Introduction
There are a number of issuers that have already strengthened their positions in the Credit Card Market in Bangladesh. One Bank Ltd. (OBL), as one of the country’s leading bank in the backdrop of the growing demand and positive response in the market and considering the potentiality to enter into Credit Card Business. In this attempt, I am going to attempt to study the customer satisfaction in terms of the credit card attributes, fees and interest charges and issues regarding ATM booths. This section devotes to the analysis of OBL’s existing Credit Card and performance comparison of services with other market leaders based on a survey data.
Credit Card of One Bank
One Bank Limited (OBL) launched MasterCard Credit Card business back in April 14, 2004. Presently it has only 8,500 cards in market whereas other contemporary competitors have grabbed a remarkable market share. Lack of dynamic product features, proper marketing effort, structured credit process, supervision of delinquency etc. is behind this miserable situation. Hence, One Bank Limited has re-launch its One Card shortly with all dynamic features, proper marketing strategy, smooth distribution channels (Direct Sales Team), structured collection team and above all with a best Credit Process for Cards Division. There are 4 packages in the “One Card”. Information regarding those 4 packages are mentioned below according to their website, leaflets and brochures. One of the participants inCredit Card Services is the Cardholder who is solicited, screened and 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.
MasterCard Silver
This is a local MasterCard Credit Card which is valid only in Bangladesh. It can only be used in local currency (BDT) within the country. This type of credit card has a limit ranging from BDT 10,000 to BDT 49,999. This type of card has designed for medium earner category customers.
Usage | Limit |
| Local Classic/Silver Card (Domestic use only)
| Local Classic/Silver Card Tk. 10,000- Tk. 49,999 |
MasterCard Silver Dual
This is basically one plastic that has dual options to make transaction in two currencies. Its acceptance jurisdiction is in country and outside country in BDT and USD respectively. Classic dual is for the medium earner category customers. Its credit limit is USD 100 to 1000 and BDT 10,000 to BDT 49,999.
Usage | Limit |
| Dual Classic/Silver Card (For both Domestic and International use)
| Dual Classic/Silver Card Tk. 10,000- Tk. 49,999 + US$ 500 – USS$ 1,999 |
MasterCard Gold
This type of card is taka card of which acceptance jurisdiction is only in Bangladesh and transaction currency is BDT. The differences between these two cards are higher credit limit than classic card. Credit limit of MasterCard Gold card is ranging from BDT 50,000 to BDT 5, 00,000. This type of card has been designed for the higher earner category customers.
Usage | Limit |
| Local Gold Card (For Domestic use only)
| Local Gold Card BDT 50,000 – BDT 500,000
|
MasterCard Gold Dual
This is a high value dual card remaining other features same with classic dual. Gold dual is also for the higher earner category customers and its credit limit is USD 1,001 to 4000 and BDT 50,000 to BDT 500,000. A secured dual card’s limit will be maximum USD 28,000 against lien on RFCD or ERQ account.
Usage | Limit |
| Dual Gold Card (International/Domestic use)
| Dual Gold Card BDT 50,000 – BDT 500,000 + US$ 2,000 – US$ 3,000
|
Credit Card Application Process
Service Offerings
All the service offerings of different issuers are listed at the following page in Table 1. The following are the highlights of them.
Facility | OBL | BAL | DBBL | EBL |
Average Card Processing & Delivery Time |
5 Days | 5 Days | 5 Days | 2 Days |
Average Fund & Disbursement Time |
2 Day | 2 Days | 3 Days | 3 Days |
Grace Period | 50 Days | 45 Days | 45 Days | 45 Days |
Payment Due Date from Statement Date |
20 Days | 15 Days | 15 Days | 15 Days |
Cash Withdrawal/ Advance Facility | Available (50%) | Available (40%) | Available (50%) | Available (50%) |
ATM Facility | 18 | 6 | 234 | 27 |
Table 1: Service offerings/facilities of different issuers’ cards
1) Card Processing & Delivery Time
The average time for processing the card and delivery is 5 Days for OBL. EBL takes only 2 days for processing the card and delivery.
2) Grace Period/Interest Free Period
OBL is enjoying a competitive edge by providing the maximum grace period of 50 days, comparing to 45 days provided by the other issuers.
3) Payment Due Date from Statement Date
OBL is also the provider of the maximum time in the market for payment due date from statement date with 20 days comparing to the same of 15 days provided by the other issuers. All the other issuers provide cash advance facility of 50% of the credit limit, except Bank Asia, which provides only 40% of the same.
4) ATM Facility
Cash advance facility has a close relation with ATM (Automated Teller Machine) facility for credit card, which is very convenient for the cardholders to draw cash from ATM rather than going to the bank. Here DBBL is in a leading position with 234 ATM booths all around the country. Currently OBL is on their way to an agreement with DBBL to Share their ATM facility.
5) Fund Disbursement Time
The average time for the disbursement of fund (through cheque or pay order) to the merchants is 2 day of OBL, 1-2 day(s) of BAL, and 3 days of DBBL and EBL. Being aware of the importance of this matter, OBL is now trying to provide the fastest service in the market.
Charges, Fees & Attractive Features of Different Issuers
The schedule of different charges and fees of various cards of different issuers are given in the next two pages in Table 2 (local) the focus of this study is primarily on the local cardholders; so, the best offers in cases of all the local charges are listed below:
- The Lowest annual fee for Basic card local classic is Tk. 1000 (offered by OBL, DBBL & EBL) and local gold is Tk. 1500 (offered by DBBL).
- The Lowest annual fee for supplementary card local gold is Tk. 750 (offered by OBL) and local gold is Tk. 500 (offered by OBL).
- No renewal charge for Basic & Supplementary Card this feature is provided by EBL.
- Late payment fee for local gold is Tk. 300 (offered by OBL) and local gold is Tk. 200 (offered by OBL& DBBL) which is low comparing to other banks.
- The lowest return cheque fee is Tk. 100 both for local gold and classic offered by OBL.
- The sales slip retrieval fee is Tk. 100 both for local gold and classic offered by OBL
- The monthly interest rate of OBL is lowest with 2.5% comparing to 3% of others.
Table 2: Schedule of Charges of Different Issuers’ Local Cards
Fees & Charges |
One Bank Ltd | Bank Asia (Visa) |
DBBL | Eastern Bank (Visa) | |||||
Gold | Silver | Gold | Classic | Gold | Silver | Gold | Classic | ||
| Annual Fee Basic Card | 2000 | 1000 | 2000 | 1000 | 1500 | 1000 | 2500 | 1300 | |
| Annual Fee [Supplementary Card] | 750 | 500 | 1500 | 1000 | 2000 | 1000 | 2500 | 1300 | |
| Renewal Fee Basic Card | 2000 | 1000 | 2000 | 1000 | 1900 | 1000 | 0* | 0* | |
| Renewal Fee [Supplementary Card] | 750 | 500 | 1000 | 500 | 900 | 600 | 0* | 0* | |
| Replacement Card Fee | 400 | 200 | 500 | 500 | 700 | 500 | 300 | 150 | |
| Late Payment Penalty | 300 | 200 | 500 | 250 | 350 | 200 | 500 | 300 | |
| EOL Charge | 500 | 200 | 500 | 300 | 400 | 300 | nil | nil | |
| Pin Re-issue Fee | 500 | 500 | 500 | 500 | 200 | 200 | 300 | 150 | |
| Cash Advance Fee | 2% or TK.75 | 2% or TK.75 | 2% or TK.150 | 2% or TK 150 | 2% or TK.100 | 2% or TK. 100 | 3% or TK.100 | 3% or TK.100 | |
| Return Cheque Fee | 100 | 100 | 350 | 250 | 350 | 250 | 200 | 200 | |
| Statement Retrieval Fee | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | |
| Sales Slip Retrieval Fee | 100 | 100 | 250 | 200 | 250 | 200 | 200 | 200 | |
| Out Station Cheque Collection Fee | 100 | 100 | 100 | 100 | 100 | 100 | 250 | 250 | |
| Cash Advance Limit | 50% | 50% | 50% | 50% | 50% | 50% | 50% | 50% | |
| Cash Advance Interest | 2% P/M | 2% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | |
| Debit Interest | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | 2.5% P/M | |
| Advance Income Tax | NIL | NIL | 3% | 3% | – | – | – | – | |
| Minimum Payments | 5% | 5% | 5% | 5% | 5% | 5% | 5% or 500 H | 5% or 500 H | |
Special Features | NIL | Spouse Card Free | Nil | *No renewal charge for Basic | |||||
SWAT Analysis
SWOT is an acronym for an organization’s Strengths, Weaknesses, Opportunities and Threats. The underlying assumption of a SWOT analysis is that managers can better formulate a successful strategy after they have carefully reviewed the organization’s strengths and weaknesses in the light of the threats and opportunities presented by the environments.
The SWOT analysis of ONE Bank Credit Card Division
S (Strength) | W (Weakness) |
| 24 hours services are being provided | Few personal ATM machines |
| The bank has goodwill in the market as a Leading Private Bank | Shortage of Manpower |
| Uses latest technology | Lack of perfect monitoring |
| Better advertising campaigns | Scarcity of telephone and Computer |
| The working environment is very cooperative and friendly | Lack of space in the office, which is not well decorated |
| Insurance of ‘Credit Card’ through branch | Operation process for producing & delivering cards sometimes delays & creates bad reputation
|
| Having competitive advantages in Bangladesh | The system is connected with the BTTB & sometime the line remains down for which the cardholder cannot charge |
O (Opportunity) | T (Threat) |
| The Card market has been growing with the increasing acceptability of plastic money in many outlets
| High cash advance charge can reduce the card base |
| Most of the people now days prefer credit card for security purpose | Always rush because of shortage of manpower. |
| The bank has several types MasterCard with attractive features, which can easily grab the market
| Political instability hampers the environment of the business society |
| Expanding product lines, some of which is associated with card facility | As the card base grows high, the number of delinquent cardholder’s increases as well |
