cow is not exchangeable for 1 meter cloth,neither it can be dividable in smaller units.As result, people had o think for a mechanism that would solve these problems andfacilitate the transaction process. This resulted in the introduction of money in the formof stone, metals, bones etc.


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After the introduction of money, the volume of transactions increased to a great extent.People with surplus money started to feel insecure about their money. At that stage,goldsmiths, priests, businessmen were the most honorable and trusted people in thesociety. People started to keep their surplus money and jewelry deposited with them.

They lent this money without any charge to those who needed money. This was thetransaction of utmost faith. From here, the history of bank counts.After some time, businessmen started to charge some charges on those who took loanfrom them. It was the goldsmiths who introduced the deposit slips in the history. Dayby day, volume and complexity of transactions kept increasing, so as the concept of bank.


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The banking systems of ancient age and the banking systems of modern age are twodistinctively separate entities. The situations and flaws that resulted the banking systemsin the present form are highlighted below:

As early as 2000 B.C., Babylonians had developed a system of bank. In ancient Greece

and Rome the practice of granting credit was widely prevailed. Traces of Credit bycompensation and by transfer orders were found in Assyria, Phoenicia and Egypt beforethe system attained full development in Greece and Rome. The book of old Hindu sawgiver, MANU, is full of regulations for governing credit. He speaks of judicialproceedings credit instruments were called for, interest on loans, on bankers, users andeven of the renewals of commercial papers.


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In Rome, bankers were called Argentarii. Some banks carried business on their ownaccount and others were appointed by the Government to receive the taxes. They used totransact their business on the similar lines as those of the modern banks. Loan bankswhich lent money to the poor without any interest on the security of land for a period of 3of 4 years were also common in Rome.

The Bank of Venice, established in 1157, is supposed to be the most ancient bank. It wasnot a bank in the modern sense being simply an office for the transfer of public debt.

History shows the existence of a Monte in the Florence in 1336/ the meaning ofMonte is given in the Italian Dictionary 1959 as a standing bank or mount of money, asthey have in diverse cities of Italy. Banbrigge, an English writer, speaks about the threebanks of Venice meaning the three public loans of Monte.


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As early as 1349, the drapers of Barcelona carried on business of banking. It was subjectto official regulations. The drapers were not allowed to commence business until they hadgiven sufficient security. During 1401, a public bank was established in Barcelona. Itused to exchange money, receive deposits, discount bills of exchange, both for citizens

and foreigners. During 1407, the Bank of Genoa was established. The Bank ofAmsterdam was established in 1609 to meet the needs merchants of the city. It acceptedall kinds of specie on deposits. These deposits could be withdrawn on demand ortransferred from the account of one person to another. The bank also adopted a plan bywhich a depositor received a kind of certificate entitling him to withdraw his depositswithin six months. These written orders, in the course of time, came to be used in thesame manner as the modern cheque. It is interesting to see that most on the Europeanbanks now in existence were formed on the modes of the Bank of Amsterdam.


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The beginning of the English banking may correctly be attributed to the Londongoldsmiths. They used to receive their customers valuables and funds for safety custodyand issue receipts acknowledging the same. These notes, in the course of time, becamepayable to bearer on demand and hence enjoyed considerable circulation. In fact, the

goldsmiths notes may be considered as the precursor of the bank note. The business ofthe goldsmiths got a rude shock by the ill treatment of the Government of Charles II,under the Cabal ministry. In the words of Bagehot; It had perpetrated one of thosemonstrous frauds which are likewise gross blunders. The goldsmiths used to deposittheir reserve of treasure in the Exchequer with the sanction and under the care ofgovernment. But Charles II shut down the Exchequer and paid nothing to the goldsmiths.However, the ruin of goldsmiths marks a turning point in the history of the English


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banking. It led to the growth of private banking and the establishment of the Bank ofEngland.

In the India, as early as Vedic period, banking existed in the crudest form. The bloods ofManu contain references regarding deposits, pledges and policy of loans and rates of

interest. Truly, banking in those days largely meant money lending and they did not knowthe complicated mechanisms modern banking. This is true not only in case of India butalso in case of other countries.

The evolution of banking institutions became more and more organized as the timepassed. In various periods, different amendments were made in different countriesthroughout the world. So, different countries have different contributions to the bankinginstitutions to appear in the present form.


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2.4. Banking operation in Bangladesh

Economic history shows that development has started everywhere with the banking

system and its contribution towards financial development of a country is highest in the

initial stage. The case studies of some particular developed countries also show the useful

roles played by the banks in economic development process of local communities. Bank

is a financial intermediary accepting deposits and granting loans; offers the widest menu

of services of any financial institution.


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Banks are the most important financial institution in the economy. They are the principal

sources of credit (loan able funds) for millions of individuals and families for many units

of the government. At middle of 2001 there were 52 scheduled Banks. But during 2000,

two foreign banks. Standard Chartered Bank and ANZ Grind lays Bank PLC havebeen Marged as standard chartered Grindlays reducing the total number of scheduled

Bank in Bangladesh to 51. Thus there are 51 scheduled Banks in Bangladesh of which 4

are nationalized , 29 are private Banks of which 5 are Islamic Banks, 12are foreign

Banks including Islamic Bank and 5 are specialized Banks.


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In India the first bank, The bank of Hindustan was established in 1700. During the 18th

and 19th century there were several banks like the bank of Calcutta, Central Bank of

India, the Bank of Madras and the Bank of Bombay established. The Banking Companies

Ordinance was promulgated on the 7th June 1962. This has been adopted in Bangladeshand is applicable to the banking companies only. Nothing of this ordinance shall apply to

a co-operative bank registered under the cooperative Securities Act. 1912.

Bangladesh has a mixed banking system comprises of nationalized, private and foreign

commercial banks. Bangladesh Bank (BB) has working as the central bank of the country

since the independence of the country. Its prime jobs include issuing currencies,


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maintaining foreign exchange reserve and providing transaction facilities of all public

monetary mattes. BB is responsible for planning and implementing the governments

monetary policy. The banking sector of Bangladesh comprises of four categories of

scheduled banks. These are nationalized commercial banks (NCBs), government owneddevelopment finance institutions (DFIs), private commercial banks (PCBs) and foreign

commercial banks (FCBs).


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CCHAPTERHAPTER 3 3

FFOREIGNOREIGNEXCHANGEEXCHANGE::


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AATHEORETICALTHEORETICAL

FRAMEWORKFRAMEWORK


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3.1 Foreign Exchange- its meaning and definition:

Foreign exchange refers to the process or mechanism by which the currency of one

country is converted into the currency of another country. Foreign exchange is the means

and methods by which rights to wealth in a country's currency are converted into rights to

wealth in another country's currency. In banks when we talk of foreign exchange, we

refer to the general mechanism by which a bank converts currency of one country into


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that of another. Foreign Trade gives rise to foreign exchange. Modern banks facilitate

trade and commerce by rendering valuable services to the business community. Apart

from providing appropriate mechanism for making payments arising out of trade

transactions, the banks gear the machinery of commerce, specially in case of internationalcommerce, by acting as a useful link between the buyer and the seller, who are often too

far away from and too unfamiliar with each other.

According to Foreign Exchange Regulation Act (FERA) 1947, "Any thing that conveys

the right to wealth in another country is foreign exchange. Foreign exchange means and


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includes all deposits, credits and balances payable in foreign currency as well as foreign

currency instruments such as drafts, TCs. Bill of Exchange, promissory Notes and Letters

of Credit payable in any foreign currency. ".

This definition implies that all business activities relating to Import, Export, Outward &

Inward Remittances, buying & selling of foreign commissions, etc. come under the

purview of foreign exchange business. Foreign exchange department of banks plays

significant roles through providing different services for the customers.


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The international trade can be illustrated by the following diagram

Contract of sale(1)

Contract of sale(1)

Exporter(Beneficiary)

Importer

(Applicant)

Ships Goods to

(5)

Forwards L/C to

(4)Presents documents and

obtains payment from (6)

Recovers Amount from

(8)Applies for opening of L/C

(2)

Advising/ negotiating Bank

Obtains reimbursement

from (7)

\

IssuingBank

Opens L/C and send itto(3)


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3.2 Types of Foreign Exchange:

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

a) Import


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b) Export

c) Foreign Remittance

Foreign Exchange Department

L/C ForeignRemittance


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Import Export Foreign Inward Outward

Currency A/C Remittance Remittance

3.3 Importance of bank foreign exchange

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


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the world function as anchors of trading between a wide range of different types ofbuyers and sellers around the clock, with the exception of weekends.

The primary purpose of the foreign exchange market is to assist international trade andinvestment, by allowing businesses to convert one currency to another currency. For

example, it permits a US business to import European goods and pay Euros, even thoughthe business's income is in US dollars. It also supports speculation, and facilitates thecarry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitivenessin some countries.[1]

In a typical foreign exchange transaction a party purchases a quantity of one currency bypaying a quantity of another currency. The modern foreign exchange market started


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forming during the 1970s when countries gradually switched to floating exchange ratesfrom the previous exchange rate regime, which remained fixed as per the Bretton Woodssystem.

The foreign exchange market is unique because of its-

* Huge trading volume, leading to high liquidity* Geographical dispersion* Continuous operation: 24 hours a day except weekends, ie trading from 20:15 UTC

on Sunday until 22:00 UTC Friday* The variety of factors that affect exchange rates* The low margins of relative profit compared with other markets of fixed

income


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* The use of leverage to enhance profit margins with respect to account size

As such, it has been referred to as the market closest to the ideal of perfect competition,notwithstanding market manipulation by central banks.[citation needed] According to theBank for International Settlements,[2] average daily turnover in global foreign exchange

markets is estimated at $3.98 trillion, as of April 2007. $3.21 Trillion is accounted for inthe world's main financial markets.

The $3.21 trillion break-down is as follows:

* $1.005 trillion in spot transactions* $362 billion in outright forwards* $1.714 trillion in foreign exchange swaps


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* $129 billion estimated gaps in reporting

Forex is an international currency trading market. In the modern world, nationalcurrencies are independently valued due to their backing in a central banking system thatis specific to its nation. However, each currency, from the most valuable and influential

to the weakest with little influence, are all interconnected and dependent upon each otherfor stabilization and value. The trade between currencies is an important part of theoverall value of a single nation's currency. This active exchange also provides a snapshotin time that tells financial industry experts what the state of the global economy is inresponse to a variety of external events and influences. The Forex market is the placewhere all of this happens. Foreign exchange trading is always happening, and its reachspans the globe. For example, as the currency markets open at the beginning of the dayon European continent, the Forex markets in Asia to the east are closing for the trading


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day. After Europe completes its trading day, the countries in the north, central andsouthern Americas are opening for their turn at the Forex market. The markets in Japan,China, Australia, including all the regional markets in that part of the world, will be soonawake to a new trading day as the Americas close theirs. This cycle of trading activitycontinues in sequence around the world, creating an active market.

Who engages in Forex trading?

The major players in foreign exchange markets are banks, large commercial enterprises,national central banks, hedge funds, investment management firms, retail traders, andindividual investors. National central banks and hedge funds are the two most influentialparticipants in the foreign currency market. Central banks trade on the market for avariety of reasons. Two examples are to stabilize their own currencies, or to synchronize


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their interest rates with other national interest rates. Central banks also trade on theforeign currency market to manipulate their currency in order to manage economicinfluences like inflation, and to control the supply of money.Hedge funds represent the more speculative end of the foreign exchange tradingspectrum. The trading done by hedge funds in the international currency exchanges often

takes advantage of the environment where regulation is scarce. Hedge funds can controlsignificant blocks of a nation's securities, and can actually undermine the attempts ofnational central banks to stabilize a currency if recent market and world events make suchadjustments necessary.

The recent Asian currency crisis demonstrates how critically exchange rates impacteconomic developments. A key factor leading to the crisis was the maintenance ofpegged exchange rate regimes which encouraged external borrowing and resulted in


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excessive foreign exchange risk exposure. Wide swings of the yen/dollar exchange ratealso contributed to the crisis. Since the international business environment has nouniversal medium of exchange, exchange rates are a necessity for international trade.Presently, both translation and conversion of foreign currency involve the use ofexchange rates. Therefore, in order to gain a more through understanding of foreign

currency translation, it is important to examine the nature of exchange rates and thecritical role they play in the international economy.The recent Asian currency crisis demonstrates how critically exchange rates impacteconomic developments. Stanley Fischer, First Deputy Managing Director of theInternational Monetary Fund (IMF), noted that one of three key factors that led to thecrisis was the maintenance of pegged exchange rate regimes for too long whichencouraged external borrowing and led to excessive exposure to foreign exchange risk inboth the financial and corporate sectors. Also contributing to the crisis were wide swings


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of the yen/dollar exchange rate over the past three years. Fischer explained that the crisiserupted during the summer in Thailand and the contagion to the regions other economiesappeared relentless. As currencies continued to slide, debt service costs rose. This leddomestic residents to hedge their external liabilities and intensified exchange ratepressure. One of the problems the IMF has faced in trying to help stem the crisis is that it

took months to gauge the magnitude of the problem in the face of Asia's opaqueaccounting and financial secrecy. This was compounded by a "crazy quilt" of currencyregimes and financial systems in the region (Bremner and Engardio1998). The key to stemming the crisis remains restoring confidence in and stabilizing theregions currencies. The $1.5 trillion-per-day foreign exchange (FX) market surpassesstocks and bonds as the largest market in the world. Foreign exchange markets are criticalfor setting exchange rates between countries.


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Liquidity

In terms of international trade, liquidity is the ease in which foreign currency is convertedinto domestic currency. FX markets, such as the New York Mercantile Exchange, matchbuyers and sellers to bring about speedy, orderly transactions.

Rates

Buyers and sellers set prices using the auction method in the FX market. Sellers try toearn the highest "ask" price possible, and buyers try to purchase currency at the lowest"bid." Buyers and sellers meet at the "spot" price, the current value and exchange rate fora particular currency against others.Reserves


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International governments enter the FX market to build and manage foreign exchangereserves. They build the reserves to make official payments and influence domesticcurrency values.

International Trade

Businesses rely on FX markets to buy currency that is spent to obtain overseas goods.Corporations will also look to FX markets to convert international earnings back into thedomestic currency.

Hedging


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Traders use foreign exchange derivatives, which "derive" their valuations and costs fromthe spot market. Options and futures contracts effectively lock in exchange rates for a setperiod, to hedge against the risks of currency fluctuations.

The importance of foreign exchange is described in brief as under:-

1) Foreign exchange reserves shows the financial strength and the stage of developmentof the economy.2) The acceptance of currency at a predetermined rate makes the international trade easy.3) The foreign exchange ratio shows direct relationship between the prices of thecommodities in the national and international market.4) The foreign exchange balances of a country directly affect the rates of exchange. Ahard currency nation has stability in foreign exchange rate.


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

3.4 Foreign Exchange planning

We offer full Foreign Exchange facilities. Whether you need Foreign Currency,Traveller's Cheques, Letters of Credit, Forward Exchange Contracts or Drafts, we ensurethat your Foreign Exchange requirements are handled quickly and efficiently.DraftsThe following should be taken into consideration when considering Drafts: Drafts arenot drawn on the issuing bank, but on the issuing bank's foreign correspondent.


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Drafts are not a substitute for Traveller's Cheques. Drafts are cheques and will be treatedas such - some companies might want to ensure that the Draft is cleared and paid beforethey will release goods or perform services against it. Electronic payments are moresecure and reliable and can be used in lieu of drafts.Mercantile Bank branches will usually need advance notice to prepare a Draft and we

recommend using registered mail services to send your cheque to the beneficiary.Key Benefits:Pre-pay your hotel.Pre-pay your car hire.Pre-pay your sightseeing tours.Pay your foreign subscriptions.Send a Draft as a gift or as a student allowance.Exchange Control Services


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Our International Banking/Group Settlement Division also offers the following productsand services;Open Account Foreign Payments (Payment Orders or Telegraphic Transfers Inward andOutward)CFC (Customer Foreign Currency) Accounts

Currency Investment Accounts Foreign Currency Accounts (FCAs)Offshore Trade FinanceVisit any one of our branches for assistance with your export/import documentation.Foreign Cash

If you intend travelling abroad you benefit from having some foreign currency availableto pay for taxis, food, tips and other small items.You can buy foreign notes from a Mercantile Bank branch.


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For your convenience it is advisable to order your foreign notes at least 48 hours beforeyour trip.For charges, visit our Pricing Schedule.

Imports and Exports

Businesses all around the world are increasingly depending on buying and selling fromother countries. Although the international trade environment has changed substantiallyover the last 100 years, the risks have essentially remained the same. Mercantile Bank isready to assist you with your trade documentation and adherence to exchange controlregulations.

SWIFT


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Electronic payments are the most commonly used method of transferring any currency.These payments are most commonly used for imports and exports, but holidaymakersmay also use them. They are done using SWIFT, a worldwide electronic payment andreceipts network.

Key Features and Benefits:SWIFT transfers are secure and fast.Pre-pay hotels, car hire and sightseeing tours.Use to transfer student allowance.Payments can be made in 25 different foreign currencies.Due to time zones, payments should be made two days before the due date.

Traveller's Cheques


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If you are travelling out of the country either for business or holiday, you can buyTraveller's Cheques directly from us.Using your Traveller's Cheques

Safeguarding your Traveller's Cheques:

Immediately sign each Traveller's Cheque in the top left corner to protect yourself in caseof loss or theft.Keep the serial numbers of your Traveller's Cheques separate from the Cheques.Safeguard your Traveller's Cheques, as you would cash.Spending Your Traveller's Cheques:Use them directly at hotels, shops, restaurants and services.


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If your Traveller's Cheques are in the local currency, they can be spent directly for goodsor services - acceptors need only watch you sign your Traveller'sCheques, compare the signatures, and give appropriate change.Key Features and Benefits:Traveller's Cheques are welcomed throughout the world as a means of payment.

A wide range of currencies and denominations are available, offering you the flexibilityyou need.Safer than cash - if lost or stolen they can be replaced virtually anywhere in the world,usually within 24 hours.No wastage - we'll buy back your leftover Traveller's Cheques on your return.

3.4 Foreign exchange and Bangladesh bank


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INTRODUCTORY

1. Foreign Exchange Regulation (FER) Act, 1947 (Act No. VII of 1947) enacted on 11th

March, 1947 in the then British India provides the legal basis for regulating certainpayments, dealings in foreign exchange and securities and the import and export ofcurrency and bullion. This Act was first adapted in Pakistan and then, in Bangladesh. TheAct is reproduced at Appendix-1. Bangladesh Bank is responsible for administration ofregulations under the Act. Appendix 4 provides a list of Bangladesh Bank's offices andtheir jurisdictions.


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2. Basic regulations under the FER Act are issued by the Government as well as by theBangladesh Bank in the form of Notifications which are published in the BangladeshGazette. Notifications issued by the Bangladesh Government and the erstwhileGovernment of Pakistan and the Bangladesh Bank and the erstwhile State Bank ofPakistan are reproduced at Appendices 2 and 3. Directions having general application are

issued by the Bangladesh Bank in the form of notifications, foreign exchange circularsand circular letters.

3. Authorized Dealers (ADs) in foreign exchange are required to bring the foreignexchange regulations to the notice of their customers in their day-to-day dealings and toensure compliance with the regulations by such customers. The ADs should report to theBangladesh Bank any attempt, direct or indirect, of evasion of the provisions of the Act,or any rules, orders or directions issued there under.


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under Section 2 of that Act. However, for the purpose of this publication and theinstructions issued by the Bangladesh Bank from time to time, the following terms asdefined below shall be used in addition to those defined under Section 2 of theFER Act:

(i) Resident and Non-Resident

A resident is a person bank or firm who/which resides in Bangladesh. A non-resident is aperson, bank or firm who/which resides outside Bangladesh. Non-residents includeBangladesh nationals who go out of Bangladesh for any purposeA person is presumed to be ordinarily resident if he maintains a home in Bangladesh orresides in the country for a substantial part of each year or pays income tax as a residentof Bangladesh. On the other hand, the fact that a person gives an address in Bangladesh


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does not necessarily mean that he should be regarded as a resident if he is, in fact, only atemporary visitor and is ordinarily resident elsewhere.

(ii) Bangladesh Bank

Bangladesh Bank (BB) means the Bangladesh Bank established under the BangladeshBank Order, 1972 (President's Order No. 127 of 1972).

(iii)Taka

Taka means the Bangladesh Taka unless otherwise specified.

(iv) Dollar


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Unless otherwise indicated the term dollar used in this publication shall mean the USdollar.

(v)Authorized Dealers

Wherever used in this publication, the term Authorized Dealer or AD would mean a bankauthorized by Bangladesh Bank to deal in foreign exchange under the FER Act, 1947.

AUTHORIZED DEALERS AND MONEY CHANGERS

1. Bangladesh Bank issues licenses normally to scheduled banks to deal in foreignexchange if it is satisfied that the bank applying for this license has adequate


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manpower trained in foreign exchange, there is prospect to attract reasonable volume offoreign exchange business in the desired location and the applicant bank meticulouslycomplies with the instructions of the Bangladesh Bank especially with regard tosubmission of periodical returns. Bangladesh Bank may issue general licenses or licenseswith authority to perform limited functions only.

2. Licenses with limited scope are also issued to persons or firms to exchange foreigncurrency notes, coins and travellers' cheques in places where money changing facilitiesare required. The authorizations are granted to persons or firms of adequate means andstatus who, in the opinion of the Bangladesh Bank, will be able to conduct their dealingsstrictly in accordance with the Foreign Exchange Regulations.


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3. Applications for the grant of AD licenses should be made to the General Manager,Foreign Exchange Policy Department, Bangladesh Bank, Head Office, Dhaka. Theapplications should contain information on availability of trained staff

4. Applications for the grant of licenses to act as Authorized Money Changers should be

made to the Foreign Exchange Policy Department of the area where the applicant'sbusiness is located. The applications should contain full particulars as regards the mainbusiness conducted by the applicant, the location of the business premises, the names andaddresses of the applicant's bankers. The application should be routed through theapplicant's banker who should furnish a report on the financial status of the applicant.

FORWARD DEALINGS IN FOREIGN EXCHANGE


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1. ADs, on their own, are free to buy and sell foreign currencies forward in accordancewith tile internationally established practices however, in all cases the ADs must ensurethat the cover is intended to neutralize the risks arising from definite and genuinetransactions.

2. Be it forward sale or purchase, ADs must cover their own risk within die shortestpossible time.

3. All forward contracts should be treated as firm and should be closed out onexpiry. In such cases the ADs should charge the difference between the contracted(booked) rate and the TT clean spot buying or TT spot selling rate, as the case may be,ruling on the date the contract is closed out. The forward contract should be closedwithout charging any difference if the rate moves in favour of the customer on the date of


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the closure. In other words, in case of a forward purchase by Authorized Dealer nodifference will be charged if the TT spot selling rate on the date of closure is at par orlower (i.e., inferior from the point of view of tile customer) than the booked rate.Similarly, no difference should be charged for closing out a forward sale contract if theTT clean spot buying rate on the date of closure is at par or higher (i.e., costlier than the

booked rate from the point of view of the customer) than the booked rate. No forwardcontract should be renewed at the old rate. All cases of renewal should be treated as newcontracts and the rates as applicable for purchase-sale of forward contracts on the date ofrenewal should be applied.

4.The ADs may undertake swap transactions to cover their risks arising from forwardtransactions. However, they are advised to refrain from taking speculative positionsthrough swap transactions.


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5.All documents (copy of LC, contracts etc.) relating to forward contracts and Swaptransactions must be, preserved for subsequent inspection by the Bangladesh Bank.

OUTWARD REMITTANCES

1. Most outward remittances are approved by the ADs, on behalf of the Bangladesh Bankfollowing declaration of Taka as convertible for current accounts payments from March,1994. Only a few remittances of special nature require Bangladesh Bank's prior approval.

2. All remittances from Bangladesh to a foreign country or local currency credited to onresident Taka accounts of foreign banks or convertible Taka account constitute outwardremittances of foreign exchange. ADs must exercise utmost caution to ensure that foreign


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currencies remitted or released by them are used only for the purposes for which they arereleased, they should also maintain proper records for submission of returns toBangladesh Bank as also for the latters inspection from time to time.

3. In all cases of purchase of foreign currency an application must be made to an AD and,

wherever necessary to Bangladesh Bank. For payments against imports into Bangladesh,the prescribed application form is form IMP (Appendix 5/13) and for other types ofremittances form TM .TM form must be used for reporting by the ADs even whenremittance is approved by Bangladesh Bank in any other manner, for instance by issuinga special permit. On receipt of the application in the prescribed form, the ADs may effectthe sale of foreign exchange if they are empowered to approve the application. If thetransaction requires prior approval of the Bangladesh Bank, the form should beforwarded by the AD to the Bangladesh Bank for consideration.


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4. Applications for Bangladesh Bank's prior approval for outward remittances, whereverrequired, should be submitted to Bangladesh Bank only through the Ads and not by theircustomers directly; all such applications should be forwarded by the ADs to BangladeshBank by their own messengers or by post.

5. In respect of the forms or permits etc. approved from the Bangladesh Bank, the ADsshould see that these have been approved by duly authorized officers and that they bearthe Bangladesh Bank's embossing sea. In case the authorization is signed by an official ofBangladesh Bank whose specimen signature may not be available with them suchauthorization should be resented to the nearest office of the Foreign Exchange PolicyDepartment and the signatures authenticated. It is most important that, once forms havebeen approved by or on behalf of the Bangladesh Bank, the ADs carry out the


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transactions only on behalf of the original applicants for whom the forms were approved.

6. Permits issued (where applicable) by the Bangladesh Bank must be utilized within theperiod of its validity indicated in the permits. The amount released must not exceed theauthorized limit. Also, the instructions, if any, given in the permits with regard to the

amounts to be released periodically e.g. monthly or quarterly must be strictly adhered to.

7. When the permit is exhausted or no longer required, it should be returned to theBangladesh Bank by the AD alongwith the TM form on which the last remittance isreported.

8. All authorisations excepting TM forms approved by the Bangladesh Bank or by theADs on behalf of the Bangladesh Bank remain valid for a period not exceeding 30 days


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from the date of approval unless they are expressly stated as valid for a specified longerperiod or unless they have been revalidated for a further period. TM form approved bythe Bangladesh Bank will, however, remain valid for a period of three calendar monthsfrom the date of approval by the Bangladesh Bank. Permits issued by the BangladeshBank are also valid for specified periods as stated on the permits. The ADs should not

effect any remittance against approved Forms or Permits which have lapsed unless theyhave been duly revalidated.9. Original copies of all IMP forms, TM forms covering remittances effected by the ADsmust be submitted to the Bangladesh Bank alongwith the appropriate Returns as laiddown.

10. In the event of any remittance which has already been reported to the BangladeshBank on the prescribed return being subsequently cancelled either in full or in part, the


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Importer (Buyer)/Applicant

The Issuing Bank (Opening Bank)

The Advising Bank/Notifying Bank

Exporter/Seller (Beneficiary)

Confirming Bank

Negotiating Bank

The Paying/Reimbursing/Accepting/Remitting Bank.


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a) Applicant

The person/body (customer of the bank) who requests the bank

(opening bank) to issue letter of credit. As per instruction and on behalf

of the applicant, bank open L/C in line with the terms and conditions ofthe sales contract between the buyer and seller.

b) Opening bank/Issuing Bank


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The bank which open/issue L/C on behalf of the applicant/importer.

Issuing banks obligation is to make payment against presentation of

documents drawn strictly as per terms of the L/C.

c) Advising/Notifying Bank

The bank through which the L/C is advised/forwarded to the beneficiary

(exporter). The responsibility of advising bank is to communicate the

L/C to the beneficiary after checking the authenticity of the credit. The


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advising bank acts only as agent of the issuing bank without having

any engagement on their part.

d) BeneficiaryBeneficiary of the L/C is the party in whose favor the letter of credit is

issued. Usually they are the seller or exporter.

e) Confirming Bank


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The Bank, which under instruction in the letter of credit, adds

confirmation of making payment in addition to the issuing bank. It is

done at the request of the issuing bank having arrangement with

them. This confirmation constitutes a definite undertaking on the partof confirming bank in addition to that of issuing bank.

f) Negotiating Bank

The Bank, which negotiate documents and pays the amount to the

beneficiary when presented complying credit terms. If the negotiation


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of documents is not restricted to a particular bank in the L/C, normally

negotiating bank is the banker of the beneficiary.

g) Reimbursing/Paying BankThe Bank nominated in the credit by the issuing bank to make

payment stipulated in the document, complying with the reimbursing

bank.


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Chapter4


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Overview of


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Mercantile Bank LTD.


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4.1 Background

Mercantile Bank Limited was incorporated in Bangladesh as a Public Limited Company

with limited liability under the Bank Companies Act, 1991 on 20 May 1999 and

commenced commercial operation on 02 June 1999. The Bank went for public issue of

shares on in 2003 and its shares are listed with Dhaka Stock Exchange and Chittagong


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Stock Exchange. The Mercantile Bank Limited is a highly capitalized new generation

Bank with an Authorized Capital and paid-up Capital of Tk. 3000.00 million and Tk.

1498.90 million respectively. The Bank provides a broad range of financial services to its

customers and corporate clients. The Board of Directors consists of eminent personalitiesfrom the realm of commerce and industries of the country. The main branch of

Mercantile Bank Limited is located in the Dilkusha commercial area. The total manpower

of this branch is 118.The total number of the senior vice president is 10.As it is the main

branch of the bank, the customer appearance in the bank is very high.


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In the Mercantile Bank Limited, Main Branch, the people are mostly courteous, friendly

in nature and eager to help despite the tremendous workload. Manpower is sufficient in

the branch but there is no information booth for customer information. So as a new

private bank, Mercantile Bank Limited is running steadily.

The Mercantile Bank Limited (MBL) undertakes all types of banking transactions to support the

development of trade and commerce in the country. MBLs services are also available for the

entrepreneurs to set up new ventures and BMRE of industrial units. The bank gives special

emphasis on Export, Import, Trade Finance, SME Finance, Retail Credit and Finance to women


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Entrepreneurs. To provide clientele services in respect of International Trade it has established

wide correspondent banking relationship with local and foreign banks covering major trade and

financial centers at home and abroad.

In 2007, Mercantile Bank Limited remained at forefront of the banking industry of the

Bangladesh, in the face of challenges of intense competition, on going reforms in the

banking industry and a more challenging business and economic environment

confronting its customers. The bank continued to play an important role in the

governments drive to strengthening the rural economy as the driver of the future

economic driver of the Bangladesh. Mercantile Bank Limited emerged as a new


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commercial bank to provide efficient banking services and to contribute socio-economic

development of the country. With the passage of time it has expanded its number of

branches and variety of services along with its core business of taking deposits and

granting loans. Now MBL has emerged as a new commercial bank to provide efficientbanking services and to contribute socio-economic development of the country. Rising

trend of the banks profitability over the last 8 years is also materialized. The MBL is

committed to the delivery of the superior shareholders value. Foreign Exchange

Department of the bank is one of the most important departments. Now it has become the

backbone of the bank. With the aim to be the bank of choice, it is operating in the


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industry with a team of devoted personnel to excel both their own career and the banks

future.

Objectives

Mercantile Bank Limited aims at excellence and its committed to explore a new horizonof banking and provide a wide range of quality products and services comparable withthose available with any modern bank in the world.

It is a bank for the common people including businessmen and professionals. It intends toserve with quality at a price competitive to anyone in the financial market. It wouldconstantly keep on exploring the needs of the clients. The management of the bank bears


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in mind the fact that we are on the threshold of a new millennium, which would poseextra ordinary challenges to be faced and at the same time open up new opportunities andpossibilities. A young and talented team of business entrepreneurs and managers shall berequired to guide the density of our nation in the 21st century.

So the bank shall also develop a youthful and exuberant management team technologically sound and rich in experience. They would work hand in hand with zealand enthusiasm to achieve the objectives of the bank in the new millennium.

Structure & Management


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The bank will have an Authorized Capital of TK. 800 million and Paid-up Capital of TK.245 million contributed by sponsors. The Head Office of the bank is situated at 61,Dilkusha C/A, Dhaka 1000.

The Sponsor Directors of the bank are well-established businessmen and professional of

the country having business in and out of Bangladesh.

The Chairman of the board, Mr. Md. Abdul Jalil is a renowned businessman besidesbeing an eminent personality of the country.

The Chief Advisor of the bank, Mr. Lutfar Rahman Sarkar brings with him a vast wealthof experience of managing both public and private sector banks. Mention may be madethat Mr. Lutfar Rahman Sarkar had been the Governor of Bangladesh Bank till recently.


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The Managing Director of the bank, Mr. M. Taher Uddin has also got vast experience inboth private and public sector banks as Chief Executive. His initiative and drive as adynamic leader always inspires his colleagues and instills a new vigor in the managementof the bank.

Above all, the bank will be manned and managed by a galaxy of talented professionalsproficient in their individual fields and dedicated to the cause of the bank.

Mercantile Bank Limited is fully committed to the delivery of superior shareholders

value. Initiative ranging from having more efficient capital structures and improving

return on equity, pursuing a high dividend payout policy to the pursuit of excellence


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corporate governance have been undertaken with a view to enhancing superior

shareholders value. The Bank does believe that it has differentiated itself from other

banks through its products and services. It is banking for the people to fulfill their needs

conceptualizing product and services to meet their aspiration and expectations. The bankis proud to have exemplified the true concept as Banglar Bank.


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4.2 Corporate information at a glance

Name of the Bank Mercantile Bank Limited

Status Public Limited Company

Date of Incorporation May20, 1999

Date of Commencement June 02, 1999.

Subscription for Shares October 21-22, 2003

Listed in Dhaka Stock Exchange February 16, 2004


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Listed in Citation Stock Exchange February 26, 2004

Head Office 61, Dilute Commercial Area, Dhaka- 1000

Phone +880-2-9559333, 01711-535960

E-mail [email protected]

Website www.mblbd.com

Chairman Md. Abdul Jail

Managing Director Dean Manipur Raman
mailto:[email protected]://www.mblbd.com/http://www.mblbd.com/mailto:[email protected]


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Number of Employees 1104

Number of Branches 42

Table: General Information of MBL


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4.3Management Structure of MBL:

Organization Chart of Mercantile Bank Limited

Chairman

Managing Director - HRD

Executive Vice President/

Company Secretary

Chief AdviserBoard of Directors

Deputy Managing Director

ID, IT, CREDIT, R&P


GSD, CAD, A&I, GB,

D&M

Senior VicePresident

Senior Vice PresidentSenior Vice President

Vice President

Senior Asst. VicePresident

Asst. Vice President

Senior PrincipleOfficer

Principle Officer

Senior Officer

Officer

Junior Officer

Asst. Officer

Abbreviations:

GSD General Service DivisionCAD Central AccountDivisionASI Audit and InspectCB Central BankD&M Developing and

MarketingID International DivisionR&P Research & Planning


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Figure: 3.3Organization chart


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4.4 Branch Network of the Organization


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Branch Information

Branch: 50 & SME / Krishi Branch : 3

Head Office

61, Dilkusha Commercial AreaDhaka-1000, BangladeshPABX : 9559333, 9553892, 9561140Fax : 88-02-9561213, Tlx : 642509 MBL ID BJSwift : MBLBBDDH


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E-mail : [email protected] : www.mblbd.com

Zonal Office

Hotel Hawai Building39, Agrabad C/A, ChittagongPhone : 031-2529445, 031-716421723181, 721772

Training Institute

Swadesh Tower, Level-641/6, Purana Paltan LaneDhaka-1000Phone: 7174016, 7172282


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Mobile : 01711-722925Fax : 88-031-2529445

Sl.No. Branch Name & Address Sl.No. Branch Name & Address

01. Main Branch

61, Dilkusha C/ADhaka-1000Phone : 9559333, 9571618Mobile : 01711-535958Fax : 88-02-9554410

02. Dhanmondi Branch

2/1, Cosmos TowerRoad No.- 28 (Old), 15(New)Dhanmondi R/A, Dhaka-1205.Phone : 9130500, 9142691,


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8126768, 8124234Mobile : 01713-452824Fax : 88-02-8126768

03. Kawran Bazar Branch

99, Kazi Nazrul Islam AvenueKawran Bazar C/A, Dhaka- 1215.Phone : 8112440, 8141910Mobile : 01711-535953Fax : 88-02-8126882

04. Agrabad Branch

Hotel Hawai Building (1stFloor)39, Agrabad C/A, ChittagongPhone : 031-716421, 723181,721772Mobile : 01713-384491,01711-722924Fax : 88-031-716459


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05. Joypara Branch

Samabay Super MarketJoypara Bazar, Dohar, Dhaka.Phone : 03894-680032

Mobile : 01711-535949Fax : 03894-680032

06. Banani Branch

Awal Centre, (2nd Floor)34, Kemal Ataturk AvenueBanani C/A, Dhaka-1213

Phone : 8816473, 8816474Mobile : 01711-535954Fax : 88-02-8827807

07. Rajshahi Branch

JODIAC Plaza, Shaheb Bazar, RajshahiPhone : 0721-771214, 772562Mobile : 01711-419079, 01713-193961

08. Naogaon Branch

Main Road, Chakdev,Naogaon.Phone : 0741-63331, 69181,


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Fax : 88-0721-771215 69182Mobile : 01711-419057Fax : 88-0741-63230

09. Sylhet Branch

Laldighirpar, SylhetPhone : 0821-723650, HOB : 723651Mobile : 01711-922810Fax : 88-0821-723722

10. Board Bazar Branch

Board Bazar, GazipurPhone : 9291604, 9293639Mobile : 01711-535950Fax : 88-02-9291660

11. Nayabazar Branch

25/1, Zinda Bahar (1st Lane)

12. Khatunganj Branch

599, Ramjoymohajan Lane


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Nawab Akhtar Uddin MansionNayabazar, Dhaka-1100.Phone : 7393827, 7393655Mobile : 01711-535956

Fax : 88-02-7390869

Khatunganj, ChittagongPhone : 031-626101, 626102,622751Mobile : 01711-723051,

01711-724147Fax : 88-031-635514

13. Mohakhali Branch

17, Mohakhali C/ A (2nd Floor)Red Crescent Concord Tower, Dhaka-1212Phone : 9888346, 9891520

14. Mirpur Branch

Rokeya Sarani, Razia Plaza(1st Floor)184, Shenpara Parbota,Mirpur - 10, Dhaka- 1216


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Mobile : 01711-535957Fax : 88-02-9895797, 9863215 (M) Phone : 9008852, 9015661,

8034577, 8034588Mobile : 01711-535955Fax : 88-02-8034577

15. Ashulia Branch

Bhuiyan Complex, Jamgora BazarAshulia, Savar, DhakaPhone : 7790708Mobile : 01711-535948Fax : 88-02-7702491

16. Uttara Branch

House- 10(A), Road- 7/DSector- 9, Uttara ModelTownUttara, Dhaka -1230Phone : 8955879, 8958177,8958244


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Mobile : 01711-535942Fax : 88-02-8955881

17. Jubilee Road Branch

Kamal Chamber (2nd Floor)61, Jubilee Road, KotwaliChittagongPhone : 031-621018, 624819Mobile : 01711-724874Fax : 88-031-626072

18. Elephant Road Branch

Osman Plaza75, Elephant Road, Dhaka-1205Phone : 8618732, 9677364Mobile : 01713-044832Fax : 88-02-9669458

19. Motijheel Branch 20. Madam Bibir Hat Branch


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Malek Mansion128, Motijheel C/A, Dhaka-1000Phone : 7161923-4, 9570131Mobile : 01819-260289

Fax : 88-02-7161925, HOB : 9561178

Bhatiary, Shitakund,Chittagong.Phone : 031-2780465,

2780686Mobile : 01713-103107,01713-10506201730-076127 (M

21. Khulna Branch

Kastury Plaza73, KDA Avenue, C/A, Khulna

22. Rangpur Branch

Press Club ComplexStation Road, Rangpur


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Phone : 041-813561-2Mobile : 01711-343080Fax : 88-041-813563

Phone : 0521-51299, 51323Mobile : 01713-201636Fax : 88-0521-51110

23. Satmasjid Road Branch

House : 735 (Old), 82/A (New)Road : 8/A (New)Satmasjid Road, DhanmomdiDhaka-1209Phone : 8112463-4, 9141148Mobile : 01713-039792Fax : 88-02-9139183

24. Jhilongja Branch

Hotel Sea Palace Ltd.Kalatoli Road, Cox's BazarPhone : 0341-62234Mobile : 01713-103662Fax : 88-0341-63734


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25. O R Nizam Road Branch

191, CDA AvenueEast Nasirabad, Chittagong.Phone : 031-657512, 2550876

Mobile : 01713-103663Fax : 88-031-2550877

26. Bogra Branch

Barogola, Bogra Sadar,BograPhone : 051-69840

Mobile : 01713-044835Fax : 88-051-69190

27. Chowmuhani Branch

Somobay Bhaban (2nd Floor)Karimpur Road, ChowmuhaniBegumgonj, NoakhaliPhone : 0321-52960, 52966

28. Konabari Branch

Motiur Rahman Plaza,Konabari UnionGazipur Sadar, GazipurPhone : 9298484-5


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Mobile : 01713-036991Fax : 88-0321-52966

Mobile : 01713-044846Fax : 88-02-9298486

29. Gulshan Branch

CES (A), 54(A), Gulshan AvenueGulshan Model Town, Dhaka-1212Phone : 8835276-7, 8835614Mobile : 01713-045296Fax : 88-02-8835615

30. Hemayetpur Branch

Hatem Ali Complex, SingairRoadHemayetpur, Savar, DhakaPhone : 7741532, 7741533Mobile : 01713-452995Fax : 88-02-7741531

31. Feni Branch 32. Moulvibazar Branch


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105, S.S. Kaiser Road, Feni Sadar, FeniPhone : 0331-63558, 63559Mobile : 01713-452994Fax : 88-0331-63557

152-2 (1st Floor), CourtRoad, MoulvibazarPhone : 0861-62871, 62872

Mobile : 01713-068126Fax : 88-0861-62873

33. Bijoynagar Branch

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

34. Moghbazar Branch

331 (Old), 227 (New)Outer Circular Road (1stFloor)Ramna, Dhaka-1227


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Mobile : 01713-068127Fax : 88-02-8333043

Phone : 8333016, HOB :8333017Mobile : 01711-643281Fax : 88-02-8333018

35. Sapahar Branch

Village & P. O. : SapaharUnion & Thana: Sapahar, NaogaonPhone : 07432-74080, 74081Mobile : 01713-068096Fax : 88-07243-74080

36. Beanibazar Branch

Zaman Plaza, Beanibazar,SylhetPhone : 03799-288656Mobile : 01713-384495Fax : 88-03799-288657


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37. Barisal Branch

141, Sadar Road, BarisalPhone : 0431-2176209Mobile : 01713-384496

Fax : 88-0431-2176208

38. Bhojeshwarbazar Branch

Naria, ShariatpurMobile : 01713-384497

39. Comilla Branch

1042/945, Jhautola, ComillaPhone : 081-65275Mobile : 01713-384498Fax : 88-081-65276

40. Green Road Branch

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


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41. Sheikh Mujib Road Branch

304, SK Mujib Road, ChittagongPhone : 031-2514235, 2514236Mobile : 01730-013454

Fax : 88-031-2514235

42. Engineers' InstitutionBranch

The Institution of Engineers,Bangladesh

8/A, Ramna, Dhaka-1000Phone : 7110651, 7110684Mobile : 01713-199852Fax : 88-02-7110610

43. Dagonbhuiyan Branch

Mizan Tower273, Basurhat Road

44. Mazar Road Branch

Hazrat Shah Ali Girls HighSchool & College


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Dagonbhuiyan, FeniPhone : 03323-79105Mobile : 01730-328684Fax : 88-03323-79106

Market Complex, MazarRoadMirpur-1, Dhaka-1216Phone : 8035529, 8035539(PABX)

Mobile : 01730-328681Fax : 88-02-8035529

45. Dinajpur Branch

Dinajpur Plaza, GoneshtolaSadar Upazilla, DinajpurPhone : 0531-61217Mobile : 01730-328682

46. Jessore Branch

A. Ali Complex45, R. N. Road, JessorePhone : 0421-62933Mobile : 01713-452667,


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Fax : 88-0531-6121801730-328683Fax : 88-0421-65392

47. Progati Sarani Branch

Green Orlando, 42/4, Progati SaraniBaridhara, DhakaPhone : 8411503, 8411501-2Mobile : 01730-318186Fax : 88-02-8411504

48. Chittagong EPZ Branch

S A TowerAirport Road, ChittagongMobile : 01730-318185

49. Faridgonj Branch

Faridgonj Bazar, Chandpur

50. Narayangonj Branch

H R Plaza, 64 (Old), 90


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Mobile : 01730-318187 (New)Bangabandhu Road,NarayangonjMobile : 01730-318188


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4.5 Number of employees

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


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4.5 Functions of the Organization

Board Directors(Chairman, vice Chairman, Members)

Board DivisionChairmans Sect.

MDs Sect. Public Relations


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Managing Director

Additional Managing Director


Marketin & Branch

Central Accounts Division

ICC (i) Audit (ii) Marketing(iii) Compliance

Credit Addmn. RM De t.

Trainin Institute

Recover /Law

Debt. Collection

Trans ort Pool

Intl Division Corres ondent

Treasur Div. Dealin Room

Returns/Re ort

Treasur

Remitt. De t.Credit Div.

Gen. Credit& Trade

Small Loan

Housin Loan Unit

O erations

LAN/WAN

Securit

Branches

AreaOffice

Branches

Human Resource Division

MIS


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4.6 Vision statement of the bank

To be in the forefront of national development by providing all the customersinspirational strength, dependable support and the most comprehensive range of business

solutions, through our team of professionals who work passionately to be outstanding ineverything we do.


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4. 7.Mision statement of the bank

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

resources, and nevertheless would remain healthy and gainfully profitable Bank.


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Mercantile Bank Limited aims to become one of the leading banks in Bangladesh by

prudence, flair and quality of operations in their banking sector. The bank has some

mission to achieve the organizational goals. Some of them are as follows as:

Mercantile Bank Limited provide high quality financial services to strengthen thewell being and success of individual, industries and business communities.

Its aim to ensure their competitive advantages by upgrading banking technology

and information system.


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MBL intends to play more important role in economic development of Bangladesh

and its financial relations with the rest of the world by interlining both modernistic

and international operations.

MBL encourages investors to boost up share market.

The bank creates wealth for the shareholders.

The bank believes in strong capitalization.

It maintains high standard of corporate and business ethics.

Mercantile Bank Limited extend highest quality of services, which attracts the

customers to choose them first.


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The bank creates wealth for the shareholders.

The bank maintains congenial atmosphere for which people are proud and eager to

word with Mercantile Bank Limited.

Mercantile Bank Limited intend to provide better benefits to their customers and

good returns to their shareholders.

The bank intends to meet the needs of their clients and enhance their profitability

by creating corporate culture.


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Mercantile Bank Ltd will become most caring, focused for equitable growth based on

diversified deployment of resources, and nevertheless would remain healthy andgainfully profitable Bank.

4.8 Product Scheme


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The Bank has launched a number of financial products and services since its inception.Among these, Monthly Savings Scheme, Family Maintenance Scheme, Double BenefitDeposit Scheme, Quarterly Benefit Deposit Scheme, 1.5 Times Benefit Deposit Scheme,Advance Benefit Deposit Scheme, Consumer Credit Scheme, Small Loan Scheme, LeaseFinance Scheme, Overseas Employment Loan Scheme, Car Loan Scheme, Home Loan

Scheme and SME Loan have received wide acceptance among the people.

Deposit Products

Monthly Saving Scheme

It is our significant product; i

mercantile 1

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