Lending operation of Mutual Trust Bank Limited

Executive Summary:

Mutual Trust Bank limited a private sector commercial bank. The bank has its head office at Dhaka and 50 branches. The bank conducts all types of commercial banking activities including foreign exchange business and other financial services. The Company carries out international business through a Global Network of Foreign Correspondent Banks. While running orientation with MTBL Principal Branch; generally I was placed in two vital departments, but I have gathered knowledge other department. My placing department is Customer Relationship Management and Credit Appraisal and Credit Management Of Mutual Trust Bank Ltd. Different kinds of experience were gathered while performing the job during the Internship period. During the period of internship there were lots of constrains, but the employee of Mutual Trust Bank Ltd solved it through authentic determination and the proper guidance. Customer Relationship is the starting point of all General banking operations. It is the department, which provides day-to-day services to the customers. General Banking Department comprises of account opening, short collection, remittance, clearing, cash etc. Through this sections the department establishes Banker relationship, collects bills from customers, remit funds of customers from one place to another, honor cheque drawn.  General Banking department provide these service in a faster and better manner. The conventional banking operations MTB strives to introduce an array of products and services and already launched a number of consumer banking products with the aim of popularizing consumer banking operations and offer higher return to its clients. These are :- Saving Deposit, Current Deposit, Fixed Deposit, Short Term Deposit, Brick by Brick Savings Scheme, Monthly Benefit Plan, Children Education Plan, Best Invest Plan, MTBL Millionaire Plan, Festival Saving Plan, MTBL Double Sarver Plan, MTBL Triple Sarver Plan, Unique Saving Plan etc. Mutual Trust Bank online banking offers a customer to deposit or withdraw any sum of money from any branch anywhere.

Bank Credit is an important catalyst for banking about economic development in a country. Without adequate finance, there can be no growth or maintenance of a stable economy. The credit department approves the loans and advances of Corporate Banking division.

The main function is monitoring credit facilities granted by the corporate banking unit. The credit department of MTBL is divided into two parts: SME & Credit. Under SME the credit products are- Consumer Financing, Consumer Loan Scheme, Home Loan Scheme, Home Repair/ Renovation Loan Scheme, Auto Loan Scheme. And in credit, the consumers are offered Continues loan, Term loan, Export Finance. Though Mutual Trust Bank is going well in the market but it faced some problems. To recover this problem I gave some recommendation that will help them to work successfully in the future.

Background of the Study:

Banking sector plays a significant role in achieving the high economic growth of the country. A Bank is a financial Institution whose main aim is to earn profit through accepting deposit of money and making loan and advances. So, the Banking system occupies an important place and plays an important role in a nation’s economy building. Also it plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In recent time this sector over the world has been changing a lot due to regulation, technological innovation, globalization etc. Banking sector in Bangladesh is lagging behind in adopting these changes. To thrive well in this changing environment, not only development of appropriate infrastructure is necessary but also infusion of professionalism into banking service is essential. It should be concerned that one can’t be professional unless it would be engaged in real world business.

A professional is a person who is skilled in the theoretical, scientific and practical aspect of an occupation and who performs with a high degree of competence. It develops professional attitude towards banking business. This sort of financial intermediary accepting deposits and granting loans; offers the widest menu of services for different business ventures. These types of institutions are borrowing public money and offering the credit services as well as growing and more innovating services like investment advice, security undertaking and financial planning. Commercial banks have significantly expanded their financial services to the clients and government around the world.

Banks are one of the key sectors in contributing the development of economy of the global village. In processing the economic development, country requires banking sector to handle efficiently the capital resources to the proper development agencies. People and the government itself are very much dependent due to service providence of the financial market for the process of economic development to function properly. While making a reasonable amount of profit after meeting the cost of fund, commercial banks are mobilizing their funds from one group to another.

The importance of commercial banks are measured in varies ways, such as the bank offers services through payment system, checking accounts, money transfers, credit cards, credit service, foreign exchange service, investment service, electronic service etc. Banking abilities are very much important.

Organizations are the product of human integrity, created to serve one to specific needs of a community, be it a neighborhood, a state, or multiple nations. An organization is a group of people working towards as common objects of providing value to the people served. Business organizations of even modest size created systems to use financial and technical resources to provide products, services, and/or experiences valued by one or more segment of society, including customers, owners, and employees.

Locating and attracting well-qualified individuals to fill vacancies is really a challenging task for the organization. Improved technology and procedures in the recent years accentuated the need for specially trained and educated personnel in the workforce. From skilled tool- makers to senior executives, the demand for qualified human power is increasing day by day. It is becoming critical as business expansions as well as technological development make new demands for the quantity and quality of personnel. An organization cannot survive without the human resources to keep it alive, vigorous and growing.

Organizational culture describes the fundamental assumptions about the organization’s value, beliefs, norms, symbols, language, rituals and myths that give meaning to organizational membership and are collectively accepted by a group as guides to excepted behaviors. As a relatively new concept, organizational culture is open to many interpretations. Some managers think of organizational culture as simple ‘the way we do things around here’ while others believe, it is more complex “set of share value, believes and assumptions that get every one headed in the same directions. Most of the managers agree that when members are aware of the organizational culture, formal controls are less necessary.

Although a few human activities occur without motivation, nearly all-conscious behavior is motivated, or caused. It requires no motivation to grow hair, but getting a haircut does. Eventually, anyone will fall asleep without motivation, but going to bed is a conscious act requiring motivation.

Internal needs and drives tensions that are affected by one’s environment. For example, the need for food products is a tension or hunger. The hungry person then examines the surrounding to see which foods are available to satisfy that hunger. Results occur when motivated employees are provided with the opportunity (such as proper training) to perform and the resources (such as proper tools) to do so.

The presence of goals and the awareness of incentives to satisfy one’s needs are also powerful motivation factors leading to the release of effort.

In this paper we will focus on an organization that are striving and that hire employees to serve the needs of customers or clients. By focusing on serving customers, organizations indirectly help society when they accomplish the purpose for which they were created.

Objective of the Study:

Primary objective:

      To find out the reality in practical life.

      To fulfill the requirement for the completion of graduate (BBA) program.

Secondary Objective:

    To identify the customer service and the credit

    To develop the practical knowledge by the practical orientation of work.

    To build up the pillar of the career for near future.

    To know about the Mutual Trust Bank Ltd (MTBL) operational activities.   

Research Methodology:

Some fundamental steps of research methodology have been adopted through my specialization field of study of BBA program and also from the fields of other areas. In my study I had to go for personal interaction with the organizational people of Mutual Trust Bank Ltd., (Principal Branch) to conduct the research work.

Sources of Information:

Both primary and secondary sources of information were being pursued with regards to the presentations of this study. The following procedure and sources I accessed:

Primary Source:

      Personal observation

      Working at different desks of the bank

      Face to face conversation with other officer

      Face to face conversation with client

Secondary Source:

      Annual report of MTBL 2010.

      Files and Folders

      Statement affairs

      Bank rate sheets

      Progress report of Bank

      Websites

      Different circulars sent by Head Office and Bangladesh Bank

      Some books on Banking

Limitation:

Limitation is a usual part of report analysis. Whenever any report is going on to analysis, there are several lacking to find out the result of the particular topic. To make this report, I am also faced lacking or limitation. These are given below;

v  Three month time is not enough for such an extensive study. It is very difficult to collect all the required information in such short period.

v  MTBL is fully centralized bank and all information is available in head office. Branch gets information when special request is made. Branch employees only know the information that the head office informed.

v  Due to some legal obligation and business secrecy banks are reluctant to provide data. For this reason, the study limits only on the available published data and certain degree of formal and informal interview.

v  A worthwhile study requires the analysis of as much data as possible covering various aspects of the study. But I did not have access to the various types of information about Loans & advances.

v  To protect the organizational loss in regard of maintaining confidentiality some parts of the report are not in depth.

v  I carried out such a study for the first time. So, in-experience is one of the main factors that constituted the limitation of the study.

v  The employees of the bank are so much busy. For that reason I could not collect more information from the Source

An overview of Mutual Trust Bank Limited (MTBL):

“A bank is an establishment which makes to individuals such advantage of money as may be required and safely made and to which individuals entrust money when not needed by them to use.”……Kinlay

Mutual Trust Bank Limited a private sector commercial bank. The bank has its head office at Dhaka and 50 branches. The management of the bank is vested in 13-member board of directors, including representatives of the 3 sponsor firms. The managing director is its chief executive. The bank conducts all types of commercial banking activities including foreign exchange business and other financial services. During the first two years of operations, the bank’s main focus was on the delivery of personalized customer services and expansion of its clientele base.

Mutual Trust Bank started its operation on October 24, 1999 as a private sector bank with an authorized capital of Tk. 995 million and paid up capital of Tk.150 million. The paid up capital of the bank amounted to Tk. 850.40 million as on December 31, 2010. Total capital of the bank as June 31th, 2010 stood at Tk.1114.52 million consisting of shareholders’ equity of Tk. 1504.79 million. The Capital Adequacy Ratio (CAR) of the bank was 11.83% as on June 31, 2010 as against the minimum requirement of 9% indicating a sound capital base of bank.

 Mutual Trust Bank Limited is the growing private sector bank in Bangladesh offering full range of Personal, Corporate, International Trade, Foreign Exchange, Lease Finance and Capital Market Services. Mutual Trust Bank Limited is the preferred choice in banking for friendly and personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments, assuring Excellence in Banking Services.

Background of Mutual Trust Bank Limited

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 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.

(vi)             Any related Financial Services.

The Company (Bank) operates through its Head Office at Dhaka and 54 branches and 3 SME Service Centers. The Company/ Bank carry out international business through a Global Network of Foreign Correspondent Banks.

Mission
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.

Vision
Mutual Trust Bank’s vision is based on a philosophy known as MTB3V. We envision MTB to be:
One of the Best Performing Banks in Bangladesh
The Bank of Choice
A Truly World-class Bank

Capital Base

Authorized Capital:   38, 00,000,000.

Paid up Capital     :   389,026 million

Slogan :You can bank on us

Credit Division

Loans & Advances is the nerve center of a Bank. MTBL have a comprehensive selection of facilities to offer, from a simple personal loan, credit cards, auto loan and overdraft facilities to home loan. MTBL strive to remain competitive and are committed to constantly reviewing both MTBL lending policies and rates to ensure that our customers get the best deals in town.

Mission and Vision for Credit Management of MTBL

MTBL mission is ‘to make as the most preferred bank of the customers by ensuring prompt and quality services with highly motivated and skilled manpower, using updated technology, covering wide range of financial activities, maintaining transparency, accountability and integrity and thereby ensuring a stable and sound financial operational system.

• Extend all types of credit facilities at competitive price with prudence & efficiency
• Offer wide range of financial products
• Encourage loans & advances to productive income generating activities and there by create employment opportunities and improve standard of living of the common people. Loans and advances for productive purpose, which will alleviate poverty, will be given priority.
• Prioritize welfare oriented banking services.
• Diversify lending activities by avoiding undesirable sectoral concentration and ensuring balanced geographical dispersal.
• Design loan operations keeping social and economic and environmental factors in to consideration.
• Attach due importance to consumer credit, personal loan, SME loan and agricultural credit.
• Prefer lending which will be judiciously backed by acceptable security.
• Ensure borrower’s stake in the activity.
• Encourage syndicated/Club financing in prospective/ profitable ventures.
• Invest at reasonable lending rates.
• Monitor and ensure end use of loans/advances for the sanctioned purpose.
• Constantly explore prospective and profitable ventures to achieve institutional and national objectives.
• Prefer short term lending through small and medium enterprises
• Extend credit which would contribute within defined risk limitation to the bank’s achievement of profitable growth and judicious return on the bank’s capital.
• Not to enter in to any speculative uncovered foreign exchange risk in investing/lending fund.

Credit Policy of MTBL

To achieve MTBL goal for maximizing the stakeholders’ value and protect the interest of the depositors as well as to improve asset quality, MTBL will abide by but will not be confined to the following credit principles, which should guide our behavior in our lending decisions:

     Assessment of the customer’s character, integrity and willingness to repay will form basis of lending.

     Customers having capacity and ability to repay shall only be lent

     Possibility of default will be worked out before lending.

     Credit will be extended in the areas, risks of which can be sufficiently understood and managed.

     Independent credit participation in the credit process shall be ensured

     Ethical behavior in all credit activities shall be ensured.

     Encourage pro-activeness in identifying, managing and communicating credit risks.

     Maintain due diligence in ensuring that credit exposures and activities including processing function comply with MTBL requirements as well as requirement of regulatory authority.

     Risk and reward to be optimized.

     Diversified credit portfolio to be built and maintained.

     Credit will normally be financed from customers’ deposits and not out of short-term temporary funds or borrowing from other banks.

     The bank shall offer suitable credit services and products for the market in which it operates.

     Credit will be allowed in a manner which will in no way compromise with the Bank’s standard of excellence and to customers who will not compromise with such standards.

     All credit extension must comply with the requirement of Bank Company Act- 1991 and amendments thereof made from time to time and all the requirements of other regulatory authorities.

     Prevention of extending credit facilities to the CIB black listed persons/entities.

Laws and Norms

All credit operations- processing of credit proposals, sanctioning, documentation, disbursement and follow up to be made in strict compliance with the policy guidelines, existing laws and norms, circulars issued/to be issued by Bangladesh Bank and other competent authorities from time to time.

Lending Guidelines

Þ     MTBL finances in lawful business for lawful purpose in lawful manner.

Þ     MTBL extends credit facilities to individuals, proprietorship concerns, partnership concerns, limited companies-private and public, government organizations, financial institutions, joint ventures, and such other organizations having legal existence and necessary permissions for conducting business in Bangladesh.

Þ     MTBL extends credit facilities only to productive and legitimate business activities, which are socially desirable, nationally important, and financially viable and will avoid lending as far as possible for unproductive purposes and speculative ventures.

Þ     While extending credit facilities MTBL will abide by its Know Your Customer (KYC) policy, anti money-laundering regulations, and will conduct its credit activities within the prescribed regulatory parameters of Bangladesh Bank and Bank Company Act. All statutory requirements outlined in BOI Guidelines, Industrial policy, Export Policy, Import Policy, Transfer of Property Act,  etc. to be strictly followed.

Þ     The intending borrower must have legitimate source of earnings, clear purpose of utilizing loans, specific sources of repayment and capacity to enter in to loan agreement.

Þ     MTBL discourages low net-worth or highly leveraged borrowers.

Þ     Credit proposals will not be unduly influenced by over reliance on the sponsoring principal’s reputation, reported independent means, or their perceived willingness to inject funds into various business enterprises in case of need.  These situations will be discouraged and treated with utmost caution.  Rather, credit proposals and granting of loans will be based on sound fundamentals, supported by a thorough financial and risk analysis.

Þ     MTBL discourages lending against owner’s cheque or pledge of goods

Þ     Satisfactory turnover in the credit operation to be stressed upon.

Þ     MTBL does not generally accept subordinate position to other lenders.

Þ     Tenor of loans to be set rationally matching with cash conversion cycle/cash flows.

Þ     MTBL prefers extending credit facilities within the command areas.

Þ     MTBL prefers extending credit facilities where it has the industry/business knowledge and discourages where highly specialized skills needed to properly evaluate the loan proposals.

Product Range/ Types of Loan Facilities :

MTBL credit products include conventional products like Cash Credit, Secured Overdraft (SOD), Industrial Term Loan, loan General, House Building loan, Bank Guarantee, Letter of Credit, LTR/Bill Purchase/ Back to Back L/C under import/ export finance, Lease Finance, Consumer Credit etc. Large scale Industrial Finance may also be considered under consortium arrangement. A list of MTBL’s credit products are below:

Term Loans: The term of loan is determined on the basis of gestation period of a project generation of income by the use of the loan. Such loans are provided for Farm Machinery, Dairy, Poultry, etc. It is categorized in three segments:

Over Draft (OD)

OD is some kind of advance. In this case, the customer can over draw from his/her current account. There is a limit of overdraw, which is set by the bank. A customer can with draw that much amount of money from their account. For this there is an interest charge on the over draw amount. This facility does not provide for everyone, the bank will provide only those who will fulfill the requirement. It means that only real customer can get this kind of facility.

Cash Credit (Hypo)

It allows to individuals or firm for trading as well as whole-sale purpose or to industries to meet up the working capital requirements against hypothecation of goods as primary security fall under this type of lending. It is a continuous credit. It allowed fewer than two categories:

            1. Commercial Lending

            2. Working Capital

Cash Credit (Pledge)

Financial accommodation to individual/firm for trading as well as whole sale purpose or to industries as working capital against pledge of goods primary security falls under this head of advance. It also a continuous credit and like the above allowed under the categories:

            1. Commercial Lending

            2. Working Capital

Features of different credit

MTB Home Loan :

Planning to own a home is one of life’s most rewarding challenges. Whether it is purchasing a new house or a new apartment, MTB has a wide range of home loan options that can be customized
to your specific need. An experienced, dedicated team of experts and a complete loan package is in place, to meet all your housing finance needs. MTB Home Loan helps you fulfill your dream.

Features:

Loan for residential apartment/house purchase
Loan amounts from BDT 5,00,000 to BDT 1,00,00,000
Loan tenor from 3 to 25 years
Loan amount up to 80% of the property value
Aggregation of co-applicant’s income
Competitive interest rates
Quick and simple processing and approval time
Loan for apartment under construction
Partial or early settlement options available

 MTB Home Equity Loan :

Planning to build/uplift/renovate a home or furnish your home? MTB Home Equity loan provides a packaged financial assistance to individuals for fulfillment of your dream home. It’s time to get your coveted home by MTB Home Equity Loan.

Features:

Loan for house construction, extension, renovation, face upliftment, finishing work
Loan amounts from BDT 5,00,000 to BDT 1,00,00,000
Loan tenor from 3 to 25 years
Loan amount up to 80% of the property value
Financing at different stages of construction work
Partial disbursement facility of approved loan
Aggregation of co-applicant’s income
Competitive interest rates
Quick and simple processing and approval time
Partial or early settlement options available

Auto Loan:

To own a car is everyone’s dream as well as a part of today’s living, which enhances standard and quality of life. Auto Loan scheme has been designed to help materialize your long cherished dream of a car of your own. Purchase of new/ reconditioned cars is allowed under this scheme. Salaried executives, professionals, businessmen, govt. officials or self employed persons are eligible to avail this loan.

Loan amount under this scheme is 70% of car value but maximum of Tk. 20 lac. With the objective of extending financial support to small businessmen, this loan scheme has been introduced. It has been designed to get business loans on easy terms and without any hassle.

Only the genuine business men having entrepreneurship quality and honesty, to run and expand their business smoothly. Maximum loan under the scheme will be up to Tk. 50 lac. No collateral security is required up to Tk. 5 lac. Collateral security is required for loan above 5 lac.

Features
Loan amounts from Tk. 3, 00,000 to Tk. 20, 00,000

   Financing up to 80% of vehicle price

   Flexible repayment of 12 – 60 months

   No hidden charges

   Competitive interest rate

   Easy documentation and quick processing

   Option for early settlement

SMELoan :
MTB Bhaggobati:

Features:

   Loan amount range BDT 1.00 lac to BDT 50.00 lac

   Loan tenure up to 3 years

   Rate of interest 10% p.a (only in case of re-finance from BB)

   Up to BDT 5.00 lac is collateral free

   Easy repayment schedule

   No service charge or hidden charge

   Easy processing

   At least one year of business experience.

Credit Analysis

The division of the bank responsible for analyzing and recommendations on the fate of most loan applications is the credit department. Experience has shown that this department must satisfactorily answer three major questions regarding each loan application:

·                     Is the borrower creditworthy? How do you know?

·                     Can the loan agreement are adequately protected and the customer has a high probability of being able to service the loan without excessive strain?

·                     Can the bank perfect its claim against the assets or earnings of the customer so that, in the event of default, bank funds can be recovered rapidly at low cost and with low risk?

·                     Let’s look in turn at each of these three key issues in the “yes” or “no” decision a bank must make on every loan request.

Is the Borrower Creditworthy?

The question that must be deal with before any other is whether or not the customer can service the loan-that is, pay out the credit when due, with a comfortable margin for error. This usually involves a detailed study of six aspects of the loan application- character, capacity, collateral, conditions, and control. All must be satisfactory for the loan to be a good one from the lender’s point of view.

   Character

The loan officer must be convinced that the customer has a well-defined purpose for requesting bank credit and a serious intention to repay. If the officer is not sure exactly why the customer is requesting a loan, this purpose must be clarified to the bank’s satisfaction.

Responsibility, truthfulness, serious purpose, and serious intention to repay all monies owed make up what a loan officer calls character.

   Capacity

The loan officer must be sure that the customer requesting credit has the authority to request a loan and the legal standing to sign a binding loan agreement. This customer characteristic is known as the capacity to borrow money. For example, in most states a minor (e.g., under age 18 or 21) cannot legally be held responsible for a credit agreement; thus, the bank would have great difficulty collectors on such a loan.

   Collateral

In assessing the collateral aspect of a loan request, the loan officer must ask, does the borrower possess adequate net worth or own enough quality assets to provide adequate support for the loan? The loan officer is particularly sensitive to such features as the age, condition, and degree of specialization of the borrower’s assets.

   Conditions

The loan officer and credit analyst must be aware of recent trends in the borrower’s line of work or industry and how changing economic conditions might affect the loan.

   Control

The last factor in assessing a borrower’s creditworthy status is control which centers on such questions as whether changes in law and regulation could adversely affect the borrower and whether the loan request meets the bank’s and the regulatory authorities’ standards for loan quality.

3.13.2 Can the Loan Agreement Be Properly Structured and documented?

The five Cs of credit aid the loan officer and bank credit analyst in answering the broad question: Is the borrower creditworthy? Once that question is answered, however, a second issue must be faced: Can the proposed loan agreement be structured and documented to satisfy the needs of both borrower and bank?

A properly structured loan agreement must also protect the bank and those it represents- principally its depositors and stockholders- by imposing certain restrictions (covenants) on the borrower’s activities then these activities could threaten the recovery of bank funds. The process of recovering the bank’s funds- when and where the bank can take action to get its funds returned-also must be carefully spelled out in a loan agreement.

Check List for providing the Loan :   

When a customer want take the loan those customers some rules should be followed:

1. Client’s application through their letterhead duly signed and sealed therein
2. Client’s application through Bank’s prescribed from duly signed & sealed in every page.
3. 2 (two) copies of Photograph of the proprietor/guarantors/partners/directors.
4.  Owners(s) declaration in Bank’s prescribed form.
5. Form-Ka duly signed & sealed by the proprietor/partners/directors for obtaining CIB       report from Bangladesh Bank.
6. Board resolution regarding credit facility.
7. Net Worth statement of the proprietor/partners/directors in Bank’s prescribed form.
8. Up to date Trade license, IRC & ERC.
9. Tax clearance certMTBLate & VAT certMTBLate.
10. Permission of Board of Investment, in case of Garments factory & Join venture company.
11. Bio-data of the proprietor/partners/directors with business experience.
12. Memorandum & Articles of Association.
13. Form-XII from RJSC in case of limited company.
14. Certificate of Incorporation, in case of limited company.
15. Certificate of Commencement of Business, in case of Public Limited Company.
    1. Last 3 (three) year’s Financial (Income statements, Balance sheets, Cash flow Statements) of the applicant, in case of existing company.
    2. Project profile, in case of new company.
    3. Stock report.
       1. Brief description of the applicant and its sister concerns regarding nature of business, products of business, sources of raw materials, market channel, production procedure, organization chart, existing & future buyers etc.
       2. Group information & performance i.e., Name and address of sister/allied concerns, nature of business, last year’s sales/turnover, profit, total group debt, total group equity, export-import performance etc.
       3. Group liability with us & other banks.
       4. Total project cost with break-up and list of machinery with origin & price.
       5. Sources & amount of Income & Expenditure, in case of SME & RealEstateCompany.
       6. Security, which will be offered.

Security documents:

i)                    Original Title Deed of the land or Certified copy of Title Deed along with original money receipt.

ii)                  Bia-deed of the land.

iii)                Certified copy of CS, SA, RS & Mahanagar Hal Jarip Parcha.

iv)                Certified copy of Mutation Parcha long with DCR.

v)                  Up to date Ground rent receipt & Municipal tax payment receipt.

vi)                Non Encumbrance Certificate from related Sub-registry Office.

vii)              No Objection Certificate regarding mortgage from RAJUK/ministry of Works/Any other Authority related to the land, in case of need.

viii)            Allotment Letter from RAJUK/Ministry of Works/Any other Authority.

ix)                RAJUK Approved Building’s Plan, Site Plan & Mouza Map.

Credit Approval Process of the MTBL:

The primary factor determining the quality of the bank’s credit portfolio is the ability of each borrower to honor, on a timely basis. All credit comities made to the bank. The authorizing credit personnel prior to credit approval must accurately determine this. If the report of the project appraisal is very satisfactory to approve the loan proposal, than the following steps furnish the approval procedure:

• Make a proposal by the client to the bank
• Give all the necessary documents
• Bank will send the parties statement to the Bangladesh Bank, their CIB (Credit Information Bureau) will inquiry that whether this party is defaulter or a new    one.
• Bank will take the collateral from the party and analysis that how much it will cover the total loans.
• Bank will send this proposal to the head office. In the head office the Board of Directors and Managing Director will approve the loan.
• Head office will send the approval to the branch office.
• Branch office will give the sanction letter to the party.
• Bank will take the security and make it in their favor.

Loan Disbursement

After completing all the necessary steps for sanctioning loans bank will create a loan account by the name of the party and deposit the money to that account. Bank will give cheque books to the party and advise them to draw the money and use it as soon as possible, because whenever the money will transfer to the account interest will count from that time

Analyzing the Year Wise Loan Disbursement by MTB

Table: 03

 From the graph we can say that in the year 2010 the total loan disbursement is 39% (Tk 9738.32 million) to compare with other financial years. In the year 2009the loan disbursement was 28% (Tk 6804.45 million) and in the year 2006, 2007 & 2008 the loan disbursement was 7% (Tk 1603.95 million), 8% (Tk 1897.63 million) & 18% (Tk 4358.31 million). So according to this graph we can easily say that the bank’s loan disbursement is increasing day by day. It is a positive sign for the bank. After establishing the bank, disbursement of loan is not so high because of their inexperience and inadequate loan disbursement policy. Now the bank has an attractive loan policy which attracts the customers. If we see the percentage increase by the year than in the loan disbursement is 39% and in the previous year it was 28%. So the percentage increases by 11% only. In the year 2006 & 2007 the percentage increased by 10%. In compare, the increasing percentage is about to same that is in 2009 the increasing percentage was 11% which is more than 1% in the previous year.It may be the good sign for the bank because the loan disbursement is increasing or steady not decreasing. Bank’s main earning source is loan disbursement, like: interest earning. It is a big part of the bank’s total earning. So the bank should take care in this loan side.

Analyzing the Sector-wise Lending by MTBL (million/Tk)

Table: 04

Operating Profit:

Mutual Trust bank earned an operating profit of Tk. 969.47 million in 2010compared to Tk. 651.85 million in 2009achieving a growth of 48.73%. This growth is a remarkable achievement considering the socio-political environment that prevailed in the country during 2010. After keeping provision on loans and advances Profit Before Tax stood at Tk. 874.47 million. The Net Profit for the year stood at Tk. 478.28 million compared to the previous year’s Tk. 336.17 million. Earning per share (EPS) in 2010 increased Tk. 50.32 registering a 42.27% growth as against Tk. 35.37 during the preceding year. Bank’s Return on Asset (ROA) in 2010 was 1.82% as against

1.74% in 2009.

Conclusion:

As an internee of Mutual trust bank limited I have truly enjoyed my internship from the learning and experience viewpoint. I am confident that this three months internship program at MTBL will definitely help me to realize further career in the job or personal life. Mutual Trust Bank Limited is a very modern bank in the banking business area. It was incorporated in the year 1999. So within this short time the bank already get the popularity in the people and the attractiveness of the bank increase day by day. When this bank starts its operation, their first target customer was the army person, but with the demand of general people the bank is also doing business with the general people.

The bank is spreading its operation through all over the Bangladesh. Recently this bank has 54 branches in all over the Bangladesh. So very recent it will increase their branches to meet up the people’s demand and the process is continuing. The Bank already has shown impressive performance in different financial sector. The bank now should start new services and take different types of marketing strategy to get more customers in this competitive market of banking business.

In its lending operations, the Bank has learnt a lot from its past experiences. Hopefully the MTBL is able to improve in all its areas especially in the lending operations.

We hope that this bank will compete with the first class banks of Bangladesh very soon.