Understanding Dhaka Mercantile Co-Operative Bank Limited

Dhaka Mercantile Co-Operative Bank Limited is a unique financial institution in Bangladesh. It was established in 1982.

The bank's primary goal is to provide financial services to the merchant community in Dhaka.

Dhaka Mercantile Co-Operative Bank Limited has a strong presence in the city, with several branches across various areas.

The bank offers a range of financial products and services, including loans, deposits, and remittances.

Dhaka Mercantile Co-Operative Bank Limited was established on 6 January 1973 as a cooperative society licensed under the Bengal Co-operative Societies Act, 1940.

The bank went through a revival in 2001 led by retired Group Captain Abu Zafar Chowdhury, who would later become a key figure in the bank's history.

In 2005, Abu Zafar Chowdhury defended the bank from Bangladesh Bank, which questioned the use of the bank's name.

Group Captain Abu Zafar Chowdhury was re-elected chairman of Dhaka Mercantile Co-Operative Bank Limited on 11 July 2007.

The bank's employees refused to let an administrator appointed by the Department of Cooperatives join in 2016, citing an appeal filed with the courts.

Dhaka Mercantile Co-Operative Bank Limited was established on 6 January 1973 as a cooperative society licensed under the Bengal Co-operative Societies Act, 1940.

The bank went through a revival in 2001 led by retired Group Captain Abu Zafar Chowdhury, who would later play a significant role in the bank's history.

In 2005, Abu Zafar Chowdhury defended the bank from Bangladesh Bank, which questioned the use of the bank's name.

Group Captain Abu Zafar Chowdhury was re-elected chairman of Dhaka Mercantile Co-Operative Bank Limited on 11 July 2007.

The bank had a significant amount of deposits and loans, with 9.81 billion BDT in deposits and 10.79 billion BDT in loans, as of the time regulators discussed the bank's operations in 2016.

In October 2016, six regulators of Bangladesh agreed that Dhaka Mercantile Co-Operative Bank Limited was engaged in banking without proper licensing.

The Department of Cooperatives considered liquidating the bank due to its unlicensed banking activities.

In January 2020, the Anti-Corruption Commission filed a case against three officials of Dhaka Mercantile Co-Operative Bank Limited for embezzling 92.5 million BDT from the bank.

The DMCB has undergone significant growth and development over the years. The company's early success led to the establishment of a new factory in 1950, which increased production capacity by 50%.

One of the key factors contributing to the DMCB's growth was its innovative approach to manufacturing. The company's introduction of the first automatic drum machine in 1960 revolutionized the industry.

By the 1970s, the DMCB had expanded its product line to include a range of new machines, including the popular 8000 series. This expansion helped the company to reach a wider market and increase its customer base.

The 1980s saw the introduction of new technologies and materials, which further increased the DMCB's efficiency and productivity. The company's commitment to innovation and quality helped it to maintain its position as a leading manufacturer.

Throughout its history, the DMCB has remained committed to its core values of quality, innovation, and customer satisfaction. This dedication has helped the company to build a loyal customer base and establish itself as a trusted brand.

Dhaka Mercantile Co-Operative Bank Limited has faced regulatory issues, including a 2017 Bangladesh Bank order to freeze its operations due to its poor financial condition.

The bank's poor financial condition was attributed to its high non-performing loans, which stood at 32.64% of its total loans as of 2017.

The bank's financial instability led to a loss of Tk 1.24 billion in 2016, as reported in its annual financial statement.

The bank's management has been criticized for its handling of the financial crisis, with some experts calling for a more effective governance structure.

In 2018, the bank was able to recover Tk 3.44 billion from its non-performing loans, helping to improve its financial position.

The Dhaka Mercantile Co-operative Bank is licensed as a co-operative, but acts like a bank. It has taken deposits from over 200 thousand clients.

Its interest rate is twice that of normal banks, but it has to depend on loans from other banks to pay this high interest. This can be a risky situation, especially when clients request withdrawals.

The co-operative authorities and Bangladesh should come forward with positive intervention to prevent a collapse. The Dhaka district co-operative office has directed the institution to stop any further collection of deposits, provision of loans, and selling of shares.

The prime minister's office has also directed Bangladesh Bank to investigate the matter. This is a serious issue that requires immediate attention.

The co-operative has been accused of unlawful and unapproved opening of branches all over the country and collecting deposits indiscriminately. The attorney general's office sent a letter to the co-operative's office about this issue about a year ago.

The irregularities in the co-operative are not limited to interest rates, but also include determining dividends, loans, and other matters. This has raised serious questions about the overall administrative responsibility of the banking system.

There are many other such institutions in existence, and it is imperative that good governance and order is enforced in these institutions without further delay. The banking and finance sector has been rife with corruption, and this has led to the pilfering of funds of the general public and even the government.