Loans Performance Evaluation of Mutual Trust Bank

The main objectives of this report is to analysis Loans Performance Evaluation of Mutual Trust Bank Limited, Dhanmondi Branch. Other focus subjects are to identify types of Loan given by Mutual Trust Bank and evaluate loan recovery position of the bank in the term of loans performance. Finally identify problems affecting loans performance and suggest recommendation to overcome the problem.

Objective of the Study:

• To Identify types of Loan given by Mutual Trust Bank.
• To asses loan disseverment of the selected bank
• To evaluate loan recovery position of the mutual trust bank
• To identify problems affecting loan performances.
• To suggest to overcome the problem.

The Emergence of Modern Banking:

The word ‘Bank’ originated from Italian word ‘Banca’. Banca means long tool. In ancient time Italian Jews merchant used to do business of lending money by sitting on the tools. It is assumed that the word ‘bank’ derived from the word Banca. To meet the expense of war of 117 one-type credit certificates was launched in Italy at an interest rate of 5%, it was called as Monte in Italian language and Banke in German language then German language was widely used in Italy. As a result the word Banke gradually changed to the word Banca from which the word bank originated.

The linguistics and etymology suggest an interesting story about banking origins. Both the old French word “Bangue” and the Italian word Banca were used centuries ago to mean a bench or moneychangers table. This describes quite well what historians have observed concerning the first bankers, who lived more than 2000 years ago. They were money changers, situated usually at table or in a small shop in the commercial district, aiding travelers who came to town by exchanging foreign coins for local money or discounting commercial notes for a fee in order to supply merchants with working capital.

Most of early bank was Greek in origin. The first bankers probably used their own capital to fund their activities, but it was not long before the idea of attracting deposit and security temporary loan from wealthy customers became a source of bank funding. Loans were then made to merchant’s shippers and landowners at rates of interests low as 6 percent per annum to as high as 48 percent a month for the riskiest ventures.

MTB at a Glance:

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 25 branches. The Company/Bank carries out international business through a Global Network of Foreign Correspondent Banks

Vision:

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

Mission:

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

General Banking:

Customer Service

This department mainly gives service to their customer. The officers of this department always solve the problem of their customer. Provide information and aware people about the products of MTBL are the main jobs of the officers.

The main function of customer service department

• Information provide to the customer about the product.
• Account opening
• Account closing
• Cheque Book issue
• Cheque received
• Pay Order and Pay Clip issue
• Customers attend
• Customers phone call attend
• Give account statement to the customer
• Give account information to the customer

Cash

The Cash Department manages all of incoming and outgoing cash payments.

The main function of cash department

• Receive the money.
• Verified the notes.
• Pay the money.
• When branch need money, this department collect money from principal branch.
• When branch has excess of money, send the money to the principal branch.

Clearing

Collection of cheques, drafts etc. on behalf of its customers is one of the basic function of a commercial bank. The department which performs this function is known as Clearing Department. Clearing stands for mutual settlement of claims made in between member banks at an agrees time and place in respect of instruments drawn on each other within the same clearing house.

Types of Clearing:

• Outward Clearing: Outward clearing means when a particular branch receives instrument drawn on the other bank with in the clearing zone and sends those instruments for collection through the clearing arrangement is considered as outward clearing for that particular branch.
• Inward Clearing: When a particular branch receives instruments which are on themselves and sent by other member bank for collection are treated as inward clearing of that branch.
• Outward Returned: Clearing return (outward) includes those cheques which were presented to us the preceding clearing by other banks but we have to return them unpaid to the collecting bank owing to various reason. Return of the 1^st clearing are exchange in the special clearing.
• Inward Returned: Clearing Returns (inward) consists of those instruments which were presented by us to other banks for payment in the preceding clearing but we have been returned unpaid by them due to one reason or the other through the Clearing House.

Accounts

The accounts department performs daily functions of collecting and accounting for taxes, receipt of grants and other income, preparing deposits, account analysis, payroll, and processing purchase orders, check requests, paying vendors, monitoring and reporting on grants and budgets and various other projects to assist tribal members, staff and directors with accounting administration.

The main function of Accounts is

• Budget Preparation
• Procurement & Payment
• Payroll
• Financial Statements

Account analysis

• Monthly, half yearly and yearly closing
• Interest updated
• vat and tax send to the Head Office
• Daly transfer execute

Credit:

The credit department approves the loan of Corporate Banking division. The approval is mainly based on the risk analysis of the corporate clients done by the Corporate Banking division. The main function is monitoring credit facilities granted by the corporate banking unit. Its function is to make sure that credit has been provided in a right manner. This department ensures that internal controls of the corporate relations are maintained.

The main function of Credit department is,

• To manage MTBL credit portfolio.
• Processing of credit applications and approvals
• Aware people about the credit scheme.
• Credit disbursement
• Investigating and resolving unauthorized deductions
• To encourage loan repayment loan.
• Collecting from billed customers.
• Covering added volumes during crunch periods
• Send the statement to the Head Office.

Foreign Exchange:

The foreign exchange department transfers wherever one currency is traded for another. Foreign exchange held abroad by foreign nationals or foreign business houses, expect to the extent responding earning abroad in respect of business conducted in Bangladesh or service rendered while in Bangladesh.

The main function of Foreign Exchange department is,

• To open import L/C (letter of credit) and make payment their against.
• Verified master L/C and open back to back L/C their against.
• Issue exports L/C.
• Received and payment foreign remittance
• Send all types of statement (foreign exchange related) to Bangladesh Bank.

Consumer Banking:

Their aim to satisfy all clients, regardless of how big or small they may be. Individuals are counseled on the best type of accounts suitable to them such as Current, Savings, Short Term Deposits, Fixed Deposits, Consumer Asset and Liability Products, etc.

Apart from 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.

 Consumer Banking Products are:

• Saving Deposit
• Current Deposit
• Fixed Deposit
• Short Term Deposit
• Brick by Brick Savings Scheme
• Monthly Benefit Plan
• Children Education Plan
• Consumer Credit Scheme
• BestInvest Plan
• MTBL Millionaire Plan
• Festival Saving Plan
• MTBL Double Sarver Plan
• MTBL Triple Sarver Plan
• Unique Saving Plan

Saving Deposit:

Savings accounts are accounts maintained by commercial banks, savings and loan associations, credit unions, and mutual savings banks that pay interest but can not be used directly as money (by, for example, writing a cheque). These accounts let customers set aside a portion of their liquid assets that could be used to make purchases while earning a monetary return.

Account is eligible for individual’s savings, transaction, investment, loans repayment and payroll purpose. Requirement for personal account: savings and access (single) and graduate account.

• AOF: The account opening form (AOF) completed properly.
• Introduction: Duly introduced by an existing accounting holder having satisfactorily relationship with Standard Chartered Bank for at least six months
• Photograph: Two copy of account holder photograph duly signed by introducer.
• Nominee: Signature of nominee on the AOF along with the relevant portion and also with a photo duly attested by applicant.
• Document: Valid passport/ driving license/, voter ID card,/ reference letter by the first class gazette officer and one copy photo of the account holder signed by officer(affidavit is not acceptable), organizational photo ID.(commissioner certificate, certificate from Gazette officer is not acceptable )

Any kind of over writing must be signed by applicant in AOF. Name, father’s name, mother’s name, date of birth, address, have to match with supplied documents. Transaction profile and important document are the essential parts of all account opening.

Sole proprietor, trust, partnership, NGOs:

Requirement:

Completed AOF with sole proprietorship declaration

• Trade License.
• Tin certificate
• Passport of proprietor/ main signatory
• Two copy of photograph
• Company Seal

In case of Partnership all the above mentioned entry in addition with-

• Deed in case of partnership
• Passport of all partners

KYC (Know your customer from which fill up by the officer) required for all partner

Current Deposit:

Current account is an efficient and convenient way of handling their daily finances. A frequent transaction of the account that provides customer convenience and flexibility. Put an end to people’s worries about carrying large sums of money when they need it. In the current account, the account holder does not get any interest on deposit money. The account holder can withdraw and deposit his money any branch of MTBL. The minimum deposit is Tk. 1000 to open a current account.

Requirement for current account and access (single) and graduate account.

• AOF: The account opening form (AOF) completed properly.
• Introduction: Duly introduced by an existing accounting holder having satisfactorily relationship with Standard Chartered Bank for at least six months
• Photograph: Two copy of account holder photograph duly signed by introducer.
• Nominee: Signature of nominee on the AOF along with the relevant portion and also with a photo duly attested by applicant.
• Document: Valid passport/ driving license/, voter ID card,/ reference letter by the first class gazette officer and one copy photo of the account holder signed by officer(affidavit is not acceptable), organizational photo ID.(commissioner certificate, certificate from Gazette officer is not acceptable )

Any kind of over writing must be signed by applicant in AOF. Name, father’s name, mother’s name, date of birth, address, have to match with supplied documents. Transaction profile and important document are the essential parts of all account opening.

Sole proprietor, trust, partnership, NGOs:

Requirement:

Completed AOF with sole proprietorship declaration

• Trade License.
• Tin certificate
• Passport of proprietor/ main signatory
• Two copy of photograph
• Company Seal

In case of Partnership all the above mentioned entry in addition with-

• Deed in case of partnership
• Passport of all partners

KYC (Know your customer from which fill up by the officer) required for all partner

Fixed Deposit:

Fixed deposit is the same as a term or time deposit. Money may be placed with a bank, merchant bank, building society or credit union for a fixed term at a fixed rate of interest which remains unchanged during the period of the deposit. Depositors may have to accept an interest penalty if they break the deposit, ie, ask to take the money out before the agreed period has expired.

If the customers need money before the end of their fixed deposit period, they can withdraw their money. For this purpose, the customer needs to give an application to the branch manager of MTBL. The customer does not get the interest of the fixed deposit; but they get the interest rate of saving deposit. Some charge will cut from the customer as an excise duty and but no service charge will taken. The charges are given below;-

Short Term Deposit:

Short Term Deposit (STD) account convenient customer to way of saving for the future. STD account is any-branch banking solution that gives the customer more service, such as, interest rate on the deposit (6%), affordable minimum balance (Tk. 1000), any branch banking.

Requirement ( Sole proprietor, trust, partnership, NGOs )

Completed AOF with sole proprietorship declaration

• Trade License.
• Tin certificate
• Passport of proprietor/ main signatory
• Two copy of photograph
• Company Seal

In case of Partnership all the above mentioned entry in addition with-

• Deed in case of partnership
• Passport of all partners

KYC (Know your customer from which fill up by the officer) required for all partner

Loan Advantage

The customer can avail loan up to 90% of the deposited amount against lien of this plan will be Tk. 25,000.

Monthly Installment and Saving

Monthly Benefit Plan:

This plan offers you to generate monthly income out of your deposit. It has been designed to help and assist conscious savers from all strata of the society.

Terms and Condition

• Any individual, NGO, Education Institution, Trust, Society etc. may invest their saving in this plan. The customer may open more than one account in the same branch.
• Minimum deposit is Tk. 50,000 or in multiples thereof. There is no upper limit.
• This is a 3 and 5 year plan.
• Monthly installment income will be credited to the depositor’s saving or current account.
• For premature encashment, interest will be paid as per prevailing saving rate but no interest will be paid if encashed with in one year.
• In case of death, deposit will be encashed will applicable interest and paid to nominee(s).

Loan Advantage

The customer can avail loan up to 90% of the deposited amount but minimum loan amount against this plan will be Tk. 25,000.

Deposit & Monthly Income

Children Education Plan:

Education is the backbone of any nation and one of the primary factors of prosperity. An educated nation stands tall in the committee of nations and deserves respect. A child’s education is of prime importance and every parent should ensure and make every effort to get their child educated. This plan will generate savings for the children education. It has been designed to help and assist the people who are concerned about the cost of their children’s education.

Terms and Condition

• Initial deposit of MTBL Education Plan is Tk. 5000 and subsequently monthly installments are Tk.1000 and multiple thereof up to a maximum Tk. 2000.
• Consumer can select a period of 4/7/9 years, depending on his or her convenience.
• Customer is eligible to open more than one account in the same branch.
• Monthly installment of any plan will be debited from customer’s saving or current account as auto transfer arrangement.
• If the customer fail to pay 3 consecutive installments then the plan will cease to function and payment will be made as per as following clause.
• For premature encashment, interest will be paid as per prevailing saving rate but no interest will be paid if encashed with in one year.
• In case of death, deposit will be encashed will applicable interest and paid to nominee(s).

Deposit & Income

Consumer Credit Scheme:

In order to make a significant contribution in the living standards of the people of medium and low income category, Mutual Trust Bank has introduced a scheme called “Consumer Credit Scheme”. With a view to materialize the dreams of those who are unable to make one time investment from their own savings, one can now afford to buy necessary household equipments and thus improve the standard of living.

All sorts of household durables e.g. Television, Refrigerators, Computers, Air Conditioners, Video Cameras, Washing/ Drying Machines and Furniture’s are allowed under this scheme. One can buy Motorcycle too under this programme.
One can repay the loan in equal monthly installment (EMI) with the flexibility of choosing the loan tenure from 12-48 month installments. No collateral security is requiring. Only hypothecation and some other stander documents are needed. MTBL offer the most competitive interest charges will be 14% per month annum. Rates may vary depending on security available.

Loan Amount

• Minimum Tk. 30,000
• Maximum Tk. 300,000 or 6 time of monthly income whichever is lower
• Up to 90% of the price of purchase item

Best Invest Plan:

BestInvest offers efficient high return investment plan. This plan helps one to build up a sizeable income in easy and affordable installments. This plan allows someone to own 5 times the initial invested amount. BestInvest offers two separate and convenient term deposit periods for 4 years and 6 years respectively.

BestInvest is available in units worth Tk.50,000 each. One will invest Tk.10,000 as down payment for purchasing 1 (one) unit and the Bank will provide loan for Tk.40,000. The customer also has the option to buy units in multiples of Tk. 50,000 but maximum up to Tk. 1,00,00,000 (one crore). This is a unique high return plan catering to all income groups.

Deposit & Income(In BDT)

MTBL Millionaire Plan:

Millionaire plan is a monthly saving plan, which will make people a millionaire in a few years.

Terms and Condition

• Any individual, NGO, Education Institution, Trust, Society etc. may invest their saving in this plan. The customer may open more than one account in the same branch.
• Consumer can select a period of 6/8/10/12 years.
• Customer is eligible to open more than one account in the same branch.
• Monthly installment income will be debited from the customer saving or current account.
• For premature encashment, interest will be paid as per prevailing saving rate but no interest will be paid if encashed with in one year.
• In case of death, deposit will be encashed will applicable interest and paid to nominee(s).

Loan Advantage

The customer can avail loan up to 90% of the deposited amount but the facility will be allowed after one year of opening the A/C.

Monthly Installment and Savings

MTBL Double Saver Plan &

MTBL Triple Saver Plan:

MTBL Double Saver Plan is a one time saving scheme, which will provide double the amount of the deposit after six years. MTBL Triple Sever Plan is a saving plan scheme, which will provide the three times of the deposit after eleven years. In both case, the customer will receive a big amount at maturity.

Terms and Condition

• Any individual, NGO, Education Institution, Trust, Society etc. may invest their saving in this plan. The customer may open more than one account in the same branch.
• Minimum deposit would be Tk 10,000 (MTBL Double & Triple Saver Plan) and there is no limit for maximum amount.
• The period of deposit is six years for MTBL Double server plan and eleven years for MTBL Triple server plan.
• After maturity customer can get double and triple times of the deposited amount along with a gift item.
• Customer is eligible to open more than one account in the same branch.
• For premature encashment, interest will be paid as per prevailing saving rate but no interest will be paid if encashed with in one year.
• In case of death, deposit will be encashed will applicable interest and paid to nominee(s).

Loan Advantage

The customer can avail loan up to 90% of the deposited amount but minimum loan amount against these plans will be Tk. 25,000.

Indicative Figures:

Festival Savings Plan:

MTBL Festival Saving plan has been designed to generate saving for religious festival. It will help to prepare and enjoy a happy festival. This plan includes,-

• Eid-ul-Fitr
• Eid-ul-Azha
• Durga Puja
• Christmas Day
• Buddha purnima

Unique saving Plan:

Unique Savings Plan is an any day, any amount savings plan. The beauty of this plan is that a customer can deposit any day, any time and any amount. Unique Savings Plan offers you to deposit any amount of your choice but not less than Tk. 500/- for 3/4/5 years. This is a high income plan with withdrawal facilities. The withdrawal facility will help you at the time of any emergency. Customer can withdraw 50% of the deposited balance for once a month. At maturity you will get a handsome amount.

Foreign Trade:

MTB provides a wide range of banking services to all types of commercial concerns such as Import & Export Finance and Services, Investment Advice, Foreign Remittance and other specialized services as required. Although they are a private commercial Bank, they have a strong global network that helps them to undertake international trade smoothly and efficiently.

Import Business

Mutual Trust Bank supports its customers by providing facilities throughout the import process to ensure smooth running of their business. The facilities are:

• Import Letter of Credit
• Post Import Financing (LIM,LTR etc)
• Import collection services & Shipping Guarantees

Export Business

Mutual Trust Bank offers extra cover to its customers for the entire export process to speed up receipt of proceeds. The facilities are:

• Export Letters of Credit advising
• Pre-shipment Export Financing
• Export documents negotiation
• Letters of Credit confirmation

Remittance

Mutual Trust Bank provides to its customers the following services:

• Inward/ Outward Remittance Services
• TT/ DD Issue
• DD/ Cheque collection
• Endorsements
• Travelers Cheque Issuance

On-line Banking:

Mutual Trust Bank is playing a pioneering role among its competitors in providing real time online banking facilities to its customers. Mutual Trust Bank online banking offers a customer to deposit or withdraw any sum of money from any branch anywhere. Any account holder having a checking account with the bank can avail this service.

The Software

Based on two-tier client-server architecture, the banking software works basically on central server approach providing the fastest possible access time to any client database from any branch as well as updating the transaction. The branch level server keeping the up to date transaction history of the client ensures the offline transaction ability in case of any failure in the remote communication. Using Microsoft’s enterprise version of SQL Server 2000 as data reservoir, the software ensures the highest level of security at application, network, database and operating systems level ascertaining the confidentiality and security of customer’s personal and account’s information.

Hardware
In order to ensure the safety and accessibility of mission critical data, the Central Data Center of Mutual Trust Bank is equipped with the state of the art Servers. The recently procured Dell 6600 Server, powered by 4 Xeon processors (RAID5 volume fault tolerance implemented) has been employed as the primary data reservoir of the bank. As a disaster recovery preparation, they have deployed Dell 4300 series Server as Backup server, powered by 2 Xeon processors, which ensures quick fail over of the primary server and smooth operation of online transactions.
Swift Service:

The Society for Worldwide Interbank Financial Telecommunication or S.W.I.F.T. is a worldwide community. 7,800 financial institutions in 200 countries connected to one another through SWIFT.

In their own word SWIFT “consistently delivers quantifiable business value and proven technical excellence to its members through its comprehensive messaging standards, the security, reliability and ‘five nines’ availability of its messaging platform and its role in advancing STP.

The guiding principles of SWIFT are clear: to offer the financial services industry a common platform of advanced technology and access to shared solutions through which each member can build its competitive edge.

Mutual Trust Bank has already become the member of SWIFT community and has started its operation from March 2004. With introduction of SWIFT, MTB ensures its customers the quickest and most secured financial transaction around the world.

The SWIFT address or BIC of Mutual Trust Bank is: MTBL BD DH

Some Additional Service:

ATM/Debit Card Service

A debit card is a plastic card which provides an alternative payment method to cash when making purchases. Its functionality is more similar to writing a check as the funds are withdrawn directly from either the cardholder’s bank account (often referred to as a check card).

MTBL debit card is start from the 3^rd August. The MTBL customer can use the booth of Duch Bangla bank ltd. Every Debit card has an expiry date. It as well requires replacements. The request for debit card (with prior notification) is dealt by the account service department. Customer collects the card after 5 working days. Customer can easily withdraw cash and make purchases whenever he/she wants using this Debit card.

Statement and certificate preparation

Statement is send to the correspondence address of the account holder in two times a year (June & December). Some time customer need bank statement on urgent basic for some purpose. Then the account holder come to any branch of MTBL and can take the statement. The statement is given when he or she can prove that he or is the account holder or the authorized person of the account holder. He or she can get this statement is office working hour. It is charged from customer’s account.

Account Service

Address change

Customers sometime want to change mailing and permanent address. They have to fill up a form and give supporting documents for address alteration (in case of permanent address change). Supporting documents should be photo id (passport/driving license/ voter id) and one copy of photograph of the account holder is required to change any kinds of account service form. This is free of cost.

Signatory change (Delegation of authority)

Sometime customer wants to add new person or nominee as joint signatory. Customers have to fill up a form and a signatory card where new applicant’s signature (duly attested by him or her), a copy of passport or voter ID or driving license is required.

Signature change

If a customer wants to change his signature he has to provide his previous valid documents (which were supplied at the time of account opening) and a copy of photograph with a complete form.

Account closing

Customers have to surrender his cheque-book at the time of closing or surrendering the account. Closing charge is Tk. 100 for saving account, Tk. 500 for current and STD account and Tk. 1000 for the another scheme.

Account Transfer

Customer can transfer their account from one branch to another branch of MTBL. For this purpose he or she has to submit an application. The new branch opens a new account with a new account number. This transfer takes maximum 3 days. The transfer charge is TK. 200.

Locker Service

Bank provides safety locker service to its customers. Any account holder can obtain it. Account holder needs to fill up a form with specimen signatory card. Signatory may not be more than three. In the form, locker holder must mention the account number from where locker charge will be debited. After clarifications all documents allocation of a locker and key takes place.

Type                Annual charge                      

 Small                      1500

Medium                  2000

Large                              3000

Locker holder can visit the locker any time within 9 a.m to 5 p. m- from Sunday to Thursday. Customers had to sign the visiting record and locker’s custodian verifies it. If any one wants to surrender the locker, he or she needs to surrender the locker key and visit the locker finally with custodian. The manager keeps the key in the volt and reallocates it. If any one lost the key of the locker, he or she has to pay one thousand take as punishment or for the new key.

Credit Management (Loans & Advances):

The credit department approves the loans and advances of Corporate Banking division. The approval is mainly based on the risk analysis of the corporate clients done by the Corporate Banking division. The main function is monitoring credit facilities granted by the corporate banking unit. Its function is to make sure that credit has been provided in a right manner and also ensures that internal controls of the corporate relations are maintained.

Advances by commercial banks are made in different such as loan, cash credit, overdrafts, bills purchased, bills discounted etc. These are generally short-term. Advance may be granted against tangible security or in special deserving cases on an unsecured or clean basis.

In a loan account, the entire amount, the entire amount is paid to the debtor at one time, either in cash or by transfer to the current account. No subsequent debit is ordinarily allowed expect by way of interest, incidental charges, insurance premium, expenses incurred for the protection of the security etc. Sometimes, repayment is providing for by installment without allowing the demand character of the loan to be affected in any way. Interest is charge on the debit balance, usually with quarterly rests unless there is an arrangement to the contrary.  No cheque book is issued. The security may be personal or in the form of shares, debentures, Government papers, immovable property, fixed deposit receipts, life insurance policies, goods etc.

Small & Medium Enterprise (SME):

SME finance in keeping strengthens with the prevailing economic policy of the country. The bank is financing in different sectors of SME sector of the country to a great extent. SME division in MTBL is conducted by two heads or sectors i.e. Small Enterprise Financing and Consumer Financing program in accordance with the prudential regulations or the guidelines of Bangladesh Bank.

Small Enterprise means an entity, ideally not a public limited company, does not employ more than 60 persons (if it is manufacturing concern) and 20 persons (if it is a trading concern) and 30 persons (if it is a service concern) and also fulfills the following criteria:

• Service concern: Total assets Tk. 50,000 to 30 Lac (excluding land & building cost)
• Trading concern: Total assets Tk. 50,000 to 50 Lac (excluding land & building cost)
• Manufacturing concern: Total assets Tk. 50,000 to 1 Crore (excluding land & building cost)

Export Finance:

Export Finance interchangeably to mean the financing that an exporting business requires to help them run their business. The term “Export Financing” is used to mean “foreign buyer financing”, or simply Buyer Financing, or even Buyer Credit. Other synonyms often used are vendor financing or supplier financing.

• Back To Back

Back to Back import L/Cs against export L/Cs received by export oriented industrial units which opening a advise of the beneficiary under the bonded warehouse system.

• Payment Against Document (PAD)

In a Payment against document collection, the documents are released to the buyer/importer upon payment. Thus, the buyer/importer has to pay outright from his own financial resources. Alternatively, the importer may arrange for trade financing from his own banker (in the form of trust receipt, overdraft, loan, etc).

Rate of Interest on Lending:

The sales term or branch staff responsible for loan sales and should be the owner of the customer relationship and must be held responsible to ensure the accuracy of the loan application submitted for approval. They must be familiar with the bank’s Lending Guidelines and should conduct due diligence on new borrowers, purpose of the loan and guarantors.

KYC form to be done by the branch properly and Transaction Profile From to be obtained from the client duly filled in and signed and the same to be preserved carefully.

Monitoring: Branch shall exercise strong monitoring of the credit facility provided to the client and to ensure payment of installment in time.

 Recovery: The collection process for loan will start when the borrower has failed to meet one or more installments.

Network & Software in MTBL:

The Dhanmondi Branch of MTBL is not so big branch. Amount of tasks are directly related with IT. It is an online bank so that all computers of the branch are connected to each other through a server computer. The computer also connected with the main server of Head Office. All departments of the branch use Flora software and for clearing purpose they use NIKASH software.

Flora Software: Flora is in-house banking software. Almost every bank in Bangladesh uses this software. MTBL bought this software from Flora Ltd. Its requirement is WINNT platform. This software is use in every department of the branch; like –front desk, cash, credit, accounts, clearing, foreign exchange etc.

NIKASH software: NIKASH is software which developed for entering and processing of clearing house data. This program is written under FoxPro database program. All banks are using this software for clearing purpose. This operation manual describes the 1^st house menu, receipt menu, payment menu; return house menu, clearing menu, maintenance menu and exit menu to prepare data diskette for clearing house. All necessary code file are include in this software.

• Problem of Online Banking:

The main problem of Digital Data Network is that sometime the link goes down. At that moment the online transaction cannot be executed. The branch office suffers a lot because of this Digital Data Network link interruption.

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:

• Less manpower.
• Less number of branches.
• More focus on Dhaka and Chittagong.
• The company gives online banking service but only cash tractions.
• Deposit is more then the advances.
• MTBL has not that much good market share then the other commercial bank.
• Poor Marketing Strategy.

Opportunity:

• Branch expansion.
• Business expansion.
• They can launch credit card.
• Expanding the company’s product line to meet a broader rage of customer needs.
• Start 24-hour banking.

Threats:

• Other commercial bank and the multi-national companies.
• Political instability and corruption are threatening Bangladesh’s economy.
• Natural disaster.

Observation and Recommendation for Customer service:

• MTBL should include more differentiate product in their consumer product; like- Foreign Currency Deposit Account, Resident Foreign Currency Account etc.
• They can improve their customer service introduced by call center, phone banking, given 24-hours banking etc.
• Customers are not so much aware about different product. MTBL should be concern about it
• Customers are not so much aware about different charges. They claim to the bank after debiting their account. MTBL can organize lift lets and paper materials to inform them before the imposition of new charges.
• Complaint management system is not so good. Bank can set up a complaint box and customer can put the complain letter into the box. At the day end open the box screening the letter and try to solve the problem or send to relevant manager or departments.
• More staffs need in front desk to attend the customers.
• The software, which is used for giving customer service, should be improved.
• 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.
• They can launch credit card as a customer service.

Observation and Recommendation for Credit Management:

• MTBL should include more differentiate product in their consumer credit scheme; like- teacher loan, student loan, doctor credit scheme, personal loan for women etc.
• A good linkage is essential between front desk office & credit office. If a Loan application declines, front office officials face customer queries and dissatisfaction.
• Verification process needs to improve because customers do not want to disclose confidential information to unknown person.
• To encourage loan repayment loan closing fees and early settlement fees need to restructure.
• The management should emphasis more on the time lag between loan disbursement and loan recovery.
• The credit department should expand; like- recovery, valuation etc
• Head office and Branch communication gap should be minimize.
• Loan facility should be increased.
• Loan procedure should be clear and systematic.

Conclusion

It is a great pleasure for me to have practical experience in Mutual Trust Bank Ltd. This internship program is an integral part of BBA student. The main purpose of the report was to focus on the lending services to its valuable customers and the credit management provided by Mutual Trust Bank as comprehensively as possible. Although I did not have much time to learn the whole procedures but it was supportive to understand and gather an initial banking management experience. As the long-term performance of any organization depends on its intake of qualified people and developing them to perform their best as a team, as well as individually.