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MD.

SHAHIDUL ISLAM ID # M 20831111018

Chapter: 1 INTRODUCTION

Prepared For: Md. Masum Hossain

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MD. SHAHIDUL ISLAM ID # M 20831111018

1.0. INTRODUCTION OF THE TOPIC:


Financial institution/intermediary that mediates or stands between ultimate borrowers and ultimate lenders is knows as banking financial institution. Banks perform this function in two ways: taking deposits from various areas in different forms and lending that accumulated amount of money to the potential investors in other different forms.

General Banking is the starting point of all the banking operating. General Banking department aids in taking deposits and simultaneously provides some ancillaries services. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service form Bank. On the other hand, there are some customers with who bank are doing its business frequently. It is the department, which provides day-to-day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring chaque. It opens new accounts, demit funds, issue bank drafts and pay orders etc. since bank in confined to provide the service everyday general banking is also known as retail banking. Banking system occupies an important place in a nations economy because of its intermediary role; it ensures allocation and relocation of resources and keeps up the momentum of economic activities. A banking institution is indispensable part of a modern society. It plays an important role in the economic development of a country and forms the core at the money market in any country. In a developing country like Bangladesh the banking system as a whole has a vital role to play in the progress of the economic development.

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MD. SHAHIDUL ISLAM ID # M 20831111018

Bangladesh Bank introduced new accounting policies with respect to loan classification, provisioning and interest suspense in 1989 with a view to attaining international standards over a period of time. A Revised policy for loan classification and provisioning was introduced from 1st January, 1999.The Revised policy calls for an independent assessment of each loan on the basis of qualitative factors and objective criteria. Each loan is branded with the worst level of classification resulting from these independent assessments.

If a Continuous Credit or a Demand Loan remains non-performing for 6 months or more it is classified Sub-standard. It is classified as Doubtful if it remains non-performing for 9 months and classified as Loss if non-performing for 12 months or more.

In the case of a Term Loan, which is repayable within a maximum period of 5 years, if any installment is not repaid within the specified period and if the time-equivalent of such unadjusted balance is 6 months, it is classified Sub-standard. A Term loan is classified Doubtful and Loss if the time-equivalent of unadjusted balance is 12 months and 18 months respectively.

Under the existing system scheduled banks are required to maintain provisions against unclassified and substandard loans in addition to doubtful and loss loans. They are allowed to book interest against classified loans only on cash basis.

Whether a credit is classified or not under the objective criteria, it is subjected to classification under qualitative judgment if any doubt arises regarding repayment of loan

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MD. SHAHIDUL ISLAM ID # M 20831111018

1.1. ORIGIN OF THE REPORT:


Bachalor of Business Administration (BBA) in a specialized course. The course in designed with an excellent combination of practical and theoretical aspect. After completing the BBA exam three months is preserved for internship. As a student of BBA with the requirement of my course I was assigned to Mutual Trust Bank Ltd., Shah Mokhdum Avenue Branch, Uttara, Dhaka for my Internship.

I have timed my best to use this opportunity to enrich my knowledge on banking system. I have also tried my level best to present my practical experiences in this internship report.

1.2. CONCEPTUAL FRAMEWORK OF THE REPORT:

Objective of the practical orientation program is to have practical exposure for the students. Our internee duration is three months, which was somehow not sufficient enough to gather adequate experience of such vast banking business. After working whole day in the office it was very much difficult and also impossible to study against the theoretical aspects of banking. Finally as the banks renovation activities was going on so the physical working condition was not healthy enough that we thought it would be.

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MD. SHAHIDUL ISLAM ID # M 20831111018

1.3. OBJECTIVES OF THE STUDY: Broad Objective:


The objective of the reports is divided in two parts. In first part of the report is about the level of performance of the bank is analyzed. The strengths, the weaknesses and their potential or threats are analyzed. It therefore, provides an in depth analysis of the whole organization including it various department and identified the existing problem and also provides recommendation for solving the problem. The second part of the report focuses on general banking and credit operation of the Bank.

Other Objective:
Without this we have various objectives that are follows: What type of client they are attending? How they measure the client performance? How much credit risk the Bank has to obtain? What are the policies about the default client? To know about the organizational framework of the bank. To gather comprehensive knowledge on general banking system. To acquire the knowledge about the primary forms of entrance in the

international trade i.e., the export-import.

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MD. SHAHIDUL ISLAM ID # M 20831111018 To acquire the knowledge about the credit systems of Mutual Trust Bank. To

observe the banks involvement in the foreign exchange business, formalities, and activities of the letter of credit (L/C). To focus the growth and development of Mutual Trust Bank Ltd. To know the work environment & organizational behavior of the bank.

1.4. METHODOLOGY:
The study is descriptive in nature. Each and every aspect of operation especially General Banking & credit issues are forced on study. I collected information both from primary and secondary sources. In depth technique was used to collect data from the executive. Their opinion helped in explaining the issues. Secondary data were collected from annual reports, bulletin, previous research books, journals and web site. Based on objective, frequency table and grapes were used for analysis.

1.5. TIME PERIOD OF THE STUDY:


The report is a combination of three months internship program with Mutual Trust Bank Limited. This report focuses about ninety days working experiences in Mutual Trust Bank Limited, Shah Mokhdum Avenue Branch, Uttara, Dhaka. This report will give a clear idea about the activities and operational strategies of Mutual Trust Bank Limited.

1.6. LIMITATIONS:
In doing the report I have faced some limitations that cannot be ignored. Some of those limitations are:

Workload at my job place was a barrier to prepare this report. Getting relevant papers and documents were strictly prohibited. Prepared For: Md. Masum Hossain

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MD. SHAHIDUL ISLAM ID # M 20831111018 Although the officers have been very helpful, they didnt have enough time to share with me, as they are very busy with their assigned words. So, in some cases, observation was needed. Finally, the length of this internship program is not sufficient to conduct a detailed study on the subject of research.

Chapter: 2

ORGANIZATION PART

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MD. SHAHIDUL ISLAM ID # M 20831111018

2.0. NAME, LOCATION AND BACKGROUND OF THE COMPANY

Registered Name of the Company:


Mutual Trust Bank Limited.

Legal Form:
The Company 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 Authorized Capital of Tk. 38,00,000,000 divided into 3,80,000,000 ordinary shares of Tk.10 each.

Company Registration No.:


C38707(665)/99 on September 29, 1999

Bangladesh Bank Permission No.:


BRPD (P)744(78)/99-3081 on October 5, 1999

Registered Office:
MTB Centre, 26 Gulshan Avenue

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MD. SHAHIDUL ISLAM ID # M 20831111018 Plot 5, Block SE(D), Gulshan 1, Dhaka 1212

SWIFT Code:
MTBL BD DH

Historical background:
The Company 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 3,80,000,000 ordinary shares of Tk.10 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.

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MD. SHAHIDUL ISLAM ID # M 20831111018 The Company (Bank) operates through its Head Office at Dhaka and 76 branches. The Company/ Bank carry out international business through a Global Network of Foreign Correspondent Banks.

Memberships of MTB:
Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI, D) The Institute of Bankers Bangladesh (IBB) Bangladesh Foreign Exchange Dealers Association (BAFEDA) Bangladesh Institute of Bank Management (BIBM) International Chamber of Commerce Bangladesh Limited (ICCB) Association of Bankers Bangladesh Limited (ABB) Bangladesh Association of Publicly Listed Companies (BAPLC) American Chamber of Commerce in Bangladesh (AMCHAM)

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2.1. MISSION, VISION, OBJECTIVES AND STRATEGIES OF THE COMPANY

2.1.1. Vision:
Mutual trust banks vision is based on philosophy known as MTB3V. we envision MTB to be: i. ii. iii. One of the best performing banks in the country The bank of choice and A truly world class bank

2.1.2. Mission:
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.

2.1.3. Values:
Commitment

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MD. SHAHIDUL ISLAM ID # M 20831111018 Shareholders - Create sustainable economic value for our share holders by utilizing an honest and efficient business methodology.

Community committed to serve the society through employment creation, support community projects and events and a responsible corporate citizen.

Customer render state-of-the-art service to our customer, offering diversified products and aspiring to fulfill their banking need to the best of our abilities.

Employees Be reliant on the inherent merit of the employees and honor hour relationship as a tribute to be a part of this renowned financial institution.

Accountability As a bank, we are judged solely by the successful execution of our commitment, we expect and embrace the form of judgment. We are accountable for providing the highest level of service along with meeting the strict requirements of regulatory standards and ethical business practices.

Agility We can see things from different perspective; we are open to change and not bounded by how we have done things in the past. We can respond rapidly and adjust our mode of operation to meet stakeholder needs and achieve our goals.

Trust

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MD. SHAHIDUL ISLAM ID # M 20831111018 We value mutual trust, which encompasses transparent and candid communication among all parties.

2.1.4. Overall strategic objectives:


To ensure the inflow of funds and combination of list possible cost To maintain a discreet credit policy To enhance versatility and diversification through the penetration of new market segment, thereby fulfilling unmet needs To extend financial assistance to the citizenry, living at dispersed locations by expending the network of branches To practice stronger IT-driven initiatives that will meet the challenges and requirements of the bank and its clientele To improve administrative and organizational structure in order to prepare the platform for best practices of corporate governance To enrich the banking sector with improve awareness to corporate social responsibility to provide extensive carrier opportunities through competitive pay and benefits and a flexible environment

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MD. SHAHIDUL ISLAM ID # M 20831111018

2.2. ORGANIZATION STRUCTURE

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2.3. COMPANYS MAJOR FUNCTIONS, ITS BUSINESS DESCRIPTION OF VARIOUS FUNCTIONAL DEPARTMENTS

Figure 1: Organization Structure of Mutual Trust Bank Limited

&

If the jobs are not organized considering their interrelationship and are not allocated in a particular department it would be very difficult to control the system effectively. If the departmentalization is not fitted for the particular works there would be a haphazard situation and the performance of a particular department would lose its measurability. MTB has done

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MD. SHAHIDUL ISLAM ID # M 20831111018 this very well by dividing all sorts of operations into 25 divisions/departments having specific and specialized job responsibilities. I have identified the divisions and outlined their functions below:

1. Banking Operations Division (BOD):


Submission of special important returns/information to National Task Force, Anti Corruption Commission, Bangladesh Bank, Central Intelligence Cell, National Board of Revenue, Income Tax Authorities and other Law Enforcing and Regulatory Authorities collecting from the branches as per their requirements. Issuance of all kinds of Instruction Circulars, Circular Letters and other Departmental letters regarding banking operations. Correspondences with Private General Insurance Companies for enlistment and Renewal of those with our Bank. Issuance of Circulars/Letters in communicating the instructions issued by the regularity authorities and monitoring the compliance activities of branches.

Collection of information from branches as required by different departments of Bangladesh Bank, consolidation of those information and then submission to the respective authorities.

Correspondences regarding re-confirmation of lien of FDRs of our branches as well as of other banks to comply the instructions of Bangladesh Bank.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Circulation of revised interest rates and review/revision of Schedule of Charges and Commissions to cope with the market and also to comply with Bangladesh Banks guidelines/instructions. Discharging secretarial services to BACH Implementation Unit of the bank. Take necessary measures to comply with the instructions of Bangladesh Bank inspection report regarding banking operation. Take necessary steps to solve miscellaneous problems of the branches related to banking operations.

2. Anti Money Laundering Division (AMLD):


Issuance of circulars/instructions to branches in pursuant to the instruction of Regularity Authority. Liaise with the regulatory bodies including Bangladesh Bank. Monitoring the activities of branches regarding compliance of AML

instructions/guidelines.

Conducting training /workshop to make the officials aware /updated with the change in regulations, procedures etc.

Examination of Independent Procedure Testing Reports submitted by Internal Audit of ICC Division, Head Office as well as Self Assessment Report submitted by the branches and take necessary measures to mitigate to irregularities/problems.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Holding meetings of CCU on a quarterly basis and report the progress to MD. Submission of CTR and STR to Bangladesh Bank after observing necessary formalities. All AML related actions assigned by Management from time to time.

3. Test Key Department:


Fixation of fixed and variable numbers for all branches with the newly opened branches. Responsible for the following works as in-charge of the Board Division under close supervision of DMD and Group Company Secretary: i. Preparation of notice for serving to the honorable Directors for Board meeting, Executive Committee meeting and Audit Committee meeting. ii. Preparation of Agenda and File for Board meeting, Executive Committee meeting and Audit Committee meeting. iii. Preparation of minutes of Board meeting, Executive Committee meeting and Audit Committee meeting.

iv.

Preparation of advice on the decision of Board Meeting, EC meeting and Audit Committee meeting and communicate of the same to the related division/department of Head Office.

v.

Submission of minutes and other related periodical statements to Bangladesh Bank and other regulatory bodies.

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MD. SHAHIDUL ISLAM ID # M 20831111018 vi. Preserving of Board Memos, minutes and filling of other important documents in a systematic way. vii. viii. ix. Various work related to holding AGM and EGM. Maintaining liaison with MTBSL, MTBCL and Share Department. Arrangement of Monthly Communication Meeting of the Board Division and preparation of minutes thereof. x. Any other job as assigned by the DMD and Group Company Secretary.

4. Card Division:
Cards Customer Service New Accounts Opening & Maintenance Card Production Accounts Merchant Acquiring Cards Sales

5. Credit Administration Department:


Resolving the difficulties regarding disbursement Ensure timely and smooth submission of the regulatory compliance Disbursement approval letter Page 111

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MD. SHAHIDUL ISLAM ID # M 20831111018 Maintain close contact with Bangladesh Bank regarding compliance issues. Complying with our 76 Branches regarding their limit authorization, CL statement & Bangladesh Bank issues.

6. Credit Monitoring Cell:


To scrutinize & follow-up of all performing Loans & Advances up to risk grade 5 as per Credit Risk Management(CRM) guide line. To review all Loans & Advances at every stage from sanctioning, disbursements till the expiry of the same for keeping the loan portfolio of the bank as unclassified. To follow-up/ monitor the Overdue/EOL& SMA of loans & advances through on line of all branches. To follow-up the term loans of all branches whether any installments becomes overdue. To follow-up the continuous loan account whether any limit is going to be expired or transaction found unsatisfactory. To follow-up whether any un-authorized excess over limit allowed by the branches.

Financial statements are to be collected from the branches on regular basis. To provide necessary information to the Management through In-charge of the Cell. Constant follow-up is going on to escape the loan accounts from classification of SMA/Overdue.

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MD. SHAHIDUL ISLAM ID # M 20831111018 To provide current data & information regarding recovery of expired EOL, Overdue & SMA loan accounts to the top Management for taking necessary action.

7. Credit Risk Management:


Setting mission and vision on credit of MTBL Setting Credit Principles, single borrowers exposure limitations of MTBL, determining lending caps, identifying discouraged business types and setting loan facility parameters. Having oversight of banks credit policies, procedures and controls relating to all credit risks. Ensuring correct credit evaluation process in compliance with Credit Risk Management guidelines of Bangladesh Bank. Setting Industry and Business segment focus Ensuring processing of credit proposals by undertaking appropriate evaluation process and gradation of risks Placing proposals to the approving authority in compliance with delegation of business power.

Acting as Member Secretary of Credit Committee and critically evaluating credit proposals before recommendation by the Credit Committee.

Placing credit proposals to the Board/EC for approval

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MD. SHAHIDUL ISLAM ID # M 20831111018 Handling credit portfolio of the bank in order to ensure quality advance and there by good asset quality

8. Engineering Department:
Responsible for all MTB premises for the Bank and all its subsidiaries all over the country. Responsible for full time supervision of the under construction MTB Tower at Kazi Nazrul Islam Avenue, Bangla Motor. Responsible for the interior decoration of proposed branches/departments/ ATMs/etc and renovation/maintenance works of the existing branches and other MTB establishments. The department is also responsible for preparing future Engineering plans of MTB.

9. Group Finance:
This is one of the most important divisions with a lot of functions and man-power. The department is further divided into two departments, each having very specific functions as outlined below:

i. Financial Administration Division and Reconciliation Dept: Preparation of Financial Statements of the Bank (Quarterly/Half yearly/Yearly) Editing of Financial Statements for Annual Report

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MD. SHAHIDUL ISLAM ID # M 20831111018 Issuance of Instruction Circular, Circular letter relating to FAD/Recon Issuance of letter, Office Note relating to FAD/Recon Maintenance of daily and monthly Accounting of Head Office Accounts Computation of Corporate Tax, preparation of Tax Return, filing of return to Tax Office Payment of Advance Corporate Tax of the Bank Follow up and liaison with Tax Office and getting the assessment done by Tax Authority Issuance of Certificate in support of deduction of Taxes to the payee Liaison with Credit Rating Agency, submission of requisite papers as per requirements and getting the Credit Rating done Regular assessment of necessity of T-Bill to be purchased/sold for SLR purpose and arrange for purchase/sale of T-Bill, payment thereof and accounting of the above transactions Follow up of T-Bill maturity & receiving the advice for sale proceeds of T-Bill and proper accounting thereof Payment of all Source Tax & VAT to Bangladesh Bank and collect copies of Challan Attending various meeting with Tax Office and External Auditors Liaison with Bangladesh Bank Inspection Team during Inspection work till Inspection completed Liaison with External Auditors and External Audit Team during audit till completed Editing of Financial Statements given by External Auditors

Preparation of Annual Budget of the Bank for approval of the Board Distribution of budget to the Branches

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MD. SHAHIDUL ISLAM ID # M 20831111018 Approval of Daily vouchers of Head Office Accounts and signing of IBCA & IBDA Issuance of Closing Circular (Quarterly/Half Yearly/Yearly) Editing of Printing Materials for Annual Financial Statements to publish in Newspaper MIS for Board meeting and Managers Conference Supervision of all statements to Bangladesh Bank Signing of Dividend Notice Approval for Cash in Safe, Cash on Counter & Cash in Transit for Branches Insurance for Head Office Maintenance of Bank Account of Merchant Banking Division, signing of cheques as one signatory and approval of vouchers Maintenance of MTB Employees Welfare Fund Account Maintenance of MTB Foundation Account Maintenance of MTB Employees Death Benefit Plan Account Maintenance of MTB Employees Medical Assistance Fund Account

ii. Inter Branch Reconciliation Dept Head of Inter Branch Reconciliation, sending of branch wise monthly outstanding list and follow up till reconciliation completed Maintenance of Provident Fund Accounts investment & mature

10. Human Resource (HR):


Preparation of Organogram of the Bank. Fix up the Pay Structure of the Bank. Recruitment of the Personnel for the Bank. Transfer & Posting of the Employees.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Promotion for the employees. Disciplinary action, termination, Charge Sheet, dismissal. Annual Performance Appraisal for employees. Training (local & foreign) /Workshop /Seminar for the employee. Power of Attorney and Specimen Signature for Executive/Officers. Sanction of yearly increment/special increment. Resignation & Termination of the Employee. Employees Car Loan Scheme. Mobile Phone Purchase & Bill ceiling for Executives. Internship program for University student. Permission for higher study. Leave for the employees Approval of TA/DA Policies & guidelines related to HR. Arrangement for MANCOM meeting Implementation of decisions made by MANCOM meeting Updating HR services, policies, and program

11. Internal Control & Compliance Division:


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MD. SHAHIDUL ISLAM ID # M 20831111018 This is another division with very important functions as MTB gives a lot of importance to internal control and compliance. Hence, this division is further divided into three departments with specific functions as outlined below: i. Audit & Inspection To assist preparing /designing Audit plan for each calendar year & get its approval from the competent authority. To conduct routine and surprise audit & inspection of different AD& non AD branches and Divisions/Departments of CHO as per audit plan duly approved by competent authority. To conduct special audit on higher risk areas of the bank as & when required by the management. To conduct Investigation/Inquiry in to the complaint as & when assigned by the management. To report the deficiencies identified during audit & inspection to appropriate levels as per guideline laid down in the Internal Control & Compliance Risk Manual of the bank. To submit informal audit report to the branches on the end of closing of conduction of Audit & Inspection with request to rectify the same within the scheduled date. To prepare and submit the final report to Head of ICC for onward submission to MD & CEO. Any other duties as & when assigned.

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MD. SHAHIDUL ISLAM ID # M 20831111018 To keep close liaison with the regulators at all levels and notify the other units of the Bank regarding regulatory changes for their compliance. To prepare and submit Executive Summary on the audit findings of Internal Auditors to the appropriate level as per ICC Risk guidelines of the bank. To prepare and submit Executive Summary on the serious irregularities detected by the Internal Auditors reported vide their Interim Reports. To prepare and submit Executive Summary on the audit findings of Bangladesh Bank Inspection Teams and External Auditors. To ensure timely and proper compliance of all audit objections as raised by Internal Auditors, BBs Inspection Team and External Auditors. To ensure timely preparation of periodical reports/memorandum on audit position of the Bank for onward submission to the management, Audit Committee and Board of Directors along with the progress report on compliance of all audit irregularities raised by Internal and External Auditors. To prepare and furnish working papers of Audit Committee meetings and submit the same to the Competent Authorities. To ensure timely compliance of the instructions/decisions of the Audit Committee & Board of Directors of the Bank. To prepare and submit the working papers of ICC Evaluation Committee meetings. Convey the decision of ICC Evaluation Committee meetings to the concern offices and branches for compliance. To initiate office note before the Management for taking approval regarding the implementation of control strategies as recommended by the Internal & External Auditors from time to time.

All work related to formulation of policy guidelines of Internal Control & Compliance Risk of the Bank.

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MD. SHAHIDUL ISLAM ID # M 20831111018 To look after the overall activities of monitoring unit as per guidelines of Banks manual on ICC Risk adopted from Bangladesh Banks manual of Core Risks in banking. To review all control function checklists (Loan Documentation Checklist, Loan Sanction Checklist, LC Documentation Checklist, Departmental Control Function Checklist & Quarterly Operational Report) and report the exceptions to Head of ICC/Management. To collect relevant data from various branches/departments of Head Office of the Bank & analyze them to assess the quantum of risk by using Risk Matrix Guideline stipulated in the ICC Risk Manual of the Bank & put up the same before the Management for their observations & decisions. To prepare Annual Health Report on the Bank by February of each year based on the financials of the last year as a regulatory compliance. To prepare Annual Risk profiling of the branches of the Bank as a regulatory compliance. iii. Monitoring To collect certificate from all branches regarding compliance of Departmental Control function Checklist on daily, weekly, monthly & quarterly basis as designed by Internal Control & Compliance Division duly communicated to the branches vide instruction circular no.40/45 dated 29.12.2005. To collect & review Quarterly Operational Report (QOR) and point out the exceptions and collect the compliance timely.

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MD. SHAHIDUL ISLAM ID # M 20831111018 To put up the positions of deficiencies & compliance of Quarterly Operational Report before the management for perusal & instructions by the 15th day of following month of the quarter ends. To collect Loan Documentation Checklist(LDCL)from all branches and point out the exceptions & collect compliance by making necessary correspondence with branch/respective departments of Head Office & put up to the management perusal & their instructions those are to be complied with. To collect operational performance of various branches in the prescribed format of the Bank on quarterly basis & put up the same before management by the 10 th day of following month of the quarter ends. To collect certificates on periodical basis from all branches/departments of Head Office in respect of timely compliance of their regulatory requirements. Any other duties as and when assigned.

12. Group ITS Division:


Overall supervision of the activities and operations of the Group ITS Division Analyze and rework existing business processes, with identification and development of the necessary capabilities using new technology, thereby streamlining the Banks network access, as well as exploiting its knowledge resources Head the Banks efforts to integrate the Internet into both its long-term strategy and its immediate business plans Provide strategic and tactical planning, development, evaluation, and coordination of the information and technology systems and platforms of the Bank.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Oversee effective and efficient electronic communication between staff,

management, branches, and other technology resources within the Bank Oversee the back-office computer operations of the Banks information systems, including local area and wide-area networks, satellite or stand-alone systems including BACH Set up Disaster Recovery (DRPs)/ Business Continuity Plans (BCPs) and procedures for Core Banking Application and other critical systems Effective negotiation for purchase of IT related products to reduce costs Provide the appropriate infrastructure and/or solutions, at the right time, to support the business needs, in the most cost effective manner Upgrade the MTB Internet Banking system into one of the best available in the country Project Manager for Bangladesh Automated Clearing House (BACH), ensure MTB remains in the forefront for early implementation Project Manager for MTB branded ATMs, efficiently deliver the goal of acquiring 200 ATMs by December 2011 and implementation of Euro Master Visa (EMV) module Act as Project Manager for transforming and upgrading the Banks core IT system, in 2012, allowing it to have one of the best in the world Ensure LAN/WAN networking, Network security issues, Routers/Switches and Firewall configuration, OS installation, Other Communication equipment

implementation.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Report and liaise with the Senior Management on all departmental issues and progress status Perform all other managerial works related to the ITS Division Point-of-contact for all the strategic and operational IT needs Support the overall banks human resources in upscaling their computing skills

13. General Services Division:


To Prepare notes for approval and learning the system To prepare board memo(s) To prepare deeds and look after renewal process & others

14. International Trade Services Division:


Process proposals for AD Licenses for Bangladesh Bank approval Attend all queries of Bangladesh Bank in respect of Non-Payment of accepted bills, overdue export bills and overdue Bills of Entries with proper co-ordination with AD Branches Make necessary correspondences with Bangladesh Bank for recovery of un-paid accepted bills by others Banks Prepare proposals for any special permission of Bangladesh Bank in respect of any Foreign Exchange Transaction

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MD. SHAHIDUL ISLAM ID # M 20831111018 Supervise timely submission of statements and returns in respect of Foreign Trade Transaction and other related issues to Bangladesh Bank and other regulatory bodies Process notes for management approval for new correspondent banking relationship and opening or closure of any Nostro account Prepare drafts of Agency Agreements, obtain legal opinion from our legal advisor and finalize them for execution Annually review and renew U.S. Patriot Act certification of the Bank and provide on request to our different correspondent banks Annually prepare KYC AML Questionnaire for different foreign correspondent banks and Exchange/ Remittance Houses Prepare and Issue Instruction Circulars for our branches in respect of operational guidelines, management policies, compliances, changes of regulations and circumstantial directions of the management and other regulatory bodies Review and make necessary correspondences with our branches for timely internal and external audit compliances in respect of Foreign Trade transactions Look after pending suits of the Bank in foreign courts, which arose from foreign trade transactions of our branches in co-ordination with the legal advisor of the bank, respective branches and Head Office and attend queries of the foreign and local lawyers and update Bangladesh Bank from time-to-time Review & Revise banks schedule of charges for foreign exchange transaction as and when required by the management.

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MD. SHAHIDUL ISLAM ID # M 20831111018

15. Communications Department:


To promote the MTB brand and enhance the understanding and engagement of the staff through various projects, branding etc. Responsible for the Banks CSR activities, Sponsorships and budgeting to help develop the brand.

16. NRB Division:


This is a division which generates huge income for MTB and as a result the importance of this division is immense. This division is also further divided into three departments so that this division is well-maintained and can reach greater heights. i. NRB Business: Prepares the annual Business Development Plan; as well as prepares the annual Work Plan. Lead and develop officials by identifying training needs. Define and follow up of yearly targets and objectives. Develop and implement strategies for new products and services. Determine new opportunities by analyzing business needs. Provide direction, guidance to the division to ensure alignment with the divisions strategies. Prepare proposals for any special permission of Bangladesh Bank in respect of new tie up with exchange Company. Supervise timely submission of statements and reply to queries to Bangladesh Bank.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Process notes for management approval for new tie up with foreign correspondent and other divisional matters. Drafting of Agency Agreements, obtain legal opinion from the legal advisor and finalize them for execution. Execution and implementation of any other job as and when assigned by HoNRB.

ii. NRB Operations: Instant Cash Product Money Gram, Xpress Money, Instant Cash, Instant Exchange UK, Al Fardan Exchange, Al Zaman Exchange, Asia Exchange, Bahrain India Intl Exchange, Wall Street & Zenj Exchange(Turbo Cash): i. ii. iii. iv. Download and mail to concern branches. Reconciliation. Reply to amendments and queries. Account credit transaction sorting and processing.

NRB accounts: i. ii. iii. iv. Processing and sorting of applications upon receipt. Record keeping. Communicate with NRB account holder. Sending cheque book and other document to NRB account holder.

Other Jobs: i. ii. All courier related issues. Reply to DD related queries and discrepancies.

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MD. SHAHIDUL ISLAM ID # M 20831111018 ii. NRB Overseas Representative: L/C opening (Cash, Deferred & others Miscellaneous Work. Preparation of daily LC position. Shorting & distribution of daily Inward swift message Issuance of precedes realization certificate Cash incentive related. Maintenance of IRC renewal, reporting(CCI&E), received & transfer related work. As a member of loan Recovery cell. Frequently visit to the client for loan recovery purpose and duly report to head of recovery cell of the Branch. Report to foreign exchange In Charge (Import) for daily assignment

17. Research & Development Department:


To undertake Research Projects as par need of the Management of the Bank. To maintain different kind of information database and to grow the department as the Centre for Information To publish monthly Magazine MTBiz Quarterly Peer Group Review Study Other ad hoc studies like: Customer Satisfaction Survey, Employee Satisfaction Survey etc.

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18. Retail Banking Division:


To deal with both asset and liability portfolio of Retail Banking-by product & by branch & sales team. Follow up the Direct Sales Team(DST) / Branches budget with actual achievement Monitoring performance of direct sales executives both asset & liability and arrange sales commission & make list of non performer based on performance. Communicate and implement management strategies for Retail Banking To survey the market, develop the product and launching new product accordingly Managing the growth of portfolio of Retail Asset, Liability, including underwriting and risk management processes. Overseeing pricing strategies of the portfolio to ensure appropriate pricing for credit risk incurred, while meeting the banks profitability objectives. Analyzing complex market forces and anticipates impact of changes in the economic environment

19. Special Asset Management Department:


Supervise and conduct Operational Activities Mobilize/Procurement of new business/ deposits for attaining the budget fixed by the competent authority of the bank.

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20. Share Department:


Submitting Annual return, Particulars of Directors, Return of Allotment and other information to Register of Joint Stock Companies. Submitting monthly shares and shareholding statements required form SEC, DSE & CSE. Sending all other information necessary and required from SEC, DSE & CSE. Providing related information to shareholders. Maintaining necessary records Correspondence with Central Depository Bangladesh Limited (CDBL) Bonus and Dividend related jobs Correspondence with various institutions related to Share Dept. Transfer of Shares IPO related records maintaining Right issue related records maintaining Share delivery of IPO applicants Lost / Lien of Shares Documentation & Dispatch AGM and EGM related work

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21. SME Banking Division:


To manage credit quality standards through effective management of risk according to MTB policy and MTB3V. To achieve set targets in terms of sales volume & number of accounts of entire SME Banking. To increase the customer base. To achieve revenue target of all branches, SME/Agri branches. To have control over cost and maintain cost/income ratio. To manage bad portfolios. To help in recovering the loan. To develop sales strategies for specific product channels. To plan for attribution and make necessary arrangements so that required numbers are maintained. Managing credit quality standards through effective management of risk according to credit policies. To ensure that effective process and controls are in place with clear responsibility and accountability for the prevention of money laundering, mis-selling, misrepresentation, fraud and customers protection in line with the MTB policy and local legal and regulatory requirements.

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MD. SHAHIDUL ISLAM ID # M 20831111018 To monitor the quality and completeness of applications source by the branch. To ensure that unethical / illegal practices are discouraged and discipline in the team is maintained. To develop, maintain and where applicable, roll out procedures and controls that meet the requirement of MTB policy, local laws and regulations. To ensure training standards laid down at center level including those relating to compliance are met. To organize sales promotions (campaign, presentations, exhibitions etc.) in coordination with Managers. To drive motivate and inspire respective sales center to achieve their planned sales activities.

22. Risk Management Unit:


Identification, Measurement, Reporting, Monitoring and control of all risks, those usually affect BFI, in a qualitative and quantitative manner. Ensuring regulatory compliance regarding RMU ICAAP, SREP manual preparation and effective implementation Stress Testing, Scenario Analysis, Sensitivity Analysis to benefit the risk management and capital planning. Develop the risk awareness culture in the bank.

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23. Treasury Department:


Overall responsibility of all treasury activities Responsible for treasury financial plan Determine overall treasury business and risk strategy Set individual dealer dealing limits Monitors all dealers positions and ensure dealers all internal and regulatory as well as dealer specific limit Decide on particular positions during adverse situations Continuous development of systems, processes, business strategies etc. Member of ALCO Propose overall balance sheet strategy to the ALCO Trading spot and forward positions arising from import/export/remittances etc. Forming Market views Profitability trading Cross currency dealing Pricing for Money Market and Forex Monitoring of maintenance of CRR and SLR

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MD. SHAHIDUL ISLAM ID # M 20831111018 Investment in Treasury Bond/ bills portfolio Repo activities Overnight / Call Money activities Term market activities Managing balance sheet gap Interest rate and market forecasts Analyses of Risk report

24. Corporate Banking Division:


Lead and manage the lending portfolio of the Bank. Provide strategic direction to grow business through a core team of Credit Officers at Head Office and the branch network across the country. Introduce guidelines to assist clients with financial products and services to source Working Capital and Revolving Lines, Mortgages, Letters of Credit, Term Loans, Equipment and Auto Lease. Offer opportunities to leverage companys strength to raise capital manage cash flow and provide innovative asset-based solutions to meet financing needs. Manage and enhance the capability of the Banks Structured Financing and Loan Syndication Team. Develop the Banks Retail and Small and Medium Enterprise (SME) business and manage both the units. Work to set up leadership teams for the Retail and SME segments and provide strategic guidance.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Responsible for the Banks Credit Card Division and work to hire appropriate talent to run the unit. Manage the Banks Offshore Banking Unit and build the Banks Cash Management Unit.

2.4. THE COMPANYS COMPETITIVE CONDITIONS, INDUSTRY ANALYSIS AND SWOT ANALYSIS 2.4.1. World Economy: An overview
In the era of trade liberalization, globalization has presented new challenges as well as greater opportunities for countries all over the world. Economic boundaries of nations are being abolished and the world is gradually becoming one global village. In the beginning of the year1999, the Euro currency started to replace the currency of eleven European Union countries. In the financial service sector profound changes have been taking place globally. E-commerce is becoming the predominant mode of transactions. Revolutionary changes in the fields of cost control, retail channels, range and delivery of services, accessibility and reach are being witnessed. These changes have already triggered off reorganization, amalgamation, and takeover of financial institution globally. However, from 2007, the financial industry has started to melt down with many financial institutions going bankrupt due to malfunctioning practices. The financial world was taking more and more risks to increase their profitability which ultimately resulted in a backlash. The whole world came to know of what we call a Liquidity Crisis. This was the start of the global recession, the largest of its kind in modern history. Many researchers found that the whole system of the financial industry was at fault. People lost faith in the financial institutions and it seemed like the end is near for the financial industry. However, things have started to improve from the end of the year 2010 and the world economy is recovering slowly but steadily. Prepared For: Md. Masum Hossain

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2.4.2. Bangladesh Economy An overview


The improved political environment in the country, after a delayed period of civil disobedience, brought a much-awaited economic stability during the financial year (FY) 2008-2009. The macro economic development during the year was marked by a healthy GDP growth and moderate inflation. For the second year running bumper rice harvest maintained growth at above 6% and GDP growth during the FY 2008 was at 5.59%. On the other hand, the growth performance in industry was slow with manufacturing growth 7.4% being one of the lowest rates in the recent years. Several unfavorable factors contributed to this situation which included disturbance in the supply of natural gas which in the turn affected the power supply and production activities. Other than that import of raw materials and private sector credit also affected the manufacturing growth. Furthermore, labor disputes during the second quarter of the year badly affected the operation of Chittagong port. In the services sector, growth in transportation, storage and communication contributed to about 13% to the total GDP but growth in trade sector was slow due to lower import growth.

During the year some positive initiative were taken in the banking sector with improvements in the legal and regulatory environment to improve loan recovery but unfortunately the high quantum of nonperforming assets and under capitalization continued to plague the entire banking sector thus causing a major threat to the macroeconomic stability. The size of classified loans increased significantly which contributed to lower profitability of the banks.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Investment rate in FY 08 showed some increase and the declining trend in private savings was substantially reserved. The national savings rate increased from the previous year. This was partly due to increased inward remittances, increase in nominal interest rates and lower rate of inflation.

A recent report from Bangladesh Bank gives us a brief overview regarding the economy of Bangladesh, which is stated below: Within last one decade (2000-2001 to 2010-2011) nominal GDP increased more than threefold from TK. 2535.5 billion to TK. 7875.0 billion. In 2010-2011 per capita income was USD 818 which was USD 374 in 2000-2001. Foreign exchange reserve increased to USD 10.91 billion from USD 1.30 billion. Export income has increased to USD 22.92 billion from USD 6.47 billion. Import payment has increased to USD 33.66 billion in 2010-2011 from USD 9.33 billion in 2000-2001. During the last FY wage earners remittances was USD 11.65 billion which was only 2.50 billion in 2000-2001.

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2.4.3. Industry Analysis


Bangladesh economy has been experiencing a rapid growth since the 90s. Urbanization and lifestyle changes along with the economic development have created a demand for banking products and services to support consumer investments in a profitable manner. To meet the overgrowing demand of consumers the number of commercial banks in Bangladesh is increasing day by day. So it is wise to say that the banking industry is quite saturated and competitive. Some of the major players in this industry are the Hong Kong and Shanghai Banking Corporation (HSBC), Standard Chartered Bank (SCB), City bank, MTB, BRAC Bank, Prime Bank Limited Dutch Bangla Bank Limited, Mutual trust Bank, National Bank, AB Bank, etc. Over the years these banks are significantly holding the market share and continuously exerting pressure over one another. This highly competitive and profitable industry therefore inspired others to come forward and thus made this industry even more competitive and tougher. In todays world everyone needs something unique to survive, and like everyone else each bank also has some specific characteristics which set them apart from the others. For example, the unique selling point of Dutch Bangla Bank Limited is its ATM outlets. None of the banks can even think about competing with Dutch Bangla Bank in terms of ATM outlets. With their massive promotion and superior ATM service quality, Dutch Bangla bank has created a specific image in the minds of the customers. Similarly BRAC Bank specializes in SME banking. This has been really profitable for BRAC bank for quite some time now. This untapped market has great potential and at this moment BRAC Bank almost enjoys a monopoly in that field. Again if we consider the case of Prime Bank, it specializes in

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MD. SHAHIDUL ISLAM ID # M 20831111018 corporate clients. Though MTB and Prime bank Limited came in the industry at the same time however Prime Bank has expanded its business to a great extent. Today Prime Bank is a famous name among all the corporate and is proving to be quite successful. This does prove that the banking industry is quite competitive.

However keeping all that in mind, a new dynamic bank emerged named MTB, a fully online scheduled commercial bank opened in 1999, is dedicated to offer its clientele truly international standard banking services. MTBs customer friendly product with convenient features is designed to meet the grouting and changing needs. Most important, The MTB has a team of expert sales persons who will take banking at the doorsteps of customers. Such innovative schemes, diversified services and dedicated human resource have been the success factor of MTB in such a competitive industry. A recent report from Bangladesh Bank also gives us the following information regarding the industry: Net NPL ratios have declined by more than two thirds since 2004. Return on assets has more than doubled since 2004 (from 0.69 to 1.78 average for all banks). Return on equity has sharply increased from 9.7 percent in 2003 to 21 percent in 2010. BB prepared risk management guidelines to strengthening debt management and increasing the quality of assets. BB conducted stress testing to increase the shock absorbing capacity of the banking sector. Completed Basel II implementation to increase capital of banks and has started working on the implementation process of Basel III.

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2.4.4. PESTLE Analysis

Political Factors: 1. Reigning government always tries to bring new banks in the market making their own people the directors and owners of the banks. 2. Banks which has a board of directors who are from the political party of the reigning government tends to get more business and favor from the government. 3. The government often scrutinizes the banks with directors of the opposition party. Economic Factors: 1. The economy is currently on a downfall following the stock market crash. 2. Many people lost their savings who invested in the stock market. 3. Almost all economic activities in the country have slowed down which will take its toll on the banking industry. 4. Though the economy is on a downfall, the rate of inflation is still high for which people are not convinced about saving in terms of money in a bank. 5. The GDP growth of the economy is however steady. Social Factors: 1. People in the rural areas ideas are still skeptical about the banking industry and their offers and schemes.

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MD. SHAHIDUL ISLAM ID # M 20831111018 2. People, especially in the rural areas, still prefer to save money in their home or save in terms of land. 3. People, especially aged and in rural areas, think that taking a bank loan is a bad idea and is a burden.

Technological Factors: 1. Emergence of online banking and telephone banking brought a whole new dimension in the industry. 2. ATMs now play a big role especially in the urban cities. 3. Due to technological advances, banking have become faster, efficient and more coordinated. Legal Factors: 1. Banks are now more regulated than they were before in their early stages. 2. Bangladesh Bank strongly monitors all the banks. 3. Most banks are still suffering to maintain the Statutory Liquidity Reserve (SLR) and Cash Reserve Ratio (CRR) imposed by the Bangladesh Bank. 4. Most banks are also suffering to maintain their Debt-Liquidity Ratio imposed by the Bangladesh Bank. Environmental Factors: 1. Due to technological advances, banks now have to rely less on papers and as a result they are not doing much or any hard to the environment.

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2.4.5. SWOT Analysis

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Figure 2: SWOT Analysis

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Chapter: 3

GENERAL BANKING

3.0. GENERAL BANKING:

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3.1. Deposit Products:


The aim to satisfy all clients, regardless of how big or small they may be, individuals are counseled on the best type of accounts suitable to them such as Current, Savings, Short Notice Deposits, Fixed Deposits etc.

3.1.1. Current & Short notice deposit (SND) Account:


Both individuals and business concerns including non-profit making organization can open current and & Short notice deposit account. For opening a personal current account, the account holder must provide his/her true names, parents name, present and permanent address, date of birth, place of birth, account holders two recent passport size color photographs, nominees one passport size color photograph, TIN number (if any), Passport or Voter ID card or any others employer ID card and certificate from the ward commissioner or union council chairman, The requirement of sole proprietorship account is same as of personal account plus proprietor valid trade license photocopy is needed. The requirement of partnership account is same as of sole proprietorship account plus partnership deed and mentioned those will provide authority to operate the account. The requirement of sole limited company account is same as of personal account with some additional documents which are listed below: Certificate of incorporation Resolution of the board of directors Memorandum and articles of association Proper information as of personal account of directors and accounts operators

Certificate of the returns submitted to the register of joint stock companies

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MD. SHAHIDUL ISLAM ID # M 20831111018 Attestation by embassies or high commissions in the respective countries if the company is incorporated outside of Bangladesh. In addition, Different club, Co-operative society, private school, college& Madrasa, Trustee board can open current account as per provide their board resolution, Deed of those organization and others document as per types of organization.

3.1.2. Saving Account (SB):


Saving account always opened by individual for saving purpose of deposited amount over a period. For opening a saving account, a person must provide his true names, parents names, present and permanent address, date of birth, place of birth, account holders two recent passport size color photographs, nominees one passport size color photograph, Passport or NID Card or any others employer ID card or certificate from the ward

commissioner or union council chairman, Details of occupation or employment and source of wealth or income and an introducer, who already has a account with the bank.

3.1.3. Fixed Deposit (FD) Account:


Fixed Deposit is one, which is repayable after the expiry of a predetermined period fixed by the client. The period varies from 1 month to 12 months. These deposits are not repayable on demand but they are withdrawing able subject to a period of notice. Hence, it is a popularly known as Time Deposit or Time Liabilities. Normally the money on a fixed deposit is not repayable before the expiry of a fixed period.

3.1.4. Deposit Products and Interest Rate:


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Types of Deposit
1. Savings Deposits a) General b) NRB 2. Special Notice Deposits (SND) Below BDT 10.00 million BDT 10.00 million to below 250.00 million BDT 250.00 million to below 1.00 billion BDT 1.00 billion and above

Interest Rate
6.50% 6.75%

5.50% 7.00% 9.50% 12.00%

3.

Fixed Deposits: 1 month Any Amount 3 months Any Amount 6 months Any Amount 12 months Any Amount 12.50% 12.50% 12.50% 12.50%

Table1: MTB Deposit Offers & Schemes

3.2. Retail Savings Products:


3.2.1. MTB Senior:

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MD. SHAHIDUL ISLAM ID # M 20831111018 MTB Senior is an exclusive savings account that adds interest on daily basis and pays out on monthly basis.

Eligibility of a Client to open this account: Must be a citizen of Bangladesh Age 60 and above

Unique features of this product: Lifetime Free Debit Card Free internet banking 20% off on locker charge First 3 cheque books free Interest calculated on daily basis and paid monthly Unlimited transactions Online banking facility across MTB branches and access to largest ATM network.

3.2.2. MTB Inspire:


MTB Inspire is an exclusive savings account that adds interest on daily basis and pays out on monthly basis.

Eligibility of a Client to open this account: Must be a citizen of Bangladesh

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MD. SHAHIDUL ISLAM ID # M 20831111018 Age 18 years and above

Unique features of this product: Interest calculated on daily basis and paid monthly No Debit card Fee for 1st year Free internet banking Unlimited transactions Online banking facility across MTB branches and access to largest ATM network.

3.2.3. MTB Ruby:

MTB Ruby is a daily interest bearing and monthly interest paying savings account for female customers.

Eligibility of a Client to open this account: Any Bangladeshi female citizen with photo ID document Age 18 years and above

Unique features of this product: Interest calculated on daily basis and paid monthly No Debit card fee for 1st year Free internet banking Online banking facility across MTB branches and access to largest ATM network.

3.2.4. MTB Privilege Saving:


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MD. SHAHIDUL ISLAM ID # M 20831111018 MTB Privilege Savings Account is a daily interest bearing and monthly interest paying savings account for MTB privilege customers.

Eligibility of a Client to open this account: Any Bangladeshi Citizen who has deposit balance of Tk. 30 lac and above with MTB (Total Balance including the opening balance of this account) Age 18 years and above

Unique features of this product: Interest calculated on daily balance Interest is credited to account every month Free internet banking No account maintenance fee Waiver in account maintenance fee Waiver in cheque book fee Free debit card

Required documents to open the account: Banks prescribed AOF (signed by the applicant) Three PP size photographs of applicant(s) attested by the introducer Copy of valid photo ID like, Passport/NID/Driving License etc. One PP size photograph of nominee attested by account holder

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3.2.5. MTB Junior:


MTB Junior is a daily interest bearing and half yearly interest paying savings account for school/college students.

Eligibility of a Client to open this account: School/college students Age below 18 years

Unique features of this product: Interest calculated on daily balance Interest is credited to account on half yearly basis No debit card fee Waiver in account maintenance fee

Required documents to open the account: Banks prescribed AOF (signed by the applicant) ID card of the school Three PP size photographs of applicant(s) attested by the institution authority / bank official / any person acceptable to MTB Intimation of Guardian as per banks prescribed AOF (Individual information form duly signed by guardian). 3 copies PP size photographs of the guardian Copy of valid photo ID like: Passport/NID/Driving License etc of guardian One PP size photograph of nominee attested by guardian.

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3.2.6. MTB Graduate:


MTB Graduate is a daily interest bearing and monthly interest paying savings account for College /University students.

Eligibility of a Client to open this account: Any Bangladeshi college/university student with photo ID document as applicable for savings account. Age 18 years and above.

Unique features of this product: Interest calculated on daily basis and paid monthly. No Debit card fee. No account maintenance fee.

Required documents to open the account: Banks prescribed AOF (signed by the applicant). ID card of the college/university Three PP size photographs of applicant(s) attested by bank official / any person acceptable to MTB Copy of valid photo ID like; Passport/NID/Driving License etc. One PP size photograph of nominee attested by account holder.

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3.2.7. MTB Retail Savings Products (Deposit Slab and Interest Rate):
Product Name MTB Inspire Deposit Slab ( If any) Below BDT 0.1 million BDT 0.1 million to less than BDT 0.5 million BDT 0.5 million to less than BDT 1.0 million BDT 1.0 million and above MTB Ruby Day End Balance Up to BDT 5 lac Above BDT 5 lac and up to BDT 20 lac Above BDT 20 lac MTB Senior Below BDT 0.1 million BDT 0.1 million to less than BDT 0.5 million BDT 0.5 million to less than BDT 1.0 million BDT 1.0 million and above MTB Junior Day End Balance Up to BDT 20,000 Above BDT 20,000 and up to BDT 50,000 Above BDT 50,000 MTB Graduate Day End Balance Up to BDT 20,000 Above BDT 20,000 and up to BDT 50,000 Above BDT 50,000 Privilege Savings Day End Balance Up to BDT 5 lac Above BDT 5 lac and up to BDT 15 lac Above BDT 15 lac and up to BDT 25 lac Above BDT 25 lac Table 2: MTB Retail Savings Products Rate 6.00% 6.50% 7.50% 8.50% Interest Rate 5.50% 5.75% 6.00% 6.00% 6.50% 7.50% 8.50% Interest Rate 5.00% 5.50% 6.00% Interest Rate 5.25% 5.75% 6.00% Interest Rate 5.50% 6.00% 6.25% 6.75%

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3.3. Deposit Schemes:


Apart from the conventional banking operations MTB strives to introduce an array of products and services and already launched a number of deposit schemes products with the aim of popularizing consumer banking operations and offer higher return to its clients. These products are:

3.3.1. Brick by Brick:


Drops of water make an ocean. Your habit of regular savings will provide you comfort in the future. Brick by Brick is a unique monthly savings plan which builds up over the years and provides a lump sum amount at maturity.

The savings periods are 3, 5, 8 and 10 years. Monthly installments are Tk. 500/=, 1,000/=, 2,000/=, 5,000/= and thereafter in multiples of Tk. 500. Any one will have to open an account in the bank from which a standing instruction will be given to transfer the monthly deposit in the scheme's account and you must ensure that their account has sufficient balance within the 10th of each month. This plan is so flexible that at maturity any one can earn a handsome amount depending on the size of installment amount of savings and tenure.

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3.3.2. Monthly Benefit Plan:


This plan offers you to generate monthly income out of your deposit. It has been designed to help and assist conscious savers from all strata of the society. The minimum deposit is Tk. 50,000/= or in multiples thereof. There is no upper limit and this plan is for a 1, 2 & 3 years term that cannot be changed subsequently. You will require opening a savings/current account. Monthly income will be credited to your account.

3.3.3. MTB Double Saver Plan:


]MTB Double Saver Plan offers Clients a one time savings scheme, which will provide of clients double the amount of your deposit after eight (8) years. Clients will receive a

handsome amount at maturity. If you are an individual or if the institution is an NGO or an Educational institution or a Trust or Society or any other institution, Clients may invest their savings in this scheme with a minimum deposit of Tk. 10,000/- for eight (8) years with no limit for maximum amount. At maturity Clients will get double of their deposited amount along with a gift item. Clint can even avail loan up to 90% of the deposited amount.

3.3.4. MTB Millionaire Plan:


Millionaire Plan is a monthly savings plan, which is designed to make you a millionaire in a few years.

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MD. SHAHIDUL ISLAM ID # M 20831111018 If the clients are an individual or if their institution is an NGO or an Educational institution or a Trust or Society or any other institution, the clients may invest their savings in this scheme for 6/8/10/12/15/20 years with different installment sizes. At maturity they will get Tk. 10,00,000/-. The clients can even avail loan up to 90% of the deposited amount after 1(one year).

3.3.5. MTB Education Plan:


Education is the backbone of any nation and one of the primary factors of prosperity. An educated nation stands tall in the committee of nations and deserves respect. A child's education is of prime importance and every parent should ensure and make every effort to get their child educated. To admit a child in a good institution parents require adequate amount of savings for the cost of admission into a school. This plan allows new parents to save for 4/7/9/12 years.

The parent can deposit any amount of money at any day of the month. The interest rate is very lucrative and Mutual Trust Bank offer substantially more than the prevailing savings rate.

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3.4. Corporate Employee Privilege Program (CEPP):

MTB has started offering different retail banking privileges to well known corporate houses under Corporate Employee Privilege Program (CEPP). Employees of these corporate houses will be eligible for specific offer on retail products and services as approved by the management while opening salary account with MTB. Under CEPP the corporate houses will get following benefits: Salary Account: Saving or Current account No account maintenance fee No account opening deposit No Debit Card fee Free internet banking Free cheque book Credit Card: 50% discount in annual fee Personal Loan: Rate of interest:18% p.a Processing fee : Regular fee will apply Auto Loan: Rate of interest:16.50% p.a Processing fee : Regular fee will apply

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3.5. Correspondent Banking:


The objective of Mutual Trust Bank correspondent banking operations is to strengthen our existing relationships with foreign banks and financial institutions around the globe as well as exploring new relationships. In addition to that, we provide assistance in marketing the products of the correspondent banks. At present MTB is maintaining relationships with 30 (thirty) foreign correspondents and the number is growing every day. Currently the bank has 18 (eighteen) NOSTRO A/Cs with large foreign banks abroad. The bank is a "SWIFT" member and its Bank Identification Number or BIC is 'MTBL BDDH'.

3.6. Foreign Trade:


MTB provides a wide range of banking services to all types of commercial concerns such as Import & Export Finance and Services, Investment Advice, Foreign Remittance and other specialized services as required. Although MTBL are a private commercial Bank, It has a strong global network that helps us to undertake international trade smoothly and efficiently.

Import Business:
Mutual Trust Bank supports its customers by providing facilities throughout the import process to ensure smooth running of their business. The facilities are: a. Import Letter of Credit b. Post Import Financing (LIM, LTR etc) c. Import collection services & Shipping Guarantees

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Export Business:
Mutual Trust Bank maintains a strong network with the Exchange Houses worldwide for ensuring better remittance services for its customers. The Bank having a network of 36 branches has established remittance arrangements with a number of exchange houses to facilitate wage earners to remit their money to Bangladesh. The following is the list of exchange houses having arrangement with Mutual Trust Bank Ltd.

3.7. Online Banking:


Mutual Trust Bank is playing a pioneering role among its competitors in providing real time online banking facilities to its customers. Mutual Trust Bank online banking offers a customer to deposit or withdraw any sum of money from any branch anywhere. Any account holder having a checking account with the bank can avail this service.

Based on two-tier client-server architecture, the banking software works basically on central server approach providing the fastest possible access time to any client database from any branch as well as updating the transaction. The branch level server keeping the up to date transaction history of the client ensures the offline transaction ability in case of any failure in the remote communication. Using Microsoft's enterprise version of SQL Server 2000 as data reservoir, the software ensures the highest level of security at application, network, database and operating systems level ascertaining the confidentiality and security of customer's personal and account's information.

3.8. Remittance Services:


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Exchange House Name

Service Available 1. Taka Draft Arrangement 2. Express Money 3. TT Arrangement

Presence

UAE Exchange Centre LLC

Global

Wall Street Exchange Centre LLC Instant Cash Worldwide Ltd.

1. TT/ EFT Arrangement 1. Instant Cash Payment. 2. TT/EFT Arrangement. 1. TT/EFT Arrangement 2. Taka Draft Arrangement 1. TT/EFT Arrangement 1. TT/EFT Arrangement 1. TT/EFT Arrangement 1. TT/EFT Arrangement 1. Taka Draft Arrangement 2. TT Arrangement 1.Taka Draft Arrangement 2.TT/EFT Arrangement 1. TT/EFT Arrangement 1. TT/EFT Arrangement 1. Instant Cash Payment

UAE Global

Al Ahalia Money Exchange Bureau Route of Asia Money Exchange Ltd. Bangladesh Money Transfers (UK) Ltd. Instant Exchange UK Ltd. Money link UK Ltd. Trust Exchange Co. W.L.L.

UAE UK UK UK UK Qatar

Economic Exchange Company Al Ghurair Exchange LLP ICICI Bank, India Money Gram Payment System

UAE UAE Global Global

Table 3: Exchange House

3.9. SWIFT Service:


The Society for Worldwide Interbank Financial Telecommunication or S.W.I.F.T. is a worldwide community. 7,800 financial institutions in 200 countries connected to one another

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MD. SHAHIDUL ISLAM ID # M 20831111018 through SWIFT. In their own word SWIFT "consistently delivers quantifiable business value and proven technical excellence to its members through its comprehensive messaging standards, the security, reliability and five nines availability of its messaging platform and its role in advancing STP. The guiding principles of SWIFT are clear: to offer the financial services industry a common platform of advanced technology and access to shared solutions through which each member can build its competitive edge."

Mutual Trust Bank has already become the member of SWIFT community and has started its operation from March 2004. With introduction of SWIFT, MTB ensures its customers the quickest and most secured financial transaction around the world. The SWIFT address or BIC of Mutual Trust Bank is: MTBL BD DH. Bank Identification Code (BIC) for the MTB Branches are:
Branches Principal Branch Panthapath Branch Agrabad Branch Babu Bazar Branch Progati Sarani branch Dilkusha Branch Khatunganj Branch Uttara Model Town Branch Dhanmondi Branch BIC MTBL BDDH PBR MTBL BDDH PPB MTBL BDDH AGB MTBL BDDH BBB MTBL BDDH PSB MTBL BDDH DIL MTBL BDDH KTG MTBL BDDH UTR MTBL BDDH DHA

3.10. Cards Services:

3.10.1. Visa Electron Debit Card:

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MD. SHAHIDUL ISLAM ID # M 20831111018 MTB Visa Electron Card will be offered to each and every Savings, Current & SND Account holders of the Bank. This electron Card can be used at any MTBs ATM or any VISA logo ATMs all over the country.

3.10.2. International Travel Card: An internationally accepted VISA prepaid card for the travelers: Will reduce dollar endorsement hassle and will provide best support while in abroad. Easy to use & Carry. Secured & Convenient Handy & Prestigious. Usability on 550,000 Visa ATMs worldwide.

3.10.3. MTB Hajj card: Hajj card is a pre-paid card which is valid only in Saudi Arabia (KSA) to perform Hajj or Omrah. According to the Central Bank Foreign Currency regulations, this card will allow the pilgrims to withdraw cash from any of the VISA acquired ATM and purchase or pay against service by using VISA POS throughout Saudi Arabia. The cardholder will be able to withdraw SR 100 in cash per transaction or up to the face value of the card.

MTB Hajj cards are especially designed to ease the payment for food and lodging of the Bangladeshi pilgrims at Saudi Arabia to perform Umrah or Hajj. However these cards can also be used by any travelers at Saudi Arabia considering the security aspect in handling cash required for their travel while in the Kingdom. Prepared For: Md. Masum Hossain Page 111

MD. SHAHIDUL ISLAM ID # M 20831111018

Benefits of the Hajj Card: Peace of Mind No need to worry about carrying large amount of cash.

Safety The traveler will receive a personal identification number (PIN code) for each card. ATM Cash can only be accessed by the cardholder by entering the confidential PIN code.

Easy Withdrawing cash from VISA acquired ATM is done by following a few easy steps. Hotel Booking: Any Bangladeshi pilgrim can easily book hotel in Mecca or Medina from Bangladesh before going to perform Hajj or Omrah by using his/her hajj card. Card holder also can buy/book advance air ticket in advance by the card at their convenient schedule.

Convenient: Hajj cards can be used to withdraw cash & purchase or getting service 24 hours a day, 7 days a week from any of the VISA ATMs and VISA accepted outlet across Saudi Arabia.

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No Confusion: The cards value will be converted in Saudi Riyals. The travelers does not need to worry about foreign currency exchange once the purchase is done by using card in KSA.

Cost Saving: There are no fees on ATM withdrawals made with Saudi Umrah and Haj Cards, and 100% cash value can be withdrawn in cash.

Sharia: The cards adhere 100% to Islamic Sharia regulations.

Souvenir: Once used these attractive cards can be kept as a souvenir of the trip to the Holy Lands.

3.10.4. Remittance card: Remittance card is a revolutionary product of Mutual Trust Bank and it is also the first time in Bangladesh, it acts like a debit card but it is different than debit cards. Usually debit cards are issued against a bank account number and the withdrawal amount are debited from the customers account when a card is used on an ATM or POS.

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MD. SHAHIDUL ISLAM ID # M 20831111018

On the contrary in case of Remittance Card there will be no need to open or maintain a bank account with MTB. The remitted amount of money will be directly credited to the card account. It will fulfill the purpose of quick money transfer from non-resident Bangladeshi (who are working abroad) to their relatives in Bangladesh. Beneficiary can draw remitted amount sent to him by using this card. Money transfer within a short time Easy to use & Carry. No need to rush to the bank branches. No need to rush to the bank branches. 24 Hours day night cash drawing facility More than 400 ATM accessibility countrywide More than 15,000 shopping outlet countrywide Accepted everywhere displaying VISA sign No annual fee for card uses.

3.10.5. Local Classic & Gold Credit Card: Buy now pay later. Best for middle class income group personnel. Best for middle class income group personnel Secured

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MD. SHAHIDUL ISLAM ID # M 20831111018 Handy & Prestigious 50% Cash Advance facility. Useable at all ATMs bearing Visa 5000 outlets for shopping in Bangladesh Easy repayment options. Up to 45 Days Interest free period.

3.10.6. International Credit Card: Useable in Any Currency at Home and Abroad. Best for upper class income group. Easy to use & Carry. Secured & Convenient. Handy & Prestigious. 50% Cash Advance facility. Easy repayment options Up to 45 Days Interest free period

3.11. Other Activities:


The Bank provides services for remittance, underwriting, guarantee, public offering of shares etc. The bank also provides funds to investment and leasing companies. Thus recently created a venture capital fund for equity support to innovative but risky projects.

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Chapter: 4 Credit Disbursement Analysis

4.0. CREDIT OPERATION:

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MD. SHAHIDUL ISLAM ID # M 20831111018 According to the different product and services the bank has to provide to their customer, Loans & Advance has the major impact in respect of both bank and also for their customer. The making of loan and advance is always profitable for the bank. As banks assemble savings from the general people in the form of deposit, the most important task is to disburse the said deposit as loans and advance to the mass people for the development of commercial, industrial and the people who are in need of fund for investment. Like other financial institution, the main purpose of the commercial bank is to make profit. Because loans and advance is the main asset of the bank, from where the bank has their interest income, which is the main source of income for the financial institution like bank. Mutual Trust Bank also knows the debt financing is cheaper than equity financing. So, in this way the bank helps to build up the industrial infrastructure of the country by giving them opportunity of being financed by using the debt capital. Loans & advance also helps to pull up the operating and financial leverage. But to get the loans and advance the investors has to follow some terms and condition which falls under the policy and practice of the bank instruction booklet.

4.1. Policy and Practice:


1. All lending will be adequately secured with acceptable security and margin requirement as lay down by the Head office credit committee. 2. The bank shall not incur any uncovered foreign exchange risk (currency exposure) in the lending of funds. 3. The bank shall not incur any risk of exposure in respect of unmatched rates of interest of funding of loans and advances beyond 15% of outstanding loans and Advances.

4. End use of working capital facilities will be closely monitored to ensure lending used for the purpose for which they were advanced. Prepared For: Md. Masum Hossain

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MD. SHAHIDUL ISLAM ID # M 20831111018 5. Country risk in loans and advances will be accurately identified and shall be within the country limits if any approved for the bank. The same treatment will be given to country risk arising out of contingent liabilities relating to Letters of credit and letters of guarantee.

4.2. Type of Credit Activities:


MTB disburses loans in different form. It has verity in purpose wise, mode wise and sector wise. Depending on the various nature of financing, all the lending activities have been brought under the following major heads:

Loan

Long Term

Short Term

Industrial Loan

Commercial Loan

Bank Guarantee, Performance Guarantee, Issuance of CDR

Cash Credit (Hypothecation), Cash Credit (Pledge), Cash Credit (Export), Loan General, Secured Overdraft (SOD), Loan against imported merchandise (LIM) and others Loan.

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4.2.1. Cash Credit (CC):


By this agreement, a banker allows his customer to borrow money up to a certain limit. CC is a favorable mode of borrowing by traders, industrialists etc. for meeting their working capital requirements. It is operate like an overdraft account. Depending on the need of business, the borrower can draw on the cash credit account at different time and when he gets money can adjust the liability. Mutual Trust bank charges interest on the daily outstanding balance of the account. Based on the charging security there are two forms of cash credit. They are-

CC (Hypo) The stocks of goods are under the control 1 of borrower. For this letter of hypothecation is obtained 2 from the borrower. Borrowers have to submit stock report on 3 monthly basis to the lending Bank. In case of CC (Hypo) Bank obtained sufficient collateral security for covering loan risk. 4

CC (Pledge) The stocks of goods are under the control of lending Bank. For this letter of pledge is obtained form the borrower. Bank maintains pledge register; stock reports not require submitting. In case of CC (Pledge) Bank takes other collateral security if available in the hand of borrower.

Required documents for CC (Hypo) Loan:

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MD. SHAHIDUL ISLAM ID # M 20831111018 SI .No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Name of the document Clients Application in letterhead pad. Credit personal form Owners declaration form Up-to-date stock report Valid trade license TIN Personal net worth of the proprietor CRG(enclosed) Branch valuation report Address visit report Surveyor valuation report CIB report Legal opinion Nationality certificate / Passport Photograph of the proprietor Lease /rent agreement of the shop /warehouse Other business involvement (proof) Clients bank statement with MTBL

4.2.1. Over draft (OD):

It is a continuous advance facility. By the agreement the, the bankers allows his customer to overdraft his current account up to his credit limits sanctioned by the bank. OD is of two types in the Mutual Trust Bank limited. They are described in the table below.

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MD. SHAHIDUL ISLAM ID # M 20831111018 TOD means Temporary Overdraft It is allowed only for short time such as 1 one or two days. It is allowed without security or against 2 collection of instrument. It has not a sanction limit Borrower cannot withdraw any amount 4 as required by him. TOD allowed for meet up temporary 5 crisis of the borrower. the business. required up to the sanction limit. It is allowed as working capital to meet run 3 such as FDR, PSP etc. It has a sanction limit Borrower can withdraw any amount as as one year. It is allowed against en-cashable securities SOD means Secured Overdraft It is sanctioned for a stipulated period such

4.2.2. Term Loan:


Term loan is advancing both short and medium term credit to the industrial sector on the basic of their capital structure, construction and liquidity consideration. It is given against land and building along with machinery, personal guarantee of directors and hypothecation of raw materials.

4.2.3. Loan General:


It is given against personal guarantee, hypothecation of goods, land and building.

4.2.4. Import Finance:


There is also some loan that can be taken on the imported materials. They are of two types. The difference between them are describe in the table below:

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MD. SHAHIDUL ISLAM ID # M 20831111018 LTR LTR means Loan against Trust * Receipt It is an import connected loan 1 facilities. LTR liability is adjusted within 30 2 (thirty) days. For 3 maintained. Stock 4 borrower control. of goods kept under 4 Stock goods kept under Banks control. this LTR Register is 3 For this LIM register is maintained. 2 LIM liability is adjusted within 45-60 days. 1 It is also an import connected loan facility. * Merchandise LIM LIM means Loan against Imported

4.2.5. Lease Finance:


The Lease Financing is a major financial sector of Banking Sector. As Mutual Trust Bank is a leading financial institution in the financial sector in our country it also involves in lease financing. But the procedure of lease financing is sometimes different from the pure leasing companies. The Mutual Trust Bank at first started lease financing in usual style in when started its operation.

4.2.6. SME Loan:


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MD. SHAHIDUL ISLAM ID # M 20831111018 With the objective of extending financial support to small businessmen, this loan scheme has been introduced. It has been designed to get business loans on easy terms and without any hassle only the genuine businessmen having entrepreneurship quality and honesty, to run and expand their business smoothly. Maximum loan under the scheme will be up to Tk. 50 lac. No collateral security is required up to Tk. 5 lac and collateral security is required for loan above 5 lac.

4.2.7. Retail Loan:


Home Loan Scheme:
Home Loan Scheme has been introduced to facilitate people to fulfill their dream of a home of their own. It has been designed o help people to get home loans on easy terms and without any hassle. Loan amount under this scheme is maximum Tk. 50 lac. Salaried executives, professionals, businessmen and govt. officials are eligible to avail this loan scheme. The loan is to be repaid by monthly equal installments including interest within the period ranging from 5 years to 20 years depending on the size of loan. Home Repair/ Renovation Loan Scheme: Prepared For: Md. Masum Hossain Page 111

MD. SHAHIDUL ISLAM ID # M 20831111018 Home Repair/ Renovation Loan Scheme has been designed with a view to help the owners of house/ building/ flat to mitigate their financial need for repair/ renovation of their house/ building/ flat. Only the genuine residential house owners will be eligible to avail the loan facilities to repair or renovate their own house/ building/ flats according to their needs. Maximum loan under the scheme will be up to Tk. 5.00 lac commensuration the monthly income. The loan is to be repaid by monthly equal installments including interest within maximum 60 months. Personal Loan: In order to make a significant contribution in the living standards of the people of medium and low-income category, Mutual Trust Bank has introduced a scheme called Personal Loan Scheme". With a view to materialize the dreams of those who are unable to make one time investment from their own savings, one can now afford to buy necessary household equipments and thus improve the standard of living.

4.2.8. Required papers for Retail Loan:


A. House Building Loan:
Loan Application Form duly filled in and signed by the customer. Copy of trade license/ copy of other license required( in the case of business ) TIN (Where applicable) Net worth of the Clint along with photograph duly attested. Detailed Income Expense Statement Spouse particular with photograph

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MD. SHAHIDUL ISLAM ID # M 20831111018 Guarantors If any details (addresses both present and permanent own telephone numbers of residence office & mobile no. Net worth of the guarantors along with photograph duly attested Bank statement of the Borrower( duly attested minimum 6 month ) Other Bank statement( If any) Lone A/C Statement with is as well as other bank ( if any) Latest CIB report from Bangladesh Bank Copy of valid Passport/ Driving License/ other identification like as National ID/ Telephone Bill / Gas Bill / Electricity Bill / Rent race applicable) Branch valuation certificate( In respect of collateral security) Enlisted surveyors valuation (in repent of collateral security) Site visit plan / Architectural or structural plan Approved by RAJUK/ Mun Cost of the project Copy of legal opinion as obtained from panel lawyer to the bank.

B. House Building (Flat Purchase) Loan:


Loan application form duly filled in and signed by the customer Copy of trade license / Copy of other license Required in case of Business) TIN (where applicable) Net worth of the client along with photograph duly attested Detailed income-expense statement Spouse particulars with photograph

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MD. SHAHIDUL ISLAM ID # M 20831111018 Guarantors (if any) detailed (address - both present and permanent, work address, all telephone numbers of residence, office and mobile no.) Net worth of guarantor(s) along with photograph (s) duly attested (Where applicable ) Bank statement of the Borrower (duly attested ,minimum six months) Other bank statement (if applicable) Loan A / C Statement with as well as other bank (if any) Latest CIB report from Bangladesh bank Copy of valid passport / Driving license/ other identification i.e. Nationality certificate / National ID / telephone bill / Gas Bill / Electricity bill / Rent Receivable Bill (if applicable ) Branch valuation certificate (in respect of collateral security) Enlisted surveyors valuation ( in respect of collateral security) Site visit plan / Architecture or Structural plan Approved Municipality Cost of the project Copy of legal opinion as obtained from panel lawyer of the bank Detailed information from developer company by RAJUK /

C. Auto Loan:
Loan application form duly filled in and signed by the customers. Car quotation duly signed and accepted by the customer. Copy of trade license / Copy of other license required (in case of Business) both client and guarantors. TIN and VAT Certificate

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MD. SHAHIDUL ISLAM ID # M 20831111018 Net worth of the client along with photograph duly attested Detailed income-expense statement Guarantors (if any) detailed (address - both present and permanent, work address, all telephone numbers of residence, office and mobile no.) Net worth of guarantor(s) along with photograph (s) duly attested (Where applicable ) Spouse particulars with photograph Letter from employer with details of employment and salary (where applicable) A/ C statement with us as well as other bank (if applicable) Loan A / C statement with us as well as other bank ( if any) Latest CIB report from Bangladesh bank Copy of valid passport / Driving license/ other identification i.e. Nationality certificate / National ID / telephone bill / Gas Bill / Electricity bill / Rent Receivable Bill(if applicable ) Photocopy professional degree (if applicable)

D. Personal Loan:
Application duly filled in & signed by the applicant. Photo ID (Valid Passport/ valid driving license/ National ID). Latest salary certificate ( duly signed by head of HR/CEO as per banks holder) Last six months Bank statement

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MD. SHAHIDUL ISLAM ID # M 20831111018 Visiting card/ Office ID. TIN certificate(if any) Proof of residence (Utility Bill- Electricity, Gas or Water Bill. Name of the Purchase item.

4.2.9. MTB Loan Products and interest rate: Categories


1 2 Term loan Agriculture a) Industrial

Rates
13.00% (Highest) * 14.00% (Mid Rate)

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b) Non-Industrial 3 4 5 6. Import finance Working Capital Export Finance (PC, ECC) Commercial Lending a) General b) Essential Goods (rice, wheat, edible oil, lentils, chickpeas, onion, date and sugar) 7. Housing Loan: a) Commercial b) Residential 8. 9. 10. 11. Consumer Credit Lease Finance Loan to Non-Banking Financial Institutions Loan/ SOD against FDR of MTB 16.50% (Mid Rate) 14.00% (Mid Rate) 7.00% (Highest)* 16.50% (Mid Rate) 16.50% (Mid Rate) 15.00% (Mid Rate)

16.50% (Mid Rate) 14.50% (Mid Rate) 18.00% (Mid Rate) 16.50% (Mid Rate) 17.00% (Mid Rate) 3.00% above FDR interest rate but not less than 14.00% P.A. 17.00% (Mid Rate) 3.00% above deposit product interest rate but not less than 14.00% P.A. 16.50% (Mid Rate) 16.50% (Mid Rate) 17.00% (Mid Rate)

12. 13.

SOD against FDR of other Banks Loan/SOD against other Special Deposit Products of MTB

14. 15. 16.

Auto Loan Small Business Loan under SME Others

Table4: MTB Loan Products

4.3. Procedure for Processing Loan Application:


In setting up the procedures for the evaluation / approval of the small project the length of processing time become a significant factor. Compared to other financial institutions usually two months average processing for its medium and large loan program, the processing /approval time of small industry loan remain well below the above processing time because

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MD. SHAHIDUL ISLAM ID # M 20831111018 of its lesser detailed studies as well as the bank considers that small entrepreneurs are looking for their sources of credit at their time of need. The processing /approval time for small industry loan is not more then two months from the date of receiving complete application from. Application in prescribe form of received in triplicate, duly filled in, and sealed and signed by the sponsoring directors along with their attested photographs duly affixed in the space provided for. Draft layout plan of the proposed building and the estimated for construction cost is obtained. For location of industry in other areas, permission / no- objection for setting up the small industry is obtained from the appropriate authorities. Utility agencys letter of consent of providing necessary utility services to the unit to be obtained. Detailed credit report of the sponsors/ project is prepared i.e. the Bank should carry out detailed credit investigation of the promoters. Tentative list of machinery / work with detailed specification should be obtained supported by 3 price quotation. The individual project appraisal report for small scale and cottage industry may not be very elaborate and exhausted. However it covers the basic area of project viability. Join report from the Bank and the borrower is prepared for informal sector. The bank sometime seek advice for the panel of experts whose service may be haired by the bank and when required in specific case.

4.4. Credit Appraisal System:


The first step of credit proceedings is the request for credit from the clients. Then scrutinizing and collection of information from primary and secondary sources take place.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Credit appraisal and evaluation is the most important part of credit management. On the basis of evaluation approval is given by the higher-authority with certain conditions to be fulfilled. Sanction of credit is done by the sanctioning officer, who has the authority to sanction the Credits. After fulfilling the conditions the credit is disbursed. Credit monitoring and reviewing start at the time of disbursement. Necessary steps should be taken to minimize the risk and increase the return of the Bank. Delegation of Business Power is important in credit sanctioning. Four-tire level is maintained in case of large amount of credit sanctioning.

4.4.1. Request for Credit from the client:


Bank provides credit facilities to the people who are credit worthy to the bank. Credit worthiness depends on the credibility, financial capability, and feasibility of the project and management ability of the credits to earn profits. When bank is satisfied with all these then the client is provided with the requested credit. At this point it should be mentioned that the client has to go through an interview where his credit potentiality is justified through critical observation. When credit officer is satisfied with the customer he is asked to submit an application and to fill up a form with specific details.

4.4.2. Credit Application:


Completeness of information can best be obtained by requesting the applicant to fill out a comprehensive application. Psychological attitudes toward the seriousness of credit obligations are improved when the application is rather formal and complete.

When the customer fills in the application, it is well for the interviewer to look over the form and to provide supplemental information, which will assure completion of the blanks not filled

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MD. SHAHIDUL ISLAM ID # M 20831111018 in, or which probes more deeply into the questionable areas. It is well to provide space on the form for the recording of more information after the customer has left. Points in favor of having the applicant fill out the form is that fewer skilled credit personnel are necessary and that more customers can be accommodated in the same space.

4.4.3. Scrutinizing and collection of information:


In case of clients who have previous record of taking credit facilities, their in-file records are examined to see whether the client has a good record of payments in time. Information gathered through direct inquiry: Direct inquiry one of the common methods of obtaining information to verify facts presented on the application of during the interview of an applicant for an initial credit transaction. A careful distinction is made between obtaining credit information directly form sources having such facts and between buying somewhat similar credit data in the form of prepared reports from the credit reporting bureaus and agencies. Information gathered through in-file ledger fact: In-file ledger facts are one of the most important sources of information available to credit committee whether to accept or reject a larger amount of credit from an established credit customer. From the in-file records, credit analysts have at their disposal the experience of the concern with the customer. They know the customer's payment habits, the complaints registered, and the collection efforts, if needed to keep the customer in line with the established terms.

4.4.4. Credit Appraising & Presentation of Credit Proposal for Approval:

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MD. SHAHIDUL ISLAM ID # M 20831111018 When credit officer is satisfied with his credit worthiness, financial capability, management ability and feasibility of the project through credit appraisal of clients in a prescribed form, he can hope for credit from the bank. Credit appraisal is done through 'credit appraisal form'. Ratio analysis is give importance in case of project finance. But most of the medium quality loans are given on the basis of financial capability of repaying and credit worthiness of the client. Lending risk analysis is done in a prescribed form in case of large amount of loan, above 50 Lac. Credit officer prepares a credit proposal along with the prescribed 'Credit Proposal Form'. Credit officer measures the risk associated with the credit facility. No credit proposal can be put for approval unless there has been a complete written analysis. It is absolute responsibility of the Proposing Officer to ensure that all necessary proposal documentation have been collected before the facility request is sent to the Sanctioning Officer.

4.5. Associate Risk in Credit Investment:


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Borrower Analysis: The majority shareholders, management term and group or affiliate companies should be addressed. Any issue regarding lack of management depth, complicated ownership structures inter group transaction should be addressed, and risk mitigated.

Industry Analysis: The key risk factors of the borrowers industry should be addressed. Any issue regarding the borrowers position in the industry, overall industry concerns or competitive forces should be addressed and the strength and weakness of the borrower relative to its competition should be identified.

Supplier /buyer Analysis: Any customer or supplier concern should be addressed, as these could have a significant impact on the future viability of the borrower.

Historical Financial Analysis: An analysis of minimum of 3 years historical financial statements of the borrower should be presented. Where reliance is placed on corporate guarantors, guarantors financial statement should also be analyzed. The analysis should address the quality and sustainability of earnings, cash flow and the strength of the borrowers balance sheet. Specially, cash flow. Leverage and profitability must be analyzed.

Projected Financial Performance: Where term facilities (Tenor > 1 year) are bring proposed, a projection of the borrowers future financial performance should be provided, indicate an analysis of the sufficiency of cash flow to service debt repayment. Loans should be granted if projected cash flow is insufficient to repay debts

Account Conduct: For existing borrowers, the historical performance in meeting repayment obligation (trade payment, cheques, interest and principal payment, etc) should be addressed.

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Adherence to lending guidelines: Credit Applications should clearly state whether or not the proposed application is in compliance with the banks Lending Guidelines. The Bank Head of Credit or Managing Director/CEO should approve Credit Application that does not adhere to the banks Lending Guidelines.

Mitigating factor: Mitigating factor for risk identified in the credit assessment should be identified. Possible risk includes, but is not limited to: margin sustainability and/ or volatility, high debt load (leverage/ gearing), overstocking or debtor issues; rapid growth, acquisition or expansion; new business line/ product expansion; management charges or succession issues; customer and supplier concentration and lack of transparency or industry issues.

Loan Structure: The amounts and tenors of financing proposed should be justified based on the projected repayment ability and loan purpose. Excessive tenor or amount relative to the business needs increased the risk of fund diversion and may adversely impact the borrowers repayment ability.

Security: A current valuation of collateral should be obtained and the quality and priority security being proposed should be assessed. Loan should not be granted based solely on security. Adequacy and the extent of the insurance coverage should be assessed.

Name lending: Credit proposals should not be unduly influenced by an over reliance on the sponsoring principals reputation, reported independent means, or their perceived willingness to inject funds into various business enterprise in case of need. These situations should be discouraged and treated with great caution. Rather credit proposals and the granting of loan should be based on sound fundamentals, supported by a through financial and risk analysis.

4.6. Credit Approval:


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MD. SHAHIDUL ISLAM ID # M 20831111018 Branch credit committee: Branch credit committee to be headed by the Branch Manager, other members to be selected by the manager in consultation with Head Office. Head office credit committee: Head office credit in accordance with authority established and delegated by the Board of Directors. Reviewing, analyzing and approving extension of credit in accordance with authority established and delegated by the Board of Directors. Evaluate the quality of tending staff in the bank & take appropriate steps to improve upon. Recommending credit proposal to the Executive Committee/Board of Directors which are beyond the delegated authority. Ensuring, that all elements of Credit application i.e. Forms, Analysis of statements and other papers have been obtained and are in order. Confirming that the transaction is consistent with existing loan policy and Bangladesh Bank guidelines & if not the Committee may prepare a recommendation form an exception to or change in policy for consideration by the Executive Committee/Board of Directors. Executive committee: Approving credit facilities as delegated by the Board of Directors. Supervising the implementation of the directives of the Board of Directors. Reviewing of each extension of credit approval by the Head Office Credit Committee/Managing Director. Keeping Board of Directors informed covering all these aspect. Board of Directors: Establishing overall policies and procedures for approving and reviewing credits. Delegating authority to approve and review credits. Approving credit for which authority is not delegated. Approving all extensions of credit which are contrary to bank's written credit policies.

4.7. Sanction of Credit:

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MD. SHAHIDUL ISLAM ID # M 20831111018 Most important step of providing credit facility is the sanctioning of credit. Because sanctioning authority will be held responsible for any discrepancy. In this step all the documentation is completed and the customer is sent an advising letter for the credit facility along with all the terms and conditions. Norms maintained in sanctioning of credits are described below: Credit will be sanctioned and disbursed strictly in terms of the approved Credit Operational Manual of the Bank and Head Office Circulars issued from time to time. All norms informed through the Circulars of Credit Division in particular and all other relevant circulars in general, which are to be followed meticulously while exercising power. Credits will be subject of Bangladesh Bank restriction. The party to whom credit will be allowed should be as far as possible within the command area i.e. Area of operation of the Branch. Deviations, if any are to be explicitly explained in the proposal. No Sanctioning Officer can sanction any credit to any of his near relations and to any firm/company where his relations have financial interest. Such cases should be sent to the Head Office. All Sanctioning Officers maintain a Sanctioned Register for recording serially all the credits sanctioned by him. Sanctioning officer will accountable for non-recovery due to his injudicious decision. All approval of credit facilities must be conveyed under dual signature. Ideally both the signatories must have the required lending authority. If however, two lending officers of the required lending are not available, one of the signatories must have the required authority.

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4.8. Disbursement of Credit:


Disbursement of credits presupposes observance of all norms and procedures, which are conveyed through different Circulars of Head Office, issued from time to time.

4.8.1. Sanction Letter:


After getting the approval from the Head Office, The branch issues the sanction letter to the borrower. A sanction letter contains the following particulars amongst other details: name of the borrowers, managing partners, name of facility, amount, and expiry, rate of interest, purpose, security and the following terms and conditions: Before availing the loan all documentation formalities must be completed. Register power of attorney in favor of Mutual Trust Bank to sell the mortgage property without the consent of the court or owner of the lender. DP note and other usual charge documents/ undertakings etc. duly stamped must be signed and submitted to the authority before the disbursement of the loan. The loan should be governed by all other terms and conditions as per policy and practice of the bank that will be acceptable for the sanction to safeguard the interest of the Bank. The bank reserves the right to amend, modify or withdraw all the terms of the loan facility at any time without assigning any whatsoever or to terminate/ call, back the loan facility at any time for which the bank or its official cannot be held responsible for any loss for such cancellation of the loan. The borrower receives the letter and returns a copy of this letter duly signed by him as a token of having understood and acceptance of the terms and conditions above.

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4.8.2. Documentation of Loans and Advances:


In spite of the fact that banker extends credit to a borrower after inquiring about the character, capacity and capital of the borrower, he obtains proper documents contain the precise terms of generating loans and they serves as important evidence in the law courts if the circumstances so desire. The documents for loans and advance can be classified into two categories: charge documents and security documents.

4.8.3. Security:
When Banker ordinarily takes as things assets, goods, valuables, financial papers, any surety, guarantee, against the risk of lending is called security. Security fortifies or makes secure persons under taking, particularly to pay or repay money. An element of risk is always present in every advance, in whatever degree a banker knew his customer personally and intimately, in whatever degree he has the confidence in the integrity and honesty of a customer. Through a banker always lay stress on the integrity and honesty of the customer and on the gentility of the purpose for which the borrower needs money, but till today the security continuous to be one of the most important factors that determines to a significant extent the bankers willingness to land money.

Personal Security:

Security by which the borrower is personally made liable to repay the loans and advances. Demand Promissory Note, Personal Guarantee, Bill of Exchange etc. Guarantee by the third party for repayment of loan in case of demand by the original borrower is also consider as personal security. Bakers obtain the right of taking action against the borrower personally by taking personal security.

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Tangible Security:

Tangible asset like stock of goods, Bonds, deposits receipts, bill of lading, bills receivables, warehouse receipts, real state, shares, assignable insurance policies etc. are taken as security against lending. When the borrower does not replay debts, selling or transfer of the tangible goods does not realize the outstanding. Tangible security is divided into two parts. They are primary and collateral security Primary Security: The security, which is deposited by the borrower himself against lendings, is called Primary Security. Primary security is the main cover for the advance made by the banks. Primary security is associated with the purpose for which the lending is allowed. Stock in trade, industry plants, land and building, bills receivables, deposits receipts, shares etc that are deposited by the borrower shall be treated as primary security. Collateral Security: Additional, subsidiary or secondary security in addition the primary security is called collateral security. Collateral Security runs parallel to or side by side with the primary security. In case of default by the borrower to repay the loan, and when loan amount cant be realized in full/ partially by selling primary security, the amount / or rest of the loan amount are realized by selling the collateral securities. Direct Collateral Security: Collateral security obtained from the borrower himself to secure his own accounts is known as Direct Collateral Security. Indirect Collateral Security: Collateral security given by the third party/ person to secure a customers loan account is called indirect collateral security.

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Categories of Collateral Security: The most significant categories of securities lodged as cover of loans are: Real State Deposit Receipts Bills Receivables Share and Securities Life Insurance Policies Documents of title of goods Goods and Committees Gold and Gold Ornaments

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4.8.4. Selection of security:


To be a good security, it should fulfill certain requirements. Before selection of security, there must be a critical appraisal of the same. Before selection of a security, a banker should check the economic side i.e. marketability, durability, price, etc of the security. A tangible security should possess the following attributes for selection of the same against lending: Clear and undisputed title Validity of title Easy Transferability of title Marketability Easy ascertainment of value Stability of value/Price Durability Transportability Low storing/ supervisory cost (For pledge godown, insurance, supervision cost) Yield/ Productivity (Income from security, value yield from security) Advance of contingent liabilities (Lease property not fully paid fully paid shares, etc)

Selection of real estate as security: Selection of a security is a very important task for the relative Bank officer in prospect of securing the loans and advances. There must be some propaganda for making the real state as security that is describe below-

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MD. SHAHIDUL ISLAM ID # M 20831111018 Property should be situated in municipal Areas/ Commercially important areas/ Developed areas outside Municipality/ Industrial areas and other developed areas. Residence house at village/ Lowland /ponds etc should not be taken as security. Vacant land outside Municipality Areas from which no earnings comes also should not be taken as security. Property identified and clearly demarcated property. Ownership must be clear and transferable and there should not be any defect in title or documents. The property should be under possession of the owners. In case of third party mortgage, consent from the owner of the property to mortgage the same against the loan is to be obtained.

4.8.5. Valuation of Security:


Valuation of the securities is important since the loan amount or withdrawal limit is fixed, considered on the basis of the value of securities less stipulated margin/equity. Methods of valuation of different categories of securities should be different based on the market value, invoice value and controlled value. Government securities, shares and debenture: Prices is to be ascertained from market quotations- where the price of a particular share suffers from wide fluctuation, the value of its should be fixed slightly lower then the market value. Higher margin should be kept. Seasonal Commodities: Current market price or controlled prices, whichever is lower. Finished/ Manufactured goods: Cost price or market prices whichever is lower. Trade Goods: Market price or invoice prices whichever is lower. Stock in Process: To be ascertained from the record of stock.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Controlled Commodities: Controlled prices are fixed by the government / respective authority or market price, whichever is lower. Imported Goods: At landed cost or market value, whichever is lower. Life Policies: At surrendered value, the value of which the company/ corporation is prepared to pay.

4.8.6. Insurance of Goods:


Insurance is a contract where by the insurer undertakes to identify the assured in an agreed manner and extent against loss. Insurance may be defined as a contract of indemnity. The insured enters into a contract with the insurer to the effect that in consideration of the payment of the premiums, the insurer will pay a particular a sum of money to the former on the happening of a specific event. Bank generally deals with the moveable and immovable securities and securities are insured against risks they bear. For insurance of goods, bank generally obtains insurance covering the risk of fire, thief/ burglary, RSD, flood/cyclone, tidal bore/earthquake. Policy to be taken covering all the risk asks for. Policy to be taken in the joint name of the bank and the borrower or assigning to the bank. Policy to be taken covering Bank Clause (Mortgage Clause). Policy to be got renewed before expiry. Policy to be obtained covering full value of the stock (including margin). Goods and properties & the storage godowns must be correctly described in the policy. Any event of damage of stock must be intimated immediately in writing. Policy to be taken from insurance companies on the on the banks approved list.

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MD. SHAHIDUL ISLAM ID # M 20831111018 It is to be ensured that all the desired terms and co0nditions are incorrect in the policy. Reinsurance is to be obtained by the insurance companies in case amount of insurance beyond its limit. Money receipt and the Original Cover Note / policy to be kept with the bank.

4.8.7. Charges on Securities:


Banks lend money to the borrower for an agreed period of time. The borrower repays the loan with interest. Borrowers borrow, but sometimes do not repay the loan and interest. Bank therefore wants protection. They want security an interest in the borrowers asset giving preferential status or default or insolvency. Usually security means a charge created over asset(s) held by the business vis--vis sponsor (s) to guarantee fulfillment of an obligation especially the assurance that the debtor will repay (usually with interest) the money or credit intended to him. Charge means right of payment out of certain property. In a charge there is no transfer of interest or property. Ti is a right over some tangible asset of the borrower. It is a transaction as a result of which the lender acquires certain rights over the property and the borrower is refrained from dealing in them. In a charge there must be a notice to0 the subsequent transferees; otherwise the charge is not effective as to the subsequent transferees. A charge may be classified as: (!) Fixed charge (!!) Floating charge

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MD. SHAHIDUL ISLAM ID # M 20831111018 Fixed charge: A charge is said to be fixed if it is made especially to cover definite and ascertained asset of a permanent nature or asset capable of being ascertained and defined, e.g. charges on land and building or heavy machinery. It prevents the loaner from dealing with the property charged without consent of the charge holder.

Floating charge: It is a charge on the property, which is constantly charging e.g. stock. A company can deal with such property in normal course of its business until it becomes fixed on the happening of an event. Thus, it is a charge on the asset of a company in general. Pari Passu charge: The term is usually used in the case of consortium lending. In case of such lending, a number of banks or financial institutions join together to lend to a single borrower in an agreed ratio against some common securities. The securities are charges to the entire banker / financial institution without any references like first charges or second charges only etc. The term that instructions will have a Pari Passu charge over the assets of the borrower means that the lender are entitled to have equal rights over the asset as per the agreed share. In other wards, in the absence of the sufficient asset to pay each lender, they will lose rate ably without any preference to any one or more. Second charge:

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MD. SHAHIDUL ISLAM ID # M 20831111018 A creditor holding a second charge by ay of mortgage entitled to the proceeds after the first charges meet. He must inform to the prior mortgage of his charge because the first mortgage cant part with the proceeds or title of the property if he has notice of the second charge.

4.8.8. Modes of Charges Securities:


Lien: Lien is the right to possession and no right of ownership. Banks lien is general lien over its own financial obligation to client. Property under lien cant be sold without notice to the owner and sometimes without courts order.

Hypothecation: This is mortgage of moveable by an agreement and here neither possession nor ownership is transferred. Hypothecation good cant be sold out / disposed off without notice and courts order. However, if a special power of attorney is taken in that case can be disposed off without going to the court.

Pledge: Pledge is the bailment of goods as security for payment of a debt or performance or promise. Here, title and ownership are not transferred. Pledge good may be sold out and proceed thereof may be appreciated towards the adjustment of liability in case of future of the borrower to repay or fulfill the terms and conditions.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Mortgage: Mortgage is the transfer of interest in immovable property to secure the repayment of money advanced. Equitable mortgage courts order is not necessary for sale / disposal of the mortgaged property for adjustment of advance.

4.8.9. Credit Administration and File Maintenance:


The credit file for each facility shall contain all information necessary to facilitate ready monitoring of that facility. It should contain a through history of the customer relationship to help credit officer': track any problems, assist a newly assigned credit officer in understanding the customer and make the lending process transparent. Primary items in Credit File include: A popular disbursement procedure is essential for implementing a project, small or big, within the essential time or cost. However the constant monitoring of the projects on the one hand and timely mobilizing the equity on the other hand cannot be under estimated for efficient implementation of a project. The following factors are taken into account. After machinery contract is finalized the bank will open irrevocable letter of credit on behalf of the borrower in the joint name of the bank and the borrower. Disbursement of the foreign currency loan is made automatically as soon as irrevocable letter of credit for import of machinery is established and the foreign supplier makes shipment of machinery.

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MD. SHAHIDUL ISLAM ID # M 20831111018 The local currency loans are to be made available to the project after satisfactory and full utilization of equity by the borrowers by creating by required physical facilities (tangible asset) for the project. The sponsor has to request for release of local currency loan to the bank supported to the paper like progress report, statement of account, documents. The local currency loan of the bank to be disbursed in one or more installment according to the nature of the project. The borrower must use the loan for the purpose for which the advance is extended.

The borrower shall apply the proceeds of the loan exclusively to finance the cost of the goods and services required to carry out the project. Foreign currency shall be disbursed only for goods and services that have neither been paid for in Bangladeshi currency not were produced in.

If the completion of the project or its successful operation is hindered or delayed because the fund s available are inadequate to ensure its completion. It should be the responsibility of the borrower to make prompt arrangements in accordance with financial plan approved by the bank to provide the necessary fund.

Credit application and Credit approval notes/analysis. Evidence of credit approval and data upon which approval was granted together with any comments, if appropriate.

Copy of sanction and loan agreement. A checklist along with copies of all legal & banking documents obtained / to be obtained. Details and 6 monthly updated information of all related facilities to the name customer group.

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MD. SHAHIDUL ISLAM ID # M 20831111018 All supporting data such as financial statements and analysis, references, credit investigation results, CIB & other Bank reports and notes of all discussions with the borrower and other relevant parties with paper clipping. Correspondences call reports, site visit reports, stock report etc. each credit file shall be maintained in a secured location and where access restricted to authorized personnel's only. Copies of the information may be kept where regular access is required.

4.8.10. Facility Evidence Maintenance:


All charge documents should be maintained in a place of utmost security. All charge documents as prescribed by the bank & local laws, for the relevant credit facility, Signed credit agreement, Signed guarantees or other evidence of credit security or collateral agreement shall be kept in fire proof safe under the custody of Branch manager or his designate alternative and another officer. A register of charge and security documents should be maintained under the supervision of the Branch Manager.

4.9. Credit Monitoring and Reviewing:


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MD. SHAHIDUL ISLAM ID # M 20831111018 monitoring shall be evidenced from the comments of the Manager in monthly Call/Visit Report and be kept in the Credit File with a copy to the Head Office. This Review shall be formally performed at intervals prescribed by Head Office but it is the responsibility of the Manger to ensure at all times that the credit portfolio meets the standard set forth by the Bank. Factors analyzed in the Loan Monitoring: Credit policy of the Mutual Trust Bank Limited has set forth the guideline that must be followed in the time of loan review. After getting the review of the loan portfolio from the branch level the assigned officer of the head office credit department analyze and preparing the report. The following factors are taken into consideration at the time of monitoring the loan and advance.

The account has not excess over limit The terms and condition of the sanction letter are strictly followed The value of the collateral security of the loan is adequate There is not any unfavorable situation in market, economy and political conditions, which may endanger the reliability of the borrower account

The analysis of the borrowers business performance and comparison of the projected and actual to find any deviations.

General Norms for Monitoring Credit Facilities: The Branches will submit a monthly statement of the credits allowed under the discretionary powers of the Manager to the Head Office irrespective whether the same are outstanding or not on the date of return.

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4.10. Management of Default Clients:


When a problem loan is detected the responsible loan officer takes the corrective action and tries to minimize the loan losses by allowing different facilities to the client. The steps are followed by the Mutual Trust Bank to manage the clients are: Persuasion: This is to step practice at Mutual Trust Bank to manage the problem loan. This step involves: Open discussion with the borrower Discussion with third party to find out the underlying reasons. Issuing the 1st Reminder letter of inform the due date and due installments.

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MD. SHAHIDUL ISLAM ID # M 20831111018 If the party does not respond issuing the 2nd Reminder and then 3rd Reminder letter.

Negotiation: If the percussion failed, the loan officer negotiated a plan of action with the borrower to save both the bank and the borrower from possible loss. This calls for certain sacrificing on the part of the bank and borrower in their mutual interest. The plan of action in Mutual Trust Bank consists of the following: Revise the loan agreement Concession of interest (If the client is difficult to manage) Reschedule of the loan and giving installment facility to repay the overdue amount beside the regular installment.

Litigation: If the client failed to repay the loan even after rescheduling the loan, Mutual trust bank goes for the taking the legal action against the delinquent client to recover the loan. The branch manager sent a letter to the head office credit department informing the borrowers reluctance to repay the loan. Following measure is taken: Filing case against the client Assigning the loan officer for assisting the lawyer.

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MD. SHAHIDUL ISLAM ID # M 20831111018 The responsibility for review and classification of credit facilities starts at Branch level. The frequency of the supervision and monitoring depends on the classification of credits. Sub-standard Advances: This classification contains accounts where irregularities have occurred but where such irregularities are considered to be either "technical" or "temporary" in nature. The main criteria for a sub-standard advance are that despite these "technical" or temporary irregularities no loss is expected to arise. These accounts will require close supervision by the management to ensure that the situation does not deteriorate further. Doubtful Debt: This classification contains debts where doubt exists the full recoverability of the principal and/or interest. Although a loss is anticipated it is not possible at this state to quantify the exact extent of that loss. Management is required to handle such debts with the utmost caution to either avoid or minimize the Bank's losses.

Bad-Debts: These facilities are considered to be uncorrectable shall be made a provision @ 100% of the base. Special Mention: In addition to the above classification rating, there should be another category which is not classified but where special attention is necessary to keep the account out of classification. This category will be known as Special Mention. Facilities required special monitoring are to be flagged or put on a watch list. No provision is necessary for this category.

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Chapter: 5

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COMPANYS CURRENT & FUTURE

5.0. COMPANYS CURRENT STATE OF OPERATIONS AND FUTURE DIRECTIONS:


5.1. Current State:
MTB has been in the industry for 12 years now and during these years MTB has spread its business in the fields of Corporate, Retail and Investment Banking. So far the performance of MTB in these fields has been good enough and the business is growing successfully. 2011 has been quite a successful year for MTB as the organization did much better from the previous years. This proves that the organization is on the right path to becoming the benchmark in the banking industry. Prepared For: Md. Masum Hossain

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MTB wants to be famous for its retail banking facilities. It is continuously coming up with new deposit schemes to attract clients. Customers are regularly coming to deposit their funds in different schemes like Savings, Fixed deposit and Deposit Pension Schemes. MTB is continuously promising the clients with attractive rate and return policy on such schemes and the demand of MTB is increasing day by day. To attract more clients MTB has come up with the facilities of locker system. This has been an instant hit. Because of such facilities the clientele of MTB is increasing day by day.

MTB is also earning more revenue, thanks to its investment banking policy. Clients of MTB are extremely happy with the investment banking system of MTB. Since MTBs EPS price is raising in the stock market that has further increased the Investment banking popularity.

MTB has an efficient human resource department which is continuously working to encourage the employees and make them more efficient and productive. One of the main factors behind the success of MTB is its employees. MTB has created training facilities for such employees and because of that they are getting highly trained. Besides the foreign exchange branches of MTB are open on Saturday (Holiday), customers appreciate it a lot and as a result of that the operating profit of MTB is increasing day by day.

MTB is continuously trying to fully automate all its services. In this age of technology it is quite tough to survive if youre of fully automated. MTB is continuously trying to do that by making all its offices fully computer operated. All the branches of MTB are connected, so

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MD. SHAHIDUL ISLAM ID # M 20831111018 clients of any branch can get the services from any other branch. Because of such facilities the clientele of MTB is increasing day by day.

Table 5: Deposits of the Industry in Crores

The table above shows that MTB has already captured 1.47% of the industry deposits. This in itself is a good achievement in this competitive industry.

Table 6: Industry Advances in Crores

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MD. SHAHIDUL ISLAM ID # M 20831111018 The table above shows the industry share for Advances of MTB in the year 2010. This percentage has now increased to 2.8% which is quite an improvement.

Figure 3: P/E Ratio of all New Generation Banks

The graph shows the P/E Ratio of all the New Generation Banks in our country. This is basically a peer group comparison and it shows that the P/E Ratio of MTB is quite low compared to most other banks of its generation.

Figure 4: EPS of all New Generation Banks

In this graph, we actually see that MTBs EPS was the highest amongst all its peers and that is a great state to be in.

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5.2. Strategic, Operational and Legal Issues:

The world is developing everyday and the global economy is going through several changes. To cope up with all that a bank like MTB must always be ready. To continuously meet up the ever changing demands of clients MTB must come up with new products and services. In this age of globalization, MTB alone cannot do all that. One of the strategic issues of MTB has always been the lower number of partnership and foreign conglomerate. MTB should do something about that to remain competitive. When it comes to the operational side MTB should explore into new dimensions. Islamic banking is gaining popularity day by day. MTB should definitely take some steps to capitalize on this profitable segment. This is an area of great potential, so if MTB doesnt take any decisions immediately regarding that then it will have to face tough competition in the years ahead.

One of the operational issues of MTB has been the recovery of the disbursed loan. Whenever a loan is issued, MTB often faces difficulty is recovering these loans. So MTB must do something to solve this problem, otherwise it will face a great loss. Another issue that MTB must address is the threat of new entrants. The banking industry over the years has proved to be one of the most popular industries. As a result of that more people are getting into this industry. So in order to survive in this industry one has to continuously come up with new products and services to satisfy clients. The most important operational issue that I found out from interviewing a Senior Executive is that MTB relies heavily on Call Money due to the lack of deposits they have which is greatly hampering their profitability.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Banking requires a lot of documentation. This is an industry where a small mistake could destroy the life and carrier of others. So this is a legal issue that MTB often faces. Proper documentation is required by the government and any mistake in that is severely dealt. So MTB always has to ensure required documentation.

Another legal issue is the minimum Statutory Liquidity Reserve (SLR) and the Cash Reserve Requirement (CRR) which new generation banks like MTB struggle to maintain keeping a high profitability. These new generation banks including MTB have considerably low amount of deposits which they can lend out to generate profit and on top of that they have to keep a significant amount of deposits as a reserve with the Bangladesh Bank. These banks genuinely believe that the SLR and the CRR should be lower than what it is now to make the industry more competitive and profitable.

5.3. Future Directions:


MTB expects a higher growth of business in the coming years. This growth will predictably be generated from the diversified Corporate Sector, Retail Banking, Money Market Operations, Consortium and Structured Financing and Export Oriented and remittance initiatives. MTB believes that the way that the business has developed so far, it can easily fulfill its objectives in the coming years and MTB will become a benchmark in the banking industry. As one of the future initiatives MTB wants to establish its position in the field of SME and Retail Banking. SME is one of the market segments with great potential. MTB wants to explore this untapped resource to the fullest and in the process become more successful and contribute to the

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national economy. At the same time since the popularity of Islamic banking is growing day by day, MTB plans to get involved in this sector. MTB currently has 76 branches but only 68 ATMs in the country. Because of such lower number of ATMs, MTB is often heavily criticized. MTB has decided to open up more ATM outlets to meet the demand of its ever growing customers. Besides it has decided to improve its online facilities so that the customers can get uninterruptible services all the time. MTB has also decided to get more involved in projects and CSR activities. Every year MTB finances some projects and since this is an important segment MTB has decided to increase its investment. Other than that MTB wants to give something back to the community and because of that, MTB has decided to increase its number of CSR activities to a great extent. These innovative steps will definitely improve the popularity of MTB and will contribute to the profitability in the long run.

Chapter: 6
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RECOMMENDATIONS & CONCLUSION

6.1. RECOMMENDATIONS:
The overall performance of the banking industry is quite crucial not only to its customers and shareholders but also for the economy. The main driving force attracting the potential and existing investors is often the successful achievements of the bank. So, it is very important for all the concerned people including the regulators to be very careful in dealing with this industry.

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MD. SHAHIDUL ISLAM ID # M 20831111018 MTB has been present in the banking industry for 12 years now. Throughout these years MTB has gained a reputation for delivering good customer service in banking. But now that the world is changing, MTB must also change its policies. To continuously serve the clients MTB has decided to form some partnerships and conglomerate. One of the steps has been to form alliances with some companies and NGO in the field of foreign remittance and that has proved to be quite favorable for MTB.

MTB must also explore into new dimensions i.e. Islamic banking. MTB has recently explored into new dimensions like Investment banking and SME. However, MTB must also establish Investment banking facilities in most of its branches like some other competitors. MTB must be innovating continuously to provide a wide range of services to remain in this competitive market.

I have observed some problems and difficulties with their services while doing my internship. From my personal observation and from customers suggestions, following

recommendations can be made for future progress in service quality of Mutual trust Services should be targeted towards small accountholders too.

Reduce service charges and interest rates of different investment. More sitting arrangement should be made. Have bigger branch premises for increased number of customers. Number of branches should be increased. Need to speed up processing of loan application. Bank must introduce new service time to time. Service people can instruct customers about how they can get their job done. It will also reduce their stress.

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MD. SHAHIDUL ISLAM ID # M 20831111018 Bank should identify the peoples problem that are closing the account and should take steps if the lacking is in banks side.

Mutual Trust Bank must improve its market conditions in order to do well. They must go for more aggressive and interactive promotional strategies for the people to notice them and get interested towards them. Moreover, MTB must also open up newer branches and more ATM Booths at frequent intervals. This will make people feel more convenient to deal with MTB and will also make people notice MTB more. MTB must also carry out CSR activities to enhance the image of them self so that people start to believe that MTB is a reliable and responsible bank. If MTB does not do anything to get noticed or improve their image, then they will keep on facing problems and hardships as long as they survive in the industry.

6.2. CONCLUSION

The fall-out from the ongoing volatility in global credit markets and slowing economic growth has combined to place significant pressure on the financial performance and capital position of Bangladesh. This situation is also accompanied by soaring inflation rates. As a result of that, the regulators and policy-makers are in a state of confusion as to what to do. To make things worse, the capital market of the country came crashing down putting huge pressure Prepared For: Md. Masum Hossain

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MD. SHAHIDUL ISLAM ID # M 20831111018 on the regulatory bodies. Then recently, Bangladesh Bank came up with new regulation for the safety of the Banking Industry and also to control the inflationary pressure in the economy. In this regulation, they have increased the level of Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and the Advance-Deposit Ratio (AD Ratio) for all the banks.

The entire policy of the bank is designed in a way which always tried to avoid default risk. Adequate power of the top management for monitoring credit operation makes the bank culminates in the banking sector. It takes some steps to minimize loss that is very good decision. The bank also supports development of trade, business and other commercial activities in the country. It also cover the full range service to exporter and importer extending various facilities such as cash credit, short term loan, local bill purchase and foreign bill purchase and other facilities which also leads the bank.

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APPENDIX

REFERENCES
Bangladesh Bank Website www.bangladesh-bank.org Mutual Trust Bank Website www.mutualtrustbank.com Annual Report Mutual Trust Bank (2008-2010)

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MD. SHAHIDUL ISLAM ID # M 20831111018 Rose, Peter S. & Hudgins, Sylvia C. (2008), Bank Management & Financial Services, (7th ed.), McGraw-Hill, New York. Ali, Syed A. Hawlader, R.A. (2008), Banking Law and Practices, (Revised ed.), Mawla Brothers, Dhaka. Malhotra, Naresh K. (2006), Marketing Research: An Applied Orientation, (5th ed.), Prentice Hall, New York. De Veaux, Richard D. & Velleman, Paul F. (2006), Intro Stats, (2nd ed.), Prentice Hall, New York. Lovelock, Christopher. & Wirtz, Jochen. (2007), Services Marketing, (6th ed.), Prentice Hall, New York.

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