really final project
TRANSCRIPT
Letter of Transmittal
Date: 29 April, 2012
To Bashir HossainProfessor, Department of BBANorth South University
Subject: Submission of Internship Report.
Dear Sir,
With due respect I am stating that I am Tamanna Sharmin is submitting my Internship
report on “Customer satisfaction with mortgage loan of Standard Chartered Bank ”
for your kind evaluation , as part of my requirement of completing the BBA program.
I acknowledge with thanks for wholehearted support and kind guidance received from
you, I would like to mention that there might be some unintentional error in this
report. I hope that you will consider my shortcomings while you evaluate my paper.
Sincerely Yours
Tamanna SharminID: 072 350 030Department of BBANorth South University
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Acknowledgement
I would like to begin by thanking the Almighty for giving me physical and mental
strength and blessings to successfully carrying out the Internship Report. In
performing the internship, I was specially exposed to the real life experience. I also
feel it is a unique opportunity for me to learn about the practical work and customer
interaction in a reputed organization. This internship improved my knowledge and
attitude about the field to a large extent.
I am grateful to my respective supervisor Professor Bashir Hossain; Lecturer,
Department of Business Administration for allowing me to do such an interesting and
knowledgeable Internship Report on Standard Chartered Bank Bangladesh and for his
outstanding support and specific direction which made this reports almost a faultless
one. Wonderful ideas and factual path showing are the specialties of those directions.
The report topic is “Customer Satisfaction With Mortgage Loan of Standard
Chartered Bank”. I have done the whole report based on the information from primary
and secondary data.
And my special thanks to my supervisor Abdul Quaium sir, Head of loan operations,
Tareq Hasan, Manager, Loan operations of Standard Chartered Bank, Head office for
their enormous and continual effort and guidance for the successful completion of the
Report. My thanks also goes to Zahid vai, Ashraf vai and Limon vai, Ayesha Nayar,
Ahrar Masud, Officer of SCB for their heartier coordination to understand each and
every task, to work with this product ‘Mortgage Loan’.
And it is my great pleasure to work on this topic as a student of Department of
Business Administration, North South University. For that reason my gratefulness is
always to the Department of Business Administration as a whole.
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EXECUTIVE SUMMARY
This report is prepared to fulfill the requirement of the course program and it is
concerned about the enlargement of the knowledge regarding the business
environment specially the multinational banks in Bangladesh. As banking is the most
thriving industry in our country, the students of business administration should have a
clear understanding of the procedure through which the private commercial banks and
as well as the multinational banks in our countries operate their business. The
multinational banks in Bangladesh are successfully operating their business and they
are contributing on the country’s economy. They also provide assistance to the local
banks in Bangladesh and help them in expanding their business. Through this report
we have tried to find out the customer satisfaction in terms of mortgage loan of the
renowned multinational bank, Standard Chartered Bank (SCB). In this report one
could find out the different aspect of SCB like history of the bank, their vision and
their overall performance. So here we have shown their performance for the last three
months. Most of the customers are not satisfied with the performance of the loan
sanction. Some of them think that the department is very effective in their work
because they take instant action for the wrong processing and they also inform the
customers about any incomplete instruction. The one disadvantage is they take high
charges for the processing. Overall the whole process of preparing this report was a
stiff learning curve for us.
Standard Chartered Bank is in its 60th year of business in Bangladesh since 1948. It
has built up an enviable goodwill and reputation over the years with sincere and
dedicated service, which saw generations of customers supporting the bank to the top
position where it stands today. Its operation in Bangladesh was further widened and
strengthened by the global acquisition of Grindlays from ANZ Banking Group by the
Standard Chartered for a staggering US$ 1.34 billion in July 2000. This not only
brought in the largest network of a foreign bank in Bangladesh to the disposal of
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Standard Chartered, but also provided them with a huge customer base. Though
Standard Chartered and Standard Chartered Grindlays were two separate legal
entities, yet in practical terms they have integrated wholly. From January 01, 2003
both of the banks were operating their activities in Bangladesh by renaming them
officially as Standard Chartered Bank and has changed their LOGO.
Standard Chartered Bangladesh today is faced with challenges. Internally, it has
inherited the largest retail customer base of any foreign bank in Bangladesh from
Grindlays. Managing this base along with its existing customers and synchronizing
the operations of the two parts of the bank is a daunting task. Though the Bank is
equipped with modern information technology and a skilled well-trained force
amongst other strengths, yet maintaining the service standards remains a challenge.
Externally, it has to face up to the local commercial banks and foreign banks. The
market scenario in recent years has undergone changes with a number of local private
and foreign banks entering into the market. Besides, the customer today is more
conscious of the quality of service and the benefit offered by various banks and has a
wide array of choices. In the face of such challenges it has become imperative for
Standard Chartered to maintain the level of customer satisfaction and to explore ways
and means to improve it. Therefore, it is crucial for the bank to ascertain the
satisfaction level and reasons for discontent.
The general image of Standard Chartered Bank is that it is “Responsive,
Trustworthy, International, Creative and Courageous.” In Bangladesh Standard
Chartered Bank is primarily consumer finance driven. Standard Chartered services in
Bangladesh, ranges from Personal & Corporate Banking to Institutional Banking,
Treasury and Custodial services The Consumer Banking Service generates more
revenue for its bank. So maintaining the customer satisfaction is the key challenge.
Mortgage loan was launched by SCB in 05August; 2006.SCB launched it with the
lowest interest rate in Bangladesh. And it has cut a very good figure in the total loan
disbursement on the month of January, February and March in Gulshan branch (Head
Office). Because of its competitive interest rate and opportunity for large amount, it
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has become one of the attractive products to the SCB customers rather than other
banks. I was appointed in the Head Office of Standard Chartered Bank.
The topic of my report is “Customer satisfaction with Mortgage loan of Standard
Chartered Bank” For that reason both Secondary and Primary data collections have
taken place. The analysis is done on the basis of those data. In the secondary data
analysis loan disbursement was shown for the month of January, February and March.
In the primary data analysis, it is found that most of the customers took Mortgage loan
to purchase apartment. There were some factors which motivated customers to take
Mortgage loan but when they applied for it and availed the loan then the real scenario
appeared. Customers thought that there will be low processing fee. But after having
the loan, customers expressed their reaction. SCB should maintain the quality for
which people are satisfied. Such as after analyzing it shows three major source of
satisfaction is interest rate, no hidden charge and opportunity for large amount. The
factors for which they are dissatisfied should be minimized, like high processing fee,
early settlement fee. Customers are more logical and conscious than before. They
must hunt for their benefits. So SCB should make proper decision to capture the best
exposure.
After the analysis and the findings some recommendations are also suggested
regarding service and the loan offer for the next.
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Me Tamanna Sharmin , student ID: BBA 072 350 030, student of Bachelor of
Business Administration (BBA) major in Marketing from North South University
Bangladesh do hereby declared that this report entitled “Customer Satisfaction in
terms of Mortgage loan” submitted by me to North South University for the
Graduation of B.B.A (Bachelor of Business Administration) degree is of my own and
has not submitted to any other university or institute for the award of any degree as
well as this paper may not use any actual market scenario
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STUDENT’S DECLARATION
ACKNOWLEDGEMENT
1.Introduction
Standard chartered Bank (SCB) is the most popular bank in the world. It is operating
its business Bangladesh as a multinational bank for more than 100 years. Because of
its wide range of coverage and experience it provides various types of unique
products and service.
Today, Standard Chartered Bank is the largest international bank in Bangladesh with
26 Branches, 57 ATMs and 7 Financial Kiosks; employing over 1,300 people. We are
the only foreign bank in the country with presence in 6 cities – Dhaka, Chittagong,
Khulna, Sylhet, Bogra and Narayanganj; including the country's only offshore
banking units inside Dhaka Export Processing Zone (DEPZ) at Savar and Chittagong
Export Processing Zone (CEPZ). First international bank to extend credit lines to
Bangladesh and open the first external letter of credit (LC) in Bangladesh in 1972 .
Financial Institutions business is the largest contributor to USD Clearing in New York
A leading price player in treasury instruments and foreign currencies Leader and
pioneer in Consumer Banking
The bank increasingly invested in people, technology and premises as its business grew in relation to the country's thriving economy. We currently provide both Consumer Banking and Wholesale Banking Services, ranging from Personal & Corporate Banking to Institutional Banking, Treasury and Custodial services. Extensive knowledge of the market and essential expertise in a wide range of financial services underline our strength to build business opportunities for corporate and institutional clients in Bangladesh. Continuous upgrading of technology and control systems has enabled the bank to offer new and improved services such as Phonebanking, I-banking, e-Lending.
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Standard Chartered is very much renowned in terms of Loan operations. They have a
range of loans they offer to its consumer in exchange of guaranty and interest. Theses
are Personal Loan, SME, Auto loan, Mortgage loan, Home loan, CIB(Credit
Information Burro), Consumer Credit & Collections (CCU). The first four are known
as the value centers (VC). WM is the liability VC, while the other 3 are the asset VCs.
VCs are the owners of the respective products and sub-products. They are also
responsible for development of new products, promotion & sales of all their products
and maintenance of their portfolio. The last one is the most important part nowadays
in every bank because of the order of Bangladesh Bank`s new regulation.
This VC is the owner of personal loan (PL). The sub products include gift card, travel
cards, unsecured/ partially secured personal loans, Islamic finance etc. Auto VC is the
owner of 2 products - AL & IPF, and all the sub products. They are also responsible
for all the legal matters pertaining to these products. Mortgage VC is the owner of 3
products – ML,SHBL & SHF, and all the sub products. They are also responsible for
all the legal matters pertaining to these products.
Mortgage loan was launched by SCB in 05August; 2006.SCB launched it with the
lowest interest rate in Bangladesh. And it has cut a very good figure in the total loan
disbursement on the month of January, February and March in Gulshan branch (Head
Office). Because of its competitive interest rate and opportunity for large amount, it
has become one of the attractive products to the SCB customers rather than other
banks. I was appointed in the Head Office of Standard Chartered Bank.
.1.1Background
Banks are the most prominent among the financial institutions to create credit and
thus help in different economic activities. All sorts of economic and financial
activities revolve round the axis of the bank. As the industry produces goods and
commodities, so does the bank creates and controls money-market and promotes
formation of capital. From this point of view, banking-a technical profession- can be
termed as industry. Services to its customers are the products of banking industry
besides being a pivotal factor in promoting capital formation in the country.
Commercial banks are the primary contributors to the economy of a country. It helps
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to flow funds from surplus unit to deficit unit and through this it facilitated the
efficient allocation of the resources as well as accelerated economic growth. This
sector is moving towards new dimension as it is changing fast due to competition,
deregulation and financial reforms. In the modern day banks are playing a significant
role in a country’s economy. As all economic and fiscal activities revolve round this
important 'Industry', the role of banking can hardly be over emphasized. To ascertain
the role of banks and to analyze its operational aspects and its overall impact on our
national economy a thorough study as to its distribution, expansion and contribution is
essential to comprehend its past, present and future bearings for the growth and
development of the banking sector of the country. In the global context, the role of
banks is far - reaching and more penetrating in the economic and fiscal discipline,
trade, commerce, industry, export and import- all carried through the bank. Banks are
the only media through which international trade and commerce emanate and entire
credit transactions, both national and international.
1.2Origin of the report
I have been assigned to do my Internship program in Standard Chartered Bank,
Gulshan Branch; for the academic requirement of Department of Business
Administration. Internal supervisor Professor Bashir Hossain; Lecturer, Department
of Business Administration has assigned to conduct the research study on the topic
“CUSTOMER SATISFACTION WITH MORTGAGE LOAN OF STANDARD CHARTERED
BANK”. After approving the proposal, both the Internal and External supervisor has
assigned this topic to work with Internship program which is a prerequisite for BBA
degree. Actually classroom discussion solely cannot make students to be acquainted
with the real life situation; therefore it is an opportunity for the students to know
about the practical environment of the real business world through this program. It is
a stimulating opportunity and a valuable experience for me to view real business
world. Working in SCB helped me in heartening my theoretical knowledge. And it
will carry greater values for the carrier also.
1 . 3 1 . 3 O b j e c t i v eO b j e c t i v e
The objectives are as follows:
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Broad objective
To measure the “customer satisfaction with mortgage loan of SCB’
Specific Objective
To identify the overview of mortgage loan procedure.
To discover the total loan disbursement from Gulshan branch and show the
contribution of mortgage loan among the total loan disbursement
Identifying the motivating factors for choosing the mortgage loan of SCB
Analyze the customers satisfaction factors
Analyze the dissatisfaction factors that customers considering
1.4 Significance
This report mainly tends to determine the customer satisfaction of mortgage loan that
Standard Chartered Bank’s CBS (Consumer Banking Service) customers expect and
to what extent Standard Chartered has been able to meet them. The banks and
branches surveyed are all within the geographical location of Dhaka city. The survey
included the customers’ of-SCB only in Gulshan branch. And it opened the door of
being familiarized with the banking environment. The report does not stand as a
universal remedy for the Standard Chartered Bank nor is it the final job regarding the
issue. Further study may take place in the same scope and this can be used as the prior
work in the field.
1.5 Methodology
To meet the objectives of the report, different methodology is used to acquire as well
as to analyze the data. To evaluate the customer selection criteria to provide the
mortgage loan, face to face conversation was conducted with the respective officers of
Gulshan Branch and with Mr. Tareq, manager of mortgage. To identify the
customer’s satisfaction with mortgage loan among various loan products of SCB,
questionnaire survey was conducted. In this research the numbers of respondents were
limited who take Mortgage loan from Gulshan Branch(Head office) of SCB. A
summary of the methodology is provided below:
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1.4.1 Research Design: Both primary and secondary data were collected. After
collecting the data; the analysis is done mainly with the help of some application
software like MS-Excel. Other methods are also used as per requirement of the report.
Questioner findings are presented in graphical view.
Data Collection Method:
Formal questionnaire for data collection will be use. Sample will be collected from
the general and priority customer of At the same from Standard Chartered Bank.
Information will be collected through informal discussions with Relationship
managers & respective Branch Manager.
Data have been collected from two sources. These are as follows:
A) The Primary Sources of Data:
Face to face conversation with the bank officers and staff.
Direct conversation with the clients.
File study of different section.
Desk work: During my practical orientation I worked according to
the following routine.
B) The Secondary Sources of data:
Annual Report of Standard Chartered Bank.
Different publications of Standard Chartered Bank.
Unpublished data received from the Branch.
Different text books.
Websites
Magazine, Journals, Newspapers.
Bangladesh Bank Database.
Analysis will be done with the help of SPSS software. Statistical tools such as
hypothesis Test, ANOVA, Pearson Chi-square, cross tabulations, Z-test/T-test,
Correlation, Regression, Will coxon, will be also be used in the analysis process.
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1.4.2 The Sampling Process:
Selection of the population will be defined as----
Elements: All the available customers of Standard Chartered Bank of Gulshan
branch,
Sampling Unit: Direct Customers
Area: Dhaka Metropolitan City
The Sample Size: Since maximum number of customers who have taken mortgage
loan stay in Dhaka, it would give us the mirror image of satisfaction of mortgage
customers of other areas. Considering the time constraint, the sample size had to be
reduced to 56 of the total sample size of 287.
1.6 Source of data
The report is constructed upon both primary and secondary sources of information.
They are:
1.5.1 Primary data collection
Personal interview with the mortgage manager of SCB.
Face to face conversation with the respective officers of the bank.
Questionnaire survey to Mortgage loan borrowers.
1.5.2 Secondary data collection
- SCB’s Annual report of 2011.
- Monthly, quarterly and Half yearly Statements of loan from Gulshan
Branch office.
- The Booklet of Standard Chartered Group.
- Filtered data table of disbursed ‘Mortgage loan’
- Website of SCB www.bd.standardchartered.com
1.7Limitation
Confidentiality of Bank data was another constraint that was faced during
the study. As part of the policy of the Standard Chartered Bank, some data that
could not be used to enhance the parameter of the analysis. Because, maintaining
the secrecy of such data is important to the bank’s interest.
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Limitation of time was one of the most important factors that shortened the
present study. Due to time constraints, many aspects could not by discuss in
the present study.
Because of time and cost constraint it is not possible to conduct large
number of borrowers for making more productive.
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2.STANDARD CHARTERED BANK: AN OVERVIEW
Standard Chartered is the world's leading emerging markets bank headquartered in
London. Its businesses however, have always been overwhelmingly international.
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.
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. 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.
2.1 Motivational factors in Standard Chartered Bank
Standard Chartered supports the rights of the individual as expressed in the 1948
United Nations Universal Declaration of Human Rights (UDHR).
The UDHR contains a number of fundamental rights, which SCB aims to uphold in
all circumstances, including:
The right to life
The right to legal recognition as a person
Freedom of thought, conscience and religion
Freedom of opinion and expression
Freedom from torture
Freedom from cruel, inhumane or degrading treatment
Freedom from slavery and servitude
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2.2 Vision of SCB
Previously according to “ANZ Grind lays Bank” Nov 1994, its vision statement was
follows:
“We are renowned as the top performing banking group service in Australia, New
Zealand and international market. Provide the greatest return to our shareholders by
achieving some profitable growth. Be perceived by customers and stuff as the best
wherever we operate, have the stuff of the highest caliber. Excel in the way we work
together to make decision and get things done. We will achieve this position by the
end of 1998 and sustain it where after.”
After the acquisition the new vision is one bank one message
“The best of the best-that’s what we’re determined to become! Our aim is for
Standard Chartered to be the worlds leading emerging bank. We will concentrate what
we do best.”
At Standard Chartered our success is built on teamwork, partnership and the diversity of our people.
At the heart of our values lie diversity and inclusion. They are a fundamental part of our culture, and constitute a long-term priority in our aim to become the world's best international bank.
Today we employ 75,000 people, representing 115 nationalities, and you'll find 60 nationalities among our 500 most senior leaders. We believe this diversity helps to fuel creativity and innovation, supporting the development of exciting new products and services for our customers worldwide.
What we stand for
Strategic intent The world's best international bank Leading the way in Asia, Africa and the Middle East
Brand promise
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2.3 Principles & Values
Leading by Example to be The Right Partner
Values Responsive Trustworthy International Creative Courageous
Approach Participation
Focusing on attractive, growing markets where we can leverage our relationships and expertise
Competitive positioning
Combining global capability, deep local knowledge and creativity to outperform our competitors
Management Discipline
Continuously improving the way we work, balancing the pursuit of growth with firm control of costs and risks
Commitment to stakeholders Customers
Passionate about our customers' success, delighting them with the quality of our service
Our People
Helping our people to grow, enabling individuals to make a difference and teams to win
Communities
Trusted and caring, dedicated to making a difference
Investors
A distinctive investment delivering outstanding performance and superior returns
Regulators
Exemplary governance and ethics wherever we are
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2.4 Business & Strategy
By combining our global capabilities with deep local knowledge, we develop innovative products and services to meet the diverse and ever-changing needs of individual, corporate and institutional customers in some of the world's most exciting and dynamic markets.
Personal Banking
Through our global network of over 1,750 branches and outlets, we offer personal financial solutions to meet the needs of more than 14 million customers across Asia, Africa and the Middle East.
SME Banking
Our SME Banking division offers a wide range of products and services to help small and medium-sized enterprises manage the demands of a growing business.
Wholesale Banking
Headquartered in Singapore and London, with on-the-ground expertise that spans our global network, our Wholesale Banking division provides corporate and institutional clients with innovative solutions in trade finance, cash management, securities services, foreign exchange and risk management, capital raising, and corporate finance.
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Islamic Banking
Standard Chartered Saadiq's dedicated Islamic Banking team provides comprehensive international banking services and a wide range of Shariah compliant financial products that are based on Islamic values.
Private Banking
Our Private Bank advisors and investment specialists provide customised solutions to meet the unique needs and aspirations of high net worth clients.
Our people, our values
We are one of the world's most international banks in terms of the diversity of our people. Our 75,000 employees, representing 115 nationalities, are exposed to exciting career opportunities as a result of our unique global footprint.
Our board of directors
Our leaders reflect the diversity that drives Standard Chartered's success and makes us one of the world's most international banks.
Our global team
The Bank offers a well-rounded career that is truly global in scope. Our size and reach facilitate exposure to international banking standards and work experience by
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2.5People
providing employees with opportunities to travel, interact and learn from other cultures.
Each year as many as 20 per cent of our employees get expanded role opportunities. Over 2,000 of our employees are on cross-border assignments at any one time.
Nearly half of our employees are women, and almost 60 nationalities are represented among the senior management, reflecting the bank's policy towards providing equal opportunity for all employees.
Last year (2007) was the most successful year for Standard Chartered Bank. In the
year of 2007 SCB has got several most important awards which were very significant
for the bank and those awards will certainly help the bank to perform more better way
than the previous years. The awards which the Standard Chartered Bank got are:
Asian Legal Business SouthEast Asia Awards 2007
Global Finance Best Emerging Markets Bank Awards 2007
Global Finance World's Best Internet Banks Awards
Trade Finance Awards for Excellence 2007
Euromoney Awards for Excellence 2007
FinanceAsia Country Awards for Achievement 2007
2.7 HISTORY OF SCB - a year wise progression:
SCB has a history of more than 150 years. The name “Standard” stems from the two
original banks from which it was founded-“Chartered Bank” of India, Australia and
China and “Standard Bank” of British South Africa.
Chartered bank was established in 1853 by a Royal Charter granted by Queen
Victoria of England. The main person behind the Chartered Bank was a Scot, James
Wilson who had also started “The Economist” still one of the most eminent
publications today. He foresaw the advantages of financing the growing trade links
with the areas in the East, where no other financial institution was present that time
widely.
1853
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2.6Achievement of SCB
Set up by James Wilson in 1853, at the request of Queen Victoria, the Standard
Chartered Bank aimed to finance and manages trade between the British Empire and
its colonies in India, Australia and China. It mainly operates in Asia-Pacific, Latin
America, the Middle East and Africa. In all, it has 500 branches in 56 countries.
1858
The overseas branch of the Chartered Bank opened in Calcutta, Bombay and
Shanghai followed by Hong Kong and Singapore in 1859.
1862
The Standard Bank is incorporated in England and under the new title of The
Standard Bank of British South Africa Limited.
1957
The Chartered Bank and The Standard Bank incorporated as Standard and Chartered
Banking Group Limited.
1969
Merger of The Standard Bank and The Chartered Bank by the incorporation of
Standard and Chartered Banking Group Limited
1973
Standard Chartered acquires the Hodge Group, whose operating company later
becomes Chartered Trust Limited.
1985
Parent company of the group renames Standard Chartered PLC. Standard Chartered
Bank becomes a clearing bank within the UK clearing system.
1993
Receive the very first ‘Best Bank in Asia’ awards from Euromoney magazine.
2000
On 27 April, ANZ announced the sale of its Grindlays businesses in the Middle East
and South Asia, and associated Grindlays Private Banking business, to Standard
Chartered PLC. ANZ announces US$8 million strategic investment in Hong Kong,
online stockbroker, BOOM.com. ANZ announces sales of Grindlays to Standard
chartered for US$1.3 (A$2.2) billion in cash.
2004 and onwards
Number of shares 1,174,520,020. Number of employees (31/12/2003) 30,000. It has
500 branches in 56 countries. At present the bank has 18 offices in Bangladesh. In
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Bangladesh Standard chartered Bank has more than 620 permanent employees
(31/12/2005)
2.8 Global Market
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 Coles berg 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.
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 Dares 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. s radically changed and strengthened.
Standard Chartered in the 1990s:
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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.
Standard Chartered in Middle East & South Asia (MESA):
The MESA region performed well in year 2002. The region accounts for
approximately eleven percent of the group’s revenues. The integration of Grindlays
was successfully completed and the group is now one of the leading international
banks in each of its chosen markets in the region. The contribution of the Group’s
business in the United Arab Emirates reflects the businesses. Standard Chartered now
holds leadership positions in most of its key product segments in the UAE. The
average number of employees in the Middle East and other South Asia region in 2002
was 2995.
Standard Chartered in Hong Kong:
Hong Kong remains the Group’s largest market, generating one third of the Group’s
revenue. They have a network of 74 branches. Standard Chartered has been
transacting business in Hong Kong since 1858 and they issue bank notes there. In
2002, Standard Chartered became the first FTSE 100 Company to launch a new dual
primary listing in Hong Kong. This will make the Group more accessible to Asian
investors and will enhance the Group’s regional profile. The average number of
employees in Hong Kong in 2002 was 4,677.
Standard Chartered in Singapore:
Standard Chartered has been doing business in Singapore for 144 years and has 20
branches and offices, the largest branch network among foreign banks. The business
in Singapore accounts for approximately eleven percent of the Group’s revenues.
Standard Chartered has Qualifying Full Bank Status, which has enabled expansion of
the distribution network. In 2002, Asian banker magazine named Standard Chartered
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the ‘Best Retail Bank in Singapore’. The average number of employees in Singapore
in 2002 was 2,451.
Standard Chartered in Malaysia:
Standard Chartered is the oldest bank in Malaysia, where there is a network of 29
branches. Malaysia is another of the group’s core markets with broadly based
business as a result of long established franchises. The group continues to expand its
Shared Service Center that was opened in 2001 and carries out operations and
processing activity. The Centre in Kuala Lumpur has contributed significantly to
improvements in the Group’s processing and service efficiency.
Standard Chartered in other Asia Pacific:
The group has more than 80 branches and 14 offices in 14 countries across the region.
In China, Standard Chartered has one of the largest branch networks of any foreign
bank and is well positioned for growth and opportunities. The group is developing its
Consumer Banking business and has opened branches in Shanghai and Shenzhen. In
Thailand, the integration of Nakornthon Bank was successfully completed in
2002.The average number of employees in other Asia Pacific in 2002 is 4851.
Standard Chartered in India Region:
Standard Chartered is the largest international bank in India and, following successful
completion of the integration of Grindlays, have a combined customer base of 2.4
million in Consumer Banking and over 1200 corporate customers in Wholesale
Banking. The group launched its business in Mauritius in 2002 to provide Wholesale
Banking services to corporate client’s .The shared service centre in Chennai continues
to develop rapidly as more services and processes are migrated from other countries.
The average number of employees in the India region in 2002 was 5251.
Standard Chartered in Africa:
Standard Chartered continues to be one of the leading banks in sub Saharan Africa.
The group offers consumer banking and wholesale banking services in 13 African
countries with a network of 149 branches and offices. Standard Chartered recently
launched operations in the Ivory Coast and re-entered Nigeria. Business in East Africa
has performed well. Despite difficulties in Zimbabwe, the group’s business in Africa
has delivered good results. The average number of employees in 2002 was 5009.
Standard Chartered in United Kingdom and the Americas:
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Businesses in the United Kingdom and the Americas provide services to leading
multinationals and major financial institutions, which trade or invest in Asia, Africa,
the Middle East and Latin America. In 2003, the businesses in the Americans were
extensively restructured to improve efficiency for future growth. The Group also
operates a growing off shore banking business based in Jersey. The average number
of employee in the United Kingdom and Americas in 2002 was 2098.
The Acquisition of ANZ Grindlays by Standard Chartered:
The main idea behind acquisition and merger is making an investment and usually
involves more than mere cash. When two separate legal entities merge every
organization aspect of both companies are expected to change be it internal or
external. Such management decision is taken for a variety of reasons but the ultimate
aim is to add up to shareholder's wealth. For banks operating in the consumer and
wholesale banking sector, earning depends largely on the interest margin as well as
the service charges.
2.9 Standard Chartered Today
Standard Chartered employs 38,000 people in 950 locations in more than 50 countries
in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom
and the Americas. Standard Chartered is one of the world's most international banks,
with employees representing 80 nationalities.
Standard Chartered PLC 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, securities services, 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
2.10 Acquisition of ANZ Grindlays Bank by Standard Chartered Bank
Page 27
In August 2000, the US $1.34 billion acquisition of Grindlays Bank was completed.
This made the Standard Chartered Bank the leading international bank in India and
the other countries of South Asia. The acquisition strengthened the Group’s
competitive position in Middle East and brought to the group a respected private
banking business.Standard Chartered Bank has taken the advantage of the expansion
opportunities. Buying Grindlays from ANZ now propel it from number five to
number one among international banks in India, with some choice extra footholds in
the Middle East. At 1.34 billion US dollars, it is hard to complain that Standard
Chartered Bank has overpaid. The financial ease is less compelling for ANZ
shareholders, as there are advantages of getting out of a strategically peripheral
business. This acquisition of Grindlays Bank has added 6000 employees and 4
countries to Standard Chartered Bank’s existing network of 7000 employees and 570
offices in 50 countries. The end result is that Standard Chartered Bank, which went
into the 1997 Asian crisis with strong business in Hong Kong, Singapore and
Malaysia, emerges with additional core markets in India and Thailand.
The deal has made Standard Chartered Bank the largest foreign bank by assets in
India, Pakistan and Bangladesh and the second largest in Sri Lanka and United Arab
Emirates. The bank has been seeking to expand in the region since the end of the
Asian economies crisis, and has finally become successful in its expansion. The
primary goal of the integration is to combine the best of the both the banks, and put
right people in right jobs on the basis of fairness and equitability.
In September 2000, the group agreed to acquire Chase’s Hong Kong consumer
banking business for US$1.32 billion, which makes Standard Chartered Bank the
leader in Hong Kong cards. At that time it was also announced that the chartered
Trust had been sold to Lloyds TSB for 627 million pounds.
Until September 2002, both Standard Chartered and Standard Chartered Grindlays
operated under the same management but as separate entities. With effect from
September 2002, the merger was complete and Standard Chartered Bank started
operating as single entity.
2.11 Acquisition of AMEX in Bangladesh
Standard Chartered Bank has signed an Agreement to acquire the commercial banking
business of American Express Bank Limited in Bangladesh.
Why is SCB acquiring the AMEX business in Bangladesh?
Page 28
Good deposit base
Good corporate clientele
Attractive talent pool
Branch licenses
Defensive strategy
In May, SCB received a NO-OBJECTION-CERTIFICATE to proceed with the BPA
from the Bangladesh Bank and have since signed an Agreement with AMEX. Standard
Chartered Bank plans to migrate AEBL customers to SCB over a three month
Transition Period starting August 01, 2005. From November 01, 2005 all AMEX
customers can visit SCB branches. The acquisition will add 3 branches, and 3 booths
to the existing network.
2.12 Country Classifications
To ensure that key resources (management time, capital, Human resources and
information technology) are correctly allocated and that the exchange of best practice
is accelerated between entities, the group has classified the countries where it operates
into 3 categories: the large, the major and the international. (
Figure: Country classification
2.13 Operation Starting in Bangladesh
Standard Chartered Bank started its business in Bangladesh in 1948, opening its first
branch in the port city of Chittagong. The bank increasingly invested in people,
Page 29
technology and premises as its business grew in relation to the country's thriving
economy. At present the bank has numerous offices in Dhaka Chittagong and Sylhet,
including the country's only offshore banking unit inside the Dhaka Export Processing
Zone at Savar.
Extensive knowledge of the market and essential expertise in a wide range of
financial services underline the strength to build business opportunities for corporate
and institutional clients at home and abroad. Continuous upgrading of technology and
control systems has enabled the bank of offer new services, which include unique
ATMs and Phone-banking.
Standard Chartered's services in Bangladesh, ranges from Personal & Corporate
Banking to Institutional Banking, Treasury and Custodial services. Standard
Chartered is one of the world's most international banks headquartered in London.
This is summary of the main events in the history of Standard Chartered and some of
the organizations with which it merged.
Bangladesh is under the Middle East and South Asia (MESA) region, with the
controlling office in Dubai. Its correspondent relationship with Sonali Bank, the
largest Bank in Bangladesh, gives its customers access to all major centers in the
country. Standard Chartered Bank’s worldwide network facilitates convenient
connections with foreign trade and remittance business. Standard Chartered Bank’s
branch banking license in Bangladesh allows it to offer a full range of banking
services.
2 . 1 4 2 . 1 4 S C B a t a G l a n c e : S C B a t a G l a n c e :
Name of the Organization: Standard Chartered Bangladesh LTD.
Year of Establishment: 1948.
Head Office: Gulshan, Dhaka 1216, Bangladesh
Nature of the organization: Multinational Company with subsidiary
group in Bangladesh.
Capital: Paid up capital: TK 4380 million
Deposit – Tk 4,980 million
Advance – Tk 3,255 million
Shareholders: SCB group shareholders
Products: Shown in detail
Management: Chief Executive Officer
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Chief Operating Officer
Manager, Personal Financial Services
Head of Corporate Banking
Manager, Human Resources
Manager, Marketing
Number of Branches: 24 (13 in Dhaka, 6 in Chittagong and 1
in each of these places Savar, Sylhet,
Khulna, Bogra and Narayanganj. )
Number of ATM’s: 38
Technology: Offers full online banking from branch to
branch and also from Dhaka to
Chittagong.
Service Coverage &
Customers: Serves individual and corporate
customers within Dhaka & Chittagong.
2.15 2.15 At A Glance Standard Chartered Bank, Gulshan BranchAt A Glance Standard Chartered Bank, Gulshan Branch
To Consistently help the customers construct Intelligent Financial Choices.
By being the preferred provider of the Highest Quality services in the
Chosen business areas, Relevant to all the Constituencies…
Page 31
BSSM
SA CSM STM
CSO1 CSO2 CSO3 CSO4 CSO5 PSO1 PFC1 PFC2
Figure: Organ gram of SCB Gulshan Branch
BRO
Standard Chartered aims to be the right partner for its customers.
Responsive
SCB spend time listening to their customers to understand who they are and how they
operate to anticipate their needs. They empower their employees to deliver great
service, through enabling them to take decisions which positively impact their
customers. How we response to our customer will influence their belief in our
commitment to them.
Trustworthy
Trust is the foundation of every successful relationship. We trust because we believe
in the sincerity of our promise’s peoples set their organization above other
organizations through their unique ability to build trusted relationships with all
stakeholders. Trustworthy is about meaning what they say, being able to explain their
actions, doing what they promise and being consistent in their approach.
Creative
Creativity belongs to those of us who are excited by challenges and engage them in
fresh thinking and an open mind They encourage employees who can see a better way
of doing things to contribute their ideas. The quality of SCB’s people and the
diversity of their backgrounds mean that they have an infinite capacity for fresh ideas
and alternative solutions.
International
As a member of global village we view the world from the widest perspectives. They
believe in working as “one Bank” across all geographies and businesses, providing a
seamless relationship to their customers. They uphold consistent ethical standards
wherever they operate.
Courageous
Being courageous is about confidently doing what’s right. Often the task may seem
Insurmountable but with courage and tenacity, the odds can be overcome. A truly
courageous act both inspires and builds character’s, encourages their people to take
measured risks to deliver improved results for all their stakeholders. The support they
provide to employees gives them the courage to develop their talents and skills so
they can make a difference,
2.16 Organization Structure
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Divisional Structure
The Standard Chartered Bank in Bangladesh has it’s headquarter Is in Dhaka and It
has branches in Chittagong, Khulna, Bogra and Narayangonj. While the full range of
services is available at the headquarters, other branches offer specific services
appropriate for the location. At the headquarters, the bank mainly consists of two
divisions:
Business Division
Business Support Division
The Business Division has the following departments:
Corporate Banking Group (CBG)
Global Markets (Formerly Treasury)
Financial Institution (Formerly Institutional Banking Group)
Consumer Banking (CB)
Custodial Services (CUS)
The Support division provides assistance to the above business activities and consists
following departments:
Operations
Finance, Administration and Risk Management
Information Technology
Human Resource Department
Legal and Compliance
External Affairs
Credit
Chain of Command and Functions of division Heads
Standard Chartered Bank in Bangladesh follows a hierarchical pattern of command.
The Chief Executive Officer (CEO) reports to the Regional General Manager, MESA
in Dubai. Each of the division’s heads at the headquarters report to the CEO. The
Organogram is shown in the Figure .In Chittagong, managers both report to the
respective line heads and as well as to the Head of Chittagong. The respective branch
managers are responsible for the performance of their unit. The support activities or
functions of the division’s heads are as follows:
Head of Finance and Administration, who looks after the general ledger,
budget, financial scenario of the bank, risk management administration and
audit operation.
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Head of Consumer Banking, who supervises retail-banking operation like
sales and services, retail lending, product development and product marketing.
Head of Corporate deals with the relationship management, corporate finance
etc.
Head of Human Resources looks after succession planning, training and
industrial matters.
Head of Lending Management who assists the management division of
Corporate, retail and Credit Cards in their lending operations.
Head of Global Markets deals with the foreign exchange, money market and
asset liability operation.
Head of International Services deals with the trade finance, guarantee and
correspondent banking.
Head of Operations who looks after the support services in banking lending,
CBS User, Treasury, SWIFT/TELEX operation etc. Head of Technology is
directly accountable to him.
Figure: Organ gram of Standard Chartered Bank
2.17 Management:
The goal of Standard Chartered Bank is to be the "Bankers of First Choice." Towards that
goal, the overall planning in the Organization is done at the headquarters level in Dhaka by a
Management Committee (MANCO), headed by the CEO and consisting of the business heads
of Corporate Banking, Consumer Banking, Treasury, and from the support divisions the
Page 34
CHIEF EXECUTIVE OFFICER
CHIEF EXECUTIVE OFFICER
Support Manager to CEOSupport Manager to CEO
Head of Corporate and Institutions
Head of Corporate and Institutions
Head of Finance & Admin.
Head of Finance & Admin.
Head of GSAMHead of GSAM
Head of Consumer Banking
Head of Consumer Banking
Head of Human Resource Dept.
Head of Human Resource Dept.
Chief Operating Officer
Chief Operating Officer
Head of Global Markets
Head of Global Markets
Senior Credit Officer
Senior Credit Officer
Head of Information Technology
Head of Information Technology
Head of Financial Institutions
Head of Financial Institutions
Head of Legal & Compliance
Head of Legal & Compliance
Head of External Affairs
Head of External Affairs
heads of Human Resource, Operations and Finance Departments. They meet once a month,
or when a special situation arises, to plan the strategic decisions. The decision making,
although apparently based on a top-down approach, leaves room for participation down to the
level of department heads, which are responsible for carrying out the planning of their
department within the broad guidelines set by MANCOM.
Among the broad strategic objectives are:
1Creating a congenial work environment
2Modernization of the Management Information System to achieve full automation by
drastically cutting down paper work in the long run.
3Focusing on service quality and consumer needs.
4Recruiting and maintaining top-grade, efficient employees.
5To invest in those technological systems which will upgrade and enhance financial
services, and
6 Creating an excellent brand image of the Bank.
2.18 Banking services
Standard Chartered Bank is providing two types of services.
1) Retail or Consumer Financial Services
2) Business or Corporate Financial Services
Structure of Consumer Banking
In the following figure, the reporting line and the responsibilities of the top
management of consumer banking division of the standard chartered bank is
presented.
Figure: Consumer Banking Division of SCB Source: SCB’s Official
Document
Page 35
Head of Consumer Banking
Head of Consumer Banking
Manager SQ and MISManager SQ and MIS
Support ServiceSupport Service
Manager BFSManager BFS
Control and MIS ManagerControl and MIS Manager
Head of Product Marketing Service
Head of Product Marketing Service
Head of Banking Products
Head of Banking Products Heads of CardsHeads of CardsHead of
Distribution and Priority Banking
Head of Distribution and
Priority Banking
Head Credit and Collections
Head Credit and Collections
Business Banking of SCB
It is very true that major contribution to the bank’s equity has been from business
banking sector. It provides several types of services under business banking
(Figure1.4 below).
Figure: Business Banking of SCB Source: Business Banking,
SCB
Corporate Banking
SCB is recognized as the leading financial institution in corporate finance services in
Bangladesh. A professional management team caters to the needs of its clients and
provides them with a wide range of financial services some of which are project
financing and investment constancy, syndicated debt and equity, bond and guaranties,
local and international treasury products.
Institutional Banking
This service of SCB is designed for different fund based organizations like donor
agencies, NGOs, voluntary organizations, foreign missions, airlines, shipping lines
and their personnel with the facilities like convertible and non-convertible current
accounts, convertible Taka accounts, which are freely convertible to major
international currencies, local and foreign currency remittances through a large
network of branches and correspondence.
Commercial Banking
SCB offers different commercial banking facilities to all commercial concerns
specially those with particular involvement with import and export finance. It also
provides bonds and guarantees, investment advice, leasing facilities, project finance
opportunities.
Quasi Governmental Banking
The Quasi Government Service of SCB helps the government by providing different
financial service like efficient and knowledgeable management of trade business
Page 36
(import and export), skills in barter, swaps and counter trade deals. In addition, the
opportunity of debenture finance for new projects, possibilities of hard currency loans
and lease deals, the opportunity of syndicated hard currency, financing of loans and
import L/C, highly efficient account management and remittance handling within the
country or aboard.
Treasury Banking
The treasury of SCB is one of the leading treasuries that offers foreign exchange
requirements, provides market commentaries, economic forecasts and advisory to its
major corporate clients. To keep its customers’ up to date with what is happening in
the money markets, SCB has “Weekly Treasury Updates”.
Consumer Banking Services
The service of PFS and Credit Card Services are known as Retail Banking or
Consumer Banking. Retail banking deals with the providing the bank services to
individuals on a one-to-one basis.
Personal Banking Services
SCB started its personal banking services in March 1992. Besides usual deposit
services, consumer finance services of SCB have been most popular. This section of
report discussed all these personal banking services; consumer finance services of
SCB have been most popular. This section of report discusses all these personal
banking services provided by SCB.
a) Deposit Services
SCB has the deposit services for its customers. SCB’s deposit services are shown in
the figure below:
Figure: Deposit service Source: SCB’s Official Document
b) Locker Facilities
Page 37
SCB’s locker service allows the customers to keep their valuable in a safe and secure
place and access the same at convenient times.
c) Government Bonds
Like other banks, SCB provides its customers with bond services. Three types of
government bonds are available with the bank. These bonds are sold and related
accounts are maintained according to the already established procedures.
d) Consumer Finance
SCB first introduced consumer finance in Bangladesh and until today they are the
market leaders. It has varieties in financing its retail customers with innovative
products. These nclude different types of credit and saving schemes shown in the
figure in the following figure:
Figure: Scheme offered under consumer finance of SCB
Source: External Affairs division, SCB
e) Chequebook
The customer service department helps the customers to collect new chequebook. The
Chequebook is sought due mainly to two reasons: If the customer has lost it or if it is
stolen. In addition to these services, officers also take order for new chequebook for
the customers. Usually it takes two workings days to collect a new chequebook.
f) ATM Services
There are various services provided to ATM card users like they can apply for new
ATM card. The customer can apply to halt the lost ATM card. The bank for free of
charge provides an ATM if it’s normally being expired. If the customer damages the
card then there’s a replacement fee of BDT 300tk to collect a new ATM card. Also
customer can collect the card after 24 hours from customer service department
without any fees.
g) Accounts Statement and Certificate
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Usually every account holder gets statement through mail as per their requirements
when they open the account. There is an option in the account opening form about
statement frequency and the customer can mention the period to send statement
through mail. Except this, most of the time customer came to collect statement or
certificate from the bank for many purposes like visa purpose, tax payment purpose
etc. As the detail information is up to date time to time through online services and
software’s, the customer service officer normally can provide one year statement for
the customer on the spot.
h) Closing an account
An account holder is required to bring all the materials that have been provided by the
bank during opening the account if the customer wants to close an account. Basically
an ATM card, a chequebook is provided by the bank for an account holder. Whenever
an account holder comes to close the account the customer service officer tale backs
those materials from the customers and destroyed it in front of the customer. A bank
account closing charge and government excise fee being taken from the customers to
close an account. This is the formality to close an account.
i) Purchase of Sanchaya Patra on Behalf of a customer
SCB is providing free service for the account holder by purchasing Sanchaya Patra
on behalf of the customer. If an account holder wants to purchase Sanchaya Patra
than he or she can apply directly from any branch of Standard Chartered Bank. The
fund is transfer from the account as much as the customer wants to purchase based on
the government rules and regulation. The customer can encash this security to refund
purpose. The customer also can deposit coupon interest into their account very easily.
j) Different types of queries
Many customer come to various branches of SCB with different types of queries.
Most common queries are given bellow:
To know the account opening process.
To know about loan facilities.
To know about the account position.
To know the account balance.
To know about any fund transfer.
Enquiry about lost Cheque, and ATM card.
To know about any returned Cheque information.
Different charges for different activities regarding account/ card services.
Page 39
These are the most common queries of the customers. Queries vary according to
situations and instances of emergency.
k) Credit Card Services
SCB provide credit card services in an exclusive manner with different offerings for
the customers. To be a card holder the applicant must have to provide TIN number,
trade license, voter id with attested photo/passport/driving license, minimum six year
bank statement or source of income to get a credit card. The authority decides the
credit limit by analyzing the statement of the applicant. There are four types of credit
card offered by SCB.
l) SMS (Short Message Service) Banking Services
SCB has introduced SMS Banking Service in Bangladesh with Grameen Phone and
City Cell the two biggest mobile companies in the country. SMS banking is the
simplest way of finding out Accounts daily/monthly balance or credit cards daily
outstanding balance and available limit; statement balance, minimum due amount and
payment due date. With SMS banking all this information will be available in users’
cell phone.
With SMS banking service, customers do not have to wait to statements to arrive
through mail or call up at cards call center/phone banking. Once a customer become a
member of SMS banking, will have 24 hours access to the key financial information
of his/her credit card/account.
m) E-Statement Service
This is secure and reliable way to receive Credit Card/Account Statement’s anywhere
in the world. An account holder of SCB can receive e-Statements with the help of the
Internet. It is a fast, reliable and efficient service of Standard Chartered to minimize
customer’s convenience.
n) Auto Bills Pay Service
It is the simplest way and most convenient way of paying Monthly Bills of mobile
phone, electricity, internet, cable TV, etc. Paying any bills has never been so easier.
With the help of Account/Credit Card, a holder can put an end to the hassle and
frustration involved in paying bills as the traditional way.
2.19 Competitive market analysis
Page 40
Threat of New Entrant
The flexible governmental policy regarding the financial sector development has
made it difficult more for entering Private local and foreign banks into the industry. .
So, considering the situation, the threat of new entrants is very high in the banking
industry. Standard Chartered’s brand loyalty, product innovation, high service quality
will make it difficult for new entrants to take market share
Bargaining Power of Customers and Suppliers
In consumer banking the bargaining power is different from the other banking
services. Here the individual customers are directly interacting with the bankers and
here is a opportunity for the customers to say more. Diversifying into personal baking
can be a good alternative to sustain the increasing bargaining power of the clients
Threats of Substitute Products
Leasing companies, NBFIs (Non-Banking Financial Institutions), DFIs (Development
Financial Institutions); etc are coming up with the alternative financial solutions in
relation to traditional solutions provided by banking sector Efforts should be made
find new avenues of business like leasing, insurance service to sustain the threat of
substitute products. Efforts have already been taken such “Islamic Banking” division
at Gulshan which tries to capture the Islamic minded people
Rivalry among Existing Banks
The level of competition among the players in the banking sector is very high. The
technological integration, better managerial and human resources have resulted in the
tremendous competition for the market share. Historically, Grindlays had the largest
market share among the foreign banks. But after the acquisition of Grindlays,
Standard Chartered became the giant with around 70% market share of the total
foreign banks. Major strategies followed by these competing banks to ensure more
value are as follows:
Constant review of client needs and deposit trends.
Maintain good relations with the corporate clients.
ATM service should be up to the the marks so that people can withdraw and
deposit money at any time (24 hours)
They waive certain banking charges like ledger fee, minimum balance fee, etc.
for certain large corporate clients.
the baking sector should be specialize in specific service areas, minimize cost,
through efficient management
Page 41
2.20:Swot Analysis
STRENGTH WEAKNESS
Strong corporate Identity
Wide range of Financial Product
Offerings
Local Knowledge with Global
Capability
Strong employee bonding and
belongingness
Young Enthusiastic Workforce
Free Exchange of Communication
MBO
Strong Operating and Branding
Activities
Achievement of High Customer
Confidence
Value addition through Acquisition
More Experienced & Managerial
Too Many Contract Workers
Low Remuneration Package for Entry
Level Officers
Concentration on Varied Financial
Products
Very Little Active Account Being
Maintained Till the End
No Transparency Regarding the
Decisions Taken By Upper
Management
Loss of Valuable Market Information
due to Top-Down Communication
Method
Charges high fees in comparison to its
rivals
Page 42
Know-How
High Demand of Housing Loans
Growing Awareness among People
toward Quality of Service and
Technology
Growing Customer Consciousness
about The Risk Management Capability
of The Banks
Upcoming Banks
Default Culture
Low Foreign Exchange Reserves in
The Country With Falling Exports
Stricter Regulations against the Foreign
Banks
Standardized Product Offerings from
The New Local Private Banks
Slowdown In Global Economy
OPPORTUNITY THREAT
2.20 SWOT ANALYSIS OF STANDADR CHARTERED BANK
Table: SWOT Analysis
Page 43
3At a glance ‘MORTGAGE LOAN’
3.1 Standard Chartered Home loan:
Every body dreams to have a home of their own. To make your dream true Standard
chartered bank bought a new home loan scheme with exciting features. To build a
new home or apartment, to restructure, to expansion or to transfer other financial
institution’s to SCB you can take Standard chartered home loan scheme.
The Mortgage loan offers following benefits:
Attractive interest rate
No hidden cost
No fixed deposit or personal guarantee is needed *
No need to hold a account with Standard chartered bank
Loan can be received on installment
Facility of only interest payment during structuring of building
Loan is granted on shortest possible time
Facility of repayment of loan fully or partial before maturity
Loan can be granted by mortgaging land
Easy and simple documentation
Special characteristics of home loan:
Loan disbursement on installment: There is facility to take home loan on
installment. This will depend how much amount the client will handle through down
payment.
Financial during structuring: Loan is available only after completion of foundation
and structuring
Matters that need to consider
Page 45
Clients who are at least three years in their profession are targeted for this loan
scheme. Following things are considered during processing of loan application form.
1.Loan is granted on the basis of applicant’s professional experiences, condition
of the business, position of the real estate, past financial transactions, current debt
etc.
2. Loan will depend on CIB report on applicant’s debts
Amount of home loan:
Minimum Amount: Minimum Loan amount: BDT 500k.
Maximum Amount:
1. Loan is granted on highest 80% of current value of asset in case of buying new
home or apartment. In this case maximum loan amount will be 1 crore taka.
2. Loan is granted on highest 75% of current value of asset in case of
restructuring, extension, and furnishing. In this case maximum loan amount is
1crore taka.
3. Home loans from other financial institutions are transferable to standard
chartered home loan scheme. In this case maximum loan amount is 75 lac taka.
Time frame of home loan:
Maturity of loan repayment is depending on original borrower’s age and profession.
Maximum maturity of home loan is 20 years.
Home loan disbursement:
Borrower can take the whole loan amount at a time or in partial disbursement
according his needs. There is facility of paying interest only on disbursed loan
amount.
Home loan payment process:
Equal monthly installment: Loan can repay by monthly installment combining
the principle amount and interest. In this case monthly installment will be charged
based on maturity and interest of the loan. So there can be difference in monthly
installment due to different maturity with same interest.
Interest only: In this case you can only repay the interest before the hand over of
home or apartment. After the hand over you have to repay the loan by monthly
installment.
Collateral of home loan:
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Home loan is provided by mortgaging any kind of real estate.
Fee and charges of home loan:
Processing and documentation fee of new loan: 1.5 % of granted loan. No
processing fee is required in case of transferring other loans to standard chartered
bank.
Settlement fee: There is option to repay the whole loan before maturity. In this case
fee on depend on current status of the loan. Beside all the insurance fee of real estate
are on the applicant side. There will be 15% vat on all the fee and charges of home
loan.
3.2 Documents required for home loan:
1. 2 copies passport size photo of applicant
2. Photocopy of passport of the applicant.
3. Bank statement of last 12 months
4. Pay slip in case of job holder and a certificate from the employer
5. In case of professionals, photocopy of professionals certificate.
6. In case of businessman, photocopy of trade license, in case of partnership deed
is required
7. Tin certificate photocopy
8. In case of restructuring, furnishing, extension Cost list provided by developer.
Mortgage in detail:
3.3 Product Range:
Home Loan: For purchasing residence for dwelling purpose
Home Credit: Extending loan facilities for different purposes
House extension: Loan facility for extension of house on freehold or
leasehold land by mortgaging the property before disbursement. LTV
to be calculated on current status only
Renovation work / face uplifting: Loan facility for renovation or face
uplifting work of apartment or house by mortgaging the property
before disbursement. Property valuation to be done based on current
value of property. Registered mortgage required.
Finishing work for almost completed property: Loan facility for
finishing work of almost completed property (50% work done).
Page 47
Take-over loan: Transfer of existing housing / house renovation loan
from other bank or FI.
3.4 Customer Segments:
Segment 1: Salaried Professionals
Employees of MNCs
Employees of Supranational Organizations
Employees of middle to large-corporates
Employees of government offices
Employees of private organizations having salary with SCB or other
banks
Segment 2: Self Employed professionals / Businessmen
Businesspersons or self employed professionals having at least 06-
month /12-month account relationship with SCB or other bank
Segment 3: Landlord / Landlady
People having a stable source of income from rented premises
Segment 4: Wage Earners (100% Secured loan only)
Wage earners or NRBs having A/C with SCB or any other bank
Exclusion segments: Customers with business in manpower, Tour
operators, stock brokers, & Land developers. Only applicable for NTB
customers. For existing customers, financing allowed under L2.
Restricted segments: Film actor / actress, freelancers, PEP, transport
business, Lawyers, Journalists, Police. For L2 same as above rule is
applicable. Lawyers, journalists and security forces will fall under L-3
3.5 Primary borrower:
Must be the owner of the property if the property owner and the main
financially eligible person are different persons
Loan tenor to be decided based on the age of the property owner and / or the
main financially solvent person, whichever is lower.
3.6 Secondary applicant:
Co-applicant
Page 48
Co-applicant is generally mandatory for all proposals except for cases where
the primary owner is both the property owner and the financially eligible
person and assigns his/her Life Insurance Policy in favor of the bank.
For co-applicants, flexibility in some areas of eligibility is allowed.
Relationship and no. of co applicants may vary depending on the title
ownership of the property to be mortgaged.
Co-borrower
Eligibility criteria of co-borrower are similar to that of the main income
generator and should be part of immediate family (Spouse, father, mother, son,
and brother only).
Loan tenor to be decided based on the age of the property owner and / or the
main financially solvent person.
3.7 Age:
Minimum age:
Main borrower / Co-borrower: 25 Years
Co-applicant (whose income is not being considered): 21 years
Maximum age:
Segment 1: 56 years or retirement date, whichever is lower at the end
of loan tenor.
3.8 Customer & Property location:
Main Borrower:
Within the metropolitan areas of Dhaka (Including Narayanganj) and
Chittagong
Main borrower may reside outside the metropolitan areas mentioned
above if:
– Minimum income is greater than BDT 40K
– Is a salaried employee of certain top-rated corporates
– Is a self employed individual with an asset repayment history of
>= 1 year or account relationship >= 3 years
Property:
Within the metropolitan areas of Dhaka and Chittagong
Co Applicant:
Page 49
May reside anywhere in Bangladesh
3.9 Work / business experience:
Segment 1: 3 years work experience required
Applicant must have completed probation period and be a permanent
employee of the organization at the time of application
3 months with present employer if salary A/C with SCB with 1 salary
credit
(L-2: 1 month with present employer)
6 months with present employer if salary A/C with other bank with 3
salary credits
(L-2: 3 months with present employer)
Contractual employees of FAO, WHO, CARE, Save the Children, etc
can be eligible if:
– Minimum service length is 5 years
– Minimum 2 contract renewals are provided
3.10 Minimum income:
For all segments: (Except Govt. employees)
Total aggregate income of BDT 25,000/-
One of the borrowers must have income of at least BDT 20,000/-
For Govt. employees:
One of the applicants must have minimum income of BDT 12,000
3.11 Age of property:
Maximum 30 years at the time of underwriting
Must not exceed 40 years at the end of loan tenor
3.12 Property to be mortgaged:
Apartments / houses on leasehold / private / freehold properties
Residential properties (Fully completed / almost completed)
Existing residential property (Fully completed / almost completed)
Second hand residential property (Completed)
Land area where building plan has been duly approved by RAJUK/CDA.
Page 50
3.13 Finance against own construction:
The finance will be provided against RAJUK/ CDA approved plan. The
following procedure will be followed:
Customer will provide a phase out plan along with a cost estimate.
There will be maximum of 04 phases.
We will disburse according to the work-stage plan provided by the
customer & validated by the valuers.
In case of completion of more than one stage by the customer, we will
disburse according to the phase out plan and completion of the
particular phase. However, the first disbursement will not be more than
25% of the loan limit.
3.14 Insurance Requirement:
Property to be insured before disbursement
Fire, earthquake, and flood damage risks to be covered
Cyclone coverage mandatory for cyclone prone zones like Chittagong
All mortgaged properties must be insured against property value or the loan
amount for the full tenor of the loan. Insurance must be for a period of at least
12 months at the time of disbursement.
Insurance policy to be assigned favoring the bank
Insurance not mandatory for 100% secured loan
3.15 Approval process requirements
Approval conditions:
Debt consolidation:
Existing debts including credit cards to be consolidated and the
residual amount will be allocated for Mortgage facility in line with
DBR and LTV for specified segments along with maximum 20% A/C
credit to customer’s account.
Conditional approval:
To be provided after full completion of income assessment and initial
assessment of selected property.
The approval will be valid for 6 months without new income
assessment.
Page 51
However the following revalidation process will be followed:
– Updated LOI and recent A/C statement in case of salaried
segments
– Recent A/C statement for Seg-2 & 3 customers
Approval requirements:
Mandatory documents (Before submission in addition to standard
documents):
All fields of the first 4 pages of the application form duly completed
Customer’s photograph
MID Duly signed by customer
Recommendation by FTE
Mandatory documents (Before disbursement):
Money receipt of insurance
Latest Tax clearance certificate
Builder’s letter
Registered Deed of Sale of agreement / allotment letter
Disbursement advice
TPA / FPA / Registered Mortgage with IGPA
Board resolution in cases where income assessment is based on
Limited company statements and where PDCs are required from
company account
Verification:
For segment 1: Verification of employment details
For segment 2: Verification of business details
For segment 3: Verification of rented premise details
For all segments:
– Telephone verification of residence / business
– Physical address verification of office & residence
– Physical verification of the property to be mortgaged (by 3rd
party agents)
Legal aspects to be thoroughly scrutinized by listed law firms / legal
advisors
Page 52
Valuation of all properties to be carried out by bank appointed valuer:
Valuation report must contain clarifications on the following
– Completion date (if not already complete)
– Status of construction
– Market rate
– Forced sales value
– Date of site visit
– Market value of the property
– Photographs of the inspected property
– % of work completion at the time of evaluation
– Cost breakdown in terms of the value of land and the structure
3.15.5 Documents for verification of title and legal clearance:
Necessary documents are to be furnished as per lawyer requirement, basedon which
satisfactory legal and title report is to be attained from bank approved advocates
3.16 Interests of home loan:
Standard chartered bank offers very attractive home loan interest rate. You have the
flexibility to choose variable or fixed interest rate in case of home loan. If you choose
fixed rate you can enjoy the offer throughout the maturity of loan. In case of variable
interest rate interest will be fixed yearly.
Table: Monthly Installment list of Mortgage loan (installment of per lakh)
Interest rate/Tenor(month)
15.5% 14.75% 13.99% 12.50%
12 9049 9014 8978 8908
24 4872 4837 4801 4731
Page 53
36 3491 3454 3417 3345
48 2808 2770 2732 2568
60 2405 2366 2326 2255
72 2142 2101 2060 1981
84 1958 1916 1873 1792
96 1824 1780 1737 1563
108 1722 1678 1633 1547
120 1644 1598 1554 1464
132 1582 1535 1488 1398
144 1533 1485 1436 1344
156 1493 1444 1394 1300
168 1461 1410 1360 1263
180 1434 1383 1331 1233
192 1412 1359 1307 1207
204 1393 1340 1287 1185
216 1378 1324 1270 1166
228 1356 1310 1255 1150
240 1354 1298 1243 1136
Source: Standard Chartered Brochure
3.17 Process of Mortgage Loan of Standard Chartered:
Page 54
Figure: Process of Mortgage Loan
Page 55
Issuing of Conditional Approval Letter.
Necessary Document for Home loan Application
Determination of Applicant’s Income.
Justification of Applicant’s documents.
Valuation of Proposed Asset.
Legal Justification of Proposed Asset.
Collection of CIB (Credit Information Bureau) Report from
Bangladesh Bank.
Signature of Bank’s Issued Conditional Approval Letter
Issuing of Banking Arrangement Letter with interest,
Maturity, Instalment, Payment Process Condition are
Mentioned.
Signature of banking Arrangement Letter, Insurance of Financed Asset, Registration, Mortgaging.
Loan Disbursement
Issuing Pay order in Favour of Developer.
Disbursement of Partial Loan to Client’s Account.
Client’s Role Bank’s Role
4 . A n a l y s i s 4 . A n a l y s i s
4 . 1 S e c o n d a r y d a t a a n a l y s i s :4 . 1 S e c o n d a r y d a t a a n a l y s i s :
PL, Flexi, BIL, Mortgage, Auto disbursed on the month of January 2012
Table: Monthly disburse (Jan-12)
S
o u
r c
e :
Monthly disbursed amount from Gulshan
On January 2012 total amount of mortgage loan shows BDT 68, 50,000 (BDT 6850k)
Other types of loan also disbursed such as Flexi loan was of total BDT 600k (BDT
600,000), Business Installment Loan was of BDT 7048k (7048,000),Personal loan
was 5844k(58,44,000) and Auto contribution was the lowest 1158k(11,58,000).In this
table we see that the mortgage contribution in Gulshan was 31.86% in february.
Page 57
LOANS Total Amount(‘000)
PL/FLEX 5844
FLEXI 600
BIL 7048
MORTGAGE 6850
AUTO 1158
Total Amount of Loan in January(‘000)
27%
3%
33%
32%
5%PL/FLEX
FLEXI
BIL
MORTGAGE
AUTO
Figure: Monthly disbursed amount from Gulshan
PL, Flexi, BIL, Mortgage, Auto disbursed on the month of February 2012
Table: Monthly disburse (Feb 12) LOANS Total Amount(‘000)
PL/FLEX 6636
FLEXI Nil
BIL 6151
MORTGAGE 6758
AUTO Nil
Source: Monthly disbursed amount from Gulshan
In month of February we can see that the total contribution of mortgage was the
maximum The target for this month was BDT 70, 00,000.It was almost touching the
the target. The amount of mortgage loan disbursed was BDT 6758000.The
contribution of this loan was 34.58% among the total amount.
Page 58
Total Amount of Loan in February (‘000)
34%
0%
31%
35%
0%PL/FLEX
FLEXI
BIL
AUTO
MORTGAGE
Figure: Monthly disbursed amount from Gulshan
PL, Flexi, BIL, Mortgage, Auto disbursed on the month of March 2012Table: Monthly Disburse (March 12)
In the month of March after BIL contribution Mortgage contributes most. The graph will show the clear picture.
Total Amount of Loan in March (‘000)
22%
3%
38%
32%
5%PL/FLEX
FLEXI
BIL
MORTGAGE
AUTO
Page 59
LOANS Total Amount(‘000)
PL/FLEX 4258
FLEXI 580
BIL 7535
MORTGAGE 6290
AUTO 980
Figure: Monthly disbursed amount from Gulshan
Source: Monthly disbursed amount from Gulshan
4.2PRIMARY DATA ANALYSIS AND FINDINGS OF THE STUDY:
Primary data of the customers was collected from all the customers who have taken
‘Mortgage Loan’ from Standard Chartered Bank, Gulshan branch. The sample size is
56. These 56 customers have given their opinion and remarks on that questionnaire
survey.
Gender: From the table it’s clear that most of the customers who took; loan are male
and 20.7% are female.
Table: Gender
Statistics
Gender
N Valid 56
Missing 2
Mean 1.2143
Median 1.0000
Mode 1.00
Std. Deviation .41404
Gender
Frequency Percent Valid PercentCumulative
Percent
Valid Male 44 75.9 78.6 78.6
famle 12 20.7 21.4 100.0
Total 56 96.6 100.0
Missing System 2 3.4
Total 58 100.0
Page 60
Age: From the survey it was seen that most customers fall between the age group of
45-54. And the lowest percentage belongs to 25-34 age group.
Table: Age group
Statistics
Age
N Valid 56
Missing 0
Page 61
Age
Frequency Percent Valid PercentCumulative
Percent
Valid 25-34 8 14.3 14.3 14.3
35-44 13 23.2 23.2 37.5
45-54 20 35.7 35.7 73.2
55-65 15 26.8 26.8 100.0
Total 56 100.0 100.0
Income level and Occupation: From the survey it shows that maximum number of
customers falls between the ranges of 61000-80,000.And lowest number of customers
fall between 20000 -39,000.
Table: Distribution of income level and occupation of Mortgage customers
Page 62
Statistics
Income
N Valid 56
Missing 1
Mean 2.9821
Median 3.0000
Std. Deviation 1.32790
Income
Frequency Percent Valid PercentCumulative
Percent
Valid 20000-39000 9 15.8 16.1 16.1
40000-59000 12 21.1 21.4 37.5
61000-80000 16 28.1 28.6 66.1
81000-100000 9 15.8 16.1 82.1
100,000-above 10 17.5 17.9 100.0
Total 56 98.2 100.0
Missing System 1 1.8
Total 57 100.0
Page 63
INTEREST RATE:
Statistics
Interest_rate_charges
N Valid 56
Missing 2
Mean 1.7143
Median 2.0000
Std. Deviation .45584
Page 64
Interest_rate_charges
Frequency Percent Valid PercentCumulative
Percent
Valid moderate 16 27.6 28.6 28.6
Too high 40 69.0 71.4 100.0
Total 56 96.6 100.0
Missing System 2 3.4
Total 58 100.0
Eligibility for applying loan:
SCB has high legal requirement the data implys that 36.2% said high legal
requirement. 46.6%said moderate legal requirement. It conclude that SCB loan
sanction process is lengthy, time consuming, high formalities.
Statistics
Eligibility_for_applying_loan
N Valid 56
Missing 2
Page 65
Eligibility_for_applying_loan
Frequency Percent Valid PercentCumulative
Percent
Valid high legal requirement 21 36.2 37.5 37.5
moderate legal requirement
27 46.6 48.2 85.7
low legal requirement 8 13.8 14.3 100.0
Total 56 96.6 100.0
Missing System 2 3.4
Total 58 100.0
Purpose to choose mortgage loan:
Among the 56 mortgage customers, 34.5% customers have said that they choose this
loan to purchase apartment. Then 17.2% customers choose this for the extension or
Page 66
renovation of house. Here for take over loan 5.2% customers have contributed and
31% customer applied because of finishing work of complete property.
Table-Purpose to choose mortgage
Statistics
Purpose_to_chose_SCB
N Valid 56
Missing 2
Purpose_to_chose_SCB
Frequency Percent Valid PercentCumulative
Percent
Valid purchase apartment 20 34.5 35.7 35.7
construction or renovation
10 17.2 17.9 53.6
take over 3 5.2 5.4 58.9
purchase properties for invesrment
18 31.0 32.1 91.1
other 5 8.6 8.9 100.0
Total 56 96.6 100.0
Missing System 2 3.4
Total 58 100.0
Page 67
Figure-: Purpose to choose mortgage
Loan amount applied for:
Most of customers have applied for 2000,000-4000,000 About 7% customers have
applied for this loan. The customers who have taken loan didn’t apply above . So out
of 56 customers 41,00,000-60,00,000 loan takeb by 26%. The following table will
show the real scenario.
Table: Loan amount applied for
Page 68
Statistics
Loan_Amount_Apply
N Valid 56
Missing 1
Mean 3.1607
Median 3.0000
Std. Deviation 1.20268
Loan_Amount_Apply
Frequency Percent Valid PercentCumulative
Percent
Valid 2000,000-4000,000 4 7.0 7.1 7.1
41,00,000-60,00,000
15 26.3 26.8 33.9
61,00000-80,00000 14 24.6 25.0 58.9
81,00000-10000000 14 24.6 25.0 83.9
above 9 15.8 16.1 100.0
Total 56 98.2 100.0
Missing System 1 1.8
Total 57 100.0
Page 69
Loan amount get: Here we see the real scenario of how much an applicant really
eligible to get a certain amount of loan. It varies according to the eligibility, apply
amount and actual need for loan of an applicant. As because high loan defaulter rate
in Bangladesh SCB hardly sanction loan amount above 1 crore.the numerical rate is
only 7%.
Table: Loan amount get
Statistics
Loan_amount_get
N Valid 55
Missing 2
Mean 2.8182
Median 3.0000
Std. Deviation 1.12367
Loan_amount_get
Frequency Percent Valid PercentCumulative
Percent
Valid 20,00,000-40,00,000 7 12.3 12.7 12.7
41,00,000-60,00,000 15 26.3 27.3 40.0
61,00,000-80,00,000 18 31.6 32.7 72.7
81,00,000-1000,0000
11 19.3 20.0 92.7
above 4 7.0 7.3 100.0
Total 55 96.5 100.0
Missing System 2 3.5
Total 57 100.0
Page 71
Figure- Loan amount get
Duration of loan amount: In this table we see that 29% loan fall between the ranges
of 16-20 year. And 5.3% loan amount fall betweenn1- 5 years. Because customers
want to extend the time period so that he may repay it with less difficulties.
Statistics
Duration_of_loan
N Valid 49
Missing 8
Mean 2.9388
Median 3.0000
Std. Deviation .94446
Page 72
Duration_of_loan
Frequency Percent Valid PercentCumulative
Percent
Valid 1-5 3 5.3 6.1 6.1
6-10 14 24.6 28.6 34.7
11-15 15 26.3 30.6 65.3
16-20 17 29.8 34.7 100.0
Total 49 86.0 100.0
Missing System 8 14.0
Total 57 100.0
Figure- Duration of loan amount
Features that motivated customers to choose loan: Out of 56 customers, 56
responses were made. Most of the customers subscribed that because of the lowest
interest charge, they preferred the loan from SCB.Then 30.92% customers said that
they chose the offer because of amount needed for personal guarantee.. Facilities for
Page 73
interest payment during under construction and others option were equally important
to all customers when they made the decision.
Table: Features that motivated customers to choose loan
Statistics
Feature_Motivated
N Valid 56
Missing 2
Mean 3.1786
Median 3.0000
Std. Deviation 1.20766
Feature_Motivated
Frequency Percent Valid PercentCumulative
Percent
Valid competitive Interest rate 3 5.2 5.4 5.4
amount needed for personal gurantee
17 29.3 30.4 35.7
no hidden charge 13 22.4 23.2 58.9
facilities for onterest payment
13 22.4 23.2 82.1
flesible loan policy 10 17.2 17.9 100.0
Total 56 96.6 100.0
Missing System 2 3.4
Total 58 100.0
Page 74
Additional feature that customers want:
Statistics
Need_for_more_feature
N Valid 53
Missing 4
Mean 1.2075
Median 1.0000
Std. Deviation .40943
Page 75
Need_for_more_feature
Frequency Percent Valid PercentCumulative
Percent
Valid yes 42 73.7 79.2 79.2
no 11 19.3 20.8 100.0
Total 53 93.0 100.0
Missing System 4 7.0
Total 57 100.0
When customers were asked about whether they should want more additional
features, then out of 56 customers 42 answered yes. And the rest answered no.
Customers specified some factors which needed to be consider. Based on the
customer’s response the factors that they expect are:
Processing fee should be minimum. Some expressed that it should be
less than BDT10,000
Customers made commence about the bank statement. They said that
1 year bank statement seemed unnecessary it can be for 6 months so
that more customers can apply.
Page 76
As Bangladesh bank offering home loan up to 15 lac at the rate of 10
%percentage interest, in that case, SCB should consider the fact.
Early settlement fee should be nil
If loan amount exceed 15 lac, SCB may lessen the interest rate
although it is competitive. in the market
Customers want to apply singly
Overall Level of satisfaction: Based on customer’s response it indicates that only
10.3% customers are highly satisfied, maximum respondents are dissatisfied towards
SCB loan service.The responses of indifference are almost touching to dissatisfied
group, Here we see that more weight is with satisfied group than dissatisfied group,
Table: Level of satisfaction
Statistics
Level_of_satisfaction
N Valid 54
Missing 4
Level_of_satisfaction
Frequency Percent Valid PercentCumulative
Percent
Valid highly satisfied 6 10.3 11.1 11.1
satisfied 12 20.7 22.2 33.3
Indifferent 12 20.7 22.2 55.6
Dissatisfied 20 34.5 37.0 92.6
highly dissatisfied
4 6.9 7.4 100.0
Total 54 93.1 100.0
Missing System 4 6.9
Total 58 100.0
Page 77
Figure- Level of satisfaction
ANOVA
Purpose_to_chose_SCB
Sum of Squares Df Mean Square F Sig.
Between Groups 42.112 4 10.528 6.951 .000
Within Groups 77.245 51 1.515
Total 119.357 55
According to table value
Page 78
Null hypothesis: Purpose to choose mortgage loan from SCB does not depends on income level of people.
DF= there are 4 predictors. So. K-1= 4-1= 3(C-1)/(Cn-C) = (5-1)/(5*56-5)=4/275 = 0.01454Critical value=6.951>0.01454 Calculated value. Significance level =.000<.05 = Highly significant.
Reject null hypothesis.Purpose to choose mortgage loan from SCB depends on income level of people. People usually move towards SCB when their income level is high. People with low to moderate income don’t take loans from SCB and the reason might be high interest rate.
One-Sample Test
Test Value = 0
95% Confidence Interval of the Difference
t dfSig. (2-tailed)
Mean Difference Lower Upper
Loan_Amount_Apply
19.667 55 .0630 3.16071 2.8386 3.4828
Income 16.806 55 .080 2.98214 2.6265 3.3378
With 95% confidence level the assumption significance is =.063>.05 Do not reject null hypothesis.Loan amount apply not related with Income level of respondents.
Loan amount apply doesn’t related to income level as because the previous analysis proved that people from high income level go to SCB to apply for loan. Amount for loan vary according to the amount they need for different purpose.
Page 79
Null hypothesis: Loan amount apply not related with Income level of respondents.
Model Summary
Model R R SquareAdjusted R
SquareStd. Error of the Estimate
1 .039a .02 -.017 1.13336
a. Predictors: (Constant), Eligibility_for_applying_loan
R=.039 not so close to 1.
R square= 20% less valid
Adjusted R square= -.017< R square .02
Reject null hypothesis
Page 80
Null hypothesis: Eligibility for applying loan determines how much loan an applicant will get.
Regression
Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
t Sig.B Std. Error Beta
1 (Constant) 2.707 .421 6.426 .000
Eligibility_for_applying_loan
.063 .223 .039 .284 .778
a. Dependent Variable: Loan_amount_get
Alpha .01 DF= n-k = 56-3= 53T= calculated value 6.426>2.68 critical value.Reject null hypothesis.Eligibility for applying loan does not determine how much loan an applicant will get.
Eligibility such as tin number, national id card, passport number or other legal requirement will determine wether an applicant is valid or qualified to get a loan from SCB or not, loan amount get is further step of whole loan sanction process.
Page 81
Null hypothesis: Feature of SCB loan motivates the consumers are relevant with the interest rate charges for the loan paid.
Feature_Motivated * Interest_rate_charges Crosstabulation
Count
Interest_rate_charges
Totalmoderate Too high
Feature_Motivated
competitive Interest rate 0 3 3
amount needed for personal gurantee
5 12 17
no hidden charge 2 11 13
facilities for onterest payment
7 6 13
flesible loan policy 2 8 10
Total 16 40 56
Chi-Square Tests
Value dfAsymp. Sig.
(2-sided)
Pearson Chi-Square 6.743a 4 .150
Likelihood Ratio 7.294 4 .121
Linear-by-Linear Association
.593 1 .441
N of Valid Cases 56
a. 6 cells (60.0%) have expected count less than 5. The minimum expected count is .86.According to table value Df-(R-1)(C-1)=(3-1)(5-1)=2*4=8 alpha-.05 critical value is =15.507 > 6.743 = calculated value. Significance level = .15 >.05 So Do not reject null hypothesis. Interest rate is not one of the feature that motivate consumers towards SCB loan.
Page 82
Occupation * Need_for_more_feature Crosstabulation
Count
Need_for_more_feature
Totalyes no
Occupation Bussiness service 5 0 5
PVT service 12 4 16
Govt service 1 2 3
Land lord 15 5 20
other 9 0 9
Total 42 11 53
Chi-Square Tests
Value dfAsymp. Sig.
(2-sided)
Pearson Chi-Square 7.906a 4 .095
Likelihood Ratio 9.826 4 .043
Linear-by-Linear Association
.148 1 .700
N of Valid Cases 53
a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .62.
According to table value Df-(R-1)(C-1)=(2-1)(5-1)=1*4=4 alpha-.05 critical value is =9.488 > 7.906 = calculated value. Significance level = .095 >.05 So Do not reject null hypothesis. Opinion about need for more feature varies according to the people from different professional background. Its because of their different professional need for different types of loan. For the various financial support for particular profession.
Page 83
Null hypothesis: Occupation of the respondents and their opinion about feature needed for mortgage loan are correlated.
Model Summary
Model R R SquareAdjusted R
SquareStd. Error of the Estimate
1 .154a .024 .005 1.16026
a. Predictors: (Constant), Feature_Motivated
R= .15 notclose to 1.R square= 24% less valid
Adjusted R square= .005< R square .024
Reject null hypothesisSCB loan features are not enough to satisfy the customers need.
4.3 Highlights of Analysis Interest Rate
69% said SCB interest rate is too high and according to the mass opinion nobody confesses that interest rate is low. Only 27% said interest is moderate.
Purpose to choose SCB loan:
People usually take loan for Purchase apartment and construction 65.5%. As because the recent senerio of Dhaka city, the real estate business is on rise. People have high tends to purchase apartments. 80% land owners are giving their lands to builders for construction and renovation. An it’s the most profitable business in Bangladesh.
Loan amount applied for:
50% people applied for the amount of 6100,000 – 10000,000 BDT. And 24% applied for above 1 crore. The reason might be high interest rate and high legal requirement. So that’s why only 5% applied for 20,00,000-40,00,000 BDT. For such less amount of loan people are not interested to move to SCB because SCB has high interest rate, high legal requirement.
Loan amount get
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SCB loan features are enough for Customer satisfaction
31.6% people usually get the loan amount of 61,00,000 – 80,00,000 BDT. People don’t usually apply for less amount to SCB so SCB doesn’t highly practice the policy of sectioning loan less than 30,00,000. In our further analysis it has been proved that Purchase apartment and construction is the main purpose of respondents to choose SCB for apply loan. And for both the purpose 61- 80 lac is more than enough to meet there need of loan. Above 1 crore gets 7% people. Its risky to sanction loan above 1 crore. Banks in Bangladesh has a rising rate of loan defaulter now a days. That’s why SCB only give loan approval of above 1 crore to a limited number of loyal, known and highly reputed person.
Duration
Duration of loan depends on the amount of loan sanctioned. If the amount is high the duration of loan payout will be high, if the amount is less than the duration will be less as well. But the average duration for payout of loan is 16-20 year, 29.8% respondent gave approval to it.
Feature motivated According to survey only 5.2% conveyed that SCB has competitive interest rate which motivates them. It has also proved in our previous findings that only 27% said that SCB interest rate is moderate. No hidden charge and and facilities for interest payment is the most attractive feature that attracts consumer most, 44.8% replied the same.
Need For More Feature
The survey showed that 73.3% respondents said Yes, there should be more feature to SCB mortgage loan service. And only 19.3% said No. The public opinion indicated that SCB should increase the feature or options on Loan service. Level of Satisfaction
Dissatisfied: 34.5% Satisfied 20.7%The analysis is the key evidence that general satisfaction towards SCB loan policy is less. Most people are dissatisfied. One reason might be high interest rate because 69% of our survey respondents said SCB interest rate is too high. Another reason might be high legal requirement. Eligibility for applying loan
36.2% said SCB has high legal requirement regarding applying loan. 46.6% said that SCB has moderate legal requirement. In this circumstance we can conclude that SCB has high formality or process in the whole loan sanction process and its not flexible as well. That’s why its dissatisfying the consumers.
Null hypothesis: Loan amount apply not related with Income level of respondents
One sample T test
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Loan amount apply doesn’t related to income level as because the previous analysis proved that people from high income level go to SCB to apply for loan. Amount for loan vary according to the amount they need for different purpose.
Null hypothesis: Purpose to choose mortgage loan from SCB does not depends on income level of people.Annova test People usually move towards SCB when their income level is high. People with low to moderate income don’t take loans from SCB and the reason might be high interest rate.
Null hypothesis: Eligibility for applying loan determines how much loan an applicant will get.
Regression analysis
Eligibility such as tin number, national id card, passport number or other legal requirement will determine wether an applicant is valid or qualified to get a loan from SCB or not, loan amount get is further step of whole loan sanction process.
Null hypothesis: Feature of SCB loan motivates the consumers are relevant with the interest rate charges for the loan paid.
Chi- Square & Cross Tab
Interest rate is not one of the feature that motivate consumers towards SCB loan.
Null hypothesis: SCB loan features are enough for Customer satisfactionRegressionSCB loan features are not enough to satisfy the customers need
Null hypothesis: Occupation of the respondents and their opinion about feature needed for mortgage loan are correlated
Cross tab Chi- square
Opinion about need for more feature varies according to the people from different professional background. Its because of their different professional need for different types of loan. For the various financial support for particular profession.
4.4Conclusion of Findings
SCB charges a high interest rate and it has a high legal requirement which eligible very limited number of people for loan sanction. For the high risk of loan defaulter rate in Bangladesh SCB protect itself by approving loan above 1 crore to a very little
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number of high profile personality. People from medium to low income level doesn’t usually move to SCB for loan apply.Moreover SCB loan feature are not enough to satisfy consumer need. Even the duration of loan payout period is not so much flexible. Overall customer satisfaction is indicating towards”Dissatisfiaction”
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5. Conclusion:
The Standard Chartered Group has earned the reputation of top foreign banks
operating in Bangladesh. This organization is much more structured compared to any
other foreign bank operating in Bangladesh. It is relentless in pursuit of business
innovation and improvement. It has a reputation as a leader in financing
manufacturing sector. With its vast operation both regarding its technology, wide
range of products, versatile services, strong financial base, invaluable customer’s
satisfaction, and profound reputation it has grown into a unique stature which is now
subject to every ones envy and Standard Chartered Group’s pride. And after the take
over of Grindlays Bank from ANZ group and American Express Bank, it becomes
undoubtedly the power- house of this region.
With a bulk of qualified and experienced human resource, Standard Chartered can
exploit any opportunity in the banking sector. It is pioneer in introducing many new
products and services in the banking sector of the country. Being right partner is the
pivotal goal and hence ensuring its financial success of customers become key priority
of SCB.
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5.1 RECOMMENDATIONS:
FOR BANK:
The survey shows that people are mainly attracted to Standard Chartered Bank
because of its “No hidden charge” . The differentiation of its product should
go on. If it stops, the customers may not be interested to take mortgage loan
from SCB.
While filling the questionnaire customer, made complain about the sales
executive of Mortgage who sell this product to its customers. So, SCB should
consider this fact while handling third party so that customers feel free to
make decision.
Two important facts should be considered by SCB.First,according to new offer
of BB about interest rate of 10% on 15 lac amount and interest rate should be
kept minimum if it exceed 15 lac.If SCB fail to match with recent changes of
other institution then, they will loose a promising market.
Using the SPSS 17.0 calculation the satisfaction and dissatisfaction
identification is a useful tool for identifying Banks lacking and improve that.
The low satisfaction or the high dissatisfaction criteria should be noticed first
and then work on that so that proper steps can be taken.
FOR CUSTOMERS:
Basically the loan is given for a long period of time if his income level doesn’t
support his installment payment amount then he/she will not be eligible
One year bank statement is needed to know whether consistent and required
balance is being deposited or not.1 financial year is needed for that
calculation.
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All legal valuation, verification and assessment are done by SCBs official
team consist of 15 members. So, there occurs a charge.
The loan is for a long period of time. if the sole applicant dies or face
disabilities that’s why SCB wants joint applicant for applying
6 . B i b l i o g r a p h i e6 . B i b l i o g r a p h i e
1. William G. Zikmund, (2003), Business Researches Methods, 7th ed.,
Thompson, Mason, Ohio.
2. Alam, S. M. Ikhtiar. (1986). Job Satisfaction: A case Study of Working
Women in Different Garment Factories in Dhaka City, The Journal of
Management, Business & Economics, Vol. 12, No. 1, January. IBA,
University of Dhaka
3. Annual report Standard Chartered Group 2011
4. Loan Guideline Page-71&72, 5th Edition, Standard Chartered Bank
5. Booklet of ‘Mortgage Loan’
6. Website of SCB www.bd.standardchartered.com
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QUESTIONNAIRE:
D e a r R e s p o n d e n t :D e a r R e s p o n d e n t :
I am a student of the Department of Bachelors of Business Administration (BBA),
North South University. As a part of my academic requirements, I am conducting a
survey to write a report on “CUSTOMER SATISFACTION WITH MORTGAGE
LOAN OF SCB” Note that the information will be used only for academic purpose.
Your information will be kept confidential.
Demographic Profile
1. Gender □ Male □ Female
2. Age Group: □ 25 – 34 □ 35 – 44
□ 45 – 54 □ 55 – 65
3. Occupation: □ Business □ Service (Pvt.)
□ Service (Govt.) □ Land lord □ Other
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4. Income Level (Monthly income in BDT):
□ 12000- 39000 □ 40000 – 590000
□ 60,000 – 79000 □ 80,000 – 990000
□10000000- above
5. What was the purpose to choose the mortgage loan from Standard Chartered Bank?
For-
□Purchase Apartment □Construction or renovation
□Take over □Purchase properties for investment
□ Other
6. How much of loan amount did you apply for?
20-40 lac 41-60 lac 61-80 lac 81- l Crore above
7. How much amount of loan did you get?
20-40 lac 41-60 lac 61-80 lac 81- l Crore above
8. The duration of loan amount is
□1-5 year’s □6-10years
□11-15 year’s □16-20 years
9. Which features motivated you to choose the mortgage loan of SCB?
□Competitive interest rate
□ Amount Need for personal guarantee
□No hidden charge
□Facilities for interest payment during construction of home
□ Flexible Loan policy
10. Do you think that there should have more additional features with this loan for
the
Customers?
□ Yes □No
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11. What is your level of satisfaction about “Mortgage loan” of SCB compared to that
of other Financial Institutions?
Highly
Satisfied
Satisfied Indifferent Dissatisfied Highly
Dissatisfied
12. Eligibility to apply for Mortgage loan in SCB?
High legal requirement Moderate legal requirement Low legal requirement
13. Interest rate and charges for the loan repayment?
Moderate Too high Low
14. Time it takes to sanction a mortgage Loan?
1 month 2 month 3 month 4 month - above
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