Introduction

1.1 Introduction:

In today’s world only academic education does not make a student perfect to become
competitive with the outside world. Internship is a great opportunity to gain ideas, knowledge
and experience with applying academic knowledge. Through the internship program, a
student gets the opportunity to face with the real business world. It helps to build self-
confidence, & interpersonal skills which is important for entrance as a fresher in job market.
However, it is also beneficial for both a student & organization to upsurge relationship
among them for further opportunities. The program covers a period of 12 weeks of
organizational experience. As a mandatory part of my graduation, I took the opportunity to
conduct my internship with one of the renowned private commercial banks in our country,
Mercantile Bank Limited. My academic supervisor Md. Saidur Rahaman, Senior
Lecturer, Metropolitan University approved the topic & allowed me to prepare the report as
part of the fulfillment of internship requirement as well as gave me appropriate guidelines. As
an intern, I got the privilege to work at MBL from May 1, 2018 to July 31, 2018. In recent
banking sector, MBL has already created a positive image to the customers’ mind by
providing best banking service. This bank has introduced some modern banking scheme that
has gotten high market demand. As the bank is maintaining the pace with the competitive
business world, its activities, culture, philosophy and style would help an intern student to be
the best at any field of working life.

1.2 Origin of the study:

This report is originated as the academic requirement of the BBA program at Metropolitan
University (MU). As the practical orientation is an integral part of the BBA degree
requirement, I worked with the Mercantile Bank Ltd (Subid Bazar Branch) to take the real
life exposure of the activities of banking and financial institutions. An intern must carry out a
specific project, which is assigned by the concerned organization and approved by the
Department of Business Administration, The Metropolitan University consequently a report
based on the project is to be submitted to the department.

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1.3 Objectives of the Report

The main objective of the report will be to provide an overview of the “General
Banking Activities of Mercantile Bank Limited- a Study on Subid Bazar Branch
with fulfilling the requirement of BBA program. However, the objective behind
this study is something broader.
Objectives of the report are summarized in the following manner-

To present an overview of Mercantile Bank Limited.

To identify the general banking activities of Mercantile Bank Limited. Analyze the
general banking activities of Mercantile Bank Limited.
To identify problems related to general banking activities of Mercantile Bank Limited
To make some recommendations to solve the problems of Mercantile Bank Limited.

1.4 Methodology of the Report:

From my educational background I have learned different methodology in research process.
So in this study I had the opportunity to implicate May educational knowledge in practical
field. I have collected data from many sources:

sources
Data

Primary Secondary
sources sources

1.4.1 Primary Sources

 Interviewing Manager and FVP of the bank
 Interviewing officers of the bank
 Conversation with clients of this bank
 Conversation with clients of other competing banks.

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1.4.2 Secondary Sources
 Annual report of the bank
 Prospectus of the bank
 Procedures manuals of the bank
 Website
 Statement of affairs
1.5 Scope of the Report
MBL is one of the new generation private banks in Bangladesh. The scope of the study is
limited to the branch only. The report covers the organizational structure, background,
functions and the performance of the bank. It consists of my observation and on the job
experience during the internship period. This report incorporates the different aspects of
general banking tools and techniques and its effects on the performance of the bank.

1.6 Benefits
 It gives us knowledge about banking system.
 It helps to know about overall general banking activities of MBL.
 It provides knowledge about deposit product and services.

1.7 Limitations of the Report

The following limitations were apparent in preparing this report
 The main objective of internship program is to observe the functions of the bank but
the time allocated was only 3 months which is too short to learn the overall functions
of bank.
 My study is based on Subid Bazar Branch and this branch is too new branch than
others.
 All required information is not available in any specific branch of the bank and there
is also limited opportunity to visit more than one branch.
 Lack of experience in internship report writing.

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 Banking System in Bangladesh

2.1 Definition of Bank:

The Jews in Jerusalem introduced a kind of banking in the form of money lending before the
birth of Christ. The word ‘Bank’ was probably derived from the word ‘bench’ as during
ancient time Jews used to do money -lending business sitting on long benches.
First modern banking was introduced in 1668 in Stockholm as ‘Savings Pis Bank’ which
opened up a new era of banking activities throughout the European Mainland.
In the South Asian region, early banking system was introduced by the Afghan traders
popularly known as Kabuliwallas. Muslim businessmen from Kabul, Afghanistan came to
India and started money lending business in exchange of interest sometime in 1312 A.D.
They were known as ‘Kabuliwallas

Banks have influenced economies and politics for centuries. Historically, the primary purpose
of a bank was to provide loans to trading companies. Banks provided funds to allow
businesses to purchase inventory, and collected those funds back with interest when the
goods were sold. For centuries, the banking industry only dealt with businesses, not
consumers. Banking services have expanded to include services directed at individuals, and
risk in these much smaller transactions is pooled.

The name bank derives from the Italian word banco “desk/bench”, used during the
Renaissance by Florentines bankers, who used to make their transactions above a desk
covered by a green tablecloth. However, there are traces of banking activity even in ancient
times. In fact, the word traces its origins back to the Ancient Roman Empire, where
moneylenders would set up their stalls in the middle of enclosed courtyards called macella on
a long bench called a bancu, from which the words banco and bank are derived. As a
moneychanger, the merchant at the bancu did not so much invest money as merely convert
the foreign currency into the only legal tender in Rome—that of the Imperial Mint.

2.2 Definition of Banker:

A banker is responsible for establishing and maintaining positive customer relationships,

planning and delivering effective sales strategies and monitoring the progress of new
and existing financial products. Bankers may work as managers in high street

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branches providing operational support on a day-to day basis, or in more specialized posts
in corporate or commercial departments at area, regional or head offices.

2.3 Definition of Banking:

Banking is the process through which an institution, most often owned by the
government, Provides financial services. They include collecting deposits, landing money
and issuing debit and credit cards. Banking is the process of performing the activities of a
Bank.

2.4 Banking in Bangladeshi Perspective:

Banking is the backbone of the national economy. All sorts of economic & financial activities
revolve round the axis of the bank. As the industry produces goods & commodities, so does
the banks create & control the money market & promotes the formation of the capital. From
the point of view banking a technical profession can be termed as industry. Services to its
customers are the products of the banking industry besides being a pivotal factor in
promoting capital formation in the country. As all economic & fiscal activities revolve round
this important industry, the role of banking can hardly be over emphasized.

Circumstances being such, it becomes imperative to find out the role of banks now playing in
the country & analyze its operational aspects so as to ascertain the importance of this fragile
financial sector & its overall impact on the national economy. To do this a thorough study as
to its distribution, expansion & contribution is essential to comprehend its past, present &
future bearings for the growth & development of the banking sector of the country.

In global context, the role of banks is far reaching & more penetrating in the economic &
fiscal discipline, trade, commerce, industry, export & import et5c all are carried through the
banks. Banks are the only media through which the international trade & commerce are being
carried out .Moreover the entire credit transaction, both national & international is done
through the banks.

2.5 Banking Business in Bangladesh

The banking system at independence consisted of two branch offices of the former State
Bank of Pakistan and seventeen large commercial banks, two of which were controlled by

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Bangladeshi interests and three by foreigners, other than West Pakistan. There were fourteen
smaller commercial banks. Virtually all banking services were concentrated in urban areas.
The newly independent government immediately designated the Dhaka Branch of the State
Bank of Pakistan as the Central Bank and renamed it the Bangladesh Bank. The bank was
responsible for regarding currency, controlling credit and monetary policy, and administering
exchange control and the official foreign exchange reserves. The Bangladesh Government
initially nationalized the entire domestic banking system and proceeded to reorganize and
renamed the various banks. Foreign owned banks were permitted to continue doing business
in Bangladesh.

 Banking System in Bangladesh:

At the moment financial sector reform programs are underway. Private banks and
insurance companies with few exceptions are functioning creditably. Bangladesh
pursues a liberal market economy. Bangladesh Bank is the apex bank of the country
responsible for promoting healthy growth and development of the banking system.
Banks and insurance companies, both in the private and public sectors, are operating
freely and contributing to the economy. Foreign banks like HSBC, SCB, City Bank
etc. function in Bangladesh through their branches.

 Wider commercial role:

 The commercial role of banks is not limited to banking and includes;
 Issue of banknotes (promissory notes issued by a banker and payable to bearer on
demand.)
 Processing of payments by way of telegraphic transfer, EFTPOS, internet banking
or other means.
 Issuing bank drafts and bank cheques
 Accepting money on term deposit
 Lending money by way of overdraft, installment, loan or otherwise.
 Safekeeping of documents and other items in safe deposit boxes.
 Currency exchange

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  Economic Function:

The economic function of banks includes:

 Issue of money
 Netting and settlement of payments
 Credit intermediation
 Credit quality improvement
 Maturity transformation

2.6 Regulatory Authority of Banking Industry in Bangladesh

Bangladesh Bank is a typical central bank of a third world country with a medley of tasks on
its agenda. These agenda include not merely issuing notes and controlling supply of money
but also the responsibility to act as the holder of gold and currency reserves, banker to the
government, lender of the last report, supervisor of the banking system, overseer of national
credit policy, promoter of credits to agricultural and other important socio-economic sector
and administrator of exchange control.

 Bangladesh Bank:

Bangladesh Bank (BB) has been working as the central bank since the country’s
independence. Its prime jobs include issuing of currency, maintaining foreign
exchange reserve and providing transaction facilities of all public monetary matters.
BB is also responsible for planning the government’s monetary policy and
implementing it thereby.

 Banking Legislations of Bangladesh:

The Banking Companies act, 1991, has been the most important piece of legislation
enacted in Bangladesh to define all aspects of operation of banking institutions and
regulation of their activities by regulatory authorities. This important landmark was
preceded by a medley of laws passed by the parliament and presidential Ordinances
and Orders enacted or promulgate during the British and later Pakistan eras.

 Bangladesh Bank Order, 1972:

In addition to the Banking Companies Act, 1991, Bangladesh Bank Order, 1972 also
contains a few provisions about regulating some aspects of banking operation.
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2.7 Banking Service in Bangladesh

With years, banks are also adding services to their customers. The Bangladesh banking
industry is passing through a phase of customers market. The customers have more choices in
choosing their banks. A competition has been established within the banks operating in
Bangladesh. With stiff competition and advancement of technology, the services provided by
banks have become more easy and convenient. The pastdays are witness to an hour wait
before withdrawing cash from accounts or a cheque from north of the country being cleared
in one month in the south.
This section of banking deals with the latest discovery in the banking instruments along with
the polished version of their old systems.

2.8 Types of Bank Account:

The most common and first service of the banking sector. There are different types of bank
account in Bangladesh banking sector. The bank accounts are as follows:

 Bank Savings Account - Bank Savings Account can be opened for eligible person /
persons and certain organizations / agencies (as advised by Bangladesh Bank from
time to time)
 Bank Current Account - Bank Current Account can be opened by individuals /
partnership firms / Private and Public Limited Companies / Specified Associates /
Societies / Trusts, etc.
 Bank Term Deposits Account - Bank Term Deposits Account can be opened by
individuals / partnership firms / Private and Public Limited Companies / Specified
Associates / Societies / Trusts, etc.
 Bank Account Online - With the advancement of technology, the major banks in the
public and private sector has facilitated their customer to open bank account online.
Bank account online is registered through a PC with an internet connection. The
advent of bank account online has saved both the cost of operation for banks as well
as the time taken in opening an account.

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2.9 Plastic Money:

Former ANZ Grindlays Bank, now Standard Chartered Grindlays Bank, took a pioneering
role in introducing credit card in Bangladesh. It started acquiring Visa and Mastercard nearly
10 years back. In the first few years, its operational area was very limited and concentrated
only on the large hotels and restaurants. In 1997 the bank decided to launch full-scale card
operation and very realistically brought a wide range of people under its service system. It is
now giving a wide range of card services through multifarious quality facilities.

Credit cards are financial instruments, which can be used more than once to borrow money or
buy products and services on credit. Basically banks, retail stores and other businesses issue
these.

2.10 Future of Banking in Bangladesh:

A healthy banking system is essential for any economy striving to achieve good growth and
yet remain stable in an increasingly global business environment. The Bangladeshi banking
system has witnessed a series of reforms in the past, like deregulation of interest rates,
dilution of government stake , and increased participation of private sector banks. It has also
undergone rapid changes, reflecting a number of underlying developments. This trend has
created new competitive threats as well as new opportunities. This paper aims to foresee
major future banking trends, based on these past and current movements in the market.
Given the competitive market, banking will (and to a great extent already has) become a
process of choice and convenience. The future of banking would be in terms of integration.
This is already becoming a reality with new-age banks such as Banking, Mobail Banking etc.
Technology will prove to be the differentiator in the short-term but the dynamic environment
will soon lead to its saturation and what will ultimately be the key to success will be a better
relationship management.

2.11 Risk Management:

The future of banking will undoubtedly rest on risk management dynamics. Only those banks
that have efficient risk management system will survive in the market in the long run. The
effective management of credit risk is a critical component of comprehensive risk
management essential for long-term success of a banking institution.
Although capital serves the purpose of meeting unexpected losses, capital is not a substitute
for inadequate decontrol or risk management systems. Coming years will witness banks
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 striving to create sound internal control or risk management processes. With the focus on
regulation and risk management in the Basel II framework gaining prominence, the post-
Basel II era will belong to the banks that manage their risks effectively. The banks with
proper risk management systems would not only gain competitive advantage by way of lower
regulatory capital charge, but would also add value to the shareholders and other stakeholders
by properly pricing their services, adequate provisioning and maintaining a robust financial
structure.
‘The future belongs to bigger banks alone, as well as to those which have minimized their
risks considerably.’

2.12 function of commercial banks of Bangladesh:

Function of Commercial
Banks of Bangladesh

Receiving Advancing
Deposit Loans

Current Saving Fixed Marketing Bank Cash

Account Deposit Loans Overdraft Credit
Account

Long
Term
Loans

Mid-Term
Loans

Short Term
Loans

Page 10 of 35
 Institutional Background of Mercantile Bank Limited

3.1 Background of MBL:

Mercantile Bank Limited emerged as a new commercial bank to provide efficient banking
services and to contribute socio-economic development of the country. The Bank commenced
its operation on June 2, 1999.
The Bank provides a broad range of financial services to its customers and corporate clients.
The Board of Directors consists of eminent personalities from the realm of commerce and
industries of the country.
3.2 History of MBL:
The Bank went for public issue of shares on in 2003 and its shares are listed with Dhaka
Stock Exchange and Chittagong Stock Exchange. The Bank has 100 branches spread all over
the country. MBL is a highly capitalized new generation Bank with an Authorized Capital
and paid-up Capital of Tk. 12,000.00 million and Tk. 6599.61 million respectively. With
assets of TK. 14,484.19 Crore and more than 1800 employees, the bank has diversified
activities in retail banking, corporate banking and international trade. There are 30 sponsors
involved in creating Mercantile Bank Limited; the sponsors of the bank have a long heritage
of trade, commerce and industry. They are highly regarded for their entrepreneurial
competence. The sponsors happen to be members of different professional groups among
whom are also renowned banking professionals having vast range of banking knowledge.
There are also members who are associated with other financial institutions insurance
Companies, leasing companies etc. MBL undertakes all types of banking transactions to
support the development of trade and commerce in the country. MBL’s services are also
available for the entrepreneurs to set up new ventures and industrial units. The bank gives
special emphasis on Export, Import, Trade Finance, SME Finance, Retail Credit and Finance
to women Entrepreneurs. To provide clientele services in respect of International Trade it has
established wide correspondent banking relationship with local and foreign banks covering
major trade and financial centers at home and abroad. With the passage of time it has
expanded its number of branches and variety of services along with its core business of
taking deposits and granting loans. Rising trend of the bank’s profitability over the last 15
years is also materialized. The MBL is committed to the delivery of the superior
shareholders’ value.

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3.3 Vision, Mission & Objective of MBL:

Vision

 Would make finest corporate citizen

Mission

 Will become most caring, focused for equitable growth based on diversified
deployment of resources and nevertheless would remain healthy and gainfully
profitable bank

Objective

Strategic objectives
 to increase shareholders' value
 to achieve economic value addition
 to be market leader in product innovation
 to be one of the top three financial institutions in Bangladesh in terms of efficiency
 to be one of the top five financial institutions in Bangladesh in terms of market share
in all significant market segments we serve

Page 12 of 35
3.4 Company Profile:

Title Details
Legal Form A public ltd. company incorporated in Bangladesh on May 20,1999
under the companies Act 1994, the Bank Company Act 1991 and Act
12of 1997
Date of June 02, 1999
Commencement
Registered Office Mercantile Bank Limited, 61, Dilkusha, C/A, Dhaka-1000
Telephone +88-02-9559333, 9553892
E-mail E-mail
Web Page www.mblbd.com
Swift code MBLBBDDH
Auditor Khan Wahab Shafique Rahman & Co., CA K. M. Hasan & Co., CA
Tax Advisor K. M. Hasan & Co., CA
Fully owned Mercantile Bank Securities Ltd, Mercantile Exchange House (UK)
Ltd
Chairman Morshed Alom
Managing Director Managing Director & Chief Executive Officer
& Chief Executive
Officer
Authorized Capital Tk. 12,000.00 million

Paid-up capital Tk. 6599.61 million

3.5 Board of Directors

Name Position

 Morshed Alom, M.P Chairman

 A.S.M Feroz Alam Vice Chairman
 M. S. Ahsan Vice Chairman
 Al-Haj Akram Hossain (Humayun) Director
 Dr. Mahmood Osman Imam Independent Director
 Md. Shahabuddin Alam Director
 Md. Anwarul Haque Director
 M. Amanullah Director
 Md. Abdul Hannan Director
 Mohd. Selim Director
 A.K.M. Shaheed Reza Director

Page 13 of 35
  Al Haj Mosarof Hossain Director
 Dr. Md. Rahmat Ullah Independent Director
 M Ehsanul Haque Managing Director & CEO

3.6 Organizational structure on MBL

The organization structure and corporate of Mercantile Bank Limited (MBL) strongly reflect
its determination to establish, uphold and gain a stronger footing as an organization which is
customer-oriented and transparent in its management

Managing Director & CEO

Additional Managing
Director
Deputy Managing Director
Director
Senior Executive Vice
president (FEVP)
Executive Vice President
Director
(EVP)
Vice President (VP)
president (FEVP)
(EVP)
First ViceDirector
President (FVP)
president (FEVP)
(EVP)
Director
Assistant Vice(FEVP)
president president
(AVP)
Director
First Assistant
(EVP) Vice
(FAVP)
president (FEVP)
Principle Officer
(AVP)
Director
president (FAVP)
(EVP)
Senior Executive
(AVP) Officer
president (FEVP)
president (FAVP)
(EVP)
Director
Executive
(AVP) officer
president (FEVP)
president
(EVP)(FAVP)
Director
Officer
(AVP)
president (FEVP)
president
(EVP)(FAVP)
Director
Assistant
(AVP) officer
president (FEVP)
president
(EVP) (FAVP)
Director
(AVP)
president (FEVP)
Page 14 of 35
(EVP)
Director
president (FEVP)
Director
3.7 Function of MBL
Mercantile Bank Limited performs all types of functions of a modern commercial bank,
which generally includes flowing-
 Mobilization of savings of the people and safe keeping of all types of deposit account.
 Making advances especially for productive activities and for the other commercial
and socio-economic needs.
 Providing banking services to common people through the branches.
 Introduce modern Banking services in the country.
 Discounting and purchasing bills.
 Various information, guidance and suggestions for promotion of trade and industry
keeping in view of the overall economic development of the country.
 Finance for both capital machinery and working capital.
 Finance under small business of self employed clients.
 Finance of farming and non-farming activities to rural people including purchase of
agricultural equipments.
 Developing new products Market surveys before making any finance.
 Finance for small transport.
 Monitoring and forecasting.
 Developing marketing campaigns.
 Finance for household durables.
 Work simplification studies.
 Monitoring diversification of portfolio among different sectors.

3.8 MBL Networks

Corporate Offices ( Corporate Branch and Local Office ) 2
Regional Office 10
Worldwide Affiliates 400
Total Branches ( Including Corporate Branch and Local Office ) 100
Authorized Dealer Branches 24
Treasury and Dealing Room 1
Training Institute 1
Man Power 2000

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 General Banking Activities of Mercantile Bank Limited
4.1 Introduction:
The relationship between banker and customer begins with the opening of an account by the
customer. Opening of an account binds the banker and customer into contractual relationship
under the legal framework of the ‘Contract Act – 1872’. But selection of customer for
opening an account is very crucial for a bank. In fact, fraud and forgery of all kinds start by
opening account. So, the Mercantile bank ltd. takes highest caution in this regard.
4.2 General Banking Department:
During my internship I was place in local office of Mercantile bank ltd. General banking of
this branch consists of different sections, namely Account opening section, cheque book
issue, remittance section, clearing and bills section, cash section.

General section is considered as the direct customer service center. It is the starting point of
all the banking operation. It opens new accounts, remits funds, honor cheques, takes deposits,
issues bank draft and pay order etc. General banking is also known as retail banking. A
typical Bank has generally the following sections -

Account
Opening

General
Cash Clearing
Banking
Section

Remittance

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 4.2.1 Account Opening Section
 Account Opening
The relationship between banker and customer begins with the opening of an account by
the customer. Opening of an account binds the banker and customer into contractual
relationship crucial for a Bank.

Mercantile Bank Ltd. opens the following accounts:

Saving accounts
Current accounts
Fixed Deposit Receipt (FDR)
Short Term Deposit (STD) accounts
Term Deposit Account

Opening General Account Procedure is given bellow:

Applicant fill up the relevant He/she is required to fill up the For an individual
application form in the specimen signature card in
prescribe manner front of

After depositing the cash one The authorized officer

cheque book is issued scrutinized the introduction and
examines the documents
submitted

Issuance of deposit slip and the

Account is opened deposit must be made in cash, no
cheque and draft is acceptable to
the bank
 Account Closing
Account closing is also done by account opening section. The customer may close
his/her/their account(s) at any time giving notice to the bank. Similarly, the bank on
genuine ground may close customer(s) account giving reasonable notice for the action or
without any notice if the conduct of the account is not satisfactory to the bank or any
reason(s)
Procedure of Account closing:

Account holder requires applying in a He/she/they must surrender the unused

specific form with full signature. leaves/cheque book provided by the bank

Verification of signature and

Close the account
approval by operation head.

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On closure of the account, the bank will pay the credit balance (if any) of the account and any
profit due to the customer(s). The customer(s) shall surrender the unused cheque books/
leaves along with the requisition slip and other materials (if any) supplied by the bank for
operation of the account.

 Various Types of Deposit Account:

MBL offers following types of Deposit Accounts:

 Current Deposit Account

 Saving Deposit Account
 Fixed Deposit Account
 Double Benefit Deposit Scheme
 Mashik Sanchay Prakalpa
 Family maintenance Deposit
 Quarterly Benefit Deposit Scheme
 1.5 times Benefit Deposit Scheme
 Advance Benefit Deposit Scheme
 Special Savings Scheme
 School Banking
 Educational Planning Deposit Scheme
 Super Benefit Deposit Scheme
 Current Deposit Account
Current Deposit Account is the net flow of current transactions with no restriction. It is an
easy to- use, convenient current account. Current Deposit Accounts are suitable for those
customers who need unlimited transactions because of no restriction on withdrawal either
in amount or in frequency.
 Savings Bank Account
This account has been designed and developed for savers who want to save their income.
There are restrictions of withdrawal in both amount and frequency.

 Special Noticed Deposit Account

Any individual or corporate body can open Special Notice Deposit Account, which is an
interest bearing deposit account, for a short period of time. However, 7 days of notice is
required if the customer wishes to withdraw money from this account.

Page 18 of 35
Interest rate on SND accounts will be varied based on the amount and not on the customer
or tenure.
 Fixed Deposit Account
Unlike CD, SND and SB account, Branch shall accept deposit of fixed amount of money
from the customers for a fixed period of time with interest under the term plan time to
time. FDR is neither Transferable nor Negotiable and as such payment against this
instrument with interest shall normally be made to the depositor on maturity. Payment
against FDR can also be made to nominee or assignee after observing essential
formalities.
 Double Benefit Deposit Scheme (DBDS)
Objectives
 Give maximum benefit.
 Help in meeting specific needs like education, marriage etc.
 Deposit becomes double in 7 years.
Mode
 Tenure of the deposit is 7 years.
Rates
Tenure Effective Interest Rate
7 years 10.42%

 Family Maintenance Deposit (FMD)

Objectives
 Help the retired persons for investing their retirement benefits.
 Create investment opportunities for Non-Resident Bangladeshi.
 Explore investment opportunities for school, college, university etc.
 Give investment opportunities for Trust; Foundation etc.
Mode
 Deposit a fixed amount of money for a minimum tenure of 03 (Three) year to a
maximum tenure of 05 (Five) years.
 Depositor will get a certain sum of money in each month proportion to his/her
deposit during the entire tenure.
Benefits
 Minimum amount of required deposit is TK.50,000.00 or its multiple
 Monthly Saving Scheme
Objectives

Page 19 of 35
  Build up habit of savings.
 Attract small savers.
 Saving for rainy days.
Mode
 Monthly installment sizes are 250, 500, 1000, 1500, 2500, 5000 and in multiples
of 5000 up to BDT 25000.
 Quarterly Benefit Deposit Scheme
'Quarterly Benefit Deposit Scheme' will be maintained for a period of 3 (three) years and
the minimum amount of deposit is BDT 50,000.00 (fifty thousand) or its multiples
.Interest will be paid on quarterly basis as per example given below On maturity the
principal amount will be paid back.

 Times Benefit Deposit Scheme

Under the ‘1.5 Times Benefit Deposit Scheme’ a deposit of minimum BDT 50,000.00
(fifty thousand) or its multiples will be received for a period of 45 months (3 years & 9
months). On maturity after 45 months (3 years & 9 months), 1.5 times of the deposited
amount will be paid back to the account holder as per.

 Advance Benefit Deposit Scheme (ABDS)

Objectives
 Get Extra benefit from minimum Deposit.
Mode
 Maintained for a period of 2 (Two) years.
 Minimum deposit amount 1, 00,000 (One Lac) only.
 Special Savings Scheme (SSS)
Objectives
 Give maximum benefit.
 Help in meeting specific needs like education, marriage etc.
 Deposit becomes more than three (03) times in ten years.
Mode
 Tenure of the deposit is 10(Ten) years.

Page 20 of 35
  MBL Interest Rate:
Fixed Deposit Rate

Period Below BDT 1 Crore Below BDT 1 Crore & Above

1 month 6.00 % 6.00%
3 month 8.75% 9.00%
6 month 8.75% 9.00%
12 month 8.75% 9.00%

4.2.2 Clearing section:

Customers pay and receives bill from their counter party as a result of transaction. MBL
collects bill on behalf of their customer. Collection mechanisms in MBL are clearing,
outward bill for collection (OBC), inward bills for collection (IBC).

Outward Bills for Collection (OBC): When a particular branch receives bills from its
local parties or banks and sends those to an outstation branch or bank for collection, the
bills are considered outward bills for that particular branch.
Inward Bills for Collection (IBC): When the bills are received by a branch either from a
outstation branch, bank or parties direct for collection and remittance of the proceeds, the
bills are considered inward bills for the particular branch.

Clearing Section: Clearing is a system by which a bank can collect customers fund from one
bank to another through clearing house. Clearing section plays a vital role in general banking.
This section receives cheques, DD, PO etc from depositors attached with a deposit slip. Then
instruments are posted the Nikash Computer. After posting this instruments are segmented
bank wise. The Clearing House sits twice daily on all working days. The first clearing is held
in the morning and the second clearing in the afternoon. Time for both the clearings is
predetermined. Change in timing, if any, is advised from time to time by Bangladesh Bank
and MBL. In the first clearing representative of each member banks delivers instruments
drawn on rest of the banks and receives instruments of other banks drawn on it. Cheques or
instruments returned unpaid are delivered to the respective representative along with
returning memo in the second clearing.

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4.2.3 Remittance Section:
Remittance is significant part of the general banking. The bank receives and transfers various
types of bills through the remittance within the country. Obviously the bank charges
commission on the basis of bills amount. Mercantile remittances are safe, swift, inexpensive
and simple. Different types of remittances remitted by Mercantile Bank are

Issuing Paying
Remitter Branch Branch Payee

Chart: Bank Remittances Flow

 Types of Remittance

Mercantile Bank Ltd. earns more from this section by TT, DD, MT, PO, Spot cash,
Western Union, Xpress Money, Transfast, EFT, BFTEN etc. Remittance can be of two
types; such as:-

A. Inland Remittance
B. Foreign Remittance.

a) Inland Remittance: When money is remitted within a country through proper

banking channel, it is termed as inland remittance. Mercantile Bank, Subid Bazar Branch
deals a lot of inland remittance at every working day.

Modes of Inland Remittance: From three months internship program I have known that
there are various types of inland remittances. They are:-

1. Demand Draft (DD)

2. Pay Order (PO)
3. Mail Transfer (MT)
4. Telegraphic Transfer (TT)
5. Any Branch Banking (ABB)

1. Demand Draft (DD):

DD is the most widely used instrument of remitting fund. It is order to pay money drawn
by one branch of a bank upon another branch of same bank for a particular amount of
money that is payable to order and demand. This instrument can be purchased by a
customer from a particular bank for himself and can be handed over to the purchaser for
delivery to the beneficiary. The payee or beneficiary will claim the amount of money in
the instrument by producing the same to the concerned paying branch. Demand draft may
be paid in cash to the payee on proper identification or the amount may be credited to his
account (in case of A/C holder of the bank).

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Voucher Issuing Branch gives Purchaser
submitted to branch DD to sends DD to
branch prepares DD purchaser payee

Paying Payee
branch pays presents DD
the amount to branch

Flow Chart for DD

Receiving Money DD presented

Issuing Branch Sends Paying Branch

Advice of Drawing

Issues DD Pays DD

Flow Chart for DD Payment

2. Pay or Payment Order (PO): Payment Order (PO) is an instrument that contains an
order for payment to the payee only in case of local payment whether on behalf of the
bank or its constituents. Customers can purchase to deposit as security money or earnest
money. Payment Order is in the form of receipts and issued by joint signatures of two
officials. Payment of this instrument is made from the branch it has been issued. The
payee’s banker who should certify that the amount would be credited.

3. Mail Transfer (MT): MT is another widely used instrument of remitting fund from
one branch of a bank to another branch of the same bank. It is not used to remit fund from
one bank to another. MT is nearly same as DD

a) In case of MT, the sender of money is not provided with the MT paper but a receipt.
The branch sends the MT paper under its own responsibility by mail to the MT receiving
branch.

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b) The MT issuing branch has to send a secret message i.e. test to the MT receiving
branch. It is must for any amount of money. Here the amount of money, issuing date and
other particulates are mentioned.

c) To maintain the secrecy of the message sent, the issuing branch codes the message by
a particular number consisting of different digits. After receiving the message, the paying
branch decodes it by using the predetermined techniques. This process is called test. In
Subid Bazar Branch of MBL test is done by Senior Principal Officer. If everything is
Okayed, the paying branch makes payment to the payee.

4. Telegraphic Transfer (TT): TT is another widely used mode for remittances of funds.
Telegraphic Transfer is quicker than a transfer of amount by DD or MT. The customer
deposits money with the branch to be sent. The customer obtains a cash memo containing
TT serial number.

5. Any Branch Banking (ABB): Mercantile Bank Limited is providing Any Branch
Banking facility through its 5 branches. To provide fast service, Subid Bazar Branch of
Mercantile Bank Limited is providing this facility to its customer. To transfer an amount
through ABB from Subid Bazar Branch, the customers have to use TT, MT, DD form (F-
11). The bank detects a service charge from customers on the basis of transferred amount.

 Charges: The commission for DD, TT, and MT up to TK 30,000 is Tk. 30 for per
1000 and Tk. 1 for every thousand above Tk. 30,000. But in case of Payment Order (PO),
the following service charges are charged:-

Amount Charge
Upto TK 1000 20
Upto TK 1,00,000 30
Above TK 1,00,000 100

In present as VAT TK 5 is charged for DD, TT, MT, and PO. There are some branches
of MBL which provides DD, TT and MT services for their employees without any
service charges and some branches provide these services to their staff with service
charge.

B) Foreign Remittance: The procedure to transfer money from one country to another
country through bank or other govt. authorized agencies is called foreign remittance. The
Mercantile Bank, Subid Bazar Branch, Sylhet provides following foreign remittance
facility to its customer directly.

Procedures for Western Union, Spot cash, Transfast, Xpress money: When the clients
arrive to receive cash, performs the following duties:-

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 a) Customers show pin number from the remitter abroad to the banker for payment. If 8
digits, it will be spot cash, If 16 digits, it will be Xpress money, if 10 digits, it will be
Western Union, If 13 digits, it will be Transfast,

b) The banker logs in that site and confirms payment by matching information and

c) Then the banker gives payment instrument and the customers collect money from
cash counter.

4.2.4 Cash Section:

Cash is the most liquid asset and it should be dealt very carefully. So this department is really
handed with intensive care. This department starts the day with cash in vault. All cash
receipts and payments are made through this department.

Cash section is a very sensitive organ of the branch and handle with extra care. I was not
authorized to deal in this section because of its sensitivity. But I was fortunate enough to
know the procedures of this section. Operation of this section begins at the start of the
banking hour. Cash officer beings his/her transaction with taking money from the vault,
known as the opening cash balance. Vault is kept in a very secured room. Keys to the room
are kept under control of cash officer and branch in charge. The amount of opening cash
balance is entered into a register. After whole day’s transaction, the surplus money remains in
the cash counter is put back in the vault and known as the closing balance. Money is received
and paid in this section.

 Cash Receipt

When clients deposit cash in the bank, the bank officer on receipt of the cash and the pay
in slip/credit voucher shall:
 Check and count the received cash.
 Make sure that the amount in word and number in the deposit slip are same.
 Check the account title and the number.
 Both the deposit slip is in order.
 Depositor’s signature is in the slip.
 Receive seal in the slip is a must.
 Write the domination of the currency at the back of the pay in slip or the credit
voucher and affix stamp in the slip/voucher.
 Enter particulars of in slip/credit voucher in the receiving cash officer book.

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  At least, send the pay in slip/voucher to the deposit department or to the respective
department.
 Deposit slip must be signed by the respective officer.
 Carbon copy of the deposit slip must be handover to the client with proper seal
and signature.

 Cash Payment
Cheques, demand drafts, pay orders, pay slips and debit cash vouchers etc. are received
from various departments for payment of cash to customers/payees. Prior payment of
cash it is the officer’s duty to make sure that the cheque/or the instrument has been
genuinely passed. The following common precaution is thoroughly practiced before
honoring a cheque:

 Check of it is an open or crossed check.

 The branch name in the cheque.
 The date in the cheque is very crucial. Cheques are normally valid six months and
predated cheques are asked to present after the date given.
 Tk in words and figure of the cheque is same.
 Balance in the account is available.
 The apparent tenor of the cheque. Whether any figure, date or anything has been
altered in the cheque presented. If any, then the respective officer must check
whether the client is making his signature for alteration or not.
 The specimen card signature and signature in the cheque should match.
 Signature of recipient is obtained on the reverse of cheque.
 In case, where a prior arrangement has been made with the bank, a client may
overdraw against a cheque.

4.3 Other Relevant Activities:

I have done others Bank related activities of document typing, electric bill entry, mail, and
call to customers for different reasons. I visited clients’ residence with my supervising
officer.

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 Task Completed During Internship Program & Knowledge Gained
During BBA Program to Accomplish Each Task
5.1 Learning’s:

Staying the internship period of 3 months in Mercantile Bank – Subid Bazar Branch as an
Internee was extensively experiencing. I have gone through a lot of new situations,
experienced a very new environment and learned about professional life.
5.2 Learning’s From Organization:

In the processing of collecting, gathering, synchronizing several information and preparing

this report; I have learned many banking procedures, facts such as Account opening, closing,
Profit taking, transferring also dealing with different types of customers & situations.

5.3 Learning’s From Internship Program:

The learning’s for Internship program was a new experience since such event is very new in a
student’s life. I have learned to study a bank’s documents and prepare an affiliation report.

Within the period, I had to deal with different designated employees & stuffs of the branch
and several types of clients. I faced several types of situation, some made me happy, some
sad, some anger etc. Through these ups and downs, I have come to know what the
environment of an office is and how to deal with it. This experience surely made me prepared
for my next corporate life.

5.4 Knowledge Gained During BBA Program:

As a student of business department; I learned many things from my BBA program; gained a
verity of knowledge through the class lectures; text book; assignment; presentation; viva;
exams etc. while conducting my internship in Mercantile Bank Limited some of this
knowledge was very essential for practical professional life.

PRINCIPLES OF MANAGEMENT :

We studied this course at 2nd semester of our BBA Program. It helped me learn how to
manage works in most efficient and effective manner and maintain the chain of command
within the organization. While doing internship program, I was able to complete my all tasks
efficiently and effectively at the shortest possible time and maintain the chain of command.

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PRINCIPLES OF ACCOUNTING:

During my internship program I was able to make various debit voucher and credit voucher
by applying the basic concepts learned from Principles of Accounting course which I studied
at 2nd semester.

BUSINESS COMMUNICATION :

Business Communication is a course which we studied at the 4th semester. During my

internship this course helped to be a good communicator by different types of communication
skills; like: writing, speaking, listening and interpersonal. Following are the cases in where I
needed these skills during Internship program:-

 To communicate with the branch employees,

 To collect information from the customers and clients and
 To write formal letter and application

BANKING AND I NSURANCE AND BANKING LAW AND PRACTICE:

We have studied both courses at 7th semester and 10th semester respectively. It is a very
informative course for BBA students and its practical use is much more to do an internship
program especially in a bank organization. Firstly these courses give us a clear idea about
bank, banking, banker, customer, clients. By studying this course we have known about
different types of account; like-current account, savings account, fixed account, different
types of cheques; like- bearer cheque, crossed cheque, blank cheque, antedated cheque etc,
parties of cheque, inland remittance and foreign remittance, reason of dishonoring a cheque.
We have got a detailed idea about L.C. from these courses.

ORGANIZATIONAL BEHAVIOR (OB):

Organizational Behavior is concerned with the behavioral issues and I read it at 7th semester
of 4 (Four) years BBA Program. It is a course which comprises of all actions, norms,
behavior which an individual needs to follow within organization. This course made me
aware about conduct in the corporate field. During internship I needed the following things
learned from this course:-

 Marinating office time properly

 Maintaining formal dress

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  How to manage the customers in a diplomatic manner
 How to work in a team as well as an individual etc.

MANAGEMENT INFORMATION AND CONTROL SYSTEM (MICS):

Management Information and control enabled me to research this specific topic, analyze the
problem, think creatively, suggest a solution, and prepare a clear written presentation of the
solution and working individually to make the project. Studying this course at 8th semester I
also got a clear idea about 3 dimensions of information system that is quite needed to know
for workin excellently in the bank organization for an employee.

HUMAN RESOURCE MANAGEMENT (HRM):

HRM is a course which tells us about the process of managing human resource and this
course was studied at 8th semester. Though this course seems only necessary for higher level
employees like manager to maintain good performance by hiring the right people in right
place and motivating them to achieve organizational goal, it is also necessary for all
employees in case of maintaining ethics and integrity in the workplace.

BUSINESS RESEARCH METHOD:

Business Research Method is a course which is a field of practical study and we studied it at
9th semester. Studying this course I was able to obtain data and analyse them to make a
critical evaluation and to make the report a complete one. Following are the things learned
from this course by which I have benefited to prepare the report:-

 Different research methods,

 What are the relevant and legal source of data,
 How to collect data and information,
 How to filter the data and information,
 How to use facts and information for study,
 How to place right information in right place,
 To know and explain the purpose of the study and
 To identify the problems.

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 Concluding Remarks
6.1 Findings:
 Board Members do not have necessary trainings on the updated circular. The Policy
on training of Directors includes providing training and updated information on all the
latest policy guidelines, circulars and Acts issued by the regulatory/legislative
authorities.
 One third of the members did not attend the meetings regularly. From the report we
can see that only one board member has attained all the meetings.
 The CEO, CFO, Head of Internal Audit does not have any shares in the company.
 No implementation of Whistle Blowing policy. The whistle blowing policy of the
Bank aims to promote transparency and serves as a channel of corporate fraud risk
management. The policy enables an employee, who has a legitimate concern on an
existing or potential wrong-doing, to raise the issues and bring the same to the notice
of the competent authority.
 No remuneration review Committee.
 MBL does not have any succession planning process.
 Employee productivity analysis is not done and there is no measurement scale to
evaluate it
 Annual reports and other information of interest to shareholders are uploaded to
Company’s corporate website www.mblbd.com. But for last year no annual was
published in the website.
 General Public does not hold more than 50% of shares. Al most 40% shares are hold
by the directors.
 Lack of efficient executives or officers especially in the general and credit division
hampers the customer service process.
 Lack of dedication of some employees is the main obstacle of the growth of this
particular branch.
 There are various products and schemes of loans and advances but customer are not
known to all of them.
 There were lacks of employees to meet the needs of the customers. There are not
much availability of ATM Booth

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6.2 Recommendations:
 The Policy on training of Directors includes providing training and updated
information on all the latest policy guidelines, circulars and Acts issued by the
regulatory/legislative authorities. So proper training has to be given so that the MBL
can perform in a better way.
 Central Complaint Cell has been established and a vigilance team has also been
formed to protect fraud and error. Risk Management Wing (RMW) also acts as the
whistleblower of the Bank.
 Board members must attend the meetings regularly. Though Bangladesh Bank
Guidelines do not permit to form a separate committee of Board on remuneration. As
such, MBL does not have such committee. However, the Board of Directors should
time to time review and evaluate the remuneration paid to all level of employees,
director and others and decides on the issue. In addition, Board Members should
directly involve in recruitment, promotion and remuneration process of top executives
(Up to two-level below the rank of the Managing Director & CEO) as per the
Bangladesh Bank Circular
 Efficient succession planning is an integral part of efficient employee management
and MBL should possesses a sound HR Policy covering succession planning to
carefully avoid the problems of leadership vacuum under any circumstances
 Employee productivity should be measured in terms of total deposit, investment,
income profit.
 Annual Reports need to be published annually.
 Percentage of the shares of the directors should be reduced.
 It should give more concern in their management quality to improve it satisfactory
position.
 The Bank has to go through the proper online banking for better service to the
customer.
 The Bank should try to follow modern marketing system.
 The Bank should promote their product by advertisement.
 The Bank should introduce new and attractive product to their customer.
 The Bank should emphasize on training its employee on a frequent basis.
 The Bank should open more and more ATM booth

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6.3 Conclusion:
As an organization the MBL is much more structured compared to any other listed bank
operation in Bangladesh. Mercantile Bank Limited is a customer oriented financial
institution. It remains dedicated to meet up with the ever growing expectations of the
customer.

In MBL, Board of directors formulates bank’s policies, management functions on approved

policies In addition, board of directors takes care the interest of shareholders & all other
stakeholders, management remains compliant with the policies, regulations, laws given by
board of directors, Bangladesh bank, other regulators However, MBL gives importance on
their customers, employees and shareholders. They want to achieve strong corporate growth
through financial inclusion. They try to provide solutions at a minimum cost based on a high
level of satisfaction of all segments of our customers, thus also contributing to the prosperity
of our employees and shareholders.

MBL is trying to develop innovative and technologically advanced products and services that
satisfy their customer needs.

At the end of the report, I have identified several findings & recommendations of this
banking system. In spite of some weakness & lacking, MBL remains strong position in
banking sector. If MBL follows effective corporate, uses its strengths, overcomes its
weakness, develops some promotion works & changes its services little bit user friendly, then
it is sure that MBL will get competitive advantages over its major competitors.

Page 32 of 35
 References
Report,
 Koch, Timothy w., and S. Scott. MacDonald. Bank management. South-Western,
Cengage Learning 2010
 Sharma, D. (2010). Principles of Banking. New Delhi: Rajat Publications.
 Kovacs, Hannah, and Jayne Gerner. Banking. Blake Education,2009
 Gulati, Neelam C, Banking and Insurance: Priciples & Paractices. Excel, 2011
 Agarwal, O.P. Banking and Insurance. Himalayan Books, 2011
 Annual & Other Report of MBL – 2011, 2012, 2013, 2014,2015,2016
 published by MBL.

Website
 www.assignmentpoint.com/.../banking/general-banking-activities-of-Mercantile-
bank-bang...
 Different types of products of Mercantile Bank Limited i.e. Leaflets, Brochures etc.
 http://www. mblbd.com
 some other web sites
 www.Google.com

Page 33 of 35
 List of Abbreviation

MBL Mercantile Bank Limited

AOF Accounting Opening Form.
ATM Automated Teller Machine.
BAL Banking Arrangement Letter.
BFS Business Financial Service
BIBM Bangladesh Institute of Bank Management.
BSSM Branch Sales and Service Manager.
BCA Business Credit Application.
BIL Business Installment Loan.
BDT. Bangladesh Taka.

CIB Credit Information Bureau.

CC Credit Card

DP Note Demand Promissory Note.

DBR Debt Burden Ratio.

EVSA Extra Value Savings Account.

EMI Equated Monthly Installment.

FDR Fixed Deposit Receipt.

FCY Foreign Currency.

GBP Great Britain Pound.

GB General Banking.

OD Over Draft
OSA Operating Savings Account

PL Personal Loan
PFC Personal Financial Consultant.
PDC Post Dated Cheque.
PIN Personal Identification Number.

RMG Ready Made Garments.

STD Short Term Deposit.

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SOD Secured Over Draft.

TP Transaction Profile
TIN Telephone Identification Number.

UDC Undated Cheque.

VAT Value Added Tax.

WEDB Wage Earner’s Development Bond.

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