‘Consumer Banking of Standard Chartered Bank’

PREFACE

On completion of requisite courses and a comprehensive examination of

M.B.A of Chittagong University are required to undertake an internship

program. In order to implement this program, each of them is attached

with an organization. After the completion of internship program every

student is required to prepare a report on a selected topic on the

organization where he/she has been attached. The basic purpose of this

attachment is to expose the student to the real Business world and

acquaint himself/herself with the current operations & practices in modern

Business. This exposure is very helpful in comprehending how things move

on and to find the gap between theory and practical operation.

This report also originates from that some perception about the practical

situation as a fresh student. Actually this report comprises how a student

has perceived the real situation in the business. As I am being attached

with the Standard Chartered Bank, so I always tried of my best to observe

how they deal with their Customer. I also studied about their working

environment and how to process Credit and Collect outstanding. As a

consequence, I have put theoretical glimpses of the key points wherever

necessary and have tried to knit a relationship with this observation.

Comments and suggestions for future development of the report or any

concept will be appreciated.

EXECUTIVE SUMMARY

I here, who am a student of Accounting and Information System, have just

appeared the MBA Examination. After completing my written examination

and Viva, I started an internship program at Standard Chartered Bank. In

attendance in this program, I have acquired practical knowledge. I have

assembled an excellent and practical experience. Based of this program, I

have prepared this report. Though there were several problems and

limitations meanwhile the program I have tried to maintain level of best to

make this report instructive and fledgling one

Part – 1:- Encompasses objective methodology and limitation the report

Part – 2:- Focus on An overview of SCB and Agrabad Branch.

Part – 3:- Focus on an overview of Credit & Collection of SCB.

Part – 4:- Focus on an overview of SCB Credit Card.

Part – 5:- Focus on the portfolio

Part – 6:- Focus on the other Bank.

Part – 7:- Various types of Packages and offered by SCB.

Part – 8:- I have elaborately discussed about my working experience in

SCB and all of the things I have learned during my internship period.

Part – 9:- I focused on project part, which contains the analysis of the

collection data. After analyzing the data I have identified the main

problems faced by SCB and also provided some recommendations.

ACKNOWLEDGEMENT

I have the immense pleasure and satisfaction in presenting report, which

is termination of my project works at SCB. This is one pride to thank one

and all who have helped me to take this project a great success. Most of

my friends have heartily and cooperatively contributed to prepare this

internship report. But scope and limitations prohibits the listing of all of

them who have made significant contribution.

I articulate my heartiest gratitude to my honorable supervisor Ranjit

Kumar Chowdhury, Associate Professor, Department of Accounting and

Information System, University of Chittagong for her significant advice and

cooperative behavior.

The success of this report depend on the contribution of many

people, especially those who spare time to share their mindful

art of judging of merits and faults and have given valuable

suggestions.

I would like to extend my thanks to the contributors of generous help from

whom I have received much information about SCB. I am grateful to Syed

Sanowarul Hoque, Credit Manager, Consumer Banking Division Chittagong

and K.M. Bodroudoja, Collections Manager, Consumer Banking Division;

Chittagong Who permitted us to perform our internship program and

coordinated us sincerely.

My gratitude also goes to Mr. Tanim Muntasir, Credit Analyst, Mr. Niaz

Morshed, Officer, Collection And Mohammed Irfan Haidar Khan, Credit

Analyst, Consumer Credit and Collections who have supplied necessary

information and given valuable time to prepare my report.

I offer my grateful thanks to Hasan Mohammad Iftekhar and Jahangir Iqbal,

whose inspiration and kind assistance made my report successful.

I could never forget the contribution of nor could express my gratitude

fully to all that gave their heartiest effort in helping me.

Thank you all.

Md. Kabir Uddin

LETTER OF TRANSMITAL

To

The Associate Professor

Department of Accounting & Information system

University of Chittagong.

Chittagong.

Subject: Prayer to accept my internship report.

Dear Sir,

It gives me immense pleasure to submit the research report based on

internship report entitled ‘Consumer Banking of Standard Chartered Bank’

to fulfill the partial requirement of MBA program. I tried to make full use of

this programmer through regular participation. I sincerely believe that the

findings of this report will be of immense help to the academic and

references and for any explanation and clarification of any aspect of this

report.

I would therefore pray and hope that your honor would be kind enough to

accept my internship report and taking that limitation in account. I am

thanking you.

Sincerely Yours,

----------------------

Md. Kabir Uddin

Exam Roll: 82 (2001)

Class Roll: 14507

M.B.A

Department of Accounting &Information system

University of Chittagong.

OBJECTIVE OF THE STUDY

The prime objective of this report is to learn practical knowledge along

with our Institutional study; also I acquire knowledge and evaluate Credit

and Collection Policies. The broad of this internship programmed is to get

familiarity with Standard Chartered Bank and its marketing activities. To

achieve this, the following objectives have been considered for the

internship programmed.

The main objectives of the study are as follow:

1. To focus on the product policy of the Bank under study.

2. To highlight on the CCU (Credit and Collection Unit)

3. To examine the Credit and collection system of the Bank.

4. To identify the problem of SCB.

5. To evaluate the promotional policy of SCB.

6. For identifying the prospect of the SCB.

7. To know the knowledge about Assessment of Various

Statement.

8. To identify desire package of SCB Customer.

9. To identify the Credit and Collection problem and to suggest

remedial measures in order to help and solve those problems.

Origin of the report

This time come of necessity to submit an internship report in partial

fulfillment of MBA program. After the completion of final written

examination of MBA, a student is supposed to have a weeklong internship

program to be conducted in any business or service organization and

submit a report on it. The report then evaluated by the judicious teaches &

supervisor of the department of Accounting accordingly. Being guided by

Ranjit Kumar Dey, Associate Professor Department of Accounting, C.U. The

author conducted his internship on “Consumer Banking of SCB.” And

produced this report as per requirement.

RESEARCH METHODOLOGY

This report is prepared according to the practical experience achieved

during the period of internee. All this materials are given below. The

relevant information is collected from primary sources as well as

secondary sources.

PRIMARY DATA:

1. Group discussion with SCB Employee.

2. Primary information has been collected from the advertisement.

3. By meeting with responsible Officer.

SECONDARY SOURCES:

1. Secondary information has been collected from articles; journal,

paper and different textbook are also used when necessary.

2. SCB annual report.

3. Data from different official source and records.

4. Internet.

RESEARCH PROBLEM

In my study I mainly depended on primary data which was collected

through direct survey. I developed a questionnaire that consisted close

ended questions and on open ended question.

Data collection based is done on a random basis. The results are

represented through bar charts. My research findings come out through

analyzing those data.

I also collected data and necessary information by interviewing employees

of SCB which can be treated as secondary data.

Another important dimension of the problem may arise from confidential

Bank policy and lack of other internal and external sources.

In view of above problems, I feel interest to know about it through SCB

which would be a useful academic experience.

RATIONALITY OF THE STUDY

Bank sector in the present environment has become subject to growing

importance and interest with the emergence of giant industrial

undertaking. In today’s Bank is the prime mover of most social and market

activities and delivery of standard of living to the society. This report is

mainly focused on that.

Bank is one of the most suitable sectors for Bangladesh having a good

demand and market growth rate. Banking is the part of MBA program. The

research is one of the important parts of the course. The purpose of the

study is to assist the report writer to find out the Banking activities and

also the opinion of the Customer about the existing system of SCB and

other Bank.

In the present world a progressive firm always looks forward to make the

best utilization and allocation of their resources and make the best use of

the scopes and opportunities in order to maintain their position in this

competitive market, SCB is no exception to it. The research communicates

with the consumer, customer and public to the marketer through

information.

In this report I have tried to present about different pertinent parties can

be benefited researcher involved with Bank can get an over view to find

out potential competitive advantages, It will be also helpful for the policy

maker of the Bank to make quick decisions. The marketing professional

can consume less time to express their valuable opinion by going through

this report. Coming entrepreneur of Banking Sector will be benefited by

this report by analyzing the findings of this report and evaluating potential

threats and opportunities, its market position and facilities to customer

and other Banking activities. This report will help to know how SCB

maintains their Credit and Collection system by managing competition

with different Banks. Although the study may be useful for the Banking

sector in formulating different policies on Credit and Collection and

thereby in future decision making. The potential entrepreneur,

professional, the students of business and young learners will be benefited

and search their knowledge in this report. These are all the rational of the

study.

LIMITATION OF THE REPORT

Time Constraints:

In preparing the report time was the principal constraint. As my internship

program was only for three months it was difficult for me to figure out the

report with absolute information and required data. For the report and

proper presentation after internship program in needs much time for

preparation.

Data Constraints:

Last few decades our banking system developed much with its resources

and collaborations. But comparison to Western countries we have the

different of few more decades realized (by me) when I attempted to collect

essential required data. These are still scarce in our country. Whether it is

primary or secondary data. With the best available data this report is

illustrated.

Experience constraints:

To prepare and produce such kind of report properly it is needed previous

experiences. In the faculty we have produced some reports but not as

great as it is. In preparations of the internship report I also used my

previous faculty experience although it is needed much more. I think

experienced could have differed a great deal.

Organization constraints:

As a financial organization SCB has a great deal of hidden information that

is not possible to present in the report. As organizations permanent

employee one can know it but not so this is also one of the limitation of

my report.

About the Report

In this report I have tried to expose a total picture of my activities in SCB.

This report is basically divided into three parts and these are:

Part – A

Part – B

Part – C

Part – D

The first part contains an observation of my work. This is the part where I

have tried to present an overview of the total SCB. I have worked on with

an introduction to the study. The second part contains Credit, Credit Cards

and Project of SCB, in the third part I have drawn on Collection criteria and

last part Conclusion.

The first part, which would be, mentioned as an observation part, the

second part which has been named as Consumer CREDIT and statistical

analysis part, the third one has mentioned as Collection and last, the

conclusion and recommendation part.

INTRODUCTION

Overview

Standard Chartered leading the way in Asia, Africa and the Middle

East Standard Chartered employs 30,000 people in over 500

locations in more than 50 countries in the Asia Pacific Region, South

Asia, the Middle East, Africa, The United Kingdom and the Americas.

It is one of the world's most international banks, with a

management team comprising 70 nationalities.

Standard Chartered is listed on both the London Stock Exchange

and the Stock Exchange of Hong Kong and is in the top 25 FTSE-100

companies, by market capitalization.

It serves both Consumer and Wholesale Banking customers. Consumer

Banking provides credit cards, personal loans, mortgages, deposit taking

and wealth management services to individuals and small to medium

sized enterprises. Wholesale Banking provides corporate and institutional

clients with services in trade finance, cash management, lending, custody,

foreign exchange, debt capital markets and corporate finance.

Standard Chartered is well-established in growth markets and aims to be

the right partner for its customers. The Bank combines deep local

knowledge with global capability.

The Bank is trusted across its network for its standard of

governance and its commitment to making a difference in the

communities in which it operates.

Our History:-A brief history of Standard Chartered

Standard Chartered is the world's leading emerging markets bank headquartered in

London. Its businesses however, have always been overwhelmingly international.

This is summary of the main events in the history of Standard Chartered and some of

the organizations with which it merged.

Launch the interactive timeline to learn about remarkable people, events

and discoveries that have shaped the world we live in, through out the

history of Standard Chartered.

The early years

Standard Chartered is named after two banks which merged in

1969. They were originally known as the Standard Bank of British

South Africa and the Chartered Bank of India, Australia and China.

Of the two banks, the Chartered Bank is the older having been

founded in 1853 following the grant of a Royal Charter from Queen

Victoria. The moving force behind the Chartered Bank was a Scot,

James Wilson, who made his fortune in London making hats. James

Wilson went on to start The Economist, still one of the world's pre-

eminent publications. Nine years later, in 1862, the Standard Bank

was founded by a group of businessmen led by another Scot, John

Paterson, who had immigrated to the Cape Province in South Africa

and had become a successful merchant. Both banks were keen to

capitalize on the huge expansion of trade between Europe, Asia and

Africa and to reap the handsome profits to be made from financing

that trade. The Chartered Bank opened its first branches in 1858 in

Calcutta and Mumbai. A branch opened in Shanghai that summer

beginning Standard Chartered unbroken presence in China. The

following year the Chartered Bank opened a branch in Hong Kong

and an agency was opened in Singapore. In 1861 the Singapore

agency was upgraded to a branch which helped provide finance for

the rapidly developing rubber and tin industries in Malaysia. In 1862

the Chartered Bank was authorized to issue bank notes in Hong

Kong. Subsequently it was also authorized to issue bank notes in

Singapore, a privilege it continued to exercise up until the end of

the 19th Century. Over the following decades both the Standard

Bank and the Chartered Bank printed bank notes in a variety of

countries including China, South Africa, Zimbabwe, Malaysia and

even during the siege of Marketing in South Africa. Today Standard

Chartered is still one of the three banks which print Hong Kong's

bank notes.

Expansion in Africa and Asia

The Standard Bank opened for business in Port Elizabeth, South Africa, in

1863. It pursued a policy of expansion and soon amalgamated with

several other banks including the Commercial Bank of Port Elizabeth, the

Colesberg Bank, the British Kaffarian Bank and the Fauresmith Bank. The

Standard Bank was prominent in the financing and development of the

diamond fields of Kimberly in 1867 and later extended its network further

north to the new town of Johannesburg when gold was discovered there in

1885. Over time, half the output of the second largest goldfield in the

world passed through the Standard Bank on its way to London. In 1892 the

Standard Bank opened for business in Zimbabwe, and expanded into

Mozambique in 1894, Botswana in 1897, Malawi in 1901, Zambia in 1906,

Kenya, Zanzibar and the Democratic Republic of Congo (D.R.C.), in 1911

and Uganda in 1912. Of these new businesses, Botswana, Zanzibar and

the D.R.C. proved the most difficult and the branches soon closed. A

branch in Botswana opened again in 1934 but lasted for only a year and it

was not until 1950 that the Bank re-opened for business in Botswana. In

Asia the Chartered Bank expanded opening offices in, Myanmar in 1862,

what is now Pakistan and Indonesia in 1863, the Philippines in 1872,

Malaysia in 1875, Japan in 1880 and Thailand in 1894. Some 34 years after

the Chartered Bank appointed an agent in Sri Lanka it opened a branch in

1892 to take advantage of business from the tea and rubber industries.

During 1904 a branch opened in Vietnam. Both the Chartered and the

Standard Bank opened offices in New York and Hamburg in the early

1900s. The Chartered Bank gaining the first branch license to be issued to

a foreign bank in New York.

The impact of war

Even the First World War offered opportunities for expansion when the

Standard Bank set up a branch in Tanzania shortly after British troops

occupied the formerly German administered Dar es Salaam in September

1916. Both banks survived the inter-war years but the world trade slump

led to the closure of operations in the Canary Islands, Liberia, the

Netherlands, and Equatorial Guinea. Disaster struck the Chartered Bank's

office in Yokohama, Japan, when it was destroyed by an earthquake in

1923 killing a number of staff. The Chartered Bank was particularly

affected by the Second World War when numerous Asian countries were

occupied by Japan.

The post war years

After the Second World War many countries in Asia and Africa gained their

independence. This led to local incorporation in some countries,

particularly in Africa. Other operations such as those in Iraq, Angola,

Myanmar and Libya were nationalized, while in Indonesia the Jakarta office

was destroyed in an attempted coup d'etat. In 1948 the Chartered Bank

opened in Bangladesh and during 1957 it acquired the Eastern Bank. The

Eastern Bank gave the Chartered Bank a network of branches including

Aden, Bahrain, Beirut, Cyprus, Lebanon, Qatar and the United Arab

Emirates. The Chartered Bank also entered into a joint venture to form the

Irano-British Bank which opened for business in 1959. The bank grew

rapidly and had 24 branches when it was nationalized in 1981. By the mid

1950s the Standard Bank had around 600 offices in Southern, Central and

Eastern Africa. Its network grew substantially in 1965 when it merged with

the former Bank of British West Africa which had some 60 branches in

Nigeria, 40 branches in Ghana and eleven branches in Sierra Leone in

addition to operations in Cameroon and Gambia. Despite these

acquisitions and expansion into new countries such as Mexico, South

Korea and Oman (1968), both the Standard and Chartered Bank networks

were comparatively small. Both viewed the future with some trepidation

as the need to protect them from acquisition became ever more apparent.

Standard Chartered PLC In 1969 the decision was made by the Standard

Bank and the Chartered Bank to undergo a friendly merger thus forming

Standard Chartered PLC. It was one year later that the descendants of the

"Chartered Bank of India, Australia and China" were finally permitted to

open a representative office in Sydney, Australia. Standard Chartered

subsequently acquired the UK based Hodge Group, in which it already had

a minority shareholding, and the Wallace Brothers Group. The Hodge

Group brought to Standard Chartered an extensive network of UK offices

specializing in installment credit and industrial leasing, and after a period

of rationalization its name was changed to Chartered Trust Limited.

Standard Chartered operations in Jersey emerged from the integration of

other Hodge Group businesses with those of Wallace Brothers Bank

(Jersey), Limited.

Standard Chartered decided, after the merger, to expand the Group

outside its traditional markets. In Europe a number of offices were opened

including Austria, Belgium, Denmark, and Ireland, Spain and Sweden as

well as several major cities in the UK. Standard Chartered also opened

offices in Argentina, Canada, Colombia, the Falkland Islands, Panama and

Nepal. In the USA a number of offices were opened and three banks were

acquired. These included the Union Bank of California which gave

Standard Chartered a presence in Brazil and Venezuela. The opening of a

branch in Istanbul in 1986 was overshadowed by a far more dramatic

event when Lloyds Bank of the UK made a hostile take-over bid for

Standard Chartered. Standard Chartered won its right to remain

independent but entered into a period of considerable change.

By the late 1980s Standard Chartered already had considerable exposure

to third world debt. To this were added provisions against loans to

corporations and entrepreneurs who could not meet their commitments.

Standard Chartered reviewed its operations and decided to focus on its

core strengths of Consumer Banking, Corporate & Institutional Banking

and Treasury in its well established operations in Asia, Africa and the

Middle East. This led to a series of divestments notably in Europe, the

United States and Africa. During this time staff numbers were reduced;

businesses not considered core were sold or closed; associate holdings

disposed of; unprofitable branches closed and back office functions

consolidated. In addition expensive buildings were sold with the proceeds

reinvested in the business, and the senior management team was

radically changed and strengthened.

Standard Chartered in the 1990s

Even within this period of apparent retrenchment Standard Chartered

expanded its network, re-opening in Vietnam in 1990, Cambodia and Iran

in 1992, Tanzania in 1993 and Myanmar in 1995. With the opening of

branches in Macau and Taiwan in 1983 and 1985 plus a representative

office in Laos (1996), Standard Chartered now has an office in every

country in the Asia Pacific Region with the exception of North Korea. In

1998 Standard Chartered concluded the purchase of a controlling interest

in Banco Exterior de Los Andes (Extebandes), an Andean Region bank

involved primarily in trade finance. With this purchase Standard Chartered

now offers full banking services in Colombia, Peru and Venezuela. In 1999,

Standard Chartered acquired the global trade finance business of Union

Bank of Switzerland. This acquisition makes Standard Chartered one of the

leading clearers of dollar payments in the USA. Standard Chartered also

opened a new subsidiary, Standard Chartered Nigeria Limited in Lagos,

acquired 75 per cent of the equity of Nakornthon Bank, Thailand; and

agreed terms to acquire 89 per cent of the share capital of Metropolitan

Bank of the Lebanon.

Standard Chartered today’s

Today Standard Chartered is the world's leading emerging markets bank

employing 30,000 people in over 500 offices in more than 50 countries

primarily in countries in the Asia Pacific Region, South Asia, the Middle

East, Africa and the Americas.

The new millennium has brought with it two of the largest acquisitions in

the history of the bank with the purchase of Grindlays Bank from the ANZ

Group and the acquisition of the Chase Consumer Banking operations in

Hong Kong in 2000.

These acquisitions demonstrate Standard Chartered firm committed to the

emerging markets, where we have a strong and established presence and

where we see our future growth.

STANDARD CHARTERED BANK IN BANGLASESH

Standard Chartered Bank started its operation in Bangladesh back in

1948. Standard Chartered Bank network facilitates fast and convenient

connection for foreign trade, bonding and remittance business as well as

market ad business intelligence. Besides, the Bank is serving a large

number of local corporate and Government organizations.

Acquisition of ANZ Grindlays Bank by Standard Chartered Bank was

completed on 31st July 2000. The transaction represents a major for both

the sides.

In Bangladesh Standard Chartered Bank is operating 17 offices in 6(six)

divisional cities and towns including Dhaka, Chittagong, Khulna, Sylhet,

Bogra, and Narayangong.

The standard Chartered Banking activities around the country within the

divisional cities and towns can be traced from the following table:

Divisional Cities &

Towns

Points of representation No. of

Branches/Cas

h office (s)

Dhaka Dilkhusa, Motijhel, Dhanmondi,

Banani, Kawrna Bazar, Kakrail,

Gulshan, Hotel Sheraton, Uttara

10

Chittagong Agrabad C/A, Nasirabad, Station

Road

3

Khulna Khulna 1

Sylhet Sylhet 1

More over, the Bank is now operating its ATM (Automatic Teller Machine)

service from 23 individual locations in Dhaka, Chittagong, Khulna, Sylhet,

Bogra, and Narayangong.

STANDARD CHARTERED BANK

(CHITTAGONG MAIN)

IN CHITTAGONG

AN OVERVIEW

LOCATION:

Standard Chartered (Ctg. Main) is located at Agrabad, the commercial

location of Chittagong. The area Agrabad has grown over the years to a

prime commercial location with the development of the port and the

tr5ade based business.

CUSTOMERS:

The customers of Standard Chartered Chittagong main comprises mainly

of professionals, service holders, businessmen who are involved in trading,

manufacturing and service oriented entrepreneurs and limited extent of

housewives. Besides, these customers, it also caters to the needs of

people who are operating different company accounts. The average age of

the customers of Standard Chartered Chittagong main ranges from 30 to

45 years. Among the professionals maintaining accounts in this branch,

45% are service holders where as the rest i.e. 55% are businessmen. More

than 60% of the businessmen are involved in trading or other related

business. Among the service holders a significant portion are working in

different corporate organization. However, it is observable that the

account holders are not usually present at the Bank for Cash Transaction.

LOCATION CONDITION:

The economic condition of the area is developing rapidly. Because of the

possibility of gas and oil exploration, the influxes of people from different

overseas countries are increasing day by day.

Awareness among the people foreign Banks is increasing gradually and

people are becoming more confident in dealing with reputed foreign

Banks. These changes and improvements of the overall economic and

social condition have significantly changed the mindset of the general

people, which will ultimately help to improve the entire scenario in case of

foreign Banks.

PART –B: Account Opening

A/c Opening

To open an account the party has to duly fill up A/c opening form, S.S.

card and then has to submit the necessary particulars according to

account nature. All kinds of account require two photograph of party

except three stages savings scheme. One form is used to open all kinds

of savings accounts. Another form is used for limited Company,

Autonomous Corporation and societies club etc. Yet another for current

account for individual joint or proprietorship the opening form of

partnership is a bite different. Three types of accounts such as:

-For SB account

-For CD account

-For term Deposit.

Name of Accounts are-

Savings account

Extra Value Savings Scheme

Current deposit account

STD (Short Term Deposit Account)

Limited Company, Autonomous Corporation account

Three stage savings scheme

Marriage savings Scheme

Millionaire Savings Scheme

Children Education Scheme

Rainy Day Savings Scheme

For Different type of account the following papers are required:

Savings Account:

1. Duly filled up account opening form with introduction from an existing account

holder.

2. Nominee with photo.

3. Party has to submit two copy passport size photographs. in case of

a minor.

Partnership Account:

1. Partnership deed is needed which is attested by notary public.

2. Who will operate the account must be written in the partnership

deed.

3. A notary’s certificate of partnership deed is also required.

4. Each page of partnership deed is to be attested by notary public.

5. In case of decease of any partner, his family member or a

nominated person can operate the account if there is any

instruction if the account.

6. Individually every partner has to sign in the partnership letter

formatted by the bank.

Current Account

1. Collecting current deposit a/c opening form from the bank counter.]

2. Filling up the form with required information.

3. Enclosing photographs attested by introducer.

4. Full signature and specimen signature in the application form as

well as in the SS (specimen signature) card.

5. Minimum required cash deposited to the cash counter.

6. Checking of the required information and introducer a/c no. by the

authorized officer.

Limited Company/ Semi Govt. Autonomous Corp. A/C

True certified copy of memorandum and articles of association.

Board resolution

True certified copy of certificate of incorporation.

Attested Signature by the board of directors.

In case of public limited company certificate of

commencement is required.

Proprietorship Accounts

The common procedure of current deposit account opening is

followed. In addition one needs to enclose:-

- Photocopy of trade license given by the City

corporation/Pourashava.

- Sign and seal of proprietor in the application form as well as

in the SS (Specimen Signature) card to be given properly.

STD A/C

- The A/C opening procedure is same as C/D A/C opening.

- 5.5% interest is given against this deposit A/C

- Minimum 7 days notice is needed in earlier cases but, it has

now become a practice to withdraw money by the clients with

immediate prior written notice or Telephone contact.

Cheque Book Issuance:

The chequebook is a security stationary used for transactions

by the account holders. Chequebook is issued through a

requisition form/slip which acts as an application from the

respective A/C holder.

The requisition slip comes into action at two stages

(a) At the time of account opening.

(b) For new chequebook when the slip is located nearly at the

end of the old one (e.g.-three leaves before the end of the 10-

leaf chequebook).

The requisition form contains

(a) The date of issuing.

(b) The serial number of the leaves

(c) Signature of the applicant.

Procedure

(1) Authorized officer verifies the applicant’s signature.

(2) A/C no is mentioned on each leaf of the new chequebook.

(3) Two officer’s initials are put on every leaf, usually one

beside the A/C. no and the other beside the cheque series no.

(4) A register is maintained for this purpose, where the-

- A/C holder’s name

- A/C no.

- Serial no. Of cheque leaves are written.

The A/C holder signs the register before the new chequebook is

issued to his name. Both S/B and C/D A/C cheque books are

issued through this procedure though the particulars are

recorded on different registers. Again S/B A/C usually needs

ten or twenty-five leaf cheque books while due to its frequent

nature of transaction, C/D A/C usually requires more leaves-

fifty or hundred leaf cheque books.

Issuing duplicate cheque book

Due to various reasons, a cheque book may be damaged or

missing, which rouses the need for a duplicate cheque book.

Procedure

(1) The A/C holder submits a written application for a duplicate

chequebook.

(2) Inquiry is made whether any unused leaf of the chequebook

was signed.

(3) Payment is stopped on the missing serials of the

chequebook after the serials of the missing leaves are

matched on the register.

(4) With the permission of the In-charge, a duplicate

chequebook is issued whose serial numbers are not the same

as that of the previous one.

I.B.C. & O.B.C. I

Inward & Outward Transfer Delivery

Transfer delivery takes place when the cheque of one branch

of the SCB is presented to another branch for collection.

Receiving the cheque, branch authority sends it for collection

to the payee branch, without sending it to principal office. If

they honor the cheque of the respective branch, the payee

branch issues an IBCA in favor of the collecting branch.

Responding the IBCA the collecting branch debits the payee

branch and credits the parties account. This is the procedure

for outward transfer delivery.

If the other branch collects the cheque of our branch, then it is

called inward transfer delivery. Collecting branch send the

cheque to us. Verifying the signature, branch authority

examines whether there is sufficient money available or not in

the account. If the cheque is honored the branch authority

issues an IBCA debiting the party account in favor of the

collecting branch. A credit voucher is prepared against. Which

the IBCA is issued as under:

Party A/C Dr.

Gen. A/c Collecting Branch Cr.

Out ward Bills for Collecting (OBC)

Besides clearing house and transfer delivery, we have to send

cheques to other district for collection. Basically OBC is

required when the cheque is not of a same clearinghouse.

Steps required for collecting outward bills are as follows:

1) Register entry of the cheque.

2) Stamping OBC seal on the face of the cheque and writing

the OBC No. As such given in the OBC register and endorsing

(Payee’s account will be credited after realization) the cheque

with the signature, of authorized officer.

3) Writing two copies of OBC forwarding letter, of which one

copy will be

Sent to the collecting branch along with the cheque and

another will beI kept in the OBC outstanding file. The contra

voucher for OBC collection is as such:

- Outward Bills lodged Dr.

- Outward bills for collection Cr.

After collecting the amount of cheque the originating branch

will send an IBCA. Responding the IBCA, collecting branch

debits the originating branch and credits the party account

through the pay-in-slip that is kept with the forwarding letter of

OBC. If the cheque is drawn on a bank other than ours, a D.D is

sent in U response to the OBC with the commission & postage

charge of the D.D deducted from the amount of the cheque.

The D.D is issued in favor of our branch, therefore the

endorsement “Received Payment” is put on the reverse of the

D.D before sending it for collection through clearing. The

amount is credited to party’s NC though party credit voucher.

Reverse contra voucher is prepared for positing.

- Outward bills for collection A/C Dr.

- Outward Bills lodge Cr.

Besides this, commission and postage will be charged to the

party for collection of the cheque. Accounting procedure will be

as such:

Party A/C Dr.

I /A Comm. on OBC Cr.

I/Postage on OBC Cr.

After posting commission and postage charge in the register

along with the IBCA No. a signature of the authorized office is

taken and after signing the vouchers by the officers these are

posted in computer.

Inward Bills for Collection (IBC)

.The branch through dispatch receives instrument with a

forwarding letter.

2. Entry is passed to the register of I.B.C.

3. A simple credit voucher is prepared under the title: “SCB

Gen. NC Respective Branch” (O.B.C. issuing branch) with the

following date in that voucher O.B.C no. With the

corresponding O.B.C no is recorded.

4. In the reverse side of the instrument “Our Branch

endorsement confirmed” endorsement with the authorized

officer’s signature is given.

5. The instrument is then sent for collection through the

clearinghouse according to the procedure.

6. After collection of amount/proceeds an I.B.C.A. is prepared

favoring the instrument-sending branch.

In this way the proceeds of honored O.B.C is sent to the O.B.C

issuing branch.

The following are subsidiary works, done at the OBC desk

ACCOUNT TRANSFER:

Account transfer implies the transfer of account of a party from

one branch to another of the same bank.

Steps of account transfer are as follows

- At first, the party submits an application to the branch

manager for transferring his account.

- In the application, party mentions the branch name to which

party intends to transfer his/her account.

- Party surrenders his/her chequebook with unused cheque

leaves.

- Then cheque series no are checked with the record.

- Authorized officer verifies the party signature on application.

- Unused cheque leaves are destroyed in front of the party.

- An inquiry is made in every department of the branch

whether the party is maintaining a loan account or not.

- If everything is all right, balance position of the account is

taken from the computer.

- Bank debits party account to make the balance nit.

Then the following vouchers are prepared:

- Party A/C. Dr.

- Income A/C transfer chargeCr.

- SCB General A/C. (New branch) Cr.

- An IBCA is prepared and sent to the new branch with a

forwarding letter.

- Account opening form and S.S. card are marked

“Transferred from X Branch to Y branch”.

- Transferring branch keeps application, balance statement,

photocopy of account opening form and S.S. Card.

- A/C opening form, S.S. card and balance statements are sent

to new branch.

- Party account is marked “Transferred” in the account opening

register.

- No. of A/C is deducted by one in the account opening register.

- A transferring note has to be taken in the A/C opening

register.

FUND TRANSFER

Fund transfer implies transfer of fund from one account to

another in the same branch. It is a simple process. Bank just

debits the account, which would be transferred and credits the

account that would get the deposit. Two vouchers are

prepared in this regard.

- Party (Drawer) account. Dr.

- Party (Payee) Cr.

CLOSING OF DIFFERENT TYPES OF ACCOUNTS:

SB A/C

Step of SB A/C, closing are as follows:

- At first, the party will submit an application to the branch

manager for closing his/her account.

- Party will surrender his chequebook with unused cheque

leaves.

- Cheque leaf serial no. will be checked with the record.

- Authorized officer will verify the party’s signature on

application.

- Unused cheque leaves are to destroy in front of party.

- An inquiry is to be made in every department of the branch

whether the party is maintaining a loan account or not.

If every thing is all right, balance position of the account has to

be taken from the computer. Bank will debit party account to

make the balance nil.

Then the following vouchers are to be prepared

Party A/C. Dr.

Income A/C charges on account closing Cr.

Bills payable pay slips issued. Cr.

Two authorized officer will approve voucher. S.S. card and

account opening form will be marked “Closed”.Party account is

to be marked “Closed” in the account opening register.No. of

account will be deducted by one in the account opening

register. A closing note has to be taken in the account opening

register.

CD/AC

Same as savings A/C except charging the interest.

Closing of schemes

Different schemes are at work or were maintained in the

branch such as Three Stage Saving Scheme, SCB Savings

Scheme etc. Clients may choose to close this A/C before or

after maturity. Party submits application along with his/her

pay-in-slip book.

CESS A/C closing: Before maturity

There are three terms of maturity for C.S.S A/Cs —4 years, 7

years and 10 years. No interest in given if a C.E.S.S A/C is

closed before 6 months.

If anyone chooses to close the A/C after 6 month but before 4

years, the accounting procedure is as follows:

1. Balance up to previous month

+( Interest Provision for the month (Adj. A/C

Balance up to the date===================

-( Amount of installation given by party each month

Interest @ 11 % [the closing is premature, interest will be

given at Savings rate instead of C.E.S.S rate of 11%]

The vouchers

a) Adjusting A/C:

Interest. Payable on C.S.S (provision for current

month) -Dr.

C.S.S. A/C Cr.

b) C.S.S A/C Dr.

Expenditure A/C: Interest. Paid on C.S.S (excess interest) Cr.

Income A/C: closing charge Cr.

Other liabilities: 10% Source tax Cr.

Bills payable: Pay slip issued cr.

Deceased A/C.

While working at the desk I had an opportunity to see the

closing of a deceased account.

- One nominee on behalf of all nominees and successors

submit an application to the bank mentioning the death of

his/her relative.

- All kinds of transactions are made stopped by the bank then.

The Bank follows the following procedures to make payment

- Submission of an application reporting the death of A/C

holder by the nominee on behalf of all nominees and

successors to with draw the balance amount maintained with

the Bank.

- The authorized nominee then has to submit the following

documents.

- Death certificate of the account holder

- Gorosthan Certificate.

- One copy of successor certificate given by the district Judge,

mentioning the proportionate amount to be distributed to each

of the successors & nominees of deceased A/C holder from

various accounts of various Banks. (I.e. various Bank balance).

- Word commissioner identification certificate with

photographs.

Then the Bank collects balance conformation sheet from the

computer department internally duly signed by authorized

Officer of the branch. Account opening form with SS card

collected by the authorized officer internally. After

conformation a forwarding letter is sent to the H.O. (Law dept.)

mentioning the deceased account holder’s particulars to make

arrangement of payment of the account. The H.O. (CAD) sends

an approval letter after judgment of the documents with the

forwarding. At the time of final settlement of disbursement of

the fund of the A/C after receiving the confirmation letter from

H.O. one indemnity bond on a non-judicial stamp (150/-) is

signed by the authorized nominee and by other nominees and

successors. After the payment of the proceeds “Deceased A/C

closed” is marked both on the A/C opening form and on the S.

S. card.

CLEARING

Clearing activities are of two types:

(I) outward clearing.

(ii) Inward clearing.

Outward clearing

• Cheques,

• DD,

• Pay order

• SDR

• Treasury Challan etc.

Instruments are deposited by various customers of different

A/C Of Principal Office (P.O.) for collection through writing in

the pay-slips and credit vouchers in case of IBC. Or

instruments received from Head Office (H.O.) and F. Exchange

Dept. of P.O. As to provide customer service Bank acts as an

intermediary to collect proceeds of instruments through the

Bangladesh Bank clearing house. It is to be mentioned here

that collected instruments are of other than the SCB. When the

cheque or other instruments come for collection, the clearing

officer receive the instruments from the customer by giving

“Received” seal and initials On the foil of the pay-in-Slips.

Immediate after receiving the instruments special

crossing/recipient Branch. Crossing is given on the instrument.

“Clearing” seal with the next date is given on both the

instruments and pay-in-slips. Proper endorsement and the

authorized officer’s signature are given on the back side of the

instruments. The clearing officer then keeps the instruments in

his custody. Except these different instruments received the

P.O. from HO, IBC of P.O. sent by various branches of the SCB

for collection through their OBC which are out side the clearing

zone, and different instruments sent by other branches

received by them from their own customers for collection

inside the clearing zone are also collected by P.O. through

clearing house. Cheque and other instruments’ detailed

information are recorded in the outward clearing register (date

validation sheet _ house). Statements of Bank wise delivery

details and Branch wise delivery details/cheque totals are

prepared. In the first house of the next day, Principal Office

sends the instruments to the issuing branch./originating

branch. Of various Banks for collection through the clearing

house.

Inward clearing

Under this mechanism Principal Office collects the cheque and

instruments issued by different branches and P.O. of the SCB

for collection. One representative officer of the SCB collects the

instruments from other Banks through clearing house. Our

inward clearing instruments are the outward clearing

instruments of other Banks. The instrument are then sorted out

and sent to the respective issuing branches after proper

recording to the register.

After receiving the inward clearing instruments, the

instruments issuing branch/originating branch makes entry in

the inward clearing register.

The authorized officer of the branch then examines the

instruments.

The officer then checks the balance of respective NC in the

computer whether sufficient balance available or not to honor

the instrument. After the instruments have been passed, an

IBCA is prepared fig. P.O. for the total honored fig. The

dishonored instruments are returned to the P.O. with return

memo. Accounting procedure of different Branch is as under

(For honored instrument)

1. Party Dr.

(Instrument it self)

2. SCB General NC: P.O Cr.

Accounting procedure of P.O. as under

1. Respective Branch. A/C Dr.

(Responded IBCA sent by different

(Branch for honored fig.)

2. SCB General NC: HO Cr.

(For honored fig of instruments Of P.O. & other branch)

For total honored fig. of instruments of P.O. and other branches

inside the clearing zone an IBCA is prepared for. H.O. and sent

to H.O.The dishonored instruments of P.O. and other Branches

are sent to second clearinghouse of B.B with Bank wise

delivery cheque totals to return the instruments to the

respective collecting banks for final settlement of transactions

among the various Banks for that day. The dishonored fig. is

also recorded in the inward clearing reg. of P.O. In this way

clearing function occurred. Endorsement for clearing. While

receiving any kind of cheques or instruments, which will be

deposited in the customers A/C, SPL crossing is given by the

Branch. Then the following endorsement is usually put on the

reverse side of the instruments.

1. “Received payment for the SCB”

- When there is no payees name in the cheque but only

instruction that pays to self, cash, you, or SCB P.O., The SCB,

then this is the appropriate endorsement.

2. “Payee’s A/C credited for the SCB”

- When the name of the payee is given on the cheque and the

drawee Bank is in that clearing house then this is the

appropriate endorsement.

3. “Payee’s A/C will be credited on realization for the SCB”

- When the drawee Bank is not in that clearing House, This

endorsement is given by the OBC sending Branch. In Case of

IBC of this branch for collection.

4. Our branch endorsement confirmed for the SCB

- The collecting branch gives when an instrument is received

as IBC sent by other branch of the Bank for Collection then this

endorsement. in side clearing house.

DEPARTMENT: SANCHAYAPATRA:

Sanchaya Patra is the instrument against which both

institutional and non institutional customers/people make

investment of their idle money. It is a mode of investment

against which the customers in terms of Bank or/and the

people who have no legal relationship with the Bank as

customer make risk free investment though the instruments

(S.P). It is the system of collecting idle money from

people/institutions whose money will be considered to be of no

use for a minimum period time (i.e. 1 year or above). The

“Jatiya Sanchaya Bureau” is the only authorized organization of

the Bangladesh Govt. to print out the instrument and arrange

to collect the sales proceeds of S.P for deposit mobilization

from the public. Bangladesh Bank is the only authorized dealer

to arrange the mechanism/collect the sales proceeds of S.P.

disbursement of Interest payable to the S.P. purchaser thereof.

Since all NCBs, Automous and private Banks are the agents of

B.B. to provide public service, So NCBs, Autonomous and

private Bank and some govt. organizations (selected) performs

the activities of selling S.P. and payment of interest. thereof to

the S.P. purchaser as per the instructions of Bangladesh Bank

(B.B). Against these services NCB5,. Autonomous and private

Banks receive commission through B.B. from “Jatiya Sanchaya

Bureau”. “Jatiya Sanchaya Bureau” utilizes the collected

proceeds in the best possible way that keeps risk at the lowest

level and earns more profit agt. which Interest is paid to the

customer of S.P.

The process of selling S.P. & payment of Interest thereof are

out of General Banking activities, but a specific section under

General Banking Department does these activities.

Issuing Procedure

1. Duly filled up application form submitted by the customers

(the form provided by the Bank).

2. Customers may make payment to purchase SP in the

following ways

(i) In cash

(ii) By cheque through clearing or transfer.

(iii) Via other branch. Of the same bank.

Preparation of Vouchers for the above payment procedure:

(i) If a customer makes payment in cash

A customer makes payment in cash through cash counter.

Cash dept. gives “Cash received” seal on the credit voucher.

- Cash (if self) Dr.

- Sundry deposit A/C. S.P issued Cr.

(ii) a. If a customers make payment by cheque of the same

branch

The submitted cheque is considered as debit voucher by duly

passing it by the Authorized officer of the branch.

- Party A/C (Cheque if self) Dr.

- Sundry deposit A/C S.P. issued Cr.

(ii) b. If a customer makes payment by cheque of the other

bank

- Received cheque is deposited to the customer’s A/C in the

branch with the pay-in-slip.

- Proceeds are collected through clearing house /O.B.C

mechanism.

- The customer then draws a cheque on his/her A/C agt. S.P.

purchase purpose.

- This cheque is then considered as debit voucher by duly

passing it by the authorized Officer of the Branch.

(iii) If a customer maintains an A/C with other branch, of the

same bank and intends to purchase S.P by that branch

- The customer can make payment in cash or issues a cheque

on his/her A/C maintaining with that branch.

- After passing if by the A. Officers of that branch. An IBCA is

prepared

And sent to the S.P. issuing branch. (P.O.)

The application form (filled up) of the customer after

verification of his/her sign thereby an A. Officer, with a

forwarding letter mentioning A/C holders same, A/C No. S.P.

Name & value therein sent to the S.P. issuing branch. With the

IBCA.

S.P. issuing branch. Then responds the IBCA, which in turn

becomes a debit voucher then.

- SCB Gen. A/C. (respective branch. IBCA issuing branch.)

Dr.

- Sundry Deposit A/C S. P. issued Cr.

3. Then entry is passed to the S.P. issuing Register.

4. Instruments are prepared and issued to the customer.

5. A.S.P. Sales statement with a forwarding letter sent to B.B.

within 72 hours of sales, stating therein to collect the proceeds

from S.P. Selling Bank, from the A/C of the Bank (HO)

maintained with B.B. One photocopy of the statement with a

forwarding Letter is sent to the CAD of HO of S.P. issuing

Branch.

7. Agt. this statement, B.B. sends a debit advice to S.P. issuing

branch. After collection of proceeds from the A/C of H. 0.

> S.P. issuing branch. Then makes reconciliation with the

advice and S.P. selling statement & forwarding letter.

> After confirmed Ok, one photocopy of debit advice B.B. is

sent to CAD of

HO.CAD of HO then prepares and sends an IBDA to S.P. issuing

branch. for the proceeds to collect on behalf of B.B.

Voucher preparation by HO

1. SCB Gen A/c S.P. issuing branch Dr.

2. Bangladesh Bank Cr.

After receiving IBDA, S.P. issuing Branch. Makes the following

treatment.

1. Sundry deposit A/C S.P. issued Dr.

2. SCB Gen A/C H.O Cr.

(Responded IBDA)

This is how the complete process of sales and reimbursement

of sales proceeds occurs.

Encashment procedure of Inset, of Interest or and F.V. of S.P

(A) In order to encash Instt. of Interest or and F.V. of S.P.

customers bring coupons or and S.P. instrument directly to the

S.P. issuing Bank.

1. -Sus. A/C Encashment of F.V/lnt Dr.

2. —Bills payable A/C pay Slip issued Cr.

(With net payable amount after deduction).

Or -Customer’s A/C Cr.

(With net payable amount after deduction.)

3. —Other Liabilities A/C S. tax Cr.

(B) When other branch. of the Bank sends the Int. coupon/and

S.P. instrument of their own customer with a hand written

application from the customer and a forwarding letter by the

branch. The following steps are done by the S.P. issuing

Branch.

1. Sus. A/C Encashment FV/lnt. Dr.

2. Other Liabilities A/C Source Tax Cr.

(if applicable)

3. SCB Gen A/C respective branch Cr.

(Net payable amount after deduction of S. Tax if it is

applicable).

- The net payable amount is then sent by preparing an IBCA

fvg. That branch.

Reimbursement procedure of Interest /and F.V. of S.P. paid to

the customer from B.B

- After encashment of lnt./and F.V. of S.P. a statement is sent

to B.B. with a forwarding letter.

- Against this statement B.B. sends a credit advice to the

branch. The S.P. issuing branch. Then makes reconciliation

with the Cr. advice of B.B. and encashment statement sent

earlier to B.B. Found every thing Ok and marking “SCB Ok” on

the Cr. advice of B.B., S.P. issuing branch. (P.O.) then sends

one photo copy of the advice to the CAD of HO.

Then CAD of HO prepares the following vouchers:

1. Bangladesh Bank Dr.

2. SCB Gen A/C S.P. issuing branch Cr.

An IBCA fvg. S.P. issuing branch, is then prepared and sent to

the branch.

After receiving the IBCA from Ho, S.P. issuing branch. Then

responds the IBCA. The Responded IBCA then becomes the

debit voucher of the branch.

Treatment is as under

SCBGen.AICHO Dr.

(Responded IBCA)

2. Suspense. A/C Encashment FV/lnt Cr.

Rate of Commission

Sales: Tk. 1,000/- per sales of S.P worth Tk. 1, 00,000/-

Encashment: Tk. 0.25 per instrument.

In this way the process of encashment of lnt./and F.V. of S.P.

and reimbursement of the proceeds from B.B. on this behalf

completed. Remittance is a very important section of General

Banking Dept. In general,

Remittance refers to “Transfer of Funds”. Remittances are of

two types:

1. Cash Remittance.

2. Fund Remittance.

Generally, the remittance section of the General Banking

Department does fund remittance. All kinds of issue and

payment of

1. P.S. (PAY SLIP)

2. P.O. (PAY ORDER)

3. S.D.R. (SICURITY DEPOSIT RECEIPT)

4. D.D. (DEMAND DRAFT)

5. T.T, (TELEGRAPHIC TRANSFER)

6. F.D.R, (FIXED DEPOSIT RECEIPT) Etc is done through this

section. This section also does transfer of funds from one A/C

to another A/C and from one branch to other branch of the

Bank or to other Banks.

Payment

The PS instrument ultimately returns to the issuing branch of

the bank for payment.

The payee must affix a revenue stamp (signed or sealed by

individual or company respectively) on the instrument before

submitting it.

The payee may submit the pay Slip to any bank. Though the

process of clearing, it arrives at the issuing branch of the bank.

The revenue stamp is checked and the date of payment is

mentioned on the instrument and then the beneficiary account

is credited accordingly.

2. Pay Order (P.O.):

This is an instrument widely used by the customers for

payment to a beneficiary for many different reasons.

Issuance:

The application form

The customer has to apply through a duly filled up form after

the banks chosen format where necessary information are

mentioned.

- Name and A/C no, bank and branch name of the beneficiary.

- The amount.

- The purchaser’s name and address.

The instrument

After the customer makes the payment (through cheque or

cash) along with commission and after the payment is duly

acknowledged by the bank, an instrument containing three

parts is issued.

• The first part is for the bank.

• The second part is for the purchaser.

• The third part is for beneficiary.

After signing on the reverse side of the counterfoil, the

purchaser receives the last two parts of the instrument which

are duly authorized by the bank officials before the hand over.

All the parts contain the P0 number and date. However the first

and second part contains the purchaser’s & beneficiary’s name

and the amount but in the third part the purchaser’s name is

not mentioned.

Commission

For every P.O., the bank gets a commission according to the

rate mentioned below:

For P.O. between Tk. 1/- 10,000/- : Tk. 10/-

For P.O between Tk. 10001/- 1.00 lac/- : Tk. 25/-

For P.O between Tk. 100001/- 5.00 lac/- : Tk. 50/-

For P.O between Tk. 50000/- above : Tk. 100/-

A cost memo showing the amount of commission is issued for

the purchaser.

The amount of the P.O. is recorded under the title of account

“Bills payable pay order issued.” The commission goes under”

Commission on remittance”.

Payment

Like the P.S. the P.O. instrument also ultimately returns to the

issuing branch for payment.The third part of the instrument is

given to the beneficiary by the purchaser.The beneficiary then

submits this part to any bank and through the process of

clearing payment is confirmed.

Cancellation

A P.O. may be cancelled in two ways-

a. The beneficiary may refund it (with “released” sign on the

reverse side) in which case no cancellation charge in required.

b. Otherwise, where the purchaser who has not given it to the

beneficiary at all, has to submit an application along with the

instrument with his sign on the reverse side and a cancellation

charge of Tk. 15/-

3. Security deposit receipt (S.D.R)

This instrument has the same function as the P.O. except that

it is considered as deposit by the bank.

Issuance

The same application form for the P.O. is valid for S.D.R. The

difference lies in the actual instrument which has two parts: for

the bank and the beneficiary, where in the second part the

purchaser name is is mentioned. Again it may be generated

through crediting “Sundry deposit A/C: SDR issued” through

simple credit voucher.

Commission

The rate of commission is same as P.O.

Payment

Payment procedure is again same as that of P.O. But the

beneficiary has to affix a revenue stamp on the reverse side of

the instrument (signed or sealed) before submitting it.

4. Demand Draft (D.D.):

The application form , which the customers must fill up

properly, contains the following information:

- Name and address of applicant

- Amount

- In whose favor it is being drawn

- Drawn on which branch.

The instrument

After the payment by the customer (though cheque or cash) is

duly acknowledged by the bank, an instrument is prepared

with-

- D.D. number

- Date

- Amount

- Which branch it is drawn on

According to the branch the D.D is being drawn on, a branch-

wise issuing serial number is put beside the printed D.D. no of

the instrument. This is the controlling number.

The Register

An issuing register is maintained where the particulars of the

D.D issued are recorded. The test number test number, having

two parts, is given for the D.D by two authorized officers. A

serial number starts the test message. The other part contains

a compendium of

• Branch code

• Day code

• Date code

• Currency code

• Amount code

(If the amount of D.D. is less than Tk. 20,000/-, then no test-

Number is needed)

This number is very much an important secret. The responding

branch will transfer the amount to the party A/C only if. When

the test no. is agreed.

Advice

The D.D. payable proceeds are sent by post the payee branch

by preparing an IBCA favoring the payee branch. The amount,

test no. the P.A no of the two authorized officers is mentioned

there.

Charges & Commission

The purchaser has to pay a fixed amount of Tk. 40! - As telex

charge but if the

Amount for the D.D. is below Tk. 20,000/- (up to 19,999!-) no

telex charge is needed.

A minimum commission of Tk. 25/- or Tk. 1/-per Tk. 1000/- has

to be paid as commission for the purchase of each D.D. A cash

memo showing the amount of charges & commissions is issued

for the purchaser. The commission is recorded under the title

of account “I/A Commission on remittance”. Payment (Inward

D.D).Two kinds of situation may arise in case of payment of

D.D.

a. The advice from the issuing branch has not yet reached the

responding Branch. In that case the D.D. is paid from the

suspense A/C.

Suspense A/C: D.D. paid without advice Dr.

Party A/C. Cr.

After advice reaches the responding branch.

SCB General A/C (issuing br.) Dr.

Suspense A/C: D.D. Paid W.A. Cr.

b. If advice is received before payment of proceeds to the

customer:

SCB General A/C (issuing branch.) Dr. (Responded IBCA)

Bill Payable: D.D. Payable Cr.

Bills Payable: D.D. Payable Dr.

Party A/C. Cr.

A receiving register records all the particulars of a received

D.D.

Cancellation

The branch receives application from the customer along with

the instrument. Since the advice has been issued to the

responding branch, if the purchaser wants to cancel the D.D.

the issuing branch has to inform the receiving branch. That the

instrument is in the possession of the issuing branch. Then the

party may be paid from the suspense A/C. before the advice is

returned.

Suspense A/C: D.D. cancelled Dr.

Party A/C. Cr.

The payee branch is requested to send an IBCA to refund the

amount debited from the suspense A/C.

Responded IBCA from payee branch. - Dr.

Suspense A/C. Cr.

Again if the payee releases the D.D. no cancellation charge is

required. Otherwise a cancellation charge of Tk. 30/- has to be

paid by the purchaser.

5. Society For World Interbank Financial Transactions (T.T)

This is another profoundly used means for fund transfer

between countries. In this case, however, the customer must

maintain an account with the branch.

The application form:

The first step is the submission of a duly filled up form (by the

purchaser)

Containing-

• - Name of the payee A/C and address

- Place,

- Amount

- Name of applicant, address, phone number.

- Commission & charges.

After the payment, the bank officials duly authorize the form.

The register Entry is passed to the SWIFT register, which

records all particulars an outgoing T.T.

Controlling and test number

A responding branch-wise T.T number is put on the application

form as well as a test number, like that of the D.D., which

bears the same importance.

Conveying the message

The T.T. information- the test number, T. T. number, the

amount, the power of attorney number of the authorized

officers are conveyed over phone or through telex message by

the authorized officer.

T. T. Confirmation

The T.T. confirmation is sent to the payee branch (by post)

mentioning T.T. no., date, Test no., amount, beneficiary’s

name and A/C no. The authorized officers duly sign this. One

copy of the T.T. confirmation is kept as the office copy.

Charges & Commission

The rate and procedure of charges & commission are same as

that of D. D. except that the telex charge has to be paid at all

times.

Payment: (Inward T.T)

After receiving branch, agrees with the T.T. test number only

then it credits

the party NC accordingly. The title of account that records the

transaction for the receiving branch. are as follows :-

SCB General NC-issuing branch. - Dr.

Bills Payable: T.T. Payable - Cr.

Bills Payable: T.T. Payable Dr.

Party NC Cr.

Entry is passed to the inward (receiving) T.T. register with all

particulars.

IBCA through T.T

Inter Branch Credit advice are also sent and received by

telegraphic transfer, mainly for quick fund transfer.

Issuance of IBCA:

Party NC/cash/cheque Dr.

SCB General NC (responding branch) ..Cr.

IBCA the responding branch is prepared and the IBCA no, date

and test is conveyed over phone or telex.

The accounting procedure for the responding branch

It is the same as that of T.T. The only difference is when the

actual IBCA reaches the branch it is not responded (since it has

already been responded on the day it was received over

phone) but marked as “Vouched as on . . .“ This procedure is

followed to save time and offer better client service.

6.Fixed deposit Receipt (F.D.R):

FDR is a contact based deposit where the amount is deposited

for a fixed period of time: I month, 3 months, 6 months, 1 year

and so on. For each period of time a certain rate of interest

(annual) is allocated.

Issuance

Application the customer has to fill up the FDR application form

to open an FDR A/C. The procedure is same as that of C/A or

SIB A/C opening.

Instrument

After the application is authorized properly an instrument is

issued where the date of issuing, the date of maturity, the

name or names of the party are mentioned.

Register

A register is maintained for the issuance of FDR where

particulars are recorder.

Rate of interest

I month -7.5% 1 year- 8.5%

3 month -8% 2 year- 9%

6 month 8.25% 3 year- 9.5%

Conditions of Encashment Two different situation may arise :

on

Maturity and before maturity.

-Maturity in 3 months, If encashed before it, the customer

will

get no interest.

- Maturity in 6 months, If encashed before it, the customer

will get interest at savings rate.

-Maturity in 1 year, The customer may collect the interest

After the completion of every 6 months,

if encashed after 3 months, he will get

Interest at SB rate. Or FDR rate

Whichever is lower.

-Maturity in 2 year, Again the customer may opt to collect

Interest of every six month, if enchased

Between 1 year to maturity, he will get

Interest at the rate of the period the

Amount remained deposited. No interest

Will be paid for fraction period.

-Maturity in 3 year, If encashed before 6 months party will

get no Interest If encashed after that 6

month mt @ SB/FDR rate is given,

whichever is lower. A daily maturity sheet accounts for all

maturity and six months interest payment for FDR A/C. These

are also accounted on monthly basis. If the customer fails to

encash on maturity, the FDR is automatically renewed for the

same period of time at the same rate, the previous. Principal

amount along with the interest now considered as the new

principle amount for the renewed FDR.

Source tax

At every withdrawal, 10% source tax if deducted the interest.

Excise duty

At any stage of transaction if the total amount (Principal +

Interest) touches the range of excise duty cut, then at the time

of encashment, excise duty is deducted from the whole

amount of the F.D.R., usually at the end of the year.

FDR value Ex. duty FDR Value

10,000/-I .00 lac Tk. 120 10,00,001/ 1.00 crore Tk. -500

1,00,001/- 10,00,000/- 250 1,00,00,001/-5.00 crore Tk. -

250

5,00,00,001/- above -5000

Payment of interest

At first interest will be credited to FDR A/C. Then the excess

amount (on deduction of 10% source tax) will be deducted

from party A/C. The title of account is as follows:-

Adjusting A/C: Interest Payable on F.D.F. Dr.

Expenditure A/C: Interest Paid on F.D.R. Dr.

F.D.R. A/C Cr.

(The interest for the complete Calendar months is recorded

under Adjusting A/C and that of the fraction Calendar month

remains under the expenditure A/C. Though actually the

expenditure A/C. is debited and the adjusting A/C is credited at

the completion of every month.)

For deduction of 10% tax on interest

F.D.R. A/C Dr.

Other liabilities A/C. 10% Tax (deducted at source) Cr. For

deduction of excise duty

F.D.R. A/C Dr.

Other liabilities: excise duty on deposit Cr.

Encashment of F.D.R.

Instrument (F.D.R.) Dr.

(For Principal amount)

F.D.R. A/C Dr.

(Total Int. deposited to F.D.R. A/C after

Deduction of Source Tax and excise duty)

Bills Payable P.O. /P.S. issued Cr.

(Total amount payable to customer)

Or

Party A/C Cr.

• Every Instrument issued by the remittance section is crossed

“NC payee only”.

INSTRUMENT LOST: DUPLICATE ISSUED

If any of the above-mentioned instruments gets lost or

damaged, duplicate may be issued in its place.

The process is as follows

The issuing branches, after being notified by the purchaser of

the loss/damage, informs the responding branch and the Head

Office about the particulars of the lost instrument and request

them to stop payment of that instrument. Head office then

issues a circular to each branch for stopping payment of that

particular instrument. After the confirmation reaches the Head

office that no payment has been made for the lost instrument

by any of the branch, it gives permission to issue duplicate.

The purchaser has to pay duplicate issuing charge of 1k. 100/-

and sign an indemnity Bond, declaring that he/she will be liable

for any damage due to the lost instrument, on a Tk. 150/- non-

judicial stamp. Two witnesses also have to sign this document.

The Duplicate remains almost the same as the previous

instrument. For example, the controlling number of the

duplicate. D.D. remains the same though the printed serial on

the block is changed. The duplicate issued will be marked

“Duplicate issued in lieu of original D. D. No. Registers that are

maintained with the cash department are:

1. Cash Receive Register.

2. Cash Payment Register

3. Vault Register

4. Cash Balance Book.

After going through the registers, I saw how the bills of

Grameen Phone are received. There are three parts in a bill.

After receiving the money from the customer, the cash officer

transfers the bill receipt to the cash In-charge. The cash In-

charge then signs and endorses the bill. One part of the bill is

given to the customer; one part is kept to the bank and the

other part in sent to the Grameen Phone. Then I observed how

to make payment of cheque, the procedure is as such: at first

the customer presents his cheque to computer counter and the

computer operator then check the balance, send it to the Cash

In-charge for checking of specimen signature. Cancellation of

the cheque is necessary for the safety measure. If the amount

of the cheque is more than five thousand then two power of

Attorney (P.A) holder officers’ cancellation is required. After

passing, the cheque is sent to the cash counter for payment;

there the cash officer takes a signature on the reverse of the

cheque and then makes payment to the customer. At the time

of payment, the cash officer keeps the denomination of the

money paid to the customer. At the end of Banking hour

closing of cash is done. Different steps of cash closing are as

follows:

Finalization of the daily transaction in (a) Cash Receive

registers (b) Cash Payment register:

v’ Cash balancing.

v’ Preparation of the cash position.

(Writing in the Vault register according to the denomination of

note and maintaining the Vault Register.

Cash Receive: Cash in received for the following there ways:

1. Different types of Bills like T & T, Grameen Phone.

2. Receipts of different accounts like SB., CD. and STD etc. In

this case cash is received either in Pay in Slip or in Simple

Credit Voucher (Only for FDR, BCD and PSP).

3. Different type’s remittance like TT, DD, SDR and P0 etc are

received in their prescribed application form.

+ Cash Remittance Inward

In Simple Credit Voucher SCB General P.O and cash received

seal is put. This acts as the responding of IBCA sent by Head

office.

•• Lottery tickets are also sold by branch and thus the branch

also receives cash.

It can be done by two ways:

1. By the instruction of Head office, a new A/C can be opened

with the organization’s name and thus deposit in sale Proceeds

goes to the opened A/C.

2. By the instruction of Head Office, the sales proceeds can be

kept in Sundry creditor and after a certain time the total

amount will be transferred to Head Office where HO will later

send the commission amount by IBCA. Payment: Cash is paid

in the counter by the following three ways:

1. Cheque of different types.

2. Cash Debit Voucher and

3. Pay slip.

•. A different type of Bank’s expenses that is made to Bank’s

officials or staffs is made through cash debit voucher.

Bank’s expenses and other payments other than cheques

(such as NC is closed but the client is to be paid), which is paid

to outsiders, is made through pay slip.

Consumer Loans

Three channels usually source the loan proposal. These channels

are Share Distribution (Branches), Direct Sales and Priority Banking.

If the applicant seems to be eligible, the channel sources the

proposal and with complete documents forwards to Credit Unit

provided by the RM’s recommendation.

Assessment

CREDIT LINE PROPOSAL

In this step of the term loan, the branch sends a credit line proposal

to the head office for approval of term loan. The credit line proposal

contains the following particulars:

Fresh/renewal/revision of the term loan

Borrower’s name

Types of business

Capital structure

Particulars of previous transaction

Existing vis-à-vis proposed credit limits

Movement of the accounts

Liabilities of sister concerns

Particulars of proposed facilities, etc.

PROJECT APPRAISAL

It is the reinvestment analysis done by the banker before a project

he approved. Project appraisal in the banking sector needed for the

following reasons:

To justify the soundness of an investment

To endure repayment of bank finance

To achieve organizational goals

To recommend if the project is not designed properly

TECHNIQUES OF PROJECT APPRAISAL

An appraisal is a systematic exercise to establish that the proposed

project is a viable preposition. The appraising officer checks the

various details submitted by the promoter in first information sheet

credit application form, feasibility report.SCB [PO] consider the

following aspects in appraising.

A. Entrepreneur

Entrepreneur/promoter has to be creditworthy and competent

enough to run the proposed industry.

Preference given for educated/knowledgeable sponsors, who

know about their business concern, technical expertise and

expertise in the line of proposed industry.

Who have own land and building for running the project?

Have experience in working abroad.

Sponsors with innovative ideas

Sponsors must have net worth more then 2.5 times of the

equity required for investment in the project.

Who have good dealings with the bankers/out side parties and

has social contacts and standings.

Have an account in SCB

Sponsors requiring group findings may be given financial

assistance provided for each other etc.

B. Viability of the project

The project should be viable from organizational, technical,

commercial, financial and economic points of view.

a) Technical viability: it implies the assessment of various

requirements of actual production process. It involves a

critical study of following factors.

1. Location and site of the project: selection of the

optimum location, therefore, revolves around the joint

consideration and evaluation of the following factors:

Raw materials supplies

Transportation facilities

Power and fuel supply]

Water and supply of manpower

Nature and climate factor

2. Size of the project/plan:

Size of the project/plan depends on the area covered by

the project. It varies on project to project.

3. Technology, plant & equipment:

MAJOR PROBLEMS OF LRA IMPLEMENTATION:

Inadequate or inaccurate data proved by the applicants.

Unwilling to disclose information.

Lack of auditor’s performance.

Lack of experienced assessor.

Credit appraisal:

To assess the creditability of a borrower the bank must monitor the

following things of the applicants:

6Cs: Character, Capacity, Cash, Collateral, Conditions, Controls

3Rs: Reliability, Resource, Responsibility

Three questions that must be satisfactory answered in each credit

application:

1. Is the borrower creditworthy?

2. Can the credit agreement be properly structured and documented

so that the bank and its depositors are adequately protected?

3. Can the bank perfect its claim against the assets and earnings of

the customer, so that, in the event of default, bank can be

recovered?

HEAD OFFICE APPROVAL

Up on receipt of the credit line proposal from the branch the head office

appraises the project. If it seems to be viable one, the HO sends it to the

Head office credit committee (HOCC) for the approval of the loan. The

head office credit committee (HOCC) considers the proposal and tasks

decision whether to approve the loan or not. If the loan is approved by the

HOCC, the HO sends the approval to the concerned branch.

SANCTION LETTER

After getting the head, office approval the branch issues the sanction

letter to the borrower. A sanction letter consist the following particulars

amongst other details:

Name of borrower.

Facility allowed.

Purpose

Rate of interest

Margin

Period of the loan and mode of repayment.

Security

Other terms and conditions that is required.

The borrower received the latter and returns a copy of this letter duly

signed by the borrower as a token of having understood and acceptance

of the terms and conditions above.

DOCUMENT

If the borrower accepts the sanction letter, the documentation starts.

Documents is a written statement of fact evidencing certain transaction

covering the, legal aspects duly signed by the authorized persons having

the legal status. For the term loan, documents should be obtained:

Joint promissory note

Certificate copy of memorandum and articles of association.

Latter of agreement

Letter of disbursement

Latter of installment

Letter of continuity

Latter of revival

Letter of request

Latter of counter guarantee

Letter of lien

Letter of hypothecation

Letter of guarantee

Stock report

Thrust report

Documents relating to mortgage

OBTAINING CIB REPORT AND OTHER CONFIDENTIAL REPORT

FROM FINANCIAL INSTITUTIONS:

The CIB report and other credit report from financial institutions is

necessary to know about the borrowers, if he taken any loan facility

from any financial institutions and if he taken then what is condition

of previous transactions. It is helpful to judge the borrowers’ status.

It can be known through-

Confidential report from other bank

Credit information bureau report from Bangladesh bank

Personal investigation

MORTGAGE

What is mortgage? A mortgage is the transfer of an interest in specific

immovable property for the purpose of the payment of money advanced

or to the purpose of securing the payment of money advanced or to be

advanced by way of loan, existing or future debt or performance of an

engagement, which may give raise to pecuniary liability. The transferors

called a mortgagor and the transferee is called mortgagee. The principal

money and the interest of which payment is secured for the time being

are called the mortgage money and instrument (if any) by which the

transfer is effected is called the mortgage deed. The term immovable

property includes land, building and similar other assets.

The main characteristic of a mortgage is the mortgagor does not transfer

the ownership of the property to the mortgagee. He transfers only some of

his rights as an owner that means he cannot now sell the properly without

the consent of the mortgagee.

There are six types of mortgage, such as:

1. Simple mortgage

2. Mortgage by conditional sale

3. Unregistered mortgage

4. English MORTGAGE

5. Equitable mortgage

6. Registered mortgage

The SCB generally practiced the equitable mortgage and the register

(legal) mortgage in the branch.

EQITABLE MORTGAGE

In case of an equitable mortgage, the mortgagor deposits the title deeds

with the mortgagee with the intention of giving the mortgagee an

equitable interesting the property. It does not require the registration. It is

only for the reliable clients of the bank.

Procedure for equitable mortgage:

1. The mortgagor or his agent should deposit the title deeds relating

to the property with the bank at a notified place. In case the

advanced is made is made by a bank which is not situated at a

notified place, the title deeds may be deposited with the branch of

the properly at a notified place is not required.

2. The mortgagor is required to send a covering latter with the title

deeds acknowledging the deposit of title deeds with the intenation

to create an equitable mortgage there on to secure a specific debt

or debts.

3. The bank should accept documents only in original. Usually the

bank gets a list of documents from its lawyer, which the mortgagor

has to deposit with the bank.

4. The mortgagor has to furnish periodically an encumbrance

certificate declaring that no charge has been created against the

mortgaged property subsequent to the date of the mortgage.

5. Periodical tax receipts shall also be verified.

6. In case the mortgage happens to be a limited company, the

mortgage must be registered with in 30 days of execution of the

mortgage. The disadvantages for this mortgage are property

mortgaged can be realized, when required, only through the courts

orders. This is a time consuming as well as expensive process.

REGISTER MORTGAGE OR LEGAL MORTGAGE

In a mortgage, the mortgagor transfers to the mortgage the legal title

to the property. The sub registry office must register it. On repayment

of loan, the mortgage transfers the title to the mortgagor.

Procedure of a legal mortgage:

1. An instrument mortgaging the property is executed. it is signed

by the mortgagor and two witnesses.

2. The mortgage is complete as soon as the deed is registered but

it will be effective from the date of execution.

In case the instrument is not only duly attested and registered when

it is so required, the mortgage will be void.However,he may use the

instruments to establish personal convenient to pay.

DISBURSMENT

For the case of recover money by selling mortgage property.

For the case of recover liquid money

After verify all the documents the client disburses the loan to the

borrower by issuing a cheque book. A loan is repayment schedule also

prepared by the bank and given to the borrower.

FOLLOW-UP

After the disbursement of the loan, the bank follows the borrower in

the following manner:

Continuous supervision

Working capital

Stock report

Break even analysis

Rescheduling of repayment

RECOVERY

In general, the loans are repaid in installment. This installment is

according to bank directives. Some loans are repaid all at a time. If any

loan is not repaid then notices served to the customer. Sometimes legal

actions also taken for recover the loan.

LEGAL ACTIONS

If legal actions are need to take for recover the loan, the following

procedure is followed,

Money suit (No security) title suit

Decreed Decreed

Money execution Title execution

……..for the seize of ……….Case to sell

property

movable and immovable property ……….Advertisement for auction

sale

…….arrest on dewani court

(for30/60) days ………….Bidder

………….Sell at highest rate given

party

LOAN CLASSIFICATIONS AND PROVISIONING

The loan classification procedure for all type of loan is governed by the

guidelines contained in BCD circular by Bangladesh bank, in 1989 and a

subsequently revised partially through BRPD circular no.16,issued in

1989.according to this circular the loan are classified on the basis of the

following:

CLASSIFIED TERM LOAN

STATUS CC/OD MID-TERM LONG-

TERM

Unclassified Less then 6 Less then 6 months

Less then 11

months

months

Substandard 6 to 8 months 6 to 11 months

12 to 17 months Doubtful 9 to 11 months 12 to 17

months 18 to 23 months Bad and loss 12 and above

18 and above 24 and above

INTEREST CHARGE:

a) If any loan becomes classified like substandard [SS] and

doubtful[DF]the charged interest should be preserved in

interest suspense a/c

b) Bed debt/loss a/c cannot be charged interest but in order to

operate such or to mitigate the outstanding interest can be

shown on interest suspense a/c.

c) Only after the receiving the loan money the loan a/c can be

shown on interest suspense a/c can be adjusted.

PROVISION:

TYPES OF CLASSIFICATION RATE OF PROVISION

Unclassified 1%

Substandard 20%

Doubtful 50%

Bad/Loss 100%

CARD PRODUCTS

CREDIT CATDS

What is a Credit Card?

A credit Card is a piece of plastic used for purchasing goods &

service and for obtaining cash disbursements on credit terms.

It is an unsecured credit, i.e. credit without collateral of security.

Each cardholder is assigned a revolving credit limit by the issuing

financial institution. Cardholders can purchase goods/services up to

the credit limit and can re-use the credit facility upon repayment.

The cardholder is billed periodically (usually monthly) for

repayment of the credit extended. The transactions during the

period are summarized in the bill.

Credit Card allows partial payments for purchases, but charges

interest on the amount owed. Interest rates are traditionally higher

than those charged on consumer loans. Cardholders can pay

outstanding in full to avoid interest payments.

Credit card is a safer substitute to cash and is the major made of

payment worldwide.

HISTORY OF CARDIT CARD

The use of plastic money originated in the united states during the 1920s,

when individual companies, such as hotel chains and oil companies, began

issuing them to customers for purchases made at those business. This use

increased significantly after World War II. In 1951, Diners club issued the

first Charge Card to 200 customers who could use it at 27 restaurants in

New York. With this system, the Credit Card Company charged cardholders

an annual free and billed them on a monthly of yearly basis. Another

major charge card was established in 1958 as the American Express Card

by the American Express company.

Later in the late ’50, the Credit Card concept emerged where the Bank

credits the account of the merchant as sales slips are received and

assembles charges to be billed to the cardholder at the end of the billing

period. The cardholder, in turn, pays the bank either the entire balance or

in monthly installments with interest. The first Credit Card ‘Bank

Americard’ was issued by Bank of America in last 1958 in California, USA.

This system was licensed in other states starting in 1966 in California,

USA. This system was licensed in other states starting in 1966, and was

renamed as VISA in 1976. At the some time, three different groups of

banks that were not franchisees of Bank of America began activities that

would later merge to become today’s MasterCard International.

Both organizations originally set out signing up member banks to issue

cards, enroll merchants, and /or both. Competition was fierce. Banks that

offered one card could not handle the other, thus losing money. More

importantly, the merchants themselves were being forced to turn down

sales from customers who did no carry the same card the merchant

accepted.

In 1978 the Master Card International and VISA International organizations

agreed to a concept of duality, in other words, banks could honor and

issue Credit Cards.

KEY BENEFITS OF STANDARD CHARTERED CREDIT CARD

Wide Acceptance

Standard Chartered Bank (SCB) issues both VISA and MasterCard Credit

Cards, the two renowned Credit Card brands. Standard Chartered Taka

Credit cards are accepted at more than 4000 outlets across Bangladesh.

Cardholders can use their cards in Hotels, Restaurants, Airlines, Travel

Agents, Departmental Stores, Supermarkets, Hospitals & Diagnostic

Centers, Jewelry Shop, Electronic & Computer Shops, Mobile & Internet

Service outlets. Petrol pumps etc.

Easy Repayment

Facility

Standard Chartered Credit Cardholders have the flexibility to make

payment of as little as 5% of the outstanding balance and carry forward

the rest of the balance.

Supplementary Card

Standard Chartered Credit Cardholders can enjoy the convenience of

having supplementary cards for cardholders’ spouse, children over 10

years of age of family members of friends. The primary cardholder can set

a spending limit for the supplementary card which limits the maximum

amount that the supplementary cardholder can spend in one billing cycle.

Cash Advance Facility

SCB Credit Cardholders can get instant cash advance up to 50% of card

limit from of the SCB ATMs, thus having access to cash 24 hours a day.

Besides, from any of the SCB ATMs, thus having access to cash 24 hours a

day, besides,

All Accident insurance

Coverage

SCB Taka (both primary & supplementary) Credit Cardholders are

automatically enrolled into all accident insurance coverage. Silver

cardholder are insured for BDT 100, 00/- and Gold cardholders are

Covered for BDT 500,000.

Safety Net Insurance Scheme

This is a unique offer of SCB Credit Card. In case of death or ‘Total

Permanent Disability ((TPD)’ of the primary cardholder, the total

outstanding balance on the card in waived by the bank. All cardholders are

automatically enrolled into the program and are charged a nominal free of

0.35 on their monthly balance for availing this facility.

Insta Buys

This exclusive feature allows SCB Taka Credit Cardholders to enjoy

installment loan facility on their Credit Card at an interest rate of 16.95%

under this plan, Cardholders can transfer any purchase greater than BDT

5000/- into instalment loan and repay in Equal monthly installments

(EMI).cardholders have the flexibility to pay-off in 6,12,18,24,30, or 36

Monthly installments. Moreover, special promotions are run with specific

merchants where customers can Insta Buys Facility at 0% Interest.

Rewards Program

Under this plan SCB Taka cardholders are rewarded for using their cards at

merchant outlets. For every 50 Taka spent, cardholders earn 1 treasure

points can be redeemed at any time to against with variety of gifts offered

by Standard Chartered Bank.

Auto Bills

pay

This exclusive feature allows SCB Credit Cardholders to pay their Monthly

utility bills through Credit Card by a Standing instruction. Cardholders can

avail this facility to pay their monthly mobile phone bills of Grameen

Phone / AKTEL / City Cell / Banglalink or Internet bills of Agni / BOL / Access

Tel or Cable TV bill of Prisma Digital. Besides electricity bill of DESA /

DESCO can also be settled through this facility.

SMS Banking

Facility

This feature provides cardholders as easy 24-hour direct access to their

Credit Card balance information through their Grameen Phone Mobile,

Cardholders availing this service will also receive a monthly mini-

statement through SMS, absolutely free of charge.

E-Statements

This is a secure and prompt way to receive Credit Card’s monthly

statement through e-mail address instead of receiving a paper statement.

Cardholders can choose a maximum of 3-e-mail address for receiving their

statements. In case delivery failure (for any reason), paper statement will

be sent to the cardholder’s mailing address.

Procession of Credit Card Applications

Step

Applications submitted to any SCB branch or credit card sales

team are forwarded to the Credit Card operation (CCO) unit for

capturing data into card application processing system (CAPS).

This process usually takes one working day.

Step

Applications are then forwarded to the consumer credit unit

(CCU) for necessary credit assessment. After credit review, all

approved application specifying credit limits are sent back to

card Operations. The rejected applications are forwarded to

sales teams for review of comments.

Step

Approved applications received at CCO are sent for contact

point verification (CPV) by outsource agencies. The agency

verifies the telephone no. residence and business address of

the applicant and forwards a report on each applicant to CCO.

Step

After receiving all CPV report, CCO forwards the approved

applications along with CPV report to CCU for further review.

CCU revisits applications and any application with negative

CPV is declined. Previously set credit limit may be reviewed at

this point based on CPV report.

Step

After this final review from CCU, approved applications are

sent back to CCO for opening card accounts and producing

plastics and PINS. CCO sends a system generated intimation to

the applicants whose Credit Card applications are declined.

Step

CCO arranges to deliver the Card and PIN at customers mailing

address.

Common Reasons for declining a credit card

application

Incomplete documentation:

- Less than 3/6 months bank statements

- More than 2 months old bank statement

- Documents not duly authenticated

Financial capacity of the Customer:

- Debt Burden Ratio > 50%

- Poor delinquency History of any other loan account with

SCB

- Earnings not meeting minimum required income.

Others:

- Negative contact pint verification (CPV) report

- Non-availability of telephone (Off/Res.)

- Existing credit cardholders

Credit Card Statement

Cardholders are sent monthly bills/ statements detailing

transactions and outstanding on their Credit Card accounts

during the b9illing cycle.

• Cardholders have the option to choose paper statement or e-

statements, whichever they find convenient. All card accounts

are assigned a billing/ statement date at the time of accounts

opening. Customer accounts can have billing dates from 1st to

• 22nd of every month. Staff account’s statement date is 23rd

of every month.

• All Bank Charges like finance charges/ late fee/ over-limit fee

etc. are applied on the billing/ statement date.

• Payment due date mentioned on the statement is set as 15

days after the statement date.

• Current Balance on the statement is the total outstanding

balance of the account as of eh statement date.

• Minimum Amount due is calculated as 5% of Current Balance

of BDT 500 (local cards)/ USD 10 (International cards),

whichever is higher.

• Cardholders must pay the minimum due amount by the

payment due date to keep card account regular.

PART- C: CollectionCollection unit results:

Improve the effectiveness of my results by using proven collection

negotiation skill.

Contribute to the quality of each telephone call and provide a high

level of customer service to the customers.

Maintain productivity standards by understanding how to use proven

collection techniques.

o Main process:

Verify information.

Obtain Reasons For Delinquency-RFD.

Explain benefits to pay.

Get kept promise.

Account Documentation: Concise summary and abbreviated

notes.

A. Verify information

Mailing Address

day time and evening number

Mobile phone, relative etc

B. Obtain Reasons For Delinquency-RFD.

*Why is the account past due?

*What is the customers’ present financial situation?

* Is the customer and/ or spouse working?

*Explain benefits to pay-

…………according to the severity of the delinquency………………….

Delinquency Benefit= Avoiding a consequence.

1st Month …………………………………….

2nd Month ………………………………………..

3rd month ……………………………………….

C. Get kept promise.

*How much?

-Always being the negation requesting the total amount due.

*When?

-A specific date.

*How?

-payment at the branch

-money order

- Payment by mail.

*Where?

-at the branch

-ATM

*What are the sources of funds?

-cash on hand

-commission cheque

-bonus cheque

-relatives

-borrowing the money from a friend

-loan

-selling a possession

Questioning techniques:

Collection is a sales job. Some mission is to convince the customer to pay him the total

amount due today. Use motivation and persuasion to create urgency and to overcome

the customer’s objections. Questioning is a critical tool in the counseling process.

Questions are tools to-

A. Determine ability and willingness to pay.

B. Identify the customers’ needs and expectations.

1. If we are looking to-

a) Understand the customers’ position about the specific situation.

b) Confirm that the information provided was understood.

c) Verify an agreement

During the counseling process, we need to ask different types of questions to get

various results. Closed questions are used to verify specific information and can

only be answered with “No” or “Yes”.

-Did you receive your statement?

-Have you changed job?

-Do you have a pen to take down my number?

-Would you take a message?

-Is he at work?

2. If we are looking to –

a) Obtain information about customers’ current financial situation.

b) Understand alternatives to make short term payment arrangement.

c) What programs does the customer quality for?

d) Know which actions the customer is considering to resolve the situation. An

open-ended question seeks information and allows for a wide range of answers and

often requires a several sentence response or longer explanations. Some examples

are-

Why did you miss the payment?

How can you feel behind?

What obstacles prevent you from paying today?

When will you make the payment?

Where will you pay?

Where are you getting the money to pay?

Who is responsible for the account?

Who can take a message?

How often do you speak to him?

The use of open-ended questions will help eliminate faculty assumptions and bring

about more effective communications.

Collection Negotiation techniques

Approach and Attitudes

Characteristics of effective sales people

I. Good product knowledge

II. Understand where be wounds

III. Communication skills

IV. Negotiation skill

CHARACTERISTICS OF COLLECTORS

Effective collectors snare qualities:

1. Inquisitive(ask good question)-Effective collectors ask the right

questions to find out why customers aren’t paying and get the

information they need to obtain a firm promise to pay.

2. Good listeners-Effective collectors ask appropriate questions,

and listen to the answers so that they develop a payment

arrangement that is tailored to the customer’s situation.

3. Clear communicators- Effective collectors phrase their questions

and comments in ways that are readily understood and realize

that customers want clear communicators. They also have good

voice qualities-tone, volume, and rate.

4. Use Good judgment- Effective collectors know how to balance

being firm, air and friendly. They also know when to bring a call

to a conclusion (i.e. they don’t let a customer ramble on after a

promise to pay has been agreed upon), and they know when to

stress the urgency of paying immediately.

5. Knowledgeable-Effective collectors know how to follow the

negotiation sequence and which remedies to select to resolve

the account situation. They also know what they can and cannot

do within the policies of the bank, as well as legally.

6. Self-confident-Effective collectors ‘words communicate the

impression that they are in control. They are firm and fair.They

know how to do their jobs and are prepared to negotiate a

mutually satisfactory payment arrangement.

7. Motivated/Persistent-Effective collectors have lots of drive and

persistence to keep going, call after call and customer after. This

helps them achieve effectiveness, quality and productivity goals.

They measure their success by their results and strive to be the

best at what they do.

8. Positive attitude-Effective collectors react positively to objections

and resistance to making or keeping a promise. They are not

stopped by the first no or excuse that they encounter. When

customers start giving excuses for not paying, these collectors

go to work to overcome the objections to pay.

9. Persuasive-Effective collectors motivate customers to act on the

importance of honoring their commitments and maintaining a

good credit rating. They personalize their approach to the

customer and gain the customer’s commitment. That helps in

negotiating better payment arrangements.

10.Imaginative-Effective collectors are creative in tailoring solutions

to fit customers’ circumstances. They adapt readily to different

customer types and have lots of good techniques at their

fingertips.

An excellent collector needs to:

1. Consistently perform the basics-Excellent collectors are good at the

basics and put them into practice every day, on every account and

during every contact.

2. Use their time effectively-Excellent collectors don’t waste time.

They review account information and notes quickly and correctly so

they can get right to the point when talking to customers.

3. Adapt their approach to the customers- Excellent collectors realize

that people are different and react differently to collection situation.

When they try to educate and motivate, they tailor their approach

to the customer.

4. Adapt their strategy to the customer’s situation- Excellent collectors

realize that situations are different and call for different approaches

and remedies. Although they may have an initial strategy for

resolving a problem, they are flexible enough to change their

approach as they surface additional information during a call.

5. Obtain good promises to pay and firm commitments- Excellent

collectors can detect insincere agreements and ask the customer

enough questions to determine whether a particular solution is truly

workable.

6. Turn broken promises into kept promises- Excellent collectors know

how to identify the customer’s problem through effective

questioning and listening and then how to address it with the

customer.

7. Learn from past experience- Excellent collectors always assume

that they can do the various parts of their job better, and actively

look for ways to improve. They learn from their mistakes, as well as

their successes.

8. Team players- Excellent collectors share ideas and contribute

suggestions, help train other collectors and make recommendations

to improve the process.

Establish the importance and relationship of MONITORING,

MEASUREMENT AND MOTIVATION as fundamental tools for effective

supervision in a collection call center.

Define the need for call MONITORING and understand WHEN, WHY,

HOW, MUCH and HOW to monitor telephone collectors.

Learn COACHING and FEEDBACK techniques to improve the

performance of telephone collectors performing below job

standards and motivate high performers to perform at optimum

levels.

Define and develop consistent FORMATS and PROCEDURES to

review telephone collector’s performance.

THE 3 M’S OF COLLECTION MANAGEMENT

An effective supervisor should practice and become an expert on the 3 M’s

to meet business goals and objectives.

MONITORING

Permanent/Ongoing Call Monitoring-is one of the most important

responsibilities of collection supervision to reinforce effective

performance.

Call Monitoring is a very useful technique to evaluate and improve

collectors’ skill and is, undoubtedly, the foundation to structure productive

feedback in individual or group sessions.

The primary objectives of call monitoring in a collections operation are:

Identifying opportunities-for collectors to improve their

communication skills in order to get firm commitments to pay

from customers

Ensuring –that collectors are following company policies

Verifying compliance-with laws and regulations

Secondary objectives may include improving the quality of customer

service, identifying training needs, recognizing good performance, and

improving the relationship between supervisors and collectors.

MONITORING CATEGORIES

There are different ways to implement Monitoring. They are

complementary and using different combinations of techniques results in

an objective and precise evaluation of collectors’ performance.

When monitoring calls, a supervisor should evaluate certain

characteristics including:

Content .The content of the call is determined by listening to the

telephone conversation between the collector and the customer. A

supervisor observes the collector’s speaking and listening skills, the

duration of the call, how the collector identifies the situation, and

the way the collector makes decisions. A supervisor will distinguish

the type of call and analyze the collector’s ability to address the

situation quickly and appropriately.

Call Duration. Call duration may be impacted by how quickly

collectors can access system information. It is not unusual for a

collector to need to view at least three screens to handle a call: the

predictive-dialing interface screen which is the initial screen a

collector may view that displays basic account information, the

collection database which may include historical and financial

information and real-time payment information from host system,

for example. Collectors frequently spend a lot of time flipping

through screens to get information. This time can be greatly

reduced by using specialize tools such as workflow and customer-

relationship management software.

After-Call Work Time-A critical factor that infects productivity in a

predictive-dialing environment is after-call work time or update

time, the time a collector spends updating the customer’s record

with the call results. Experienced collectors usually update the

customer’s recode during the conversation. Best practices indicate

that in an early delinquency collection operation, optimum time

usage is at least 85% talking to customers and 15% or less updating

the record. To minimize after-call work time many collection

operations use abbreviations and codes to recode call results.

Performance Feedback. There is strong value in giving immediate

performance feedback to the collector about the handling of calls

monitored. Giving corrective feedback by positively coaching

collectors assists them in making immediate improvements.

Managing the call and controlling the Conversation

1. Puts the facts on the table

Explain the status of the account.

State the last activity on the account.

keep it in the present

Ask for the money.

2. Information Gathering

Use open- close questioning technique.

Extract information without jumping to conclusions.

Find out RFD.

Classifying the customers’ response to identify willingness

and ability to pay.

Develop the sales strategy.

3. Bridging

Listen

Get on the customers’ side.

Acknowledge.

Overcome the emotions.

Lead the customers back to the negotiation.

4 Tips for the managing angry customers’

Need to avoid charged words like-“Problem”. Instead use

more neutral language, such as –situation; occurrence,

etc.

Let the customer vent his or her frustrations and do not

interrupt.

If a customer use obscene language, advice him /her you

will disconnect the call if he or she continues.

Do not take what the customer says personally.

Chapter

Delinquency, Provisioning and Legal Action:

The level of delinquencies is determined based on the number of days loan

installment(s) is/ are missed by the customer.

SWOT ANALYSIS OF SCB

Strength:

1. Usage of poster PC banking software cards 400

2. Efficient administration

3. Fewer default loan in credit card

4. Co-operation with each other

5. Good banker- customer relationship

6. Strong Financial Position

7. Energetic as well as smart work force.

Weakness:

1. Shortage of Branches & ATM machine

2. Customer awareness

3. Shortage of men

4. Shortage of Merchant

Opportunity:

1. Huge fairness area credit card.

2. Growth of sales volume

3. introducing new facilities for credit

4. Introducing ATM & Branch in our rural area.

Threats:

1. Different classic services of other Banks.

2. Political unrest

3. Entrance of new private Bank.

CUSTOMER SATISFACTION: FROM THEORETICAL VIEW

Customer satisfaction is the extent to which a product or

service’s received performance matches a buyer’s

expectations. If the product or service’s performance falls short

of expectations, the buyer is dissatisfied or delighted.

Expectations are based on customers past buying experiences,

the opinion

friends and associates, and marketer and competitor

information and

promises Marketer must be careful to set the right level of

expectations

I they set expectations too low, they may satisfy those who

buy but fail to

tract enough buyers In contrast they raise expectations too

high,

iyers are likely to be disappointed can arise either from a

crease in product and service quality or from a increase in

customer

pectations. In either case, it presents an opportunity for

companies that

rn deliver superior customer value and satisfactions

Today’s most successful companies rising, expectations and

delivering

rformance to match. Such companies track their customer

expectations,

rceived company performance and customer satisfaction

Highly satisfied

istomers produce several benefits for the company Satisfied

customers

e less price sensitive, remain customers for a long period and

talk

vorably to others about the company and its products and

services

Although the customer-centered firm seeks to deliver high

customer satisfaction relative to its competitors, it does not

attempt to maximize customer satisfaction. A company an

always increase customer satisfaction by lowering its price

increasing its services, but it may result in lower profits. Thus,

the purpose of marketing is to generate customer value

profitably. This requires a very delicate balance, the marketer

must continue to generate more customer value and

satisfaction but not give away house.

Now, we have a very good idea regarding the importance of

customer satisfaction. So, it is also important for the company

to know about the satisfaction level of the customers. When

any problem is identified, it becomes easier to solve the

problem. In the next part of my paper I have focused on the

customer satisfaction factors of. That has been followed by my

primary research; a survey to find out the customer

satisfaction level of Credit Card.

Concluding Remarks

As a first generation private bank, Standard Chartered Bank has come a

long way to reach its present stature. In addition, we are proud to be a

part of this pioneer of private sector banking. However; every organization

has its brighter side as well as a few difficult ones. In order to minimize the

difficulties, we should be careful in reshaping our venture and efforts to

obtain the goal.

The meaning of Service for the banking sector is constantly being

reshaped. Most international banks and some local private banks have

already introduced all-time-case-line, telephone banking, and On-line

banking in their service fleet. Therefore; we also should try to revitalize

the quality and quantity of service. We must say, the initiative taken to

introduce the Various Cards Issued by SCB combining A.T.M. Card, Credit

Card, Debit Card and Utility Bills payment Card all in a single card is a

great step on part of the Bank to improve its customer service. In this way,

we should reshape our products and introduce innovative ones in such a

competitive market composition in which we stand.

Since the prime concern of a bank is to impress its client not only through

financial service but also through a cordial environment, our attention

should always be focused on this subject. The Bank has decorated it

officers beautifully, but in the present decor, the shortage of sitting

arrangement for clients remains a conspicuous weakness, despite the very

cordial and efficient service offered by the employees.

While our experience will serve as the pre-amble for future success, we

should also try to gain a perfect and dynamic vision for the future, since

an imperfect past can make the future tense. In addition, we are the ones

to make the tension-free and bright future-a future that must necessarily

be better than today.

Thank you all for your patient perusal.

WORKS CITED

1. ZEITHAML, VALARIE, BITNER, MARY.

“SERVICE MARKETING MACRAW-HILL, 1996

2. www.stardandchartered.com Standard Chartered web site.

3. “Credit Card Procedure Manual.

4. RESEARCH MEIHODOLOGY METHODS & TECHNI QUES”

- BY CR KOTHART.

5. “METHODOLOGY OF RESEARCH IN SOCIAL SCENCE”

-BY DR. O. R. KRISHNAWAMY