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An Internship Report on
General Banking Operation of “Mutual Trust Bank”,
Gulshan Branch

Prepared by
MUHIBUL HAQUE GALIB
ID: 2016-1-30-032
Department of Economics
East West University

Supervisor
Biva Arani Mallik
Departmental Head
Department of Economics
East West University
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Letter of transmittal

Date: 24/12/2020

Biva Arani Mallik

Departmental Head

Department of Economics

East West University

Subject: Submission of internship report on “Small Medium Enterprise Operation of

Mutual Trust Bank limited, A study on Gulshan branch.”

Dear Ma’am,  

It is a great pleasure for me to submit this report, which has been prepared for the completion
of the course ECO495. This Internship program helped me to gain the practical experience.
It helped me to learn the practical implementation of the theories as well. This report is based
on the experiences that I have gained during my internship period in Mutual Trust Bank. If you
need any further explanation, I will be very glad to add that.  

Sincerely Yours, 

MUHIBUL HAQUE GALIB

MUHIBUL HAQUE GALIB

Bachelor of Science in Economics

ID: 2016-1-30-032
East West University, Dhaka
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Acknowledgement

Firstly, I want to thank Allah for everything. With the help of Allah and my parent’s blessing, I
have completed my months’ internship period at Mutual Trust Bank. the internship process was
really educational and helpful. I must remember to say my gratitude to the honorable faculty
Biva Arani Mallik, Senior Lecturer of East West University for her endless support, inspiration
and guidance during this internship. This report has been prepared and presented to her for the
assessment and final evaluation of this course.  I must mention my appreciation I am also
thankful to general banking department team to help me to complete my internship program at
Mutual Trust Bank Limited Bangladesh I must mention name of some people who trained and
help me much during the internship program and also help me preparing this by sharing
their views with me MD. MAHMUDUL HASAN, junior asst vice president  Lastly, I thank
everyone else at MTB Bangladesh who were nice to me and helped me during the internship
program. Last but not least, I am very grateful to my university which is the reason I got the
opportunity to work here and added a value of my experience and help to complete my bachelor
degree successfully.
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Executive Summary
The Banking sector is always considered one of the most fundamental sectors for the economy to
be able to function. In this economic era, in order to attain development in industrial and
commercial division, there should be a sound banking system to support not only the economy
but also the society. 

SME financing is an important sector of banking activities. It is said that Small and Medium
Enterprises (SME) account for about 50 percent of GDP and 60 percent of employment. SMEs
are projected to contribute between 25 and 35 percent of world manufactured exports. Financial
Institutes around the world are relentlessly trying to enhance the SME exposure in their groups.
Although all over the world, the importance of SME financing is highly appreciated and
entertained, this sector lacks proper boost from the government and attention of financial
organizations. There are many reasons that financial organizations, especially banks are
unwilling to support small and medium enterprises. Mutual Trust Bank Limited is currently
motivated hard to enhance the SME exposure of the bank. Nowadays it is completely impossible
to think of a country without a bank, because banks play a diversified role in the development of
an economy. The most important task of a bank is building capital which is the key factor of the
development of an economy. Banking sector now helps to flourish the SME Business sector by
supplying the capital to the SME entrepreneurs.
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Table of contents:
(Chapter- 1) INTRODUCTION
1.1 Origin of the Report…………………………………………………………………………………………………………………………………8

1.2 Objectives of the Report………………………………………………………………………………………………………………………….8

1.2.1 Broad Objective………………………………………………………………………………………………………………………………….8

1.2.2 Specific Objectives………………………………………………………………………………………………………………………………8

1.3 Significance of the Report………………………………………………………………………………………………………………………..9

1.4 Scope of the Report………………………………………………………………………………………………………………………………….9

1.5 Rationale………………………………………………………………………………………………………………………………………………….9

1.6 Methodology of the Report………………………………………………………………………………………………………...............10

1.7.0 Data Sources………………………………………………………………………………………………………………………………………...10

1.7.1 Primary Source……………………………………………………………………………………………………………………………………10

1.7.2 Secondary Source……………………………………………………………………………………………………………….................10

1.8 Limitation of the Report………………………………………………………………………………………………………………………….10

(Chapter- 2) LITERATURE REVIEW

2.0 Bank Concept………………………………………………………………………………………………………………………………………….11

2.1 General Banking Activity…………………………………………………………………………………………………………………………11

2.2 Literature Review on Banks Profitability…………………………………………………………………………………………………12

2.3 Literature Review on Competition in Banking Sector………………………………………………………………………………13

(Chapter- 3) History of Bank

3.0 HISTORY OF BANKING……………………………………………………………………………………………………………………………16

3.1 THE WORD BANK…………………………………………………………………………………………………………………………………..16

3.2 Different kinds of Bank………………………………………………………………………………………………………………………….18

(Chapter- 4) ORGANIZATION OVERVIEW

4.1 History of Mutual Trust Limited…………………………………………………………………………………………………………….20

4.2 Mutual Trust Bank Vision………………………………………………………………………………………………………………………21

4.3 Mutual Trust Bank Mission……………………………………………………………………………………………………………………21

4.4 Core Values of Mutual Trust Bank Ltd……………………………………………………………………………………………………21

4.5 MTB Board of Director…………………………………………………………………………………………………………………………..22

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4.6 Company Organigram……………………………………………………………………………………………………………………………23

4.7 Principles of Mutual Trust Bank…………………………………………………………………………………………………………….23

4.8 General banking section…………………………………………………………………………………………………………………………….24

4.9 Different Banking sector of MTBL……………………………………………………………………………………………………………...24

4.9.1 Current account…………………………………………………………………………………………………………………………………….24

4.9.2 Brick by brick ……………………………………………………………………………………………………………………………………….25

4.9.3 MTB EDUCATION PLAN……………………………………………………………………………………………………………………….…

26

4.9.4 Fixed Deposit…………………………………………………………………………………………………………………………………….....26

4.9.5 Mutual Trust Bank

senior……………………………………………………………………………………………………………………...26

4.9.6 Mutual Trust Bank

inspire………………………………………………………………………………………………………………….....27

4.9.7 Mutual Trust Bank Ruby………………………………………………………………………………………………………………………..27

4.9.8 Mutual trust Bank millionaire plan………………………………………………………………………………………………………..27

4.9.9 Mutual trust Bank shanchay………………………………………………………………………………………………………………….27

4.9.10 Mutual Trust Bank care……………………………………………………………………………………………………………………….28

4.10 Mutual trust bank loan product……………………………………………………………………………………………………………….28

(Chapter- 5) SME Banking of Mutual Trust Bank limited

5.1 Purpose of SME Loan................................................................................................................................. 30

5.2 SME Exposure Limit................................................................................................................................... 30
5.3 Criteria and Condition of SME Loan............................................................................................................ 31
5.3.1 Selection Criteria of Potential Enterprise for SME..................................................................................31
5.3.2 Entrepreneur Selection Criteria………………………………………………………………………………………………........ 32

5.3.3 Guarantor Selection Criteria…………………………………………………………………………………………………………. 32

5.4 Procedure of SME Loan………………………………………………………………………………………………………………………………32

5.4.1 Processing and Screening of SME Loan Proposal....................................................................................32
5.4.2 Documents Required for the Loan Facility…………………………………………………………………………………………..…33
5.4.3 Mode of Repayment………………………………………………………………………………………………………………………..……34
5.5 Security for the Loan Facility………………………………………………………………………………………………………………………35
5.6 Marketing Process Related to SME loan…………………………………………………………………………………………………….35
5.6.1 Marketing Process................................................................................................................................. 35
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5.6.2 Target Marketing.................................................................................................................................. 36

5.6.3 Market Position.................................................................................................................................... 36
(CHAPTER 6) DATA ANALYSIS AND FINDINGS
6.1 Age Limit of the Clients……………………………………………………………………………………………………………………………..38
6.2 Educational Qualification of the Clients...................................................................................................... 38
6.3 Different Categories of Business................................................................................................................. 39
6.4 Business Experience of the Proprietors...................................................................................................... 40
6.5 Major Use of the SME Loan........................................................................................................................ 41
6.6 Waiting Period between Loan Application and Sanction.............................................................................41
6.7 Satisfaction Level on the Service of Mutual Trust Bank SME.......................................................................42
6.8 Determination of Problems Faced by Bank.................................................................................................43
6.9 SWOT Analysis of Mutual Trust Bank Limited............................................................................................. 44
6.10 Findings from The data collection the following things are found:............................................................45
(Chapter- 7) MY RESPONSIBILITY & CONTRIBUTION TOWARDS ORGANIZATION

7.1 Assignments and Contribution towards the organization…………………………………………………………………………..47

7.2 Summary of Internship work …………………………………………………………………………………………………………………….48

7.3 Key Learning and Function of Internship period……………………………………………………………………………………...…49

(Chapter- 8) RECOMMENDATION & CONCLUSION

8.1 Recommendation...................................................................................................................................... 51
8.2 Conclusion................................................................................................................................................. 51
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(Chapter- 1)
INTRODUCTION
1.1 Origin of the Report
 As a qualification of obtaining BSS in Economics we have to do research or an intern program.
The main reason for this course is to experience the reality of corporate life and relate it with the
knowledge gained from academic curriculum with practical situations. This course is taken as a
90 days’ program which creates opportunities for every student to work in different
organizations where they work in a different working environment and gather practical
knowledge. 

1.2 Objectives of the Report 

The objectives of the report are divided in two parts. One is broad objectives and another one is specific
objectives. 

 1.2.1 Broad Objective

The broad objective of this report is- “To explore SME banking of Mutual Trust Bank Limited”

 1.2.2 Specific Objectives 

Specific objectives of this report are – 
1. To examine the bank's overall credit policy towards SME facilities.

2. Find out the marketing policy of SME loan in Mutual Trust Bank Limited

3. Find out the barriers against smooth flow of SME loans.

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4. Analysis of demographic profile of selected SME clients of Mutual Trust Bank Limited and
their perception about the service quality of MTB Limited’s SME Division 

5. To understand the function of Banking services of Mutual Trust Bank Limited

6. To understand the general banking system

7. To learn about private banking rules & regulations

1.3 Significance of the Report

In the modern banking concept one of the most important concepts of financial institutions is
proper management of credit risks. As SME (Small Medium enterprise) is one of the most
important and significant sectors of credit, risks involved in this type of financing is of the
highest importance. In this study, a conceptual study has been conducted on the SME (Small
Medium enterprise) financing of Mutual Trust Bank Limited. Mainly two kind of risk associated
in SME banking adverse selection and moral hazard all this occurs lack of symmetric
information between borrower and lender. And another risk is one party is intended to bridge the
contract. This study will help those who want to conduct further research on the prospect of SME
(Small Medium enterprise) financing in Bangladesh.

1.4 Scope of the Report

The main function of the bank is borrowing money from the people by accepting deposits and
lending them for development of trade, commerce, industry and agriculture. A Bank is thus a
dealer of money and credit. Banks act as financial intermediaries between savers and investors. It
is a profit seeking business concern as any other commercial or industrial organization. SME
(Small Medium enterprise) loan is an important mode of investment for the financial
organizations. In recent years the financial organizations especially the banks are trying hard to
maximize the SME loan exposure. This study covers the aspect of SME credit management
policy of Mutual Trust Limited and will try to find the performance in SME sector compared to
other banks. This study carried out in developing & developed economics since customer
perception may differ in multiple culture.
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1.5 Rationale

I applied in the bank because I wanted to achieve different practical real life experience in my
major concentration. Banking Career has a huge prospect now-a-days in a developing country
like Bangladesh. So I want to establish my career in bank. And not many research has been done
under bank industry so this will be beneficiary to my future as well as the banking employers and
policy makers.

1.6 Methodology of the Report

Methodology is the most important component in any study proposal since it explains the
procedures and methods through which a particular study will be carried out. This includes
discussion on data requirements, sample selection, sampling analysis & design, data analysis,
limitations etc.

1.7.0 Data Sources

The data collecting wasn’t easy as organizations doesn’t really want disclose their data. But my
respected supervisor MD. MAHMUDUL HASAN and other employees helped me collect as
data as possible. And other than that, I collected some data from official website and annual
reports.

 1.7.1 Primary Source

 Practical work exposure in Mutual Trust Bank Limited
 Conversation with the SME (Small Medium enterprise) Proprietors

 1.7.2 Secondary Source

 Annual Report of Mutual Trust Bank Limited
 SME Manual of Mutual Trust Bank Limited
 Bank records
 Official website of the Bank

1.8 Limitation of the Report

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Credit management in SME is a vast area of studying. To identify the SME risk management
procedure, much longer time and vast publicity is needed. It is not possible to collect whole data
within a short time for survey because the secondary source of data is not available. In this
report, the work is done on a sample of small respondents. Time limitation is also one of the
main reasons so for that more detailed study was not possible.

(Chapter-2)
LITERATURE REVIEW
2.0 Bank Concept
“The bank is one of the financial institutions. But it differs from other firm because the bank
collects money from customer as a deposit and gives money to customer as a loan. So the bank
acts as financial intermediaries between the depositors and borrowers. Deposits are liabilities to
the bank. Deposit must be maintained by the bank to maximize the profit”. (Shelagh Heffernan
2005).

“The bank maintains financial statement such as balance sheet and profit and loss account to
measure their financial performance. Main source of bank is a customer deposit. Deposits are
reported on the balance sheet as a liability. These deposits are used by the bank for investment.
This is assets for the bank. The bank capital arises from different between the total liability and
total asset. On the other hand, bank increasing their fund by issuing bonds and equity”. (Barbara
Casu 2006)

2.1 General Banking Activity

So far research has been conducted on ways to measure and improve General Banking Activities
measuring and ensuring of bank clients, tools of general banking activities. The reviewed articles
to prepare this report are as follows:

According to M.K Dash and D.M. Mahatama (2005), with better understanding of General
Banking Activities, companies can determine the actions required to meet the customer’s needs.
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They can identify their own strength and weaknesses, where they stand in comparison to their
competitors, chart out path future progress and improvement. General Banking Activity
measurements helps to promote an increased focus on customer outcomes and stimulate
improvements in the work practices and processes used within the company.

Kotler (1999) also noted that satisfaction is a function of perceived performances and
expectations which identifies feelings of a person resulting from comparing a product’s
perceived performances in relation to his or expectations. For most companies and businesses,
obtaining feedback from customers and clients is essential. It provides them with a glimpse in
what they are doing right, what they are doing wrong, as well as in which operations and
relationships could be improved. But obtaining and organizing this feedback in a way it can
easily be sorted and delivered to the right peoples within the company can often be challenging.

2.2 Literature Review on Banks Profitability

In the literature, bank profitableness is typically divided as an internal and external determinant.
Variety of instructive variables are projected for each classes, consistent with the character and
purpose of every study. The most conclusion rising from these studies is that internal factors
justify a giant proportion of banks profitability; still external factors have additionally had an
impression on their performance. Some recent studies additionally specialize in the impact of
rules on banks performance and profitableness (e.g. Barth et al., 2003, 2004), and report solely
weak proof to support that bank superordinate structure and rules have an effect on bank profits.
Empirical studies on the bank profitableness literature have centered chiefly on a selected
country, together with the United States of America (Berger, 1995; Angbazo, 1997), Hellenic
Republic (Mamatzakis and Remoundos, 2003; Kosmidou, 2006), Australia (Pasiouras et al.
2006), malaysia (Guru et al., 1999), Colombia (Barajas et al., 1999), Brazil (Afanasieff et al.,
2002) and Tunisia (Ben Naceur, 2003). Molyneux and Thorton (1992) were the primary to
analyze a multi-country setting by examining the determinants of bank profitableness for a panel
of European countries, followed by Abreu and Mendes (2001), Staikouras and Wood (2003), and
Pasiouras and Kosmidou (2006). different multi-country studies embrace Hassan and Bashir
(2003), United Nations agency examine profitableness for a sample of Islamic banks from
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twenty-one countries; and Demirguc Kunt and Huizinga (1999) United Nations agency take into
account a comprehensive set of bank specific characteristics, likewise as political economy
conditions, taxation, rules, monetary structure and legal indicators to look at the determinants of
bank web interest margins in over eighty countries. This cluster of studies additionally includes
Haslem (1968), Short (1979), Bourke (1989). A newer study during this cluster is Bikker and Hu
(2002), although it's completely different in scope; its stress is on the bank profitability-business
cycle relationship. Studies within the 1st cluster chiefly concern the banking industry within the
United States of America (e.g. Berger et al., 1987 and neely and Wheelock, 1997) or the rising
market economies (e.g. Barajas et al., 1999). All of the higher than studies examine combos of
internal and external determinants of bank profitableness. The empirical results vary
considerably, since each datasets and environments take issue. There exist, however, some
common parts that permit an extra categorization of the determinants.

The literature concentrating on regulative framework suggests that the rising economies have
considerably exaggerated the attractiveness of its banking industry for foreign investors. Foreign
possession could have an impression on bank profitableness because of variety of reasons. First,
the capital brought in by foreign investors decrease business enterprise value of banks’
restructuring (Tang et al., 2000). Second, foreign banks could bring experience in risk
management and a much better culture of company governance, rendering banks additional
economical (Bonin et al., 2005). Third, foreign bank presence will increase competition, driving
domestic banks to chop prices and improve potency (Claessens et al., 2001). Finally, domestic
banks have benefitted from technological spillovers led to by their foreign competitors. The
literature on impact of deregulating on bank performance lacks formal verification. However, the
contestable market theory and regulation theory normally, illustrate the importance of entry
barriers in enhancing profitableness, whereas another regulative intervention could have
associate degree opposite impact. (Mamatzaky et al. 2005) give proof that a non-collusive
behavior among banks is operative in banking system, suggesting the existence of a contestable
market. In distinction, different studies on transition countries have highlighted the actual fact
that the monetary reform method completely have an effect on banks’ profitableness which
banking sector reform may be a necessary condition for the event and deepening of the world
(Fries and Taci, 2002).
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2.3 Literature Review on Competition in Banking Sector

The role of competition in banking sector Many researches in the banking industry have stressed
the significance of competition in this area stating its effects for social welfare, pricing,
accessibility to financial services, stability and effectiveness (Claessens and Leavens, 2004;
Bikker and Spierdijk, 2009). There are also other empirical researches that show that competition
in the banking industry destabilizes financial stability (Keeley, 1990).

The notion of banking competition is that the power of the market can be dangerous in banking
or any other industry (Leon, 2015). Competition reduces the costs incurred in banking for
various stakeholders, and improves the access to the financial services, at the same time enables
growth of an economy while increasing the efficiency. Consequently, it makes managers to in
effect reduce costs incurred so that the businesses can remain profitable (Claessens and Laeven
2004; Buchs and Mathiesen 2005).

Again, anti-competitive behavior in any sector will negatively affect the welfare of the
consumers. The same will also discourage competition particularly in a growing economy, and
slow down the progress of development (Shiroishi and Wu, 2013).

Claessens and Laeven (2004) state that a decline in the competition level of any banking
industry will in effect raise the costs of financial services thus, leading to reduced financing that
hampers the growth on the economy. On the other hand, proponents of market power state that
market power is beneficial in risk and stability in the banking industry (Kouki and Ali-Nasser,
2014).

To add on to this, reduced competition can afford to include incentives to acquire relevant
information on borrowers and be able to stabilize the financial system. The intent of this paper is
to examine literature on competition in banking sector and how this competition affects the
accessibility to financial services for the companies and individuals. Accessibility to financial
services for the small and medium enterprises (SMME)s is vital for progression of growth in
inclusivity of any economy, for creation of employment and ultimately poverty eradication.
OECD (2010) argues that competition in banking industry and low entry barriers can play a vital
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role in enhancing accessibility to financial services by adopting lower interest rates and
providing better loan terms. Then again, global literature has not conclusively analyzed the effect
of competition on accessibility to financial services. This paper therefore, will assist to identify
the gaps in secondary research particularly in the South African case in which only limited
empirical literature is available on competition in the banking industry. Furthermore, an inclusive
financial structure is perceived desirable because it promotes the economic efficiency and
provides welfare through giving opportunities for a wide part of the population to enhance secure
and safe saving practices, at the same time facilitate the use of a number of accessible financial
services (Sarma and Pais, 2008).

By guaranteeing an extensive financial services outreach is also essential to ensure that the small
entrepreneurs and poor households, together with SMEs (Small and Medium-sized Enterprises)
with insufficient collateral and credit background are not overlooked in the formal credit market.
Such exclusion of financial sector could occur because of imperfections in the financial sector
such as information asymmetry or high costs in the transactions or even lack of adequate legal
framework to enforce transactions. The constraints that arise out of credit consequently make it
hard for the poorer households or small scale entrepreneurs to finance investments with a high
rate of return, in effect reducing the effectiveness and efficiency of resource allocation in a
situation or economy
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(Chapter-3)

History of Bank

3.0 HISTORY OF BANKING

Banking within the trendy sense of the word may be derived to medieval
and early Renaissance Italian Republic, to the rich cities within the north like Florence, Venice
and Genoa. The Bardi and Peruzzi families dominated banking in fourteenth century Florence,
establishing branches in several different components of Europe. Maybe the most known Italian
bank was the house bank, started by Giovanni house in 1397. The earliest known state deposit
bank, Banco di San Giorgio (Bank of St.  George), was based in 1407 at Genoa, Italy. The word
bank was borrowed in English language from Middle French banque, from Italian banca, from
previous German banc, bank "bench, counter". Benches were used as desks or exchange
counters throughout the Renaissance by metropolis bankers, WHO won't create their transactions
atop desks coated by inexperienced tablecloths. According to Banking Acti, Conventional
Banking means that the business of receiving cash on current or savings account, paying and
assembling cheques drawn by or paid in by customers, the creation of advances to customers,
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and includes such alternative business because the Authority might order for the needs of this
Act. 

3.1 THE WORD BANK

The definition of a bank varies from country to country. Under English common law, a banker is
outlined as an individual WHO carries on the business of banking, that is such that as:
Conducting current accounts for his customers, paying cheque drawn on him, and Collecting
cheque for his customers. Banco Diamond State Republic of Venezuela in Coro.

In commonest law jurisdictions there's a Bills of Exchange Act that codifies the law in reference
to negotiable instruments, together with cheque, and this Act contains a statutory definition of
the term banker: banker includes a body of persons, whether or not incorporated or not, WHO
continue the business of Bank.iiThough this definition looks circular, it's really practical, because
it ensures that the legal basis for bank transactions like cheque doesn't rely on however the bank
is union or regulated.

The business of banking is in several English common law countries not outlined by statute
however by common law, the definition on top of. In different English common law jurisdictions
there are unit statutory definitions of the business of banking or banking business. once viewing
these definitions it's important to stay in mind that they're process the business of banking for the
needs of the legislation, and not essentially generally. Specifically, most of the definitions area
unit from legislation that has the needs of entry regulation and management banks instead of
regulation the particular business of banking. However, in several cases the statutory definition
closely mirrors the common law one. Samples of statutory definitions:

"banking business" suggests that the business of receiving cash on current or savings account,
paying and collecting cheques drawn by or paid in by customers, the creating of advances to
customers, and includes such different business because the Authority might order for the needs
of this Act; iii
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"Banking business" suggests that the business of either or each of the following: receiving from
the overall public cash on current, deposit, savings or different similar account repayable on
demand or at intervals but [3 months] ... or with an amount of decision or notice of but that
period; Paying or collection cheques drawn by or paid in by customers; Since the arrival of
EFTPOS (Electronic Funds Transfer at purpose Of Sale), direct credit, direct debit and web
banking, the cheque has lost its importance in most banking systems as a payment instrument.
This has semiconductor diode legal theorists to recommend that the cheque primarily based
definition ought to be broadened to incorporate monetary establishments that conduct current
accounts for purchasers and alter customers to pay and be paid by third parties, notwithstanding
they are doing not pay and collect cheques.

3.2 Different kinds of Bank

Banks' activities may be divided into retail banking, dealing directly with people and little
businesses; business banking, providing services to mid-market business; company banking,
directed at massive business entities; non-public banking, providing wealth management services
to high web price individuals and families; and investment banking, with reference to activities
on the money markets. Most banks area unit profit-making, non-public enterprises.

However, some area unit owned by government, or area unit noncommercial organizations.
There are a unit differing kinds of bank. Some necessary varieties of bank area unit

BANKING
SYSTEM

COMME INVESTM SPECIALI

CENTRAL
RCIAL ENT ZED
BANK
BANK BANK BANK

 Central banks are generally government-owned and charged with quasi-regulatory

responsibilities, such as supervision industrial banks, or dominate the money rate. they
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typically give liquidity to the banking industry and act because the loaner is expedient in
event of a crisis.

 Commercial bank refers to a bank or a division of a bank that principally deals with
deposits and loans from firms or massive businesses. It may be public or non-public.
 In the perspective of Bangladesh, the activity of investment banks is not much. Generally,
in our country most of the commercial banks are act like investment bank. Although
(ICB) investment corporate bank Bangladesh provide financial assists to individuals,
corporation even government in rising capital by acting as the client’s agents in the
insurance of security.

 The main concern of specialized banks is small and cottage industrial actives. Specialized
banks are also help to increase in social norms like social justices. Grameen bank, palli
sanchay bank are the example of specialized bank
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(CHAPTER- 4)

ORGANIZATION OVERVIEW

4.1 History of Mutual Trust Limited:

The economy of Bangladesh has been encountering a quick development since the 90's. Modern
and horticultural advancement, universal exchange, inflow of ostracized Bangladeshi laborers
settlement, neighborhood and remote interests in development, correspondence, power,
sustenance preparing and benefit ventures introduced a period of financial exercises.
Urbanization and way of life changes simultaneously with financial advancement made an
interest for managing account items and administrations to bolster the new activities. Mutual
Trust Bank Limited was incorporated as a Public Limited Company in 1999, under the
Companies Act 1994, with an Authorized Share Capital of BDT 1,000,000,000 divided into
10,000,000 ordinary shares of BDT 100 each. At present, the Authorized Share Capital of the
company is BDT 10,000,000,000 divided into 1,000,000,000 ordinary shares of BDT 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
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of Association and as licensed by Bangladesh Bank under the provisions of the Banking
Companies Act 1991. Company Registration No: c38707(665)/99 on September 29, 1999.
Bangladesh Bank Permission No: BRPD (P)744(78)/99-3081 on October 5, 1999. Also member
with-

 Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI, D)

 The Institute of Banker’s Bangladesh (IBB)

 Bangladesh Foreign Exchange Dealers Association (BAFEDA)

 Bangladesh Institute of Bank Management (BIBM)

 International Chamber of Commerce Bangladesh Limited (ICCB)

 Bangladesh Association of Banks (BAB)

 Association of Bankers Bangladesh Limited (ABB)

 Bangladesh Association of Publicly Listed Companies (BAPLC)

 American Chamber of Commerce in Bangladesh (AMCHAM)

 Primary Dealers Bangladesh Limited (PDBL)

4.2 Mutual Trust Bank Vision:

Mutual Trust Bank’s vision is based on a philosophy known as MTB3V. they are envisioning
MTB to be:

 One of the best performing banks in Bangladesh

 The bank of choice

 A truly world-class bank

4.3 Mutual Trust Bank 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.
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4.4 Core Values of Mutual Trust Bank Ltd:

Mutual Bank Limited practices the following values:

 Shareholders – Create sustainable economic value for our shareholders by utilizing an

honest and efficient business methodology.

 Community – Committed to serve the society through employment creation, support

community projects and events and be a responsible corporate citizen.

 Customers – Render state-of-the-art service to our customers by offering diversified

products and by aspiring to fulfill their banking needs to the best of our abilities.

 Employees – We rely on the inherent merits of the employee and honor our relation as a
part of this renowned financial institution. We work together to celebrate and reward
unique backgrounds, viewpoints, skills and talents of everyone at the work place, no
matter what their job is.

4.5 MTB Board of Director

The following are members of the MTBL Board of Directors-

 Mr. Md. Hedayetullah (Chairman)

 Mrs. Khwaja Nargis Hossain (Vice Chairman)
 Mr. Syed Manzur Elahi (Director & Founding Chairman)
 Dr. Arif Dowla (Director)
 Mr. Rashed Ahmed Chowdhury (Director)
 Mr. M. A. Rouf, JP (Former Chairman) (Director)
 Mr. Md. Abdul Malek (Director)
 Mr. Md. Wakiluddin (Director)
 Ms. Anika Chowdhury (Director)
 Mr. Mohammed Abdur Rouf (Director)
 Mr. Md. AbdulMalek (Director)
 Daniel de Lange (Director)
 Mr. Tarik Ur Rahman (Director)
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 Mr. M. Mokammel Haque (Independent Director)

 Habibur Rahman (Managing Director & CEO)

4.6 Company Organigram:

4.7 Principles of Mutual Trust Bank

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MTBL is well-known for their aims to attain their planned principles as well as economical
objective. Their essential values and principles are given below:

a. Uprightness

b. Harmony

c. Politeness

d. Reasonableness

e. Duty

f. Knowledge and Spirit

g. Business Ethics

4.8 General banking section:

As an intern I stat my first day in general banking section. Activates of general banking are

1. Accounts Opening 

2. Accounts maintaining 

3. Account closing,  

4. Issuing Pay order,  

5. Bank draft 

6. Demand draft 

7. Opening of Fixed Deposit  

8. Clearing of Bank cheque 

9. Credit card service 

10. Debit card service 

11. Other Consumer Savings Schemes 

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12. Pension Savings Scheme (PSS) 

13. Student Account service 

14. Kids account service 

15. Education Savings scheme (ESS)

4.9 Different Banking sector of MTBL

 4.9.1 Current account:

Mutual Trust Bank current account a customer can access their account anytime, anywhere,
using payable or deposit cheque at any Mutual Trust Bank branch. With current account a
customer can access to largest ATM fleet of Bangladesh. Also a CD account holder can apply for
safe deposit locker facilities and collect foreign remittance in both T.C. and taka.

 4.9.2 Brick by brick:

Brick by brick plan mainly focus for the middle and low income people. Anyone can deposit on
monthly basis and get a handsome amount of interest. A brick by brick account holder also apply
for credit facilities against the account.
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 4.9.3 MTB EDUCATION PLAN:

This savings scheme will ensure the future large sum of expenditure for education of the
children. The middle income and lower income clients to ensure their children’s education/
higher education. The customer can avail loan up to 90% of the deposited amount. Minimum
loan amount will not be less than Tk. 25,000/-

 4.9.4 Fixed Deposit:

When customer want to long-term investments and wish to earn higher interest’s savings Mutual
Trust Bank fixed deposit in perfect for them. Because Mutual Trust Bank offer Automatic
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renewals and Overdraft facility which a customer enjoys Fixed Deposit as collateral to apply for
an overdraft facility at a competitive rate.

 4.9.5 Mutual Trust Bank senior:

When a person is above 60 age and citizen of Bangladesh are eligible of MTBL senior account.
MTBL want to empower the senior citizen so that they can carry out their day to day banking
transaction independently. Senior citizen has some facilities for this particulate account such as
free life time debit card, free internet banking also free cheque books.

 4.9.6 Mutual Trust Bank inspire:

Right now all the savings account in banks are offered same kind of service so it is hard for a
young customer to know which one is best for him. That’s why mutual Trust Bank inspired
provides a range of enhanced service while letting a customer enjoy unique benefits of getting
returned on deposit monthly instead of traditional half yearly. In this account a customer can
enjoy free Internet banking and also interest calculated on daily basis and paid monthly.

 4.9.7 Mutual Trust Bank Ruby:

Mutual Trust Bank Ruby account designed for independent women to enjoy hassle free banking
service. It is an exclusive savings account with packed special benefits for women customers.
The benefits are Interest will add on daily and credited monthly also no Debit card fee for one
year.

 4.9.8 Mutual trust Bank millionaire plan:

It is a monthly deposit scheme where customers can make million taka after a certain period of
time. This savings account is very important for future plans because our customer may apply a
loan against the millionaire plan account. 
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 4.9.9 Mutual trust Bank shanchay:

This product is mainly focused on the low income group of people who don’t manage their
finance due to the lack of available banking facilities. Mutual trust Bank shanchay will help to
minimize their financial risk. The best thing about the product is the minimum account opening
balance is 10 taka and no account maintenance fee. Any Bangladeshi with a photo and Id can
able to open this savings account.

 4.9.10 Mutual Trust Bank care: 

MTB care is a saving product for children with special needs. Mutual Trust Bank families show
responsibility towards helping special children have access to the banking section. The most
attractive feature of this saving product is there is no account maintenance fee, and 1 st three
cheque books are free. There are also some other deposit products that MTB offer such as mutual
Trust Bank millennial plan, mutual Trust Bank instant, gift cheque, MTB extreme savings
account.

4.10 Mutual trust bank loan product

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Unlike all other banking Bangladesh mutual Trust Bank also offered some exclusive credit
Service. From a simple personal loan 2 home loan mutual Trust Bank offers the lowest interest
rate to their customer. Mutual Trust Bank retail loan products are: 

 MTB personal loan

 MTB auto loan

 MTB home loan

 MTB home equity loan

 MTB professionals loan

 MTB need

 MTB grameen griho reen 

 MTB cash line 

(Chapter-5)

SME Banking of Mutual Trust Bank limited

Mutual trust bank start to provide SME loans in 2007 and within 7 years the bank gets best in
SME banking award in 2014. MTB offers comprehensive financial solution for CMSMEs
(Cottage, Micro, Small and Medium Enterprises) customer in Bangladesh. Because the bank
believes that a middle income country like Bangladesh CMSMEs customer are the brick builder.
By providing SME loans the bank want to be a member who want fulfil the a nation dream.
MTB banks SME products are innovative and fully customized for different section of SME ad
there are flexible funded and non-funded facilities

SME Loan Products:

 MTB Small Business Loan (SBL)

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 MTB SME CC (Hypo)

 MTB Digoon
 MTB Bhagyobati
 MTB Gunabati
 MTB Light Engineering
 MTB Krishijat
 MTB Mousumi
 MTB Green Energy Loan
 MTB IT Genius
 MTB Youth Line
 Commercial Space Finance
 MTB Shachal – Vehicle Financing
 MTB Supply Chain Finance
 MTB Abason

5.1 Purpose of SME Loan

1) Working capital finance & fixed asset finance
2) Delivery Van /Transport for business purpose
3) Renewing office/ Business premises
4) Purchasing of capital machinery
5) Purchase of commercial land, possession for new venture
6) Other eligible portfolio of the bank

5.2 SME Exposure Limit

The minimum and maximum exposure of the bank on single Small Enterprise shall remain
subject to the following:
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1. In case of working capital finance- Maximum up to 100% of the net required working
capital or 75% of the sum total of inventory and receivables whichever is lower.
2. In case of fixed assets purchase- Maximum up to 90% of the purchased price.
Limit on clean facility for Tk. 2 Lac to below Tk. 10 Lac:
In order to facilitate growth of smaller loans, banks are free to determine security requirements
for loan below Tk. 10 Lac
1. As a minimum Bank must take charge on assets being financed.
2. Branch should also obtain other common documents/ charge documents as applicable.
For Loan Amounting Tk. 10 Lac to Tk. 50 Lac:

Registered mortgage over immovable properties with registered power of attorney and
disclaimer from the mortgagor(s)-

 Hypothecation on the inventory, receivables, advance payments, plants

 Machineries
 Personal guarantee of spouse/ parents/ other family members
 Third party guarantee from a person acceptable to the Bank
 Postdated cheques for each installment and one postdated cheque for full loan Value
including full interest
 Branch shall also obtain other common documents/ charge documents as applicable

Maximum Exposure as per Bangladesh Bank's Guidelines the Bank can take the following
maximum exposure in SME finance:

% of Classified SE Advances to Total Portfolio of SE Maximum Limit

Advances
a. Below 5% 10 times of the equity
b. Below 10% 6 times of the equity
c. Below 15% 4 times of the equity
d. Up to and above 15% Up to the equity
On the basis of the above criteria, Annual Budget for SME Finance shall be placed before the
Board of the Bank for approval.
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5.3 Criteria and Condition of SME Loan

 5.3.1 Selection Criteria of Potential Enterprise for SME

 Enterprise Selection Criteria:

 The success of SME largely depends on the selection of a business and man behind it. In
terms of the business (Enterprise), the following attributes should be sought:
 The business must be in operation for at least one year.
 The Enterprise must have a clear operational growth with a defined market.
 The business should be environmental friendly (Ex: No narcotics or Tobacco business).
 The business should be legally registered, i.e., valid trade license, income tax or VAT
registration, wherever applicable.
 The business should be in legal trade, i.e. smuggling will not be allowed or socially

 5.3.2 Entrepreneur Selection Criteria:

In order to understand the capability of the management behind the business, the following
should be assessed: -
 The entrepreneur should be physically able and in good health, preferably between age of
20 to 60. If the proprietor is an elderly person closer to 60, it should be seen what is the
succession process will be and whether it is clearly defined or not.
 The entrepreneur must have the necessary technical skill to run the business, i.e.
academic background or vocational training, relevant work experience in another
institution or years of experience in this line of business.
 The entrepreneur must possess a high level of enthusiasm and should demonstrate that he
is in control of his business and has the ability to take up new and fresh challenges to take
the business forward.
 Clear-cut indication of source of income and reasonable ability to save.

 5.3.3 Guarantor Selection Criteria:

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Proper selection of guarantor is also equally important. The following attributes are important
while selecting the guarantor:
 The guarantor must have the economic solvency to repay the loan.
 The guarantor net worth in minimum 125% of the loan amount but in case of family
guarantor this limit is relax able.
 The guarantor of an existing loan in allowed to take loan from the bank unless his/her
personal guarantee is replaced by another eligible guarantor.
 Any existing borrower can’t provide more than one guarantee for another loan.
 The guarantor should be aware of all the aspect of the loan and the responsibilities.
 The guarantor should be well known to the entrepreneur.

5.4 Procedure of SME Loan

 5.4.1 Processing and Screening of SME Loan Proposal

Currently all the branches of Mutual Trust Bank Limited have dedicated SME officers for
marketing the SME Loan. These officers help in SME Loan and Deposit product marketing,
proposal preparation, loan documentation, loan disbursement, loan monitoring and recovery.
Every loan proposal is generated at the grass root level through the marketing officers. These
officers primarily generate the proposal and process the positive proposal under supervision of
"Area Group Leader" and place it to their respective "Regional SME Center". The Head of
Regional SME Center Business Development Manager (BDM) may decline the unviable loan
proposal at their level. In viable cases, he may conduct physical inspection (if necessary) and
send the positive proposal to SME-CRM Unit. The CRM unit at Head Office analyzes every pros
and cons of the proposals and recommends to the management for sanction of the loan if they
think viable. After sanction of the proposal, the SME- CRM unit sends the loan file to the
concerned SME Center for disbursement. After completing all documentation formalities as per
sanction, the center will disburse the loan through their respective branches after obtaining
disbursement authority from Credit Administration Division (CAD) and report it to "SME
Banking Division" at Head Office. The Work flow diagrammatically is as below:

 5.4.2 Documents Required for the Loan Facility

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 Loan Application Form duly filled in and signed by the customer.

 Recent photographs of the entrepreneur and guarantors dully attested
 Up- to –date Electricity Bill
 Fixed asset Schedule
 Stock statement
 Borrower's Basic Fact Sheet under the seal and signature of the borrower.
 A written declaration obtained from the borrower divulging details of various facilities
already obtained from other institutions.
 Acceptance of the terms and conditions of Sanction Advice
 Copy of up-to-date Trade License.
 Personal net worth statement of the proprietor / partners/ directors.
 Copy of up-to-date TIN Certificate.
 Short description of the products of the enterprise.
 Project Profile (if new project).
 Bank statement of borrower
 Audited financial statement of the business is required for total loan exposure over taka 4.00
million (under small enterprise)

 Quotation/ Indent/ Pro-forma Invoice etc. (as applicable)

 Marketing distribution system of the company.
 Short profile of the proprietor / partners/ directors mentioning their business experience/
education etc.
 Brief description of the management of the company mentioning their educational
professional experiences.
 A latest liability statement of all the business concerns of the Group with other Banks/ Financial
Institutions (Mentioning -name of business concern, name of bank and branch, nature of facility,
limit amount, outstanding, overdue, if any etc.)
 Up-to-date & unclassified Credit Information Bureau (CIB) report from Bangladesh Bank.
 Copy of financial statements for last 03 years duly singed by the borrower
 Copy of Registered Partnership Deed duly certified as true copy or a partnership Deed on non-
judicial stamp of Tk.150 denomination duly notarized (as applicable).
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 Contract point verification (CPV) should be done for all applicants (information of business
and residence)
 Copy of Memorandum & articles of Association of the company including Certificate of
Incorporation duly certified by Register Joint Stock Companies (RJSC) and attested by the
Managing Director accompanied by an up-to-date list of Directors (as applicable).
 Copy of Board Resolution of the company for availing credit facilities and authorizing
 Managing Director/ Chairman/ Director for execution of documents and operation of the
accounts (as applicable).
 An Undertaking not to change the management of the company and the Memorandum and
articles of the company without prior permission of the bank.

 5.4.3 Mode of Repayment

 For continuous loan credit turnover must be equal to the limit amount in a quarter and full
and final adjustment within the validity period
 For term loan, repayment to be made by monthly installment and full and final adjustment
within the validity period.
 For seasonal loan, repayment to be made by single installment and at the end of the loan
tenure or earlier as the wants but interest to be paid on monthly basis.

5.5 Security for the Loan Facility

 Registered mortgage of land property (minimum force sales value 125% of loan amount)
 Hypothecation of stock and inventories, receivables, advance payment, plant and
machineries
 Ownership of the vehicle/machinery purchased in the name of the Bank
 Ownership of the space/possession right purchased in Bank's name
 Registered mortgage of loan property + FD
 Personal guarantee of spouse /parents/brother/sister/other family member and land owner
 Deposit of original title deed/up to date rent receipt/rent deed of business premises
 Postdated cheque for each installment and one undated cheque for full loan value
including full interest payable thereon
 DP note or other usual charge document
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 Any other security as deemed fit on a case to case basis.

5.6 Marketing Process Related to SME loan

 5.6.1 Marketing Process

In terms of marketing the SME loans the financial institutions start out with extensive business
and marketing plans to attract potential customers. A good marketing plan starts with segmenting
the potential market and then start to provide service. The marketing structure of Mutual Trust
Bank Limited is as follows:

 Geographic Segmentation: In terms of SME Loan, it targets every region around the
country in terms of small business. The dedicated SME marketing officer is attached with
all the branches to hunt the SME clients and nurture the existing ones which means each
and every branch of Mutual Trust Bank acts like a dedicated SME office.
 Demographic Segmentation: The demographic segmentation is of very importance in
SME loan disbursement in MTB limited. For example, the age of the SME clients must
range between 20 to 60 years.
 Psychographic Segmentation: In terms of SME Loan, clients are different in attitudes,
interest and activity like some are time constrained and some are money constrained. So
bank always tries to focus these things and then very carefully provide the loans to the
clients.
 Behavioral Segmentation: In terms of SME loan, few clients would be found who are
very much highly educated like graduate or post graduate. In the present scenario of
Bangladesh, the highly educated people don't get attracted to SME loans. That is why the
behavioral segmentation plays a major role in determining which segment of prospective
customers to go for while selecting the client.

 5.6.2 Target Marketing

There are too many different types of customers with too many different kinds of needs. In terms
of SME loans, Mutual Trust bank Limited’s target market is small and medium enterprise. There
are three sectors of target marketing which SME follows: Trading, Manufacturing and Service.
As the sectors of loan disbursement are different, there are different strategies before and after
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loan disbursement. The marketing officers are chosen in such a way that they can handle
different types of customers.

 5.6.3 Market Position

In Bangladesh, there are other banks and Non-Banking Financial Organizations which are
relentlessly trying to market their loan products to customer. That is why Mutual Trust Bank
Limited has taken some innovative strategies to make a strong position in the market. The
marketing officers are very customer friendly and the loan processing system is made as easy as
possible. For example, the SME interest rates are comparatively higher than the other loan
products. But the customer service and the other facilities like fast service and customer friendly
environment equivalents all the other disadvantages. For market positioning Mutual Trust Bank
Limited’s SME division provides the services like:

 Rescheduling System- If after taking SME loans any customer gets any problem in
repaying the loan then the rescheduling process is made for the ease of the customer.

 Quick Service- The main facility of SME is to provide quick service to the customers. It
takes only 15-20 days’ time to disburse the loan to the customer's account.

 Direct Service- To get the loan the marketing officers do all the hard work. They even provide
the service in the holidays for the clients support.
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(CHAPTER 6)
DATA ANALYSIS AND FINDINGS
6.1 Age Limit of the Clients
In this study, it was found that 76% of the surveyed clients are between 30-50 years. For SME
banking in Bangladesh, it would be risky to provide loans above 60 aged clients and Mutual
Trust Bank Limited’s SME authority also discourages the loan to the proprietors aged above 60.
39 | P a g e

40 38
35
30
25
20
15
10
10
5 2
0
Below 30 30 to 50 Above 50

Figure: Age limit of the clients

6.2 Educational Qualification of the Clients

In the study, it was found that most of the proprietors are H.S.C pass. In Bangladesh, a common
perception about the SME customers is that they are educationally not much advanced. The
result of the surveyed clients also reflects that perception.

Below SSC
SSC
8%
Post graduation 4%
34% HSC
14%

Graduation
40%

Below SSC SSC HSC

Graduation Post graduation

Figure: Educational qualification of the clients

6.3 Different Categories of Business

In the survey, it was found that trading concern is the major portion of the interviewed SME
proprietors. 80% of the proprietors run the trading business while manufacturing percentage is
16% and service only 4%. In terms of the business sectors, textile & fabrics is the leading
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business type (38%). The others plastic and retail products (18%), paper and book (4%),
engineering works (4%), furniture and wood products (8%), agro business (14%), iron and steel
(8%) and electronics (6%).

Business type

4% 16%

80%

Manufacturing Trading Service

Business Sector

6% 18%
8%
14% 4%

8%
4% 38%

Plastic & Retail Products Paper & Book Textile & Fabrics
Engineering works Furniture & wood product Agro Business
Iron an Steel Electronics

Figure: Business Type and Business Sector

6.4 Business Experience of the Proprietors

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In the study, it was found that the maximum portion of the sample lies in the range of 5-10 years
(22), the second highest is 10-15 years (10). That means most of the proprietors are quite
experienced in their line of business.

Figure: Survey response on Experience of the Proprietors

6.5 Major Use of the SME Loan

From the responses obtained it is observed that the loan is mostly used for purchasing raw
materials. 58% respondents agreed that the most use of this loan is for purchase of raw materials.
Salary and daily expense (28%) is second most used purpose of the loan. Paying the creditors’ is
another use of the loan. 14% respondents agreed to the fact.
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Respondents

pay credi-
tors
salary & 14%
daily raw materi-
expense als purchase
28% 58%

raw materials purchase salary & daily expense pay creditors

Figure: Survey response on Use of the Loan

6.6 Waiting Period between Loan Application and Sanction

Customers were asked how much time they had to wait for the loan to disburse in Mutual Trust
Bank Limited. Most of the respondents (48%) said that it took less than 1 (one) month between
loan application and sanction. 24% respondents said that it took around 1 month to get the loan.
18% respondents said that it took between 1 to 2 months and 10% replied that it took more than
2 months to get the loan.

More than 2 month

11%

1 to 2 month
20%

less than 1
month
55%

Around 1 month
14%

Figure: Survey response on waiting period for loan

6.7 Satisfaction Level on the Service of Mutual Trust Bank SME

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The respondents were given 5 levels of satisfaction. In response, 8 respondents gave their
opinion that they are highly satisfied, 24 are satisfied, 3 are neutral, 9 are dissatisfied and 6 are
highly dissatisfied with the SME service of Mutual Trust Bank.

Figure: Survey response on Satisfaction level of customers

6.8 Determination of Problems Faced by Bank

Interviews with the SME bankers revealed some problems or risks that bank faces in SME
management. Problems or risks associated with SME loans for bank are as follows:
1. Limited opportunity to offer flexible repayment options for private loan borrowers
prior to default: Currently, MTB has this type of problems for the term SME loan
facilities. The borrowers become defaulter if they fail to pay 3 installments in a row and if
they face some problems MTB authorities find it hard to provide the flexible repayment
options to them.
2. Confusion with borrowing terms and conditions: According to the bank officials,
another problem with the client is the confusion with the borrowing terms and conditions.
Most of the SME proprietors are not experienced in transacting with banks and for this
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reasons they are not easy to handle. Managing them is a bit problematic for the bankers
due to this reason.
3. Inaccurate information regarding the borrower: The CIB (Credit Information Bureau)
is the base for the information of the prospective clients of the bank. Currently the bankers
are facing constant challenge due to inaccuracy in the CIB report of the borrowers.
Problems are created when classified loans are not mentioned in the CIB report and the
classified borrowers get the loans.
4. Collateral Risk: Risks with collateral means that whether the collateral is under
possession of the owner, whether the collateral is the correct property shown by the
borrower etc. This type of problem is very common case in Bangladesh and maximum
loans become irregular or default due to this problem.
5. Risks with Documentation: Applying SME loans from the banks with fake or faulty
documents is a common thing for the borrowers. In order to ensure safety lending, banks
must ensure the originality of the documents related to the mortgaged properties.
6. Moral Hazard: Even when loans are made to the SMEs, it may so happen that the owners
of these SMEs take higher risks than they otherwise would without lending support from
the banks.
7. Unsecured Lending: Unsecured loans consist of maximum portion of the total SME
portfolio. In this type of lending, personal guarantee of the proprietor and his/her relative
or some other persons is considered as the main security. But when the borrower fails to
repay the loan, the bank faces difficulty in recovering that because personal guarantee is
not sufficient for lawsuit and other legal steps.

6.9 SWOT Analysis of Mutual Trust Bank Limited

In general, the assessment of strengths, weaknesses, opportunities and threats of an organization

and its surrounding environment is referred to as SWOT analysis. The core purpose of the
SWOT analysis is to identify strategies that align, fit or match a company’s resources and
capabilities to the demands of the background in which the company operates. To express it
differently, the idea of the strategic alternatives generated by a SWOT analysis should be built on
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Company strengths in order to exploit opportunities and defend threats and to rectify company’s
weaknesses. During my internship period, I have found some aspects relating to Bank’s
strengths, weakness, opportunities and threats, which are affecting The Bank’s overall
performance. The SWOT analysis of Mutual Trust Bank Limited is given below:

 Strengths: Mutual trust Bank limited has recognized a favorable reputation and
significant business growth already. In 2019 the total amount of revenue was $157.70
million dollar. The top management are highly qualified and most experienced
personally which is the strong key point of mutual trust Bank. Mutual trust Banks are
gradually getting more and more popular among people and people are relying on it.
From the very beginning mutual trust Bank limited its surroundings with modern
equipment and facilities.
 Opportunities: MTB can chase a modification scheme in growing its existing route
of the business. Management reflects selections of preliminary client service in
commercial division. Here are numerous chances for MTB to enlarge its product line
 Threats: The appearance of the multinational banks and their prompt growth poses a
potential risk to the new PCB’s. Due to the thriving energy sector, more foreign banks
are predictable to arrive in Bangladesh. Furthermore, the already present foreign
banks such as Standard Chartered are now hunting a destructive branch development
plan. These banks are instituting more branches nationwide and are estimated to get
into the process soon. Since the foreign banks have marvelous financial power, it will
pose a danger to local banks to a certain amount in terms of clutching the well-paid
clients.
 Weaknesses: The greatest irony is that claiming to be “you can bank on us” is simply
used for the purpose of advertising their mission statement. The bank as of these days
did not develop a beautiful set of vision during this competitive market place. That’s
why the bank could not ascertain the core business space wherever it ought to
concentrate. The bank doesn’t have any long-run ways of whether or not it needs to
concentrate on general banking or become a corporate bank. That’s why the bank has
been unsuccessful in each aspect in retail banking and likewise as in company
banking. The trail for the long run ought to be determined currently. Mutual trust
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Bank limited recruitment method isn’t up to the mark. They recruit their employees
for mid-level and lower level while not coaching. Many individuals are recruited
underneath the references of the advice of the board of directors. Which has become
an everyday application in their enlisting policy. As a result, the service of the bank is
not up to the mark. Therefore, the bank misses their right individuals for the bank.
Poor service quality has become a serious drawback for the bank. The client service
quality all told the department and within the most of the branches is extremely low.
The service of MTB bank is relatively lower than its competitors such as National
Capital Bank, Prime bank, Dutch Bangla Bank etc.

6.10 Findings from The data collection the following things are
found:
 SME authority of Mutual Trust Bank Limited should carefully choose the proprietors
while disbursing the SME loan. Because overly aged persons cannot pay the SME loans.
The maximum age limit for taking any SME loan program is 60 years according to MTB
Limited’s SME policy.
 Inexperienced proprietors are not encouraged to gain the SME loans. From the data, it
was found that most of the proprietors have 5-10 years of experience who are currently
getting the SME loan.
 Most of the interviewed proprietors use this SME loan for purchasing raw materials. The
other major use of the SME loan is for meeting salary and daily expenses.
 Most of the proprietors (48%) said that it took less than 1(one) month between loan
application and sanction. 24% proprietors said that it took around 1 month to get the loan.

 According to the proprietors those who apply for the loan, MTB SME service should be
more attractive in time length between loan applications and loan payment. Inexperienced
marketing force is also the negative thing to discourage the proprietors to the loans. This
means that the MTB Management should make some proper steps to organize the whole
SME marketing and disbursement process for better results.
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 After taking the loans from MTB, some proprietors said that they are either highly
satisfied or just satisfied with the SME loan of Mutual Trust Bank Limited. It means that
more than 60% of the proprietors think that the service level of MTB is quite good and
it’s also quite satisfactory to the clients.
 The problems or risks regarding SME loans for the bankers are like flexible repayment
options for borrowers, confusion with borrowing terms and conditions, wrong
information, risks with guarantee, documentation risk, moral hazard problems with
unsecured loans, monitoring activity etc.

(Chapter-7)

My responsibility and contribution towards

organization

7.1 Assignments and Contribution towards the organization

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During the first week in the bank was an interesting moment for me as I got introduced with the
entire bank facilities by my bank supervisor. I was assigned with the method of opening bank
accounts & different investment modes. I was provided some books and journals to experience &
gain more knowledge about the bank

During the whole course period, all intern students should follow the learning steps arranged
by the bank. I was also assigned to learn how the General Banking Section works and how it
manages the banking activity efficiently. Before that, I was called by the assistant deputy
supervisor of the bank. He mentioned me several points about General Banking as it is the
heart of all banking activities. I was surprised to know that it is the busiest & very important
department of a branch. Manager also mentioned that it is also known as “Retail Banking”.

Along with other intern students was assigned to help customers filling the account opening
form, providing customers the cheque books. I was also told to inform my bank supervisor
upon facing any difficulty managing customers. I had to do the same work for couple of
days and other days I had privileges to gain some vital knowledge in the cash & remittance
section. As bankers in that department were extremely busy that they couldn’t teach me
details about those departments. Also the information in those departments is highly
confidential. Therefore, I just had permission to overlook their workings.

The toughest assignment was to deal in the customer service department in the bank such as
counting money, servicing accounts and honoring cheques. I had no fixed duties to perform
as the bank was too busy dealing customers. My role was to collect money from the
customers and count those in counting machine and inform the banker in charge of it.
Besides it, last several days of this week, I handled slight transaction supervised by my bank
supervisor.

When I was working these things mentioned above, I was so nervous that I spent a lot of
time to finish my task. My Bank supervisor assisted me through the process and all the
decisions were taken by my bank supervisor as I was not allowed to take any decision
myself. Besides it, along with other intern students I had to work in the cheque learning
section. This was the second time for us to work in this section because manager wants us to
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learn more about how to clear cheque efficiently. This week was really busy week for me
because I had no chance to take rest. Manager proposed all of us to get vital experience
under the supervision of the head officer in this section.

7.2 Summary of Internship work

I worked in different sections of MTB. My job responsibilities increased gradually as I was
showing progress. The tasks that I did during internship program were:

❖ Account Opening Section: In this section my activities were more or less to

provide support to my supervisor to handle customers. The major task of this
division is to provide them account opening information and services.

❖ Cheque Clearing Section: In clearing section my major tasks were to receive

cheque with deposit slip, separate high value and low value, summing up cheques,
batch entry, finding return cheque. And I checked the account number, date,
phone number and signature in the cheque. My faultless work made the
department more efficient. By working in this section I learned how a client
credited the amount of cheque given by others to his/her account.

❖ ATM Card Issuing Section: I also got the opportunity to contribute to the
Credit Division. The use of ATM card is increasing day by day so it a very
important department for any bank. I have learned many new things by working
this section. At first I had to acquire some knowledge of some basic regulations.

❖ Investment Department: This is one of the most important department for the
bank. The major work in this department is very sensitive so, I was given very
basic task in this department. By working this department, I learned what are the
documents (such as mortgage paper, land registration paper etc.) needed with loan
application.

❖ Cash Division: There was not much work to do other than receiving and
paying to the customer where most work was done by my supervisor.
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7.3 Key Learning and Function of Internship period:

One day the bank was too busy handling customers because there were too many customers
came to the bank. Bankers felt too hard to handle all the customers. Then supervisor came to
all intern students and requested us to do some workings to assist customers. The works we
all done have been mentioned below:

✔ Asking customer what types of accounts they want to open.

✔ Suggesting them what type of account will be helpful for them

✔ Telling them what papers are needed for opening account? Sometime I had to
print the documents need for opening accounts and provided them for their
help.

✔ Filling up the account opening form.

✔ Taking signatures from customers.

✔ Providing an account number from the software.

✔ Checking all the documents.

✔ writing the deposit slip of the clients.

One week I had to deal some workings alone without the help of my supervisor. But after I finish
work my supervisor checked my workings if there was any mistake. The things which I have
done:

✔ Applications of loan applicants in the different files were kept properly.

✔ Software which is used by the bank to keep details information about the load
applicants was handled to manage most of their tasks.

✔ All the important documents such as land registration paper, mortgage,

RAJUK document etc. were checked with the application serial.

✔ Checked signatures of loan applicants in the loan application form.

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(Chapter-8)

RECOMMENDATION & CONCLUSION

8.1 Recommendation
For achieving the best possible targets, the bank should take following some steps. These can be-
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 Regular checking of the SME portfolio should be made more successful

 Interest rate of SME should be made more competitive in order to expand the SME
portfolio
 Loan documentation process needs to be more.
 Mutual Trust Bank Limited authority should provide adequate training to their SME
officers so for that they can get new SME clients and also credit analysts should be
recruited to reduce pressure on existing employees
 The banking industry is extremely competitive and continuously changing. So, Mutual
Trust Bank Limited should put more time and money in developing new SME products

8.2 Conclusion
As a third generation private commercial bank, Mutual Trust Bank Limited has a good
possibility to be a leading bank in the economy of Bangladesh. To achieve that, they need to find
out the areas where they can expand. In recent years, their performance in SME sector compared
to other banks is not so much satisfactory. This means that they have the possibility to be one of
the best banks in SME sector. All the banks are always trying to maximize their SME collection.
That is why, to keep up with other banks in Bangladesh, Mutual Trust Bank need to know the
problems of the future SME clients and try to find the best possible way which will make good
connection with their new clients and achieve their goals.
Internship program is very important for every business student as we only have acquired
theoretical knowledge. This program gives us the prospect to have the practical knowledge so
that we can relate the theories to the reality. I am fortunate enough to complete my internship
program at Mutual Trust Bank Limited, Gulshan Branch. Although the internship period is very
short to acquire in-depth knowledge, yet it gave me the taste of commercial world.