Chapter one

Introductory

1

Introduction:

Standard Chartered Bank (SCB), Bangladesh (the bank) commenced its banking operations

in Bangladesh in 1948 after obtaining banking license from the central bank. Standard

Chartered Bank is incorporated in England by Royal Charter 1853, to be read in

conjunction with Standard Chartered Bank Act 1984. The liability of its stockholder is

limited.

As per the asset purchase agreement (APA), between Standard Chartered Bank England

and Standard Chartered Grindlays Bank (SCGB) Australia dated 23 December 2002,

which has been duly approved by Bangladesh Bank, SCB took over all assets and

liabilities of SCGB and commenced operations as a combined legal entity with effect from

1 January 2003.

The principal activity of SCB Bangladesh is to provide a comprehensive Range of

financial service, commercial banking tae services, cash management treasury and security

and custody service

Origin of the report:

This report titled “Standard Chartered Bank’s Credit Management & its Different

Aspects” is a thesis paper, which is the integral part of MBA program.

Scope of the Study:

The scope of the report is limited at drawing descriptive and analytical rather than critical

presentation of SCB. The whole analysis reflects only from Bangladesh point of view.

2

Objective of the report:

# To familiarize with the techniques of selecting the borrowers, credit

investigation, pre- sanction analysis of different types Advances and various operational

procedures.

# To acquaint with the technique of identification and rehabilitation of non-

performing Loans.

# To acquaint with the techniques of loan structuring and pricing.

# To develop knowledge about the mechanism of credit planing in the context of

Bank’s credit management.

# To know what extra facilities it’s providing to local customers as a foreign bank.

# Application of theoretical knowledge in the practical field.

Research Methodology:

Some fundamental steps of research methodology have been adopted through my

specialization field of study of MBA program and also from the fields of other areas. In my

study I had to go for personal interaction with the organizational people of Standard

Chartered Bank, Dhanmondi Road –2 Branch to conduct the research work.

Sources of information:

Both primary and secondary sources of information were being pursued with regards to

the presentations of this study. The following procedure and sources I accessed:

# Web page of SCB

# Prior researches report on this topic.

#Face to face interaction with PFC, Cash officers and Branch sales executive (BSE) to

get depth information.

#Annual reports of SCB

3

# Significant amount of information was gathered from secondary sources, such as

bank’s brochures, relevant different printed formats, eBBS statements, Outserves

Newsletter.

Limitation of the study:

I have tried my best to provide with all necessary information about SCB supplied by PFC

STM and BSE. But due to exhaustive nature of this study most secret & strategic ethics

could not be brought in this report. As having the status of the empirical study, this report

is subject to following limitations:

1. SCB is fully a centralized bank and all information is available in head office.

Branch gets information when special request is made. Branch employees only can know

the information that’s available in eBBS systems

2. Some of the data are self-generated by ratio analysis, so it was difficult to draw

inference.

3. A worthwhile study requires the analysis of as much data as possible covering

various aspects of the study. But I did not have access to the various types of information

about Loans & advances.

4. To protect the organizational loss in regard of maintaining confidentiality some parts

of the report are not in depth

5. I carried out such a study for the first time. So, in-experience is one of the main

factors that constituted the limitation of the study.

4

Chapter Two

Snapshot of

Standard chartered Bank

5

Standard Chartered Bank started its’ business in Bangladesh in 1948, opening its first

branch in the port city of Chittagong. The bank increasingly invested in manpower,

technology and premises as its business grew in relation to the country's thriving economy.

At present the bank has 18 offices in Dhaka, Chittagong, Sylhet, Khulna, Bogra and

Narayanganj including the country's only offshore banking unit inside the Dhaka Export

Processing Zone at Savar. It also has several ATM booths and newly opened Auto Billspay

services. Extensive knowledge of the market and essential expertise in a wide range of

financial services indicate its’ strength to build business opportunities for corporate and

institutional clients at home and abroad. It generates new products and services to match

the specific requirements of customers. In Bangladesh Standard Chartered offers 24-hour

service through its Moneylink ATMs. Continuous upgrading of technology (especially in

IT sector) and control systems has enabled the bank to offer new services, which include

unique ATMs, Call Centre and Auto Billspay service.

Standard Chartered Bank’s services in Bangladesh, ranges from Personal & Corporate

Banking to Institutional Banking, Treasury and Custodial services. With over 150 years of

experience in trade finance and an extensive international branch network, Standard

Chartered is committed to help customers succeed in every competitive environment. SCB

applies state-of-the-art technology to automate daily operations and electronic delivery

system has been put in place to ensure that transactions are handled swiftly and efficiently.

It adopts a proactive approach in tailoring customized packages to meet customers' ever-

changing needs.

2/A Year wise progression of the Standard Chartered Bank

1853

Set up by James Wilson in 1853, at the request of Queen Victoria, the Standard Chartered

Bank aimed to finance and manage trade between the British Empire and its colonies in

6

India, Australia and China. It mainly operates in Asia-Pacific, Latin America, the Middle

East and Africa. In all, it has 500 branches in 56 countries.

1858

The overseas branch of the Chartered Bank open in Calcutta, Bombay and Shanghai

followed by Hong Kong and Singapore in 1859.

1862

The Standard Bank is incorporated in England and under the new title of The Standard

Bank of British South Africa Limited.

1957

The Chartered Bank and The Standard Bank incorporated as Standard and Chartered

Banking Group Limited.

1969

Merger of The Standard Bank and The Chartered Bank by the incorporation of Standard

and Chartered Banking Group Limited.

1973

Standard Chartered acquires the Hodge Group, whose operating company later becomes

Chartered Trust Limited.

1985

Parent company of the group renames Standard Chartered PLC. Standard Chartered Bank

becomes a clearing bank within the UK clearing system.

1993

Receive the very first ‘Best Bank in Asia’ awards from Euromoney magazine.

7

2000

On 27 April, ANZ announced the sale of its Grindlays businesses in the Middle East and

South Asia, and associated Grindlays Private Banking business, to Standard Chartered

PLC. ANZ announces US$8 million strategic investment in Hong Kong, online

stockbroker, BOOM.com. ANZ announces sales of Grindlays to Standard chartered for

US$1.3 (A$2.2) billion in cash.

2004

Number of shares 1,174,520,020. Number of employees (31/12/2003) 30,000. It has 500

branches in 56 countries. At present the bank has 18 offices in Bangladesh.

2/B Global Market

Standard Chartered Bank has its’ wide variety of products and services are available the

following countries:

Africa Tanzania, Ghana, Zimbabwe, Gambia, Morocco, Tunisia,

Mauritius, Zambia, Nigeria, Ivory Coast, Kenya, Uganda,

Botswana, Malawi, Seychelles, Mozambique, Ethiopia

Latin

AmericaArgentina, Brazil, Chile, Colombia, Mexico, Venezuela, Peru

Middle East Egypt, Lebanon, Oman, Bahrain, Jordan, Qatar, Kuwait, Saudi

Arabia, UAE

Asia India, Korea, China, Taiwan, Philippines, Bangladesh, Cambodia,

8

Pakistan, Sri Lanka, Vietnam, Myanmar, Fiji

Europe Czech Republic, Malta, Turkey, Cyprus, Poland

9

Chapter Three

I did the following jobs in SCB under consumer Banking:

10

3/A. Account opening:

3/A-1: Personal account: This account is eligible for individual for savings,

transaction, investment, loans repayment, payroll purpose. It comprises of savings,

current, access,

Foreign currency account (FC), Resident foreign currency accounts (RFCD).

Requirement for personal account: current, savings and access (single)

1.AOF: Properly fills up the account opening form (AOF)

2 .introduction: Duly introduced by an existing accounting holder having

satisfactorily relationship with Standard Chartered Bank for at least six months

Photograph; one copy of account holder photo graph duly signed by introducer

3.Nominee: signature of nominee on the AOF with fill up the given portion

also with a photo duly attested by applicant.

4.Documents: valid passport/ driving license/, voter ID card,/ Holopnama

from Notary public with photo signed by authority(affidavit is not acceptable),

organizational photo ID.(commissioner certificate, certificate from Gazetted officer is not

acceptable )

NB. Any kind of over writing must be signed by applicant in AOF

Name, father’s name, mother’s name, date of birth, address, have to match with

supplied documents. Transaction profile is one of the integral parts of all account opening.

3/A-2 : Sole proprietor, trust, partnership, NGOs:

Requirement: Fill up AOF with sole proprietorship declaration

Trade license

Tin certificate

Passport of proprietor/ main signatory

One copy of photo graph. In addition to that

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Partnership deed in case of partnership

Passport of all partner

KYC (form -2) required for all partner

3/A-3: Foreign currency account (FC):

Usually it is introduce for the person of wage earners out side Bangladesh. It is also a

foreign currency account. In addition to the normal requirement job contact letter, copy of

utility bill to verify address if applicant write down foreign address are also necessary .Any

Bangladeshi nationals who receive salary in non local currency s/he also can open this

account. Requirement is almost same

3/A-4: Resident foreign currency account (RFCD):

This is a foreign currency account, usually dollar / GBP/Euro account. A person

needs to visit outside Bangladesh and can open this account within 30 days of arrival. To

get an international credit card it is mandatory. This account opening needs approval from

head office. This account holders does not get any chequebook or ATM card, they only

deposit and withdraw foreign currency over the counter showing passport. Minimum

amount is $1000 or 500 pound. Code of this account is 01

Requirements:

Fill up of AOF

Passport copy with arrival date

Approval from head office

RFCD declaration

3/B: Statement and certificate preparation:

Statement is send to the correspondence address o f account holder according to

instruction. Some time they need statement on urgent basic for visa purpose. At that time

we receive a request in a prescribed form with verifying signature .we deliver it in the next

working day. We charge 200 and 15% vat for statements for last one year over the counter.

12

If he requires more than one-year statement then we send to account service and it takes 3

days to delivery. Certificate is a complicated one. It is normally for tax purpose. We give

certificate concerning interest receive and tax deducted at sources on the account. We give

certificate-seeing account existing information or taking documents from customer. It is

charged from his account. We don’t mention the word “Solvent”. It is completely

restricted. We may add another statements according to customer instruction after safe

guarding us.

NB: no statement or certificate would be delivered If minimum balance of the account

below 230

3/C: ATM card services:

Every ATM has expire date. It required replacing. I received the request of ATM

with prior one and send it to account service. Customer collects I after 3 working days.

ATM replacement / new issue charge is 345(300+ vat)

3 /D: Account services:

3/D-1: Address change: customers some time want to change mailing and permanent

address. They fill up a form and give supporting documents for his address (in case of

permanent address change). Supporting documents may be DESA, WASA, PHONE bill

copy etc This is free of cost.

3/D-2: Signatory change (delegation of authority): some time customer wants to add new

one as joint signatory. Customer fills up a form and a signatory card where new applicant

signature duly attested by him/ her. A copy of passport or voter ID or driving license is

required for new applicant

3/D-3: signature change: if customer want to change signature he have to provide his

any valid document (required for account opening) and a copy of photograph with form.

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3/E: Account closing:

Customers have to surrender his chequebook and ATM card at the time of closing.

Closing charge is 575+ excise duty (it is applicable if customer has more than 100000 bal.

in last 6 month) + any DR balance.

3/F: Purchasing of Sanchaypatray

Bank purchase Sanchaypatray only on behalf of account holder:

3/F-1: 5 years Sanchaypatray:

Requirement: Filling up the prescribed form.

Check the balance whether available or not.

Match the signature and verify it.

Prepare KYC and PFC sign

Finally BSSM approval for send

3/F-2: 3monthly interest bearing Sanchaypatray

Requirement: Same as 5 years Sanchaypatray:

3/F- 3 :pensioner Sanchaypatray:

Requirement: 1. Retirement certificate from department

Original copy o pension book

Original copy of pension certificate

Original copy of gratuity certificate

Filling up purchase form

NB: A person cannot purchase Sanchaypatray beyond the total amount he /she receive at

the time of retirement.

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3/F-4 : Wage earners bond (USD):

Bank purchases wage earners development bonds (WEDB) on behalf of customers.

Customers who have foreign currency account can purchase the bond. The rate of interest

is 12.5%.

3/G. Locker service:

3/G-1: Locker opening:

Bank provides safety locker service to it s customers. Any account holder can take it.

Account holder need to fill up a form with specimen signatory card. Signatory may not be

more than three. In the form locker holder must mention the account number from where

locker charge will be debited. After clarify all things we allocate the applicant a locker and

give him a key.

Type Annual charge Size

Small 3000 4.5x 7x23.5

Medium 4200 4.5x14x23.5

Large 5400 7x14x23.5

3/G-2: Locker visiting:

Locker holder can visit any time within 9 am to 5 p.m. from Saturday to Wednesday.

But in Thursday visiting time is 9 am to 2 p.m. customer would sign the visiting record

and locker custodian will verify it.

3/G-3: Locker charge:

Locker holder is charged BDT 115 for per visit within office hours (e.g.: 9 am to 3 p.m.

from Saturday to Wednesday. Thursday 9 a.m. to 1 p.m.) No charge within the time 3p.m

to 5 p.m. and 1pm to 2 p.m. customers are not allowed to visit if his account balance is

sufficient to deduct charges (yearly & per visit charge).

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3 / G- 4: Locker closing:

If any one wants to surrender the locker, s/he needs to surrender the locker key and visit

the locker finally with custodian. We keep the key in the volt and re allocates it.

3 /H Call center:

Recently bank inaugurates a center from where customer can know all the account related

& credit card information. He /she need to fill up a call center form and s/he will given a

password (TIN). This password is his identity to give information. Call center facilities are:

--- Information on account balance

--- Information of the last 5 transactions

---Request a chequebook

--- Request a bank statement

--- Receive information on foreign currency exchange rate.

--- Talk to a phone Banker regarding:

Information regarding other products & services of standard chartered Bank.

Changing of account address

Information on remittance

Informing bank about lost or captured ATM card

Stop cheque instruction

Receive instruction from customer to prepare pay order / demand draft to be

collected at the branch.

Other account opening assistance

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3 /I: Receive & delivery of UDC/PDC:

When the customers close his loan his UDC/PDC (previously given by him) come

back to branches. We give entry in a registrar and locked it in a box. When customers

come to receive it, we receive a acknowledgement from him and give him UDC/PDC after

verify signature.

3 /J: Welcome packs stock maintaining :

Welcome pack contains an ATM card and the chequebook. It is given at the time of

account opening if customer want. We request around 30 welcome pack of current, savings

and access account to account service according to muster number in a printed form. We

receive welcome and our BSSM acknowledge it. We store these in volt. Every morning we

bring out 5 welcome of each type. At the end of the day we balance the welcome in a

prescribed form and return it to volt after signing the balance by cash manager and BSSM.

3 /K: Customers Queries:

Over the counter I respond to customer queries. Common quires was account

balance, money arrival, account opening, account closing, ATM replacement, chequebook

stop, ATM stop, loan closing,

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Time Study:

TYPES TIME

Average service time :

Minimum

Maximum

1.72 minutes

1.45 minutes

2.04 minutes

Average waiting time:

Minimum

Maximum

9.79 minutes

7.21 minutes

11.43 minutes

Average no: of customer serve 792

I observe that around 12-15 minutes requires serving a loan customer. At that time PFC

can not concentrate to others. Because customer want to know different loan interest,

installment tenor process of sanction etc. some customer wait to talk the specific PFC. at

that time he \she booked chairs that’s makes other standing. More over a normal customer

with general queries can solve the problem through call centre

Motion Study:

The layout of the bank can be changed to serve the customers in the best way. Customers

sometimes found roaming here and there in the bank because they do not have the proper

instruction as to where he/she shall be served and how he /she will be served. That is why a

lot of time spends for a single customer by this time 2 or 3 customers could be served. So

each and every employee of the bank should know their assigned task as well as they

should know the overall banking solution so that they can serve / assist the customer in the

spot. But the employee should bear in mind that he/she have to do his assigned job first.

Figure shows quick customer service at the right way possible.

18

Chapter-Four

A Dianosis of Loans & Advances

19

4/A- Detailed Analysis of Loans & Advances:

Year

Loans and

Advances:

2003 2002

Secured overdraft 7,275,547,592 6,401,067,569

Staff loan 435,726,837 139,845,463

Term loan 25,962,399,760 18,390,689,558

Loan against import 4,286,335,045 3,578,856,917

Bills discount and

purchased

1,279,391,954 1,017,490,489

Total 39,239,421,188 29,527,949,996

4/B --Maturity grouping of loans and advances:

Types 2003 2002

Payable on demand 8,215,659,067 7,009,991,483

Less than three month 7777,372,125 6,826,460,386

More than three months but less

than 1 year

8,336,397,248 5,127,079,139

More than 1 year but less than

5years

11,934,791,868 9,163,694,782

20

More than 5 year 1,695,808,926 383,233,717

Total 37,960,029,234 28,510,459,507

4/C --Loans advances – insides and outside Bangladesh:

Types 2003 2002

Inside Bangladesh 37,960,029 28,510,459

Outside Bangladesh ---- ----

Total 37,960,029 28,510,459

4/D --Loans and advances on the basis of significant concentration:

Loans and advanced to the Chief Executive and

Other executives (head)

154,731,492 62,065,384

4/E --Total number of customers having credit facilities of more than 15% of the bank’s

capitals was 10 and outstanding amount was TK 5,780,603,378 as at 31December

2003.This does not include any adversely classified loans.

4/F---- Particulars of loans and advance:

Description 2003 2002

Debt considered good in respect of which the

Bank is fully secured

33,454,674,187 9,070,633,415

Debt considered good for which the Bank

holds on other security than the debtor’s

personal security

5,784,747,874 2,023,594,167

21

Debts considered good and secured by the personal security of one or more parties in

addition to the personal security of the debts.

Debts considered doubtful or bad ,not provided for

Debts taken by directors or executives or any of them taken jointly or separately with other

persons.

Debts due by directors or officer of the bank or any of them either severally or jointly with

any other person and debts due by companies or firms in which the directors ,partners or

managing agent or in the case of private companies are members

Maximum total amount of advance, including temporary advances made at any time during

the period to directors of the Bank are interested as directors, partners or managing agents

or, in case of private companies, as a members.

Due from other banking companies

Loans against which legal action/

proceedings are taken to recover

433045008 645687000

. Loans written off during the year 349,441,104 2,532,430

4/G--Bill discounted and purchased:

1. Inside and out side Bangladesh: 2003 2002

Inside Bangladesh 1,216,799,408 1,001,080,038

Outside Bangladesh 62,592,546 16,410,451

Total 1,279,391,954 1,017,490,489

2. Maturity wise

Less than 1 month 158,840,555 124,305,701

More than 1month less than 3 months 402,909,645 315,309,688

More than 3 months less than 6 months 717,641,754 577,875,100

More than 6 month

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Total 1,279,391,954 1,017,490,489

4/H--Geographical location wise loans and advance (including –bill discounted and

purchased)

Year

Area

2003 2000

Dhaka Area 29,410,873,884 22,330,834,765

Chittagong Area 9,009,268,445 6,891,283,292

Narayongonj 264,377,696

Sylhet 400,991,682 305,831,939

Bogra 37,841,289

Total 39,239,421,188 29,527,949,996

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4/I --Unclassified, classified, doubtful and bad loans and advances:

(Including bill discounted and purchased)

Year

classification

2003 2002

Unclassified 38,158,891,188 28,982,354,996

Substandard 119,322,000 22,339,000

Doubtful 222,794,000 1,764,000

Bad\ loss 738,414,000 521,492,000

Total 39,239,421,188 29,527,949,996

A graphical presentation of classification of Loan:

24

Latest Loan information as at 30 June 2004 (according to types of Loans)

Amount in Thousand

Types of Loan Received Approved Target

Personal 659,417 362,897 462,475

Flexi 1,826,599 652,354 1,053,605

Auto 849,034 495,485 486,004

BIL 3,,321,975 92,225 882,403

BFS Over Draft 183706 158706

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Cash Line 1074679 141205

Credit Card 15771 10397 11568

Sectors-wise classification of loans and advances (including bill discounted and purchased)

Year

Sectors

2003 2002

Personal Mortgage 360,899,142 108,442,138

Personal 15,994,053,896 11,775,723,755

Agriculture, hunting,

forestry and fishing

779,586,000 291,702,390

Manufacturing 14,024,558,169 11,513,181,156

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Electricity, gas and water 1,802,268,000 1411316861

Construction 91,061,000 116994871

Real estate 1,315,000 89,653

Commerce 1,659,994,000 1,278,956,664

Transport &communication 1,587,901,000 822,745,404

Community ,social and

personal services

916,218,000 615,885,342

Financing ,insurance and

business services

1,284,378,000 920,476,311

Banks 737,188,981 672,435,451

Total 39,239,421,188 29,527,949,996

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Standard chartered bank

28

Bangladesh branches

Financial highlights

As at 31st December 2003

St Particulars 2003 2002

1 capital- fund deposit with

Bangladesh bank

845900504 830519447

2 total capital including retained

earnings

4957008961 4174076000

3 Surplus/ shortage of capital 2439732001 2330177000

4 Total of assets 57376039295 51934162827

5 total deposit 45467743899 39692634989

6 total loans and advances 39239421188 34507799291

7 Total contingent liabilities 43031852153 40796872573

8 Profit after tax and provision 1953674738 1142571767

9 Amount of loans classified during

the year

487554147 42445794

10 Amount of provision against

classified loans

(4637999) 446641770

11 Provision surplus/ shortage 157878000 239531000

12 Interest expenses 1801679531 1507916632

Non interest bearing assets 5608423823 8771011849

13 interest bearing assets 51767615472 43163150978

Standard chartered bank Bangladesh

Interest rate matrix (effective-01 may 2004)

29

A. deposit rates

1. current account(LCY & FCY):

minimum balance required BDT 50000 or equivalent

interest rate no interest is paid

2. savings account (LCY)

Minimum balance required BDT 100000

monthly average balance Interest rate

Below BDT 100000 0.00%

BDT 100000 up to BDT 500000 4.00%

BDT 500000 up to BDT 1000000 4.25%

BDT 1000000 and above 4.25%

Note: other condition apply (e.g. maximum number/ amount withdrawal)

3.super saving account (LCY- ) client relationship

Account balance Interest rate

Operating saving account(OSA) Up to BDT250000 0.00%

Above BDT 250000 3.50%

I f balance falls below 250000 on any day during a month, interest will be forfeited for

that full month

Account Monthly average balance Interest rate

Investment savings

account(ISA)

Up to BDT 5 million 5.00%

Above BDT 5 million to

BDT 10 million

5.50%

Above BDT 10 million to

BDT 15 million

6.00%

30

Above BDT 15 million to

BDT 20 million

6.25%

Above BDT 20 million 6.75%

4. Resident foreign currency deposit account (RFCD)

Minimum balance required –USD 1000 or GBP 500 or equivalent. No interest to be

accrued if the balance falls below the minimum amount.

Interest rate – based on international market rate and Bangladesh bank guidelines – to be

advised by global market to all branches from time to time.

5. STD Account- consumer banking:

Minimum balance required BDT 250000. if the balance falls below 250000, no interest

will be accrued interest rate 3.00% to 5.00%

.6. STD Account- client relationship

Minimum balance required BDT 250000. If the balance falls below 250000, no interest

will be accrued

Interest rate 3.00% to 7.50%

7. fixed deposit (LCY) - consumer banking:

Minimum amount required: BDT 100000

tenor BDT 2m& below Above 2 m & up to

BDT 10 M

Above BDT10m

1 month 5.00% 5.50% 5.5%

3 month 6.00% 6.2% 6.3%

6 month 6.4% 6.5% 6.75%

1 year 6.5% 6.75 7.00%

31

Chapter Five

Details of Loans & Advances

Cash Line

32

Cash Line is a fully secured lending facility. It is intended to meet the emergency cash needs of the customer. The customer’s money is tied-up in investments but he needs cash now. Rather than pulling out his investment, he can take a Cash Line and meet his immediate need.

To this end, there are 2 basic types of Cash Line: a) Overdraft b) Fixed Loan

Meaning of fully cash-secured

Fully cash secured means that customers can get this facility by pledging/ liening a security that is either cash or can be very easily converted to cash. The amount of the loan is at best, can be equal to the value of the security.

securities that can be “easily converted to cash”

The securities that SCB considers can be easily encased are Government issued security bonds, ICB units, Fixed Deposit Accounts of SCB.

How much cash security is required to get this Loan?

Since this is a fully cash secured facility, security is more that the loan amounts. Generally, 80% to 90% of the security present value is approved as loan. Loan amount determined by the present value of the security, not face value.

Meaning & differences of present value & face value

Face value means the amount of money that none would get if he en cashed the security today. Sometimes, present value of a security is more than the face value because of interest that has accrued on that security.

The difference between the two is that, present value is always higher that the face value of the security. Present value contains interest receivable amount, if any. The calculation for cash line loan amount is determined by present value

LTV Ratio

LTV means Loan-to-Value. Value. Other words the ratio between the loan amount and the value of the security deposited. The value here is the present value. Generally, LTV ratio is

33

in the range of. 8 to. 9 or 80% to 90% of the present value of security. Rarely, LTV ratio of more than 90% is given as loan. For that, Head of Credit & Collections and Head of Consumer Banking’s approval is required.

LTV ratios for various forms of Security

No, not all types of security will get the customer a loan amount that is 90% of their security’s present value. Listed below are the different maximum LTV ratios for different types of security: Up to 90% of the face value of Fixed Deposits of our Bank Up to 90% of the encasement value of Government Savings Certificates issued by our

Bank. Up to 80% of the encasement value of Investment Corporation of Bangladesh (ICB)

Unit certificates. Up to 80% of the encasement value of Government Savings Certificates issued by

other Bank. The issuing branch must be in a city where SCB has a branch.Deposits of transaction A/c like STD A/c, Savings A/c, Current A/c, even if it is with SCB are not accepted as security by CCU.

Overdraft in CASHLINE?

Cash Line Overdraft is an overdraft facility. The limit of the facility is 90% of the security value pledged to SCB.

Fixed Loan in Cash Line?

Cash Line Fixed Loan is an installment loan payable in either monthly or quarterly installments.

The amount that the customer has top pay each month is called EMI-Equated Monthly Installments.

who can get Cash Line

Both Salaried executives and self-employed/businessmen can get Cash Line.

purposes for which customers can get Cash Line

Customer’s can get Cash Line for any of the following reasons:

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House renovations Purchase of Personal ComputersMarriages in the family Purchase of refrigeratorsAdvance rental payments Purchase of furnitureTrips abroadOffice renovationsHospitalization or other emergency medical needsHigher professional or tertiary education/ professional trainingPurchase of office equipment/ accessoriesPurchase of miscellaneous household appliances

Note: Cash line can be taken for reasons that are not mentioned above, as long as it is not an illegal activity.

Minimum and Maximum Loan available under Cash Line

Minimum Loan Amount: Tk.80, 000Maximum Loan Amount: TK.5, 000,000

interest rates in Cash line?

Overdrafts 13% Interest Rate PA Installment loans 11% Interest Rate PA Builet Payment loans 11% Interest Rate PA

Bullet Payment Loan?

Bullet Payment Loan is a fixed loan to be repaid at the end of the loan period. The difference is that customers can pay their interest installments quarterly rather that monthly. Customers also have the option of paying down the principle amount any time they feel like.

Minimum and Maximum Tenors of Cash Line

Minimum Loan Tenor: 12 monthsMaximum Loan Tenor: 60 monthsFor Cash Line OD, the facility has to be renewed annually.

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Procedure of Loan disbursement

The loan will be disbursed by crediting the account of the client. The customer mentions the account where the loan will disburse or the account that an overdraft limit will be attached to. If the applicant does not have an account with us an account is opened with “zero balance” for the loan purpose.

Fees & charges of Cash Line

Processing Fee: 1% of approved loan amount or BDT 2000, whichever is higher. Other Charges: BDT 1000 for overdraft renewal charge at annual interval. Early settlement Fee: BDT 1000 Principal reduction fee for bullet Payments: BDT 500 every time

Third Party SecurityThird Party security is security in a person’s name that is not the applicant. Third party securities are acceptable to the bank.

Formalities in case of 3-rd party security

Third party’ s signature against the specimen attached to the original instrument is to verified

Third party instrument to be sent to the issuing office for verification and written confirmation on lien marking and encashment of instrument.

Third party’ s confirmation to be obtained with regard to lien marking and authority for encashment of securities.

Loans repayment procedure

Cash line Fixed Loan: EMI & Bullet PaymentsCustomers will repay the loan by Monthly Installments for Cash Line Fixed Loan. For Bullet Payment arrangements, customers a/c holders and SCB non-a/c holders.

Customers with A/c with SCB: They can put a standing order in their a/c that will automatically take the EMI every month. The benefit of Standing order is, that it can be set for any date of the month.

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Customers with no prior A/c with SCB: They can give Post Dated Cheques (PDC)s for the entire loan tenure. The PDC s will be dated 1st, 8th 15th or 26th of each month Customer will have to choose one date among the four for all ODC s

How will the Customers repay the Loans?

Cash Line OD:Cash Line OD is a utilization-based product. Interest is based on utilization.Interest is charged daily on the utilization. At the end of the quarter the accred interest will “hit” the collection account. Since all Cash Line OD customers are SCB account holders, a standing order will be in place on the transaction a/c, which will automatically transfer the interest amount to collection account.

penalties for missing an installment

The penalty for missing an installment is that an additional 24% penal interest will be charged on the outstanding amount. This interest will be charged daily on the outstanding amount till the customer pays the outstanding.

Cash Line OD’s limit can be enhanced/ decreased

Yes, Cash Line OD’ limit can be enhanced or decreased. Limit can be enhanced Either by submitting more security. Applying to the Bank saying that the present value of security has increased, therefore

his limit can be enhanced.

Limit can be decreased by: By withdrawing or en cashing security.

Documents required at the time of loan approval

During loan approval the documents required are 6-months’ latest account statement. The security to be pledged must also be with the application papers. In case the loan is over TK. 5lac, a valid identification is required.

Documents required at the time of loan disbursement

The documents that must bear customer’s signature are:

Demand Promissory Note

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Letter of Continuation Undated Letter(authorizing the bank to encash security at its discretion) A dated letter authorizing the bank to put date on the undated letter. Letter of Lien & Set-off over Deposit a/c (in case security is FDR). Original receipt of FDR signed & surrendered by customer. Letter of Guarantee (in case security is in 3 rd party’s name) Filled in Banking Arrangement Letter.

“Cross Collectivization”

“ Cross Collectivization” means using the same security for tow or more lending facility.

Suppose some one has lac worth of 3 MSP. He takes Flexi Loan pledging 3lac of that 3 MSP as collateral. With the remaining 7 lac he took a Cash Line of TK 6.3 lac o.

So, this security of 10 lac is used for a Cash Line and a Flexi Loan. Thus the securityIs said to be cross collaterized or simple said “Crossed”

In a more complex scenario, a year later, the present value of the security has increased (interest) and by paying his installments he has reduced the outstanding of both facilities. This security required to cover this reduced outstanding is less than what it was a year ago. So now, the customer can apply for another facility with the “freed-up” security.

Example of charge documents?

Demand Promissory Note, Letter of Continuation’ Letter of Lien and Set-Over Deposit, Letter of Hypothecation these documents are called charge documents.

Why are these documents important?

Incase the customer defaults on his installment payments, and then these documents will help us establish our right in court to liquidate his loan by encashing customer’s security.

Only the customer can sign on these documents. Bank employees or representatives must not sign or stamp a seal on these pages

Methods of verifying signature of applicant

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The best way to verify signature is to stamp a “Signature Verification” seal on the customer’s signature on the inside front cover of the booklet. The Person doing the verification must also give his full signature and stamp his/her official seal. In this way, the signature there becomes verified and could be used as reference for all other customer signatures throughout the application form.

If the signature on the security differ from the signature on the application form

If this happens then the loan can still be disbursed, but what is done here is that a Personal guarantee is taken. In that guarantee the applicant signing with the signature on the security is virtually guaranteeing the application form signature. The two Signatures are tow separate entities, one standing in guarantee for the other.

personal loan

It is a loan offered to individuals for some given purposes and is to be repaid by equal monthly installments. No security is needed for this loan. The monthly installment is called EMI.

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Meaning of EMI

EMI or Equated Monthly Installment is the amount a customer has to pay every month to pay back that loan. (Click the underlined words for details of Personal Loan EMI)

Persons eligible to get personal Loan

Salaried employees of MNCs, Large local corporate bodies, NGOs, International aid agencies, UN bodies, Airlines. Government employees, businessmen and self-employed professionals can also get this loan.

Since no security is taken, the income of the applicant is given prime consideration. Therefore, based on employment applicants are divided into segments.

Different type of segments

Segment 1: Executives of listed local corporate bodies and multinationals which have a corporate relationship with us, have been maintaining their salary A/C with us and have a history of EOSB (End-of-Service-Benefit) payment of their employees through SCB accounts.

Example: Executives of Lever Brothers, British American Tobacco Company, Novartis etc.

Segments 2: Executives of Supra Nationals sector who have their salary A/C with us.

Example: Executives of ILO, World Bank, ADB and other UN agencies.

Segment 3: this segment is further divided into 3 categories.Category 1: Employees of corporate bodies, Educational Institutes, NGO who have salary A/C with us only.Category 2: Employees of corporate bodies, Educational Institutes, NGO who are paid salary through A/C with other banks.Category 3: Employees of corporate bodies, Educational Institutes, NGO who are paid salary in cash.Category 4: Self-employed professionals and businessmen.

Reasons for segmentation

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Remember, no security is taken for this loan. The bank considers the salary of the applicants as security. So we segregate the applicants based on their salary and Benefit relationship with us. That is why those whose employers have a corporate relationship with us, they get their salary through SCB and their employer keeps their pension and other staff benefit fund with us are in one segment. We feel that we can assess their income correctly and in case of default are in a good place to collect the remaining amount.

UN agencies, ILO, ADB World Bank staffs are considered safe and reliable so they are in another segment. All other are in segment-3. Segment-3 is considered more risky since it contains businessmen and executives who do not get their salary through us or in cash.

As you will read through this module, you will learn that since we do not take any security, monthly income becomes very important in giving this loan. Segmentation is done based on their salary and pension with or without us and who their employer is.

SCB reluctant to give Personal Loan to the followings.

People working in garments, restaurants, car showrooms, trading/ indenting firms, lawyer.

Defense Officials.

purposes of getting a Personal Loan

The purposes for which Flexi Loan can be availed are:

House renovation Purchase of miscellaneous household appliances. Marriages in the family. Advance rental payments. Hospitalization or other emergency medical needs. Trips abroad. Higher professional or tertiary education/professional training. Owners of sole proprietorships can apply in their personal name not in their

company name. They can take the loan to buy office furniture and machinery but not for working capital and heavy industrial machinery.

Remember: Purpose of the loan must be clearly written in the specified space Most Important: The DB ratio of the applicant must support the loan amount.

Differences in loan for the different segments

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The difference is in the maximum loan amount and documentation required.

Eligibility criteria for Segment-1 applicants

Nationality: Bangladeshi Salary: Minimum Net monthly Salary BDT 10,000. Work Experience: Minimum 6 months of continuous employment with present

employer. Minimum Age: 23yrs Maximum Age: Either 65 years or the loan tenor must end before retirement.

The options that will give a lesser number will be taken. Security: No security or Personal guarantee is required for this segment. Interest Rate: 19.5% Minimum Loan Amount: BDT 60,000 Maximum Loan Amount: BDT 1 Million or 15 times of Net Salary, whichever is

lower.

This segment can get loans of more than BDT 1 Million but the applicant’s End-Of-Service-Benefits must also be more than BDT 1 Million. This amount will have to be declared be the employer of the applicant. The loan amount will be equal to the declared amount. This is segment-1’s biggest benefit.

Documents required

Salary Payment voucher/pay slip Letter of introduction from HR or Finance or Line manager. Salary assignment from HR/Personal department . Assignment of EOSB (End-of Service-Benefit) . Last 6 month’s a/c statement. Signed Demand Promissory Note. If the applicant wants to repay the loan in more than 3 years then he/she will have to

sign the letter of continuation. 1 undated cheque for the entire amount. (To be given only after loan is approved). One Photograph No Personal Guarantee is required for this Segment.

Eligibility criteria for Segment-2

Category 2.3 & 4:

Nationality: Bangladeshi Salary: Minimum Net monthly Salary BDT 12,000.

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Work Experience: Minimum 6 months of continuous employment with present employer.For Self-employed & Businessmen: Minimum 3 years in business or self-employment.

Minimum Age: 23yrs Maximum Age: Either 65 years or the loan tenor must end before retirement.

The options that will give a lesser number will be taken.For Self-employed & Businessmen: 55 years

Security: Only Personal guarantee is required for this segment. Interest Rate: 19.5% Minimum Loan Amount: BDT 60,000 Maximum Loan Amount: For Salary A/C With Other Banks: BDT 1 Million or 8 times of Net Salary, whichever is lower.For Self-employed, Businessmen & those who get salary in cash: BDT 1 Million or 6 times of Net income, which is lower.

Following documents Segment-3 customers will give at the time of application

Category 1,2 & 3 (Salaried Individual):

Salary Payment voucher/pay slip Letter of introduction from HR or Finance or Line manager. Last 6 month’s a/c statement. Personal Guarantee. Salary certificate from HR/Personal department . Assignment of EOSB (End-of Service-Benefit) . Signed Demand Promissory Note. If the applicant wants to repay the loan in more than 3 years then he/she will have to

sign the letter of continuation. 1 undated cheque for the entire amount. (To be given only after loan is approved). Post-dated cheques. (if salary a/c is not with SCB) One Photograph

Eligibility criteria for Segment-3 applicants

Category-1: Salary Account with SCB

Nationality: Bangladeshi Salary: Minimum Net monthly Salary BDT 10,000.

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Work Experience: Minimum 6 months of continuous employment with present employer.

Minimum Age: 23yrs Maximum Age: Either 65 years or the loan tenor must end before retirement. The

options that will give a lesser number will be taken. Security: Only Personal guarantee is required for this segment. Interest Rate: 19.5% Minimum Loan Amount: BDT 60,000 Maximum Loan Amount: BDT 1 Million or 10 times of Net Salary, whichever is

lower.

Following documents Segment-3 customers give at the time of application

Category-4 (Businessmen & Self-employed)

Valid trade License. Certified true copy of Memorandum and Articles of Association of the Limited Co

with Form X, Form XII and Form XVII. Partnership Deed for partnership business Personal Guarantee. Bank statements of the last 12 months One undated cheques (UDC) for total payment amount (Installments times the

EMI), is required during disbursement of loan. Post dated cheques (PDC) for each EMI (if A/C is not maintaining with us), is

required during disbursement of loan. One Photograph

Process of Loan disbursment

The loan will be disbursed by crediting the account of the customer. If the applicant does not have an account with us an account is opened with “Zero balance” for the loan purpose.

Process of loan repayment

Customers will repay the loan by Monthly Installments. Customers with A/C with SCB: They can set a standing order in their a/c that will

automatically take the EMI every month. The benefit of Standing order is, that it can be set for any date of the month.

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Customers with no prior A/c with SCB: They can give Post Dated Cheques (PDC) s for the entire loan tenure. The PDC s will be dated 1st, 8th, 15th or 26th of each month. Customer will have to choose one date among the four for all PDC s.

Time of 1st installment due

First payment will be within 59 days after loan disbursement.

Installment payment periods

For Segment 1, 2 & Category 1 of Segment 3: The loan can be paid back in a minimum of 12 installments and a maximum of 60 installments.

For Segments 3 (Category 2 & 3): The loan can be paid back in a minimum of s12 installments and a maximum of 48 installments.

Penalties for missing an installment

The penalty for missing an installment is that an additional 24% penal interest will be charged on the outstanding amount. This interest will be charged daily in the outstanding amount till the customer pays the outstanding.

Customer can repay the loan before maturity

Customers can settle the loans before maturity. For that there is an early settlement fee for

Meaning of Top UpTop-Up: Simply said, Top-Up means additional loan under the same facility.

Eligibility for Top-UP

FIRST, the loan must be at least 1 year old. Existing customers who have never missed 2 installments, consecutively or separately. In other words, only those who have regular repayment record can get top-up of their loan.

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Remember: One customer can have maximum of 2 top-ups for 1 facility. There will be no 3rd top-up. The customer then will have to apply for a new loan.

Additional Loan thing

Additional loan is nothing but a new loan given to the same customer. All documentation and eligibility criteria are the same.

Additional or subsequent loans are given only when the applicant’s DB ratio meets our disbursement criteria.

Example of the charge documents

Demand Promissory Note, Letter of Continuation, and Letter of Lien and Self-off over Deposit, Letter of Hypothecation these documents are called charge documents.

Importance of these documents Incase the customer defaults on his installment payments, and then these documents

will help us establish our right in court to liquidate his loan by en cashing customer’s security.

Only the customer can sign on these documents. Bank employees or representatives must not sign or stamp a seal on these pages.

Auto loan

Distinguishing feature;

Loan amount unto 75% of car value

Payable in a maximum of 60 monthly installments

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Lowest interest rate in the market.

Custom designed

With standard chartered auto loan it is easier than ever to buy the car you always wanted

because only standard chartered offer one the option of buying brand new car,

reconditioned car or used car. Auto loan offers complete flexibility in structuring your

loan. You can choose your loan tenure, cash security requirement, loan amount and even

the interest rate on your facility. Auto loan also offers you an option of early settlement or

partials payment of your loan if the need arises.

Trouble free

There is no requirement to provide personal guarantee or cash security to qualify for an

auto loan. If you choose to provide 30% or more of the loan amount as cash security you

will enjoy a higher loan amount and discounted interest rate

Simple

Auto loan is designed to make life easier for you. We offer you easy repayment options

and the freedom to choose your repayment period –from 1 year to 5 years depending on

your car. For your better understanding installment amounts for different tenors for 100000

are shown in the followings

Installment amount for BDT 100000 loan

Interest rate 12

months

24

months

36

months

48

months

60

months

13% 8932 4755 3370 2683 2276

13.5% 8956 4778 3394 2708 2301

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13.75% 8967 4790 3406 2721 2314

14% 8979 4802 3418 2733 2327

Please note that interest rate will depend on the security amount you will provide

INCOME ASSESSMENT MODULE FOR AUTO LOAN

Methods for Statement Analysis of Self Employed Professional or Businessmen

Background:

As of now there has been no formalized income assessment module for calculate income of applicants for auto lone. We have been using modules used for Flexi Loan to calculate incomes. While using these modules we have identified many loopholes and drawbacks, which we have addressed now. In the proposed modules used for different product are described below.

Type of Accounts taken into consideration:

1. Personal a/c2. Proprietorship a/c 3. Partnership a/c4. Limited Company a/c

Note:

I. For personal accounts, a/c must be in single name of joint names with spouse. II. Loan Eligibility calculation from Partnership and Limited Company accounts.

To derive an individual’s income from company accounts with credit facilities (cc or project loan), firstly the company’s liabilities are deducted from the gross monthly credit turnover or average balance to derive the net credit turnover or average balance, respectively. Then the net figure is apportioned to the applicant as per his/her share in the business.

Methods Used for Applicant with Repayment History with SCB:

Since the risk profit of an existing customer is different from a new customer, methods used to determine income of an existing a/c holder is somewhat relaxed. Following are the methods used for an existing a/c holder.

Method 1- Consistent Average Balance in a/c: FF

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This method is used for customers who maintain a steady and consistent balance in their account. We extract the average balance figure from the system and allow a loan amount with PROPOSED EMI if less than or equal to 25% of the average balance.

EMI = Average Balance / 4

Conditions Apply:

1. Minimum Balance of the account at any period in the last 12-months must be equal to the EMI amount.

2. Must have at least 1 year of account relationship.3. Account must be operative/transactional and must match with business nature.

Method 2- Inconsistent Average Balance: FF

This method is basically used for customers who do not have required balance in their account, but has a good repayment history. They are eligible to get a loan with EMI equivalent to the EMI of the previous loan they have satisfactory repaid in full within the last 6 months.

Conditions Apply:

1. Minimum 1-year repayment history of an EMI based loan.2. Previous loan was settled not before 6 months of the new application.3. Previous loan never went to 60+DPD.4. Previous loan never went to 30+DPD more than twice during the loan tenor.

1.4 Methods Used for Customers with no Previous Borrowing History of a/c Relationship with SCB:

Regular a/c with Satisfactory Average Balance: FT

The following method is used for customers of this category.

Income = Monthly Average Balance * 10%-30%

Monthly Average Balance = (Opening Balance + Mid-month balance + Closing

Balance)/3; if the customer does not qualify this method, then the following method can be

used:

Monthly average balances: 30 days actual average balance

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Note: Income has been considered maximum up to 30% of average balance since the average balance is the net figure derived after considering all debits and credits from the account. This is the figure, which can be disposed for any further commitment.

Note: % has been increased since average balance is the net figure after considering all debits and credits from the amount.

Conditions Apply:

1. For business a/c, transaction in the a/c must match with the nature of business. An a/c with sufficient average balance may not be considered if the a/c transaction does not match with nature of business.

2. Latest 12 months average balance will be taken into consideration. However, latest 6 months average balance will be taken for a/c with declining trend of average balance.

3. When a business a/c statement with over aft facility is provided, average credit turnover of OD a/c is considered to derive income.

4. Trend of monthly average balance will be considered and any extra ordinary average balance of a particular month will not be considered that may have arisen out of a non business transaction like sale of property, liquidation of security or transfer from another a/c etc.

5. A maximum of one inward clearing cheque returned for insufficient fund is allowed over a one-month period.

Overdraft Account with Valid CC Limit: FE

This method is basically used for assessing a/c with OD facility. Since the average balance of a/c with OD facility give us a negative figure (Dr Balance), this method is used derive the income.

Income = Average Monthly Credit Turnover*2% - 50%

Monthly Credit Turnover = Summation of total monthly credits.

Conditions Apply:i. The percentage factor of the credit turnover will depend on the of business.ii. Account swing of the overdrawn balance is to be observed. iii. Account discipline of the overdraft a/c is to be observed. A proposal may be

declined if overdrawn balance frequently goes over approved limit.iv. Extra ordinary credit that may have arisen out of a non-business transaction like

sale of property, liquidation of security of transfer from another a/c etc will not be taken into consideration.

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v. Trend of average monthly credit turnover and natural of transaction is matched with nature of business. In case of mismatch, the application may be declined.

vi. A maximum of one inward clearing cheque returned for insufficient fund is allowed over a 3-month period.

vii. A maximum of 15-day grace period is allowed for regularization of excess, only at quarter ends.

viii. Credit may decline applications if the excess seems to be inauthentic or exaggerated.

Average Credit Turnover in Regular Account (New approach) FR

This method is used for accounts with strong credit swing but weak EOD balance. Under this method Limited Company account, proprietorship account, partnership account and personal account can be considered.

Income = Average Monthly Credit Turnover*2% - 50%

Monthly Credit Turnover – Summation of total monthly credits.

Condition: PROPOSED EMI must be less than or equal to 25% of the average balance of the account (company or personal) based on which the loan is assessed.

Conditions Apply:i. For business a/c, transaction in the a/c must match with the nature of business.

An a/c with, sufficient average balance may not be considered if the a/c transaction does not match with nature of business.

ii. Latest 12 months Credit Turnover will be taken into consideration. However, latest 6 months average credit turnover will be taken for a/c with declining trend of credit.

iii. Trend of monthly current transactional account will be considered and any extra ordinary credit volume of a particular month will not be considered that may have arisen out of a non business transaction like sale of property, liquidation of security or transfer from another a/c etc.

iv. A maximum of one inward clearing cheque returned for insufficient fund is allowed over a 3-month period.

v. The percentage factor of the credit turnover will depend on the nature of business.

vi. Account swing is to be observed.vii. The average balance of the said account must be equal to 4 times of the

proposed loan EMI.viii. The balance in the said account at any given point of time remains sufficient to

cover 1 loan EMI.

Income Assessment Method for Self-Employed Professionals and Landlords:

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Conditions Apply:

i. Only personal a/c in single name or in joint name with spouse is taken into consideration.

ii. The credit in the a/c has to be regular as per the nature of the income.iii. The lump sum credits that may have arisen out of sale of property, security or

any other extra ordinary credits that does not match with the nature of the income will not be taken into consideration.

Income Assessment Method for Self-Employed Doctors: FD

There are a lots self employed professionals (like doctors) who deals in cash and thus their financial worth is not truly reflected in their bank statement, but they are socially renowned & earn a handsome amount from consulting practices. They also have demonstrated satisfactory repayment behavior earlier.

Net Income = Up to 50% of Average Credit Turnover in the personal a/c

Credit Turnover = Summation of all monthly credits

Income Assessment Method for Landlord: FL

There are a lots self employed personnel’s (like Landlord/Landlady) who deals in cash and thus their financial worth is not truly reflected in their bank statement, but they are solvent & have credit worthiness. They also have demonstrated satisfactory repayment behavior in different times. The basic quest of credit is to find out the ability and willingness of a customer to reply the loan.Net Income = Declared rental income supported by the rental agreement & verified by

third party agency.

Conditions Apply:

At least 25% of declared rental income should be reflected in the a/c. Valid rental agreement should be provided with cash vouchers along with related title

deed.

Income Assessment Method for Self Employed Professionals (Accountants/ Consultants, Engineers, Architects): FP

It has been observed that particular classes of self employed professionals like Engineers, Accountants; Consultants hold a very respectable position in the society having strong peer influence. These professionals tend to be committed to their profession during their entire career. Overall repayment history of this segment is also satisfactory as their cash inflow

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deemed to be regular due to their profession and their career are also extended beyond the normal retirement age. These professions can continue and flourish in their career as freelancers without depending on others.

Net Income = 25% of Average Credit Turnover in the personal a/c= 10% - 25% of average Credit Turnover in the company account (Provided account is a sole proprietorship account)

Credit Turnover = Summation of all monthly credit

Income Assessment for Customers with Multiple Bank Statements:

It has been observed that due to the volatile financial environment & shifting of office of the businessmen, these customers tend to shift their account one bank to the other and hence fails to meet the 1-year relationship with other bank as per the PDD criteria. As per the standard module, fractional bank statements (5 months from one bank and the rest from other to make a complete one-year of transaction) are not considered. Through these statements contain continuity of substantial transaction.

Net Income = as per calculation guideline given earlier for Average balance and Credit turnover.

Condition Apply:

i. All conditions will remain in force as advised under average balance and credit turnover methods.

ii. However proper justification has to be given to retrieve the true reason for a/c hopping within 1 year.

iii. Maximum 2 fractional statements must make up the basic requirement of 1 year. Only one switch in the last 1 year is accepted.

iv. Main a/c has to be maintained for a minimum of 1 year and the support a/c for at least 6 months to be acceptable for income assessment.

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Flow chart of Flexi Loan process

DSE/PFC/STM

Consumer Credit Unit (Approval)

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Contact Point Verification (CPV)Statement Verification

Approved Declined Loans

Return to Source

Asset OpsDisbursement

Meaning of Flexi Loan

Flexi Loan a partially secured loan facility given for any legitimate purpose. The loan can be either partially secured of fully secured. The security for the loan should be in a readily encashable form. This loan is repayable in Equated Monthly Installments _EMI Flexi Loan cannot be taken as working capital or any business purpose Maximum Loan Installment is 60 installments Minimum Loan Amount: BDT 100,000 Maximum Loan Amount: BDT 5,000,000

Persons eligible for Flexi LoanFlexi loan targeted for

Employees of reputed Loan Corporate, Multinationals, NGOS, private universities, International Aid Agencies, UN bodies and Airlines.

Government Employees Self-employed professionals (Doctors, Engineers, Chartered Accountants and

Architects) Businessman

Persons not eligible for Flexi Loan

People working in any sole-proprietorship / partnership firm(garments, restaurants, car showrooms, trading/ indenting firms)

Defense officials. Business experience less than 3 years.

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purposes for which Flexi Loan sanctionThe purposes for which Flexi Loan can be availed are very particular. They are: House renovation Marriages in the family. Advance rental payments. Higher professional or tertiary education/ professional training. Purchase of Miscellaneous household appliances

purpose for which Flexi loan cannot be takenFlexi Loan cannot be used for business purposes like working capital and buying industrial machinery. But doctors, architects, Cash, engineers who have private practices can use this loan to buy their office machines, office equipment’s/ accessories or office renovation.

Interest rate of Flexi LoanInterest Rate: Interest rates depend on readily encashable/ cash securities are provided by the clients. Rates are: 14% annually If security value = 100% of loan amount 16% annually If security value = 50% to 99% of loan amount 18%annually If security value = 30%to49% of loan amount processing Fee: 1% of approved loan amount or BDT 200, whichever is higher

Note : Readily encashable/ cash securities need to be acceptable to bank.

Tax Tk (11,000)Total Deduction Tk (22,000)Other AllowanceHouse rent allowance Tk 10,000Total other Allowance Tk. 10,000Net Salary Tk. 73,000

He has a Personal Loan of SCB with an EMI of TK. 3,362

He has credit card with the limit BDT 100,000

Now, he wants Flexi Loan of Tk. 8.25 lac for 4 years.

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His DB ratio will be: (All EMIs +3% of credit card limit) / Net Monthly income

His EMI for new Flexi loan will be: 29.24 x 825 = 24,123 per

DB ratio = (3,362 + 24,123 + 3,000 + 6000) / (73,000 + 6,000) = (36,485 / 79,000) = 0.46 or 46% is within his DB ratio. So he will get the Loan.

Meaning of EMIEMI or Equated Monthly Installment is the equal amount a customer has to pay every month to set off that loan.

EMI table for Flexi-loanInterest rate 12 Months 24 Months 36 Months 48 Months 60 Months

14% 89.79 48.01 34.10 27.25 23.1915% 90.18 48.40 34.58 27.24 23.7016% 90.73 48.96 35.06 28.24 24.2118% 91.68 49.93 36.02 29.24 25.25

How will you get the actual EMI amount from this table: Select the tenor (months) and the interest rate. Then multiply the loan amount in thousands with the corresponding factor and you will have the EMI for that tenor and that interest rate.

For example: Mr, Rizvi, a businessman, wants to take a Flexi loan of Tk. 20 lac by providing 35% readily encashable / cash security. He wants to repay the loan in 3 years. So his tenor will be 36 months, interest rate will be 18%and the corresponding factor will be 36.02.That will be multiplied by 2000, since 20 lac means 2000 thousand.

Therefore, his EMI will be: 36.02 x 2000 = 72,040.Similarly, someone wanting a 12 lac Taka loan by providing 50% readily encashable / cash security for 2 years would have an EMI of:

1200 x 48.96 = 58,752Note: EMI must be within the Debt- Burden Ratio. You have the option to advice the customer to take a lower amount of loan if the EMI does not support his DB ratio.Example of DB Ration Calculation:Mr. Junayed is a salaried Executive of a Large Local Corporate.

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Monthly Gross-Income Tk. 85,000

Deductions

Provident fund comntribution

(5000)

Internal Loan Payment

(6000)

Meaning of Debt-Burden Ratio

Debt-Burden Ratio (DBR) is the ratio between applicants’s proven monthly income and his / her total monthly repayment commitments towards all loans and credit card. So, DB Ratio = (All EMI s +3% of Credit Card limit)/ Net Monthly Income Net monthly income = Gross salary – (provident fund + taxes + Leave Fair Allowance

+Bonus; yearly, quarterly, if shown in the monthly break down) It represents the portion of his / her monthly income which can be used to service the

loan installment or EMI. The monthly EMI of the proposed loan facility also need to be included while

calculating the DB ratio. Acceptable DB ratio is different for different income levels. For Flexi loan they are:Income Ratio25,000-34,999 35%35,000-49,999 40%50,000 + 50%

Eligibility criteria for Self- employed professionals and Businessmen to get Flexi loan

Minimum Age 23 yrs

Maximum Age 55 yrs but the duration of the loan must end before age 60

Minimum Total Monthly Income 12,000 TakaLocation Must live in a city where SCB has a branchTelephone Must have either a personal mobile phone

or a phone in residenceNationality Bangladeshi

Income is assessed through tax returns and bank statement. SCB A/ C holders have to provide latest 6-monts statement Other Bank A/C holders have to provide latest 12 months statement.

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Procedure of Loan disbursement Existing account holderThe loan will be disbursed by crediting his / her account Non- Account HolderThe loan will be opening a new account with “zero balance” for the loan purpose.

Minimum or Maximum Loan amount available under Flexi Loan Minimum Loan Amount: BDT 100,000 Maximum Loan Amount: BDT 5,000,000

Following Factors are considerable for loan amount Applicants monthly income Monthly expenses Other monthly commitments Credit card balance Security detail Customer type and as prescribed by Credit & Collection Unit.

Minimum or maximum loan installment for different cases

No, the number of maximum installments is not the same for all cases. It depends on the loan amount.

Maximum Installments:Loan amount Loan amountTk.1 Lac- Tk. 5 lac 36 InstallmentsTk. 5 Lac- Tk. 10 lac 48 InstallmentsTk. 10 lac- Tk. 50 lac 60 Installments

Types of security that are accepted for Flexi Loan

For Flexi Loan the acceptable securities are: Fixed Deposit (FD) of bank Govt. security bond – Wage Earner Dev. Bond (WEDB)issued by Standard Chartered

or other banks from branches in cities where SCB also has branches

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ICB unit certificates

Process of loan repayment

Customers will repay the loan by Equal Monthly Installments (EMI). The repayment method is different for SCB A/C holders and SCB non A/C holders.

Customers’ A/C with SCB: They can put a standing order in their A/C that will automatically take the EMI every month.

Customers’ no prior A/C with SCB: They can give Post Dated Cheques (PDC) s for the of each month.

Time to pay the installments First payment will be within 30 days after loan disbursement

Following documents should be given at the time of applicationFor

Businessmen &Self- Employed professionals

Application form filled in Latest Bank Statement: 6-12 months Proprietorship Business A/C: Valid Trade License Partnership Business A/C: Certified true copy of Memorandum & Articles of

Association with Form XII and Form XVII For OD A/C: Copy of the offer letter of the facility is to be submitted with the

statement Details of security to be submitted Copy of valid Trade License & TIN cerificate must be attest by Branch official / Sales

Manager as “O /S” – Original seen

Note: In case the loan is Tk.5 Lac or over Tax Identification Number (TIN) & CIB clearance from Bangladesh Bank are required

Charge documents and these documents importance

A Demand Promissory Note, Letter of Continuation, Letter of Lien and Set-off over Deposit, Letter of Hypothecation these documents are called charge documents.

Incase the customer defaults on his installment payments, then these documents will help us establish our right in court to liquidate his loan by encashing customer’ s security.

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Only the or representatives must not sign or stamp a seal on these pages.

Top-Up: Simply said, Top-Up means additional loan under the same Facility.

Eligibility for Top-Up

The loan must be at least 1 year old Existing customers who have never missed 2 installments, consecutively or separately In other words, other words, only those who have regular repayment record can get

top-up of their loan. .One customer can have maximum of 2 top-ups for 1 facility. There will be no 3 rd top-

up. Then customer then will have to apply for a new loan.

Introduction of additional loan

Additional loan is nothing but a new loan given to the same all documentation and eligibility criteria are same.

Addition or subsequent loans are given only when the applicant’s DB Ratio meets our disbursement criteria.

Methods of verifying signature of applicant

The best way to verify signature is to stamp a “Signature Verification” seal on the customer’s signature on the Inside front cover of the booklet. The person doing the verification must also give his full signature and stamp his/ her official seal. In this way The signature there becomes verified and could be used as reference for all other customer signatures throughout the application form.

If the signature on the security is different from the signature on the application form

If this happens then the loan can still be disbursed, but what is done here is that a personal guarantee is taken. In that guarantee form the applicant use the same signature, which signature(s) is (are) used on the security. These two signatures are two separate entities, one standing in guarantee for the other.

What are the penalties for missing an installment?

The penalty for missing an installment is that an additional penal interest @ 24% annually will be charged on the missing installment amount. This interest will be Charged daily on the missing installment till the customer pays the outstanding Installment.

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Business Financial Services:A new era of consumer banking dawned on the 1st of march ,2004 when Bangladesh

become the first country in the middle east and south Asia region of standard chartered

62

bank to offer banking facility for the small and medium enterprise segment with BFS.

Currently it is offering of Letter of Credit (L/C), guarantee, overdraft and Business loan.

For an emerging economy like Bangladesh, the small and medium enterprise (SME)

segment is the engine of growth .BFS is a prime manifestation of the bank’s focus on the

market and introducing products and services that address the need of its chosen segment.

Business Loan has been a Hit in the market with total outstanding already reaching BDT

890 million at July end. SCB is the first foreign Bank to offer such packaged services in

Bangladesh.

This loan is given as:

# Bank over draft

# Installment loan

# Revolving loan

#Letter of credit

#Guarantee

TERMS AND CONDITION

In consideration of Standard Chartered bank (together with its successors and assigns hereinafter called ;the Bank)agreeing to grant me \us (together with its successors and assigns hereinafter referred to as ;the customer )loan facility the facility under Flexi Loan applied for by me \us, herein ,I\ we agree that by signing the declaration below we shall be bound by the following terms and condition; 1. The facility shall be made available for the customer form date of the Banks

acceptance of this application until such time as stipulated in any latter and this facility shall be a continuing one until full adjustment with interest and other change.

2. The Bank is authorized to open and maintain for the purposes of the facility in addition to any current \ overdraft accounts (s) utilized in respect of the facility ,such other or further account (s)as in necessary for the purpose of administering and recording payments by the Customer in respect of the facility.

3.a) Interest rate is floating and can be re-fixed at the Bank’s sole discretion.

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3.b) Interest on the facility shall accrue at the rate as mentioned in banking Arrangement

Letter or at such other rate to be re-fixed form time to time at the Bank’s sole

discretion .Any repayment ,whether in part or full ,or facility will be attributable fist to

interest which has accrued on the facility and than to principal . The rate of interest

determined by Standard Chartered Bank form time to time shall remain in full force and

effect a if the facilities granted to the borrower were still in force, even tough the account \

accounts in the customers‘s name with the Bank are closed, become dormant or are subject

to litigation,until settlement of all the customer’s liabilities to the Bank .

3. Prepayment penalty will be charged on the outstanding amount as and when decided

by the Bank.

4. All payments required to be made respect of the facility shall be made by the customer

on the respective due date and the customer hereby irrevocably authorizes the Bank to

debit any of the customer’s with the bank with all amounts owing in respect of the

facility ,including interest ,charges and expenses (together the indebtedness)at such

time as the same shall become or be due and payable and transfer such sum to the

Loan account for adjustment , but in any case the customer shall always remain liable

and agrees to make payment in full of all such to the bank .

5. The Bank is further authorized to enforce all or any of the securities executed \kept

by the customer in favor of the Bank, which may include, but is not restricted to, any or

all of the following;

1. Demand promissory note

2. Deposit A\c held with the Bank or any other Bank

3. Monthy\3 Monthly \ 6 Monthly sanchaya

4. Pratirakkha sanchaya patra

5. Bangladesh sanchaya Patra

6. ICB Unit Certificate 7. WEBD 8. Post dated Cheques

9. Undated Chaque 10.Other

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1. The Customer irrevocably authorizes the bank to encase the securities duly

discharged and kept with the Bank as securities as security at its absolute discretion

in the event the loan account become irregular and small apply the proceeds

towards adjustment of the outstanding loan liabilities along with all legal fees . The

Customer further agrees (s0 that the Bank shall have irrevocable lien on any fixed

depositor any account maintained by the Customer with the Bank.

8. In the event of normal death of the Customer, the Bank shall be entitled to en cash the

securities and adjust the dues first before any refund is made to the heirs \ nominees.

9. Save and except in the case of manifest error, the banks statements and records shall be

binding on the Customer and constitute conclusive evidence of debt for all purposes.

10. If at any time, any provision of hereof becomes illegal, invalid or unenforceable in any

respect .the legality, validity and the enforceability of the remaining provisions shall

neither be affected nor impaired thereby.

11. The bank reserves the right to alter these terms and conditions at any time on

notification to the Customer.

12. Any notice made by the Bank in respect of the facility shall be in writing and made to

the address given by the customers to the Bank and shall be deemed to have been

served on the Customer 3 business days form the date of posting.

13. If the declaration below is signed by more than one person as Customer, the liability of

each such person is thereunder, and those terms and conditions shall be joint and

several.

These terms and conditions shall be governed by and construed in accordance with the

laws of Bangladesh and the Customer and the parties hereby irrevocably submit to the non-

exclusive jurisdiction of the courts of Bangladesh.

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Loan documents required: To deals with a loan customer PFC tell about different

documents. There are no printed copies of the requirements. Followings are the

requirements at a glance

Personal loan:

Type of customer

Service holder Businessman

1.Bank statement (one year)

2.Gruanter one person with photo & visiting card

AVP,VP,Manager, Astt. Manager)

3-salary statement approved by HRD

4, one copy of photo

5 passport /voter ID/notary public

Sole proprietor Limited company

1. Trade license 1.Trade license

.2.Bank statement (one year) 2.Bank statement (one year)

3 One copy of photo one copy of photo

4 passport/ driving license/ voter ID/ notary public 4 passport/ driving license/

voter ID/ notary public

Article of association

Memorandum of association

Schedule 10

Board resolution

Incorporation license

Rate of interest is: 18%. It’s going to be 17%. Rate of interest vary with negotiation

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Auto loan:

Type of customer

Service holder Businessman

1.Bank statement (one year)

3-salary statement approved by HRD

4, one copy of photo

6 passport /voter ID/notary public

7 Quatation from showroom

8 Tin certificate

Sole proprietor Limited company

1. Trade license 1.Trade license

.2.Bank statement (one year) 2.Bank statement (one year)

One copy of photo one copy of photo

4 passport/ driving license/ voter ID/ notary public

5. Quotation from car showroom 4 passport/ driving license/

voter ID/ notary public

Article of association

Memorandum of association

Schedule 10

Board resolution

Incorporation license

Rate of interest is 13%. Maximum amount of loan is 40 Lac. Bank will provide 75%of

Price or 40 Lac which ever is lower. Maximum tenor is 48.

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Flexi loan:

Sole proprietor; limited/partnership

1. Trade license Trade license

.2.Bank statement (one year) Bank statement (one year)

3 Tin certificate Tin certificate

4. One copy of photo Article of association

5 passport/ driving license/ voter ID/ notary public Memorandum of association

Schedule 10

Maximum loans amount 12 Lac. Tenor – 5 yr. 50 % of sanctioned amount must deposit

as fixed. Rate of interest is 14%.

Business financial services:

Sole proprietor Limited/ partnership

Bank statement of all banks customer

maintain

Tin certificate

Trade license 3 years

Incorporation certificate

Bank statement of all banks customer

maintain

Tin certificate

Trade license 3 years

Incorporation certificate

Board resolution

Memorandum & article of association

Maximum amount is 60 Lac. Rate of interest is 14%. 50% of loan amount need to deposit

as fixed.

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Case line: A product that offers you the best of both worlds, permitting ready access to

cash without disrupting interest-earnings on fixed investments. It provides ready access to

cash against quasi-cash investment papers like Terms deposits (Lcy / Fcy) Savings

Certificates, Wage Earners' Development bonds, ICB units certificates etc.).

Other features:

Both Revolving & terminating options.

High utilization Limit (based on security value).

Quarterly payment of Interest (only on the outstanding amount).

No commitment fee (on unused limit).

This loan is sanctioned against FDR. It is 100% secured. Two types are here. One is

Over draft and another is every month installment (EMI). Rate of interest in case of OD

10%, in case of and EMI 10.5%. Tenor 5 years

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Credit CardsStandard Chartered Credit Card comes with a winning combination of value –

packed features and benefits.

Types of credit cards

1. Gold Master Card

2. Silver Master Card

3. VISA Silver Card

Month Closed card

reinstate

Jan

Feb 27

March 134

April 68

May 87

June 78

Month Activate

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Jan 1904

Feb 1517

March 2276

April 1754

May 2468

June 2408

Requirements to get a credit card (LCY):

Service holder Businessmen

Filling up a credit card application form

Tax identification certificate

One year bank statement

Passport

One copy of passport size photograph

Filling up a credit card application form

Tax identification certificate

Trade license

One year bank statement

Passport

One copy of passport size photograph

4.1.5.2Benefits

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Wide Acceptance

Standard Chartered Credit Card is accepted at over 3500 merchant outlets around the

country. Wide range of merchants include hotels, restaurants, airline and travel agents,

shopping malls and departmental stores, hospitals and diagnostic centers, jewelry and

shops, electronics and computer shops, leather goods, mobile and internet service

providers, petrol pumps and many more! This number is increasing everyday to cater to

customers’ needs.

Easy Credit

With Standard Chartered Credit Card customers have the convenience to pay as little as

5% of their outstanding on the card account every month.

Instant Cash Advance

Customers do not have to carry cash anymore if they have a Standard Chartered Credit

Card. customers can withdraw cash up to 50% of credit limit from any of the branches

or ATMs across the country.

Rewards Program

Standard Chartered Credit Cards offer a reward program. Rewards catalog is packed

with a variety of products and gift. Rewards can be selected based on the number of

points the customer has earned. For every TK 50 spent on credit card, customer will

earn 1 treasure point.

SafetyNet Insurance

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SafetyNet insurance comprehensively covers the entire dues on the Credit Card in the

unfortunate event of death or permanent disability of the primary Cardholder. Every

Standard Chartered Credit Cardholder is automatically enrolled in SafetyNet with a 2

months free trial period.

All Accidental Death Insurance

The Standard Chartered Credit Card gives you an All Accident Insurance coverage up

to TK 100000 (for silver card) or TK 500000 (for Gold Card) in case of accidental

death. This coverage is also applicable for supplementary Cardholders.

Standard Chartered International VISA Credit Card

Standard Chartered International VISA Credit Card simplifies customer’s travel and

eliminates the need to carry cash.

Benefits

Worldwide recognition and acceptance.

Standard Chartered International VISA Credit Card is welcomed and honored at

over 18 million establishments in more than 160 countries.

Customer can pay as little as 5% of the amount due every month.

Standard Chartered International VISA Card allows cash advances from 550,000

VISA ATMs worldwide.

Customer can avail cash advances from 398,000 VISA member offices around the

world.

Customer can avail cash up to 50% credit limit.

Supplementary Card

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Standard Chartered International VISA Credit card holders can enjoy the convenience

of supplementary card for their spouse, children over 18 years of age or any family

member or friend.

Benefits

To avoid overspending customer can also set a spending limit of his/her choice,

which will be the maximum amount that the supplementary card holder can spend

in a month.

If the customer loses his/her card, he/she has nothing to worry about. Customer is

covered for all fraudulent charges as soon as it is reported. Customer needs to make

sure that he/she reports the loss immediately on discovery. The Call Center is open

24 hours a day and 365 days a year for assisting customers.

Service & price charge Guide for Local Cards

Mater

card gold

Visa Silver Master card Silver

General

Payment due date from

statement date

15 Days 15 days 15 days

Minimum amount due 5% or BDT 500 whichever is Higher

Cash advance limit 50% of credit limit

Maximum interest free days

available

45 Days 45 Days 45 Days

Fees

Annual fee(BDT) 3000 1500 1500

Annual fee for first and

additional Supplementary card

2000 1000 1000

Cash advance fee Tk.100 or 2% which ever is higher

Cash replacement fee 500 200 200

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Other fees and charges(all cards)

Finance charge ( daily average

balance method)

2.5% per month

Over limit charge 500 200 200

Late payment charge 500 200 200

Duplicate statement 50 50 50

Returned cheque 500 500 500

Copy of sales voucher 100 100 100

Certificate charge 100 100 100

Out station cheque processing 100 100 100

Service & price charge Guide for international Cards

International visa gold International Visa classic

General

Payment due date from

statement date

15 Days 15 days

Minimum amount due 5% or $10 whichever is Higher

Cash advance limit 50% of credit limit

Maximum interest free days

available

45 Days 45 Days

Fees

Annual fee(BDT) USD 120 USD 70

Annual fee Supplementary card 60 35

Cash advance fee 2.5% 2.5%

Cash replacement fee 15 15

Other fees and charges(all cards)

Finance charge ( daily average

balance method)

2.5% per month

Over limit charge 15 15

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Late payment charge 15 15

Duplicate statement 5 5

Returned cheque 15 15

Copy of sales voucher 10 10

Certificate charge 15 15

Out station cheque processing 15 15

Different ratio analysis:.

Ratio Year 2003 Year 2002

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Deposit Loan ratio 86.3% 86.94%

Classified to total Loan ratio 2.75% 2.66%

Loan Asset ratio 68.385% 71.18%

Bad debt ratio 1.88% 1.76%

Interest income to loan ratio 11.28% 8.23%

Interest expense to deposit & borrowings ratio 4.00% 3.28%

Provision for loan ratio .26% .27%

Net Profit to interest income ratio 44.6% 37.18%

Return on Asset 3.41% 2.20%

Return on investment 42.63% 29.69%

Some eye catcher ratio:

From the above analysis it is praiseworthy that ROI has increased by about 13% and

also ROA by 1.21%. Collection dept performance is not good enough because bad debt

ratio has increased. As bad debt is higher than last year why does provision for loan is little

bit less than previous year, is not understandable. Contribution of interest to net income

has increased by around 5%. Average interest on loan as well as interest expense has also

increased.

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Recommendations and Conclusion:

The following recommendations are made based on responses from questionnaire and over

the counter claim at the time of customer service.

Recommendations for customer service:

1 Call center need to popularize. It will reduce customer queue and bothering.

Customers account related queries except closing and claim can solve through call

center at any time.

2. In case of locker visiting, option of cash payment for visiting need to introduce.

Because locker-visit record keeping, vouchers preparing is time consuming relating

to BDT 100. More over some customer have not available balance.

3. Customers want statement and certificates immediately. Day to day request can be

delivered with cash payment because voucher preparing, Checking then entry is a

length process and time consuming for a PFC.

4. Complaint manager system is good. But complaint mail is not good enough. Bank

can set up a complaint box and customer will put the complain liter into the box. at

the day end PFC open the box ,screening the letter ,try to solve it or send to c-

manager.

5. Customers are not so much aware about different charges. They claim to the bank

after debiting their account. SCB can inform them before imposition of new

charges.

6. DSE need adequate training and information about day to day change in different

requirements.

7. It is recommended that branch performance should not hit by DSE account

opening return

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Recommendations for Loans services:

1. A good linkage is essential between front office & back office. Because if a Loan

application decline PFC faces customer queries and dissatisfaction.

2. To encourage loan repayment, Loan closing fee and Early settlement fee need to

reconstruct. Because customer claim against these.

3. Inspect the reasons of great variation between Loan application and approved that

shown in the graphical presentation on page . Also instruct the person how to clarify a

loan application.

4 Verification process needs to improve. Because customer are not willing to give

confidential information to unknown. In this situation back office can contact to

PFC or BSE/DSE to give more information not declining the application

immediately.

5. SCB can offer different incentives to reach loan target such as

a. Concession interest rate.

b. Offer to adjust interest & principal money for classified loan if a lump sum

amount is paid.

c. Can arrange “SCB Loan week”

d. Relaxing some requirements of loan that is far from target.

Conclusion: the main purpose of the report was to focus on the lending services to its

valuable customers and the credit management provided by Standard chartered bank as

comprehensively as possible. Although I did not have much time to learn the whole

procedures but it was supportive to understand and gather an initial banking management

experience. As the long-term performance of any organization is depend on its intake of

qualified people and developing them to perform their best as a team, as well as

individually. To cope with the recent challenges of banking sector SCB is creating an

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environment where employees are happy to build their career and customers feel good

doing business with them

Annexure-A

Consumer banking schedule of charges

Item Charge

Current accounts

Minimum account opening amount BDT 50000

Ledge fees –BDT account Nil

Ledger fees FCY accounts of both

Bangladeshi and foreign nationals

Nil

Average balance fees –BDT account BDT 500 half yearly (if monthly average

balance falls below BDT 50000 , in any

month during the period)

Transaction fees BDT 12.50 per entry from 8th transaction (7

free entries)

Monthly minimum balance fees Nil

Savings account and extra value savings

accounts(Evsa)

Minimum account opening amount

BDT 100000

BDT 300000 EVSA

Ledger fees / monthly minimum balance fees Nil

Average balance fees BDT 500 half yearly (if monthly average

balance falls below BDT 100000 for

savings and BDT 300000 for EVSA, in any

month during the period)

Access account

Minimum account opening amount BDT20000

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Ledger fees / monthly minimum balance fees Nil

Over the counter cash withdrawal BDT 50 per withdrawal

Average balance fees Nil

Cash/ travelers cheque

Issue of FCY cash & TC customer 1%+BDT 200

Issue of FCY cash & TC non customer/ or

against cash payment in LCY

Not allowed

Travelers chques enactment- customer Our TC – free

Other TC-.25%

Minimum BDT 500

Travelers chques enactment- non customer Our TC – free

Other TC-.25%

Minimum BDT 1000

Intercity transactions

BDT 1 to BDT 100000 Deposit to any account- free

Withdrawal from savings account- BDT 100

charge to account holder

Withdrawal from other accounts- free

BDT 100001 to BDT 500000 Deposit to savings account- free

Deposit to current- BDT 150, charged to the

account holder

Withdrawal from account- BDT 150 charged

to account holder

BDT 500001 to BDT 1000000(deposit &

withdrawal both)

BDT 250 charged to the account holder

BDT 1000001 to BDT 5000000(deposit &

withdrawal both)

BDT 500 charged to the account holder

Over BDT 5000000(deposit & withdrawal

both)

BDT 1000 charged to the account holder

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Fund transfer

Cheque on selves/ pay order issue-(customer

only)

.10% (minimum BDT 100, maximum 500)

Cancellation of LCY draft pay order BDT 250

Issuance of FCY Draft USD 10

Others charges

Fees for personal cheque book from the 2nd

item onward

BDT 200(applicable for account not

maintaining required monthly average

balance)

Fees on destruction of uncollected cheque

book and ATM cards

BDT 200 per item ( at the end of 2nd month

from the date of issuance)

Instant in house account to account fund

transfer( on an urgent basis)

BDT 100

Dishonored cheque-due to insufficient funds BDT 500 per cheque

ATM card annual fees BDT 150

ATM cards replacement fees BDT 300

NB 1.vat is applicable @ 15%on all fees and charges

1. The bank reserve the right to assess charges on transaction which are not covered by

this schedule and to amend without prior notice the terms, condition or rate, stated in

this schedule

Questionnaire I am a student of Dhaka University MBA program (major in AIS). This questionnaire is

developed solely with the purpose serve the customer satisfaction on consumer banking of

82

standard chartered bans. All the data provided here by the respondent will be only used for

this purpose and will be kept confidential to any other parties.

I will be grateful, if you kindly spare some of your valuable time to fill out the

questionnaire.

Thank you

Name:

Address:

Age: 20-30 30-40 40-50 above 50

Occupation:

Income: 10000-20000 20001-30000 30001-40000 above 40001

Questions:

1.Maintaining account with:

2. What is the driving factors to open an account in SCB?

Social status Technology driven Exclusive product & service

Easy to operate from anywhere Multinational Bank

3.Who influence to open an account?

Self sales executive advertisement any existing account holder

4. Types of account

Savings account current account access account

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FC account RFCD account

5.what problem have you faced in account opening?

1. Manifold requirement compared to other bank

2. 3 working days to open an account

3 others what did you face

6. Do you use ATM card? Yes No

7. What are the reasons for not using the ATM?

Operating procedure Risky capture problem other

8. Which site you, use more?

9. Do you use Auto bills pay? Yes No

10.Have you a call center password? Yes No

11 What you prefer most? Call center Over the counter solution

12.What are the problems you facing over the counter service?

Long queue Space problem person are not giving you to the

point solution

13. Why do you not deposit money through ATM?

Acknowledgement problem Process is unknown others not use so I also

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14.Have you any complain to charges? Which one?

Relationship fee statement & certificate fee ATM fee Locker

visiting fees

15.How long have you been maintaining an account?

16.which part do you think SCB need to improve?

Comment about service

Satisfied Dissatisfied Moderate

Not at all

17. Your valuable suggestion.

Bibliography

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1.Face to face interaction with PFC and other credit personnel to get in

depth information.

2. Primary information sources, such as questionnaire, information gathered at the time of customer service.

3 Secondary information sources, such as product brochures, different printed format, manual and guidelines for PFC, Booklet of Loan application.

4. Outserve Newsletter –Bangladesh (2004) volume1, issue 2

5. Prior research work and reading material on this topic

6. Annual Report of SCB, 2003.

7. Web site of SCB

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