Nature of the job at Foreign Exchange Department Mutual Trust Bank
In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial bank with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly Mutual Trust Bank Ltd. was created and commencement of business started on September 29, 1999. The sponsors are reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile and finance to energy, etc. As a fully licensed commercial bank, Mutual Trust Bank Ltd. is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and it repositions itself in the changed market condition.
Mutual Trust Bank Ltd has already made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country. It has already occupied an enviable position among its competitors after achieving success in most of the areas of business operation.
Mutual Trust Bank Ltd, a new generation private commercial bank strives to consolidate its position among the top banks in the country by offering competitive services and products. It was incorporated in Bangladesh in the year 1999 as a banking company under the Companies Act, 1994. All types of commercial banking services are provided by the bank within the stipulations laid down by the Bank Companies Act 1991and as directives received from Bangladesh Bank from time to time.
The bank has now 86 branches and 14 SME (Small and Medium sized Enterprises) service centers. The Bank operates through its Head Office situated in the Gulshan area of Dhaka. They are also looking forward to ten more branches and five more SME service centres to be added by the end of this year.
The bank carries out international operations through a global network of foreign correspondents banks. MTBL is also a member of SWIFT community as well. Their real time online banking facilities gave them a pioneer role among its competitors.
The bank floated its shares in 2003 to the general public and was subsequently listed with Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd.
As envisaged in the Memorandum of Association and as licensed by the Bangladesh Bank under the provisions of the Companies Act 1991, MTBL started its banking operations 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.
It started its operations on 24 October 1999 with an authorized and paid up capital of Tk 1,000 million and Tk 200 million respectively. The capital is divided into ordinary shares of Tk 100 each. Soon in December 2000, the bank total equity and reserve funds grew to Tk 208.48 million and Tk 8.48 million respectively.
The bank is a Bangladeshi joint venture company with equity participation from Advanced Chemical Industries Ltd., East West Properties Development Ltd. and Associated Builders Corporation Ltd. Previously the bank had its head office at Dhaka and started with only 4 branches. The total number of employees of the bank was 68.
The management of the bank was vested in an 18-member board of directors, including representatives of the 3 sponsor firms. The managing director is its chief executive.
Though at present the bank conducts all types of commercial banking activities including foreign exchange business and other financial services, during the first two years of operations, the bank’s main focus was only on the delivery of personalized customer services and expansion of its clientele base.
On 31 December 2000, the total deposits of the bank stood at Tk 1,673.63 million. The deposit-mix comprised short-term deposits, savings deposits, current deposits, fixed deposits, deposits under special schemes and other deposits. In 2000, the bank introduced two deposit products in the market namely, Save Every Day and Brick by Brick. These two schemes attracted huge pool of depositors into the new bank due to its special features.
Total loans and advances of the bank stood at Tk 602.32 million on 31 December 2000. Trade finance was the main focus of lending but import and export finance as well as working capital finance for industrial units was also major lending areas. In its lending policy, the bank gave priority to the private sector and it is the same as yet. It introduced consumer credit facilities for the professionals, service holders, students, and teachers to help them improve their standard of life. However MTBL had no classified loan upto the end of 2000.
During 2000, its foreign exchange business amounted to Tk 2,071.57 million, which comprised imports servicing (Tk 1,533.80 million), exports financing (Tk 507.34 million), and remittance facilities (Tk 30.43 million). The bank established correspondent relationships with 14 reputed banks at various foreign financial centers.
In December 2000, the total assets of the bank were valued at Tk 2,444.79 million. Assets sprung from offbalance-sheet items were Tk 446.7 million which changed the total financial look of the firm. The bank earned a good amount of interest incomes through treasury functions and by timely placement of surplus funds in call money market.
During 2000, the total operating income of the bank was Tk 178.20 million and its operating expenses were Tk 158.02 million which resulted in operating profits of Tk 20.18 million.
The net profit after tax had been divided as follows. Tk 2.80 million was transferred to Statutory Reserves and the remaining Tk 5.59 million to General Reserves. ―The bank reached break even within only 67 days after it commenced business.
The objective of the Mutual Trust Bank Limited is specific and targeted to its vision and to position itself in the mindset of the people as ‗a bank with difference‘. And to bring its objectives to reality they have arranged to devote in the following issues. They are:
- To mobilize the savings and channeling it out as loan or advance as the company approve.
- To establish, maintain, carry on, transact and undertake all kinds of investment and financial business including underwriting, managing and distributing the issue of stocks, debentures, and other securities.
- To finance the international trade both in import and export.
- To carry on the foreign exchange business, including buying and selling of foreign currency, traveler‘s cheques issuing, international credit card issuance etc.
- To develop the standard of living of the limited income group by providing Consumer Credit.
- To finance the industry, trade and commerce in both the conventional way and by offering customer friendly credit service.
- To encourage the new entrepreneurs for investment and thus to develop the country‘s industry sector and contribute to the economic development.
We aspire to be the most admired financial institution in the country, recognized as dynamic, innovative and client focused company that offers an array of products and services in the search of excellence and to create an impressive economic value.
To be the bank of first choice by creating exceptional value for our client, investors and employees.
STRUCTURE OF MTBL
The organization structure and corporate of Mutual Trust Bank Limited (MTBL) strongly reflects its determination to establish, uphold and gain a stronger footing as an organization which is customer-oriented and transparent in its management.
The Bank is being managed by highly professional people having wide experience in domestic and international Banking.
The present Managing Director Mr. Anis A Khan has long experience in domestic and international Banking.
The Bank has made significant process within a very short time due to its very competent Board of Directors, dynamic management and introduction of various customer friendly deposit and loan products.
Board of Directors
In Mutual Trust Bank Limited, the board of directors has been conceived as the sources of all power headed by its chairman. It is the legislative body of the bank board can delegate its power and authority to professionals, but cannot delegate, relinquish or avoid their responsibilities. The board of directors of the bank consists of 13 members who are reputed business personalities and leading industrialists of the country
TYPES OF COMMITTEES
The Board of Directors who also decides on the composition of each committee determines the responsibilities of each committee.
All routine matter beyond delegated powers of management are decided upon by or routed through the Executive Committee, subject to ratification by the Board of Directors.
All mater relating to the principles, policies, rules, and regulation, ethics etc. for operation and management of the bank are recommended by the Committee to the Board of Directors.
The management of the bank is vastly on a Board of Directors, for overall supervision and directions on policy matters by the board. The power of general supervision and control of the affairs of the bank is exercised by the president and managing director of the bank who is also the chief executive officer of MTBL. Above all, the bank will be manned and managed by a galaxy of talented professionals proficient in their individual fields and dedicated to the cause of the bank.
It would be very difficult to control the system effectively, if the jobs are not organized considering their interrelationship and are not allocated in a particular department. If the departments are not fitted for the particular works there would be random situation and the performance of a particular department would not be measured. Mutual Trust Bank Limited has done this work very well. There are –
- MDs Secretariat
- Board Division
- Internal Control & Compliance Division
- ICC Audit Department
- ICC Compliance Unit
- ICC Monitoring Unit
- Human resource Division
- General Services Division
- Security & Printing Stationery
- Financial Administration Division
- Reconciliation Department
- MIS Department
- Credit Division
- CIB Department
- Syndication Department
- Credit Processing & Approval
- International Division
- Correspondent Banking Dept.
- Remittance Department
- SWIFT Department
- Merchant Banking Division
- Card Division
- SME Division
- Treasury Department
Banking Operations Department
- Anti Money Laundering
- Test Key Department
- Corporate Banking Department
- Credit Administration Department
- Credit Monitoring Cell
- Credit Recovery Cell
- ID Department
- Business Development& Marketing
- Public Relations Department
- Share Department
- Engineering Department
- Training Institute
ARRAYS OF SERVICES OF MTBL
―We aim to satisfy all clients, regardless of how big or small they may be – this is the motto of consumer banking sectors ‘officials of MTBL. 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. The most popular schemes offered are:
- Brick by Brick Savings Scheme 2. Monthly Benefit Plan 3. Save Everyday Plan 4. Children‘s Education Plan 5. Consumer Credit Scheme 6. Best Invest Plan
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 we are a private commercial Bank, we have a strong global network that helps us to undertake international trade smoothly and efficiently.
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
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
Mutual Trust Bank provides to its customers the following services:
- Inward/ Outward Remittance Services
- TT/ DD Issue
- DD/ Cheque collection
- Travelers Cheque Issuance
The objective of our correspondent banking operations is to strengthen our existing relationships with foreign banks and financial institutions around the globe as well as exploring new relationships. In addition to that, we provide assistance in marketing the products of the correspondent banks.
At present MTB is maintaining relationships with 30 (thirty) foreign correspondents and the number is growing every day. Currently the bank has 18 (eighteen) NOSTRO A/Cs with large foreign banks abroad. The bank is a “SWIFT” member and its Bank Identification Number or BIC is ‘MTBL BDDH’
The Internet has brought about a revolutionary change in the world leading to convergence of communication and computing technologies. In order to provide round the clock and up to date information on the Bank to the trade and business communities worldwide, the IT Team of Mutual Trust Bank Limited has developed a web for the Bank. It can be accessed under the domain name: www.mutualtrustbank.com
The Bank has become the member of SWIFT Alliance Access, a multi-branch secure financial messaging system provided by the Society for Worldwide Inter-bank Financial Telecommunication [SWIFT], Belgium. With the activation of the SWIFT system the Bank enjoys instant, low-cost, speedy and reliable connectivity for L/C transaction, fund transfers, message communication and other worldwide financial activities.
MUTUAL TRUST INTERNATIONAL TRADE SERVICE
Mutual Trust International Trade Service started its journey at July 1, 2011 by MITS Dhaka center. It is a trade service division of Mutual Trust Bank Ltd. Here all types of foreign activities and foreign banking activities are performed. MITS of Mutual Trust Bank Limited plays a very important role in effecting foreign exchange transaction of a country. Mainly transaction with overseas countries is respect of export and import comes under the preview. Foreign exchange affected, central bank records all sorts of foreign exchange transaction and therefore, transaction effected by the Mutual Trust Bank Limited. MITS plays a vital role to earn bank’s maximum profit. This department is classified according to their activities.
Definition of L/C:
L/C is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover full or remaining amount of purchase.
It is a promise by buyer’s bank to seller’s or exporter bank that buyer’s bank will honour the invoice presented by the exporter on due date and make payment.
At present L/C is not just an instrument of international trade but it is a source of income of any profitable financial institution like Bank. Any reputed and well known institution can operate this activity as their regular activity.
Types of Letters of Credit:
Commercial Letters of Credit:
Commercial letters of credit are mainly used as a primary payment tool in international trade such as exporting and importing transactions. Majority of commercial letters of credit are issued subject to the latest version of UCP (Uniform Customs and Practice for Documentary Credits). The ICC publishes UCP, which are the set of rules that governs the commercial letters of credit procedures.
Standby Letters of Credit:
Commercial letters of credit are a means of payment to be utilized when the principal perform its duties. As an example, let us consider an exporter who ships the goods according to the sales contract and apply to the nominated bank for the payment. If the nominated bank decides that the presentation is conforming to the terms and conditions of the credit and the UCP rules then exporter will be paid. This situation is just contrary in standby letters of credit. Standby letters of credit have their own rules, which are called The International Standby Practices 1998 (ISP98).
Revocable Letters of Credit:
Revocable letters of credit give issuer the amendment or cancellation right of the credit any time without prior notice to the beneficiary. Since revocable letters of credit do not provide any protection to the beneficiary, they are not used frequently.
Irrevocable Letters of Credit
Irrevocable Letters of Credit cannot be amended or cancelled without the agreement of the credit parties. Unconfirmed irrevocable letters of credit cannot be modified without the written consent of both the issuing bank and the beneficiary. Confirmed irrevocable letters of credit need also confirming bank’s written consent in order any modification or cancellation to be effective.
Back-to-back Letter of Credit:
The beneficiary of the export credit, who is not the manufacturer of the goods, may approach a bank to open a letter of credit in favour of the manufacturer who is ready to supply the goods. Such a letter of credit is opened on the strength of the export letter of credit and hence called back-to-back letter of credit. Such a documentary credit should be opened on behalf of the good exporters and suppliers.
Common Mistakes Made With Letters Of Credit:
Exporters make the following common mistakes, which cause them to lose the sale or not get paid.
- Presenting documents after the letter of credit has expired.
- Shipping their goods after the specified date.
- Making a partial shipment when partial shipment is not allowed.
- Not presenting the proper documents.
- Not legalizing the documents.
- Not obtaining completed bills of lading.
- Not obtaining required insurance.
- Submitting copies instead of originals.
- Spelling mistakes.
- Mathematical mistakes.
Documentary Collection against L/C Payment:
Documentary collection against payment is the closest international equivalent to cash on delivery.
- It is not as expensive as a letter of credit.
- The seller must ship before getting paid.
- The buyer does not receive the goods until payment is made.
- The buyer receives the goods after signing a note promising to pay.
- This promissory note may be negotiable.
Risk with this form of payment:
The buyer may not contact the collecting bank to acknowledge acceptance.
The collecting bank is under no obligation to force such an acknowledgement.
Nature of the job at Foreign Exchange Department:
One of the most important parts in MTBL Gulshan Corporate Branch is Foreign Exchange Department that deals with import, export, foreign remittance and post import financing. During my internship period I was placed in import and export section. My responsibilities are mentioned below:
My Core responsibilities:
- How to behave with other official.
- How to control own self toward the customer.
- How to adjust with the corporate culture.
- What are the rules and regulation of banking, foreign operations.
- Necessity of commitment.
- Punctuality and regularity is very important
- Ability to interact with different sorts of people.
My Specific responsibilities:
Opening Back to back L/C: Back-to-Back L/C is a secondary L/C opened by the seller’s Bank based on the original/master L/C to purchase the raw materials and accessories for manufacturing of the export products required by the seller.
Payment Instruction: This is a universal system allowing importer’s bank to pass on a payment order drawn on to the receiving bank of different country for execution. For giving import payments from foreign banks, Payment Instruction is mandatory.
IMP Report: At the end of each month every commercial bank sent a report to Bangladesh Bank on the basis of their import payment during the whole month.
DIFFERENT ASPECTS OF JOB PERFORMANCE:
During my three month internship period, I was assigned for different types of task and activities.
At MTBL I was assigned Foreign exchange department, over there a t first I was assigned for L/C openings. I fill up L/C opening forms on behalf of clients, receiving the documents, input in the register and finally input in the Bangladesh bank system.
Next, I was assigned for L/C acceptance. Here I also receive the documents for acceptance, input in the register and system, follow the company instruction and procedure regarding making bill and charging and finally, input in the Bangladesh bank system.
Besides, I was assigned for Payment section. Here I received Documents make bill and give payment. Finally, input in the Bangladesh bank system.
As a finance student, I always prefer to do a job in a financial organization. So, obviously banks get the first priority to me. An internship in a bank, like MTBL is a great way to demonstrate interest in the sector and for me to learn more about the actual job I would be doing on a routine basis.
During internship period, employees of MTBL were very supportive & always helped me to learn. But it was not possible for me to know about all the departments within 3 months.
In the follows I found out some problem over in the TBL as critical Observation, and some recommendation regarding the observation:
Critical observations and recommendations:
During my internship I observed that work load in foreign exchange and trade department at Gulshan Branch was more than compared to the number of working employees. As their work pressure was being doubled, so motivational levels of those employees were getting down. So, the authority is required to be a little careful about their employees. May be their current policy is not to recruit any new employee, but they can solve this situation by transferring employees from other departments. Otherwise the motivation level of the employee will be low.
In MTBL Gulshan MITS Branch, the management is not so strict about punctuality. As a result, the tendency of being not on time is growing among employees. To change this practice management may need to be a little harsh about their rules and regulation.
These things should immediate to be changed:
- Management should increase the number of employees at MITS.
- Improve better operating systems, software and Intra Networking System.
- Improve the management of document and file reservation. And improve the file searching system
- Increase the number of office stuff.
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. Mutual Trust Bank Limited (MTBL) is a third generation private commercial bank in the country with commendable operating performance directed by the mission to provide prompt and different services to clients. It provides a wide range of commercial banking services MTBL has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience, commendable knowledge and expertise in conversation with modern banking. It also achieved very good will in foreign trade and service by providing excellent, dynamic and innovative service. MITS has the adequate modem technology to meet its present requirement of Global demand.