Chapter - 01: Prepared By: Md. Moinuddin, MBA-06. MKT, C.U

Chapter - 01 INTRODUCTION
Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U
EVOLUTION OF THE WORD BANK

The word bank originated from Italian word Banca. Banca means long tool. In ancient time Italian Jews merchant used to do business of lending money by sitting on the tools. It is assumed that the word bank derived from the word Banca. To meet the expense of war of 1171 one type credit certificate was launched in Italy at an interest rate of 5% it was called as Monte in Italian language and Banke in German language then German language was widely used in Italy. As a result the word Banke gradually changed to the word Banca from which the word Bank originated.
THE EMERGENCE OF MODERN BANKING

The linguistics and etymology suggests an interesting story about banking origins. Both the old French word Banque and the Italian word Banca were used centuries ago to mean a bench or moneychangers table. This describes quite well what historian has observed concerning the first bankers, who lived more than 2000 years ago. They were money changers, situated usually at table or in a small shop in the commercial district, aiding travellers who came to town by exchanging foreign coins for local money or discounting commercial notes for a fee in order to supply merchants with working capital. The first bankers probably used their own capital to fund their activities, but it was not long before the idea of attracting deposit and securing temporary loans from wealthy customers became a source of bank funding. Loans were then made to merchants shippers and landowners at rates of interests low as percent per annum to as high as 48 percent a month for the riskiest ventures! Most of the early bank was Greek in origin. The banking industry gradually spread outward from the classical civilizations of Greece and Rome into northern and western Europe. The early bank in Europe was places for safe keeping of valuable items (such as gold and silver bullion) as people came to fear loss of their asset due to war, theft, or expropriation by government. When colonies were established in North and South America, old world banking practice was transferred to the new world.
DEVELOPMENT OF BANK IN BANGLADESH

Bank system was practiced in Indian subcontinent from the ancient period in Indian subcontinent merchants; goldsmith moneylenders were the primary bankers. During the mughal period banking and credit business was enchanted rapidly. Indigenous banking in Bangladesh is as old as banking in other parts of the world. Money used to be accepted as a deposit and advances used to be given. During mughal period, indigenous banking flourished. The subarna banik the bullion trading community used to do banking in the then Bengal. Subsequently, larger banking in Bangladesh was gradually taken over by the upcountry bankers who were known as Seth, shah etc. but subarna baniks continued to operate in rural Bengal. With the British gradually coming over to Bengal and settling here, banking in the form of agency house, exchanging house started to flourish in Calcutta. Entry of the Bengalese into banking started in the part of this century, especially in the wake of the swadeshi movement. In 1700 AD Hindustan bank was established as the first joint stock bank. In 1784 Bengal bank and in 1786 general bank of India was launched. Then both the bank absolved respectively in 1793 and 1832. During the early period of nineteenth century the three banks Bank of Bombay, Bank of madras and bank of Bengal merged to imperial bank of India. In 1947 after the separation of Bengal, bank business faced a severe disaster as non-Muslim bankers migrated to India. In order to rebuild the bank business State bank of Pakistan was established as a central bank of Pakistan in 1948. In 1971 Bangladesh became independent. After liberation Bangladesh bank was automated with the asset and liabilities of former State bank of Pakistan.
Chapter - 02 C O M PA N Y P R O F I L E
BACKGROUND OF MTBL
In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial bank with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly Mutual Trust Bank Ltd. was created and commencement of business started on September 29, 1999. The sponsors are reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile and finance to energy, etc. As a fully licensed commercial bank, Mutual Trust Bank Ltd. is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and it repositions itself in the changed market condition. Dhaka Bank Ltd has already made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country. It has already occupied an enviable position among its competitors after achieving success in most of the areas of business operation. The present day banking structure has evolved over several decades. The farreaching program of economic reform is being carried out at present towards efficient utilization of scarce resources and the development of private entrepreneurship. In a fast changing business environment, financial intermediaries are gradually being left to be guided by market forces rather than regulations. Competition is strengthened by the entry of new and innovative providers of financial services through the development of money market and the capital market. Under the ongoing financial liberalization programmed, Mutual Trust Bank Ltd. emerges as a new bank in the private sector to operate in the commercial arena of Bangladesh.
Mutual Trust Bank Limited in the Banking Area Of Bangladesh The banking sector of Bangladesh comprises of four categories of scheduled banks. These are: Nationalized Commercial Banks Govt. Owned Development-Finance Institutions Private Commercial Banks Foreign Commercial Banks Commercial banks are again divided into three categories First generation Second generation Third generation MTBL is the leader of third generation bank
GOALS AND OBJECTIVES OF MTBL

To earn and maintain CAMEL Rating 'Strong' To establish relationship banking and improve service quality through development of Strategic Marketing Plans To remain one of the best banks in Bangladesh in terms of profitability and assets quality. To introduce fully automated systems through integration of information technology. To ensure an adequate rate of return on investment To keep risk position at an acceptable range (including any off balance sheet risk) To maintain adequate liquidity to meet maturing obligations and commitments. To maintain a healthy growth of business with desired image. To develop and retain a quality work force through an effective HRM system. To maintain adequate control systems and transparency in procedures. To ensure optimum utilization of all available recourses
To be the bank of 1st choice by creating exceptional value for our clients, investors and employees.
We aspire to be the most admired financial institution in the country, recognized as a dynamic, innovative and client focused company, that offers an array of products and services in the search for excellence and to create an impressive economic value.
BOARD OF DIRECTORS OF MTBL

The Board of Directors of Mutual Trust Bank consists of 13 Directors, which includes a Chairman and a Vice Chairman.
Chairman Mr. Samson H. Chowdhury, Chairman Mr. Samson H. Chowdhury, a recognized entrepreneur of the country, is the Chairman of Mutual Trust Bank. This prolific business magnate with variegated experience is a Senior Cambridge and he participated in the Management Training Course jointly conducted by the University of Dhaka and the Harvard University. He has been an icon in the country's pharmaceutical industry for long. He is the Chairman of the reputed conglomerate Square. Furthermore, he is the Chairman of Central Depository Ltd and Shabazpur Tea Estate as well as life member of Transparency International, Bangladesh Chapter and its former Chairman. Vice Chairman Dr. Arif Dowla , Vice Chairman Dr. Arif Dowla is the Vice Chairman of Mutual Trust Bank. He is the Managing Director of Advanced Chemical Industries Limited. He obtained PhD degree in Mathematics from the University of California, San Diego. He is also a member of the American Mathematical Society. His doctoral dissertation was on non-stationary stochastic processes, which is a field of study related to probability theory and statistics. His thesis advisor was the renowned Time Series and Random Fields analyst Professor Dimitris N. Politis. Directors Mr. Syed Manzur Elahi (Founder-Chairman) Mr. Syed Manzur Elahi, Son of late Justice Sir Nasim Ali, former Chief Justice of Kolkata High Court, was the founder Chairman of Mutual Trust Bank. He is a man of pleasant personality and enjoys an impeccable reputation and respect. He has made significant contribution in various industrial & business enterprises including Banking.
He did his M. A. in Economics from University of Dhaka. Mr. Elahi is the Chairman of Bangladesh Association of Banks, Vice Chairman, Bangladesh Association of Publicly Listed Companies and Director of ACI.

Mr. Hedayetullah Mr. Kh. Rashiduzzaman (Representing East West Properties Development Ltd.) Al-haj Syed Abul Hossain Mr. M.A. Maruf Mr. Md. abdul Malek Mr. Rashed Ahmed chowdhury Mrs. Yasmeen haque Mr. A.F.M Mahfuzul Hasan Mr. Md. Wakiluddin Mr. Saidur Rahamn Ratan
Managing Director Of MTBL Mr. Kazi Md. Shafiqur Rahman Mr. Kazi Md. Shafiqur Rahman joined Mutual Trust Bank Limited as Managing Director on 1st May 2007. Earlier he joined Mutual Trust Bank as Additional Managing Director on February 22, 2007. Mr. Shafiqur Rahman is an MBA and started banking career as Senior Officer in Janata Bank in 1973.. Deputy Managing Director Mr. Quamrul Islam Chowdhury , Mr. Quamrul Islam Chowdhury, Deputy Managing director, is the Company Secretary of the Bank. He joined erstwhile State Bank of Pakistan as Trainee Officer in February 1965 and after completion of training he was absorbed in the then Habib Bank as Officer. He served in Habib Bank/ Agrani Bank for 34 years and held important positions. He was DGM/ Board Secretary of Agrani Bank before he joined Mutual Trust Bank in September 1999 as Sr. Vice President & Company Secretary.
MANAGEMENT STRUCTURE OF MTBL

MANAGING DIRECTOR DEPUTY MANAGING DIRECTOR SENIOR EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT SENIOR VICE PRESIDENT VICE PRESIDENT SENIOR ASSISTANT VICE PRESIDENT ASSISTANT VICE PRESIDENT OFFICER SENIOR PRINCIPAL PRINCIPAL OFFICER SENIOR EXECUTIVE OFFICER SENIOR OFFICER OFFICER JUNIOR OFFICER ASSISTANT OFFICER
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BRANCH NETWORK OF MTBL

Principal Branch 7-8, Motijheel C/A, Dhaka. Tel : 711 3237-8, 7110930-1 Dilkusha Branch 68 Dilkusha C/A, Dhaka 1000 Tel : 7171 301- 2 , 7170137 Panthapath Branch 69/1 Panthapath, Dhaka. Tel : 861 3807, 8629887 Babu Bazar Branch Aman Court, 15, Babu Bazar, Dhaka. Tel :731 4821 Progati Sarani Branch 15/5, Progati Sarani, Dhaka Tel : 881 8804, 885 5863 Dhanmondi Branch Green Taj Center Tel : 815 5607, 8158334 Uttara Model Town Branch Sector 04, Uttara, Dhaka. Phone:8924379, 8951474 Pallabi Branch 14/11, Pallabi, Mirpur-12, Dhaka Tel : 901 6273 , 805 5630 Agrabad Branch 21-22, Agrabad C/A,Chaittagong Tel : 031-716 487, 813 287 Chakoria Branch Chiringa, Chakoria Tel: 0173-108693 Pabna Branch Abdul Hamid Road,Dilalpur, Pabna Tel: 0174-567109 Gulshan Branch House # 50, Road # 03 Gulshan, Dhaka Sylhet Branch Sylhet City Center Zindabazar, Sylhet Moulvi Bazar Branch 103, M. Saifur Rahman Road Moulvi Bazar. Savar Branch United Super Market Bus Stand,Savar. Tel: 7741452, 7741453 CDA Avenue Branch 565/A, CDA Avenue (GEC Point) East Nasirabad, Chittagong. Khatunganj Branch 325 Asadganj Road, Chittagong Tel : 031-61 22 54 , 840718 Mograpara Branch Mograpara, Sonargaon Tel : 06723-88105 Sreenagar Branch Sreenagar , Munshigonj Tel : 06925 88222 Aman Bazar Branch Hathazari, Chittagong Tel : 031-681022 Bashundhara City Branch Bashundhara City Shopping Mall Tel : 9124021, 9136113, 8122044 Chandra Branch Dewan Plaza Kaliakoir, Gazipur Tel : 06822-51968 Jubilee Road Branch 214 Jubilee Road Chittagon. Tel : 031-627533 Nazirhat Branch M.M. Plaza, Fatikchari,Chittagong. Tel : 0821-4483498 Fulbaria Branch Annexco Tower, Fulbaria, Dhaka. Tel: 9559842 Madaripur Branch Howlader Harun Plaza, Kotwali, Madaripur Tel: 066162483 Dholaikhal Branch Dholaikhal New Road,Dhaka. Tel: 7172602, 7172363 Raipur Branch Gazi Complex,Raipur Laxmipur Aganagar Branch Babul Tower-2 ,East Aganagar, Dhaka Phone: 7762226, 7762227 Joypurhat Branch 553 Main Road Joypurhat Sadar Joypurhat.
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CORPORATE CULTURE
This bank is one of the most disciplined Banks with a distinctive corporate culture. Here they believe in shared meaning, shared understanding and shared sense making.The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture has developed has not been imposed; it has rather been achieved through their Corporate conduct.
Corporate Information The Bank was incorporated on September 29, 1999 under the Companies Act 1994 as a public company limited by shares for carrying out all kinds of banking activities with Authorised Capital of Tk. 38,00,000,000 divided into 38,000,000 ordinary shares of Tk.100 each. The Company was also issued Certificate for Commencement of Business on the same day and was granted license on October 05, 1999 by Bangladesh Bank under the Banking Companies Act 1991 and started its banking operation on October 24, 1999. As envisaged in the Memorandum of Association and as licensed by Bangladesh Bank under the provisions of the Banking Companies Act 1991, the Company started its banking operation and entitled to carry out the following types of banking business: (i) All types of commercial banking activities including Money Market operations. (ii) Investment in Merchant Banking activities. (iii) Investment in Company activities. (iv) Financiers, Promoters, Capitalists etc. (v) Financial Intermediary Services. (vii) Any related Financial Services. The Company (Bank) operates through its Head Office at Dhaka and 31 branches. The Company/Bank carries out international business through a Global Network of
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Foreign Correspondent Banks. The Registered Office of the Bank is: 68, Dilkusha C/A, Dhaka-1000 Phone: 717 0138, 717 0139, 717 0140 Fax: 880-2-956 9762, SWIFT-MTBL BD DH ,Telex: 632173 MTB HO BJ E-mail:
mtbl@bangla.net
Capital Structure MTBL started its operation on October 24, 1999 as a private sector bank with an authorized capital of Tk. 1,000.00 million and paid up capital of Tk. 200.000 million. The authorized capital increased to Tk. 3,800.00 million in 2007. The paid up capital of the bank stood at Tk. 997.92 million as on December 31, 2007 registering an increase of Tk 47.52 million or 5% to that of previous year . Total capital of the bank on December 31, 2007 increased by Tk. 256.42 million and stood at Tk. 2,370.95 million consisting of shareholders equity(Tire-1) of tk. 1,925.53 million and Supplementary capital(Tire-11) of Tk. 445.42 million. Shareholders equity consists of paid up capital, reserve and retained earning whereas Supplementary capital includes general provision against Loan and advances and exchange equalization and revaluation gain on HTM securities. Total capital of the bank as on December 31, 2006 was Tk. 2,114.53 million. Corporate Objectives of MTBL i) ii) iii) iv) v) vi) vii) viii) To earn a remarkable income from all heart-center of free economy To build up a strong pillar of capital To make the best Bank by offering better services with competitive price To offer standard financial service to the people To discover strategies for achieving systematic growth To choose the Mutual Trust Bank Ltd. at first time in respect of offering best service To enhance asset of the shareholders To convert standard long term investment by using the Banks silent amount
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ix)
To produce congenial atmosphere, so that the client becomes interested to deal in the Mutual trust Bank Ltd.
Corporate Social Responsibility (CSR): Profits are not the bottom line to Mutual trust Bank Limited. Apart from earning profits, the bank lays emphasis on the sustainable development of itself as well as the country, the welfare of the society and the contribution to the humanity. With this end in view the bank responds to the clarion call of less privileged and handicapped people. Though the concept of CSR is nascent in our country, MTB is enlightened with the spirit of CSR. The bank has contributed to various charitable, educational and healthcare institutions across the country in the form of donation and sponsorship. The bank has formed MTB foundation to serve the humanity. The philanthropic supports were extended both from the bank and from the MRB foundation.
MTBL FINANCIAL REPORT 2007
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O P E R AT I O N O F M T B L
Mutual Trust Bank Limited, since its inception is a fully focused Bank depending on technology. The Bank has by now a network of 30 branches strategically located in different cities. All the branches are functioning in computerized environment and integrated through Wide Area Network (WAN). The branches are full-fledged units and can provide all commercial and investment-banking services raging from small and medium enterprises to big conglomerates and houses. Sectors like housing, transport, lease and hire purchase are financed to broaden the spectrum of loan portfolio. The Bank has been accorded license by the Securities and Exchange Commission (SEC) for carrying out operation as merchant banker and portfolio manager. The Bank is expected to start operation in the areas of issue management, underwriting and portfolio management. Priority sectors like agriculture and IT are also considered favorably so as to contribute in the national economy. The Bank will introduce modern system of Leasing Operation as in practice with Banks in all other countries of the world. The Lease Finance portfolio of the Bank will be the first of its kind in a Commercial Bank in Bangladesh. A warehousing system will be developed in the country through private entrepreneurs. The conventional go down system of the Banks will gradually be done away with and modern system of warehousing will be encouraged in its place for pledge of goods of the clients as in vogue in all other countries of the world. Because, Banks deal with papers not with goods. Mutual Trust Bank Ltd. will try to achieve excellence in customer services. The customer is most important for them. Their policy will be customer driven. The Bank will introduce Inland Travelers Cheque and launch Special Savings Schemes, Special Credit Scheme will also be devised for the benefit of the low-income group, especially for the self-employment of the educated youth.
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Mutual Trust Bank is primarily a corporate Bank, its loan distribution being 39% large companies, 35% medium companies and 10% small companies. In terms of lending type the focus is on in trade finance. Consumer lending is very small. Services, Products & Loans Profile OF Mutual Trust Bank Ltd Keeping pace up with the head office instruction and to fulfilling the perfect needs of the customers, the MTBL provides the following services:
Account Related Services Corporate Banking Remittance Correspondent Banking
Personal Banking Capital Market Services Foreign Trade
THE DIFFERENT BANKING SERVICES & PRODUCTS OF MTBL

Categories of Account Related Services:
Current Account FDR Account MTB Triple Saver Plan MTB Millionaire Plan
Savings Account DPS Account MTB Education Plan MTB Unique Saving Plan
STD Account MTB Double Saver Plan MTB Festival Plan
Categories of Services Under personal Banking:
Personal Loan Excel Account Credit Card
SME Loan Draft Against DPS Car Loan
ATM / VISA Card Locker and Safe custody
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Corporate Banking Products:
Letter of Credit Syndicate Loan
Guarantee
Leasing
Import & Export Finance Project Financing
Working Capital Financing

Remittance Related Services: a) Local Remittance:
PO/DD/TT Collection of PO/DD/TT Purchase/Discount of cheques-Inland Bill

b) Foreign Remittance:
Encasement of any Foreign TT Collection of clean Bill Cancellation of foreign currency draft Encasement of any Foreign currency draft
Purchase of Foreign Draft Issuance of foreign currency draft Student file opening
The MTBL Loans Portfolio Continuous Credit:
Security over
Cash Credit:
draft Share
Financials obligation
DPS
Pledged
Hypothecation
Export Credit Facility:
Packing Credit
Import Credit Facility:
Payment against document (PAD)
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Loan against trust receipt (LTR) Loan Against Imported Materials (LIM)
Industries Loan:
Long term loan

Personal Loan:
Short term loans
Car loa Hire purchase SME Financing:
HBL Lease financing
Vocational Marriage loan
Educational
MTB Digon Loan Scheme MTB Bhaggobati Loan Scheme MTB Microfinance Loan Scheme
Consortium financing:
MTB Doctors Loan Scheme MTB Life Line Loan Scheme.
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M T B L- J U B L L E E R O A D B R A N C H
ORGANOGRAM: SAVP& ManagerMr. Syed Nurul Kabir
Principal officer & Deputy Manager -
Mr. Md. Zahangir Kabir Sr. Executive officer(SEO)Mr. Ariful Hoque
Officer (4)
junior officer (2)
Assistant officer (4)
OVERALL POSITION OF PERFORMANCE AS ON DECEMBER 31, 2008 : Total Deposit Total Loan & Advances Total Fixed Assets Total Net Income Total Expenditure Total Import Total Export Remittance Profit :tk. 67,08,13,509 :tk. 72,96,60,923 :tk. 57,64,314 :tk. 10,49,82,446 :tk. 7,72,68,542 :tk. 95,89,22,895 :tk. :tk. 37,61,845 2,77,13,904 :tk. 74,53,61,827
ACTIVITIES- JUBLLEE ROAD BRANCH

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Customer Care Center

Accounts opening Remittance (Local) Cash
Cash Receipt
Cash Payment
Financial Control Department (FCD)

Daily Accounts Clearing
Foreign Exchange Department
Import & Remittance (Foreign)
Export
Loans & Advance Department
Continuous
Demand
Term Loan
Time Loan
a.CC (Hypothecation) b.Overdraft c.SOD d.Cash Collateral e.Loan Againts Trust Receipt (LTR)
PAD Inland Bill Purchase (IBP) Foreign Documentary Bill Purchase (FDBP)
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Chapter-03 GENERAL BANKING OPERATION
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GENERAL BANKING The starting point of all the banking operations is General Banking. It is an important department for all banks because it provides services to the customers day-to-day. Front Desk is the important for general banking. Customers give their deposits and meet their demand for cash by honoring cheques. The customer opens new accounts, remit funds, issues bank drafts and pay orders etc. General banking is also known as retail banking. There are various functions in this department, which are as follows: Account Opening Section/Customer Relation, Local Remittance Section, One Stop Utility Services Section, Deposit Schemes Section, Clearing Section, Collection Section, Cash Section, Accounts Section,
ACCOUNTS OPENING SECTION

Accounts opening section is an important factor for banks because customer is the main source of bank. Selection of customer is another important factor. Banks success and failure largely depends on their customers. If customer is not good then may create fraud and other problems by their account with bank and thus destroy goodwill of banks. So, bank must be conscious in selecting its customer. For this reason keep key information system.
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Major Functions: To open Account To perform Promotional Activity To Issue Check & Deposit Book To Show the statement of different accounts To provide necessary information to the clients Types of Account of: Current Account Savings Account Fixed Deposit Account STD (Short Term Deposit) SOD (Secured Overdraft) CC A/C (Cash Credit) CD A/C (Current Deposit)
Special scheme: MTB Doctors Loan Scheme
MTBL BHAGGOBATI Loan Scheme MTBL DIGOON Loan Scheme MTB Life Line Scheme MTB Microfinance Loan Scheme MTB Education Plan Scheme MTB Double Saver Plan Scheme
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MTB Monthly Saving Scheme MTB Visa Electron Card Procedure to open an Account: For opening an account, at first the prospective account holder will apply for opening an account by filling up account opening form. Account opening form consists of the name of the branch, type of account, name of the applicant(s), present address, permanent address, passport number (if any), date of birth, nationality, occupation, nominee(s), special instruction (if any), initial deposit, specimen signature(s) of the applicant(s), introducers information etc. The prospective customer should be properly introduced by the followings: 1. 2. 3. An existing customer of the bank. Officials of the bank not below the rank of Assistant Officer. A respectable person of the locality who is well known to the manager or authorized officer. Two copies of passport size photograph duly attested by the introducer. Signature of the prospective account holder in the account opening form and on the specimen signature card duly attested by the introducer. Then the concerned authority will allocate a number for the new account. The customer than deposit the initial deposit by filling up a deposit slips. Initial deposit to open a current account in is TK. 10000.00 and saving account is Tk. 5000.00.
Activities & papers necessary for opening an account: A. Joint Account:
If the account is a joint account, then the joint account holder should submit a declaration and operational instructions of the account along with their signature. The declaration is:
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Any balance to the credit of the account is and shall be owned by us as joint depositors. Any liability whatsoever incurred in respect of this account shall be joint and several.
B.
Partnership firm:
The following documents have to be submitted for preparing an account of a partnership firm: 1. (a) Partnership deed. If the partnership firm is a registered one, then one copy of registration forms. (b) If not, then a copy of certificate from the notary public.
C.
Limited Company: For the opening of an account of a limited company, following documents have to be submitted:
A copy of resolution of the company that the company decided to open an account in the Bank.
Certified true copy of the Memorandum & Articles of Association of the Company.
Certificate of Incorporation of the company for inspection and return along with a duly certified Photocopy for Banks records.
Certificate from the Registrar of Joint Stock Companies that the company is entitled to commence business (in case of Public Ltd. Co. for inspection and return) along with a duly certified Photocopy for Banks records.
Latest copy of balance sheet.
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Extract of Resolution of the Board/General Meeting of the company for opening the account and authorization for its operation duly certified by the Chairman/Managing Director of the company.
List of Directors with address (a latest certified copy of Form-XII).
D.
Club/Society:
Following documents have to be obtained in case of the account of the club or society: a) b) c) d) Up to date list of office bearers. Certified copy of Resolution for opening and operation of account. Certified copy of By-Law and Regulations/Constitution. Copy of Government Approval (if registered).
E.
Cooperative Society: Following documents have to be obtained in case of the account of Cooperative Society:
a) b) c) d)
Copy of by law duly certified by the Co-operative Officer. Up to date list of office bearers. Resolution of the Executive Committee as regard of the account. Certified copy of Certificate of Registration issued by the registrar, Cooperative societies. F. Non-Govt. College / School / Madrasha / Muktab:
Following documents have to be obtained in case of the account of non-govt. college / school / madrasha / muktab:
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a) b)
Up to date list of Governing Body/Managing Committee. Copy of Resolution of the Governing Body/Managing Committee authorizing opening and operation of the account duly certified by Gazetted Officer. G. Trustee Board: Following documents have to be obtained in case of the account of trustee board:
a)
b) c)
Prior approval of the Head Office of . Certified copy of Deed of Trust, up to date list of members of the Trustee Board and certified copy of the Resolution of Trustee Board to open and operate the account. H. Minors Account:
Following documents have to be obtained in case of the account of minor: a) b) c) Putting the word MINOR after the title of the account. Recording of the special instruction of operation of the account. The AOF is to be filled in and signed by either the parents or the legal guardian appointed by the court of law and not by the minor.
L O C A L R E M I T TA N C E S E C T I O N
Functions of remittance Section: a) b) c) d) Telegraphic Transfer, Demand Draft issue, Saving Certificate Issue (Sanchaypatra issue), Pay order.
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Telegraphic Transfer: It is an order from the issuing branch to the drawee bank / branch for payment of a certain sum of money to the beneficiary. The payment instruction is sent by telex and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no account is maintained with the drawee branch. Procedure of issuing TT: Following procedures are followed while issuing of TT: a) The applicant fills up the relevant parts of the prescribed application form in triplicate, duly signed the same and gives it to the GB. b) GB will fill up the commission part for banks use and request the applicant to deposit necessary cash or cheque at the cash booth. c) The first copy of the application form will be treated as Debit Ticket while the second copy will be treated as Credit Ticket. The third copy will be handed over to the applicant as customers copy. d) GB will prepare telex in appropriate form, sign it and send it to the telex operator for transmission of the message. e) GB will prepare necessary advice. Debit advice is sent to the client if clients account is debited for the amount of T.T. f) g) T.T. Confirmation Advice is sent to the drawee branch. Credit Ticket (second copy of the application form) is used to credit the MTBL General Account.
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Accounting Treatment: For telegraphic transfer, MTBL gives the following entries--Clients Account MTBL General Account Telex Account Commission Account Payment of T.T. On receipt of T.T. the drawee branch passes payment instructions the following entries if the T.T. is found to be correct on verification of the Test number a. b. MTBL General Account DAD Account TT Payable DAD Account TT Payable Clients Account/Pay Order Dr. Cr. Dr. Cr. Dr. Cr. Cr. Cr.
In case the beneficiary does not maintain any account with the drawee branch a pay order will be issued in favor of the payee and sent to his banker / local address as the case may be. Every branch maintains a prescribed T.T. Payable Register. All the particulars off T.T. are to be properly recorded in this register duly authenticated. A separate Type of T.T. confirmation advice is sent to the drawee branch on the same day. On receipt of T.T. confirmation advice, the particulars of T.T. are verified with reference to particulars already recorded in the T.T. payable register.
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Demand Draft (DD) Issue: Sometimes customers use demand draft for the transfer of money from one place to another. For getting a demand draft, customer has to fill up an application form. The form contains date, name and address of the applicant, signature of the applicant, cheque number (if cheque is given for issuing the DD), draft number, name of the payee, name of the branch on which the DD will be drawn and the amount of the DD. The form will be duly signed by the applicant and by the authorized officer. MTBL charges 15% commission on the face value of DD as service charge. Process of issuing Local Draft: Following procedures are followed while issuing local draft a) b) c) d) Get the application form properly filled up and signed by the applicant. Complete the lower portion of the form for the banks use. Calculate the total amount including the banks commission. If the cheque is presented for of the local draft, the officer should get the cheque duly passed for payment by the authorized person and record the particulars of local draft on the back of the cheque. e) If the client wants to debit his account for the payment of the draft amount, the officer should get the account holders signature verified properly, from signature card on record of the branch and debit clients account for the total amount including commission. f) The first copy of the application form will be treated as Debit Ticket while the second copy will be treated as Credit Ticket and kept by the GB. The third copy is handed over to the applicant as customers copy. The GB Department maintains a prescribed L.D. Issue Register. All the required particulars of LDs issued by MTBL should be entered in that register duly authenticated. Issue of Duplicate Draft:
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Before issuing duplicate L.D. the branch should observe the followings a) Verify the purchasers signature on the request letter from the signature appearing on the original application form. b) Immediately issue a stop payment instruction to the drawee branch under advice of head office and obtain confirmation of non-payment the L.D. in acquisition. c) After the drawee branch has acknowledged the stop payment order and confirmed that the local draft in acquisition remains unpaid at their end, the issuing branch should obtain an Indemnity Bond on stamp paper as per prescribed format from the purchaser duly signed by him. The branch will thereafter write to head office for their approval to issue a duplicate draft. d) The head office on receipt of the request from the issuing branch will immediately issue a caution circular to all the branches regarding the lost of the local draft asking them to record stop payment. e) The head office will thereafter issue clearance to the issuing branch for issuing for issuing a duplicate draft in lieu of original reported lost. f) On receipt of the clearance from head office, the issuing branch will issue a completely fresh draft marking clearly the words duplicate issued in lieu of original draft no. dated .in bold letters on the top of the front page of the draft. The printed serial number on the draft should not however be struck off. Intimation should be given to the drawee branch furnishing full particulars of the duplicate draft. g) The particulars of the duplicate draft must resemble those of the original draft in all respects, i.e., all the particulars to the duplicate draft must be identical with those in the original draft. No further IBCA is to be issued for the duplicate draft. h) Prescribed duplicate issuance charge is to be recovered for issuing the duplicate draft and credited to Income Account. Cancellation of Local Draft:
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The followings are followed while canceling a L.D. a) The purchaser should submit a written request for cancellation of the L.D. attaching therewith the original L.D. b) The signature of the purchaser will have to be verified from the original application form. c) draft. d) Cancellation charge is to be recovered from the applicant and only the amount of the draft less cancellation charge should be refunded. Commission charge, posted charge etc. recovered for issuing the L.D. should not be refunded. e) f) The original entries are to be reversed giving proper narration. An IBDA for the cancelled L.D. should be issued on the drawee branch. Cancellation of L.D. should also be recorded in the L.D. Issue Register. Payment of L.D.: While payment of L.D. MTBL performs the following functions a. On receipt of Credit Advice (IBCA) from the issuing branch the following entries are to be passed MTBL General Account DAD Account b. 1) 2) Dr. Cr. Managers prior permission is to be obtained before refunding the amount of
When L.D. is presented for payment at the paying branch, its details are to be carefully examined with reference to the following points Whether the draft is drawn on the Local office. Whether the draft is crossed or not. Amount of crossed draft is not paid in cash to the payee but to be paid to his account with a bank.
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3)
Draft must have to be signed by two authorized officers of the issuing branch. Their signatures are to be verified from the specimen signature book for being sure that draft that the draft is genuine. The verifier should put his initial.
4) 5) 6) 7) 8)
Endorsement on the back of the draft must be regular in case the draft is presented through clearing. The amount of the draft should not exceed the amount written in red ink at the top of the draft. The payee is to be properly identified in case of cash payment. The particulars of the draft i.e. the draft number, date, amount and the name of the payee should be verified from the L.D. Payable Register. In case of payment, the draft should be cancelled with red ink. The date of payment should be recorded in the L.D. Payable Register.
Accounting Treatment: While payment: DAD L.D. Payable Account Clients Account An IBCA should be sent with this. Stop payment of Local Draft: The payee or purchaser of the draft cannot give stop payment instruction to the drawee branch. If the paying branch receives a request from the purchaser of the draft for stopping payment of the draft, it will ask the purchaser to approach the issuing branch about the purpose. The paying branch should however exercise necessary precaution in this regard. Only the issuing branch can issue instruction for stop payment of the draft under special circumstances. Saving Certificates: MTBL Jubllee Road branch sales shanchaya patra as its ancillary services rendered to customers on behalf of govt. Through Bangladesh bank. Jatio Shanchay Bureau guided by Bangladesh bank issues Shanchaya patra. Dr. Cr.
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Shanchaya Patra: Shanchaya patra is received from Bangladesh bank (BB). People purchasing these bonds by depositing money in this branch and payment are made on maturity to customers from this branch only. Every transaction is reported to Bangladesh bank. In case of issuance, report to be reached to BB within 48 hours, otherwise penalty is imposed. Money is realized from BB after making payment to customer. Pay Order: For issuing a pay order, the client is to submit an application to GB in the prescribed form. This form should be properly filled up and signed. The procedure of the issuing pay order is similar to that of the Local Draft. For issuing pay order MTBL charges commission on the following rate # For Tk. 1 to 100000, the commission is Tk.25. # For Tk. 100000 to 500000, the commission s Tk. 60. # For Tk 500000 to above, the commission is TK. 75. Payment of Pay Order: The pay order is presented to the bank either through clearance or for credit to the clients account. While payment, relative entry is given in the pay order register with the date of payment. Cancellation of Pay Order: The following procedure should be followed for the cancellation of the pay order: i) ii) iii) iv) The client should submit a written request for canceling the pay order attaching therewith the original pay order. The signature of the purchaser will have to be verified from the original application form. Managers prior permission is to be obtained before refunding the amount of the pay order. Cancellation charge is to be recovered from the applicant and only the amount of the pay order less cancellation charge should be refunded. Commission recorded for issuing of the original pay order should not be refunded.
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v) vi) vii)
Then the officer should write, Cancelled on the pay order. The original entries should be reversed with narration. Cancellation of the pay order should also be recorded in the register.
Accounting Treatment: While issuing pay order, MTBL gives the following entries --Clients Account Pay Order Commission Dr. Cr. Cr.
CLEARING SECTION
According to the Article 37(2) of Bangladesh Bank Order, 1972,the banks, which are the member of clearinghouse, are called as Scheduled Banks. The scheduled banks clear the check drawn upon one another through the clearinghouse. This is an arrangement by the central bank where everyday the representative of the member banks gathers to clear the chouse. Banks for credit of the proceeds to the customers accounts accept check and other similar instruments. The bank receives many such instruments during the day from account holders. Many of these instruments are drawn payable at other banks. If they were to be presented at the drawee banks to collect the proceeds, it would be necessary to employ many messengers for the purpose. Similarly, there would be many check drawn on this the messengers of other banks would present bank and them at the counter. The whole process of collection and payment would involve considerable labor, delay, risk and expenditure. Clearing: As far as safety is concerned customers get crossed cheque for the transaction. As we know crossed cheque cannot be encased from the counter, rather it has to be collected through banking channel i.e. clearing. For example, a client of Mutual Trust Bank received a cheque of another bank, which is located within the clearing range; deposit the cheque in his account at Mutual Trust Bank. Now Mutual Trust Bank will credit his account and collect it. Though the amount is credited in the customers account but he will not get the money until the cheque is honored.
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Types Of Clearing: 1. O u t w a r d C l e a r i n g : Outward clearing means when a particular branch receives instrument drawn on the other bank within the clearing zone and those instruments for collection through the clearing arrangement is considered as outward clearing for that particular branch. 2. Inward Clearing: When a particular branch receives instruments, which on them and sent by other member bank for collections are treated as inward clearing. Clearing house Clearing House is a place in the Central Bank where different banks come to settle their interrelated liabilities. Clearing House System The mechanism of working at a Clearing House in general is as follows: Every Bank of the locality, which is a member of the clearinghouse, prepares a Bank-wish list of cheques after receive from customers and drawn on different Banks of the locality. An officer, in charge of clearinghouse, goes to the clearinghouse in the morning with the cheques and their list. He delivers the cheques to the officials of the respective banks. Similarly, he also receives the cheques drawn on his Bank from the officials of the other banks. The official of each bank computerizes the final balance, payable or receivable by his Bank after taking into account the various amount of receipt and payment. The official return of their respective Bank to meet again in the afternoon to return any dishonored instruments to the officials of the respective Banks. The final settlement is effective by the supervisor of the clearinghouse by debiting or crediting, as the case may be, the accounts of the respective Banks as maintained with the clearinghouse.
Activities of the Section:
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(a) (b)
Preparation of Clearing Outward and Inward Lodgment and record maintenance of the same. Batch posting as and when required.
On receipt of instruments, the same is endorsed here. Then clearing section will sent IBDA to head Office for clearing purpose and on receipt of IBCA from Head Office amount is credited to customers account and vice versa. If the instrument is return then the same is given back to the customer. Accounting Entries: For inward instruments: Customer A/C ----------------------------------Debit MTBL General A/C ---------------------------Credit Incase of return: MTBL General A/C ------------------------Debit Customers A/C -----------------------------Credit For Outward instruments: MTBL General A/C -------------------------Debit Customers A/C -------------------------------Credit. In case of return: Customer A/C --------------------------------Debit MTBL General A/C---------------------------Credit. Outward Bills for Collection (OBC): Customers deposit cheque, drafts etc. for collection, attaching their deposit slip. Instruments within the range of clearing are collected through local clearinghouse. But the other, which is outside the clearing range, is collected through OBC. A customer of Mutual Trust Bank, Jubllee Road Branch, is depositing a cheque of Sonali Bank, Dhanmondi Branch. As a collecting bank Mutual Trust Bank Jubllee Road Branch sends IBCA along with cheque to Mutual Trust Bank, Principal Branch. Mutual Trust Bank, Main Branch will collect it by Jaamuna Bank, Dhanmondi Branch, the agent. They will forward the bill to that particular (Dhanmondi) branch. OBC number given the on the forwarding letter.
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Inward Bills For Collection (IBC): In this case bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill. Next steps are: Entry in the IBC register, an IBC number given. The instrument is sent to clearing for collection. An IBC is dispatched in this regard. If dishonored > in this case the instrument is returned to the collecting branch along with return Memo indicating the cause of dishonored.
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ACCOUNTS DEPARTMENT
Introduction: Accounts division is the center of a bank. As all transactions carried by a bank is being legalized as far as accounting is concerned. If transactions were not recorded properly there would be dis-equilibrium in state of the bank. There can be imbalance in the cashbook thus the whole mechanism will collapse. The regular tasks of department are: To record all transactions in the cashbook. To prepare daily fund position, weekly position, periodic statement of affairs. Prepare necessary statements for reporting purpose. To pay all expenditures on behalf of the branch. Make salary statements and pay salary. Branch to branch fund remittance and supporting accounting treatment. Prepare statements for customer. Publishing basic data of the branch etc. General practices of an Accounts Department: Scrutinizing Vouchers: At the day end all vouchers are sent to the accounts department by the respective department from where vouchers are originated. On the next day an `activity report is received from computer department. The activity report is the detail statement of all the transactions carried by the branch of a particular date. It is the summary of all account position. It also displays cash, clearing, transfer position, individual deposit account position etc.
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Provisioning: Accounts department make provision for different deposit accounts. Provisioning means keeping the record of expense, which has occurred by non-cash way. This department also made depreciation of assets that is one kind of non-cash expense.
CASH SECTION
There are various systems maintain by cash officer that is under: Vault Cash Payment Cash Receive Transaction after banking hour. The cash department is the riskiest department of the bank. This is the section where tight security is required to avoid any accidents. There is a limit to be amount of cash that each counter can carry; carrying of excess cash is avoided for safety reasons. Cash Receipt: When clients deposit cash in the bank, the bank officer on receipt of the cash and the pay in slip/credit voucher shall: Check and count the received cash. Make sure that the amount in word and number in the deposit slip are same. Check the account title and the number. Both the deposit slip is in order. Depositors signature is in the slip. Receive seal in the slip is a must. Write the domination of the currency at the back of the pay in slip or the credit voucher and affix stamp in the slip/voucher. Enter particulars of in slip/credit voucher in the receiving cash officer book.
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At least, send the pay in slip/voucher to the deposit department or to the respective department. The respective officer must sign deposit slip. Carbon copy of the deposit slip must be handover to the client with proper seal and signature. Cash Payment : Cheques, demand drafts, pay orders, pay slips and debit cash vouchers etc. are received from various departments for payment of cash to customers/payees.Prior payment of cash it is the officers duty to make sure that the cheque/or the instrument has been genuinely passed. The following common precaution is thoroughly practiced before honoring a cheque: Check of it is an open or crossed check. The branch name in the cheque. The date in the cheque is very crucial. Cheques are normally valid six months and pre-dated cheques are asked to present after the date given. Tk in words and figure of the cheque is same. Balance in the account is available. The apparent tenor of the cheque. Whether any figure, date or anything has been altered in the cheque presented. If any, then the respective officer must check wheteher the client is making his signature for alteration or not. The specimen card signature and signature in the cheque should match. Signature of recipient is obtained on the reverse of cheque. In case, where a prior arrangement has been made with the bank, a client may overdraw against a cheque.
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Books maintained by cash department : Vault Register: This book where amount of cash available in the branch is maintained. That is, the amount in the vault register book. Cash Receive Register: This register keeps record of all incoming cash. Cash Payment Register: Similar to the cash register book, this book keeps tracks of all outgoing cash that is all payments. Daily Cash Balance Register: This is the book where cash balance is recorded by counting the notes and coins that are physically available. The balance in this book is compare with the vault register, which should be the same. In case there is an error, then the figures would not match but if no discrepancy is found then anything is to be worried about. Mail Receive and Dispatch Section: Banking is the business of correspondence. Lot of mail comes to the bank and dispatch from the branch daily. Lot of mail document causes much loss for bank. That is why bank has to record all Mail received and dispatched through the bank. Mail receiving: All mail comes to the bank recorded in this desk. For this reason a register book maintained called inward mail register. A number is given on receiving mail and records particulars of document in the register book. Mail Dispatching: Before dispatching mail from the bank must record in outward mail register. A number is given on the mail. Destinations, date of dispatch are recorded in that register
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Chapter-04
SERVICE OFFERED BY CREDIT DEPARTMENT
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CREDIT MANAGEMENT
Credit management is the part of bank management which decides what type of lending product will be offered, to whom it will be offered, how much it will be offered and analyze and measure the credit risk on loans and manage all the activities regarding the loans. The aim of the credit management is to have a secured loan portfolio so that the bank can earn profit by keeping the depositors savings secured. The entire job regarding that consist the credit management.
LOAN
Loan means lending a fixed amount of money to borrower for a certain period time. The borrower must repay the loan within the given time period. In Loan, the disbursement will take place only for one time. The borrower can repay the loan all at a time or by installment.
ADVANCE
Advance is a little bit different than Loan. In Advance, the borrower is allowed credit limit for a given period of time. In that given period, the borrower can withdraw money, as many times as he want but he cannot exceed the credit limit. Again he can repay several times whenever he wants. In Advance, disbursement and repayment occurs several times. But at the end of the period, whole credit amount must be repaid to the banks. This type of credit is allowed to business for their working capital requirement.
PAPERS/DOCUMENTS REQUIRED FOR LOAN & ADVANCES

Original Title Deeds R.S.Khatian/ P.S.Khatian / B.S.Khatian R.S., P.S., &B.S.Sheet or Information Slip regarding corresponding plots B.S. Mutation Khatian, DCR & CC Of Order Sheet of Mutation case Vendor Deeds (Bia Deed) Up-to- date rent receipt Up to Non Encumbrance certificate
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Municipal Holding Tax Receipt CDA approved plan Mortgage permission No objection certificate From Third party All original deeds & documents Trade license TIN Certificate VAT certificate IRC/ERC L/C Performance for last 01 year Liability With other bank (sanction letter) Nationality Certificate Two copies passport size photographs Clients Letter Pad Account statement of recent year with cash flow & Income statement Bank statement of the existing Banks Stock report
E X I S T I N G C R E D I T P O L I C Y O F M T B L LT D
Mutual Trust Bank Ltd. is a new bank. It is committed to provide high quality financial services/products to contribute to the growth of GDP of the country through stimulating trade and commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, poverty alleviation, raising standard of living of limited income group and overall sustainable socio-economic development of the country. In achieving the aforesaid objectives of the bank, Credit Operation bank is of paramount importance as the greatest share of total revenue of the bank is generated from it, maximum risk is centered in it and even the very existence of the bank depends on prudent management of its credit port-folio and is less often the result shrinkage in the value of other assets. As such, credit portfolio not only
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features dominant in the assets structure of the bank, it is critically important to the success of the bank also. To provide a broad guide line for the Credit operation towards achieving the objectives of the bank, for efficient and profitable deployment of its mobilized resources and to administer the Credit portfolio in the most efficient way, a clearly defined, well planed, comprehensive and appropriate Credit Policy and control guidelines of the bank is a pre-requisite. The administration of the loan process covers all laws and regulations at both local and global levels including Bank Policy as set out in this documents and The Bank's Credit manual / circulars. Proper analysis of credit proposal is complex and requires a high level of numerical as well as analytical ability. To ensure effective understanding of the concepts and thus to make the overall credit portfolio of the bank healthy, proper staffing of the credit departments done through placement of qualified officials who have got the right aptitude, formal training in finance, credit risk analysis, bank credit procedures as well as required experience. Where repayment and interest servicing performance of a credit deteriorates in it is identified at an early state and closely monitored in order to avoid loan losses. Types of Credit Facilities: Mutual Trust Bank Ltd. ltd provides the following types of credit facilities to the individuals, partnership firms, companies, corporations and other: Term Loan Temporary Over draft Overdraft against securities Loan Against Packing Credit Cash credit Payment Against Documents Loan Against Trust receipt Foreign Bills Purchased (clean) Foreign Bills Purchased (Documentary)
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Local bill Purchased (clean) Local Bills Purchased (Documentary) Foreign Bills Discounted Local Bills Discounted Other Banks Acceptance Purchased Demand loans Staff loans
CREDIT FACILITIES PROVIDED BY THE MTBL.
FUNDED CREDIT FACILITY
NON-FUNDED CREDIT FACILITY
Over Draft (OD)
Cash Credit (CC)
Term Loan
Letter of Credit (L/C)
Letter of Guarantee
SOD(P) SOD(H)
CC CC Pledge Hypothecation
Figure: credit facilities of MTBL.
SME & CONSUMER FINANCING OF MTBL

MTB has formulated and launched a number of products under Small Enterprise Financing & Consumer Financing program in accordance with the prudential Regulation/Guidelines of Bangladesh Bank. The products are Small business Loan, Consumer Loan, Home Loan, Home Repair & Renovation and Auto Loan. These products are now dealt with SME Division of the bank as SME loan products.
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SME & Consumer Financing: a. MTB Doctors Loan Scheme b. MTB Bhaggobati Loan Scheme c. MTB Digon Loan Scheme d. MTB Life Line Loan Scheme e. MTB Microfinance Loan Scheme (a) MTB Doctors Loan Scheme: Now to diversify the banks product as well as make profitability, the bank may introduce new product for lending in the potential sectors of the consumer market. Doctors Loan is now a demanding and lucrative product. Most of the private commercial banks such as Prime Bank Limited, Eastern Bank Limited, BRAC Bank Limited, Trust Bank Limited etc have product for financing the doctors. (b).MTBL BHAGGOBATI Loan Scheme: Women are no more belong for household activities only. Rather their movement started shifting toward ruling nation, leading corporate office, developing as business think tank. In all over the world for the last decade women has proved their capacity and entrepreneurship skill in their respective arena. The state and Bangladesh Bank feel to give a comfortable ground for the development of the women in the business entity and are encouraging and inviting the financial facilitators to extend their hands. There are thousands women specially in handcrafts, boutique, agro based industry, beauty parlor, readymade garments, creative works, interior design, entertainment market etc keeping their superb contribution and emerging gradually. It is the right time for us to develop a product for the development of women entrepreneur, which will have long-term impact on the growth of our economy.
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(c) MTBL DIGOON Loan Scheme: There are around 120,000 bankable small and medium enterprises (SMEs) in Bangladesh according to market survey. Based on the estimate, there is a total funding requirements of BDT 200 Billion. A lot of banks are financing for their working capital, fixed asset purchase and other business purpose through complicated or less friendly credit analysis methods by taking land and / or building as primary collateral. MTBL, as specified in its Small & medium Enterprise Financing Policy, would like to offer simply structured, process based, yet risk mitigating banking product to the SMEs. MTB DIGOON has been designed based on the above objectives to achieve (d)MTB Life Line Scheme: MTB Life Line is an any purpose unsecured and terminating loan facility (EMI based) for any legitimate purpose. Bank would finance against gross monthly income of the any credit worthy individual. To meet life style needs of the credit worthy individuals and to capitalize the vast market gap, this loan is a suitable unsecured consumer loan product. (e)MTB Microfinance Loan Scheme: Micro finance loan is now a demanding and lucrative product. Most of the Nationalized Commercial Banks (NCBs), Private commercial Banks (PCBs) and also the Foreign Commercial Banks (FCBs) are lending the micro finance institutions (MFIs) as wholesale credit under specific product program. The product as proposed for microfinance lending under Microfinance Scheme may be dealt with SME Division as specialized product.
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FUNCTIONS OF CREDIT DEPARTMENT

The responsibilities/ functions perform by the credit department for processing and servicing of all types of advances as well as maintaining the records are as follows: The Branch Managers is the first line-lending officers and are responsible for Know their borrower fully Comply with the applicable instructions, manual, circulars and other rules of the bank as well as those of Bangladesh Bank including Banking companies Act 1991 (as mentioned from time to time). Take interview of the prospective borrower. Receive the credit information assembled and placed in the Customer's Credit file. Process and sanction credits to the customers. Disburse credit facilities to borrowers in accordance with established procedures. Record the credit facilities. Prepare vouchers pertaining to credit facilities disbursed and maintain records of relevant entries. Control the securities and proper customer of documents. Follow up the recovery of credit as per due date. Review and analyze the following in connection with credit risk proposals covering any obligor. History of antecedent of the obligor and its management personnel. Financial condition of the obligor evidenced by comparative statements like
exercising their authority with due diligence and discipline. They must also:
Balance Sheet, Income Statement, operation results - and supplementary facts as well as by personal Net Worth Statement of the proprietor, parents and directors. Bank and Credit Information Bureau (CIB) checking and trade standing through investigation.
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C R E D I T I N F O R M AT I O N B U R E A U ( C I B ) R E P O RT
Credit information bureau is a department of Bangladesh Bank, which provide report on the prospective client of loan. If the applicant is defaulter at any Bank than Bangladesh Bank restrict that particular client. Therefore, CIB Report plays an important function in giving loan and advances.
The following flow chart shows the process of getting CIB Report.
INQUIRY FORM
HEAD OFFICE
CIB REPORT
REPORT
BANGLADESH BANK
Figure: Process of getting CIB Report CIB Report is required in the following three fields: New loan Renewal Enhance
Five Inquiry Forms have to produce by the bank to get CIB Report. These are: SEGMENT 1: Information of individual/organization/institution SEGMENT 2: owner information SEGMENT 3: Information of allied concern SEGMENT 4: Outstanding information SEGMENT 5: Guarantor information
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Chapter -05 FOREIGN EXCHANGE DEPARTMENT
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FOREIGN EXCHANGE
Foreign Exchange Department is international department of Bank. It deals globally. It facilitates international trade through its various modes of services. It bridges between importers and exporters. If the branch is authorized dealer exchange market, it can remit foreign exchange form local country to foreign country. This department mainly deals in foreign currency. This is why this department is called foreign exchange department. Some national and international laws regulate function of this department. Among these Foreign Exchange Act, 1947 is for dealing in foreign exchange business, and Import and Export Control Act, 1950 is for Documentary Credits (UCPDC-1993 revision & International Chamber of Commerce Publication no-500) is also an international trade. Governments Import & Export policy is another important factors for import and export operation for banks.
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Foreign Exchange Mechanism
BUYER/ IMPORTER
INDENTOR Sales/ purchase Contract Advises or confirms L/C Forwards Documents Makes payment
SELLER/ EXPORTER/ BENEFICIARY
Application for opening L/C
Present documents
Issuing L/C
ADVISING BANK CONFIRMING BANK NEGOTIATING BANK ISSUING BANK L/C OPENNING BANK
PAYING / REIMBURSING BANK
Pay or Reimburses
Makes Payment
Makes Payment against documents
Submits documents
Instructs to pay or reimburse
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Functions of This Department

Foreign Exchange
Imports
Exports
Opening of L/C
Payment against Document (PAD)
Export L/C Advising
Pre-Shipment Finance
Loan against Trust Receipt
Loan against Imported Merchandise (LIM)
Post-Shipment Finance
Foreign Bills for Collection (FBC)
Inward Bills (For Collection)
Guarantees Inland & Foreign
Export Certificates
Realization
Dealing Section
Remittance
Quoting Rates of Exchange

Reconciliation (Foreign Bank A/c)
Forward Cover (Booking of Contract)
Inward Remittance
Out ward Remittance FDD, MT, TT
Guidance on rates trends to customer Travel Returns
Issue & Sales of Foreign currencies & TC
Purchase or encashment foreign currencies & TC
Rectums to Bangladesh Bank
Other Rectums HO (IBD)
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I M P O R T O P E R AT I O N
Import section helps business and other people to import goods. In international environment, buyers and sellers are often unknown to each other. So seller always seek guarantee for the payment for his goods exported. Here is the role of bank. Bank gives export guarantee that it will pay for the goods on behalf of the buyer. This guarantee is called Letter of Credit. Thus the contract between importer and exporter is given a legal shape by the banker by its Letter of Credit. When a buyer goes to import some goods from a foreign buyer, he requests his bank make payments to the exporter of goods. And the bank recovers the amount from the importer. Steps for Import L/C Operation- (6 Steps Operation): Step 1-Registration with CCI&E 1. For engaging in international trade, every trader must be first registered with the Chief Controller of Import and Export. 2. By paying specified registration fees to the CCI&E. the trader will get IRC/ERC (Import/Export Registration Certificate), to open L/C with bank, this IRC is must. Step 2-Determination terms of credit 1. The terms of the letter of credit are depending upon the contract between the importer and exporter. The terms of the credit specify the amount of credit, name and address of the beneficiary and opener, tenor of the bill of exchange, period and mode of shipment and of destination, nature of credit, expiry date, name and number of sets of shipping documents etc.
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Step 3-Application by importer to the banker to open letter of credit 1. For opening L/C, the importer is required to fill up a prescribed application form provided by the banker along with the following documents 1. Pro-forma invoice 2. Demand Promissory Note 3. Authority to debit account 4. Tax Information Certificate 5. Filled up amendment request from 6. IMP form 7. Insurance cover note, etc. 8. Filled up LCA form Step 4- Opening of L/C by the bank for the opener 1. Taking filled up application form the importer 2. Collects credit report of exporter from exporters country through his foreign correspondence there. 3. Opening bank then issues credit by air mail or cable followed by credit advice as asked for by the opener through his foreign correspondent or branch as the cash may be, at the place of beneficiary. The advising bank advises the credit to the beneficiary on his own form where it is addressed to him or merely hands on the original credit to the beneficiary if it is so addressed. Step 5-Shiment of goods and submission of documents by exporter 1. Then exporter ships the goods to the destination of the importer country 2. Sends the documents to the L/C opening bank through his negotiating bank. Generally the following documents are sent to the Opening Banker with L/C: 1. Bill of Exchange 2. Bill of Lading 3. Commercial Invoice 4. Certification of Origin 5. A certificate stating that each packet contains the description of goods over the packet.
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6. Packing List 7. Advice Details of Shipment 8. Pre-shipment Inspection Certificate 9. Vessel Particular Step 6-Lodgment of Documents by the opening Bank from the
negotiating bank 1. After receiver the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening banker call importer retiring the document. At this time many thing can happen. These are indicated in the following: Discrepancy found but the importer accepts-no problem occurs in lodgment. Discrepancy found and importer not agreed to accept- in this case, importer protest and send back all the documents to the exporter and request his to make in the specified manner. Here banker is not bound to pay because the documents send by exporter is not in accordance with the terms of L/C. Documents are OK but importer is willing to retire the documents-In this cash bank is obligated to pay the price of exported goods. Since importer did not pay bill of exchange, this payment b bank is one kind of credit to the importer and this credit in banking is known as FORCED PAD. Everything is O.K. but importer fails to clear goods from the port and request bank to clear in this cash banks clear the goods and takes delivery of the same by paying customs duty and sales tax etc. So, this expenditure is debited to the importers account and in banking it is called LIM.
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E X P O R T O P E R AT I O N
Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen countries. Garments sector is the largest sector that exports the lion share of the countrys export. Bangladesh exports most of its readymade garment products to U.S.A and European community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through MTBL are readymade garment exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers. Export L/C operation is just reverse of the import L/C operation. For exporting goods by the local exporter, bank may act as advising banks and collecting bank (negotiable bank) for the exporter. A. As an advising Bank It receives documents from the foreign importer and hands it over to the exporter. Sometimes it adds confirmation on the L/C on request from the Opening Bank. By adding confirmation, it assumes the responsibility to make payment to the exporter. B. As Negotiating Bank It negotiates the bills and other shipping documents in favor of the exporter. That is it collects the proceeds of the export-bill from the drawer and credits the exporters account for the same. Collection proceed from the export bill is deposited in the banks NOSTRO account in the importers country. Sometimes the bank purchases the bills at discount and waits till maturity of the bill. When the bill matures, natures, bank presents it to the drawee to encash it.
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Chapter -06 COMPARATIVE ANALYSIS
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COMPARATIVE ANALYSIS AMONG FIVE 3 RD GENERATION BANK

I compare the competitive position of MTBL with other five modern Banks on the basis of following financial terms by Taking 2006 as base year & 2007 as current year on the basis of growth rate: Deposits million Taka
Name Year 2003 2004 2005 2006 2007
In B. ASIA
10431.38 13470.98 18500.07 25289.36 30004.09
ONE B.
8847 10915 18030 20253 24484
D.B.B.L.
17133.81 21067.56 27241.11 40111.54 42110.15
J.B.L
6614.06 10450.16 14454.13 17284.811 20924.02
TRUST B.
4483.26 9314.95 12704.90 18985.95 27101.59
M.T.B.L
7163.67 13164.13 16098.54 22264.05 24776.92
Investments: Million Taka

Name Year 2003 2004 2005 2006 2007 2496.69 3240.51 2256.28 3345.33 4211.35
In ONE B.
688 1229 2165 3321 3587 3880.03 4372.14 4992.13 5876.52 5909.32 935.48 1163.70 2037.84 2552.67 5390.032 1896.92 3220.78 2447.95 3122.81 3785.45 996.06 1676.21 2495.98 2821.62 3956.53
B. ASIA
D.B.B.L.
J.B.L
TRUST B.
M.T.B.L
Loans & Advances: Million Taka

Name Year 2003 2004 2005 2006 2007
In ONE B.
6051 9613 13851 15681 19709
B. ASIA
8189.82 11861.19 17869.84 22255.64 28456.94
D.B.B.L.
11431.32 15927.23 22592.27 30456.32 29403.12
J.B.L
3239.52 6722.80 11011.83 12796.63 16617.45
TRUST B.
4358.31 6804.45 9738.32 13188.09 18682.16
M.T.B.L
5904.18 11692.97 14373.26 18591.52 22683.23
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ROI: Million Taka

Name Year 2003 2004 2005 2006 2007
In B. ASIA
5.19 6.26 9.15 7.45 11.09
ONE B.
13.22 15.86 13.94 12.86 13.05
D.B.B.L.
8.84 6.22 5.87 7.30 5.33
J.B.L
3.69 4.68 2.93 10.02 10.68
TRUST B.
3.59 5.46 4.95 8.43 8.80
M.T.B.L
11.29 14.74 13.80 8.50 6.31
EPS: Million Taka

Name Year 2003 2004 2005 2006 2007
In B. ASIA
18.53 11.82 10.04 11.03
ONE B.
23.44 24.10 37.46 39.06 38.97
D.B.B.L.
103.97 116.93 181.97 170.18 237.37
J.B.L
14.25 36.35 46.58 31.94 8.04
TRUST B.
19.47 35.20 24.26 52.63 28.28
M.T.B.L
43.37 34.33 35.37 47.93 21.12
NET PROFIT: Million Taka

Name Year 2003 2004 2005 2006 2007
In ONE B.
91 195 302 347 405
B. ASIA
215.85 293.74 383.51 475.75 669.77
D.B.B.L.
210.15 236.35 367.82 362.18 479.81
J.B.L
61.14 155.95 199.82 253.40 89.11
TRUST B.
68.14 175.98 121.29 263.16 239.03
M.T.B.L
190.34 247.19 336.17 478.28 210.80
Profit Position of Different banks as on 30-06-2008

Position 12 14 21 22 23 25 Name of the Banks YTD June-08 1100.00 900.00 670.00 550.00 460.00 400.00 Profit YTD June- 07 680.0 700.0 350.0 460.0 280.0 448.0 Growth 61.76% 28.57% 91.43% 19.57% 64.29% -10.71%
DBBL B. ASIA JBL MTBL TBL ONE B.
S W O T A N A LY S I S
65
From The SWOT analysis we can figure out the ongoing scenario of MTBL. That is by doing THE SWOT analysis it is possible to find out the strengths, weaknesses, opportunities, and threats of MTBL so to have a better view of the present business practices of MTBL, I did the SWOT analysis.
SWOT ANALYSIS
Internal Factor
External Factor
Strength
Weakness
Opportunity
Threats
In SWOT analysis two factors act as: Internal factors, which are prevailing inside the concern, which include strength & weakness. External factors which act as opportunity & threat.
66
Strength: Very good profit margin achieved by the last few years Strong capital back up brings available liquidity Efficient and experienced management team Directors of the bank are not over ruling the decisions made by the management team Several deposits schemes and financial products offered by the organization, So clients have enough options to invest their money Bank quickly expanding its business all over the country.
Weakness: No online banking facilities. Performance of the marketing sector is really poor Officers are limited experienced and not enough trained Traditional banking system is followed
Opportunities: Clients reliability on MTBL is growing day by day on the bank Business Banking Diversification Modern facilities & computerization Stirring Branches Interactive Corporate Culture After online service bank growth are rapidly increasing.
Threats: Very competitive market Our political unsuitability effects the banking sector very often Our economy now passing recession this also effects the bank Central banks policies some times are not in favor of the private Competitors have more deposits Competitors have more products and services
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Government pressures to reduce interest rate
THE PROBLEMS OF THE BRANCH

Lack of cross Employee. There is no customer complain desk, for this reason it is some time occur as a irritate matter. Officer is less than necessary. The manpower of MTBL is not sufficient in context of their necessity. It takes time to take decision of Head Office to branch office. Reluctance to add campaign. The duration of our internship program is only two months that is not sufficient for us to gather knowledge about the organization.
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R E C O M M E N D AT I O N S
I could gain the practical knowledge in the banking sector. Actually we cant realize how much its area if anybody doesnt work here practically. I found that there is some system loss in the banking sector, which is so confidential. Every commercial bank is involved with this for their business. None bank maintains the rules & regulations of Bangladesh Bank perfectly. For which I think that this business is not done systematically according to the law of banking. The management of central bank should try to monitor it perfectly. For this reason they can use advanced technology. The duration, two months is not sufficient for the recommendations. In spite of that I recommend for this bank in order to overcome the weakness & Threats. Top Level Management should be aware of their duty & responsibility as if the overall condition of Mutual Trust bank can be improved & can fight with their rival & competitors For the technological advancement SWIFT machine, availability of internet service, extension of T&T line for the more than 20 PABX line, sufficient computer & printer, advanced software, LAN (Land Area Network) among all computer, central generator & central Air condition, By doing some social highlight themselves to advertisement On line service can be effective for MTBL Employees should be properly trained as if they can serve confidently, quickly. Manpower should be increased in the foreign exchange because they work restless. In spite of that they cant complete their duty smoothly.
responsibilities Mutual Trust bank can be known & marketing as well as
69
`Face is the index of mind but the out look of the Mutual Trust bank isnt good at all in the comparison of other commercial bank like EBL Bank, Dhaka bank, one bank etc. Effective decision should be taken by the trust for the more deposit because the more deposit, the more loans, the more profit & the more investment. Diversification of business reduces risk. So it is also essential.
NECESSARY STEPS FOR RAPID GROWTH

To improve the performance level to lessen the problems as stated in the previous paragraphs MTBL might take the following steps: Firstly the branch has to increase their advertisement and also increase their social activities. They have to go with the peoples needs and demands. They have to explore their name to the people that every one can know about Mutual Trust Bank ltd, Jubllee Road Branch. Thirdly the branch has to take some initiative to receive some power to sanction a certain limit of loan amount when the customer require the loan on the urgently basis. It can earn of that customers satisfaction and in future he or she may be do vast business with the bank. Fourthly, communicational skill of the officials should be improved further, so that they can create an excellent communication flow with the customer Fifthly the branch should minimize its official unnecessary expenses. Lastly and importantly employee satisfaction should be ensured for quality services. If the employee is demotivated and unsatisfied, no further measure will work
70
CONCLUSION
Mutual Trust Bank Limited has been established with the objective of providing efficient and innovative banking services to the people of all sections of our society. One of the notable strengths of this bank is that the disciplined and strongest Management Body backs it. The bank is committed to contribute as much as possible within its limitations for the economic growth and for ensuring locative value of its available resources. Despite stiff competition among banks operating in Bangladesh, both foreign and local, Mutual Trust Bank, Jubilee Road branch has achieved satisfactory progress in the areas of its operation and earned an impressive operating profit in spite of new branch. The branch will hope to achieve a satisfactory level of progress in all areas of its operation including target of profitability during the year 2012. We hope that this bank will compete with the first class bank of Bangladesh very soon.
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BIBLIOGRAPHY
BB ........................Bangladesh Bank MTBL ......................Mutual Trust Bank Lt. MTB ......................Mutual Trust Bank B. Asia ..................Bank Asia Ltd. One B. .................One Bank Ltd CC .........................Cash credit CL .........................Classified loan CSE .......................Chittagong stock exchange DD .........................Demand Draft DPS .......................Deposit pension scheme DSE .......................Dhaka stock exchange FC .........................Foreign currency FDI ........................Foreign direct investment FE .........................Foreign exchange FCAD .....................Financial control and accounts department IC and PF ...............investment companies and provident fund ICB ........................Investment corporation of Bangladesh IDA ........................International development association IBDA ......................Inter branch debit advice IBCA ......................Inter branch credit advice LIM .........................Loan against imported merchandise LAM ........................Loan against merchandise LTR .........................Loan against trust receipt MT ..........................Mail/Money transfer NCD ........................Negotiable certificate of deposit OBU ........................Offshore banking unit PAD .........................Payment against document PSS .........................Pension savings scheme SBS .........................Scheduled Bank Statistics SEC .........................Securities and Exchange Commission SEM ........................Secondary Exchange Market STA .........................Special trade arrangement STD .........................Short term deposit TT ...........................Telegraphic Transfer UC ............................Unclassified
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REFERENCE
Inspection Manual, Bangladesh Bank, 1993. Rose Peter S. Commercial Bank Management. 4th ed. Singapore: McGRAWHILL, 1999 Annual Report of Mutual Trust Bank Ltd. 2007 Management Report of Mutual Trust Bank Limited, 2007 Annual Report of Mutual Trust Bank Limited, 2006 & 2007. Annual Report of Trust Bank Limited, 2006 Annual Report of Bank Asia Ltd. 2007 Annual Report of One Bank Ltd. 2007 Annual Report of Dutch Bangla Bank Ltd. 2007 Annual Report of Trust Bank Ltd 2007 www.mutualtrustbank.com. www.Jamunabankbd.com. www.bankasia-bd.com www.onebankbd.com www.bddl.com.bd www.mutualtrustbank.com Survey CSE Library Personal consultation with banking personal. Previous year internship report analysis.
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Chapter - 01: Prepared By: Md. Moinuddin, MBA-06. MKT, C.U

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Chapter - 01 INTRODUCTION

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

EVOLUTION OF THE WORD BANK

THE EMERGENCE OF MODERN BANKING

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

DEVELOPMENT OF BANK IN BANGLADESH

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

GOALS AND OBJECTIVES OF MTBL

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

BOARD OF DIRECTORS OF MTBL

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

MANAGEMENT STRUCTURE OF MTBL

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

BRANCH NETWORK OF MTBL

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

MTBL FINANCIAL REPORT 2007

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Account Related Services Corporate Banking Remittance Correspondent Banking

Personal Banking Capital Market Services Foreign Trade

THE DIFFERENT BANKING SERVICES & PRODUCTS OF MTBL

STD Account MTB Double Saver Plan MTB Festival Plan

Categories of Services Under personal Banking:

Personal Loan Excel Account Credit Card

SME Loan Draft Against DPS Car Loan

ATM / VISA Card Locker and Safe custody

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Corporate Banking Products:

Letter of Credit Syndicate Loan

Import & Export Finance Project Financing

Working Capital Financing

PO/DD/TT Collection of PO/DD/TT Purchase/Discount of cheques-Inland Bill

The MTBL Loans Portfolio Continuous Credit:

Export Credit Facility:

Payment against document (PAD)

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Long term loan

Short term loans

Car loa Hire purchase SME Financing:

HBL Lease financing

Vocational Marriage loan

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Principal officer & Deputy Manager -

Mr. Md. Zahangir Kabir Sr. Executive officer(SEO)Mr. Ariful Hoque

junior officer (2)

Assistant officer (4)

ACTIVITIES- JUBLLEE ROAD BRANCH

Customer Care Center

Financial Control Department (FCD)

Foreign Exchange Department

Import & Remittance (Foreign)

Loans & Advance Department

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U

Chapter-03 GENERAL BANKING OPERATION

Prepared By: Md. Moinuddin, MBA-06. Mkt, C.U