Chapter one: Introduction 1. 1 Introduction 1. 2 Origin of the report 1. 3 Objectives 1. 4 Methodology 1. 5 Limitation 1. 1 Introduction Internship is a partial requirement of graduation. It offers a great opportunity for any student to get some tremendous and brilliant ideas about the practical field. It is also a challenging experience to prepare Internship Report which increases intellectual abilities as an efficient graduate.

As Banking sector have emerged as the most important player of our economy and they also offer a passionate environment for career development so it was my premier objective since the very beginning of BBA program to accomplish internship in this type of financial institution. A developed banking sector plays a vital role for financial stability of a country. Mercantile Bank Ltd. (MBL) is a national bank with a unique national network. It is trying to expand its operation all over the country. I am very glad for getting the opportunity to accomplish my internship in the Mercantile Bank Ltd. MBL) – Green Road Branch. The internship program was carried on the general banking and credit department. The internship report is based on the Customer satisfaction level collected information through a design questionnaire and the respondents are customers or clients of MBL. During the two months internship period spanning form August 23 to October 18 in Mercantile Bank, I gear the practical knowledge about the products, services and customer satisfaction. The customer satisfaction level includes varous factors like reliablity, assurance, tangibility and responsiveness factors.

Then, the collected infromation is analyzed through graphical method and using the SPSS. The SPSS sofware indentifies the realtionshiop customer staisfaction and the factors. 1. 2 Origin of the report The report has been prepared as a fulfillment of the partial requirement of the internship program as authorized by Faculty of Business Administration and Management (BAM), Patuakhali Science and Technology University (PSTU). The primary goal of the internship program is to provide on the job coverage to the student and an opportunity for translation of theoretical conceptions in real life situation.

Students work as an internee various enterprises, organizations, research institutions as well as development projects. The program covers an overall period of 3 months organizational attachment, with report preparation. 1. 3 Objectives The report prepared on “Customer Satisfaction Level 0f Mercantile Bank Limited- A study on Green Road Branch” has some special objectives. The objectives can be divided in two ways- general and specific objectives. The objectives are shown below- General objectives: This study is conducted to expose the customer’s satisfaction level and know how to provide them better service.

Specific objectives: The specific objectives are as follows- * To describe the general banking function, structure and its procedures, rules and regulation. * To know the existing overall banker’s customer relationship. * To identify specialized functions and characteristics of MBL. * To understand the internal and external environment of the organization. * To indentify the problems those exist in MBL. 1. 4 Methodology Sources of information: Of the two sources of information the present is study is using both the secondary sources and primary sources of information by using- * Annual report of the company. Also related information is collected through internet. * Direct conversation with the officers and executives. * Using a structured questionnaire. * Different brochures and newsletters of MBL. * Observation during the internship periods. Data collection methods: Considering the nature of the study- * The data has been collected trough the structured questionnaire. * Convenience sampling technique is used to collect data from the respondents. * Scaling technique is used like satisfied, highly satisfied, etc. * On the basis of scale in the questionnaire there contains a rank like 5, 4, etc.

Sample size: The sample size of the study is 30. Data collection time: The data is taken from the customers within September 25 to October 10. Factors selection: The prime objective of the report is to identify the customer satisfaction level. For indentify that four factors are using like- * Reliability factors: Determine the level of customer reliability on the bank. * Responsiveness factors: indentify the customers’ opinion about the response shown by the officers and executives. * Assurance factors: Dictates that how much the customers are satiated by the employees and assure about the services whether it is perfect or not. Tangibility factors: Tangibility factors determine that the tangible elements can satisfy the customers or not. * Satisfaction: The satisfaction comes from the summation of ranks provided the respondents on above factors. Data processing: After collecting the related information is analyzed through the use of MS Excel, and SPSS. 1. 5 Limitation Banking is not small activity; it is huge operation so within a short time of internship it is not eligible to know about all sorts of activities of bank. For the so called reason limitations prevail in conducting such type of study.

The limitations exist in this report are as follows- * The bank’s policy of not disclosing some data and information for obvious reasons, which would have been beneficial for preparing the report. * Clients are often too busy; they have not enough time to fill up the questionnaire. * As the bank is continuously changing its product offering regarding Account, Loan with new interest, flexible loan terms etc, so it is difficult to show the true performance of the product. * Statistical analysis comes from the software but the analysis derived from the software may not match with practical situation.

Chapter two: Industry 2. 1 Five forces of banking industry 2. 1 Five Forces of Banking Industry According to this framework, the intensity of competition determines the potential for creating abnormal profits by the firms in an industry. Whether or not potential profits are kept by the industry is determined by bargaining power of the firms in the industry and their customers and suppliers. Five forces analysis of banking industry is given below- Threat for new competitors entering in the industry Threat of substitutes produce by other industry

Rivalry among current competitors in the industry Bargaining power of the industry’s suppliers Bargaining power of the industry’s customers Threat of new entrants- * Economies of scale: The economies of scale of banking industry are low. As the large percentage of cost of banking industry is fixed. So, by the increasing number of customer pre head fixed cost will be decreased, as economies of scale of this industry are low. So, this low economy of scale will attract the new entrant. So, threat will be high. We also observe that the low economies of scale give signal of high profit.

As a result our banking industry is flourishing which is the cause of high threat of new entry. * Product undifferentiated: In the banking industry the product is different types of deposit and loan. The banks belonging to the bank industry more or less provide the same type of product. That means the different banks serve the customers with more or less same types of offerings. So, it can be said that the product is undifferentiated which give the signal of threat of new entrants. * Capital requirements: For entering the banking industry it requires a large capital. So, from this perspective of new entrants is low.

If we consider capita requirement then in Bangladesh banking industry the new entrants will be few. * Customer switching cost: In the banking industry the switching cost is very low as the product is undifferentiated and more or less same types of services. So, customer can get the same satisfaction withal banks. If customers want to shift that will be easy because the switching cost is low. * Incumbents don’t control distribution channels or sources of supplies: In the banking industry we can see that the Bangladesh bank has recently added some rules and regulation regarding the income source of depositors.

So, this incumbent has control distribution channels or sources of supplies in banking industry. From the view of threat of new entrants is low. * Bangladesh bank regulation: Banking industry is totally regulated by Bangladesh bank. To start a new bank it has to face very complicate regulations. The bank must possess Tk. 400 crore of paid up capital and many other restrictions. Power of Buyers: Depositors and borrowers are the major buyers of banking industry. Besides, some customers get other exceptional services like- discounting bills, money drafting, over drafting, credit card service, ATM service, etc.

Bargaining power of the buyers can be measures through the following ways- * Concentration of buyers and volume of purchase: Buyers of banking industry are not much concentrated as there are huge numbers of customer of banks. Though buyers trade on high volumes, buyers markets are not concentrated. * Product undifferentiated: General products of banking industry are undifferentiated. A little bit difference may exist. Maximum services of banks are unique. Interest rate and service charges differ from banks to banks. But these differences are not significant. Buyer’s backward integration: there is weaken threat of backward integration from borrowers but strong from the depositors. Depositors have the scope to invest their fund directly rather to via bank. They can invest in any business, share market or in any other sector and can gain profit, what is their ultimate goal. But it is quite hard for the borrowers to communicate directly with depositors. So, threat from borrower is weak. * Transparency and production of cost: The banking operations are in general transparent. The interest rate of sector, cost of each services, the buyers know investment planning of banks, their ability, etc.

So, the buyers have a clear idea about the productive cost. * Product’s impact on quality of final product: Bank is mainly used as a source of money. Either to increase value of money through depositing or to gain profit by borrowing money. Whatever the job the quality of the goal or product of buyers is not much influenced by the point from where the money comes from. Through the interest rate is different bank to bank; it is not much different to influence the job of buyers. Power of suppliers: Suppliers are directly related to manufacturing industry.

But in banking industry there is no vendor as it is a service oriented industry. For banking industry there is no need of raw materials like the manufacturing industy. So, there is no supplier exaclty like that. But here we can consider necessary commodity that is related to administartion of a bank like- PC, papers, pen, other furniture, etc. But today the most important commodity is software. So, the sources of supply of this commodity can be called be supllier. So, it can be said that the power of suppliers is not only low but also has minimal impact on this industry. Threat of Substitutes:

Few substitute of banking services are available. Other savings institutions, leasing companies, credit unions, pension funds, insurance companies, finance companies and mutual funds are most substitute service source of banks. We justified the following points to measure the threat of the substitute in banking industry- * Profitability of industry of substitute service: Profitability of the substitute institutions is not higher than banking industry. As the substitute industries invest their funds for long run. But bank can invest their money for the short run rapidly.

Also the risks of the substitute industries are higher than the banking industry. Bank also provide some exceptional services like credit card, bill discounting, ATM, etc. * Improvement of substitute services: Substitute services are improving its price and performance. But still they cannot be the perfect substitute of the service of bank. So, the above analysis viewed that the threat of substitute are lower in the banking industry. Intra-industry Rivalry: * No. of competitors: There are a huge number of competitors in the banking industry of Bangladesh.

Now Bangladesh about 49 commercial banks are operating. So, a greater degree of competition exists in this industry, which creates high degree of intra-industry rivalry. * Growth of industry: At a certain point of the life cycle the industry was increasing rapidly. It was after 1995. But now the growth of the industry has almost to a steady rate. As the intra-industry rivalry is fiercest, the industry is growing slowly. * Percentage of fixed cost: Large portion of the banking industry cost is fixed. As the bank providing service to its customer the major elements of the business is related to fixed cost.

It also reflects the high degree of intra-industry rivalry. * Service undifferentiated: Service of all banks is mostly undifferentiated. This unique feature creates rivalry among the industry participants. * Buyers’ switching cost: Customers of the banking industry face comparatively low switching cost while they switch from one bank to another. But still there is a question of efficiency and reliability of the bank to customer about their service. As the switching cost is low, it is a threat to the bank and it creates great rivalry. * Exit barriers: Exit barriers for the banks are not much high.

If the board of bank wants to exit the industry easily it can do it by selling the bank to others. So, the rivalry created by this point is much low. Chapter three: The organization 3. 8 Timeline 3. 9 Organogram 3. 10 Branch location 3. 11 Financial highlights 3. 12 Credit rating report 3. 13 CSR 3. 1 History 3. 2 Vision and Mission 3. 3 Objectives 3. 4 Core Values 3. 5 New Technology 3. 6 Corporate information 3. 7 Functional departments 3. 1 History Mercantile Bank Limited emerged as a new commercial bank to provide efficient banking services and to contribute socio-economic development of the country.

The Bank commenced its operation on June 2, 1999 with an authorized capital of Tk. 800 million divided into 8 million ordinary shares of Tk. 100 each. On 31 December 2001, its paid up capital was Tk. 596. 5 million Mercantile Bank Limited went for public issue of shares on October 21, 2003. The Bank provides a broad range of financial services to its customers and corporate clients. The Board of Directors consists of eminent personalities from the realm of commerce and industries of the country. 3. 2 Vision and Mission Vision: “Would make finest corporate citizen”.

Mission: “Will become most caring, focused for equitable growth based on diversified deployment of resources, and nevertheless would remain healthy and gainfully profitable Bank. ” 3. 3 Objectives Strategic objectives: * To achieve positive Economic Value Added (EVA) each year. * To be market leader in product innovation. * To be one of the top three financial institutions in Bangladesh in terms of cost efficiency. * To be one of the top five financial institutions in Bangladesh in terms of market share in all significant market segment they serve. Financial objective: To achieve 20% return on shareholders’ equity or more, on average 3. 4 Core Values: For the customer- * Providing with caring services by being innovative in the development of new banking product and services. For the shareholder- * Maximizing wealth of the bank. For the employer- * Respecting worth and dignity of individual employees devoting their energies for the progress of the bank For the community- * Strengthening the corporate values and taking environment and social risks and reward into account. 3. 5 New Technology “Adopting the state-of- art technology in banking operations. ”

MBL has adopted the modern technologies to make the services easier and quicker they have introduced online banking and SMS banking services for their customers. They are providing 24 hours banking services to their clients through SMS banking and ATM booths across the country. 3. 6 Corporate information HEAD OFFICE 61, Dilkusjha Commercial Area Dhaka-1000 Phone: +88-02-9559333, 9553892, 9561140 Fax: +88-2-9561213 Swift: MBLBBDDH E-mail: mbl@bol-online. com Website: www. mblbd. com 3. 7 Mercantile Bank’s Functional Departments Mercantile Bank Limited has the following departments, which includes the whole operations of the bank-

ID, IT, Credit, R&D Senior Executive Vice President Senior Vice President First Vice President Assistant Vice President Principal Officer Senior Executive Officer Executive Officer Officer Assistant Officer Trainee Assistant Officer 3. 9 Organogram 3. 10 Branch Location 3. 11 Financial Highlights Particulars| 2006| 2007| 2008| 2009| 2010| Authorized capital| 3000. 00| 3000. 00| 3000. 00| 8000. 00| 8000. 00| Paid up capital| 1199. 12| 1498. 90| 1798. 68 | 2158. 42| 4072. 21| Deposits| 33332. 65 | 39348. 00 | 49538. 36 | 58033. 47| 75629. 14| Loan and Advances| 26842. 14| 31877. 6| 43419. 36 | 48295. 55| 66377. 70| Investments| 5407. 90| 7099. 97| 6264. 71| 9664. 72| 10937. 20| Total assets| 37159. 65| 44940. 54| 55928. 72| 66166. 52| 87140. 11| Interest income| 3498. 67| 4450. 90| 5604. 36| 6741. 69| 7669. 42| Operating income| 1178. 76| 1385. 14| 1581. 51| 1911. 70| 2847. 12| Profit after tax| 494. 22| 540. 50| 615. 88| 807. 52| 1425. 34| Share price (BDT)| 355. 25| 415. 61| 348. 25| 395. 00| 580. 50| Share outstanding (‘000)| 11991. 19| 14988. 98| 17986. 78| 21584. 13| 40722. 01| This table shows the upward growth of the organization year by year.

The strong management and the interest of directors made the growth of the business smooth. Hence, the bank has positioned itself a comparatively better among the other local private banks of the country. The main function of the bank is to mobilize fund from the surplus unit to deposit unit and hence the two main activity of the bank is to collect deposit and disburse loan and advances. When we talk about the performance of bank we must observe the performance on these two activities and the growth and balance of these two activities confirm that how better the bank is performing. Deposits and Deposit Mix:

Now-a day, deposit mobilization has become a challenging task for the commercial banks. In 2010, bank mobilized total deposits of Tk. 75, 629. 14 million compared to that of Tk. 58,033. 47 million up to the end of 2009. The growth rate is 30. 32%. Competitive interest rates, attractive deposit products, deposit mobilization efforts of the bank, superior customer services along with the confidence responded by the customers on the bank contributed to the notable growth in deposits. The bank evolves a number of attractive deposits scheme to carter to the requirement of small and medium savers.

This improves not only the quantum of deposits; but also qualitative changes in deposits. The deposit mix of MBL is shown below- Total Income: Total income increased to Tk. 9,951. 81 million in 2010 from Tk. 8,247. 81 in 2009. Interest is accounted for 77. 07%, exchange gains 5. 75%, commission 6. 32% and others income 10. 86% to total income as against 81. 74%, 6. 93%, 5. 92% and 5. 42% respectively in 2009. The contribution of total income in the year of 2010 is show graphically- Loan and Advances: Total loans and advances of the bank stood at Tk. 66,377. 0 million as on December 31, 2010 against that of Tk. 48,295. 55 million at the end of December 2009. The bank recorded a 37. 44% growth in loans and advances. Major sector where the bank extended credit includes trade and commerce, garment industries, large and medium scale industries, construction, agriculture and related sectors, hospital and medical services, telecommunication, solar energy, effluent treatment, etc. besides, bank continued its support to small and medium enterprise (SME) and extended credit facilities to them through its SME unit.

The total loan and advances of MBL is shown graphically- Asset Portfolio: The bank’s total assets as on December 31, 2010 amounted to Tk. 87,140. 11 million as compared to Tk. 66,166. 52 million at the end of 2009. Among the total assets outstanding in 2010, loan and advances contributed 76. 17%, investments 12. 55%, cash 5. 60%, balances with other banks 1. 04% and other assets 4. 64% as against that of 72. 99%, 14. 62%, 7. 24%, 1. 54% and 3. 61% in end of 2009 respectively. The graph represents the contribution of total assets- Total expense: Total expense of the bank stood at Tk. ,104. 69 million during 2010 as compared to Tk. 6,336. 11 million during 2009. Interest expense accounted for 72. 85%, salaries and allowances 13. 13%, rent, rates, taxes, etc 3. 24%, depreciation and repairs 1. 69%, stationery, printing, and advertisements 1. 64%, postage, stamp, and telecommunication 0. 71% and other expenses 6. 74% of total expenses in 2010 as against 75. 06%, 12. 74%, 2. 91%, 1. 52% 1. 30%, 0. 43% and 6. 04% respectively in 2009. Profit after Tax: Profit after tax or net income of the bank is Tk. 1425. 34 million in the year ending 2010 as compared to Tk. 807. 2 million in 2009. It shows 78% growth in profit after tax. Following graph shows that the net income of MBL is increasing year by year- Return on Assets (ROA): In the following graph the return on assets of MBL is shown. It dictates that the return on asset of MBL is very much consistent and the return is in peak in the year of 2010 (1. 64%). Though, it was around 1. 20% in the year of 2007, 2008 and 2009. 2006 2007 2008 2009 2010 Return on Equity (ROE): The following graph shows the return on equity (ROE) of MBL. It shows that the ROE is highest in 2006 (21. 4%). Then, in the year of 2007, 2008, 2009 and 2010 it was 18. 45%, 17. 75%, 18. 80% and 19. 84% – seems consistent. 2006 2007 2008 2009 2010 3. 12 Credit Rating Report Year| Long Term Rating| Short Term Rating| 2010| AA-| ST-2| 2009| AA-| ST-2| Outlook| Stable| Date of Rating| 29-May-2011| Credit Rating Information and Services Limited (CRISL) has reaffirmed the rating of Mercantile Bank Limited with “AA-” (pronounced as double A minus) in Long Term and reaffirms “ST-2” rating in Short Term based on financials up to December 31, 2010.

MBL’s Long Term Rating has been reaffirmed to “AA-” which implies that the bank is adjudged to be of high quality, offer higher safety and have high quality. This level of rating indicates MBL as a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic condition. The Short Term rating “ST-2” indicates high certainty of timely repayment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. 3. 13 Corporate Social Responsibility:

MBL believes that Corporate Social Responsibility (CSR) is integral and inseparable part of the long-term business and sustainable growth and success, which plays an important role in promoting values both locally and internationally. The Bank integrates all social, environmental and socio-economical issues in the time of its decision making. In line with its slogan- “Banglar Bank” MBL is fully committed to conduct its banking business in an economically, environmentally and socially sustainable manner. Contribution in CSR programs is always supported and encouraged by the Board of Directors of the Bank.

The Management reports to the Board on CSR activities and is responsible to implement a specific line of approving authority, control and monitoring for financial support to such activities. CSR activities have been fully integrated into the business functioning, which ultimately acting as a catalyst to build up an ever-lasting warm relationship with all the stakeholders and society people. The Bank does CSR activities, besides its own fund, through Mercantile Bank Foundation, which acts as a helping hand to the distressed people of the country.

In the table below, sector-wise spending of the Bank for CSR purpose in 2010 has been furnished: Sectors| (BDT in Millions) | Education| 7. 19| Health| 13. 15| Disaster Management | 11. 87| Sports| 7. 88| Art & Culture | 14. 42| Others| 11. 40| Total| 65. 91| Mercantile Bank Foundation-its Objectives and Activities: Mercantile Bank Foundation has been established with an aim to work for the distressed and disabled people. The Foundation has been promoting a dialogue between the Bank and its community people. It has been acting as a mechanism to improve the Bank’s image to the society.

MBL contributes 1% of its Operating Profit or BDT 4. 00 million, which one is maximum; to the Mercantile Bank Foundation every year, and from this amount, the Foundation cares the distressed and disabled people of the country. Objectives: Mercantile Bank Foundation has been formed with the aim of achieving some objectives, which has been furnished below: * To take possible initiatives in increasing social well-being and alleviating poverty from the country. * To support the education by establishing new educational institutions, providing stipends/ scholarship to the poor but brilliant students. To provide awards to the Scholars of various significant arenas for their outstanding contribution. * To assist research activities on Bengali Literature through Bangla Academy. * To Patronizing the writers and publishers by purchasing their books and distributing these two different educational institutions on the occasion of national and historical days. * To assist the unemployed young to make them self-sufficient. * To assist the rootless and distressed orphans through taking appropriate steps for their mental perfection and self support. To support in establishing hospitals, clinics, etc. for the improvement of the health sector, to donate one time financial endowment to the poor artist, literature-patron and fatal disease-affected poor patients, to support the poor father for arranging his daughter’s marriage, to help poor but bright students. Mercantile Bank Award-2010 Since inception, Mercantile Bank Foundation has been awarding Scholars of the country for their outstanding contribution in respective fields. In its continuation, eleven Scholars have been awarded in 2010.

Nurul Islam| Journalism| Abdul Gaffar Choudhury| Agricultural Research and| Shykh Seraj| Development Sports| Rani Hamid| Mercantile Bank Special Award – 2010| Banking and Economy| Muhammad Taheruddin| MBL Foundation for Distressed and Disabled People: MBL Foundation receives requests for financial aid from disabled people, disaster victims and various organizations including educational and professional institutions and charities. In response of these requests, the Foundation comes forward to aid these people and institutions.

Bank’s Responsibilities to Society People: Conducting business in an ethical way, creating opportunities for business and economic growth, empowering people to fulfill their aspirations, ensuring protection of environment while financing businesses and supporting the distressed people of the society are the focal points of the CSR policy of MBL. In discharging the CSR responsibilities, the Bank contributes on the areas of education, health, employment, professional development, art & culture, disaster management and contribution to the national exchequer as well. Disaster Response: MBL always shares the well and woe of the distressed people. It concentrates on addressing the needs of disaster victims. The Bank strives to assist the victims of natural disaster by providing financial help in rehabilitation and rescue purposes. * Donation to “Neemtoli” Tragedy Victims: The Bank strives to assist the victims of natural disaster providing financial support in rehabilitation and rescue purpose. MBL has donated an amount of BDT 5 million to the Prime Minister’s Relief Fund for the victims of devastating fire of Neemtoli of the Old Town of the Capital. Distribution of Winter Clothes among the Poor People: MBL has distributed winter clothes among the distressed people of the cold affected areas of the country. About 20,000 pieces of new winter clothes like Blankets, Shawls, Quilts and Sweaters worth BDT 3. 4 million has been distributed with the co-operation of the Local Peoples’ Representatives in the different cold affected areas of the country. * MBL continues Financial Support to BDR Mutiny-affected Families: BDR mutiny in February, 2009 caused an irretrievable loss to the nation. MBL has widened its arms to share the sufferings of the revolt-affected families.

In continuation of 2009, this year also MBL donated BDT 0. 96 million to two BDR mutiny-affected families and this support will continue up to ten years. * Health and Medical: MBL believes that earning profit is not the only goal; rather it always wants to maximize the social well-being. The Bank provides financial support to different medical and health institutions each year. Apart from institutional support, the Bank also provides financial assistance to individuals for their treatments. * Professional Development: Every year MBL has been supporting the various Professional bodies.

Some professional institutions that MBL donated in 2010 are- * Bangladesh Photojournalists Forum. * The Dhaka University Alumni Association. * The Chittagong Press Club. * Bangladesh Paper Merchants Association. * The Naogaon Press Club. * Bankers Association of Bangladesh. * Education and Learning: MBL is continuing its supports to the education sector as before. Every year, scholarships are provided to the needy but brilliant students of different educational institutions. Children of the employees are also given scholarship for their brilliant results. The Bank also encourages the employees to have professional degrees.

MBL gives opportunities to the employees who wish to get higher studies in abroad. * Art and Culture: As a recognized benefactor of culture, MBL takes some non-profit initiatives every year. Cultural institutions have been donated to organize cultural events in different times. Moreover, the Bank supports the writers, musicians and other performers in their inventive and creative activities. Contribution to the Economy The Bank has contributed to the economy by generating employment of over 1,600 full time employees. It also plays an imperative role in creating job opportunities by financing to the productive sectors.

The Bank recruits a number of fresh graduates and experienced officers every year. In 2010, a total of 293 fresh graduates and 67 experienced bankers have joined with MBL Family. In the intermediation process, the Bank mobilized resources of BDT 75,629. 14 million from the surplus economic unit and deployed BDT 66,377. 70 million in 2010 to deficit group. Following table depicts the Bank’s performance in terms of deposit mobilization, its deployments, international business, inward foreign remittance and employments as at December 31 of 2010 and 2009: Contribution to Economy| 2010| 2009|

Mobilization of Deposit| 75,629. 14| 58,033. 47| Deployment of Loans and| 66,377. 70| 48,295. 55| Advances| | | Export Business| 59,404. 20| 46,298. 60| Import Business| 89,524. 10| 60,592. 50| Inward Foreign Remittance| 5,108. 10| 5,061. 30| Employment (in numbers)| 1,605| 1,200| Figure in Million Contribution to the National Exchequer The Bank plays its responsibility to the Government of Bangladesh paying corporate tax regularly. Each year, 42. 50% Tax is being paid to the National Exchequer from its operation profit. The Bank has made provision of BDT 1,010. 59 million for corporate tax in 2010 against BDT 855. 6 million in 2009. Care for the Environment The whole world is increasingly experiencing the devastating effects of environmental changes for Green House affects due to global warming. The Bank is mindful of its responsibilities to the future generations by playing its part in promoting environmental awareness and in the conservation of the environment. The Bank takes environmental issues very cautiously while financing new projects. It finances only in those projects which are environment-friendly. Early detection of environmental risks is an integral part of credit appraisal system of the Bank.

Ecological damage will sooner or later harm not only the society but also the Bank, in the form of loan losses or image problems. In this regard, the Bank participated by sending its officials in Foreign Training Program on ‘Environmental Issues’. Issue of Green Banking is considering with utmost core in our Bank. Chapter four: Products & Services 4. 6 Deposit scheme 4. 7 Loan and advances 4. 8 Transfer through SWIFT 4. 9 Brokerage house 4. 10 NRB banking 4. 1 General banking 4. 2 Foreign exchange 4. 3 Online banking 4. 4 SMS banking 4. 5 Cards of MBL

Mercantile Bank Limited has offer a broad array of innovative financial services specially designed to match the specific requirement of the client ranging from large corporate houses, small and medium enterprises to private individuals. The team of professionals assists the clients in finding the most appropriate financing package making use of the Bank’s own resources and organizing loan to help the clients realize their short-term goals and long-term aspirations. 4. 1 General Banking The general banking department does the most important and basic works of the bank. All other departments are linked with this department.

It also pays a vital role in deposit mobilization of the branch. MBL provides different types of accounts, locker facilities and special types of saving scheme under general banking. For proper functioning and excellent customer service this department is divided into various sections namely as follows- * Deposit section * Account opening section * Cash section * Bills and clearing section * Remittance section * FDR section * Accounts section Functions of General Banking division- * Account opening * Check book issuing * Signature Scanning * Demand draft issue * Pay order issue * Telephonic Transfer Account enquiry * Providing Accounts Statements. * Solvency certificate issuing * Account transfer * Account closing * Dispatch * Return of Bangladesh Bank and Head office statements General banking division of Mercantile Bank can be divided in following way- * Help desk * Cash department * Clearing section * Accounts section 4. 2 Foreign Exchange Foreign Exchange department facilitate the inflow and outflow of foreign currency exchange by opening export-import L/C. This department also facilitates local L/C. Functions of Foreign Exchange department- Import: * Opening of letter of credit * Advance bills Bills for collection * Import loans and guarantees Export: * Pre-shipment Advances * Purchase of foreign bills * Negotiating of foreign bills * Export guarantees * Advising and conforming letters of credit * Advance for deferred payment export * Advance against bills for collection Remittances: * Issue of D. D, T. T & M. T. * Payment of D. D, T. T, M. T * Issues and encashment traveler’s Cheque * Sale and encashment of foreign currency notes * Non-residence accounts 4. 3 Online banking services To make the process easier, comfortable, not time consuming and secured banks of now-a-days maintain on line banking system.

It was activated in the European and American countries many years ago. But the banks of our country operated it in recent years. So, being one of leading private banks in Bangladesh MBL maintains online banking service. On-line service is now available for all customers of the bank. On-line banking have so far activated with 42 branches. As a result, it saves the time and efforts of the customers. They can easily deposit and withdraw money, transfer money from one place to another place by using online banking facility. Online banking time: * Saturday: 9 AM – 12 AM Sunday – Thursday: 9 AM – PM Transaction limit: * Maximum deposit Tk. 500,000 per transaction and cumulative deposit can’t be more than 1000,000 in a day. * Maximum withdrawal Tk. 500,000 per transaction and cumulative withdrawal can’t be more than 600,000 in a day. Charges of online banking: Intracity (Branches inside the city) transaction is free and Intercity (Branches outside city area) transaction takes charge in the following ways. Amount (Tk. )| Charge (Tk. )| 0 – 100,000| 50| 100,001 – 200,000| 100| 200,001 – 300,000| 150| 300,001 – 400,000| 200| 00,001 – 500,000| 250| 4. 4 SMS banking To make the procedure convenient safe, low-cost, fast and available round the clock MBL launches SMS banking. MBL SMS Banking has following criteria- * Access to account balance * Last 3 transaction inquiry * Cheque leaf status inquiry 4. 5 Cards of MBL * Dual Card (two in one): Single Card with double benefits. No hassle to carry two cards (local and international). A single credit card can be used both locally and internationally to withdraw cash from ATM or POS transaction. This is the special feature of MBL Visa card. Debit Card: Visa debit card is mainly tagged with deposit account (CD/SB/STD) that is automatically debited from the A/C having available balance. Debit card can also be used for purchasing goods, services, payment of utility bills etc as well as withdrawal of cash from ATM. * Pre-Paid Card: Those who have no account with MBL may avail Pre-Paid card facilities. The Pre-Paid cardholders pay first buy later. Pre-Paid card offers the convenience and security of electronic payment in situations where one might otherwise use cash, such as birthday gift or a monthly allowance for a young adult. Examples include gift cards and salary payment etc.

Facilities of the card holder- * Credit Facility: Mercantile Bank Ltd. Visa Credit Card offers maximum 45 days credit facilities free of interest and minimum payment is 5% of outstanding billing amount for easy payment and convenience of the customers. * Supplementary Card: A principal cardholder (local) may apply for more than one supplementary card where one supplementary card is free. Expenses made by supplementary card will be charged to the principal card. * No Cash Withdrawal Fee: For withdrawals of cash from MBL ATM by MBL cardholders no cash advance fee is necessary and from any other Q-cash ATM the fee is Tk. 0 only. MBL is the only bank offering such unique facility. Moreover, our VISA Cardholders can also withdraw cash from any Visa logo ATM locally and internationally. * Acceptability: International/Dual card is accepted all over the world at millions of outlets and ATMs. A Dual card is also accepted in most of the big cities like Dhaka, Chittagong, Khulna, Rajshahi, Sylhet at more than 10,000 outlets including 4500 POS. It covers various kinds of merchants like hospital, hotel, restaurant, department store and the card has accessibility to any outlet having VISA logo. Advance against Credit card: MBL cardholder can take advance as term loan up to 50% of the card limit to be repaid on the monthly installment basis. Any POS transaction over TK. 20000 but not exceeding 50% of the credit limit is convertible to Personal loan/CCS and to be repaid on monthly installment basis. Repayment period of such loan may be from 6 months to 36 months. * Payment Order Facility: MBL Cardholders can (Local Card) can enjoy their full credit limit in the form of Cash through Payment Order. Cardholders can enjoy this interest free facility for up to 45 days.

Hence 1. 1% commission will be charged on total Credit amount for one time. 4. 6 Deposit Scheme Current Deposit (CD): Current Deposit Account is the net flow of current transactions with no restriction. It is an easy-to-use, convenient current account. Current Deposit Accounts are suitable for those customers who need unlimited transactions because of no restriction on withdrawal either in amount or in frequency. * Interest Rate : Nil * Cheque-book facility Current Deposit Account: * Individuals * Two or more persons jointly * Sole Proprietorship Concerns * Partnership Firms Limited Companies (Both Public and Private) * Societies / Clubs / Associations / Local Bodies * Banks * Govt. / Semi Govt. Offices / Corporations / Autonomous bodies * Others Savings Deposit (SD): This account has been designed and developed for savers who want to save their income. There are restrictions of withdrawal in both amount and frequency. Rate of Interest on Savings Deposit: | Rate of Interest | Savings Deposit | 6. 00%| Savings Account may be opened in the name of: * Individual (Single) * Two or more individuals (joint) who are not partners * Minor jointly with Natural / Legal Guardian Clubs / Societies / Associations or Similar Institutions / non-profit organizations Special Notice Deposit (SND): Any individual or corporate body can open Special Notice Deposit Account, which is an interest bearing deposit account, for a short period of time. However, 7 days of notice is required if the customer wishes to withdraw money from this account. Interest rate on SND accounts will be varied based on the amount and not on the customer or tenure. Features and Benefits: * Attractive Interest Rates * Customer has to notify 7 days before withdrawing money. * MICR Cheque Book with every SND account is a must. Minimum Balance Fee : NIL * Incidental Charge Ledger Fee: NIL * Service Charge: NIL * Account Maintenance Fee: Maximum BDT 500. 00 Only (half yearly basis) * Account Closing Fee: Maximum BDT 300. 00 Only Less Than BDT 1 Cr. | BDT 1 Cr. to less than BDT 25 cr. | BDT 25 Cr. to less than BDT 50 Cr. | BDT 50 Cr. to less than BDT 100 Cr. | BDT 100 Cr. and above | 7%| 8%| 9%| 9. 25%| 9. 5%| Fixed Deposit (FDR): Unlike CD, SND and SB account, Branch shall accept deposit of fixed amount of money from the customers for a fixed period of time with interest under the term plan time to time.

FDR is neither Transferable nor Negotiable and as such payment against this instrument with interest shall normally be made to the depositor on maturity. Payment against FDR can also be made to nominee or assignee after observing essential formalities. Fixed Deposit Account can be opened in the name of- * Individual (Single) * Two or more persons (joint) * Sole Proprietorship Concern * Partnership Concern (Firm) * Limited Companies (both Public and Private) * Society / Club / Association / Local Bodies / Govt. / Semi Govt. Organization, etc.

Interest rates of FDR: Period| Interest Rate for Any Amount | 1 Month FDR | 12. 00%| 3 Months to 6 Months FDR| 12. 00%| Above 6 Months to 1 year| 12. 00%| Double benefit deposit scheme: Under this scheme, one can deposit a certain amount of money for a period of seven and half year. After 7. 5 years, the deposit amount will be doubled. Objectives: * Give maximum benefit. * Help in meeting specific needs like education, marriage etc. * Deposit becomes double in six years. Condition: * Tenure of the deposit is 7. 5 years. Quarterly Benefit Deposit Scheme:

The ‘Quarterly Benefit Deposit Scheme’ will be maintained for a period of 3 (three) years and the minimum amount of deposit is BDT 50,000. Interest will be paid on quarterly basis as per example given below. On maturity the principal amount will be paid back. Initial deposit| Term| Quarterly Benefit Payable| 50,000| 3 years| 1500| 100,000| 3 years| 3000| 200,000| 3 years| 6000| Mashik Sanchaya Prokalpa (MSK) Or Monthly Savings Scheme (MSS): The prime objective of this scheme is to encourage the people to develop their habit of saving.

Under this scheme, one can save a fixed amount in every month and get a lucrative amount of return after five, eight or ten years. Objectives: * Build up habit of savings. * Attract small savers. * Saving for rainy days. Condition: * Monthly installment should be made. Benefits: Installments| 5 years| 8 years| 10 years| 500| 20,625 | 40,375 | 57,500 | 1000| 41,250 | 80,750 | 1,15,000 | 1500| 82,500 | 1,61,500 | 2,30,000 | 2000| 1,23,750 | 2,06,250 | 4,12,500 | 2500| 2,42,250 | 4,03,750 | 8,07,500 | 5000| 3,45,000 | 5,75,000 | 11,50,000 | Family Maintenance Deposit Scheme:

Under this scheme, one can deposit a certain amount of money for five years and in return he/she will receive benefits on monthly basis. Benefit start right from the first month of opening an account under the scheme and continue up to five years. On maturity the principal amount will be paid back. Objectives: * Help the retired persons for investing their retirement benefits. * Create investment opportunities for Non-Resident Bangladeshi. * Explore investment opportunities for school, college, university etc. * Give investment opportunities for Trust; Foundation etc. Condition: Deposit a fixed amount of money for 05 (Five) years. * Depositor will get a certain sum of money in each month proportion to his/her deposit during the entire tenure. Benefits: * Tenure of deposit is 05 (Five) years. * Minimum amount of required deposit is TK. 50, 000. Time Benefit Deposit Scheme: Under the ‘1. 5 Times Benefit Deposit Scheme’ a deposit of minimum BDT 50,000 or more will be received for a period of 42 months (3. 5 years). On maturity after 42 months, 1. 5 times of the deposited amount will be paid back to the account holder as per example given below- Initial deposit| Return after 42 months| 0,000| 75,000| 100,000| 150,000| 500,000| 750,000| Advance Benefit Deposit Scheme (ABDS) or Agrim Munafa Amanat Prokolpo (AMAP): Under this Scheme, one can deposit a certain amount of money for two years. The depositor will receive the benefit on yearly basis. The benefit amount of first year will be received in advance at the time of deposit. On maturity, the depositor will get back the principal amount with the benefit amount of second year. Objectives: * Get Extra benefit from minimum Deposit. Condition: * Maintained for a period of 2(Two) years. * Minimum deposit amount 1, 00,000 only.

Initial deposit| Benefits in 1st year| Benefits in 2nd year| 100,000| 11,112| 13,000| 4. 7 Loan and Advances products: 1. Consumer Credit Scheme: Consumers’ Credit Scheme is one of the popular areas of collateral-free finance of the Bank. People with limited income can avail of credit facility to buy household goods including computer and other consumer durables. Objectives: * Help fixed-income people for buying house hold durable. Conditions: * For the amount up to Tk. 1, 00,000 the period is two years. * Interest rate will be charged quarterly rest. * Interest Rate 16%, Risk of fund 1%, and supervision charge 0. 5%. * Application fee Tk. 200. Special Feature: * The loan amount is directly credited to the customer’s account. 2. Small loan scheme: This scheme has been designed especially for the businessmen who need credit facility for their business and can’t provide tangible securities. Objectives: * Extend credit facility to small shopkeepers. * Give collateral-free credit Conditions: * Maximum amount of loan Tk. 2, 00,000. * Interest Rate 16%, Risk of Fund 1% and supervision charge 0. 25%. * Application fee Tk. 200. * Repayment period 3 years & Interest rate will be charged at quarterly. 3.

Small and Medium Enterprise (SME) loan: Small and medium enterprise (SME) loan offered by MBL to provide credit facilities to small and medium size entrepreneurs located in the urban and sub-urban areas to encourage new and educated young entrepreneurs to undertake productive ventures, to assist them to take part in the economic activities. A special credit scheme under the name and style “Small and Medium Enterprise (SME) Scheme” has been introduced to extend credit facilities to the small and medium entrepreneurs of the country. Objectives: * Contribute to the socio-economic development of the country. Encourage small and medium industry especially agro-based industry of the country. * Participate in reduction of poverty through employment generation and income generating projects. * Provide financial assistance to small and medium enterprise, which have limited access to the formal financial markets. Target segments of SME financing: 1. Hospital and Clinics| 11. Plastic and other synthetics | 2. IT business| 12. Entertainment | 3. Agriculture & agriculture development items| 13. Photography| 4. Fishing and fishing business promotion| 14. Transportation and Communication| 5.

This scheme has been designed to assist and encourage the genuine and capable entrepreneurs and professionals for acquiring capital machineries, medical equipments, computers, vehicle and other items. Flexibility and easier terms and conditions of this scheme have attracted the potential entrepreneurs to acquire equipments of production and services and repay gradually from earnings on the basis of ‘Pay as you earn’. Objectives: * Assist and encourage entrepreneurs for acquiring capital machinery, medical equipment, automobiles etc. Condition: * Lease period 3 to 7 years. * Lease rent is 16% and Risk of Fund 1. 0% * Service Charge 0. 25% per year on outstanding balances. Security: * Primary: Ownership of fixed items. * Collateral: Landed property, Bank Guarantee, ICB Unit Certificate etc. 5. Doctors Credit Scheme: Doctors’ Credit Scheme is designed to facilitate financing to fresh medical graduates and established physicians to acquire medical equipments and set up clinics and hospitals. Objectives: * Help new F. C. P. S. or post-graduate doctors for setting up chambers and buying medical equipment. * Help experienced doctors for refurbishing chambers and buying medical equipment. Assist private clinics for acquiring modern medical equipment. * Interest rate will be charged at quarterly rest. Conditions: * Interest rate 16%, risk of fund 1% and service charge 0. 25%. * Repayment period 5 years. * Credit limit: For new doctor 5 lac, experienced doctor 15 lac, and hospital, clinic and diagnostic center 50 Lac. * Application fee Tk. 200. 6. Rural Development Scheme: Rural Development Scheme targeted for the rural people of the country to make them self-employed through financing various income-generating projects. This scheme is operated on group basis.

Objectives: * Raise the standard of living of rural people. * Initiative to break the vicious cycle of poverty. * Enhance the purchasing power of rural people. Group information: * 30 persons in a group including one group leader. * 6 sub-groups consisting 5 persons each in a group. * Each sub-group has a leader. Conditions: * Interest rate 14%, risk of fund 1% and service charge 0. 25% per year. * Repayment period one year. * Group guarantees as security no collateral. * Credit limit: Maximum Tk. 5000 to a person may be gradually increased to Tk. 10,000. 7. Personal loan scheme:

Personal Loan Scheme has been introduced to extend credit facilities to cater the needs of low and middle-income group for any purpose. Government and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations and teachers of recognized public and private schools, colleges and universities are eligible for this loan. Objectives: * Assist and encourage entrepreneurs for acquiring capital machinery, medical equipment, automobiles etc. Conditions: * Lease period 3 to 7 years. * Lease rent 16%, risk of fund 1% and service charge 0. 5% per year. * Ownership of fixed items as primary security. * Landed property, Bank Guarantee, ICB Unit Certificate etc as collateral. 8. Car loan scheme: Car Loan Scheme has been introduced to enable middle-income people to purchase Cars/SUVs/Jeeps. Government and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations, teachers of recognized public and private universities and businessmen are eligible for this loan. Objectives: * Help fixed-income people for buying car. Conditions: * Maximum loan amount is Tk. 25 lacs. Tenure of loan is 5 years. * Interest rate will be charged quarterly basis. * Interest rate 16%, risk of fund 1% and service charge 0. 25% per year. * Tk. 7. 5 lacs for reconditioned jeeps or car or SUVs. * Tk. 25 lacs for new jeeps or car or SUVs. 9. Woman Entrepreneurs Development Scheme Women Entrepreneurs Development Scheme has been introduced to encourage women in doing business. Under this scheme, the Bank finances the small and cottage industry projects sponsored by women. 10. Home Loan Scheme To meet the growing need of housing for middle and lower-middle income people, MBL has introduced Home Loan Scheme.

We also support the Bangladesh Bank’s Home Loan Refinance Scheme. The Scheme boosts up the growth of housing sector. Such loan shall be available for purchase or construction of new apartments for self-residing purpose. 11. Overseas Employment Loan Scheme Overseas Employment Loan Scheme is designed to facilitate the Bangladeshi youths seeking employment aboard but who are unable to meet the expenses to reach the workplace from their own sources. Objectives: * To promote skilled or semi-skilled manpower to different countries across the world as well as to provide support to Government Policy considering priority of this sector. By availing loan under this scheme, the active youths of middle and lower middle class can get overseas employment by avoiding borrowing from the illustrious class or village ‘MOHAJON’ at a very high cost or selling their paternal properties. * The scheme helps fetching foreign currency for the country as well as fulfills the Bank’s commitment to encourage micro-lending for poverty alleviation, improve the quality of life and thereby contribute to socio-economic development of the country. 4. 8 Transfer trough SWIFT

MBL is offering high quality products and services at a competitive rate. Why Mercantile Bank Brokerage House: * Professionally trained staffs are engaged. * Chosen as the preferred broker by most foreign/international and high-net worth investors. * Corporate member of Dhaka Stock Exchange. * Depository Participant (DP) of Central Depository Bangladesh Ltd. * Margin Loan facilities. * Maintains International. * MBL has a strong commitment to its corporate, institutional and individual clients. Brokerage Services * Trade execution Executive dealings through dedicated and skilled Authorized Representatives. * Counseling on investments in different financial instruments. * Asset allocation advice. Functions: * BO (beneficiary Owner) account opening and maintenance. * Dematerialization (the process of conversion of physical script to script-less to the CDBL part of the company register). * Re-Materialization. * Freeze (freeze request and release request) and suspensions. * Transfers and multiple accounts movement. * Pledging, un-pledging and confiscation. * Corporate events announcement inquiry (Cash and Non Cash). BO ISIN (balance and master maintenance inquiry). Fees & Charges: * Brokerage services: Brokerage fee of 0. 20% to 1% (negotiable) * CDBL Charges (at actual) * Custodial services (at actual) * Free advisory service is offered as & when required. 4. 10 NRB Banking Services MBL has established separate NRB Division with a good team of professionals for ensuring better services to the expatriates and their families. They are marching ahead in terms of technology, quality service, efficiency & market value although tough competition exists in the market. Features: 1.

Channelizing Foreign Remittance (Inward & Outward)- * Prompt delivery of remittance to the beneficiaries without service charges/deducting any amount. * Instant Cash payment over the counter against proper identification & Secret Pin. * Online account credit to those who have accounts with Mercantile Bank branches. * Account credit within 72 hours those who have accounts with third banks. * Remittance services through mobile money transfer (up-coming shortly). * Remittance services through NGO networks (up-coming shortly). 2. Attract NRBs & their families to our different accounts/Deposit Schemes- * F.

C (foreign currency) Account * Wage Earners Development Bond * U. S Dollar Investment Bond * U. S Dollar Premium Bond * N. F. C. D (Non Resident Foreign Currency Deposit) Account * Family Maintenance Deposit Account * Double Benefit Deposit Scheme * Monthly Benefit Deposit scheme * Advance Benefit Deposit Scheme 3. Other Features- * Consultancy services to the NRBs so that they can get maximum return. * Focus on serving the emerging needs of NRBs. * Providing extensive services to the families of NRBs as CSR of the Bank. Chapter five: Learning as a Student 5. General responsibilities 5. 2 Specific responsibilities 5. 3 Aspects of performance 5. 4 Critical observations Internship is a program which meets the requirement like practical orientation, concept building about corporate culture, coping with corporate culture, makes student eligible to work, and maintenance of good relationship with corporate peoples so that they can be used as references. In the Universities student familiar with only theoretical concepts to give them practical orientation internship is inevitable. During my internship program in Mercantile Bank Ltd. I’ve learnt lot of things that can be expressed in words. I try to give you a short look what are the duties and responsibilities I’ve performed. 5. 1 General responsibilities: Responsible for performing a variety of duties to support the customer service function the branch; coordinating work within the department, as well as with other departments; reporting pertinent information to the managers; responding to inquiries or requests for information. 5. 2 Specific responsibilities: As an intern I’m not eligible to do important tasks, mostly I’ve observed the tasks of the officers and executives.

From this observation I’ve lot of learnt lot of things about corporate culture. The very few activities I’m adequate to perform are as follows- * Voucher sorting: This is the very first thing I’ve to do. To match the voucher with its category of cash, clearing, and transfer it is essential. The total debit or credit of either cash, clearing or transfer should be matched with scroll total. After matching it should be checked that all the vouchers are signed by the officers, supplements are signed by the officers, cancelation of the cheques, and at last organized the vouchers as per clean cash report. Maintenance of voucher registrar: After voucher sorting it the total of each section of cash, clearing and transfer should be posted in voucher registrar. * Preparing the vouchers like salary voucher, conveyance voucher, refreshment voucher, etc. * Receiving clearing cheques from the clients: The checks of other banks which will go for clearing in Bangladesh Bank. * Maintenance of transfer registers. * Reporting to the managers about inward cheques. * Upholding the inward register. * Responding to IBCA (Inter Branch Credit Advice) or IBDA (Inter Branch Debit Advice). Matching the vouchers as per supplements at the day end. * Maintenance of cash receipt register. 5. 3 Different aspects of performance: As an intern in Mercantile Bank Ltd- Green Road Branch I’ve started my journey in clearing and accounts section. In the internship period I’ve passed my most of days in these sections. I’ve also worked some days in credit section. In this department, I have learnt

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