Report on Consumer Banking in Standard Chartered Bank

Main purpose of this report is to analysis the Consumer Banking in Standard Chartered Bank, here briefly measurement of the customer satisfaction of this bank. Other objectives of this report is to pay attention to two broad issues, they are briefly look in Standard Chartered Bank and understand the main banking process, keeping close attention on the culture. The second objective is briefly discuss about the existing customer satisfaction level soon after increasing some charges and also fesses.

Objective:

The objective of this report is to focus on two broad issues. One is to briefly look at Standard Chartered Bank and understand the whole banking process, keeping close attention on their culture. The second objective and the main issues of this report is as follows-

To briefly discuss about the current customer satisfaction level after increasing some charges and fesses.

Methodology:

Approach:

Standard Chartered Bank is the leading foreign bank in Bangladesh. The report is based on both primary and secondary research. The secondary research provided the main input for the report. This provided a theoretical basis of the report. The primary research was done to know about the banks working procedures and different segments of banks.

Primary source:

Primary data was collected form the computer database of SCB.( users of software EBBS.) Relationship managers and respective unit heads are interviewed who are using this database to analyze the financial strength of the customers.

Secondary source:

The secondary data has been collected from the different publication and brochures of Standard Chartered Bank. To clarify about different product Internet, different articles published in the journals & magazines are used.

Sample Information:

Sample is collected randomly among daily customers from the Mirpur, and Dhanmondi branch of Standard Chartered Bank.

Data Collection Method:

For the organization part information has been collected through different published articles, journal, and brochures. Formal questionnaire for data collection is used for better understand of customers current satisfaction level after the charges increased by bank. Basic company Information is collected through informal discussions with Relationship managers & respective Unit heads of SCB.

Data analysis:

In the organization part information is provided in a descriptive manner. In the project part data analysis has been done into two parts. One is the data presentation. The second part is analysis. Statistical analysis of the quantitative data has been done. Based on the survey result I use SPSS software to get the statistical analysis. There I use T -test and cross tabulation method to find out the customer satisfaction level on different issues.

Standard Chartered Bank in Bangladesh:

The Chartered Bank started operating in the East Pakistan in 1948, opening a branch in Chittagong.  The branch was opened mainly to facilitate the post-war reestablishment and expansion of South and Southeast Asia.  The Chartered Bank opened another branch in Dhaka in 1966, where it is still headquartered. After the merger of the Chartered Bank with the Standard Bank in 1969, the Standard Chartered Bank took up a program of expansion.  It increasingly invested in people; technology and premises as its business grew in relation to the country’s economy.  In 1993, there was an organizational re-structuring, which led to a substantial expansion of the Bank’s business.  Today the bank has in total four main branches in Dhaka apart from the Chittagong branch, including an offshore branch at the Savar Export Processing Zone.

The Organization Structure:

The Standard Chartered Bank in Bangladesh has its headquarters and twenty one branches across the country including its sub- branches and Booths. While the full range of services is available at the headquarters, other branches offer specific services appropriate for the location.  At the headquarters, the bank mainly consists of two divisions:

1. Business
2. Support

The business division has the following departments:

• Corporate Banking Group (CBG)
• Global Markets (GM)
• Institutional Banking Group (IBG)
• Consumer Banking (CB)
• Custodial Services (CUS)
• The Support division provides assistance to the above business activities and consists following departments:
• Operations
• Finance, Administration and Risk Management
• Information Technology Center
• Human Resource Department
• Legal and Compliance
• External Affairs
• Credit

All the staff members of Standard Chartered Bank belong to an internal trade union known as “Standard Chartered Bank Employees Union” the clauses of which are reviewed and agreed upon every two years.

Chain of Command:

Chartered Bank in Bangladesh follows a hierarchical pattern of command. The Chief Executive Officer (CEO), David M. Fletcher reports to the Regional General Manager, MESA in Dubai.  All the department heads at the headquarters report to the CEO. In Chittagong, however, since there are two major business activities, a manager or senior manager, who reports directly to the head of the respective division in Dhaka, heads each. The Custodial Service division at the headquarters reports to the Head of Corporate Banking.

Chief Executive Officer’s Office:

Standard Chartered as well as Standard Chartered Bank in Bangladesh is headed by the Chief Executive Officer, who reports to the office of the Regional General Manager, Middle East and South Asia (MESA). While performing staff functions, the CEO is assisted by different heads whose functions are mentioned in the following section.

• Head of Finance and Administration, who looks after the general ledger, budget, financial scenario of the bank, risk management administration and audit operation.
• Head of Cards who supervises credit card operation.
• Head of Consumer Banking, who supervises retail-banking operation like sales and services, retail lending, product development and product marketing.
• Head of Corporate deals with the relationship management, corporate finance etc.
• Head of Human Resources looks after succession planning, training and industrial matters.
• Head of Lending Management assists the management division of Corporate, retail and Credit Cards in their lending operations.
• Head of Global Markets deals with the foreign exchange, money market and asset liability operation.
• Head of International Services deals with the trade finance, guarantee and correspondent banking.
• Head of Operations looks after the support services in banking lending, CBS User, Treasury, SWIFT/TELEX operation etc. Head of Technology is directly accountable to him.

Corporate Banking Group

Standard Chartered Bank offers its local customers a wide variety of financial services. All the accounts of corporate clients, which mainly comprise the top local and multinational companies operating in Bangladesh, are assigned a Relationship manager who maintains regular and close contact to cater to their needs. The wide variety of lending needs are catered to with skilled and responsive attention

• Project finance and investment consultancy
• Syndicated loans
• Bonds and Guarantees
• Local and International Treasury products
• The trade finance of Standard Chartered Bank takes care of the commercial activity related issues, particularly those related to import and export finance services. Some of the services are:
• Trade finance facilities including counseling, confirming export L/Cs and issuing of import L/Cs, backed by its international branch and correspondent loan network
• Bond and Guarantees
• Project finance opportunities for import substitution and export oriented project

Global Markets

Institutional Banking Group:

The IBG of Standard Chartered Bank offers a wide variety of products and services to the banks and financial institutions.  It has global links with leading banking institutions and agency arrangements through its network of offices in 40 countries.  The Bank offers a full range of clearing, payment collection and import-export handling services.  The bank offers foreign missions, voluntary organizations, consultants, airlines, shipping lines, and their personnel the following financial services:

• Current accounts in both Taka and other major foreign currencies
• Convertible Taka accounts (these funds are freely convertible to major international currencies)
• Local and foreign currency remittances etc.

Consumer Banking

Superior retail banking services comprising a wide range of deposit and loan products are offered by the Standard Chartered Bank to its individual customers.  The Consumer Banking division constantly faces challenges and meets them by developing new products and services to fulfill the specific requirements of local TU Bank offers a 24-hour service in Bangladesh through its Moneylink ATM network and Phone-link Phone Banking services.

Products and Services of the Bank:

Standard Chartered Bank has highly qualified professional staff members who have the capability to manage and meet all the requirements of the bank.  Every account is assigned to an Account Manager who personally takes care of it and is available for discussion and inquiries, whether one writes, telephones or calls.  The services of the Bank are personalized and backed by advanced computerization.

The following paragraphs illustrate the essential products and services of the Bank:

Cash management:

Standard Chartered is highly recognized as a leading cash management supplier across the emerging markets. Our Cash Management Services cover local and cross border payments, collections, information management, account services and liquidity management for both corporate and institutional customers.

Features:

• Manage the availability of client’s funds efficiently
• Monitor and control the movement of funds
• Settle payments to client’s suppliers in a timely and cost-effective manner.
• Capture every investment opportunity to increase your income

Trade finance:

Standard Chartered possesses 140 years of experience in Trade Finance. The bank has presence in over 40 countries, in addition to our extensive network of overseas banking partners and correspondents. The bank obtained ISO9002 accreditation for its quality service. Dedicated trade and payment systems are in place to make sure that your every transaction, even across different currencies, will be professionally executed.

Custody and clearing services:

Standard Chartered Custody and Clearing Services’ combination of local market expertise, with the security offered by being an integral part of one of the world’s leading international banks has garnered an impressive client base which includes leading North American, European and Asian institutions.

Electronic banking:

Standard Chartered offers the client a comprehensive range of Cash Management services. Whether it is a financial institution, a multi-national corporation or a domestic company, Electronic Banking application has the capability to support full range of Cash Management reporting and transaction initiation needs. It provides the secure, reliable and effective link between the client and client’s accounts anywhere across the Standard Chartered network.

Lending:

Working Capital Loan to help the client meet their financial obligations and operate effectively, the bank offers assistance in the form of working capital loans, overdrafts, term loans (including real estate loans and other secured debt), backstops and revolvers.

Global markets:

According to the latest ‘Activities of Bank and Financial Institutions’ published by the Banking Division of the Ministry of Finance of Bangladesh, Global Markets, Bangladesh is, in terms of foreign exchange transactions, first amongst the multinational banks and 4^th amongst all the banks in Bangladesh.

The Treasury division of the Standard Chartered Bank has a centralized dealing room in Dhaka and consists of the following two areas:

Structured finance:

Standard Chartered provides Commodity, Structured Trade and Export Finance global group (“Structured Finance”) service. Many financial institutions have been retreating from these markets. Standard Chartered stands out as the only bank which is committed to financing Commodity and Export Credit Agency supported trade flows.

Features:

• Access to long established expertise in Commodity Finance and willingness to accept the credit risks associated with approved counterparties.
• Access to structuring skills for emerging markets medium term financing and to country limit availability for many countries in Asia, India, Middle East, Africa and Latin America.
• Presence on the ground in many emerging markets which facilitates transactions through local knowledge and the provision of local commercial banking infrastructure.
• Track record and capability for global arranging, underwriting and syndication in the whole area of Structured Finance.

Two types of lending facility are provided to client at present:

Loan Structure and Syndication: this facility helps borrowers to meet substantial financing needs by enabling them to reach the banks most interested in lending to their particular industry, geographic location and structure through syndicated debt offerings.

Foreign Exchange:

The Reuters monitors placed in the Treasury Division give continuous updates on exchange rate movements as well as ready access to market information. The Foreign Exchange service includes:

Foreign exchange contracts for the same day value, next day value or spot transactions

Forward Contracts: Foreign exchange contracts to hedge exchange risks.

Cross Currency Contracts: The customers can trade a wide range of currencies.

Information analysis: The Treasury division publishes daily and weekly currency newsletters, which provide analyses of currency trends and related issues.  Seminars and workshops are conducted for customers from time to time on foreign exchange related topics.  Customers can also have access to the bank’s information database round the clock through Phone banking.

Money Markets and Investment:

Standard Chartered Bank’s Treasury division is the local market leader in debt instruments including both short and long-term fund mismatches through the money market and takes front line position in inter-bank and market developments.  The money market is managed through tools like inter-bank call money rate, government T-bills of various maturities and inter-bank SWAPS. In future, new instruments like repo and reverse repo will be introduced which will add to the depth of the money market.

Equipments like telephone, voice recorder, money 2000, telex, sealing system, time keeper, swipe doors, computers, fax internet are used to ease and fasten operations of the dealers to conduct deals.

Call deposit:

An easy way to turn short-term savings into high-yield assets, blending of the flexibility of a current account with the yield of a fixed deposit. Other features include:

• Interest rate is between 2 to 3%
• Interest will accrue everyday.
• No withdrawal restriction irrespective of frequency or size subject to seven day’s notification.
• Minimum balance requirements is BDT 250000
• Interest will be forfeited the day balance goes below BDT 250000

Resident Foreign Currency Deposit (RFCD):

Specially designed foreign currency account for resident Bangladeshis. Offers wonderful opportunity to build a deposit base in foreign currency. Helps make payment for overseas commitments and dues like credit card bills, traveling expense etc.

• Main features: Minimum balance required – USD 1000 or equivalent. No interest to be accrued if the balance falls below the minimum amount.
• Offered in USD, GBP and Yen
• Competitive Interest on deposit
• Can only be opened within 6 months of arrival from abroad
• Deposit can be made in foreign currency only (cash, TC or Drafts)
• Cash withdrawal in local currency only
• Fund Remittance (in both Lcy and Fcy) to any place in and out of the country (without restriction)

Recent changes: RFCD account is being offered in Euro from 2004.

Foreign currency current account:

Applicable to Bangladeshis working abroad, it can be opened in USD, GBP and Yen without restriction on transaction frequency. Can be operated through nominees in absence of the accountholder. Fund remains in foreign currency and is freely remittable.

Main features:

• Deposit can be made in foreign currency only (cash, TC or Drafts or transfer from other FCY account).
• Cash withdrawal from the account is in local currency only.
• Fund Remittance (in both LCY and FCY) to any place in and out of the country (without restriction).
• Fund can be used to make investment in Wage Earners’ Development Bond.

Non- resident foreign currency deposit:

• A short-term foreign currency deposit account suitable for Bangladeshis living abroad, offering most competitive interest rates available in both local and international markets. Other features include:
• Interest paid in Foreign currency
• Can be opened for a term of 1 month, 3 months, 6 months or 12 months
• Interest rates are tiered (based on amount and term)

Cash line:

This product permits ready access to cash without disrupting interest-earnings on fixed investments. It provides ready access to cash against quasi-cash investment papers like Terms deposits (Lcy / Fcy) Savings Certificates, Wage Earners’ Development bonds, ICB units certificates etc.).

Other features:

• Both Revolving & terminating options
• High utilization Limit (based on security value)
• Quarterly payment of Interest (only on the outstanding amount)

Money builder:

A unique savings plan that helps customer builds up a sizeable savings base over a period of 5 years. One can begin to save with a small amount, add affordable monthly installments for 5 years and get an amazing return on maturity.

Personal loan:

An easy and fast loan product that requires minimum documentation no cash security, no down payment and minimum processing time.

Main features:

Available for any personal reasons ranging from purchase of consumer durable educational expenses to medical treatment.

3 different repayment-tenor options – 12, 24 or 36 equal monthly installments.

Can be secured by salary assignment and employer’s undertaking or personal guarantee.

Can be repaid in advance, anytime ahead of maturity date

Special Interest Rate for corporate Client:

Phone link:

Phone link in Bangladesh was inaugurated in March 1997.  It helps to bring banking within the dialing distance of the customers, providing access to account information and details, 24 hours a day from the privacy and comfort of their homes, offices and cars. Phone link service is offered to all customers free of charge.

The Phone link service includes:

Automated Services:

• Account-related services
• Foreign currency related information
• Change of Telephone Identification Number (TIN)

Through the Phone bankers one can avail the following services:

• Enquiry on the product services
• Change of account address
• Notification to the bank of lost or captured Moneylink ATM Cards
• Stop Cheque instruction
• Pay Order / Demand Draft preparation (to be collected later by the customer) Status enquiry on remittance

Moneylink:

Standard Chartered Bank launched Moneylink ATM in 1994, the first bank to offer this service in Bangladesh. Moneylink ATM service is free of charge, offering the following features:

• Cash Withdrawal & deposit
• Cheque deposit
• Cheque book request
• Change of PIN
• Printing of mini-statement
• Payment of utility bills.

Safe deposit locker:

Standard Chartered Bank’s safe deposit locker service offered from Dhanmondi and Sylhet branch gives you a modern facility for safekeeping of precious items, confidential documents and other valuables. Other features:

• Personalized service from a dedicated locker officer
• Available to any customers (for an annual fee which depends on locker size)
• Accessibility anytime during the banking hours
• No additional charge for locker visit during locker hours.

Priority banking:

Standard Chartered Bank Bangladesh offers Priority Banking, a special service package for our valued customers. Under this segment an exclusive combination of services are offered to customers who signed up for it. Some of the benefits offered under the program are:

A Priority Card that recognizes client’s Priority Status at all our local branches and also at our global Priority Centers

• Higher withdrawal limit per day from all ATMs in Dhaka, Chittagong & Sylhet
• Privileges associated with the Priority card in reputed hotels, restaurants and stores locally and globally.
• Exclusive Priority Centre in Dhanmondi & Sylhet with reserved parking space.
• Dedicated Customer Relationship Personnel at the Priority Centres.
• And also commission free SCB Visa travelers’ cheques against travel quota, swifter transactions, pre-arranged banking services and invitation to special social and cultural events.
• All one need to do is to meet the priority criteria (set in terms of deposit value), and sign up the relevant forms and the client will immediately be eligible for all the benefits
• In summary, some of the basic products and services offered by the Personal Banking division are: Current Accounts, Overdraft on Current Accounts, Foreign Currency
• Term Deposits, Local Currency Cash Cheques, Cheque Purchase, Drafts, Savings Accounts, Term Deposits, Telegraphic Transfers, Traveler’s Cheques, and Personal Loans.

Account Statement Charges:

The charge for holding statements is BDT 1150 per annum per account, and for Additional/ Duplicate statement (Per cycle) is BDT 500 per statement. Photocopy of statements is Taka 1000.

ATM Card Charges:     

The annual fees for ATM card are Taka 690 per card, and the charge in case of damaged or lost card is Taka 600 per card. And phone banking and internet banking and evening banking is absolutely free.

Charges for Cash and Travelers Cheque Foreign Currency:

For issuance of FCY cash, customers need to pay 1% of the transaction plus Taka 200/= per passport. And for issuance of Travelers cheque 1% of the transaction plus Taka 200/=. The charge for encashment is absolutely free in case of travelers cheque issued by SCB.And encashment for other bank’s issued T.C is 0.25% of the transaction value or minimum BDT 500. SCB also provides encashment facility for non-customers, is 0.25% of the transaction value or Taka 1,000.

Charges for maintaining Student file:

For customers, opening student file for SAARC countries, they charge BDT 3500 per student, per annum plus Taka 500 per remittance. This is a centralized system. No matter where the customers conduct his/her banking, for opening and maintaining student file, he/she is bound to come to SCB Kakrail Branch, which is at 109, Kakrail. That branch exclusively deals with Student File. And, the charge for other countries is Taka 5000 per student file plus Taka 500 per remittance. This opening of student file is not available for non-customers

Two separate divisions of SCB in Bangladesh:

Product Division: There are different divisions for targeting different type of customers. Mainly consist of two divisions, that is Consumer Banking Division (C B) and other is Corporate Banking Division named Corporate and Institutional Banking (C & I).

Consumer banking division meets the needs of individual customers with various products like Savings Account, Extra Value Savings Account, Access Account, Call Deposit, FCY Deposit, NFCD Fixed Deposits, RFCD Account, Personal Loans, Auto Loans, Flexi loans, Cash Line, Installment loans, etc. This department also deals with other savings instruments like education savings scheme, rainy day scheme, marriage day scheme, millionaire scheme (some printed brochures are enclosed in the Appendix)

Findings and Recommendations: 

Consumer banking is number one profitable sector in Bangladesh. While it has solid revenue potential it involves close cooperation and coordination among several departments within the bank and liaison with a large number of entities.

The following aspect should be taken under consideration to increase the customer satisfaction which ultimately help SCB to be profitable:

• First things that Standard Chartered bank should do are maintaining the standard during recruiting the employees. An employee bears the brand name so if employees make some thing wrong that will ultimately affect Standard Chartered bank. And consumer banking directly deals with customer and they face the major problem of loosing customer if employees make something wrong.
• Second thing is Standard Chartered bank should create a new division whose major responsibility will be looking after the ATM booths. These days people are interested to make their banking transaction through ATM but due to some technical problem most of the time they face problem in ATM. So new division can solve this problem by solving the technical problem right on time and make servicing of machine regularly.
• From my survey most of the client or customer these days needs to come to the bank for Sanchayapatra coupon encashment. Here for better customer service Standard Chartered bank should introduce new software where customer can drop their Sanchayapatra and all the coupon will be en cashed automatically after maturity. This will increase the brands power on the mind of the customer.
• Prevailing legal procedures is very lengthy and complicated. It takes longer period to settle any kind of dispute. On the other hand, encashment of security after maturity is a long drawn process, i.e. generally takes 5 – 6 days. So, SCB should be more careful in the case of opening and closing different securities. So that after maturity customer gets them very quickly and timely.

Conclusion:

In retrospect of the marvelous growth of consumer banking revenue over the last 20 years and contemplating the intensity of competition yet to come, it is crucial for SCB to rethink its strategies and marketing plan to sustain the growth consumer banking revenue. Correspondent banking service providers domiciled in Bangladesh are expected to be fighting for a bigger pie, as the growth prospect of the country’s correspondent banking business is limited. One of the ways to achieve that objective is to maximize consumer banking revenue generated from local clients and introduces more local products.

At the same time Standard chartered bank must have to consider the consumer mind setup. As a multinational bank customer want more benefit from them then other 3^rd generation bank. So instead of making profit only they should care about the customer as well. They can start many new savings product like millionaire scheme. But here problem is that all these scheme is very costly. So they should introduce something for the middle class, but still SCB continuously working with upper class and upper middle class.

When these types of facility is come on front then and only then Standard Chartered Bank can compete with other banks like HSBC, Prime Bank, Dutch Bangla Bank. Customer is the heart of the bank and if SCB can make them satisfied and make them return to the bank with their deposit it will become the largest profitable bank in Bangladesh within a short period of time