Chapter 1 IntroduCt Ion “Foreign Exchange Operations of Mutual Trust Bank Limited” Part- 1
Introduction
Economic history shows that development has started everywhere with the banking system and its contribution towards financial development of a country is highest in the initial stage. Schumpeter (1933) regarded the banking system as one of the two main agents (other being entrepreneurship) in the whole process of development. Keynes also emphasized the role of bank services in the process of economic development of a country, while he was addressing the House of Lords regarding International and Monetary System (quoted in Sharma 1985). Moreover Alexander Gerschenkron (1962) in his popularly known “Gerschenkron’s Hypothesis” explained the banking system as the key role player at certain stage of the industrialization process. Bank is the most important financial institution in the economy. It plays vital role in the economy by providing means of payment and in mobilizing resources. The economic development of a country depends on the development of banking sector to a great extent. The dependence of banking sector in modern economy is increasing day by day because this sector ultimately contributes to run the wheel of development in a more dynamic way. Today’s modern banks are not only provides traditional banking, rather banks are expanding the menu of financial services, banks are making the untouchable service touchable for their customers. The changing and expanding role of banking has made the banking business more complex and competitive. For survival and growth of this business demands creativity,
Specialization and knowledge and adoption of new technology. But technology, creativity, specialization all these cannot support a bank to survive unless the services are marketed in the right track. For this banks need experts who will able to run the business even in against the wind. 1.2) Objective of the study To prepare the report has been acquainted with day-to-day foreign exchange functions of MTBL ; know the progress of foreign exchange and foreign trade of MTBL, to gain in-depth knowledge of export, import and remittance of MTBL highlighting the foreign exchange activities of this bank. The primary & secondary objectives of this report are1.2.1 Primary Objective The general objective of this report is to fulfill the requirement of internship report to get BBA degree and it is also necessary to get admitted for MBA. The main objective is to know the significant relation that exists between import-export and branch performance in this sector. On the other hand the significant relation that exists between import-export and business world. 1.2.2 Secondary objective Secondary objective are given below-
• To know and focus the whole import-export mechanisms. • To know and focus the remittances activates. • To know and focus the rules and regulation of import-export mechanisms. • Identify some problems and also make some recommendations. • To observe the working environment in commercial banks. • To apply theoretical knowledge in the practical field. • To build up the pillar of the career for near future. 1.3 Scope of the study The scope of the organizational part covers the organizational structure, background, objective, function and department and business performance of MTBL as a whole. The main part covers the operational scenario of advance, foreign exchange, remittance of Dhanmondi branch as well as over all of MTBL. This refers that how the bank help the customers in exporting and importing the goods, providing advance, and how it remits the money of the foreign clients, etc. all are in the project part of the report.
1.5) Methodology of the Report Methodology includes-
• Things that have been consider before selecting the topic: 1. Interest: Bangladesh is an import based country which is the part of foreign exchange. It consist import, export and remittance. Letter of credit is the part of import and export. Remittance is really important for the country economy. So it’s interesting to know about the process about the foreign exchange operation. 2. Magnitude: foreign exchange operation is very important. Its data are available and within the time make a report about it is possible. 3. Measurement of concepts: the basic concepts about the import, export and remittance are clear. 4. Relevance: the topic is relevant to the previous study and major subjects. 5. Availability of data: import, export and remittance data are quite available. 6. Ethical issues: import, export and remittance data are not that much confidential. So the ethical side also is maintained.
• Selecting the method: Foreign exchange operation is systematic situation, service and program. These are the characteristics of descriptive method. So in the report descriptive method is used to describe the foreign exchange operation.
• Research design after selecting the topic: 1. Literature review 2. Objective of the research 3. Method of data collection 4. Tool for data collecting 5. Data processing and 6. Data analysis
7. Reporting the findings and recommendation
• Literature review: Literature part has been taken from the Bangladesh Bank web site, different wed site and from the different financial books.
• Objective setting: 1. Primary: It is an overall statement of the study. So to make the statement has been given priority to the main associations and relationships that have been discovered or established. 2. Secondary: These objectives have been made on the specific aspects of the topic that investigated within the main framework of the main study.
The objectives Wording has been made clear complete and specifically communicate the readers intention. The objectives contain only one aspect of the Study and Used action oriented words or verbs to writing the objectives.
• Method of data collection Sources of data The report is descriptive in nature. The information was collected from both primary and secondary sources of data. Regarding the information required was collected within the organization from the Corporate Division of Mutual Trust Bank Limited.
1. Data from primary sources
Practical desk work.
Face to face conversation with the respective officers and clients.
Informal questionnaire survey of Bank customer.
Personal observation.
Relevant file study as provided by the officers concerned.
2. Data from secondary sources
Study on Annual Reports of Mutual Trust Bank Limited.
Online data from MTBL website.
Published or unpublished or personally collected data from officers, Local officers and Head office of the Mutual Trust Bank Limited.
Different journal regarding Mutual Trust banking.
• Tools for data collection 1. Observation:
Observe the foreign exchange dept banker for fifteen hours per week for six weeks, focusing mostly on observes at the customers, dealings with the customers, especially those conversations in which things changes to the work processes and issues need to focus in the work and maintaining the customer relationships and identifies these things.
The technique were to observe the people, actions and situations without asking from the respondent
2. Interview: personal interview
Interview foreign exchange dept banker to clarify and provide insight into conversations. Interviews have been attempted to conduct these interviews shortly after conversations of interest. While the interviews could not formal or structured. The general strategy for the interviews is to start off with short questions and follow up on the interviewee’s responses, to capture the meaning and to avoid imposing my meanings on the interviewee.
• Data processing: a. Editing: Examining the collected raw data to detect errors and omissions and to correct these when possible b. Classification the data according to attributes: here data is analyzed on the basis of common characteristics which can either be
I. Descriptive II. Numerical c. Tabulation: it summarizing raw data and displaying the same in compact form for further analysis. I. It facilitates the process of comparison. II. It facilitates the summation of items and the detection of errors and omissions. III. It provides the basis for various statistical computations.
• Data analysis: •
Qualitative data analysis: a. Identifying the main theme b. Integrate the main theme
•
Quantitative data analysis a.
Data analysis happened though the computer by using excel.
• Reporting the findings and recommendation: After analyzing all data the lacking have been discover that put in to the findings. And the recommendations also have been drawn. To write the findings and recommendation the academic writing style has been followed. And the language style is formal and not journalistic.
• Timetable: Complete literature review by Complete fieldwork by
26th March
Complete analysis by Give viva about internship on Complete final report by
05 February 02th April 18th April 20th April
• Time preference The time preference of the study relates to the period covering the years 2007 to 2011 and also shown some analysis from 2010 to 2011 as per month analysis & evaluation. All these years has been taken for different analysis purposes.
• Checking system All qualitative and quantitative data has been checked twice to make it error free.
• Ethical issues maintained During the study some of the data and information are obtained that are very much confidential. Those data and information has been hidden to show in the report.
1.6) Limitation of the study Mutual Trust Bank Ltd. is a large financial institution; therefore it is not possible to find out the true pictures within a short period. To prepare the report I faced some problems & limitations. Those limitations are unavoidable for me. That may causes reduction in the quality of my report. Some of the major problems are pointed below-
• Lack of time: had to complete this report within a very short span of time that was not sufficient for investigation.
• Lack of Supervision: As the officers were busy with their daily work, they could provide me very little time. Sometimes, they did not want to supervise due to pressure of work load.
• Restricted Information: There is various information the bank officer did not provide due to security and other corporate obligations.
• Other limitation: As I am a newcomer, there is a lack of previous experience in this concern. And many practical matters have been written from my own observation that may vary from person to person. Constraints are one of the major problems / limitations to know
Chapter 2 Company profIle of mtB
the information.
Part -2 Company Profile As a fully licensed commercial bank, a highly professional and dedicated team is managing MTB Bank with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so the bank and its responsibilities itself changed in the market condition. MTB Ltd is a banking company incorporated in the People’s Republic of Bangladesh with limited liability. 2.1 Background and History of the Company
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. 1,000,000,000 divided into 10,000,000 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: 
All types of commercial banking activities including Money Market operations.

Investment in Merchant Banking activities.
Investment in Company activities.
Financiers, Promoters, Capitalists etc.
Financial Intermediary Services.
Any related Financial Services.
The Company (Bank) operates through its Head Office at Dhaka and 76 branches and 79 ATM booths. The Company/Bank carries out international business through a Global Network of Foreign Correspondent Banks
2.2 MTB at a Glance
Name
Mutual Trust Bank Ltd.
Registered Office
MTB Centre, 26 Gulshan Avenue, Plot 5, Block SE(D),
Authorized Capital
Gulshan 1, Dhaka-1212 Authorized Capital of Tk. 380, 00, 00,000 divided into 38, 00,
Paid up Capital Net Profit (after tax) Operating Profit Earnings Per Share
00,000 ordinary shares of Tk.10 each. BDT 2543.50 million. As per 2011. BDT 992.14 million (as per Annual report 2011) BDT 3491.18 million (as per Annual report 2011) 3.04 (as per Annual report 2011)
2.3 Shareholders and Shareholding Structure of MTB Institutional Sponsors, Directors and general public all are involved in composition of the shareholding structure of MTBL respectively.
Table 2.3.1: Shareholders and Shareholding Structure of MTBL Sponsors and Directors Institute Public Total
39.42 % 29.44 % 31.14 % 100
Figure2.31: Shareholders and Shareholding Structure of Sponsors and Directors, Institute & Public
2.4 Vision, Mission of Mutual Trust Bank LTD:
“You Can Bank On Us” is the motto of Mutual Trust Bank Limited. Mutual Trust Bank limited is prepared to meet the challenge of the 21st century well ahead of time. To cope with the challenge of the new millennium it hired experienced and well-reputed banker of the country from the inception. So the Bank defined:
Vision of Mutual Trust Bank Limited Mutual Trust Bank Vision is based on Philosophy known as MTB3.We envision MTB to be One of the Best Performing Bank in Bangladesh The Bank of Choice A Truly World-class Bank
Mission of Mutual Trust Bank Limited We aspire to be one of the most admired banks in the nation and be recognized as an innovative and client-focused company, enabled by cutting-edge technology, a dynamic workforce and a wide array of financial products and services
Efforts are focused of Mutual Trust Bank Limited
On delivery of quality service in all areas of banking activities with the aim to add increased value to shareholders’ investment and offer highest possible benefits to our customer.
Strategic priorities of Mutual Trust Bank Limited To have sustained growth, broaden and improve range of products and services.
2.5 Objectives of Mutual Trust Bank LTD:
Objectives of MTB
To ensure inflow of funds at combination of least possible cost.
To maintain a discreet credit policy.
To enhance versatility and diversification through the penetration of new market segment, thereby fulfilling unmet needs.
To practice stronger IT-driven initiative that will meet the challenges and requirements of the bank and its clients.
To enrich the banking section with improved awareness on Corporate Social Responsibility.
To provide extensive career opportunities through competitive pay and benefits and a flexible environment.
2.6 Core Values of Mutual Trust Bank:
•
Shareholder- Create sustainable economic value for our shareholders by utilizing an honest and efficient business methodology.
•
Community- Committed to serve the society through employment creation, support community project and events and be a responsible corporate citizen.
•
Customer- Render state-of-the-art service to our customers, offering diversified products and aspiring to fulfill their banking needs to the best of our abilities.
•
Employees- Be reliant on the inherent merit of the employees and honor our relationship as a tribute to be a part of this renowned financial institution.
2.7 Products and Services of Mutual Trust Bank Mutual Trust bank Limited has not yet only gained enormous popularity but also been successful in mobilizing deposit and loan products since commencement of banking operation. The bank has made significant progress within a very short time period due to its dynamic management and introduction of various consumer-friendly loan and deposit products. All the products and services offered by the bank can be classified under three major heads as below: Retail Banking A)
Deposit Products:
1.
MTB Regular Savings
9.
2.
Current Account
10. MTB Inspire
3.
Brick By Brick
11. MTB Graduate
4.
MTB Double Saver Plan
12. MTB Privilege Savings
5.
Fixed Deposit
13. MTB Ruby
6.
Children’s Education Plan
14. Special Notice Deposit (SND)/ Former
7.
MTB Millionaire Plan
8.
Monthly Benefit Plan
B)
MTB senior
STD
Loan Products: 1. Consumers’ Credit Schemes:
Personal Loan
MTB Microfinance
MTB home Loan
MTB Krishi
Travel Loan
MTB Mousumi
MTB car Loan
MTB Green Energy
Small business loan
MTB Revolving Loan
MTB Digoon
Advance Against Salary
CNG Conversion Loan
Marriage Loan
Education Loan
Hospitalization Loan
C) Card Products 1. Local Cards 2. International Cards Wholesale Banking Term Finance Project Finance | BG (Bid Bond) | Finance for Importing Capital Machinery | Lease Finance | House Building Finance | Term Loan NBFI | Working Capital Finance Secured over Draft (SOD) | Cash Credit (Hypo) | Cash against Document | Short Term Loan | Inland Bill Purchase (IBP) | Foreign Bill Purchase (FBP) | Trade Finance Export finance Back to Back L/C opening | Export Bill Discounting (FDBP and IDBP) | Secured Over Draft (SODgeneral/export bill) | Import finance Loan Against Trust Receipt (LTR) | Term Loan (TR) | Non-funded trade finance L/C Opening (Sight & Deferred) | L/C Advising | L/C Transfer | Bank Guarantee | Secured Over Draft (SOD) in the form of SOD (general/export bill) and SOD (Others-work order, FDR, land, etc.) | Bank Guarantee in the form of Performance guarantee, Advance Payment guarantee |Inland Bill Purchase (IBP) includes mainly government security bills and bonds || Foreign Bill Purchase (FBP) includes foreign drafts | Syndications & Structured Finance
Infrastructure Financing e.g. Power, Telecom, Hotels | Aircraft Financing | Manufacturing Project Financing e.g. Steel, Cement, Glass, Petrochemical | Agro-based Project Financing | Micro Financing | Off-Shore Banking Term Finance Working Capital Finance | Trade Finance | NRB Banking N RB Savings | NRB DPS | NRB FD SME Banking MTB Bhaggobati | Green Energy Loan | MTB Probaho| MTB Buniad | MTB Gunabati | 2.10 Service Portfolio:
1.
Deposit
2.
Investment
3.
Foreign Trade
4.
Remittance and Fund Transfer
Deposit Deposit
Investment Investment
Figure 2.10: Service Portfolio
ForeignTrade Trade Foreign
Remittance&& Remittance FundTransfer Transfer Fund
Chapter 3 departments of mtB
3. Departments of Mutual Trust Bank Mutual Trust Bank Limited has always been prepared the internship program for its internees. It is strictly followed by both parties. There are 3 different departments in Dhanmondi branch and they are: 1. General Banking (GB) 2. Credit Department (CD) 3. Foreign Exchange Department (FED)
3.1 General Banking (GB) General Banking is the starting point of all the banking operating. General Banking department aids in taking deposits and simultaneously provides some supplementary services. It provides those customers who come frequently and those customers who come one time in banking for enjoying supplementary services. In some general banking activities, there is no relation between banker and customers who will take only one service form bank. On the other hand, there are some customers with who bank are doing its business frequently. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc. since bank in confined to provide the service everyday general banking is also known as retail banking. The job was really hard at GB. I also had to hear a lot of complaints from the customers. At first, I was demoralized. But later on, I have learned how to deal with it. 3.2 Credit Department (CD) The word credit is derived from the Latin word “credo” which means “I believe” and is usually defined as the ability to buy with a promise to pay. It consists of actual transfer and delivery of goods
and services in exchange for a promise to pay in future. It is simply the opposite of debt. Diversification of banking service has accelerated the use of credit in the expansion of business operation. It is a fundamental precept of banking everywhere that advances are made to customers in reliance on his promise to pay rather than the security held by the banker. Whatever credit facility anybody is looking for, he/she will surely find it at MTBL. It has a comprehensive selection of facilities to offer, from a simple personal loan, credit cards, auto loan and overdraft facilities to home loan. MTBL provides loan at very low interest rate compare to the other commercial banks. It has a wide variety of credit facility that makes it different from the other banks to the consumers. There are mainly two types of credit products. They are – 1. Consumer loan product 2. Corporate loan product People who want to tale loan for different purpose like personal purpose or for business purpose they come to this section and take loan at a lower interest rate. This department generally deals with giving loan and collecting the loan money back.
3.3 Foreign Exchange Department (FED) Foreign exchange transaction plays a vital role in the economic development of a nation. Foreign exchange transaction comprises both international trade & remittance. There are various rules and restrictions in international trade that means import and export transactions. To export or import any items the exporters or importers need financial support. The commercial banks of Bangladesh play an important role by providing them financial support through loan, various incentives and advising letter of credit. This paper empirically discuss with the rules, restrictions and procedures of foreign exchange transactions comprising LC advise, negotiation of documentary bills, repatriation of proceeds and its impact on profits. An easy and simple procedure of such transactions may help the exporters and importers to increase their business in future.
Chapter 4 foreIgn exChange operatIons of
4. Foreign Trade & Foreign Exchange Transactions (Theoretical Framework) To know about the overall Foreign Exchange section, it is necessary to have some theoretical knowledge. The theoretical description is given below4.1 Foreign Exchange Foreign Exchange means foreign currency and it includes any instrument drawn, accepted, made or issued under clause (13), Article 16 of the Bangladesh Bank Order, 1972. All deposits, credits and balances payable in any foreign currency and draft, travelers cheque, letter of credit and bill of exchange expressed or drawn in Bangladeshi currency but payable in any foreign currencies. Foreign Exchange Act 1947 defines foreign exchange as "Foreign currency and includes deposits, credits, and balances payable in foreign currency as well as drafts, travelers cheques, letter of credit, bills of exchange drawn in local currency but , payable in foreign currency". According to Dr. Paul Einzig, "Foreign exchange is the system or process of converting one national currency into another and transferring money from the country to another." Foreign exchange deals with foreign trade and foreign currency. 4.2 Foreign Trade No country is self-sufficient in all the goods. Some countries have special advantage to produce some items. Bangladesh can manufacture readymade garments easily due to lower cost of labor. So, Bangladesh is exporting readymade garments to USA where as USA is exporting machinery to Bangladesh due to their favorable transaction to that item. These kinds of cross border transaction or exchange of goods are called foreign trade. 4.3 Foreign Exchange and Foreign Trade MTBL undertakes spot purchase and sales foreign currencies by deploying its own fund. Foreign exchange and foreign trades of a country are conducted according to the law of that country. Mutual Trust Bank Ltd. performs all its banking operations including foreign exchange activities
according to that law. Mutual Trust Banks conduct their foreign exchange businesses mainly into two ways: a) Bank provides service as an agent for the transaction and earns service charge, commission etc. b) Bank invests its fund for the purchase of foreign currencies and sale of such currencies on the basis of present transaction and may earn profit thereof. 4.4 Foreign Exchange Transactions Conversion of currencies or exchanges is known as foreign exchange transactions. The conversion may arise for a transaction between a bank and its customers or between a bank and another bank at home or abroad. The transaction involves at least two currencies. For a bank in Bangladesh, the process of conversion frequently involves conversion of Bangladeshi taka into foreign currencies or vice- versa. For instance, one of the customers of your bank wishes to send an amount of $1000 to his son in USA. Assuming that this remittance is permissible or that permission from the exchange control authority has been obtained, you will issue a draft in favor of the beneficiary for $1000 drawn on your USA correspondent or a branch of yours, if any, in favor of your customer's son and ask your customer to pay the equivalent amount in Taka. The transaction involves two things: payment of $ 1000 from your dollar account - your NOSTRO account maintained with your USA branch or correspondent and recovery of its taka equivalent at the ruling ready (spot) rate of exchange between taka and dollar. In another instance, your customer may ask you to buy a draft for Tk.10000 drawn on a bank in Iran towards the value of jute bags supplied to the Iranian buyer against a letter of credit open by a bank of Iran. If you are satisfied that the documents accompanying the drafts are in order, you will pay the taka amount and ask that bank of Iran to pay you equivalent amount in dollar or Iranian Real. In the illustration given above, remittance of $1000 to USA would involve conversion of local currency into a foreign currency and in the later case the transaction would involve conversion of a foreign currency- dollar or Iranian Rial into local currency. 4.5 Wings of Foreign Exchange A Bank's Foreign exchange department has three definite wings through which foreign exchange transactions are conducted.
Foreign Foreign Exchange Exchange
Import Import Section Section
Export Export Section Section
Remittance Remittance Section Section
Figure 4.5: wings of foreign exchange The achievement of Mutual Trust Bank in the above three areas of foreign exchange business has been quite phenomenal. The Bank has been providing services to import and export trade and for repatriation of hard-earned foreign exchange of Bangladeshis living and working abroad and has, by
now, consolidated its position in these areas. The following chapters will discuss about these areas in details. 4.5.1 Wings of Foreign Exchange: Import Import trade of Bangladesh is controlled under the Import & Export control Act (IEC) 1950. Authorized Dealer Banks will import the goods into Bangladesh following import policy, public notice, F, E circular & other instructions from competent authorities from time to time. 4.5.1.1 Definition on Import Buying of goods & services from foreign countries for sales is considered as import. The person or organization who import the goods & services from foreign countries is known Importer and from which goods & services are imported is known as Exporter. In case of Import, the importers are asked by their Exporters to open a Letter of Credit (L/C). So that there payment against goods & services is ensured. 4.5.1.2 General Provision for Import Regulation of Import – Import of goods under this order shall be regulated as under: Banned list: Banned goods are not allowed to import through the foreign exchange transaction. Such as Live Swine, Eggs of shrimps and prawns etc. Restricted list: Any item, which is restricted by the “Import Policy Order 1997-2002” in Annexure –1(b) shall be importable only on fulfillment of the conditions (b) specified therein against the item. Free Importable Items: The items which are not included either in the Banned list or Restricted list shall be freely importable: In addition to the conditions mentioned in the Restricted and Banned Lists the conditions restrictions and procedures for import of various items mentioned in the test portion of this Order, shall as usual apply in case of import of those items. 4.5.1.3 General conditions of Import Goods 1) Import Trade Control Schedule Numbers- For import purpose use of new ITC Numbers with at least six digits corresponding to the classification of goods as given in the Import Trade Control Schedule 1998, based on the Harmonized Commodity Description and Coding System shall be mandatory. 2) NOC on the basis of ROR (Right of Refusal): No objection Certificate on the basis of right of Refusal form any authority shall not be required for import of any freely importable item by any Public Sector Agency. However, in cases where a public sector agency is required to import banned or restricted items included in the control list prior permission of the Ministry of Commerce shall have to be obtained on the basis of ROR issued by the ministry of Industries or by the Sponsoring Ministry/Division or by both as the case may be. 3) Restriction regarding source of procurement of goods: (a) Goods from Israel or goods originating from that country shall not be importable. Goods shall also not be importable in the flag vessels of that country. (b) All kinds of import from and export to Serbia and Montenegro, fragments of former Socialist Republic of Yugoslavia shall be banned.
4) Pre- Shipment Inspection: Unless otherwise specified pre-shipment inspection of imported goods shall not be obligatory in case of import be the private sector importers. 5) Shipment of Bangladesh Flag Vessels: Subject to waiver specified below shipment of goods shall normally be made on Bangladesh flag vessels. 4.5.1.4 Types of Importer Goods are imported for personal use, commercial or industrial purpose. So there are three kinds of importer such as: 1. Personal Importer. 2. Commercial Importer. 3. Industrial Importer. 4.5.1.5 Authorized Dealers Authorized Dealer means a Bank, Authorized by Bangladesh Bank to deal in Foreign Exchange under the Foreign Exchange Regulation (FER) Act 1947. But there are some persons or firms, authorized by Bangladesh Bank to deal in Foreign Exchange with limited scope are called Authorized Money Changers. To get a license for authorization a bank will apply the General Manager, Foreign Exchange Policy Department, Bangladesh Bank, Head Office, Dhaka is complying the subsequent conditions: i. The Bank must have adequate (about five) manpower trained in Foreign Exchange ii. Prospect to attract reasonable volume of Foreign Exchange business in the desired location. iii. The bank meticulously complies with the instruction of Bangladesh Bank. iv. The bank will commit to deal in Foreign Exchange within the limit & will submit periodical returns as instructed by Bangladesh Bank. 4.5.1.6 Functions of Authorized Dealer Authorized Dealer can handle all kinds of Foreign Exchange transaction as per Foreign Exchange Regulation (FER) Act 1947 under the instruction of Bangladesh Bank. Following are the main function of an Authorized Dealer: i. ii. iii. iv. v. vi. vii. viii.
Exchange of Foreign Currencies. To make arrangement with Foreign Correspondent. Buying & Selling Foreign currencies. Handling of Inward & Outward Remittance Opening of L/C & Settlement of Payment. Investment in Foreign Trade. Opening & Maintenance of Accounts with Foreign Banks under intimation to Bangladesh Bank. Export Documents handling.
4.5.1.7 Letter of Credit (L/C) Letter of Credit (L/C) is a payment guarantee to the seller by the issuing bank on behalf of the importer. In other words, it is a letter of the Issuing Bank to the beneficiary undertaking to effect
payment under some agreed conditions. L/C is called documentary Letter of Credit, because the undertaking of the Issuing Bank is subject to presentation of some specified documents. Through the L/C Buyers & Sellers enter into a contract for buying and selling goods/services and the buyer instructs his bank to issue L/C in favor of the seller. Here bank assumes fiduciary function between the buyer and seller. 4.5.1.7 Flowchart of L/C
Accounting treatment for opening L/C For opening L/C, importer will apply to the issuing bank. In that case, importer is called applicant or opener. After opening it bank will create a contingent liability. In that case, the accounting posting will be the followingCustomer liability …….. Dr. Contingent liability………..Cr. • While paying money but the issuing bank, issuing bank will reverse the above entry & the entry will beContingent liability…….. Dr. Customer’s liability…………..Cr. • Then the issuing bank will give another entryPayment against Document (PAD)……….. Dr. MTBL General Account…………………………….. Cr. Exchange Gain……………………………………..….Cr. PAD will debit because the bank will pay the money against some documents. MTBL General Account is a miscellaneous account. It will be credited because by this entry MTBL creates a liability. It has to pay the money to the advising bank. & the gain made by the transaction is shown at
Exchange Gain Account. All this entries are made after receiving some documents from the exporters. The above procedure is called Lodging. After giving the above entry, MTBL will inform the clients for collecting the documents from the bank. After opening L/C, MTBL (Issuing Bank) must receive the documents for any other proceedings. These documents are1.Bill of Exchange 2.Invoice 3.Packing List 4.Bill of Lading 5.Country of Origin 4.5.1.7.1
Different Parties to a Documentary Credit
Normally the subsequent parties are related to a documentary credit. Such as 1) The Issuing Bank: This is the bank who issues Documentary credit on account of its client. 2) The advising Bank: This is a Bank acting as Agent of the Issuing Bank, to advise the L/C to the beneficiary. 3) The confirming Bank: This Bank gives the beneficiary a double assurance of payment. This is a third Bank undertake to make payment, to the beneficiary, if the Issuing Bank fail to make Payment. 4) Negotiating Bank: This Bank provides value to the beneficiary against presentation of documents complying credit terms. Usually this is exporter’s Bank who purchases the export documents. 5) Reimbursing Bank: This is a Bank acting as Agent of the Issuing Bank Authorized to make payment or to honor reimbursing claim of the Negotiating Bank. 6) The Transferring Bank: If the L/C is transferable then the 1 st beneficiary through a bank nominated by the Issuing Bank this bank is called the Transferring Bank. 7) The Applicant: Importer or buyer is the applicant of a Letter of Credit. Applicant must be the client of the Issuing Bank. 8) The beneficiary: Exporter or Seller of the goods is the Beneficiary of a Letter of Credit. 9) Notify Party: The Party / Bank to whom the arrival of shipment has to be notified or to be informed is called notify party. 4.5.1.7.2 Import Procedure To import a person should be an importer. In accordance with Import & Export Control Act, 1950 the office of chief Controller of Import & Export provides the registration (TRC) to the importer. After getting, this person has to secure a letter of credit authorization from Bangladesh Bank. Then he becomes a qualified importer; He is the person who requests or instructs the opening bank (MTBL) to open an L/C. He is also called opener or applicant of the Letter of Credit. 4.5.1.7.3
Import Registration Certificate
Import Registration Certificates are issued by the office of chief controller of imports and exports. Intending importers are to submit applications to CCI & for registration along with required documents are as follows: 1.Application 2.Trade License
3.Nationality Certificate 4.Income tax certificate along with TIN, VAT 5.Bank Certificate 6.Membership certificate from Trade Association Certificate of incorporation, Article and Memorandum of Association. Partnership Deed for partnership firm. 4.5.1.7.4 Procedure for Registration To obtain import registration certificate (IRC) the applicant will submit the following paper to the CCI & E through this nominated Bank. a) Questionnaire duly filled in & signed by the applicant b) Trade License c) Membership certificate from chamber of commerce or any other trade Association d) Nationality Certificate e) Income tax registration certificate, VAT. f) Partnership deed/certificate of registration with the register of Join Stock companies where applicable. On being satisfied, the CCI & E issues IRC obtain original copy of treasury challan for payment of registration fee. 4.5.1.7.5 Preliminary Steps for Opening L/C Before opening the L/C Bank will takes the subsequent steps: 1) Applicant to be Bank’s A/C Holder: Bank (MTBL) will open the L/C on behalf of an entity who has an account with the Bank. Unknown person will not be allowed to open L/C. 2) Registered importer: Before opening the L/C bank must confirm that the L/C applicant is a registered importer or personal user, and the IRC of the importer has been renewed for the current year. 3) Permissible item: The item to be imported must be permissible and not banned item. If the item is from conditional list, the condition must fulfill to import the same. 4) Market Report: Bank will verify the marketability of the item & market price of the goods. Sometimes the importer may misappropriate the Bank’s money through over invoicing. 5) Sufficient Security or margin: Price of some items fluctuates frequently. In case of those items Bank will be more careful to take sufficient cash margin or other security. 6) Business Establishment: Bank should not open an L/C on behalf of a floating businessman. The importer must have business establishment, particularly he must have business network for marketing the item to be imported. 7) Restricted Country: Goods not to be imported from Israil. 8) Credit report of the beneficiary: It the amount of L/C in one item exceeds TK. 5.00 lac, supplier’s credit report is mandatory. Bank will collect credit report of the beneficiary through its correspondent in abroad. 9) Application of the client to open the L/C: The client will approach to open the L/C in Bank’s (MTBL) prescribed form, duly stamped & signed, along with the following paper & documents: Such as 1. Indent/Pro forma invoice. 2. Insurance cover note with money receipt. 3. LCAF duly filled in & signed.
4. 5. 6. 7. 8.
Membership certificate form chamber of commerce/Trade Association. Tax payment certificate/declaration. IMP & TM form signed by the importer Charge documents IRC, Pass book, Trade license Membership certificate & VAT, registration certificate in case of new client. 9. Export L/C in case of back-to-back L/C. 10) Permission from Ministry of Commerce: If the goods to be imported under CIF (cost insurance & freight), then permission from ministry of commerce to be obtained. 11) Creditability of the Client: In consideration of all the above points, if Bank (MTBL) becomes satisfied regarding the client then L/C may be opened on behalf of the client. Before opening the L/C bank will issue & authenticate a set of LCAF in the name of the importer. 4.5.1.7.6 Presentation of the Documents The seller being satisfied with the terms and the conditions of the credit proceeds to dispatch the required goods to the buyer. Then he has to present the documents evidencing dispatching of goods to the negotiating bank on or before the stipulated expiry date of the credit. After receiving all the documents, the negotiating bank them checks the document against the credit. If the documents are found in order the bank will pay accept or negotiate to Bank. Then bank checks the documents. The usual documents are: • • • • •
Invoice Bill of lading Certificate of origin Packing List Shipping Advice
• • • •
Nor negotiable copy of bill of lading Bill of exchange Pre-shipment inspection report Shipment Certificate
4.5.1.7.7 Steps Involved in Import procedures:
• Procurement of IRC from the concerned authority • Signing purchase contract with the seller • Requesting the concerned bank (Mutual Trust Bank) to open an L/C on behalf of the importer favoring the exporter/seller/beneficiary.
• The issuing bank opens/issues the L/C in accordance with the instructions/request of the importer & request another bank (advising bank) located in sellers /exporter’s country to advice the L/C to the beneficiary. The issuing may also request the advising bank to confirm the credit, if necessary.
• The advising bank advises the seller that the L/C has been issued. • As soon as the exporter /seller receives the L/C & is satisfied that he can meet L/C terms & conditions, he is in a position to make shipment of the goods.
• After making shipment of the goods in favor of the importer the exporters submit the documents to the negotiating bank for negotiation.
• Lastly, importer collect their goods from the dock, port etc. 4.5.1.7.8 Different Types of Letter of Credit provided by MTBL
4.5.1.7.8.1 Back to Back L/C: Back-to-Back L/C is defined as a credit, which is opened at the instructions and the request of the Beneficiary of the original Export L/C on the strength credit. Back to Back is a term given to an ancillary credit, which arises where the seller’s uses the credit, granted to him by the Issuing Bank to his supplier. Sometimes Back-to-Back credit is called Counter Veiling Credits, i.e. credit and counter credit. There are two types of Back-to-Back credit: Foreign Back to Back Credit
Local Back to Back Credit
4.5.1.7.8.2 Revolving L/C: A revolving credit is a credit, which provides for the amount of the credit to be renewed automatically after use without the need to renew the credit every time. It can be resolved with respect to either: Time Amount (i.e. total value of the credit) 4.5.1.7.8.3 Case to Case L/C An importer opens this type of L/C in all around the year. Before importing any goods the importer can open this L/C. 4.5.1.7.8.4 Limit L/C An importer opens this L/C once in a year. In this L/C the importer set the total import for the year. By this L/C he can import goods around the year. For importing he has not open new L/C before every import. 4.5.1.7.8.5 At Sight L/C Payment must be made within seven (7) working days after the documents have been received from the exporter. Nowadays most the import deals are handled by the head office rather than branches but some local area clients open LC in the branch of their own area to import goods like war materials, machineries, final products and so on. In Dhanmondi branch here only few importer like Mina Bazar, Agora, Almas, Bridge Cheme and so on open LC. The entire old or regular importer get the chance of 10% limit, it means they need to deposit only 10% of their total money of goods in the bank and Bank trust them because they are regular clients. When the clients are new they have to deposit 100% money in the bank to open LC. Here the clients can deposit hard cash money or FDR for the LC.
4.5.2 Wings of Foreign Exchange: Export The export policy 1997-2002 has been formulated by the government to operate within imperative and opportunities of the market economy with a view to maximizing export growth and narrowing down the gap between import payment and export earnings. As per existing Export Policy an Exporter can export any goods or services except the items listed as band and restricted in the said policy. Duration of present EPO-5 years effected from 1 st July 1998, but it is valid till announcement of new policy. Foreign Exchange Regulation Act, 1947 Clearly states that nobody can export by post and otherwise than by post any goods either directly or indirectly to any place outside Bangladesh, unless a declaration is furnished by the exporter to the collector of customs or to such other person as the Bangladesh Bank (BB) may specify in this behalf that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by BB. So a clear lawful procedure must be followed in case of export of goods & services. 4.5.2 1 meaning of export -
Selling goods to foreign countries against of foreign currency.
-
Export means lawfully carrying get of anything from one country to another country for sale. The import and export trade of the country is regulated by the IEC Act. 1950.
4.5.2.2 Export Policy As per export policy order, 1997-2002 now in force an exporter can export any goods or services except the items listed as banned and restricted in the said policy. 4.5.2 .2.1 Objectives of Export / Export Policy Growth of national wealth, increase of production in export sectors, generation of employment & flow of capital and to achieve the growth of GDP target @7%. 4.5.2.3 Exporter Registration An exporter must obtain Export Registration Certificate from the office of the Chief Controller of Import & Export (CCI & E). The procedures for obtaining export registration certificate (ERC) from the CCI & E, the following documents are required: 1) 2) 3) 4) 5) 6)
Application as per format prescribed by CCI & E. Bank Solvency Certificate. Membership Certificate from a Chamber of Commerce. Nationality certificate. Partnership deed (Registered / Un-Registered) for partnership business concern. Memorandum & Articles of Association & its incorporation certificate for public limited company. 7) Income Tax payment certificate (TIN) 8) Recent passport size photographs of the applicant. 9) Treasury Challan showing payment of fees for ERC.
4.5.2 4 Securing the Order: After getting ERC Certificate the exporter may proceed to secure the export order. He can do this by contacting the buyers directly or through agent. In this purpose the exporter may get help from:
• • • • • •
License officer Buyers local agent Export promotion organization Bangladesh Mission Abroad Chamber of Commerce(local & foreign) Trade fair etc
4.5.2 5 Classification of Export i. Export under L/C: Exporters are allowed to export the commodity under irrevocable L/C, under this type of export, exporter will ship the goods as per terms of the credit and will get payment as per arrangement of the credit. ii. A firm Contract/Consignment Basis Export: Exports are allowed against firm contract. As per contract, exporter will ship the goods and the buyer will make payment after selling the consignment. iii. Export against Advance Payment: Sometimes exporter receives payment in advance. In that case AD should obtain a declaration from the exporter on the "Advance Receipt Voucher certifying the purpose of the remittance. Then the exporter will export the goods against the advance payment. Export section MTBL, New market Branch deals with two types of L/C that are as followsFigure 4.5.2.5.1: Types of LC
Export Section
Back-to-Back L/C
Export L/C
4.5.2 5.1 Back-to-back letter of credit Back-to-back L/C is a secondary L/C (New Import L/C) opened by the seller's bank based on the original L/C (Master L/C) to purchase the raw materials and accessories for manufacturing of the export product (s) required by the seller. Under the 'Back to Back' concept, the seller as the Beneficiary of the master L/C offer it as a 'security' to the advising Bank for the issuance of the second L/C. The beneficiary of the Back-toBack L/C may be located inside or outside the original beneficiary's country. In case of a Bark-toBack L/C, the bank takes no cash security (margin). Bank liens the Master L/C and the drawn bill is a Usance/Time bill.
4.5.2 5.2 Export letter of credit The other type of L/C facility offered by the bank is Export L/C. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and wove), jute, jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters exports to foreign countries. Garments Sector is the largest sector that exports the lion share of the country's export. Bangladesh exports most of its ready-made garments products to USA and European
Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to USA. 4.5.2.6 Formalities Required for Export L/C The export trade of the country is regulated by the Imports & Exports (Control) Act, 1950. There are a number of formalities that an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated as follows A. Export Registration Certificate (ERC): The exports from Bangladesh are subject to export trade control exercised by the Ministry of Commerce through Chief Controller of Imports & Exports (CCI&E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI&E and holds valid ERC. The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP (Export) Forms and other documents connected with exports. B.
The EXP Form: Foreign Exchange Regulation (FER) Act- 1947 prohibit export of any goods directly or indirectly to any place outside Bangladesh unless the exporter furnish a declaration to the effect that the export value of goods has been or will be repatriated into the country within a period time specified by the Bangladesh Bank. So, repatriation of export proceed is mandatory for all exported goods or services. Accordingly, before shipment of goods an exporter must declare on Export Form (Exp) prescribed by Bangladesh Bank and issued by the Authorized Dealer (Exporters Bank). The EXP Forms are numbered serially and issued in quadruplicate. For delay in repatriation of export proceeds or non-realization of export proceeds, the exporters render themselves for action under Foreign Exchange Regulation Act 1947. Authorized Dealers (AD) and their officials who certify the export forms also render themselves of such action by the Central bank. An EXP Form usually contains the following particulars a. Name and address of the Authorized Dealer; b. Particulars of the commodity to be exported with particulars and code no; c. Country of destination; d. Port of destination; e. Quantity; f.
L/C value in foreign currency;
g. Terms of sale; h. Name and address of Importer/ Consignee; i.
Bill of Lading/Railway Receipt/Airway Bill/Truck Receipt/Post Parcel Receipt no. and date;
j.
Port of Shipment/Post Office of Dispatch;
k. Land custom post l.
Shipment Date;
m. Name of the Exporter with address; n. Registration number and date; o. Sector (public or private) under which the exporter fails. C. Securing the Order: Upon registration, the exporter may proceed to secure the export order. Contracting the buyers directly through correspondence can do this. D. Signing of the Contract: While making a contract, the following points are to be mentioned: a) Description of the goods; b) Quantity of the commodity; c) Price of the commodity; d) Shipment; e) Insurance and marks; f) Inspection, and g) Arbitration.
E. Procuring the materials: After making the deal and on having the L/C opened in his favor, the next step for the exporter is set about the task of procuring or manufacturing the contracted merchandise. F. Registration of Sales: This is needed when the proposed items to be exported are raw jute and jutemade goods. G. Shipment of Goods: The following documents are normally involved at the stage of shipment: (a) EXP From, (b) photocopy of registration certificate, (c) photocopy of contract, (d) photocopy of the L/C, (e) customs copy of ERF Form for shipment of jute-made goods and EPC Form for raw jute, (f) freight certificate from the bank in case of payment of the freight if the port of lading is involved, (g) railway receipt, berg receipt or truck receipt, (h) shipping instructions, and (i) insurance policy. 4.5.2.7 Export Documents: After due passing of EXP, the exporter then execute shipment. As evidence of export and as per terms of the export L/C, Contract, exporter must prepare document in order to get his payment and to facilitate release of goods by the buyer abroad. Document are of (2 (two) types. i) Financial Document: The Financial document, prepared by exporter is known as bill of exchange or Draft. It is prepare by the exporter directing the L/C issuing Bank to pay sum of money at a certain date or determinable future time to negotiating Bank or order. The parties to a Drafts are Drawer, Drawee, Payee, Endorser & Endorsee.. ii) Commercial Document: The documents evidencing description and other details of goods shipped and supporting other terms and condition of L/C Contract are commercial documents. Some Vital commercial documents are: a) Invoice/Commercial Invoice
b) Bill of Lading/Airway bill/Truck Receipt c) Packing/Measurement List d) Certificate of origin e) Pre-shipment Certificate f) GSP Certificate issued by EPB. 4.5.2.8 Inland Letter of Credit (ILC) ILC means L/C within the same country. This type of L/Cs is opened when seller does not believe the buyer though they are in the same country and also in the cases where the sales contract is of a big amount. MTBL has couple of ILC. 4.5.2.9 Settlement of local bill The settlement of local bills is done in the following ways •
The customer submits the L/C to the branch along with the documents to negotiate
•
The branch officials scrutinizes the documents to ensure the conformity with the terms and conditions;
•
The documents are then forwarded to the L/C Opening Bank;
• The L/C Issuing Bank gives the acceptance and forwards an acceptance letter; Payment is given to the customer on either by collection basis or by purchasing the document. A LBPD Register is maintained to record the acceptance of the issuing bank. Until the acceptance is obtained, the record is kept in a collection register. 4.5.2.10 Modes of Payment for Export Bills under L/C Broadly payment methods under a L/C are as follows4.5.3.10: Modes of payment
Payment Method
Sight Payment
Deferred Payment
I) Sight payment Credit: In a Sight Payment Credit, the bank pays the stipulated sum immediately against the exporter's presentation of the documents. II) Deferred Payment Credit: In deferred payment, the bank agrees to pay on a specified future date or event, after presentation of the export documents. No bill of exchange is involved. In UBL, payment is given to the party at the rate of D.A 60-90-120-180 as the case may be. But the Head office is paid at T.T clean rate. The difference between the two rates us the exchange trading for the branch. Another two types come under the same heads. These are as follows-
A. Negotiation Credit: In Negotiation credit, the exporter has to present a bill of exchange, payable to him in addition to other documents, that the bank negotiates. B. Acceptance Credit: In acceptance credit, the exporter presents a bill of exchange payable to him and drawn at the agreed tenor (that is, on a specified future date or event) on the bank that is to accept it. The bank signs its acceptance on the bill and returns it to the exporter. The exporter can then represent it for payment on maturity. Alternatively he can discount it in order to obtain immediate payment.
4.5.2.11 Advising L/C When export L/C is transmitted to the bank for advising, the bank sends an Advising Letter to the beneficiary depicting that L/C has been issued. 4.5.2.12 Test key arrangement Test key arrangement is a secret code maid by the banks for the authentication for their telex massage. It is a systematic procedure by which a test number is given and the person to whom this number is given can easily authenticate the same test number by maintaining that same procedure. MTBL has test key arrangements with so many banks for the authentication of L/C messages and for transfer of funds, 4.5.2.13 Export Financing To meet up the cost of the goods to be exported, the exporter may require Bank finance. Besides, he may require finance for godown rent, electricity bill, freight etc. Even after shipment of the goods, exporter may require Bank finance to meet-up his current expenditure up to repatriation of the export proceeds. There are two types of export finance: a) Pre-shipment Finance Pre-shipment investment is finance, allowed by a Bank to an exporter, to meet the cost up to the shipment of the goods to overseas buyer. The purpose to the investment is to purchase Raw materials or finished goods or manufacturing processing. Packing and transporting the goods. b) Post -Shipment Finance There is a fine gap between export of the goods and realization of the proceeds. So exporter may require finance in that period to continue his business. So bank may finance against export documents ensuring the following: i.
Export documents comply with the credit terms.
ii.
Buyer is bonafide.
iii.
Party's past performance is satisfactory.
iv.
Any other security in case of export under contract.
4.5.2.14 Settlement for Export Claims
In terms of export policy order 1997-2002 of exchange control Manual Bangladesh Bank, produces of export bills must be repatriated within a maximum period of four months. This is period may be extended by Bangladesh Bank on reasonable grounds, it has already been pointed out that side by emphasis has also been given on settlement of the foreign buyer's claims arising out exports, as quick settlement of export claims is an indirect incentive to the overseas buyer for our products. If the buyer becomes reluctant to accept discrepant documents without discount like may allow discount on the request of the exporter, if discount is less than 10% of the export value, subject to post facto approval from export promotion Bureau. If the discount is more than 10% prior approval is required is required. Foreign commission, brokerage or other trade charges related to export might be allowed up to 5% without Bangladesh bank permission, but for more than 5%, permission is required. In case of export of books, journals, and magazines, 33% discount id allowable. Export claim may be deducted from the bill value or may be remitted against claim after full realization of the export proceeds.
4.5.2.15 A Simple Flowchart of Export Business Mechanism
Exporter- Consult Export Policy order get ERC ↓ Contract Buyer-Settle sales terms ↓ Issue Pro-forma Invoice - to exporter abroad ↓ Export L/C-Check carefully by exporter & exporter's Bank ↓ EXP Passing – Issued by AD signed by exporter and AD ↓ Shipment - Submit document of goods or the item exported Documents ↓ Submit document by the exporter to their Bank ↓ Negotiation - Payment made by the exporter bank to the exporter ↓ Or Collection - I documents are discrepant/ unaccepted ↓ Reimbursement - Getting payment by the negotiating Bank Generally head office deals with the total export section of Mutual Trust Bank but a few local clients on request open LC for export in the branch. Some RMG and Lather organization opens LC in the branch.
4.5.3 Wings of Foreign Exchange: Remittance Remittance means sum of money remitted from one place to another. We send money from one place to another through post office, Banks etc. When money is transferred from one country to another then it is called foreign remittance. In all respect MTBL follows exchange control manual published in I986 by Bangladesh Bank. Respect of foreign remittance we are to follow that manual and circular time to lime from circulated Bangladesh Bank. 4.5.3.0 What is Remittance? Remittance means transfer of money/funds from one place to another. Money fund goes comes from one place to another through post office, Bank, etc. 4.5.3.1 Types of Remittance • Inward Remittance • Outward Remittance 4.5.3.1.0 Inward remittance means remittance received from foreign countries or abroad. 4.5.3.1.1 Outward remittance is when foreign currency transferred from home country to other country them it is called foreign outward remittance. 4.5.3.2 Instrument of Remittance1. Cash 2. 3. I. 5. 6. 7. 8.
TC (Travelers Cheque) FDD (Foreign Demand Draft) TT (Telegraphic transfer) MI (Mail Transfer) PO (Payment Order) IMO (International money order) Cheque etc.
Foreign currency A/Cs under WES which plays a vital role on our all foreign exchange are opened by Bangladesh Nationals serving and earning abroad having income from sources other than Bangladesh (FCAD, FCAP, PC AY, RCADM). It is noted that current A/C also plays a vital role in foreign business. Upon approach by the amongst others as under1) 2) 3) 4) 5) 6) 7) 8)
PLS
A/C
holder
the
respective
A/C
Filling properly the relative A/C opening form. Obtaining declaration Copy of passport- 1st 7 pages i-e- up to visa (original PP to produce) Service contract. Letter of authority 3 PP size photos of the A/C holder 1 PP size Photos of the nominee Signature cards due and both A/C holder and nominee etc.
is
opened
by
A/D
4.5.3.3 Foreign Remittance (Inward) Inward remittance coining in to our country from other countries financed by the purchases of freely convertible foreign countries by A/D defeat to non Resident Thana A/Cs of foreign banks. 4.5.3.3.0 Purposes of inward Remittance • Indenting commission • Donation • Family maintenance Draft • Export proceeds • Foreign investment • Others. 4.5.3.3.1 Foreign Remittance (Outward) When foreign Currency transferred from home country to other it is called foreign outward remittance. Generally it includes all the remittance of invisible items: in broad sense it also includes the remittances against visible items. On March 24, 2004 Bangladeshi Taka was declared convertible for current account international transaction. As a result remittance becomes more liberalized. Outward remittance include sale of Foreign Currency by T.T, M.T, Draft, T.C or in cash for private, official and commercial purpose. 4.5.3.4 Who can remit? a) Any Bangladeshi Nationals who want to travel can remit/bear foreign currency up to a minimum limit fixed by Bangladesh Bank from time to time. b) Exporters for business travel as per quota fixed by Bangladesh Bank c) Student who are residing abroad for study purpose having permission from Bangladesh Govt./Bangladesh Bank. d) Medical treatment and other purposes having Bangladesh Bank permission. e) Bangladeshi Nationals warring abroad can also remit out of balance held in their foreign currency A/Cs against direct remittances. f) Foreign Nationals, Diplomatic missions, Embassy, juridical persons etc. Working/ residing in our country may also remit out of the fund already remitted to our country. g) Foreign nationals come to our country for visit purpose and on cash foreign currency into local currency may also remit in freeing currency up to maximum limit of his convened amount. h) In Foreign National those who are working in our country also remit out of their salary subject to approval of a Bangladesh Bank' Bangladesh Bank/Bangladesh Govt. (excluding f) i) Importers may also allow remitting foreign currency for their import as per import policy of Bangladesh Government. j) Any persons who want to take sample from abroad may also remit foreign currency as per Bangladesh Bank Rule 4.5.3.4 Instrument of Outward Remittance a) Cash (say US Dollar, Stg. SRL etc.) b) TC (Say US Dollar, Stg. SRL etc.)
c) d) e) f) g)
T.T (Telegraphic transfer or cable transfer). M.T (Mail Transfer). P.0 (Payment Order). I.M.O (International Money Order). Cheque etc.
4.5.3.5 Papers/Document to be obtained for out ward remittance a) For Import Imp. Form duly signed. b) Oilier than import T/M form to be filled in. c) Permission from Bangladesh Bank if and when required. d) Papers regarding on casement when issued foreign travels. e) Declaration signed by the applicant in case of issuance or foreign currency for membership, fees for application, registration, admission examination (TOFEEL, SAT etc.)
4.5.3.6 Present limit for outward remittance A. Private Remittance i.
Family Maintenance: a. Foreign nationals working in Bangladesh may remit 50% of salary and 100% of leave salary as also actual savings and admissible pension benefits for their family maintenance. b. Moderate amount of foreign currency for maintenance abroad of family members (spouse, children, parents) of Bangladesh nationals are allowed.
ii.
Membership/Registration fees etc;
ADs are allowed to remit membership fees of foreign professionals and scientific institutions and fees for application, registration, and admission, examinations in connection with admission into foreign educational institutions, supported by demand notice1 or letter of the concerned institution. iii. Education: a) ADs may release AD foreign exchange favoring Bangladeshi students staying abroad or willing to proceed abroad for study. According to the following drill: b) Application by the student as per prescribed format c) Admission letter issued by the concerned institution d) Estimate relating to tuition fee lodging and incidental expense issued by the concerned institution e) Attested copies of educational certificates f) Valid passport
iii.
Travel:
Private travel quota entitlement of Bangladeshi national is set at US$ 3,000 per year for visit to countries other than SAARC member countries and Myanmar. Quota for SAARC member countries and Myanmar is US$ 1,000 for travel by air and US$ 500 for travel by overland route.
iv.
Health and Medical:
The ADs may release up to US$ 10,000 for medical treatment abroad on the basis of the recommendation of the medical board. v.
Foreign nationals a) The ADs may issue T.C. to foreign nationals without any limit and currency notes up to US& 300 against surrender of equivalent foreign currency. b) ADs may allow re-conversion of unspent taka fund of foreign tourist exchange on production Encashment Certificate of Foreign Currency
vi.
Remittance for hajj:
ADs may release F.C. to the intending pilgrims as per institutions / circular to be issued by Bangladesh Bank each year.
A. Official and business travel / travel quota for new exporter ADs may release up to US$ 6,000 to a new exporter for business travel abroad against recommendation of EPB. I.
Travel Quota For Importer a) Subject to annual upper limit of US$ 5,000 importers are entitled to a Business Travel quota @ 1% of their imports settled during the previous financial year. b) Local products are also entitled to a Business Travel quota as above.
B. Exporters Retention Quota Merchandise exporters may retain up to 40% realized FOB value of their export. It is 7.5% for export of goods having high import content. 4.5.3 Money Transfer
Foreign Remittance through Exchange House For Inward Remittance, Mutual Trust Bank established extensive drawing arrangement network with Banks and Exchange Companies located in the important countries of the world. MTBL use some money transfer companies like Western Union, Money Gram, Money Exchange AlMudaraba, Al-Mukharaand and so on. In Mutual trust bank Dhanmondi branch generally deals with inward remittance but here they also have some outward dealings e.g. book buying, student tuition fees, travels and so on.
Chapter 5 fInanCIal performanCe of mtB 5. Performance of the MTBL 5.1 Financial Performance Overall financial performance of MTB has a growing trend in recent years. Net profit after tax in the year 2011 is more than previous years. The difference between two year’s profits is satisfactory for a company like MTB. Total operating revenue increased not in a huge amount and portfolio of the company also became rich compared with the previous years. In financial ratio analysis, the ROE (return on equity) is in a stable position compared to the previous year’s change. The earnings per share (EPS) have grown rapidly. In 2008, the EPS was BDT 17.27, but in 2010 it reaches BDT 4.63 which strongly indicates achievement. The company has now a stable level of the Value of Net Asset where it was in a declining rate in previous years. But the Value of Net Asset is increasing now. The company was facing capital shortage in the year of 2007 and 2008 but now the company tries to come out from this situation and the financial report of 2011 is the proof of the rise. 5.2 Operational Performance of last 5 years Table: 5.2 Operational Performance of last 5 years Financial
2011 (Tk. In
2010 (Tk. In
2009 (Tk. In
2008 (Tk. In
2007 (Tk. In
Performance Total Revenue
millions) 1182.2
millions) 1,166.6
millions) 870.15
millions) 737.13
millions) 554.56
Total Expenses
1747.661
1396.93
917.10
644.48
424,484,555
Operating Profit
3491.18
3,398.64
2,544.02
1,839.57
1,188.38
Profit before Tax
1571.9
1,490.55
1,391.91
558.53
395.55
Net Profit after
992.14
988.36
820.60
305.03
210.80
Tax Paid-up Capital
2543.50
2,119.58
1,766.31
149.68
997.92
Shareholder’s
4483.49
4,378.80
3,684.50
2,483.09
2,044.29
20%
20%
20%
18%
25%
Equity Dividend %
Here the Net Profit as well as Total Revenue in 2010 increased mainly because of increase in income from brokerage from brokerage services and income from Portfolio Investment. Total Portfolio increased in 2010 due to increase in term financing, short-term financing and margin loan to customers. Provision for Tax went up because of higher Net Profit.
MTB’s Ongoing Journey towards Excellence
Chapter 6 analysIs of mtB
6. Analysis 6.1 Strategic Analysis of MTB 6.1.1 SWOT ANALYSIS
The SWOT analysis comprises of the organization’s internal strength and weaknesses and external opportunities and threats. SWOT analysis gives an organization an insight of what they can do in future and how they can compete with their existing competitors. This tool is very important to identify the current position of the organization relative to others, who are playing in the same field and also is used in the strategic analysis of the organization. Strength:
Good management. A bulk of qualified and experienced human resource is the strength of MTBL Brand name.
The sponsor firms (Square Group, Apex Group, ACI etc). Good customer service capabilities. Better product quality offer to the customer. Fully computerize and online banking.
Foreign Remittance
Weakness:
More focus on Dhaka and Chittagong. The company gives online banking
Opportunity:
service but only cash tractions. Deposit is more than the advances. MTB has not that much good market share then the other commercial bank. Poor Marketing Strategy. Less number of ATM booths.
Threats:
Branch expansion. Business expansion. Expanding the company’s product line to meet a broader range of customer needs. Start 24-hour banking.
Other commercial bank and the multinational companies. Political instability and corruption are threatening Bangladesh’s economy. Natural disaster. ATM booths of Dutch Bangla Bank Limited
6.2 Financial Analysis of MTB 6.2.1 Paid up Capital The paid up capital of the Bank is TK. 2543.50 million ordinary shares of TK. 100 each. Except 2007 the number of ordinary share is increase for the year 2011. The data table with graph is given below: Table 6.2.1: Paid up Capital Year
Paid up capital (Tk. In millions)
2011
2543.50
2010
2119.60
2009
1766.32
2008
1496.90
2007
997.93 Figure 6.2.1: Paid up Capital
Comment The increasing rate of Paid up Capital is very outstanding. This flow will ensure the strength of the Bank.
6.2.2 Satisfactory Reserve & General Reserve The total reserve was TK. 600.84 million in the year 2008; in 2009 it was increased on
TK. 772.14
million. In 2010 it was reached at TK. 1640.22 million and in 2011 it was 1835.36. Here we can say that reserve fund of MTB is increasing gradually every year. Here we can see in 2010 and 2011 the General reserve is same. Data table along with graph are given below: Table 6.2.2: Satisfactory Reserve & General Reserve Year 2011 2010 2009 2008 2007
Satisfactory Reserve (Tk. In millions) 1,473.58 1,278.44 980.33 701.94 590.24
General Reserve (Tk. In millions) 361.78 361.78 161.79 70.20 10.60
Figure 6.2.2: Satisfactory Reserve & General Reserve
Comment The satisfactory reserve has grown gradually from 2007 to 2011 which was important for Mutual Trust bank Limited. Its general reserve also increased gradually but it decreased slightly in 2011. 6.2.3 Profit and loss The profit is in 2008 is Tk. 305.03 million. It increases in 2009 and 2008 but in 2011 the profit decreases by Tk. 584.14 million. Table 6.2.3: Profit and Loss Year
Amount (Tk. In millions)
2011
404.22
2010
988.36
2009
862.60
2008
305.03
2007
210.80
Figure 6.2.3: Profit and Loss
Profit & Loss (in million) 1200 1000 2011
800
2010
600
t n u o m A
2009
400
2008
200
2007
0 2011
2010
2009
2008
2007
Comment In this line graph we can see from 2007 to 2010 the profit is increasing but in 2011 the profit of MTBL decreased and the profit decline from Tk. 988.36 million to Tk. 404.22 million. Decrease of profit is not good for the bank. It is very essential to do something to generate more profit. 6.2.4 Investment In 2008 the investment was Tk. 5606.59 million and it increase in 2009. But in 2010 the investment decrease Tk. 321.64 million and in 2011 the investment increase from Tk. 9216.33 to 20148.72. In 2011 the investment is almost double from 2010. Table 6.2.4: Investment of MTB Year
Amount (Tk. In millions)
2011
20148.72
2010
9216.33
2009
9537.97
2008
5606.59
2007
3955.22
Figure 6.2.4: Investment of MTB
Comment From 2008 to 2011, the amount of investment fluctuated and it became double in 2011. This is good sign for the bank because the investment grows very high than other years. 6.2.5 Foreign Currency Demand Deposit noninterest bearing Foreign currency demand deposit in 2010 is Tk. 188.63. It decreased Tk. 9.52 million in 2009 from 2008. Table 6.2.5: Foreign Currency Demand Deposit Noninterest Bearing Year
Amount (Tk. In millions)
2011
160.20
2010
188.63
2009
90.30
2008
99.82
Figure 6.2.5: Foreign Currency Demand Deposit noninterest bearing
Comment In 2009, the foreign currency demand deposit decreased and in 2010, it increased more than double from 2009. But in the 2011 the value of foreign currency goes up and taka’s value goes down so people weren’t interested to but the foreign currency. So it isn’t good for the bank. 6.2.6 Foreign Currency Translation Gain In 2010 the foreign currency translation gain is Tk. 235052 and in 2011 it became Tk. 2298101. It increased 977.66%.
Table 6.2.6: Foreign Currency Translation Gain Year
Foreign Currency Translation Gain (Tk. In millions)
2011
22,98,010
2010
2,35,052
2009
1,89,564
Figure 6.2.6: Foreign Currency Translation Gain
Foreign currency transaction 2500000 2000000
t n u o m A
1500000 1000000 500000 0 2011
2010 year
Comment From 2010 to 2011 it increased almost ten times. The bank gain Tk. 2062958 more from 2011 which is good for the bank.
6.2.7 Statement of Import (Top 5 Branch compare with Dhanmondi Branch) Table 6.2.7: Statement of Import Name of the
Budget 2012
Budget up to
Achievement
% of
Branch
(Tk. In millions)
March (Tk. In
(Tk. In millions)
Achievement
15,081.22 6,943.05 6,348.58 6,032.09 3,559.18 282.31
millions) 3,770.31 1,735.76 1,587.14 1,508.02 889.73 70.58
3,266.45 1,580.16 1,279.91 1,217.80 738.37 38.99
86.64% 91.04% 80.64% 80.75% 82.98% 55.24%
Principal Agrabad Dilkusha Panthpath Khatungonj Dhanmondi
Figure 6.2.7: Statement of Import
Comments From the graph it can be said that the overall import performance is not good for Dhanmondi Branch compare to the other top 5 branches of MTBL. MTBL Dhanmondi Branch would take some essential steps to increase their performance and stand up from the situation. 6.2.8 Statement of Export (Top 5 Branch compare with Dhanmondi Branch) Table 6.2.8: Statement of Export Name of the
Budget 2012
Budget up to
Achievement
% of
Branch
(Tk. In millions)
March (Tk. In
(Tk. In millions)
Achievement
Principal Panthpath Dilkusha Agrabad Gulshan Dhanmondi
13,049.12 8,075.56 3,370.58 6,032.09 1,251.36 33.17
millions) 3,262.32 2,018.89 842.65 579.61 312.84 8.29
1,772.90 1,263.97 459.84 939.03 272.58 2.78
54.34% 62.61% 54.57% 162.01% 87.13% 33.53%
Figure 6.2.8: Statement of Export
Statement of Export 14,000.00 12,000.00 10,000.00 8,000.00 6,000.00 4,000.00 2,000.00 0.00 Principal
Panthpath
Budget 2012 (million)
Dilkusha
Agrabad
Budget up to March (million)
Gulshan
Dhanmondi
Achievement (million)
Comment It is like the situation of import of MTBL Dhanmondi Branch. The overall performance of Export was is good compare to the other top five branches of MTBL. They would give some incentives to the exporter to encourage export from Dhanmondi branch. 6.2.9 Statement of Foreign Exchange of Dhanmondi Branch Table 6.2.9: Total Foreign Exchange in Dhanmondi Branch Particulars Import Business Export Business Foreign Remittance
2012 (NOV) 137.62 18.10 67.73
2011 148.500 25.392 80.102
Figure 6.2.9: Statement of Foreign Exchange
2010 251.292 36.313 101.164
2009 429.953 44.244 47.301
Comment The overall situation of foreign exchange of Dhanmondi Branch is not so good. All the element of foreign exchange except remittance gradually decreased from 2009 to 2012. They would take proper initiatives to improve their performance. They would give proper inceptives and change their foreign exchange policy to increase their overall condition of Dhanmondi Branch
Chapter 7 fIndIngs of
mtB 7.1 General Findings
Mutual Trust Bank Limited has already established a favorable reputation in the banking industry of the country. It is one of the good private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth the profits and deposits sectors. Mutual Trust Bank Limited, Dhanmondi Branch is situated in a very good place in Dhaka city. The environment of this branch is very nice and the employees are very helpful. This bank has their own strategy to give their service to the customers. Findings are completely from my personal point of view. Those are given below:
Environment of MTB bank is very nice.
Work is never left pending for the next day unless it is absolutely necessary
Give service to the customer in a minimum time.
Help the customers for the best solutions.
The software that bank is using is good but need to update a bit.
Most of the customers are satisfied about the behavior of the employee.
Customers said that they are getting more facilities comparing to other private bank in our country.
In MTBL, their clients get full support for export, import and remittance.
Clients do not need any extra procedures or do not get any harassment to deal with foreign exchange business.
In general banking department they fall on the traditional banking system.
Lots of people open FDR account and other savings account because they give more interest compare to other commercial banks and they have one month period FDR facility which is allowed to renew every month.
Most of the customers said loans and advances department takes a long time to process the loan system. This is because there are some rules and regulation of the bank and the Bangladesh Bank.
Interest rate and payback period are very important criteria for any kind of loan but most of the clients are not satisfied to MTB Consumer Credit interest rate and loan payment period. They want lower interest rate and more payment period. Due to the present Government and Bangladesh Bank monetary policy for controlling inflationary rate it is not possible for MTB to reduce interest rate.
In case of use of Management Information Systems- an important determinant of making the banks more competitive, I think the position of Prime Bank is lagging behind in comparison to other private banks, such as Dhaka Bank Limited, Standard Chartered Bank, HSBC that are thought to be its major competitor.
The customers acknowledge that MTB is a regulated financial institution, which operates within the scope of certain regulatory frameworks and laws of Bangladesh and also by the rules, sanctions, boycotts etc. of the international chambers, organizations, UN bodies and other local and international authorities.
Each Import Credit will be irrevocable, issued in a from acceptable to MTB and is a separate transaction from any contract or other dealing between the Customer and any other party in relation to which the Import Credit is issued and in binding on MTB regardless of what may occur.
The customer is solely responsible for ensuring that the terms or requirements in an Import Credit are effective and enforceable and MTB is not responsible.
MTB or its correspondent bank may not notify the customer of any discrepancy in or concerning the documents presented under an Export Credit.
Their overall financial condition is good but they are facing some problem from 2011. The entire graphs which show financial condition are showing that their performance is going downward from the year 2011.
There are Training and Motivational programs are available for the Employees in MTB
Lastly, MTB maintain a good recruitment system through their strong Human Resource Department. 7.2 Some Major Problems Regarding of MTB
•
Limited Number of Investment modes :
This bank re-values its investment operations within limited number of investment modes and does not take quick initiative for new investment modes according to changing diverse need of people. •
A/C maintaining and closing charge is high :
The customer has to pay high maintaining and closing charges against their A/C. •
Lack of Promotional Activities:
MTB has no strong promotional activities to motivate its present and potential investment client. Moreover advertisement activities of MTB regarding investment mechanism and different scheme are not satisfactory. •
Bad Impression of Traditional/Commercial Banking:
Most of the people in our country are Muslim. So lots of people dislike the traditional or commercial banking because of the interest. Reason is interest is totally prohibited by the Islam. So MTB should maintain the province of Islamic banking. Then MTB will able to capture lots of traditional Muslim customer. •
Reluctant of Grant Investment For New Entrepreneurs:
SJIBL is reluctant to grant investment portfolio for new operation and inexperienced manpower in these regards. As a result, there is a large amount of money being idle and thus potential profit is not increasing. •
Disburse Invested Amount as per Banks Appreciation rather than Clients Requirement:
In some sectors like housing, real estate, project (Industry) etc, clients are failed to gain full benefits of investment disbursement because SJIBL disburse total invested amount according to Banks predetermined proportion not as per clients requirement.
Chapter 8 reCommendatIo n 8. Recommendation Through this study I myself gained some practical knowledge about Import & Export business in Bangladesh and other related matter and about the banking system. I want to put some suggestion here which I think if followed would definitely help Mutual Trust bank Limited to promote is import and export business and the banking service there-by its contribution in the whole economy. Recommendations are
To attract more clients Mutual Trust Bank Limited should sought new marketing strategy, which will increase the total export and import business. Customer care policy and new product development is very important for MTBL and they should improve these by providing training. Introduction of various incentives to increase inward remittance. Here behavior and fast service is very important so they need to be polite and keep patient to listen to different types of clients. Attractive incentive package like low service charge, membership system, different types of deposit system and so on for the importer and exporter will help to increase the import and export and accordingly it will diminish the balance of payment gap of Mutual Trust Bank Limited. Effective training is very much essential for the foreign exchange officials. Computerized Banking system and latest communication devices are the most important elements for the coming year. So for a sound and stable foreign exchange operation, Mutual Trust Bank Limited has no alternative but to modernize. Their computers and network system isn’t very high. They should update their computers and make their network system stronger and more secured. Foreign exchange operation of other Bank is more dynamic and less time consuming. Mutual Trust Bank Limited should be armed with modern facility to face the challenge.
In our country, financial problem is a great constraint to foreign trade and Mutual Trust Bank Limited is very mush conservative to post shipment finance. If the Bank took a bit liberal position the exporter could easily come out from financial constraint. Bank can provide foreign market reports, which will enable the exporter to evaluate the demand for their product in foreign countries. Ensure that the training needs and development of staff are identified through the appraisal and supervision system and that the service unit’s plan reflects these needs, in order for them to be considered in the Division’s training plan. Ensure the provision of documents and information as needed to demonstrate the effective implementation of policy and operation of the division in accordance with the relevant performance standards. To achieve service outcomes and outputs, and personal appraisal targets, as agreed with the line manager. MTBL some document like Debit card database, cheque book data base, and other files data base manually. Sometime clients need to wait to collect their cards and cheques. So they should maintain all the data bases by computer to make the services faster. Set up more ATM booths. They can improve their customer service introduced by call center, phone banking, given 24hours banking etc. Customers are not so much aware about different charges. They claim to the bank after debiting their account. MTB can organize lift lets and paper materials to inform them before the imposition of new charges. Marketing strategy should be improved. For the advertising the product, they used normal staffs. They should appoint new employees for this segment. When these employees are for development, the normal official work is hampered. Cash counter should be more systemic; because it’s a question about of security.
MTBL has to be aware of collecting loan money back and they also has to supervise the loan taking party and encourage them to give periodic payment time to time.
They should improve their customer relationship to collect loan money back
They should examine more seriously to know the clients’ financial position and should not focus only relationship with the customers.
They should have an advisor to give suggestion to the customers about which deposit package and loan package is suitable for them and the person will also give advice to the foreign exchange clients.
Service should be given faster. Customer should not wait for long time.
MTBL need to build up strong relationship with customer with all types of customer.
They have lots of opportunities and they should use it carefully.
Lastly, they should not compromise with the quality of employees by taking most of the employees by internal recruitment. They should recruit employee base on quality and ability to provide maximum services to the clients.
Mutual Trust Bank Limited with its strong corporate image and organization strength can successfully utilize the presented based on the findings.
Chapter 9 ConClusIon Conclusion
There are many nationalized commercial bank, Islam Banks and foreign banks working in our country. Among them Mutual Trust Bank Limited is strong in their performing. However, for the future planning and the successful operation for achieving its prime goals in the current competitive time with well growth and performance of foreign exchange operation, this study is supportive guideline. From the practical point of view, this internship has been enjoyed by me at Mutual Trust Bank Limited from the day of beginning. Moreover, internship program which mandatory for completing BBA program, it will be a helpful guideline for my future career. Compared with other banks Mutual Trust Bank is contributing more by their foreign exchange operation. The Mutual Trust Bank is playing an important role in socio-economic development of the country. They are contributing for the state and the society by their Though General banking is the heart of the bank but foreign exchange operation is the key of introducing the home country to host country by trading relationship with others country.
Moreover, Mutual Trust Bank Limited plays a vital role in our economy by foreign trading. After all, growth and performance of foreign exchange operation of Mutual Trust Bank is in sound position in Bangladesh local market with their identification “Committed to Cordial Services”. At last it can be said that, Mutual Trust Bank Limited will be turned into a dynamic Islamic Bank in the country and will expand its Banking Business all over the country to provide the banking services to the groups including the deserving Economic groups of the society who have no easy access to the banking channel. This will help for alleviation of the poverty, income generation, creation of employment, up-gradation of the standard of living of the lower economics groups, which will also contribute to the emancipation of national economy of the country.
APPENDIX The Organizational Structure of MTBL The objective of organizational structure and corporate governance of Mutual Trust Bank Ltd. is to establish a strong, customer- oriented and transparent Management. Corporate Management of MTBL
Chairman Top Management
Vice Chairman Board of Director Managing Director (MD) Deputy Managing Director (DMD)
Senior Executive Vice President (SAVP) Executive Level Management
Executive Vice President (EVP) Senior Vice President (SVP) Senior Asst Vice President (SAVP) Assistant Vice President (AVP) Senior Principal Officer (SPO) Principal Officer (PO)
Mid Level Management
Senior Executive Officer (SEO) Executive Officer (EO)
Senior Officer (SO) Junior Level Management
Management Trainee Officer Junior Officer Assistant Officer Trainee Assistant
Management structure of MTBL
Management Structure of MTBL (In Dhanmondi Branch)
Manager (Branch In-Charge)
Deputy Manager General Banking
Cash In-charge
Receiving Officer
Credit
Paying Officer Teller
Post-sanction (Documentation)
Foreign Exchange
Export
Clearing
Account In-charge
Import Accounts
Pre-sanction (Loaners procedure)
Remittance Officer 1
Customer Service Officer 2
Internship Application Form
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•
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•
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•
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•
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•
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•
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•
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•
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•
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