Overview of Prime bank

Overview of Prime bank

Chapter # 1 Introduction to the study: 1.1 Base of the study Prime Bank Ltd,A well reputed Bank

in private Banking sector highly focused on

providing and ensuring high quality customer services with its facility toward the very competitive market . In this concern, PBL used to offer the valued customers a wide variety of choices and options through the diversification of products and services that might be regarded to develop the bank in its technological era. .My study is concerning with the study of credit card that launched Prime Bank to reach in the global market. PBL deals with the master card whereas it is one of the top branded product since its starting of journey .It brings a new dimension to the market to deliver reliable service with superior value of products which created to reach at the sparkling name in the banking sector.Since credit card operation required real time on line connectively the bank made substantial investment in the technology and other infrastructure in related areas. High quality with its sincerity to the customer basement of software,on line processing of hardware enrich the bank to stand strongly in the competitive market.successfully issued of local and international card make it more acceptable to the people which also helps to win other leading banks.

The report bases on the study of Prime Bank Credit Card-"a comparative study of Prime Bank Limited and other Banks &Financial institution of Bangladesh:its impact on organizational growth specially on Prime Bank LTD." 1.2 Origin of the study:

At the beginning of my internship program, Kazi Tozammel Huq, First Assistant Vice President (FAVP), human resource division, Head office, Prime bank limited assign me to do a report. He has selected a topic, the topic is “Prime Bank’s Credit Card - a comparative study on Prime Bank Limited & Other Banks and Financial Institutions of Bangladesh: its impact on organizational growth specially on Prime Bank limited.”

1.3 Objectives of the study: 1. To have a glance of the existing status of the P.B.L. credit card service.

2. To make a comparative study on P.B.L. and other Banks and financial institutions of Bangladesh with reference to PBL Credit Card.

3. To assess the impact of Credit Card on Organizational Growth especially on P.B.L. 4. To get a clear picture over the Bank.

5. To verify the scope for the improvement of credit card service.

6. To find out how credit card system works.

7. To analyze current credit card market in Bangladesh.

8. To suggest suitable measures to remove the existing problems & improve the present condition of Prime Bank’s Credit Card.

1.4 Sources Of The study: Primary and secondary data has collected to prepare the report.By surveying the present market situation dufferent steps has taken to represent the position of Prime Bank.. Necessary data and information were gathered by surveying people, in-depth interview, annual report, making observations and through working in different sections of the Card Division of P.B.L. a) Sources of Data: The sources of the data collection could be mentioned as follows required for this report.

Primary sources:

I)

Observation,

II)

Personal interview through questionnaire

III)

Oral & informal interview with officers and employees of the Card Division of PBL.

Secondary Sources: I)

Annual and other periodical reports of P.B.L.

ii) Various manuals (conditions of use guides) and brochures, iii) Service rules & IV) Miscellaneous publications. b) Methods of data collection: I) Questionnaire survey: Two sets of questionnaire were used to collect information for the study, from customers and Banks. Open ended, close ended and multiple questions were set in the questionnaire for the credit card holders. ii) Observation: During internship, I was assigned to work in Customer’s service Recovery section. I have collected my information from Recovery and Accounts section..Later that I have tried my best to collect information needed for my report from reputed banks. Such as Standard Chartered Bank, National Bank who are the nearer competitor of Prime Bank.For assuring the measurement of my study I have chosen to make a constructive statement

that is relating to the attitude of my objectivity. It ensure the

favorable&unfavorable evaluation, emotional feelings, and action tendencies toward the objective or idea.

1.5 Scope of the study: As I have had a chance to work at Prime Bank Card Division recovery section there I have got the scope to getting familiar with the credit card and for my collection of knoeledge

I worked under the supervision of executive officer Mr. Shaheen Howlader where my scope was in a very little area.

1.6 Limitations of the study: In the duration of my internship program I have gathered little bit knowledge side by side when there make a scope to prepare a report I faced a number of problems that may be termed as the limitations of the study. : 1. I could not spend sufficient time required to make an in-depth study on such an important subject because of time constraint.

2. I dont have get the actual information in many cases to elaborate the studr more deeply.

3. Insufficient records& publications of the Bank.

Chapter # 2 Company Profile: 2.1. Background of the Company: Prime Bank Limited was established on 17th April 1995. It is a full licensed scheduled Commercial Bank set up in the private sector in pursuance of the policy of the Government to liberalize Banking and Financial services. The Bank has made significant progress within a very short period owing to its competent Board of Directors, dynamic Management and introduction of various customer friendly deposit and loan schemes.

PBL achieved to be one of the A- grade banks in the year 1997 as per CAMEL (Capital, Asset, Management, Earnings and liquidity) rating according to Bangladesh Bank.Divercification of product and services include Corporate banking, Retail banking, and Customer banking right from industry from agriculture and real estate to software.

Since its beginning Prime Bank LTD has ore importance on the technology integration .Staying now it is the top agenda and focus on the greater position as it was.Its adequate capitalization, greater technology, sufficient management, perfect working enviornment with the feasibility of workers making it more popular .Prme bank limited was

established with an authorised capital of Tk. 1000 million.And paid up capital stood at Tk. 650.00 million as on December 31, 2003. The bank has consistently turned over good returns on assets and capital.. The bank is manned and managed by experienced officers committed to provide a highly efficient, personalized and quality service. The bank has a good number of professional managers for adroit and effective handling of competitive and complex situation.

2.2 Objectives: Prime bank limited main objective is to maximize profit through customer satisfaction, which very much reflexes the idea of marketing concept. Its objective is to remain competitive. The bank is supporting to give the most flexible services to his customers which can help to reach at its profit maximization. On the other hand the rules ensures the competitively toward other banks besides the develop of the socio- economic sector, commerce, agriculture, industry, housing and self-employment in the country. It also wants to ensure high return on investment, sound growth and profit and service with different service products.

2.3 Organisation’s Vision: To be the best bank in terms of

customer service, profitability and technology

application.

2.4 Organisation’s Mission: Continuous improvement in business policies and procedures cost reduction through integration of technology at all level.

2.5 Organisation’s Efforts are focused: On quality services in every area of activity with the aim to offer increased value of shareholder investment and obtain the highest possible benefits for our customers..

2.6 Organisation’s Strategic priorities: To have sustained growth, broaden and improve range of products and services.

2.7 Products and services of PBL: Based on customer satisfaction, Prime bank provides various products and services to its customers. PBL products and services are briefly as follows:

Deposit Products: •

Contributory Saving Scheme

•

Monthly Benefit Deposit Scheme

•

Special Deposit Scheme

•

Fixed deposit

•

Saving Deposit Account

•

Foreign Currency Deposit Account

•

Non Resident investors Taka Account (NITA)

•

Prime Bank Insured Fixed Deposit Scheme

•

Prime Bank Money Scheme etc.

Loan Product: Consumers Credit Scheme Lease Finance Loan against share & Securities Computer Software financing scheme Prime bank Master Card Credit Card Import financing Export financing Industrial and project financing etc.

Others Products/Services On line Banking Services SWIFT Services Islamic Banking L/C Delivery Service etc.

2.8 Branches of PBL: 1. Motijheel Branch 2. Foreign Exchange Branch 3. Dhaka Club Booth 4. Dhanmondi Branch

16. Narayanganj Branch 17. Agrabad Branch 18. Jubilee Road Branch 19. Khatungonj Branch

5. Gulshan Branch 6. Elephant Road Branch 7. Kawran Bazar Branch 8. Mohakhali Branch 9.Islamic Banking Branch 10. Mouchak Branch 11. Moulvi Bazar Branch 12. Bangshal Branch 13. Uttara Branch 14. New Eskaton Branch 15. Ganakbari Branch

20. Sylhet Branch 21. Islamic Banking Branch, Agrabad 22. Court Road Branch, Moulvi Bazar 23. Rajshahi Branch 24. Jessore Branch 25. Khulna Branch 26. Barishal Branch 27. Bogra Branch 28. Madhabdi Branch 29. Banani Branch,Dhaka.

30. Islamic Banking Branch,Mirpur,Dhaka.

31.Conabari Branch, Badda,Dhaka.

OVERVIEW OF CREDIT CARD SYSTEM 3.1 Introduction of Credit Card: ‘Credit Card’ A plastic money using todays market as the very comfortability in our country. The new era for monetary fashion that has came from the western front. In the late 1940s, a number of US banks started issuing their customer script that could be used like cash in local shops. Many common people cannot understand the meaning of credit card because it sounds mysterious to them Questions like the following are being posed: 3.2 What is Credit Card?

Credit card is a plastic card bearing an account number assigned to a card holder with a credit limit that can be used to purchase goods and services and to obtain cash disbursements on credit, for which a card holder is subsequently billed by an issuer for repayment of credit extended at once or on an installment basis. (Minimum amount).

Physically, Credit card is a layered piece of hard plastic with holograms and security features. It also carries a strip of magnetic tape on the back, which is loaded with electronic data including the cardholder details. The strip is read electronically by specialized machines called Point of Sale (POS) Terminals at merchants or Automatic Teller Machines (ATM) in bank premises or elsewhere. It is developed on the technology of microchips and cryptography, which have bred a new generation of payment system.

It is only today that the revolution in information technology has fully hit the area of

retail payments. The card is rectangular, looking rather like the familiar phone card. Its distinguishing feature is that it acts as cash, may be a large account being only a small piece of documented plastic. This is why it is popularly called ‘Plastic Money’.

3.3 History: Transition from paper money to plastic money: In the late 1940s, a number of US banks started issuing their customers scrip that could be used like cash in local shops.. The Franklin National Bank (New York)- now EAB (European American Bank)-formalized in practice by introducing the first modern credit card in 1951. California-based Bank of America extended the idea through out the United States by introducing the bank Americard (now VISA) in 1960 and franchising a single bank in each major city as its local affiliate. These affiliates were responsible for signing contracts with merchants to accept cards as payment, as well as enrolling cardholders in their respective areas.

At this time, a group of enterprising US banker who were not ‘franchises’ of Bank Americard created their own network by accepting one another’s local credit cards. On August 16, 1966, the group formed the Inter bank Card Association (ICA), which later became Master Card International.

3.4 Peoples knowledge about the credit card: People were quite aware of the product credit card.But the recent years they seems to be careful and intersted to the credit card.When there make a survey it shows that they know the name of credit card but have a little knowledge about that.The following figure shows the position: Extent knowledge Know completely Know little Know very little

of no of respondent 26 16 09

% of the knowing 6.76% 2.56% .68%

But as the day is passing the pople are knowing more about the credit card.The chart shows that peoples are not so much concerd about the card but it can be change toward the change of time by giving them the more knowledge about that.

3.5 Different types of Credit Cards in Bangladesh: There are three types of credit cards: 1

Bank Cards: issued by banks (for example, Visa, Master Card and Vanik Card).

2

Travel and Entertainment (T&E) cards, issues for the travel such as American Express cards.

3

House cards- That are good only in one chain stores . These cards are not available in our country.

The first digit in any credit card signifies the system:  Travel /Entertainment cards  Visa 

Master Card

 Vanik The structure of the card number varies by the system For example American Express card numbers start with 37, Cartle Blanche and Diners Club with 38.

Master Card: Credit card of the Prime Bank Limited has following aspects First digit indicates master card number, Second digit to six digits indicates bank identification number, Seventh digits identifies cycle, Eighth digits through fifteen digits indicates account number, in this number fourteen digits is stand for supplementary card number and fifteen digits is stands for card replacement number and Sixteen digits are for check digits.

Visa: Always first digit is 4. Digits two through six are the bank number, digits seven

through twelve or seven through fifteen are account number and digit thirteen or sixteen is a check digit.

American Express: Started with 37, digits three and four are type and currency, digits five through eleven are the account number, digits twelve through fourteen are the card number and digit fifteen is a check digit.

Vanik: Started with 6, two through six are the bank number, the digits after the bank number up through digit 15 are the account number and digit 16 is a check digit.

3.6 The market of Credit Card: The market is running on the credit card which is the most usable paper money in our country as it is toward the world.Less than 40 years the growth of the payment services industry has soared. At the end of 1977, there were 78 cards in circulation per (banked) person globally (including Master Card, Visa, American Express, Vanik and

Diners

Club

Card).

3.7 Most Dealer of Credit Card in Bangladesh: Standard Chartered bank pioneered local credit card business in Bangladesh in January 1997 and by far, it has become the most successful in this business. But initially it started by only acquiring merchant transaction for Visa and Master card (i.e. an international travellers can use his international Visa or Master card in a local outlet and the merchant can receive the payment from ANZ Grindlays bank Bangladesh.) In January 1997 ANZ introduced its local currency VISA and Master card. With the branch support in all metropolitan cities, ANZ cards are widely accepted in the major outlets in these cities (At present there are about 2000 merchants in all over Bangladesh.)

Market players Standered Chatered Bank National Bank Limited

Start of local credit cards operation January 1995 March1997

Prime Bank Limited

November 1999

Table: Major Market Players In Bangladesh.

National Bank Limited- is the pioneer of issuing international credit card ‘Master card’ but most importantly they also first introduced local currency (Taka dominated) Master card in Bangladesh. The foreign currency dominated cards could only be issued to the very few persons (mainly foreigners) who had foreign currency accounts outside the country. So the actual revolution of credit card started when the taka credit card was actually got introduced. The local NBL Master Card is accepted at 800 merchants with free personal accident insurance of TK.5lach, and cash withdrawal facility at any branch spread over the country.

Prime bank limited- Obtained principal Membership of Master card international in the month of May 1999. Within a period of 6 month, the bank successfully launched Master card ‘credit card’ which created a new dimension in its customer finding. The special feature of the prime bank master card is that its bears the card holder’s photo on the card, which is the first of its kind in Bangladesh and adds security against misuse. Prime Bank Limited issues 4 types of cards. These are Gold local & International and Silver local & International.

3.8 Advantage of Credit Card: Credit card gives the following facility: 1) It is safer than the paper money.

2) Risk free and hazard free, a card can be attributed to a huge amount of money.

3)It offers the largest portability. One can also avoid the toil of finger counting changes in this system.

4) No fear for the harrasment whether the card stole or lost.

5)A PIN(Personal Identification Number) given to withdraw the cash from the account which is more secured.

6) It can use for the shopping or for the payment of the bill of hotels, motels, restaurants, handicraft shops, jewelry shops, can service centers, tailoring shops, music

arcades, groceries, departmental stores, diagnostic centers, stationery shops and airlines etc.

7)International card can help in traveling to various countries such as buying air tickets, booking hotels, etc.

3.9 Limitations of Credit Card: The Credit Card has also some limitations. These are: 1)

All shopping centers may not be equipped with the card facilities. So, the cardholders cannot avail themselves of the opportunity of using them anywhere they would like.

2)

Many restaurants and shopping centers having card facilities do not accept a small amount of bill, which the customer wants to pay the amount by credit card.

3)

Thirdly, because of ceiling-touch income bracket along with other criteria, only a small number

of people in Bangladesh can practically qualify for holding cards and

enjoy its fantastic facilities.

4)

Many cardholders do not know how and in what place cards should be used.

FUNDAMENTALS OF CREDIT CARD SYSTEM

4.1 Card holder: Is the participants who carried the card in which his picture will be attasted to prove him as the owner of the card approved by the issuer. The letter establishes a line of credit for the customer and issues the credit card.

The Cardholder uses the credit card either to purchase goods and services from a merchant or obtain a cash advance from a member for which the cardholder receives a monthly bill from the issuer.

4.2 Issuer: The participants who issues the card bases upon all the information taken for the verifications.The Cardholder’s financial institution (usually called the issuing member or issuer) is a licensed member of Master Card and /or Visa. The Issuer: •

Receives and pays for transactions from Master card or Visa.

•

Bills collects from the cardholder.

•

Issues the card to the approved card holder.

4.3 Agent Banks: Dealings with the credit card is such a expensive and quite difficult to manage it perfectly. But some small financial institutions prefer to offer credit cards to their customers without taking on the complications and responsibilities of becoming an issuing member. These small financial institutions can contract to become an issuing agent of an issuing member. But they will not be able to give the facility which needed.The issuing agent solicits cardholder applicants for the issuer generally through take-ones made available at its branches. The issuer, in turn, issues the card in its name has the cardholder relationship, makes all of the Credit decisions and completely manages the card program. It the agent Bank’s name appears on the card, and then the agent bank must be an affiliate/associate member of Master Card/Visa Int’l.

The issuer usually keeps most of the income from the cardholder account: the agent member may not receive small compensation for providing the application. While the issuing agent’s income from this arrangement is small, it does retain customers who might take their business elsewhere if a Credit Card Program were not available at their local financial institution. When the issuing agent’s name appears on the card it tends to preserve the financial institution-Card holder relationship.

4.4 Acquirer: The acquirer is a member of Master Card and /or Visa and holds a written agreement with the merchant to: •

Accept the merchant’s sales slips.

•

provide the merchant with credit card authorization terminals, instruction, and contracted support services.

•

Handle and process the credit card transactions.

The acquirer is licensed by Master card and /or Visa and agrees to follow the operating rules and regulations of the two associations. Master Card and Visa provide various services to the acquirer, including authorization and settlement processing, interchange and resolution to member disputes. Many financial institutions are both issuers and acquirers: As issuers they maintain the cardholder relationship. As acquirers, they maintain the merchant relationship.

4.5 Merchant: The Merchant can be virtually any company, which meets the qualification standards of Master Card and/or Visa and an acquirer. Typical merchant business includes retail stores, restaurants, airlines, mail order companies, and health plans to name a few Master Card and Visa both require that the merchant be financially responsible and of good repute. The merchant has a written agreement with the acquirer to accept the Credit cards as payment and to abide by the terms of the agreement.

4.6 Operations of the Master card International: Bank- net is a global Master card Tele communication networks. It is used primarily to send and receive authorization, clearing, and settlement transaction. Bank net provides the following benefits1

Flexibility - through an adaptive and reactive routine network.

2

Reliability- through rerouting capabilities and back up facilities

3

Efficiency- through peer-to-peer

(PTP) architecture and packet

switching protocol.

4

Expandability- without re -design & Intelligence of a Distributed network.

5

Speed - average speed 2.1-second response time.

4.7 Banks network Like other Tele communication all data pass through a central switching center (a star network configuration). Through the world Master card has 16 switching center. Among those 7 switches are exits in US and rest of them exits whole world. In Asia two switch are exit.(Bahrain & Singapore) Recent Master card is going to establish more switch .This network is very fast and expensive.

The distributed network helps to travel along with the destinatiopn where several routes offers for the use of that.distention. This is called a distributed network & also refereed to as Peer-to- Peer (PTP) architecture. Compare to Star network it is cheaper.

4.7.1 Network Layout: Member host computer system - is the gateway through which Master card merchants and card holder have access to the vast Master card payment system.. To ensure good services to merchants and cardholders it is important to manage communication from host system to the Master card Interface Processor (MIP) efficiently.

4.7.2 Master card Interface Processor (MIP) Data enters the Bank-net through MIP’s, which perform two general functions for the members: 1

Provide member host access to Bank-net, which lets bank authorization as well as send and receive Inter Bank Network for Electronic Transfer (INET) files and a variety of reports.

2

Provide processing support for member’s payment card software application.

MIPs are joined to the Bank-net network through Tele communication centers called ‘Nodes’ or ‘Switches’. Each node is like an intersection on the system, which access to at least two other nodes. Before entering the network, a member’s data enclosed in a packet by the sending MIP. When a packet reaches its destination, the receiving MIP arranges all the packets in sequences for processing.

4.7.3 Member Host Connection: The member host is connected to the bank host to the MIP number and different types of services provided to the merchants and cardholders .The member host connection may involve one or more of the following options; On-line - Banks host computer can be directly connected to

an on-site MIP at bank

business location. Bank can communicate to an off-site MIP using standard communication software and locally available Telecommunication access. Members who are in remote areas or do not have the transaction volume to warrant using on-site MIP may find MIP sharing a viable option.

Off- line - Bank can use Bank-net PC file express a personal computer connection to the Master Card mainframe in St Louis, for sending and receiving bulk files over Telephone lines, Bank can use Computer-Assisted Telex Services (CATS), an authorization processing system offered to members who are not on-line.

Applications: Online with immediate response for the processing of clearing and sattlement are the major categories of Master Card.In that case online is the primary key to make the solution& the sattle ment is the secondary one.

4.7.4 Authorization: Authorization is the process by which a payment card transaction is either approved or declined by an issuer or its authorized agent or by Master card on behalf of the issuer.

The authorization is required before the merchant completes the transaction. To facilitate authorization, the central site host computer maintains the member master and other organization support files. Payment and card transaction are approved or decline by an issuer in one of voice authorization or POS terminal authorization.

Standard authorization process is step-by-step procedure for authorization the use of Master card .For terminal authorization these seven steps process is complete in an average 2.1 seconds (MIP to MIP) if the issuer and acquirer are different parts of the world.

Step 1: The cardholder gives the card to the merchant.

Step 2: The merchant starts the authorization process by either: •

Placing a call to the acquirer or its agent, or

•

Entering the transaction in to the POS terminal.

Step 3: The acquirer host computer system sends an authorization request message to the Bank-net network through the acquirer MIP. Step 4: The Bank-net network sends the authorization request message through the issuer MIP. The issuer MIP sends the authorization request to the issuer host computer.

Step 5: The issuer host computer processes the authorization request and sends an authorization request response.

Step 6: Bank-net routs the response to the acquirer or its agent.

Step 7: The acquirer or agents delivers the response to the merchant.

4.7.5 Settlement: Is the process by which funds can be exchanged as the monitary transaction to the net value of its transaction. It may be the sales transaction, cash disbursement, merchandise credits and miscellaneous records. The bank through with the settlement process occurs is called the settlement bank.The sattlement can be International or Local.

International Settlement:

The international sattlement will be calculate in US Dollar. But it may be uses on local currency. Wheter it counts as the US dollar it will be converted to the local currency for payments.

Local Settlement: In local processing the domstic transaction will be the sattlement of the bank or may be on INET to sattle. Members participating in local settlement process their domestic transaction through a local settlement bank.

4.8 Security and Fraud: Security is the main feature in the card business. For the security purpose the following actions are involve.

4.8 (A). Security Staff- Job responsibilities can be divided in to the following parts.

4.8. (A)-1- Internal: 1 Conduct pre-employment investigating of prospective card department employee.

2 Plan and supervise the manufacturing shipping, storing, embossing, encoding and mailing of cards.

3 Plan and supervise the physical protection of card department and building including the related data processing and data communication facilities.

4 Conduct investigations for other Master card members on request.

5 Maintain liaison with the Master card security and risk management department on Network and relevant internal department.

6 Train all personnel including employees with direct customer contract in fraud and awareness and detection.

4.8 (A) 2 Cardholder or Merchant related: •

Investigate prospective merchant (if applicable).

•

Investigate cases of fraud involving the institution.

•

Creates and implement cardholder and merchant education program (if applicable).

•

Assists consumer civic and business groups in preparing and

conducting fraud

awareness programs.

4.8 (A) 3 System related: • Review proposed changes in institutions card production and processing systems.

•

Establish and monitor fraud detection systems for both card holder and merchant account.

•

Report all fraudulent transactions to the Master card fraud reporting system, called Systems to Avoid Fraud Efficiency (SAFE).

4.8 (B) Card and System Security: Make sure for the card production and processing the following criteria are required-•

Physical security of the premises.

•

Protection of cards during their production and issuance.

•

Merchant education and monitoring (if applicable).

•

Early warning systems monitoring

•

Fraud reporting and analysis.

•

Investigation of cards and merchant fraud..

4.9 Card production Security: Card production security occur by the following two steps4.9.1. Plastic Procurement: Plastic is the hiden security of the card where the information included need for using the card. Master cards periodically in the security Bulletin lists manufacturers,

embowers and encodes that have been inspected and are in compliance with Master card minimum-security standards.

4.9.2. Card security features

For making sure of the security of card the following steps has been taken.

Master card signature panel-Signature panel helps to avoid fraudulent activities also provides authentication of the cardholder.

Identification of card source--- The ordering member or affiliates ICA number the month and the year the order was placed and the manufacturer’s name placement of this information on the card is at the card designer’s discretion.

Expiration date-After two years it will not be usable from the issue date.

Master card embossed characters-On the front of the card a special character assigned which is difficult to reproduce.

Hologram-A three dimensional insignia created with a laser.

Indent printing - Account number printed in reverse italic type on the card signature panel.

Two-card validation Codes (CVC1 &CVC2) - One of these 3 digits codes in printed on the signature panel following the account number and other is encoded on the magnetic stripe.

ANALYSIS OF PRESENT COMPETITOR OF CARDS 5.1 NATIONAL BANK LIMITED An international master card from National Bank Ltd, is accepted at millions of establishment across the world and a local NBL Master Card accepted at over 800 retail and service outlets around the country .The overview should be concern as the following.

5.1.1Establishment :

It was established in 1983. Its well skilled human resource and a long term vision with its mission make it more popular along the reputed commercial bank in Bangladesh.

Chairman

: Abu Taher Mia

Managing Director

: Rafiqual Islam Khan

Company Secretary

: Md. Abdur Rahman Sarker

5.1.2 Objective of the Company: •

Expand the multinational service in economic sector to reach the mass people

•

To encourage saving attitude in different classes in the society

•

To gain confidence by easing the international transaction in internal trade

•

Analyzing the realistic demand by consumers needs and provide short and long term finance.

•

To activate the capital market by facilitating the banking system

•

Utilizing the latest technology for the best service to the customer.

5.1.3 Present company Financial Position at a Glance: Year Authorized Capital Paid up Capital Income Expenditure Net Profit before Tax Assets/Liabilities

2000 1000.00 430.27 2988.90 2064.75 333.59 47148.08

2001 1000.00 430.27 3285.06 2268.42 400.68 48732.10

Branches: Almost 80 branches all over the country.

5.1.4 Card Division: A)

Establishment: March 1997

.

Card Base:

2002 1000.00 430.27 3583.76 2475.77 470.66 50347.11

(Tk. in million) 2003 1000.00 430.27 3883.31 2693.14 546.11 51935.16

a. Gold Card

:

2750

b. Silver Cared

:

9000

Total card B)

: 11750

Trend Analysis:

Year Issued Card Surrendered Card Income from Card (in million Tk) Marketing Expenditure (% of

2001 2700 58 95.00 5

2002 1400 63 85.00 7

2003 2100 75 92.00

income)10 Merchant

425

700

970

C)

Pre-requisites for having card: i) Mainly salaried person. ii)

Income Tk. 10000 or more selected for silver card, if other thing

remain same. iii) More than Tk. 60000 or more selected for gold card. iv) For international card the prospect cardholder have to open a RFCD account v) Card is issued in security basis.

5.1.5 Credit Limit: Every cardholder is assigned a certain limit for the use of card. He/ she should not exceed the limit if limit is exceed frquently, it may result cancellation of card at the banks own discretion or attract a service charge fixed by the bank.

5.1.6 Fees and Charges: NBL master card gives cardholder the opportunity of being flexible in their repayment schedule suiting to their most convenient time. They will receievmonthly statement showing the details of purchase and cash

advance in privious 30 days.2% to 3% (average 2.8%) on agreement basis.

5.1.7 Merchant Discount: NBL will accept all charges slips or sales slip in order to make payment to merchant subject to discount on the total amount listed on the signed charge slip from at the rate of .2% to 3% (average 2.8%) on agreement basis.

5.1.8

Exceptionality of NBL : a) Pay within 15 days from the statement date and thus enjoy a maximum of 45 days free credit facility. b) Pay 10% of the outstanding or tk 500 for local card or USD 25 for international card ( whichever is greater) within 15 days and ask for revolving of the rest amount. c) NBL card center is open from 9.00am to 10.00 p.m for 363 days in a year( including two Eid days). d) The master gold card holder automatically covered under personal accident insurance against loss of life for as high as tk 5 lakh in case of air travel

5.2 STANDERD CHARTERED BANK Standard Chartered is named after two banks when merged in 1969. They were originally known as the Standard Bank of British South Africa and the Chartered Bank of India. Australia and China of the two banks, the Chartered Bank is the older having been founded in 1953 following the grant of a Royal Charter from Queen Victoria.Today Standard Chartered is a international bank focused on the merging markets in which it has worked for over 100 years in Asia, Africa, the Middle East and Latin America. It has a network of over 500 offices in more than 50 countries, and it’s headquarter is in London.

5.2.1 Establishment and operation in Bangladesh:

The Chattered Bank opened in Chittagong in 1948, which was, at the time, the eastern region of newly created Pakistan. The branch was opened mainly to facilitate the post-war re-establishment and expansion of South and South East Asia. The Bank opened its first branch in Dhaka in 1966 and shifted it’s headquarter from Chittagon to Dhaka after the birth of Republic of Bangladesh in 1971.On the year of 2000 it was known as ANZ Grindleys Bank . But now it is Standerd Chartered Bank.

5.2.2 Objective Of the Company: •

To be renown as the top performing baking group serving Australia, New Zealand and in the international market

•

To have a strong customer focus and to build a relationship based on integrity superior services and mutual benefit.

•

To strive for profit and sound growth.

•

To work as a team to serve the best interest of the grou

•

To work for continuous business innovations and improvements.

•

To value and respect people and make decisions based on merits.

•

To provide recognition and rewards on performance

•

To be the most outstanding financial institution providing a broad range of services.

•

To have the "Touch the Power " of the banking sector.

5.2.3 Branches: 18 all over the country.

5.2.4 Card Division: The Cards services Division (CSD) has six units namely, Risk Assessment, Collections, Merchant Services, Operation Services, Issuing Services continuously corking on improvement and wide acceptance of Standard Chartered cards. A manager who reports directly to the Head of Cards heads each of these units. The Head of Cards in responsible for overall operation of CSD. A sales team known as Direct Sales Agents

work alongside these units to build up the customer’s base A)

Establishment: March 1995 [ AS The Name of ANZ Grindlays Bank] Card Base: a. Gold

: 14500

b. Silver

: 68000

Total card B)

:82500

Trend Analysis:

Year Issued Card Income from Card (in million Tk) Marketing Expenditure (%of income) POS machine (no) Merchant C)Pre-requisites for having a card:

2001 10000 170.00 10% 350 2100

2002 38000 300.00 15% 500 3500

2003 57000 398.00 12% 650 3300

i) The age of the applicant should be 18 to 70 years. ii) Monthly income should be 10000 or above. iii) He or she should be a graduate to be a card holder. iv) Executives, govt. officials, defense personnel, housewives,

entrepreneurs

or businessman can apply. v) Secured documents should be approved.

5.2.5 Credit Limit : Credit limit of the gold card (local) is the maximum amount of credit available to the cardholders, which they can access at any time. This credit limit will be notified in writing to them. The bank may vary much from time to time and will notify the cardholder of any such variation. The available credit is the unused balance available to them at any point in time.

5.2.6 Fees and Charges: Service charge from the cash advances will be calculated from the day of advance

to the day of full payment or statement day,whichever is earlier. But the service charge for retail purchase will be calculated from the posting date.Any amount is in excess of the approvesd credi limit will attract a flat over limit fee as prevailing from time to time.

5.2.7 Merchant Discount: Standered chartered bank will accept all charges slips or sales slip in order to make payment to merchant subject to discount on the total amount listed on the signed charge slip forms at the rate of 3% in case of Master Card.A merchant is a shop, outlet, hotel or restaurant that accepts credit card. This department, also known as acquiring Department, brings in new merchants to expand the business of the credit cards and if they agree they become merchants off Stan chat. This department also takes up promotional activities to boost up the transactions at the merchant stores and sets up POS terminals to make credit card transactions easier and quicker. Initially, the Banks cards market was very small with only 29 merchants. Currently, the total number of merchants is around 3500. Commission is set up on agreement with merchant in bargaining system. It varies merchant to merchant in reputation and volume of sales.

The rate falls from 1.5% to 4%.

5.2.8 Cxceptionality of the Bank: •

It gives 24 hours service for the cardholder or as the facility of the bank transaction.

•

Standard Chartered Credit Card gives you access to cash up to 50% of the credit limit.

•

If you loose you card, you are protected against financial charges from the moment you report the loss to us.

•

The Standard Chartered Credit Card gives you free air accident insurance coverage up to Tk. 100,000 (for Silver Card) or Tk. 500,000 (for Gold card).

•

You may apply for Supplementary Cars (s) for your spouse, parents, sisters, brothers, friends or children over 18 years of age.

•

With Standard Chartered Credit Card you have the convenience to pay as little as 5% of your outstanding

•

The agreemnent with the bank and the merchant will give the facility to own discount.

•

Its six division will give the most facility of card toward the card division.

•

POS terminal to make transaction more esier & quicker.

•

Issuence of PIN (personal identification number) to withdraw cash or to deposit.

5.2.9 Special Promotional Offer: The bank offer special to its Cardholders time. Such as•

Discount 5% to 20% in various renowned restaurant and first food store, i.e. Chillis Chines & Thai Restaurant, La Villa, Royal Orchid, Hot Hut, Sajna, Santoor, Hotel Agrabad etc.

•

Discount in payment in Five Star Hotel i.e. Hotel Pan Pacific Sonargaon (20%).

•

Discount in payment in air tecket i.e. Malaysia Airlines.

•

Special offer package tour at discount.

•

Air Insurance

•

Discount in different promotional period.

5.3 PRIME BANK LIMITED Prime Bank Limited is a fast growing private sector Bank and the Bank is already at the top slot in terms of quality service to the customers and value addition for the shareholders. The Bank made satisfactory progress in all areas of business operation in 2003. Despite difficult circumstances, the Bank closed the year with a number of achievements. The Bank further expanded and consolidated its customer base in both of its core businesses and retail banking. During the year under review, the network of

branches increased to 31 with a branch at Conabari to focus on the social development as well as the development of the banking sector.We are very selective in locating branches so that customers can be better served. This year we have already planned to add a few branches to our network, which will give the Bank strategic advantage in terms of operation and business potential.

5.3.1 Establishment: The Prime bank has established on May 1999. That refer to it is giving its services fomm that year with the dealing of Master Card. And Prime Bank has started its Visa card from May 2004 for giving better services to the valuable customers.

5.3.2 Objective of the company: To have a strong customer focus and to build a relationship based on integrity superior services and mutual benefit.

•

To work as a team to serve the best interest of the group.

•

To work for continuous business innovations and improvements.

•

To value and respect people and make decisions based on merits.

•

To provide recognition and rewards on performance.

•

To be the most popular bank in the banking sector toward its service.

•

Give the facility to the cardholder as well as for the clients.

•

By maintaining its regularity making a global network.

•

Having a package with quality service to the development of the banking sector.

5.3.3 Branches of PBL : 31 branches all over the country.

5.3.4 Current Position: On 10th May 2004 the credit / advance of the company was tk 73455250/16. The Bank consolidated its position and retained its product line and financial services aimed at various target groups. In a challenging market conditions, the Bank continued to

provide more innovative products and better service to retain the market share.

Taka in million YEAR Authorized

2000 1000.00

2001 1000.00

2002 1000.00

2003 1000.00

Capital Paid up Capital Reserve Fund Investment Income Expenditure Net Profit

400.00 573.73 1524.54 1515.63 922.43 526.20

500.00 761.43 1730.74 1987.58 1231.49 705.09

600.00 807.92 1996.23 2250.96 1503.12 696.84

750.00 866.63 2246.47 2854.8 2004.88 772.52

2004 upto April

3054.23 2160.13

before Tax Number

of 518

613

730

730

Employees Return

on 4.61

4.80

3.73

3.73

Assets (%) Fig: Current financial Position at a glance (Source: Annual report, 2003 and collection from card division) 5.3.5 Asset and liability committee (ALCO): The management of Bank’s asset and liability is managed by ALCO at Head Office.

The committee generally maps the strategy for liquidity management, reduction of interest rate risk, market risk and maturity gap. In addition, ALCO provides the Bank continued access to different funds including inter bank so that liquidity risk is low. The pricing policy for different kinds of liability and asset is also determined in this committee.The Bank ensures its available funds to meet obligation of maintaining Statutory Liquidity Ratio (SLR) and investment of liquid assets in a profitable manner.

5.3.6 Card Division: A)

Prime Bank Card Service: Establishment: 18th November, 1999 Issued Brand of Credit Card: MasterCard

Initial Investment: Taka 15 million B)

Human Resources: a. Executive

:3

b. Non Executive

: 39

c. Technical

:2

Total

: 44

C) Card Division: Card Type: International gold International silver Local gold Local silver Total card

Year -2001 604 224 3509 2955 7292

Year-2002 784 437 3941 3964 9126

Year-2003 925 548 4483 6516 12472

D) Recosition for owning Prime Bank different card: International Card: •

Gold Travel Quota [credit limit $ 1,500-$3,000]

•

Gold RFCD [on deposit balance $3,000-$5,000]

•

Gold Retain Quota [$ 6,000-$ 20,000]

•

Silver Travel Quota [credit limit $ 1,000]

•

Silver RFCD

•

Gold Board/Employee [Tk. 25,000-5, 00,000]

•

Gold VIP [Tk. 1, 00,000-5, 00,000] Local card:

•

Any one who is agreeable to keep under lien Tk. 3,00,000/-

•

Directors GM/AVP of all commercial Banks.

•

Any Borrowers who have credit limit of Tk. 25 lac and above with our Bank

provided no overdue.

•

Customers have a balance of Tk. 5 lac with any Bank and Tk. 2 lac in our Bank

•

Chairman,Deputy Secretary & Directors of all Government Corporation, Local Bodies.

•

GM and above in Bangladesh Bank.

•

Doctors,Vice Chancellors, Professors of Universities, Lawyer etc.

d)

However the Bank is performing it should reach a competitive target level toward issuing productible cards. From my point of view it may will have a good impact on its strategy on 2004:

Card Type: International gold International silver Local gold Local silver Total card

Jan 2004 42 21 87 155 305

February 2004 24 12 78 151 265

March 2004 24 14 63 140 241

Total Card within December 2004 can be reach more than 15000. e) Prime Bank focuses the following group of people for our Card Marketing:  Employee, Executives, and the Directors of Banks, Insurance and other type of Financial Institutions Companies.

•

Directors and Executives of export oriented Garments Industries.

•

Members of renowned Clubs and Societies.

•

Doctors and Engineers.

•

Employees of Foreign and Multinational companies

•

Directors of 100% Export Oriented Leather and other Industries

•

University and College Teachers

•

Employees of Mobile Telephone Service Provider i.e. Grameen phones, SHEBA

Telecom, Aktel etc.

•

Govt. high officials (DS and above)

•

Renowned businessmen in the society

•

Members of Chamber of Commerce and Industries

•

Defence officers and High officials of renowned NGOs, International Voluntary Organization.

5.3.7 Credit Limit: Prime bank has the authority to fix up the limit of the credit of cardholder . Prime bank can accept the limit which he/she wish to or may fix up the limit depending upon all of the given information.Later if the cardholder want to exceed the limit it may increase or not , that means the decision will just make only by the authority assigned for this purpose.

5.3.8 Fees & Charges: Prime bank has the less fees and charges for the card. As for local gold one should give 2300tk as the annual fee and 1150tk for local silver card but just for the banker it offer 550tk for local silver.For international gold card one should pay $92& $50 for international silver.But for the first supplimentary card it will give it to them as the free which will be applicable just for local .

5.3.9 Merchant discount: The bank offers the finest facility for the merchant for that reason it has the most merchant dealing toward its area of marketing .Result of the merchant shows the reflect of their achieavement.On the month of April total EDC Terminal was220 which was in Dhaka & Chittagong .The total Manual was 170 which was concerning to Dhaka, Chittagong, Sylhet,Rajshahi,&Coxs bazar.The flow of the merchant has occured for its discount rate .

1.3.10xceptionality of Prime Bank:

 Payment option as low as 8%.

•

Free supplimentary card given to the card holder for first time.

•

Interest free facility for minimum 20 days&maximum 50 days.

•

Open RFCD account with 200000 tk and own free card.

•

Facility to withdraw 50% cash of the credit limit.

•

PIN(personal identification number) will be given as to withdraw cash .

•

International master card offers the lowest fee in the market.

5.3.11 Department of PBL: The six department of card division give their facility to satisfy the customers. Its services for the cardholders ensure the quality of the bank.As well as it is famous to having

different

department

with

different

facility.

Marketing

department,Creditanalysisdepartment,operationdepartment,accountingdepartment,rec overy department,& customer service department has their service to help on the basis of customer needs Although I had my internee on PBL card division but I have a chance to work at recovery section.The restriction of time give me the chance to get little bit knoeledge from the recovery section.Side by side I have gathered lump sum from other section which got by the help of the sections workers.

I had to work in these sections turn by turn. I started my learning experience from Operation Department from 12th October and ended in Marketing on 12th January. And in the mean time, I had travelled all the sections in due time.

1. Marketing Department: SDA (Direct Sales Agent) are the Marketing Executives of PBLCard Business. They collect the card application from the interested cardholders &the send it to the credit analysis department.Usually they contact the prospective customers over phone to make appointment and than they visit the customers. At the end of month they get the commission according to the number of approved applications from the Card

management.

Merchant Marketing: Merchant marketing means to make new merchant and give the services to those merchant,for merchant setup prepare the prposal,to make installation of POS or manual machine at the merchant end.The merchant also help to sattle the disputed transaction & delivery to merchant payment and report to the member alert to control high risk merchant by followig MATCH rules.

2.Verification: The first job of the Credit Analysis Department is to justify the information given by the applicants. To verify whether they have given the right information or not.

Strictly following up the rules of the PBL the decision should be make to give card. In that case the applicants financial base and status will get the priority to give the credit card or to become the cardholder of PBL. After proper verification of full documentation the verification officers submit the application to the credit analysis officer to cross check the information.Later that the officer of the card division will finalize to give the card and to sattle the credit limit as per the rules of the bank or the choice of the customer. The officer sets the credit limit according to the set rules and cardholder choice. The officer hands over the application for making business proposal. The proposals get approved / rejected by the management. The approved applications are handed over to the operation department for next processing.

3. Operation Department: Operation department is the heart of card Business.It is the most closest section for the card holder as well as for the card division. In their working process they perform different kinds of work.As for Data capture where the data of the cardholders will be captured on the computer .They processes the EDP (End of Day Processing) at the end of the process. They embosses the plastic cards using a scanner to scan the image of

cardholder, prints the photo in the plastic and then embosses the card by an embossing machine. The cards are then ready then ready to hand over to the Card Delivery Section.

Whether the card holder is agree to use the card will send the acknowledgement slip, after verifying the signature the card will be activate for use.

4. Accounts Dept: The accounts department perform different activities for the bank needed. It starts from receiving cheque and make the proper steps as needed. Checking EDP report ,maintains properly and collects adequate fund from RFCD a/c for various card a/c, reconciliation with ID / F AD, settlement of Local card transaction bill with NBL / STANDARD CHARTERED Bank is the main work for the dept.The dept also prepare report if found any discrepancy take necessary action immediately& also maintain daily merchant payment other kinds of late payment; Excess limit charge and other dispute charges etc.

5. Recovery In fact recovery is the department from where the most dealing of the cardholder started. Collection of outstanding amount from the delinquent cardholders is sometimes very much crucial and difficult. However recovery section have to perform their works in different ways. They have to prepare reminders letter for all defaulters, need to Prepare MIS on overdue accounts of the cardholder. They should have to make calls to the cardholder&give the cardholder the information which may tern to the legal procedure .If any action need to take they visit to the cardholders physically,appear at the court or take it to the CL as the overdue card account.

The MIS of the recovery section shows how huch recovery is coming from that section.The recovery of this section come by the division workers who collects over the phone calls.During my internship they have collected more than 1 crore 10 lac tk on March 2004,more than 86 lac on April 2004,and more than 87 crore on May 2004.This is the collection from the cards which came over the recovery collection .And

the recovery is the result of the divisions hard working.

6.

Customer Service: The main performance of the customer sevice follow customer queries relating

to various disputes.Help cistomer filling up the applications, payments, A/C balance receive cardholder's documents such as Application forms, request for enhancement of card limit, change of card type, lost & found report, replacement of cards, request for PIN, acknowledgement slips, change of address/designation and auto debit instructions, waiver of service charges, cancellation of card account, transaction disputes, IBCA from branches, etc.Reply to cardholder's queries in written or over phone. Maintain individual register for all customer letters and applications forms received, help cardholders in understanding the rules of interest calculation, and follow up cardholder payment pattern and remind them over phone to make the payment with in due date.

They also receive of cheques and forward to the Account Dept. at the end of the day after proper record keeping.

5.3.12 Special Promotional offer: •

Reduction on annual MasterCard fees and other charges .

•

Flexible payment term .

•

Enhanced cash advance facilities.

•

20%cash withdrawal facility from the ATM card.

•

If someone open an account with tk2 lac he will get accredit card on free.

•

Prime Bank launched Visa card form May 2004.

•

Free supplementary card for the first time.

•

Minimum 20 days and maximum 50 days facility.

5.3.13 Facility or problem of Prime Bank card: Prime Bank gives the various types of facility which concern that it is the better

facilitate bank than the other banks. The bank has its security to make the facility to the customer for the proportion of the banks prestigious issues. It brings the first photo card in Bangladesh. Give the facility to the customer to make the easy purchase & have the repayment facility to the card holder. Side by side it collects the minimum payment with minimum interest rate .The service centres of the bank are spread stand to give the latest transaction of the plastic money. Its minimum 20 days and maximum 50 days helps people to have the convenient way of bill payment. The World-class brand of that bank has the better security for the customers. Then we can flow up a feature of the those facility: 1.

Convenient-easy purchase/repayment.

2.

First photo card.

3.

Security for the customer.

4.

Prestigious issue as the Plastic money.

5.

Minimum payment with its easy payment.

6.

Additional card issuing facility.

7.

Minimum 20 days and maximum 50 days interest free period.

8.

Minimum interest.

9.

Service censers are ill most important places.

10 .

World-class brand to make the convenient way of bill payment.

The Master Card of Prime Bank Limited can be obtained through direct sales agent or through the bank branch network. The prime criterion for getting the card is the regular income of the clients. It is not mandatory to have an account of the client to get a Master Card. After receiving the application, generally it takes three days for issuing the card. But sometimes more time is required for further verifications. Two types of cards issued by Prime Bank Limited based on the security: Unsecured Card: There the bank dont want any security from the interested applicants

but it is the rare usable card. In case oful1secured card Prime Bank Limited doesn’t take any security (as collateral) against the issuance of the cards.

Secured Card: To assign for the secured card the bank want different types of documents from the interested customers in against of the security. These may include share certificate, Sonchoipotro, FDR, Business solvency, Telephone number, Third party guarantee etc. Whenever the card issued it will be valid usually for two years from the issuing date. ` 5.3.14 Charges of card account: PBL may charge and debit the Card Account the amount of each and every Card Transaction made or effected, whether by the Cardholder or any other person with or without the Cardholder's knowledge or authority notwithstanding that the balance due to PBL on the Card Account may as a consequence of any such charge or debit exceeding any credit limit that may be sanctioned. For existing Fees and Service Charges, one may contact Card Division at PBL's Head office or any Branch of PBL. . 5.3.15 Processing in against lose of card: If the cardholder has lost his card he has to inform to the card dovision or the branch from where he got the card.Then it will be block &PBL may require F.I.R or Police report . But if the lost card is found or recovered, the cardholder shall not make use of the card but shall immediately cut it into halves and return the same to PBL. 5.3.16 Collection of PIN no: Whether a cardholder want his PIN no (Personal Idetification number) he has to collect it from the card division. Whether he or she will apply for it , might get the the PIN no within two or the days.

5.3.17 Cash advance fee: In respect of each Cash Advance made through the use of any Card and or the PIN, PBL charge and debit the Card Account a fee as decided from time to time.

5.3.18 Payment procedure:

Every cycle has its due date to sattle the bill and it is specified by the Bank. Each and every card holder should maintain the date otherwise he or she should give late payment charge with the interest . If outstanding balances stated in card account statement are not paid in full within the Payment due date stated , PBL may charge and debit the card account calculated on a daily basis, subject to minimum monthly finance charge of 2.5% or such other sum as may be determined from time to time by PBL without notice.laCharges incurred in any currency other than US$ will be converted into US$ at rates that will not be less favourable to Cardholder than the rate arrived at by use of an inter bank m existence within 24 hours that PBL or any authorized Agent posses the charge plus 1% of the converted amount.

5.3.19 Other charges and fees: PBL might have the right to charge as their rules has specifiedThey can be stated as the following: •

An annual service charge for the issue or renewal of the card should be given and such fee shall not be refundable in any event.

•

If any cheque has given by any cardholder and has returned PBL may assess a service charge for each cheque so dishonored or returned to reimburse PBL for the cost and expenses of collection.

•

For the replacement of the card the card holder should give replacement fee .

•

A charge for each travel airline or hotel reservation made through the use of the card which is subsequently cancelled or not taken up and such charge shall be at the rate prescribed by the Merchant with or through whom the reservation was made or at such rate as prescribed from time to time without notice; and

5.3.20 Lacking of the Prime bank: Card holder of the Prime Bank are the asset for the bank.To fulfill the need of the customer the bank should give the required service for the customer.The caradholders who are not the client of the PBL might be the customer of other

bank.So the efforts of the bank shall be made to convince other banks clients to become the client of PBL which can be possible by making the available facility for the customer.

1. Lackings of trained marketing executives without proper marketing knowledge 2. Lackings of technical support such as software, hardware, telecommunication etc 3. Lack of proper management system.

4. Lack of technically trained person.

5. Improper logistic support to motivate the job enviornment.

6. Decisions taken by higher authority of not match with the implementation’s view.

7. The market is not well defined to catch the customer.Lackings of advertising such as paper,magazines,or publicity etc.

5.3.21 Problems of PBL Card Division: •

Vision and mission is not well specified.

•

The market is not well defined.

•

Inter section relation is not well correlated

•

Lack of proper marketing knowledge

•

Always in a pressure from the higher authority.

•

Lack of proper management

•

Lack of motivation.

•

Switching tendency of the employees.

•

Improper logistic support.

•

Lack of technical person.

•

Lack o training facilities

•

Decisions taken by higher authority of not match with the implementation’s view.

•

Slow return on investment.

•

Lack of technical support (software, hardware, tele-communication etc.)

Comparison of the Bank 6.1 Inter Bank Comparison: The credit card is not an old name it is still a new for the people. But it has explore its place within a short period of time.As it has created the better market place soon there arising more competitor to become a successful one.In Bangladesh, there are five financial institutions issuing credit cards they are: Standard Chartered Bank Ltd.  Prime Bank Ltd.  National Bank Limited  Dhaka Bank Limited and  Vanik Bangkadesh Ltd. Vanik is the only card producing company in Bangladesh who issue the credit card under their own brand name.Other banks fall in the criteria of Vanik because they dont have their own brand. From those bank I have selected three banks to make my study.

Name of Bank National Bank Standered

Establishment March,1995 Master&Visa

CharteredMarch

Card

,1997 Prime Bank

November,1999,

Brand Master Card 64000

Issued cards 12000 63.16%

Market share 10.53%

Master&Visa

17000

16.84%

Card May,2004 Other Banks Total

93000

9.47% 100%

Table6.1: The market shares of the Major players in the Credit Card business in Bangladesh (as of Dec, 2003) Table 6.1 As according to the act of Dec 2003 the market of the three banks credit cards were 93000. On that case the proportion of the National Bank was10.53%,Standered Chartered 63.16%,and 16.84% of Prime Bank,and 9.47% for other Banks.

(Source Interviews of responsible person of different organizations).

M ARKET PROPORTION (%)

NBL SCB PBL VANIK

FIGURE 6.1(a) % Market share position in percent.

NO OF ISSUED CARD

MARKET SHARE IN TERMS OF ISSUED CARD 70000 60000 50000 40000

Series1

30000 20000 10000 0 NBL

SCB

PBL INSTITUTION

VANIK

FIGURE 6.1(a) Market share position (Issued card)

Name of the Banks

No.

Prime Bank Ltd. National Bank Ltd. Standard Chartered Bank Ltd. Other Banks Total

Merchants 650 2000 4500 2200 9350

of

Percentage (%) 6.67% 21.33% 53.33% 18.67% 100%

Table 6.2: Market share in terms of Merchants (as of Dec 2003).

Market Share Position in terms of Merchant 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

Prim e Bank Ltd. National Bank Ltd. Standerd Chartered Bank Ltd VANIK

1

Table 6.2 shows that PBL had only 6.67% of the total merchant market. Whereas NBL, SCB had respectively 21.33 %, 53.33 % and Other Banks hold 18.67 % of merchants of the total market.

Figure (a) Market Share Position in terms of merchant.

PRIME BANK LTD NATIONAL BANK LTD STANDARD CHARTERED BANK LTD

Figure 6.2 (b): % of Market Share Position in terms of merchant.

VANIK

6.3 SWOT Analysis: 6.3.1 What is SWOT?

SWOT is the word from which an organizations position can be found.There included the organizations strengths, weaknesses, opportunities and threats. That means the manager of an organization can draw a prfect picture of the company after evaluating .For that case ones have to find out the strengths & weaknesses of the company and should have to take the efficient steps neded for the company.The right dicision made up by the right stretegy can drive the company to be a successful one .

But the wrong decision can flow it to the negative way.So ones have to make the good decision which will fit the company to stand as a fitted one toward its internal & external factor of the organization.for that case the steps should be asthe following: 1.Define the organizational Strenghts&make it stable.

2.Find out the organizational weaknesses.

3. Analyse the position of the company toward its feature.

4.Take the steps needed for the company fittness.

6.3.2 Analysing Factor OF SWOT For the analise first the manager shold have to be careful about analysing those factors.If we consider Prime Bank as the example of the analyse,the manager have to asses the company weaknesses,strengths,opportunity&threats of the bank.

Several factors that the manager have to consider at first the strengths come which should have to be define clearly.In that case the valuable steps need to be taken to stable the strengths of the bank the strengths of the Prime Bank are: •

24 hours services for the Prime Bank customers.

•

The internal & external working environment of the organization.

•

Its goddwill as the leading Private Bank toward its services&facilities.

•

Prime Bank cooperativeness and friendlyness make it more popular in the banking sector.

•

Latest technology of the bank with better facility.

•

Making econical & social welfare toward its service.

•

Adequate financial resources.

So the manager should have to take those steps which will ensure to stable the

strengths or to be the better ones .

At the second place the manager should identify the organization weaknesses.Then define whether the weaknesses has occured or how to recover the weaknesses.The main problems of the bank which turned as the weaknesses of Prime Bank are: •

Lack of perfect monitoring or strategic direction.

•

Unavailability of telephones and Computers.

•

Lack of interpersonal workers for perfect monitoring.

•

Shortage of personal ATM machine.

•

Lackings of better technology to give updated facility.

•

Taking more time for delevering card or the branches delays.

•

Weak distribution networks for the improve of the implementation.

The manager should have to find out why the faults has occured and find out the

way to make a solution that will help the company to convert the weaknesses as the strengths of the Bank.

Then the opportunity of the conpany should be clearly found.In that case the opportunity of the bank will be the different way which can be defined as the following: •

People are choosing credit card as the plastic money rapidly.

•

The security of the credit card is making it more acceptable.

•

The Bank Master card with its Visa card easily attract the market.

•

As the cardholder are increasing it will be benefited for the organization.

•

Faster market growth of the Bank helps the Economy as a whole After all functions having copleted at the forth the Threats come.The threats of

the Prime Bank should me mention as High cash advance charge can reduce the card market of the bank. The shortage of manpower of the bank will not be able to give the facility as needed for them. Political instability hampers the environment of thebusiness society. Poor track record in implementing

the strategy can be effected the

environment. Rising the sales of substitute products can hamper the card market.

Vulnerability to recession and business costly regulatory requirements cycles can flow a negativity.

Analysing those factors the Management team of the Institution can draw a decision for the achievement of the Bank different factors.For that puppose each and every person of the Organization should be aware about the implementation of their strategy.The neede steps should be taken for making the solution of the Bank.And find out what problems has occured,why occured,revise is it true & take how to recover those problems or how to stable the strengths.

6.4 Comparison Of Different Cards: 6.4.1 Position of Cards Business: People who are using cards want to use the branded product . For their interest they would like to use on the name such as they prefer Slandered Chartered cards then HSBC cards and then prefer Prime Bank cards. Here the customers are choosing upon the name of the bank because they think that the name of the bank is the credit issue for them . But there need to think about their service. In that situation one matter effect that "First Entry First Choice", menans the bank which enter with credit card first will have the preference to take facility from. According to branded product Vanik issue the Credit Card under its own Brand name. PBL issues its Credit Card under the brand name

of MasterCard / Visa Card from May 2004 .And Standard Chartered issue Visa Credit card. The Visa card of Prime Bank will drive the bank to the more popular one among the other banks.

Master Card

Strongly

Dis - Indiffere Agree

Disagree (- agree 2) i) It has more retail access 0 ii) More ATM access 1 Iii) Low charges 6 iv) Easy operation in 2

(-1) 3 2 14 3

Strongly

Total

nt (0)

(1)

Agree (2)

Score

7 10 13 8

25 23 5 21

5 4 2 6

32 27 -17 26

transaction Table 6.4.1: Respondents opinion about Master Card and Others.

The above table shows that MasterCard has more retail access, more ATM access and easy operation in transactions than those of Visa / Vanik Card as scores obtained from the respondents’ answers corresponding those features are positive. But the charges of Master Credit Card are not low than those of Visa / Vanik Credit Card as the scores obtained is negative

Master card Vs Others 40 30

i) It has more retail access

20

ii) More ATM access

10

Iii) Low charges

0 -10

1

2

3

4

5

6

iv) Easy operation in transaction

-20

Different bank arises with its different types of facilities for the proportion of the customer choice .As for an example if we think about NBL,SCB& PBL ones give the facility which other don’t give .But some exceptionality of those banks make them more

facilitate bank for the customers.

6.4.2 TABLE: FACILITIES PROVIDED BY THE MAJOR PLAYERS Facilities Merchant Payment Time Cash withdrawal Credit Period Security

NBL Established 15-45 days 20% 45 days 2 security

SCB Established 15-45 days 50% 45 days 3security

measured3secur

measured

PBL Established 20-50 days 50% 50 days

ity measured Free cards

Free supplement card

Free

suppliment card Table 6.4.2 shows facilities provided by PBL,SCB& NBL. PBL and Standard Chartered ensure high level of security measures. They have three kinds of security measures whereas the NBL has two security measures .And SCB & PBL provides free supplimentary card for the first time which refer to the better facility.

6.5 PBL Credit Card Vs NBL Credit Card: Although PBL and NBL has started their business in different times ,they havecreated a place for their business . Each Company has its features which attractthe people to use their card .Their provided terms can be differeciate as the ollowing: 6.5.1 Facility Annual fees Interest on transaction Minimum Payment Customer service Card production

Prime Bank 50% for bankers 2.5% 8% 24 hour hotline Master &Visa

Credit time

cardMaster card Maximum 50 Maximum 45 days days

National Bank Reasonable 2.5% 5% 12 hour service

Table 6.5.1:preferences of PBL &NBL according to their some point of view.

The table shows that Prime Bank is giving the better facility toward some considering factors .it can be seen that customer perceives the PBL as better than NBL in the following four respects: PBL has the transaction of Master & Visa card but NBL deals Master card.

•

PBL has Easy operation in transaction than NBL

•

PBL has Different types of Cards and its limit Than NBL

•

PBL has better customer service than NBL.

•

PBL‘s cards have less annual fees & charges than NBL. Although there make different perception whether the name of NBL & PBL

comes ,people almost refer those banks as the same assurance. Customers are equally satisfied by the two bank . Scored positive on the above criteria. Again it was found from the survey that customers scored PBL negatively on the point “Cash advance fee”. This represents those customers satisfaction in using the PBL credit card is lower compared to NBL credit card. There fore the study come to the point that removing the above problems PBL could retain enough customers, which would strengthen its competitive position in the market. The market share of PBL is higher than that of NBL. PBL has already gain more than16000 cards in according to its issuence.Within a short period of time it is a matter for the card market ,NBL has 12000 card users which again ensure that PBL & NBL is the nearer competitor of credit cards.

According to the earning of the profit Prime Bank stand at almost the same of NBL .In the year of 20003 NBL has has earned a profit of more than 400 lacs (approx.) whereas PBL earned almost 460 lacs.But recently PBL has taken different steps for the better improvement of the company. The improvement of the card facility givev it to reach at the better position.The calling of the recovery of PBL has increases its return of credit card .As for an examle the earn from the card of PBL was more than 85 lacs which will be able to help the PBL economy as a whole.(Source: HO, PBL). Whether the earn of

the card division will increase it is ultimately means the increase of prifit .

The credit facility of PBL has make it more preferable whereas PBL gives 50 days as its credit period &NBL gives 45 days to recover the credit of the cardholder.The another point is that PBL gives the facility for the bankers who will use the credit cards.The banker have to give 550 tk as their annual fees instead of 1150 tk for local cards of PBL .On the other hand NBL dont give those types of facilities .In that case PBL will get the better preferance.

6.6 PBL Credit Card Vs Standard Chartered Bank (SCB) Credit Card: Standard Chartered Bank is the first institution in Bangladesh which srarted its credit card business as strongly as now it stands. . It has started its business in credit card from 1995 and has absorbed the largest market share. Among all the cardholders, Standard Chartered has own the greater cardholders, which is 63.16 % of the total market share. On the other hand, Prime Bank Limited has started its card business from 1999 and has obtained only 16.84% market share. But as PBL started their business later SCB the market position is not greater but it has improve smothly within a short period of time.

The research had tried to identify some major difference between PBL and SCB. This difference of the features of card is presented in the following table.

Standard Chartered Bank Prime Bank Limited 1. It has 21 ATM machine of its own and 1. It has no ATM machine of its own but cardholders can enjoy it cardholders are allowed to use SCB’s ATM. 2. 50% Cash withdraw facility from both 2.50%Cash withdraw facility from its cash ATM and cash counter.

counter and SCB ATM . .

4. Cardholders can have statement from 4. Statement is sent only once a month & 2nd ATM machine any time. as c/h wants.

5. No international MasterCard but it has 5. It has MasterCard and launched Visa card international Visa card. on May 2004.

6. No special facility for the banker 6. Annual fee is 50% for the banker.

7. More than 4500 own machine in the 8. Approximately 650 owned machines in

merchant shop around the country.

merchant shops around the country.

The unique features of SCB & PBL has shown but there may have other things such as Annual fees, Return cheque fee, PIN replacement fee, of SCB are higher than that of PBL.But as Standred Chartered Bank has established their business before Prime Bank it has placed before PBL .So people are making concern about the old one .Still now SCB has the greater card holders which helps the bank to earn the more profit for the interest of the bank .

For the recovery of the cards SCB has opened "Call Center" which drive the bank to be the best one of all the banks credit cards .And it gives the higher credit limit whether the cardholders apply for a card .The sanctions of higher credit limit to the cardholders compare to other banks and financial institutions do,the reason is that SCB wants to remain the highest market shareholder. In addition it continuously monitors and evaluates different segments and change the target market segment what PBL doesn’t do.

The other point is that SCB has the trained marketing executives who have the better knowledge about the cards .The marketing executives also have the interpersonal ability to match with the environment .For that they can give those information needed for the customer .But PBL Marketing Executives are not well trained & they don’t have much interpersonal ability as they needed to perform their Marketing. As the marketing people of PBL work individually they don’t have any target to fulfil the organization goal.

On the other hand SBC each marketing officers is under a team and they work to reach at a target which will refer to the achievement of the bank .

The recovery of the SCB comes from the permanent officers of the bank & as they have the responsibility to reach a target label they try their best to fulfill the company wants . But the PBL recovery don’t have their sufficient workers to recover the bank wants. So by increasing the workers of the PBL can be help to make more recovery In comparing PBL with SCB, the study also looked for the customer’s perceptions toward each of the institutions regarding their credit card facilities. The responses of the

cardholders are scored in the table.

Impact of Prime Bank Card Division on its (PBL) Growth : 7.1 Inderect& direct impact: Prime Bank is running to its five years of operation card business. Because the card market was showing growth with the increasing acceptability of plastic money in many outlets, the business had become intensely competitive. More players had entered into the market and some others were preparing for entry into the same. As the people are increasing the customer also incresing they alo impact on the banks credit cards as well as the economy.The Prime Bank has increase its card business from their starting of business & they also increasing their cardholders which increase the profit of the bank.The earn of the card division of Prime Bank helps to increase the earn of the PBL as a whole.They have already taken different steps to enlarge the card division as for they are thinking about to stable a call center for the better inprovement of the recovery .They are also trying to expend the merchant network to have the better implimentation of the card division .

The bank’s earning capacity grew and the customers got a new product of plastic

money which can be define as the following: A) Expenses of some considering factors Factors Salary and allowances Interest on prime general Depreciation Total

2002 49.26 80.44 13.50 232.74

2003 90.98 164.37 22.60 501.76

The figure shows that its expenses has increases before the last year.

B) Income from Card business: Factors Fee local Fee International Merchant commission

2002 92.71 63.31 22.42

2003 98.96 47.30 35.91

Other Income Totl Income

7.72 506.66

4.34 603.84

C) Profit generated from card business: Profit

102.08

The chart of some considering factors of Prime Bank shows , as its income increases the expenditure also increases .

But the considering factor should be to expenses less as they are expensing.

7.2 Bank is also earning by the following ways: Factors Interest income local Interest income International Late payment charge local Late payment charge International Cash advance fee local Cash advance fee International

2002 180.52 31.48 42.54 9.97 5.35 0.49

2003 256.12 36.62 31.27 7.22 14.77 0.31

2.5% interest per month on both local and international cards. Interest is calculated daily basis on card accounts from the posting date.

7.2.1 Foreign Currency Earnings: Prime Bank Limited has been adopting following policies for the International Card: i. Lien on Foreign Currency. ii. Lien on RFCD. iii. US$ 3000.00 per visits to countries other than SAARC member countries and Myanmar. iv. US$ 1000.00 for Travel Quota for SAARC member countries and Myanmar by air and US$ 500.00by overland route.

Prime Bank Limited has been earning a lot of foreign currency by following the abovementioned policies. Shareholder equity, number of account holders & foreign currency earning has increased, which is contributing to Bank’s steady growth.

It should be mention here that PBL commenced its card business from November

1999. As a result, it had more than four years business but the business is growing as a very positive signal for the performance. For the year 2003, the growth has been estimated 20% over the year 2002 because of the highly competitive environment and unfavourable economic condition of the country. Now let’s look at the current performance of the PBL card division.

•

Increasing the number of cards from 12472 on Dec 2003 & 12859 on Feb 2004 .

•

The increse of Profit for the month of May-04 is 42.86% which is higher.

•

Merchant comission 5.35% which is higher than the previous year.

•

Profit of Tk.11.84 lac on Feb 2004 which is less than Jan 2004.

•

Income of the bank has increase as on Jan 2004 it was 47.74 lac on Feb 2004 it was 51.59 So overall we can say that the current performance level is satisfactory provided

that it will improve its level of income.

Credit card business is a highly growing sector in the modern electronic banking system.

So, customer satisfaction is extremely necessary in order to succeed in this business.

The findings from the questionnaire for Credit Card holders are described below. This will give a clear view of the age levels of the real customers, the reasons for using the Credit Cards their popularity and income and satisfaction level of customers.

Findings from the Credit Card Holders Table 7.3 Frequency of Age Age 21-25 26-30 31-35 36-40 41-45 46 and Above Total

No. of Credit Card Holders 02 14 30 40 12 02 100

Percentage (%) 02 % 14 % 30 % 40 % 12 % 02 % 100 %

In the table 7.3 it is found that the Bank issues Credit Cards to deserving persons from the age of 21 to 70. Persons of the age level of 36-40 prefer using Credit Card most.

Table 7.4 Occupation-wise use of Credit Card.

Occupation Service Business Others Total

No. of Respondents 50 38 12 100

Percentage (%) 50% 38% 12% 100%

From the table 7.4 those service holders and persons having business occupation Prefer Credit Cards most.

Table 7.5 Use of Credit Card according to income range of respondents.

Monthly Income Range Tk.10,000-20,000 Tk.20,000-30,000 Tk.30,000-40,000 Tk.40,000-50,000 TK.50,000 and above Total

Person 24 28 28 14 6 100

Percentage (%) 24% 28% 28% 14% 6% 100%

From the Table 7.5 person who have monthly income 20,000-40,000 prefer credit cards.

Table 7.6 Purpose of using Credit Cards Purpose Credit facility Avoiding cash for security Convenience Emergency Payment Social Status Others Total

No. of Persons 40 20 09 16 13 2 100

Percentage 40% 20% 09% 16% 13% 02% 100%

From the table 7.6 it is clear that people are not using Credit Cards only for the status.

They also want to use Credit Cards in consideration of the convenience of using such cards. Now-a-days, it has become a necessity because of dearth of security Table 7.7 Bank Preferences

Institutions SCB NBL PBL Other

Number 40 12 23 25

Percentage (%) 40% 12% 23% 25%

In the table 7.7 portrays that consumers have their own preference own preference of Banks for taking Credit Card. It differs due to good service, goodwill, reputation and facilities of banking and financial institutions. From the survey, it has been found that in Bangladesh, customers prefer SCB most for taking Credit Cards, 23% people like to take Credit Card facility from PBL, 12% from NBL and 25% from other banks.

8.1 RECOMMENDATIONS: Prime Bank a well reputed bank toward the all card business institutions .Rapidly increase of credit card make the baks to be more competitive in their best choice as well as the bank bases upon. Prime Bank Ltd. is one of the topmost private Commercial Banks in the country and it has been operating quite successfully.

Although it has a healthy and steady growth in sales trend of credit cards, the organization needs to address some of the bottlenecks found out from the survey conducted for the concerned study .But it has to take some steps which can be able to lead the company for better positioning .The taken steps can be mentioned as respectively : •

PBL should upgrade their soft ware. By this software it is not easy to count bonus point of cardholders. More over excess limit charges occur two times (when card holder not pay amount with in the month).

•

Officers should pay more sincere attention to solve the customers’ problems

•

Card Division should practice job change periodically in order to make their employees efficient in every field and also to increase their acceptability to possible changes.

•

The management team should be more aware about the improve of the

organization.

•

The marketing executives should be well trained & select the interpersonal skilled executives.

•

The office should be well decorated which will attract the customer also the workers to feel comfortable.

•

Making the enviornment as which will flow officers and staffs to work with discipline and cleanliness.

•

Customer services should need more worker to give services required for win the customer minds

•

.PBL should reduce cash advance fee. It creates negative effect to the cardholder. It is also a bad sign for the future business.

•

PBL should give the facility for assigning credit limit of the cardholder, it causes to attract for the other banks.

•

Officers should pay more sincere attention to solve the customers’ problems.

PBL has no ATM machines. They always depend on the Standard Chartered ATM machines. Therefore, PBL should procure their own ATM machines.

•

Card Division should put maximum emphasis on the merchant marketing because it is very essential to steadily increase the number of credit card holders and also play vital role for earning profit.

•

Prompt customer services is required for win the customer minds.

•

PBL should wishes to the card holder in different occasion..

•

PBL should reduce cash advance fee. It creates negative effect to the cardholder.

It is also a bad sign for the future business.

•

PBL should not so conservative about credit limit of the cardholder, it causes some card cancelled.

•

PBL should increase their publicity by magazines. newspapers or advertising .

•

The policy should be to allow competitive salary and good incentives in order attract and retain excellence in service.

•

To achieve this objective they may consider creating an efficient and effective Card Division in each of the Bank’s main branches in the Divisional Headquarters outside Dhaka .

•

Card Division should meticulously verify the applicant’s income from salary, status and other required particulars because many cardholders have a tendency to furnish erroneous information in their applications.

•

Arrangement for offering attractive gifts & prizes should be made so that the number of credit card holders’ increases day by day.

8.2 CONCLUSION The Credit Card a conversion name of money which we call as the "plastic Money”.

Recent years it has drive to gain popularity alover the world as well as in Asia .Feeling secured is the main factor for having todays position of Credit Card .As the credit card dealers are more concern for giving the better facility to the customer they work for the better satisfaction of the customer .The use of credit card is increasing the competitor of credit card bubiness.The impact of credit card ultimately effect on the economy of the country .Only a better effective and efficient work force under a dynamic management can achieve the objective to reach the goal .PBL has the better facility to make their market .It has already made a "Vista" of credit card toward all other business & after effectively following the recommendation it can reach to the enormous of the potential customers .The management team should be more strong to gain their objective and have to make the stretegy more effective by producing the latest technology which can compete to the market . Then the name of Prime Bank will be one of the example of Credit Card business.

Bibliography

Annual Report: Prime Bank Limited Report from Card Division(PBL) National Bank Limited Standered Chartered Bank Limited Books: Bank Managemant Guide (on 2002) Human Resource Managament Stephen P. Robbins Principles of Marketing Phillip Kottler Organizational Behavior(fifth edition) Gregory Moorhead / Ricky W.Griffin Managemant(fifth edition) Ricky W.Griffin Management(tenth edition) Heinz Weihrich & Harold Koontz Social Psychology Freedman / Charlsmith Library: Asian University Library.

British Council Library.

Indian Library.