ABSTRACT In the recent years poverty alleviation has become one of the burning issues worldwide.

About hundred thousand million people are living under poverty line at the end of 2011 all over the world. A systematic development of a nation mainly depends on the proper alleviation of poverty. For this reason poverty alleviation have become global challenges, especially in the developing country like Bangladesh. The micro credit program is playing a vital role in the poverty alleviation. In parallel of government of a country, many NGOs and economical institutions have initiated different activities on the basis of Micro credit program to alleviate the poverty. In this article we have investigated the role of Micro credit to alleviate the rural poverty in Bangladesh. Our main objective in this paper is to study and analyze the activities on Micro credit program carried out by (DMCBL) The Dhaka Mercantile Co-operative Bank Ltd., one of the leading Co-operative Banks in Bangladesh.. This paper focuses the poverty structure of the rural population of the country and the strategy to alleviate poverty based on both primary and secondary data. The information has been collected from companies annual reports and talking face-to-face with officials of the company. In order to make the report i also had to analyze the micro-credit industry as a whole. So, I also studied how micro-credit is conducted by the companies and how people are getting benefited in the root level. Getting deep into the system what I have found that, this system works well for the poor people at the root level. They provide small amount of loan and tell how to utilize that money so the financial solvency is established when they have no money. Moreover, the default rate of the loan is very low so, the companies are successful almost every cases. Although the role of micro-credit is applauded all over the world, there have been some incidents that has mildly scarred the system i.e. their high interest, way of behaving to those who are default etc. So, the bottom-line is, if we disregard those sporadic incidents we can see that micro-credit is alleviating poverty in a large scale and DMCBL is playing a vital role in it along with other companies.

1. INTRODUCTION

After industrial revolution most of the world still has to challenge with the daily pain of poverty. Nearly half of the people live in poor countries with an average annual income per head of $400 or less (Azam, 1997). Bangladesh ranks as the worlds eight and Asians fifth most populous country (Azam, 1997) with a land area of only 147570 sq. km. resulting in a population density of about 961 persons per sq. km. (Population and Housing Census, 2011) which is one of the highest in the world. It is one of the poorest countries of the world where 76.9 % of the total population live in the rural areas (Population and Housing Census, 2001). About 49 % of the rural populations live below the poverty line (Fifth Five Year Plan-1997-2002). Bangladesh is primarily an agricultural country. About 77% of the populations live in village and 75% of them are dependent on agriculture, which contribute more than half of the GDP. In recent years, Bangladesh is overwhelmingly characterized by poverty, disease, malnutrition, illiteracy, unawareness that dominates the lives of the rural poor (Alamgir, M. 1978),. The under develop ness of the rural economy of Bangladesh is reflected in the low productivity, high population pressure, underemployment, lack of work opportunities outside agriculture and the resultant deteriorating living condition of the rural poor. As Bangladesh is one of the poorest countries in the world having a per capital GDP at current market prices (in US$) 445 (National Accounts Statistics, 2005). In Bangladesh 60% of rural populations are functional landless, 20% do not even own their homestead. Majority of them are directly or indirectly depend on agriculture and selling labour. In addition due to the domination of the society by the rural sites most of the available resources are owned by the upper socio-economic strata. The rural poor are victim of various kinds of oppression, deprivation and injustice. Land takes the leading role in generating rural income and its distribution. But above 60-70 percent of the household do not posses enough land to generate income for subsistence. The available findings on land holding structure showed a very twisted distribution to land and it has been associated with rise of landless and marginal farmers in the rural society. The high population growth and low level of economic activities particularly in rural areas may be identified as important causative factors for high incidence of poverty (Ahmed and Hossain, 1984). Government of Bangladesh has given priority to the development of villages and agriculture too. However, the production-oriented development strategy which the government has been pursuing for a long time can hardly ameliorate the problem of under employment in the rural economy. Because of a low output elasticity of demand for labour, 2.8 percent (Rahman, 1999) growth of the cereal output, which is the single major component of agriculture production in the country, was associated with only 1.4% increase in demand for labour and during 1977-1982 an impressive 3.3 percent growth in the cereal production was associated with a growth in agriculture employment of only 2.1 percent per annum (Yunus, 1985). Provision of non-farm credit at a reasonable rate of interest can play a significant role in the life of rural disadvantaged group.

However, the banking institutional in the country could not manage with the situation for reasons such as: a) The bankers preference for handling big rather than petty loans which the rural poor need. b) The practice of keeping collateral against loans which they can not provide. c) The formalities for obtaining credit that the illiterate poor find difficult to complete. Above the circumstances, there arose a need for separate programme for the landless poor in the village areas to provide banking facilities to the rural mass and to extend a wide variety of financial assistance to rural people. (DMCBL) The Dhaka Mercantile Co-operative Bank Ltd. was established to provide loan to the rural disadvantaged group. The main object of the bank is to extend banking facilities to the poor men and women to eliminate the exploitation of the money lenders and to create opportunities for self-employment. DMCBL is working beside other institutions and economical agencies such as BRAC, PROSHIKA, GRAMEEN BANK, RFL, and RDB etc. which are also contribute to eliminate poverty of Bangladesh. 1.1 Rational of the study In most of the developing countries in Asia growing attention has been given for rural development during past two decades. This is because majority of the people live in rural areas where problems of poverty, inequality, unemployment etc. are increasing rapidly. The percentage of rural population is as high as 77 in Bangladesh, 95 in Nepal and above 70 in India, Pakistan and Sri-lanka. The socioeconomic background and population problems have prompted policy makers to take up specific rural development programme in order to improve quality of life of vast majority of the rural poor who have not been benefited from the general development programme (Akter, 1996). Though there is some positive in respect of farm productivity and overall economic growth rate in same developing countries, nevertheless, the extent of poverty, inequality, landlessness and unemployment have been become widespread in many countries. With a low level of income and pervasive poverty the development priorities in Bangladesh increasingly focus on efficient growth policies and provision of basic services to the poor. The factors that create and perpetuate involve a number of dimension e.g. sewed distributions of assets and land, exploitative land tenure systems, inequitable access to and control over new technology in irrigation, inadequate employment opportunities, low labour productivity and wage rates, low growth and unequal distribution of growth benefits, under

developed physical infrastructure and lack of access to basic social services credit and off-farm activities. Within the general framework, poverty alleviation strategies in the country put emphasis on accelerated growth generation of productive employment human resources development and increased self-reliance. Economic growth is recognized as fundamental to development but not to reduce poverty (Asaduzzaman and Akter, 1990). In order to ensure the access of the poor to employment and basic social services, the growth-oriented strategies need to be supported by direct attacks on poverty. Therefore, self- employment creation through a credit led strategy in the rural area can play a significant role in reducing the rural unemployment and acute poverty. The project oriented lending programmes and policies of rural credit project department in Bangladesh could play a crucial role in creation of self-employment opportunities in the country if they were implemented and pursued with commuted determination. The DMCBL, a famous innovative credit institution has been making a unique contribution in the creation of productive self-employment for the poorest of the poor in the rural area of the country. So, Researcher has selected this area for study. 1.2 Objective of the study The overall of the study will be to evaluate the role of The Dhaka Mercantile Co-operative Bank in alleviating poverty. The specific objectives are as follows: To apply of theoretical knowledge in the practical field. To understand the real management situation and try to suggest for improving existing problems. To analyze the financing system of the Bank. To examine the profitability and productivity of the Bank. To acquire knowledge about the every day banking operation of DMCBL. To suggest appropriate policies for effective use of bank financing for poverty alleviation.

1.3 LIMITATION OF THE STUDY

The researcher have obtained whole hearted co-operation from employee of DMCBL although they were extremely busy. So they were not able to give much time as they and I would 1ike. Besides, total duration of internship is not sufficient to give me more than a superficial idea of the functioning of the various departments I was rotated through. On the way of my study, I have faced the following problems which may be termed as the Limitation/short coming of the study. Few limitations are pointed out below: The main constraint of the study was insufficiency information which is required for the study. Since the bank personnel are very busy with their activities, as a result they failed to cooperate with me to complete this report. The major problem of the study was short time period. For an analytical purpose, adequate time is required. It would have been better if data could be taken from larger sample than what has been considered here. It would have been better if data could be taken from all the poverty alleviation activities in rural areas in our study. The majority of the loanee respondents do not maintain any record to their income, expenditure etc. So, they depend on their memories, which made our investigations limited.

ROLE OF MICRO-CREDIT
The Dhaka Mercantile Co-operative Bank Limited (DMCBL), one of the leading Co-operative Banks in Bangladesh is a well known social welfare organization which has some Investment Schemes. But the most popular scheme of DMCBL is micro credit. The micro credit activities guided by DMCBL is being carried out within 60 districts out of 64 (up to February 2012) in Bangladesh where 90 thousand members most of which are small business people are involved with this activities and the running capital is BDT 135 millions. My intern period was in the Head office thats why I cant collect the information from the field. But I just collect the information from personal interview and official documents and have selected only 150 members randomly out of 90 thousand members to prepare this article. The details analyses are presented in the following. All the field data provided here have been collected from December 2011 to February 2012. Educational background of the respondent

Education is the backbone of a nation. It is vital matter to alleviate poverty. To develop the socioeconomic condition it is a crucial instrument.

Educational background of the respondent

Level of education Illiterate Can sign only Primary level Junior high school High school Above Total No. of respondent 12 25 54 30 19 10 150 Percentage 8 16.67 36 20 12.67 6.67 100

The Table 1(a) shows the educational background of the sample respondent. It shows that 8% is illiterate, 16.67 % can sign only their name, 36 % got primary level, 20 % received junior high school level, 12.67 % got high school education and only 6.67 % got secondary above secondary level. From this data it appears that the level of education of DMCBL loanees are not yet to be satisfactory and so, because the rural poor are unable to change their fortune smoothly. Age-wage distribution of respondent The age of an individual respondent is perhaps an important factor for motivating her in accepting anew and challenging venture. An early entry surely gives her the scope for development over a long period but late comer gets a few opportunities.

Table 1(b). Age-wage distribution of respondent

Age group(years) 20-30 31-40 41-50 51 and above Total No. of respondent 15 60 52 23 150 Percentage 10 40 34.67 15.33 100

The Table 1(b) indicates that 10% loanees age lies between 20-30, 40% whose age lies between 3140, 34.67% are 41-50 and 15.33% age are 51 and above. It shows that large part of loanees belongs to

the age group ranging from 31-40 year and small part is 20-30 year .It is obviously clear that the loanees from DMCBL are able to change their present economical status. Marital status of the respondent DMCBL delivers loan to the needy class people, who are may be Married, Unmarried, Divorced and Widow. The following table shows the marital status of the respondent.

Table 1(c). Marital status of the respondent

Groups Unmarried Married Divorced Widow Total No. of respondent 30 108 9 3 150 Percentage 20 72 6 2 100

Above the table 1(c) shows that 20% respondents are unmarried, 72% are married, 6% are divorced and 2% are widow. It is clear that the majority of loanee are married. Time required for getting loan For the effective utilization of credit, it is possibly necessary to use the required amount of credit in time. Non timely credit makes a man inefficient. Below the table present the timing of DMCBL loan dispose.

Table 1(d). Time required to get loan

Days 1-7 8-15 15 and above Total No. of respondent 83 56 11 150 Percentage 55.33 37.33 7.33 100

The Table 1(d) shows that the time gap between submission of proposal and receipt of the amount from 1-7 days of 55.33%, 8-15 days of 37.33% and 15 and above days of 7.33% respondent. It is clear that the respondent receive the loan in timely. Payment of instalment

The repayment of borrowed money along with interest according to the agreed schedule is an indication about the improvement in the financial health of the respondent.

Table 1(e) Payment of instalment

Payment of instalment Regular Irregular Total No. of respondent 120 30 150 Percentage 80 20 100

The Table 1(e) shows that the respondents found to be very much sound in experience loan repayment culture. The data provide an indication that there is a positive influence of DMCBL operation on strengthening the credit repayment ability of the respondents through a marked improvement in their income. Income of respondent before and after joining DMCBL Income status is the important measurement of the respondents economical condition. The table shows the economical positions respondents before joining and after joining the DMCBL.

Table 2(a). Income of respondent before and after joining DMCBL

Monthly income size Below-10,000 10,000-20,000 21,000-30,000 31,000-40,000 41,000-50,000 51,000-60,000 61,000 and above Total Before joining DMCBL No. of Percentage respondent 30 20 45 30 30 20 22 14.67 18 12 3 2 2 1.33 150 100 After joining DMCBL No. of Percentage respondent 12 8 24 16 39 26 47 31.33 20 13.33 5 3.33 3 2 150 100

The table 2(a) shows most of the respondents that is 30 percentage monthly income are 10,00020,000 before joining the DMCBL But after joining the DMCBL majority respondents income changes positively. Here 31.33 percent respondent income is 31,000-40,000 taka per month. It is cleared that the change of income pattern of receiving loans from DMCBL is so significant.

Capital of respondent before and after joining DMCBL

In our country DMCBL provides loan in various sectors. The destitute class people utilize these loans and create a capital fund after release DMCBL loan.

Table 2(b). Capital of respondent before and after joining DMCBL

Capital size ( Taka ) 0-100,000 100,000-150,000 150,000-200,000 200,000-250,000 250,000 and above Total Before joining DMCBL No. of respondent 40 37 30 25 18 150 Percentage 26.67 24.67 20 16.67 12.00 100.00 After joining DMCBL No. of respondent 11 40 47 32 20 150 Percentage 7.33 26.67 31.33 21.33 13.33 100.00

The Table 2(b) represents that more than 26.67 percent of the total loanees had capital up to taka 100,000 before joining DMCBL 24.67 percent, 20 percent, 16.67 percent, and 12 percent of the total loanees had capital 100,000-150,000, 150,000-200,000. 200,000-250,000 and 250,000 and above respectively. But after taking the loan of DMCBL only 7.33 percent of the total respondent capital up below taka 100,000 and 26.67 percent capital range are TK. 100,000-150,000, 31.33 percent capital range are TK 150,000-200,000, 21.33 percent capital range are TK 200,000-250,000 and 13.33 percent capital range are TK 250,000 and above. It is obvious that, the loanees capital has increased after joining DMCBL.

Methodology
The information of this article basically has collected from primary source which is collected through personal interview from the selected members and the bank personnel. But hardly any updated data could be found. In the absence of updated information or data dependence on secondary data has been inevitable. The necessary information has been collected from the head office and sample branch of the study areas of DMCBL. However, whenever possible primary data has been used. Data were also collected by interviewing the responsible officers and from some documents & statement printed by the bank and website of DMCBL. Bank Annual Report also helped me in collecting data. Moreover various books, journal and other publications related with micro credit were used for collecting other information. In this report researcher would try to follow the appropriate methodology to obtain the necessary primary data and analyze them in the light of desired objective of the study.

Sources of Data:
The following sources have been used for the purpose of gathering and collecting data as required.

Primary Data:
I) Official records of DMCBL. II) Face to face conversation. III) Data collection by own supervision.

Secondary Data:
I) DMCBL Annual report (2005 to 2010) II) Working papers III) Office files & Printed forms IV) Selected books V) Published & unpublished documents VI) Website

Organization Over view

Overview of DMCBL The Dhaka Mercantile Co-operative Bank Limited (DMCBL) was registered with the government under the then The Bengal Co-operative Societies Act 1940 (Bengal Act XXI) on 06.01.1973. After registration, Bye-laws of the society were prepared for operating its activities. After its establishment in 1973, DMCBL was put into liquidation process thrice in 1974, 1980 and 1990. After the last liquidation order was withdrawn in 1997, DMCBL started its activities with the burden of loss of Tk. 28,38,154.00 only. Internal chaos, inefficiency in management and corruption enhanced the accumulated loss at Tk. 1,11,80,831.00 in 2001-2002 on the basis of prima-facie

information. At this stage, the existing management committee of the bank took its responsibilities and appointed a leading audit firm, S.F. Ahmed & Company, Chartered Accountants, to ascertain the position of the Bank. The audit firm ascertained the accumulated loss of the bank at Tk. 2,15,52,580.00 in 2002-2003. It may be mentioned that due to non-availability of appropriate information and related vouchers, register, ledger etc. loss to the tune of Tk. 28,38,154.00 estimated for the year 2000-2001 sort up to Tk. 1,11,80,831.00 in the year 2001-2002. Due to the far sightedness and efficiency of the existing management committee, the bank took its rebirth in 2003-2004 and activated and earned a profit of Tk. 8,62,625.00 with the provision of dividend of 10% for its shareholders. As a result, the bank got the award of the best Co-operative in the country, Business Award, 2004 by the F.N.S. Besides, it also got the award of the best Co-operative from Rafiqul Islam Foundation. DMCBL started its journey again in 2001 with existing 08 branches and at present it has total 99 branches located in different parts of the country both in rural and urban areas. Its head office is located in 19, Indira Road, Farmgate, Tejgaon, Dhaka 1215.

Vision of the DMCBL:

To be the trendsetter for innovative banking with excellence & perfection

Mission of the DMCBL:

To be the best performing Co-operative Bank in the country

Objectives of the DMCBL

Developing the standard of living of the limited income group by offering consumer credit. To improve the socio-economic condition of the members of the society through extension of investments to their small business, trades, cottage industries etc. for augmentation of activities by creation of jobs; Encouraging and motivating the new entrepreneurs to establish industries and business in line with development of national economy. Enhancing savings tendency of the people by offering attractive and lucrative new savings scheme. Enhancing the mobilization of savings both from urban and rural area.

 To procure funds particularly from the small savers for investments; To extend security free investments to attract the small people towards co-operative societies; To help the members of the society for improving individual and social understanding among themselves for the improvement of their lots; and To explore the needs of the common people including businessman and professionals. Contribute to the GDP of the country. Business philosophy of DMCBL The business philosophy of DMCBL is to move and develop with the changing new era. Especially DMCBL operates its activities as quite accurate as possible rather than other co-operative banks/societies operating in Bangladesh because this bank has come to this position through Managing Director substantial step by step. By developing human resource and providing qualitative service DMCBL will be the leader in co-operative sector in Bangladesh. Side by side DMCBL assist in the Deputy Managing Director development of national economy.

Organizational StructureExecutive Vice President of DMCBL

There are three different wings to consist the organizational structure of DMCBL. They are: Senior Vice President Board of Directors Executive Committee Senior Executives
Senior Assistant Vice President

Vice President

Organizational Hierarchy of DMCBL

Assistant Vice President

Senior Principal Officer DMCBL has 13 steps in organizational hierarchy. The entry level post is the Assistant Officer. The organizational hierarchy is shown below: Principal Officer

Senior Officer Officer / Probationary Officer Junior Officer Assistant Officer

DMCBL Corporate & Investment Bank:

DMCBL has emerged as the premier organization for meeting the financial services needs of corporations, governments, and institutional and individual investors around the country.

Private Client Group:

Wealth management and financial planning services for affluent and high-net-worth private investors, small-to-mid-sized businesses, non-profit organizations and family foundations. A

broad range of corporate benefits services and compensation plans to large corporations, executive financial services, and advisory services to private corporations.

DMCBL Private Co-operative Bank:

Personalized wealth management services for affluent clients.

Retirement Services:
Defined-benefit, defined-contribution, health and welfare services to large and small businesses and organizations countrywide.

DMCBL Alternative Investments:

Creates and offers efficient investment opportunities through a comprehensive platform of alternative asset classes and vehicles that try to match the reality of the investor's unique requirements.

Structure of the bank:

The bank is structured according to the four product divisions: Corporate Banking, Financial Institutions, Cash Management and Treasury. There are also four other departments that can be termed as support and these are Operations, Credit Administration, Financial Control and Human Resource.

Corporate Banking:
The main activities involved in Corporate Banking division of the bank include communication with customers and calls: The relation manager try to establish contact with key customers; know about the status of their capabilities. The next step is to collect customer information and make a detailed analysis of the needs of the client matched with what the bank can offer. After agreement of both parties, the bank gets approval from the lending unit. Once a company has become a client with credit relationship, the tasks are not yet over; the relation manager then have to monitor the performance of the company and ensure that no classification of credit occurs.

The products offered by the corporate banking division:

Corporate Finance:

Corporate finance and other credit products constitute the core of commercial banking services. DMCBL offers a full range of financing options that are tailor-made to each of the circumstances of each client. The lending products are customized based on purpose, tenor, currency and other criteria. The products and services offered are: Commercial Paper or Fixed Income Securities Project Finance

Working Capital Finance:

This is basically the funding provided for financing of a particular working capital need, which can either be short-term loan or overdrafts. Some common forms of working capital finance are financing of inventory or raw material purchase etc. Cash Management Services

The products and services offered are: Account Services Payments & Collections Cash Pick-up & Delivery

Financial Institutions:
DMCBL is a local correspondent bank of financial institutions operating in Bangladesh. In FI, the customers of the bank include the largest nationalized commercial and co-operative banks, which account for approx. 50% share of the countrys financial market, and also the top tier private sector banks. Customers can avail a variety of account services such as payments processing in collections, investment of funds, view / download daily account statements etc

Cash Management:

Cash Management deals mainly with deposit collection i.e. is involved in liability management of the bank. For this, the team has to go out on calls to bring about customer deposits and get companies to open account with DMCBL. Other activities in the department include speed cash collection. The products and services offered from this department include: Efficient collection mechanisms at different outstation points Innovative and competitive deposit products Prompt distribution of inward remittance at competitive rates

Other Departments
Human Resource Department (HRD) This department is very essential and important department for every organization. This is the place where the employees get the opportunity to get trained and all other human resource related services are dealt. This department is not directly involved with bank business but working with those persons who directly & indirectly involved with bank business. The major responsibility of HRD is employees recruitment, posting, transfer, increment, bonus, provident fund, confirmation, training, hire & fire and so on. Welfare of all departmental employees is on HRD. Therefore, HRD should be judicious, compassionate and rewarding to all employees. The major responsibility of HR is as follows: Employee recruitment Posting Transfer Increment Established yearly performance bonus Provident fund Confirmation Training Travel policy Telephone policy Hospitalization

Credit Department: Lending money is one of the main functions of a commercial bank. In the lending process, selection of borrower is the most crucial and vital job for a banker. Before a customer enjoys credit facilities it is important that the applicant should qualify for five Cs. The five Cs are: Character Intention to pay back the loan, Capacity Borrowers competence in terms of utilizing the fund profitably and generate income, Capital Financial strength to cover the risk, Conditions General business condition between two parties, Collateral Implies additional securities. In addition objectives of the credit department are managing credit exposure of the bank, maintaining credit risk, compliance of DMCB Limited, compliance of Central Bank Ltd, recovering or collecting dues of retail loans or advances. At present credit division performs following activities: Credit Approval Process: Corporate Credit Micro Credit

Collection and Monitoring Activity: Recovery Risk management

Risk Management Department: Risk management is one of the administrative departments of DMCB Limited. From its name it is self explanatory that this department deals with uncertainty and safeguarding the bank against any sort of uncertainty. There are some core risks of the bank. They are asset liability management risk, credit risk, money laundering risk and internal control and compliance risk. Asset liability risk can be broken into various other risks. They are liquidity risk, interest rate risks and market risk. One of the major risks for any financial institution is credit risk. Credit risk is the risk of a loan to default. For this reason strict monitoring and proper documentation of customer profile is required. Five important information about a customer should be properly collected and should be authenticated. This information is age, profession, nominee, introduction and monthly transaction. If this information can be properly collected then credit risk can be minimized to a great extent. Finally there is one risk which is internal control and compliance risk. The reputation of the bank may be at

risk if compliance issues are not maintained. For this reason risk management department has a compliance wing which deals with policy and process monitoring of the bank.

Financial Control:
The activities of this department include managing the financial books of the bank; checking all entries of the book are according to standards, preparing daily reports, revenue appropriation and calculations, setting the internal pricing rates etc.

Central Processing Center (CPC) Department:

CPC process some operation centrally. Main areas of CPC are: a) Cheque book printing b) Corporate Salary c) A/C Opening, signatures scanning. d) Sanchaypatray Issue ( only for clients) e) Mysis day opening & day closing.

Asset Operation Department:

Loan is asset to any financial institution. That is why it is very much necessary to ensure that a loan does not become bad. The first step in ensuring that is to ask for proper documentation of the loan applicant. A default loan might be very hard to recover due to lack of proper charge documents. This is where the asset operation department of the bank comes into action. Asset operation department of the bank acts as a last frontier to mitigate all loan related risks before disbursement of a loan. The following diagram shows the flow chart of the loan disbursement procedure.

Client Loan Application Business Unit Recommendation Credit Approval Asset Operation Docs checking, loan disbursement & Custodian of securities

The functions of asset operation department can be broadly categorized under two heads. The first one is the disbursement and monitoring of loans. In this case the department disburses loans after obtaining clean CIB reports of the clients, checking all documents and collecting securities after proper lien and charges creation after terms of approval. This department also periodically review conditions of past due loans, limit, expiry and document deficiency. The next operation of the department is to act as custodian and compliance of the charge documents and prepare various MIS reports for the central bank and other audit authorities. The documents that are required by asset operation department can be classified into three parts. First one is the business verification and related documents of the applicant. Second one is the basic charge documents like demand promissory note, letter of continuity, letter of pledge letter of hypothecation and some other documents. The third documents that asset operation department need to disburse loan is the security documents like post dated cheque, undated cheque for unsecured loan, fixed deposit or title deed for secured loan.

Impaired Asset Management Department:

This department of the bank looks after the default loans and tries to recover them. It is said that the less job load this department has, the better it is for the bank itself. The head of IAM directly reports to the Managing Director of the Bank and this division is an administrative division of the bank. This department of the bank has two wings. One wing looks after the impaired assets of SME wing and another wing looks after the impaired assets of retail business. Normally if a loan instalment is six months over due, then the credit department hands over the file to IAM for recovery. IAM first issues a letter in soft language. Then if it does not work, IAM issues further three letters to the defaulter. If it does not work either, then IAM files a case against the defaulter. The bank can file a case against a defaulter in three ways. The first one is the Negotiable Instrument Act of 1881 (Sec 138). It is a civil case. The second option that the bank has is the Money loan court act of 2003. The third is the fraudulent act that is 420/406/109.

Information Technology Department (IT)

Information Technology department plays a very vital role in this bank. All 99 branches of the Bank are computerized and the software development team of the Bank has developed a banking software system named DMCBL Banking Software. More than 95 Branches are running successfully with Banking Software System and the rest of the branches will be gradually brought under the Banking Software System. 99 Branches are connected by internet service and the Bank entered in internet world through its web site www.dmcbl.com.

Website
The website of DMCBL is informative and it provides information about the bank and its products. It also informs about the coming up new products and current hot news of the bank.

Different Wings of DMCBL:

There are two wings of DMCBL. These are Head Office and Regional Office. Each contains different branches and sub-branches have been given bellow: Head Office: Chairmans Secretariat Managing Directors Secretariat Boars Department MIS and IT Department Marketing Division: Marketing division is very vital for each financial institution. DMCBL also holds a marketing division, which contains following departments associated with each other: Business Development Department Branches Department Public Relation Department

Every branch spends a huge amount of money as business development for capturing and increasing consumer. The functions of this department are: Maintain market survey in regular Bring new banking technology to serve consumer quickly. Audit and Inspection Division: It consists of two departments. These are: Internal Audit Department External Audit Department Internal audit team audits own branches. Operations, Technology & ICU (Internal Control Unit) The Operations department of the bank deals with account opening, deposit management, loan booking etc; the Technology part involves processing of transactions and maintenance; and ICU is involved in reconciliation of various accounts and also making sure that every day the suspense account balance is 0.

Products and Services Offered by DMCBL: a) Types of Banking Service:

DMCBL is always ready to provide all types of banking as the different needs of different clients. This bank provides all services through rules and regulations. The different categories of banking that DMCBL offers are follows:

Retail Banking:
The retail banking comprises the domestic braches network with the specialized customer credit. Retail banking deals with the banking service to the individuals. DMCBLs retail banking strategy is aimed at keeping as closely in tune with the customers needs as possible and further improving the quality of advisory services. As a result, DMCBL offers different product ranges to different target

groups. In this banking individuals may their personal accounts like Current Accounts, Savings Accounts, FDR Accounts, MSP Accounts, Education Accounts, Marriage Accounts, Hajj Accounts etc.

Institutional Banking:
DMCBL offers various services to various organizations, contractors, schools, colleges Universities, doctors etc. The services include Deposit services, Current accounts etc.

Islami Banking:
To provide the Islamic banking services in accordance with the principles of Islamic Shariah, DMCBL has established Islamic Banking Wing and started its functioning by opening full-fledged Islamic banking branch on July, 2008. Prominent Islami Banker Mr. Anisul Haque has joined the Bank as its Islamic Banking Consultant. A dedicated team of experienced Islamic bankers is working under his active guidance both at head office and branch level. A competent Shariah Council consisting of Islamic scholars, Ulema, Fukaha and Islamic bankers headed by Mr. Md. Wadud a prominent Islamic scholar has also been formed to guide the Islamic banking affairs. Board of directors as well as management of the bank are very much interested to promote Islamic banking system in the bank aiming at opening more Islamic branches in the near future. The goals and objectives of Islamic banking Wing are as under:

To facilitate the Islamic banking system in the country To create new entrepreneurs and to arrange required finance for them To play effective role for socio economic development of the country To give assistance in launching welfare oriented economic system under Islamic values

Under this wing DMCBL extends the following Islamic banking services:

Deposit services Investment services

Under Deposit services the following services are being rendered:

Mudaraba Savings Account Mudaraba Education Deposit Scheme

Mudaraba Term Deposit Account (with different terms) Mudaraba Marriage Deposit Scheme Al-Wadiah Current Deposit Account Mudaraba Hajj Deposit Scheme

Some other schemes are under process.

Investment Banking:
DMCBL is the first Private Sector Co-operative Bank in our Bangladeshis. Since our inception, we have been participating in different industrial and national development activities in addition to normal Trade Finance and SME development. DMCBL has 59 branches within the country.

b) Deposit Service Provided By the DMCBL:

As a bank the business philosophy of DMCBL is to provide innovative banking. The future growth of the banking industry and its profitability depends on customer satisfaction. So if any financial institution can prove a satisfactory service success is indisputable.

Loans / Advances:
DMCBL is extending credit facilities in all sectors covering commercial credit lines to the business community. In addition to that other facilities like micro credit, consumer credit, marriage loan, education loan, consumer loan, supervisory credit to the farmers, weavers in the agricultural sector etc. to be extended for development of the country. In this area DMCBL specially offers two types of schemes for different persons. Every person must be a member of the DMCBL before take the any kind of loan. Every person must be come through the official rules and regulations to take loan. These are: Consumer Credit Scheme Personal Loan Scheme Education Loan Scheme Education Loan Scheme

Investment Services:

DMCBL Islamic Banking Wing provides investment facilities for project finance, working capital finance, SME finance, consumer / retail baking finance etc. under following modes:

Hire-Purchase under Shirkatul Melk (HPSM): Under this mode the Bank and the client procure asset such as machinery, land, car etc. on equity participation basis. The Bank rents out its portion of assets to the client for a certain period. The client pays the rental with a part of principal amount on monthly / quarterly basis. The client gets its proportionate ownership with the payment of monthly / quarterly instalments. On maturity, total ownership of the assets automatically goes to the client as and when final payment of the account is made.

Ijara or Leasing: It is more or less like the HPSM. In this case equity participation may or may not exist. Ownership of the asset is not automatically transferred to the client with the payments of instalments. On maturity, the bank transfers the ownership to the client on payment of certain transfer fees.

Bai-Muajjal / Bai-Murabaha: These modes are applicable for working capital finance. Under these schemes bank purchases goods / raw materials as per requirement of the client. In case of Bai-Muajjal bank receives the sales proceed on deferred payment basis. On the other hand in case of Bai-Murabaha Bank receives the sale price at the time of delivery of the goods / raw materials. Before handing over the goods / raw materials the bank generally keeps the same in its custody under pledge.

Musharaka : Under this mode the Bank and clients jointly participate in a project, in a scheme or project. Profit is shared between the Bank & the concerned client as per pre-agreed ratio. On the other hand loss is shared according to capital ratio.

Mudaraba: Under this mode bank finances the scheme as a Shaheb-Al-Maal (owner of the capital). Profit is shared between the two sides as per pre-agreed ratio.

Sector of Investment: Islamic Banking Wing of the bank finances in all sectors i.e. Industry, Business, and Agriculture etc. if purpose of the investment is permissible under Islamic Shariah. Limit of Investment:

Investment is offered to the extent of single borrower exposure limit as fixed by the Bangladesh Bank from time to time. DMCBL Islamic Banking Wing has been continuously trying to expand its service horizon keeping the necessity of valued clients in view and upholding the principle of Islamic Shariah.

Present Status of DMCBL:

Present Network of DMCBL: DMCBL is one of the largest private-sector co-operative banks in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensure efficient service to clients. 99 branches create efficient networking and reach capability. DMCBL is a bank that serves both clients and country. The board of Directors consists of 15 members. The bank is headed by the managing Director who is the Chief Executive. The Head Office is located in 19, Indira Road, Farmgate, Tejgaon, Dhaka 1215.

Image and Reputation:

The reputation of this bank well indeed. In private sector it is the largest co-operative bank. Most of districts it is providing services, which are incapable of other private co-operative banks. All the branches are computerized and people are getting quick benefit from the bank. In rural area DMCBL has achieve a great goodwill and if the bank can hold this reputation it can earn much better profit in future within the new competitive era.

Retail Banking:

Practice of Loan and Advances: Consumer Credit Scheme: DMCBL has devised and introduced Consumer Credit Scheme to extend credit facility to the limited and fixed income group to improve their standard of living. Under this scheme the bank finances their purchase their consumer durable viz. Air Conditioner, freeze, TV, Washing Machine, Private Car, Jewellery etc. The individual repay the loan in easy monthly instalment. Objective of the consumer Credit: To extend credit facility to the limited income group. To develop standard of living of middle and upper middle class. To participate in the socio economic development in the country. Credit available for:

Individual such as confirmed officers/ executives of Government/Semi Government organizations. Autonomous bodies, Corporations, multinational companies, local renowned companies Banks, insurance companies Teachers of educational institutions Officers of armed force, member of professional bodies and Other self employed persons Financing Products:

Air conditioners, Refrigerator, Deep freezer, Washing machine Mobile phone Cooking range, Micro wave Furniture, Sewing machine and Other domestic appliance Entertainment Items

 TV, VCD, VCP Music system, Sound system, Video camera with accessories etc. Office equipment:

Personal computer, Photocopier IPS, UPS Small non-commercial generator and Other office equipment Vehicles:

Car Microbus Small jeeps Motorcycle etc. Intangibles:

Medical Expenses Holydays Marriage Education Others:

Home repair Redecoration and Renovation Jewellery

Limit:
Through the bank gives the consumer loans, but it has got some limitations.

Procedure for availing the credit facility: Minimum loan amount Minimum loan amount Minimum loan amount : Tk.25,000/- and : Tk.5,00,000/- (for Personal Loan - unsecured). : Tk.10,00,000/- (for Auto Loan - unsecured).

Debt equity ratio:

Equity in the form of margin shall be at least 15% of the value of the item (except for vehicle). For vehicle, it will be at least 30%. The client/borrowers before disbursement of the loan will deposit the amount if equity.

Repayment Arrangement:
Equal monthly Instalment for both principal and interest, covering the period of the loan. Instalment to be paid within the 30th of each month.

Securities and Documentation:

Personal guarantee (for all product specification). Cash collateral (for secured overdraft / loans). Charge documents. Cycle registration shall be in the joint names of the bank and the borrower.

Authority for approval:

Branch Managers jointly with Sub-Manager / Relationship Official. For exceptional cases - the Senior Executive Vice President (Corporate Banking) or Managing Director.

Monitoring:
The members of the Consumer Banking Department review the position of all the Branches and monitor each and every account. Letters, reminders or even phone calls are made to any Branch which fails to realize the instalments timely. The Branches are given time limit to reduce the overdue

liabilities or face the consequence of having to lose their discretionary power of disbursing further Consumer Loans.

Unsecured Loans:
1. Personal Loan: Target Customer Employees of reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Purpose Consultants), Businessmen. Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of Loan Amount Charges Tenor Rate of Interest Security furniture. Minimum Tk. 25,000.00 and Maximum Tk. 5,00,000.00 Processing fee: Tk. 250.00 to Tk. 2,500.00 depending on the sanction amount. Minimum 12 months and Maximum 36 months. 19.50% p.a. - 21.00% p.a. Hypothecation of the product to be purchased. Two personal guarantees (as per our list of eligible guarantors)

2. Auto Loan: Target Customer Employees of reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Purpose Loan Amount Charges Tenor Consultants), Businessmen. To purchase Brand new vehicle, non-registered reconditioned vehicle. 70% for the brand new car 60% for the reconditioned car but must not exceed BDT 10,00,000.00 Application fee: Tk. 500.00, Processing fee: 0.50% on the approved loan amount or Tk. 5000.00 whichever is higher. For reconditioned Car: Maximum 36 months and for Brand new Car: Maximum 60 months

Rate of Interest Security

18.50% p.a. 19.50 p.a. Hypothecation of the vehicle to be purchased. Two personal guarantees (as per our list of eligible guarantors)

3. Easy Loan (For Executives): Target Customer Purpose The loan is specially designed for salaried people who are employed in different reputed companies Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of furniture, Advance rental payment, Trips abroad, Admission/ Loan Amount Charges Tenor Rate of Interest Security Education fee of Children etc. Minimum Tk. 50,000.00 and Maximum Tk. 3,00,000.00 Application fee: Tk. 500.00, Processing fee: 0.50% on the approved loan amount or Tk. 1000.00 whichever is higher Minimum 12 months and Maximum 36 months 19.00% p.a. Letter of confirmation from the employer. One personal guarantee (as per our list of eligible guarantors)

4. Gold Grace (Jewellery Loan): Target Customer Purpose Loan Amount Charges Tenor Rate of Interest Security The loan is specially designed for salaried women who are employed in different reputed companies To purchase ornaments/Jewellery for personal use Minimum Tk. 50,000.00 and Maximum Tk. 3,00,000.00 Application fee: Tk. 500.00 and Processing fee: 0.50% on the approved loan amount or Tk. 1000.00 whichever is higher Minimum 12 months and Maximum 36 months 19.00% p.a. Letter of confirmation from the employer. Personal guarantee from the parents and spouse (if married)

5. House/Office Furnishing/Renovation Loan: Target Customer Expatriate Bangladeshi nationals who are in business or service holders. Employees of reputed Banks & Leasing companies, reputed

Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies. Government Employees. Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants). Reputed Purpose and highly respectable Businessmen with a reliable source of income House/Office Furnishing/ Renovation, For interior decoration / Titles Stones, Electrical fittings, wooden cabinets / Overall furnishing and all types of House/Office Renovation, purchase/ furnishing of Loan Amount Charges Tenor Rate of Interest Security apartments etc. Minimum Tk. 1,00,000.00 and Maximum Tk. 10,00,000.00 Application fee: Tk. 500.00 and Processing fee: 0.50% on the approved loan amount or Tk. 2000.00 whichever is higher Minimum 12 months and Maximum 48 months 19.00% p.a. Title deed of the House/Office to be furnished/renovated along with memorandum of deposit of title deed duly supported by a notarized power of attorney to be kept by the bank as a matter of comfort. Two personal guarantees (as per our list of eligible guarantors). Registered mortgaged of the property if the loan amount is more than Tk. 5.00 lac

6. Staff Loan: Target Customer Purpose All permanent employees of DMCBL Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Loan Amount Charges Tenor Rate of Interest Security Product Name Target Customer Computers, Purchase of audio-video equipment, Purchase of furniture According to the debt burden ration and other criteria Processing fee: 0.50% on the approved loan amount or Tk. 1000.00 whichever is higher Minimum 12 months and Maximum 36 months 16.00% p.a. Hypothecation of the product to be purchased Education Loan Students Criteria: Students of reputed Educational Institutes, such as Public & Private

Universities, Medical Colleges & Engineering Institute. Undergraduate & Post graduate Level Professionals degrees (Chartered Accountants (CA), Cost & Management Accountants (CMA), Marine, MBM, MBA) Doctorate degree (PhD), FCPS etc. Occupation: Student Minimum Age: 17 years Maximum Age: 40 years Educational Qualification: Minimum HSC/A-Level Pass.

Parents Criteria: Service Holder: Individuals with ranks equivalent to Senior Assistant Secretary or higher would qualify guarantor Bank officials (Equivalent to Senior Principal Officer of NCBs, AVP / Branch Manager of Local and Foreign banks) and Department Head of Multinational Company or established Local Corporate. Guarantors must be accepted by the Branch Manager/Head Office. Businessman: Well reputed and widely respected Self-employed professionals To Financially Assist The Parents: Admission/Education Fees, Semester Fees, Study abroad Minimum Tk. 50,000.00 and Maximum Tk. 3,00,000.00 Application fee: Tk. 500.00 and Processing fee: 0.50% on the approved

Purpose Loan Amount Charges

Tenor Rate of Interest Security

loan amount or Tk. 1000.00 whichever is higher Minimum 12 months and Maximum 36 months 18.50% p.a. 19.50% p.a. One personal guarantees (as per our list of eligible guarantors)

Secured Loans:
1. Personal Loan: Target Customer Purpose Loan Amount Charges Tenor Rate of Interest Security All Clients of DMCBL To meet personal requirement of fund Maximum 95% of the present value of the security Processing fee: Tk. 1000.00 Minimum 12 months and Maximum 36 months 17.00% p.a. 18.00% p.a. (subject to type of the security). 2% spread must be maintained in case of own bank FDR Lien over FDR, BSP, ICB Unit Certificate, RFCD, NFCD, CD account(s) etc. One personal guarantee in case of third party cash collateral (as per our list of eligible guarantors) 2. Personal Overdraft: Target Customer Purpose Loan Amount Charges Tenor Rate of Interest Security All Clients of ABBL To meet personal requirement of fund Maximum 95% of the present value of the security Processing fee: Tk. 1000.00 Revolving with annual review 13.50% p.a. - 16.50% p.a. (subject to type of the security). 2% spread must be maintained in case of own bank FDR Lien over FDR, BSP, ICB Unit Certificate, RFCD, NFCD, and CD account(s) etc. One personal guarantee in case of third party cash collateral

Corporate Banking:
At DMCBL we provide complete range of solutions to meet Corporate Customers requirements. Our Corporate Banking solutions include a broad spectrum of products and services backed by proven, modern technologies.

Corporate Lending:
Our specialist teams offer a comprehensive service providing finance to large and medium-sized businesses based in Bangladesh. For more information as to how we might best meet your corporate debt needs, please contact us at our Corporate Head Office. We aim to provide tailored financing solutions with a dedicated team who can rapidly respond to client needs. Following are some of the products and financial tools of Corporate Banking: Project Finance Working Capital Finance Cash Management Equity Finance Corporate Advisory Services

SME Banking:
SME Loan:
Considering the volume, role and contribution of the SMEs, in the last seven years DMCBL has been patronizing this sector by extending credit facilities of different types and tenor. As of now 65% of the banks total loan portfolio is segmented to the SMEs which deserve all out attention in our plans, projections and forecasting. As such the bank has emphasized on the following issues:

To provide the best services to the SME sector To increase the SME portfolio of ABBL significantly To improve the quality of ABBLs portfolio

Structure of SME division:

SME

Field Level CRO, ZO, TM, QAO

Head Office Level Credit, Loan Adm., Fin. Admin, Recovery & MIS

The reporting line in SME: Customer Relationship Officer (CRO) Zonal Officer (ZO) Team Manager (TM)

Field Level:
In the field level there are three types of designated DMCBL staff operates. They are Customer Relation Officer (CRO), Zonal Officer (ZO) and Territory Officer (TM). CRO: Customer relationship officers. There are about 860 CRO working all over the country. CRO are assigned to spot potential entrepreneurs through out the country and motivate them to take loan from DMCBL. Each CRO falls under their assigned territory and they have to perform their job within that. They are under direct supervision of the Zonal Officers (ZO). CRO goes to people, identifies their need and according their need, suggest them to avail loan from DMCBL. CRO are responsible for evaluating the trustworthiness of the client whether they are capable to repay the loan or not. To provide loan and ensuring loan repayment are the two main tasks done by the CRO.

ZO: There are 16 Zonal Officers. These ZO controls the CRO. They visit the spot that the CRO already located. Each and every enterprise will be visited by ZO. ZO has the authority to sanction loan highest up to taka 50.00 thousand. TM: There are 4 team Managers. They supervise the ZO. QAO: There are 4 Quality Assurance Officer. They perform the job of monitoring. They supervise the ZO and TM.

Head Office Level:

Credit: The Credit limit varies depending on the rank. ZO has the authority to sanction up to highest 50.00 thousand. TM has the authority to sanction up to highest 1.00 lac If the credit limit exceed taka 1.00 lac it goes to Credit Committee If the credit limit exceeds taka 5.00 lac it goes to the Board.

Loan Admin - The posting is done in the system in the Asset Operations Department. Then Loan Admin sends requisition to Finance Admin. Finance Admin: Finance Admin take care of the other expenses. Recovery: Recovery Department prepares an overdue report and informs the TM. Recovery department keeps track of the money. Legal notices are given to the defaulters. MIS: MIS department keeps the total record of loan from its sanction to repayment. SME Sectors in which DMCBL has participated so far:

Agri machinery Poultry Animal Feed Dairy Product Hotel & Restaurants Garments Accessories

Furniture : Wooden & Metal Paint Printing & Packaging Aluminium Clinics and Hospitals Engineering & Scientific Instruments

SME Banking Process Flow:

DMCBL SME division has been in relentless pursuit to enhance and secure the business portfolios of thousand of small businesses around the country. As part of its development strategy, the bank provides loan facilities between 50.00 thousand and 15.00 lac taka to the small and medium enterprises around the country without any easy access to banks/financial institutes. There are over 860 Customer Relation Officers (CUSTOMER RELATIONSHIIP OFFICER) providing door-to-door service to clients.

Overview of the Process:

The success of SME largely depends on the selection of a business and the person running it. DMCBL only provides facilities to business operations with over two years of experience. The business also needs to be legally registered and must have a valid trade license. The entrepreneur should also be physically able, preferably between the ages 20 to 50. He/She must have the necessary technical skills to run the business and have an acceptable social standing in the community. DMCBL gives equal importance to the guarantor of the loan. The guarantor must have a net worth equal to 125% of the loan amount. The guarantor should know the entrepreneur well and should preferable live in the same community. The client must possess an account in DMCBL against which entrepreneurs can apply for loan. Customer relation officers search new potential customers by providing door-to-door service. They talk with clients and monitor their manners, activities of their business and provide the loan to the potential customers. The customer relation officers also monitor the borrowers activities after the loan disbursement. Monitoring also facilitates the build up of an information base for future references.

Asset Operations division is responsible for the complete disbursement and closing procedures. The process starts form the sanction of the SME loan. The respective Customer Relationship Officers select potential enterprises, collect confidential information about the enterprises, open clients accounts in the respective branches, fill up the CIB form and send it to Asset Operations Department (AOD). AOD sends the CIB form to the Bangladesh Bank to verify the applicants status. If the report comes out clean, then the CRO send complete details of the customers. AOD then prepares a loan file and checks all necessary documents and enters information regarding the loan in MYSIS, which includes initial ID generation, generating Customer Information Number (CIF) for clients individual account or any link accounts, loan account opening, risk fund collection, and activation of the loan. Loan approval activities are done through KASTLE, includes accumulating all the CIF numbers thereby generating an unique application id and entering product type code, approved amount, scheme type, basic information related to the client, business information, security information, financial information, sales report, stock report, debtor and creditor information, liability and bank statement and asset financing information. The SME Division deals with KASTLE and when the CIF id is generated through MYSIS then KASTLE create a unique application id with accumulation different CIF numbers. Suppose a client may have one FDR account, one current account, one savings account and thereby applied for a loan. MYSIS will generate individual CIF numbers for each and every account. Again when the loan gets approved AOD deals with the post disbursement manual activities, include sending repayment schedule to the unit offices in paper format, documents stamp cancellation and sending the loan file to the archive. Apart from that the respective unit heads and authorized employees can access through MYSIS for repayment schedule. Recovery activities include receiving SMS/Fax for instalments deposits, entering the instalments information into MYSIS, printing vouchers, CRO checking SMS/Fax and solving problems, repayment voucher check and posting. Closing activities include receiving SMS/Fax requesting for closing, accessing the loan file from the archive in MYSIS, obtaining approval for closing from the concerned authority, CROs-checking with KASTLE, SMS concerned customer relations officer , and receiving and printing closing SMS/Fax.

Basic Appraisal of Small & Medium Enterprise:

Business or project appraisal is a technique of evaluating a business from various aspects, primarily the risks associated with that business enterprise. During an appraisal one has to perform a feasibility study on different aspects. These are:

a. Management and Personal Aspects b. Technical Aspects c. Marketing Aspects d. Financial Aspects e. Social Economic Aspects f. Security Aspect a. Management and personal aspects: During the appraisal the Customer Relation Officer should endeavour to obtain details about the prospective borrowers, some of which are: i. ii. iii. iv. Business related information Credit History Liquidity Information Management Background

In considering the above, one should look at how the business is managed. The CRO should also consider clients previous credit history particularly his loan repayment record. One should also verify the clients bank accounts and amount of balance maintained. Managements qualification, experience, successor and maintenance of records should provide insight in to the business. b. Technical Aspects: From a business perspective, this aspects deals with design of the system in place, the operation of the business, the different type of physical resources used, the technology used, the capacity to handle business and all other inputs (labour, raw materials, utilities etc.) The technical factors to be investigated during an appraisal are:

The size of project The process, materials, equipment, and reliability of technical systems to be used Location of projects Sustainability of the plans, layout and design used Total quantity of the goods /Service produced/Traded monthly Environment of the business and its surrounding areas Availability to various factors of production, both physical and human Raw materials availability, price level and its variations

c. Marketing Aspects: A CRO should consider the following factors of a business before making any loan commitment with a customer:

Total demand and supply of the products in the market Whether the business operates in growth Major marketing threats that the business may face.

d. Financial Aspects: This phase checks the financial health of a business through an analysis of the profit and loss account, balance sheet, cash flows, ratios and requirement of working capital. If the financial data can be collected properly, it could give a proper picture of the businesses actual position. How ever, all the data collected must be CRO checked as much as possible with the physical features of business. The following things are to be considered and determined at the time of verifying the financial feasibility of the business:

Current years profit/Loss of the business and probable profitability of business after taking the loan Determination of assets, liabilities and net worth of the manufacturing/ trading / service institution before and after taking loan Present net cash flow of the business after disbursement of loan should be determined, To know the cash position of the institution To know the source of income, production and other expenditure of the business probable financial risks of the business

e. Socio Economic Aspects: CROs should try to establish the contribution of the business to the countrys GDP, the employment generated, the sort of adverse impact of the business on the environment, and any other benefits offered. f. Security Aspects:

Ensure proper survey or verification of the security offered Ensure attachment of survey report.

Selection of Potential Enterprise for SME:

Enterprise Selection Criteria The success of SME will largely depend on the selection of a business and man behind it. In terms of the business (Enterprise), the following attributes should be sought: 1. 2. 3. 4. 5. 6. The business must be in operation for at least two years The business should be environment friendly, no narcotics or tobacco business The business should be legally registered, i.e., valid trade license, income tax or VAT registration, wherever applicable. The business should be in legal trade, i.e.; smuggling will not be allowed or socially unacceptable business will not be entertained. The business must have a defined market with a clear potential growth The business must be located ideally close to the market and the source of its raw materials/suppliers. It should have access to all the utilities, skilled manpowers that are required. 7. Any risk assessed by the management in turn will become a credit risk for the bank. So effort should make to understand the risk faced by the business. Entrepreneur Selection Criteria In order to understand the capability of the management behind the business, the following should be assessed: 1. The entrepreneur should be physically able and in good health, preferably between the age of 20-50. If he/she is an elderly person closer to 50, it should be seen what the succession process will be and whether it is clearly defined or not. 2. The entrepreneur must have the necessary technical skill to run the business, i.e. academic background or vocational training, relevant work experience in another institution or years of experience in this line of business. 3. The entrepreneur must have and acceptable social standing in the community (People should speak highly of him), he should possess a high level of integrity (Does not cheat anyone, generally helps people), and morally sound (Participates in community building)

4. The entrepreneur must possess a high level of enthusiasm and should demonstrate that he is in control of his business (Confidently replies to all queries) and has the ability to take up new and fresh challenges to take the business forward. 5. Suppliers or creditors should corroborate that he pays on time and is general in nature 6. Clear-cut indication of source of income and reasonable ability to save. Guarantor Selection Criteria: Equally important is the selection of a guarantor. The same attribute applicable for an entrepreneur is applicable to a guarantor. In addition he should posses the followings: 1. The guarantor must have the ability to repay the entire loan and is economically solvent (Check his net worth) 2. The guarantor should be aware about all the aspect of SEDF loan and his responsibility 3. Govt. and semi-govt. officials can be selected as a Guarantor such as school teachers, college teachers, doctors and so on. 4. Police, BDR and Army personnel, political leaders and workers, and Imams of mosques cannot be selected as a guarantor. 5. The guarantor should know the entrepreneur reasonable well and should preferably live in the same community Terms and Conditions of SME Loan: The SME department of DMCBL will provide micro credit loans to potential borrower under the following terms and conditions:

The potential borrowers and enterprises have to fulfil the selection criteria The loan amount is between Tk. 50.00 thousand and 15.00 lac.

SME will impose loan processing fees for evaluation / processing a loan proposal. Loan Loan can be repaid in two ways: In equal daily instalment or monthly instalment.

processing fee is 0.50% of the sanctioned loan amount.

Loan may have various tenures, such as, 3 months, 4 months, 6 months, 9 months, 12 months, 15 months, 18 months, 24 months, 30 months, 36 months and 48 months. The borrower must open a bank account with the same bank and branch where the SME has its account

Approved loans will be disbursed to the client through that account by account payee cheque in the following manner: Borrower name, Account name, Banks name and Branchs name The borrower will install a signboard in a visible place of business of manufacturing unit mentioned that financed by DMCB Limited. The borrower has to give necessary and adequate collateral and other securities as per banks requirement and procedures. SME, DMCBL may provide 100% of the Net Required Working Capital but not exceeding 75% of the aggregate value of the Inventory and Account Receivables. Such loan may be given for periods not exceeding 18 months. Loan could also be considered for shorter periods including one time principal repayment facility, as stated in loan product sheet. In case of fixed asset Financing 50% of the acquisition cost of the fixed asset may be considered. While evaluating loans against fixed asset, adequate grace period may be considered depending on the cash generation after the installation of the fixed assets. Maximum period to be considered including grace period may be for 36 months.

Monitoring:
Monitoring is a system by which the bank can keep track of its clients and their operations. So monitoring is an essential task for a CRO to know the borrowers activities after the loan disbursement. This also facilitates the build up of an information base for future reference.

Importance of Monitoring:
Through monitoring a CRO can see whether the enterprise invested the sanctioned amount in the prespecified area of his business, how well the business is running, the attitude of the entrepreneur, cash credit sales and purchase, inventory position, work in process and finished goods etc, This information will help the CRO /DMCBL to recover the loan accruing to the schedule and to take the necessary decisions for repeat loans. Moreover, monitoring will also help to reduce delinquency. Constant visit over the client /borrower ensures fidelity between the bank and the borrower and tends to foster a report between them.

Areas of Monitoring:
The purpose is to know the entire business condition and all aspects of the borrowers so that mishap can be avoided.

a. Business Condition: The most important task of the CRO to monitor the business frequently, it will help him to understand whether the business is running well or not, and accordingly advice the borrower, whenever necessary. The frequency of monitoring should be at least once month if all things are in order. b. Production: The CRO will monitor the production activities of the business and if there is any problem in the production process, the CRO will try to help the entrepreneur to solve the problem. On the other hand the CRO can also stop the misuse of the loan other than for the purpose for which the loan was disbursed. c. Sales: Monitoring sales proceed is another important task of the CRO it will help him to forecast the monthly sales revenue, credit sales etc. which will ensure the recovery of the monthly loan repayments from the enterprise as well as to take necessary steps for future loans. d. Investment: It is very important to ensure that the entire loan has been invested in the manner invented. If the money is utilize in other areas, than it may not be possible to recover the loan. e. Management of raw materials: In case of a manufacturing enterprise, management of raw materials is another important area for monitoring. If more money is blocked in raw materials then necessary, then the enterprise may face a fund crisis. On the other hand the production will suffer if there are not enough raw materials.

Economic Mapping Survey:

The branch will survey of the business of the entrepreneurs. The objective of the survey is to collect relevant information about the business, which will help to select potential business for Micro Credit/SME loans.

Mapping and Survey Method:

To conduct the economic mapping and survey properly, the following process should be followed:

The CRO will prepare a physical map of his working area showing main roads, businesses,

markets and industrial locations. In this map, the CRO will show different kinds of business in different colours. This map will show the approximate location of all kinds of business within the area.

The CRO will drive his total working area into several clusters, if possible, after that he will

conduct the survey cluster wise. After completing one cluster, the CRO will start surveying another cluster.

After the survey, the CRO will preserve the survey form cluster wise in a separate file. Based

on the survey, the CRO will identify the potential businesses to pursue those for Micro Finance/SME loans.

Therefore, CRO will approach the potential borrowers immediately to process loan

application

Loan Sanction Activities:

Select potential enterprise: For Micro Finance/SME loan, in this step the CRO conduct a

survey and identify potential enterprise. Then they communicate with entrepreneurs and discuss with the Branch Manager.

Loan Presentation: The function of CRO is to prepare loan presentation based on the

information collected and provided by the entrepreneur about their business, land property (Where mortgage is necessary)

Collect confidential information: Another important function of a CRO is to collect

confidential information about the client from various sources. The sources of information are suppliers regarding the clients payment, customers regarding the delivery of goods of services according to order, various banks where the client has account which shows the banks transactions nature of the client.

Open clients accounts in the respective branch. DMCBL will disburse the loan through this

account. On the other hand the client will repay by this account. Although there is some exception occur by the special permission of the authority to repay by a different bank account.

Fill up CIB form: CRO gives a CIB form to the client and the client fill and sign in it. In some

case if the client is illiterate then the CRO fill the form on behalf of the client. Then CRO send the filled and signed form to the head office.

Sending CIB to Bangladesh Bank: The head office collects all information and sends the CIB

form to Bangladesh Bank for clearance. Bangladesh Bank return this CIB form within 10-12 days with reference no.

CIB report from Bangladesh Bank: In the CIB report Bangladesh Bank use any of the

following reference no: 1. 2. 3. 4. 5. NIL: If the client has no loan facility in any bank or any financial institution then BB UC (Unclassified): if the client has any loan facility in any bank or financial SS (Substandard): if the client has any loan facility in any bank or financial DF (Doubtful): if the client has any loan facility in any bank or financial institution BL (Bad lose): if the client has any loan facility in any bank or financial institution

(Bangladesh Bank) use NIL in the report institution and if the instalment due 0 to 5.99 then BB use UC in the report institution and if the instalment due 6 to 11.99 then BB use SS in the report and if the instalment due 12 to 17.99 then BB use DF in the report and if the instalments due for more than 18 or above months then BB use BL in the report. This report indicates that the client is defaulter and the bank should not provide loan the client.

Loan Sanction:
The respective branch sanctions loan to the clients up to 1.00 lac and then send the sanction letter including all necessary charge documents to the asset operation division for disbursement the loan. If the amount is higher than 1.00 lac then the respective branch sends the proposal to head office, credit division for sanction. The head office credit division sends the proposal to the credit committee or board. After sanctions the loan, the sanction letter including all documents send to the branch for disbursement.

Disbursement of SME loan:

Pre Disbursement Manual Activities

Prepare loan file: Receiving all documents, Credit Officer prepare a loan file with all documents received the applicant. Charge documents checking: The credit administration division checks all charge documents. Following charge documents are checked: Money receipt (Risk fund) Sanction letter Demand promising note (With stamp of Tk 20/=) Letter of arrangement (With stamp of Tk 150/=) General loan agreement (With stamp of Tk 150/=) Letter of undertaken (With stamp of Tk 150/=) Letter of stocks and goods (With stamp of Tk 150/=) Letter of hypothecation book debt and receivable(With stamp of Tk 150/=) Letter of disbursement Photocopy of trade license Two guarantors ( one must be Spouse/parents) If the loan provide for purchase of fixed assets or machineries and if the loan amount is over Tk 50,000/= then the stamp of a certain amount is require)

Documents deficiency and problem resolving: If there is any error found then it informed to the respective branch. If the application form is not filled properly then the file send to the branch to fill the application properly. If any document error found then the credit administration division asked the branch to send the require documents and the file stored to the credit administration division.

Prepare disbursement list: The credit administration division lists all new sanctioned clients details and send a request to the treasury through internal mail.

Disbursement of the amount: Sending the list to the treasury of DMCBL for disburse the amount, the treasury disburse the amount to the client through the branch account of the clients.

Financial Analysis:

An analysis of historical financial statements of the borrower should be presented. Where reliance is placed on a guarantor then guarantors financial statements should also be analyzed. The analysis should address the quality and sustainability of earnings, cash flow and the strength of the borrowers balance sheet. Specifically, working capital assessment, cash flow, leverage and profitability should be analyzed. However for small enterprises. However it should be mentioned here that a large number of enterprises other than limited companies (i.e., grocery shop, general store, hotel, fish shop, lead workshop, sole proprietorship/partnership firms etc.) may not have proper books of accounts including balance sheet, profit & loss account and they may not be able to prepare current and future cash flows due to lack of sophistication and expertise. It is expected that in such cases, the respective Credit Officer shall assist the borrower(s) in obtaining/developing such books of accounts as per forms/formats prescribed by each bank. Complying with lending guidelines: There should be Lending Guidelines that clearly outline the senior managements view of business development priorities and the terms and conditions that should be adhered to in order for loans to be approved. The Lending Guidelines elaborated in this Policy Document shall be reviewed in every six months to reflect changes in the economic outlook and the evolution of the banks loan portfolio, and be distributed to all lending/marketing officers. The Lending Guidelines should be approved by the Credit Committee & Board of Directors of the bank based on the endorsement of the banks Head of Credit. Any departure or deviation from the Lending Guidelines should be explicitly identified in credit applications and a justification for approval provided. Approval of loans that do not comply with Lending Guidelines should be restricted to competent authority as decided by banks Credit Committee & Board of Directors. Complying with PPG: Officers/Employees related with Approval process should ensure that the proposed facility complies with the Clauses outlined in the PPG of that particular product. Any departure or deviation from the PPG should be explicitly identified in credit applications and a justification for approval provided. Approval of loans that do not comply with PPG should be restricted to competent authority as decided by banks Credit Committee & Board of Directors.

Approval process: Loan Applications in the prescribed format shall be received at Credit Approval Committee recommended by credit officer. The credit officer is 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 should be familiar with the banks Credit Policy and PPG and should conduct due diligence on new borrowers, purpose of the loans and guarantors. During recommending for a client it is expected that the respective Officer has adhered to Know Your Customer (KYC) and Money Laundering guidelines. Credit Approval Sheet should have, as a minimum, the following details: Amount and type of loan(s) proposed. Purpose of loan(s) Loan Structure (Tenor, Covenants, Repayment Schedule, Interest) Security (if any)

Approvals must be evidenced in writing. Approval records must be kept on file with the Credit Applications. Loans and advances on becoming inoperative / stuck up should not be renewed and / or re-scheduled without getting prior approval from the Credit Committee. In case of loan take over from any bank/financial institution, then any correspondence should be made with the bank/financial institution directly, such as security takeover. Credit assessment: The evaluation process is carried out based on Lending Guideline described in this Policy and the clauses and documents checklist as per the PPG. The detailed credit risk assessment should be conducted prior to the approving of any loans. The Credit Risks are detailed in the Risk Management Chapter of this policy. Risk grading: Bank shall formulate a separate risk-grading matrix customized for Micro Financing on the basis of expert opinion taking into consideration the experience of the Bank in lending the Micro Finance for last few years.

Approval authority: Lending Authority is delegated to officers related with approval individually by the Managing Director in writing. Records of such authority are retained with Head of Credit. Copies of all Delegation of Lending Authorities are also retained by Credit Administrations Department. Any breaches from Lending Authority should be reported to the Managing Director and Head of Credit. The executives charged with approving loans shall have relevant training and experience to carry out their responsibilities effectively. Execution of approval authority: While exercising the lending authority instructions / stipulations contained in the Banks Manuals, instructions issued by Bangladesh Bank and other instructions issued by the Head Office from time to time should be strictly followed. Lending authority is not transferable or assignable. No lending officer may approve a credit extension on behalf of others or delegate his authority to others.

Sanction letter: All letters addressed to the borrowers sanctioning credit facilities should be prepared in duplicate and signed by two authorized officers of the Bank. Among the two authorized Officer one must be a Manager of the branch. If the terms and conditions of loan sanction letter are acceptable to him the borrower should return the duplicate copy duly signed. Reporting: A monthly summary of all new facilities approved, renewed, enhanced, and a list of proposals declined stating reasons thereof shall be reported by branch to the Head of Credit.

DMCBL at a Glance:
Financial Highlights: SL NO 1 2 3 4 5 6 7 8 As at 30 June (Taka in lac) 2011 287 662 37,908 39,416 26,623 12,793 8,589 7,959 2010 296 411 27,735 27,646 19,720 7,926 6,340 5,864 2009 276 227 17,030 16,917 11,248 5,669 4,102 3,848 2008 246 138 11,991 11,927 7,955 3,972 2,896 2,635 2007 175 28 8,835 8,596 5,519 3,077 2,388 2,325

Particulars Share Capital Reserve Fund Total Deposits Total Investments Micro Investments Other Investments Total Income Total Expenditure

9 10 11 12 13 14 15 16 17 18.

Net Profit Total Assets Fixed Assets Return of Share Capital Return of Assets Investment Deposit Ratio Dividend No of Employees No of Branches No of Customers

630 42,919 1,132 291% 1.47% 103.98% 40% 1557 94 41,119

476 30,656 882 161% 1.56% 100.32 30% 1,401 80 39,575

254 18,916 627 92% 1.34% 99.34% 30% 1,064 67 29,670

261 14,176 521 106% 1.84% 97.55% 30% 847 52 24,632

63 9,405 476 36.36% 0.68% 95.74% 20% 815 47

Table A (Growth rate of Deposits, Investments and Profit/Loss from 2001 to 2011) Deposits Deposits Growth Rate 10,680,000 39,020,000 95,195,000 241,943,000 394,100,000 636,149,487 883,531,954 1,199,081,851 1,703,034,244 2,773,555,556 3,790,835,512 65.43% 265.35% 144.00% 154.15% 62.89% 61.42% 38.89% 35.71% 42.03% 62.86% 36.68% 5,302,000 25,932,000 71,203,000 214,757,000 337,517,060 568,971,134 859,636,522 1,192,750,792 1,691,769,656 2,764,687,429 3,941,629,898 Investments
Investments

Year July to June 2000 - 2001 2001 - 2002 2002 - 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 - 2009 2009 - 2010 2010-2011

Growth Rate 77.20% 389.09% 175.00% 201.61% 57.16% 68.58% 51.09% 38.75% 41.84% 63.42% 42.57%

Inv./Dep.

Ratio 49.65% 66.46% 74.80% 88.76% 85.64% 94.34% 95.74% 97.55% 99.34% 100.32% 103.98%

Profit / Loss (2,838,154)

Up to 30.06.01

(11,180,831) (7,533,595) 862,625 7,252,279 4,447,035 6,381,908 26,112,456 25,420,411 47,663,828 63,006,781

It may be mentioned that due to non-availability of appropriate information and related vouchers, register, ledger etc. loss to the tune of Tk 2,838,154.00 estimated for the year 2000-2001 shot up to Tk 1,11,180,831.00 in the year 2001-2002. Due to the far sightedness and efficiency of the existing management committee, the bank took its rebirth in 2003-2004 and activated and earned a profit of Tk. 8,62,625.00 with the provision of dividend of 10% for its shareholders. The payment of dividend increased to 20% for the year 2004-2005 and continued at the same rate for next fiscal year. And also the payment of dividend increased to 30% for the year 2007-2008 and it also continued at the same rate for next two fiscal years. The dividends for the year 2010-2011 for the shareholders of the bank declare is 40%, subjected to approval by next Annual General Meeting (AGM) .

Classification of Deposit & Savings Scheme:

Deposit:
(a) Savings Deposit. (b) Current Deposit / Deposit without Interest. (c) Fixed Deposit / Special Term Deposit.

Savings Scheme:
(a) (b) (c) (d) Monthly Savings Scheme. Education Savings Scheme. Marriage Savings Scheme. Hajj Savings Scheme.

Deposit & Savings Scheme adopted by the Bank proved to be people friendly i.e.; the people of small means accepted these schemes as their own and invested remarkably. This would be evident from the outstanding amount of deposits in the deposit & savings scheme for only a period of six years as given in Table-B bellow. Table B
Financial Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Al-Wadeeah Current Deposits 1,345,602 1,823,450 5,614,468 6,612,408 227,266,415 394,060,833 Mudaraba Savings Deposits 110,111,828 143,362,154 179,056,217 252,063,903 178,232,097 169,063,812 Mudaraba Term Deposits 328,936,701 420,527,608 581,700,232 866,516,499 1,574,273,003 2,078,222,196 Mudaraba Special Deposits 194,352,441 314,578,599 432,319,274 576,992,489 790,825,920 1,147,642,866

Other Deposits 1,402,915 3,240,143 391,660 848,945 2,958,121 1,845,805

Total Deposits 636,149,487 883,531,954 1,199,081,851 1,703,034,244 2,773,555,556 3,790,835,512

Growth Rate 38.89% 35.71% 42.03% 62.86% 36.68%

The total Deposit at the end of the previous year was Tk.277.35 (in core). During the year under review the amount stood at Tk.379.08 (in core) which was 36.68% higher than the position of the previous year. The proportion of Deposit during the year as given below: 2% 15% 0% 35%
Proportion of Deposit For the year of June,2008

48%

Savings

Curent

FDR

Special Deposit

Sundry

Classification of Loans & Advances:

1. Bai - Murabaha (Micro Investments) Success of any Co-operative Bank like DMCBL depends on the quality of money it receive and the quality of money it distributes. Taking this principle as the guiding philosophy, the bank extends small investments. As these investments are provided without securities it appraises any investment proposal very cautiously taking the people into consideration. The bank recovers investment in a number of instalments with profit generally within twelve months. 2. Bai - Muazzal (Consumer Investments) Consumers Investment is meant for people of Fixed Income Group i.e. service holder. The Consumer Investment is repayable within one to two years depending upon the Clients position. 3. Bai - Murabaha (SOD) These are allowed against Mudaraba Term Deposit Receipts (MTDR) and Mudaraba Special Deposits etc. In such case, investment constitutes up to a maximum of the 80% of the deposits and is realized in monthly instalment basis. 4. Special Scheme Term Investments

Many skilled workers, small traders are not able to procure investments from scheduled banks for paucity of securities. Considering their locus standing and reputation, they are extended investments without securities to help them to be self sufficient. Clients are not required to waste extra time for having investments. They are also not required to come to office to repay investments. Rather the employees of the bank collect instalments from their door step on daily, weekly and monthly basis. 5. An instance of Bai - Murabaha (Micro Investments) If a small trader takes banks investment of Tk 10,000.00 and invest in his business, he will have to pay Tk 100.00 or Tk 80.00 or, Tk 70.00, Tk 60.00 or Tk 50.00 or Tk 40.00 or Tk 30.00 or Tk 20.00 out of the profit of his daily sale proceeds. This payment will be collected by the banks employees directly from his trading/business place/door step. In this process, the entire investment is repaid in 132 days through 107 instalments or 164 days through 136 instalments or 194 days through 158 instalments or 232 days through 188 instalments or 286 days through 232 instalments or 373 days through 303 instalments or 538 days through 437 instalments or 970 days through 786 instalments. As a result, the Clients dont face difficulty and investment becomes his own investment. Around 120,000 members of this society are being benefited through this process. The total Advance at the end of the previous year was Tk 276.47 (in corer). During the year under review the amount stood at Tk 394.16 (in corer) which was 42.57% higher than the position of the previous year. The position of the bank Advance from 2005-2006 to 2010-2011 were given in the Table C and the proportion of Advance during the year as given below: Table C
Fiscal Year

Bai -Mudarab a (Micro)

Bai -Mudarab a (General)

129,844,081 174,308,426 207,652,645 315,034,388 334,162,212 383,050,422

Bai -Mudarab a (Cash

Bai -Mudaraba (SOD)

36,749,507 78,767,336 112,447,994 166,512,245 289,888,599 465,101,492

Bai -Muazzal (Consume)

Bai Muazzal (Staff &

Hire Purchase (Rick/Van/

Total Investments

Growth Rate

Credit)
24,141,042 25,939,399 25,114,077 28,790,093 31,176,988 40,365,956 16,958,140 25,848,029 37,412,345 39,170,281 44,030,895 47,522,606

Others)
828,145 1,697,008 13,380,158 12,582,547 81,749,211 333,326,793

CNG/Ca)
1,187,803 1,111,724 1,221,697 4,819,503 11,653,237 9,914,197 568,971,134 859,636,522 1,192,750,792 1,691,769,656 2,764,687,429 3,941,629,898 68.58% 51.09% 38..75% 41.84% 63.42% 42.57%

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

359,262,416 551,964,600 795,521,876 1,124,860,599 1,972,026,287 2,662,348,432

Income, Expenditure and Profit & Loss: Total Income & Expenditure of the bank during the year were Taka 858,995,155.00 & Taka 795,988,374.00 respectively resulting in a Profit of Taka 63,006,781.00 before appropriation. Sector wise break - up of Income and Expenditure for the financial year 2010-2011 is shown below: Particulars Income: Profit on Micro Investments Profit on Other Investments Membership Fees Other Operating Income Total Income Expenditure: Salary and allowance with remuneration Profit paid on deposits and others Rent, rates and taxes, etc Bills and service charge, etc Stationery, printing, advertisements, etc Depreciation, repair and maintenance Other expenses Total Expenditure Net Profit for the year Amount (Tk) 684,252,242.00 107,703,337.00 5,828,950.00 61,210,626.62 858,995,155.62 291,701,492.00 351,391,804.30 58,810,799.17 5,088,399.00 40,067,527.50 28,086,704.00 20,841,648.38 795,988,374.35 63,006,781.27 % of Income 79.66% 12.54% 0.68% 7.13% 100% 36.65% 44.15% 7.39% 0.64% 5.03% 3.53% 2.62% 100%

During the year 2010-2011 the bank has made provision of Tk 126.01 lac against General Reserve, Tk 126.01 lac against Bad and Doubtful Investments, Tk 18.90 lac against Co-operative Development Fund, Tk 31.50 against Staff welfare fund, Tk 12.60 Recreation and sports fund, Tk 31.50 against Incentive bonus, Tk 12.60 against Reserve for profit payable, Tk 31.50 against Provision for other Liabilities, Tk 118.34 against Dividend (proposed) and Tk 119.72 lac against other reserve. As such, Retained Earnings for the year stood at Tk 121.08 lac.

Contribution to the Revenue

Earnings of the Government In operating its activities, the DMCBL has been contributing to the revenue earnings of the Government considerably. Since the final takeover of the bank by the existing management in 20022003, it has been adding revenue to the exchequer of the Government through settlement of power, water and gas bills and payment of the income tax and value added tax. Volume of revenue and tax contribution of bank for last 5 years from 2006-2007 to 2010-2011 were as reflected in Table -D. Table D 2006-2007 Power Water Gas Telephone Income Tax Vat TOTAL 2,397,678.00 177,210.00 231,762.00 1,131,371.00 3,182,938.00 401,974.00 7,522,933.00 2007-2008 2,683,159.00 277,070.00 310,475.00 1,385,201.00 5,430,282.00 637,423.00 10,723,610.00 2008-09 3,547,012.00 355,015.00 423,743.00 888,903.00 7,088,253.00 1,656,797.00 2009-10 5,124,479.00 514,097.00 578,077.00 838,199.00 14,448,404.00 1,735,722.00 2010-11 5,879,979.00 666,368.00 833,693.00 868,084.00 16,069,197.00 4,182,873.00 28,500,194.00

13,959,723.00 23,238,978.00

What ever have been told in the Annual Report 2010-2011 is considered from the Auditors Report on the Financial Statements of the Dhaka Mercantile Co-operative Bank Limited for the year ended 30 June, 2011. Branch Expansion & Modernization: 19 (Nineteen) new branches were opened at 1. Norail 2. Meherpur 3. Jenaidah 4. Magura 5. Sherpur 6. Chatok, Shunamgonj 7. Hobigonj 8. Chatkhil, Noakhali 9. Matiranga, Khagrachari 10. Bandarban

11. Kotchandpur, Jhenaidah 12. Pirojpur 13. Bhola 14. Kurigram 15. Chuadanga 16. Rangamati 17. Nawabgonj 18. Shariatpur and 19. Lalmanirhat. As such the total number of Branches stood 99 (ninety nine) all over the country. Last one new branch to be opened very shortly in the next financial year.

Annual General Meeting The Annual General Meeting of the Bank for the financial year 2009-2010 was held on 05 August, 2010 at Trust Milonayaton, Dhaka Cantonment, Dhaka. The Meeting discussed about Policy Issues, Budget, Distribution of Profit and Loss, reward to employees, additional bonus to employees, annual Audited Accounts, appointment of Auditors for the financial year 2010-2011 and overall performance and other matters of importance and accorded its approvals as and when require. In the meeting 59

(fifty nine) Branch Managers were awarded crest and cash reward for achieving target of Profit, Deposit, Investment and their best performance for the year ended 30 June, 2010.

Audit Committee:
Internal Audit The Internal Audit Committee of the Bank comprises only those Board Members who have expertise in accounting and audit. Internal Audit function of the Bank has been strengthened to financial and operating information assess compliance with written policies and procedures of the bank and other regulatory authorities. Appointment of Auditors M/s. S. F. Ahmed & Co. Chartered Accountants was appointed as Auditors of the Bank for 20102011 in the Annual General Meeting. External Auditors are provided absolute freedom and support as per law in order to ensure that the financial statement drawn up, are in conformity with Generally Accepted Accounting Principal (GAAP), and International Standards on Auditing (ISA) as adopted in Bangladesh.

Future Plan
The Dhaka Mercantile Co-operative Banks plan to have a poverty free Bangladesh in course of generation in the new Millennium, reflecting the National dream and be pro-active in fulfilling our social responsibilities. To meet the needs of our customers, provide fulfilment for our people and constantly seek to better serve our customer and extend investment facilities of the bank in rural areas. The Bank is going to introduce various new Investment schemes like education, agriculture and women entrepreneur cell etc. We are making a work environment to be supportive of teamwork, enabling the employees to perform of them best of their abilities.

SWOT Analysis of DMCBL:

SWOT is an acronym for the internal strength and weakness of a firm and the environmental Opportunity and Threat facing that firm. So if we consider DMCBL as a business firm and analyze the its strength, weakness, opportunity and threats the scenario will be as follows: Energetic as well as smart team work. Strength Good Management Cooperation with each other Good banker-customer relationship Excellent monitoring and supervision.

Lack of proper motivation, training and job rotation. Weakness Lack of experienced employees in junior level management. Lack of own ATM services. Tendency to leave the bank in quest of flexible environment.

Expanded market Opportunity Growth of sales volume Change in political environment

Threats

Different services of FCBS (Phone Banking/Home Ban king) Daily basis interest on deposit offered by HSBC Entrance of new PCBs

Findings:
The researcher has find out some points by screening the whole study which is expressed as major findings. The researcher has analyzed the data sincerely and carefully and has tried to identify appropriate findings. Moreover, conversations with the DMCBL officials were very significant for these findings. After overall appraisal of DMCBL, the major findings are as follows: Position: DMCBL is the pioneer in private sector co-operative banking operations of the country. Operational Orientation: Its major operations are development & welfare oriented. Management System: Management system of DMCBL is fully democratic. Training Facilities: DMCBL provides training facilities to its officer of the bank and also provides executive development & internship program. Management Functions: The management functions (from planning to control) are not clearly present in their various activities. Computerization: All activities are not computerized. Manual Work: Paper-based works are still existed in branch. Decoration: It is a leading co-operative bank of Bangladesh but it has no attractive appearance in office environment.

Conclusion:
There are a number of nationalized banks, foreign banks, and local commercial and co-operative banks operating their activities in Bangladesh. The DMCBL is the largest of co-operative bank in Bangladesh. For the future planning and the successful operation in achieving in its goal in this current competitive environment this report can be a guideline. Bank always contribute towards the economic development of a country. DMCBL, compared with other co-operative banks are contributing more by investing most of their funds in fruitful projects leading to increase in production. It is obvious that right thinking of this bank including establishing a

successful network over the country and increasing resources, will be able to play a considerable role in the portfolio of development financing in the developing country like ours. Mobilization of savings is very important for the economic development of our country. The various new saving schemes of DMCBL with prospect of higher return could link a huge population of both rural and urban area with development activities of the whole country. The bank has computerized all its branches to facilitate the service offered to the customer. Besides this, the bank is arranging a number of training for the officers to improve the quality of banking service through development of human resource. Being one of the leading private co-operative banks, DMCBL is undertaking a lot of socio-economic program.

Recommendations:
In order to get competitive advantage & to deliver quality service, top management should try to modify the services. For the improvement of the service the following measures should be taken: Customers Convenience: For customers convenience, DMCBL should provide more personnel to deliver faster services to their honourable customer. Human Development: Development of human resources should be ensured to increase efficiency in work. Communication System: Ensure proper communication system and maintenance of files & machineries should modernize. R & D: Research & Development wing must be more extensive & rich. Strategy: Effective strategies must be undertaken against defaulter. Project Management: Project Management must be practiced in case of investing in the project. Feasibility study of the project, project planning, monitoring & evaluation should be undertaken.

Managerial Functions: DMCBL must have to follow the management functions (from planning to control) strictly in all of their business activities and also operation the bank. Financial Analysis: Branch should have a separate section to analyze the financial statement for fining its liquidity, profitability & ownership ratios. Strict Rules for arrival and departure for the employee: Management should strict about the arrival and departure time for the employees. Punch Card System: It is very important for the employee when they enter into the office they should punch their card so that every employee will be punctual to attain the office.

Job Rotation: In DMCBL job rotation is fully absent job rotation is very important to make the entire employee efficient for all departments. Image: Office should be fully decorated to attract people to come into it. Evaluate customers needs from their perspective and explain logically the shortcomings. Use of effective MIS. To deliver quality service top management should try to mitigate the gap between customers expectation & employees perception.

REFERENCES
Md. Nazmul Haque. (January 2012). THE ROLE OF MICRO CREDIT TO ALLIVIATE RURAL POVERTY OF BANGLADESH. Available: www.journals.savap.org.pk. Last accessed February 28, 2012. Microcredit: One of Many Intervention Strategies, CGAP, http://www.cgap.org /p/site/c/ template.rc/1.9.2413/ Ahmed and Hossain (1984). Rural Poverty Alleviation in Bangladesh: Experiences and policies, FAO, Rome. Asaduzzaman and Akter (1990). Evaluation of Poverty Alleviation Program. The Bangladesh Institute of Development Studies, Vol. II, 1990. Islami Banking. Available: http://www.dmcbl.com/saving-schemes-service. Last accessed February 28, 2012.

Company Profile. Available: http://www.dmcbl.com/company-profile. Last accessed February 29, 2012. Organizational Structure. Available: http://www.dmcbl.com/organizational-structure. Last accessed 5th March 2012. Management Team. Available: http://www.dmcbl.com/management-team. Last accessed 5th March 2012. Job descriptions. Availble: http://www.dmcbl.com/job-descriptions. Last accessed 6th March 2012. DMCBL (2010-2011). Annual Report. Dhaka: The Dhaka Mercantile Co-operative Bank Ltd.. p10p33.