‘consumer banking of standard chartered bank’
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‘Consumer Banking of Standard Chartered Bank’
PREFACE
On completion of requisite courses and a comprehensive examination of
M.B.A of Chittagong University are required to undertake an internship
program. In order to implement this program, each of them is attached
with an organization. After the completion of internship program every
student is required to prepare a report on a selected topic on the
organization where he/she has been attached. The basic purpose of this
attachment is to expose the student to the real Business world and
acquaint himself/herself with the current operations & practices in modern
Business. This exposure is very helpful in comprehending how things move
on and to find the gap between theory and practical operation.
This report also originates from that some perception about the practical
situation as a fresh student. Actually this report comprises how a student
has perceived the real situation in the business. As I am being attached
with the Standard Chartered Bank, so I always tried of my best to observe
how they deal with their Customer. I also studied about their working
environment and how to process Credit and Collect outstanding. As a
consequence, I have put theoretical glimpses of the key points wherever
necessary and have tried to knit a relationship with this observation.
Comments and suggestions for future development of the report or any
concept will be appreciated.
EXECUTIVE SUMMARY
I here, who am a student of Accounting and Information System, have just
appeared the MBA Examination. After completing my written examination
and Viva, I started an internship program at Standard Chartered Bank. In
attendance in this program, I have acquired practical knowledge. I have
assembled an excellent and practical experience. Based of this program, I
have prepared this report. Though there were several problems and
limitations meanwhile the program I have tried to maintain level of best to
make this report instructive and fledgling one
Part – 1:- Encompasses objective methodology and limitation the report
Part – 2:- Focus on An overview of SCB and Agrabad Branch.
Part – 3:- Focus on an overview of Credit & Collection of SCB.
Part – 4:- Focus on an overview of SCB Credit Card.
Part – 5:- Focus on the portfolio
Part – 6:- Focus on the other Bank.
Part – 7:- Various types of Packages and offered by SCB.
Part – 8:- I have elaborately discussed about my working experience in
SCB and all of the things I have learned during my internship period.
Part – 9:- I focused on project part, which contains the analysis of the
collection data. After analyzing the data I have identified the main
problems faced by SCB and also provided some recommendations.
ACKNOWLEDGEMENT
I have the immense pleasure and satisfaction in presenting report, which
is termination of my project works at SCB. This is one pride to thank one
and all who have helped me to take this project a great success. Most of
my friends have heartily and cooperatively contributed to prepare this
internship report. But scope and limitations prohibits the listing of all of
them who have made significant contribution.
I articulate my heartiest gratitude to my honorable supervisor Ranjit
Kumar Chowdhury, Associate Professor, Department of Accounting and
Information System, University of Chittagong for her significant advice and
cooperative behavior.
The success of this report depend on the contribution of many
people, especially those who spare time to share their mindful
art of judging of merits and faults and have given valuable
suggestions.
I would like to extend my thanks to the contributors of generous help from
whom I have received much information about SCB. I am grateful to Syed
Sanowarul Hoque, Credit Manager, Consumer Banking Division Chittagong
and K.M. Bodroudoja, Collections Manager, Consumer Banking Division;
Chittagong Who permitted us to perform our internship program and
coordinated us sincerely.
My gratitude also goes to Mr. Tanim Muntasir, Credit Analyst, Mr. Niaz
Morshed, Officer, Collection And Mohammed Irfan Haidar Khan, Credit
Analyst, Consumer Credit and Collections who have supplied necessary
information and given valuable time to prepare my report.
I offer my grateful thanks to Hasan Mohammad Iftekhar and Jahangir Iqbal,
whose inspiration and kind assistance made my report successful.
I could never forget the contribution of nor could express my gratitude
fully to all that gave their heartiest effort in helping me.
Thank you all.
Md. Kabir Uddin
LETTER OF TRANSMITAL
To
The Associate Professor
Department of Accounting & Information system
University of Chittagong.
Chittagong.
Subject: Prayer to accept my internship report.
Dear Sir,
It gives me immense pleasure to submit the research report based on
internship report entitled ‘Consumer Banking of Standard Chartered Bank’
to fulfill the partial requirement of MBA program. I tried to make full use of
this programmer through regular participation. I sincerely believe that the
findings of this report will be of immense help to the academic and
references and for any explanation and clarification of any aspect of this
report.
I would therefore pray and hope that your honor would be kind enough to
accept my internship report and taking that limitation in account. I am
thanking you.
Sincerely Yours,
----------------------
Md. Kabir Uddin
Exam Roll: 82 (2001)
Class Roll: 14507
M.B.A
Department of Accounting &Information system
University of Chittagong.
OBJECTIVE OF THE STUDY
The prime objective of this report is to learn practical knowledge along
with our Institutional study; also I acquire knowledge and evaluate Credit
and Collection Policies. The broad of this internship programmed is to get
familiarity with Standard Chartered Bank and its marketing activities. To
achieve this, the following objectives have been considered for the
internship programmed.
The main objectives of the study are as follow:
1. To focus on the product policy of the Bank under study.
2. To highlight on the CCU (Credit and Collection Unit)
3. To examine the Credit and collection system of the Bank.
4. To identify the problem of SCB.
5. To evaluate the promotional policy of SCB.
6. For identifying the prospect of the SCB.
7. To know the knowledge about Assessment of Various
Statement.
8. To identify desire package of SCB Customer.
9. To identify the Credit and Collection problem and to suggest
remedial measures in order to help and solve those problems.
Origin of the report
This time come of necessity to submit an internship report in partial
fulfillment of MBA program. After the completion of final written
examination of MBA, a student is supposed to have a weeklong internship
program to be conducted in any business or service organization and
submit a report on it. The report then evaluated by the judicious teaches &
supervisor of the department of Accounting accordingly. Being guided by
Ranjit Kumar Dey, Associate Professor Department of Accounting, C.U. The
author conducted his internship on “Consumer Banking of SCB.” And
produced this report as per requirement.
RESEARCH METHODOLOGY
This report is prepared according to the practical experience achieved
during the period of internee. All this materials are given below. The
relevant information is collected from primary sources as well as
secondary sources.
PRIMARY DATA:
1. Group discussion with SCB Employee.
2. Primary information has been collected from the advertisement.
3. By meeting with responsible Officer.
SECONDARY SOURCES:
1. Secondary information has been collected from articles; journal,
paper and different textbook are also used when necessary.
2. SCB annual report.
3. Data from different official source and records.
4. Internet.
RESEARCH PROBLEM
In my study I mainly depended on primary data which was collected
through direct survey. I developed a questionnaire that consisted close
ended questions and on open ended question.
Data collection based is done on a random basis. The results are
represented through bar charts. My research findings come out through
analyzing those data.
I also collected data and necessary information by interviewing employees
of SCB which can be treated as secondary data.
Another important dimension of the problem may arise from confidential
Bank policy and lack of other internal and external sources.
In view of above problems, I feel interest to know about it through SCB
which would be a useful academic experience.
RATIONALITY OF THE STUDY
Bank sector in the present environment has become subject to growing
importance and interest with the emergence of giant industrial
undertaking. In today’s Bank is the prime mover of most social and market
activities and delivery of standard of living to the society. This report is
mainly focused on that.
Bank is one of the most suitable sectors for Bangladesh having a good
demand and market growth rate. Banking is the part of MBA program. The
research is one of the important parts of the course. The purpose of the
study is to assist the report writer to find out the Banking activities and
also the opinion of the Customer about the existing system of SCB and
other Bank.
In the present world a progressive firm always looks forward to make the
best utilization and allocation of their resources and make the best use of
the scopes and opportunities in order to maintain their position in this
competitive market, SCB is no exception to it. The research communicates
with the consumer, customer and public to the marketer through
information.
In this report I have tried to present about different pertinent parties can
be benefited researcher involved with Bank can get an over view to find
out potential competitive advantages, It will be also helpful for the policy
maker of the Bank to make quick decisions. The marketing professional
can consume less time to express their valuable opinion by going through
this report. Coming entrepreneur of Banking Sector will be benefited by
this report by analyzing the findings of this report and evaluating potential
threats and opportunities, its market position and facilities to customer
and other Banking activities. This report will help to know how SCB
maintains their Credit and Collection system by managing competition
with different Banks. Although the study may be useful for the Banking
sector in formulating different policies on Credit and Collection and
thereby in future decision making. The potential entrepreneur,
professional, the students of business and young learners will be benefited
and search their knowledge in this report. These are all the rational of the
study.
LIMITATION OF THE REPORT
Time Constraints:
In preparing the report time was the principal constraint. As my internship
program was only for three months it was difficult for me to figure out the
report with absolute information and required data. For the report and
proper presentation after internship program in needs much time for
preparation.
Data Constraints:
Last few decades our banking system developed much with its resources
and collaborations. But comparison to Western countries we have the
different of few more decades realized (by me) when I attempted to collect
essential required data. These are still scarce in our country. Whether it is
primary or secondary data. With the best available data this report is
illustrated.
Experience constraints:
To prepare and produce such kind of report properly it is needed previous
experiences. In the faculty we have produced some reports but not as
great as it is. In preparations of the internship report I also used my
previous faculty experience although it is needed much more. I think
experienced could have differed a great deal.
Organization constraints:
As a financial organization SCB has a great deal of hidden information that
is not possible to present in the report. As organizations permanent
employee one can know it but not so this is also one of the limitation of
my report.
About the Report
In this report I have tried to expose a total picture of my activities in SCB.
This report is basically divided into three parts and these are:
Part – A
Part – B
Part – C
Part – D
The first part contains an observation of my work. This is the part where I
have tried to present an overview of the total SCB. I have worked on with
an introduction to the study. The second part contains Credit, Credit Cards
and Project of SCB, in the third part I have drawn on Collection criteria and
last part Conclusion.
The first part, which would be, mentioned as an observation part, the
second part which has been named as Consumer CREDIT and statistical
analysis part, the third one has mentioned as Collection and last, the
conclusion and recommendation part.
INTRODUCTION
Overview
Standard Chartered leading the way in Asia, Africa and the Middle
East Standard Chartered employs 30,000 people in over 500
locations in more than 50 countries in the Asia Pacific Region, South
Asia, the Middle East, Africa, The United Kingdom and the Americas.
It is one of the world's most international banks, with a
management team comprising 70 nationalities.
Standard Chartered is listed on both the London Stock Exchange
and the Stock Exchange of Hong Kong and is in the top 25 FTSE-100
companies, by market capitalization.
It serves both Consumer and Wholesale Banking customers. Consumer
Banking provides credit cards, personal loans, mortgages, deposit taking
and wealth management services to individuals and small to medium
sized enterprises. Wholesale Banking provides corporate and institutional
clients with services in trade finance, cash management, lending, custody,
foreign exchange, debt capital markets and corporate finance.
Standard Chartered is well-established in growth markets and aims to be
the right partner for its customers. The Bank combines deep local
knowledge with global capability.
The Bank is trusted across its network for its standard of
governance and its commitment to making a difference in the
communities in which it operates.
Our History:-A brief history of Standard Chartered
Standard Chartered is the world's leading emerging markets bank headquartered in
London. Its businesses however, have always been overwhelmingly international.
This is summary of the main events in the history of Standard Chartered and some of
the organizations with which it merged.
Launch the interactive timeline to learn about remarkable people, events
and discoveries that have shaped the world we live in, through out the
history of Standard Chartered.
The early years
Standard Chartered is named after two banks which merged in
1969. They were originally known as the Standard Bank of British
South Africa and the Chartered Bank of India, Australia and China.
Of the two banks, the Chartered Bank is the older having been
founded in 1853 following the grant of a Royal Charter from Queen
Victoria. The moving force behind the Chartered Bank was a Scot,
James Wilson, who made his fortune in London making hats. James
Wilson went on to start The Economist, still one of the world's pre-
eminent publications. Nine years later, in 1862, the Standard Bank
was founded by a group of businessmen led by another Scot, John
Paterson, who had immigrated to the Cape Province in South Africa
and had become a successful merchant. Both banks were keen to
capitalize on the huge expansion of trade between Europe, Asia and
Africa and to reap the handsome profits to be made from financing
that trade. The Chartered Bank opened its first branches in 1858 in
Calcutta and Mumbai. A branch opened in Shanghai that summer
beginning Standard Chartered unbroken presence in China. The
following year the Chartered Bank opened a branch in Hong Kong
and an agency was opened in Singapore. In 1861 the Singapore
agency was upgraded to a branch which helped provide finance for
the rapidly developing rubber and tin industries in Malaysia. In 1862
the Chartered Bank was authorized to issue bank notes in Hong
Kong. Subsequently it was also authorized to issue bank notes in
Singapore, a privilege it continued to exercise up until the end of
the 19th Century. Over the following decades both the Standard
Bank and the Chartered Bank printed bank notes in a variety of
countries including China, South Africa, Zimbabwe, Malaysia and
even during the siege of Marketing in South Africa. Today Standard
Chartered is still one of the three banks which print Hong Kong's
bank notes.
Expansion in Africa and Asia
The Standard Bank opened for business in Port Elizabeth, South Africa, in
1863. It pursued a policy of expansion and soon amalgamated with
several other banks including the Commercial Bank of Port Elizabeth, the
Colesberg Bank, the British Kaffarian Bank and the Fauresmith Bank. The
Standard Bank was prominent in the financing and development of the
diamond fields of Kimberly in 1867 and later extended its network further
north to the new town of Johannesburg when gold was discovered there in
1885. Over time, half the output of the second largest goldfield in the
world passed through the Standard Bank on its way to London. In 1892 the
Standard Bank opened for business in Zimbabwe, and expanded into
Mozambique in 1894, Botswana in 1897, Malawi in 1901, Zambia in 1906,
Kenya, Zanzibar and the Democratic Republic of Congo (D.R.C.), in 1911
and Uganda in 1912. Of these new businesses, Botswana, Zanzibar and
the D.R.C. proved the most difficult and the branches soon closed. A
branch in Botswana opened again in 1934 but lasted for only a year and it
was not until 1950 that the Bank re-opened for business in Botswana. In
Asia the Chartered Bank expanded opening offices in, Myanmar in 1862,
what is now Pakistan and Indonesia in 1863, the Philippines in 1872,
Malaysia in 1875, Japan in 1880 and Thailand in 1894. Some 34 years after
the Chartered Bank appointed an agent in Sri Lanka it opened a branch in
1892 to take advantage of business from the tea and rubber industries.
During 1904 a branch opened in Vietnam. Both the Chartered and the
Standard Bank opened offices in New York and Hamburg in the early
1900s. The Chartered Bank gaining the first branch license to be issued to
a foreign bank in New York.
The impact of war
Even the First World War offered opportunities for expansion when the
Standard Bank set up a branch in Tanzania shortly after British troops
occupied the formerly German administered Dar es Salaam in September
1916. Both banks survived the inter-war years but the world trade slump
led to the closure of operations in the Canary Islands, Liberia, the
Netherlands, and Equatorial Guinea. Disaster struck the Chartered Bank's
office in Yokohama, Japan, when it was destroyed by an earthquake in
1923 killing a number of staff. The Chartered Bank was particularly
affected by the Second World War when numerous Asian countries were
occupied by Japan.
The post war years
After the Second World War many countries in Asia and Africa gained their
independence. This led to local incorporation in some countries,
particularly in Africa. Other operations such as those in Iraq, Angola,
Myanmar and Libya were nationalized, while in Indonesia the Jakarta office
was destroyed in an attempted coup d'etat. In 1948 the Chartered Bank
opened in Bangladesh and during 1957 it acquired the Eastern Bank. The
Eastern Bank gave the Chartered Bank a network of branches including
Aden, Bahrain, Beirut, Cyprus, Lebanon, Qatar and the United Arab
Emirates. The Chartered Bank also entered into a joint venture to form the
Irano-British Bank which opened for business in 1959. The bank grew
rapidly and had 24 branches when it was nationalized in 1981. By the mid
1950s the Standard Bank had around 600 offices in Southern, Central and
Eastern Africa. Its network grew substantially in 1965 when it merged with
the former Bank of British West Africa which had some 60 branches in
Nigeria, 40 branches in Ghana and eleven branches in Sierra Leone in
addition to operations in Cameroon and Gambia. Despite these
acquisitions and expansion into new countries such as Mexico, South
Korea and Oman (1968), both the Standard and Chartered Bank networks
were comparatively small. Both viewed the future with some trepidation
as the need to protect them from acquisition became ever more apparent.
Standard Chartered PLC In 1969 the decision was made by the Standard
Bank and the Chartered Bank to undergo a friendly merger thus forming
Standard Chartered PLC. It was one year later that the descendants of the
"Chartered Bank of India, Australia and China" were finally permitted to
open a representative office in Sydney, Australia. Standard Chartered
subsequently acquired the UK based Hodge Group, in which it already had
a minority shareholding, and the Wallace Brothers Group. The Hodge
Group brought to Standard Chartered an extensive network of UK offices
specializing in installment credit and industrial leasing, and after a period
of rationalization its name was changed to Chartered Trust Limited.
Standard Chartered operations in Jersey emerged from the integration of
other Hodge Group businesses with those of Wallace Brothers Bank
(Jersey), Limited.
Standard Chartered decided, after the merger, to expand the Group
outside its traditional markets. In Europe a number of offices were opened
including Austria, Belgium, Denmark, and Ireland, Spain and Sweden as
well as several major cities in the UK. Standard Chartered also opened
offices in Argentina, Canada, Colombia, the Falkland Islands, Panama and
Nepal. In the USA a number of offices were opened and three banks were
acquired. These included the Union Bank of California which gave
Standard Chartered a presence in Brazil and Venezuela. The opening of a
branch in Istanbul in 1986 was overshadowed by a far more dramatic
event when Lloyds Bank of the UK made a hostile take-over bid for
Standard Chartered. Standard Chartered won its right to remain
independent but entered into a period of considerable change.
By the late 1980s Standard Chartered already had considerable exposure
to third world debt. To this were added provisions against loans to
corporations and entrepreneurs who could not meet their commitments.
Standard Chartered reviewed its operations and decided to focus on its
core strengths of Consumer Banking, Corporate & Institutional Banking
and Treasury in its well established operations in Asia, Africa and the
Middle East. This led to a series of divestments notably in Europe, the
United States and Africa. During this time staff numbers were reduced;
businesses not considered core were sold or closed; associate holdings
disposed of; unprofitable branches closed and back office functions
consolidated. In addition expensive buildings were sold with the proceeds
reinvested in the business, and the senior management team was
radically changed and strengthened.
Standard Chartered in the 1990s
Even within this period of apparent retrenchment Standard Chartered
expanded its network, re-opening in Vietnam in 1990, Cambodia and Iran
in 1992, Tanzania in 1993 and Myanmar in 1995. With the opening of
branches in Macau and Taiwan in 1983 and 1985 plus a representative
office in Laos (1996), Standard Chartered now has an office in every
country in the Asia Pacific Region with the exception of North Korea. In
1998 Standard Chartered concluded the purchase of a controlling interest
in Banco Exterior de Los Andes (Extebandes), an Andean Region bank
involved primarily in trade finance. With this purchase Standard Chartered
now offers full banking services in Colombia, Peru and Venezuela. In 1999,
Standard Chartered acquired the global trade finance business of Union
Bank of Switzerland. This acquisition makes Standard Chartered one of the
leading clearers of dollar payments in the USA. Standard Chartered also
opened a new subsidiary, Standard Chartered Nigeria Limited in Lagos,
acquired 75 per cent of the equity of Nakornthon Bank, Thailand; and
agreed terms to acquire 89 per cent of the share capital of Metropolitan
Bank of the Lebanon.
Standard Chartered today’s
Today Standard Chartered is the world's leading emerging markets bank
employing 30,000 people in over 500 offices in more than 50 countries
primarily in countries in the Asia Pacific Region, South Asia, the Middle
East, Africa and the Americas.
The new millennium has brought with it two of the largest acquisitions in
the history of the bank with the purchase of Grindlays Bank from the ANZ
Group and the acquisition of the Chase Consumer Banking operations in
Hong Kong in 2000.
These acquisitions demonstrate Standard Chartered firm committed to the
emerging markets, where we have a strong and established presence and
where we see our future growth.
STANDARD CHARTERED BANK IN BANGLASESH
Standard Chartered Bank started its operation in Bangladesh back in
1948. Standard Chartered Bank network facilitates fast and convenient
connection for foreign trade, bonding and remittance business as well as
market ad business intelligence. Besides, the Bank is serving a large
number of local corporate and Government organizations.
Acquisition of ANZ Grindlays Bank by Standard Chartered Bank was
completed on 31st July 2000. The transaction represents a major for both
the sides.
In Bangladesh Standard Chartered Bank is operating 17 offices in 6(six)
divisional cities and towns including Dhaka, Chittagong, Khulna, Sylhet,
Bogra, and Narayangong.
The standard Chartered Banking activities around the country within the
divisional cities and towns can be traced from the following table:
Divisional Cities &
Towns
Points of representation No. of
Branches/Cas
h office (s)
Dhaka Dilkhusa, Motijhel, Dhanmondi,
Banani, Kawrna Bazar, Kakrail,
Gulshan, Hotel Sheraton, Uttara
10
Chittagong Agrabad C/A, Nasirabad, Station
Road
3
Khulna Khulna 1
Sylhet Sylhet 1
More over, the Bank is now operating its ATM (Automatic Teller Machine)
service from 23 individual locations in Dhaka, Chittagong, Khulna, Sylhet,
Bogra, and Narayangong.
STANDARD CHARTERED BANK
(CHITTAGONG MAIN)
IN CHITTAGONG
AN OVERVIEW
LOCATION:
Standard Chartered (Ctg. Main) is located at Agrabad, the commercial
location of Chittagong. The area Agrabad has grown over the years to a
prime commercial location with the development of the port and the
tr5ade based business.
CUSTOMERS:
The customers of Standard Chartered Chittagong main comprises mainly
of professionals, service holders, businessmen who are involved in trading,
manufacturing and service oriented entrepreneurs and limited extent of
housewives. Besides, these customers, it also caters to the needs of
people who are operating different company accounts. The average age of
the customers of Standard Chartered Chittagong main ranges from 30 to
45 years. Among the professionals maintaining accounts in this branch,
45% are service holders where as the rest i.e. 55% are businessmen. More
than 60% of the businessmen are involved in trading or other related
business. Among the service holders a significant portion are working in
different corporate organization. However, it is observable that the
account holders are not usually present at the Bank for Cash Transaction.
LOCATION CONDITION:
The economic condition of the area is developing rapidly. Because of the
possibility of gas and oil exploration, the influxes of people from different
overseas countries are increasing day by day.
Awareness among the people foreign Banks is increasing gradually and
people are becoming more confident in dealing with reputed foreign
Banks. These changes and improvements of the overall economic and
social condition have significantly changed the mindset of the general
people, which will ultimately help to improve the entire scenario in case of
foreign Banks.
PART –B: Account Opening
A/c Opening
To open an account the party has to duly fill up A/c opening form, S.S.
card and then has to submit the necessary particulars according to
account nature. All kinds of account require two photograph of party
except three stages savings scheme. One form is used to open all kinds
of savings accounts. Another form is used for limited Company,
Autonomous Corporation and societies club etc. Yet another for current
account for individual joint or proprietorship the opening form of
partnership is a bite different. Three types of accounts such as:
-For SB account
-For CD account
-For term Deposit.
Name of Accounts are-
Savings account
Extra Value Savings Scheme
Current deposit account
STD (Short Term Deposit Account)
Limited Company, Autonomous Corporation account
Three stage savings scheme
Marriage savings Scheme
Millionaire Savings Scheme
Children Education Scheme
Rainy Day Savings Scheme
For Different type of account the following papers are required:
Savings Account:
1. Duly filled up account opening form with introduction from an existing account
holder.
2. Nominee with photo.
3. Party has to submit two copy passport size photographs. in case of
a minor.
Partnership Account:
1. Partnership deed is needed which is attested by notary public.
2. Who will operate the account must be written in the partnership
deed.
3. A notary’s certificate of partnership deed is also required.
4. Each page of partnership deed is to be attested by notary public.
5. In case of decease of any partner, his family member or a
nominated person can operate the account if there is any
instruction if the account.
6. Individually every partner has to sign in the partnership letter
formatted by the bank.
Current Account
1. Collecting current deposit a/c opening form from the bank counter.]
2. Filling up the form with required information.
3. Enclosing photographs attested by introducer.
4. Full signature and specimen signature in the application form as
well as in the SS (specimen signature) card.
5. Minimum required cash deposited to the cash counter.
6. Checking of the required information and introducer a/c no. by the
authorized officer.
Limited Company/ Semi Govt. Autonomous Corp. A/C
True certified copy of memorandum and articles of association.
Board resolution
True certified copy of certificate of incorporation.
Attested Signature by the board of directors.
In case of public limited company certificate of
commencement is required.
Proprietorship Accounts
The common procedure of current deposit account opening is
followed. In addition one needs to enclose:-
- Photocopy of trade license given by the City
corporation/Pourashava.
- Sign and seal of proprietor in the application form as well as
in the SS (Specimen Signature) card to be given properly.
STD A/C
- The A/C opening procedure is same as C/D A/C opening.
- 5.5% interest is given against this deposit A/C
- Minimum 7 days notice is needed in earlier cases but, it has
now become a practice to withdraw money by the clients with
immediate prior written notice or Telephone contact.
Cheque Book Issuance:
The chequebook is a security stationary used for transactions
by the account holders. Chequebook is issued through a
requisition form/slip which acts as an application from the
respective A/C holder.
The requisition slip comes into action at two stages
(a) At the time of account opening.
(b) For new chequebook when the slip is located nearly at the
end of the old one (e.g.-three leaves before the end of the 10-
leaf chequebook).
The requisition form contains
(a) The date of issuing.
(b) The serial number of the leaves
(c) Signature of the applicant.
Procedure
(1) Authorized officer verifies the applicant’s signature.
(2) A/C no is mentioned on each leaf of the new chequebook.
(3) Two officer’s initials are put on every leaf, usually one
beside the A/C. no and the other beside the cheque series no.
(4) A register is maintained for this purpose, where the-
- A/C holder’s name
- A/C no.
- Serial no. Of cheque leaves are written.
The A/C holder signs the register before the new chequebook is
issued to his name. Both S/B and C/D A/C cheque books are
issued through this procedure though the particulars are
recorded on different registers. Again S/B A/C usually needs
ten or twenty-five leaf cheque books while due to its frequent
nature of transaction, C/D A/C usually requires more leaves-
fifty or hundred leaf cheque books.
Issuing duplicate cheque book
Due to various reasons, a cheque book may be damaged or
missing, which rouses the need for a duplicate cheque book.
Procedure
(1) The A/C holder submits a written application for a duplicate
chequebook.
(2) Inquiry is made whether any unused leaf of the chequebook
was signed.
(3) Payment is stopped on the missing serials of the
chequebook after the serials of the missing leaves are
matched on the register.
(4) With the permission of the In-charge, a duplicate
chequebook is issued whose serial numbers are not the same
as that of the previous one.
I.B.C. & O.B.C. I
Inward & Outward Transfer Delivery
Transfer delivery takes place when the cheque of one branch
of the SCB is presented to another branch for collection.
Receiving the cheque, branch authority sends it for collection
to the payee branch, without sending it to principal office. If
they honor the cheque of the respective branch, the payee
branch issues an IBCA in favor of the collecting branch.
Responding the IBCA the collecting branch debits the payee
branch and credits the parties account. This is the procedure
for outward transfer delivery.
If the other branch collects the cheque of our branch, then it is
called inward transfer delivery. Collecting branch send the
cheque to us. Verifying the signature, branch authority
examines whether there is sufficient money available or not in
the account. If the cheque is honored the branch authority
issues an IBCA debiting the party account in favor of the
collecting branch. A credit voucher is prepared against. Which
the IBCA is issued as under:
Party A/C Dr.
Gen. A/c Collecting Branch Cr.
Out ward Bills for Collecting (OBC)
Besides clearing house and transfer delivery, we have to send
cheques to other district for collection. Basically OBC is
required when the cheque is not of a same clearinghouse.
Steps required for collecting outward bills are as follows:
1) Register entry of the cheque.
2) Stamping OBC seal on the face of the cheque and writing
the OBC No. As such given in the OBC register and endorsing
(Payee’s account will be credited after realization) the cheque
with the signature, of authorized officer.
3) Writing two copies of OBC forwarding letter, of which one
copy will be
Sent to the collecting branch along with the cheque and
another will beI kept in the OBC outstanding file. The contra
voucher for OBC collection is as such:
- Outward Bills lodged Dr.
- Outward bills for collection Cr.
After collecting the amount of cheque the originating branch
will send an IBCA. Responding the IBCA, collecting branch
debits the originating branch and credits the party account
through the pay-in-slip that is kept with the forwarding letter of
OBC. If the cheque is drawn on a bank other than ours, a D.D is
sent in U response to the OBC with the commission & postage
charge of the D.D deducted from the amount of the cheque.
The D.D is issued in favor of our branch, therefore the
endorsement “Received Payment” is put on the reverse of the
D.D before sending it for collection through clearing. The
amount is credited to party’s NC though party credit voucher.
Reverse contra voucher is prepared for positing.
- Outward bills for collection A/C Dr.
- Outward Bills lodge Cr.
Besides this, commission and postage will be charged to the
party for collection of the cheque. Accounting procedure will be
as such:
Party A/C Dr.
I /A Comm. on OBC Cr.
I/Postage on OBC Cr.
After posting commission and postage charge in the register
along with the IBCA No. a signature of the authorized office is
taken and after signing the vouchers by the officers these are
posted in computer.
Inward Bills for Collection (IBC)
.The branch through dispatch receives instrument with a
forwarding letter.
2. Entry is passed to the register of I.B.C.
3. A simple credit voucher is prepared under the title: “SCB
Gen. NC Respective Branch” (O.B.C. issuing branch) with the
following date in that voucher O.B.C no. With the
corresponding O.B.C no is recorded.
4. In the reverse side of the instrument “Our Branch
endorsement confirmed” endorsement with the authorized
officer’s signature is given.
5. The instrument is then sent for collection through the
clearinghouse according to the procedure.
6. After collection of amount/proceeds an I.B.C.A. is prepared
favoring the instrument-sending branch.
In this way the proceeds of honored O.B.C is sent to the O.B.C
issuing branch.
The following are subsidiary works, done at the OBC desk
ACCOUNT TRANSFER:
Account transfer implies the transfer of account of a party from
one branch to another of the same bank.
Steps of account transfer are as follows
- At first, the party submits an application to the branch
manager for transferring his account.
- In the application, party mentions the branch name to which
party intends to transfer his/her account.
- Party surrenders his/her chequebook with unused cheque
leaves.
- Then cheque series no are checked with the record.
- Authorized officer verifies the party signature on application.
- Unused cheque leaves are destroyed in front of the party.
- An inquiry is made in every department of the branch
whether the party is maintaining a loan account or not.
- If everything is all right, balance position of the account is
taken from the computer.
- Bank debits party account to make the balance nit.
Then the following vouchers are prepared:
- Party A/C. Dr.
- Income A/C transfer chargeCr.
- SCB General A/C. (New branch) Cr.
- An IBCA is prepared and sent to the new branch with a
forwarding letter.
- Account opening form and S.S. card are marked
“Transferred from X Branch to Y branch”.
- Transferring branch keeps application, balance statement,
photocopy of account opening form and S.S. Card.
- A/C opening form, S.S. card and balance statements are sent
to new branch.
- Party account is marked “Transferred” in the account opening
register.
- No. of A/C is deducted by one in the account opening register.
- A transferring note has to be taken in the A/C opening
register.
FUND TRANSFER
Fund transfer implies transfer of fund from one account to
another in the same branch. It is a simple process. Bank just
debits the account, which would be transferred and credits the
account that would get the deposit. Two vouchers are
prepared in this regard.
- Party (Drawer) account. Dr.
- Party (Payee) Cr.
CLOSING OF DIFFERENT TYPES OF ACCOUNTS:
SB A/C
Step of SB A/C, closing are as follows:
- At first, the party will submit an application to the branch
manager for closing his/her account.
- Party will surrender his chequebook with unused cheque
leaves.
- Cheque leaf serial no. will be checked with the record.
- Authorized officer will verify the party’s signature on
application.
- Unused cheque leaves are to destroy in front of party.
- An inquiry is to be made in every department of the branch
whether the party is maintaining a loan account or not.
If every thing is all right, balance position of the account has to
be taken from the computer. Bank will debit party account to
make the balance nil.
Then the following vouchers are to be prepared
Party A/C. Dr.
Income A/C charges on account closing Cr.
Bills payable pay slips issued. Cr.
Two authorized officer will approve voucher. S.S. card and
account opening form will be marked “Closed”.Party account is
to be marked “Closed” in the account opening register.No. of
account will be deducted by one in the account opening
register. A closing note has to be taken in the account opening
register.
CD/AC
Same as savings A/C except charging the interest.
Closing of schemes
Different schemes are at work or were maintained in the
branch such as Three Stage Saving Scheme, SCB Savings
Scheme etc. Clients may choose to close this A/C before or
after maturity. Party submits application along with his/her
pay-in-slip book.
CESS A/C closing: Before maturity
There are three terms of maturity for C.S.S A/Cs —4 years, 7
years and 10 years. No interest in given if a C.E.S.S A/C is
closed before 6 months.
If anyone chooses to close the A/C after 6 month but before 4
years, the accounting procedure is as follows:
1. Balance up to previous month
+( Interest Provision for the month (Adj. A/C
Balance up to the date===================
-( Amount of installation given by party each month
Interest @ 11 % [the closing is premature, interest will be
given at Savings rate instead of C.E.S.S rate of 11%]
The vouchers
a) Adjusting A/C:
Interest. Payable on C.S.S (provision for current
month) -Dr.
C.S.S. A/C Cr.
b) C.S.S A/C Dr.
Expenditure A/C: Interest. Paid on C.S.S (excess interest) Cr.
Income A/C: closing charge Cr.
Other liabilities: 10% Source tax Cr.
Bills payable: Pay slip issued cr.
Deceased A/C.
While working at the desk I had an opportunity to see the
closing of a deceased account.
- One nominee on behalf of all nominees and successors
submit an application to the bank mentioning the death of
his/her relative.
- All kinds of transactions are made stopped by the bank then.
The Bank follows the following procedures to make payment
- Submission of an application reporting the death of A/C
holder by the nominee on behalf of all nominees and
successors to with draw the balance amount maintained with
the Bank.
- The authorized nominee then has to submit the following
documents.
- Death certificate of the account holder
- Gorosthan Certificate.
- One copy of successor certificate given by the district Judge,
mentioning the proportionate amount to be distributed to each
of the successors & nominees of deceased A/C holder from
various accounts of various Banks. (I.e. various Bank balance).
- Word commissioner identification certificate with
photographs.
Then the Bank collects balance conformation sheet from the
computer department internally duly signed by authorized
Officer of the branch. Account opening form with SS card
collected by the authorized officer internally. After
conformation a forwarding letter is sent to the H.O. (Law dept.)
mentioning the deceased account holder’s particulars to make
arrangement of payment of the account. The H.O. (CAD) sends
an approval letter after judgment of the documents with the
forwarding. At the time of final settlement of disbursement of
the fund of the A/C after receiving the confirmation letter from
H.O. one indemnity bond on a non-judicial stamp (150/-) is
signed by the authorized nominee and by other nominees and
successors. After the payment of the proceeds “Deceased A/C
closed” is marked both on the A/C opening form and on the S.
S. card.
CLEARING
Clearing activities are of two types:
(I) outward clearing.
(ii) Inward clearing.
Outward clearing
• Cheques,
• DD,
• Pay order
• SDR
• Treasury Challan etc.
Instruments are deposited by various customers of different
A/C Of Principal Office (P.O.) for collection through writing in
the pay-slips and credit vouchers in case of IBC. Or
instruments received from Head Office (H.O.) and F. Exchange
Dept. of P.O. As to provide customer service Bank acts as an
intermediary to collect proceeds of instruments through the
Bangladesh Bank clearing house. It is to be mentioned here
that collected instruments are of other than the SCB. When the
cheque or other instruments come for collection, the clearing
officer receive the instruments from the customer by giving
“Received” seal and initials On the foil of the pay-in-Slips.
Immediate after receiving the instruments special
crossing/recipient Branch. Crossing is given on the instrument.
“Clearing” seal with the next date is given on both the
instruments and pay-in-slips. Proper endorsement and the
authorized officer’s signature are given on the back side of the
instruments. The clearing officer then keeps the instruments in
his custody. Except these different instruments received the
P.O. from HO, IBC of P.O. sent by various branches of the SCB
for collection through their OBC which are out side the clearing
zone, and different instruments sent by other branches
received by them from their own customers for collection
inside the clearing zone are also collected by P.O. through
clearing house. Cheque and other instruments’ detailed
information are recorded in the outward clearing register (date
validation sheet _ house). Statements of Bank wise delivery
details and Branch wise delivery details/cheque totals are
prepared. In the first house of the next day, Principal Office
sends the instruments to the issuing branch./originating
branch. Of various Banks for collection through the clearing
house.
Inward clearing
Under this mechanism Principal Office collects the cheque and
instruments issued by different branches and P.O. of the SCB
for collection. One representative officer of the SCB collects the
instruments from other Banks through clearing house. Our
inward clearing instruments are the outward clearing
instruments of other Banks. The instrument are then sorted out
and sent to the respective issuing branches after proper
recording to the register.
After receiving the inward clearing instruments, the
instruments issuing branch/originating branch makes entry in
the inward clearing register.
The authorized officer of the branch then examines the
instruments.
The officer then checks the balance of respective NC in the
computer whether sufficient balance available or not to honor
the instrument. After the instruments have been passed, an
IBCA is prepared fig. P.O. for the total honored fig. The
dishonored instruments are returned to the P.O. with return
memo. Accounting procedure of different Branch is as under
(For honored instrument)
1. Party Dr.
(Instrument it self)
2. SCB General NC: P.O Cr.
Accounting procedure of P.O. as under
1. Respective Branch. A/C Dr.
(Responded IBCA sent by different
(Branch for honored fig.)
2. SCB General NC: HO Cr.
(For honored fig of instruments Of P.O. & other branch)
For total honored fig. of instruments of P.O. and other branches
inside the clearing zone an IBCA is prepared for. H.O. and sent
to H.O.The dishonored instruments of P.O. and other Branches
are sent to second clearinghouse of B.B with Bank wise
delivery cheque totals to return the instruments to the
respective collecting banks for final settlement of transactions
among the various Banks for that day. The dishonored fig. is
also recorded in the inward clearing reg. of P.O. In this way
clearing function occurred. Endorsement for clearing. While
receiving any kind of cheques or instruments, which will be
deposited in the customers A/C, SPL crossing is given by the
Branch. Then the following endorsement is usually put on the
reverse side of the instruments.
1. “Received payment for the SCB”
- When there is no payees name in the cheque but only
instruction that pays to self, cash, you, or SCB P.O., The SCB,
then this is the appropriate endorsement.
2. “Payee’s A/C credited for the SCB”
- When the name of the payee is given on the cheque and the
drawee Bank is in that clearing house then this is the
appropriate endorsement.
3. “Payee’s A/C will be credited on realization for the SCB”
- When the drawee Bank is not in that clearing House, This
endorsement is given by the OBC sending Branch. In Case of
IBC of this branch for collection.
4. Our branch endorsement confirmed for the SCB
- The collecting branch gives when an instrument is received
as IBC sent by other branch of the Bank for Collection then this
endorsement. in side clearing house.
DEPARTMENT: SANCHAYAPATRA:
Sanchaya Patra is the instrument against which both
institutional and non institutional customers/people make
investment of their idle money. It is a mode of investment
against which the customers in terms of Bank or/and the
people who have no legal relationship with the Bank as
customer make risk free investment though the instruments
(S.P). It is the system of collecting idle money from
people/institutions whose money will be considered to be of no
use for a minimum period time (i.e. 1 year or above). The
“Jatiya Sanchaya Bureau” is the only authorized organization of
the Bangladesh Govt. to print out the instrument and arrange
to collect the sales proceeds of S.P for deposit mobilization
from the public. Bangladesh Bank is the only authorized dealer
to arrange the mechanism/collect the sales proceeds of S.P.
disbursement of Interest payable to the S.P. purchaser thereof.
Since all NCBs, Automous and private Banks are the agents of
B.B. to provide public service, So NCBs, Autonomous and
private Bank and some govt. organizations (selected) performs
the activities of selling S.P. and payment of interest. thereof to
the S.P. purchaser as per the instructions of Bangladesh Bank
(B.B). Against these services NCB5,. Autonomous and private
Banks receive commission through B.B. from “Jatiya Sanchaya
Bureau”. “Jatiya Sanchaya Bureau” utilizes the collected
proceeds in the best possible way that keeps risk at the lowest
level and earns more profit agt. which Interest is paid to the
customer of S.P.
The process of selling S.P. & payment of Interest thereof are
out of General Banking activities, but a specific section under
General Banking Department does these activities.
Issuing Procedure
1. Duly filled up application form submitted by the customers
(the form provided by the Bank).
2. Customers may make payment to purchase SP in the
following ways
(i) In cash
(ii) By cheque through clearing or transfer.
(iii) Via other branch. Of the same bank.
Preparation of Vouchers for the above payment procedure:
(i) If a customer makes payment in cash
A customer makes payment in cash through cash counter.
Cash dept. gives “Cash received” seal on the credit voucher.
- Cash (if self) Dr.
- Sundry deposit A/C. S.P issued Cr.
(ii) a. If a customers make payment by cheque of the same
branch
The submitted cheque is considered as debit voucher by duly
passing it by the Authorized officer of the branch.
- Party A/C (Cheque if self) Dr.
- Sundry deposit A/C S.P. issued Cr.
(ii) b. If a customer makes payment by cheque of the other
bank
- Received cheque is deposited to the customer’s A/C in the
branch with the pay-in-slip.
- Proceeds are collected through clearing house /O.B.C
mechanism.
- The customer then draws a cheque on his/her A/C agt. S.P.
purchase purpose.
- This cheque is then considered as debit voucher by duly
passing it by the authorized Officer of the Branch.
(iii) If a customer maintains an A/C with other branch, of the
same bank and intends to purchase S.P by that branch
- The customer can make payment in cash or issues a cheque
on his/her A/C maintaining with that branch.
- After passing if by the A. Officers of that branch. An IBCA is
prepared
And sent to the S.P. issuing branch. (P.O.)
The application form (filled up) of the customer after
verification of his/her sign thereby an A. Officer, with a
forwarding letter mentioning A/C holders same, A/C No. S.P.
Name & value therein sent to the S.P. issuing branch. With the
IBCA.
S.P. issuing branch. Then responds the IBCA, which in turn
becomes a debit voucher then.
- SCB Gen. A/C. (respective branch. IBCA issuing branch.)
Dr.
- Sundry Deposit A/C S. P. issued Cr.
3. Then entry is passed to the S.P. issuing Register.
4. Instruments are prepared and issued to the customer.
5. A.S.P. Sales statement with a forwarding letter sent to B.B.
within 72 hours of sales, stating therein to collect the proceeds
from S.P. Selling Bank, from the A/C of the Bank (HO)
maintained with B.B. One photocopy of the statement with a
forwarding Letter is sent to the CAD of HO of S.P. issuing
Branch.
7. Agt. this statement, B.B. sends a debit advice to S.P. issuing
branch. After collection of proceeds from the A/C of H. 0.
> S.P. issuing branch. Then makes reconciliation with the
advice and S.P. selling statement & forwarding letter.
> After confirmed Ok, one photocopy of debit advice B.B. is
sent to CAD of
HO.CAD of HO then prepares and sends an IBDA to S.P. issuing
branch. for the proceeds to collect on behalf of B.B.
Voucher preparation by HO
1. SCB Gen A/c S.P. issuing branch Dr.
2. Bangladesh Bank Cr.
After receiving IBDA, S.P. issuing Branch. Makes the following
treatment.
1. Sundry deposit A/C S.P. issued Dr.
2. SCB Gen A/C H.O Cr.
(Responded IBDA)
This is how the complete process of sales and reimbursement
of sales proceeds occurs.
Encashment procedure of Inset, of Interest or and F.V. of S.P
(A) In order to encash Instt. of Interest or and F.V. of S.P.
customers bring coupons or and S.P. instrument directly to the
S.P. issuing Bank.
1. -Sus. A/C Encashment of F.V/lnt Dr.
2. —Bills payable A/C pay Slip issued Cr.
(With net payable amount after deduction).
Or -Customer’s A/C Cr.
(With net payable amount after deduction.)
3. —Other Liabilities A/C S. tax Cr.
(B) When other branch. of the Bank sends the Int. coupon/and
S.P. instrument of their own customer with a hand written
application from the customer and a forwarding letter by the
branch. The following steps are done by the S.P. issuing
Branch.
1. Sus. A/C Encashment FV/lnt. Dr.
2. Other Liabilities A/C Source Tax Cr.
(if applicable)
3. SCB Gen A/C respective branch Cr.
(Net payable amount after deduction of S. Tax if it is
applicable).
- The net payable amount is then sent by preparing an IBCA
fvg. That branch.
Reimbursement procedure of Interest /and F.V. of S.P. paid to
the customer from B.B
- After encashment of lnt./and F.V. of S.P. a statement is sent
to B.B. with a forwarding letter.
- Against this statement B.B. sends a credit advice to the
branch. The S.P. issuing branch. Then makes reconciliation
with the Cr. advice of B.B. and encashment statement sent
earlier to B.B. Found every thing Ok and marking “SCB Ok” on
the Cr. advice of B.B., S.P. issuing branch. (P.O.) then sends
one photo copy of the advice to the CAD of HO.
Then CAD of HO prepares the following vouchers:
1. Bangladesh Bank Dr.
2. SCB Gen A/C S.P. issuing branch Cr.
An IBCA fvg. S.P. issuing branch, is then prepared and sent to
the branch.
After receiving the IBCA from Ho, S.P. issuing branch. Then
responds the IBCA. The Responded IBCA then becomes the
debit voucher of the branch.
Treatment is as under
SCBGen.AICHO Dr.
(Responded IBCA)
2. Suspense. A/C Encashment FV/lnt Cr.
Rate of Commission
Sales: Tk. 1,000/- per sales of S.P worth Tk. 1, 00,000/-
Encashment: Tk. 0.25 per instrument.
In this way the process of encashment of lnt./and F.V. of S.P.
and reimbursement of the proceeds from B.B. on this behalf
completed. Remittance is a very important section of General
Banking Dept. In general,
Remittance refers to “Transfer of Funds”. Remittances are of
two types:
1. Cash Remittance.
2. Fund Remittance.
Generally, the remittance section of the General Banking
Department does fund remittance. All kinds of issue and
payment of
1. P.S. (PAY SLIP)
2. P.O. (PAY ORDER)
3. S.D.R. (SICURITY DEPOSIT RECEIPT)
4. D.D. (DEMAND DRAFT)
5. T.T, (TELEGRAPHIC TRANSFER)
6. F.D.R, (FIXED DEPOSIT RECEIPT) Etc is done through this
section. This section also does transfer of funds from one A/C
to another A/C and from one branch to other branch of the
Bank or to other Banks.
Payment
The PS instrument ultimately returns to the issuing branch of
the bank for payment.
The payee must affix a revenue stamp (signed or sealed by
individual or company respectively) on the instrument before
submitting it.
The payee may submit the pay Slip to any bank. Though the
process of clearing, it arrives at the issuing branch of the bank.
The revenue stamp is checked and the date of payment is
mentioned on the instrument and then the beneficiary account
is credited accordingly.
2. Pay Order (P.O.):
This is an instrument widely used by the customers for
payment to a beneficiary for many different reasons.
Issuance:
The application form
The customer has to apply through a duly filled up form after
the banks chosen format where necessary information are
mentioned.
- Name and A/C no, bank and branch name of the beneficiary.
- The amount.
- The purchaser’s name and address.
The instrument
After the customer makes the payment (through cheque or
cash) along with commission and after the payment is duly
acknowledged by the bank, an instrument containing three
parts is issued.
• The first part is for the bank.
• The second part is for the purchaser.
• The third part is for beneficiary.
After signing on the reverse side of the counterfoil, the
purchaser receives the last two parts of the instrument which
are duly authorized by the bank officials before the hand over.
All the parts contain the P0 number and date. However the first
and second part contains the purchaser’s & beneficiary’s name
and the amount but in the third part the purchaser’s name is
not mentioned.
Commission
For every P.O., the bank gets a commission according to the
rate mentioned below:
For P.O. between Tk. 1/- 10,000/- : Tk. 10/-
For P.O between Tk. 10001/- 1.00 lac/- : Tk. 25/-
For P.O between Tk. 100001/- 5.00 lac/- : Tk. 50/-
For P.O between Tk. 50000/- above : Tk. 100/-
A cost memo showing the amount of commission is issued for
the purchaser.
The amount of the P.O. is recorded under the title of account
“Bills payable pay order issued.” The commission goes under”
Commission on remittance”.
Payment
Like the P.S. the P.O. instrument also ultimately returns to the
issuing branch for payment.The third part of the instrument is
given to the beneficiary by the purchaser.The beneficiary then
submits this part to any bank and through the process of
clearing payment is confirmed.
Cancellation
A P.O. may be cancelled in two ways-
a. The beneficiary may refund it (with “released” sign on the
reverse side) in which case no cancellation charge in required.
b. Otherwise, where the purchaser who has not given it to the
beneficiary at all, has to submit an application along with the
instrument with his sign on the reverse side and a cancellation
charge of Tk. 15/-
3. Security deposit receipt (S.D.R)
This instrument has the same function as the P.O. except that
it is considered as deposit by the bank.
Issuance
The same application form for the P.O. is valid for S.D.R. The
difference lies in the actual instrument which has two parts: for
the bank and the beneficiary, where in the second part the
purchaser name is is mentioned. Again it may be generated
through crediting “Sundry deposit A/C: SDR issued” through
simple credit voucher.
Commission
The rate of commission is same as P.O.
Payment
Payment procedure is again same as that of P.O. But the
beneficiary has to affix a revenue stamp on the reverse side of
the instrument (signed or sealed) before submitting it.
4. Demand Draft (D.D.):
The application form , which the customers must fill up
properly, contains the following information:
- Name and address of applicant
- Amount
- In whose favor it is being drawn
- Drawn on which branch.
The instrument
After the payment by the customer (though cheque or cash) is
duly acknowledged by the bank, an instrument is prepared
with-
- D.D. number
- Date
- Amount
- Which branch it is drawn on
According to the branch the D.D is being drawn on, a branch-
wise issuing serial number is put beside the printed D.D. no of
the instrument. This is the controlling number.
The Register
An issuing register is maintained where the particulars of the
D.D issued are recorded. The test number test number, having
two parts, is given for the D.D by two authorized officers. A
serial number starts the test message. The other part contains
a compendium of
• Branch code
• Day code
• Date code
• Currency code
• Amount code
(If the amount of D.D. is less than Tk. 20,000/-, then no test-
Number is needed)
This number is very much an important secret. The responding
branch will transfer the amount to the party A/C only if. When
the test no. is agreed.
Advice
The D.D. payable proceeds are sent by post the payee branch
by preparing an IBCA favoring the payee branch. The amount,
test no. the P.A no of the two authorized officers is mentioned
there.
Charges & Commission
The purchaser has to pay a fixed amount of Tk. 40! - As telex
charge but if the
Amount for the D.D. is below Tk. 20,000/- (up to 19,999!-) no
telex charge is needed.
A minimum commission of Tk. 25/- or Tk. 1/-per Tk. 1000/- has
to be paid as commission for the purchase of each D.D. A cash
memo showing the amount of charges & commissions is issued
for the purchaser. The commission is recorded under the title
of account “I/A Commission on remittance”. Payment (Inward
D.D).Two kinds of situation may arise in case of payment of
D.D.
a. The advice from the issuing branch has not yet reached the
responding Branch. In that case the D.D. is paid from the
suspense A/C.
Suspense A/C: D.D. paid without advice Dr.
Party A/C. Cr.
After advice reaches the responding branch.
SCB General A/C (issuing br.) Dr.
Suspense A/C: D.D. Paid W.A. Cr.
b. If advice is received before payment of proceeds to the
customer:
SCB General A/C (issuing branch.) Dr. (Responded IBCA)
Bill Payable: D.D. Payable Cr.
Bills Payable: D.D. Payable Dr.
Party A/C. Cr.
A receiving register records all the particulars of a received
D.D.
Cancellation
The branch receives application from the customer along with
the instrument. Since the advice has been issued to the
responding branch, if the purchaser wants to cancel the D.D.
the issuing branch has to inform the receiving branch. That the
instrument is in the possession of the issuing branch. Then the
party may be paid from the suspense A/C. before the advice is
returned.
Suspense A/C: D.D. cancelled Dr.
Party A/C. Cr.
The payee branch is requested to send an IBCA to refund the
amount debited from the suspense A/C.
Responded IBCA from payee branch. - Dr.
Suspense A/C. Cr.
Again if the payee releases the D.D. no cancellation charge is
required. Otherwise a cancellation charge of Tk. 30/- has to be
paid by the purchaser.
5. Society For World Interbank Financial Transactions (T.T)
This is another profoundly used means for fund transfer
between countries. In this case, however, the customer must
maintain an account with the branch.
The application form:
The first step is the submission of a duly filled up form (by the
purchaser)
Containing-
• - Name of the payee A/C and address
- Place,
- Amount
- Name of applicant, address, phone number.
- Commission & charges.
After the payment, the bank officials duly authorize the form.
The register Entry is passed to the SWIFT register, which
records all particulars an outgoing T.T.
Controlling and test number
A responding branch-wise T.T number is put on the application
form as well as a test number, like that of the D.D., which
bears the same importance.
Conveying the message
The T.T. information- the test number, T. T. number, the
amount, the power of attorney number of the authorized
officers are conveyed over phone or through telex message by
the authorized officer.
T. T. Confirmation
The T.T. confirmation is sent to the payee branch (by post)
mentioning T.T. no., date, Test no., amount, beneficiary’s
name and A/C no. The authorized officers duly sign this. One
copy of the T.T. confirmation is kept as the office copy.
Charges & Commission
The rate and procedure of charges & commission are same as
that of D. D. except that the telex charge has to be paid at all
times.
Payment: (Inward T.T)
After receiving branch, agrees with the T.T. test number only
then it credits
the party NC accordingly. The title of account that records the
transaction for the receiving branch. are as follows :-
SCB General NC-issuing branch. - Dr.
Bills Payable: T.T. Payable - Cr.
Bills Payable: T.T. Payable Dr.
Party NC Cr.
Entry is passed to the inward (receiving) T.T. register with all
particulars.
IBCA through T.T
Inter Branch Credit advice are also sent and received by
telegraphic transfer, mainly for quick fund transfer.
Issuance of IBCA:
Party NC/cash/cheque Dr.
SCB General NC (responding branch) ..Cr.
IBCA the responding branch is prepared and the IBCA no, date
and test is conveyed over phone or telex.
The accounting procedure for the responding branch
It is the same as that of T.T. The only difference is when the
actual IBCA reaches the branch it is not responded (since it has
already been responded on the day it was received over
phone) but marked as “Vouched as on . . .“ This procedure is
followed to save time and offer better client service.
6.Fixed deposit Receipt (F.D.R):
FDR is a contact based deposit where the amount is deposited
for a fixed period of time: I month, 3 months, 6 months, 1 year
and so on. For each period of time a certain rate of interest
(annual) is allocated.
Issuance
Application the customer has to fill up the FDR application form
to open an FDR A/C. The procedure is same as that of C/A or
SIB A/C opening.
Instrument
After the application is authorized properly an instrument is
issued where the date of issuing, the date of maturity, the
name or names of the party are mentioned.
Register
A register is maintained for the issuance of FDR where
particulars are recorder.
Rate of interest
I month -7.5% 1 year- 8.5%
3 month -8% 2 year- 9%
6 month 8.25% 3 year- 9.5%
Conditions of Encashment Two different situation may arise :
on
Maturity and before maturity.
-Maturity in 3 months, If encashed before it, the customer
will
get no interest.
- Maturity in 6 months, If encashed before it, the customer
will get interest at savings rate.
-Maturity in 1 year, The customer may collect the interest
After the completion of every 6 months,
if encashed after 3 months, he will get
Interest at SB rate. Or FDR rate
Whichever is lower.
-Maturity in 2 year, Again the customer may opt to collect
Interest of every six month, if enchased
Between 1 year to maturity, he will get
Interest at the rate of the period the
Amount remained deposited. No interest
Will be paid for fraction period.
-Maturity in 3 year, If encashed before 6 months party will
get no Interest If encashed after that 6
month mt @ SB/FDR rate is given,
whichever is lower. A daily maturity sheet accounts for all
maturity and six months interest payment for FDR A/C. These
are also accounted on monthly basis. If the customer fails to
encash on maturity, the FDR is automatically renewed for the
same period of time at the same rate, the previous. Principal
amount along with the interest now considered as the new
principle amount for the renewed FDR.
Source tax
At every withdrawal, 10% source tax if deducted the interest.
Excise duty
At any stage of transaction if the total amount (Principal +
Interest) touches the range of excise duty cut, then at the time
of encashment, excise duty is deducted from the whole
amount of the F.D.R., usually at the end of the year.
FDR value Ex. duty FDR Value
10,000/-I .00 lac Tk. 120 10,00,001/ 1.00 crore Tk. -500
1,00,001/- 10,00,000/- 250 1,00,00,001/-5.00 crore Tk. -
250
5,00,00,001/- above -5000
Payment of interest
At first interest will be credited to FDR A/C. Then the excess
amount (on deduction of 10% source tax) will be deducted
from party A/C. The title of account is as follows:-
Adjusting A/C: Interest Payable on F.D.F. Dr.
Expenditure A/C: Interest Paid on F.D.R. Dr.
F.D.R. A/C Cr.
(The interest for the complete Calendar months is recorded
under Adjusting A/C and that of the fraction Calendar month
remains under the expenditure A/C. Though actually the
expenditure A/C. is debited and the adjusting A/C is credited at
the completion of every month.)
For deduction of 10% tax on interest
F.D.R. A/C Dr.
Other liabilities A/C. 10% Tax (deducted at source) Cr. For
deduction of excise duty
F.D.R. A/C Dr.
Other liabilities: excise duty on deposit Cr.
Encashment of F.D.R.
Instrument (F.D.R.) Dr.
(For Principal amount)
F.D.R. A/C Dr.
(Total Int. deposited to F.D.R. A/C after
Deduction of Source Tax and excise duty)
Bills Payable P.O. /P.S. issued Cr.
(Total amount payable to customer)
Or
Party A/C Cr.
• Every Instrument issued by the remittance section is crossed
“NC payee only”.
INSTRUMENT LOST: DUPLICATE ISSUED
If any of the above-mentioned instruments gets lost or
damaged, duplicate may be issued in its place.
The process is as follows
The issuing branches, after being notified by the purchaser of
the loss/damage, informs the responding branch and the Head
Office about the particulars of the lost instrument and request
them to stop payment of that instrument. Head office then
issues a circular to each branch for stopping payment of that
particular instrument. After the confirmation reaches the Head
office that no payment has been made for the lost instrument
by any of the branch, it gives permission to issue duplicate.
The purchaser has to pay duplicate issuing charge of 1k. 100/-
and sign an indemnity Bond, declaring that he/she will be liable
for any damage due to the lost instrument, on a Tk. 150/- non-
judicial stamp. Two witnesses also have to sign this document.
The Duplicate remains almost the same as the previous
instrument. For example, the controlling number of the
duplicate. D.D. remains the same though the printed serial on
the block is changed. The duplicate issued will be marked
“Duplicate issued in lieu of original D. D. No. Registers that are
maintained with the cash department are:
1. Cash Receive Register.
2. Cash Payment Register
3. Vault Register
4. Cash Balance Book.
After going through the registers, I saw how the bills of
Grameen Phone are received. There are three parts in a bill.
After receiving the money from the customer, the cash officer
transfers the bill receipt to the cash In-charge. The cash In-
charge then signs and endorses the bill. One part of the bill is
given to the customer; one part is kept to the bank and the
other part in sent to the Grameen Phone. Then I observed how
to make payment of cheque, the procedure is as such: at first
the customer presents his cheque to computer counter and the
computer operator then check the balance, send it to the Cash
In-charge for checking of specimen signature. Cancellation of
the cheque is necessary for the safety measure. If the amount
of the cheque is more than five thousand then two power of
Attorney (P.A) holder officers’ cancellation is required. After
passing, the cheque is sent to the cash counter for payment;
there the cash officer takes a signature on the reverse of the
cheque and then makes payment to the customer. At the time
of payment, the cash officer keeps the denomination of the
money paid to the customer. At the end of Banking hour
closing of cash is done. Different steps of cash closing are as
follows:
Finalization of the daily transaction in (a) Cash Receive
registers (b) Cash Payment register:
v’ Cash balancing.
v’ Preparation of the cash position.
(Writing in the Vault register according to the denomination of
note and maintaining the Vault Register.
Cash Receive: Cash in received for the following there ways:
1. Different types of Bills like T & T, Grameen Phone.
2. Receipts of different accounts like SB., CD. and STD etc. In
this case cash is received either in Pay in Slip or in Simple
Credit Voucher (Only for FDR, BCD and PSP).
3. Different type’s remittance like TT, DD, SDR and P0 etc are
received in their prescribed application form.
+ Cash Remittance Inward
In Simple Credit Voucher SCB General P.O and cash received
seal is put. This acts as the responding of IBCA sent by Head
office.
•• Lottery tickets are also sold by branch and thus the branch
also receives cash.
It can be done by two ways:
1. By the instruction of Head office, a new A/C can be opened
with the organization’s name and thus deposit in sale Proceeds
goes to the opened A/C.
2. By the instruction of Head Office, the sales proceeds can be
kept in Sundry creditor and after a certain time the total
amount will be transferred to Head Office where HO will later
send the commission amount by IBCA. Payment: Cash is paid
in the counter by the following three ways:
1. Cheque of different types.
2. Cash Debit Voucher and
3. Pay slip.
•. A different type of Bank’s expenses that is made to Bank’s
officials or staffs is made through cash debit voucher.
Bank’s expenses and other payments other than cheques
(such as NC is closed but the client is to be paid), which is paid
to outsiders, is made through pay slip.
Consumer Loans
Three channels usually source the loan proposal. These channels
are Share Distribution (Branches), Direct Sales and Priority Banking.
If the applicant seems to be eligible, the channel sources the
proposal and with complete documents forwards to Credit Unit
provided by the RM’s recommendation.
Assessment
CREDIT LINE PROPOSAL
In this step of the term loan, the branch sends a credit line proposal
to the head office for approval of term loan. The credit line proposal
contains the following particulars:
Fresh/renewal/revision of the term loan
Borrower’s name
Types of business
Capital structure
Particulars of previous transaction
Existing vis-à-vis proposed credit limits
Movement of the accounts
Liabilities of sister concerns
Particulars of proposed facilities, etc.
PROJECT APPRAISAL
It is the reinvestment analysis done by the banker before a project
he approved. Project appraisal in the banking sector needed for the
following reasons:
To justify the soundness of an investment
To endure repayment of bank finance
To achieve organizational goals
To recommend if the project is not designed properly
TECHNIQUES OF PROJECT APPRAISAL
An appraisal is a systematic exercise to establish that the proposed
project is a viable preposition. The appraising officer checks the
various details submitted by the promoter in first information sheet
credit application form, feasibility report.SCB [PO] consider the
following aspects in appraising.
A. Entrepreneur
Entrepreneur/promoter has to be creditworthy and competent
enough to run the proposed industry.
Preference given for educated/knowledgeable sponsors, who
know about their business concern, technical expertise and
expertise in the line of proposed industry.
Who have own land and building for running the project?
Have experience in working abroad.
Sponsors with innovative ideas
Sponsors must have net worth more then 2.5 times of the
equity required for investment in the project.
Who have good dealings with the bankers/out side parties and
has social contacts and standings.
Have an account in SCB
Sponsors requiring group findings may be given financial
assistance provided for each other etc.
B. Viability of the project
The project should be viable from organizational, technical,
commercial, financial and economic points of view.
a) Technical viability: it implies the assessment of various
requirements of actual production process. It involves a
critical study of following factors.
1. Location and site of the project: selection of the
optimum location, therefore, revolves around the joint
consideration and evaluation of the following factors:
Raw materials supplies
Transportation facilities
Power and fuel supply]
Water and supply of manpower
Nature and climate factor
2. Size of the project/plan:
Size of the project/plan depends on the area covered by
the project. It varies on project to project.
3. Technology, plant & equipment:
MAJOR PROBLEMS OF LRA IMPLEMENTATION:
Inadequate or inaccurate data proved by the applicants.
Unwilling to disclose information.
Lack of auditor’s performance.
Lack of experienced assessor.
Credit appraisal:
To assess the creditability of a borrower the bank must monitor the
following things of the applicants:
6Cs: Character, Capacity, Cash, Collateral, Conditions, Controls
3Rs: Reliability, Resource, Responsibility
Three questions that must be satisfactory answered in each credit
application:
1. Is the borrower creditworthy?
2. Can the credit agreement be properly structured and documented
so that the bank and its depositors are adequately protected?
3. Can the bank perfect its claim against the assets and earnings of
the customer, so that, in the event of default, bank can be
recovered?
HEAD OFFICE APPROVAL
Up on receipt of the credit line proposal from the branch the head office
appraises the project. If it seems to be viable one, the HO sends it to the
Head office credit committee (HOCC) for the approval of the loan. The
head office credit committee (HOCC) considers the proposal and tasks
decision whether to approve the loan or not. If the loan is approved by the
HOCC, the HO sends the approval to the concerned branch.
SANCTION LETTER
After getting the head, office approval the branch issues the sanction
letter to the borrower. A sanction letter consist the following particulars
amongst other details:
Name of borrower.
Facility allowed.
Purpose
Rate of interest
Margin
Period of the loan and mode of repayment.
Security
Other terms and conditions that is required.
The borrower received the latter and returns a copy of this letter duly
signed by the borrower as a token of having understood and acceptance
of the terms and conditions above.
DOCUMENT
If the borrower accepts the sanction letter, the documentation starts.
Documents is a written statement of fact evidencing certain transaction
covering the, legal aspects duly signed by the authorized persons having
the legal status. For the term loan, documents should be obtained:
Joint promissory note
Certificate copy of memorandum and articles of association.
Latter of agreement
Letter of disbursement
Latter of installment
Letter of continuity
Latter of revival
Letter of request
Latter of counter guarantee
Letter of lien
Letter of hypothecation
Letter of guarantee
Stock report
Thrust report
Documents relating to mortgage
OBTAINING CIB REPORT AND OTHER CONFIDENTIAL REPORT
FROM FINANCIAL INSTITUTIONS:
The CIB report and other credit report from financial institutions is
necessary to know about the borrowers, if he taken any loan facility
from any financial institutions and if he taken then what is condition
of previous transactions. It is helpful to judge the borrowers’ status.
It can be known through-
Confidential report from other bank
Credit information bureau report from Bangladesh bank
Personal investigation
MORTGAGE
What is mortgage? A mortgage is the transfer of an interest in specific
immovable property for the purpose of the payment of money advanced
or to the purpose of securing the payment of money advanced or to be
advanced by way of loan, existing or future debt or performance of an
engagement, which may give raise to pecuniary liability. The transferors
called a mortgagor and the transferee is called mortgagee. The principal
money and the interest of which payment is secured for the time being
are called the mortgage money and instrument (if any) by which the
transfer is effected is called the mortgage deed. The term immovable
property includes land, building and similar other assets.
The main characteristic of a mortgage is the mortgagor does not transfer
the ownership of the property to the mortgagee. He transfers only some of
his rights as an owner that means he cannot now sell the properly without
the consent of the mortgagee.
There are six types of mortgage, such as:
1. Simple mortgage
2. Mortgage by conditional sale
3. Unregistered mortgage
4. English MORTGAGE
5. Equitable mortgage
6. Registered mortgage
The SCB generally practiced the equitable mortgage and the register
(legal) mortgage in the branch.
EQITABLE MORTGAGE
In case of an equitable mortgage, the mortgagor deposits the title deeds
with the mortgagee with the intention of giving the mortgagee an
equitable interesting the property. It does not require the registration. It is
only for the reliable clients of the bank.
Procedure for equitable mortgage:
1. The mortgagor or his agent should deposit the title deeds relating
to the property with the bank at a notified place. In case the
advanced is made is made by a bank which is not situated at a
notified place, the title deeds may be deposited with the branch of
the properly at a notified place is not required.
2. The mortgagor is required to send a covering latter with the title
deeds acknowledging the deposit of title deeds with the intenation
to create an equitable mortgage there on to secure a specific debt
or debts.
3. The bank should accept documents only in original. Usually the
bank gets a list of documents from its lawyer, which the mortgagor
has to deposit with the bank.
4. The mortgagor has to furnish periodically an encumbrance
certificate declaring that no charge has been created against the
mortgaged property subsequent to the date of the mortgage.
5. Periodical tax receipts shall also be verified.
6. In case the mortgage happens to be a limited company, the
mortgage must be registered with in 30 days of execution of the
mortgage. The disadvantages for this mortgage are property
mortgaged can be realized, when required, only through the courts
orders. This is a time consuming as well as expensive process.
REGISTER MORTGAGE OR LEGAL MORTGAGE
In a mortgage, the mortgagor transfers to the mortgage the legal title
to the property. The sub registry office must register it. On repayment
of loan, the mortgage transfers the title to the mortgagor.
Procedure of a legal mortgage:
1. An instrument mortgaging the property is executed. it is signed
by the mortgagor and two witnesses.
2. The mortgage is complete as soon as the deed is registered but
it will be effective from the date of execution.
In case the instrument is not only duly attested and registered when
it is so required, the mortgage will be void.However,he may use the
instruments to establish personal convenient to pay.
DISBURSMENT
For the case of recover money by selling mortgage property.
For the case of recover liquid money
After verify all the documents the client disburses the loan to the
borrower by issuing a cheque book. A loan is repayment schedule also
prepared by the bank and given to the borrower.
FOLLOW-UP
After the disbursement of the loan, the bank follows the borrower in
the following manner:
Continuous supervision
Working capital
Stock report
Break even analysis
Rescheduling of repayment
RECOVERY
In general, the loans are repaid in installment. This installment is
according to bank directives. Some loans are repaid all at a time. If any
loan is not repaid then notices served to the customer. Sometimes legal
actions also taken for recover the loan.
LEGAL ACTIONS
If legal actions are need to take for recover the loan, the following
procedure is followed,
Money suit (No security) title suit
Decreed Decreed
Money execution Title execution
……..for the seize of ……….Case to sell
property
movable and immovable property ……….Advertisement for auction
sale
…….arrest on dewani court
(for30/60) days ………….Bidder
………….Sell at highest rate given
party
LOAN CLASSIFICATIONS AND PROVISIONING
The loan classification procedure for all type of loan is governed by the
guidelines contained in BCD circular by Bangladesh bank, in 1989 and a
subsequently revised partially through BRPD circular no.16,issued in
1989.according to this circular the loan are classified on the basis of the
following:
CLASSIFIED TERM LOAN
STATUS CC/OD MID-TERM LONG-
TERM
Unclassified Less then 6 Less then 6 months
Less then 11
months
months
Substandard 6 to 8 months 6 to 11 months
12 to 17 months Doubtful 9 to 11 months 12 to 17
months 18 to 23 months Bad and loss 12 and above
18 and above 24 and above
INTEREST CHARGE:
a) If any loan becomes classified like substandard [SS] and
doubtful[DF]the charged interest should be preserved in
interest suspense a/c
b) Bed debt/loss a/c cannot be charged interest but in order to
operate such or to mitigate the outstanding interest can be
shown on interest suspense a/c.
c) Only after the receiving the loan money the loan a/c can be
shown on interest suspense a/c can be adjusted.
PROVISION:
TYPES OF CLASSIFICATION RATE OF PROVISION
Unclassified 1%
Substandard 20%
Doubtful 50%
Bad/Loss 100%
CARD PRODUCTS
CREDIT CATDS
What is a Credit Card?
A credit Card is a piece of plastic used for purchasing goods &
service and for obtaining cash disbursements on credit terms.
It is an unsecured credit, i.e. credit without collateral of security.
Each cardholder is assigned a revolving credit limit by the issuing
financial institution. Cardholders can purchase goods/services up to
the credit limit and can re-use the credit facility upon repayment.
The cardholder is billed periodically (usually monthly) for
repayment of the credit extended. The transactions during the
period are summarized in the bill.
Credit Card allows partial payments for purchases, but charges
interest on the amount owed. Interest rates are traditionally higher
than those charged on consumer loans. Cardholders can pay
outstanding in full to avoid interest payments.
Credit card is a safer substitute to cash and is the major made of
payment worldwide.
HISTORY OF CARDIT CARD
The use of plastic money originated in the united states during the 1920s,
when individual companies, such as hotel chains and oil companies, began
issuing them to customers for purchases made at those business. This use
increased significantly after World War II. In 1951, Diners club issued the
first Charge Card to 200 customers who could use it at 27 restaurants in
New York. With this system, the Credit Card Company charged cardholders
an annual free and billed them on a monthly of yearly basis. Another
major charge card was established in 1958 as the American Express Card
by the American Express company.
Later in the late ’50, the Credit Card concept emerged where the Bank
credits the account of the merchant as sales slips are received and
assembles charges to be billed to the cardholder at the end of the billing
period. The cardholder, in turn, pays the bank either the entire balance or
in monthly installments with interest. The first Credit Card ‘Bank
Americard’ was issued by Bank of America in last 1958 in California, USA.
This system was licensed in other states starting in 1966 in California,
USA. This system was licensed in other states starting in 1966, and was
renamed as VISA in 1976. At the some time, three different groups of
banks that were not franchisees of Bank of America began activities that
would later merge to become today’s MasterCard International.
Both organizations originally set out signing up member banks to issue
cards, enroll merchants, and /or both. Competition was fierce. Banks that
offered one card could not handle the other, thus losing money. More
importantly, the merchants themselves were being forced to turn down
sales from customers who did no carry the same card the merchant
accepted.
In 1978 the Master Card International and VISA International organizations
agreed to a concept of duality, in other words, banks could honor and
issue Credit Cards.
KEY BENEFITS OF STANDARD CHARTERED CREDIT CARD
Wide Acceptance
Standard Chartered Bank (SCB) issues both VISA and MasterCard Credit
Cards, the two renowned Credit Card brands. Standard Chartered Taka
Credit cards are accepted at more than 4000 outlets across Bangladesh.
Cardholders can use their cards in Hotels, Restaurants, Airlines, Travel
Agents, Departmental Stores, Supermarkets, Hospitals & Diagnostic
Centers, Jewelry Shop, Electronic & Computer Shops, Mobile & Internet
Service outlets. Petrol pumps etc.
Easy Repayment
Facility
Standard Chartered Credit Cardholders have the flexibility to make
payment of as little as 5% of the outstanding balance and carry forward
the rest of the balance.
Supplementary Card
Standard Chartered Credit Cardholders can enjoy the convenience of
having supplementary cards for cardholders’ spouse, children over 10
years of age of family members of friends. The primary cardholder can set
a spending limit for the supplementary card which limits the maximum
amount that the supplementary cardholder can spend in one billing cycle.
Cash Advance Facility
SCB Credit Cardholders can get instant cash advance up to 50% of card
limit from of the SCB ATMs, thus having access to cash 24 hours a day.
Besides, from any of the SCB ATMs, thus having access to cash 24 hours a
day, besides,
All Accident insurance
Coverage
SCB Taka (both primary & supplementary) Credit Cardholders are
automatically enrolled into all accident insurance coverage. Silver
cardholder are insured for BDT 100, 00/- and Gold cardholders are
Covered for BDT 500,000.
Safety Net Insurance Scheme
This is a unique offer of SCB Credit Card. In case of death or ‘Total
Permanent Disability ((TPD)’ of the primary cardholder, the total
outstanding balance on the card in waived by the bank. All cardholders are
automatically enrolled into the program and are charged a nominal free of
0.35 on their monthly balance for availing this facility.
Insta Buys
This exclusive feature allows SCB Taka Credit Cardholders to enjoy
installment loan facility on their Credit Card at an interest rate of 16.95%
under this plan, Cardholders can transfer any purchase greater than BDT
5000/- into instalment loan and repay in Equal monthly installments
(EMI).cardholders have the flexibility to pay-off in 6,12,18,24,30, or 36
Monthly installments. Moreover, special promotions are run with specific
merchants where customers can Insta Buys Facility at 0% Interest.
Rewards Program
Under this plan SCB Taka cardholders are rewarded for using their cards at
merchant outlets. For every 50 Taka spent, cardholders earn 1 treasure
points can be redeemed at any time to against with variety of gifts offered
by Standard Chartered Bank.
Auto Bills
pay
This exclusive feature allows SCB Credit Cardholders to pay their Monthly
utility bills through Credit Card by a Standing instruction. Cardholders can
avail this facility to pay their monthly mobile phone bills of Grameen
Phone / AKTEL / City Cell / Banglalink or Internet bills of Agni / BOL / Access
Tel or Cable TV bill of Prisma Digital. Besides electricity bill of DESA /
DESCO can also be settled through this facility.
SMS Banking
Facility
This feature provides cardholders as easy 24-hour direct access to their
Credit Card balance information through their Grameen Phone Mobile,
Cardholders availing this service will also receive a monthly mini-
statement through SMS, absolutely free of charge.
E-Statements
This is a secure and prompt way to receive Credit Card’s monthly
statement through e-mail address instead of receiving a paper statement.
Cardholders can choose a maximum of 3-e-mail address for receiving their
statements. In case delivery failure (for any reason), paper statement will
be sent to the cardholder’s mailing address.
Procession of Credit Card Applications
Step
Applications submitted to any SCB branch or credit card sales
team are forwarded to the Credit Card operation (CCO) unit for
capturing data into card application processing system (CAPS).
This process usually takes one working day.
Step
Applications are then forwarded to the consumer credit unit
(CCU) for necessary credit assessment. After credit review, all
approved application specifying credit limits are sent back to
card Operations. The rejected applications are forwarded to
sales teams for review of comments.
Step
Approved applications received at CCO are sent for contact
point verification (CPV) by outsource agencies. The agency
verifies the telephone no. residence and business address of
the applicant and forwards a report on each applicant to CCO.
Step
After receiving all CPV report, CCO forwards the approved
applications along with CPV report to CCU for further review.
CCU revisits applications and any application with negative
CPV is declined. Previously set credit limit may be reviewed at
this point based on CPV report.
Step
After this final review from CCU, approved applications are
sent back to CCO for opening card accounts and producing
plastics and PINS. CCO sends a system generated intimation to
the applicants whose Credit Card applications are declined.
Step
CCO arranges to deliver the Card and PIN at customers mailing
address.
Common Reasons for declining a credit card
application
Incomplete documentation:
- Less than 3/6 months bank statements
- More than 2 months old bank statement
- Documents not duly authenticated
Financial capacity of the Customer:
- Debt Burden Ratio > 50%
- Poor delinquency History of any other loan account with
SCB
- Earnings not meeting minimum required income.
Others:
- Negative contact pint verification (CPV) report
- Non-availability of telephone (Off/Res.)
- Existing credit cardholders
Credit Card Statement
Cardholders are sent monthly bills/ statements detailing
transactions and outstanding on their Credit Card accounts
during the b9illing cycle.
• Cardholders have the option to choose paper statement or e-
statements, whichever they find convenient. All card accounts
are assigned a billing/ statement date at the time of accounts
opening. Customer accounts can have billing dates from 1st to
• 22nd of every month. Staff account’s statement date is 23rd
of every month.
• All Bank Charges like finance charges/ late fee/ over-limit fee
etc. are applied on the billing/ statement date.
• Payment due date mentioned on the statement is set as 15
days after the statement date.
• Current Balance on the statement is the total outstanding
balance of the account as of eh statement date.
• Minimum Amount due is calculated as 5% of Current Balance
of BDT 500 (local cards)/ USD 10 (International cards),
whichever is higher.
• Cardholders must pay the minimum due amount by the
payment due date to keep card account regular.
PART- C: CollectionCollection unit results:
Improve the effectiveness of my results by using proven collection
negotiation skill.
Contribute to the quality of each telephone call and provide a high
level of customer service to the customers.
Maintain productivity standards by understanding how to use proven
collection techniques.
o Main process:
Verify information.
Obtain Reasons For Delinquency-RFD.
Explain benefits to pay.
Get kept promise.
Account Documentation: Concise summary and abbreviated
notes.
A. Verify information
Mailing Address
day time and evening number
Mobile phone, relative etc
B. Obtain Reasons For Delinquency-RFD.
*Why is the account past due?
*What is the customers’ present financial situation?
* Is the customer and/ or spouse working?
*Explain benefits to pay-
…………according to the severity of the delinquency………………….
Delinquency Benefit= Avoiding a consequence.
1st Month …………………………………….
2nd Month ………………………………………..
3rd month ……………………………………….
C. Get kept promise.
*How much?
-Always being the negation requesting the total amount due.
*When?
-A specific date.
*How?
-payment at the branch
-money order
- Payment by mail.
*Where?
-at the branch
-ATM
*What are the sources of funds?
-cash on hand
-commission cheque
-bonus cheque
-relatives
-borrowing the money from a friend
-loan
-selling a possession
Questioning techniques:
Collection is a sales job. Some mission is to convince the customer to pay him the total
amount due today. Use motivation and persuasion to create urgency and to overcome
the customer’s objections. Questioning is a critical tool in the counseling process.
Questions are tools to-
A. Determine ability and willingness to pay.
B. Identify the customers’ needs and expectations.
1. If we are looking to-
a) Understand the customers’ position about the specific situation.
b) Confirm that the information provided was understood.
c) Verify an agreement
During the counseling process, we need to ask different types of questions to get
various results. Closed questions are used to verify specific information and can
only be answered with “No” or “Yes”.
-Did you receive your statement?
-Have you changed job?
-Do you have a pen to take down my number?
-Would you take a message?
-Is he at work?
2. If we are looking to –
a) Obtain information about customers’ current financial situation.
b) Understand alternatives to make short term payment arrangement.
c) What programs does the customer quality for?
d) Know which actions the customer is considering to resolve the situation. An
open-ended question seeks information and allows for a wide range of answers and
often requires a several sentence response or longer explanations. Some examples
are-
Why did you miss the payment?
How can you feel behind?
What obstacles prevent you from paying today?
When will you make the payment?
Where will you pay?
Where are you getting the money to pay?
Who is responsible for the account?
Who can take a message?
How often do you speak to him?
The use of open-ended questions will help eliminate faculty assumptions and bring
about more effective communications.
Collection Negotiation techniques
Approach and Attitudes
Characteristics of effective sales people
I. Good product knowledge
II. Understand where be wounds
III. Communication skills
IV. Negotiation skill
CHARACTERISTICS OF COLLECTORS
Effective collectors snare qualities:
1. Inquisitive(ask good question)-Effective collectors ask the right
questions to find out why customers aren’t paying and get the
information they need to obtain a firm promise to pay.
2. Good listeners-Effective collectors ask appropriate questions,
and listen to the answers so that they develop a payment
arrangement that is tailored to the customer’s situation.
3. Clear communicators- Effective collectors phrase their questions
and comments in ways that are readily understood and realize
that customers want clear communicators. They also have good
voice qualities-tone, volume, and rate.
4. Use Good judgment- Effective collectors know how to balance
being firm, air and friendly. They also know when to bring a call
to a conclusion (i.e. they don’t let a customer ramble on after a
promise to pay has been agreed upon), and they know when to
stress the urgency of paying immediately.
5. Knowledgeable-Effective collectors know how to follow the
negotiation sequence and which remedies to select to resolve
the account situation. They also know what they can and cannot
do within the policies of the bank, as well as legally.
6. Self-confident-Effective collectors ‘words communicate the
impression that they are in control. They are firm and fair.They
know how to do their jobs and are prepared to negotiate a
mutually satisfactory payment arrangement.
7. Motivated/Persistent-Effective collectors have lots of drive and
persistence to keep going, call after call and customer after. This
helps them achieve effectiveness, quality and productivity goals.
They measure their success by their results and strive to be the
best at what they do.
8. Positive attitude-Effective collectors react positively to objections
and resistance to making or keeping a promise. They are not
stopped by the first no or excuse that they encounter. When
customers start giving excuses for not paying, these collectors
go to work to overcome the objections to pay.
9. Persuasive-Effective collectors motivate customers to act on the
importance of honoring their commitments and maintaining a
good credit rating. They personalize their approach to the
customer and gain the customer’s commitment. That helps in
negotiating better payment arrangements.
10.Imaginative-Effective collectors are creative in tailoring solutions
to fit customers’ circumstances. They adapt readily to different
customer types and have lots of good techniques at their
fingertips.
An excellent collector needs to:
1. Consistently perform the basics-Excellent collectors are good at the
basics and put them into practice every day, on every account and
during every contact.
2. Use their time effectively-Excellent collectors don’t waste time.
They review account information and notes quickly and correctly so
they can get right to the point when talking to customers.
3. Adapt their approach to the customers- Excellent collectors realize
that people are different and react differently to collection situation.
When they try to educate and motivate, they tailor their approach
to the customer.
4. Adapt their strategy to the customer’s situation- Excellent collectors
realize that situations are different and call for different approaches
and remedies. Although they may have an initial strategy for
resolving a problem, they are flexible enough to change their
approach as they surface additional information during a call.
5. Obtain good promises to pay and firm commitments- Excellent
collectors can detect insincere agreements and ask the customer
enough questions to determine whether a particular solution is truly
workable.
6. Turn broken promises into kept promises- Excellent collectors know
how to identify the customer’s problem through effective
questioning and listening and then how to address it with the
customer.
7. Learn from past experience- Excellent collectors always assume
that they can do the various parts of their job better, and actively
look for ways to improve. They learn from their mistakes, as well as
their successes.
8. Team players- Excellent collectors share ideas and contribute
suggestions, help train other collectors and make recommendations
to improve the process.
Establish the importance and relationship of MONITORING,
MEASUREMENT AND MOTIVATION as fundamental tools for effective
supervision in a collection call center.
Define the need for call MONITORING and understand WHEN, WHY,
HOW, MUCH and HOW to monitor telephone collectors.
Learn COACHING and FEEDBACK techniques to improve the
performance of telephone collectors performing below job
standards and motivate high performers to perform at optimum
levels.
Define and develop consistent FORMATS and PROCEDURES to
review telephone collector’s performance.
THE 3 M’S OF COLLECTION MANAGEMENT
An effective supervisor should practice and become an expert on the 3 M’s
to meet business goals and objectives.
MONITORING
Permanent/Ongoing Call Monitoring-is one of the most important
responsibilities of collection supervision to reinforce effective
performance.
Call Monitoring is a very useful technique to evaluate and improve
collectors’ skill and is, undoubtedly, the foundation to structure productive
feedback in individual or group sessions.
The primary objectives of call monitoring in a collections operation are:
Identifying opportunities-for collectors to improve their
communication skills in order to get firm commitments to pay
from customers
Ensuring –that collectors are following company policies
Verifying compliance-with laws and regulations
Secondary objectives may include improving the quality of customer
service, identifying training needs, recognizing good performance, and
improving the relationship between supervisors and collectors.
MONITORING CATEGORIES
There are different ways to implement Monitoring. They are
complementary and using different combinations of techniques results in
an objective and precise evaluation of collectors’ performance.
When monitoring calls, a supervisor should evaluate certain
characteristics including:
Content .The content of the call is determined by listening to the
telephone conversation between the collector and the customer. A
supervisor observes the collector’s speaking and listening skills, the
duration of the call, how the collector identifies the situation, and
the way the collector makes decisions. A supervisor will distinguish
the type of call and analyze the collector’s ability to address the
situation quickly and appropriately.
Call Duration. Call duration may be impacted by how quickly
collectors can access system information. It is not unusual for a
collector to need to view at least three screens to handle a call: the
predictive-dialing interface screen which is the initial screen a
collector may view that displays basic account information, the
collection database which may include historical and financial
information and real-time payment information from host system,
for example. Collectors frequently spend a lot of time flipping
through screens to get information. This time can be greatly
reduced by using specialize tools such as workflow and customer-
relationship management software.
After-Call Work Time-A critical factor that infects productivity in a
predictive-dialing environment is after-call work time or update
time, the time a collector spends updating the customer’s record
with the call results. Experienced collectors usually update the
customer’s recode during the conversation. Best practices indicate
that in an early delinquency collection operation, optimum time
usage is at least 85% talking to customers and 15% or less updating
the record. To minimize after-call work time many collection
operations use abbreviations and codes to recode call results.
Performance Feedback. There is strong value in giving immediate
performance feedback to the collector about the handling of calls
monitored. Giving corrective feedback by positively coaching
collectors assists them in making immediate improvements.
Managing the call and controlling the Conversation
1. Puts the facts on the table
Explain the status of the account.
State the last activity on the account.
keep it in the present
Ask for the money.
2. Information Gathering
Use open- close questioning technique.
Extract information without jumping to conclusions.
Find out RFD.
Classifying the customers’ response to identify willingness
and ability to pay.
Develop the sales strategy.
3. Bridging
Listen
Get on the customers’ side.
Acknowledge.
Overcome the emotions.
Lead the customers back to the negotiation.
4 Tips for the managing angry customers’
Need to avoid charged words like-“Problem”. Instead use
more neutral language, such as –situation; occurrence,
etc.
Let the customer vent his or her frustrations and do not
interrupt.
If a customer use obscene language, advice him /her you
will disconnect the call if he or she continues.
Do not take what the customer says personally.
Chapter
Delinquency, Provisioning and Legal Action:
The level of delinquencies is determined based on the number of days loan
installment(s) is/ are missed by the customer.
SWOT ANALYSIS OF SCB
Strength:
1. Usage of poster PC banking software cards 400
2. Efficient administration
3. Fewer default loan in credit card
4. Co-operation with each other
5. Good banker- customer relationship
6. Strong Financial Position
7. Energetic as well as smart work force.
Weakness:
1. Shortage of Branches & ATM machine
2. Customer awareness
3. Shortage of men
4. Shortage of Merchant
Opportunity:
1. Huge fairness area credit card.
2. Growth of sales volume
3. introducing new facilities for credit
4. Introducing ATM & Branch in our rural area.
Threats:
1. Different classic services of other Banks.
2. Political unrest
3. Entrance of new private Bank.
CUSTOMER SATISFACTION: FROM THEORETICAL VIEW
Customer satisfaction is the extent to which a product or
service’s received performance matches a buyer’s
expectations. If the product or service’s performance falls short
of expectations, the buyer is dissatisfied or delighted.
Expectations are based on customers past buying experiences,
the opinion
friends and associates, and marketer and competitor
information and
promises Marketer must be careful to set the right level of
expectations
I they set expectations too low, they may satisfy those who
buy but fail to
tract enough buyers In contrast they raise expectations too
high,
iyers are likely to be disappointed can arise either from a
crease in product and service quality or from a increase in
customer
pectations. In either case, it presents an opportunity for
companies that
rn deliver superior customer value and satisfactions
Today’s most successful companies rising, expectations and
delivering
rformance to match. Such companies track their customer
expectations,
rceived company performance and customer satisfaction
Highly satisfied
istomers produce several benefits for the company Satisfied
customers
e less price sensitive, remain customers for a long period and
talk
vorably to others about the company and its products and
services
Although the customer-centered firm seeks to deliver high
customer satisfaction relative to its competitors, it does not
attempt to maximize customer satisfaction. A company an
always increase customer satisfaction by lowering its price
increasing its services, but it may result in lower profits. Thus,
the purpose of marketing is to generate customer value
profitably. This requires a very delicate balance, the marketer
must continue to generate more customer value and
satisfaction but not give away house.
Now, we have a very good idea regarding the importance of
customer satisfaction. So, it is also important for the company
to know about the satisfaction level of the customers. When
any problem is identified, it becomes easier to solve the
problem. In the next part of my paper I have focused on the
customer satisfaction factors of. That has been followed by my
primary research; a survey to find out the customer
satisfaction level of Credit Card.
Concluding Remarks
As a first generation private bank, Standard Chartered Bank has come a
long way to reach its present stature. In addition, we are proud to be a
part of this pioneer of private sector banking. However; every organization
has its brighter side as well as a few difficult ones. In order to minimize the
difficulties, we should be careful in reshaping our venture and efforts to
obtain the goal.
The meaning of Service for the banking sector is constantly being
reshaped. Most international banks and some local private banks have
already introduced all-time-case-line, telephone banking, and On-line
banking in their service fleet. Therefore; we also should try to revitalize
the quality and quantity of service. We must say, the initiative taken to
introduce the Various Cards Issued by SCB combining A.T.M. Card, Credit
Card, Debit Card and Utility Bills payment Card all in a single card is a
great step on part of the Bank to improve its customer service. In this way,
we should reshape our products and introduce innovative ones in such a
competitive market composition in which we stand.
Since the prime concern of a bank is to impress its client not only through
financial service but also through a cordial environment, our attention
should always be focused on this subject. The Bank has decorated it
officers beautifully, but in the present decor, the shortage of sitting
arrangement for clients remains a conspicuous weakness, despite the very
cordial and efficient service offered by the employees.
While our experience will serve as the pre-amble for future success, we
should also try to gain a perfect and dynamic vision for the future, since
an imperfect past can make the future tense. In addition, we are the ones
to make the tension-free and bright future-a future that must necessarily
be better than today.
Thank you all for your patient perusal.
WORKS CITED
1. ZEITHAML, VALARIE, BITNER, MARY.
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