Credit procedure of Mercantile Bank Limited: a case study of Mohakhali Branch

Abstract

Building strong relationship with all the stakeholders, particularly the customer is crucial for MERCANTILE BANK LIMITED (MBL)'s growth and prosperity. Technology and competition have made it vital to forget stronger bonds with the customers to meet their heeds at their convenience. MBL put emphasis on meeting this continuous challenge of managing relationship significant achievements over the past years-both financial and strategic are solid indication of its strength and potential. MBL values close relationships with each other. At the same time it brings the decision making authority close to the customers to give them the best service available. Banking is a service-oriented business and they have drawn excellent people for the purpose. MBL is very fortunate to have a strong credit management team. They are committed to the continued implementation of its sound strategic programs. It focuses on creating a culture that places importance on profitability and success. Credit procedure of Mercantile Bank is a vast method where every parts of credit department is important but lending is the heart of credit procedure. Lending comprises a very large portion of bank’s total activities. Sound lending practice therefore, is very important for profitability and success of a bank. Like other financial intermediary, commercial banks also intermediate between the savers and borrowers to mobilize the financial surplus of the savers and allocate these savings to the creditworthy borrowers of different sectors of the economy. In this way they not only help in financial development of a country but also facilitate its economic development. For the sake of sound lending, it is necessary to develop a sound policy and modern credit techniques to ensure that loans/ advances are safe and the money will come back within the time set for repayment. For this purpose, proper and prior analysis of credit proposal is required to access the credit worthiness for avoiding risk.