Evaluation of Customer Services Quality of Prime Bank Limited

EXECUTIVE SUMMARY

The banking system plays a critical role in underpinning economic development. Against the background of Financial Sector Reform Policy in Bangladesh, Prime Bank Limited (PBL) has resulted in great success in all areas of operation with a view to improve the socio-economic development of the country.

Since the beginning of its journey PBL has never looked back. It has established itself as one of the strong local bank of this country. Its capital base is as strong as its profit is high, not only this it has a capital adequacy ratio of 11.92 % and classified loan ratio of 1.98 %. Its last year’s operating profit was Tk.167 (2009-2010) core. Literally this bank is growing day by day.

After the introduction of Financial Sector Reform Policy and Banking Company Act 1991, changes in banking sector of the country are very remarkable. Activities of different dimensions, modern systems and methods of workings and better policies have been taking place in the banks. Successful application and operations of these methods and policies in different banks for providing efficient services enhance performance of them. The evaluation of customer services quality is a result of this trend.

During the evaluation process of customer service quality in Prime Bank Limited I followed the whole survey on the basis of some parameters known as (1) Reliability, (2) Responsiveness (3) Assurance, (4) Empathy and (5) Tangibles. I made a questionnaire to follow and tried to get response from the clients of my Branch. I analyzed the data and finally came to a conclusion with some recommendations to the Bank. The data were analyzed on the basis of the parameters and discussed to reach a conclusion.

Origin of the Study

As a student of Bachelor of Business Administration (MBA) in Strategic & International Management every student has to conduct a practical orientation in any organization for fulfilling the requirements of the 12 weeks Internship Program. The main purpose of the program is to expose the students to the real world situation .This report is done as a partial requirement of the internship program for the MBA students.

Rationale of the study

 In order to fulfill the requirement of the Internship program I chose Prime Bank Limited. The Human Resource Division (HRD) of Prime Bank Limited placed me to its Narayangonj Branch .The HRD of Prime Bank Limited also assigned me a topic of the report to be submitted .The topic of my report is “Evaluation of Customer Service Quality in Prime Bank Limited”. I have done my internship in Prime Bank Limited, Panthapath Branch. During this period I tried to get familiarize myself with the theoretical concept and practical process of customer service in Prime Bank Limited.

 Objectives and Scope of the Study:

The primary objective of this report is to use the theoretical concepts, gained in the classroom situations, in analyzing real life scenarios. This is also a partial requirement of the MBA program. This objective is basically met by remaining attached with a reputed organization and by gaining some real life experiences, so that it adds value to the knowledge base of me, a MBA graduate. In case of this report, the objectives are:

• To observe and understand the activities of the different departments of the host organization: Prime Bank Limited (PBL)
• To identify the customers demand to Prime Bank Limited.
• To identify the customers perception or attitude towards the customer services of Prime Bank Limited.
• To   identify the quality of services compared to other Banks.
• To provide suggestions to ensure better customer service.

Prime Bank limited is one of the successful private banks in our country. I arranged the report into two main parts. In the first part of the report I focused upon the organizational structure and the financial services offered by PBL.

The second part of the report basically focuses on the study of customer services quality in Prime Bank Limited, on the basis of a questionnaire and which was adorned on the basis of some parameters. Finally, I analyzed the findings from the questionnaire and came to a conclusion with some of my recommendations.

 Methodology:

   I have collected primary and secondary data for my research paper.

Primary Sources:

         I have collected primary data by interviewing employees and clients of the Prime Bank Limited .I made a questionnaire for the customers of Prime Bank Limited and collected primary data by survey method. I also collected Primary data by face to face conversation with the officers of some other Banks.

Secondary sources:

         I have collected secondary data for my research paper .I have collected secondary data for my research paper from:

•  Annual reports of PBL
• Bank records
• Journals of the Bank published by DU research centre
• Different books, training papers, manuals etc. related to the topic
• Website of the Bank

 Target Group:

         The target group was the customers of Prime Bank Limited.

 Data Collection and presentation Techniques:

         I designed a structured questionnaire for the customer of the Prime Bank Limited .This structured questionnaire was the major tool of this research paper. For collaborating the data and information collected through primary and secondary sources I have used both qualitative and quantitative method. I analyzed and presented the data by percentage, graphical presentation techniques, used different types of charts. I tried to analyze the major or critical findings .Then, based on everything; I provided recommendations and conclude the research paper.

Sample Size:

          I surveyed 120 clients of Prime Bank Limited in Narayangonj city by the questionnaire. My Study includes qualitative analysis of data which were collected through the questionnaire. I used both qualitative and quantitative method for collaborating the information that was collected.

 Limitation of the study:

• The one of the main limitations of the research paper was to conduct a small scale survey on clients.
• Time period was the other limitation for collecting   information, which was only three month long.
• Insufficient supply of relevant books and journals.

Chapter- 2

Literature review

Customer Service:

         Customer service means to provide customers with good services in order to earn profit along with customer satisfaction.

             Successful customer service companies focus their attention on both their customers and their employees .They understand the service profit chain, which links service firm profits with employee and customer satisfaction .This chain consists of five links:

• Internal service quality:Superior employee selection and training, a quality work environment, and strong support for those dealing with customers.
• Satisfied and productive service employees: More satisfied, loyal and hard working employees.
• Greater Service Value: More effective and efficient customer value creation and service delivery.
• Satisfied and loyal customers: Satisfied customers who remain loyal, repeat purchase, and refer other customers.
• Healthy service profits and growth: Superior service firm performance.

From the above discussion it can be said that well managed customer service companies share a number of common virtues regarding customer service .Successful service companies are “Customer Obsessed” ,and set high service quality standards.

 Managing Service Quality :

Quality may be defined as meeting or exceeding the expectations of the customers. Service firm’s ability to hang onto its customers depends on how consistently it delivers value to them. The like product marketers, service providers need to identify the expectations of target customers concerning service quality .A service firm may win by delivering consistently higher quality service than competitors and exceeding customer’s expectations. These expectations are formed by their past experiences, word of mouth and advertising. After receiving the service, customers compare the perceived service with the expected service. If the perceived service falls below the expected service, customers loose interest in the provider. If the perceived service meets or exceeds their expectations, they are apt to use the provider again.

                Researchers formulated a service quality model that highlights the main requirements for delivering high service quality. The model, shown in the figure below, identifies five gaps that cause unsuccessful delivery.

1.0 Gap between consumer expectation and management perception:

   Management doesn’t always perceive correctly what customers want. A Bank authority may think that clients want prompt service but clients may be more concerned with more responsiveness.

2.0  Gap between management perception and service-qualityspecification:

               Management might correctly perceive the customers’ wants but not set a specified performance standard. A bank may tell the officers to give fast service without specifying it quantitatively.

3.0  Gap between service -quality specifications and service delivery:

 The personnel might be poorly trained, or incapable or unwilling to meet the standard or they may be held to conflicting standards, such as taking time to listen to customers and serving them fast.

4.0 Gap between Service delivery and external communications: Customer expectations are affected by statements made by company representatives and advertisements.

5.0  Gap between perceived service and expected service:

This gap occurs when the consumer misperceives the service quality. The Banker may keep visiting the valued clients but the client may interpret this as an indication that something really is wrong.

 Service Quality Parameters:

 Researchers found out five parameters of service quality. These are presented in order of importance:

Reliability: Reliability means the ability to perform the promised service dependably and accurately. In its broadest sense reliability means that the company delivers their services on its promises .In my questionnaire 3 question were to assess the reliability of the Prime Bank Limited, which were:

1.    Do you think PBL provides the services all time that it promises to do so?

 2.    When you face a problem PBL show interest to solve the

Problem? 

3.   Problems are solved very promptly?

Responsiveness: Responsiveness is the willingness to help customers and to provide prompt service. This dimension emphasizes on attentiveness and promptness in dealing with customer request, questions, complaints and problems. Responsiveness is communicated to customers by the length of time they have to wait for assistance, answer to questions or attention to problems .Responsiveness also captures the notion of flexibility and ability to customize the service to customer needs.

In my questionnaire the following questions were about responsiveness:

1.    Do you think PBL employees are very friendly and helpful?

2. Do you think employees always search for solutions for you?

            3.  Do you think the behavior of the officers satisfy you?

Assurance: Assurance is defined as employee’s knowledge and courtesy and the ability of the firm and its employees to convey trust and confidence. In my questionnaire the following questions were about Assurance:

1.  Do you think the employees of PBL are trustful and reliable?

 3.    Every transaction by PBL employees is safe to you?

 4.    Do you think as a Bank, Prime Bank is always trustworthy from all aspect?

 Empathy: Empathy is defined as the caring, individualized attention the firm provides its customers. The essence of empathy is conveying through personalized or customized service that customers are unique and special.

               In my questionnaire the following questions were about Empathy:

 10. Do you think PBL always give you individual attention?

            11. Do you think PBL understands your specific needs?

12. Do you think PBL believes in personal relationship with their

      clients?

Tangibles:

                      Tangibles are defined as the appearance of physical facilities, equipment, personnel, and communication materials. In my questionnaire the following questions were about tangibles:

13. Do you think PBL use modern looking equipment?

14. Do you think the Bank has a convenient transaction hour?

 15. Do you think PBL should introduce new facilities like ATM card and credit card facilities?

There were also another question asking whether the customers are satisfied

with the present charges and fees of Prime Bank Limited. Also there was a

scope for them to opine on the Bank services .These were also evaluated

through the whole survey process.

Chapter-3

The profile of prime bank ltd.

Background of the Bank:

Prime Bank Limited (PBL) is one of the new Bangladeshi private banks, which was incorporated on 17^th April 1995 with Tk. 1000 million of authorized capital & Tk. 100 million of paid up capital by a group of successful entrepreneurs. It is not only a conventional Bank. It’s a modern, dynamic private commercial bank & plays a constructive role in the economic development of the country. Prime bank is the first private bank to introduce lease finance, Hire purchase & customer credit schemes along with Islamic banking services in the banking sector in order to bring about qualitative changes in the lives of people of Bangladesh. PBL through its steady progress & continuous success has, by now, earned the reputation of being one of the leading private sector Banks of the country.

Prime Bank is listed with ‘promoter shareholders’ collectively holding a 46% stake in the bank. One of the main reasons for the bank’s good financial condition is that the bank’s promoters, who have other business interests as well, have refrained from ‘using’ the bank for insider lending. This is a huge issue for Bangladeshi private banks, and together with somewhat tax supervision, is the single biggest factor for the poor financial condition of most private banks. While Prime Bank has so far benefited from its promoter shareholders’ approach of maintaining an arms-length relationship between the bank and their other businesses, whether this would continue to be the case in future, particularly when the second-generation promoters become directors of the bank, remains to be seen.

 Prime Bank mainly caters to the trade finance market. Manufacturing activity in Bangladesh is relatively subdued, but there are certain industries such as textiles, where the country has a competitive advantage. Many textiles manufacturers export their merchandise (garment exporters for example) and it is this customer segment that the bank mainly caters to. The bank is involved at all stages of the export cycle: it gives pre-shipment finance for working capital and also provides post-shipment facilities such as bill discounting. In addition, the bank also undertakes some amount of project financing for its clients’ plant and machinery, or modernization requirements. The lending restrictions on state banks (due to their poor capital position) have helped private banks such as Prime, which have been growing at rapid rates (30-35% per annum). While the bank has done well so far, its relatively small size makes it somewhat vulnerable to unexpected loan losses if some large accounts go bad. Over the last three years, Prime Bank has introduced credit cards in association with MasterCard. The credit card market in Bangladesh is still relatively undeveloped with only about 250,000 cards in circulation (population of Bangladesh: 130m). The foreign banks (mainly Standard Chartered) are the main players in this segment, although some local banks such as Prime have been investing in this market to position themselves for the future. While delinquency rates on credit cards are relatively high (Prime Bank: 10%; another local bank: 20%), the annualized interest rates on outstanding balances are more than 40%, so it is a lucrative business to be in. Prime Bank has signed a co-branding agreement with HSBC for issuing credit cards on their behalf, and also plans to tie-up with VISA in the near future.

In addition to conventional interest-based banking, Prime Bank operates two branches (completely separate from conventional banking) on the Islamic Shariah principle; however, Islamic banking operations are relatively small and constituted only about 5% of the conventional banking business.

The Profile at a Glance

Name:                                                                   Prime Bank Limited

Date of Incorporation:                                       12^th February, 1995

Date of Inauguration of Operation:                17^th April, 1995

Registered Office:                                             Adamjee Court Annex Building-2

                                                                119-120, Motijheel C/A

                                                                Dhaka-1000, Bangladesh.

Logo:       

Name of the Managing director:                    Mr. Md. Shahjahan Bhuiyan

Number of Branches:                                       40          

Services Provided:                                            Deposit scheme, Loan & Islami Banking.

Diversification of products & services:       Corporate Banking, Retail Banking &

                                                                                Consumer Banking.

Paid up capital:                                                   Tk. 1000 million

Publicly Traded Company:                               Share quoted daily in DSE & CSE

 Credit Card:                                                        Member of Master Card

Banking Operation System:                            Both Conventional and Islamic                                                                                                                    Banking System.

Technology Used:                                              Member of SWIFT, on line Banking,

                                                                                UNIX based Computer System

Initial Public Offering:                                        Number of Shareholders:                                                2620

Market value per share:                                   879.50

E-mail:                                                                   primebnk @ bangla.net

Web Site:                                                              www.prime-bank.com

SWIFT:                                                                   PRBLBDDH

SWIFT:                                                                   PRBLBDDH

 Corporate Organogram:

Vision and Mission:

Prime Bank Limited aims to become one of the top-performing banks by prudent financing, to earn sustainable profit & rendering of services to customers more efficiently & effectively. Its Vision is to be the most efficient bank in terms of customer service, profitability and technology application and Mission is continuous improvement in their business policies and procedures as well as cost reduction through integration of technology at all level. To achieve the mission, strategic priorities shall have the sustainable growth, broader and improved range of product and services.

Financial Highlights:

    (Taka in million)

Branch Network:

Prime Bank has 40 existing branches and some other proposed branch all over the Bangladesh to provide better service to their valuable customers.

Existing Branches 

Dhaka Division

¯Motijheel Branch                          ¯Uttara Branch

¯Dhanmondi Branch                     ¯Foreign Exchange Branch

¯New Eskaton Branch                  ¯Islamic Banking Branch

¯Madhabdi Branch                                    ¯Mohakhali Branch

¯Banani Branch                             ¯Kawran Bazar Branch

¯ Islamic Banking Branch             ¯Mouchak Branch

¯Pragati Sarani Branch                 ¯Elephant Road Branch

¯Shimrail Branch                           ¯Gulshan Branch

¯Shyamoli Branch                         ¯Bangshal Branch

¯Tongi Branch                                ¯Narayanganj Branch

¯Panthapath Branch                     ¯Gonakbari Branch

¯Moulvi Bazar Branch

Chittagong Division                   Rajshahi Division

¯Jubilee Road Br                          ¯Rajshahi Branch

¯Agrabad Branch                         ¯Bogra Branch

¯Khatungonj Branch

¯Islamic Banking Branch              Khulna Division

   (O.R. Nizam Road)

¯Islamic Banking Branch              ¯Khulna Branch

B S Plaza                                          ¯Jessore Branch

¯Fatickchari Branch

Sylhet Division                         Barisal Division

¯Sylhet Branch                               ¯Barisal Branch

¯Islamic Banking Branch

   (Nabiba Complex)

¯Court Road Branch

¯ Tajpur Branch, Sylhet

¯Upashahar Branch, Sylhet

 ¯Beanibazar Branch

Field of Operations:

PBL, being one of the best financial intermediaries in the country, blended its operations in conventional banking, Islamic banking and investment banking. The blending has been done with the objective of diversifying the operations for catering to the needs of the customers of the different strata of the society from one viewpoint and for having sustainable growth in profitability and business with the least possible risk. The bank’s operations were diversified into the following areas of activities as a dynamic financial intermediary.

   Conventional Banking Operation

  Islamic Banking Operation

  Lease Finance Operation

  Merchant Banking

  Retail Banking

In order to carry out these diversified operations PBL has set up the following divisions, departments and units in its Head Office:

1. Credit Operation & Management Unit
   1. Corporate/Relationship Operation Department
   2. Credit Risk Management Department
   3. Credit Administration department
   4. Credit Monitoring and Recovery Department
   5. Export Finance Division
   6. Small & Medium Enterprise (SME) Credit Cell
   7. Structured Financing Unit
   8. International Division
   9. Treasury Division
   10. Leasing Unit
   11. Card Division
   12. Retail Credit Division
   13. Corporate Affairs Division
   14. Islamic Banking Division
   15. Merchant Banking & Investment Division

For facilitating operations by the above mentioned divisions the bank has established the following divisions to provide support and internal services:

  Human Resource Division

  Information Technology Division

  Public Relations Division

  Financial Administration Division

  General Services Division

  Marketing Division

  Prime Bank Training Institute

  Branches Control Division

For ensuring internal and statutory compliance there are following three cells namely,

• Board Audit Cell
• Audit and Inspection Division
• Central Compliance Department

Besides, there is a Board Secretariat to look after the company matters and to for arrange for Board/Executive Meetings and record the proceeding of the board/EC.

 Performance:

Prime Bank has been profitable since the first year of its operations. Profits were low in 1998 as the bank incurred losses on its stock market operations. Management described this as a ‘learning experience’ and has since refrained from stock trading activities. Indeed the bank’s profitability has been exceptional compared with its Bangladeshi counterparts, and it reported an average ROE of 41% (ROE at end-2002 was 30%) between 1999 and 2002.

As a fully licensed commercial bank, Prime Bank Ltd. is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and it repositions itself in the changed market condition.

Prime Bank Ltd. has already made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country through internationally accepted CAMEL rating. The bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation.

The bank has consistently turned over good returns on Assets and Capital. During the year 2004, the bank has posted an operating profit of Tk. 1146.14 million and its capital funds stood at Tk. 2476.06 million. Out of this, Tk. 1000 million consists of paid up capital by shareholders and Tk. 1476.06 million represents reserves and retained earnings.

 The bank’s current capital adequacy ratio of 10.74% is in the market and much above the stipulated line of 9%. In spite of complex business environment and default culture, quantum of classified loan in the bank is very insignificant and stood at less than 1.52%.

 Comparative Position:

Prime Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software.

Prime Bank Ltd., since its beginning has attached more importance in technology integration. In order to retain competitive edge, investment in technology is always a top agenda and under constant focus. Keeping the network within a reasonable limit, bank’s strategy is to serve the customers through capacity building across multi delivery channels.

Bank’s past performance gives an indication of their strength. The bank is better placed and poised to take its customers through fast changing times and enable them compete more effectively in the market they operate.

There are 52 banks operating in our country. Among all these banks PBL has established itself as one of the most influential local bank. Prime Bank’s position can be figured out from the following table_

PBL’s Comparative Position

                                                       (Figure in crore Tk.)

                                                                                               Source: Prime Bank Training Institute

Graphical Representation:

So, Prime Bank Limited is a fast growing and modern private commercial bank. It is making its marks in the country’s socio-economic condition by channel zing the much-needed fund to the entrepreneurs. And by doing this consistently and efficiently it is also satisfying the shareholders.

 Narayangonj Branch of Prime Bank Limited:

Narayangonj Branch of Prime Bank Limited is a profit earning branch .It is one of the newest branches of Prime Bank Limited which was established just in April 2005. It is situated at the S. M. Maleh Road, Tanbazar, Narayangonj. It is a very important place as the place is becoming a more commercial area day by day.

The Branch has 12 Officers of which the Head Of the Branch Mr. Muhammad Shahinur Rahman is a Vice President of Prime Bank Limited .The Branch has 1 Senior Executive Officer, 1 Executive Officer, 1 Principal Officer, 2 Senior Officers , 1 Officer , 4 Junior Officers and 1  Trainee Assistant Officer. All of them are very cooperative and helpful which is enough to satisfy their clients. .Although it started its operation in February 2006 as the year ended we have to admit that despite all barriers it succeeded to fulfill its profit target. Although it is not still an Authorized Dealer of Foreign Exchange, it performs its dealings through its Motijheel Branch. The performance of this Branch is very well which could be analyzed with the help of following data.

Yearly (November 16, 2009) Existing Position of Narayangonj Branch:

 Narayangonj Branch is a new Branch, so it is cognizable that the Branch will take time to settle down in a ‘Prime’ condition. As the Officers always try hard to improve the status and the high officials of the Bank are always keen to make the Branch a busiest one it is expected that the above volume will be larger day by day.

Chapter- 4

Customer service Of prime bank ltd.

Products and Services offered by Prime Bank Ltd.:

1)    Deposit Scheme

2)    Loan

3)    Other Services

(1)  Deposit Scheme:

Bank is the largest mobilizer of surplus domestic savings. For poverty alleviation, we need self employment, for self-employment we need investment and for investment we need savings. In the other words, savings help capital formations and the capital formations help investments in the country. The investment in its turn helps industrialization leading towards creation of wealth of the country. And the wealth finally takes the country on road to progress and prosperity. As such, savings is considered the very basis of prosperity of the country. The more the growth of savings, the more will be the prosperity of the nation.

The savings rate in Bangladesh is one of the lowest in the world. In order to improve the savings rate, Financial Institutions responsible for mobilization of savings should offer attractive Savings Schemes so that the marginal propensity to save increases. The savings do not, of course, depend only on the quantum of income but largely depend on the habit of savings of the people.      

PBL formulated the following deposit products:

            XCurrent Account Deposit

           XSaving Account Deposit

            XContributory Savings Scheme

            XEducation Savings Scheme

            XShort Term Deposit

            XDouble Benefit Deposit Scheme

            XResident Foreign Currency Deposit Account

           XNon-resident Foreign Currency Deposit Account

            XNon-resident Taka Account

           XNon-resident Investors Taka Account

XForeign Currency Account

XMonthly Benefit Deposit Scheme

XFixed Deposit Scheme

XLakhopati Deposit Scheme

      (2) Loan Products:

There are several loan products offered by Prime Bank Ltd. The loan and advances is mainly of two types, General Loan and Consumer Credit Scheme. The general loans includes both industrial and individual loan. Popular loan products are briefly discussed below:

• General Loan Schemes:

This type of loan is classified into individual and industrial loans. In case of industrial loan, there are again four types, short-term loan, term loans, import finance and export finance. According to the maturity, the loans can be classified as short-term, medium term and long term loan as well.

• Consumer Credit Scheme (CCS):

            In order to provide financial assistance to the limited income group of people, this scheme is beneficiary. The limited income group of people can raise their standard of living by accruing domestic durable products, for example, TV, freezer, computer, motor vehicle etc. The amount of credit determined in such a manner that the monthly installment does not exceed 50% of the disposable income of the customer. Generally the time periods of this CCS loan are two years times with an interest rate of 15%; but in cases it can be changed in the interest of the bank.

• Lease Financing:

It is one of the convenient long-term sources of acquiring capital machinery and equipment, where a client is given the opportunity to have a right to use an asset, for an agreed period of time against the payment of rent. The major advantage it has is to use an asset without buying it. It is suitable for the firms who want to acquire capital machine, equipment, automobiles, etc. The lessee has to pay monthly rental in advance starting from the date of execution till the end of lease term.

• Small and Medium Enterprise:

It is a scheme offered by PBL to provide credit facilities to small and medium size entrepreneurs located in the urban and sub-urban areas to encourage new and educated young entrepreneurs to undertake productive ventures, to assist them to take part in the economic activities etc. The loan ceiling is taka 2.5 lac for small enterprise; and taka 75 lac for medium enterprise. Interest rate charged is around 15%.

• House Building Loan Scheme:

These loans are allowed to individuals or enterprises for construction of house or business premises. The amount is repayable by monthly installments within a specific period of time. It is known as house building loan-general. For the bank employees, loans are allowed to purchase or construction of house known as house building loan-staff.

• Hire Purchase:

Hire purchase is a type of installment credit under which the Hire Purchase agrees to take the goods on hire at a stated rental, which is inclusive of the repayment of Principal as well as interest for adjustment of the loan within a specified period.

• Advance against Share:

In order to contribute to the development of the Capital Market of the country, Prime Bank Limited extends credit facilities against pledge of shares to individuals as well as to the Member of Dhaka Stock Exchange (DSE) & Chittagong Stock Exchange (CSE).

      (3) Other services:

Master card:

Prime Bank Limited obtains principal membership of MasterCard international in the month of May 1999. Within a period of 6 months, the bank successfully launches MasterCard – credit card which created a new dimension in its customer service and consumer financing.

The special feature of the prime bank MasterCard is that it bears the card holder’s photo on the card, which of the first of its kind in Bangladesh and adds security against misuse. Prime Bank Limited issues four types of cards. These are Gold local and International and Silver local and International. Local cards can be used in Bangladesh only.

One stop utility services scheme:

Prime Bank Limited has recently introduced a scheme entitled “One stop utility services scheme”. The scheme is designed to provide all the required services to the customers in making payment of their following bills on their behalf from the counter of the Bank.

• To pay electricity bill.
• Cash deposit in his / her account at any branch of the bank irrespective of locations.
• Cash deposit in other’s account at any branch of the bank irrespective of locations.
• Transfer of money from his/ her account with any branch of the bank.

Service Provided by Different Departments:

Customer service is always a very vital issue for Prime Bank Limited. There is a common dialogue in Prime Bank which says “Customers are our KING”. So it likes to treat its customers with a very outstanding manner. As the hospitality is very necessary, the Bank always tries to give its clients the best service. All the efforts and works in the Branch Banking environment focus on customer satisfaction .There are several departments in a Bank which are more or less directly linked with the customers.

All Branches of Prime Bank Limited are divided into three Departments.

1. A.      General Banking Division
2. B.   Foreign Exchange Division
3. C.     Credit Division

A.  General Banking Divisions:

General Banking is the most significant department for any commercial bank. This department is designed to serve the general people in saving money, smoothing transactions for commercial people and ensure security of the precious wealth of the client.

General Banking is fully computerized. All transactions are maintained in computer. Computer maintains daily clean cash report, daily general ledger of general banking.

General banking may be termed as retail banking. PBL function of General Banking are divided into following sections-

•   Front Desk Activities
• Accounts Opening Department
• Clearing and Bills Department
• Remittance Department
• Accounts Department.
• Cash  Department
• Computer Department

 Front Desk Activities:

Front desk play a very vital role in a bank’s customer service. This happens gradually that a prospective client approach to a bank at first to know something, to know the facilities which the Bank could provide him/her. There are varieties of clients .Someone may be a teacher, someone is a doctor, and someone is businessman and may be some are students. To a Bank all the prospective customers are equally valuable. When a client enters into a bank, he at first meets to the Front Desk. So the officers who serve here play a very important role .It is a very common rule that “First impression should be the best impression”. Prime Bank is very prompt in their front desk activities. Here customers find their guideline and all necessary information .They can open their account ,open different deposit schemes, can get cheque book, deposit cheques for clearing, can do pay order, demand draft, telegraphic transfer and could get all support to do so from the experienced officers.

Accounts opening Department:

Account opening department is important department of Genera! Banking for the deposit. This department invites people to open A/C to be a client to taking service provided by the Bank. Relation between customer and a banker starts with opening an account.

Bills and Clearing Department:

The main function of this department is to collect instruments on behalf of its customers as agent through clearing House or OBC (outward Bill collection ) and to make payment against the account payee instrument drawn upon that branch , received from clearing house or through IBC ( inward bill collection). This department receives all kinds of account payee instrument from its customer for collection. The instruments are cheques, draft, dividend warrant, etc. If the instrument is drawn upon any bank which is a number of clearinghouse of that area. The Bank collects it through clearing house and if any instrument is drawn upon any bank which is situated out of its clearing or of any branch of the receiving bank, the bank collects it through OBC.

Remittance Department

The bank gives their customers the facility to remit funds from one place to another. The people who are not customers can also enjoy this facility. In our country banks have a wide network of branches all over the country and remit funds from one place to another through this network. The instruments, which are and to remit funds, are demand draft, telegraphic transfer and mail transfer.

Accounts department:

This department records all kinds of transactions of the branch, confirming their accuracy and preparing statements are the main function of this department. Now a day under computerized banking system the job of accounts department became very easy. In computerized account department of PEL, the clean cash statement and supplementary statement on the computer directly prepares party ledger vouchers. The accountant needs not to prepare these manually. The functions of the accounts department can be divided into two parts:

• Daily functions and
• Periodical functions.

 Cash department

The cash department of a Bank is one of the most sensitive departments. The responsibility of the officers of this department is incredible. Two main function of this department are:

  To receive cash &

  To payment cash.

Receiving cash is considered as a liability for the Bank. The Bank is liable to pay its clients, whether he wants to with draw cash from his account. So cash is credited in the bank’s general account and debited in the client’s account. On the other hand whenever cash is payment the bank’s general A/C is debited as it credited accordingly. All transaction of cash department is posted in computer. There are checking machine in the cash departments to promote the function effectively.

Computer Department:

Computer is a very necessary part of Branch Banking activities. At present Prime Bank is using PC BANK software for their all daily transaction .Officers help customers in this section to post their cheques, provide them bank statement, and give them different types of certificates as the customers demand. They also provide them bank balance directly or over phone. Here officers help their clients to get a track of all transactions as if they feel comfort.

B. Foreign Exchange Division:

        Foreign Exchange division is a very important part of any commercial Bank. At present all the branches of Prime Bank Limited are not doing foreign dealings with their clients directly .There are 24 branches of Prime Bank which are AD (Authorized Dealer) of foreign exchange. At present branches play a very important role in supporting LC (Letter of Credit) facilities to their customers. To open an LC in a Bank the following requirement are necessary for any client:

• They should have a Current Deposit (CD) account in that branch.
• There transaction list should have a good track record of business.
• They should bear a IRC (Import registration certificate) from the authority of Chief controller of Import and Export.
• They should have a TIN certificate.
• They should mention their all prospective business deal in a Pro forma invoice where all the description of the business should be notified.

At present the commercial banks in Bangladesh is paying more importance in foreign exchange dealings. The reason behind it is that it provides them with huge profit than other fields. Prime Bank Limited is also aware of the whole matter and so they are leading in this field at present than other banks in Bangladesh. Good customer management and service helped the institution to invade the proud field certainly.

1. C.   Credit Division:

Prime Bank Limited serves its customer with different types of loans. These are mainly of the following types.

1) Consumer Credit Scheme:

Consumer Banking means for consumption / utilization of consumer durables. Consumer & Retail banking is one of the credits, which is provided to people having fixed, but regular income for acquiring consumer durables and other assets for personal use to service from their monthly income. Consumer Credit is a collateral free credit and backed by the monthly income of the loonies and guarantors acceptable to the bank. Since it was introduced in 1995 it is still a very demanding loan scheme of Prime Bank Limited. Under this category, persons from different backgrounds apply for a bank loan for a special demand which may be for a Car Loan, Doctors Loan, Household durables Loan, Loan for home appliances etc. This loan is not directly delivered to the interested parties, but it is delivered to the party from whom the above thing was bought.

   2) Personal loan:  

Any person having CD/SB/STD account may avail this loan against Lien on FDR or any other savings instruments duly discharged with Letter of Authority to encash in case of default. Here the rate of interest would be 2-3% above FDR rate in case of FDR and 14% p.a. with quarterly rest in case of other deposit and the period of loan is maximum 12 months   (renewable ) .The Limit of loan under this scheme would be as per delegation of power circulate from time to time.

3) House Building Loan:

Under this category land owners get loan for construction purpose in their own land. The construction process will be closely monitored by the Bank personal.

            In the credit division the respective banker needs to be very smart, intelligent and alert. As the loan section bears a very sharp risk he needs to be very alert, also he needs to be very friendly to the good customers. This is a very important division in Private Bank and so customer service evaluation is very necessary in this field.

Online Banking in Prime Bank Limited :

           At present Prime Bank Limited is serving its clients with Online Banking facility .With this service customer can draw money or deposit money to any one branches of PBL throughout the country. This helps them in innumerable ways. Although Prime Bank Limited doesn’t offer this facility to all of its customers at present but as the process is upgrading for better services, it is hopeful that the valued customers will get the benefit of real-time online banking very soon. 

Chapter- 5

Overview of credit card system of prime bank ltd.

Introduction of Credit Card:

The ‘Credit Card’ has lately been a curious topic of discussion in our country. It is a new arrival in the monetary fashion 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:

a) What is a Credit Card?

b) Is it just an alternative to paper money?

c) Is it something like a cheque that is just an ancillary to the currency

   in vogue?

          d) How can it be used/ operated?

The credit card can contribute to our country’s economy to change the practice of cash dealings.

History of 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.

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’.

Different types of Credit Cards in the world:

There are three types of credit cards:

• Bank Cards: issued by banks (for example, Visa, Master Card and Vanik Card). These cards are available in our country.
• Travel and Entertainment (T&E) cards, such as American Express and Diners Club. American Express cards are available
• House cards- That are good only in one chain stores T&E cards House cards have same terms and conditions. These cards are not available in our country.

ANSI Standard X 4.13 –1983 is the system used by most national credit card system. Here some number stand for the following cards:

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: Always first digit is 5.Digits two and three, two through four, two through five or two through six are the bank number. This is called BIN (Bank Identification Numbers). The digits after the bank number up through digit 15 are the account number and digit 16 is a check digit.

               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 the 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 digits.

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.

The market:

In 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). The total gross dollar volume on those cards in 2001 was more than USD 5 trillion.

Credit Card in Bangladesh:

ANZ Grindlays 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.)

 Table:  Market players and credit card operations

Advantage and Limitation:

There are many advantages of credit cards. It is safer than the paper money. Risk free and hazard free, a card can be attributed to a huge amount of money. So, it offers the largest portability. One can also avoid the toil of finger counting changes in this system. Dollar, Pounds or Taka can be plundered, stolen or lost. But there is no such fear with card. The card holder is given a code number called PIN (Personal Identification Number) without which a card cannot be used for taking cash money or it cannot be used if the card holder advises the Bank to block his/her card. The credit card can be used to pay after all sorts of shopping. It may be payable in hotels, motels, restaurants, handicraft shops, jewelry shops, can service centers, tailoring shops, music arcades, groceries, departmental stores, diagnostic centers, stationery shops and airlines.

If one wants to go urgent shopping but one hasn’t cash money in hand, there will be no problem; credit card will help one buy as soon as one wishes. Various types of bills can also be paid by means of Credit Cards.

International card can help in traveling to various countries. With this card one can travel around the world. Buying air tickets, booking hotels, etc.  All can be done comfortably by using the credit facility.

Limitations:

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.

Chapter- 6

Fundamentals of credit card system

Card holder:

One of the participants in Credit Card transaction 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.

Issuer:

The second participant in Credit Card transactions is the Issuer. The Cardholder’s financial institution (usually called the issuing member or issuer) is a licensed member of Master Card and /or Visa. The Issuer:

 Issues the card to the approved cardholder.

 Receives and pays for transactions from Master card and/or Visa

:Bills collect from the cardholder.

The issuer also benefits from the services of a Third Party and /or association in processing information and payments.

Agent Banks:

Managing a credit card program is expensive and 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. 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.

Acquirer:

The acquiring member or acquirer solicits screens and accepts merchants into its Credit Card Program. The acquire 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 usually charges the merchant a merchant discount for handling the 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.

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.

Operations of the Master card International:

Banknet 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 benefits-

• Flexibility – through an adaptive and reactive routine network.
• Reliability- through rerouting capabilities and back up facilities
• Efficiency- through peer-to-peer (PTP) architecture and packet switching protocol.
• Expandability- without re -design.
• Intelligence of a Distributed network.
• Speed – average speed 2.1-second response time.

How does Bank 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 Banknet network offers several routes that information can travel along to arrive at any given distention. This is called a distributed network & also refereed to as Peer-to- Peer (PTP) architecture. Compare to Star network it is cheaper.

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.

Master card Interface Processor (MIP)

Data enters the Banknet through MIP’s, which perform two general functions for the members:

• Provide member host access to Banknet, which lets bank authorization as well as send and receive Inter Bank Network for Electronic Transfer (INET) files and a variety of reports.
• Provide processing support for member’s payment card software application.

MIPs are joined to the Banknet 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.

Member Host Connection:

The connection from banks host computer system to a MIP depends on the number and types of the services provided to 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 Banknet 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:

Master Card system applications are divided into two major categories: authorization which is primarily done On-line with immediate response time and bulk data processing such as Clearing and Settlement. 

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 Banknet network through the acquirer MIP.

Step 4: The Banknet 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: Banknet routs the response to the acquirer or its agent.

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

Each day, millions of cross-border and local Master card transactions involving hundreds of millions of dollars, are “cleared” and “settled” via the Banknet Tele communications network using the Interbank Network for Electronic Transfer (INET). Clearing is the process of exchanging transactions details between an acquirer and an issuer to facilitate posting of a cardholder account, handle retrieval request and reconcile a member’s settlement position. Issuers, acquirer and INET play and assume the following responsibilities in the clearing process.

Acquirer:

• Checks data captured from merchant documents to ensure that format meets master card standards.
• Stores records into issuing ICA member sequence and classify transactions by merchant to minimize the transaction and processing time and costs…
• Creates a proper file with numerically stored records.
• Balances the prepared data before transmissions in to Master card in St Louis, USA
• Transmits data in the appropriate format.
• Keeps a transmission log or a listing of each transmission.
• Re-submits any items, batches or transmissions that have been declined for any reason by Master card.

INET (Inter bank Network for Electronic Transfer):

• Edits balances and distributes transaction data received from acquiring and issuing members.
• For all transaction calculates each member’s daily net settlement figure, sends figures to each member and the member’s clearing bank and to master card net settlement bank.
• Verifies and when necessary, adjusts batch amounts and fee calculations.
•  Rejects invalid records, batches or transmission and notifies sending members of rejection.
• Updates acquirers interchange files to confirm that transmission have been received accepted.
• Sorts and accepts incoming batches.
• Produces and distributes outgoing inter change transmission files for each participating member.

Issuer:

• Edits and balances records received from INET.
• Updates cardholder accounts and reconciles net settlement data

Settlement:

It is the process by which funds are exchanged between members for the net value of monetary transaction such as sales transactions, cash disbursement, merchandise credits and miscellaneous records. In this process Master card instructs the Master card settlement bank to transfer funds to those members in a credit position and to debit any members who are in a debit position. The bank through with the settlement process occurs is called the settlement bank.

International Settlement:

When acquirer and issuer are located in different countries the settlement amount is calculated is either US Dollar or in some cases local currency .For local currency the members settlement amount is determined in US Dollar & then converted to the local currency for payments. Funds transfer is subject to international two days standards.

Local Settlement:

Master card offers this service to accommodate members in the same country who need to clear all their transactions through INET and who desire to settle transaction with in the country in their local currency. Members participating in local settlement process their domestic transaction through a local settlement bank at an agreed upon inter change rate(s). Master card credit and debit advisement are sent to a member designated local bank.

Security and Fraud:

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

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

       following parts.

                 (A)-1 Internal:

• Conduct pre-employment investigating of prospective card department employee.
• Plan and supervise the manufacturing shipping, storing, embossing, encoding and mailing of cards.
• Plan and supervise the physical protection of card department and building including the related data processing and data communication facilities.
• Conduct investigations for other Master card members on request.
• Maintain liaison with the Master card security and risk management department on Network and relevant internal department.
• Train all personnel including employees with direct customer contract in fraud and awareness and detection.

(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.

          (A)-3 Systems 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).

      Continually check that your institutions system is operating efficiently and effectively.

(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..

Card production Security:

 Card production security occur by the following two steps—

1. Plastic Procurement:

Institution is responsible for obtaining cards from a plastics manufacturer. Master card periodically in the security Bulletin lists manufacturers, embowers and encodes that have been inspected and are in compliance with Master card minimum-security standards.

2. Card security features:

To minimize fraudulent the following steps are occur—-

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—No longer than two years from the issue date.

Master cards embossed character— A special character, which is difficult to reproduce. This is appeared on the front of the cards.

 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.

Chapter- 7

Comparison of prime bank with other banks

Comparison of Prime Bank Limited with other   Competitive commercial Bank:

In this case I have selected Standard Chartered Bank and BRAC Bank Limited as these banks have a better perception of the consumers as better and fast service providing banks. The comparison is shown below:

Chapter- 8

Findings and analysis

 Summary of the findings:

Now the survey findings are represented by according to different parameters. The answer of the questions are representing according to the  parameter that identify the customer perception or attitude towards customer services of the Prime Bank Limited.

 A Reliability Parameter:

Q. 1) Do you think PBL provides the services all time that it promises to do so?

This is one of the important questions asked to the customers of PBL .There are 36 respondents who  were strongly agreed  which is  30% of the whole respondents.48 respondents answered agree of this question which are 40% and 25% were neutral to answer this question and only 5 % of the respondents answered disagree.

When you face a problem PBL show interest to solve the problem ?       

 This is also one of the important questions asked to the customers of PBL

.There are 39 respondents who  were strongly agreed  which is  32% of the whole respondents.53 respondents answered agree of this question which are 44 % and 13% were neutral to answer this question and only 11 % of the respondents answered disagree.

Problems are solved very promptly?

This is also one of the important questions asked to the customers of PBL .There are 39 respondents who  were strongly agreed  which is  32% of the whole respondents.53 respondents answered agree of this question which are 44 % and 13% were neutral to answer this question and only 11 % of the respondents answered disagree.

Findings:

• Prime Bank Limited provide its services at the time it promises to do so.
• When you face a problem Prime Bank Ltd shows a sincere interest to solve it.
• Problems are solved promptly.

b Responsiveness Parameter:

Do you think PBL employees are very friendly and helpful ?

This is an another  important question asked to the customers of PBL .There are 14 respondents who  were strongly agreed  which is  12% of the whole respondents.41 respondents answered agree of this question which are 34 % and 17 % were neutral to answer this question and  23 % of the respondents answered disagree.14% of the respondents expressed strongly disagree in this question.

 Do you think employees always search for solutions for you?

This is an another important question asked to the customers of PBL .There are 47 respondents who were strongly agreed which is 39% of the whole respondents.28 respondents answered agree of this question which are 23 % and 22 % were neutral to answer this question and 8 % of the respondents answered disagree 8% of the respondents expressed strongly disagree in this question.

 Do you think the behavior of the officers satisfy you?

 This was a very vital question asked to the customers of Panthapath Branch. .The reply was that 49 respondents among them   were strongly agreed which is 41% of the whole respondents. 26 respondents answered agreed to these questions which are 22 % and 17 % were neutral to answer this question while 15 % of the respondents answered disagree. 5 % of the respondents expressed strongly disagree in this question.

Findings:

• Employees of Prime Bank Limited are friendly and helpful.
• Employees always search for solutions for the clients.
• The behavior of the employees is very good.

c Assurance:

Do you think the employees of PBL are trustful and reliable ?

This was an important question in the questionnaire  .There are 51 respondents who  were strongly agreed  which is  42% of the whole respondents.33 respondents answered agreed to this question which are 28 % and 12% were neutral to answer this question and  14 % of the respondents answered disagree. 4% of the respondents expressed strongly disagree in this question.

Q.8) Every transaction by PBL employees is safe to you?

 This was an  important question asked to the customers of PBL .There are 16 respondents who  were strongly agreed  which is  13% of the whole respondents.45 respondents answered agree of this question which are 38 % and 27 % were neutral to answer this question and  19 % of the respondents answered disagree. 03 % of the respondents expressed strongly disagree in this question.

Do you think as a Bank, Prime Bank is always trustworthy from all aspect?

This is an another  important question asked to the customers of PBL .There are 54 respondents who  were strongly agreed  which is  45 % of the whole respondents.31 respondents answered agreed to this question which are 26 % and 21  % were neutral to answer this question and  8 % of the respondents answered disagree.

Findings:

• Employees of Prime Bank Limited are trustful and reliable.
• The transaction by PBL employees is safe to the clients.
• As a Bank, Prime Bank Limited is trustworthy to its clients.

 d Empathy

Do you think PBL always give you individual attention?

 This question was asked during the survey time in PBL .There is 31 respondents who were strongly agreed which is 26% of the whole respondents. 62 respondents answered agree to this question which are 52 % and 6 % were neutral to answer this question and 16 % of the respondents answered disagree. No one answered strongly disagree in this question.

  Do you think PBL understands your specific needs?

 This is an  important question asked to the customers of PBL .There are 29 respondents who  were strongly agreed  which is  24 % of the whole respondents.33 respondents answered agree to this question which are 28 % and 38 % were neutral to answer this question and  10 % of the respondents answered disagree.

Do you think PBL believes in personal relationship with their clients?

 This is a very attractive question asked to the customers during the survey  .There are 18 respondents who  were strongly agreed  which is  15% of the whole respondents.30 respondents answered agree of this question which are 25 % and 32  % were neutral to answer this question and  21 % of the respondents answered disagree.7% of the respondents expressed strongly disagree in this question.

Findings:

• Prime Bank Ltd .always gives individual attention to its clients.
• Prime Bank Ltd. understands customers’ specific needs.
• Prime Bank believes in personal relationship with their clients.

 e Tangibles:

Do you think PBL use modern looking equipment

This is an   important question asked to the customers of PBL .There are 28 respondents who were strongly agreed which is 23 % of the whole respondents. 55 respondents answered agree of this question which are 46 % and 13 % were neutral to answer this question and 11 % of the respondents answered disagree. 7 % of the respondents expressed strongly disagree in this question.

Do you think the Bank has a convenient transaction hour?

 This is an important question asked to the customers of PBL .There is 43 respondents who were strongly agreed which is 36 % of the whole respondents. 52 respondents answered agree of this question which are 43 % and 17 % were neutral to answer this question and 4 % of the respondents answered disagree.

 Do you think PBL should introduce new facilities like ATM card and credit card facilities?

This is a very good  question asked to the customers of PBL .There are 60 respondents who  were strongly agreed  which is  50% of the whole respondents. So we see about half a portion of the respondents strongly support it. 32 respondents answered agree to this question which are 27 % and 16 % were neutral to answer this question and 7 % of the respondents answered disagree.

Findings:

• Prime Bank use modern equipment in their Banking service.
• Prime Bank has a convenient transaction hour.
• Modern facilities like ATM machine, credit card facility should be introduced to Prime Bank.

 f Others

Do you think the fees and service charges of the Bank is reasonable in comparison with other Banks?

 Findings:

 Customers seldom say that the charges of Prime Bank Ltd  is quite high .So these fees should be reduced.

 What is your opinion to improve the Services of the Bank

 Findings:

Clients of Prime Bank Limited strongly desire ATM service, which we found from the above table. Some say that Evening Banking should be little more lengthened while some demands online service to be very fast.

SWOT Analysis:

SWOT analysis enables an organization to have a comprehensive insight about its current position in the industry compared to the competitors. It provides the organization a scope to strategically improve its position in the market. Here, the internal strengths and weaknesses of Prime Bank Limited as well as the external opportunities and threats are discussed:

Strengths-

• Good Customer Service:

PBL provides quality services to the clients compared to its other contemporary competitors. The bank has a very good relationship with its customers. The bank believes in maintaining personal relationship with the clients. One of the major goals of the bank is to build long term relationship with the customer and to create value for them. To maintain this relationship, PBL sometimes waiver high charges for those valued clients who are linked with the bank for a long period of time. The bank recently has approximately more than 1,54,000 clients, highest in the private sector commercial banks of our country.

• Innovative Products:

Prime bank has been offering various kinds of deposit schemes by which people have got opportunity to save their small money and bank is also able to earn more for themselves for their clients. Most of the private banks are offering three to four number of deposit schemes. Comparatively Prime Bank offers maximum number of deposit schemes by which the bank is successful to capture and retain large number of customers.

• Efficient Administration:

Prime Bank Ltd. has an efficient administration. The work is done in a timely and systematic manner for which the efficient administration is responsible. There is close relationship between the employees and management though the chain of command is maintained strictly. Overall, there is a good balance between the administration and the employees.

• Capital Adequacy:

Prime Bank Ltd. is maintaining a strong capital base. By the end of March 2005, capital adequacy ratio of the bank was 10.74% that is well above the stipulated requirements of 9%.  The bank had a target to have tk. 1000 million of capital fund by the year 2006, whereas it already reached capital fund of almost tk. 2000 million by 2003, positioning the bank as one of the strong capital based bank of Bangladesh. The bank has now also increased its authorized capital to 4000 million to its expansion programs.

• Experienced Senior Management:

The senior management of the bank is responsible for promoting the highest level of business ethics and integrity. Their aim is to create and foster a culture throughout the bank that emphasizes and demonstrates the importance of maintaining high business ethics and close relationship with customers.

Weaknesses-

• Technology:

One of the major weaknesses of Prime Bank Ltd. is the technology used by the bank. With the change of time, technological advancement is essential to survive in the competition. Hence, PBL is lagging far behind in this area. PBL was the pioneer in online banking but the online facility which the bank is providing currently is not up to the standard.

• Promotion:

When an employee gets a promotion to the next level, he/she gets more compensation. PBL is regular in giving promotion, but the employees get late effect of this promotion. Often there is a long gap, for example a six month gap in getting the effect.

• Training:

PBL has its own training institute PBTI (Prime Bank Training Institute) to strengthen the capabilities of human resources. However, there is a lack of specific training for specific jobs. As a result, the employee has to learn things from the job by doing it practically.

   Opportunities-

• ATM Facility:

Currently Prime Bank Ltd. does not have ATM facility. Many other leading competitors have ATM service that provides 24 hours cash transaction to their clients. This service is highly preferred by the clients. So, PBL has a good opportunity to provide their own ATM facility to the customers in near future and survive in the competition.

• Branch Expansion:

Prime Bank is growing quickly all over the country. Besides expanding in the urban areas, PBL has prospects to open more branches in sub-urban areas, which will eventually enhance the government’s effort at reviving the rural economy as well as reaching more people by better service.

• Training Facility:

Prime Bank Training institute (PBTI) is supporting the bank by offering in house training courses, workshops and seminars. As the bank has its own training institute to enhance the capability of human resources, PBL can use this opportunity to train their employees in specific areas and create specialized and expert people for the bank.

• Banking Software:

Providing quality service is one of the major goals of PBL. Though Prime Bank is still lagging behind in upgrading their software system, the bank has the prospect to select high quality banking software which will make the banking operations easier and smooth.

   Threats-

• Level of Competition:

Competition is always a major threat for any organization. In recent years, the number of private bank is increasing. These banks always pose a threat for others by coming up with new product line, innovative technology, quality services, etc. thus the level of competition rises and creates threat for prime bank limited.

• Technological Advancement:

With time, technology is getting advanced and most of the private banks are upgrading their operating system to survive in the industry. PBL is lagging behind in this department and still mostly dependent on manual work rather than technology. Advancement of technology is posing great threat for P

Chapter- 9

Recommendations and conclusions

 Recommendations:

The survey results have given valuable information as to where improvements are necessary to improve the customer services quality of PBL. Now I recommend the following major things, which will be helpful for PBL:

    Banking is a service-oriented business. Its business profit depends on its service quality. That’s why the authority always should be aware about their service quality.

    Modern banking today is introducing various kinds of services, which attract different types of target customers. PBL should diversify its banking services and add new features in its services so that it can attract customers from all groups of people. Financial researcher of PBL should be innovative in developing new banking services, which will attract customers and also reduces cost.

    Bank should offer more facilities to the customers such as ATM machine service.

    Now a days world is going very fast. Now most of the banks open online customer service system. So in order to compete in the competitive market they should adopt real time online banking system in every branch.

    Prime Bank Limited should provide bank statements periodically, because most of the top positioned bank now a days offer this facility. The bank should redesign the format of its account into a clearer and easily understandable format that will be helpful for the customers.

    As for deposit schemes, PBL has innovative products like the education savings scheme, but it can do product extension and increase its deposit base by introducing more variety in the maturity of the schemes.

    Long-term training very much required for the employees.

    Many branches can be opened to reach the bank’s services in remote locations.

    In general banking department it is necessary to implement modern banking process instead of traditional system. It should be more computerized.

    Data based networking is the most modern technology to transfer data form branch to branch or branch to head office and vice versa. So they must use this technology to enhance the Information Technology (IT) dependence of the Bank.

 Conclusion

Prime Bank limited is a modern commercial bank.. It is committed to provide high quality financial services / products to contribute to the growth of G.D.P. of the country through stimulating trade & commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, raising standard of living of limited income group and overall sustainable socio-economic development of the country.

The Bank is operating efficiently with its existing products and services. It has remained profitable from the inception of its operation in the commercial banking sector. The emergence of fierce competition and adverse economic condition has forced the bank to be innovative in offering its products and customer services.

Service quality is a critical component of customer perceptions. In the case of pure services, service quality will be the dominant element in customers’ evaluations.

 The services which the Bank provides to their clients are very prompt and quality one compare to other private or foreign banks. So Prime Bank is the bank, which will survive in the banking sector of the world on the slogan-

“A Bank with a difference”.

References & Bibliography:

• George H. Hempel and Donald G. Simonson (1998), Bank Management: Test and Cases, 5^th Edition, New York: South-Western Pub.

• Joel Bessis (2001) Risk Management in Banking, 3^rd Edition, New York:  John Wiley & Sons Ins.

• Peter S. Rose (2001), Commercial Bank Management, 5^th Edition, New York: Irwin Professional Pub.

• Peter S. Rose and Sylvia Conway Hudgins (2003), Bank Management & Financial Services, 5^th Edition, New York: McGraw-Hill.

• Reading Materials on General Banking & Credit Department.

• Radhaswami, M. and S. V. Vasudevan (2000), Text Book of Banking, 3^rd Edition, New Delhi: S. Chand & Company Limited.

• Timothy W. Koch and Steven Scott Macdonald (2002), Bank Management, 5^th Edition, New York: South- Western Pub.

• Woelfel, Charles J. (1994), Encyclopedia of Banking and Finance – 10^th Edition, New Delhi: S. Chand & Company Limited.

• Prime Bank “Annual Report 2009-2010”
• Different Project Appraisal reports of PBL
• Manual of different departments of PBL.
• PBL web side “www.primebank.com “