Overall Banking System of Mutual Trust Bank Ltd.

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“Overall Banking System of Mutual Trust Bank Ltd.”

CHAPTER 1

INTRODUCTION

1.1 Introduction:

Managing the function of each department efficiently and flexible payment procedure is enough for a bank to achieve success. A prudent bank management should always try to make an appropriate balance between the payments and receive .The payment and receive flexibility with in short time gives the customer ultimate satisfaction, which attracts the more clients in the bank. The transaction will be automatically high and increase the commission and profit of the bank. As a pioneer Mutual Trust Bank Limited (MTBL) is able to do so to earn the trust of general people. MTBL has the glory of being oldest bank owned by the general people of Bangladesh and it servers the nation for last 11 years with largest line of diversified banking services in different sectors. So far, MTBL is performing well and listed in the “A” category for long time.

1.3 Background Of The Study

Banking sector is a very curtail part of a country. It plays a very much important role in the countries economy and always tries to make a sign on the economy. This institution is responsible for the financial stability of a country. Due to globalization of the market, all the industries have to face the competition. The foreign banks come in to the local market and the local banks have to fight most to gain the market share. And the present developing economy of Bangladesh demands immediate development of financial institutions which can make a good step to build up a strong economic infrastructure. In this view the banks have to drive their operation in such way which can make a contribution on the economy. And make a contribution into the economy; banks need efficient personnel with modern banking knowledge. This report has been prepared in the light of this view to gather practical knowledge and prepared under the guidance and supervision of the core teacher.

1.4 Objectives of The Study

1.4.1 Broad Objectives:

· To make familiar with the terms what have studied during MBA course.

· To know about the banking sector in Bangladesh.

· To get an overall idea about the management terms and operation strategy and the limitation of a bank by going though the Mutual Trust Bank Ltd.

1.4.2 Specific Objectives:

· To know the management policy of a bank.

· To know the objectives and planning of a bank.

· To be familiar with the banking sector.

· To gather comprehensive practical knowledge on the total banking function.

· Critically analyze the functions and the operation of each level of the Mutual Trust Bank Ltd.

· To fulfill the partial requirement of MBA degree.

1.5 Scope of the Study

This report is the outcome of my practical knowledge during in working at Mutual Trust Bank Ltd. Babu Bazar Branch. The study covered in banking areas are:

· General Banking Department (Account Opening, Accounts, Remittance)

· Investment Department (Loans and Advance)

· Foreign Exchange Department (Import, Export, Remittance)

1.6 Methodology

This report is based on the primary and secondary data. This report also bears the practical knowledge of individual worked at the particular branch. So the methodology is the mixing of primary and secondary data with practical knowledge.

1.7 Sources of Information

In order to make the report more meaningful, two sources of data have been collected.

1.7.1 Primary Data Source:

· Face to face conversation with the respective officers and staffs of the branch.

· Informal conversation with the clients

· Practical work experience from different department of the bank.

· Relevant files and documents as provided by the concerned officers.

1.7.2 Secondary Data Source:

· Annual Report of the bank.

· Bank Training & Research Academy

· Various books, articles and manuals etc

· Different web sites.

1.8 Limitations

· Time Constraints:

Because of limited time to submit the thesis report it was not possible to learn a more and prepare this report to submit. Inadequate of Information:

The relative information is not so sufficient to get ready for an extra ordinary report.

· Insufficient time of Bank Personnel:

As the bank officials are so much busy in their desk work so it is hard to keep peace with them and get overall support from them.

· Fear of Disclosure:

Because of some confidential reason, it was not possible to make a good report.

CHAPTER 02

PROFILE OF MUTUAL TRUST BANK LTD.

2.1 A HISTORICAL VIEW OF BANKING SYSTEM IN BANGLADESH

Bangladesh inherited its banking structure from the British regime and had 44 banks and other financial institutions before the partition of India in 1947.

The Dhaka bank established in 1806 as the first commercial bank in the Bangladesh region of British India. Bengal bank the first British- patronized modern bank established in India in 1784 had opened its two branches in 1873 in Sirajgonj and Chittagong of Bangladesh region. Later in 1862, the Bengal bank purchased the Dhaka bank and opened its first branch in Dhaka in the same year by reconstituting and merging the Dhaka bank. Thereafter, another branch of Bengal bank was opened in Chandpur in 1900 there were six other branches of Bangladesh Bank in operation in the territory of Bangladesh until the partition of British India in 1947.

Following the emergence of Pakistan in 1947 state bank of Pakistan the central bank of the country came into being in July 1948. Later the national Bank of Pakistan a strong commercial bank was set up in 1949. In all 36 schedule commercial banks were in operation in the whole Pakistan until 1971. Pakistanis owned most of these banks and only three of them namely; National Bank of Pakistan, Habib Bank Ltd. and the Australia Bank Ltd. had one branch of each in East Pakistan in 1949. During 1950-58 three other Pakistani owned banks Premier Bank Ltd., Bank of Bhowalpur Ltd. and Muslim commercial bank had opened their branch in East Pakistan. East Pakistan had only to banks owned by local business groups with headquarters in Dhaka. These were the Eastern Mercantile bank Ltd. (presently Pubali Bank Ltd) and Eastern Banking corporation Ltd (presently Uttara Bank Ltd) established in 1959 and 1965 respectively.

In the beginning of 1971, there were 1130 branches of 12 banks in operation in East Pakistan. The foundation of independent banking system in

Bangladesh was laid through the establishment of Bangladesh Bank in 1972 by presidential order no – 127 of 1972 (which took effect on 16^th December, 1971). Though the order, the eastern branch of the former state bank of Pakistan at Dhaka was renames the Bangladesh Banks a full fledged office of the central bank of Bangladesh and the entire undertaking of the state bank of Pakistan in, and in relation to Bangladesh has been delivered to the bank.

The Bangladesh Banks (Nationalization) order enacted in 1972 nationalized all banks except foreign ones. Six nationalized Banks were formed through margin the exiting banks of that period.

The rate of growth and development of banking sector in the country was extremely slow until 1983 when the govt. allowed to establish private banks and started denationalization process. Initially, the Uttara Bank in the same year and thereafter, the Pubali Bank, and the Rupali Bank in 1986.There were no domestic private commercial banks in Bangladesh Until 1982 when the Arab- Bangladesh Banks (AB Bank) commenced private commercial banking in the country. Five more commercial banks came up in 1983 and initiated a moderate growth in banking financial institutions.

Banking structure in Bangladesh has under gone a rigid regulatory during the period 1972-83 which was repression in nature. Through out this period, the socioeconomic objective led NCBs suffered an infirmity due to absence of competition, and also from both allocative and operational in inefficiency.

In order to established and promote systematic stability and efficiency optimal competition and enable the banks to safe guard themselves from fragility, the country banking structure has been reorganized and is now governed under a gradually liberalized regulatory environment.

At present the Bank Company Act 1991 is the main law relating to regulation of banking in Bangladesh. All legal requirements for establishment of banks and banking operation are incorporated in this Act. One of the main objectives of recently initiated banking sector reform is to open up the market for private sector banks and encourage competition. The ultimate objective is to improve the quality of banking services through promoting operational managerial and fund mgt.

HISTORICAL BACKGROUND OF MUTUAL TRUST BANK LTD.

The financial institutions that support people at the time of necessary are bank. Bankers deal with two sensitive things of the society, Men and Money. So Mutual Trust banks should be top quality in all aspects of professional life to ensure highest service to its customers. This report represents Babu Bazer Branch of the Mutual Trust Bank Ltd. This report will give a clear idea about the whole operational activities of the bank.

The Company was incorporated on September 29, 1999 under the Companies Act 1994 as a public company limited by shares for carrying out all kinds of banking activities with Authorized Capital of Tk. 38,00,000,000.00 divided into 38,000,000 ordinary shares of Tk.100 each.

The Company was also issued Certificate for Commencement of Business on the same day and was granted license on October 05, 1999 by Bangladesh Bank under the Banking Companies Act 1991 and started its banking operation on October 24, 1999. As envisaged in the Memorandum of Association and as licensed by Bangladesh Bank under the provisions of the Banking Companies Act 1991, the Company started its banking operation and entitled to carry out the following types of banking business:

(i) All types of commercial banking activities including Money Market operations.

(ii) Investment in Merchant Banking activities.

(iii) Investment in Company activities.

(iv) Financiers, Promoters, Capitalists etc.

(v) Financial Intermediary Services.

(vii) Any related Financial Services.

A group of established, Famous and recognized entrepreneur dedicated and pious personalities of Bangladesh are the Chairman and directors of the bank. Among them, a recognized entrepreneur of the country & business magnate with variegated experience Mr. Samson H. Chowdhury is the founder chairman of the bank. His progressive leadership and continuous inspiration provided a boost for the bank is getting a foothold in the financial market of Bangladesh.

The Company (Bank) operates through its Head Office at Dhaka and 37 branches and 5 SME Service Centers. The Company/Bank carries out international business through a Global Network of Foreign Correspondent Banks.

This report has been prepared by a careful review of existing literature and personal interview to various executives of this bank. I have tried my best to make this report in a standard form.

The Registered Office of the Bank:

68, Dilkusha C/A, Dhaka

Phone: 717 0138, 717 0139, 717 0140

Fax: 880-2-956 9762,

SWIFT-MTBL BD DH

E-mail: mtbl@bangla.net

2.2 VISION OF MUTUAL TRUST BANK LTD.

To be the bank of 1st choice by creating exceptional value for our clients, investors and employees.

2. 3 MISSION OF MUTUAL TRUST BANK LTD.

To be the most admired financial institution in the country, recognized as a dynamic, innovative and client focused company, which offers an array of products and services in the search for excellence and to create an impressive economic value.

2.4 OBJECTIVES OF MUTUAL TRUST BANK LTD.

· Offering quick and improved clientele service through application of modern information technology. Bringing modern Banking facilities to the doorstep of general public through diversification of Banking services, thereby arousing saving propensity among the people.

· Playing an important role in the national progress by inculcating improved banking-customer relationship, thereby bringing us closer and closer to them.

· Ensuring highest possible dividend to the respect shareholders by making best use of their equity.

· Pursuing the policy of nurturing balance growth of bank in all sectors.

· Consolidating our position in the competitive market by introducing innovative banking products.

· Ensuring highest professional excellent for our work force through enhancement of their work efficiency and technological knowledge.

· Expanding the bank’s area of investment by taking part in syndicate large loan financing.

· Upholding the image of the bank at home and abroad by pursing dynamic and time-befitting banking activities.

· Ensuring capital adequacy, asset quality, efficient management, highest profit and satisfactory liquidity through successful implementation of the programmed for Marketing Core Risk banking.

2.5 BUSINESS IDEOLOGY

Alongside providing best service to the clients, patronizing and taking part in social development activities as well as making due contribution to growth of the national economy.

2.6 Division of Mutual Trust Bank Ltd.

Name of the divisions of MTBL are as follows:

A. Human resources division (HRD):

It is one of the important divisions of the bank. It formulates the draft policies for the bank that is usually placed in the board meeting to accept. The division controls all the administrative activities of the banks. Decision about requirement, and postings of the bank employees in different divisions or branches as well as other important decisions are taken by the division.

B. General Service Division (GSD):

Administrative activities regarding general banking done here. To control these activities divisions issues necessary circulars.

MTBL other activities regarding general banking are:

· Opening new branches

· Issuance of power of attorney to the officer of the bank.

· Customer’s services.

· Legal affairs.

· General correspondence with Bangladesh

· Cash affairs of the bank.

C. Audit and Inspection Division:

The role of the division is to conduct extensive visit to all branches allover the country and head office also. At the time of inspection the officers audit the books accounts and of the respective ranch, observe their performances and takes notes on their issues, which they think, are not fit to the originality. In this way each and every branch of allover the country comes under H/O’s supervision.

D. Finance and Administration Division (FAD):

This division can be called the central account division because all the accounts related activities are done here. All the branches send their monthly statement to the head office.

In this divisions, using annual closing statements, which prepares monthly position of the bank in cumulative basis. The in charges of the branches are requested to ensure completion of annual closing of accounts and preparation of all the statements and returns accurately as per following detailed programmed. It may be mentioned here that from the annual closing statements, to prepare balance sheet, profit and loss account, close flow statement, statement of change in equity and liquidity statements according to bank companies Act. That bank, profit target of the bank for the year 2004 has been fixed at taka 125crores, deposit target at taka 3100 crores and advance target at taka 2700 crores. In this connection all concerned are ardently requested to exert all out combined efforts to raise the profit of the bank by taking all possible steps for enhancing quality, business of the bank and controlling avoidable expenditures which will help to earn higher earnings and make us able to achieve profit target.

Some important points and entries that are given below (From annual closing):

1) Balancing of Books.

2) Balance certificate.

3) Incidental charges/ service charges.

Service charges irrespective of all A/C’s on half-yearly basis as per following details:

Current A/c TK.575/-Per Year

Savings A/c TK.230/-Per Year

STD A/c TK.575/-Per Year

C/C A/c TK.920/-Per Year

4) Interest on monthly savings scheme deposit and special deposit scheme a/c.

5) Interest on CIBTA A/C.

It should be charged at the prevailing interest @8.75% p.a on the credit balance of respective branch.

6) Income Tax on Deposit Interest.

• It should be realized @10% from the Interest Payable to the depositors
• Excise duty on deposit & Advance Account.

7) Income tax on Commission earned on L/C deducted at source, vat on common Banking services (L/C, L/G Remittance inland DD, TT, PO, SDR, MT, ETC) and vat on fuel bill.

8) Income Tax at the rate of 5% on commission earned on L/C from Bank’s portion of commission, VAT at source at the rate of 15% on the commission on Banking services and VAT at the rate of 2.25% on fuel bill.

9) Stationary Consumed:

All stationary consumed up to debited to Expenditure A/C Printing Stationary and Expenditure A/C Security Stationary and Credited to Stock of Printing Stationary and Stock of Security Stationary in hand.

10) Expenses:

Accrued / Pre-Paid.

11) Interest on Advances.

Interest on Loans, Overdrafts and Cash Credits that is charged on quarterly basis must be actually and correctly calculated and charged for the quarter of the year.

12) Reversal of Adjusting Entries.

It must be reversed on the next working day after closing of the year.

13) Cash Remittance.

Outstanding in the Sundry Assets A/C if any, on account of cash Remittance made by the Branches must be adjusted.

14) Discounting of TT.

15) Unclear Cheques / Cheques under Collection.

Branches are advised that they should credit in the Deposit Accounts the amounts, which have actually been received/collected by them. Under no circumstances the Branch should include the amount of unclear CHEQUES in Deposits by Debiting Suspense A/C /CIBT A/C/BP A/C and Clearing Adjustment A/C. All advices pertaining to Inter-Branch Transaction must be responded on or before closing to avoid inflated deposits.

16) Statements of Reconciliation of Bankers Account.

All concerned are advised to prepare separate statements of Reconciliation of Banker’s Account for the accounts maintained with different Bank’s. The monthly statement should be prepared correctly and the certificate of balances from each of the Banks should be enclosed with the relative statements

E. International division:

MTBL has separate division to deal with foreign exchange business, which is known as international division. It plays a middleman role between a branch of MTBL and foreign correspondents in the case of Export-import and other foreign exchange activities.

F. Marketing division:

It is directly related to the marketing of the bank’s services. It takes all the arrangement in deposit mobilization, customer service related activities and all other marketing related activities. The main task of this division is to formulate strategies of achieving the bank’s corporate objectives.

G. Credit Card Division:

The bank sets this division only for implementation purpose of its credit card service. This division controls all activities dealing with operation of credit card. The bank has implemented its credit card on May 27, 2008.

H. Computer division:

As all the branches of MTBL except sandpit become computerized this division has a lot of activities to maintain all branches. I f any problem faced by any officer of any branches he/she can get help by telephone and can get guidance from this department. For significant problem this division sent their related specialist to this branch to correct this problem. On the other this division always helps by providing latest software of banking sector.

I. Tax department:

This new and special department is formed for the purpose of monitoring all activities related to tax of government. They always take steps as a way that will be easy to follow for their branches according to the rules regulation of taxation. For this reason this department always keeps proper communication and relation with Bangladesh Bank and National Board of Revenue (NBR)

J. Law and Recovery Division:

MTBL has a separate division for recovery of classified stuck up advances and to take lawful actions against these types of defaulters. The main task of this division is to make proposal to take lawful action against the classified and stuck-up loan holders.

Mutual Trust Bank Foundation

MTBL is a vibrant and promising bank. Its activities are not limited only to business and financial matters. Out of social responsibility, MTBL has extended its support for expansion of educated in the country.

Sports and Cultural Activities

Since its inception, MTBL has been playing a pioneering role in sponsoring sports and games in the country. MTBL was the sponsor of Metropolis Football League and Senior Division Football League last year. Besides, MTBL extended substantial patronization to Bangladesh Olympic Association and Bangladesh volleyball Federation in 2003 also in the Inter Bank Football Compotation. The Bank never hesitates to extend its helping hands to the people as in the days of crisis so also in the exuberant happy moments of cultural events.

ORGANIZATION HIERARCHY OF MUTUAL TRUST BANK LIMITED

2.8

Mr. Samson H. Chowdhury	Chairman
Dr. Arif Dowla	Vice Chairman
Mr. Syed Manzur Elahi	Director
Mr. Md. Hedayetullah	Director
Mr. Kh. Rashiduzzaman	Director
Al-haj Syed Abul Hossain	Director
Mr. Mohammed Abdur Rouf	Director
Mr. Md. Abdul Malek	Director
Mr. Rashed Ahmed Chowdhury	Director
Mrs. Yasmeen Haque	Director
Mr. A.F.M. Mahfuzul Hassan	Director
Mr. Md. Wakiluddin	Director
Mr. Saidur Rahman Ratan	Director
Mr. Anis A. Khan	Managing Director & CEO

2.9

Organogram of MTBL, Branch has been shown here:

2.10

PRESENT TRENDS OF THE BANK

BRANCHES OF MTBL

MTBL, which started its operation at Principal Branch on October 24, 1999, was the first branch of this bank, located at the hub of the business center of Motijheel area also Principal branch contributes largely to the profit of the Bank. This bank is operating throughout the country as well as the age of the Bank is 11 years. During this period it has established total 37 branches & 5 SME center over the country and made a smooth network inside the country as well as throughout the world. The number of Branches as territory-wise is mentioned in the table.

1.	Principal Branch WW Tower (1st-3rd Floor) 68, Motijheel C/A Dhaka-1000 Tel : 711 3237-8, 7110930-1 Fax : 880-2-956 6181 Tlx : 642543 EMTEB BJ E-mail: mtbpb@bangla.net
2.	Dilkusha Branch MNSN Tower 60 Dilkusha C/A Dhaka-1000 Tel : 7171 301- 2 , 7170137 E-mail: mtbldil@bangla.net
3.	Panthapath Branch Chandrashila Suvastu Tower 69/1 Panthapath, Dhaka. Tel : 861 3807, 8629887 Fax : 862 4687 Tlx: 632129 MTB PP BJ E-mail: mtbpp@progetelbd.net
4.	Babu Bazar Branch Aman Court, 15, Armenian Street Babu Bazar, Dhaka. Tel :731 4821-2 Fax : 731 6393 Tlx : 632128 MTBBB BJ E-mail: mtblbb@bangla.net
5.	Progati Sarani Branch 15/5, Progati Sarani, Dhaka Tel : 881 8804, 885 5863 Tlx: 642543 EMTEB BJ E-mail: mtbpsb@bangla.net
6.	Dhanmondi Branch Green Taj Center Plot # 81 New, Road # 8/A New 1st Floor, Dhanmondi,Dhaka Tel : 815 5607, 8158334 E-mail: mtbldhan@bonline.org
7.	Uttara Model Town Branch House No.4, 1Road No.07 Sector 04, Uttara, Dhaka. Phone:8924379, 8951474 Fax:8951474 E-Mail: mtblut@yahoo.com
8.	Pallabi Branch 14/11, Pallabi, Mirpur-12, Dhaka Tel : 901 6273 , 805 5630 E-mail: mtbplb@bangla.net
9.	Agrabad Branch Akhtaruzzaman Centre,21-22, Agrabad C/A Chaittagong Tel : 031-716 487, 813 287,Fax : 031-721 091
10.	CDA Avenue Branch 565/A, CDA Avenue (GEC Point) East Nasirabad, Chittagong. Tel : 031- 623 559, 625336 Fax : 880-31-623559 E-mail:mutualcdagec@spctnet.com
11.	Khatunganj Branch 325 Asadganj Road, Chittagong Tel : 031-61 22 54 , 840718 E-mail: mtblktg@gononet.com
12.	Sonargaon Branch Khandker Plaza, Thana Road Mograpara, Sonargaon Tel : 06723-88105
13.	Sreenagar Branch Sreenagar Bazar Sreenagar , Munshigonj Tel : 06925 88222
14.	Aman Bazar Branch Kamal Khan Plaza , Chikondandy Hathazari, Chittagong Tel : 031-681022
15.	Bashundhara City Branch Bashundhara City Shopping Mall Level-3, Block-A Panthapath, Dhaka. Tel : 9124021, 9136113, 8122044
16.	Chandra Branch Dewan Plaza Chandra Polly Biddut Kaliakoir, Gazipur, Tel : 06822-51968
17.	Jubilee Road Branch 214 Jubilee Road Chittagong Tel : 031-627533
18.	Nazirhat Branch M.M. Plaza, Fatikchari Chittagong. Tel : 0821-4483498
19.	Chakoria Branch Shah Amanat Shopping Complex (1st Floor) Chiringa, Chakoria Cox’s Bazar Tel: 0173-108693
20.	Pabna Branch Abdul Hamid Road Dilalpur, Pabna Tel: 0174-567109
21.	Gulshan Branch House # 50, Road # 03 Plot- SWH-7, South Avenue Gulshan, Dhaka
22.	Sylhet Branch Sylhet City Center Zindabazar, Sylhet
23.	Moulvi Bazar Branch 103, M. Saifur Rahman Road, Moulvi Bazar, Sylhet
24.	Savar Branch United Super Market Savar Bazar, Bus Stand Savar. Tel: 7741452, 7741453
25.	Fulbaria Branch Annexco Tower 8, Phonix Road Fulbaria, Dhaka. Tel: 9559842 Fax: 880-2-9559867
26.	Madaripur Branch Howlader Harun Plaza Main Road, Puran Bazar Kotwali, Madaripur Tel: 066162483
27.	Dholaikhal Branch 25 Jorpool Lane Dholaikhal New Road Dhaka. Tel: 7172602, 7172363
28.	Raipur Branch Gazi Complex Thana : Raipur Dist : Laxmipur
29.	Aganagar Branch Babul Tower-2 Shahid Delowar Hossain Rd East Aganagar, Dhaka Phone: 7762226, 7762227
30.	Joypurhat Branch 553 Main Road Joypurhat Sadar Joypurhat.
31.	Narayangonj Branch 31, 31/1, Loyal Tank Road, Tanbazar, Noor Mansion
32.	Rangpur Branch Mostafa Super Market Holding#1 Mouja: Radhabollov Pourasava: Rangpur Thana: Rangpur Sadar
33.	Banani Branch Rupsha Center (Ground& 1st Floor) House# 72, Road# 11 Block-D, Banani Dhaka-1213
34.	Kushtia Branch Eden Complex 169 (94/6 old) NS road 1st Floor, Thanapara, Kustia
35.	Gournadi Branch Holding No- 3594 Mouja- Chor Ghatali Gournadi, Barisal
36.	Tongi Branch United shoping complex Hossain Market Tongi, Gajipur
37.	Elephant Road Branch 235/5, Elephant Road, Dhaka-1205

SME SERVICE CENTERS

1.	Haidergonj SME Service Center Gazi Super Market (1st floor), Haidergonj, Raipur, Laxmipur.
2.	Dagon Bhuiyan SME Service Center R B Plaza (1st Floor) 74-Dagoan Bhuiyan, Feni.
3.	Laksham SME Service Center Laksham Private Hospital Bhaban, Holding no. 1739, Paschim Gaon, Laksham, Comilla.
4.	Noria SME Service Center Mazi Plaza, Holding No: B-148 Thana- Noria, Dist: Shariyatpur
5.	Kaliganj SME Service Center Kaliganj Bazar Gazipur

Table 02: Number of Branches

Years	2004	2005	2006	2007	2008
Number of Branches	20	25	28	30	36

Graph 01: Graph of Number of Branches.

Numbers of branches remain same of MTBL from 2004 to 2008; which are 36 in numeric number increased in 2008 confirms the better performance over the years. In 2008 the number has been increased to 36, which is a good achievement for any private bank. It indicates that the bank is performing well over the last five years.

Numbers of Employees:

Mutual Trust Bank is the pioneer in private banking sector. The numbers of employees increased throughout its life because of growing nature. In 2007 the number of employees were 1270, which were 2183 in 2005 and 2133 in 2004. Number will be increased when the number of branches will be increased.

Table 03: Numbers of Employees.

Years	2005	2005	2006	2007	2008
Number of Employees	1185	1133	1183	1270	1432

Graph 02: Graph of Numbers of Employees.

It seems that as the branches increases, the numbers of the employees also increases to provide better customer service to retain the passion in the banking sectors. It indicates that the bank is performing well over the last five years.

Number of Foreign Correspondents:

Mutual Trust Bank is the pioneer in private banking sector. In 2007 the Number of foreign correspondents are 400, which are 391 in 2006 and 358 in 2005. Number of Number of foreign correspondents will be increased when MTBL is able to make contract with other oversees financial institution.

Table 04: Number of Foreign Correspondents.

Years	2004	2005	2006	2007	2008
Number of foreign correspondents	358	410	391	400	405

Graph 03: Graph of Foreign Correspondents.

It seems that MTBL maintains good relationship with its foreign banks and exchange houses. For this reason the numbers of the foreign correspondences are increasing day by day. It indicates that the bank is performing better over the last five years.

Capital Structure of Mutual Trust Bank Ltd. :

Mutual Trust Bank is one of the oldest banks in Bangladesh. It owns one of the strongest capital structures in the banking history of Bangladesh. Authorized capital is increased in 2006 which is 2450 millions. Apart from that paid up capital is also increased since it started its journey. On the report the paid up capital is reported Taka 805.47 million. Last year it was 619.59 million, which was lower than the amount reported in the year 2006.

Table 05: Capital Structure of MTBL.

Years	2003	2004	2005	2006	2007	2008
Authorized capital	1000.00	1,000.00	1000.00	1000	2450.00	2450.00
Paid up capital	430.27	430.27	516.33	619.59	805.47	1208.20
Reserve Fund	1198.7	1270.63	1345.99	2115.03	2468.79	3360.18

Graph 04: Graph of Capital Structure of MTBL.

Deposits of Mutual Trust Bank Ltd. :

On 2008 total deposits of the bank stood at TK. 47961.2 million which is higher than last years 40350.9 millions and the growth rate is 18.86%. The increasing trend of collecting deposit is followed in last five year.

Table 06: Deposits of MTBL.

Year	2004	2005	2006	2007	2008
Deposits	22257.12	28973.39	32984.05	40350.9	47961.2
Growth Rate	NIL	30.18%	13.84%	22.33%	18.86%

Graph 05: Graph of Deposits of MTBL.

From the Chart and the Table shown above, it is visible that from the year 2004 to 2005 the deposit had been increased by 30.18%. It is also seen that from the year 2006 to 2008 the amount has been increased steadily. In the year 2008, the total deposit of Mutual Trust Bank Limited has reached 47961.2million Taka, which is 18.86% more from the year 2007. It indicates that the bank is performing well over the last five years in collecting deposits.

Loans and Advances of Mutual Trust Bank Ltd.:

With a view to improve the quality and soundness of Loan portfolio, the bank arranges more strict procedure for risk assessment, lending decisions and monitoring functions at the time of granting Loans and Advances. The emphasis on maintaining the quality of assets has rendered a diversified and well-structured advances portfolio. I have furnished below the loan and advance position of Mutual Trust Bank Limited to comparison its progress for last five years.

Table 07: Amount of different types of Advances of MTBL

Year	2004	2005	2006	2007	2008
Loans, Cash credit, Overdrafts etc.	21119.53	21613.77	24913.19	29619.6	33137.02
Others	1137.62	1226.67	2107.01	3090.08	3338.73
Total	23122.53	23617.77	26918.19	31625.6	35144.02
Growth rate	NIL	13.12%	33.22%	22.41%	13.28%

Graph 06: Graph of Loans and Advances of MTBL.

Here it can be observed from the chart that the growth rate of loans and advances has been increased day by day and it recorded 13.28% growth rate in the year 2008. Mutual Trust Bank Limited extended its credit in different sectors like Agriculture, pharmaceuticals, textiles and garments, chemical industries, Food and allied, transport and communications industries, electronics and automobiles industries, housing and constructions industries, engineering and metals industries, energy and power industries, services industries and many other industries.

International Trade of Mutual Trust Bank Ltd. :

In the year 2008 Mutual Trust Bank Limited remains highly active in the arena of international trade financed by offering a board spectrum of services namely, Issuance of Documentary Credit, Advising of Export L/Cs, Purchase and negotiation of export bills, Documentary collections, pre-shipment and post-shipment financed, Remittance Disbursement Activities etc.

Import:

In the year 2008, Mutual Trust Bank saw the highest ever growth rate in import business, which stood at Tk 62759.00 million, compared to 2007s volume of Tk 42458.50 million marking the increase of 47.81% from last year. The major import items of the year were: Coals, Steel items, HDPE, Raw cotton, Fabrics and Accessories, Industrial commodities and Seeds, poultry feeds, capital machineries etc

Table 08(a): Import of MTBL.

Year	2004	2005	2006	2007	2008
Import	19264.5	22028.3	31648.2	42458.5	62759
Growth rate	NIL	14.35%	43.67%	34.16%	47.81%

Graph 07(a): Graph of Import Performance of MTBL.

Throughout the years MTBL is getting better and better in import business service provider, because they provide the best customized self-tailored service to its different valued customers. It indicates that the bank is performing well over the last five years in import service business.

Export:

Mutual Trust Bank experienced sound growth of export business in 2007 from 2008. The volume of export business rose 28019.2 million from Tk 31824 million in 2008 showing and increase of around 13.58%. As before, Ready Made Garments still remained in the major export item of 2008 constituting more than 19.3%. The other export items were frozen fishes, which was 4.2% of total export.

Table 08(b): Export of MTBL.

Year	2004	2005	2006	2007	2008
Export	16341.8	17105.3	21344.1	28019.2	31824
Growth Rate	NIL	4.67%	24.78%	31.27%	13.58%

Graph 07(b): Graph of Export Performance of MTBL.

The increasing trend of performing export business for client has been experienced for last few years. In the year 2007, MTBL experienced the highest ever growth rate which was 31.27%, but the highest amount of export revenue is earned by MTBL in the year 2008, which is around 31824 millions. It seems that MTBL is getting better and better day-by-day in this sector.

Foreign Exchange Business:

Mutual Trust Bank Limited has passed a successful year in foreign exchange business. MTBL expended the foreign exchange business in different countries with different agencies in last year. Mutual Trust Bank made money transfer arrangements with Bolaka exchange house last year.

MTBL has the highest number of foreign correspondents in abroad. So it receives the major portion of remittance from the non-returning Bangladeshis and from the international importers. Mutual Trust Bank Ltd remittance volume increased at a huge amount by 56.80% about Tk 21353.9 million from last year’s Tk. 13618.2million. It also increased by 29.07% in the year 2007.

Table 09: Foreign Remittance Business of MTBL.

Year	2004	2005	2006	2007	2008
Foreign remittance	7637.5	9035.5	13618.2	21353.9	27560.8
Growth rate	NIL	18.30%	50.72%	56.80%	29.07%

Graph 08: Graph of Foreign Remittance of MTBL.

It indicates that the bank is performing well over the last five years in foreign remittance business.

Profit of MTBL:

Profit performance of Mutual Trust Bank Limited proves that it is performing well in the last five years. In 2004, profit before tax was 336.09 millions. Profit became 88.12 millions, when tax for that year was deducting. Since then, the profit before tax and profit after tax are increasing at a faster growth rate. The highest amount of profit is earned in 2008. The profit of last five years suggests that MTBL is managed well during that time.

Table 10: Profit of MTBL.

Year	2004	2005	2006	2007	2008
Profit Before Tax	336.09	484.21	581.13	1058.73	2035.10
Profit After Tax	88.12	170.02	271.67	507.49	1238.11

Graph 09: Graph of Profit Level of MTBL.

It indicates that the bank is performing well over the last five years.

Source & Utilization of Capital:

Main part of the source of capital of MTBL bank is Equity of Share Holder & Savings of mass people. That money the bank used for short term & long term debt/loan to the different enterprise & financial institutions and earn huge profit against that.

Fig: Source & Use of Fund

2.11 Table-1: This table shows the Overall Performance of Mutual Trust Bank Limited of last five years.

Year	2004	2005	2006	2007	2008
Authorized capital	1,000.00	1,000.00	1,000.00	2450	2450
Paid up capital	430.27	516.33	619.59	805.47	1208.20
Reserve Fund	1270.63	1345.99	2115.03	2468.79	3360.18
Deposits	27762.12	28973.39	32984.05	403520.87	47961.22
Loans	22257.15	23129.65	27020.21	32709.68	36475.74
Investment	4044.2	4374.17	3564.82	6239.38	7760.38
Import business	19264.5	22028.3	31648.2	42458.5	62753.00
Export Business	1634108	17105.3	21344.1	28019.2	31824.00
Gross Income	3622.31	3715.21	4202.52	5728.82	6644.40
Gross Expenditure	2473.23	2677.22	2980.06	3351.19	4582.04
Profit-Before Tax	336.09	484.21	581.13	1058.73	2035.10
Profit-After Tax	88.12	170.02	271.67	507.49	1238.11
Fixed Assets	889.61	895.35	1431.23	1627.29	1842.28
Total Assets	356709.33	35127.30	38400.37	46796.04	56526.96

Table: 1(a): This table shows the Overall Performance of Mutual Trust Bank Limited of last five years:

Particulars	2004	2005	2006	2007	2008
Loan/Deposit	80.17%	79.83%	81.92%	81.06%	76.05%
ROA	2.61%	2.09%	2.22%	2.50%	4.29%
Book value per Share	395.31	360.68	441.36	406.50	378.12
Market value per Share	226.61	475.25	746.50	760.50	1494.00
Earning per Share	17.07	27044	43.85	63.01	102.00
Dividend (In number)	20% (Bonus share)	20% (Bonus share)	30% (Bonus share)	50% (Bonus share)	55% (Bonus share)
Number of foreign correspondents	358	410	391	400	405
Number of Employees	1102	1133	1183	1270	1432
Number of Shareholders	9276	9491	9564	10240	10760
Number of Branches	20	25	28	30	36

CHAPTER 3:

OVER ALL BANKING

OPERATION OF MUTUAL TRUST BANK LTD.

3.1.1 INTRODUCTION

Bank is nothing but an intermediary between lender (surplus unit) and borrowers (deficit unit). Savings and deposits are the main strength of the banks to provide loan and the interest earned from the difference borrowing and lending is the major portion of banks income. Banks also earns from variety of operation. Branch banking includes four operational divisions in First Security Bank Limited. They are:

1. General Banking
2. Acc