Satisfaction Level of the Customers In Terms Of Products and Services Offered By Standard Chartered Bank

View With Charts And Images  

1. Introduction

Standard Chartered Bank is the leading multinational bank in this country. To maintain its leading position in the imp with trustworthy clients. To achieve this end, they have always upgraded their approaches to achieve profitability. The Standard Chartered Bank is an international banking and financial services group that is incorporated in the U.K. with its headquarters in London. It has a unique international network. It now spans in the developed and emerging economies of the world, after been built over 150 years.

Standard Chartered Bank’s operation is segmented under six regions: Europe, Middle East, South Asia, South East Asia, Australia and the USA. Globally, the SCB group owns a network of 600 offices in more than 50 countries with staff of about 28000 people. Globally, SCB specializes in personal, corporate, institutional and personal finance and custodial services. The bank excels in providing the most efficient, consistent and timely services and is the multinational bank in the Middle East, South Asia and North African regions.

2. Banking Sector In Bangladesh

2.1 Overview of Banking

Whoever, being an individual firm, company or corporation generally deals in the business of money and credit is called bank. In our country, any institution, which accepts, for the purpose of lending or investment deposits of money from public, repayable on demand or otherwise, and with transferable by checks draft order and otherwise can be termed as a bank.

The purpose of banking is to ensure transfer of money from surplus unit to deficit units. Bank in all countries work as the as the repository of money. The owners look for safety and amount of interest for their deposits with Banks. Entrepreneurs try to obtain money from the banks as working capital and for long-term investment. These entrepreneurs welcome effective and forward-looking advice for investment. Banking sector thus owe a great to the deposit holders on the hand and the entrepreneurs on the other. They are expected to play the role of friend, philosopher, and guide for the deposit holders and the entrepreneurs.

Since liberation, Bangladesh passed through fragile phases of development in the banking sector. The nationalization of banks in the post liberation period was intended to safe the institutions and the interest of the depositors. Those handling the banking sector have borne the burden of putting banks on reliable footings. Despite all that was done, some elements of irregularities appeared. With the assertion of the role of the Central bank, The Bangladesh bank started adopting measures for putting banking institutions on right track. Yet the performance of public sector management of banks left some negative effects in the money market in particular and the economy in general. The agility among the borrowers manipulates the banking sector as a whole. In effect, a default culture appeared on the scene.

The opening of private and foreign participants to the banking sector was intended to obtain desirable results from banking. The authorization of private banks was designed to create competition among the banks and competition in the form of efficiency with and the productivity in enterprises funded by banks. Unfortunately, for the people, at large banking sector is yet to obtain the credit for efficiency, credibility, and growth.

The clever, among the user of banking services, have influenced the management of banks, for obtaining short-term and long-term loans. They sometimes showed inflated to get money for investment in business and industry. Few diverted their loan money to purposes different from the loan proposals, and invested in non-profitable units have failed to repay their loans to the banks. For this reason new entrepreneurs are not getting capital while defaulting entrepreneurs have started obtaining either relief in the form of rescheduling of the repayment program or additional inevitable money for diversified units.

2.2 The Banking Sector in Bangladesh:

Domestic banks can be divided into four main groups: Nationalized Commercial Banks (NCBs); Private banks established in the early 1980s; and private banks established in 1999:

2.2.1 Nationalized Commercial Banks (NCBs) In general terms; NCBs are large, operationally inefficient and technically insolvent. They are used as vehicles of government directed lending. These banks enjoy an enormous and stable customer deposit base, which provides a cheap source of funding. In addition, most large government related business is routed through these banks

2.2.2 Private Banks, 1980s– set up to service the sectors not being addressed by the larger NCBs.  Not subject to state directed lending but have generally suffered from related lending to directors and their extended families;

2.2.3 Private Banks, 1995 – six new licenses were granted. These are the better managed banks with strong capital base and good asset quality and under a much improved regulatory regime. All the banks clustered in this group have successfully raised capital from secondary market and all the shares are now traded in the stock exchange at premium.

2.2.4 New private sector banks. Ten new banks have been granted licenses over the year 1999. While some bankers complain that the country is over-banked, the more commonly held view, including that of the World Bank, is that there is adequate scope for these banks to survive given currently untapped gaps in the market, fat in existing interest margins (currently circa 5%), and efficiency/ service level disparities. It is estimated that up to 70% of the Bangladeshi economy remains un-banked. While this appears to imply that the newer banks may move downstream in terms of asset quality but in reality the last two sets of new banks are successfully competing with NCBs (Nationalized Commercial Banks) and foreign banks on the top end market segment.

Table 1: Banks in Bangladesh

 

Name of Bank

Number of Branches

 

 

Inland

Abroad

 

 

 

1. Bangladesh Krishi Bank

836

2. Rajshahi Krishi Unnayan Bank

300

3. Bangladesh Shilpa Bank (Industrial)

15

4. Bangladesh Shilpa Sangstha

5

5. Grameen Bank

1110

C. Private Commercial Bank

 

 

1. Rupali Bank

515

1

2. Pubali Bank Ltd.

351

3. Uttara Bank Ltd.

198

4. Arab Bangladesh Bank Ltd.

58

1

 

21

16. Eastern Bank Ltd.

21

17. NBL

27

 

18. Social Investment Bank Ltd.

5

D. Foreign Commercial Banks.

 

 

1. American Express Bank Ltd.

2

 

2. Credit Agricole Indosuez

2

 

3. The Standard Chartered Bank

18

 

5. Habib Bank Ltd.

2

 

6. State Bank of India

1

 

7. Muslim Commercial Bank

2

 

8. Citi Bank NA

1

 

9. National Bank of Pakistan

1

 

10. Hanil Bank

1

 

11. Dutch Bangla Bank

2

 

12. HSBC

5

 

       

Source: www.bangladesh-bank.org

Clearly the banking industry is in a growing state and it will take years to clean up. The Government and BB have been working with the World Bank to introduce reforms, including related party lending, restricting lending concentrations to 15% of the capital base, capital adequacy and bankruptcy laws. The World Bank has indicated that there are funds available to assist individual banks improve their capital bases, but this depends on them first making full provision for NPLs. Some banks have also successfully raised capital through IPO’s (Initial Public Offerings). BB has reaffirmed its intention to continue extension of support to banks through rediscounting. However care should be exercised when taking comfort from BB's (Bangladesh Bank) assertion that it will not allow any bank to fail. While this pledge has held true to date, in effect it means that BB will allow a technically insolvent bank to continue in operation with BB guidance and "technical" support but BB will not provide a capital injection or write-off government related bad loans.

3. Organization Part

3.1 Organizational Overview

Standard Chartered Bank derives its name after two banks – Standard Bank of British South Africa and the chartered Bank of India, Australia and China. The merger took place in 1969. Standard Chartered Bank is regulated by the Bank of England and is a clearing bank in the United Kingdom.

The new millennium brought with it two of the largest acquisition in the history of the bank- the acquisition of the Grindlays Bank from the ANZ group for a consideration of $1.34 billion and acquisition of the Chase Consumer Banking Corporation in the Hong Kong for $ 1.32 billion. These acquisitions demonstrate Standard Chartered Bank’s firm commitment to the emerging markets.

Standard Chartered employs 29,000 people in over 500 offices in more than 50 countries. The group provides consumer-banking services to individuals and small to medium size businesses, and offers Wholesale Banking capabilities to corporate and institutional clients. With 150 years in the emerging markets the group has unmatched knowledge and understanding of its customers in its markets. Standard Chartered recognizes its responsibilities to its staff and to the communities in which it operates. Their 150 years of history gives them a deep better understanding of their markets, their customers, and the local communities in which they operate>It is a strong platform for future growth. Standard Chartered is holding leading positions in dynamic markets. They are in some of the world’s fastest growing markets including he United Arab Emirates, India, China, and the markets of South Asia. They are present in many of their markets for several generations and have become a trusted partner to businesses and individuals. In other words, they are trusted and well respected provider of financial products and services. They have built up an enviable knowledge of local markets in Asia, Africa, the Americans and the Middle East. In many cases, they have had a presence for more than a century. Their first two branches were in Calcutta and Shanghai and we have been operating continuously in China for the last 144 years.

3.2 Standard Chartered Bank  — The History

Standard Chartered is the world’s leading emerging market’s bank headquartered in London. Its businesses however, have always been overwhelmingly international. Here is the summary of the main history of the Standard Chartered Bank.

3.2.1 The early years

Standard Chartered is named after two banks which merged in 1969. They were originally known as the Standard Bank of British South Africa and the Chartered Bank of India, Australia and China. Of the two banks, the Chartered Bank is the older having been founded in 1853 following the grant of a Royal Charter from Queen Victoria. The moving force behind the Chartered Bank was a Scot, James Wilson, who made his fortune in London making hats. James Wilson went on to start The Economist, still one of the world's pre-eminent publications. Nine years later, in 1862, the Standard Bank was founded by a group of businessmen led by another Scot, John Paterson, who had immigrated to the Cape Province in South Africa and had become a successful merchant. Both banks were keen to capitalize on the huge expansion of trade between Europe, Asia and Africa and to reap the handsome profits to be made from financing that trade. The Chartered Bank opened its first branches in 1858 in Chennai and Mumbai. A branch opened in Shanghai that summer beginning Standard Chartered's unbroken presence in China. The following year the Chartered Bank opened a branch in Hong Kong and an agency was opened in Singapore. In 1861 the Singapore agency was upgraded to a branch which helped provide finance for the rapidly developing rubber and tin industries in Malaysia. In 1862 the Chartered Bank was authorized to issue bank notes in Hong Kong.  

3.2.2 Standard Chartered in the 1990s

Even within this period of apparent retrenchment Standard Chartered expanded its network, re-opening in Vietnam in 1990, Cambodia and Iran in 1992, Tanzania in 1993 and Myanmar in 1995. With the opening of branches in Macau and Taiwan in 1983 and 1985 plus a representative office in Laos (1996), Standard Chartered now has an office in every country in the Asia Pacific Region with the exception of North Korea. In 1998 Standard Chartered concluded the purchase of a controlling interest in Banco Exterior de Los Andes (Extebandes), an Andean Region bank involved primarily in trade finance. With this purchase Standard Chartered now offers full banking services in Colombia, Peru and Venezuela. In 1999, Standard Chartered acquired the global trade finance business of Union Bank of Switzerland. This acquisition makes Standard Chartered one of the leading clearers of dollar payments in the USA. Standard Chartered also opened a new subsidiary, Standard Chartered Nigeria Limited in Lagos, acquired 75 per cent of the equity of Nakornthon Bank, Thailand; and agreed terms to acquire 89 per cent of the share capital of Metropolitan Bank of the Lebanon.

3.2.3 Global presence of Standard Chartered Bank

Table 2: Standard Chartered Bank’s presence in total of 48 countries

 

Africa

Asia Pacific

Latin America

Middle East & South Asia

Figure 1: Global presence of Standard Chartered Bank

 

 

 

 

3.10.10 External Affairs

This department deals with advertising, public relations, promotions, partial marketing which involves disseminating new products and services to customers and above all ensuring service quality.

3.11 Human Resources Division

This department manages recruitment, training and career progression plan.  Standard Chartered Bank highlights the importance of developing its people to create a culture of customer service, innovation, teamwork and professional excellence. SCB recruits people by two ways. One is a “Management Trainee” that has a probation period of six months and after the probation period the trainees will be counted as an officer and they will do the different kinds of managerial works and another is “Non Management Trainee” which does not have any fixed probation period. Time required for training is department on the recruited person’s performance. In case of non-management trainee, two ways of recruitment is taken place. They are (a) taken by signing a contract with some outside organization for three months and after three months the contract may be renewed or not depending upon the employee’s performance. These people coming through outside contract are called “Out Source”. (b) Taken by signing a contract with the bank for the three months and after three months the contract may be renewed or not depending on his/her performance. These people coming through bank contract are called “In source”.

3.11.1 Controlling Structure at SCB

Alike all other big multi-national companies, management in SCB consists of planning organizing, directing, controlling all of the resources of an organization. The goal of Standard Chartered Bank is to be the "Bankers of First Choice." Towards that goal, the overall planning in the Organization is done at the headquarters level in Dhaka by a Management Committee (MANCO), headed by the CEO and consisting of the business heads like Corporate Banking, Consumer Banking, Treasury, Global Markets, and from the support divisions the heads of Human Resource, Operations and Finance Departments.  They meet once a month, or when special situations arise, to plan the strategic decisions. The decision making, although apparently based on a top-down approach, leaves room for participation down to the level of department heads, which are responsible for carrying out the planning of their department within the broad guidelines set by MANCOM.

Among the broad strategic objectives are:

* Creating a congenial work environment

* Modernization of the management information system to achieve full automation by drastically cutting down the paper works in long term.

* Focusing on service quality and consume needs

* Recruiting and maintaining top grade, efficient employees

* To invest in those technological systems which will upgrade and enhance financial services

* Creating an excellent brand image of the bank.

3.11.2 Personnel Policies:

The number of officers exceeds the number of clerk, which is a straight contrast to local banks specially the nationalized commercial banks. Standard Chartered Bank pays great attention to recruiting high quality staff through proper evaluation and improving their skills through structured training. Reward and punishment base on strict performance evaluation and opportunities of promotion both in country and abroad are two important features of the personnel policy of Standard Chartered Bank.

3.11.3 Recruiting, Training and Career Progression:

The recruitment process is based on references, advertisements and internships. Entry point screening is done both by the written and oral test. The medical record of the potential employee is very important and those suffering from potentially life threatening and performance deterring diseases are not hired, even if they were otherwise qualified. The placement of the staff is done in two ways. Either the employee undergoes a management trainee program with a probation period of nine months and is categorized as an officer leading to various managerial jobs, or is recruited at a non-management level as banking assistance or support officer. There is a structured training framework for all the employees, and a channel for moving people from national to international positions. International graduate recruitment and personal skill development for entry-level employees are a part of the human resources development efforts at Standard Chartered Bank.

3.11.4 Five Values of Standard Chartered Bank

Standard Chartered Bank has five values and these values are key to their success. These values determine how the employees achieve their goals, the way they work together and how it feels to be a part of Standard Chartered Bank. In brief these values are:

Courageous: Being courageous is about confidently doing what’s right. Often the task may seem insurmountable but with courage and tenacity, the odds can be overcome. A truly courageous act both inspires and builds character.

Responsive: How we response to our customer will influence their belief in our commitment to them. A proactive response is often unexpected and more effective for that. It clearly demonstrates our willingness to go beyond the unexpected.

International: As a member of global village we view the world from the widest perspective. We are all global citizens and the world is full of new opportunities and exciting possibilities. We also deliver world-class products and services.

Creative: Creativity belongs to those of us who are excited by challenges and engage them in fresh thinking and an open mind. Creative thinkers are not limited by convention but allow their minds to soar beyond predictable solutions.

Trustworthy: Trust is the foundation of every successful relationship. We trust because we believe in the sincerity of our promise. Building trust can take forever. Losing takes only moments.

3.11.5 Chain of Command:

Standard Chartered Bank in Bangladesh follows a hierarchy pattern of command. The chief Executive Officer (CEO) for the country reports to the Regional Manager, MESA (Middle East South Asia) in Dubai. All other departmental Heads at the headquarters report to the CEO. A manager or Senior Manager reports to the divisional heads. The respective Branch Managers or Branch Sales and Service Managers (BSSM) are responsible for the performance of their unit. Each branch is organized functionally along line divisions with some support facilities and the manager assigns tasks to his / her subordinate personnel and supervises their performance. 

 

3.12 Organogram

Organogram’s of different division of the bank is given in the next few pages separately.

 

 

 

 

 

Phone

Banking

 

 

Correspondent

Banking

 

 

 

Consumer Banking

 

 

 

Corporate

Banking

 

 

 

 

               
       
 

 

 

 

 

               
       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 4: Banking Services of Standard Chartered Bank

 

Chain of Command

 

 

             
   
     
 
 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 5: Chain of Command of Standard Chartered Bank

 

 

 

 

 

 

 

 

 

 

       
 

 

 

Head of Corporate and Institutional Banking

 

 
   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. Relationship Manager Sr. Relationship Manager   Relationship Manager   Sr. Relationship Manager Relationship Manager Relationship Manager   Relationship Manager

Sr. Credit Analyst   Credit Risk Manager Credit Risk Manager

Sr. Sales Supporting   Credit Risk Officer Credit Risk Officer

 

 

 

 

 

 

 

Business Dev. Manager   Relationship Manager

(Trade, Projects, Cash, Trade, Manager –FI, Sales Support

Sales) Manager – FI, Chittagong

 

Figure 11: Corporate and Institutional Banking of Standard Chartered Bank

 

4. Consumer Products of SCB

In the consumer market, SCB is well reputed for introducing innovative and lucrative offers and products to its customers. SCB’s products have always been a master blaster in the banking market.

4.1 Personal & Joint Account

For opening a personal or a joint account one needs to submit a valid passport or any identification attached with photo, one passport size photograph and needs to be introduced by any account holder of SCB whose account is minimum six months old. To open the account the person needs to fill up a form mentioning his name, address, telephone number, date of birth, occupation etc. as well as mode of operation and specimen signature. Account holder must appoint a nominee with photograph and signature who also must attest nominee’s signature and photo.

4.2 Current Account

To open a Current Account one has to deposit a minimum of Taka.50, 000. And account holder of those account need to have average balance of Taka 50000 at all time, otherwise a charge of Taka 500 will be debited. And the closing charge for those accounts is Taka 250, and if it is closed before six months, the charge will be Taka 500.

Table 3: Interest rate of Current Accounts (Local & Foreign Currency)

 

 Minimum balance required

Interest Rate

BDT 50,000 or equivalent

No interest is paid

 
4.3 Savings Account

To open a Savings Account one has to deposit a minimum of Taka. 100,000 and Taka 300,000 for extra value savings account (EVSA). And account holder of those account need to have average balance of Taka 100,000 at all times, otherwise a charge of Taka 500 will be debited. And the closing charge for those accounts is Taka 200, and Taka 300 for EVSA accounts. If the A/C is closed before six months, the charge will be Taka 500 and Taka 1000 for EVSA.

 

 

Table 4: Interest rate of Savings Accounts (Local & Foreign Currency)

 

Average Balance

Interest Rate

Average balance below BDT 100,000

 00.00%

Average balance BDT 100,000 to 500,000

04.50%

Average balance BDT 500,000 to 1,000,000

05.00%

Average balance BDT 1,000,000

 05.50%`

 

4.4 Short Term Deposit (STD) Accounts:

Minimum balance for maintaining a STD (Short Term Deposit) or Call Deposit Account is required BDT 250,000. Interest Rate on this type of account is 4.00% to 6.00% (Rate varies on amount). The main reason for big clients to maintain this type of account is just to earn interest on big amount on a daily basis.

4.5 Access Account

Access account is quite new feature of SCB that allows customers to have an account with SCB without any charges that are present in other types of accounts. Access account differs from its other account services in the way that it requires no minimum deposit size and hence it doesn’t provide any interest. The advantage is that students / people of medium income level trying to avoid high bank charges can use this account to meet emergency cash requirements. The account holders do not get any facility of cheque book and cannot withdraw more that Taka. 20, 000 in a day and also cannot overdraw their account. The charges include Taka. 150 per year and Taka. 250 for government excise duty. And the closing charge for those accounts is Taka 200.

4.6 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 for overseas commitments and dues like credit card bills, traveling expense, recreation tours, etc. This service is offered in currencies like USD, GBP and Yen. The interest that SCB offers is very competitive, but the deposit can only be made in foreign currency. The withdrawals can only be made in local currency. It offers fund Remittance in LCY and FCY to any place in and out of the country.

4.7 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 account holder. Fund remains in foreign currency and is freely remittable. The deposit can be made in foreign currency only (Cash, TC or Drafts or transfer from other FCY account). But cash withdrawals can only be made in local currency only. Fund can be used to make investment in Wage Earners' Development Bond

4.8 Non – Resident Foreign Currency Deposit (NFCD)

A short-term foreign currency deposit account suitable for Bangladeshis living abroad, offering most competitive interest rates available in both local and international markets. The interest paid in this account is in foreign currency, it can be opened for a term of 1 months, 3months, 6 months and 12 months. The interest rates are tiered (based on amount and term), but payable on maturity, but automatically renewable. It can be used as security against personal/commercial loan

4.9 Account Statement Charges

The charge for holding statements is BDT 1000 per annum per account and for Additional/ Duplicate statement (Per cycle) is BDT 200 per statement. Photocopy of statements is Taka 1000.

4.10 ATM Card Charges

The annual fees for ATM card are Taka 150 per card, and the charge in case of damaged or lost card is Taka 300 per card. And phone banking is absolutely free.

4.11 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.

4.12 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.  

4.13 Fixed Deposit Account

For a fixed deposit account a person needs to deposit a minimum of BDT 100,000. After the maturity of the fixed deposit the depositor will get the principal along with the interest. The interest rate for this fixed deposit varies with the amount and period. The rate increases as the amount and time period increases.

 

 

 

Table 5: Interest rate of Fixed Deposit (Local & Foreign Currency)

 

 

Tenor

Minimum amount required

BDT 10M & Below

BDT Over 10M

3 Months

BDT 100,000

7.00%

7.75%

6 Months

BDT 100,000