view with charts and images
Retail Banking Activities of Brac Bank Limited
Focusing on “Home Loan”:1.1: Introduction:
Bank plays an important role in the business sector and industrialization of a country. Basically bank offers different services and products to the customers. Commercial Banks are the primary contributors to the economy of a country. So, it can be said that Commercial Banks are a profit-making institutions that collect the deposits from the surplus unit of the society and then lend the deposits collected to the deficit unit of the society. So, the people of the society and the government are very much dependent on the commercial banks as the financial intermediary. Internship is an essential part for every student, especially for the students of business administration. By an internship program in bank, students can obtain practical knowledge, which helps to know real life situations, helping them to launch a career with some practical experience. I have found the opportunity to perform the Internship with Brac Bank Limited in Mirpur Branch.
The objectives of the report are as follows:
The main objective of this report is to discuss the retail banking activities of Brac Bank Limited, Mirpur Branch with special concentration on its Home Loan. The specific objectives are
1. To describe the products and services of retail banking activities of Brac Bank Limited, Mirpur Branch
2. To describe home loan activities of the bank.
3. To find out the problems of the company regarding home loan.
4. To make a comparison with other banks in the retail banking sector.
5. To recommend ways and means through which the bank can overcome those problems.
The study requires a systematic procedure from selection of the topic to preparation of the final report. To perform the study, the data source were to be identified and collected, to be classified, analyzed, interpreted and presented in a systematic manner and key point were to find out. The overall process of methodology has been given as bellow:
1.3.1: Nature of Study:
This is an exploratory type of research. Information collected to complete the report is both from primary and secondary sources.
1.3.2: Sources of Data:
- The Primary Sources: For primary data there are three types of respondents, such as
· Management Level Personnel
- The Secondary Sources:
· Annual Reports of BBL, 2008
· Prior Research Report,
· Official Website of BBL
· Right Share Offer Document, 2008
1.3.3: Target Population:
All employees and management level personnel and customers of BBL, Mirpur Branch
1.3.4: Sample Size:
· 12 Employees
· 35 Customers
1.3.5: Sampling Method:
Convenience sampling method has been used to select sample.
1.3.6: Data Collection Method:
Primary data were collected through direct and face-to-face interview and observation.
1.4: Limitations of the study:
As an intern, it was a great opportunity for me to know the banking activities of Bangladesh especially of Brac Bank Limited, Mirpur Branch. But there are some restraints also, which disclosed in below:
· It was difficult to communicate with the customers and the employees as many of them were unable to give me much time for interview.
· As I have taken a sample of 47 respondents, there may be sampling error.
· I had to go under my day to day job responsibility that I was supposed to do so. So, I could get few more time to spend in collecting data for preparing my internship report.
· The main constraints of the study are insufficiency of time.
· I was carried out such a vast study for the first time, so inexperience is one of the main constraints of the study.
Generally by the word “bank”, it can easily understand that the financial institution dealing with money. There are different types of banks like Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, and Co-operative banks etc. But when we use the term “bank” without any prefix or restriction, it refers to the Commercial Banks. Commercial Banks are the primary contributors to the economy of a country. So it can be said that Commercial Banks are a profit-making institution that collects the deposits from the surplus unit of the society and then lend the deposits collected to the deficit unit of the society. So the people of the society and the government are very much dependent on the commercial banks as the financial intermediary. As banks are profit-earning concern they collect deposits at the lowest possible cost and provide loans and advances at higher.
Banking sector is expanding its hand in different financial events every day. At the same time the banking process faster, easier and the banking arena is becoming wider. As the demand for better service increases day by day, they are coming with different innovative ideas and products. In order to survive in the competitive field of the banking sector, all the banking organizations are looking for better service opportunities to provide their fellow clients. As a result it has become essential for every person to have some idea on the bank and banking procedure.
2.1: Overview of BBL:
BRAC Bank Limited is a scheduled commercial bank in Bangladesh. It established in Bangladesh under the Banking Companies Act, 1991 and incorporated as private limited company on 20 May 1999 under the Companies Act, 1994. The primary objective of the Bank is to provide all kinds of banking business. At the very beginning the Bank faced some legal obligation because the High Court of Bangladesh suspended activity of the Bank and it could fail to start its operations till 03 June 2001. Eventually, the judgment of the High Court was set aside and dismissed by the Appellate Division of the Supreme Court on 04 June 2001 and the Bank has started its operations from July 04, 2001. The Chairman of the Bank is Mr. Muhammad A (Rumee) Ali. Now the Managing Director of the bank is Mr. A.E.A Muhaimen.
A fully operational commercial bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which till now has remained largely untapped within the country. In the last several years of operation, the Bank has disbursed over BDT 3700 corers in loans to nearly 120000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh.
The Bank is mainly owned by the largest NGO in Bangladesh- BRAC .The Bank has positioned itself as a new generation Bank with a focus to meet diverse financial need a growing and developing economy.
BRAC Bank has a centralized banking structure through on-line banking system. It consisted of four major division’s namely small and medium enterprises division, retail (direct) banking, corporate banking and treasury division.
The Corporate Banking Division provides full range of commercial banking products and services. Other departments such as Foreign Trade, Treasury, Credit Administration etc. plays the support role for a comprehensive range of service to the Corporate Banking Division.
2.2: History of BBL:
BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance Corporation (IFC) and Shore cap International, has been the fastest growing Bank in 2004 and 2005. The Bank operates under a “double bottom line” agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh.
A fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which hitherto has remained largely untapped within the country. In the last seven years of operation, the Bank has disbursed over BDT 3700 crore in loans to nearly120000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. Since inception in July 2001, the Bank’s footprint has grown to 22 branches, 327 SME unit offices and 16 ATM sites across the country, and the customer base has expanded to 500,000, as well as deposit grown up 1400 crores last 30, December 2008. In the years ahead BRAC Bank expects to introduce many more services and products as well as add a wider network of SME unit offices, Retail Branches and ATMs across the country.
It is one of the largest Southern development organizations employing 97,192 people, with 61% women, and working with the twin objectives of poverty alleviation and empowerment of the poor.
Fig-1.2 Shareholders of BRAC Bank Limited
2.3: Logo of BBL:
BRAC BANK LOGO BRAC BANK REVERSE LOGO
2.4: Corporate Vision of BBL:
“Building a profitable and socially responsible financial institution focused on Markets and Business with growth potential, thereby assisting BRAC and stakeholders build a “just, enlightened, healthy, democratic and poverty free Bangladesh”.
BRAC Bank will be a unique organization in Bangladesh. It will be a knowledge based organization where the BRAC Bank professionals will learn continuously from their customers and colleagues worldwide to add value. They will work as a team, stretch themselves, innovate and break barriers to serve customers and create customer loyalty through a value chain of responsiveness and professional service delivery. Continuous improvement problem solution, excellence in service, business prudence, efficiency and adding value will be the operative words of the organization. BRAC Bank will be a socially responsible institution that will not lend to business that has a detrimental impact on the environment and people.
2.5: Corporate Mission of BBL:
§ Sustained growth in ‘Small & Medium Enterprise’ sector.
§ Continuous low cost deposit growth with controlled growth in Retained Assets.
§ Corporate Assets to be funded through self-liability mobilization. Growth in Assets through Syndications and Investment in faster growing sectors.
§ Continuous endeavor to increase fee based income.
§ Keep our Debt Charged at 2% to maintain a steady profitable growth.
§ Achieve efficient synergies between the bank’s Branches, SME Unit offices and BRAC field offices for delivery of Remittance and Bank’s other products and services.
§ Manage various lines of business in a fully controlled environment with no compromise on service quality.
§ Keep a diverse, far flung team fully motivated and driven towards materializing the bank’s vision into reality.
2.6: Goals of BBL:
BRAC Bank will be the absolute market leader in the number of loans given to small and medium sized enterprises through out Bangladesh. It will be a world-class organization in terms of service quality and establishing relationships that help its customers to develop and grow successfully. It will be the Bank of choice both for its employees and its customers, the model bank in this part of the world.
2.7: Objectives of BBL:
The objective of BRAC Bank Limited is specific and targeted to its vision and to position itself in the mindset of the people as a bank with difference. The objective of BRAC Bank Limited is as follows:
- Building a strong customer focus and relationship based on integrity, superior service.
- To creating an honest, open and enabling environment
- To value and respect people and make decisions based on merit
- To strive for profit & sound growth
- To value the fact that they are the members of the BRAC family – committed to the creation of employment opportunities across Bangladesh.
- To work as a team to serve the best interest of our owners
- To relentless in pursuit of business innovation and improvement
- To base recognition and reward on performance
- To responsible, trustworthy and law-abiding in all that we do
- To mobilize the savings and channeling it out as loan or advance as the company approve.
- To establish, maintain, carry on, transact and undertake all kinds of investment and financial business including underwriting, managing and distributing the issue of stocks, debentures, and other securities.
- To finance the international trade both in import and export.
2.8: Management of BBL:
Boards of directors are the sole authority to take decision about the affairs of the business. All the directors have good academic background and have huge experience in business. The board of directors holds meetings on a regular basis. The current management teams and board of directors’ name are given in the following table:
|A.E.A MuhaimenManaging Director & CEO|
|Mr. Mohammad Mamdudur RashidDeputy Managing Director|
|Mr. Syed Mahbubur RahmanDeputy Managing Director|
|Shafiqul I ChowdhuryChief Operations Officer|
|Rais Uddin AhmadHead of Risk Management & Company Secretary||Firoz Ahmed KhanHead of Retail Banking|
|Mohd. Rafat Ullah KhanHead of Credit||Naushad HussainHead of Probashi Banking|
|Tahniyat Ahmed KarimHead of Human Resources||Faruk AhammadHead of Financial Administration|
|Mr. Syed Faridul IslamHead of Small & Medium Enterprise (SME)||Md. Rahmat PashaHead of Treasury|
|Khwaja ShahriarHead of Corporate Banking||Shah Alam BhuiyanHead of Enterprise Risk Management|
|Mizanur Rahman ChowdhuryHead of Information Technology (IT)|
Board of Directors
|Mr. Muhammad A (Rumee) AliChairman|
|Mr. Shib Narayan kairyDirector||Ms. Nihad KabirDirector|
|Mr. Mark A. Coffey (Nominated By Shore Cap International Limited), Director||Ms. Tamara Hasan Abed(Nominated by BRAC), Director|
|Mr. Quazi Md. Shariful Ala (Nominated by BRAC), Director||Mr. A.E.A MuhaimenManaging Director and CEO|
2.9: The Management Hierarchy of BRAC Bank Limited is given below:
2.10: Mirpur Branch:
Mirpur Branch of Brac Bank Limited was established in 15th October, 2004. It’s the only branch in Mirpur. It has two sections: Retail banking section & cash section.
2.11: Organogram of Mirpur Branch:
2.12: Departments of BBL:
If the jobs are not organized considering their interrelationship and are not allocated in a particular department it would be very difficult to control the system effectively. If the departmentalization is not fitted for the particular works there would be haphazard situation and the performance of a particular department would not be measured. BRAC Bank Limited has does this work very well. Departments are as follows:
- Human Resources Department
- Financial Administration Department
- Asset Operations Department
- Credit Division
- SME Division
- Internal Control & Compliance Department
- Marketing & Product Development
- Impaired Asset Management
- Probashi Banking Operations
- Treasury Front
- Treasury Back
- General Infrastructure Service
- Information Technology Department
- Customer Service Delivery
- Cards Division
- Phone Banking
- Cash Management
- Payment Service
- Loan Administration Department
2.13: Business Units of BBL:
There are five different business units generating business of BRAC Bank Limited:
- Small & Medium Enterprise (SME)
- Corporate Banking
- Retail Banking
- Treasury & FI
- Probashi Banking
All the units are being operated in a centralized manner to minimize costs and risks.
2.14: Shareholding Structure of BBL:
A fully operational commercial Bank, BRAC Bank focuses on perusing unexplored market niches in the Small and Medium Enterprise Business, which hitherto has remained largely untapped within the country. The Bank has provided support to more than 100000 Small and Medium Enterprise. Since inception in July 2001 the Banks footprint has grown to 36 branches, 427 unit offices and more than 75 ATMs across the country.
The Banks operate under a double bottom line agenda where profit and social responsibility to hand in hand as it strives towards a poverty free, enlightened Bangladesh.
BRAC Bank Limited with institutional shareholding by BRAC, International Finance Corporation and Shore cap International has been the fastest growing bank for last several years.
|Name of Shareholder||Percentage of Shareholder|
|International Finance Corporation||9.50%|
|Shore Cap International Limited||8.75%|
|Non Resident Bangladeshi||0.47%|
|Institutions and General Public||47.11%|
2.15: Long Term Strategy of BBL:
Summed up in a single sentence, the long term strategy is to go where the market is trying to go in the near future. The SME market in Bangladesh is large from the recent point of view, which was explored by the BRAC Bank Limited at first in the society. As a result of the achievements of the micro credit providers, Bangladesh now has an hour glass shaped banking market in which credit and other limited financial services are valuable to both very large and very small business and very wealthy and very poor individuals. While there is well-known informal system that provides credit to business, virtually nothing is available from either banks or micro finance providers to the million the middle –business and individual- who are severely constrained in their ability to produce and save for lack of access to financial resources and services . Until modern competitive financial services are readily available –including credit in amounts terms and conditions that small can access. Bangladesh will not be able to create the large middle class that is a prerequisite to social stability.
BRAC Bank limited consists of four major business divisions namely corporate banking division Retail division, Small and Medium Enterprises (SME) and foreign and Treasury. Corporate division provides full range of commercial banking products and services to any potential company clients including multinationals large or medium local corporate, institutional bodies. Retail division offers a wide array of lucrative and competitive products and services to the individual customers of the bank. Currently there are several lending products and a number of other attractive new products will be launches shortly. It also offers different types of term deposit scheme and attractive STD and saving deposit schemes giving interest on daily balance.
As a part of the total banking solution it has introduced an innovative and one of its kind remittance service under the style and name Secured and Easy Remittance Service. The aim of the program of the service is to introduce easy and secured service whereby people will be comfortable and secured in remitting funds without hustle and delay.
2.16: Products and Services of BBL:
BBL offers a wide range of products all over the Bangladesh. These are personal, corporate, investment; trade services; cash management; treasury and capital market services; insurance; consumer and business finance; pension and investment fund management; savings & deposit services, cash management; loan products, corporate and institutional services, day & night banking.
2.16.1: Personal Banking Services:
The BRAC BANK Limited offers a full range of personal banking products and services designed to take care of its customers’ growing needs and requirements. BBL in Bangladesh has launched a number of loan products and many other products during their seven years of operation.
2.16.2: Corporate Banking:
As one of the largest banking and financial organizations with an extensive local capability, the BBL is one of the major players in the Corporate banking market. BBL has a full range of products and services for corporate clients, which include: Lease Capital Financing, Term Loan, Trade Facilities, Guarantees, Work Order financing, Floor Financing and Structured Financing & Syndications etc.
Brac Bank Limited Corporate Service follows centralized process through online banking system as well as credit facility is processed at the Head office. After processing the facility the limit is put online and customer can enjoy the facility from any of the BRAC Bank Branches. BBL offers a wide range of cash financing, working capital, short and medium-term loans and guarantee facilities from its Head Office and Chittagong divisional branch.
2.16.3: Personal Financial Services:
The Bank has a range of products and services designed to cater individual requirements. The range of products & services for individual customers comprises of the following:
- Online Banking
- Phone banking
- Customer Service Department
- Savings/Current/Deposit Accounts
- My Future – Personal Savings Plans/My Loan – Personal Lending Products
- Foreign currency banking services for Resident and Non-resident Bangladeshis
Along with these products, BBL is committed to providing a superior level of personalized customer service, which is being constantly monitored through service quality department as well.
2.16.4: Investment Banking:
Investment Banking and Markets brings together the advisory, financing, equity securities, asset management, private banking and trustee, private equity and treasury and debt capital markets activities of the BBL Group. It offers a full spectrum of services for the Group’s corporate, institutional and retail clients.
By drawing on local commercial market knowledge and international product expertise, the Investment Banking and Markets business is able to provide an excellent combination of local market penetration. Private Banking is part of the Investment Banking division of the BBL Group and services offered will vary from division to division.
2.16.5: Cash Management Services:
BBL Cash Management services provide domestic transaction solutions to companies throughout the country. Services include a comprehensive range of traditional account and transaction services, augmented by liquidity and financial management solutions and delivered via BBL Internet banking platform, BBL net.
BBL operates on a local level to ensure the cross-border differences are identified and any related benefits exploited. BBL teams of specialists ensure that whether you need solutions across the country, regionally or locally, they have the skills, expertise and resources to deliver them. They automate as many functions as possible, whilst ensuring you retain control. BBL cash management service provides the effective cash management service with other supplementary services to the corporate clients with proper customer segmentation. Payment services reduce the lead time as well as magnify business opportunity and providing both banking services and a financial partnership with commercial and non commercial organizations.
2.16.6: Trade Services:
Trade finance originally facilitates “International Business” They handle Letter of Credit and do necessary activities related to international trade. As the provider of trade finance and related services to importers and exporters in Bangladesh, HSBC in Bangladesh operates a highly automated trade-processing network. The Bank uses SWIFT, an efficient and secure mechanism for bank-to-bank global communications used for all trade related activities including fund transfers and issuance of DC’s (Documentary Credit).
The trade services provided by BBL can be classified into two broad categories in accordance to the nature of business.
With over very little experience supporting importers globally, BBL is well positioned to fulfill the client’s requirements of foreign trade. A full range of import services handled by experienced staff is available, ensuring that the client’s import documents are processed without delay.
The Import Services include:
- Documentary Credits
- Import Collections
- Import Finance
- Shipping Guarantee
BBL Bangladesh has a dedicated team of experienced trade professionals to facilitate the client’s export requirements in a tailor made fashion, it aims to provide the client with faster turnaround time and innovative export solutions.
The Export Service includes:
- Pre-shipment Finance
- Post- shipment Finance
- Electronic Documentary Credit Advising
2.16.7: Service Quality:
The Service Quality department deals with all aspects related to BBL Unique Banking as well as hassle free banking provided to the customers. It is the more unique department through out the entire Bank operating in Bangladesh. This department checks out the service provided by all the employees of the BBL to their customers. They offer the customers more convenient and efficient banking than ever before. It is an innovative non desktop banking system developed by the BBL group to facilitate the customers.
2.16.8: Commercial Banking:
This is another wing of corporate banking division dealing with all the corporate products including non funded facilities to medium size enterprises where the requirement range varies from BDT 3.00 million to BDT 20.00 million. They are catering financial services to manufacturing, trading as well as to the service industry, limited company from Dhaka and Chittagong cities right at the moment with a view to serve other metropolitan cities of Bangladesh. They deal right at the moment more then one hundred customers with total outstanding of BDT700.00 million including BDT200.00 million as non funded facilities. The customers are in this department more formal than the small enterprise customers as well as less structured than corporate customer.
2.16.9: Premium Banking:
With a global outlook and commitment to provide innovative products and unparalleled service propositions to valued customers through out the country, BBL in Bangladesh launch Premium Banking service initiatives. Premium banking, as defined by the Group, is “the premium personal banking service proposition available through out the country to BBL upscale customer package of products and services designed to retain existing customers and allow us to deepen our relationship with them. It is also a vehicle to attract new customers from this valuable target
Market.” At the heart of the BBL Premium, position is the objective to build strong relationship with these key customers, to provide through out the country recognition and superior reward by delivering benefits which add value to their life style. BBL also provide associate relationship manger with the entire premium customer.
At the time of my internship at Mirpur Branch, there are two sections: Customer Service Section and Cash Section. I worked at Customer Service Section which mainly deals with one of the main business unit called “Retail Banking”. So in my internship report, I want to give an overview about Retail Banking and its several products and services. After this, I want to focus on the main part of the repot which is on “home loan”.
3.1: Retail banking:
Retail division offers a wide array of lucrative and competitive products and services to the individual customers of the bank. Currently there are several lending products and a number of other attractive new products will be launches shortly. It also offers different types of term deposit scheme and attractive STD and saving deposit schemes giving interest on daily balance. As a part of the total banking solution it has introduced an innovative and one of its kind remittance service under the style and name Secured and Easy Remittance Service. The aim of the program of the service is to introduce easy and secured service whereby people will be comfortable and secured in remitting funds without hustle and delay. Using the countrywide network of BRAC comprising more than 1100 field off SRS will ensure secured and only 24 hour lead time delivery of remittance anywhere in Bangladesh. Now a days BBL focus more on their retail division to serve their existing and new customers by their full satisfaction as well as they increase their branch
3.2: Retail Banking Products And Services:
3.3: Deposit products:
· CASA (Current & Savings Accounts), also known as Transactional Accounts.
· HNW (High Net Worth), also known as Term Deposit (TD).
3.3.1: The main CASA products are listed below:
1. Savings Classic
Savings Classic Account is a local currency interest-bearing account with cheque book facility. The minimum account opening balance is BDT 15,000. The interest rate in this account is 5.5% p.a., credited to the account Half Yearly. Any balance greater than zero will be eligible for interest. Interest forfeiture rules are applicable for this account. Annual Account Maintenance Fee of BDT 800 + VAT and Annual Debit Card Fees of BDT 520 + VAT will be charged upfront at the time of account opening and on anniversary of every following year. The account comes up with a 12 page cheque book free. The customers can avail a second cheque book of 12 pages for free, if the account’s balance is BDT 15,000 and above. If the balance is below BDT 15,000, Tk 100 + VAT will be charged. Special cheque book of 25/50/100 pages can be issued at a cost of BDT 4 + VAT per pages. Customers receive half-yearly bank statement. Interest will be forfeited in the following cases.
2. Triple Benefits Savings Account
Triple Benefits Savings Account is a local currency interest-bearing savings account with cheque book facility. The minimum account opening balance is BDT 50,000. The interest rate in this account is ranging from 4% to 8% p.a., credited to the account every month. Interest slabs are as follows:
|Monthly average balance||Rate|
|Below Tk. 50,000||0%|
|From Tk. 50,000 to less than Tk. 5 lac||4%|
|From Tk. 5 lac to less than Tk. 25 lac||6%|
|Tk. 25 lac & above||8%|
Any balance of BDT 50,000 & above will be eligible for interest. Interest forfeiture rules are not applicable for this account. There is no Annual Account Maintenance Fee or Annual Debit Card Fees or any other upfront fees. If customers do not maintain a Half-Yearly Average balance of BDT 50,000, the account will be charged with BDT 750 + VAT every half year, on 1st January and 1st July of each year. The account comes up with a 12 page first cheque book free. The customers can avail a second cheque book of 12 pages for free, if the account’s balance is BDT 50,000 and above. If the balance is below BDT 50,000, BDT 100 + VAT will be charged. No Special cheque book is available for this account. Loan amount cannot be disbursed in this account.
3. Femina Account
Femina Account is a local currency interest-bearing savings account without cheque book facility. The minimum account opening balance is BDT 5,000. The interest rate in this account is 6.5% p.a., credited to the account monthly. Interest is calculated on day-end balance. Any balance greater than zero will be eligible for interest. There is no Annual Account Maintenance Fee. Annual ATM Card Fee of BDT 400 + VAT will be charged upfront at the time of account opening and on anniversary of every following year. This is a non-cheque-book account. However, a customer can avail a special cheque of 12 pages at a premium price.
4. Current Classic
Current Classic Account is a local currency non interest-bearing account with cheque book facility. The minimum account opening balance is BDT 15,000. There is no interest in this account. Annual Account Maintenance Fee of BDT 800 + VAT and Annual Debit Card Fees of BDT 520 + VAT will be charged upfront at the time of account opening and on anniversary of every following year. The account comes up with a 12 page cheque book free. The customers can avail a second cheque book of 25 pages for free, if the account’s balance is BDT 15,000 and above. If the balance is below BDT 15,000, Tk 100 + VAT will be charged. Special cheque book of 50/100 pages shall be issued for the charge of BDT 4 + VAT per pages. For more than 5 (five) transactions in a day, charges will apply for every additional transaction as per the Schedule of Charges.
5. Ezee Account
Ezee Account is a local currency interest-bearing current account without cheque book facility. The minimum account opening balance is BDT 10,000. The interest rate in this account is 4% p.a., credited to the account Half Yearly. Any balance greater than zero will be eligible for interest. There is no Annual Account Maintenance Fee. Annual VISA Debit Card Fee of BDT 520 + VAT will be charged upfront at the time of account opening and on anniversary of every following year. This is a non-cheque-book account. However, a customer can avail a special cheque book of 12 pages at a premium price.
6. Salary Account
Salary Account is a non-cheque book individual account with overdraft facility for employees of different Corporate Houses to disburse their monthly salaries. Employees of MNC/LLC/MID CORP/NGO/Large proprietorship/Partnership firm, other than foreign nationals are eligible to open this account. Interest rate for Salary Account is 4% p.a. Any balance greater than zero will be eligible for interest. Interest calculation will be based on Daily Balance and Interest payment will be made Quarterly. There is no Annual Account Maintenance Fee in Salary Account. Annual ATM Card Fees of BDT 300 + VAT will be charged upfront at the time of account opening and on anniversary of every following year. Salary Account is a non-cheque book account. However, a customer can avail a special cheque of 12 pages at a premium price of BDT 300 + VAT.
7. Prapti Current account:
It’s a Bizness Account; it is an interest bearing account only for business Enterprise for SME and Retail banking. These customers need not to maintain any minimum balance to operate the account as well as they get 4% interest on daily balance.
8. Campus Account
Campus Account is non cheque individual account for students of different educational
Institutes. The parameter of the product has been set in a way to encourage the students to enter into the wide range of modern banking facilities of BBL. They also get 4% interest on daily balance as well as discount at different stores.
9. Current plus:
It needs take 25,000 as opening balance. It has the visa debit card facility. It has no debit Card fee and upfront fee. It also has no intercity transaction fee. This account has no account related yearly and half yearly fees.
3.3.2: The main High Net Worth products is listed below:
01. Interest First Fixed Deposit
In this account customers no need to wait till maturity to receive interest on their fixed deposit. BBL IFFD lets customers draw the interest instantly at the time of their deposit. This is a unique product for BBL where clients receive interest in advance.
BBL Abiram Account is special type of Fixed Deposit Scheme. It offers the flexibility & comfort of having a guaranteed monthly return on investment. This account ensures a safe and steady return on customer investment. This deposit provides 95% loan against the deposit.
03. Freedom Fixed Deposit
Freedom Fixed Deposit is fixed deposit product specially designed for individuals. It works like normal Fixed Deposit with the unique benefit receiving quarterly interest. The interest rate will be higher than the prevailing Fixed Deposit rate and there will be a minimum tenor for the deposit. Clients get 90% loan on face value as well as interest shall be paid on quarterly basis after deducting the income tax on the interest amount.
05. Short Term Deposit
Short Term Deposit scheme give returns to the customers. The minimum balance required to open this account is Taka 100000 and interest paid twice a year but calculated on a monthly basis if balance is Taka one lac or above at the account.
06. Fixed Deposit Premium
It is a monthly savings scheme for periods of 1 to 15 years. Customers can save in small amount installments and get a handsome return at maturity. This accout can easily maintain through customers link account that means monthly installment will be automatically realized from customers account.
3.4: Loan Products:
BBL provides Loans which are grouped under term finance depending on the term loan. It is generally categorized under short term and long term. Term finance is both fund based and non fund based.
There are several loan products of BBL. They are listed below:
01. Home Loan: we’ll discuss it broadly in below.
02. Auto Loan:
03. Salary Loan
04. Quick Loan &
05. SL & SOD
An overview of all loans at a glance:
13.5% & 14%
17.5% & 18.50%
SL-11.50% & SOD-10.50%
Loan AmountAge23-6024-68 at the time of app23-65 at time of maturity23-60 at the time of appIFFD-70%Income20K15K25k30k40k25k35k Service
1Y for A2 Y in current organigation3years3years3 Years in current organization (Own house.
4 Years (Rental house)
2Y Business proofAbiram/FFD-85%
5Y in operation5 Y in operation—5 Y in operation2YearsLoan Processing FeeResidenceResidence within the Br. NetworkResidence within city copr. areaResidence within city copr. area l 6 Months in current address—1% of the LimitNo of Staff20 Staff20 Staff -20 StaffNil Min Loan1 Lac5 Lac5 Lac1.5Lac2 Lac2 Lac Max
A-15k to 30k-10times & 30k+ 15 times/10 Lac
B -20k to 50k-8times & 50k+ 12times Gross/10 Lac
75 Lac10 Lac20 Lac20 LacMinimum
-Last 6month Bk.St
-Latest salary Slip/ LOI
-Proof of ID
-Last 6 months bank St -TIN
Depend on professionLast 1 Years Bank statement.
Guarantee & Others necessary Docs.
Last 1 Years Bank statement.
Car Quotation & Others necessary Docs.
Telephone —– DBR40%Depend on Income (35%-55%)35% Own house,30% rental houseDepend on Income(35%-45%) TINIf anyTIN req.TIN req.TIN req. (Businessman) Tenor12-60 Months12-180(Sal)&12-240(Bus, Land Lord) Months12-60 Months12-60 Months
3.5: Cards Products:
3.5.1: Product Types:
01. VISA Card Gold – Local
02. VISA Card Classic – Local
03. VISA Card Gold – Dual(international credit card)
04. VISA Card Classic – Dual(international credit card)
3.5.2: BIN List of BRAC Bank:
432146 Visa Classic (Silver) Local
432145 Visa Classic (Silver) Dual
432148 Visa Gold Local
432147 Visa Gold Dua
3.5.3: Product Description:
01. Visa Local Classic: This is a local Visa Credit Card, which is valid only in Bangladesh. It can only be used in local currency (BDT) within the country. This type of credit card has a limit ranging from BDT 10,000 to BDT 74,999. This type of card has designed for medium earner category customers.
02. Visa Local Gold: This is also local Visa taka card of which acceptance jurisdiction only in Bangladesh and transaction currency is BDT. The differences between these two cards are higher credit limit than classic card. Credit limit of Visa Gold Card is ranging from BDT 75,000 to BDT 5, 00,000. This type of card has been designed for the higher earner category customers.
03. Visa Classic Dual: This is basically one plastic that has dual options to make transaction in two currencies. Its acceptance jurisdiction is in country and outside country in BDT and USD respectively. Classic dual is for the medium earner category customers. Its USD credit limit will be within approved BDT limit assigned for this category.
04. Visa Gold Dual: This is a high value dual card remaining other features same with classic dual. Gold dual is also for the higher earner category customers and its USD credit limit will be within approved BDT limit assigned for this category. A secured dual card’s limit will be maximum USD 30,000 against lien on RFCD or ERQ account.
3.5.4: Staff Card: This is only for the BBL permanent and contractual staffs with special facilities detailed in the product parameter. Staff card will be more secured than the customer card, as they will be maintaining an account with BBL. When a staff resigns from job then he/she can continue his/her BBL Credit Card as a normal customer.
I am going to now focus on the main topic, which is on ‘ Home Loan’ and its process flow, terms and conditions, customer eligibility, property information and its important features. Along with this, I also prepared a comparative study among the several top banks of market including BBL. Then I was trying to find out the strength and also weakness of Home Loan product of BBL.
During my internship, I was going through several CSO’s who helped me so much to know about the Home Loan, Mirpur Branch of BBL and they provide me important information about several loans especially about the home loan. Then I also talked with so many valuable customer of BBL who has already taken home loan and also with the customers who want to take loans from BBL. From the discussions I made with all of them, I got all the information about home loan which I present in below.
4.1: Home Loan:
Purchase of under-construction / semi-completed / completed / secondhand Apartment or house
4.2: Process Flow of Home Loan:
Process Flow of Home Loan
Note: In case of Home loan, valuation & vetting is sent simultaneously, but in case of Home Credit or Takeover, vetting is sent if the valuation report becomes satisfactory
4.3: Customer Segment & Eligibility:
* Minimum age 24 years
* Maximum age 68 years at the end of loan tenure
* Total Job Experience is minimum 3 years (must be permanent in current job)
* Service length with Present Employer
a) 3 months for executives of Type-A companies.
b) 2 years for salaried persons of other companies.
* Contractual employees of organization like: FAO, WHO, Care, save the children etc. can be eligible provided the following conditions are met-
a) Minimum length of service 05 years
b) Minimum 02 renewals are provided
* Minimum income is BDT 20,000 for type-A company employees
* Minimum income is BDT 25,000 if employee of any company except type-A.
a) If income of both applicants’ is considered then one’s income must be minimum BDT 20,000 and the other’s must be minimum 5,000).
* Salary must be credited to bank by the employer.
* Owner / Director of Proprietorship / Partnership / Private Limited Company
* Minimum age 24 years
* Maximum age 68 years at the end of loan tenure
* Total Experience is minimum 3 years of experience with the same business. When business acquired from family then total length of inherited business should be 03 years (current + previous) with appropriate supporting documents.
* Minimum income is BDT 30,000 (If income of both applicants’ is considered then one’s income must be minimum BDT 25,000 and the others must be minimum 5,000).
* Minimum age 24 years
* Maximum age 68 years at the end of loan tenure
* Minimum income is BDT 30,000 (If income of both applicants’ is considered then one’s income must be minimum BDT 25,000 and the others must be minimum 5,000).
* Minimum age 24 years
* Maximum age 68 years at the end of loan tenure
* Minimum income is BDT 25,000 (If income of both applicants’ is considered then one’s income must be minimum BDT 20,000 and the others must be minimum 5,000).
4.4: Property information & Eligibility:
Essentials to know:
* Property must be purchased from Developer / Individual Seller
* Developer can be categorized / non-categorized
* Property can be a Joint Venture / self-built project
* Developer name & property address
* Construction stage (Superstructure completed / Brickwork completed / Inside Plasterwork completed / Floor Tiles work completed)
* Apartment No., Floor / Level (where the mortgaged property is situated), size (sft) & facing
* No. of Car parking
* Possession Handover date as per Allotment Agreement
* Property price including car parking price & utility cost.
* How much amount already paid and what is the balance amount?
* Age of the property (if secondhand Apartment)
Home Credit: Renovation / Extension / construction
Essentials to know:
* No. of Apartment(s) / Floors
* Floor area
* Estimated value of the property
* Property age (if renovation or extension)
* Area of land
* Construction status (in case of construction)
Takeover: Transfer of current balance of existing Housing loan of the customer to BBL from any other Bank / NBFI
Essentials to know:
* Particulars of the mortgaged property
* Status of security (Mortgaged / TPA)
* Financial Institution / Bank name
* Outstanding amount
* Repayment history
4.5: Some important features:
* Owner of the property must be the main borrower
* Joint applicant is mandatory for all proposals except for the cases where the main applicant happens to be both (the property owner as well as the financially eligible person) and agrees to assign his/her Life Insurance Policy (LIP) covering the loan amount in favor of the bank to mitigate the death risk. In absence of LIP, Joint-applicant is a must.
Joint Applicant eligibility: Spouse, father, mother, son and brother only.
- Maximum 2 Joint Applicants are allowed.
- For proposals, where joint-applicant is someone other than spouse while the incumbent is married, a No-Objection-Declaration from spouse to be attained.
- Main Applicant / Joint applicant must reside within the cities where BBL Branch representation is available. But this is applicable only for salaried persons of Type-A companies. For other segments in addition to Dhaka, Chittagong & Sylhet metropolitan city, greater Dhaka (Tongi, Gajipur, Savar etc.) allowed.
- Mortgaged property must be located within the metropolitan area of Dhaka, Chittagong & Sylhet.
- Bangladeshi by citizenship or by birth and permanent resident of Bangladesh.
- Minimum loan amount is BDT 5, 00,000
- Maximum Loan amount is BDT 75, 00,000 or maximum LTV whichever is lower
- Maximum age of the property is 20 years at the time of underwriting and 35 years at the end of loan tenor (maximum tenor considered 20 years)
- Mixed use properties with commercial usage allowed but financing will be done only against residential portion.
Processing fees & charges: Processing fee against loan upto BDT 15 Lac is @ 2% on loan amount + VAT. @ 1.5% + VAT on loan amount if the loan amount is above 15 lac. In case of Takeover, 0.50% of loan amount +VAT is applicable. For Home credit loan, fee may be deducted from loan amount before disbursement. Valuation charge @ 3500 + VAT will be paid by the customer after conditional approval. Legal vetting fee will be included in processing fee and to be borne by the financer. Stamp charges, registration and mortgage charges will be borne by the customer. If valuation requires to be done more than 01 time for any reason, extra charge to be borne by the customer.
Early settlement (in full)
* 5% of outstanding if settled within 1st year + VAT
* 4% of outstanding if settled within 2nd year + VAT
* 3% of outstanding if settled within 3rd year + VAT
* 2% of outstanding if settled within 4th year + VAT
* 1% of outstanding if settled within 5th year and onwards + VAT
Partial pre-payment & fees
* 5% of pre-payment amount (Minimum pre-payment amount is BDT 1,00,000).
* Pre-payment is allowed any time but first pre-payment will be allowed only after completion of 12 successful installments from the full disbursement.
* For only date rescheduling (where no partial pre-payment will be done), BDT 2000+VAT each time.
* Penal Charges Applicable in case of delay of payment of installment @ 4% + VAT
For salaried: 13.00% (floating)
For others: 14.00% (floating)
Type A & Eco ~ 55%;
For other segments ………
If income is BDT 25,000 – BDT 35,000 ~ 35%
If income is BDT 35,001 – BDT 50,000 ~ 45%
If income is BDT 50,001 – 75,000 ~ 50%