Customer Satisfaction in Retail Banking of BRAC Bank

The main purpose of this report is to analysis overall Retail banking activities and procedures of the BRAC Bank Limited. This report especially focus on Customer Service Quality and Product Promotion Strategy on retail banking. Other objectives are to know Bank service quality assessment tools and to know the expectations of customers of BRAC Bank. Here briefly discuss on to know about the Retail Product and promotion techniques and to Know the BRAC Bank position in the Market. Finally make some recommendations and conclusion to further the development of Retail products.

OBJECTIVE OF THE STUDY

General Objective

The general objective of preparing this report is to fulfill the requirement of project work as well as completion the BBA Program through gaining the experience and view the application of Theoretical knowledge in the real life. Also find out the Operational Process of the Bank and it’s overall Performance.

Specific Objective

The objectives of this report are the followings:

Get introduced with the idea of “Customer Service Quality” in BRAC Bank Ltd.
Introduce with the Bank service quality assessment tools.
Techniques to win a strong customer base.
To know the expectations of customers of BRAC Bank.
To know about the Retail Product and promotion techniques of BRAC Bank ltd.
To Know the BRAC Bank position in the Market.
To know the study’s and conditions of overall performance.
To make some recommendations and conclusion to further the development of Retail products of BRAC Bank Ltd.

About BRAC Bank Limited

BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance Corporation (IFC) and Shore cap International, has been the fastest growing Bank in for last two years. The Bank operates under a “double bottom line” agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh. A fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which hitherto has remained largely untapped within the country. In the last six years of operation, the Bank has disbursed over BDT 10,000 core in loans to nearly 2,00,0,000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. In 2011, the Bank’s has 81 branches ,22 SME service center,46 SME/KRISHI Branches, 421 SME unit offices and 240 ATM sites across the country, and the customer base has expanded to 1400 core deposit and 1,87,000 advance accounts. In the years ahead BRAC Bank expects to introduce many more services and products as well as add a wider network of SME unit offices, Retail Branches and ATMs across the country.

BRAC Bank intends to set standards as the Market leader in Bangladesh. It will demonstrate that a locally owned institution can provide efficient, friendly and Modern full- service banking on a profitable basis. It will produce earnings and pay out dividends that can support the activities of BRAC, the Bank’s major shareholder. Development and poverty alleviation on a Country wide basis needs mass production, mass consumption and mass financing. BRAC Bank goal is to provide mass financing to enable mass production and mass consumption, and thereby contribute to the development of Bangladesh.

Shareholding Structure

The shareholding structure of BRAC Bank Limited consists of different group with institutional shareholdings by BRAC, International Finance Corporation (IFC), Shore cap International and general public is also included through IPO.

BRAC

BRAC, a national, private organization, started as an almost entirely donor funded, small-scale relief and rehabilitation project initiated by Fazle Hasan Abed to help the country overcome the devastation and trauma of the Liberation War and focused on resettling refugees returning from India. Today, BRAC has emerged as an independent, virtually self-financed paradigm in sustainable human development. It is one of the largest Southern development organizations employing 97,192 people, with 61% women, and working with the twin objectives of poverty alleviation and empowerment of the poor.

International Finance Corporation

International Finance Corporation (IFC) is the commercial wing of World Bank. Using certain channels and overseas representatives, IFC it helps local financial institutions find profitable ways to target small and medium sized companies. Funding comes from the Asian Development Bank, Canada, the European Commission, the Netherlands, Norway, United Kingdom and IFC itself. IFC is a 19% shareholder in BRAC Bank. A new assistance program signed in August 2005 aims to double the bank’s number of small and medium enterprise clients in 18 months through campaigns to target women entrepreneurs and rural clients, introduce new products and train branch managers.

Shore Cap International

Shore Cap International Ltd. is an international private non-profit, equity company seeking to invest in small business banks and regulated micro finance institutions in countries with developing and transitional economies. Founded in mid 2003, Shore Cap has a current base of $28.3 million in capital commitments and seeks to support the growth of development finance institutions in Africa, Asia and Eastern Europe. The institution has made investments totaling $7 million in Bangladesh, India, Cambodia, Armenia, Mongolia and Kenya. Shore Bank is a 9% investor of Shore Cap and runs the management company, which oversees investment activities. Shore Cap typically invests between $500,000 and $2 million for an ownership position of 10- 25% of a company. As a minority shareholder, Shore Cap seeks financial institutions with a strong, experienced management team and a committed set of local development-minded investors. Shore Cap currently owns 18% of BRAC Bank Limited.

Corporate Value

BRAC Bank Limited’s strength emanates from their owner – BRAC. This means, we will hold the following values and will be guided by them as we do our jobs.

Value the fact that we are a member of the BRAC family.

Creating an honest, open and enabling environment.

Have a strong customer focus and build relationships based on integrity, superior service and mutual benefit.

Strive for profit & sound growth.

Work as a team to serve the best interest of our owners.

Relentless in pursuit of business innovation and improvement.

Value and respect people and make decisions based on merit.

Base recognition and reward on performance.

Responsible, trustworthy and law-abiding in all that we do.

Performance of BRAC Bank Ltd. AT a Glance

BRAC Bank wins the award for best retail banking in Bangladesh by Asian banker.
BRAC Bank awarded prestigious FT sustainable bank of the year 2010.
DHL-DAILY STAR Bangladesh business award 2008.
BRAC Bank received ICAB National award.
National award as the highest VAT payer for the financial year of 2007-2008.

Fastest growing bank: BRAC Bank has been the fastest growing Bank in last two years. It is one of the local private commercial bank that set the standard of banking for the leader bank of Bangladesh banking industry

Leader in SME financing through 421 SME unit offices: The idea of SME unit are become very popular to the BRAC bank customer. In the last six years of operation, the Bank has disbursed over BDT 10,000 corer in loans to nearly 2,00,0,000 small and medium entrepreneurs.

Biggest suit of personal banking & SME products: BRAC Bank has variety of product for their customer in Branch and also in SME office.

Large ATMs (Automated Teller Machine) & POS (Point of Sales) network: Now BRAC Bank has 240 ATM Machine all over the country.

SWOT Analysis of BBL

SWOT analysis is an important tool for evaluating the company’s Strengths, Weaknesses, Opportunities and Threats. It helps the organization to identify how to evaluate its performance and scan the macro environment, which in turn would help organization to navigate in the turbulent ocean of competition.

Strengths

Company reputation

BRAC bank has already established a favorable reputation in the banking industry of the country particularly among the new comers. Within a period of 10 years, BBL has already established a firm footing in the banking sector having tremendous growth in the profits and deposits. All these have lead them to earn a reputation in the banking field.

NGO name (BRAC)

BRAC is one of the largest NGO of the world and it is operating its activities in Bangladesh. BRAC bank is not a NGO bank but many people of the country consider it as a NGO bank like Grameen Bank which is not correct.

Sponsors

BRAC Bank Limited has been founded by a group of eminent entrepreneurs of the country having adequate financial strength. The sponsor directors belong to prominent resources persons of the country. The Board of Directors headed by its Chairman. Therefore, BBL has a strong financial strength and it built upon a strong foundation.

Top Management

The top management of the bank is also major strength for the BBL has contributed heavily towards the growth and development of the bank. The top management officials have all worked in reputed banks and their years of banking experience, skills, expertise will continue to contribute towards further expansion of the bank. At BBL, the top management is the driving force and the think tank of the organization where policies are crafted and often cascaded down.

Facilities and equipment

BRAC Bank Limited has adequate physical facilities and equipments to provide better services to the customers. The bank has computerized and online banking operations under the software called Finacle banking operations. Counting machines in the teller counters have been installed for speedy service ant the cash counters. Computerized statements for the customers as well as for the internal use of the banks are also available.

Impressive branches

This creates a positive image in the minds of the potential customers and many people get attracted to the bank. This is also an indirect marketing campaign for the bank for attracting customers. 81 branches of the bank are impressive and are compatible to foreign banks.

Interactive corporate culture

BRAK Bank Limited has an interactive corporate culture. Unlike other local organization, BBL’s work environment is very friendly, interactive and informal. There are no hidden barriers or boundaries while interacting among the superior or the subordinate. The environment is also lively and since the nature of the banking job itself is monotonous and routine, BBL’s likely work environment boosts up the spirit and motivation of the employees.

Team work at mid level and lower level

At BEAC Bank Limited is mid level and lower level management, there are often team works. Many jobs are performed in groups of two or three in order to reduce the burden of the workload and enhance the process of completion of the job. People are eager to help each other and people in general are devoted to work.

Weaknesses

Advertising and promotion of SME loan

This is a major setback for BBL and one of its weakest areas. BBL’s advertising and promotional activities are satisfactory but it SME loan is not advertised well. It does not expose its SME product to general public and are not in lime light. BBL does not have neon sign or any advertisement for SME loan in the city. As a result people are not aware of the existence of this bank.

Low remuneration package

The remuneration package for the entry and the mid level management is considerably low. The compensation package for BBL entry level positions is even lower than the contemporary banks. Under the existing low payment structure, it will be very difficult to attract and retain higher educated employees in BBL. Specially CRO’s are not satisfied with compensation package Provided to them.

Opportunities

Diversification

BBL can pursue a diversification strategy in expanding its current line of business. The management can consider options of starting merchant banking or diversify in to leasing and insurance. By expanding their business portfolio, BBL can reduce their business risk.

Product line proliferation

In this competitive environment BBL must expand its product line to enhance its sustainable competitive advantage. As a part of its product line proliferation, BBL can introduce the following products.

ATM

This is the fastest growing modern banking concept. BBL should grab this opportunity and take preparation for launching ATM. Since BBL is a local bank, they can form an alliance with other contemporary banks in launching the ATM.

Threats

Multinational banks

The emergence of multinational banks and their rapid expansion poses a potential threat to the new growing private banks. Due to the booming energy sector, more foreign banks are expected to arrive in Bangladesh. Moreover, the already existing foreign banks such as Standard Chartered are now pursuing an aggressive branch expansion strategy. This bank is establishing more branches countrywide and already launched is SME operation. Since the foreign banks have tremendous financial strength, it will pose a threat to local banks.

Upcoming banks

The upcoming private local banks can also pose a threat to the existing private commercial banks like BBL. It is expected that in the next few years more local private banks may emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against an on slaughter of foreign banks.

Contemporary banks

The contemporary banks of BBL such as Dhaka bank, prime bank and Dutch Bangla are its major rivals. Prime bank and other banks are carrying out aggressive campaign to attract lucrative clients as well as big time depositors.

Departments of BRAC Bank Ltd.

If the jobs are not organized considering their inter relationship and are not allocated in a particular department it would be very difficult to control the system effectively. If the departmentalization is not fitted for the particular works there would be haphazard situation and the performance of a particular department would not be measured. BRAC Bank Limited does these works very well. Departments are as follows—

Human Resource Department
Financial Administration department
Asset Operations Department
Credit Division
SME divisions
Inter Control and Compliance Department
Impaired Asset Management
Probashi Banking Operations
Treasury Front
Treasury Back
General Infrastructure Services
IT
Customer Service Delivery
Cards Division
Phone Banking Cash Management
Payment Service
Loan Administration Department

Business Division of BRAC Bank

BRAC Bank Limited consists of four major business divisions namely:

Corporate Banking Division
Retail Banking Division
Small and Medium Enterprise (SME)
Foreign Trade & Treasury

a) Corporate Banking Division

Corporate Division provides full range of commercial banking products and services to any potential corporate clients including multinationals, large or medium local corporate, NGOs, institutional bodies. The Corporate Banking Division has a centralized structure through on-line banking system. Any credit facility is processed at the Corporate Banking Division, Head office. After sanctioning of the facility, the limit is put on line and the customer can enjoy the facility from any of the BRAC Bank branches. Strict adherence to internal control guidelines and other legal and statutory compliance are followed. The Credit approval process involves separate Credit Division, the Managing Director and finally the Board. Credit Division, the Managing Director and finally the Board. Other departments like Foreign Trade, Treasury, and Credit Administration etc. play the support role for a comprehensive range of service to the Corporate Banking Division.

b) Retail Banking Division

Retail Division offers a wide array of lucrative and competitive banking products to the individual customers of the bank. Currently there are seven lending products and a number of other attractive new products will be launched shortly. It also offers different types of term deposit scheme and attractive STD & Savings deposit schemes giving interest on daily balance.

c) Small and Medium Enterprise (SME)

SME is an additional and specialized horizon of the bank which serves the bank’s special focus in promoting broad based participation by catering to the small and medium entrepreneur. The network of SME has already been established throughout Bangladesh. The SME market in Bangladesh is large. BRAC Bank is the absolute market leader in the number of loans given to small & medium enterprises throughout Bangladesh that has made more than 26500 dreams come true. The Bank disburses almost BDT 10,000 core of their loan to the SME unit. SME unit is dealing with small scale loan which is known as “ANONNO”.

Now SME banking introduced a new loan facility titled”APURBO” SME loan facility for small & medium entrepreneurs. This offer up to 50 lac as loan facility towards the SME entrepreneurs.

d) Foreign Trade & Treasury

Treasury Division is one of the major divisions of BRAC Bank. Treasury Division deals with money market. All treasury related products are processed in conformity with the Bank’s Operational, Trading, Money market, Overnight, Term placing, Deal settlement, Commercial position keeping, Treasury, Credit, Finance & other applicable policies. Treasury Operations calculates investment figure, prepares the auction application, forwards the application to Bangladesh Bank for Bid and Treasury Operations maintains and reconciles all accounts with foreign and local banks.

Product and Service of Retail Banking

Deposit product
Loan product
Card
Non-stop banking
ATM /Branch locator
Locker service
Foreign exchange & related service

Retail Banking (Deposit schemes and services)

An overview of Deposit Accounts:

One of the primary function of a banker as contained in the Banking Corporation act 1991 is to accept money from the public. Taking deposits from the customers and providing loan facility to borrower is one of the generic functions of consumer banking.

The deposits collected by bank may be broadly classified into:-

Demand Deposit

Demands on demand deposit accounts may be withdrawn on demand and thus no prior notice is needed. Deposit in

currents Accounts
Short term Deposit Accounts fall under this category.

Time Deposits

Deposits maintained in the Time Deposits or Term Deposit accounts are withdrawn on the expiry of a fixed period of time only.

Savings Accounts
Fixed Deposit Accounts

Current Deposit Accounts

A Current Deposit Account may be operated upon any number of times during the business hours of a working day. Current Deposit Account suits the requirement of Businessman, Joint Stock Companies, Institutions and Public Authorities etc. as they require numerous transactions on every working day. The banks do not pay interest on current deposits. Usually the loans and advances are disbursed through Current Accounts.

Savings Accounts

The savings accounts are usually opened and operated by individuals to meet their future contingencies and also to enjoy the convenience of easy accessibility of money kept in savings accounts. Savings accounts are designed for the investment of the personal savings. One of the objectives of such accounts is promotion the habit of thrift among people. The banks impose certain restriction on withdrawals from the savings accounts. The bankers usually on a special request may permit withdrawals exceeding these limits but then interest for that particular month in which withdrawals exceed these limits, is not paid. Interest on savings accounts is allowed on minimum balance. Interest is credited every six months (generally in June and December).

Fixed Deposit Accounts

Fixed Deposit Accounts are also called Time Liabilities of a banker. They are so called because the money is payable on the expiry of a fixed period of time only. The guest suiting his convenience chooses this time period. The rate of interest for different period is different but in case is usually higher than the arte offered on the Savings accounts. The reason is very obvious. The bank when knows the exact date of repayment, he can invest the money in long term projects bringing him a higher rate of return.

Deposit Products (Savings Accounts)

Savings Accounts

A Savings Account is an account that gives interest on the deposits kept in it.
This Account is for individuals and non-trading entities.
One can put his money in this account and earn interest on the idle funds also use the fund when he needs it.

Savings Account is suitable for

Individuals, clubs, associates, societies, trusts and others of similar stature.
Particularly suited for individuals who have regular and fixed sources of income and fixed expenses. For example: housewives, salaried professionals, businessman and other self-employed professionals.

Savings Accounts of BRAC Bank Ltd.

Triple Benefit Savings Account (TBS)
Savings Classic Account
Aporajita Account.
Future Star Account.

DPS( Deposit Premium Scheme)

BRAC Bank introduces the Deposit Premium Scheme (DPS) – a truly special savings plan that allows saving on a monthly basis and getting a handsome amount at maturity – BRAC Bank DPS account gives the convenience of saving regularly in line with one’s monthly income stream. So, if anyone wants to create a big savings to fulfill his/her cherished dream DPS is the right solution.

Installment sizes and DPS term

BRAC bank has a range of options for both installment size and maturity. The monthly installment can be as low as BDT 500 or any multiples of it i.e. BDT 1,000, BDT 2,500, BDT 5,000 and so on. Customers are also free to choose the maturity of their DPS. They may select a period of 5 or 10 Years, depending on their convenience.

Get a Savings Account and On-Line Banking Facility

Unlike other banks, BRAC Bank gives their customer the luxury of choosing any day of the month as installment date. Moreover, with a DPS at BRAC Bank, Customer will also have a Savings Account with personalized cheque book and receive on-line banking facility.

Auto Transfer Facility

Managing DPS had never been so easy. Customers don’t have to stand in long queues to deposit their installment every month. Customers can always deposit more than one installment in their savings account and Bank will automatically transfer the installment to their DPS account on due dates.

Fixed Deposit General

Fixed Deposit General is a non-transactional account that gives interest and principal at maturity. Minimum amount required to open the General FD account is BDT 50,000. FD General can be opened for 3/6/12/24/36 months. Interest is paid on maturity, calculated on 360 days, as per the Interest Rate Matrix. This account is available on a roll over basis until the customer confirms its closure. 10% Government Tax shall apply to the interest amount.

Flexi Deposit Premium Scheme (Flexi DPS)

Flexi Deposit Premium Scheme is a non-transactional account that a customer uses for interest earning and savings purposes through monthly installment basis. Minimum amount required to open an FDPS account is BDT 500 and its multiples. FDPS can be opened for 1/5/10 years. This account is available on a roll over basis until the customer authorizes its closure. Interest is accrued to the FDPS account on monthly basis. Interest (after adjusting 10% Government tax on the interest amount) will be paid at maturity date, as per the Interest Rate Matrix.

Monthly installment of Flexi DPS

Monthly Installment Tk 500		Monthly Installment Tk 1,000		Monthly Installment Tk 5,000		Monthly Installment Tk 10,000
1 year	6,246	1 year	12,492	1 year	62,461	1 year	124,922
5 year	37,989	5 year	75,978	5 year	379,891	5 year	759,782
10 year	101,779	10 year	203,557	10 year	1,017,785	10 year	2,035,571

All the figures are Indicative and subject to govt. taxes.

Interest First Fixed Deposit (IFFD)

Interest First Fixed Deposit is a non-transactional account that a customer uses for interest earning in advance and savings purposes. The unique feature of this product is that interest is given upfront, at the time of opening the fixed deposit. Minimum amount required to open an IFFD account is BDT 100,000. IFFD can be opened for 3/6/12 months. Interest (after the adjustments of 10% Government tax on the interest amount) is immediately transferred to the link account, as per the Interest Rate Matrix.

Retail Banking (Lending schemes and services)

An overview of Loan Products

BRAC Bank is offering the following loan and advance product to the client for financing different purpose that fulfill the requirements of the bank and have good return to the investment as well as satisfy the client. The loan and advance Products are:

Unsecured Loan

An unsecured debt refers to any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation. In the event of the bankruptcy of the borrower, the unsecured creditors will have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors, although the unsecured creditors will usually realize a smaller proportion of their claims than the secured creditors.

Usually BRAC Bank is used to offer two types of unsecured loan. These are-

Salary Loan.
Quick Loan.

a) Salary Loan

Salary Loan (SAL) is a term Loan facility offered by Bank’s Retail Banking Division to individual salaried people living in the cities / towns where the Bank has its operations to cater his/her personal or professional needs. It is a clean or unsecured loan in the sense that there is no cash security (like Govt. Savings Certificates or Fixed Deposits etc) taken against the loan. This is an “any purpose” loan which means the applicant does not have to declare the purpose for which he / she is taking the loan, hence there will be no hypothecation over the asset to be purchased. The credit risk of the product is covered by a process of strict selection of prospective borrower and the company he/she is working for. If anyone wants to keep an extra 15 month’s salary in his pocket, he can get BRAC Bank Salary loan, Loan against your salary. If an individual is a salaried personnel working in Bangladesh, he can apply for a salary loan. Because Salary Loan from BRAC Bank has been designed with what is just in his minds.

Eligibility

Employed as a regular salaried staff.
Have minimum age of 23 years, max – 60 years (at the time of maturity)
If he earn a monthly salary of BDT 15,000

Features

Loan amount up to BDT 1, 00,000 to 10, 00,000.
Loan up to 15 times of your Salary.
Attractive Interest Rate.
No collateral of cash securities.
Flexible repayment Equal Monthly Installments (EMIs) over a period of 12 months to 60 months.
Person with salary account with BRAC Bank will enjoy 1% less than the prevailing interest rate.

Documents required

Last 6 month’s bank statement.
Last salary slip/Letter of introduction.
Proof of identity.
Proof of employment of minimum 1 year.
Interest rate 19%.

Schedule of Charges

Processing fee: 1.5% +VAT of the loan amount.

Early Settlement Fees:

2%+ VAT on the outstanding amount if settled within 1st 2 years,
1%+ VAT for 2 years & above.

b) Quick Loan

Quick loan is a personal loan facility offered by the Retail Banking Division to businessmen who have sound business records for minimum 3 years with a valid trade license. It is a clean lending product in the sense that there is no cash security taken against the loan. This is an “any purpose” loan; hence there will be no hypothecation over the asset to be purchased. However, the applicant must need to mention the purpose of the loan clearly in the loan application form. The credit risk of the product is covered by a strict evaluation and assessment of customer’s bank statement with any bank in Bangladesh. For quicker needs that arise quickly BRAC Bank offers Quick loans. If anyone is a businessman or self employed personnel, Quick loan is specially designed just to cater his needs.

Eligibility

Businessman & Self Employed Personnel (Doctors, Engineers, Architects, and Accountants etc.).
Minimum age of 23 Years; Maximum 65 Years (At Maturity).
Having minimum income of BDT 20,000.

Features:

Loan amount up to BDT 1, 00,000 to 10, 00,000.
Attractive Interest Rate.
No collateral of cash securities.
Flexible repayment Equal Monthly Installments (EMIs) over a period of 12 months to 60 months.
Interest rate 19.5%.

Documents required:

Last 1 Year bank statement.
Valid Trade License.
TIN Certificate.
Proof of identity.

Schedule of Charges is same as the Salary Loan.

Secured Loan

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower. From the creditor’s perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property.

Auto Loan.
Home Loan.
Secured Loan/Overdraft.

a) Auto Loan

Auto Loan is a term loan facility for the middle class to upper class people of the cities, where the bank has its operations, to buy automobiles for their personal use. Under this scheme, the vehicle is hypothecated to the bank only. In addition to this registration requirement, the loan is also partially secured by the commonly acceptable form available in the market as hypothecation. Whether anyone wants to purchase a brand new car or a reconditioned one, BRAC Bank Auto Loan is built for maximum speed and efficiency. Get your dream car on the road in no time.

Eligibility

Available for Salaried individuals, Business Persons, Self Employed & Landlord.
Age between 21 at the time of application to 65 at the time of maturity.
Minimum Monthly Income: BDT 20,000 (for salaried); BDT 35,000 (for others).
Length of service: Min 2 Year as permanent employee.
Age of Business: Min 3 years.

Features

Up to 80% of quoted value of the car.
Loan Amount: Up to BDT 2,000,000.
Competitive Interest Rates.
Tenor: 12 to 60 months.
For brand new and reconditioned cars.

Documents required

Latest one year’s personal bank statement.
Photocopy of national ID/Passport.
One copy passport size photograph of the applicant.
One copy passport size photograph of guarantor.
Price quotation of the vehicle.
Business card/ visiting card of the applicant.
Personal TIN certificate.

Additional documents required for salaried person

Letter of Introduction stating salary; issued by the employer.

Additional documents required for business person

Copy of Trade License.
Company’s bank statement for last one year.
Memorandum of Articles for Limited Liability Company.

Additional documents required for self employed person

Professional Certificate issued by authorized institution.

Additional documents required for self landlord

Valid documents of the property.
Rent receipt/deed.

Schedule of Charges

Processing Fee: 1.0% of Loan Amount.
Early Settlement Fee: 5% (within 1 year),3% within( 1-2 years ) 1% (after 2 years and before expiry).

b) Home Loan (Apon Ghor)

Apon Ghor (Own Home) is the Home Loan product from BRAC Bank with a difference. It is not just a loan, rather a complete solution stretching with five value-added FREE services:

BRAC Bank Apon Ghor provides you personal bank representative for information search till moving into the home.

BRAC Bank Apon Ghor helps find a home suitable for you taste, budget and area. In addition to these there are attractive privilege consultancy for:

Furniture & Soft Furnishing.
Home Appliance.
Color & Window Treatment.
Light & Floor.

Apon Ghor is the quickest loan to get disbursed.
Apon Ghor finds you Home with proper legal documents.
Apon Ghor needs the least documentation for processing.

Product Type & purpose

Home Loan

Financing against purchase of one’s Apartment or house (under-construction / semi-completed /completed / secondhand).

Home Credit

Financing against Renovation / Extension / construction of one’s home

Takeover

Financing against transfer of the current balance of the existing Housing loan to BRAC Bank.

Customer Segment & Eligibility

Salaried Individuals

Total Job Experience is minimum 3 years & must be permanent in current job.
Minimum income is BDT 25,000/-
Salary must be credited to bank by the employer.

Businessmen / Self Employed Individuals / Landlords

Owner / Director of Proprietorship / Partnership / Private Limited Company.
Total Business Experience is minimum 3 years.
Minimum income is BDT 30,000.

Product Features

Owner of the property must be the main borrower.
Mortgaged property must be located within the metropolitan area of Dhaka, Greater Dhaka where RAJUK Plan is available, Chittagong & Sylhet.
Applicants must be permanent resident of Bangladesh.
Minimum age 25 years & maximum age 65 years at the time of maturity.
Competitive Interest Rate.
Maximum loan tenor 25 years.

Processing Fees & Other Charges

Loan up to BDT 15 Lac is @ 2% on loan amount + VAT.
Loan above BDT 15 Lac is @ 1.5% on loan amount + VAT.
For Take Over cum Home Credit loan 1% on loan amount + VAT.
In case of Takeover, processing fee is 0.50% of loan amount +VAT.
Valuation charge @ 3500 + VAT in addition to the processing fee

Early Settlement & Rescheduling Fees

Processing Fee

2% of outstanding if settled within first 5 year + VAT.
1% of outstanding if settled after 5 year + VAT.
Rescheduling fee due to Interest Rate change / Tenor change – 0.25% + VAT of outstanding or maximum Tk 10,000 + VAT whichever is lower.
Date rescheduling fee Tk 2000+VAT each time.

Partial pre-payment & fees

Minimum partial pre-payment amount is BDT 1,00,000.
2%+VAT on pre-payment amount within first 5 years.
1%+VAT on pre-payment amount after 5 year

Common Documents

Latest 01 year personal bank statement.
Latest Tax Clearance Certificate (where applicable)
Photocopy of National ID card / Passport.
Allotment Letter/ Allotment Agreement/ Byna Deed for Home Loan.
Registered ownership deed for Home Credit / Take over Loan.
Price quotation for Home Credit Loan.

Salaried Individuals

Letter of Introduction (LOI).
Latest 01 year salary account statement.

Businessmen

Trade License for last 3 years.
Latest 1 year bank statement of the company.
Registered partnership deed for Partnership Company.
MOA+ Certificate of Incorporation+ Latest Schedule X for Private Limited
Company.

Self-Employed

Certificate of membership of respective professional association.
Declaration on self-pad along with seal.
Certificate of Professional degree.

Land Lord

Registered ownership deed.
Rental deed.
Copy of any utility bill (Electricity/ Water/Gas).

C) Secured Loan/Overdraft

BRAC Bank provides loan against fixed deposits so that one can meet any cash emergencies without the need to give up on high yield savings.

Eligibility

Any individual with fixed deposits and WEDB purchased from BRAC Bank Ltd may apply for this facility.

Features

Secured Loan: Term Loan.
Tenor: 1 Year.
Paid in Equal monthly installments.
Secured Overdraft: Continuous Loan.
Tenor: 12 months (Auto renewal option available).
Quarterly interest payments.

Other features

Loan Amount up to 90% of Face Value of your fixed deposits,
Minimum Spread.
Early settlement facilities available.
Enhancement Facilities available.
Cross collateralization allowed.

Documents Required

Copy of National ID.

Schedule of Charges

Processing Fee

1.0% of the loan amount.
Maximum BDT 10,000.
Minimum BDT 1000.

Early Settlement Fee

Secured Loan- 1% of outstanding amount at any time before maturity; Maximum BDT 10,000.
Secured Overdraft – 2% of outstanding or BDT 2,000, whichever is lower.

Customer Satisfaction about BRAC Bank

Customer Service Quality

Let’s see what business Guru’s thinks:

“Customer Service is an organization’s ability to supply their customers’ wants and needs”

“Customer Service is any contact between a customer & a company, that cause a +ve /-ve perception by a customer”

At first BRAC Bank introduce the concept of customer service quality at banking sector in Bangladesh. BRAC Bank is always careful to provide their customer the best service and always try to make them happy. That’s why in every branch has a customer service department that consisting two level of employee:

BSSO (Branch sales and service officer)

They give all the service to the customer except cash transaction.

Seek information about products /service
Get more Clarity on something
Solving Problems
Lodge complaint & seek Solution
Multiple affaires: FDR Receipt order and delivery, PO etc.

BSSO are responsible to solve this problem of customer.

Floor Supervisor

Floor Supervisor normally careful about customer

Timing: They give the customer Token and Serial Number.
Correct Placement: Sometimes new or uneducated customer come to branch and they not know about where they go for which service. Floor Supervisor places them in correct department.
Information: Floor Supervisor also gives necessary information to the customer.

Normally customers are come to branch in some specific reason .BRAC Bank thinks that is the opportunity for bank to make them satisfied, loyal and ambassador. That’s why BRAC bank is tried to provide excellent customer service to their customer instead of only customer service. In this purpose all the Bank staff makes the promise to make Customer satisfied or even delighting Customers which means excellent customer service to them.

Importance of Good Customer Service

Good customer service always has to play some rule. BRAC Bank customer service is always tried to provide certain service to their customer. Those are:

Customer Satisfaction

Customer satisfaction is the main purpose of customer service. All the branch staff is always try to give the best service to their customer.

Building Relationship

BRAC Bank treat customer as their guest. That’s why floor supervisor always cordially invited the customer when they enter into the branch and serve them until they leave the branch. That’s help customer to make loyal to the Bank.

Customer Expectation

As a service organization BRAC Bank always try to provide the best service that expected by its customer.

Higher Service Charge

Expectation of better Service

Positive & Negative Word of Mouth

BRAC Bank is always following the motto ‘Customer is always right’ and also behaves softly with the customer.

Customer Loyalty

BSSO and CSM always show sympathy in the any sad news of the customer or share a Share a happy moment with their existing customer. ex: Send Eid card, Calendar, Inform about new facility.

Increasing market Competition

BRAC Bank introduces new strategy day by day to make their potential client as their loyal customer

Role of Customer Service Peoples in Service Delivery

In the branch the branch manager, customer service manager, customer service people (BSSO have to play several rules. Those are: and OCCS)

Service Quality in the Eye of BRAC Bank

Service quality is service check points for customer service or any other issues in branches and backward linkage departments.
Service Auditing and Monitoring
SQ works with process & people part of customer Service

Purpose of Service Quality

Access & Monitoring the performance of CSO & OCCS on Regular basis.
Process Designing and Reengineering
Complaint handling
Launching different service related campaign
Design new customer service
Asses and monitor customer Service standard in branches

How BRAC Bank tracks the performance of branch service quality

For tracking the performance of CSOs & CSM apply the following approaches:

Mystery Shopping
Pop-Up Visit
Customers’ Feedback

Mystery Shopping

Mystery shoppers work just like an ordinary customer to gain real customer experience, with respect to selected activities. The mystery shopper monitors each CSO and CSM (Customer Service Manager) twice in a month.

Parameter of Evaluation in Mystery Shopping

There are some parameters fixed by bank. Mystery shoppers go to branch and asses the staff in this attributes.

Attributes of Assessment (Individual)

Personal Aptitude

How an employee is behaving with customer? Includes: Acknowledgement & Greetings, Introduction and Offering seat, Facial Expression, Body Language, Closing Conversation

Professional Conduct

A Customer service person always shows professionalism in their work, Dress Up and Appearance, Impression Management & professional attitude, Addressing & accent, Dispute Handling Ability, Apologizing for Mistake, Confusing by Referring, Do it Right at the First Time.

Product Knowledge & Service focus

Complete knowledge about different type of product is mandatory. Adequate Product Knowledge, Presentation Ability, Reasonable Timing, Error Free Service Delivery, All information should be well Communicated.

Inappropriate Conduct: Some behaviors are restricted for bank staff in front of customer. Those include: Referring Without Completing, Left Seat & Kept Vacant for long time, Eating and Drinking, Receiving PERSONAL Phone Call, Prolonged Conversation with other, Causal body language, Rudely & Loudly Talking, Identical Discrimination, Act as nothing Wrong, Improper, Falls & Unsure statement, laughing at Customer, Lack of Commonsense, and Subjective Impression.

Can Bank Control over Their Customer

1% die
3% move away
5% seek alternatives or develop other relations
9% begin doing business with the competitors
14%are dissatisfied with the product or service
68% are upset with the treatment they received

That means bank have some control over 96% of the reason customers stop doing business with Bank.

Customer Service Quality Rules (Code of Conduct) of BRAC Bank

Know your customer (KYC)

When a client comes to open an account, try to get a clear idea about that person prior to open an account. Common facts required to be noticed are:

Social Position

Take prior permission from Head office and be careful in case of opening account for people who are Politicians, Customs, Technocrats, Judicial, Defense personnel, law enforcing agency, Income tax, Vat authority etc.

Occupation

Type & nature of Business job nature and duration. Check the Trade License / employment documents. Take Prior permission from Head office and be careful when the occupation is in jewelry, Exchange House, Manpower, Courier Company, Hotel & Restaurant, Machine parts.

Income Level

Check whether the level of income complies with the average industry income level for the sector and position where the customer belongs.

Address Level

At least one of the addresses (permanent / present / work) mentioned in the account opening from should be verified by personal visitation of DSE or other officer of the Bank.

Eligibility

Bangladeshi National
Foreign National
Major (age above 18 years)
Age Limit Vs eligibility
Allowed Currency of operation
Eligible to sign (thumb impression maybe acceptable in some banks)
Business Entity operating in Bangladesh
Satisfactory “KYC” understanding
Having Sound documentation for A/C opening as per bank’s policy

Analysis & Discussion

Company Competitive situation

BRAC Bank Ltd has just completed another successful year. The 12^th annual general meeting (AGM) of BRAC Bank Ltd was held on 24^th March, 2011. Looking over 2010 at a glance, BRAC Bank Ltd’s performance has increased significantly in all aspects. Their operating cost as a percentage of funds under management (FUM) reduced from 2.59% in 2010 to 2.54% in 2009. Profit After Tax (PAT) has increased by BDT 331 million while assets increased by BDT 22,140 million, I have also diversified their asset portfolio while maintain their quality and promoting values. This has also been echoed today by their respected shareholders. 2010 was an exceptionally challenging year for the financial sector in Bangladesh. Yet, they have closed the year with stellar performance.

At first we start with the Total Asset and Liabilities of the Bank. Total asset of the bank rose to BDT 119,150 million in 2010 from BDT 95,127 million in 2009 registering a growth of 25 %. Significant increase in assets documented in loans and advances, investments, fixed assets and cash assets maintained by the Bank. Loans and advances increase by BTD 20,152 million or 31% in the tear2010..

Consumer Banking

BRAC Bank Ltd’s consumer banking division has already made its mark as a differentiator. This division strives to bring international quality best practices in Bangladesh by being different in the fields of Branch Banking, Retail Lending, Liability & Wealth Management, Cards and Alternate Banking.

Retail Banking

BRAC Bank Ltd’s customer deposits of the bank grew by 17% in 2010. The bank ended the year.

2010 with total customer deposits of BDT 88,158 million compared to BDT 75,220 million in year 2009.Currently the Bank’s deposit mostly comprises of Fixed Deposits. Since, almost 39% of total deposits are in the form of fixed deposits while only 18% are in the form of current deposit. During fiscal year 2009, bank focused on increasing proportion of low cost retail deposits in our funding base. Their current and savings account deposits (CASA) as a percentage of total deposits increased 23% respectively.

Retail Lending

Retail lending business requires a high level of credit and analytical skills and strong operations process backed by technology. BRAC Bank’s retail strategy is centered on a wide distribution network comprises branches, dedicated sales forces and dealers and real estate developer relationships. A comprehensive and competitive product suite, technology enabled back office process a robust credit and analytical frame work. During fiscal 2010 Bank focused on risk containment in the retail business. They tightened their lending norms and moderate their disbursement, especially in the unsecured retail loan segment.

BRAC Bank was the larger provider of retail credit in Bangladesh with a total retail portfolio of TK.11.3 billion as on December 31, constituting 18% of their total loans. During the year they dealt with more than 7,100 new retail customers through a total disbursement of TK.5.8 billion. Home loan has secured top position among the lending products in terms of net growth. With gross disbursement volume of TK.1.3 billion of Home loan they have establish relationship with 427 new customers.

Customer Satisfaction

The success of any product is largely dependent on customer’s satisfaction and acceptance. Selling a product or a service is just the beginning of a relationship, which is to be built and maintained over the year. Only this way the sense of loyalty is established in customer’s mind. BRAC Bank Limited with the commitment to provide Excellence service in Banking always tries to offer better product to the customers as well as keeping in mind about the volatility of the market. Here in this part I have shown demand of customer satisfaction is related with its customers’ financial position and demand(by their occupation) and are they satisfied with BBL or not.

A Survey of Customer Satisfaction

Research Approach

I have conducted a survey on the people of different occupation. Today the demand of Deposit and loan is rapidly increasing. At the preliminary stage, only rich people were interested to take service from BRAC Bank. Now middle class segments are also interested to this sector. So I have surveyed on both high and middle class people. So I have tried my best to go through most of the places.

Contact Method

I have contacted to the persons individually with a questionnaires. Then I gave them both close ended questions and open-ended questions. Most of the person gave answer of my entire question. Some did not because of their busyness and lacking of knowledge about loan procedure.

Sample Design

Sample design consists of three parts-

Sample size
Sampling frame
Sample technique

Sample size

For this research (the survey on customer satisfaction) the determined sample size is 15.

Sampling frame

Opening an account is depending on the occupation of the family. He may be a company owner of related to any other type of business and he may be service holder. So the survey is conducted on these persons – businessmen & service holders.

Sampling technique

For this research the researcher follow the convenience sampling. As here the main objective was to gather knowledge about the customer satisfaction.

Research Instrument

My research instrument was a printed questionnaire to which I gave both close-ended questions and open-ended questions. It is because to make an explanatory research and to easily interpret and tabulate our research work.

Findings

By analyzing Consumer Banking system of BBL I have find out following issues-

Positive Findings

BBL always tries to satisfy their customers through quality services.
BBL tries to provide quick services to the customers and try to solve problems of the customers as soon as possible.
All the employees of the customer service have excellent interpersonal and communicational skills.
Customers of the bank pursue a great attitude about the bank.
BBL provides excellent banking environment for both the customer and the bankers.

Negative Findings

BBL customer service charges are much higher than other commercial banks in Bangladesh. This charges system should be changed. Otherwise it can be threat for the bank in future.
The remuneration package dissatisfies the bankers because it is very poor for their hard work.
Phone banking system found busy in many time.
Absence of Islamic Banking System.
There are some hidden costs in products or services which cause the customer sometimes in difficulty and sometimes the officers are not telling it to the customers properly which in the long run can hamper their business. Officers should clear every paisa about the costing to the customer clearly.
CSO dealing with retail products have to perform dual duties- Service to customers and fund collection. So that they can’t concentrate on customer service properly. As a result sometimes there service hampered as they always think how they can fulfill the target.

Recommendations

However the satisfaction level of BRAC Bank is good enough. But some customers have expressed their dissatisfaction about the BRAC bank in various aspects. It has a profound effect on the overall satisfaction level of the bank. I have to make some recommendations based on the findings that I have got from my research. I hope the recommendation will help the bank to take necessary steps in order to increase the satisfaction level of customers of BRAC Bank. The following are some recommendations for the company:

Bank has to satisfy its customer at any cost. Even if the customer is wrong in that case also, even then the officers should not make any rough behave to the customer. Because customers are everything for a bank. The employee of BBL should show a sincere interest in solving the customer’s problem.
For maintaining the relationship with the customer, employees have to give all types of support to the customers.
Officials should be more cooperative with the clients.
Officials should be faster during transaction.
There are a lot of banks now in Bangladesh and customers now have lots of options. So a bank should do everything possible for them to do to retain its customer.
Bank should be more innovative and diversified in its services.
Some customers said that the service charges of BRAC bank are comparatively higher than other bank so it should be reduced if possible. Otherwise it can be a threat for the bank in future.
Facilities of equipment like PC system should be improved so that every employee could work properly in time.
The code of conduct for the officials should be strictly maintained.
Token system/Queue system should be introduced in the customer service to minimize the rush and for easy service giving by the officer.
Mobile phone use of the customers should not be allowed inside the Bank like some other multinational Banks.
Sometime it is seen that some people are sitting in the waiting bench for hours without any cause. So security system should be more strict in the Bank.

Conclusion

Today banking business becomes more competitive than before. Now customers are more aware and become smart to compare between the banks. And then choose the most convenient bank for them for dealing with their hard earned cash and business finance. Considering the fast moving and altering business era in the world each and every business organizations need to upgrade their ways of business to keep pace in the changing situation. It is very true that the most of the customers do not hesitate to term BRAC Bank better than other banks. But it should also be considered that the customers have very few choices of banks with which they can actually compare the Consumer Banking services of BRAC Bank. The bank has successfully made a positive contribution to the economy of Bangladesh with in very short period of time. Its profit is gradually increasing. The local banks have recently focused their attention to customer service, satisfaction regarding deposit-banking services. Moreover there are a good number of private banks that are into the competition. Therefore it is better for BRAC Bank not to let the situation be worst and should emphasize on serving customers effectively and efficiently to ensure better services. By the grace of Almighty ALLAH, My study finally ended up with considerable degree of success. I consider it to be a success, because I carried out a lot of invaluable experiences. It helped me to identify the best way of applying the theoretical knowledge to practical field, to make adjustments, alteration in order to be in line with practice. As per working experience concern; it cannot be spelled out within few words. It really gave me tremendous experience of working in a congenial atmosphere. Experience with BRAC Bank Ltd. proves that putting corporate interest before individual interest and a sense of responsibility can lead an organization to its desired goal.

APPENDIX

Questionnaire

A Survey on Customer Satisfaction & Preference BRAC Bank-Gulshan branch.

Surveyed By: _________________

(Please Put a Tick Mark in your selected one)