Foreign exchange process and service assessment on Mercantile Bank Limited
AuthorRahman, Md. Ashiqur
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With the clear mission of providing efficient banking services and to contribute socioeconomic development of the country, Mercantile Bank Ltd emerged as a new commercial bank and inaugurated its operation on 2 June, 1999. From the beginning of the formation in banking service, the bank has involvement with foreign exchange business regarding conversion of currency value, maintain exchange rates and trade with other countries. The department deals with all these related activities are named as itself Foreign Exchange Department including three sub-departments- Export, Import & Remittance. The purpose of this study is to understand the foreign exchange operations of Mercantile Bank Limited and to evaluate this service which has been done by analyzing the financial information of the last five years. This paper highlights the foreign exchange functions, about the procedure of their service provided to clients by the help of import and export sections, overall activities of LC transactions, the payment procedure of both the export and import, types of currency transfer through the bank, remittances they earn, the facilities they provide to their exporters and importers, the effect of exchange rates fluctuation and finally the business position of foreign exchange operation of the bank. Afterwards, various financial apparatus that used for the export-import business; consequently, documentary credit or LC is the most important of them. The requirements, procedures, maintenances and disbursements of letter of credits are pre-settled by the Import and Export (Control) Act, 1950 of Bangladesh. Also the bank has their own rules and regulations for clients addressing to the government policies. There are time limitation, shipment validity & expiry included with the export-import trade. Besides, the position of the bank for financing in international commerce as the negotiation and advisory on behalf of parties are opposing. Finally, I have tried to figure out some findings in order to smooth the operation and include SWOT analysis in these findings and also recommended how to remove these problems to operate its business efficiently in the future years.