Report on Analysis of Credit Card and Debit Card of National Bank Limited

 EXECUTIVE SUMMARY

Private commercial Banks brought a revolution in banking sector or Bangladesh. The private quire different services than nationalized commercial Banks. First generation private commercial banks (National Bank Ltd, Islami Bank Ltd, IFIC Bank Ltd etc) in Bangladesh got quick responses from deposits and borrowers. Among those banks National bank Ltd. crated different image to the public through its innovation products and services. National Bank Ltd. has a long and proud heritage. Bangladeshi entrepreneurs established it in Bangladesh in 1983 as the first private sector bank fully owned. The members of the board of directors are reputed business personalities and leading industrialist of the country. With their continues support and patronage, the bank extended and diversified its activities to include a full range of commercial banking and exchange houses abroad. Now a days commercial banks specially the nationalize commercial banks in our country are to make loans under different schemes ZIZ. Agricultural Loan under self-employment schemes. Depending upon the purpose loan may be repayable within a few months or the repayment period may extend up to a few years. Agricultural loans are general repayable within a period of 3 (three) months to 1 (one) year. But repayment of transport loans & House building loan any take longer period comprising a number of years. Loan are generally secured by lien on fixed /term deposits shares Debentures Praribarik Sanchoya Patra Insurance Policy Pledge of gold mortgage of real estates and hypothecation of crops Vehicles machineries etc depending upon the nature & purpose of the loan.

1`Debit Card:

The common method of transfer fund is called debit card. This card is called cash card or asset card. This card is similar to prepaid mobile phone.

Objectives of debit card:

There are some objectives. Such as-

1. Revenue Generation: Debit card issuing bank increase their revenue by following points-
   1. Merchant Discount
   2. Interchange Fees
   3. Card Fees
   4. Interest on Credit Line

1. Cost Reduction: Using debit card bank reduced expenses. After using debit card paper documents such as file, voucher, letters etc expenses may also reduced which was so high prices.

1. Client Services: Debit card is used after native of cash, cheque. Other to carry a lot of money is so risky.

Merits:

The merits of using debit card are gives as bellows-

1. Any time Cash Converted: Anyone can easily converted cash with a short time.
2. Decrease of Risk: Debit card decrease risk. Because use of cash is not always safe.
3. No Chance of Damage: Cash and cheque are made of paper. So these are easily damaged. But the debit card is not easily damaged.

1. No Duplicacy: There is no chance of duplicacy in debit card.
2. Cash Equivalent: Instead of cash and cheque anyone can use debit card.
3. Carrying Facility: Anyone can easily carry the debit card instead of debit card.
4. Full Time Banking: Debit card holder enjoy full time banking.
5. No Need of Bank A/C: there is no need of bank account to become a debit card holder.

User of debit card:

Debit card is use alternative use of cash, cheque, credit card etc. The following classes of people use debit card-

1. Those who use banking services.
2. Those who use a lot of cheque.
3. Those who have earned lumsum revenue.
4. Traveler who travel all over the world.
5. Those who have a lot of assets.

Debit Card (National Bank):

National Bank issues debit card. Now, National Bank issues debit card which is called NBL power card. Before NBL had debit card, that was called ATM card. Power card is more flexible than ATM card.

Types:

The power card is three types:

1. Local Card: Local card will be valid in Bangladesh only. The amount of card is 1000 tk or multipliers. There is no upper limit.                                                                             International Card: international card will be valid throughout the world except Bangladesh. The minimum amount is $500. the maximum amount is $1000 for SAARC and Myanmar and non-SAARC Countries $3000.

1. Dual Card: Dual card will be valid in Bangladesh and abroad.

Charge:

In first year there is no charge. After one year the charge will be 200tk per year. International or Dual Card- $15 or 1% of the prepaid amount but not exceeding $40.

Duplicate card or Pin Re-issue—Tk 200

Pre- Closure fee—Tk 200

Statement printing fee—25 per instance

Cash withdrawl fee

Within Bangladeh

From NBL ATM—No fee

From Q-Cash – Tk 10 per transaction

From other ATM—TK100 per transaction

Outside Bangladesh

2% or $2 which ever is higher

Limitations:

Some people are not interested to become a debit card holder. Because they are not mentally upgrade to use debit card. Otherwise, there also some reasons why they are not interested.

1. Lack of Information
2. Knowledge in Technology
3. Awareness
4. Advertisement
5. Mental Up gradation

Service of NBL power card:

1. Cash withdrawals
2. Cash deposits
3. Utility payments
4. Balance inquiries
5. Fund transfer
6. Mini Statement

Comparison: 

There are various types of card. Debit card has various name. In NBL Debit card is called Power Card. Other bank, Debit card is called ATM card. So, for comparision purpose we compare with ATM card.

Standard Chartered Bank

ATM in Standard Chartered Bank

Standard Chartered introduced their ATM service first in Bangladesh in 1994 with only one ATM at their Banani Branch. Now they have 23 ATM in whole Bangladesh.

They have ATM in their each branch. They also have offsite or Non branch location of ATM that is there is no branch of the bank but has ATM booth.

Out of 23ATM. Standard Chartered installed:

     16 ATM in Dhaka

     4 ATM in Chittagong

     3 ATM in Sylhet

Cost Associate with ATM

Standard Chartered purchase ATM form NCR Company in installment. 50% of the total price is paid before installation of the machine and the rest 50% is paid after installation. ATM is insured against any destruction, malfunction etc.

Installation cost: The installation cost of an ATM is 2300 pound plus construction cost TK. 6 lakh.

Maintenance Cost: Yearly maintenance cost for an ATM is TK. 1.36 lakh.

Service of Standard Chartered ATM

Standard Chartered bank offers a variety of banking service through their ATM.

     Cash withdrawals

     Cash deposit

     Check deposit

     Utility payment

     Balance Inquiries

     Funds transfer

     Mini Statement

     Statement requests

     Check book Requisition

Managing Of ATM

An ATM team consisting of two persons is employed for the management of ATM service. In this team there is an ATM officer and the other is his assistant. In Chittagong and Sylhet there is also ATM team consisting of two persons who delivers  the day to day reports to the ATM officer in Dhaka.

The ATM team is responsible for the following function:

     Collection of Cash and Checks, and bring it to the Branch.

     Collecting ATM card, if retained and return it to the owner on the next working day.

Every day the team visits to all ATM booth and Check customers complaints and any problems associated with the machine.

 Standard Chartered Grind lays Bank

ATM in Standard Chartered Grind lays

Standard Chartered Grind lays ( former ANZ Grind lays) started their ATM services for their customers from June 1998. Now their total number of ATM booths overall Bangladesh is 14. They also have ATM at the off-site location of Branch as well as ATM in Branches.

ATM at the off-site location is that there is no branch of the bank but has ATM booth. Out of 14 ATMs Standard Chartered Grind lays installed:

     10 ATMs in Dhaka

     2 ATMs in Chittagong

     1 ATM in khulna

     1 ATM in Bogra

Standard Chartered Grind lays ATM card will enable one person to operate his/her Current or Savings account 24 hours a day, no matter where his or her account is maintained. It can be used through their network of Automated Teller Machines.

ATM in the branches: out of 14 ATMs of Standard Chartered Grind lays nine ATM located at the branches as mention following table:

Non Branch ATM

The rest five ATMs booth of Standard Chartered Grind lays Bank are non branch ATM booths. These Off-site locations of these ATM of this Bank are:

     One ATM at Shamoli

     One ATM at Mirpur

     One ATM at Johnson road

     One ATM at Uttara, and

     Another One ATM at Nasirabad, Chittagong.

Facilities of ATM of Standard Chartered Grind lays

Standard Chartered Grind lays ATM card Provide one person with a range of Banking services, some of the primary facilities being:

     Cash withdrawals

     Balance inquires

     Accounts transfer

     Statement requests

     Changing the PIN

Hongkong and Shaghai Banking Corporation Limited

ATM in HSBC

HSBC started their ATM services for their customers from November 2000. Now their total number of ATM booths overall Bangladesh is 11. They also have ATM at the off-site location of branch as well as ATM in Branches.

Out of 9 ATMs, HSBC installed

     8 ATMs in Dhaka

     3 ATMs in Chittagong

ATM in the Branches: Out of 11ATMs of 4 ATMs booths located at the following branches as mention in the following table:

Services of ATM of HSBC

     Cash withdrawal

     Cash/check Deposit

     Balance Inquiries

     Funds Transfer

     Mini statement

     Statement requests

     Check book Requisition

     Mail Deposit

     PIN Change

American Express Bank (AMEX)

ATM in American Express Bank

AMEX started their ATM services for their customers from December 2000. Now their total number of ATM booths overall Bangladeshis 6. All of the ATMs of AMEX banks are operated by related branch because every ATM is related to a Branch, that means every ATM of this Bank is installed with any Branch of this Bank.

Out of 6 ATMs, AMEX Banks installed:

     4ATMs in Dhaka

     2 ATMs in Chittagong

Locations of ATM: 6 ATM booths of AMEX bank are located at the following branches as mention in the Table.

Customer Requirements

A person who is the customer of the bank has a regular banking relation with any of the Branch inside Bangladesh can become an ATM Card holder of AMEX. Here also he/she has to maintain an account with a Branch of this Bank. Normally when a person opens an account to this Bank he/she is given an ATM Card with which he/she can get ATM services from any of the branch inside the Bangladesh.

Services of ATM of AMEX

A client of the bank can get a large number of important banking services with the ATM Card of American Express Bank. Most of the customers of this Bank go to the ATM booth to get the following services:

     Cash withdrawal

     Cash Deposit

     Balance inquiry

     For the Statement of the Balance

     PIN Change

They do not offer any credit card services to the customers of our country and for these customers do not get any facility to get ATM service by inserting credit card into the ATM.

Joint ATM operation of Nine Bangladeshi Private Banks.

E-cash ATM has introduced a new era in banking services. First of its kind in Bangladesh. Nine Bangladeshi bank jointly ATM operation 9^th October,2001. E-cash ATMs provide multiple banks a network to allow their customers to conduct banking transaction and pay utility bills 24 hours a day. It’s a great pleasure for Bangladesh. It’s a boast of Bangladesh. Some local private bank to keep abreast of the times with global world. E-cash ATM has to many advantage such as:

Convenient

Life is busy. Time are difficult to catch up with. Reaching the Bank within the Banking hour to withdraw cash or pay utility bills has always been a worry. That’s not all, when cash was required for an emergency or on a holiday or after Banking hours.there was no choice but to wait until the bank opened the next day. No more worries. E-cash give you access to you account any time of the day whether it’s holiday or after banking hours.

Secure

E-cash is fully secured. E-cash card holder can only carry out transactions on E-cash ATMs with Personal Identification Number (PIN). The PIN is your secret coad to access your account. It should be memorized as soon as you have received it and then destroyed without keeping any record. If you have a doubt that your PIN then and then apply for a new PIN immediately.

Reliable

E-cash ATM network is backed by state of the art technology. Our network personal are available round the clock to provide you with any assistance you require. If you have lost your Card, to prevent unauthorized transactions. You may report it to the Network Hotline immediately.

The name of nine Bank are:

Service of ATM of nine Banks

One customer can get a large number of Banking Services from this joint ATM operation. The main service that will be provided to customers are:

     Cash withdrawal

     Statement of Balance

     Balance inquiry

     Utilities

Facilities of WASA, DESA, BTTB, bill payment

Payment of mobile phone bill Grameen Phone, Sheba, Aktell & City Cell

Cash Deposit (under processing)

CREDIT CARD

The popular process of Electronic Banking is called Credit Card. In spite debit balance, customers use the debit card. Generally to pay the service and to withdraw cash, credit cards are used.

History:

In 1951 Franklin first introduced the credit card. In the end of 1951, Bank of America introduced chase Manhattan and Marine Midland Trust, Charge Card. Bank of America acquired popularity of “Bank Amari Card” with the help of Bunch Network. The popular credit cards are: VISA, Master Card, American Express, and Gold Card etc.

Objectives of Credit Card:

1. cost reduction
2. electronic banking
3. client services

Merits:

The merits of using credit card are gives as bellows-

1. Any time Cash Converted: Anyone can easily converted cash with a short time.
2. Decrease of Risk: Credit card decrease risk. Because use of cash is not always safe.
3. No Chance of Damage: Cash and cheque are made of paper. So these are easily damaged. But the credit card is not easily damaged.
4. No Duplicacy: There is no chance of duplicacy in credit card.
5. Cash Equivalent: Instead of cash and cheque anyone can use credit card.
6. Carrying Facility: Anyone can easily carry the credit card instead of cash.
7. Full Time Banking: Credbit card holder enjoy full time banking.
8. No Need of Bank A/C: there is no need of bank account to become a credit card holder.

User of Credit Card:

Normally a person whose monthly income is over 10000 can be a credit card holder. We know, there are three classes in society.

1. Upper class
2. Middle class
3. Lower class

Again, middle class is divided into two categories.

1. Upper  middle class
2. Lower middle class

The income condition is not same in every class. In normal sense, upper class and upper middle class use the credit card.

On the other hand, the user of the people may determining by the following points:

–    those who use banking services.

–    those who have earned a lot of revenue.

–    travelers who travel all over the world.

–    those who have a lot of assets.

Limitations:

In spite of some advantages, the credit card has some limitations. The limitations are given bellows –

1. Knowledge in Techonology- All men are not educated. So they have lack knowledge in technology
2. Lack of Information-   Information is important thing to inform something. If information is not supplied properly, its quite impossible to aware of the product.

1. Pay in more-    Generally Credit Cardholder pay in more in more. Because shopkeepers’ thinks they don’t get cash immediately that’s why they determine high price.

1. Security-     Security is an important factor. That’s why the Cardholder deposit cash, share, Treasury bond, cash equivalent or open a FDR account.

1. TIN-   To collect in perspective Bangladesh point of view is so difficult. In spite of willingness men are not interested to become Cardholder.

1. Booth- ATM or Q-Cash booth is not sufficient. Otherwise there are some city or town where booth is not available.

Consideration of Credit Card Issue- the consideration topics are given as bellows

1. Authorization
2. Billing and Processing
3. Card Issuance

Process of use of Credit Card:

National Bank Limited offers the cardholder 15 to 45 days credit facilities. For the proper billing the bank divided the cardholder into three cycles. These are 0 cycle, 3 cycle and 5cycle. In 0 cycle hill are prepare and send to the cardholder 1^st day or every month and last date of payment is 15^th day of the month. In 3cycle bill are prepare and send to the cardholder 3rd day of every month and last date of payment is 18^th day of the month. In 5cycle bill are prepare and send to the cardholder 5^th day of every month and last date of payment is 20^th day of the month. The cardholder can pay the bill any branch of the National Bank. If any cardholder fails to pay the bill within the last date then he/she must pay 2% monthly interest and his/her card stop automatically.  But if the cardholder pay minimum bill (10% of the bill) then he/she must pay the interest on the balancing amount and can use the card as usual. On the other hand, if the card holder withdraws any cash amount from the ATM booth (maximum limit is 20% of card limit) a monthly charge of 2.5% is to be charged from the date of withdraw. In that case the cardholder will not get the 45 days credit payment facility.

Necessary Legal Framework:

At present, all cards are going to duplicate. Otherwise, the cheating matter increase with the use of credit card. Recently we watched the credit card duplicacy in Bangladesh. So, to protect interest the customer, merchant and bank the necessary legal act must be prepared and implemented. Central Bank can play great role to implement the act.

Credit Card (National Bank)

Types:

The credit card is called Master Card or VISA. Generally Master Card is divided into two categories.

1. Local Card
   1. Gold
   2. Silver

1. International Card
   1. Gold
   2. Silver

Requirements:

At first the cardholder fill up the application form. Then he/she submit same documents. The documents are given as follows-

1. TIN (Tax Identity Number)
2. Two copy photographs
3. Photocopy of International Passport

Charge:

The charge is an important factor. The charge depends on the type of card. Charges are given below-

Local – local card is used in Bangladesh and charges are

            Gold   – 2000tk + 15%vat

            Silver  – 1200tk + 15%vat

International Card-

                              International Card is used all over the world. The international card is also two types

1. International Card (Gold)
2. International Card (Silver)\

The charge of international card is given as follows

a. Gold   – $35+15% vat

1. Silver  -$70+15% vat

Cash Withdraw –

                        Cash Withdraw is an important factor. The cash withdraw amount is given below

               At a time cash withdraw 50% or per installment 5000 tk which ever is maximum that is granted.

Service  –

            The service of credit card are given as follows

1. Deposit
2. Fund Transfer
3. Utility Payment
4. Purchasing
5. Shopping
6. Credit Facilities\

Credit Card (Standard Charted Bank)\

                    There are some foreign banks in Bangladesh. Among the banks Standard Charted Bank is one them. Standard Charted Bank is the pioneer to introduce credit card in Bangladesh.

                       The charge and other relevant information of Standard Chartered Bank are given as follows  -\

                Local Card  –

                                      Local Card is two types

1. Gold – 3000tk +500tk vat
2. Silver – 1500tk + 250tk vat\

                        International Card-

 International Card is also two types

1. Gold – $80
2. Silver -$160

 \

Cash Withdraw 

                 At a time Cash withdraw 50% or per instilment 20000 tk which ever is maximum that is granted.

Security

The security of local card and international card is not same. Depend on security the bank satisfies insurance coverage, when a credit cardholder face accident. The insurance coverage local and international are different.\

Comparison between NBL and Standard Charted Bank

The process and system of credit card of NBL and Standard Charted Bank are same. But the charge and other relevant cost are not same. The charge of Standard Charted Bank is higher than NBL. Moreover the credit card is more popular than NBL credit card. Because there are some reasons. The reasons are given as bellows

1. Goodwill
2. Internationl Recognation
3. Markesting
4. Comfort on banking facilities
5. Rely on bank