Analysis Report On Marcantile Bank Limited

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Analysis Report On Marcantile Bank Limited

1.2 Objective of the study

In order to conduct a worthwhile report preparation of BCBL, it is necessary to go through the profiles of the banks under study. This study aims at analyzing the whole banking in view of commercial bank. Consequently, the study will mainly describe the procedure, system, methods and briefly define the current condition – truly to my sense of perception. It will also contain inputs of my personal findings and/or acuity.

The objectives of the study are as follows:

Wider Objective

· To get an idea about the overall activities of BCBL and make an industry analysis on the banking sector of Bangladesh.

• To identify the job satisfaction of the employee of BCBL.

Specific Objective

• To see the level of job satisfaction of the employee of BCBL
• To examine the motivational programmers undertaken by the employer.
• To be acquainted with the background of the bank.
• To fulfill the partial requirement of the BBA program.
• To measure the performance and productivity of the bank through CAMELS rating, risk analysis.
• To identify the credit approval, their securities and monitoring process of Mercantile Bank Limited
• To identify the amount of outstanding credits and disbursement.

· To identify the different sectors that have or had been provided the different credit facilities and also to identify sectors getting highest or lowest credit facility and. reasons behind for this.

• To identify the classified loans of different sectors in the last several years and analyzing the changes that had been occurred to them
• To identify the default problem and its reason of the BCBL.
• To relevant rules, regulations, theories and practices for banking;
• To identify the strength, weakness, and critical risk factors of BCBL.

1.3 Scope of the study

The report covers the functions of different departments of BCBL, like General Banking, credit analysis, Investment and Foreign Exchange, Account, Human Resources. It’s also present a brief scenario of Mercantile Bank Limited. In total Furthermore, overall banking activities, products and services have focused.

1.4 Methodology

A checklist has been prepared and using the checklist data was collected. According to the checklist interviews were conducted and made a discussion session from the executive officer of several departments of BCBL

Sampling:

A total number of 10 employees will be randomly selected for collecting data.

Sources of information:

Primary Data: Primary data was collected for preparing this report through personal observation and interviewing the office executives.

Secondary Data: Secondary data was collected from the annual report, journals, different books related to the banking sector and the web site of MBL.

Data Collection Instruments:

In conducting evaluative study, interviewing method will be used for data collection, while a checklist would enable to record direct observation. A combination of structures and unstructured interview schedules would help generate information for this study. Along with interviewing techniques Focus secondary data source will also be used to approach the various issues to assess and to generalize the information within a very short period of time.

Study Plan:

The proposed study can be organized under three phases such as

Phase I: Inception Phase

Phase II: Survey/Data Collection Phase

Phase III: Reporting Phase

Phases	Activities
Phase I Inception Phase	Collection and review of relevant documents/literature. Development of Data Collection Instruments (DCIs) and Techniques, Developing Guidelines for Focus Group Discussions (FGD).
Phase II Survey/Data Collection Phase/Field Work	Deployment of Data gatherers, monitoring and supervision of the data collected though the field work, Development of Tabulation and Data Analysis, Plan and techniques, Field Data Collection.
Phase III Reporting Phase	Editing data, Data Computation, Analysis of Data and Preparation of Tables and prepare graphical presentation.

Sl. No.	Activities	Days	Weeks
			1	2	3	4
1	Planning the Study	5
2	Preparation of Tools	10
3	Pre-testing Tools and Production	4
4	Data Collection	45
5	Data Analysis	15
6	Draft Report Submission	12
7	Final Report Submission	7
	Total	98

1.5 Limitation of the study

To make a report various aspects and experience are needed. But I have faced some barriers for making a complete and perfect report. These barriers or limitations which I have faced are mentioned below:

· Difficulty in accessing data of its internal operations.

· Non-availability of some preceding and latest data.

· Some information was withheld to retain the confidentiality of the bank.

· Placed to this Bank for only 12 weeks of time & working like a regular employee hindered the opportunity to put the effort for the study.

· Entrance to every nock and corner of the bank was not possible for us.

· Lack of experience.

· Time constraint

2.1 Brief History of Banking System

Evaluation of the word “Bank”

The word Bank originated from the Italian word “Banco”. Banco means long tool. In ancient time Italian Jews merchants used to do business of lending money by sitting on the tools. And it is assumed that the word “Bank” derived from the word “Banco” (tools. To meet the expense of war of 1171 one type credit certificate was lunched in Italy at an interest rate of 5%. It was called as “Minte” in Italian language and “Banke” in German Language. Then German Language was widely used in Italy. As a result, the word “Banke” gradually changed to the word “Banco”from which the word “Bank” originated.

Evolution of Bank

The modern banking system is an evolutionary growth right from the Middle Ages. The genesis of modern bank lay in the functions performed by the Merchant with wide reputation commanding confidence far and near could easily finance domestic and foreign trade. The famous merchant houses established branches to trade centers at home and abroad began to use credit devises to accommodate their customers Jagath Seth, for example, had his branch office in London in the 18^th century. Even earlier the indigenous hounds, which finance domestic trade in India was the innovations of the local merchants. In these credit operations in these credit operations in the ancient merchant houses lay the germs for the development of the important credit instrument lately known as bill of exchange and these merchants were virtually forerunners of the modern exchange banks. The second ancestor of banks was the moneylender. The traditional shellac notorious for usury an edit necessity.

He was the man who could supply money through he charged heavily he did lending. The lending business earned him bad name no doubt but he was dependable and trustworthy. People with surplus quite unaccustomed with money lending business and trade secrets could safely keep their surplus with the moneylender for investment by the letter on firms of a share of profit. The moneylender thus was an embryonic banker performing duel functions lending money and mobilization of savings. Exactly the modern bank does this as a lineal descendant of the ancient moneylender. The third in the chain of ancestors stood the goldsmith have safe vaults for the safe upkeep or their gold stocks. They were the embodiments of safety and security. Naturally, people with valuables and jewelers approached goldsmiths for safe custard. Initially the goldsmiths charged commission for safe upkeep. The practice later on changed as the goldsmith utilized the deposits for earning profits. The receipts provided to the depositors certifying the amount the value of the thing deposited became honorable

Documents as soon as the reputation and integrity of goldsmith became well known. The deposit receipts embryonic bank notes. The letter of instruction transferring the ownership of deposits became the cheques. Experience neither showed that all deposits were nor withdrawn simultaneously. The goldsmith was always left with a surplus above the normal withdraws. This enabled him to issue more credit instruments even in access of actual deposits. He could thus create deposits. A modern Bank then comes in itself the functions of all the there ancestors like the merchant it makes a specialty of financings foreign trade like the money lender collects savings and end like the goldsmith provides a convenient mechanism by which people can make payments to each other.

Banking structure in Bangladesh

Banking system of Bangladesh comprises of different types of bank and financial institutions. The name of our central bank is “Bangladesh Bank” it is the director and regulator of banking system of Bangladesh. Banking structure in Bangladesh is briefly described below.

· Bangladesh Bank is the central bank of Bangladesh. It is director of money market in Bangladesh. It regulates the activities of other banks of Bangladesh through credit control, exchange control etc.

· Commercial bank both the pMBLic and private sectors of commercial bank are active in Bangladesh. There are 4 nationalized commercial bank– Sonali Bank, Rupali Bank, Agrani Bank.

· In 1983 priority gives on private sector of banking business. As a result two nationalize bank was handed over to private sector, which are Pubali and Uttara bank.

· Now in our country a large number of private banks are doing banking business.

Hierarchy Analysis

Banking sector has a vital role to play in the economic activities and development of any country. This sector is much more important in a developing country like Bangladesh. The whole scenario of the economy of a country can be ascertained by examining the condition of the banking sector. In Bangladesh, the banking sector dominates the financial sector and macroeconomic management largely depends on the performance of the banking sector. Banking grew primarily in the public sector with main emphasis on restructuring of the financial system and development needs of the war-torn economy with gradual liberalization in subsequent years. It was increasingly felt that banks should be allowed in the private sector for giving a fillip to development process on the basis of private initiative. In the 80’s for the first time a number of banks in the private sector were allowed. Subsequently in the mid 90’s some more banks in private sector also commenced operations. Finally, in 1999, 3^rd generation of private sector banks was given permission to operate. As a result while up to 80’s public sector banks dominated financial sector, banks in the private sector were given increased responsibility with the passage of time.

At present there are 51 scheduled banks operating all over the country. Out of these, 9 are state-owned (including five specialized banks), 29 are private commercial banks and the rest 13 are foreign commercial banks.

Private commercial banks are divided into three groups according to their commencement of business. They are familiar in the name of 1^st generation, 2^nd generation and 3^rd generation banks.

1^st Generation Banks (Established 1982-1988):

National Bank Limited, The City Bank Limited, United Commercial bank Limited, AB Bank Limited, IFIC Bank Limited, Mercantile Bank Bangladesh Limited and Al-Baraka Bank Bangladesh Limited.

2^nd Generation Banks (Established 1992-1996):

Eastern Bank Limited, National Credit & Commerce Bank Limited, Southeast Bank Limited, Dhaka Bank Limited, Al Arafah Islami Bank Limited, Social Investment Bank Limited and Dutch-Bangla Bank Limited.

3^rd Generation Banks (Established 1999 to present):

Mercantile Bank Limited, Standard Bank Limited, One Bank Limited, EXIM Bank Limited, Premier Bank Limited, Mutual Trust Bank Limited, First Security Bank Limited, Bank Asia Limited, the Trust Bank Limited, Jamuna Bank, and BRAC Bank, and Mercantile Bank Limited.

2.2 About Mercantile Bank Ltd.

One of the largest businesses carried out by the commercial bank is foreign trading. The trade among various countries falls for close link between the parties dealing in trade. The situation calls for expertise in the field of foreign operations. The bank, which provides such operation, is referred to as rending international banking operation. Mainly transactions with overseas countries are respects of import; export and foreign remittance come under the preview of foreign exchange transactions. International trade demands a flow of goods from seller to buyer and of payment from buyer to seller. In this case the bank plays a vital role to bridge between the buyer and seller.

Background of the organization Mercantile bank limited:-

Mercantile bank was established in June 2, 1999 as a private commercial bank and started its operation. The renowned 30 industries established this bank with everybody’s consent Mr. Abdul Jalil elected as the chairman. Mercantile bank is a private commercial bank with head office at 61 Dilkusha C/A, Bangladesh started operation on 2nd June ,1999 ,the bank has 28 branches spread all over the country and introducing some branches with assets of taka 13078.93 million and more than 300 employees. The bank has diversified activities in retail banking, corporate banking and international trade.

Credit-mercantile bank is playing an important role while giving loan for the small and the medium enterprise. In the terms of credit mercantile bank has introduced new schemes mostly for the business people in Bangladesh. Different categories of loan been provided to the businessman. The total amount of loan been provided was 47669.29 till 2005 its main investing projects are business, garments, micro credit, construction and others.

Consumer credit scheme mercantile bank has been providing loan to medium and low income people. This policy has gained a great popularity among consumers. The total amount was 314.57 million, which is 0.68% of total credit till 31 December, 2005.Micro credit after starting its operation it has gains a huge support by the consumers mainly supported by consumers who are small; entrepreneurs. Activates of this project are quit satisfactory. Import-from the beginning of the bank it has been evolve in foreign exchange to help the countries international trade. Its capital was 58325.20 million till 2005 till December the import items are,

a) machinery

b) electronic items

c) rice

d) paddy

e) whet seeds

f) garments items

g) chemical

h) button

i) cloths

j) yarn

k) accessories

l) cotton

2.3 Roles in Economic Development.

F Business roles of Mercantile Bank Limited:

• Achieve business vision through quality and customer acceptance by providing financial services.

• Maintain highest ethical standards in every aspect.
• Customer focus – a perspective of quality throughout:
• The entire organization or each department and bank.
• All processes, systems and services.
• Compliance – with regulatory requirements.
• Added value – through continuous improvements to benefit customers and the bank.

F Roles to the customers

Although, Mercantile Bank Limited is new in the Banking industry, it tries its best to satisfy its customer through developing the efficiency of its function and to reach its ultimate goal of: Winning client Satisfaction. Customer can enjoy withdrawal, transfer and pay utility bills from anywhere in Bangladesh from any of the thirteen branches. More over the bank has started PC banking facility to reduce the time to deliver the service to its customer. Moreover, it charges competitive rate of service to its customers.

F Roles to the community

Mercantile Bank Limited performs its roles for the community through:

• Contributing to higher education (Education Credit scheme).
• Promoting local industry.
• Overall development activities through different kind of scheme.

F Controlling

Mercantile Bank Limited does not believe in the traditional banking, it still believes Islamic System Base banking. It tries to increase and maintain its market share in the private banking sector through two types of control techniques:

• Feed Forward Control.
• Feedback Control.

Feedback control technique monitor output of a process and feed into the system to obtain desired outputs. On the other hand feed forward control technique monitor inputs into a process to ascertain weather these are as planned; if they are not, the inputs are changed in order to get the desired result.

F Roles towards ethics and society

Mercantile Bank Limited strongly believes in banking ethics and social responsibilities. It is fully devoted to fulfilling the satisfaction of the customer as well as it employees. It performs its social responsibilities through involving in different type of social development activities to develop the socio-economy of the country.

2.4 Divisions of MBL.

The Head Office of Mercantile Bank has nine major divisions and each comprising of various departments. The major divisions in the Head Office are as follows:

1. Investment Division

This division has the authority to determine the party or the client who will get the credit facility from the bank. The credit clients are selected according to the criteria of credit policy. This division has the fu]l authority to take any decision against or favor the client and these divisional works is supported by the Credit Services Division.

2. Financial Administration Division

This division can handle the credit proposal, disbursement, monitoring and credit recovery position that is given by all branches. Each branch has their own credit division and all branch-wise activities are reported to the head office credit services division.

3. Audit & Inspection Division, H.O

This division can control all the financial position, activities of overall organization. They provide the total budgetary limitation to every department for the respective year. They also carry out the financing activities with the access and operational activities.

4. Marketing & Public Relation Division

This division mainly works for

• To improve the marketing network through out the country
• Toimplement the marketingstrategies and the concept ofTrade Marketing
• To improve the procedure which is ultimately provide date regarding to competition and relative market.
• To arrange several workshop and seminar which can improve the quality of existing officers.

5. Common Services Division

This division can handle all the general activities except the credit and financialsector. All the administration activities aredesigned and implemented by this division.

6. Human Resource Division (HRD)

This division deals with the employees as the core resources of the organization. They mainly emphasize on the recruitment of employees and the employee benefits & services. And, the main philosophy is to motivate the employee to work with efficiently and effectively.

7. Computer It Division (IT)

This division can handle the IT activities. Each branch has their own IT division and all branch-wise activities are reported to the head office IT division

2.5 Branches.

Head Office

61, Dilkusha Commercial Area

Dhaka-1000, Bangladesh

Tel: 880-2-9559333,0171-535960

Fax:880-2-9561213

Telex: 642509 MBLID BJ

E-mail: mbl@bol-online.com

Website: www.mblbd.com

Mercantile Bank Limited has a predominately network of its forty two branches

At first have been placed in the General Banking Department. General Banking department performs the majority functions of a bank. It is the core department.

In fact, bank operates with the people’s money. And this process starts with the General Banking department. The activities of the General Banking Department of MBL are mainly divided into the following categories:

• Account Opening Section,
• Local Remittance Section,
• Deposit Schemes Section,
• Accounts Section,
• Clearing Section,
• Collection Section,
• Cash Section,

3.1 Account Opening System

The relationship between Banker and customer begins with the opening of an account by the customer. Opening of a account binds the Banker and customer into contractual relationship. 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 Bank should take extreme caution in its selection.

Types of Account:

Saving Account

Current Account

Fixed Deposit Account

Short Term Deposit (STD) Account

DPS Account

3.2 Documents Necessary To Opening An Account

• Account opening form dully filled up.
• Two copies of passport sdize photographs.

· Mandate or authority form filled up for opening an individual, proprietorship is to be obtained if a customer want to authorize another person to operate an account on behalf of him.

· Citizenship Certificate.

3.3 Documents Needed For Each Account

Current / Savings Deposit account:

Introduction of the applicant by a current account holder of this branch.

Proprietorship Firm

• Name of authorized persons, designation, specimen signature card.
• Trade licence.
• Passport (if there is no introducer)
• Citizenship Certificate

Partnership Firm

· Account must be opened in the name of the firm.

· Thre form should describe the names and addresses of all partners.

· Partnership deed is required.

· Trade licence from city corporation is needed.

· Letter of authority is achieved.

Limited Company:

· Certificate of incorporation

· Certificate of Commencement of Business (In case of Public Limited Company only.)

· Form XII. (List of all Directors, Designation, Address, Specimen Signature)

· Memorandum of Association

· Article of Association

· Power of attorney.

· Resolution of the Board of Directors authorizing opening of an account.

Societies/Clubs/Associations:

Other than above mentioned common documents resolution of who will operate the account must be noted.

Account Opening Procedure :

3.4 Current Account

It is purely a demand deposit account. There is no restriction on withdrawing money from this account. As many withdrawals are allowed the customers. It is suitable when funds are to be collected and money is to be paid away at frequent interval. Current Account is most suitable for private individuals, traders, merchants, importers and exporters, mill and factory owners, limited company’s etc. For opening of a Current Account minimum deposit of TK.1000/- is required along with introductory reference. No interest is given the Current Account deposited money.

The following points are important,

· A current account is a running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number and the amount o0f withdrawals from a current account.

· The Banker is under an obligation to repay these deposits on demand, so they are called demand liabilities of a Banker.

· The primary objective of current account is to save big customers as businessmen, join stock companies, public authorities, etc. from risk of handling a lot of cash themselves.

· The cost of providing current account facilities is considerable to the Bank since they undertake to make payments and collect the bills, drafts, cheques, for any number of times daily. The Bank is, therefore, do not pay interest on current deposits while on the other hand, some Banks charge for incidental charges on such accounts.

· The Bank provides overdraft facilities also in certain cases

3.5 Savings Account

This deposit is primarily for small-scale savers. The main object of this account is promotion of thrift. Hence there is restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice.

Features:

• Any Bangladeshi National residing home or abroad may open savings account with BCBL
• This account may be opened in single/joint name.
• Minimum amount of TK.500.00 is required as initial deposit.
• Frequent withdrawal is not encouraged
• Normally withdrawal not allowed more than ¼ th of the balance with maximum of TK.1000/- in a week.
• 7 days notice is required for withdrawal of large amount.
• The rate of interest is 7.75% against S.B Account.

Requirement for opening of the A/c.

• Account opening form as per format below. The account opening form and signature card to be filled in and duly signed.
• Two copies passport size photographs of the account holder.
• Photograph of nominee (if any) duly attested by the account holder.
• Photocopy of the 1^st 7 pages of the passport for non-resident Bangladeshi national.
• Signature in the account opening form/card must be same with the signature of the passport.

3.6 Fixed Deposit Account

It is popularly known as “Time Deposit”. Because these deposits are not repayable on demand but they are withdraw able subject to a period of notice. The prospective fixed deposit holder is expected to fill up an application form prescribed for the purpose, stating the amount and the period of deposit. The application itself contains the rules and regulations of the deposit including the space for specimen signature.

Features:

• Payment made on expiry of agreed period.
• Payment demanded before expiry of agreed date then Penalty is charged.
• Introducer is not needed.
• Copies of Party and 2 copies of Nominees photograph are needed.
• Loan is sanctioned against FDR.

Interest Rate:Rate of Interest is varies on the period of maturity date.

Duration	Rate of Interest
3 months	8.75%
6 months	9.00%
12 months	9.25%
24 months	9.50%
36 months	10.00%

3.7 STD & DPS Account

• STD Account

Short Term Deposit or STD Account opening procedure is similar to that of the Saving Account. The rate of interest on this type of account is 6% per annum.

• Deposit Pension Scheme Account (DPS)

DPS is a pension scheme, which was recommended by the Government in the eighties. Now day’s banks are reluctant to open such an account because the Government is not showing its interest any more. The Branch is only maintaining those accounts opened previously… The interest rate on this account is 15% per annum. A Depositor can open any Deposit Pension Account for deposit of TK.100/-, TK.200/-, TK.300/-, TK.400/-, and TK.500/- in each month. And for this the depositor will have to deposit the specified amount of money by the 8^th day of each month either in cash or in cheque. The depositor of this account can select more than one nominee for claiming the deposited money after his death. A depositor can withdraw the total amount of deposit (Principal + Interest) at a time after a specific period of 10 or 20 years.

3.8 Documents given to the account holders

After all the account opening formalities have been completed, Bank opens an account in the name if the applicant. Bank then provides customers with –

• Deposit Slip.
• A cheque Book.

3.9 Issuing Cheque Book To The Customer

q Issuing cheque book (For new account)

• When a new account is opened and the customer deposits the minimum required money in the account the account opening form is sent for issuance of a cheque book
• Respected Officer first draw a cheque book kept under his own disposal. He / she then sealed it with branch name.
• He / she enters the number of the cheque book in cheque Issue Register. He / she also writes down the name of the customer and the account number in the same Register.
• Account number is then writing down on the face of the cheque book and on every leaf of the cheque book including Requisition Slip.
• The name of the customer is also written down on the face of the Cheque book and on the Requisition slip.
• The word “Issued on” along with the date of issuance is written down on the requisition slip.
• Number of cheque book and date of issuance is also written on the application form.
• Next, the customer is asked to sign in the cheque book issue register.
• Then the respected officer signs on the face of the requisition slip put his initial in the register and hand over the cheque to the customer.

• Issuance of Cheque Book (Old Account)

All the procedure for issuing a new cheque book for old account is same as the procedure of new account. Only difference is that customer have to submit the requisition slip of the old cheque book with date, signature and his/her address. Computer posting is then given to the requisition slip to know the position of account and to know how many leaf/leaves still not used. The number of new cheque book is entered on the back of the old requisition slip and is signed by the officer.

• If the cheque is handed over to any other person then the account holder an acknowledgement slip is issued by the bank addressing the account holder with details of the cheque book. This acknowledgement slip must be signed by the account holder and returned to the bank. Otherwise the bank will not honor any cheque from this cheque book.

• At the end of the day all the requisition slips and application forms are sent to the computer section to give entry to these new cheques.

3.10 Transfer of an Account

When an account is transferred from one office to another, the account opening form etc. signed at the time of opening account and any forms or documents signed subsequently which are necessary for its proper conduct at the time of transfer, must be forwarded under cover of form, to the office to which the account is transferred together with the relative mail transfer, specimen signature card(s) and standing instruction if any, no exchange should be charged on such transfer. Attention is also invited in this connection.

As far as possible, the fullest, information regarding the character, means and standing of the constituents and the way to the account has been conducted must be given to the receiving office.

A banker can close the account of his customer or justifies the stoppage of the operation of the Account under following considerable circumstances: —

• Notice given by the customer himself.
• Death of customer.
• Customer’s insanity and insolvency.
• Order of the court.
• An application to close the account from customer is received.
• Signature is verified
• Draw amount from the A/C keeping TK 200 for Savings and TK 500 fo Current A/C as closng charge.
• Cheque book is destroyed.

3.11 Remittance Department

A lot of cash handling from one place to another risky. So, Bank remits funds on behalf of the customers to save them from any awkward happening through the network of their branches. There are three modes of remitting money from one place to another. These are –

1. Pay Order (PO)

2. Demand Draft (DD)

3. Telegraphic Transfer (TT)

4. Mail Transfer (MT)

3.11.1 Pay order

A pay order (P.O) is an instrument from one branch to another of the same Bank to pay a certain sum of money to the person thereon or to his order. Unlike cheque, there is no possibility of dishonoring pay order because before issuing P.O Bank takes out money of the pay order in advance.

Reasons for issuing P.O

· Remittance purpose

· Advices pay

· Payment against bill submitted to the Bank

MBL charges commission on the following rate—

# For Tk. 1 to 100000, the commission is Tk.25.

# For Tk. 100000 to 500000, the commission s Tk. 60.

# For Tk 500000 to above, the commission is Tk. 75.

Following procedure is maintained for the issuance of PO:

· Customer is supplied with PO form.

· After filling the form the customer pays the money in cash or by cheque.

· The concerned officer then issues PO on its specific block.

· This block has three parts, one for bank and other two for the customer. ‘A/C Payee’ crossing is sealed on all Pay Orders issued by the bank.

· The officer then writes down the number of the PO block on the PO form.

· Two authorized officers sign the block.

· At the end customer is provided with the two parts of the block after signing on the back of the bank’s part.

Payment of Pay order:

As the P.O issued by the bank is crossed one it is not paid over the counter. On the contrary the amount is transferred to the payees’ account. To transfer the amount the payee must duly stamp the PO.

3.11.2 Demand draft

Demand Draft (DD) is issued in favor of a customer who maintains an A/c with this branch. It can be issued against Cash, Cheque etc. If DD amount is more than Tk 20,000, a text code is given on IBCA.

Issuing of Demand Draft (D.D)

· Customer is supplied with DD/MT form.

· Customer fill up the form which includes the name of the Drawer, name of the Payee, amount of money to be sent, exchange, name of the branch, signature and address of the drawer.

· The customer may pay in cash or by transferring the amount from his/her account (if any).

· After the money is paid and the form is sealed and signed accordingly it is given to the DD issuing desk.

· Upon receiving the form concerned officer issue a DD on a particular block.

· DD block has two parts, one for bank and another for customer.

· Bank’s part contains issuing date, drawer’s name, payee’s name, sum of the money and name of the drawee branch. Customer’s part contains issuing date, name of the payee, sum of the money and name of the drawee branch.

After furnishing all the required information entry of the DD is given in the DD/MT issue register and at same time bank issue a DD confirmation slip addressing the drawee branch. This confirmation slip is entered into the DD advice issue register and a number is put on the confirmation slip from the same register. Later on the bank mails this slip to the drawee branch.

· At least two Grade-I officer sign the DD block and if the amount of the DD is Tk.20,000/= or more than the amount is sealed on the DD with a special red seal to protect it from material alteration.

· The number of DD is put on the DD form.

· Next the customer signs on the back of the DD and is supplied with his/her part of DD

How DD works?

Duplicate DD

In some cases, it may happen that the DD is lost and reported to the concerned Branches. In this case, issuing Branch will communicate with the paying Branch and will obtain confirmation regarding non-payment of the DD & Paying Branch will exercise cautions against payment of DD including caution

marking on the respective DD Advice with the words “Care Reported Lost” issuing Branch

will then issue a duplicate DD on obtaining of indemnity bond from the Applicant signed by two persons known to the Bank as Sureties. In such case, duplicate DD be marked with the words

“DUPLICATE IN LIEU OF ORIGINAL NO……………..”

Demand Draft Payment

· When a DD is brought for payment, the branch check out the following matters:

Whether the DD is drawn on them,

Whether it is crossed or not,

Whether it is properly signed by authorized officers of the issuing

branch.

· The branch then checks out whether the confirmation slip has arrived or not.

· If the confirmation has not arrived, the DD is given entry in the Ex-Advice register.

· Afterwards, when the confirmation slip arrives it is given entry in the DD/MT advice register and the word ‘Ex’ is written down beside the amount. The date of receiving the confirmation slip is written down in the contra date column of the Ex-Advice register.

· Concerned officer write down the date on which the DD was paid, on the confirmation slip, sign it and write “E.P. on <date of receiving the confirmation slip>” between two parallel lines.

· When the confirmation slip arrives before the DD, it is entered into the DD/MT advice register and kept in a file. Later when the DD arrives the date is put on the confirmation slip and the above-mentioned procedure is applied.

· When the situation of payment arises concerned officer check out whether it is crossed or not.

· If it is crossed he should just transfer the amount to the account mentioned in DD by crediting the account and debiting the issuing branch.

· If it is to be paid over the counter, the officer must check whether the person carrying the DD is the payee or not.

· If all the particulars are all right and the payee is genuine bank made the payment.

Issuing of Demand Draft:

· Customer is supplied with DD/MT form.

· Customer fills up the form, which includes the name of the Drawer, name of the Payee, amount of money to be sent, exchange, name of the Drawee branch, signature and address of the drawer.

· The customer may pay in cash or by transferring the amount from his/her account (if any).

· After the money is paid and the form is sealed and signed accordingly it is given to the DD issuing desk.

· Upon receiving the form concerned officer issue a DD on a particular block.

· DD block has two parts, one for bank and another for customer.

· Bank’s part contains issuing date, drawer’s name, payee’s name, sum of the money and name of the drawee branch. Customer’s part contains issuing date, name of the payee, sum of the money and name of the drawee branch

After furnishing all the required information entry of the DD is given in the DD/MT issue register and at same time bank issue a DD confirmation slip addressing the drawee branch. This confirmation slip is entered into the DD advice issue register and a number is put on the confirmation slip from the same register. Later on the bank mails this slip to the drawee branch.

· At least two Grade-I officer sign the DD block and if the amount of the DD is Tk.20, 000/= or more than the amount is sealed on the DD with a special red seal to protect it from material alteration.

· The number of DD is put on the DD form.

· Next the customer signs on the back of the DD and is supplied with his/her part of DD.

Stop payment of Demand Draft

The issuing can issue instructions to the drawee bank to stop the payment of the DD issued by them only on written request of the drawer and should inform the drawee bank immediately. Once the drawee branch made the payment, no action can be taken against it.

3.11.3 Telegraphic Transfer (TT)

Telegraphic Transfer is effected by telegram, telephone, telex or Fax as desired by the remitter. Transfer of funds by telegraph is the most rapid and convenient but expensive method. The drawer and the payee should have accounts with MBL. TT is issued against cash, cheque, and letter of instruction

Commission

Tk 25 or 0.15% of the principle, which is higher.

Issuing of Telegraphic Transfer (T.T)

· Customer fills up the TT form and pays the amount along with commission in cash or by cheque.

· The respected officer issues a cost memo after receiving the TT form with payment seal, then signs it and at last give it to the customer.

· Next a TT confirmation slip is issued and its entry is given in the TT issue register.

· A test number is also put on the face of the slip. Two authorized officer signs this slip.

· Telex operator then transfers the message to the drawee branch mentioning the amount, name of the payee, and name of the issuing branch, date and test number.

· The confirmation slip is send by post.

Payment of Telegraphic Transfer (T.T)

· When a TT arrives through telex it is sent to the respected officer for the verification of the test number. If the test number is OK, the officers write down “Test Agreed” on it and sign it. Otherwise a message is sent back to the issuing branch for the correction of the test number.

· After agreeing the test the branch issues a debit voucher and accredit voucher – debiting the issuing branch and crediting the payees’ account. Branch also issues a credit advice slip addressing the payee informing him/her about the arrival of the money.

· Later, when the confirmation slip arrives the contra date, on which the payment was made, is put on it and the officer sign it.

3.11.4 Mail Transfer (M.T)

It is a non-negotiable instrument and generally is not handed over to the customer rather sent through post office to the concerned Branch for credit to the perspective amount. When the transfer of fund from one branch to another takes place by mail but most of the time over telephone, it is called MT. The process of TT and MT is almost identical, only difference is the media. Procedures of issuing and payment of an MT is discussed below:

Issuing of Mail Transfer (M.T)

· Customer is provided with the MT form.

· Customer fills up the form, deposits the amount to be sent along with exchange and mail or telephone charge.

· A cash memo is then issued in favor of the customer mentioning the amount paid by the customer, name of the drawee branch, name and account number of the payee and the date. The officer then signs it and gives it to the customer.

· An MT is then issued on a prescribed block, known as the MT block. Two authorized officers sign it and a test number is put on it.

· The number of MT is entered into the MT issue register along with other details, such as name of the drawee branch, name of the payee, date of issuance, amount, and exchange, name of the drawer and test number.

· If it is to be sent by mail then the branch mail it by normal post or by courier, depending on drawers’ request.

· If it is to be sent over telephone, the message is sent over telephone with test number as soon as possible and the following sentence is written on the MT block –“Message is conveyed over telephone”.

· This block is then sent by the mail.

Payment of Mail Transfer (M.T)

· When the branch receives an MT over phone or telex the test number is checked.

· If the test is OK the MT is given entry in the DD/MT advice register.

· A credit voucher is issued on the same time – debiting the issuing branch and crediting the payees’ account.

· Later on when the branch receives the MT block it checks in the MT advice register to see whether the payment is made or not. If it is paid on then contra date is put on the block and it is vouched.

· If it is not paid on before, then it is entered in the MT advice register and payment is made to the respective payee.

3.12 Clearing & Bills section

Satmosjid Branch of MBL receives different types of instruments, such as cheque, PO, DD etc from its customers for collection. It also pays on behalf of its customers for those instruments that come to it through clearinghouse. When instruments of MBL are sent for collection or received for payment through clearing house it is called Inter Bank Clearance or IBC. These are treated in a little different manner than instruments of other banks.

Outward clearing bills

It refers the instruments drawn on the other Banks received by the MBL. They are of three kinds.

Cheques drawn on another branch of MBL. The settlement process –

Cheques drawn on another Bank, which is situated within clearing house area.

Short Collection (SC)

BCBL has many branches, which are not member of clearinghouse. When instruments of these branches come to the branch for collection, a different procedure is followed known as Short Collection. When an instrument arrives for short collection following procedure is applied:

· The instrument is crossed with crossing seal.

· Sealed with SC seal on its face.

· Endorsed by the officer and “The account will be credited on realization “ is written on the back of it by the off

· The instrument is then sent to the drawee branch.

· Upon receiving the instrument the drawee branch debits the account and sends a debit TRV with LSC (Local Short Collection) number.

· After receiving the LSC branch enters it in the LSC register and credits the party’s account issuing a credit voucher.

3.13 Cash Section

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 begins his/her transaction with taking money from the vault, known as the opening cash balance. Vault is kept in a much 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 days’ transaction, the surplus money remain 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:

· At first the depositor fills up the Deposit in Slip. There are two types of deposit in slip in this branch. One for saving account and another for current account.

· After filling the required deposit in slip, depositor deposits the money.

· Officers at the cash counter receives the money, count it, enter the amount of money in the scroll register kept at the counter, seal the deposit in slip and sign on it with date.

· Then this slip is passed to another officer who enters the scroll number given by the cash counter in his/her register along with the amount of the money, sign the slip and keep the banks’ part of the slip. Other part is given to the depositor.

· All deposits of saving account are maintained by one officer and other accounts by another officer.

· At the end of the day entries of both of these registers are cross checked with the register kept at the cash counter to see whether the transactions are correct or not.

Cash Payment:

· When a person comes to the bank to cash a cheque, (s) he first gives it to the computer desk to know the position of the check and posting of the cheque. If the account has sufficient fund the computer in charge will post it into the computer, will sign it and seal it.

· This cheque is then sent to the concerned officer. There are two officers who verify the cheques – one for savings and similar types of account and another for current and similar types of account.

· After receiving the cheque respected officer first checks it very carefully for any kind of fraudulent activity. He also checks the date of the cheque, amount in word, amount in figure and signature of the drawer.

· If the instrument is free of all kind of error the respected officer will ask the bearer to sign on the back of it.

· He will then put his/her initial beside the bearers’ signature. He will also sign it on its face, will write down the amount by red pen and will put on a scroll number from his/her scroll register.

· Then the cheque will be sent to the cash counter. At the cash counter bearer will be asked again to sign on the back of the instrument. The cash officer will then enter the scroll number in his/her register and will pay the money to the bearer.

· At the end of the day these scroll numbers of the registers will be compared to ensure the correctness of the entries.

4.1 Concept of Human Resource Management

Human Resource Management (HRM) is the term increasingly used to refer the philosophy, policies, procedures and practices related to the management of people within an organization. The terms personnel and industrial relations, personnel and labor relation and employee relations are also frequently synonymous with personnel management or human resource management.

In other words, HRM is the process of evaluating human resource needs, finding people to fill those needs and getting the best work from each employee by providing the right incentives and job environment, all with the goal of meeting the objective